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Kendra v. Kendra

August 19, 2004

[5] IN RE MARRIAGE OF KAREN KENDRA, PETITIONER-APPELLEE,
v.
DAVID KENDRA, RESPONDENT-APPELLANT LARRY RINKENBERGER AND GWENDOLYN J. RINKENBERGER, INTERVENORS-APPELLEES.



[6] Appeal from the Circuit Court for the 13th Judicial Circuit, Grundy County, Illinois No. 01--D-60. Honorable Robert C. Marsaglia Judge Presiding.

[7] The opinion of the court was delivered by: Justice McDADE

[8]  This appeal from the circuit court of Grundy County involves a dispute over the nature of a transfer of interest in property between the petitioner, Karen Kendra, and the respondent, David Kendra, on the one hand, and intervenors, Larry and Gwendolyn Rinkenberger, on the other. The respondent argues that the property was a gift from the intervenors to the petitioner and respondent, while the intervenors contend that the property was placed in a resulting trust for the use of the respondent and petitioner. For the following reasons, we find in favor of the respondent, David Kendra, and reverse.

[9]  FACTS

[10]   The petitioner, Karen Kendra, and the respondent, David Kendra, were married on September 27, 1980, and were divorced on August 24, 2001. The intervenors, Larry and Gwendolyn Rinkenberger, are the parents of Karen Kendra.

[11]   The property at the center of the dispute is a 40-acre tract of undeveloped land in rural Hancock County. The property was part of a 120-acre property purchased by Larry Rinkenberger on May 6, 1998. At the time of purchase, the property was divided into three 40-acre tracts. The tracts were conveyed separately by warranty deeds to Larry and Gwendolyn Rinkenberger, David and Karen Kendra, and Thomas and Lynn Haas, another daughter and son-in-law of Rinkenberger. The Kendra acreage was never conveyed to the Rinkenbergers by the seller. Neither the Kendras nor the Haases were present at the closing.

[12]   Rinkenberger testified that he deeded the property to his daughters and their spouses in order to encourage David Kendra and Thomas Haas to begin hunting and to guarantee them free hunting licenses rather than having them take their chances for a paid license in the annual lottery. The testimony of Karen Kendra and Thomas Haas supported this assertion. David Kendra's testimony confirmed his understanding that the property was for hunting and that he was able to get a free hunting permit by owning it.

[13]   By December 1998, the Kendra marriage had begun to deteriorate. At about that time, approximately eight months after the land purchase, Rinkenberger prepared a $28,000 promissory note which was executed on December 25 by Karen. Although the document itself contains no indication of the reason for the debt and makes no reference to or attempt to bind David, it is agreed by the parties to the note that it was for the purchase price of the 40 acres held in joint tenancy by Karen and David Kendra. Both Rinkenberger and Karen testified that the note was to serve as evidence that the property still belonged to Rinkenberger. Only in the event that Rinkenberger decided to convey the beneficial interest that he claimed to have retained would he seek satisfaction on the note.

[14]   Nearly two years after signing the promissory note, and one month after her divorce became final, Karen executed a quit claim deed to Rinkenberger, relinquishing all of her rights to the property. Rinkenberger testified that the deed foreclosed any possibility that he would seek satisfaction on Karen's note. Apart from acknowledging that David owed him no money as a result of the note, it is unclear from the record what legal effect, if any, Rinkenberger anticipated with regard to his former son-in-law.

[15]   On November 27, 2001, Rinkenberger petitioned to intervene in David and Karen's dissolution proceedings and filed a complaint for declaratory judgment claiming that the 40-acre property had not been a gift to the Kendras but was, rather, a resulting trust. After a bench trial, the court entered judgment finding that the Rinkenbergers were the beneficial owners of the property by virtue of a resulting trust. The respondent appeals.

[16]   ANALYSIS

[17]   The respondent argues on appeal that the trial court erred in finding that Larry and Gwendolyn Rinkenberger created a resulting trust when they purchased the subject property and placed it in the names of respondent and his wife. Respondent asserts that the property was a gift to Karen Kendra and himself.

[18]   The decision of the trial court following a bench trial should be overturned only if it is against the manifest weight of the evidence. Judgment Services Corp. v. Sullivan, 321 Ill. App. 3d 151, 154, 746 N.E.2d 827, 830 (2001). A decision is against the manifest weight of the evidence when the opposite conclusion is apparent or when the ruling is unreasonably arbitrary or not based on the evidence. Sullivan, 321 Ill. App. 3d at 154, 746 N.E.2d at 831. The party asserting a resulting trust must prove its existence by clear and convincing evidence. Sullivan, 321 Ill. App. 3d at 154, 746 N.E.2d at 831.

[19]   A resulting trust originates when a party purchases property with his own funds then places title to the property in the name of another, but actually intends to retain legal ownership for himself. Sullivan, 321 Ill. App. 3d at 154, 746 N.E.2d at 831. A resulting trust arises at the time of the conveyance, and its existence is determined by the intent of the purchasing party at that time. In re Estate of Koch, 297 Ill. App. 3d 786, 788, 697 N.E.2d 931, 933 (1998). The intent of the parties is determined by their conduct and relationship and surrounding the circumstances. Carlson v. Carlson, 74 Ill. App. 3d 673, 675, 393 N.E.2d 643, 645 (1979). Because the law of resulting trusts was created to enforce the intent of the parties, certain rebuttable presumptions have arisen. Sullivan, 321 Ill. App. 3d at 154, 746 N.E. 2d at 831. Relevant to this case, it is presumed that the placement of title in the name of a child by a parent is a gift, rather than a resulting trust. Sullivan, 321 Ill. App. 3d at 155, 746 N.E.2d at 831. This is so because a child is the natural object of the bounty of the person paying the purchase price. Sullivan, 321 Ill. App. 3d at 155, 746 N.E.2d at 831. A resulting trust will not be found where the transaction can be construed in any other reasonable fashion. Sullivan, 321 Ill. App. 3d at 155, 746 N.E.2d at 831.

[20]   The intervenors cite the case of Varap v. Varap, 76 Ill. App. 2d 402, 222 N.E.2d 77 (1966), for the proposition that the presumption of gift is destroyed by the fact that the property was placed in the names of both the intervenors' daughter and son-in-law. In Varap, the court found that the presumption of gift did not arise when title ...


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