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09/25/89 Central Bank -- Granite v. Mahmoud Ziaee Et Al.

September 25, 1989





CENTRAL BANK -- GRANITE CITY, Guardian of the Estate of

544 N.E.2d 1121, 188 Ill. App. 3d 936, 136 Ill. Dec. 346 1989.IL.1484

Appeal from the Circuit Court of Madison County; the Hon. Michael J. Meehan, Judge, presiding.


JUSTICE GOLDENHERSH delivered the opinion of the court. WELCH, P.J., and HOWERTON,* J., concur.


Defendants, Mahmoud Ziaee and Maryam Ziaee, husband and wife, appeal from a judgment of the circuit court of Madison County for plaintiff Central Bank -- Granite City, guardian of the estate of Clover Cochran, a disabled adult, upon a jury verdict for actual damages of $79,700 and punitive damages of $80,000. In this cause, defendants raise the following issues: (1) whether the trial court erred in allowing plaintiff to introduce evidence of the amount of defendants' annual income for the purpose of proving defendants' net worth in connection with plaintiff's prayer for punitive damages; (2) whether the trial court's award of punitive damages constituted double recovery; and (3) whether the trial court erred in admitting into evidence a tape recording of Clover Cochran's statements made on January 7, 1985. This court affirms.

Plaintiff was appointed guardian of the estate of Clover Cochran on January 9, 1985, when Clover was 89 years old. Plaintiff, in its capacity as guardian, originally filed a complaint against defendants in which it sought to have a constructive trust imposed on all land that Clover Cochran had conveyed to defendants. Plaintiff's complaint was later amended to add two additional counts. Count II alleged that the estate was entitled to damages for breach of a fiduciary duty in the amount of the difference between the market value of the assets conveyed to defendants and the consideration received by Clover. Count III alleged that the transfers made during the existence of defendants' fiduciary duty with Clover were induced by defendants' fraudulent representation that they would "attend to her financial affairs, provide her with the necessities of life, and comfortably support and maintain her for the remainder of her natural life." Count III sought both compensatory and punitive damages from defendants.

Defendants first met Clover in the winter of 1978 when she was 82 years of age. Defendant Mahmoud Ziaee was a radiologist on staff at various Alton hospitals. His position required him to maintain a residence in Alton. Dr. Ziaee approached Clover about a potential sale of her real estate, even though her property was not listed or advertised. Clover owned approximately 8.5 acres of land in a rural setting off Route 100, close to Grafton. Defendants had no relatives in the United States, and Clover's family, of which only a few were remaining, were scattered in Kentucky, Georgia and Florida. Clover had been married at one time, but had been divorced for several years and had no children. Defendants, a doctor and a nurse, had two children. Clover and the entire family instantly established a close relationship. By the time the doctor left at the end of their first meeting, he agreed that he knew Clover's life story. Both defendants and their children began calling Clover "Grandma."

According to Dr. Ziaee, he and Clover agreed on a purchase price for her property within one week of their initial meeting. The doctor was to pay Clover $5,000 with an option to buy the remainder of her property at her death for a price not to exceed $90,000. Defendants would initially have 4.2 acres on which to build their home. An Alton attorney, Charles Godfrey, who had been retained by Clover in 1978, gave a different account of the original agreement between defendants and Clover.

According to Godfrey, Clover had agreed to sell all her land to defendants for $100,000 payable in installments over a five-year period, with Clover reserving a life estate in the portion of the property where her home was situated. Godfrey, however, suggested a different approach in which defendants would make payments, including interest, over a three-year period with a balloon payment at the end. Godfrey spent some time attempting to get a good title description on the land. A meeting was then scheduled between the parties to sign the papers. Godfrey went over the entire contract with the parties. Initially, the doctor seemed to be in agreement, but then stated that he had changed his mind and wanted "to wait another year or two" before proceeding any further with the transaction. Clover seemed surprised by the doctor's announcement. Based on Godfrey's meetings with Clover in 1978, he formed the opinion that Clover's mental ability was somewhat limited at that time. He did not, however, believe that defendants were forcing her into making this agreement.

Approximately three months later, on December 5, 1978, defendants acquired title to roughly 4.2 acres of unimproved real estate from Clover and an option to purchase her remaining land on which her home was located for a price "not to exceed $90,000." Defendants paid Clover $5,000 for the 4.2-acre tract, which at that time had a fair market value of $15,500, according to plaintiff's appraiser at trial. Defendants paid no consideration for the option. A Collinsville attorney, Robert Cadagin, deceased at the time of trial, had been hired by defendants to prepare both the deed and the option. Cadagin originally represented defendants in this suit, but was forced to withdraw due to illness, which ultimately claimed his life. Clover did not have an independent attorney in connection with the transaction.

In March 1980, defendants obtained an additional three-fourths-acre parcel of land to use for their driveway and water line to the house they were constructing. Defendants paid Clover $100 for this conveyance. At trial, plaintiff's expert estimated that this property had a fair market value of $3,000 at the time of the conveyance. Again, attorney Cadagin prepared the paperwork for this transaction. Clover did not have her own counsel.

In December 1981, another transaction occurred between the parties. At this time, defendants had completed construction on their home. Clover signed an amendment to the option given to defendants in December 1978, whereby the option price on Clover's remaining land was reduced to an amount "not to exceed $70,000." Clover received no money in consideration for this transaction. Defendants and Clover then began what would be the last transaction concerning Clover's real estate.

The final transaction concerned a quit-claim deed of the remainder of Clover's land with a life estate for Clover. Defendants' original attorney in this transaction was Tim Campbell. He believed it would be in Clover's best interest to see a separate attorney who would represent her concerning this transaction. Campbell called another attorney, Robert St. Peters, and asked him to talk to Clover concerning this transaction. Mrs. Ziaee took Clover to consult with St. Peters, but waited in the hallway during Clover and St. Peters' Discussion. St. Peters tape-recorded his conversation with Clover concerning her transfer of land to defendants. This tape recording was played for the jury. Based on this recorded conversation, St. Peters concluded that Clover did not have the requisite mental capacity to make such a transfer and, further, did not desire to make such a transfer. Upon finishing his conversation with Clover, St. Peters informed Mrs. Ziaee that the transfer of Clover's land would not occur. According to St. Peters, Mrs. Ziaee became irate and pulled the deed prepared by Tim Campbell out of St. Peters' hands. Mrs. Ziaee then grabbed Clover and shoved her into the Ziaee's Mercedes. St. Peters immediately called Tim Campbell and told him that Clover did not want to transfer her land. St. Peters stated that after he had explained the deed to Clover, she was adamant that she did not want to give the land away. This was corroborated by the tape. St. Peters also sent a letter to Clover expressing his concern that defendants might try to have Clover sign the deed without her knowing what it was. The letter cautioned her not to sign anything without her knowing what it was. This letter was introduced into evidence. On April 12, 1984, Tim Campbell called St. Peters and assured him that defendants would follow Clover's wishes -- the transaction would not occur. On April 16, 1984, St. Peters received a follow-up letter to that effect with the unsigned quit-claim deed enclosed. However, on May 15, 1984, defendants acquired the balance of Clover's land by a warranty deed prepared by attorney Cadagin, now deceased. Clover kept a life estate in the remaining property, which was then worth approximately $56,800, according to plaintiff's expert. Attorney St. Peters was not consulted again and had no knowledge of the transaction.

Defendants also acquired several items of personal property from Clover, including a fur coat, a dining room set, a settee, jewelry, a piano, and a 1953 Chrysler New Yorker. Plaintiff's attorney also had in his possession 300 Kentucky Bank shares along with a general power of attorney executed by Clover. Dr. Ziaee testified that he had paid Clover $500 for the automobile and that he performed several repairs on the car. No monetary consideration was given for the remaining items of personal property. However, ...

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