Appeal from the Circuit Court of Cook County; the Hon. Harry
S. Stark, Judge, presiding.
JUSTICE SULLIVAN DELIVERED THE OPINION OF THE COURT:
FIRST DISTRICT (5TH DIVISION) JUDGMENT AFFIRMED AS MODIFIED.
Glen H. Kanwit and William Carlisle Herbert, both of Hopkins & Sutter, and Barry A. Feinberg, of Chuhak, Tecson, Kienlen & Feinberg, both of Chicago, for appellants.
McDermott, Will & Emery, of Chicago (Robert T. Palmer, of counsel), for appellee.
JUSTICE SULLIVAN DELIVERED THE OPINION OF THE COURT:
Rehearing denied July 11, 1984.
Defendants appeal from a judgment for plaintiff in an action for malicious interference with an expectancy and abuse of a confidential relationship. They contend that (1) plaintiff failed to exhaust her probate remedies; (2) plaintiff did not prove the essential elements of her cause of action; and (3) the trial court's findings with regard to liability and compensatory damages are contrary to the manifest weight of the evidence.
Plaintiff Vera Nemeth (Vera), born in Hungary in 1922, is the sole surviving child from the marriage of Rose Goldner (Rose) and Eugene Jacobovich (Eugene). After Eugene's death, Rose married Paul Sternberg (Paul) in 1929; the sole issue of that marriage was defendant Kornelia Banhalmi (Kornelia), born in 1935. In 1956, the family came to the United States, settling in different parts of the country: Rose and Paul lived in Norfolk, Virginia; Kornelia, by then married to defendant George Banhalmi (George), lived in suburban Cook County, Illinois; and Vera, with her daughter Eva, lived in Los Angeles, California. Rose and Paul opened a gift shop in Norfolk, financed in large part by jewelry and gold coins Rose managed to remove from Hungary concealed in her clothing. Their business prospered, and before their retirement in 1972, they added two parcels of income property to their holdings — an 18-unit apartment building (the Del Argo Apartments), and a smaller parcel containing three rental units (the Granby Street property). Rose and Paul agreed that Vera and Kornelia would be treated equally upon their deaths, and in 1975 they executed identical wills, each leaving the estate to the other, if surviving, and if the other spouse was not alive, leaving the estate equally divided between Vera and Kornelia (the 1975 will).
In the fall of 1975, Vera moved to West Germany to reside near her recently-married daughter, and opened a small business there. Shortly thereafter, Rose suffered a stroke and Kornelia went to Norfolk to assist her parents. Because of her own health problems, she brought Rose and Paul back to the Chicago area, where Rose was immediately hospitalized and Paul resided with Kornelia, George, and their daughter Susan. When Rose died in December of 1975, Paul (then 86) decided to remain in the Chicago area and lived with the Banhalmi family until September 1978, when he was placed in a nursing home.
In the summer of 1976, while Vera was visiting from Germany, Paul executed a new will, again providing that Vera and Kornelia would share equally in his estate (the 1976 will). After Paul died in November of 1978, Vera was unable to locate the original of this 1976 will and submitted a copy thereof for probate on the theory that the original was lost. *fn1 At that time, she first learned that there was a subsequent will, executed on January 31, 1977 (the 1977 will), which provided that she should receive the Granby Street property and 50% of such corporate stock as remained at the time of Paul's death. The balance of his property, both real and personal, was left to Kornelia. However, it further appeared that Paul destroyed the 1977 will shortly after it was executed. Since he had never adopted Vera, his entire estate passed to Kornelia as the sole heir under the laws of intestacy.
Kornelia petitioned the probate court for letters of administration, and Vera filed a complaint against Kornelia and George in that proceeding, alleging malicious interference with her expectancy under the 1976 will. *fn2 The probate court dismissed her complaint without prejudice, ruling that it was improperly brought as a supplemental proceeding. Vera then refiled her complaint in circuit court, seeking damages for malicious interference with her expectancy and abuse of a confidential relationship. The trial court dismissed that complaint for failure to state a cause of action, but we reversed that order and remanded for further proceedings in Nemeth v. Banhalmi (1981), 99 Ill. App.3d 493, 425 N.E.2d 1187.
On remand, the action proceeded to trial, and Vera testified that although Paul never adopted her, she was raised in his household from the age of seven and was treated by him as his daughter. She used the name Sternberg socially, and always referred to Paul as her father, just as he referred to her as his daughter, and treated her daughter Eva as his granddaughter. She acknowledged that there was a rift in the relationship with her parents when she married Emery Nemeth and converted from Judaism, but explained that their attitude changed after she and her husband sheltered them and Kornelia during the Nazi occupation of Hungary by creating false papers for them and hiding them in their home. Vera further testified that their close familial relationship continued after immigration to this country, despite the fact that they settled in different areas. They maintained contact through letters, phone calls, and yearly visits. During one such visit, Rose and Paul told her and Kornelia of their intention to divide their estate equally between the two girls. It was further planned that if Paul should die first, Rose would reside with Vera, and if Rose died first, Kornelia would care for Paul.
Vera also stated that she was in West Germany when her mother suffered a stroke, and returned home when informed that Rose was near death. At that time, Kornelia told her that their mother had taken several pieces of valuable jewelry with her when first hospitalized in Norfolk, and that it had disappeared; however, no police report was made, and the jewelry was not insured. After she (Vera) returned to Germany, Kornelia informed her that Paul had moved in with her, that they were renting a larger home to accommodate him, and that Paul contributed to the rent but gave her nothing for his board and care. However, when she visited again in the summer of 1976, she learned for the first time that Kornelia and George had purchased the house in joint tenancy with Paul, and that Paul had provided the entire $15,000 down payment. He explained to her that he agreed to the arrangement because he feared that if he did not, they would put him in a nursing home. He further proposed that they marry and he return to California with her, but she did not take his proposal seriously. When confronted, Kornelia did not explain why she had written that they were renting the home, stating merely that the arrangement was more practical than renting.
Vera further testified that during this visit, Paul executed the 1976 will, gave her $5,000, and promised to send her $10,000 more in monthly payments. He also decided to give each of Rose's daughters a portion of her jewelry, which he had inherited on her death. They took the jewelry for appraisal, then Paul gave her a diamond pin valued at $15,000, gave Kornelia a share of equal value, and retained $9,000 worth himself, promising that it would be divided between them on his death. Vera also stated that she knew this did not represent all of the jewelry and gold coins their mother owned, but Kornelia did not mention being in possession of other jewelry, or that their mother had given certain items of jewelry to her before her death. After this action was filed, additional jewelry which had belonged to their mother was located in Kornelia and George's safe deposit boxes; however, four pieces that she remembered were still missing — a matching diamond and sapphire pendant and ring, a large diamond solitaire ring, and a watch with a diamond bracelet.
Vera next stated that she returned to West Germany, where she remained until the fall of 1977, when she moved back to Los Angeles. She did not see Paul during 1977, but did hear from Kornelia on several occasions. Kornelia frequently wrote that Paul had suffered business losses and was therefore reluctant to comply with his promise to give her $10,000. Kornelia also told her that Paul suffered a mild stroke in May of 1977, and had become confused and had difficulty remembering things. According to Kornelia's letters and telephone calls, Paul became increasingly difficult throughout the fall of 1977, locking other family members out of the house, slamming doors, and acting childishly. However, Kornelia represented him as still sharp in business matters and able to handle his affairs, although he expressed fears that he might have to flee from nonexistent creditors and was afraid that "they" were trying to take his money away from him. She further represented that Paul was refusing to give them money, even though he was dependent on them for his care; she did not tell Vera that Paul had pooled his assets with theirs, or that George was assisting him in handling his business affairs. Throughout this period, she (Vera) received no letters from Paul and was rarely able to speak with him more than briefly during telephone calls; for the most part, when she called, members of the Banhalmi family gave some excuse why he could not come to the phone.
In early 1978, Kornelia told her in a letter that it had been a difficult two years, and a doctor had advised her that Paul would become more and more difficult to handle. There were constant arguments about money matters, and she and George had to pay most of Paul's expenses out of their own funds. Later, in April 1978, Kornelia wrote that if Paul's mental or physical condition became any worse, it would be necessary to place him in a nursing home. However, she (Vera) did not see Paul herself until June of 1978. At that time, she was shocked at his condition; he was very childlike and called her by her mother's name. She proposed that he return to California with her, fearing that his health was such that he could not survive winter weather. Kornelia seemed to approve of that plan, but when it was proposed to George, he turned white and appeared frightened. Because of this reaction, and because it appeared that Paul was incapable of handling his own affairs, she asked for an accounting of what had happened to Paul's income and property, explaining to George that as an equal beneficiary she felt that she was entitled to an accounting. George refused, but neither Kornelia nor George told her of the 1977 will or its subsequent destruction. Upon her return to California, she continued to ask for information about Paul's health and finances and pursued her plan to bring him to California until Kornelia and George, as well as Paul's doctor, informed her that the move would endanger his physical and mental condition. Kornelia and George did not notify her that Paul had been declared incompetent, or that Kornelia had been appointed as his guardian. She did not learn of Paul's death until one week thereafter, at which time Kornelia told her she was not informed because Paul did not want her at his funeral, or even notified of his death.
Vera further testified that during her lifetime, Rose always treated her daughters equally, giving both of them gifts of money and jewelry. She also received letters from Paul, signed "Father," before he moved in with the Banhalmi family; thereafter, the most he did was sign letters written by Kornelia. Prior to her death, their mother had a number of gold coins, both foreign and American; now only Kornelia and George would know what happened to those coins or to jewelry which Paul inherited from their mother.
Kornelia, called as an adverse witness, testified that even as a child she was always treated more favorably than Vera, and that Paul did not like Vera and treated her as a distant relative. She (Kornelia) felt guilty about this and frequently begged Paul to give Vera things and to treat her better. In 1974 or 1975, Rose took her to her safe deposit box in Norfolk and gave her some of the jewelry, then told her that upon her (Rose's) death she was to take the rest of the jewelry and keep it. Her mother explained to her that Vera "had already received more than her share," but suggested that she not tell Vera about it. She complied because it was her mother's wish and because she preferred to avoid a confrontation with Vera. When it appeared that records from the Norfolk bank did not confirm that Kornelia visited the box at the times indicated, Kornelia denied giving this testimony and said she never accompanied her mother to the safe deposit box. Kornelia also stated that Paul chose to live with her after Rose's death, and insisted on paying his own way. It was his suggestion that they purchase a house rather than rent, and Vera was not told of this arrangement because it was Paul's wish that she not know. She acknowledged that after Rose's death, Paul was presented with three options: he could remain in Norfolk and hire a housekeeper, move to the Chicago area and hire a housekeeper, or move in with them. He was aware that if he chose the last option, it would be necessary to find larger living quarters. It was also Paul's suggestion that he pay them $1,000 per month toward expenses; however, when that proved impractical, they pooled their resources, again at Paul's suggestion. Kornelia asserted that there was no record of how these funds were spent because they did not keep check registers once they were filled.
Kornelia further testified that Paul returned to Norfolk for a few days after Rose's death, accompanied by George, in order to wind up his affairs there. When he returned, he opened a savings account at Crawford Bank (the Crawford account) with an initial deposit of over $15,000, and a safe deposit box at Norfolk Trust and Savings Bank (Paul's box). Her name was also on the Crawford account, but she denied that George was on the account. Upon seeing bank records, she admitted that George's name was added to the Crawford account in August 1976, and that Paul's box was rented in all three names. She also stated that she drove Paul to the bank frequently, but denied that she ever made deposits or withdrawals from the Crawford account; however, when shown bank records, she acknowledged that a number of withdrawal slips on that account were signed by her or George. Kornelia admitted that $20,531.35 was deposited on March 19, 1976, followed by a $10,000 withdrawal the same day; however, she could not explain where the money came from or what was done with the $10,000. In October 1978, after Paul was declared incompetent, she and George withdrew the remaining $2,000 from the account, but she could not recall what they did with that money.
Kornelia also stated that when Rose suffered a stroke in 1975, she had to go to Norfolk to help because Paul could not cope with the situation. After Rose's death, Paul did depend on her to an extent. When Paul moved in with them, he might have brought some gold coins with him, and she remembered seeing coins on his dresser along with important papers, including a number of stock certificates. She later contradicted this and stated that those coins were in their safe deposit box and had never belonged to Paul. When Vera visited in 1976, she learned that Paul had provided $15,000 for the down payment on the house, and angrily demanded that Paul also give her $15,000. At the same time, Vera demanded a division of their mother's jewelry, and she agreed to it although this was the jewelry that their mother had given to her. She acknowledged that she did not tell this to Vera and, as a result, she might have gotten the impression that Paul was giving her the jewelry. Kornelia admitted stating in a deposition that the jewelry was Paul's, but asserted that she was mistaken on that earlier occasion. In the division of the jewelry, Vera's share was valued at $15,000, while her share had a value of only $13,000; Paul asked to keep a share, but Vera talked him out of it. Kornelia did not explain why Paul would ask to keep a share if Rose had given the jewelry to her, but stated that her ownership thereof "might not have been all that clear cut." She also could not explain how her share could have been worth only $13,000, when the jeweler's appraisal showed that the items remaining after Vera received her share had a value of $22,000.
Kornelia acknowledged that it had always been her understanding that Rose and Paul's estate would be divided equally between the two daughters, and that Paul made a will to that effect in 1976. However, in 1977, Paul decided to make a new will, and she and George were present when he discussed its provisions with the attorney as well as when he executed it. After Paul's death, she searched his effects for the original of the 1977 will but could not find it; she never saw him destroy any will.
Kornelia denied that Paul's behavior changed after the 1977 stroke or that she discussed his poor mental condition with Dr. Mohacsy at that time, although she admitted writing a letter stating that he had a poor memory and complained that people were trying to take his money away from him. In late February 1978, Paul suddenly decided to give her all of his stock, mentioned in the 1977 will, and signed in her presence the stock certificates which he kept in his bedroom. Although the certificates were signed on March 1, they were not transferred until October, after Paul had been declared incompetent. The stock in question consisted of 200 shares of Exxon, 100 shares of General Motors, 100 shares of AT&T, and several shares of Chrysler. She further testified that at his death Paul had a few thousand dollars in cash, the Granby Street property, subsequently sold for $100,000, and the Del Argo Apartments, later sold for $380,000, and a joint interest in their home; he owned no gold coins, and no jewelry other than a gold watch. She also stated that George helped Paul with financial matters at his request, and that large bills were paid out of their joint account. Kornelia admitted that she, Susan, and Paul took a trip to Jamaica in 1978 which was financed from that account, but denied that trips she, George, and Susan took to Florida and Hawaii while Paul lived with them, or their trips after his death to Taiwan and the Middle East, were paid for with those joint funds. She stated that one factor in having Paul declared incompetent in September of 1978 was to keep Vera from gaining control over him; Paul understood this and agreed to it.
Kornelia asserted that she never threatened to place Paul in a nursing home if he did not give her money and help purchase a house, nor did she ever tell him that he was suffering extensive business losses or that the cost of a nursing home was prohibitive. However, it was possible that she told him Vera was not an honest person and that she was emotionally disturbed, but this was to excuse her behavior toward him as illness, not meanness. Although Paul had always been somewhat eccentric and absent-minded, he was in good physical and mental health throughout 1977 and into 1978; he visited with friends during that time and played chess. She answered Vera's letters to Paul because he did not want to write to her, not because he was incapable of doing so. Kornelia further testified that she and Paul had a very close relationship, and he told her in February or March of 1977 that he tore up the 1977 will to ensure that she, his natural daughter, would get everything and Vera, whom he did not like, would take nothing. Finally, Kornelia acknowledged that she and George had one safe deposit box before Paul came to live with them, but opened several more while he was residing there; they kept important papers, their jewelry, and George's coin collection in those boxes.
The evidence deposition of Dr. Mohacsy, a psychiatrist, was admitted and she stated therein that she and Vera had been friends for 40 years. She knew the Sternbergs and Banhalmis in Hungary, and Kornelia called her seeking advice shortly after Paul suffered a stroke, although she could not remember whether that call took place in 1977 or 1978. During the call, Kornelia described Paul as senile and irritable, complaining that he was acting peculiarly, was forgetful and misplaced things, and that it was impossible to communicate with him.
Dr. Littman, Paul's physician, testified that he treated Paul from February 1976 until his death. He did not remember each visit, but stated that his office notes disclosed that Paul suffered from mild emphysema in early 1976 and was hospitalized for pneumonia in September of that year. At that time, his emphysema was moderately severe, and an EKG showed probable remote damage to his heart. When he first met Paul, he spoke intelligently, and he did not note any signs of confusion until 1978. Dr. Littman further testified that Paul suffered a mild stroke episode in May 1977, and denied telling Vera that he suffered a series of small strokes. On September 2, 1978, he signed an affidavit stating that he examined Paul on that date and found him confused, disoriented as to time, place and person, and physically and mentally incapable of maintaining himself or exercising judgment in his own behalf. Dr. Littman acknowledged that his office notes did not reflect an examination on that date, but he remembered the Banhalmis telling him that Paul was confused and unable to manage his personal hygiene. In his opinion, the symptoms were indicative of cerebral arteriosclerosis, and Paul was suffering from senile dementia. He arranged Paul's admission to a nursing home, and the diagnosis given at that time was chronic organic brain syndrome. Dr. Littman further testified that he listed Paul's cause of death as cerebral thrombosis brought about as a result of five years of advanced cerebral arteriosclerosis, but asserted that, since no autopsy was performed, he did not know the exact cause of death, which could just as easily have been a heart attack. On cross-examination, he asserted that people suffering from arteriosclerosis can function normally.
Dr. Arieff, a psychiatrist and neurologist, testified that he had examined Paul's medical records as well as depositions and, in his opinion, Paul suffered from progressive mental deterioration which reached a severe degree of dementia in September 1978, when he was declared incompetent. Such a condition is rarely precipitous; the deterioration would have taken place over an extended period of time. He found signs of deterioration for over a year before Paul was declared incompetent, and it appeared that this deterioration was intensified by the May 1977 stroke, as well as by the decreased flow of oxygen caused by emphysema. Hospital records from his 1976 admission indicated that nurses had difficulty obtaining a medical history and communicating with him, and that Paul was at times agitated and confused; however, while those could be signs of dementia, they could also be the result of fever. In his opinion, Paul was not able to manage his personal economic affairs from 1977 to his death in 1978.
Nicholas Burczyk, an expert in handwriting analysis, testified that he had compared signatures on Paul's stock certificates with known examples of his handwriting and, in his opinion, taking into account that Paul was an elderly gentleman, Paul did not sign the stock certificates. He acknowledged that he did not have the original documents, but believed that he could give a reasonably accurate opinion because the copies were very clear.
George, called as an adverse witness, testified that in 1975 his after-tax income was $16,531.23, he had little savings, and he rented his home; therefore, one reason he agreed to Paul's moving in with them was the chance to improve his financial standing. However, he liked Paul and would have taken him in under any circumstances. At the time of Rose's death, he and Kornelia had one safe deposit box in which they kept important papers, jewelry, and his coin collection. When Paul arrived in 1976, they opened a second box in all of their names, and he visited that box many times with Paul. He acknowledged that, with the exception of one admittance ticket signed by Paul in January 1976, he signed all the tickets on that box, but asserted that this did not mean he always entered the box; it was possible that he signed the ticket, but Paul entered alone. George also testified that he visited his sole safe deposit box a total of 21 times between 1972 and 1974, and that he was a signatory on four boxes from 1976 through 1978, which he visited a total of 108 times; a fifth box was opened in 1979. George could not remember the purpose of each particular visit, but speculated that most were in connection with his growing coin collection. He kept his collection and books in those boxes and would enter them to study his coins, compare them to the books, and add to the collection. The collection was not particularly valuable and was purchased from his salary. The bulk of the collection, approximately 70%, was acquired in 1979-83; 10% was acquired in 1976-78.
George further testified that Paul's tax returns reflected the following after-tax income from his Norfolk property: $25,970.22 in 1976; $22,075.41 in 1977; $19,324.45 in 1978; and $19,375.01 in 1979 (estate return). This money was placed in their joint fund, and he could not recall exactly how the money was spent; he acknowledged that when they pooled their funds, his and Kornelia's names were placed on Paul's account, but Paul's name was not added to their account, and he had no joint checking account with Paul. The only expenditure he specifically recalled making from those pooled funds was the purchase of a new automobile in his own name in 1977. During this same period, he and Kornelia had the following income: $18,150.39 in 1976; $21,904.33 in 1977; $21,500 in 1978; and $28,745.45 in 1979. In 1980, they had income of $24,624.47, and included in their return income from the Del Argo Apartments; in 1981, they had income of $39,733.80, but that return did not reflect the sale of the Del Argo Apartments. It sold for $380,000 but was subject to a $100,000 loan which they took out after Paul's death to pay taxes and other expenses, including litigation expenses. George also stated that he saw Paul sign the stock certificates on March 1, 1978, but could not explain why dividends received in 1978 were reported on Paul's estate tax return rather than on their income tax return.
George asserted that it was Paul's idea to buy the house, and he decided to provide further money to pay for expenses and repairs when it became apparent that he and Kornelia could not manage on their income. Paul made the 1976 will at Vera's request, and shortly after executing the 1977 will, Paul stated that he was unhappy with it and wanted to favor Kornelia even more; later, he said there was no will. Paul was mentally alert until two months before he died, ...