David v. Russo, 82-2495

• Decision Date: 10 November 1983
• Docket Number: No. 82-2495,82-2495
• Citation: 119 Ill.App.3d 290,74 Ill.Dec. 840,456 N.E.2d 342
• Parties: , 74 Ill.Dec. 840 Anna Marie DAVID and Paula David, Plaintiffs-Appellants, v. John RUSSO and Mary Russo, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 342

456 N.E.2d 342

119 Ill.App.3d 290, 74 Ill.Dec. 840

Anna Marie DAVID and Paula David, Plaintiffs-Appellants, v. John RUSSO and Mary Russo, Defendants-Appellees.

No. 82-2495.

Appellate Court of Illinois,

First District, Fourth Division.

Nov. 10, 1983.

Leonard Rubin, Chicago, for plaintiffs-appellants.

Richard J. Belmonte, Chicago, for defendants-appellees.

LINN, Justice:

Plaintiffs, Anna Marie and Paula David, appeal from the decision of the circuit court of Cook County awarding defendants, John and Mary Russo, the sum of $22,542.63 as reimbursement for funds expended by the Russos while constructive trustees of a parcel of residential property in which plaintiffs held the beneficial interest. Plaintiffs raise the following issues on appeal: (1) whether the accounting ordered by the appellate court in an earlier, related case should include reimbursement for expenditures made after the time period reviewed in the prior appellate court decision; (2) whether defendants breached their duty as constructive trustees when they ignored a court order and made repairs to the property without prior authorization from the trial court; and (3) whether the trial court erred in computing the amount of reimbursement plaintiffs owed to defendants.

We affirm the decision of the trial court but reduce the amount awarded to defendants as reimbursement for their expenses.

FACTS

This appeal is an outgrowth of earlier litigation between the same parties. The first action resulted in the creation of a constructive trust with defendants, John and Mary Russo, named as constructive trustees of a parcel of residential real estate for the benefit of Anna Marie and Paula David, orphaned minors. (David v. Russo (1980), 91 Ill.App.3d 1023, 47 Ill.Dec. 526, 415 N.E.2d 531.) Facts from the earlier case necessary to an understanding of this appeal are summarized below.

Testimony in the earlier case established that the parents of the plaintiffs, unable to obtain financing to purchase a home in Mount Prospect, Illinois, reached an agreement with their friends the Russos whereby the Russos, acting as agents for the Davids, provided the $2000 down payment, obtained the mortgage, and held legal title to the property as security while the Davids, owners of the beneficial title, paid all mortgage, tax, and special assessment payments on the house. The Davids' monthly payments, each for an amount greater than the monthly sum owed to the mortgagee bank, were made directly to the Russos, who in turn deposited the payments in a savings account from which the bank automatically deducted the proper amount each month.

Nancy David, the girls' mother, died in 1972; their father Edward died in 1977. Having no income, the David girls defaulted in their monthly payment to the Russos. The Russos then filed a forcible detainer action against them, claiming that the Davids had been nothing more than renters of the property for 10 years. In response the Davids sued for the imposition of a constructive trust on the ground that although the Russos held legal title to the property, the Davids held the equitable title and therefore were the true owners. During the pendency of these actions, the Davids were able to rent the property and thus make the necessary payments to the Russos until December, 1978, when the tenants moved and no other tenants could be found.

The house was vacant for two months, December, 1978 and January, 1979. The Russos continued to make mortgage payments during those two months and then petitioned the trial court to grant them possession of the property. The petition, granted on February 6, 1979, also relieved the Davids from making any further payments to the Russos.

When the Russos went to inspect the property later in February, they discovered that extensive damage to the house had resulted both from frozen and burst water pipes in the bathroom and basement and from what appeared to be wanton destruction by vandals. On May 23, 1979, the trial court reached a decision in the constructive trust action, finding that a partnership existed between the Davids and the Russos and ordering that the property be sold and the proceeds divided between the parties. Both sides appealed from that judgment.

Believing that they had at least a 50 percent interest in the property, the Russos filed a further petition in the trial court, complaining about the condition of the property and requesting that the Davids be ordered to reimburse them for the mortgage payments made during the two months the house was vacant. On June 8, 1979, the trial court entered the following order:

"IT IS HEREBY ORDERED, ADJUDGED AND DECREED

A) that judgment is entered for the Defendants John and Mary Russo, and against the plaintiffs in the amount of $650. Execution is stayed until a final determination by the appellate courts and a final accounting.

B) that the Defendants John and Mary Russo,

1. Will make all mortgage, taxes, assessments, insurance and other legitimate expenses on the said property,

2. May occupy the said property,

3. May arrange to make necessary repairs for normal habitation upon presentation of a petition with proper notice,

4. May have necessary plumbing repairs done immediately.

C) The court will [make] a determination of the fair rental value of the said property.

D) The court will balance the equities in a final accounting.

E) The Defendants need not pay any money on the rental value but this will be determined at the final accounting."

In February, 1980, the Russos hired Rass Bosswell, a handyman, to live in the house and to repair or replace the damaged walls, doors, floors, windows, exterior siding, electrical wiring, plumbing, appliances, and other fixtures. Bosswell testified that although the repairs themselves took approximately 160 hours, he needed six months to complete the job because his full time employment allowed him to work on the house only during his free time. Bosswell lived in the house rent free until March, 1982.

Meanwhile, on December 18, 1980, the appellate court reversed the trial court and imposed a constructive trust on the Russos, finding the Davids to be sole owners of the property and the Russos to be holding the legal title only as security for the loan for the down payment. The Russos filed an appeal in the Illinois Supreme Court, continued to make the mortgage payments, and kept Bosswell in possession of the property. On May 13, 1981, the supreme court declined to hear the appeal, and the appellate court opinion imposing the constructive trust and remanding the case to the trial court for an accounting was made effective. As of that date, the Russos ceased making mortgage payments; however, upon the institution of foreclosure proceedings against them, they paid all arrearages and costs to have the foreclosure suit dismissed.

On June 5, 1981, the Davids petitioned to set a hearing date for the accounting, but several delays ensued, and the hearing did not begin until May 7, 1982. Five additional hearing dates were necessary, and the accounting was not completed until September 15, 1982.

At the hearing on the accounting, the Russos presented an itemized list of 41 expenditures totaling $38,433.00, all of which they claimed directly benefited the property and for which they requested reimbursement. Various witnesses then established the state of disrepair of the house when the Russos took possession in February, 1979 and testified concerning bills for materials, labor, utilities, and landscaping, assessments for the new sewer, and payments to forestall foreclosure on the mortgage, all of which had been paid by the Russos in addition to the monthly mortgage deduction from their savings account. At the conclusion of the testimony, the trial judge allowed 31 of the claimed expenses and entered an order allowing $22,542.63 as reimbursement due to the Russos from the Davids. The Davids appealed.

OPINION

I

The first issue raised by plaintiffs on appeal concerns the authority of the trial court in a remand for an accounting to award reimbursement for expenditures made by defendants beyond the period reviewed by the appellate court. Plaintiffs argue that the computation should be made for only that time period subject to review by the appellate court, i.e., from August, 1967 to May, 1979, because the "Appellate Court could not have contemplated a prospective effect of its mandate, and at the time it was rendered a prospective mandate was not needed." Plaintiffs cite Spring Lake Drainage & Levee District v. Stead (1914), 263 Ill. 247, 104 N.E. 1014, and Fisher v. Burks (1918), 285 Ill. 290, 120 N.E. 768, as authority for the proposition that when a case is remanded with directions, the trial court is bound by those directions and may not take any action except as directed. Consequently, plaintiffs argue, the trial court at the accounting hearing was prevented from looking into any expenditures made by the Russos after May, 1979. We disagree.

As stated by the supreme court in Fisher, "Where the direction contained in [the mandate from the supreme court] is precise and unambiguous, it is the duty of the trial court to carry it into execution and not to look elsewhere for authority to change its meaning or direction." (285 Ill. 290, 293, 120 N.E. 768, 769.) In both Spring Lake and Fisher, the supreme court's mandate ordered the trial court to enter a specific decree, in one case for a permanent injunction and in the other for a dismissal for want of equity. "There is no question that when a cause has been remanded with special directions it is out of the power of the court receiving such direction to open the case and take any action except as directed." Spring Lake Drainage & Levee District v. Stead (1914), 263 Ill. 247, 251, 104 N.E. 1014, 1015-16.

However, "if specific directions are not given, the trial court is required to examine the appellate court's opinion and determine therefrom what...