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Union Nat'l Bk & Trust Co. v. Carlstrom





Appeal from the Circuit Court of Will County; the Hon. Wayne P. Dyer, Judge, presiding.


Union National Bank and Trust Company of Joliet (the bank) appeals from a judgment for defendant Barbara Hamilton, a/k/a Barbara Carlstrom (Barbara). Barbara cross-appeals. We affirm on all counts.

Barbara was married to Dale Carlstrom (Dale), a dentist. During the course of his career, Dale took out several loans with the bank. Dale and Barbara also borrowed money from the bank for the purchase of their primary residence, a summer home and some farmland. During the period relevant to the instant case, Dale and Barbara did most of their business with Elton Bates, a vice president.

In November 1973, Dale sought additional financing to expand his dental practice. Bates agreed to make the loan, but only if a guaranty could be obtained from Barbara. Barbara signed an absolute, unconditional guaranty for up to $60,000 of Dale's indebtedness. Barbara testified at trial that she did not remember signing the guaranty. While admitting that the signature was hers, she testified to never reading the documents her husband placed before her to sign.

In September 1974, Dale filed for divorce. In October, Dale telephoned Bates to find out the balance of his notes to the bank. Bates responded with a letter detailing the notes. The letter also mentioned that Barbara had guaranteed the notes for $60,000.

Barbara hired attorney Richard Buck to represent her in the divorce proceedings. At first, Barbara wanted to reconcile with Dale. When this appeared to be impossible, she instructed Buck to concentrate on working out a property settlement.

After meeting with Barbara to ascertain the extent of the Carlstrom's assets and liabilities, Buck concluded that he did not have adequate information. This was apparently also the conclusion of Dale's attorney, Perry Rudman. Either Buck or Rudman called Bates at the bank to set up a meeting to go over the Carlstrom's financial situation there.

The meeting was held on March 3, 1975. Although Bates had no independent recollection of the meeting, the evidence suggests that not only did the meeting take place, but that Bates had prepared for it to some extent. What occurred at the meeting was revealed only through Buck's testimony. Buck testified that he asked to look at the Carlstrom's files. Bates would not allow this, since other parties were mentioned in certain documents contained therein. Bates read from the files, and both attorneys took notes. Buck's notes were introduced at trial. They reveal that Bates gave a detailed description of Dale's borrowings over the years, the interest rates, nature and extent of collateral and various renewals granted by the bank. Bates also detailed the joint obligations of Dale and Barbara. At some point in the meeting, Bates instructed a secretary to prepare a tape on an adding machine totaling both Dale's individual debts and the couple's joint debts. The tape was introduced at trial. It listed Dale's debts at $92,375 and joint debts at $105,300. No mention was made of the guaranty at any time during the meeting. There is strong circumstantial evidence to suggest that not only was Bates aware of the guaranty's existence during the meeting, but that the guaranty instrument was in the files that Bates was reading through for the attorneys.

Based in part on the information obtained at the March 3 meeting, the attorneys negotiated a property settlement a few weeks later. The decree incorporating the settlement divided the assets and liabilities of the Carlstroms. No mention was made of the guaranty.

Dale remarried in 1975, but died in October 1976. The attorney for the executor of his estate testified that Dale's estate was insolvent. In 1977, the bank informed Barbara of its intention to proceed against her on the guaranty. She testified that this was her first knowledge of the existence of the guaranty.

The bank obtained a confession of judgment against Barbara for $60,000 plus costs and attorney fees. Barbara successfully moved to open the judgment. After numerous pleading battles, the cause went to trial with Barbara interposing an affirmative defense of estoppel based upon the bank's concealment of the guaranty. She also filed a four-count counterclaim alleging fraud, wanton and wilful misconduct, gross negligence and a violation of the Federal Truth-in-Lending Act (15 U.S.C. § 1640 (1982)). Sitting without a jury, the trial court found for Barbara on the estoppel defense. Accordingly, recovery was denied on her negligence count for lack of damages. Punitive damages under the other common law counts was denied for lack of actual damages. The court dismissed the Federal count at the close of evidence.

• 1 At the outset, we reject the bank's contention that the court erred in denying its motions to dismiss under former section 45 (now section 2-615 of the Code of Civil Procedure). The bank argues that the estoppel defense was inadequately alleged due to vagueness. We find that not only were the facts adequately presented to allow the bank to prepare its case, but that any vagueness was cured by ample opportunity for discovery. (Fanning v. Lemay (1966), 78 Ill. App.2d 166, 222 N.E.2d 815.) The bank also challenges the sufficiency of certain of the allegations as they relate to the elements of estoppel. These arguments go to the substance of the defense and will be discussed in detail below.

• 2 It is also contended that the complaint inadequately alleges a duty on the bank's part to disclose information to its customers. Ordinarily, this is true. However, as the trial court correctly found, a party may assume a duty to disclose information accurately by its conduct. That clearly was the case here. The bank voluntarily gave a detailed description of the Carlstrom's dealings with the bank. In so doing it undertook a duty not to deliberately conceal or misrepresent. Dace v. Gilbert (1981), 96 Ill. App.3d 199, 421 N.E.2d 377.

The bank's principal argument on appeal is that the trial court's findings on the estoppel defense were against the manifest weight of the evidence ...

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