Appeal from the Circuit Court of Cook County, The Honorable Jeffrey A. Malak, Judge Presiding. No. 04 P 008095
The opinion of the court was delivered by: Justice Garcia
PRESIDING JUSTICE GARCIA delivered the judgment of the court, with opinion.
Justices Cahill and McBride concurred in the judgment and opinion.
The decedent, Victoria M. Pawlinski, is survived by three children, appellant Sidmund J. Pawlinski (Sid) and appellees Edward Pawlinski (Ed) and Margaret Pawlinski Calvert. Sid, as executor of Victoria's will, filed a final account of the estate's assets for distribution amongst the three heirs. The final account did not include a number of bank certificates of deposit (CDs), worth over $500,000 combined and each titled jointly to Sid and Victoria. Ed and Margaret challenged the omissions in a citation to recover the CDs. Following an evidentiary hearing, Judge Jeffery A. Malak ordered the CDs be included in the assets of the estate. The CDs were retitled to Sid and Victoria as joint tenants after a grant of power of attorney by Victoria to Sid. Judge Malak found Sid failed to overcome the presumption of undue influence by clear and convincing evidence. Sid contends Judge Malak erred in his application of the presumption of undue influence in light of the evidence presented, in his failure to find that Ed and Margaret "conceded" that Sid met his burden of overcoming the presumption of undue influence when Ed and Margaret introduced rebuttal evidence, and in his rejection of Sid's motion to reopen the proofs. We find Judge Malak properly applied the strong presumption of undue influence, favored by Illinois courts, against a fiduciary and his ruling at the conclusion of the evidentiary hearing is not against the manifest weight of the evidence. Because Sid's motion to reopen the proofs was filed on the same day as the notice of appeal and was not ruled upon until several months thereafter, the propriety of that ruling is not properly before us. We affirm in part and dismiss in part.
Victoria Pawlinski died on August 24, 2004, survived by her three children, Sid, Ed, and Margaret. Victoria moved to Sid's home in early February 2002 following the death of her husband, Sidmund Pawlinski, Sr. (Sid Sr.), on January 31, 2002. At the time of Sid Sr.'s death, both he and Victoria were residing in a nursing home. While a resident of the nursing home, Victoria granted Sid power of attorney on February 1, 2002. Victoria resided with Sid until her death on August 24, 2004.
Victoria's will was admitted to probate on December 3, 2004, and, in accordance with its terms, Sid was appointed executor of her estate. The will stated Vitoria's intention "to provide for all [her] children." The will provided that the tangible personal property and all remaining property Victoria owned at the time of her death pass to the trustee of the "Victoria M. Pawlinski Trust [Pawlinski Trust] dated May 31, 2002." However, the parties were unable to locate the Pawlinski Trust document by the time of the hearing. Following the entry of the order declaring the three children sole heirs of Victoria, Sid filed a first and final account of the assets of the estate for equal distribution amongst Sid, Ed, and Margaret.
On July 7, 2006, Ed and Margaret filed a citation to discover assets of the estate alleging Sid possessed and withheld from the estate CDs with multiple banks worth over $500,000. Upon review of the citation, Judge Malak converted it to a citation to recover assets, which he issued on October 18, 2006. Judge Malak also granted Ed and Margaret's motion for partial summary judgment, finding that a fiduciary relationship existed between Sid and Victoria from February 1, 2002, when she appointed Sid as her attorney-in-fact, until her death. The existence of a fiduciary relationship gave rise to a presumption that any transaction executed by Victoria for Sid's benefit during that period was fraudulent as a product of undue influence. Judge Malak noted that the presumption could only be overcome by clear and convincing evidence. Beginning in April and concluding in June 2009, Judge Malak conducted an evidentiary hearing on the citation to recover assets to determine whether the CDs should be included as assets of the estate. We set out the testimony of only those witnesses that impact the issue on appeal.
Attorney Arthur Douglas Wellman testified he had represented Sid in various matters for the previous 15 years. In January 2002, Sid contacted him regarding his parents, both of whom were ill and living in a nursing home. Attorney Wellman met with Sid Sr., who stated his wish to grant Sid power of attorney over the assets he held jointly with Victoria. Before a power of attorney could be executed, Sid Sr. passed away on January 31, 2002. Attorney Wellman then met with Victoria in the nursing home on February 1, 2002. She granted power of attorney to Sid that same day and indicated to attorney Wellman that she "entrusted [Sid] implicitly." Sid was present when Victoria signed the power of attorney, accepted the appointment as Victoria's attorney-in-fact and agreed to "perform in said fiduciary capacity consistent with [Victoria's] best interests."
Attorney Wellman met with Victoria again later in February 2002 at Sid's home. According to attorney Wellman, the two met alone in a bedroom. Victoria revealed that her estate was worth over $1 million. Attorney Wellman encouraged Victoria to have financial representatives meet with her in the home to discuss how she could get the highest rate of return on her money. Victoria informed attorney Wellman that both she and her husband wanted Sid to help them with their financial affairs and that the bulk of her bank accounts and CDs should go to him upon her death. They discussed retitling some of her accounts jointly with Sid.
Attorney Wellman testified he prepared a will for Victoria, which was designed to pour the majority of her assets into an irrevocable trust he also prepared. The assets placed into the trust would go to Sid, Sid's wife, and Sid's son; any assets not placed in the trust would be distributed equally amongst Sid, Ed, and Margaret. To challenge the existence of a pourover trust, Ed and Margaret's attorney introduced into evidence a letter from attorney Wellman dated April 5, 2005, which stated, "There was no living trust or trust of any kind executed or in existence at the time of [Victoria's] death to [my] knowledge or in my possession." No pourover trust was ever introduced at the citation hearing.
Sid testified that he never discussed the power of attorney with attorney Wellman and that it was his parents' wish that he hold power of attorney over their assets. Under the power of attorney, Sid paid bills for his mother through a checking account his mother opened listing Sid as a joint tenant. He also added his name as joint tenant with Victoria to CDs at three different banks that had been previously titled to Victoria and Sid Sr. Sid denied participating in any of the meetings between attorney Wellman and Victoria, although he was aware attorney Wellman was preparing her will.
Sid testified that sometime in early March 2002, at Victoria's request, he arranged for representatives from LaSalle Bank to come to his house to speak with Victoria. According to Sid, he remained in the kitchen having coffee while the two LaSalle Bank representatives met with Victoria in the dining room. Shortly after this meeting, Sid went to LaSalle Bank by himself to conduct business on his mother's behalf concerning three CDs, which, at the time, were titled jointly to Victoria and Sid Sr. Sid testified that "whatever my mother had told them to do at the house, that's what was done with the CDs." While Sid was at the bank, the three CD accounts were consolidated into a single $88,000 CD titled to Victoria and Sid as joint tenants, with a right of survivorship, on the authority granted by the power of attorney.
Sid also visited TCF Bank in late March 2002 where Victoria and Sid Sr., as joint tenants, held a CD worth $100,000. Sid arranged for a TCF representative to meet with Victoria at his house. Sid testified that when the TCF representative arrived, Sid introduced his mother and left the room. He "went about [his] business" while the TCF representative and Victoria talked alone. Sid denied discussing any changes to the TCF CD with Victoria. A TCF CD with the same account number and balance as the CD titled jointly to Victoria and Sid Sr. was introduced into evidence. This TCF CD listed Victoria and Sid as joint tenants. Sid explained the TCF CD was merely a renewal of the CD he secured from a TCF banker on August 6, 2004, under the authority of the power of attorney given by Victoria.
Additionally, Sid testified that in March 2002 he contacted Lawrence Knight, a manager of MB Financial Bank, to arrange a home visit with Victoria regarding some accounts she had at MB. At the time, Victoria had three CDs at MB: two with a combined worth of $85,000 and one worth $94,000, all of which were jointly titled to Victoria and Sid Sr. According to Sid's testimony, when Knight arrived at Sid's home, Sid introduced Knight to his mother and left the room while the two discussed her MB accounts. The MB CDs were later retitled jointly to Victoria and Sid. Sid testified that the changes occurred after Victoria met with Knight at the house, but he could not recall whether he appeared personally at MB Financial Bank to complete the retitling of the CDs.
The parties stipulated to the introduction of the evidence deposition, conducted by telephone, of Knight, who at the time of the hearing resided in Colorado and was no longer employed at MB Financial Bank. In his deposition, Knight confirmed that Sid came to the branch office to arrange a meeting with Victoria at Sid's home concerning the MB CDs. Knight traveled to the home alone, where he met with Victoria, Sid, and Sid's wife. Knight testified that Sid and his wife were present throughout the meeting with Victoria, but could not recall whether anyone other than he and Victoria sat at the table during their meeting. When asked whether Sid and his wife spoke up during the meeting, Knight testified he was "sure they did" because Sid "was in the room, so I'm sure that he *** joined in the conversation." Knight testified that he believed Victoria was capable of making decisions about the account and that it was her desire to change the CDs to allow Sid to receive the money upon her death. Knight testified that he arrived at Sid's home with the forms necessary to retitle the MB CDs in Victoria and Sid's names, which he prepared in advance of the meeting. The only person with whom Knight discussed the CDs before meeting with Victoria was Sid. He could not recall, however, the specific conversations he must have had with Sid about the changes to the MB CDs reflected in the forms he brought to the home.
Near the close of the hearing, the parties discussed stipulating to Ed and Margaret's rebuttal evidence, which consisted of signature cards and other documents subpoenaed from the banks holding the CDs. Sid's counsel argued that while he had the initial burden to overcome any presumption of undue influence, if Ed and Margaret introduced rebuttal evidence "they may be conceding that [Sid had] overcome [that] burden." Judge Malak acknowledged the "possibility" that the introduction of rebuttal evidence might constitute such a concession. Ed and Margaret introduced the rebuttal evidence, recalling Sid to provide the foundation to introduce the rebuttal documents into evidence. Following the ...