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Jackson v. DBR Jackson Partnership

Court of Appeals of Illinois, Third District

September 7, 2016

DBR JACKSON PARTNERSHIP, an Illinois Partnership; RUSSELL E. JACKSON; DEBRA JACKSON; and IRMA JEAN JACKSON, Defendants, Cheryl Jackson, Counterplaintiff-Appellee; Russell E. Jackson, Counterdefendant-Appellant.

         Appeal from the Circuit Court of the 10th Judicial Circuit, Stark County, Illinois, Circuit No. 12-L-2, Honorable Michael P. McCuskey, Judge, Presiding.

          HOLDRIDGE JUSTICE delivered the judgment of the court, with opinion. Justices Wright and Carter concurred in the judgment, with opinion.



         ¶ 1 Russell E. Jackson appeals from an order of the circuit court of Stark County denying his motion for summary judgment and granting a cross-motion by his sister, Cheryl Jackson, for summary judgment. In granting her cross-motion, the court held that Cheryl had acquired a one- fifth interest in the family farm by way of a gift from their father, Dean Jackson. The court held that Cheryl had acquired the one-fifth interest as a gift from Dean when he executed a purchase agreement for the property in question on which he listed each his children and himself as purchasers. Cheryl maintained that, even though her name was not included as a grantee when the deed was delivered many years later, she nonetheless held an equitable interest in the property. Russell maintained in his motion for summary judgment that whatever gift Dean may have intended when the purchase agreement was executed in 1997 was incomplete and subject to revocation at any time prior to delivery of the deed. The trial court agreed with Cheryl and granted summary judgment to her. Russell appeals from that judgment.

         ¶ 2 BACKGROUND

         ¶ 3 Dean and his wife Irma had four children: Barry, Russell, Cheryl, and Janet. Dean was by all accounts a very successful farmer. In addition to several hundred acres he owned outright, he farmed several hundred additional acres under various agreements for purchase. In 1970, Barry joined Dean in the farming operation, and Russell joined them in 1978.

         ¶ 4 In 1977, Dean negotiated an agreement to purchase 320 acres of farmland from Margaret J. Dixon for $1, 334, 000 to be paid with interest in annual installments until 1997, when the balance would be paid and a warranty deed would be issued by the seller. The land came to be known as "the Dixon 320." The purchase agreement listed Dean and each of his four adult children as purchasers. On April 1, 1977, Dean brought the agreement to each of the four and instructed each to sign it. It is undisputed that none of the children had any role in procuring the Dixon 320. The terms of the Agreement required each purchaser to "first make payments, and perform the covenants herein mentioned" before the seller would convey title to the land.

         ¶ 5 After executing the purchase agreement, Dean farmed the Dixon 320 along with Barry and Russell. The grain harvested from the Dixon 320 was commingled with grain from other farms owned or controlled by the Jacksons, so it was impossible to determine what cash proceeds were generated by any specific acreage. Each year, Dean would deposit the proceeds from the farming operation into a savings account at the Wyoming Bank and Trust Co. in Wyoming, Illinois, which was titled "DBR Farm Account." That account was jointly owned by Dean, Barry, and Russell. Each year Dean would distribute enough money from the DBR account into Barry's and Russell's individual checking accounts to allow them to each pay one-third of the annual payment to Margaret Dixon, with Dean paying the other one-third. Dean, Barry, and Russell took net income from the DBR account for their personal living expenses. Neither Janet nor Cheryl ever received money from the DBR account or made any payments pursuant to the Dixon320 purchase agreement.

         ¶ 6 On March 9, 1992, an addendum to the purchase agreement was executed, which decreased the annual payment from $50, 000 to $35, 000 and extended the completion date from 1997 to 2009. As with the original agreement, Dean negotiated the addendum and then took it to each of his four children for their signatures. Russell testified that he believed that at the time the addendum was executed, it was Dean's intent to take Janet and Cheryl off the agreement, due to their lack of participation in the farming of the Dixon 320 and their lack of contribution to the annual payment. Barry testified that he also believed that the two sisters would not receive an interest in the Dixon 320 but "were going to get an equivalent value of that acreage somewhere along the way when it was paid for."

         ¶ 7 After the addendum was executed, the arrangement regarding the Dixon 320 continued as before, with Dean, Barry, and Russell participating in the farming and making the annual payment. Shortly after the addendum was executed, Dean began to turn more of the day-to-day operations over to Russell.

         ¶ 8 In 1995, Barry was involved in divorce proceedings, and Dean decided to decrease Barry's involvement in the farming operations. This resulted in a reduction in Barry's income share of the farm partnership. Despite his decreased role in the farming operations, Barry continued to pay one-third of the payments on the Dixon 320 purchase agreement until 2007. By the late 1990s, Dean was no longer involved in the operation. Dean's mental condition began to deteriorate around the time of his eighty-third birthday in 2004. Within a year, he no longer recognized people and would forget how to get home. By this time, Russell was in complete control of the partnership operations.

         ¶ 9 On February 6, 2007, Barry executed a deed conveying his "undivided interest" in the Dixon 320 to Dean and Irma, husband and wife, as tenants in common.

         ¶ 10 On March 13, 2009, Margaret Dixon executed a warranty deed to the Dixon 320 to Russell E. Jackson. Margaret would later testify that the deed was executed with Russell as the only grantee pursuant to the specific instruction of Dean. Russell signed the tax revenue sheet (PTAX) and caused the deed to be recorded. Russell did not inform Cheryl of the existence of the deed.

         ¶ 11 Dean died in May 2011. Shortly thereafter, Barry went to the courthouse and discovered that the Dixon 320 had been conveyed to Russell alone in 2009. Sometime in 2012, Barry told Cheryl about the deed. Barry then brought suit against the DBR Jackson Partnership, as well as Russell, Debra, and Irma Jean individually. Barry's complaint sought an accounting for all the partnership operations and a portion of partnership assets. One of the counts in the complaint concerned the Dixon 320 transaction. On November 8, 2013, Cheryl intervened filing a counter- claim against Russell regarding the Dixon 320 transaction, claiming either an equitable interest in the property, or in the alternative, seeking the imposition of a constructive trust over a one-fifth interest in the property. On competing motions for summary judgment, the trial court entered judgment for Cheryl and against Russell, finding that 1) Cheryl had been excluded from possession of the Dixon 320 and the proceeds therefrom since the inception of the agreement with Margaret Dixon in 1977, 2) Cheryl had not participated in making payments on the purchase agreement or the addendum, 3) ...

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