The opinion of the court was delivered by: Robson, Senior District Judge.
This cause is before the court on plaintiff's motion for entry
of judgment and defendant Georgia Canellis' renewed motion for
summary judgment. For the reasons hereinafter stated, the
plaintiff's motion for entry of judgment will be granted and the
defendant Georgia Canellis' motion for summary judgment will be
Defendant Georgia Canellis, who is George C. Canellis' mother
[hereinafter Mrs. Canellis], contests this action against her son
only to the extent that she claims a lien prior to the
government's lien. Her renewed motion for summary judgment seeks
a determination that she has a prior lien in the amount of
$30,000. Briefs have been submitted in support, in answer and in
reply to her motion.
The relevant facts appear in the oral deposition transcripts of
George Canellis and Daniel Parry, various affidavits, photo
copies of checks, a promissory note and a deed in trust, as well
as the pleadings that have been filed in this case.
Mrs. Canellis' deposition was taken on April 26, 1979. She was
then 84 years old and living in a health care facility where she
was being treated for severe injuries including head injuries.
She speaks no English and testified through a Greek interpreter.
She was tired and stated that several times during the
deposition. Her exhaustion after direct examination precluded any
cross-examination by the government. Although it appears that the
deposition was terminated with the understanding that
cross-examination would take place another day, that examination
apparently has never occurred. In support of its contention no
credible evidence exists in the record to conclude that a
security interest was intended to be created in Mrs. Canellis'
favor, the government asserts that the court has a special need
to observe Mrs. Canellis' demeanor during direct and
cross-examination. In addition, it asserts that her son was
communicating with her throughout the deposition by gesture or by
speaking in Greek. The government also asserts that the
interpreter was suggesting answers to Mrs. Canellis. Contrary to
the government's contention, upon examination of the deposition
transcript, the court finds that her testimony was barely
coherent. Mrs. Canellis' advanced age and the condition of her
health should have precluded the taking of her deposition in the
first instance. Based on the plaintiff's attempt to depose her,
where everyone present including the government's attorney and
her son had great difficulty communicating with her because of
her age and ill health, the court would not find her competent to
testify at trial. Accordingly, the court has not considered her
testimony in connection with the instant summary judgment motion.
6 Moore's Fed. Prac. ¶ 56.11[1.-3] at 56-2002 (2d ed. 1979).
Mrs. Canellis was widowed in May, 1956, and ever since then has
maintained separate savings accounts of her own funds. Upon her
husband's death, her son George Canellis acquired two laundry
businesses founded by his father. From approximately 1960 until
July 2, 1971, George Canellis asked his mother to advance him
several thousands of dollars for use in the operation of the
businesses. She executed cashier's checks made payable to George
Canellis and to herself which were allegedly paid to George with
the understanding that eventually the funds would be repaid. In
approximately June, 1971, George Canellis needed $5,000.00 to
meet an upcoming payroll. When he contacted the family's
attorney, the advisor, Daniel Parry, about this further advance,
Parry suggested that prior to the disbursement of the amount,
George Canellis should agree to provide security to his mother
for the existing indebtedness and for what became the final
advance of $5,000.00. Parry, Mrs. Canellis and her son agreed
that although the total indebtedness exceeded $30,000.00,
security would be provided for this amount only. To accomplish
this purpose, Parry drafted documents necessary to convey George
Canellis' fee interest in a residential property at 7424 Kolmar
Ave. in Skokie, Illinois, to his mother as
trustee of an Illinois land trust in which George Canellis
retained the beneficial interest. A deed in trust and trust
agreement was executed in Party's office on July 2, 1971. The
relevant provision of the trust agreement provides:
[I]t is hereby agreed between the trustee and the
beneficiary herein that in the event of the sale of
this property the trustee shall retain the sum of
$30,000. from the net proceeds of the sale, being the
sum the beneficiary has borrowed from the trustee in
the past few years. If, however, the sale is made
after the death of said trustee, the sum of $30,000.
shall be waived and be considered as having been paid
and the beneficiary shall not be obligated to the
trustee's estate in any sum whatsoever.
The deed in trust was recorded with the Cook County Recorder of
Deeds on July 7, 1971. The following year, in May, 1972, the
government made its first assessments against George Canellis for
unpaid taxes, giving rise to its lien.
The instant motion for summary judgment by Mrs. Canellis raises
two issues. First, has Mrs. Canellis demonstrated the absence of
any genuine issues of material fact on the question of the
existence and priority of her lien? Second, if so, is she
entitled to summary judgment in her favor? The government asserts
that the answer to both questions is no.
A. Availability of Summary Judgment
Mrs. Canellis produced documentary evidence in the form of
copies of cashier's checks drawn on the First National Bank of
Chicago and payable to George Canellis in the amounts of
$10,000.00 and $5,000.00, dated January, 1964 and July 9, 1971,
respectively. These documents support her contention that monies
were withdrawn and paid by her to her son over a period of years.
She also produced copies of two cashier's checks payable to
herself drawn in February, 1968, and January, 1969, in the
amounts of $2,000.00 and $1,000.00. She produced a copy of a
promissory note dated September 22, 1970, evidencing a promise by
George Canellis to pay her $10,200.00 on demand at 6% interest.
The note and checks total $30,267.00. Finally, the trust
agreement previously referred to states that the sum of $30,000.