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12/08/88 David R. Hill Et Al., v. Ben Franklin Savings &

December 8, 1988





531 N.E.2d 1089, 177 Ill. App. 3d 51, 126 Ill. Dec. 462 1988.IL.1778

Appeal from the Circuit Court of Du Page County; the Hon. S. Keith Lewis, Judge, presiding.


JUSTICE REINHARD delivered the opinion of the court. LINDBERG, P.J., and UNVERZAGT, J., concur.


Plaintiffs, David R. Hill and Linda L. Hill, appeal from a judgment for defendant, Ben Franklin Savings & Loan Association (Ben Franklin), entered at the close of plaintiffs' case by the circuit court of Du Page County in a non-jury case (Ill. Rev. Stat. 1987, ch. 110, par. 2-1110) in their action for breach of an agreement to refinance plaintiffs' indebtedness to Ben Franklin and for recovery of interest paid on certain promissory notes they purportedly did not sign.

Plaintiffs raise two issues on appeal: (1) whether plaintiff, David Hill, was erroneously prohibited from testifying to the value of his property, and (2) whether the circuit court erred in denying plaintiffs the effective assistance of counsel by prohibiting David Hill from consulting with his counsel during a weekend recess which interrupted his testimony.

A bench trial was held on counts I and IV of plaintiffs' third amended complaint. In count I, plaintiffs sought recovery for losses incurred when, due to Ben Franklin's alleged breach of an agreement to refinance certain mortgages, plaintiffs were forced to sell the mortgaged properties at below market value. Count IV alleged that certain promissory notes purportedly executed by plaintiffs bore forged signatures and sought, among other relief, imposition of a constructive trust upon interest paid on the notes.

Evidence adduced at trial establishes the following facts. David Hill was involved in the business of building single-family homes in the late 1970's. Hill did business individually under the name Scott Builders and in a partnership with Larry Bischman operating under the name Hillman Development.

Beginning in 1978, Hill obtained financing for various construction projects from Ben Franklin. The procedure for financing a project was as follows. Hill would present Ben Franklin with a plan to construct a home on a particular lot. Ben Franklin would then appraise the value of the lot with the proposed improvements and would extend to Hill a line of credit, secured by a mortgage on the lot, for a portion of the construction costs. Hill obtained additional funding with loans secured by assignment of the beneficial interest in his home at 830 Jay Drive, Downers Grove.

At the closing of the sale of a house at 6201 Sleepy Hollow, Lisle, in September 1980, Hill informed Bernard Adams, then an officer of Ben Franklin, that he thought that "pay off letters" issued by Ben Franklin showed greater indebtedness than Hill's records indicated. Hill demanded a full accounting on all construction loans. Hill testified that he repeated his request for an audit several times. Hill testified that in February 1981, he was contacted by Elliot Lease, Ben Franklin's comptroller, who requested that they meet as soon as possible. Also present at the meeting which followed were Bernard Adams and Joseph Gasior, chairman of Ben Franklin, and two unidentified individuals.

At the meeting, Joseph Gasior told Hill that all the construction loan accounts showed a negative balance and were delinquent. Hill testified that he responded that "loan in process" cards maintained by Ben Franklin, documenting the status of the construction loan accounts, showed the accounts to have a positive balance. According to Hill, Gasior replied that Adams had deposited funds from Ben Franklin Service Corporation in the accounts without anyone's knowledge. Gasior then showed Hill four notes purportedly executed by Hill totaling $80,000, with approximately $20,000 in accrued interest.

Hill testified that a full audit of all the construction loan accounts was conducted, disclosing that Adams had engaged in improper accounting of loan transactions, debiting construction payouts to loan accounts for different houses. The audit further disclosed that Adams had placed funds belonging to Ben Franklin Service Corporation into Hill's accounts and that Adams had hidden the four unsecured notes.

On March 23, 1981, Hill and Ben Franklin executed a written agreement concerning payment of Hill's indebtedness to Ben Franklin. At the time of the agreement, three homes built by plaintiffs and financed by Ben Franklin remained unsold. These homes were located at 908 Hyde Park Lane, Naperville; 6217 Sleepy Hollow, Lisle; and 6205 Sleepy Hollow, Lisle. A contract for the sale of a home at 6209 Sleepy Hollow, Lisle, had been executed, but the closing had not yet occurred. The agreement to refinance Hill's indebtedness required Hill to execute a note for $40,000 payable in two months bearing interest at 15% which would be paid from the proceeds of the sale of 6209 ...

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