Appeal from Circuit Court of Sangamon County. No. 92CH0021. Honorable Sue Myerscough, Judge Presiding.
As Corrected July 31, 1995. Petition for Rehearing Denied and Petition for Leave to Appeal Denied December 6, 1995.
The Honorable Justice Cook delivered the opinion of the court: Lund and Steigmann, JJ., concur.
The opinion of the court was delivered by: Cook
JUSTICE COOK delivered the opinion of the court:
Plaintiff Wilma Hofferkamp is the executor of the estate of Elmer Roesch, who died May 19, 1991. Elmer was plaintiff's brother. By deed recorded April 18, 1991, a residence in Leland Grove, Illinois, was conveyed to Elmer and defendant Esta C. Brehm, as joint tenants. Plaintiff filed this chancery action on February 3, 1992, asserting that Elmer lacked the donative intent (or was incompetent) to make a gift of the residence, and that Esta was guilty of undue influence. Because the court was exercising its equity jurisdiction, it convened an advisory jury, which found for plaintiff on both questions.
The court refused to be bound by those verdicts and instead found that (1) Elmer had formed a donative intent to make a gift when he signed the contract to purchase, which resulted in a conditional gift which was never revoked; (2) Elmer was competent at all pertinent times; (3) there was no fiduciary relationship, either as a matter of law or by the repose of trust and confidence, and in any event there was no breach of any fiduciary relationship; (4) Esta had not exercised any undue influence; (5) plaintiff was guilty of laches because she did not file her action in the 23 days before Elmer died, although a power of attorney naming her had then been activated; and (6) both plaintiff and Elmer had ratified the conveyance. The court did not address the concept of resulting trust, although that issue had been raised by the pleadings. Plaintiff appeals. We reverse and remand.
Elmer and Esta began dating in 1988, following the death of Elmer's wife. They became engaged in December 1990, when each was 84 years old. The wedding was planned for April 20, 1991. On March 5, 1991, they signed a contract to purchase the home in Leland Grove for $125,000. The contract was prepared by Joe Grimes, a realtor representing the seller. The contract did not state how title would be taken, but Grimes testified he explained the various forms of holding title and Elmer told him he wanted title to be in joint tenancy with Esta with a right of survivorship. Earnest money of $1,000 was deposited when the contract was signed. The contract provided for title insurance, with buyer or his attorney to have a reasonable time after receipt of such title evidence to specify objections. Closing was set for April 10.
On April 6, 1991, Elmer suffered a heart attack and was admitted to the intensive care unit at St. John's Hospital. On April 10 he was transferred from intensive care to a room in cardiac rehabilitation.
Patrick J. Sheehan testified that he was a lawyer and had represented Elmer for many years. On April 9, Esta called him to say that Elmer was in the hospital, and their real estate closing was set for April 10. Esta testified she called Sheehan on April 9 because he was Elmer's attorney, and Elmer asked her to contact him. Sheehan testified he suggested delaying the closing and Esta asked him to contact Doug Brown, the seller's attorney. Brown agreed to delay the closing to the 12th. Sheehan picked up the closing papers at Brown's office and went to Elmer's hospital room on the 11th. Because of Elmer's condition, Sheehan did not go into any detail, but told Elmer the closing could be done without him by activating a power of attorney Elmer had executed in 1988. Elmer told Sheehan he wanted to be present at the closing and asked that Sheehan get the closing delayed further. Sheehan understood that Elmer wanted Sheehan to represent him in connection with the purchase. Sheehan did not look at the proposed deed until he returned to his office. Sheehan called Brown, but Brown was reluctant to further delay the closing. According to Sheehan, Esta called on the 16th and said the seller was willing to extend the closing but the realtor was pushing to get it closed. Esta denied that statement.
Sheehan testified Esta called him on the 18th and asked if the papers were all right, and Sheehan said he had not looked at them. Esta said that they were ready to close, but Sheehan said that he had to talk to Elmer, and he was going up to the hospital to talk to him. Esta said that was not a good idea because Elmer was not doing well that day. Sheehan did talk to Elmer, around noon, and explained to him various ways of taking title, including giving Esta a life estate after Elmer's death. Elmer said he wanted to think about it overnight. As Sheehan was leaving, Esta came in, and as Sheehan began to explain the life estate idea, Esta said the deal was already closed, and they had taken title "the way the contract said, in both names." Elmer said nothing, but looked at Sheehan with a look of distress on his face. Sheehan was dumbfounded that the closing had taken place without his knowledge. Sheehan's present belief was that Elmer did not understand what Sheehan was saying on the 18th. It was apparent that Elmer was either confused or did not know that a closing was taking place. Sheehan went to Elmer's room on the 19th, but Esta was there, so Sheehan told Elmer he would be back to talk with him later. Sheehan returned on the 22nd and spoke to Elmer alone. Elmer was weaker than he had been on the 19th. Sheehan tried to explain to Elmer what had happened, but Elmer was sick and gave Sheehan the impression he really did not want to hear anything further about it. Sheehan explained that joint tenancy meant that on the death of either party the other joint tenant, here Esta, would be the sole owner of the property. Sheehan said "is that okay?" and Elmer responded "yes." Sheehan visited Elmer two more times, but both times Elmer was noncommunicative.
Sheehan testified he had prepared a general power of attorney for Elmer, dated May 4, 1988, in which Elmer appointed plaintiff his attorney-in-fact. The power of attorney would be activated when the attorney-in-fact received a written opinion from a physician familiar with Elmer's condition that Elmer was incapable of conducting his business affairs. Sheehan obtained such an opinion from Elmer's treating physician, Dr. Glen Wichterman, and sent a letter to Esta, dated April 26, advising her of that fact.
Dr. Robert Woodruff testified that he made the following hospital notes on April 14, shortly after 4 p.m.: "Will discuss code status[with] family[,]" and later, "[Patient's] fiancee comfortable [with] full code status. Will continue aggressive medical therapy. Prognosis grim." Dr. Woodruff testified that "code status" indicated how the hospital staff would respond if something happened to the patient, whether the staff would intervene or just let that patient pass away without intervention. Dr. Woodruff could not remember the person he had spoken to or whether he had spoken to her in person, but he did make the note. Esta testified that she remembered no discussions with Dr. Woodruff at any time or discussions of code status that day. Esta did remember speaking to Dr. Benning sometime after Elmer had been taken out of intensive care about the staff doing everything they could to keep Elmer alive if the time came that he needed extra help. Esta told Dr. Benning "Yes, do everything you can." Dr. Woodruff testified that "prognosis grim" meant that the patient was not doing well and that he probably would not be alive much longer. In Dr. Woodruff's opinion Elmer was clearly unable to give informed consent to medical procedures. Dr. Woodruff also believed that Elmer was not capable of making real estate decisions.
Esta testified that on April 14 she went to Elmer's house and got a key to Elmer's lockbox and his checkbook. She prepared a note to the bank giving herself access to Elmer's lockbox, and Elmer signed it. On April 15, Esta went to the bank, entered the lockbox, and removed Elmer's $100,000 certificate of deposit. Elmer endorsed the certificate, and Esta deposited the proceeds in Elmer's checking account on April 16. On April 16 or 17, Esta called the realtor, told him Elmer was feeling better and that he wanted to close the deal. On April 18, shortly before 11 a.m., Esta obtained Elmer's signature on a blank check. She and the realtor then went to the bank, filled in the amount of $121,669.27 on the check, and purchased a cashier's check with it. Esta testified this was all done at Elmer's direction. The realtor told her what to fill out. Esta told no one other than the realtor about any of this. She talked to Sheehan just before the closing, but did not tell him about it, because Elmer did not ask her to. After obtaining the cashier's check, Esta and the realtor went to Attorney Brown's office, where they exchanged the check for the deed. The realtor testified the figures had been agreed to previously, but did not say by whom. Esta and the realtor then went to the recorder's office and recorded the deed. She then went back to Elmer's room, and was there when Sheehan arrived, contrary to Sheehan's testimony. When Sheehan came in, he went over to Elmer and asked about a date for the closing, and-Elmer told him it was done. Esta stated Sheehan was very surprised. On July 8, Esta quitclaimed the property to herself and her daughter, defendant Judy Koke Balsters, as joint tenants. Esta testified she did not intend to give her daughter any present interest in the property by that deed.
Esta testified she normally was in Elmer's hospital room in the afternoon and evening, while plaintiff was there during the morning and noon hour. The nurse's notes on April 14 at 1440 show patient appears to be getting lethargic, continues to lie in bed and moan, unwilling/unable to follow commands. Esta testified she was in the room at that time, but to her knowledge those characterizations were not accurate. The nurse's notes at 1500 show patient remains lethargic, does not follow commands. Esta could not remember if that was accurate or not. The nurse's notes at 1600 show patient responds to name only, will not follow commands, moans and groans, restless in bed. Esta agreed that was his ...