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03/03/94 GILBERT BROS. v. MARY HELEN GILBERT AND

March 3, 1994

GILBERT BROS., INC., AN ILLINOIS CORPORATION, PLAINTIFF-APPELLANT,
v.
MARY HELEN GILBERT AND STEPHEN GILBERT, TRUSTEE OF THE MARY HELEN GILBERT TRUST, DEFENDANTS-APPELLEES.



Appeal from Circuit Court of Piatt County. No. 92CH10. Honorable john P. Shonkwiler, Judge Presiding.

Petition for Rehearing Denied April 5, 1994. As Corrected March 31, 1994. Petition for Leave to Appeal Denied October 6, 1994.

Honorable John T. McCULLOUGH, P.j., Honorable Robert W. Cook, J., Honorable Carl A. Lund, J.

The opinion of the court was delivered by: Mccullough

PRESIDING JUSTICE McCULLOUGH delivered the opinion of the court:

Gilbert Brothers, Inc. (Company), filed an action against Mary Helen Gilbert and her son, Stephen Gilbert, as trustee of the Mary Helen Gilbert trust, for fraudulent transfer of funds. Counts I and II of the complaint alleged the violation of the Uniform Fraudulent Transfer Act (Act) (Ill. Rev. Stat. 1991, ch. 59, par. 101 et seq.) and counts III and IV of the complaint alleged a violation of common law fraud. The trial court dismissed the action with prejudice, after allowing two amended complaints, as barred by the applicable statute of limitations. The Company appealed. The issue before the court is whether the trial court erred in dismissing the action as barred by the statute of limitations. We affirm the trial court's dismissal of the complaint.

The current action is a suit filed by the Company to recover funds allegedly fraudulently transferred by the Gilberts. A complete factual background can be found in Hannah v. Gilbert (1990), 207 Ill. App. 3d 87, 565 N.E.2d 295, 152 Ill. Dec. 53.

On April 6, 1981, Richard L. Hannah filed an action against Wilbur (Nick) Gilbert and his son, Stephen, for breach of a noncompetition clause in a contract with the Company. On March 8, 1982, Nick was found incompetent and his wife, Mary Helen Gilbert, was appointed guardian of his estate and his person. A jury verdict for Hannah was entered and Nick posted a certificate of deposit (CD) in the name of Nick and/or Helen Gilbert in the amount of $150,000 pending appeal. The appellate court reversed the trial court on January 21, 1985, holding that the Company, rather than Hannah, was the proper party to bring the action. On March 8, 1986, the claim was refiled by the Company. On February 2, 1990, the jury returned a verdict in favor of the Company.

The Company filed the complaint in this action on August 11, 1992. On September 23, 1992, the trial court granted the Gilberts' motion to dismiss pursuant to section 2-615 of the Code of Civil Procedure (Code) (Ill. Rev. Stat. 1991, ch. 110, par. 2-615). The Company filed its first-amended complaint on October 22, 1992. On February 22, 1993, the trial court once again granted the Gilberts' motion to dismiss. On March 23, 1993, the Company filed its second-amended complaint. The trial court, this time, dismissed the action pursuant to section 2-619(a)(5) of the Code (Ill. Rev. Stat. 1991, ch. 110, par. 2-619(a)(5)), without leave to refile, after examining additional exhibits filed by the Company and arguments filed by counsel.

The Company's second-amended complaint contained four counts. Counts I and II were against Stephen, as trustee, and Helen, respectively, for fraudulent transfer of funds pursuant to the Act. Counts III and IV were against Stephen, as trustee, and Helen, respectively, for common law fraudulent conveyance. The Company's complaint alleged that on February 25, 1985, Nick was the owner of a CD and that on March 13, 1985, Nick transferred ownership to his wife. The copy of the CD attached to the complaint clearly shows, however, that it was in both Nick's and Helen's names. Helen then transferred the CD to Stephen as trustee for the Mary Helen Gilbert trust. On February 20, 1990, a judgment was entered for the Company against Nick, but it has not been paid. The complaint further alleged that the conveyance of the CD was fraudulent in that at the time of the conveyance Nick expected that he would be subject to a lawsuit by the Company, that judgment might be rendered against him in favor of the Company, and that the conveyance was made to prevent the judgment from becoming a lien on the property with the intent of defrauding, delaying, or hindering the Company. Helen and Stephen received the conveyance with knowledge of Nick's purpose and with the intent to aid him. The conveyance did impair the rights of the Company in that it left Nick with no money from which to pay the judgment. Between the time the judgment was issued on January 25, 1991, and September 20, 1991, the Company examined various county records, reviewed documents, subpoenaed account information from banks, and filed a memorandum of judgment. The complaint states that it was filed within one year after the transfer was discovered and such time of discovery was reasonable. In response to the last motion to dismiss, the Company submitted the following exhibits to the trial court: the bond certificate issued on January 14, 1983, after the judgment in the first trial; the final report of guardian filed March 20, 1987; the order discharging the guardian filed on March 30, 1987, and the suggestion of death of a party filed May 11, 1987, which included the statements that Nick had died on November 26, 1986, that he left no estate to pass by probate, and his real estate and bank deposits would pass to his surviving joint tenant.

The trial court dismissed counts I and II as having been extinguished pursuant to section 10(a) of the Act (Ill. Rev. Stat. 1991, ch. 59, par. 110(a)) and counts III and IV as not having been timely filed pursuant to the general five-year statute of limitations. The Company appealed.

The trial court dismissed the entire complaint pursuant to section 2-619(a)(5) of the Code. (Ill. Rev. Stat. 1991, ch. 110, par. 2-619(a)(5).) Like a motion for summary judgment, a section 2-619 motion mayraise questions of fact to be resolved by the trial court, but the trial court may not resolve disputed factual issues without an evidentiary hearing. ( Michel v. Gard (1989), 181 Ill. App. 3d 630, 635, 536 N.E.2d 1375, 1379, 130 Ill. Dec. 164, citing Consumer Electric Co. v. Cobelcomex, Inc. (1986), 149 Ill. App. 3d 699, 703-04, 501 N.E.2d 156, 159, 103 Ill. Dec. 135.) In University of Illinois v. Continental Casualty Co. (1992), 234 Ill. App. 3d 340, 343, 599 N.E.2d 1338, 1341, 175 Ill. Dec. 324, this court discussed the standard of review in summary judgment cases as follows:

"'The entry of summary judgment is not a matter within the discretion of the trial court. In reviewing a trial court's ruling on a motion for summary judgment, the appellate court should consider anew the facts and law related to the case and determine whether the trial court was correct.' ( Shull v. Harristown Township (1992), 223 Ill. App. 3d 819, 824, 585 N.E.2d 1164, 1167, 166 Ill. Dec. 142.)"

In cases involving a section 2-619 motion to dismiss, a reviewing court must also review anew the pleading attacked and the documents filed in support of and in opposition to the motion. In ruling on a motion to dismiss, the court may consider all reasonable inferences which may be drawn from the alleged facts, but mere Conclusions of law and unsupported Conclusions of fact are not to be considered. Campbell v. White (1991), 207 Ill. App. 3d 541, 548, 566 N.E.2d 47, 51, 152 Ill. Dec. 519.

This court in prior cases has followed the abuse of discretion standard in reviewing orders on motions to dismiss. (Dick v. peoples Mid-Illinois Corp. (1993), 242 Ill. App. 3d 297, 303, 609 N.E.2d 997, 1002, 182 Ill. Dec. 463.) Discretion permits a Judge to review the facts, if any submitted, as well as the law and to make one of two choices. As in this case, the question is whether to grant or deny the motion. If the facts and law permit only one Conclusion, there is no discretion. In this case, the facts and law permit only one Conclusion. The granting of the section ...


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