Ball v. Kotter

• Decision Date: 23 July 2013
• Docket Number: No. 12–1969.,12–1969.
• Citation: 723 F.3d 813
• Parties: Susan BALL, et al., Plaintiffs–Appellants, v. Cherie KOTTER, et al., Defendants–Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

723 F.3d 813

Susan BALL, et al., Plaintiffs–Appellants,

v.Cherie KOTTER, et al., Defendants–Appellees.

No. 12–1969.

United States Court of Appeals, Seventh Circuit.

Argued Jan. 16, 2013.

Decided July 23, 2013.

Jan M. Michaels, Neal F. Thompson (argued), Attorneys, Michaels & May, Chicago, IL, for Plaintiffs–Appellants.

William Yu, Attorney, Hinshaw & Culbertson, Chicago, IL, Daniel E. Tranen (argued), Attorney, Hinshaw & Culbertson LLP, Boston, MA, for Defendants–Appellees Cherie Kotter and Kotter Family Trust.

Jason M. Kuzniar (argued), Attorney, Wilson, Elser, Moskowitx, Edelman & Dicker LLP, Chicago, IL, for Defendant–Appellee Hope Geldes.

Before BAUER and HAMILTON, Circuit Judges, and MILLER, District Judge.^*

BAUER, Circuit Judge.

This movie-script-like case features three main characters: Donald C. Hedstrom, a now-deceased, ex-husband buyer; Cherie Kotter, an ex-wife real estate agent; and Hope Geldes, the decedent's real estate attorney. The action begins with Hedstrom's desire to purchase two condominium units in Chicago's Lake Point Tower. He retained the services of Kotter and Geldes to make that happen. After a series of events, Hedstrom eventually purchased the desired units—one unit was titled to Hedstrom and Kotter as joint tenants with rights of survivorship; the second to the Kotter Family Trust. Shortly thereafter, Hedstrom died, and in accordance with the first unit's title, Kotter became the sole owner of the property.

Other characters in the script, Susan L. Ball and Jan K. Witteried, two of Hedstrom's children—the administrators of Hedstrom's estate (the Administrators)—were displeased with this result. Believing that the units were not titled in accordance with Hedstrom's desires, they filed a two-count lawsuit against Kotter ¹ and Geldes seeking to recoup the fees and commissions Kotter and Geldes earned in the transactions, as well as receive compensation equal to the combined market value of the two properties or, alternatively, a judgment transferring title of the units to Hedstrom's estate. The count against Kotter was for breach of fiduciary duty, which arose out of the interest she received in the two condo units. The other count was against Geldes for legal malpractice, alleging that she failed to recognize certain conflicts of interest in the two transactions.

Kotter and Geldes moved for summary judgment after discovery. The Administrators did the same. The district court granted summary judgment in favor of Geldes because expert testimony was needed to delineate the standard of care required of her, and the Administrators were barred from presenting the required testimony. The district court initially denied Kotter's motion but later granted summary judgment in favor of her as well, concluding that the undisputed evidence demonstrated the units were titled in accordance with Hedstrom's intent and Kotter did not breach her fiduciary duty to Hedstrom. The Administrators appeal both decisions. We affirm.

I. BACKGROUND

A. Underlying Facts

A brief synopsis of the parties' underlying relationship is necessary to understand the storyline of this case. Ball and Witteried are two of Hedstrom's children from his first marriage. In 1998, Hedstrom married Kotter, a licensed real estate agent in the State of Illinois. Their marriage lasted “about two years.” Nonetheless, Hedstrom and Kotter were on good terms at the time of Hedstrom's death, and Hedstrom went so far as to refer to Kotter as his “good friend and companion” in his will and living trust. Additionally, there is no evidence that Hedstrom lacked mental capacity or had impaired mental capacity at any time during the events at issue.

We fast forward to July 2006; that is when the events in question really began.

Hedstrom decided to purchase two condominium units in Chicago's Lake Point Tower. (One condo is “Unit 4705”; the second is “Unit 1518.” We refer to each condo by its respective unit number and the two units collectively as “the Units.”) To make his desire a reality, Hedstrom needed assistance. He reached out to Kotter to act as his real estate agent for the purchase of the Units. He also reached out to Geldes to be his real estate attorney. Kotter and Geldes had never before worked together on a real estate transaction.

On July 26, 2006, Geldes sent Hedstrom two retention letters that corresponded with each of the two Units. Geldes did not send the letters directly to Kotter. Each letter required a signature of acceptance from Hedstrom. Hedstrom signed each of these letters on July 30, which confirmed his acceptance of the terms of Geldes' representation, and he sent them back to Geldes.

On the morning of July 26, Kotter sent Geldes an email that said, in part, “[Hedstrom] is taking title in another name. He will let me know the proper way to prepare the deed. [ ... ] Don cannot hear over a phone so I will be answering all questions for him.” Kotter also told Geldes around that time that Hedstrom would be unavailable “until the end of the week of August 1, 2006,” because of surgery.

On July 31, Geldes sent letters regarding each of the Units to the attorneys for the sellers of the Units. In each letter, Geldes wrote, “At closing, title for Unit shall be conveyed by warranty deed to Mr. Donald Hedstrom.” Hedstrom and Kotter were copied on the letters via email. In response, Hedstrom emailed the following message to Geldes that evening:

For the last time, I'm going to repeat that there is to be NO mortgage on units 1518 and 4705 that I am purchasing in Lake Point Tower. I have made arrangements to have the required funds available at the day of closing or before. Also I have written in at least 4 documents that these 2 properties will be jointly owned by Cherie Kotter and me and you have copies of these. Please comply or I will have to get another attorney.The next morning, on August 1, Geldes responded to Hedstrom's email. She wrote, in part,

Please allow me to explain my letter.... Cherie had asked me to discuss with you both, whether you wanted to own it as joint tenants with right of survivorship, tenants in common or set up a living trust.... The seller's attorney will not be preparing the deeds until the end of the week. We can change title at any time.

Kotter was copied on the email, and about thirty minutes later, she responded. Kotter wrote, “Regarding 4705 [....] Please put deed to that unit in the names Don C. Hedstrom and Chrie [sic] S Kotter as joint tenants with rights of survivorship[.]” This email was not sent to Hedstrom.

Looking specifically to Unit 4705: later that day, on August 1, Geldes sent a revised modification letter to the attorney for the seller of Unit 4705 in response to the instructions she received from Kotter. The letter stated in pertinent part, “At closing, title for Unit shall be conveyed by warranty deed to Mr. Donald C. Hedstrom and Ms. Cherie S. Kotter, as joint tenants with right of survivorship.” (emphasis in original). Geldes sent the letter to the other attorney via facsimile and U.S. mail. Hedstrom and Kotter were copied via email.

Geldes testified that she spoke to Hedstrom on the telephone shortly after sending the revised letter. According to Geldes, she explained to Hedstrom the legal implications corresponding to the different manners in which the Units could be titled. Also according to Geldes, Hedstrom explicitly told her that he “wanted to take the Properties jointly with rights of survivorship because he wanted to take care of Cherie Kotter and ensure that the Properties would pass to Kotter upon his death as he was leaving several other properties he owned to his children.” Hedstrom's will and living trust confirmed that Hedstrom left other properties to his children.

On August 4, 2006, Unit 4705's seller assented to the modifications in the August 1 letter. The closing for Unit 4705 was held on August 14, 2006. Hedstrom, Kotter, and Geldes all attended it. The deed prepared listed the “Grantee” as “Donald C. Hedstrom and Cherie S. Kotter.” The deed included four possible options as to how the Unit could be titled: as tenants in common; not as tenants in common but as joint tenants; not as tenants in common nor joint tenants, but as tenancy by the entirety; statutory-fee simple. Above the four options was “Strike Inapplicable.” The record indicates that, at the closing, Kotter and Hedstrom watched as Geldes drew lines through the options “as tenants in common,” “not as tenants in common nor joint tenants; but as tenancy by the entirety,” and “statutory-fee simple.” They also watched as Geldes handwrote the phrase “with right of survivorship” after the phrase “not tenants in common but as joint tenants.” Geldes testified that she explained to Hedstrom and Kotter that she “was making sure that the deed reflected Mr. Hedstrom's wish that the property be titled to Mr. Hedstrom and Ms. Kotter jointly with rights of survivorship, as Mr. Hedstrom had previously requested on the phone,” when she made the changes. Geldes also testified that Hedstrom verbally assented to each handwritten change she made to the document.

The deed to Unit 4705 was properly recorded; it identified that the title was held by Hedstrom and Kotter jointly, with rights of survivorship.

The titling history for Unit 1518 is significantly more complex: on August 4, 2006, Geldes sent an attorney modification letter to the attorney for the seller of Unit 1518. She wrote, “At closing, title for Unit shall be conveyed by warranty deed to Mr. Donald Hedstrom and Cherie S. Kotter, as joint tenants with right of survivorship.” Geldes sent the letter to the attorney via facsimile and U.S. mail. Hedstrom and Kotter were again copied via email.

Before the closing, Kotter sent Geldes an email in the afternoon on September 13. Hedstrom was not included on the email. Kotter wrote, “Please have the deed [for Unit 1518] made out to the Kotter Family Trust dated Sept. 25th 1993.” This was not in accordance...