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David v. Russo





APPEAL from the Circuit Court of Cook County; the Hon. ALBERT S. PORTER, Judge, presiding. MR. JUSTICE JOHNSON DELIVERED THE OPINION OF THE COURT:

The defendants, John and Mary Russo, were deeded legal title to a residence located at 1102 Meadow Land, Mount Prospect, Illinois, on July 25, 1967. The plaintiffs, Anna Marie David and Paula David, minors, by their next friend, Michael Nicoletti, contend the property is held by the Russos as constructive trustees for the plaintiffs. The trial court found that a partnership existed and ordered that the property be sold and the net proceeds split between the plaintiffs and the defendants. Defendants appeal from that judgment. Plaintiffs cross-appeal, contending the 50-percent distribution to defendants is unfair. We find for the Davids on their cross-appeal.

The Russos contend on appeal that (1) the complaint praying for the establishment of a constructive trust is not sufficient as a matter of law; (2) the equitable relief sought by the Davids is barred by the doctrine of laches and the statute of limitations; (3) the amended complaint filed by the Davids is not sufficient in scope to conform to the findings of the trial judge; (4) the equitable relief sought by the plaintiffs is barred by the doctrine of unclean hands; (5) plaintiffs did not meet their burden of proof; and (6) the judgment entered was tainted because of collusion between the trial judge and plaintiffs' counsel.

A brief statement of the property ownership is necessary for an understanding of the case. Raymond Kopecky and Helen Kopecky, his wife, transferred title to the property in question to Max Sorba and Phyllis Sorba, his wife, by warranty deed in 1965. However, Ronald Brunetti and his family lived on the premises and made the payments on the mortgage. Apparently, the Sorbas only held the legal title to the property as an accommodation to the Brunetti family. On July 13, 1966, the Sorbas conveyed the property to Edward and Nancy DiVita, who were legally known as Edward and Nancy David, the daughter and son-in-law of Ronald Brunetti. Ronald Brunetti and his family continued to live on the premises with the Davids and continued to make the mortgage payments.

In 1967, Ronald Brunetti defaulted on his payments to Franklin Savings and Loan Association. Quit-claim deeds were executed on March 10, 1967, by Ronald and Anna Marie Brunetti and, also, by Edward and Nancy David to Clara C. Pfeiffer, a nominee, in lieu of foreclosure. Ronald Brunetti died a few weeks later. The nominee then transferred the property to the mortgagee, Franklin Savings and Loan Association, who, on July 25, 1967, transferred the property to defendants. The facts surrounding the transfer of the property to defendants are in dispute and form the central issue in this appeal. Nancy David died on March 1, 1972, and Edward David died in April 1977. Shortly after Edward David's death, the property was placed in a land trust by defendants. The defendants filed an action seeking an eviction of the plaintiffs, the children of Edward and Nancy David. According to defendants, the forcible detainer action is still pending in the circuit court. After the filing of the eviction suit, plaintiffs filed this action.

At trial, Sheila Brunetti testified that shortly after the death of Ronald Brunetti, her father-in-law, she and her husband called John and Mary Russo, who were old family friends. The Brunettis and Nancy David went to the Russo home. The witness stated that several conversations occurred between the Russos and the Davids. At the first conversation, her husband, Arthur Brunetti, asked the Russos to sign a mortgage on behalf of Edward and Nancy David to enable the Davids to stay in the house. The Russos agreed to take title to the property on their behalf as long as the Davids made the payments to the Russos and agreed to reimburse them for all out-of-pocket expenses. The Russos also asked Edward David to do the carpentry on other properties owned by the Russos. Subsequent conversations resulted in confirmation of the agreement.

Mary Russo's testimony amounted to a complete denial that the foregoing conversations occurred. She stated the Davids occupied the house as tenants of the Russos and any payments made by the Davids were for rent. The witness further testified that she and her husband, alone, always made the mortgage payments and paid the taxes, even though the Davids did not make all their rental payments. Mary Russo claimed she and her husband had made mortgage and tax payments on the property since the purchase.

Norman Schaper, an insurance agent, testified that the insurance policy for the property was bought, paid for, and delivered to the Davids. In her testimony, Mary Russo stated that she and her husband purchased the insurance for the property.

Anna Marie Brunetti, Nancy David's mother, testified that she delivered a mortgage payment to Mary Russo on behalf of the Davids. She also stated that Edward David did carpentry for the Russos.

Arthur Brunetti testified to several improvements made on the property by Edward David, some of which were the construction of a family room, bookshelves, an altered bathroom, a large concrete patio, a brick barbeque and a wishing well. The Russos stated they paid for some of the improvements made on the property.

Kenneth Scranton, a practicing attorney, testified that in July 1967 he represented First Federal Savings regarding the subject property in Mount Prospect. He stated that in 1967 the mortgage on the property was in default and the Russos purchased the property. He was not aware of any conversations between Edward and Nancy David and Franklin Savings and Loan Association.

The trial court decided to treat the arrangement between the Davids and the Russos as a partnership, to order the sale of the property, and to divide the proceeds equally. The Russos appeal that decision and the Davids cross-appeal, stating the court erred in awarding the Russos one-half of the proceeds from the sale of the house.

The initial question presented is whether plaintiffs pleaded sufficient allegations to invoke relief under a constructive trust theory. Pleadings must be informative of the issues and inform the other party of the nature of the claim he must meet at trial. (See Central States Southeast & Southwest Areas Pension Fund v. Gaylur Products, Inc. (1978), 66 Ill. App.3d 709, 384 N.E.2d 123.) "A complaint will not be dismissed for failure to state a cause of action if the facts essential to its claim appear by reasonable implication." Central States Pension Fund, at 713.

Defendants assert that allegations of a complaint to establish a constructive trust must be specific; they cite several cases for that position. However, in the cases defendants cite, the court could not find sufficient allegations of fact to create a constructive trust and, therefore, affirmed dismissals of the complaint. (See Perry v. Wyeth (1962), 25 Ill.2d 250, 184 N.E.2d 861; Dial v. Dial (1959), 17 Ill.2d 537, 162 N.E.2d 404.) In Perry, the plaintiff brought an action seeking to impose a constructive trust upon certain real estate. The title to the property was in the name of defendant, the widow of plaintiff's son. The defendant's motion to dismiss was on the ground that the amended complaint failed to state a cause of action for a constructive trust. The court stated:

"The allegations of the amended complaint contain no facts charging fraud * * *. * * * Nor are there any facts alleged in the amended complaint creating a fiduciary relationship between plaintiff and defendant ...

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