A man who a Cook County divorce court judge has kept in the Cook County Jail for more than two years for not paying $10 million to his ex-wife that the court ordered him to pay - but which he has maintained he does not have - is trying again to persuade a state appeals panel to allow him to get out of jail, and trade his cell for home confinement.
On Oct. 8, an attorney for Steve Fanady filed a motion with the Illinois First District Appellate Court, asking the court to modify the terms of Fanady's incarceration for contempt of court, asserting Cook County Judge Michael Forti has not abided by Illinois court rules or the law in turning a deaf ear to Fanady's requests to be released from jail.
In the filing, attorney Laura Grochocki asserted the legal reasoning backing Fanady's continued jailing amounts to the establishment of a system under which judges can order people who they believe are in contempt of court into jail "indefinitely."
Illinois First District Appellate Justice Margaret Stanton McBride
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"The bottom line is that during the last 27 months, during which Fanady has been held in jail for indirect civil contempt for non-payment of money, there has been no evidence based findings by any court on the question of whether or not the order of contempt under which Fanady is incarcerated remains coercive, or whether it has become merely punitive," Fanady's attorney Laura Grochocki wrote in the latest motion.
Judge Forti ordered Fanady, now 59 years old, to be sent to the county jail on June 28, 2022.
The detention came after the judge found Fanady in indirect civil contempt of court in February 2021. That finding was affirmed on appeal in 2022.
The finding of contempt centered on Forti's determination that Fanady had essentially refused to pay $10 million in stock to Fanady's ex-wife, Pamela Harnack.
Harnack filed for divorce from Fanady in 2008, seeking to end their marriage of five years. Their divorce was finalized in 2011.
Fanady and Harnack had no children.
According to court documents, Fanady initially cooperated with the proceedings, but then stopped. The divorce decree, for instance, was entered on Aug. 3, 2011, following a hearing which Fanady did not attend.
Under that decree, the court determined Fanady to be worth about $7.3 million. The court found that the couple's marital property included 320,000 shares of stock through the Chicago Board of Options Exchange (CBOE). The court determined Fanady held 280,000 of those shares exclusively, through various LLCs and partnerships with various names.
The court ordered that 140,000 of those shares should belong to Harnack.
However, in the months leading up to that hearing, Fanady was sued by former business partners, who claimed Fanady had breached a contract by improperly withdrawing some of those CBOE shares without compensating them.
While that lawsuit was still pending, the Cook County divorce court ordered CBOE and others to transfer 120,000 shares of CBOE stock Harnack. CBOE, however, responded in court by asserting it could not do so, because Fanady's account only contained 120,000 shares of the stock and, with legal actions pending, CBOE could not legally say to whom those shares belonged.
A court sided with Fanady's ex-business partners and awarded the 120,000 shares to them. The court found Fanady had "already transferred and received the shares to which he was entitled from the partnerships."
The ruling came over Harnack's objections.
In that 2017 ruling, the court found "Harnack 'should not benefit from her husband's bad acts' or 'from her own misunderstanding or misrepresentation as to the number of shares of CBOE Holdings which were in the marital estate.'" The court further said Harnack "was required 'to chase Mr. Fanady for her just share of the marital estate.'"
Harnack then also lost on appeal against Fanady's former business partners.
Following that loss, Harnack returned to divorce court, asking the divorce judge to enforce the judgment and order Fanady to pay her the equivalent of those 120,000 shares, plus interest, dividends and anything else Fanady may have earned while he held the stock.
Fanady has estimated that equates to about $10 million.
Fanady asked the divorce court to dismiss Harnack's motion, asserting her demands were impossible to fulfill because the 120,000 shares no longer exist and he did not have the money she was demanding. Fanady argued Harnack was essentially attempting to use the divorce decree to undo her loss in the action against Fanady's old business partners.
Fanady asserted Harnack had "knowingly deceived the trial court as to the size of the marital estate."
Harnack won before both Judge Forti and on appeal.
On appeal, the justices essentially said Fanady's misfortune is his own fault, because he did not participate in the divorce court proceedings as he should have. They said any misunderstanding concerning the number of CBOE shares Fanady held would have been cleared up years earlier, if he had participated in the divorce court proceedings.
"Fanady cannot escape his obligations to Harnack by swindling his business partners, ensuring that the assets awarded to Harnack under the judgment are unavailable," wrote First District Appellate Justice Margaret Stanton McBride in an appellate order, issued December 2021.
Despite losing in court, Fanady has not paid the money to Harnack as ordered by the court.
Fanady continues to assert he does not have the money to pay.
Seeking to enforce the order, Forti then ordered Fanady to jail in June 2022, where he has remained since.
Grochocki says Fanady's jailing has far exceeded any previous record for the longest such incarceration for failure to pay money in Illinois history.
According to court documents, while he has remained incarcerated, Fanady's physical condition has deteriorated, and he allegedly requires a walker to move about. He has reportedly been held in solitary confinement at times, as well.
During his incarceration, both of Fanady's parents have died, and he was not allowed to attend their funerals.
Grochocki asserts Fanady's life and well-being have also been repeatedly threatened by other inmates, including inmates being held on charges of violent crime.
Fanady has never been tried or convicted of a crime, nor does he have any hope of release, until he either pays the money ordered by the court to "purge" his contempt, or persuades a judge either that the jailing has gone on long enough or that the incarceration will not be effective at securing the money.
For her part, Grochocki told The Cook County Record she believes the jailing amounts to an unconstitutional debtors prison.
While Fanady may have remained in jail the longest, Cook County's divorce judges are no stranger to using the county jail to force presumably wealthy ex-husbands involved in divorce proceedings to pay money to their ex-wives and their wives' divorce lawyers.
Cook County Circuit Judge Abbey Fishman Romanek, for instance, has found River Forest developer Frank "Marty" Paris in contempt and ordered him to jail on several occasions amid Paris' messy divorce with his ex-wife. That judge similarly sought to force Paris to pay his ex-wife and her lawyers hundreds of thousands of dollars in so-called "domestic support obligations."
Both Forti and Romanek serve in the Cook County court's Domestic Relations Division, which is overseen by Cook County Judge Regina Scannicchio.
Both Forti's and Romanek's current terms are scheduled to end in December 2026.
Scannicchio is on the ballot this fall, as she seeks retention to another six-year term on the bench. Voters will be asked to vote yes or no to retain Scannicchio. To be retained, she will need to secure 60% of the vote for "yes."
In the Fanady case, Forti has continued to refuse Fanady's entreaties to be released from jail.
However, in that order, the appeals panel questioned if Fanady's two years in jail meant the incarceration from contempt had passed from being "coercive" - which is allowed under the law - to being "merely punitive."
The appellate justices sent the case back to Forti and directed him to "make explicit findings" on that question.
On July 31, Forti responded with an order declaring Fanady should remain in jail, saying the courts had previously found Fanady "had the ability to comply" with the court's payment order and "that incarceration was an appropriate means of compelling compliance."
Forti further pointed to a decision from the U.S. Eleventh Circuit Court of Appeals in Atlanta - which does not have any binding authority over Illinois courts - in which that court found "the mere passage of time is not a sufficient basis to demonstrate that it no longer has coercive purpose."
Grochocki and Fanady have now appealed the July 31 decision back to the First District Appellate Court, asserting Forti's ruling was off base and asking the appeals court to take action.
In the filing, Grochocki argued Forti had violated state law and court rules by refusing to review Fanady's incarceration at a contempt status hearing at least every 30 days.
In the filing, Grochocki further said Forti's reliance on the Eleventh Circuit ruling conflicts with Illinois state law.
She noted that because Fanady was jailed at the discretion of Judge Forti and not as the result of a trial or a criminal sentence of any kind, the appeals court holds the inherent authority to modify Forti's order.
And Grochocki argued that an Illinois appellate court has found that jailings for civil contempt which extend longer than six months should be vacated and the courts should "resentence" the contemnor under guidelines established in other appellate court decisions. To do otherwise violates the contemnors' rights to due process, Grochocki argued.
Forti's July 31 order "establishes a legal framework that allows for the indefinite detention of a civil contemnor," Grochocki wrote in her Oct. 8 filing. "This approach contradicts established Illinois law, which requires that incarceration for indirect civil contempt must serve a coercive purpose and bear a reasonable relation to the purpose of imprisonment.
"The trial court's (Forti's) failure to evaluate whether Fanady's detention still meets this criterion constitutes a significant problem for his continued incarceration in the Cook County Jail, and inclines in favor of his release on home confinement, monitoring by pretrial services or electronic monitoring."
According to the filing, while asserting he is insolvent, Fanady has also pledged that "as part of any modification of incarceration or condition of release," he "is willing to sign any document, power of attorney, letter of direction, or quit claim, prepared by Harnack's attorneys for the turnover of money, stock, property, or assets to her for the amount due..."
Grochocki noted that Fanady has made that offer on several occasions in courts.
The state appeals court has not yet ruled on Fanady's renewed motion.