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Lagen v. Lagen

JULY 30, 1973.




APPEAL from the Circuit Court of Cook County; the Hon. ROBERT L. HUNTER, Judge, presiding.


The plaintiff filed a petition under section 72 of the Civil Practice Act (Ill. Rev. Stat. 1971, ch. 110, sec. 72) to vacate a judgment for divorce and an oral property settlement agreement incorporated in the judgment on the grounds that the judgment was procured by fraud and duress. At the conclusion of the hearing the trial court found that there had not been a full and complete disclosure by the defendant as to the amount of his assets and entered an order setting aside the property settlement agreement but not disturbing the judgment for divorce. The sole issue is whether the judge's finding is against the manifest weight of the evidence.

The plaintiff, Bernice Lagen, and the defendant, Chris Lagen, were married on August 21, 1952, at Crown Point, Indiana. A complaint for separate maintenance, or in the alternative for divorce, was filed against Chris Lagen on October 6, 1966, alleging that the plaintiff was forced to leave the marital home because of the conduct of the defendant in that he had been guilty of extreme and repeated cruelty. Two children had been born during the marriage and at the time of the filing of the complaint their son, William, was 17 and their daughter, Christine, was 16. The complaint alleged that the parties owned in common or, alternatively, that the plaintiff had an equity in the following realty: 9000 South Yates Avenue, 8851 Muskegon Avenue, 21 townhouses at 80th and Emerald Avenue, 21 townhouses at 80th and Union Avenue, 8811 South Stony Island, 93rd and Stony Island, 47th and Drexel Boulevard, 69th and Euclid Avenue, 83rd and South Chicago Avenue, and 73rd and Kimbark Avenue, all located in the City of Chicago. The complaint also alleged that the parties owned in common certain stock in Chribern Builders, Inc. and certain savings contained in various depositories.

The defendant, by his answer, denied that the parties owned the realty set forth in the complaint in common or that the plaintiff had any claims or equity in the realty.

On February 14, 1967, Judge Drymalski entered judgment for divorce which stated that the cause was heard as a contested matter. In his order he found the defendant guilty of extreme and repeated cruelty and that the parties had "entered into an oral agreement after a full and complete disclosure of each to the other of all of the wealth, property, estate and income of the other and after each had been fully informed of his or her respective rights; * * * and having entered into said agreement voluntarily and with full and complete knowledge * * *." Custody of the minor children was given to both parties jointly and the children were allowed to determine with which party they would reside. The defendant was ordered to pay $25 per week for the support of William, the medical expenses of the children, and the expenses incident to the college attended by each child. The plaintiff was awarded the residence property at 9000 South Yates and was required to "* * * make all payments on the first mortgage presently outstanding and due against said realty up to the date of the entry of [the] judgment and thereafter, [and] the plaintiff [would] be responsible for the balance of said mortgage debt and [would] keep and hold the defendant harmless thereon." The plaintiff was further awarded all the furniture and other furnishings except those specifically enumerated as going to the defendant or their daughter, Christine. The defendant was awarded all stocks, bonds, securities, and interests in land trusts, particularly any interest held by the plaintiff to the real estate referred to in the complaint. The defendant was ordered to pay in lieu of alimony the sum of $30,000, which was to be paid in installments of $5000 commencing 15 days after the entry of the judgment and on the first, second, third, fourth, and fifth anniversary date of the entry of the judgment. The payments were to abate on the death of either party.

The defendant was required to deliver certain insurance policies issued on the life of the defendant to a trustee for the benefit of the two minor children so long as the children were minors or in attendance at college during the time the defendant was responsible for their college expenses. In the event the children were no longer beneficiaries under the insurance trust, the trustee was directed to disburse the proceeds of the insurance to the plaintiff to the extent of any amount remaining due under the lump sum alimony provisions. Both parties were required to hold the other harmless for any expenses incurred since the separation, and both were to bear their own costs and attorney's fees.

Marshall Perel was the attorney for the plaintiff at the time of the divorce action. He had received from the defendant the joint income tax returns for 1963, 1964 and 1965, a list of his real estate holdings and a list of his stock. The list of stocks had been prepared by his partner, who had received the information orally from one of the attorneys for the defendant. The list contained 13 stocks, the amount of shares, the price per share and the total value of each block of stock. The total value for all shares was shown as $135,000. He did tract searches on the real estate listed. He testified that representations were made to him, without identifying who made them, that most of the property was in trust, in ownership with others, that the properties were worth about what they were mortgaged for and, consequently, that the plaintiff had no equity in them. He checked into the representations and found that they were true. He never saw an unsigned statement of the defendant's financial condition dated January 1, 1966, showing the defendant's net worth to be $233,754 until after the petition to set aside the decree was filed, but he was aware of every item appearing on that statement except the actual value of the stock or the interest of the defendant in the buildings listed. He testified that the defendant's net worth was represented by his attorney as something over $100,000. He concluded that it was a little over that figure. Another financial statement dated October 2, 1967, signed by the defendant, was introduced into evidence and showed his net worth at $426,445.

Perel testified he was unaware at the time of the original decree of the following: property in Trust No. 360 in River Oaks; a bank account at Telegraph Savings and Loan Association; a bank account at Lake Shore Savings and Loan. He did not remember whether he was aware of the townhouse property at 75th and Kenwood. However, the plaintiff herself testified that she knew of the property in River Oaks but forgot to tell her lawyer. The bank account at Lake Shore Savings and Loan appears on the 1965 income tax return.

The plaintiff also testified that she did not know about the property at 73rd and Kimbark, 79th and Exchange, 7939 Ingleside and 6945 Chappel; all she knew about 75th and Kenwood was that there was a food store across the street and that the defendant had told her that the property belonged to Lamson Brothers, who she knew were her husband's brokers. However, the original divorce complaint listed the property on Kimbark, and the properties on Ingleside and Chappel were listed on the 1965 income tax return.

Of the four stocks listed on the financial statement of January, 1966, Sunset International Petroleum and Bethlehem Steel did not appear on the list of stocks prepared by Perel's partner. But the records of Lamson Brothers show that the defendant sold the Sunset stock on February 21, 1966, and thus did not own it at the time of the agreement. Moreover, we refer again to the testimony of Perel, who said that he was aware of all of the items on the financial statement, but not their value. Of the stocks listed on the financial statement of October, 1967, only G.C. Computer does not appear on the list of stocks, which did include nine stocks that do not appear on the financial statement of October, 1967. The record fails to show when the defendant acquired G.C. Computer.

The defendant testified that the list prepared by Mr. Perel's partner was incorrect in that he owned two hundred, not one thousand, shares of Indiana General and two hundred, not five hundred, shares of Syntex. This is corroborated by the records of Lamson Brothers, which show purchases of only 200 shares of Indiana General and 200 of Syntex. We note that the list of stocks prepared by the plaintiff's attorney has two separate entries of Syntex, one for 200 shares and another for 500. If the value of the 500 shares of Syntex were subtracted from the total contained in the stock list, the amount would be reduced to $102,000. The defendant denied ever using the financial statements and the plaintiff offered no testimony to refute this. Perel received the financial statement of January, 1966, from the defendant's attorney after the petition was filed. The plaintiff received the 1967 statement after the decree from Chris Mitchell, who owned property with the defendant.

At the close of the hearing, the trial court said:

"Well, gentlemen, I have listened to you fully and completely here.

Now, the defendant testified that he didn't make up those statements and that she gave this list of those properties to her lawyer and I do not think that there has been a complete disclosure here where you have stocks totaling from one hundred and thirty five thousand dollars and a net worth of one hundred and fifteen thousand and then financial statements showing that he ...

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