2012-03

In re Marriage of Romano , 2012 IL App (2d) 91339 ( 2012 )

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ILLINOIS OFFICIAL REPORTS
Appellate Court
In re Marriage of Romano, 2012 IL App (2d) 091339
Appellate Court In re MARRIAGE OF DANIEL ROMANO, Petitioner-Appellee and
Caption Cross-Appellant, and CYNTHIA ROMANO, Respondent-Appellant and
Cross-Appellee.
District & No. Second District
Docket Nos. 2-09-1339, 2-10-0100 cons.
Filed March 21, 2012
Rehearing denied April 26, 2012
Held On appeal from the judgment dissolving the parties’ marriage, the
(Note: This syllabus appellate court rejected respondent’s contentions that the trial court
constitutes no part of misclassified certain assets, failed to consider over $6 million in “missing
the opinion of the court funds,” and improperly rejected her claim of dissipation and her claim
but has been prepared that petitioner committed a fraud on her marital rights, but the trial
by the Reporter of court’s award of maintenance in the amount of $15,000 per month was
Decisions for the vacated and the cause was remanded for a determination of the proper
convenience of the amounts of maintenance and child support, since the trial court’s letter of
reader.)
opinion stating that upon reconsideration, respondent would be awarded
$15,000 per month as maintenance and zero dollars for child support
contravened petitioner’s statutory right to modify child support.
Decision Under Appeal from the Circuit Court of Du Page County, No. 06-D-1161; the
Review Hon. Rodney W. Equi, Judge, presiding.
Judgment Affirmed in part and vacated in part; cause remanded.
Counsel on Paul J. Bargiel, of Paul J. Bargiel, P.C., of Chicago, for appellant.
Appeal
Barry A. Schatz, of Berger Schatz, of Chicago, for appellee.
Panel JUSTICE HUDSON delivered the judgment of the court, with opinion.
Presiding Justice Jorgensen and Justice Schostok concurred in the
judgment and opinion.
OPINION
¶1 Respondent, Cynthia Romano, appeals from the judgment of the circuit court of Du Page
County dissolving her marriage to petitioner, Daniel Romano. Daniel has cross-appealed
from the same judgment. Cynthia argues: (1) the trial court misclassified assets used to fund
three trusts established by Daniel; (2) the trial court erred in classifying as nonmarital
Daniel’s interests in two limited liability companies; (3) the trial court failed to consider
$6,429,000 in “missing funds” in its judgment; (4) the trial court’s ruling with respect to
dissipation is against the manifest weight of the evidence; and (5) the trial court erred in
rejecting her claim that the transfer of certain assets into the trusts established by Daniel, as
well as the subsequent transfer of the assets out of the trusts, constituted a fraud on Cynthia’s
marital rights. Daniel contends: (1) the trial court’s division of marital assets was inequitable;
(2) the trial court improperly substituted a maintenance award for a child-support award; (3)
the trial court’s maintenance award was improper; and (4) the trial court erred by failing to
account for the predistribution of marital assets to Cynthia for attorney fees. We affirm in
part, vacate in part, and remand.
¶2 I. BACKGROUND
¶3 A substantial amount of evidence was presented to the trial court in this contentious
dissolution action. Accordingly, we initially set forth only information sufficient to frame the
issues raised by the parties in their appeals. Additional relevant facts will be presented in the
analysis of the issues to which they pertain.
¶4 Daniel and Cynthia were married on June 12, 1987. Daniel filed a petition for dissolution
of marriage on May 23, 2006.1 Cynthia filed a counterpetition for dissolution of marriage on
June 26, 2006. On October 16, 2007, Cynthia filed a “Notice of Claim of Dissipations.” A
trial in the matter commenced on September 18, 2008, at which the following was adduced.
¶5 Daniel is the oldest of seven children born to Donald J. Romano, Sr. (Buddy), and
1
On September 10, 2008, Daniel filed a motion to voluntarily dismiss his petition for
dissolution of marriage. See 735 ILCS 5/2-1009 (West 2008). On September 11, 2008, the trial court
granted Daniel’s motion.
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Florence Marie Romano. During the trial, one of the principal areas of contention involved
Daniel’s interests in the following companies: (1) Romano Brothers Beverage Company
(RBBC); (2) Paramount Distributing Company (Paramount); (3) Central Wholesale
Company (Central); (4) Mueller Distributing Company (Mueller); (5) M&D Investments,
LLC (M&D); and (6) Power Distributing, LLC (Power). Other members of the Romano
family also held interests in these companies. Complicating the ownership structure of the
companies was the fact that, beginning in 2001, the Romano family began to implement an
estate plan that ultimately involved transferring the family’s interests in these entities into
and out of various trusts. To this end, Daniel established three irrevocable grantor trusts on
October 29, 2001. Daniel’s trusts were denominated as follows: (1) the Daniel M. Romano
Gift Trust (DMR Gift Trust); (2) the Daniel M. Romano MP Annuity Trust (MP Trust); and
(3) the Daniel M. Romano SP Annuity Trust (SP Trust) (collectively, the DMR trusts).
Buddy was the trustee of all three DMR trusts.
¶6 During the majority of the marriage, Daniel worked at RBBC, a family-owned liquor-
distribution company. The predecessor to RBBC, Morand Brothers Beverage Company, was
originally owned in part by Daniel’s grandfather and later was fully acquired by Daniel’s
uncle, Michael J. Romano II (Michael II), and Buddy. Between 1989 and 2000, Daniel
acquired 59 shares of RBBC stock from Buddy and 12 shares of RBBC stock from his
siblings.
¶7 Between September 1987 and May 1994, Paramount, Mueller, and Central (collectively,
the Affiliates) were acquired. Immediately following the acquisitions, Daniel held a 50%
interest in each Affiliate. The remaining 50% interest in each Affiliate was held by Michael
II’s oldest son, Michael J. Romano III (Michael III).
¶8 Just prior to Michael II’s death in 1998, he and Buddy formed M&D, a holding company
for a 50% share of the profits of Olinger, a liquor-distribution company located in Indiana.2
Michael III eventually came to own 50% of the shares of M&D, while Buddy owned the
other half. Subsequently, Buddy transferred his entire interest in M&D to his four sons
(Daniel, Michael D. Romano (Michael D.), Donald J. Romano, Jr. (DJ), and Victor Romano
(Victor)) in equal shares. Thus, following the transfer, Daniel, Michael D., DJ, and Victor
each owned a 12.5% interest in M&D, while Michael III owned the remaining 50%.
¶9 In 2000, Buddy and Michael III formed Power, a distributor of Red Bull energy drink.
Michael III owned 50% of the shares of Power, and Buddy owned the other 50%. In 2000,
Buddy transferred his entire interest in Power to his four sons in equal shares. Thus,
following the transfer, Daniel, Michael D., DJ, and Victor each held a 12.5% interest in
Power, while Michael III retained 50%.
¶ 10 Buddy testified that in or about 2001, Michael III expressed a desire to leave the family
businesses and sell his interests therein. Although Buddy originally opposed any divestiture,
he eventually agreed to sell RBBC and the Affiliates contingent upon three conditions. First,
Buddy wanted to more fairly distribute among his seven children any cash proceeds
2
The other 50% of the distribution company was owned by the Glazer family, who lived in
Texas.
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generated from the sale of the businesses. Second, Buddy wanted to equalize among the
children ownership of any business interests that remained in the family’s possession. Third,
Buddy wanted to fund the college expenses of his 31 grandchildren. Buddy hired attorney
Michael Hartz to create an estate plan that would be consistent with these goals and would
protect from taxation the proceeds of any sale of the family businesses. Buddy also hired
Thomas Fee, a financial advisor, to assist in implementing and administering the estate plan
devised by Hartz. Members of the Romano family met with Hartz and Fee in the fall of 2001.
At that time, Hartz advised that Daniel be the “catalyst” of the plan to redistribute wealth
among the other family members, because Daniel owned a disproportionate share of the
family businesses. As noted above, implementation of the estate plan involved Daniel
establishing the DMR trusts.
¶ 11 In October 2001, after the DMR trusts were established, Daniel sold his 71 shares of
RBBC stock to the DMR Gift Trust and in exchange received a promissory note from the
trust, with interest, for approximately $4.2 million. In addition, Daniel sold his 50% interest
in Paramount to the SP Trust and his 50% interests in Central and Mueller to the MP Trust.
According to Hartz, the MP Trust and the SP Trust were established as grantor-retained
annuity trusts (GRATs). As a result, in exchange for the transfer of his interests in the
Affiliates to them, Daniel received a commitment from both the MP Trust and the SP Trust
to make annuity payments on the first and second anniversaries of the trusts. Hartz explained
that the value of each annuity “is equal to the value of the assets [that are] conveyed into the
trust at the time that the trust is initially funded” plus interest. Hartz also created various
trusts, including “gift trusts” and GRATs, for Buddy, Michael D., and DJ. Further, Buddy,
Michael D., and DJ transferred their business interests to their trusts at the same time as
Daniel, and they received similar commitments from their trusts in exchange.
¶ 12 In July 2002, Southern Wine and Spirits, Inc. (SWSI), a liquor-distribution company
located in Miami, Florida, purchased the assets of RBBC and the Affiliates for a cash price
of $151,012,000. As a result of holdbacks, the Romanos did not receive the entire purchase
price. Daniel testified that the breakdown of the purchase price was: $84,075,356 for RBBC;
$16,811,298 for Central; $17,636,090 for Mueller; and $26,681,360 for Paramount. Relevant
here, the DMR Gift Trust’s share of the proceeds of the sale of its interest in RBBC was
$6,867,683. Following SWSI’s purchase of RBBC and the Affiliates, Daniel began working
for SWSI pursuant to a 10-year employment contract. Daniel’s base salary at SWSI was
$550,000. In addition, Daniel was entitled to an incentive bonus of up to $350,000 per year,
which was dependent upon the company’s budget, and a discretionary bonus not to exceed
$100,000.
¶ 13 Also in July 2002, Michael III’s interests in M&D and Power were redeemed. The
redemption price was $10 million, of which $8.5 million was attributable to M&D and $1.5
million was attributable to Power. Hartz testified that the funding source for the redemption
was RBBC. He explained that the owners of RBBC at the time of the redemption were the
DMR Gift Trust and gift trusts established by Buddy, Michael D., and DJ. Thus, when RBBC
was sold to SWSI, the Romanos decided to use funds from the sale to redeem Michael III’s
interests in M&D and Power. Therefore, in July 2002, Michael III received cash in exchange
for the value of his shares in the companies, and redemption agreements dated July 2002
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were executed.
¶ 14 Meanwhile, in October 2002, Daniel, Michael D., and DJ sold their 12.5% interests in
M&D and Power to their respective gift trusts. Victor retained his interest individually. The
gift trusts executed contribution agreements dated October 1, 2002, to allocate financial
responsibility for the $10 million redemption of Michael III’s shares in July 2002, which had
been accomplished using their collective funds from the RBBC sale proceeds. The
contribution agreements show that, although the gift trusts of Buddy, Michael D., and DJ
each contributed from its share of the RBBC sale proceeds to the redemption of Michael III’s
shares, the DMR Gift Trust contributed a disproportionately higher amount. Fee explained
that the DMR Gift Trust’s contribution was higher because it would be the eventual
instrument used to transfer a one-seventh interest to each of Buddy’s three daughters: Patricia
Barry (Tricia), Christine Klauer (Chrissy), and Florence Daly (Lulu).
¶ 15 The contribution agreements reflect that Buddy’s gift trust contributed $2.857 million to
the redemption of Michael III’s interests in M&D and Power, for a one-seventh interest in
the companies. Because the gift trusts established by Michael D. and DJ each already owned
an interest of 12.5% in M&D and Power, they each had to contribute only an additional
$357,000 to obtain a one-seventh interest in the companies. Similarly, Victor already owned
an interest of 12.5% in both M&D and Power, so he had to contribute only an additional
$357,000 to obtain a one-seventh interest in the companies. The DMR Gift Trust acquired
the remaining three-sevenths interest in the companies. Since the DMR Gift Trust already
owned an interest of 12.5% in M&D and Power, it contributed an additional $6,072,000 to
reach its three-sevenths interest in the companies.
¶ 16 Hartz testified that as of October 2002 the DMR Gift Trust still owed Daniel
approximately $4.2 million pursuant to the 2001 promissory note it executed when Daniel
transferred his shares of RBBC to the DMR Gift Trust. However, the DMR Gift Trust’s
contribution to the redemption had rendered it cash poor, and it had no way to meet its
repayment obligation to Daniel. Accordingly, also in October 2002, the DMR Gift Trust
borrowed $6,072,000 from the MP Trust and pledged its three-sevenths interest in M&D and
Power as security for the loan. In November 2002, with a portion of the borrowed funds, the
DMR Gift Trust repaid Daniel on the 2001 promissory note.
¶ 17 Meanwhile, in 2003, pursuant to the 2001 estate plan, Fee instructed Daniel to personally
fund accounts established pursuant to section 529 of the Internal Revenue Code for the
benefit of Daniel’s children and the children of all of Daniel’s siblings. To this end, on
September 16, 2003, Daniel contributed $416,000 for Victor’s children and $543,000 for his
own children. Further, on September 18, 2003, Daniel contributed a total of $432,000 for
Tricia’s children, $440,000 for Lulu’s children, and $280,000 for Chrissy’s children. Finally,
on August 27, 2004, Daniel contributed $504,000 for Michael D.’s children. Fee testified that
the money to fund these accounts came from Daniel’s individual brokerage accounts, which
are discussed below.
¶ 18 In 2004, after the GRAT annuity periods had ended, the process of equalizing the
ownership of the remaining Romano family businesses, M&D and Power, began. To this
end, the shares of M&D and Power held by the DMR Gift Trust were transferred to the MP
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Trust and the SP Trust. Specifically, the DMR Gift Trust sold a 34.248% interest in M&D
and Power to the MP Trust for $8,013,299.20. In exchange, the MP Trust executed a
promissory note for $1,810,844.01 to the DMR Gift Trust. The remainder of the sales price
was satisfied by cancellation of the October 2002 promissory note for $6,072,000 from the
DMR Gift Trust to the MP Trust. In addition, the DMR Gift Trust sold an 8.562% interest
in M&D and Power to the SP Trust for $2,003,324.80. The SP Trust executed a promissory
note to the DMR Gift Trust for the entire sales price.
¶ 19 Immediately thereafter, the shares of M&D and Power held by the MP and SP Trusts
were transferred to discretionary trusts established for Tricia, Chrissy, and Lulu. Following
these transfers, the following trusts each held about a one-seventh interest in both M&D and
Power: Buddy’s gift trust, Michael D.’s gift trust, DJ’s gift trust, Tricia’s discretionary trust,
Chrissy’s discretionary trust, and Lulu’s discretionary trust. In addition, Victor owned about
a one-seventh interest individually. Moreover, Daniel personally retained an ownership
interest of 0.05% in both M&D and Power, as well as a beneficial interest for about a one-
seventh ownership in the companies as a beneficiary of Buddy’s gift trust.
¶ 20 In July 2004, pursuant to the 2001 estate plan, Buddy, as trustee of both the MP Trust and
the SP Trust, instructed Fee to distribute from those trusts $2 million to each of the
discretionary trusts established for Tricia, Chrissy, and Lulu, as well as a discretionary trust
established for Victor.
¶ 21 As noted above, after the sale of RBBC and the Affiliates to SWSI, the DMR trusts
repaid Daniel pursuant to the note and annuity agreements executed when Daniel initially
funded those trusts in 2001. Fee established several individual brokerage accounts for Daniel
and deposited the payments from the DMR trusts into these accounts. In total, between $15
million and $16 million was deposited into Daniel’s individual brokerage accounts from the
DMR trusts. According to Fee, no deposits were made to the individual brokerage accounts
except in connection with the SWSI sale. Fee testified that Daniel used $9 million of these
funds to pay taxes owed by the DMR trusts. Fee further testified that, from August 2002
through January 2007, the remaining $6 million from Daniel’s individual brokerage accounts
was expended to pay family expenses.
¶ 22 Evidence was also presented at trial regarding other assets acquired during the marriage.
In 2003, Daniel purchased $5 million in life insurance for the benefit of Cynthia and the
parties’ descendants. At Daniel’s request, Hartz drafted an irrevocable grantor trust designed
to own the life insurance (the DMR Family Trust). Hartz testified that under the terms of the
DMR Family Trust, the proceeds of the life insurance policy were payable to Cynthia and the
parties’ descendants as the sole beneficiaries of the trust.
¶ 23 In 1998, the parties purchased property at 704 Deer Trail Lane, Oak Brook, Illinois,
which they utilized as the marital residence. The parties and their children lived in the marital
residence until Daniel moved out on April 26, 2006. After Daniel moved, Cynthia, the
parties’ four emancipated children, and the parties’ one minor child continued to reside in
the marital residence.
¶ 24 In August 2003, Daniel purchased a residence located at 115 Indian Trail, Oak Brook,
Illinois (Indian Trail residence). Daniel testified that he intended the purchase to be an
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investment for Cynthia and the parties’ children. The purchase price of the property was $1.1
million. Daniel testified that he originally intended to obtain a loan to purchase the Indian
Trail residence. However, when he approached Cynthia about signing a mortgage on the
home to secure the loan, she refused, claiming that Daniel was attempting to cheat her.
Accordingly, Daniel asked Fee for funds to purchase the Indian Trail residence. Thereafter,
Fee arranged a loan to Daniel from the SP Trust for the purchase of the property. Fee testified
that this loan was repaid with interest. Daniel testified that, after the home was purchased,
improvements totaling more than $1 million were made to it. According to Daniel, the
money for the improvements “came from [his] accounts, from Tom Fee.” The parties sold
the Indian Trail residence to Cynthia’s parents in 2005 for $350,000 and netted $322,899.57
at closing. Cynthia acknowledged that she deposited $300,000 of the net proceeds into a joint
bank account, but she was unable to recall what happened to the remainder of the proceeds.
¶ 25 On May 12, 2004, the parties closed on the purchase of property at 706 Deer Trail Lane,
Oak Brook, Illinois (706 Deer Trail residence), which is adjacent to the parties’ marital
residence. The purchase price of the property was $1.35 million. According to Daniel, he
asked Fee for the money to purchase the 706 Deer Trail residence. To this end, Fee arranged
a loan from the SP Trust, and a mortgage in favor of the SP Trust was executed, pursuant to
which Daniel was required to repay the loan amount with interest. Daniel indicated that the
mortgage was never recorded. Further, Daniel acknowledged that between May 12, 2004, and
September 18, 2008 (the date of his testimony), he had not made a single monthly payment
on the mortgage. Fee recounted that he had retained counsel to collect on the loan.
¶ 26 When Daniel moved out of the marital residence in April 2006, he relocated to his
parents’ residence at 1040 Lake Shore Drive, Unit 37D, in Chicago. In August 2007, Daniel
moved out of his parents’ residence and rented unit 35D in the same building. In 2006 one
of Buddy’s trusts purchased unit 35D for $1.65 million. Daniel and his mother were the
trustees of the trust that purchased unit 35D. Daniel’s rent for unit 35D was $7,500 per
month, but Daniel testified that he never had the financial ability to pay it.
¶ 27 In his written closing argument, Daniel asserted that the following property was marital:
(1) the marital residence, with a stipulated value of $3 million (marital residence); (2) the 706
Deer Trail residence, with a stipulated value of $1.37 million;3 (3) the furnishings located at
the marital residence; (4) the parties’ automobiles; (5) Daniel’s 401(k) account; (6) Daniel’s
A.G. Edwards individual retirement account (IRA); and (7) a loan receivable from Cynthia’s
brother, Michael Pope, for funds he borrowed from Daniel in 2005. Daniel argued that he
had a nonmarital claim in the following assets: (1) his 0.05% interests in M&D and Power;
(2) the de minimis assets of his individual brokerage accounts; and (3) his interest in an
investment fund known as “Pabrai.” In addition, Daniel argued that the assets held in the
DMR trusts constituted third-party property and therefore were not subject to allocation by
the court.
3
In his written closing argument, Daniel indicated that the stipulated value of the 706 Deer
Trail residence was $1.7 million. However, the stipulation actually lists the value of this property
at $1.37 million.
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¶ 28 In her written closing argument, Cynthia claimed that the value of the marital estate
exceeded $45 million. Included in her calculation of the marital estate were claims of
dissipation against Daniel totaling $20,088,623, which consisted of: (1) the transfers of
M&D and Power from the MP Trust and the SP Trust to Tricia, Lulu, and Chrissy; (2) the
transfer of $8 million from the MP Trust and the SP Trust to the discretionary trusts of
Victor, Tricia, Lulu, and Chrissy; and (3) the contribution of $2,072,000 to the college
savings accounts for the children of Daniel’s siblings. In support of her dissipation claims,
Cynthia contended that the “genesis” of the irreconcilable breakdown of the parties’ marriage
occurred in March 2000, when she began treatment for breast cancer. Cynthia also asserted
in her closing that by the end of 2003 “she had no hope to save her marriage.”
¶ 29 The trial court issued a letter opinion with its findings on October 12, 2009. A judgment
of dissolution was entered on November 17, 2009. In its letter ruling, the trial court initially
noted that credibility was “a particularly significant factor in the court’s decision.” The court
found that “[Daniel’s] interests in the Romano companies was [sic] [Daniel’s] non-marital
property, and that the transfers of the proceeds from the sale of the companies were in fact
pursuant to a plan for the distribution of wealth generated by the sale of the Romano
companies.” The court then held that even if the funds from the sale of the family businesses
were marital, Cynthia’s dissipation claim would fail because Cynthia’s claim that the
marriage was undergoing an irreconcilable breakdown in 2000 or 2003 was not credible.
¶ 30 The court also held that the condominium where Daniel was living after he moved out
of the marital residence was a gift from Daniel’s parents. Therefore, the court classified the
condominium as Daniel’s nonmarital property. In the alternative, the court found that Daniel
was solely responsible for debt owed to his parents, i.e., back rent for the time Daniel was
living in the condominium. Further, the court classified as nonmarital Daniel’s 0.05%
ownership interests in M&D and Power.
¶ 31 With respect to the classification and allocation of the remaining property, the court
determined that the DMR Gift Trust and the MP Trust were neither marital property nor
Daniel’s nonmarital property. However, the court held that the SP Trust was marital property,
which it allocated to Daniel. In so holding, the court found that Daniel “exercised and has
the ability to exercise sufficient control over the *** SP Trust.” The court noted that to
purchase the 706 Deer Trail residence Daniel took from the SP Trust a $1.3 million
mortgage, which was never recorded, and that Daniel never made a payment on that
mortgage. The court concluded that, to the extent the lien was valid, it was owed to the SP
Trust. However, because the court allocated the SP Trust to Daniel, it found that Daniel
either was entitled to the mortgage proceeds or he could forgive the debt. The court further
explained that the division of marital property would not change if it had classified the SP
Trust as nonmarital property. Although the court assigned to Daniel the liability of the
mortgage, the court awarded the property itself to Cynthia.
¶ 32 Ultimately, the trial court allocated the following marital assets to Daniel: (1) 50% of the
assets in Daniel’s A.G. Edwards IRA, valued at $382,380; (2) 100% of the assets held by the
SP Trust, valued at $503,656; (3) 50% of the assets in Daniel’s SWSI 401(k), valued at
$58,840.50; (4) an automobile valued at $17,826; (5) 100% of an insurance note, valued at
$360,000, receivable between Daniel and the DMR Gift Trust; (6) $66,000 held in a bank
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account at Harris Bank; (7) 100% of the funds held in any bank account titled solely in
Daniel’s name (unvalued); (8) 40% of the cash value of any whole-life insurance policies
(unvalued); and (9) personal property in Daniel’s possession or under Daniel’s control
(unvalued).
¶ 33 The court allocated the following marital assets to Cynthia: (1) the marital residence,
valued at $3 million, subject to a home equity line of credit (HELOC) with an outstanding
principal balance of $534,000; (2) the 706 Deer Trail residence, valued at $1.37 million; (3)
100% of the note receivable from Cynthia’s brother, valued at $250,000; (4) 50% of the
assets in Daniel’s A.G. Edwards IRA, valued at $382,380; (5) 50% of the assets in Daniel’s
SWSI 401(k), valued at $58,840.50; (6) 100% of the funds held in any bank account titled
solely in Cynthia’s name (unvalued); (7) three vehicles valued at $175,701; (8) 60% of the
cash value of any whole-life insurance policies (unvalued); and (9) personal property in
Cynthia’s possession or under Cynthia’s control (unvalued).
¶ 34 With respect to the issue of support, the court noted that, although five children were
born to the parties during the marriage, only one (Alexander) remained a minor when the
court issued its judgment of dissolution, and Alexander resided with Cynthia under a joint
custody agreement. The court fixed child support at $6,000 per month, which it calculated
as 20% of Daniel’s net income at SWSI. In addition, the court awarded Cynthia periodic
modifiable maintenance in the amount of $6,000 per month, subject to termination on
statutory grounds. The court also ordered Daniel to pay additional child support of 20% of
his net income over his base salary and additional maintenance of 20% of his net income
over his base salary. Finally, with respect to attorney fees, the court held that in light of the
“grossly disparate division of assets in Cynthia’s favor and the payments already authorized
by the Court,” each party shall be solely responsible for any and all attorney fees and costs
and expert fees incurred by them.
¶ 35 Subsequently, the parties filed cross-motions for “clarification” of the judgment of
dissolution. In response, the trial court issued a letter opinion dated December 12, 2009.
Among other issues, the court addressed Daniel’s claim that it failed to account for the
predistribution of marital assets to Cynthia for attorney fees. The court ruled that, even after
consideration of the predistribution, “the balance of the asset distribution remained within
the range of the reasonable.” The court also updated the values of certain assets and
liabilities, including the HELOC. In addition, the court sua sponte reconsidered its awards
of maintenance and child support. In doing so, the court set Cynthia’s periodic maintenance
at $15,000 per month and child support at zero dollars per month. In accordance with the
December 12, 2009, letter opinion, an addendum to the judgment of dissolution was filed on
January 15, 2010. Both parties have appealed.
¶ 36 II. ANALYSIS
¶ 37 A. Cynthia’s Arguments
¶ 38 1. Classification of Property
¶ 39 The first two issues Cynthia raises on appeal involve the trial court’s classification of
certain assets. First, Cynthia contends that the “assets used to fund [the DMR trusts],” which
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she classifies as “[Daniel’s] share of the proceeds from the sale of the assets of RBBC,
Paramount, Central and Mueller to SWSI,” should have been classified as marital property.
Second, she asserts that the trial court’s finding that M&D and Power were Daniel’s
nonmarital property is against the manifest weight of the evidence because marital funds
were used to purchase these two entities. We address each contention in turn.
¶ 40 a. DMR Trusts
¶ 41 Cynthia first challenges the classification of “the assets used to fund” the DMR trusts.
Cynthia divides her argument into two parts. Initially, she argues that “the proceeds from
[Daniel’s] share of the sale of RBBC’s assets [to SWSI] are marital property.” In particular,
citing to In re Marriage of Sanfratello,

393 Ill. App. 3d 641

(2009), Cynthia reasons that
Daniel’s interest in RBBC should be considered marital property because “[Daniel’s]
employment at RBBC supplied [Daniel] the means to provide for his family during the
parties’ 25 year marriage.” Second, Cynthia argues that “the proceeds from the sale of
[Daniel’s] share of the assets of Paramount, Central, and Mueller are marital property.” In
support of the latter claim, Cynthia contends that the evidence establishes that Daniel’s
“personal funds” were used to acquire the Affiliates.
¶ 42 Although Cynthia frames these issues as a challenge to the trial court’s classification of
“the proceeds” from the sale of Daniel’s share of the assets of RBBC and the Affiliates to
SWSI, her arguments actually center on whether either of the underlying assets, i.e., RBBC
and the Affiliates themselves, were properly classified by the trial court. Therefore, we focus
our analysis on the classification of RBBC and the Affiliates. Prior to doing so, however, we
set forth some general principles applicable to the classification of assets and briefly review
the trial court’s findings with respect to RBBC and the Affiliates.
¶ 43 i. General Principles
¶ 44 Before a court may distribute property upon the dissolution of a marriage, the court must
first classify the property as either marital or nonmarital. In re Marriage of Henke, 313 Ill.
App. 3d 159, 166 (2000). A court’s classification of property will not be disturbed on appeal
unless it is against the manifest weight of the evidence. In re Marriage of Hluska, 2011 IL
App (1st) 092636, ¶ 76;

Henke, 313 Ill. App. 3d at 166

. A decision is against the manifest
weight of the evidence only when an opposite conclusion is clearly apparent or when the
court’s findings appear to be unreasonable, arbitrary, or not based upon the evidence. In re
Marriage of Ricketts,

329 Ill. App. 3d 173

, 181-82 (2002).
¶ 45        Under the Illinois Marriage and Dissolution of Marriage Act (Act) (750 ILCS 5/101 et
seq. (West 2008)), there is a rebuttable presumption that all property acquired by either
spouse after the marriage and before a judgment of dissolution of marriage is marital
property regardless of how title to the property is held. 750 ILCS 5/503(b)(1) (West 2008);
In re Marriage of Schmitt,

391 Ill. App. 3d 1010

, 1017 (2009). This presumption of marital
property can be overcome by clear and convincing evidence that the property was acquired
by one of the methods listed in section 503(a) of the Act (750 ILCS 5/503(a) (West 2008)).
In re Marriage of Didier,

318 Ill. App. 3d 253

, 258 (2000). Among the methods listed in
-10-
section 503(a) are the following:
“(1) property acquired by gift, legacy or descent;
(2) property acquired *** in exchange for property acquired by gift, legacy or
descent;
***
(7) the increase in value of property acquired by a method listed in paragraphs (1)
through (6) of this subsection, irrespective of whether the increase results from a
contribution of marital property, nonmarital property, the personal efforts of a spouse,
or otherwise, subject to the right of reimbursement ***; and
(8) income from property acquired by a method listed in paragraphs (1) through (7)
of this subsection if the income is not attributable to the personal effort of a spouse.” 750
ILCS 5/503(a)(1), (2), (7), (8) (West 2008).
The party claiming that the property is nonmarital carries the burden of proof, and any doubts
regarding the nature of the property will be resolved in favor of a finding that the property
is marital. In re Marriage of Johns,

311 Ill. App. 3d 699

, 703 (2000).
¶ 46       We further note that a transfer from a parent to a child is presumed to be a gift. In re
Marriage of Hagshenas,

234 Ill. App. 3d 178

, 186 (1992). This presumption can be
overcome by clear and convincing evidence to the contrary.

Hagshenas, 234 Ill. App. 3d at 186

. As we noted in Hagshenas, in a case where property is subject to both the presumption
that a transfer from a parent to a child is a gift and the presumption that property acquired
during the course of a marriage is marital property, the conflicting presumptions cancel each
other out, and the trial court is free to determine the issue of whether the asset in question is
marital or nonmarital without resort to either presumption.

Hagshenas, 234 Ill. App. 3d at 186

-87. In such circumstances, the trial court’s determination is also subject to review under
the manifest-weight-of-the-evidence standard. Hluska, 2011 IL App (1st) 092636, ¶ 88; In
re Marriage of Wanstreet,

364 Ill. App. 3d 729

, 737 (2006).
¶ 47                                    ii. Trial Court Ruling
¶ 48       In its October 12, 2009, letter opinion, the trial court ruled that Daniel’s interests in the
Romano companies, including RBBC and the Affiliates, were Daniel’s nonmarital property
and that the transfers of the proceeds from the sale of the companies were accomplished
“pursuant to a plan for the distribution of wealth generated by the sale of the Romano
companies.” Further, in its judgment of dissolution entered November 17, 2009, the trial
court found that the assets of the DMR Gift Trust and the MP Trust were “neither part of the
marital estate nor Daniel’s nonmarital property.” The court did find, however, that the assets
of the SP Trust constituted marital property. While the rationale for the trial court’s findings
that RBBC and the Affiliates were Daniel’s nonmarital property is not entirely clear from the
record, we note that we review the correctness of the trial court’s result rather than the
correctness of its reasoning. In re Marriage of Ackerley,

333 Ill. App. 3d 382

, 392 (2002).
¶ 49                                          iii. RBBC
-11-
¶ 50       As noted above, Cynthia, relying on Sanfratello,

393 Ill. App. 3d 641

, argues that
Daniel’s interest in RBBC should be considered marital property because “[Daniel’s]
employment at RBBC supplied [Daniel] the means to provide for his family during the
parties’ 25 year marriage.” However, we find that the evidence supports the trial court’s
finding that Daniel’s interest in RBBC was his nonmarital property.
¶ 51       The evidence at trial established that, prior to October 2001, Daniel possessed 71 shares
of RBBC stock. Daniel obtained the stock from two sources: his siblings and his father. With
respect to the former, Daniel testified that he obtained 12 of these shares in 1994 from three
of his siblings. Because transfers among siblings are not presumed to be gifts (see In re
Marriage of Awan,

388 Ill. App. 3d 204

, 213 (2009)) and because Daniel obtained these
shares during the marriage, there is a rebuttable presumption that these shares are marital.
750 ILCS 5/503(b)(1) (West 2008); Hluska, 2011 IL App (1st) 092636, ¶ 77. However, as
noted above, the presumption of marital property can be overcome by clear and convincing
evidence that the property was acquired by one of various methods, including a gift. 750
ILCS 5/503(a)(1), (b)(1) (West 2008);

Didier, 318 Ill. App. 3d at 258

. A gift has been
defined as “ ‘a voluntary gratuitous transfer of property from donor to donee where the donor
manifests an intent to make such a gift and absolutely and irrevocably delivers the property
to the donee.’ ”

Didier, 318 Ill. App. 3d at 259

(quoting In re Estate of Poliquin, 247 Ill.
App. 3d 112, 115 (1993)); see also Black’s Law Dictionary 696 (7th ed. 1999) (defining a
“gift” as “[t]he act of voluntarily transferring property to another without compensation”).
Here, Daniel established that his acquisition of 12 shares of RBBC stock from his siblings
was a gift.
¶ 52 First, there was evidence of a gratuitous, voluntary transfer of property. Daniel testified
that his siblings “g[a]ve” him 12 shares of stock. He further testified that he did not
compensate his siblings for the 12 shares of stock and that neither he nor any third party was
obligated to repay his siblings for these shares. Cynthia did not present any evidence to the
contrary. Second, there was evidence that Daniel’s siblings intended to make a gift and that
there was an absolute and irrevocable delivery of property. In this regard, the record contains
a certificate reflecting the transfer of the 12 shares of stock from Daniel’s siblings to Daniel
as well as copies of the cancelled stock certificates that were originally issued to Daniel’s
siblings. Because the evidence supports a finding that Daniel’s acquisition of these 12 shares
of RBBC stock from his siblings constituted a gift, the trial court could have reasonably
determined that they constituted Daniel’s nonmarital property. Accordingly, we cannot say
that the trial court’s classification of them as Daniel’s nonmarital property is against the
manifest weight of the evidence.
¶ 53 Daniel received the remaining 59 shares of RBBC stock from his father. The transfer of
these shares is subject to conflicting presumptions. First, there is a presumption that the
transfer was a gift, because Daniel testified that he obtained these shares from his father over
a course of several years, beginning in 1989.

Hagshenas, 234 Ill. App. 3d at 186

. Further,
because the transfer of these shares occurred after the parties’ marriage, there is also a
presumption that they are marital property. 750 ILCS 5/503(a)(1), (b)(1) (West 2008). As
noted above, because these 59 shares are subject to conflicting presumptions, the
presumptions cancel each other out, and the trial court was free to determine whether they
-12-
were marital or nonmarital without resort to either presumption. Hagshenas,

234 Ill. App. 3d

at 186-87.
¶ 54        The evidence presented at trial supports a finding that the 59 shares of RBBC stock
Daniel received from Buddy was a gift and therefore constituted Daniel’s nonmarital
property. First, there was evidence of a voluntary, gratuitous transfer. As he testified with
respect to the transfer from his siblings, Daniel recounted that he did not compensate Buddy
for the 59 shares of stock and that neither he nor any third party was obligated to repay
Buddy for the shares. Buddy noted that, although Daniel had worked for RBBC for many
years, the stock was not given to Daniel as any type of compensation for his work. In
addition, Cynthia does not cite any evidence that Daniel paid anything for these shares or that
he expended any personal efforts in exchange for the shares. There was also evidence of
donative intent. Buddy testified that he intended to give Daniel the shares as a gift because
Daniel was his son. See In re Marriage of Simmons,

221 Ill. App. 3d 89

, 92 (1991) (“It has
been held that the evidence most relevant in determining donative intent is the donor’s own
testimony.”). Finally, there was evidence of absolute and irrevocable delivery. Gift tax
returns filed by Buddy between 1989 and 2000 were admitted into evidence. They reflect the
59 shares gifted to Daniel. In addition, copies of the stock certificates reflecting these
transfers were admitted into evidence. Indeed, the evidence establishes a pattern of
endowment by Buddy with respect to his RBBC shares. In this regard, both DJ and Michael
D. testified at trial that they too had been given shares of RBBC by Buddy. Thus, the
evidence supports a finding that the 59 shares Buddy transferred to Daniel constituted a gift.
As such, we cannot say that the trial court’s decision that the shares were Daniel’s nonmarital
property is against the manifest weight of the evidence.
¶ 55        Cynthia does not seem to dispute that Daniel acquired his interest in RBBC as a gift.
Rather, relying on Sanfratello,

393 Ill. App. 3d 641

, she suggests that “the presumption of
gift should not overcome the presumption of marital property where the gifted property
provided the husband the means of supporting his family during the marriage.” We note
initially that, contrary to Cynthia’s suggestion, this case does not present a situation in which
the presumption of gift “overcame” the presumption of marital property. As noted above, the
gift presumption does not apply with respect to transfers among siblings. Awan,

388 Ill. App. 3d

at 213. Furthermore, although the gift presumption applied with respect to the shares of
stock acquired from Buddy, it operated only to cancel out the conflicting presumption that
the stock, having been acquired during the marriage, was marital. Hagshenas,

234 Ill. App. 3d

at 186-87. The trial court was then free to determine the classification of the stock without
resort to either presumption.

Hagshenas, 234 Ill. App. 3d at 186

-87. We now turn to
Sanfratello.
¶ 56 In Sanfratello, one of the principle areas of contention involved the husband’s
employment with, and ownership interests in, three pizza restaurants, two of which were
opened during the parties’ marriage. At trial, the husband claimed that he had no ownership
interests in the businesses and was a mere employee. He also asserted that his only income
was derived from his employment at the restaurants, which totaled about $2,200 every two
weeks. Although his tax returns supported the claim that this had been his salary for the past
20 years, he admitted to making large cash deposits of additional money into his personal
-13-
bank account. Further, the wife had testified that many of the family’s expenses during the
marriage, including “expensive dinners, designer clothing, and groceries,” had been paid in
cash. Given these facts, the trial court imputed to the husband an annual income of $130,000,
based on the uncontested evidence that he had a steady flow of cash available to him. In
addition, the court classified as marital property the husband’s interests in the two restaurants
that were opened during the marriage.
¶ 57 On appeal, the husband argued that the trial court erred in classifying as marital property
his interests in the two restaurants opened during the marriage, because those interests were
gifts from his parents. The court affirmed the trial court’s classification, reasoning that,
because these interests were acquired during the marriage, they were presumptively marital,
and the husband had not proved that the marital presumption should be disturbed.

Sanfratello, 393 Ill. App. 3d at 649-50

. Furthermore, the court observed that the restaurants
provided the husband with a means of supporting his family well beyond the income he
claimed was compensation for his personal efforts.

Sanfratello, 393 Ill. App. 3d at 650

.
¶ 58 According to Cynthia, like the husband in Sanfratello, the parties’ lavish lifestyle was
financed by Daniel’s involvement in RBBC, and, like in Sanfratello, his interest in RBBC
should therefore be considered marital property. We find that the facts of Sanfratello are
dissimilar to the facts of the case at bar and, therefore, Cynthia’s reliance on that case is
misplaced. In Sanfratello, two of the restaurants were founded during the marriage, but, at
trial, the husband initially denied that he had any ownership interests in the restaurants and
then later claimed that the interests he had were given to him by his parents. Here, unlike in
Sanfratello, Daniel did not found RBBC during the marriage. Instead, Daniel’s grandfather
founded the company long before Daniel was even born. Daniel’s father and uncle later fully
acquired the business. Further, the evidence at trial, including testimony, gift tax returns, and
stock certificates, demonstrated that Daniel had been gifted all of his interest in RBBC. No
evidence of a gift was presented at all in Sanfratello because at trial the husband initially
denied possessing interests in the restaurants.
¶ 59 Moreover, the husband in Sanfratello received a low salary from his employment at the
restaurants, and he admitted to taking cash from them for his personal use. Considering his
regular use of cash from the restaurants, the court imputed to him an annual income of
$130,000. In the present case, there was evidence that Daniel, prior to the sale of his RBBC
stock, received a substantial salary ($350,000) for his employment with RBBC, as
compensation for his personal efforts. Further, there was no evidence that Daniel was a
majority shareholder of RBBC or that he had any control over or access to RBBC’s retained
earnings. As such, throughout the parties’ marriage, the parties’ lifestyle was based on
Daniel’s income from employment. It was not until the sale of his ownership interests in
RBBC to the DMR trusts and the ultimate sale of RBBC’s assets to SWSI that Daniel
received any considerable income due to his interests in RBBC. Because the only similarity
between the instant case and Sanfratello is that Daniel worked at one time for a family
business, we reject Cynthia’s reliance on that case for her claim that RBBC is marital
property.
-14-
¶ 60 iv. The Affiliates
¶ 61 Cynthia argues that the three Affiliates are presumptively marital property because each
entity was acquired after the parties married on June 12, 1987. Citing to In re Marriage of
Landfield,

209 Ill. App. 3d 678

(1991), Cynthia asserts that the testimony provided by Daniel
was insufficient to defeat the presumption of marital property. In support, she notes that the
Landfield court stated that “the presumption that all property acquired after marriage is
marital property with certain exceptions does not disappear or cease to operate based only
on [the husband’s] testimony of the way he acquired [the property].” Landfield,

209 Ill. App. 3d

at 692.
¶ 62       The evidence presented at trial established that Paramount was acquired in September
1987, Central was acquired in 1993, and Mueller was acquired in 1994. Further, as discussed
more thoroughly below, the testimony presented at trial showed that the Affiliates were
acquired by Daniel and Michael III. As Daniel acquired his interests in all three Affiliates
after the parties’ marriage in June 1987, Cynthia correctly argues that these three entities are
presumptively marital property. 750 ILCS 5/503(b)(1) (West 2008). Moreover, unlike
Daniel’s acquisition of some of the shares of RBBC, the acquisition of the Affiliates does not
present a case of conflicting presumptions. The gift presumption applies only to transfers
between a parent and a child. See Awan,

388 Ill. App. 3d

at 213 (noting that, unlike transfers
between parents and their children, transfers of property among siblings are not presumed
to be gifts). As we discuss below, the evidence establishes that the funds Daniel used to
purchase the Affiliates did not come directly from his parents. Accordingly, it was Daniel’s
burden to overcome the presumption of marital property by a showing of clear and
convincing evidence that the property was acquired by one of the methods listed in section
503(a) of the Act (750 ILCS 5/503(a) (West 2008)).

Didier, 318 Ill. App. 3d at 258

Johns, 311 Ill. App. 3d at 702-03

. We now examine the evidence presented regarding the acquisition
of the Affiliates.
¶ 63 With respect to Paramount, the record shows that on September 22, 1987, RBBC entered
into a stock purchase agreement pursuant to which RBBC agreed to purchase Paramount’s
stock. Joseph Topinka, RBBC’s former chief financial officer and treasurer, testified,
however, that RBBC’s accountants determined that RBBC would lose its status as an S-
Corporation if it owned 80% or more of another corporation’s stock. Thus, RBBC could not
directly own Paramount. Accordingly, the ownership interests in Paramount were placed in
the names of Daniel and Michael III. Although Topinka described the transaction as “kind
of a gratuitous transfer to their sons” from Buddy and Michael II, Topinka explained that
RBBC gave Daniel and Michael III the funds to purchase Paramount. Topinka further
testified that neither Daniel nor Michael III expended any personal efforts to obtain that
money. Topinka also noted that, as part of the acquisition of Paramount, RBBC executed a
guarantee of Paramount’s debts. Topinka testified that the acquisitions of Central in 1993 and
Mueller in 1994 were structured in the same fashion, with RBBC providing Daniel and
Michael III the funds with which to purchase the companies. Topinka added that neither
Daniel nor Michael III contributed any services or work to RBBC in exchange for the funds
provided to them to purchase Central and Mueller and that RBBC also guaranteed loans on
behalf of the two companies.
-15-
¶ 64 Similarly, Daniel explained that he and Michael III acquired the three Affiliates using
funds provided by RBBC. Daniel explained that RBBC would write a check for his share of
the purchase price. Daniel would deposit these funds into his personal account and then write
a check for the same amount of money to make the acquisition. Daniel testified that he did
not render any personal services in exchange for these funds and that he never reimbursed
RBBC for the funds the company provided. For his part, Buddy testified that Daniel and
Michael III each owned a 50% share in each of the three Affiliates. Although Buddy stated
that he gave Daniel the interests in the Affiliates, he also indicated, consistent with the
testimony of Topinka and Daniel, that the funds used to purchase the Affiliates came from
RBBC. Buddy also testified that Daniel did not have to pay any money to acquire his
interests in the Affiliates and that RBBC guaranteed notes for the Affiliates.
¶ 65 Thus, Daniel established that the transfer of funds to him by RBBC to purchase the
Affiliates was accomplished through a voluntary, gratuitous transfer that was not in exchange
for compensation. See In re Marriage of Blunda,

299 Ill. App. 3d 855

, 862 (1998) (holding
that shares of stock acquired by the wife pursuant to a corporate resolution executed by her
father constituted a gift and were therefore the wife’s nonmarital property). Thus, we
conclude that the trial court’s finding that Daniel’s interests in the Affiliates were his
nonmarital property is not against the manifest weight of the evidence. We find Cynthia’s
reliance on Landfield misplaced, as the foregoing evidence establishes that, contrary to
Cynthia’s claim, more than just Daniel’s testimony was offered to rebut the presumption that
the Affiliates were marital property.
¶ 66        Despite the foregoing evidence, Cynthia asserts that Daniel’s claim that he acquired the
Affiliates with funds provided by RBBC is not borne out by the record. In support, Cynthia
points to (1) applications filed with the Bureau of Alcohol, Tobacco, and Firearms for an
importer’s and/or wholesaler’s basic permit (ATF applications), which suggest that the funds
used to purchase the Affiliates were Daniel’s “personal funds”; (2) the fact that no notes were
executed to memorialize the funds supplied to Daniel (and Michael III) by RBBC to make
the purchases; and (3) the fact that the funds supplied by RBBC were carried as a draw. We
find none of these claims persuasive.
¶ 67        With respect to Cynthia’s first contention, three ATF applications were filed, one for
each Affiliate. The ATF application for Paramount was filed on October 26, 1987. The
application indicated that Daniel would be investing $58,000 in Paramount, that the “source
of [the] funds invested in [the] business” was Daniel’s “personal funds,” and that those funds
“will be paid out of Savings Account(s), Checking Account(s) and/or loans as deemed
advisable by investment market conditions at the time.” ATF applications were also filed
with respect to Central and Mueller. Although the amounts Daniel would be investing in
Central and Mueller differed, the ATF applications for both Central and Mueller also
described the source of the funds Daniel would provide as “personal funds.” The ATF
applications for Central and Mueller also indicated that these “personal funds” would be paid
out of savings accounts, checking accounts, loans, and/or investments “as deemed advisable
by the investment market conditions at the time.”
¶ 68        Cynthia insists that, because the ATF applications referenced Daniel’s “personal funds”
as the source of his investment in the three Affiliates, Daniel “was the purchaser of his
-16-
interest in each of these entities and each of the purchases were made from [Daniel’s]
personal funds, after the parties were married.” However, as Daniel points out, the term
“personal funds” is not synonymous with “marital funds” under section 503 of the Act (750
ILCS 5/503 (West 2008)). Moreover, Cynthia does not provide any legal support for the
claim that the term “personal funds” as used in the ATF applications has any bearing on the
trial court’s classification of the funds. The ATF applications themselves suggest that
“personal funds” merely means that the funds used to invest in the businesses came from a
personal account. In addition, the fact that there were no notes to memorialize the funds
supplied by Daniel and Michael III substantiates Daniel’s argument that the funds were
intended as a gift. See

Didier, 318 Ill. App. 3d at 265-66

(finding that transferred funds were
a gift rather than a loan where funds were never repaid and no promissory note was
executed).
¶ 69 Cynthia also claims that the record shows that the funds supplied by RBBC to Daniel
were treated as “salary, bonus, or some other form of income to [Daniel] for his employment
at RBBC.” However, the trial evidence established that Daniel expended no personal efforts
in order to receive the funds. Moreover, the evidence indicated that Daniel was adequately
compensated for his work at RBBC. In this regard, Daniel testified that his salary at RBBC
in the mid-to-late nineties was approximately $250,000 per year. Daniel further testified that
by 2002 his salary from RBBC had increased to $350,000 per year. For these reasons, we
find that the trial court’s classification of the Affiliates as Daniel’s nonmarital property is not
against the manifest weight of the evidence.
¶ 70 b. M&D and Power
¶ 71 Cynthia next contends that Daniel’s interests in M&D and Power are marital assets
because marital funds were used to purchase them. Specifically, Cynthia asserts as follows.
In July 2002, the MP Trust received more than $15 million as its share of the sale to SWSI
of two of the Affiliates (Central and Mueller). Cynthia then cites to the testimony of one of
her witnesses, attorney Jay Tarshis, for the proposition that, on October 1, 2002, the MP
Trust loaned the DMR Gift Trust $6,072,000 to purchase interests in M&D and Power.
According to Cynthia, the Affiliates were marital assets. Thus, she reasons, the funds used
by the DMR Gift Trust to purchase M&D and Power were obtained from the sale of marital
assets (Central and Mueller), so the property acquired with these funds–M&D and
Power–must also be marital assets.
¶ 72 Cynthia’s argument is based on the assumption that the Affiliates are marital property.
However, the trial court determined that the Romano companies, including the Affiliates,
were Daniel’s nonmarital property. As noted above, we do not find persuasive Cynthia’s
argument for overturning the trial court’s decision. In addition, the evidence establishes that
any interest Daniel or the DMR Gift Trust acquired in M&D and Power did not constitute
marital property.
¶ 73 Daniel originally acquired an interest in M&D in 1998 and an interest in Power in 2000.
As these interests were acquired after the marriage, there is a presumption that these interests
are marital. 750 ILCS 5/503(b)(1) (West 2008);

Didier, 318 Ill. App. 3d at 258

. However,
-17-
the gift presumption also arises as Daniel’s interests in M&D and Power were acquired from
his father.

Didier, 318 Ill. App. 3d at 258

. Thus, the two conflicting presumptions cancel
each other out, and the trial court was free to determine the classification of these interests
without regard to either presumption.

Didier, 318 Ill. App. 3d at 258

-59. The trial court
found that Daniel’s interests in M&D and Power were Daniel’s nonmarital property.
Although the trial court did not explain its reasoning in depth, we reiterate that we review
the result reached by the trial court, not its reasoning.

Ackerley, 333 Ill. App. 3d at 392

. In
this case, we cannot say that the trial court’s finding that Daniel’s interests in M&D and
Power were nonmarital property is against the manifest weight of the evidence.
¶ 74       The evidence at trial established that Daniel acquired his interests in M&D and Power
as gifts from Buddy. As noted above, a gift is “ ‘a voluntary gratuitous transfer of property
from donor to donee where the donor manifests an intent to make such a gift and absolutely
and irrevocably delivers the property to the donee.’ ”

Didier, 318 Ill. App. 3d at 259

(quoting
In re Estate of

Poliquin, 247 Ill. App. 3d at 115

). The record shows that, just prior to Michael
II’s death in 1998, Michael II and Buddy formed M&D. Daniel testified that Michael III
eventually came to own a 50% interest in M&D and that Buddy owned the other 50% of
M&D. Buddy testified that he gifted his entire interest in M&D to his four sons in equal
shares. The transfers of Buddy’s interest in M&D to his four sons is reflected on Buddy’s
1998 federal gift tax return. Thus, following the transfers, Daniel and his three brothers each
owned a 12.5% interest in M&D.
¶ 75 Buddy testified that in 2000 he and Michael III formed Power. Michael III owned 50%
of the shares of Power and Buddy owned the other 50%. Buddy testified that in 2000 he
gifted his entire interest in Power to his four sons in equal shares. The transfers of Buddy’s
interest in Power to his four sons is reflected on Buddy’s 2000 federal gift tax return. Daniel
testified that he did not pay anything for the interest in Power he obtained from Buddy and
that, to the best of his knowledge, neither did his siblings. Thus, following the transfers,
Daniel and his three brothers each owned a 12.5% interest in Power.
¶ 76 The foregoing evidence established that Daniel acquired his interests in M&D and Power
as a result of voluntary, gratuitous transfers. Further, Buddy manifested an intent to make
such gifts by testifying as such and filing a gift tax return reflecting the gifts. Moreover, the
gift tax return also established that the interests in M&D and Power were absolutely and
irrevocably transferred to Daniel. Finally, Cynthia does not cite any counterevidence
establishing that Daniel paid anything for the shares or that he expended any personal efforts
in exchange for the shares. As the record establishes Daniel’s interests were acquired by gift
from Buddy, we find that the trial court’s conclusion that Daniel’s interests in M&D and
Power were his nonmarital property is not against the manifest weight of the evidence.
¶ 77 The record shows that Daniel subsequently transferred his 12.5% interests in M&D and
Power to the DMR Gift Trust in October 2002. Further, the rest of the ownership interests
that the DMR Gift Trust held in M&D and Power derived from Michael III, when his shares
in the two companies were redeemed. To this end, in July 2002, Michael III executed
separate agreements with M&D and Power whereby each company agreed to redeem
Michael III’s shares for an aggregate price of $10 million. Hartz testified that Michael III
received the funds in July 2002 and that the source of the funds was the proceeds of the sale
-18-
of RBBC to SWSI.4 Of the proceeds the DMR Gift Trust received from the sale of its share
of RBBC to SWSI, $6,072,000 was used to acquire a three-seventh share in each of the
entities. In other words, it was the DMR Gift Trust, a third-party entity, that redeemed a total
three-sevenths share of Michael III’s interests in M&D and Power, and the DMR Gift Trust
used the proceeds from the RBBC sale to redeem the interests.
¶ 78 While Cynthia is correct that the MP Trust loaned $6,072,000 to the DMR Gift Trust, the
record shows that that loan did not occur until October 2002, several months after Michael
III had been paid in full and all of his shares of M&D and Power had been acquired.
Moreover, the proceeds of the October 2002 loan from the MP Trust to the DMR Gift Trust
were used by the DMR Gift Trust to pay its outstanding obligation to Daniel on the 2001
promissory note issued when the DMR Gift Trust purchased Daniel’s 71 shares of RBBC
stock.
¶ 79 2. Missing Funds
¶ 80 Next, Cynthia contends that the trial court’s judgment failed to account for millions in
“missing funds.” In particular, Cynthia contends that $6,429,000 is “missing” from the DMR
Gift Trust and that Daniel failed to provide a discernable reason why the funds were not
deposited into the trust. Cynthia maintains that the trial court erred by not addressing the
issue of this “missing” money in its judgment or addendum and that either the marital estate
or Daniel’s nonmarital estate was undervalued as a result. Daniel responds that Cynthia’s
argument is based on her misapprehension regarding the transactions leading to the
redemption of Michael III’s shares of M&D and Power. Thus, he asserts that there are no
missing funds for which he could account. We find that Daniel’s position is supported by the
record.
¶ 81 The parties agree that the DMR Gift Trust was due a total of $6,876,683 from the
proceeds of the sale of RBBC’s assets to SWSI. Although this entire amount was not
deposited into the DMR Gift Trust’s brokerage account, the record does not support
Cynthia’s claim that more than $6 million of these funds is missing. Hartz testified that,
when RBBC’s assets were sold to SWSI, the owners of RBBC were the DMR Gift Trust and
gift trusts established for Buddy, Michael D., and DJ. According to Hartz, the trusts did not
actually receive the proceeds of the sale of RBBC’s assets. Instead, the Romanos used the
proceeds owed to the trusts to redeem Michael III’s interests in M&D and Power. In other
words, a portion of the proceeds of the sale of RBBC’s assets went directly to Michael III.
¶ 82 Cynthia contends that the proceeds of the sale of RBBC’s assets to SWSI could not have
been used to redeem Michael III’s shares in M&D and Power, because “it appears that [the
4
In her reply brief, Cynthia argues that, since the money used to redeem Michael III’s shares
in M&D and Power came from the proceeds of the sale of RBBC to SWSI, the resultant redemption
is also marital property. Cynthia did not raise this argument in her opening brief. Illinois Supreme
Court Rule 341(h)(7) (eff. July 1, 2008) provides that points not argued in the appellant’s opening
brief are forfeited and shall not be raised in the appellant’s reply brief. Moreover, as set forth above,
Daniel’s interest in RBBC was acquired by gift and was therefore his nonmarital property.
-19-
DMR] gift trust borrowed $6,072,000 on October 1, 2002 from the MP trust to make its
purchase of M&D and Power.” However, Hartz testified that Michael III received the funds
for the redemption of his interests in M&D and Power in July 2002. Thus, Cynthia’s
contention does not account for the fact that this loan came several months after Michael III
had been paid in full for his shares. Furthermore, as noted above, and according to Daniel,
the reason the DMR Gift Trust borrowed $6,072,000 from the MP Trust was so that it could
meet its obligation to pay Daniel in 2002 on the promissory note that the trust executed in
Daniel’s favor in 2001, when Daniel sold the DMR Gift Trust his shares of RBBC stock.
Daniel’s explanation is borne out by the record. Hartz testified regarding the funds the DMR
Gift Trust borrowed from the MP Trust in October 2002. Hartz noted that, when Daniel sold
his RBBC stock to the DMR Gift Trust, it issued a promissory note to Daniel. Hartz further
noted that, to pay Daniel on the note, the DMR Gift Trust needed cash. Therefore, Hartz
stated, the loan between the DMR Gift Trust and the MP Trust “acted as a mechanism for
getting liquidity into the gift trust.” Accordingly, we do not find Cynthia’s argument
persuasive.
¶ 83 3. Dissipation
¶ 84 Next, Cynthia challenges the trial court’s ruling on dissipation. She asserts that, in
rejecting her dissipation claim, the trial court applied an incorrect legal standard for
determining when the irreconcilable breakdown of the parties’ marriage occurred. Cynthia
further asserts that, if the court had utilized the proper standard, the evidence would have
supported a finding that the marriage began undergoing an irreconcilable breakdown as early
as 2000. Cynthia alleges dissipation by Daniel in the total amount of $26,777,632, which she
breaks down as follows: (1) $10,016,623 attributable to the October 2004 transfer of the
three-sevenths interests in M&D and Power from the MP Trust and the SP Trust to Daniel’s
three sisters; (2) $8 million attributable to the July 2004 transfer of funds from the MP Trust
and the SP Trust to Daniel’s three sisters; (3) $1,152,000 attributable to the September 2003
transfer of money from Daniel’s brokerage account to fund college savings accounts for the
children of Daniel’s three sisters; (4) $416,000 attributable to the September 2003 transfer
of money from Daniel’s brokerage account to fund college savings accounts for Victor’s
children; (5) $504,000 attributable to the August 2004 transfer of money from Daniel’s
brokerage account to fund college savings accounts for Michael D.’s children; (6) $260,000
attributable to the February 2004 transfer of funds from the DMR Gift Trust to Victor and
Daniel’s three sisters; and (7) $6,429,000 attributable to the funds allegedly missing from the
DMR Gift Trust, as discussed in the previous section.
¶ 85 As a threshold matter, we note that our earlier conclusion that there are no funds missing
from the DMR Gift Trust renders moot Cynthia’s claim that these funds constitute
dissipation. Additionally, we point out that issues not raised in the trial court are deemed
forfeited and may not be raised for the first time on appeal. Haudrich v. Howmedica, Inc.,

169 Ill. 2d 525

, 536 (1996). Here, Cynthia did not maintain in her written closing argument
to the trial court that the $6,429,000 in funds allegedly missing from the DMR Gift Trust
constituted dissipation. Although Daniel raises the issue of forfeiture in his brief before this
court, Cynthia has not responded to it in her reply brief. In fact, although she discusses the
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other six examples of dissipation cited above, she does not reference these funds in the
dissipation section of her reply brief, thereby effectively abandoning the claim. See First
National Bank of Chicago v. McCarthy,

334 Ill. App. 480

, 483 (1948). In addition, Cynthia
did not argue in her written closing argument before the trial court that the February 2004
transfer of $260,000 to Victor and Daniel’s three sisters constituted dissipation. As such, we
find that Cynthia is precluded from arguing on appeal that these two sums constituted
dissipation. See

Haudrich, 169 Ill. 2d at 536

. Forfeiture notwithstanding, an examination of
the merits fails to support Cynthia’s claims that these two expenditures or any of the other
five expenditures referenced by Cynthia constituted dissipation.
¶ 86        When dividing marital property, the trial court is required to consider all relevant factors,
including those listed in section 503(d) of the Act. 750 ILCS 5/503(d) (West 2008). Among
the factors listed in the statute is “the dissipation by each party of the marital or non-marital
property.” 750 ILCS 5/503(d)(2) (West 2008). Our supreme court has defined dissipation as
used in section 503(d) to mean “the ‘use of marital property for the sole benefit of one of the
spouses for a purpose unrelated to the marriage at a time that the marriage is undergoing an
irreconcilable breakdown.’ ” In re Marriage of O’Neill,

138 Ill. 2d 487

, 497 (1990) (quoting
In re Marriage of Petrovich,

154 Ill. App. 3d 881

, 886 (1987)). Whether dissipation has
occurred is a question of fact to be determined by the trial court, and such a determination
will not be disturbed on appeal unless it is against the manifest weight of the evidence. In re
Marriage of Holthaus,

387 Ill. App. 3d 367

, 374 (2008). As noted previously, a factual
determination will be found to be against the manifest weight of the evidence only when the
opposite conclusion is clearly evident or the finding is arbitrary, unreasonable, or not based
on the evidence.

Ricketts, 329 Ill. App. 3d at 181-82

.
¶ 87        The trial court rejected Cynthia’s claim of dissipation, finding that Cynthia’s allegation
that the parties’ marriage “was undergoing an irreconcilable breakdown as far back as 2000
or 2003” was not credible. The court expounded on this conclusion in its October 12, 2009,
letter opinion:
“The notion that any dispute during the course of a marriage that ultimately ends in
divorce is enough to find that the marriage is ‘undergoing an irretrievable breakdown’
ignores human nature and the realities of life. Dissipation has become the ‘silver bullet’
of divorce litigation, and virtually every case now contains allegations that the marriage
was undergoing an irretrievable breakdown, and an accounting of expenditures must be
made in the face of an allegation of dissipation. Candidly, absent some fairy-tale
marriage where no dispute of any consequence arises, and then the parties suddenly
divorce, the holding of Hazel is the appropriate law to be applied in the face of the ever-
present allegations of dissipation.
An irretrievable breakdown is not a ‘prolonged gradual process extending from
the initial signs of trouble in a marriage until the actual breakdown itself.’ In re
Marriage of Hazel,

219 Ill. App. 3d 920

, 921 *** (5th Dist. 1991). Rather, the date
of irretrievable breakdown is the date by which it is apparent that a breakdown is
inevitable.

Id. at 922.

Courts define the date of irretrievable breakdown in this way
in order to avoid the overly burdensome task of ‘examin[ing] every argument or
conflict in the marriage from the moment the vows are exchanged to the date of
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dissolution.’

Id. at 921-22.

Cf. In re Marriage of Holthaus,

387 Ill. App. 3d 367

***
(2nd Dist. 2008).
Using the standards set forth above, the Romano marriage was not ‘undergoing an
irretrievable breakdown’ in either 2000 or 2003. In further support of this conclusion, the
court finds Cynthia’s testimony in this regard less credible that [sic] [Daniel’s]. The
‘dissipation’ aspect of this case arose well into the litigation, when Cynthia apparently
realized that these ‘transfers’, even if of marital property, could not form the basis of a
claim unless they could be characterized as dissipation. Her testimony as to the alleged
‘evolution’ of the irretrievable breakdown was not persuasive, and the trial court is in the
best position to evaluate the credibility of the witnesses.”
¶ 88 As noted above, Cynthia argues that, when the trial court determined that the parties’
marriage was not undergoing an irreconcilable breakdown in 2000 or 2003, the court applied
an incorrect legal standard. According to Cynthia, rather than examining when the parties’
marriage began undergoing an irreconcilable breakdown–the standard set forth in
Holthaus–the trial court improperly looked to the precise date on which the breakdown of
the parties’ marriage was inevitable. Cynthia asserts that the trial court’s citation to Hazel
demonstrates that the court utilized this improper standard. To place Cynthia’s arguments
in context, we examine Holthaus and Hazel.
¶ 89 In Holthaus, we rejected the notion that dissipation occurs only after an irreconcilable
breakdown.

Holthaus, 387 Ill. App. 3d at 374-75

. Rather, in accordance with the supreme
court’s pronouncement in O’Neill, we held that dissipation should be calculated from when
the parties’ marriage began undergoing an irreconcilable breakdown. Holthaus,

387 Ill. App. 3d

at 374-75. In Holthaus, the trial court held that “February 2005 is the date that the
marriage was irretrievably broken.” Based on this language, we found that the trial court
“was attempting to pinpoint the date on which the parties’ marriage ‘was irretrievably
broken’ rather than attempting to determine when the marriage began to irreconcilably break
down.” Holthaus,

387 Ill. App. 3d

at 375. We concluded that the trial court’s error in
applying the incorrect standard was not harmless, because the evidence established that the
parties’ marriage was undergoing an irreconcilable breakdown prior to February 2005.
Holthaus,

387 Ill. App. 3d

at 377. Accordingly, we reversed the trial court’s decision on
dissipation and remanded the matter for further proceedings. Holthaus,

387 Ill. App. 3d

at
377.
¶ 90       In Hazel, the trial court determined that the parties’ marriage began undergoing an
irreconcilable breakdown on January 1, 1988. On appeal, the wife asserted that the marriage
began undergoing an irreconcilable breakdown at a much earlier date. She maintained that
the use of the term “undergoing” suggested that “an irreconcilable breakdown may be viewed
as a prolonged gradual process extending from the initial signs of trouble in a marriage until
the actual breakdown itself.”