In re Marriage of Zamudio , 2019 IL 124676 ( 2019 )


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    2019 IL 124676
    IN THE
    SUPREME COURT
    OF
    THE STATE OF ILLINOIS
    (Docket No. 124676)
    In re MARRIAGE OF
    LOUISE ZAMUDIO, Appellee, and FRANK OCHOA JR., Appellant.
    Opinion filed November 21, 2019.
    JUSTICE KILBRIDE delivered the judgment of the court, with opinion.
    Chief Justice Burke and Justices Thomas, Garman, Karmeier, Theis, and
    Neville concurred in the judgment and opinion.
    OPINION
    ¶1       The sole issue raised in this appeal is whether permissive pension service credit
    based on time served in the military is marital or nonmarital property under the
    facts of this marriage dissolution action. The parties purchased permissive service
    credit in the Illinois State Retirement System during their marriage based on time
    the respondent served in the active duty military prior to the marriage. See 40 ILCS
    5/14-104(j) (West 2016) (allowing purchase of pension service credit for up to four
    years of active duty military service); 40 ILCS 5/1-119(5.5), (7.5) (West 2016)
    (defining “permissive service” to include, in relevant part, “service credit purchased
    by the member” and “regular service” as “service credit earned by the member”
    that “does not include service credit purchased by the member”). The appellate
    court held that the pension credit is marital property because it was purchased
    during the marriage with marital funds. 
    2019 IL App (3d) 160537
    . For the following
    reasons, we affirm the appellate court’s judgment and remand to the trial court for
    further proceedings.
    ¶2                                   I. BACKGROUND
    ¶3       Petitioner Louise Zamudio, formerly known as Louise Ochoa, and respondent
    Frank Ochoa Jr. were married in January 2000. In May 2014, Louise filed a petition
    for dissolution of the marriage in the Whiteside County circuit court. The parties
    resolved most of the issues in the dissolution proceeding but could not agree on the
    division of Frank’s Illinois State Retirement System pension. The parties disputed
    whether permissive service credit based on Frank’s prior active duty military
    service was marital or nonmarital property.
    ¶4       The record shows that Frank served in the United States Air Force from 1974
    to 1980. In August 1989, he began working for the Illinois State Police. In
    September 2006, the parties paid $4813.20 to the State Retirement System to
    purchase 24 months of permissive military service credit. In August 2011, they
    again paid $4813.20 to the State Retirement System to purchase the remaining 24
    months of permissive military service credit. Frank retired from the Illinois State
    Police in August 2011, with 320 months of service credit, consisting of 263.5
    months of regular service, 48 months of permissive service credit based on his
    active duty military service, 6 months of unused sick time, and 2.5 months of
    unused vacation time.
    ¶5      Frank began receiving monthly annuity payments from the State Retirement
    System in August 2011. As of September 2015, his monthly annuity payment was
    $9088.86. The permissive service credit purchased by the parties increased the
    monthly annuity payment by $1363.33. Accordingly, the monthly annuity payment
    would have been $7725.53 without the additional service credit. The parties agreed
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    that Louise should receive 50% of the marital portion of the pension but disagreed
    on whether the marital portion included the amount attributable to the permissive
    service credit. Thus, as of September 2015, the amount in dispute was $681.67 per
    month, or 50% of the $1363.33 increase in the monthly annuity payment resulting
    from the permissive service credit.
    ¶6       The trial court initially ruled that the permissive service credit was marital
    because it was earned or acquired during the marriage. In response to Frank’s
    motion to reconsider, however, the trial court reversed its ruling and held that the
    permissive service credit was properly classified as nonmarital because “what was
    purchased to enhance the pension *** was military time earned prior to the
    marriage.” The trial court ordered Frank to reimburse Louise in the amount of
    $4813.20, for her share of the marital funds used to purchase the permissive service
    credit.
    ¶7       In reversing the trial court’s judgment, the appellate court observed that In re
    Marriage of Ramsey, 
    339 Ill. App. 3d 752
     (2003), suggests that courts must
    determine whether a pension enhancement is “derivative of the right to receive a
    pension in the first place or if the enhancement is nonderivative in the sense that
    the enhanced portion is directly and solely attributable to nonmarital contributions
    and not subject to division.” (Emphases in original.) 
    2019 IL App (3d) 160537
    ,
    ¶ 18. The appellate court rejected Frank’s argument that his eligibility for the
    permissive service credit stemmed entirely from his active duty military service
    completed 20 years prior to the marriage. 
    2019 IL App (3d) 160537
    , ¶ 19.
    ¶8       The appellate court instead held that Frank’s entitlement to an enhanced pension
    benefit by purchasing the service credit derived from his entitlement to the pension
    in the first place. 
    2019 IL App (3d) 160537
    , ¶ 19. The appellate court further
    concluded that Frank did not acquire the permissive service credit at the time of his
    military service. Frank’s military service had no relationship to his pension until he
    purchased the service credit during the marriage with marital funds. 
    2019 IL App (3d) 160537
    , ¶ 20. Accordingly, the appellate court held the permissive service
    credit was marital property and remanded to the trial court for an equitable
    apportionment of the pension. 
    2019 IL App (3d) 160537
    , ¶¶ 22-24.
    ¶9      Justice Schmidt dissented, asserting that “Frank enhanced a nonmarital asset
    with marital assets, and therefore, he must repay, and I believe has repaid, Louise
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    for her share of those funds. The trial court got it exactly right. Frank’s 48 months
    of military credit are no more marital property than are the 11 years of credit he
    earned for his Illinois State Police service prior to the marriage.” 
    2019 IL App (3d) 160537
    , ¶ 28 (Schmidt, J., dissenting). The dissent maintained that enhancement of
    Frank’s 48 months of military service with marital funds does not transmute his
    military service into marital property. 
    2019 IL App (3d) 160537
    , ¶ 32. Justice
    Schmidt, therefore, would have affirmed the trial court’s judgment holding the
    permissive service credit is nonmarital property. 
    2019 IL App (3d) 160537
    , ¶¶ 32-
    33.
    ¶ 10      We allowed Frank’s petition for leave to appeal (Ill. S. Ct. R. 315 (eff. July 1,
    2018)).
    ¶ 11                                     II. ANALYSIS
    ¶ 12       The only issue in dispute before this court is whether the permissive service
    credit purchased by the parties is marital or nonmarital property. Frank contends
    the permissive service credit is nonmarital because it is derived primarily from his
    active duty military service completed 20 years prior to the marriage. Frank
    maintains his military service is the primary and necessary element required to
    claim the permissive service credit and the credit cannot be considered acquired or
    earned during the marriage given that he served in the military many years before
    the marriage. Frank concludes that the monetary contributions made during the
    marriage to purchase the permissive service credit do not transmute his military
    service into marital property.
    ¶ 13       Louise responds that Frank’s military service, by itself, is not property. The
    permissive service credit enhancing Frank’s pension was only acquired when it was
    purchased during the marriage. Louise contends that the permissive service credit
    derives from both Frank’s prior military service and the monetary contributions
    made during the marriage. According to Louise, the permissive service credit is
    marital property because it was acquired during the marriage with marital funds.
    ¶ 14      In determining whether the permissive service credit is marital or nonmarital
    property, we must look to section 503 of the Illinois Marriage and Dissolution of
    Marriage Act (Act) (750 ILCS 5/503 (West 2016)), defining marital and nonmarital
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    property, and the Illinois Pension Code (Pension Code) (40 ILCS 5/1-101 et seq.
    (West 2016)), providing for the permissive service credit. Accordingly, this case
    presents an issue of statutory construction.
    ¶ 15       Our primary objective in construing a statute is to ascertain and give effect to
    the intent of the legislature. Accettura v. Vacationland, Inc., 
    2019 IL 124285
    , ¶ 11.
    The most reliable indicator of legislative intent is the statutory language, given its
    plain and ordinary meaning. Palm v. Holocker, 
    2018 IL 123152
    , ¶ 21. When the
    language of a statute is clear and unambiguous, we must apply it as written, without
    resort to aids of statutory construction. In re Marriage of Goesel, 
    2017 IL 122046
    ,
    ¶ 13. We may not depart from the plain statutory language by reading into a statute
    exceptions, limitations, or conditions not expressed by the legislature. In re
    Marriage of Goesel, 
    2017 IL 122046
    , ¶ 13. Questions of statutory construction are
    reviewed de novo. Bank of New York Mellon v. Laskowski, 
    2018 IL 121995
    , ¶ 12.
    ¶ 16      Section 503(a) of the Act provides, in pertinent part:
    “For purposes of this Act, ‘marital property’ means all property, including
    debts and other obligations, acquired by either spouse subsequent to the
    marriage, except the following, which is known as ‘non-marital property’:
    ***
    (6) property acquired before the marriage, except as it relates to
    retirement plans that may have both marital and non-marital characteristics;
    ***
    (7) the increase in value of non-marital property, irrespective of whether
    the increase results from a contribution of marital property, non-marital
    property, the personal effort of a spouse, or otherwise, subject to the right
    of reimbursement provided in subsection (c) of this Section[.]” 750 ILCS
    5/503(a) (West 2016).
    ¶ 17      Section 503(b) establishes a presumption that all property acquired during the
    marriage is marital, stating that:
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    “(b)(1) For purposes of distribution of property, all property acquired by
    either spouse after the marriage and before a judgment of dissolution of
    marriage or declaration of invalidity of marriage is presumed marital property.
    *** The presumption of marital property is overcome by showing through clear
    and convincing evidence that the property was acquired by a method listed in
    subsection (a) of this Section or was done for estate or tax planning purposes or
    for other reasons that establish that a transfer between spouses was not intended
    to be a gift.
    (2) For purposes of distribution of property pursuant to this Section, all
    pension benefits (including pension benefits under the Illinois Pension Code,
    defined benefit plans, defined contribution plans and accounts, individual
    retirement accounts, and non-qualified plans) acquired by or participated in by
    either spouse after the marriage and before a judgment of dissolution of
    marriage or legal separation or declaration of invalidity of the marriage are
    presumed to be marital property. A spouse may overcome the presumption that
    these pension benefits are marital property by showing through clear and
    convincing evidence that the pension benefits were acquired by a method listed
    in subsection (a) of this Section.” 750 ILCS 5/503(b)(1), (2) (West 2016).
    ¶ 18      Finally, section 503(c)(2)(A) states:
    “When one estate of property makes a contribution to another estate of property,
    the contributing estate shall be reimbursed from the estate receiving the
    contribution notwithstanding any transmutation. No such reimbursement shall
    be made with respect to a contribution that is not traceable by clear and
    convincing evidence or that was a gift. The court may provide for
    reimbursement out of the marital property to be divided or by imposing a lien
    against the non-marital property that received the contribution.” 750 ILCS
    5/503(c)(2)(A) (West 2016).
    ¶ 19       The Act, therefore, generally distinguishes marital from nonmarital property
    based on when the property was “acquired,” but it does not define that term. When
    a term is not defined by a statute, it is appropriate to look to dictionary definitions
    to determine its ordinary and popularly understood meaning. In re Ryan B., 
    212 Ill. 2d 226
    , 232 (2004). Merriam-Webster’s Dictionary defines “acquire” as “1: to get
    as one’s own: a: to come into possession or control of often by unspecified means
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    b: to come to have as a new or added characteristic, trait, or ability (as by sustained
    effort or natural selection). *** 2: to locate and hold (a desired object) in a
    detector.” Merriam-Webster’s Collegiate Dictionary 11 (11th ed. 2014). Black’s
    Law Dictionary 26 (9th ed. 2009) defines the term as “[t]o gain possession or
    control of; to get or obtain.”
    ¶ 20       In this case, Frank contends that the permissive service credit is nonmarital
    because it was acquired when he completed four years of active duty military
    service long before the marriage. He also suggests that the statutory monetary
    contributions made to purchase the permissive service credit may be reimbursed to
    the marital estate as provided in sections 503(a)(7) and 503(c)(2)(A).
    ¶ 21       Critically, while Frank contends his prior military service is the primary
    element required to establish the permissive service credit, the Pension Code does
    not award any benefit for prior military service alone. Rather, the permissive
    service credit at issue in this case is provided by section 14-104(j) of the Pension
    Code, stating in pertinent part:
    “By paying the contributions otherwise required under this Section, plus an
    amount determined by the Board to be equal to the employer’s normal cost of
    the benefit plus interest, but with all of the interest calculated from the date the
    employee last became a member of the System or November 19, 1991,
    whichever is later, to the date of payment, an employee may establish service
    credit for a period of up to 4 years spent in active military service for which he
    does not qualify for credit under Section 14-105,[1] provided that (1) he was not
    dishonorably discharged from such military service, and (2) the amount of
    service credit established by a member under this subsection (j), when added to
    the amount of military service credit granted to the member under subsection
    (b) of Section 14-105, shall not exceed 5 years.” 40 ILCS 5/14-104(j) (West
    2016).
    ¶ 22       Thus, section 14-104(j) sets forth two requirements for establishing permissive
    credit for prior active duty military service: (1) up to four years of active duty
    service without a dishonorable discharge and (2) payment of the statutory monetary
    1
    Section 14-105 allows service credit in specified circumstances without requiring
    contributions. 40 ILCS 5/14-105 (West 2016). That statutory provision is not at issue in this case.
    -7-
    contribution. Although Frank served in the Air Force from 1974 through 1980, the
    parties did not pay the statutory monetary contributions required to establish the
    permissive service credit until 2006 and 2011, during the marriage.
    ¶ 23       In this case, the permissive service credit was not “acquired” under that term’s
    ordinary and popularly understood meaning when Frank completed four years of
    active duty military service. Frank did not obtain or come into possession or control
    of the permissive service credit when he completed his active duty military service.
    To the contrary, Frank’s prior military service, by itself, does not have any value
    relative to his Illinois pension under the Pension Code. The statutory monetary
    contribution required to purchase the permissive service credit is undoubtedly an
    essential requirement for acquiring that credit. Indeed, the Pension Code defines
    “permissive service” to include “service credit purchased by the member.”
    (Emphasis added.) 40 ILCS 5/1-119(5.5) (West 2016). The military service,
    therefore, only made Frank eligible to purchase or “acquire” the permissive service
    credit through the monetary contribution required by the Pension Code. The
    permissive service credit was not “property acquired before the marriage,” as
    required to fall under the exception to marital property contained in section
    503(a)(6) of the Act. 750 ILCS 5/503(a)(6) (West 2016).
    ¶ 24       Frank, nonetheless, contends that the permissive service credit should be treated
    the same as his regular service time earned during his employment with the Illinois
    State Police prior to the marriage because his military service also occurred before
    the marriage. Frank maintains that service credit is earned or “acquired” solely by
    virtue of when the work was performed, not when monetary contributions are made.
    ¶ 25       The Pension Code, however, provides a clear distinction between regular
    service and permissive service credit purchased based on prior military service. The
    Pension Code states “ ‘[r]egular service’ does not include service credit purchased
    by the member.” 40 ILCS 5/1-119(7.5) (West 2016). Further, “membership
    service” is defined as “[s]ervice rendered while a member of the System for which
    credit is allowable under this Article” (40 ILCS 5/14-103.13 (West 2016)) and is
    distinguished from “creditable service” that includes both “[m]embership service
    and the total service certified in prior or military service certificates, if any.” 40
    ILCS 5/14-103.15 (West 2016). Thus, the Pension Code clearly differentiates
    between regular service and permissive service credit. Those two types of service
    -8-
    credit cannot be analogized under the terms of the Pension Code. Our decision in
    this case is based solely on section 14-104(j), providing for the permissive service
    credit at issue here.
    ¶ 26       At oral argument, Frank’s counsel also argued that Frank’s military service was
    a nonmarital asset, like physical property existing prior to the marriage, and the
    statutory monetary contributions only enhanced that existing asset. Under section
    503(a)(7) of the Act, an increase in value of nonmarital property is also nonmarital,
    even if the increase results from a contribution of marital property. 750 ILCS
    5/503(a)(7) (West 2016). The contribution of marital property may be reimbursed
    to the marital estate. 750 ILCS 5/503(c)(2)(A) (West 2016).
    ¶ 27       Frank’s argument presumes that his military service is property. But, as noted
    previously, Frank’s military service, by itself, had no monetary or property value
    in relation to his Illinois pension. According to the plain language of section 14-
    104(j) of the Pension Code, the permissive service credit is acquired only if both
    statutory requirements are met. The permissive service credit was only acquired
    when the monetary contributions were made in 2006 and 2011, with marital funds
    during the marriage. In fact, the permissive service credit would not have been
    acquired at all if both statutory requirements for obtaining it had not been met.
    Thus, we must reject Frank’s argument that the monetary contributions only
    enhanced an existing asset because that argument is contrary to the plain language
    of the Pension Code.
    ¶ 28        We also note that the parties rely on the appellate court’s decision in Ramsey.
    In that case, the appellate court considered whether pension enhancements resulting
    from early retirement incentives purchased by a party after dissolution of his
    marriage were marital property. In re Marriage of Ramsey, 
    339 Ill. App. 3d 752
    .
    Ramsey involved a different factual scenario and different statutory provisions
    establishing early retirement incentives. The holding in Ramsey was based on the
    early retirement incentives at issue in that case. See In re Marriage of Ramsey, 339
    Ill. App. 3d at 766. Our decision in this case must be based on the specific statutory
    provisions at issue here. We, therefore, conclude that Ramsey is distinguishable and
    not helpful in deciding this case.
    ¶ 29      In sum, we do not disagree with Frank’s argument that his military service was
    an essential requirement for obtaining the permissive service credit. In fact, as
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    Frank contends, the permissive service credit was obtained primarily “by his
    sustained effort and his own exertions.” The credit certainly could not have been
    obtained without Frank’s military service, and we do not dispute his contention that
    the permissive service credit acknowledges and rewards active duty military
    service.
    ¶ 30       Nonetheless, as in all cases involving statutory construction, we are guided and
    constrained by the plain language of the applicable statutes. See Michigan Avenue
    National Bank v. County of Cook, 
    191 Ill. 2d 493
    , 522 (2000). We cannot disregard
    the plain statutory language to reach a given result. Any change in the statutory
    language must come from the General Assembly, not this court. See Bremer v. City
    of Rockford, 
    2016 IL 119889
    , ¶ 34.
    ¶ 31       The statutory language controlling this case compels our decision that the
    relevant asset, i.e., the permissive service credit, was “acquired” only after all
    requirements for obtaining the credit were satisfied, including payment of the
    statutory monetary contributions. See 40 ILCS 5/14-104(j) (West 2016) (setting
    forth prior active duty military service and payment of statutory monetary
    contributions as requirements for establishing permissive service credit). Here,
    there is no factual dispute on when the statutory requirements for establishing the
    permissive service credit were completed. It is undisputed that the monetary
    contributions to purchase the permissive service credit were made with marital
    funds during the marriage. Accordingly, we conclude that the permissive service
    credit was acquired during the marriage and it is, therefore, marital property.
    ¶ 32                                  III. CONCLUSION
    ¶ 33      For the reasons stated above, we affirm the judgment of the appellate court and
    remand to the trial court for further proceedings.
    ¶ 34      Appellate court judgment affirmed.
    ¶ 35      Circuit court judgment reversed.
    ¶ 36      Cause remanded.
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