Stipulated damages in an Illinois divorce

Russell Knight

Russell D. Knight has been practicing family law as a Chicago divorce lawyer since 2006. Russell D. Knight amicably resolves tough cases while remaining a strong advocate for his client’s interests.

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Penalty Provisions In An Illinois Divorce

Stipulated damages in an Illinois divorce

The vast majority of Illinois divorces are settled by agreement. These agreements are particular to the couple and the facts surrounding their marriage and divorce. A party to an Illinois divorce may ask the other party to agree to a pre-determined penalty if they violate the Marital Settlement Agreement.

For example, a penalty provision may indicate that a failure to pay maintenance on the date due may result in an automatic penalty of $ 100 due immediately.

This penalty provision is a polite nudge to the violating party that the Marital Settlement Agreement must be followed or a specific penalty will accrue.

The alternative is filing a motion to enforce or a Petition For Rule To Show Cause, going to court, risking modification of the Marital Settlement Agreement, attorneys’ fees and increasing the enmity between two former spouses (and possible co-parents)

Instead, a penalty fee can be non-combative and specific. “You’re two days late. You owe me an extra $ 100”

There are provisions in the Illinois Marriage And Dissolution Of Marriage Act that award attorney’s fees for enforcement as a penalty.

“In every proceeding for the enforcement of an order or judgment when the court finds that the failure to comply with the order or judgment was without compelling cause or justification, the court shall order the party against whom the proceeding is brought to pay promptly the costs and reasonable attorney’s fees of the prevailing party.” 750 ILCS 508(b).

There are provisions of the Illinois Code Of Civil Procedure that allow interest to accrue on money owed.

“[J]udgments recovered in any court shall draw interest at the rate of 9% per annum from the date of the judgment until satisfied” 735 ILCS 5/2-1303

Failure to pay court ordered child support has possible criminal penalties.

“Failure of either parent to comply with an order to pay support shall be punishable as in other cases of contempt. In addition to other penalties provided by law the court may, after finding the parent guilty of contempt, order that the parent be:(1) placed on probation with such conditions of probation as the court deems advisable;(2) sentenced to periodic imprisonment for a period not to exceed 6 months; provided, however, that the court may permit the parent to be released for periods of time during the day or night to:(A) work; or(B) conduct a business or other self-employed occupation.” 750 ILCS 5/505(b)

There is nothing in the Illinois statutes (or any case law that I can find), that allows an Illinois court to impose other penalty provisions on a divorcing couple. Penalty provisions in an Illinois divorce have to be done by agreement.

Agreeing To Penalty Provisions In An Illinois Divorce

Literally any kind of provision can be included in a Marital Settlement Agreement, including penalty provisions.

“It is well settled in Illinois that the law favors the amicable settlement of property rights in cases of marital dissolution.” In re Marriage of Lorton, 203 Ill. App. 3d 823, 825 (Ill. App. Ct. 1990)

“To promote amicable settlement of disputes between parties to a marriage attendant upon the dissolution of their marriage, the parties may enter into an agreement containing provisions for disposition of any property owned by either of them, maintenance of either of them, support, parental responsibility allocation of their children, and support of their children” 750 ILCS 5/502(a)

“If the parties decide to settle their property rights by mutual agreement rather than by statute, they are bound to the terms of their agreement.” In re Marriage of McLauchlan, 2012 IL App (1st) 102114

Once the agreement is made in writing and entered as a final order, that agreement is enforceable based on the terms of the agreement.

“The language used in the marital agreement generally is the best indication of the parties’ intent” In re Marriage of Dundas, 355 Ill. App. 3d 423, 426 (Ill. App. Ct. 2005)

What Cannot Have A Penalty Provision In An Illinois Divorce?

A Judgment For Dissolution Of Marriage finalizes the divorce of two married people in Illinois. Accompanied by the Judgment For Dissolution Of Marriage are one to two more documents:

1) the Marital Settlement Agreement which governs the division of assets and future financial obligations between the divorced couple and

2) The Allocation of Parenting Time and Parental Responsibilities which govern the time spent with children and which parent can make decisions on the children’s behalf.

The Marital Settlement Agreement can be replete with penalty provisions but the Allocation of Parenting Time and Parental Responsibilities can not have penalty provisions.

Everything in an Allocation of Parenting Time and Parental Responsibilities must be in the best interests of the children. Automatically denying parenting time or parental responsibilities based on a single instance is never in the best interests of a child.

“Visitation should not be used to penalize or reward parents for their conduct.” In re Marriage of Mitchell, 745 NE 2d 167 – Ill: Appellate Court, 2nd Dist. 2001

“In allocating parenting time, the court shall not consider conduct of a parent that does not affect that parent’s relationship to the child.” 750 ILCS 5/602.7(c)

How To Vacate A Penalty Provision After An Illinois Divorce Decree

Penalty provisions presume that one or both parties are going to screw up. A penalty provision insisted on by one party is designed to punish. The other party may regret the penalty provision in the future and ask to remove or change the penalty provision (usually after they’ve violated the order and been asked to pay the penalty)

Outside of the divorce world, penalty provisions in contracts are called “stipulated damages” or “liquidated damages.”

A stipulated or liquidated damage is “cash compensation, agreed to by signed, written contract for breach of contract, payable to the aggrieved party. The contract succinctly specifies what actions, or omissions, constitute a breach.” Black’s Law Dictionary (10th ed. 2014)

“[S]tipulated damages will be regarded as a penalty…In general, a sum of money in gross, to be paid for the non-performance of an agreement, is considered as a penalty.” Auker v. Gerold, 214 NE 2d 618 – Ill: Appellate Court, 5th Dist. 1966 (citations omitted)

Illinois courts can invalidate stipulated damages clauses they believe to be unfair.

“[A] stipulated sum will not be allowed as liquidated damages unless it may be fairly allowed as compensation for the breach.” Auker v. Gerold, 214 NE 2d 618 – Ill: Appellate Court, 5th Dist. 1966 (citations omitted)

Courts should “look to see the nature and purpose of fixing the amount of damages to be paid, and if it appears to have been inserted to secure the prompt performance of the agreement it will be treated as a penalty and no more than actual damages proved can be recovered.” Advance Amusement Co. v. Franke, 268 Ill. 579, 109 N.E. 471, 472 (1915)

If a penalty is more than the person would have paid had the motion to enforce been prosecuted…the penalty may be excessive under Illinois common law and, thus, the penalty provision may be vacated.

More likely a motion to vacate a provision will be accompanied by a motion to modify the Marital Settlement Agreement to remove the penalty provision.

How To Modify A Penalty Provision In An Illinois Divorce Decree

If the penalty provision is based on the transfer of marital property, the penalty provision cannot be modified.

“The provisions as to property disposition may not be revoked or modified, unless the court finds the existence of conditions that justify the reopening of a judgment under the laws of this State.” 750 ILCS 5/510(b)

“Property provisions of an agreement are never modifiable.” 750 ILCS 5/502(f)

If the penalty provision relates to child support or maintenance, the penalty provision may be modified based on a substantial change in circumstances.

“[T]he provisions of any judgment respecting maintenance or support may be modified only as to installments accruing subsequent to due notice by the moving party of the filing of the motion for modification.” 750 ILCS 5/510(a)

“An order for child support may be modified as follows: (1) upon a showing of a substantial change in circumstances” 750 ILCS 5/510(a)

“An order for maintenance may be modified or terminated only upon a showing of a substantial change in circumstances.” 750 ILCS 5/510(a-5)

If you’re trying to include a penalty provision in your Marital Settlement Agreement or are trying to remove a penalty provision you had agreed to, contact my Chicago, Illinois family law firm to speak with an experienced Chicago divorce attorney.