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Brown v. Brown

OPINION FILED JULY 24, 1978.

KENNETH B. BROWN, PLAINTIFF-APPELLANT,

v.

BRUCE B. BROWN, SR., ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Lake County; the Hon. JOHN L. HUGHES, Judge, presiding.

MR. JUSTICE BOYLE DELIVERED THE OPINION OF THE COURT:

The plaintiff-appellant, Kenneth B. Brown, hereafter the plaintiff, as an individual and in his capacity as co-trustee of the testamentary trust under the last will of William G. Brown, hereafter the trust, sued his brother, Bruce B. Brown, Sr., the defendant-appellee, hereafter the defendant, as an individual and in his capacity as co-trustee of the trust. The plaintiff prayed that the defendant be compelled to pay off two notes held by the trust and that the conveyance of the home owned by their mother, Mrs. Helen Pearl Brown, to the defendant be set aside or in the alternative that the conveyance be held to have created a constructive trust for the benefit of the plaintiff and the defendant. The plaintiff also sought to remove the defendant as co-trustee of the trust. Finally, the plaintiff prayed that the defendant be ordered to pay the plaintiff's attorney's fees. After a bench trial in the circuit court of Lake County, the Honorable John L. Hughes held that the defendant did owe the trust on the two notes but denied the plaintiff any relief in regard to the conveyance of the family home, finding that the transaction had been free from fraud. The trial court also refused to remove the defendant as a co-trustee. Lastly, the trial court declined to order the defendant to pay the plaintiff's attorney's fees. The plaintiff has appealed, contending the record clearly demonstrates the conveyance of the family home to the defendant was fraudulent and ought to be set aside or held to have created a constructive trust for the benefit of the plaintiff and the defendant. The plaintiff further alleges that the defendant's improper behavior as a co-trustee required his removal from that position. Finally, the plaintiff contends the trial court abused its discretion by not ordering the defendant to pay the plaintiff's attorney's fees.

The record before us manifestly demonstrates that there was ample evidence presented to raise the question of an abuse of the alleged fiduciary relationship between the defendant and Mrs. Brown. However, the trial court failed to address the issue, thus necessitating a remandment for further consideration of that issue together with the question of the defendant's performance of his duties as trustee, which is inextricably interwoven with the question of the possible fiduciary relationship.

The first act in this family dispute occurred in April 1948, when William G. Brown lent his son, Bruce, the defendant, $15,000 to start up a business. The loans were evidenced by two notes made by the defendant. The first was for $2,500 and the second was in the amount of $12,500. Both notes bore interest at 3 1/2 percent and were due the following April. However, the notes were still unpaid when William G. Brown died in 1952. The defendant, as executor of his father's estate, filed an inventory and final account which included the notes as part of the estate of William G. Brown.

The last will and testament of William G. Brown provided for the creation of a trust, the principal beneficiary of which was William G. Brown's widow, Helen Pearl Brown. The trust was to be used to provide Mrs. Brown with a minimum of $500 a month in support. The trustees were empowered to increase the monthly payment to Mrs. Brown as the need arose and were empowered to invade the corpus of the trust to provide for her adequate support. Upon the death of Mrs. Brown, the trust was to be used to aid the education of the grandchildren of William G. Brown until such grandchildren reached the age of 25. After that educational purpose has been accomplished, the corpus of the trust is to be divided equally between the plaintiff and the defendant, who are the only children of William G. and Helen Pearl Brown.

The initial trustees of the trust were the defendant and Arnold Stephan, the defendant's brother-in-law. The defendant still is a trustee, but Mr. Stephan resigned in 1966 and was replaced by the plaintiff. At that time, the plaintiff was a career naval officer and was rarely in Deerfield, Illinois, the family's home. Hence, the plaintiff was required to perform such trustee duties that he did perform via the mails or the telephone. In contrast, the defendant lived directly across the street from their mother in Deerfield. There is no question that the defendant was the dominant trustee and generally handled Mrs. Brown's financial affairs.

In late 1968 and early 1969 the trust was having difficulty providing sufficient income to meet the living expenses of the then 90-year-old Mrs. Brown. A dispute erupted between the plaintiff and the defendant as to what would be the best course of action. The defendant advocated selling some of the trust's stock holdings in order to produce the needed cash. The plaintiff, then stationed in New Mexico, did not concur in the idea. The plaintiff suggested that the trust could borrow against the stock as opposed to selling it. Furthermore, the plaintiff asserted that the trust would have more than enough cash if the defendant would pay off the money he owed on the notes. The defendant refused to pay off the notes, and an impasse developed.

In March of 1969, the plaintiff wrote his mother a letter, offering to resign as trustee upon the happening of one of two conditions: First, the plaintiff would resign if the defendant would also resign and the management of the trust were taken over by the First National Bank of Chicago; secondly, the plaintiff would resign if Arnold or Frank E. Stephan agreed to serve as co-trustee with the defendant. Neither condition was met, so the plaintiff did not resign as co-trustee. The plaintiff took no further action at that time.

The defendant had Robert V. Connors, an attorney, prepare a letter for Mrs. Brown's signature, dated March 21, 1969. This letter is at the heart of the matters before this court. The letter stated that Mrs. Brown requested attorney Conners to prepare the letter. However, at trial, Mr. Conners testified that he had never met nor talked with Mrs. Brown concerning the letter or on any other matter. The letter went on to state that Mrs. Brown was aware of the impasse that had developed between the co-trustees of the trust which was created to provide for her full support. She was also aware of the trust's inability to generate sufficient cash to provide for her support. Aware of these problems and having fear for her future ability to make ends meet, Mrs. Brown agreed to exchange her house — her principal asset — for the defendant's promise that he would provide for her the rest of her life. More specifically, the defendant promised to pay all taxes and insurance on Mrs. Brown's home and to fully maintain it. Furthermore, the defendant agreed to pay for all the nursing his mother required and generally to provide for her full support as long as she lived. Before Mrs. Brown signed this letter it was read to her at least once a day over a course of a week by her live-in nurse, Margaret L. Vieth. Mrs. Brown lived for another five years before dying in 1974. Over the course of those five years, the defendant contributed over $21,000 to his mother's support. The plaintiff is quick to point out that if the notes with accrued interest, worth in excess of $25,000 on the date Mrs. Brown conveyed her home to the defendant, had been paid off, the trust would have had more than sufficient cash to provide for Mrs. Brown's support.

By conveying her house to the defendant, Mrs. Brown in effect disinherited the plaintiff. In 1958 she had written a will which provided that her entire estate, with the exception of two specific bequests of jewelry, should be divided equally between her two sons — the plaintiff and the defendant. Since Mrs. Brown's principal asset was her house, for all practical purposes, the conveyance to the defendant exhausted her estate and thus had the effect of disinheriting the plaintiff. The plaintiff claims he did not learn of the conveyance until shortly after his mother's death in 1974, at which time he commenced this action.

Carmen Brown, the defendant's second wife, was joined as a defendant because she currently owns the former home of the late Mrs. Brown in joint tenancy with her husband.

The trial court found the defendant owed the trust $32,979.71 in principal and accrued interest on the two notes. The defendant has not appealed from that judgment. The trial court also found that the conveyance by Mrs. Brown of her house to the defendant was not induced by fraud and was made for valid consideration. Furthermore, the trial court held that the defendant had properly performed his fiduciary duties to the trust and therefore declined to remove him as a trustee. Finally, the trial court denied the plaintiff's request for court costs and attorney's fees. The plaintiff has appealed from those findings.

• 1 A preliminary matter needs to be disposed of before we reach the merits of this appeal. The defendant has filed a motion seeking to strike portions of the plaintiff's brief for alleged violations of Supreme Court Rule 341 (Ill. Rev. Stat. 1975, ch. 110A, par. 341). While the plaintiff's brief is not in strict compliance with the rule, the defendant's motion must nevertheless be denied. Supreme Court Rule 341 is not a limitation upon the jurisdiction of a court of review, but rather is an admonishment to the parties. (Occidental Chemical Co. v. Agri Profit Systems, Inc. (1975), 37 Ill. App.3d 599, 346 N.E.2d 482.) A court of review may consider improperly raised issues where such consideration is necessary for a just result. (Supreme Court Rule 366 (Ill. Rev. Stat. 1975, ch. 110A, par. 366); In re Application of County Treasurer (1975), 25 Ill. App.3d 717, 323 N.E.2d 803.) In the case at hand, a just result requires us to consider all points that have been raised.

• 2, 3 The principal point in contention on this appeal is the plaintiff's assertion that the trial court erred in not setting aside the conveyance of Mrs. Brown's home to the defendant; more specifically, plaintiff argues that the conveyance of the house was the result of an abuse, on the part of the defendant, of a fiduciary relationship. The trial court's order specifically found that Mrs. Brown was competent to conduct business transactions *fn1 and that the complained of transaction was not tainted by actual fraud. The order, however, nowhere addresses the issue of constructive ...


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