Appeal from the Circuit Court of DeWitt County; the Hon.
William C. Calvin, Judge, presiding.
JUSTICE GREEN DELIVERED THE OPINION OF THE COURT:
Rehearing denied July 2, 1984.
This case concerns a suit to set aside a deed made, without consideration, by Bessie J. Lamb, conveying a 182-acre family farm to her son, defendant, Ora Odell Lamb (Odell). The deed reserved a life estate to Bessie. The trial court set aside the conveyance. The principal legal questions involved are (1) whether Bessie's executor could claim the attorney-client privilege to prevent the introduction of testimony of Bessie's attorney as to his conversations with her during the transaction in question, and (2) the application of the rule of Thayer's "bursting bubble" theory of presumptions to the long-standing rule that a conveyance to the conveyor's fiduciary is presumptively invalid. (Franciscan Sisters Health Care Corp. v. Dean (1983), 95 Ill.2d 452, 448 N.E.2d 872.) We hold that the court erred in permitting the claim of the privilege and reverse the judgment and remand for reconsideration. On remand the trial court should consider the Thayer theory as set forth in Franciscan Sisters.
The deed was executed on August 17, 1966, when Bessie was 72 years old. On September 26, 1979, when Bessie was 85 years old, she filed a four-count complaint against Odell and his wife, Patricia Lamb (Patricia), in the circuit court of DeWitt County to set aside the deed. She died on August 5, 1980, and on November 18, 1980, her son Paul Lamb (Paul), who had been appointed her executor, was substituted, in his representative capacity, as plaintiff. On April 24, 1981, the executor filed an additional count to the then amended complaint alleging that the conveyance had been obtained in breach of the fiduciary duty owed by Odell to Bessie. By June 8, 1982, 11 of Bessie's 12 children, including Paul, had joined as plaintiffs in their capacity as devisees.
The case was tried at a bench trial lasting four days. Later, on January 17, 1983, the court entered a judgment (1) rescinding the conveyance, (2) ordering Odell and Patricia to convey the premises to the executor, and (3) directing an accounting. The judgment was based on count V which alleged a breach of a fiduciary relationship. Odell and Patricia have appealed, asserting that the judgment was contrary to the manifest weight of the evidence and that the court erred in (1) permitting exercise of the attorney-client privilege, (2) permitting evidence of transactions by Bessie several years after the conveyance, (3) permitting plaintiffs to violate their discovery obligations, and (4) refusing defendants an opportunity to present newly discovered evidence at the hearing on the petition for rehearing.
A recitation of the testimony is necessary to explain our ruling. Many of the basic facts are undisputed. Prior to the death of Bessie's husband, Jerry M. Lamb, the father of all the Lamb children, in September 1965, the farmland was owned by Jerry and Bessie as joint tenants with right of survivorship. It then became Bessie's property outright. Prior to Jerry's death, Odell had been farming the land on a part-time basis, living with Patricia in a house he had built on the land. The parents lived in the farm house and had conveyed to Odell a mortgage against the premises in the amount he had expended to build the house in which Odell and Patricia lived.
Upon the father's death, the family met and decided that the oldest child, Carl, should assume the leadership in managing the family affairs. Carl went to the farm to take an inventory. Upon Carl's arrival, Odell told Carl to "get the hell out of [there]" because Odell had farmed the property prior to the father's death and maintained he should "still operate it." When Bessie was told of this, she responded that maybe the problem could be resolved. However, the record does not indicate that Bessie did anything to limit the control that Odell had assumed. By the time of the conveyance, Bessie was 72 years old. She had only a sixth grade education.
The evidence indicated that, prior to her husband's death, Bessie had not handled business concerning the farm. Although various plaintiffs testified that after her husband's death Bessie relied on Odell to help her transact farm business, those plaintiffs were unable to give specific instances of such reliance. However, an employee at the bank where Bessie did business testified that by early 1966 Odell was permitted to write checks on Bessie's account.
In early August 1966, Bessie had several conferences with her lawyer in his office. On August 17, 1966, Odell drove Bessie to that office but did not stay with her there. During a lengthy conference with that lawyer, Bessie executed a will and the deed in question. The only other person present during the conference was the lawyer's wife, who had the power of a notary public.
Between 1971 and 1974 a portion of the farm was sold to the Illinois Power Company for $39,000. Bessie, Odell and Patricia were apparently required to join in the deed. Bessie was permitted by Odell and Patricia to keep 50% of the net proceeds of the sale, although based on an actuarial valuation of her life estate interest she would have been entitled only to approximately 33% of the proceeds. The deed in question was recorded at the time of the sale to Illinois Power Company, but apparently no one in the Lamb family, other than the parties to that transaction, knew of the deed until 1979. Thereafter Bessie made the will, later admitted to probate, which left her property to her children in equal shares.
• 1 In Kolze v. Fordtran (1952), 412 Ill. 461, 107 N.E.2d 686, the court determined that a fiduciary relationship exists when there is a special confidence reposed in one who, in equity and good conscience, is bound to act in good faith and with due regard to the interests of the one reposing the confidence. The factors to be considered in determining whether a fiduciary relationship exists include the degree of kinship, disparity of age, health and mental condition, and the extent to which the allegedly servient party entrusted the handling of his business and financial affairs to and reposed faith and confidence in the dominant party. (Desiderato v. Sullivan (1980), 84 Ill. App.3d 1117, 406 N.E.2d 116.) In Kolze, the court stated:
"Where the relationship does not exist as a matter of law or is sought to be established by parol evidence, the proof must be clear, convincing, and so strong, unequivocal, and unmistakable as to lead to but one conclusion. [Citations.] The burden of proving facts from which a fiduciary relationship would arise is on the one who attempts to set aside a conveyance." Kolze v. Fordtran (1952), 412 Ill. 461, 468, 107 N.E.2d 686, 690.
• 2 Bessie apparently did nothing when Odell refused to cooperate with Carl shortly after Jerry Lamb's death, thus indicating she was relying on Odell to make decisions concerning her principal asset, the farm. Odell had taken firm control of that property. The fact that Bessie spent much time visiting other members of her family in the first few years after her husband's death did not negate the trust and confidence she was placing in Odell. The evidence supported a determination by the trial court that a fiduciary relationship had been proved by clear and convincing evidence.
Citing Desiderato v. Sullivan (1980), 84 Ill. App.3d 1117, 406 N.E.2d 116, defendants contend that in order to properly raise the presumption of invalidity of a conveyance one must not only prove the existence of a fiduciary relationship, but must also show that the relationship existed with reference to the transaction in dispute. Even if that were so, the relationship here between Bessie and Odell principally involved the farm which was the subject matter of the conveyance and Odell had aided Bessie in conferring with the lawyer who advised Bessie with reference to the transaction and who drafted the deed. In any event, we deem that evidence that the fiduciary did not participate in the transaction under scrutiny is more properly considered in rebutting the presumption of undue influence rather ...