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02/14/94 DON FALCON AND BERTA FALCON v. RON THOMAS

February 14, 1994

DON FALCON AND BERTA FALCON, HUSBAND AND WIFE, D/B/A THE EL LEO PARTNERSHIP, PLAINTIFFS-APPELLEES,
v.
RON THOMAS, RONALD L. THOMAS, STEPHEN L. THOMAS, MICHAEL D. THOMAS AND JOHN E. THOMAS, DEFENDANTS-APPELLANTS.



Appeal from Circuit Court of Adams County. No. 91L38. Honorable Mark A. Schuering, Judge Presiding.

As Corrected March 7, 1994. Released for Publication March 21, 1994.

Honorable John T. McCULLOUGH, P.j., Honorable James A. Knecht, J., Honorable Carl A. Lund, J.

The opinion of the court was delivered by: Mccullough

PRESIDING JUSTICE McCULLOUGH delivered the opinion of the court:

Defendants Ron Thomas (Thomas) and his sons, Ronald L. Thomas (Ronald L.), Stephen L. Thomas, Michael D. Thomas, and. John E. Thomas, appeal from a judgment entered against defendants and in favor of plaintiffs Don Falcon and Berta Falcon, d/b/a The El Leo Partnership, following a bench trial in the circuit court of Adams County. As amended, the plaintiffs' complaint sought to set aside a transfer of real estate from Thomas to his four sons as a fraudulent conveyance under the Illinois Uniform Fraudulent Transfer Act (Act) (Ill. Rev. Stat. 1991, ch. 59, par. 101 et seq.).

Defendants raise two issues concerning the sufficiency of the evidence, to wit: whether plaintiffs produced enough evidence to raise a prima facie case and whether, in light of all the evidence, the judgment was against the manifest weight of the evidence. We affirm.

At the inception of the trial, plaintiffs made an oral motion which the trial Judge construed as an alternative motion for a judgment on the pleadings and for a finding that, based on the pleadings and taking judicial notice of the Adams County case No. 89-L-32 (involving the registration of a foreign judgment), plaintiffs had madeout a prima facie case. That case was appealed to this court. ( Falcon v. Faulkner (1991), 209 Ill. App. 3d 1, 567 N.E.2d 686.) In Falcon v. Faulkner, filed February 21, 1991, this court affirmed a decision to grant plaintiffs' petition to register a Montana judgment entered in favor of plaintiffs and against Thomas in the amount of $131,010.80. Falcon v. Faulkner, 209 Ill. App. 3d at 4, 567 N.E.2d at 689.

The trial court denied the plaintiffs' motion for judgment on the pleadings, but after counsel's argument granted the motion for a finding that plaintiffs had made a prima facie case. Defendants complain that the motion made by plaintiffs at the inception of the trial was improper because it was a "hybrid" motion. In the cases cited by defendants, the motions were pretrial motions authorized by different statutes and therefore requiring different analysis. Rowan v. Novotny (1987), 157 Ill. App. 3d 691, 693-95, 510 N.E.2d 1111, 1112-13, involved a motion to dismiss commingling motions under sections 2-615 and 2-619 of the Illinois Code of Civil Procedure (Code) (Ill. Rev. Stat. 1985, ch. 110, pars. 2-615, 2-619). In Wilde v. First Federal Savings & Loan Association (1985), 134 Ill. App. 3d 722, 729, 480 N.E.2d 1236, 1240-41, the motion was assertedly based on sections 2-606, 2-615, and 2-619 of the Code. Premier Electric Construction Co. v. LaSalle National Bank (1983), 115 Ill. App. 3d 638, 642, 450 N.E.2d 1360, 1363, also involved a motion to dismiss which did not designate whether it was based on section 2-615 or 2-619 of the Code. Even in such situations, reversal is not required in the absence of prejudice to the opposing party. Rowan v. Novotny, 157 Ill. App. 3d at 693, 510 N.E.2d at 1112; Premier Electrical Construction Co. v. LaSalle National Bank, 115 Ill. App. 3d at 642, 450 N.E.2d at 1363.

In this case, plaintiffs' attorney moved for judgment on the pleadings (Ill. Rev. Stat. 1991, ch. 110, par. 2-615(e)) on the basis that a prima facie case was established by plaintiffs through the admissions on file and the facts established in the prior case involving the registration of the Montana judgment. The motion for judgment on the pleadings was denied by the trial court so no prejudice to defendants could have resulted. However, based on the argument of plaintiffs' counsel, the trial court, referring to the motion as a "hybrid," deemed that the plaintiffs were also moving for a finding by the trial court that a prima facie case had been made and the burden of going forward had shifted to defendants without the need of plaintiffs having to present any additional evidence. This was made clear by the trial court.

The defendants argue that they were prejudiced by this procedure because they did not get the opportunity to make a motion for directed verdict and, thereby, require the trial court to weigh the evidenceto assess whether a prima facie case had been established. By plaintiffs' motion, the trial court was asked to weigh the sufficiency of the evidence, and defendants objected to that. As a result, defendants' argument is without merit.

Defendants also contend that plaintiffs did not produce sufficient evidence to establish a prima facie case. The circumstances in this case represent the "flip side" of a denial of a motion for directed verdict at the close of plaintiffs' case in chief. If a defendant moves for a directed verdict at the close of plaintiffs' case, but proceeds to present evidence after the motion has been denied, then the issue is waived. (Ill. Rev. Stat. 1991, ch. 110, par. 2-1110.) The contention in this case that plaintiffs did not produce sufficient evidence to establish a prima facie case is deemed waived because defendants did not stand on their objection, but proceeded to produce evidence.

The only remaining question on review is whether the findings of the trial court are against the manifest weight of the evidence. ( People ex rel. Hartigan v. Anderson (1992), 232 Ill. App. 3d 273, 277, 597 N.E.2d 826, 829.) Because the trial court's order relies on language from section 6(a) of the Act (Ill. Rev. Stat. 1991, ch. 59, par. 106(a)), this court's analysis will focus on that subsection also. Only if this court agreed with defendants that a judgment based on section 6(a) was against the manifest weight of the evidence would it be necessary to analyze the facts further to ascertain whether judgment would have been properly entered under any of the subsections of section 5 or under section 6(b) of the Act (Ill. Rev. Stat. 1991, ch. 59, pars. 105, 106(b)), or whether to remand to the trial court for that purpose.

In defendants' answers to plaintiffs' original and amended complaints, defendants admitted the following allegations: (1) on January 13, 1988, plaintiffs filed a complaint in the Eleventh Judicial District Court, Flathead County, Montana, seeking damages arising from the breach of a horse-breeding contract between plaintiffs and Thomas, a copy of which contract was attached to the original complaint; (2) on January 21, 1988, Thomas was duly served with a copy of the Montana complaint and summons by the Adams County, Illinois, sheriff's department; (3) on September 5, 1988, the Montana action was pending; (4) on or about September 5, 1988, Thomas was the owner of real estate located in Pike County, Illinois, described in a quitclaim deed, a copy of which was also attached to the complaint; (5) on or about September 5, 1988, Thomas made and executed the quitclaim deed purporting to convey said real estate to his four sons, also named defendants in this case; (6) on January 19, 1989, the Montanacourt entered the $131,010.80 judgment, including court costs, attorney fees, and interest at a rate of 10% per annum; (7) the petition to register the Montana judgment was filed in the circuit court of Adams County on March 8, 1989; (8) on November 16, 1989, while the registration of judgment action was pending in the circuit court of Adams County, the quitclaim deed was recorded in the office of recorder in and for Pike County, Illinois; and (9) that said conveyance tended to and did impair the rights of plaintiffs in that Thomas did not have money or property other than the property purportedly conveyed to his sons out of which plaintiffs' judgment could be satisfied. This final allegation was admitted in the original answer, but denied in the answer to the amended complaint. The defendants dispute, that the trial court could rely on an admission in a pleading which had been supplanted by an amended pleading. However, such an admission, although not a judicial admission, may be introduced into evidence and may be considered by the trier of fact. Precision Extrusions, Inc. v. Stewart (1962), 36 Ill. App. 2d 30, 50-51, 183 N.E.2d 547, 556-57.

The copy of the quitclaim deed attached to the complaint recited that the conveyance of the property to the sons in joint tenancy was made for and in consideration of $10 and other "goods" and valuable consideration. The deed was prepared by John F. Adams (defendants' attorney). Adams notarized Thomas' signature on the deed, and Adams, as representative of the seller, acknowledged on the face of the deed that the transaction was exempt under subparagraph (e) of section 4 of the Real Estate Transfer Tax Act. (Ill. Rev. Stat. 1987, ch. 120, par. 1004(e).) The copy of the deed, which defendants did not challenge as inaccurate, also sets out the legal description of multiple parcels of property which the testimony later explained encompassed 1,342 acres. In addition, the return of service of process in this case showed Thomas resided in Texas at the time of being served on April 12, 1991.

Thomas testified that, at the time of trial, he resided in Miami, Florida. He moved there in October 1992. Prior to that he lived in Dublin, Texas. He moved there in the fall of 1987 from Quincy, Illinois. At the time of the hearing, on March 23, 1993, Ronald L. was 29, Michael was 25, Stephen was 23, and John was 19. When he moved to Texas, Thomas was in the business of buying and selling horses. His sons had been in the business. He was also in the truck sales business. Ronald L. went with him to Texas and worked in the truck business. The other family members actively participated in transporting trucks. In 1988, when he lived in Texas, he had bank accounts in Illinois and had notes at the Boatmen's Bank in Quincy.

Admitted into evidence were promissory notes payable to Boatmen's Bank dated January 14, 1988 ($150,000); December 23, 1988 ($300,000); and December 22, 1989 ($300,000). His signature was on the January 14 and December 23, 1988, notes. The signatures on the other note were his, Ronald L.'s, Michael's, and Stephen's. These notes represented a line of credit for the truck business. As to the indebtedness at the bank, there was always an inventory of trucks which would be applied against the loan value.

The deed conveying the subject farm to his four sons was dated September 5, 1988. He picked it up at his attorney's office, took it to the family residence in Quincy, and gave it to his ex-wife Sarah and Stephen. He told them he was paying his debt and it was their opportunity to take over. The deed was not recorded for over a year.

With regard to the deed, the sons did not give him cash or any other consideration. A financial statement signed by Thomas and dated August 4, 1989, was given to Schork and reflected certificates of deposit in Boatmen's Bank of $225,000. He had a like sum in that bank and one of its affiliates the year before. Also admitted into evidence was a signature card for Boatmen's Bank showing two CDs, one in the amount of $125,000, and another for $100,000. The CDs were not pledged as collateral on any notes. Both CDs matured on January 19, 1990, and were cashed. The $125,000 CD could have been paid on the note. The funds from the other CD were wired to Texas. He had no CDs at the time of trial. The last time he had a CD in his name was January 19, 1990.

At the time of the conveyance in September 1988, he lived in Texas, and he had other assets in addition to the CDs. He then owned 90 head of horses. The horses were located in Illinois. None were in Texas. The horses were in Illinois until about the end of 1990. Their average value was $2,500. He sold the horses to Allen Faulkner in Oklahoma, Shelton Ranches in Texas, and Don Duwrall in ...


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