Find Laws Find Lawyers Free Legal Forms USA State Laws
Laws-info.com » Cases » Illinois » 4th District Appellate » 2002 » In re Estate of Hurst
In re Estate of Hurst
State: Illinois
Court: 4th District Appellate
Docket No: 4-01-0528 Rel
Case Date: 04/16/2002

NO. 4-01-0528

IN THE APPELLATE COURT

OF ILLINOIS

FOURTH DISTRICT

 

In the Matter of the Estate of ROBERT ) Appeal from
CHARLES HURST, Deceased, ) Circuit Court of
ALICIA E. HURST and JULIE ANN HURST, ) Woodford County
                    Petitioners-Appellees and ) No. 98P75
                    Cross-Appellants, )
                    v. )
PATSY J. HURST, Individually, PATSY J. )
HURST, Administratrix With the Will )
Annexed of the Estate of ROBERT )
CHARLES HURST, Deceased; LORI L. )
HOFFERBERT, and TODD A. REID, ) Honorable
                     Respondents-Appellants and ) John B. Huschen,
                     Cross-Appellees. ) Judge Presiding.

 


JUSTICE TURNER delivered the opinion of the court:

This appeal involves the interpretation of two writteninstruments, a promissory note and a will, and the possible useof extrinsic evidence. Patsy J. Hurst, individually and asadministratrix of the will annexed of the estate of RobertCharles Hurst, along with Lori L. Hofferbert and Todd A. Reid,cross-appellees, appeal the judgment of the trial court withrespect to the promissory note and will, respectively. Alicia E.Hurst and Julie Ann Hurst, cross-appellants, also appeal thetrial court's ruling concerning the Dead-Man's Act (735 ILCS 5/8-201 (West 2000)). We affirm in part, reverse in part, and remandthe cause with directions.

I. BACKGROUND

Initially, the parties involved in these appealsnecessitate an introduction. Robert Charles Hurst (Chuck)married Diane Neises in September 1961. Chuck and Diane had twochildren: Lori L. Hurst and Todd A. Hurst (Lori and Todd). Chuckand Diane were divorced in April 1964, and Diane remarried toAlex Reid. Diane and Alex legally adopted Lori (now Hofferbert)and Todd (now Reid). In April 1965, Chuck married his secondwife, Karan E. Hurst. They had two children: Alicia E. Hurst andJulie A. Hurst (Alicia and Julie). Chuck and Karan were divorcedin April 1990. Later, Chuck married his third wife, Patsy J.Hurst (Patsy).

A. The Note

In 1993, Chuck and Patsy Hurst decided to open andoperate an adult entertainment club in Tazewell County. Thereafter, with the assistance of counsel, Club Cabaret, Inc., wasformed in which the Hursts retained a 51% controlling interest. The stock certificate indicated the shares were issued to "RobertC. Hurst and Patsy J. Hurst, Joint Tenants." In 1996, the Hurstsdecided to sell their interest in the business to other individuals involved with the corporation. Attorney Richard D. McCoyprepared a promissory note (note) and mortgage on behalf of theHursts. Chuck and Patsy allegedly told McCoy they wanted thenote to be payable to both of them jointly so if one of themdied, the survivor would become the sole owner of the note. McCoy drafted the note which read, in part:

"FOR VALUE RECEIVED, the undersigned,CLUB CABARET, INC. (Maker), promises to payto the order of ROBERT C. HURST and PATSY J.HURST, or either of them, or any holder ofthis note (Payee) the sum of U.S.$1,140,000.00 ***."

Similarly, the mortgage stated, in relevant part:

"This mortgage is made this 26 day ofSeptember 1996, by CLUB CABARET, INC., anIllinois corporation (Mortgagor), *** anddelivered to ROBERT C. HURST and PATSY J.HURST (jointly and severally (Mortgagee))***."

Chuck and Patsy accepted the note believing it conformed to their wishes of joint ownership with each having a fullright of survivorship. The corporation made monthly payments inaccordance with the terms of the obligation by electronic transfer to an account at Morton Community Bank. Chuck and Patsy heldthe bank account as joint tenants with right of survivorship.

In October 1997, Chuck and Patsy sought out McCoy forhis services as to their estate plans. They sought assurancefrom McCoy the proceeds of the note would be paid to the survivorof Chuck and Patsy if one predeceased the other. McCoy checkedthe note and assured them it was owned jointly with right ofsurvivorship.

In June 1998, Chuck died before completing his estateplanning. It was believed he died without a will. In August1998, Patsy was appointed independent administratrix of theestate.

In August 1999, Alicia and Julie filed a petition forcitation to discover assets against Patsy, in her individual andrepresentative capacities, and against Club Cabaret, Inc. Thepetition alleged the payees of the promissory note held it astenants in common and not as joint tenants. Thus, Chuck'sundivided one-half interest in the note passed into his estateand should be inventoried as an asset of his estate. Patsy,believing the note created a joint tenancy, did not include thenote in Chuck's estate, maintaining she was the sole owner. InApril 2000, Alicia and Julie filed a motion for summary judgmenton their petition for citation to discover assets, arguing thenote and mortgage are clear and unambiguous on their face andcreate a tenancy in common.

In February 2000, Patsy, in her individual capacity,filed a complaint to reform the note. The complaint sought areformation of the note to express the true intent of Patsy andChuck, by substituting the words

"ROBERT C. HURST and PATSY J. HURST, oreither of them, as joint tenants with rightof survivorship"

in place of the phrase

"ROBERT C. HURST and PATSY J. HURST, oreither of them."

In March 2000, Alicia and Julie filed an answer to the complaint,admitting most of the allegations but stating the note speaks foritself.

In October 2000, Patsy filed a motion for summaryjudgment and attached affidavits from Richard McCoy, RobertTudor, and James Mamer. In his affidavit, McCoy stated Chuckwanted the note to be drafted jointly with Patsy with right ofsurvivorship. He believed he was fulfilling Chuck's wishes byusing the language "or either of them." Tudor, vice-president ofClub Cabaret, Inc., stated the corporation made monthly paymentsby electronic transfer to Chuck and Patsy. Mamer, president ofMorton Community Bank, stated Chuck and Patsy held a jointaccount at the bank as joint tenants with right of survivorship.

Alicia and Julie filed a motion to strike the threeaffidavits as either irrelevant or barred by the Dead-Man's Act. Specifically, they alleged McCoy's affidavit was barred by theDead-Man's Act because McCoy was a person directly interested inthe action based on Patsy's malpractice action against him. Patsy filed a professional negligence suit, in December 1999,against Richard McCoy, Kirk Bode, and McCoy & Bode for thealleged negligence in drafting the note. Patsy argued the Dead-Man's Act did not apply because McCoy was not directly interestedin the action and had not been called to testify on his ownbehalf.

Alicia and Julie also filed a cross-motion for summaryjudgment arguing the note's language created a tenancy in common. They argued if the McCoy affidavit was inadmissible, Patsy had noevidence of a mistake to justify a reformation of the note. Theyclaimed the mistake alleged was one of law, not fact, which wasnot the proper subject for reformation.

In November 2000, the trial court denied Alicia andJulie's motion to strike the affidavits. As to the McCoyaffidavit, the trial court found McCoy was not directly interested in the action because, regardless of the outcome of thiscase, the malpractice action would still be pending.

In May 2001, the trial court, in an amended order,denied Patsy's motion for summary judgment and granted Alicia andJulie's cross-motion for summary judgment. The trial courtreasoned the note was a tenancy-in-common instrument and, sincethere was a mistake of law, not fact, reformation was prohibited. The court declared Chuck's estate as the owner of an undividedone-half interest in the note and the mortgage that secures it.

Patsy filed a posttrial motion to reconsider, arguingequity provided an exception to the general rule that a mistakeof law cannot be reformed and her case fell within the exception. The trial court denied the motion to reconsider. The courtacknowledged some mistakes of law may be reformed, but attorneyMcCoy's mistake was a legal one pertaining to a general rule oflaw, and equity did not offer relief. This appeal and cross-appeal followed.

B. The Will

In October 1999, Chuck's original will, dated January30, 1991, was found in the safe deposit box of the law firm ofMcCoy & Bode. The will stated, in relevant part:

"ARTICLE II

I give all of my personal effects,household goods, automobiles, and all otheritems of goods and chattels to my childrenwho survive me in shares of substantiallyequal value, with the descendants of anydeceased child to take the deceased child'sshare per stirpes. Currently I have twochildren whose names are as follows:

ALICIA ELIZABETH HURST and JULIE ANN HURST

If any child of mine has not attainedlegal age at my death, the executor may deliver his or her share of goods and chattelsto the guardian of his or her person or estate, or to the person with whom he or sheresides, for the benefit of the child, andthe receipt of this guardian or person shalldischarge the executor.

ARTICLE III

I give the residue of my estate, excluding any property over which I have a power ofappointment, to my children who survive me inequal shares with the descendants of anydeceased child to take the deceased child'sshare per stirpes. If any child of mine isunder the age of 25 years at the date of mydeath, I direct the executor to give saidresidue to my ex-wife, KARAN E. HURST, astrustee for the benefit of my children(Children's Trust).

***

ARTICLE VIII

I designate my wx-wife [sic], KARAN E.HURST, as the guardian of the persons andestates of my children. I direct that nosecurity be required on the bond of anyguardian designated by me."

In November 1999, Alicia and Julie filed a petition toconstrue decedent's will naming as defendants Patsy, Lori, andTodd. The petition sought relief from the court by way of anorder construing decedent's will so the word "children" isdefined to include only Alicia and Julie, and specifically toexclude Lori and Todd. In March 2000, Lori and Todd both filedresponses to the petition to construe decedent's will. Theresponses sought a declaration that Lori and Todd are heirs underthe Illinois Probate Act of 1975 (755 ILCS 5/1-1 through 30-3(West 2000)), and an order construing decedent's will so the term"children" is defined to include Lori and Todd for all purposesexcept article II.

In April 2000, Alicia and Julie filed a motion forjudgment on the pleadings, arguing decedent's will did notcontain a latent ambiguity and demonstrated decedent's intentionto disinherit his two children not named in the will: Lori andTodd. In June 2000, the trial court found the will contained alatent ambiguity and parol evidence was necessary to determinewhether Lori and Todd should be included. In December 2000, anevidentiary hearing was held on the petition to construe thewill. The parties did not produce any extrinsic evidence butrelied on their arguments based on the language of the will.

In May 2001, the trial court entered judgment in favorof Alicia and Julie and against Lori and Todd. The trial courtfound Alicia and Julie were the only persons who take underdecedent's will because case law tended to abolish the traditional rules regarding class gifts and instead reclassify thegift as an individual bequest when a person is specificallyidentified. This appeal followed.

II. ANALYSIS

A. The Note

Patsy argues the trial court erred in granting summaryjudgment in favor of Alicia and Julie. We agree. As our analysis of the note involves a question of law, we review the trialcourt's decision de novo. See Subway Restaurants of Bloomington-Normal, Inc. v. Topinka, 322 Ill. App. 3d 376, 381, 751 N.E.2d203, 208 (2001) (question of law when dealing with motion forsummary judgment).

The general rule is that before a court will reform aninstrument on the ground of mistake, "'"the mistake must be offact and not of law, mutual and common to both parties, and inexistence at the time of the execution of the instrument, showingthat at such time the parties intended to say a certain thingand, by a mistake, expressed another."' [Citations.]" Zannini v.Reliance Insurance Co. of Illinois, Inc., 147 Ill. 2d 437, 449,590 N.E.2d 457, 462 (1992); see also Spies v. DeMayo, 396 Ill.255, 272, 72 N.E.2d 316, 324 (1947) (to justify reformation,mistake must be of fact and not of law); Ambarann Corp. v. OldBen Coal Corp., 395 Ill. 154, 166, 69 N.E.2d 835, 841 (1946).

While this general rule has had a long history, courtsof equity have created exceptions in the interests of justice. Our supreme court in Peter v. Peter, 343 Ill. 493, 498, 175 N.E.846, 849 (1931), noted "[w]hile it has been stated as a generalrule that a mistake of law pure and simple is not adequate groundfor relief in equity, yet even when the mistake is one of lawequity sometimes intervenes. [Citation.] Courts of equity haveaided mistaken parties because of the demands of justice." Later, the court indicated "[r]elief is not barred in a propercase because the mistake is one of law." Darst v. Lang, 367 Ill.119, 123, 10 N.E.2d 659, 662 (1937). The court reiterated thisprinciple when it revisited the issue of granting relief tomistakes that include elements of law in Barkhausen v. Continental Illinois National Bank & Trust Co. of Chicago, 3 Ill. 2d 254,269-70, 120 N.E.2d 649, 657 (1954).

In Harbaugh v. Hausman, 210 Ill. App. 3d 715, 720-22,569 N.E.2d 523, 527-29 (1991), this court cited Barkhausen forthe proposition that a court of equity can grant relief even incases where the mistake is one of law. In Harbaugh, the courtstated "where a person is mistaken 'as to his own antecedentexisting legal rights,' relief may be granted in regard to asubsequent contract he enters into in reliance on his mistakenbelief as to antecedent rights." Harbaugh, 210 Ill. App. 3d at722, 569 N.E.2d at 528, quoting 3 J. Pomeroy, Equity Jurisprudence

Illinois Law

Illinois State Laws
Illinois Tax
Illinois Court
Illinois Labor Laws
    > Minimum Wage in Illinois
Illinois Agencies
    > Illinois DMV

Comments

Tips