Appeal from the Circuit Court of the 13th Judicial Circuit, Bureau County, Illinois Circuit No. 10-LM-73 Honorable Cornelius J. Hollerich, Judge, Presiding.
The opinion of the court was delivered by: Justice Carter
JUSTICE CARTER delivered the judgment of the court, with opinion.
Justices Lytton and Wright concurred in the judgment and opinion.
¶ 1 Plaintiff, Spring Valley Nursing Center, L.P. (Spring Valley), obtained a judgment against defendant, Mary Allen, for money it was owed for nursing home care. After obtaining the judgment, Spring Valley filed a citation to discover assets (735 ILCS 5/2-1402 (West 2010)) directed at citation respondent, Daniel McFadden, who was Allen's agent under a power of attorney. Following an evidentiary hearing, the trial court ordered McFadden to turn over approximately $7,100 of Allen's funds in partial satisfaction of the judgment. Allen and McFadden appeal. We affirm the trial court's judgment.
¶ 3 The underlying facts in this case are not in dispute. Citation respondent, Daniel McFadden, was the great-nephew of defendant, Mary Allen, and was designated as her agent under a power of attorney in 2005 or 2006. Allen lived in a house in Spring Valley, Illinois, and held a life estate interest in the real property (the property) on which the house was located. McFadden and his sister-in-law held the remainder interest in the property. Despite living in the house, Allen did not pay the property taxes for the years 2007 and 2008 and those taxes became a lien on the property. Allen also did not keep the house in good repair.
¶ 4 In June 2009, Allen became a resident of a nursing home in Spring Valley, and from that point forward, resided at that location. The nursing home was operated by plaintiff, Spring Valley. In August 2009, Allen conveyed her life estate in the property to McFadden. Allen was 99 years old at the time and mentally competent. Allen did not receive any financial compensation from McFadden for conveying her interest to him. The deed to McFadden was signed by Allen personally and not by McFadden as Allen's as agent under the power of attorney. In November and December 2009, McFadden issued two checks from Allen's account to pay off the property tax lien or to reimburse himself for doing the same. The checks were signed by McFadden as Allen's agent under the power of attorney. The total amount paid was about $3,700. After the lien was paid off, in late December 2009, McFadden and his sister-in-law sold the property for $22,500, and split the net proceeds of approximately $16,500. At the closing on the sale, the purchaser received a credit of about $1,600 against the purchase price for the sellers' prorated share of the 2009 property taxes, which were to be paid by the purchaser when they became due in 2010. That credit was essentially paid by McFadden and his sister-in-law in that it reduced the amount of the net proceeds. Allen did not receive any of the proceeds from the sale of the property.
¶ 5 In August 2010, Spring Valley brought suit against Allen for money it was owed for nursing home care. In February 2011, a judgment of over $34,000 was entered for Spring Valley and against Allen. In July 2011, Spring Valley filed a citation to discover assets directed at McFadden. In the citation proceeding, Spring Valley asserted that McFadden had breached his fiduciary duty to Allen as her agent under the power of attorney and had improperly depleted Allen's funds by failing to pay Allen for the transfer of her life estate interest and by using Allen's account to pay the property tax lien when Allen no longer had any interest in the property.
¶ 6 An evidentiary hearing was held on the citation. The only significant witness to testify at the hearing was McFadden. Relevant to the issue raised on appeal, McFadden testified that the transfer of the life estate and the payment of the tax lien occurred while Allen was a resident of the nursing home and that Allen did not receive any money for the life estate because she did not ask for any. McFadden also confirmed that Allen did not receive any of the proceeds from the subsequent sale of the property.
¶ 7 In addition to the testimony, certain documents were admitted as exhibits at the hearing, such as the deed transferring Allen's life estate interest in the property to McFadden, Allen's bank account records showing the amounts paid on the property tax lien, and some of the closing documents from the subsequent sale of the property. Also referenced, but not formally admitted, at the hearing were certain life insurance tables, which estimated that the value of a life estate interest for a 99-year-old person was about 20% of the total value.*fn1
¶ 8 At the conclusion of the hearing, in November 2011, the trial court ordered McFadden to turnover to Spring Valley assets of Allen of approximately $7,100 in partial satisfaction of the judgment. The written order did not specifically explain the bases for the trial court's ruling. After the ruling, Allen filed for a personal exemption of $4,000 (735 ILCS 5/12-1001(b) (West 2010)) as to the turnover order. Allen and McFadden also filed a notice of appeal.
¶ 10 On appeal, Allen and McFadden argue that the trial court erred in ordering McFadden to turn over the funds to Spring Valley. Allen and McFadden assert first that it was proper for McFadden to receive a conveyance of Allen's life estate without any payment to Allen because: (1) Allen had sufficient mental competence to make the conveyance; (2) the life estate had no value due to Allen's age and the condition of the property; (3) it would not have been practical or possible to obtain a buyer for Allen's life estate interest; (4) Allen received consideration in that she was relieved of any future liability for property taxes or repair on the property; and (5) McFadden acted in Allen's best interest by accepting the transfer in that it eliminated substantial liabilities in property taxes and repair costs that Allen would have otherwise incurred. Second, Allen and McFadden argue that the payment of the property tax lien was proper, even though Allen no longer had an interest in the property, because: (1) the property taxes were incurred when Allen was the life tenant of the property and well before Allen received any services from Spring Valley; (2) the property taxes from that time period were Allen's obligation to pay and were owed to the county, not to McFadden; (3) Allen committed waste by failing to pay the property taxes when ...