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In Re: the Estate of Martin Stahling, Sr., Deceased v. Martie Koehler

April 3, 2013

IN RE: THE ESTATE OF MARTIN STAHLING, SR., DECEASED, MARTIN STAHLING, JR.,
PETITIONER-APPELLEE,
v.
MARTIE KOEHLER,
RESPONDENT-APPELLANT.



Appeal from Circuit Court of Jersey County No. 08P14 Honorable Eric S. Pistorius, Judge Presiding.

The opinion of the court was delivered by: Justice Harris

Carla Bender 4th District Appellate Court, IL

JUSTICE HARRIS delivered the judgment of the court, with opinion. Justices Appleton and Turner concurred in the judgment and opinion.

OPINION

¶ 1 Respondent, Martie Koehler (Koehler), and petitioner, Martin Stahling, Jr. (Stahling Jr.), are the children of decedent, Martin Stahling, Sr., and the coadministrators of his estate. During probate proceedings, Koehler filed a petition to expend estate funds to investigate decedent's execution of a deed which transferred land to himself and Stahling Jr. as joint tenants with rights of survivorship. The trial court granted the petition and appointed an attorney to investigate the possibility of the estate filing an action to recover the property at issue in the deed. Following that investigation, the court determined retaining special counsel to pursue a claim on behalf of the estate and at the estate's expense was unwarranted. However, on Koehler's motion and pursuant to Illinois Supreme Court Rule 308 (eff. Feb. 26, 2010), the court certified the following question for review: "Whether the existence of a Health Care Power of Attorney creates a fiduciary relationship which, as a matter of law, raises a presumption of undue influence in the execution of a deed that names the agent under the Health Care Power of Attorney as a joint tenant in the deed." We answer the certified question in the negative.

¶ 2 I. BACKGROUND

¶ 3 On September 6, 2005, decedent executed a deed transferring several hundred acres of land to himself and Stahling Jr., as joint tenants with rights of survivorship. On November 7, 2007, decedent died and, on April 14, 2008, his will was admitted to probate. On June 17, 2009, Koehler filed a petition in the probate proceedings to expend estate funds to investigate the possibility of the estate filing an action to recover the property transferred to decedent and Stahling Jr. as joint tenants. She suggested decedent was unduly influenced by Stahling Jr. and alleged, at the time the September 2005 deed was signed, decedent had recently been released from the hospital and was taking numerous prescribed medications. Koehler also asserted her belief that Stahling Jr. was present "at least part of the time" when decedent met with his attorney regarding the preparing and signing of the deed.

¶ 4 On June 26, 2009, the trial court granted Koehler's petition and, on July 14, 2009, it appointed attorney Phil Hamilton to investigate the potential of a legal action by the estate to recover the property. On October 23, 2009, Hamilton filed a report on the matter. He attached affidavits from Stahling Jr.; Stahling Jr.'s wife; George Wittman, the individual who prepared the deed at issue; and Koehler. According to Wittman, decedent was 79 years old at the time the deed at issue was executed. Wittman asserted decedent expressed a clear intent that he wanted the property to go to Stahling Jr. after decedent's death. Hamilton reported "Wittman was familiar with the decedent's health situation and was convinced that the decedent knew what he was doing and understood he was making a gift to his son." Stahling Jr. was present at a meeting between Wittman and decedent when decedent first discussed his intention to transfer the property but Stahling Jr. was not present when decedent ultimately signed the deed. Wittman did not believe decedent was unduly influenced. Stahling Jr. denied attempting to influence decedent regarding what to do with the property and asserted he was surprised decedent wanted to transfer the property.

¶ 5 Koehler related concerns regarding decedent's mental and physical health at the time he signed the deed, noting he suffered a severe beating approximately two months prior, was hospitalized, and underwent heart surgery. Koehler believed Stahling Jr. administered decedent's medication, controlled decedent's affairs, and cared for decedent on a regular basis. She asserted that neither she nor her mother, decedent's live-in companion, had knowledge of the deed prior to decedent's death and that Stahling Jr. was not forthcoming about the deed.

¶ 6 Hamilton determined that, while the information he obtained could "raise at least a question as to whether the decedent was unduly influenced" by Stahling Jr., such information was insufficient to establish a presumption of undue influence. He noted that, without a power of attorney naming Stahling Jr. as decedent's agent, there was no fiduciary relationship as a matter of law and that, otherwise, proof of a fiduciary relationship had to be " 'clear, convincing, and so strong, unequivocal, and unmistakable as to lead to but one conclusion.' [Citation.]" Hamilton concluded that retaining special counsel to pursue a claim on behalf of the estate and at the estate's expense was unwarranted.

¶ 7 On November 4, 2009, Stahling Jr. filed a petition for court direction, asking the trial court to order that the estate's coadministrators expend no further estate funds pursuing an investigation into the joint tenancy deed or pursuing recovery of the real estate that was the subject of the deed. On November 24, 2009, a hearing was held in the matter and the court ordered that the coadministrators expend no further estate funds pursuing a suit based on recovering the property that was the subject of the joint tenancy deed. However, it noted nothing in its order prohibited Koehler from pursuing the matter at her own expense.

¶ 8 On December 15, 2010, Koehler filed a motion asking the trial court to reconsider its decision. She alleged Hamilton's report was based upon his belief that decedent had not executed a power of attorney naming Stahling Jr. as his agent. However, Koehler asserted a health care power of attorney, signed by decedent and naming Stahling Jr. as decedent's agent, had recently been discovered by Wittman and revealed during his deposition on September 16, 2010. Koehler maintained the health care power of attorney, dated August 26, 2005, would have had a material impact on Hamilton's opinions and the court's ultimate ruling. Koehler asked that the court authorize Hamilton to reconsider his report based upon the discovery of the health care power of attorney and file an amended report. She requested the court also authorize additional payment to Hamilton out of estate funds and that the court reconsider its previous order.

ΒΆ 9 On February 9, 2011, the trial court ordered additional facts to be presented to Hamilton regarding the health care power of attorney and directing Hamilton to advise the court if such additional facts would alter Hamilton's previous opinion. On February 18, 2011, Hamilton filed a supplemental report. He noted a property power of attorney creates a fiduciary relationship as a matter of law but stated he found no Illinois case holding the same regarding a health care power of attorney. Hamilton determined that the existence of a health care power of attorney "would appear to be some evidence potentially supporting the existence of a fiduciary relationship, but *** standing alone would not meet the burden of establishing the existence of a fiduciary relationship by clear and convincing proof." Hamilton further stated that it did not appear the deed at issue was procured in any way by Stahling Jr. and that "[o]bviously a health care power ...


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