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Docket No. 88352-Agenda 17-March 2000.

DELORES SMITHBERG, Appellant, v. THE ILLINOIS
MUNICIPAL RETIREMENT FUND et al., Appellees.

Opinion filed August 10, 2000.

CHIEF JUSTICE HARRISON delivered the opinion of thecourt:

The ultimate issue to be resolved in this case concernsentitlement to the Illinois Municipal Retirement Fund (IMRF)death benefit of James Smithberg. Following James' death,competing claims were filed with the IMRF for James' deathbenefit: one by James' first wife, Nancy Smithberg; another by hissecond wife, Delores Smithberg, to whom he was married at thetime of his death. Upon receiving notice from the IMRF that itwould not pay the death benefit "without an agreement betweenthe claimants or direction from a court," Delores filed a complaintagainst the IMRF seeking a declaratory judgment that she is therightful beneficiary. The IMRF answered and interpleaded thedeath benefit between Delores and Nancy. Nancy answered andfiled a counter-complaint for declaratory judgment, seeking toestablish her right to the death benefit. On cross-motions forsummary judgment, the trial court ruled that Delores is the rightfulbeneficiary of the death benefit. Nancy's notice of appeal wastimely filed on December 9, 1998.

On appeal, applying equitable principles, the appellate courtreversed and remanded with directions that summary judgment beentered in favor of Nancy. 306 Ill. App. 3d 1139. We grantedDelores' leave to appeal (177 Ill. 2d R. 315) and now affirm thejudgment of the appellate court. The following facts are relevantto our disposition.

On August 1, 1996, a judgment of dissolution of marriage wasentered in the circuit court of Cook County dissolving the 33-yearmarriage of James and Nancy Smithberg. Through their maritalsettlement agreement, which was approved by the court andincorporated in the judgment for dissolution, James and Nancysought to "settle between themselves *** issues relating to theirrespective rights of property *** whether now or later owned orpossessed by either of them." They acknowledged they had "freelyand voluntarily entered into [the] agreement, free of any duress orcoercion and with full knowledge of each and every provisioncontained in [the] agreement, and the consequences thereof." Aspart of the agreement, and in exchange for her waiver of any rightor claim to other retirement benefits belonging to James, it wasagreed that Nancy would be "listed as the recipient of any benefitspayable upon the death of" James from the IMRF, and that hewould "not designate any other survivors, or allocate anysurvivorship benefits, to anyone other than" Nancy.

Subsequently, on a date not disclosed in the record, Jamesremarried and, contrary to the express terms of the judgment andmarital settlement agreement, designated his second wife, Delores,as the recipient of his IMRF death benefit. Upon learning ofJames' action, Nancy filed an emergency petition for rule to showcause why James should not be held in contempt for his willfulviolation of the judgment of dissolution. The petition wasdesignated an "emergency" petition, because James was believedto be "seriously ill" at the time. Affidavits and exhibitssubsequently presented in this case show that hearing on thepetition was postponed and continued by agreement on February19, 1998, due to certain representations made on, and perhapsbefore, February 18, 1998, by James' attorney, Raymond Meader.It appears from a letter of that date that Meader led Nancy'sattorney, David Jaffe, to believe that James had agreed to do thatwhich he was obligated to do pursuant to his original agreementand the judgment of dissolution: unconditionally designate Nancyas the beneficiary of his IMRF death benefits. In his letter, Meaderindicated that he would ask James to sign the IMRF form namingNancy as primary beneficiary and would then "forward to theVillage of Romeoville [James' employer] for forwarding toIMRF."

On February 20, 1998, Meader obtained James' signature onthe form, but was purportedly instructed by James "to make sureeverything was resolved with regard to the Petition for Rule beforefinalizing the matter." Meador also claimed that James wanted toconsider other benefit options before filing the designation withthe IMRF, although it is not clear how, if at all, the designation ofa beneficiary for death benefits would impact the availability ofother benefits or why James believed he could choose not to filethe beneficiary designation.

According to Meador's affidavit, he received a telephone callfrom attorney Jaffe on February 21, 1998, and on that date advisedJaffe that the form had been signed, but still needed to becompleted. Pursuant to Jaffe's request, Meador faxed Jaffe a copyof the form, which bore James' signature and named Nancy as hisbeneficiary. Meador claimed he told Jaffe that he "needed acomplete resolution of th[e] matter" including the issue of"attorney's fees and costs" claimed in Nancy's petition for rule toshow cause. Meador's affidavit does not, however, specificallystate that he informed Jaffe the form would not be sent to theIMRF until Nancy agreed to relinquish her claim for attorney feesand costs.

When Meador visited the offices of the City of Romeoville onFebruary 24, 1998, he handed the designation of beneficiary formto Doris Mann, the village employee who handled IMRF matters,and told her not to process the document with the IMRF until heinstructed her to do so.

James died in the early morning of February 25, 1998. Theaffidavit of Doris Mann indicates that, having received no furtherinstruction, she remained in possession of the designation ofbeneficiary form until March of 1998, when the IMRF contactedher and requested it.

When the IMRF refused to pay the death benefit to Deloresbarring an agreement between the competing claimants or"direction from a court," Delores sought a resolution of the matterin the circuit court. By interpleading the death benefit andrequesting relief as the circuit court deemed "equitable," the IMRFitself implicitly acknowledged the authority of the circuit court toorder the benefit paid directly to either claimant and agreed to paythe benefit to either party. The IMRF invoked in the process thepanoply of judicial powers traditionally at a court's disposal andset the stage for redress of James' blatant wrongdoing as set forthin Nancy's pleadings and evinced in Delores' own affidavits. Aswill appear hereafter, there was no statutory or proceduralimpediment to a just result.

With that observation, we turn to our analysis and resolutionof this case. Although the ultimate issue here concerns entitlementto James Smithberg's IMRF death benefit, the facts and argumentsraise a broader, more troubling matter, specifically, a challenge tothe power of a court in this context to enforce by equitable meansa judgment based upon the incorporated terms of a maritalsettlement agreement effecting an agreed distribution of maritalassets.

Clearly, James was obligated by the express terms of hisagreement with Nancy to name her and no other as the beneficiaryof his IMRF death benefit. The marital settlement agreement,which was incorporated in the court's judgment of dissolution,acknowledged that James had "freely and voluntarily entered into[the] agreement, free of any duress or coercion and with fullknowledge of each and every provision contained in [the]agreement, and the consequences thereof." James agreed to nameNancy as the beneficiary of his IMRF death benefit in exchangefor her waiver of any right or claim to certain other retirementbenefits belonging to James, benefits, we might add, in whichNancy clearly would have had an interest in view of the parties'33-year marriage.

It appears that James, at some point subsequent to thejudgment of dissolution, designated Delores as the beneficiary ofhis death benefit. James' action was nothing less than an attemptto deprive Nancy of her vested substantive rights under the parties'marital settlement agreement and it constituted a clear violation ofthe court's judgment of dissolution. In response, Nancy filed anemergency petition for rule to show cause. Had the causeproceeded in the circuit court, James undoubtedly would havefaced a finding of contempt of court; he would have been orderedto reinstate Nancy as the beneficiary of his death benefit; and hewould have been required to pay Nancy's reasonable attorney feespursuant to section 508(b) of the Illinois Marriage and Dissolutionof Marriage Act. See 750 ILCS 5/508(b) (West 1998); In reMarriage of Scott, 286 Ill. App. 3d 1056, 1059 (1996).

James avoided that result only by means of an agreement topostpone the hearing on Nancy's petition. The resultingcontinuance was apparently achieved by either the representations,or misrepresentations, of his attorney to the effect that Jameswould forthwith comply with the terms of his marital settlementagreement and the judgment of dissolution. However, after he hadobtained the continuance of the hearing, James seems to haveviolated the latter agreement as well. Instead of unconditionallyplacing the form designating Nancy as beneficiary with the Villageof Romeoville for forwarding to the IMRF, James' attorney,contrary to representations he made in a letter dated February 18,1998, advised Doris Mann not to send the form on to the IMRFuntil instructed to do so upon the pretext that James wished toinquire about other IMRF benefits. Obviously, having obtained hiscontinuance, James either wished to use the form as furtherleverage against Nancy's meritorious claim for attorney fees andcosts or, realizing that his demise was imminent, he wanted todeprive Nancy of the death benefit altogether. Since there is noindication in the record that James' estate has sufficient funds tocompensate Nancy in the amount of the death benefit due her, it isspeculative at best to suggest, as Delores repeatedly does, thatNancy's avenue of redress lies solely in a suit against James'estate. As the appellate court held, equity will regard as done thatwhich ought to be done. 306 Ill. App. 3d at 1143.

Equity is defined as follows:

"Justice administered according to fairness ascontrasted with the strictly formulated rules of commonlaw. *** The term 'equity' denotes the spirit and habit offairness, justness, and right dealing which would regulatethe intercourse of men with men." Black's LawDictionary 540 (6th ed. 1990).

Those principles should serve as a beacon to any court charting acourse through conflicting case authorities, and we believe theyare particularly apt in the resolution of this case.

Delores argues for a strict application of section 7-118 of theIllinois Pension Code (Code) (40 ILCS 5/7-118 (West 1998)(definition of "beneficiary")), without regard to the attendantcircumstances. Section 7-118(a) states that "[d]esignations ofbeneficiaries shall be in writing on forms prescribed by the boardand effective upon filing in the fund offices." 40 ILCS 5/7-118(a)(West 1998). According to Delores, since section 7-118(b) allowsfor a change of beneficiary at any time (40 ILCS 5/7-118(b) (West1998)), and since the form on file with the IMRF as of the date ofJames' death named her as the beneficiary of his death benefit, theCode compelled payment to her in spite of James' wrongdoing,and the court system is, in effect, powerless to right the wrongdone Nancy. We disagree.

It is an elementary principle of law that a court is vested withthe inherent power to enforce its orders. In re Baker, 71 Ill. 2d480, 484 (1978). Where a domestic relations order has beenentered, the trial court retains jurisdiction to enforce its order (Inre Marriage of Hartman, 305 Ill. App. 3d 338, 343 (1999)), asfurther performance by the parties is often contemplated (In reMarriage of Adamson, 308 Ill. App. 3d 759, 764 (1999)). In thecase of the court that rendered James and Nancy's judgment ofdissolution, jurisdiction was expressly retained for the purpose ofenforcing all of its terms and conditions. Had James lived, there isno doubt that he could have been compelled by the use ofcontempt proceedings to abide by the terms of his maritalsettlement agreement as incorporated in the court's judgment. Hisdeath, however, does not leave the courts powerless to rectify hiswrongdoing and enforce Nancy's right to the death benefit.

Irrespective of empowering statutes, a court retains itstraditional equitable powers. Such inherent equitable power,derived from the historic power of equity courts, cannot be takenaway or abridged by the legislature. Marsh v. Illinois RacingBoard, 179 Ill. 2d 488, 495 (1997); Ardt v. Illinois Department ofProfessional Regulation, 154 Ill. 2d 138, 146 (1992). When thelegislature encroaches upon a fundamentally judicial prerogative,this court has not hesitated to protect judicial authority. Murneighv. Gainer, 177 Ill. 2d 287, 302-03 (1997); People v. Joseph, 113Ill. 2d 36, 43 (1986).

Although the court's contempt power became useless withJames' death as a means by which to enforce the judgment ofdissolution, the circuit court in this case had equitable remedies atits disposal and should have employed them to afford Nancy relief.As the appellate court did, and as this court has previously done(Cesena v. Du Page County, 145 Ill. 2d 32, 38 (1991); Ward v.Sampson, 395 Ill. 353, 366-67 (1946)), the circuit court could havesimply considered "that as done which ought to be done." InCesena, this court invoked its equitable powers and deemed anaccident report filed as of the date and time that an attempt wasmade to file it. Cesena, 145 Ill. 2d at 38. In this case, the appellatecourt properly exercised its equitable powers and deemed thedesignation of beneficiary form filed with the IMRF when itshould have been filed, prior to James' death.

Additionally, even had the death benefits been awarded toDelores, according to the beneficiary form on file with the IMRFas of the date of James' death, a constructive trust would havebeen imposed upon those death benefits. When a person hasobtained money to which he is not entitled, under suchcircumstances that in equity and good conscience he ought notretain it, a constructive trust can be imposed to avoid unjustenrichment. Norton v. City of Chicago, 293 Ill. App. 3d 620, 628(1997); Frederickson v. Blumenthal, 271 Ill. App. 3d 738, 741(1995); Restatement of Restitution