Harris v. Adame
| Decision Date | 30 September 2015 |
| Docket Number | 1–12–3307.,Nos. 1–12–3306,s. 1–12–3306 |
| Citation | 43 N.E.3d 1050 |
| Parties | Robert F. HARRIS, Public Guardian of Cook County, and Plenary Guardian of the Estate and Person of Arthur Lynch, Petitioner–Appellee, v. Jose A. ADAME, Respondent–Appellant (Professional National Title Network, Inc., an Illinois corporation, James Brya, T & H Mortgage, Inc., Respondents). Nicholas G. Grapsas, Administrator of the Estate of Arnold Lynch, deceased, Petitioner–Appellee, v. Jose A. Adame, Respondent–Appellant (Professional National Title Network, Inc., an Illinois corporation, James Brya, T & H Mortgage, Inc., Respondents). |
| Court | United States Appellate Court of Illinois |
Masuda, Funai, Eifert & Mitchell, Ltd., of Chicago (Timothy J. Hammersmith and Gerald L. Morel, of counsel), for appellant.
Robert F. Harris, Public Guardian, of Chicago (Charles P. Golbert, Kass A. Plain, and Janet L. Barnes, of counsel), for appellee Robert F. Harris.
Arnstein & Lehr LLP, of Chicago (Michael A. Abramson, Colleen A. Chinlund, and Julie A. Meyer, of counsel), for appellee Estate of Lynch.
¶ 1 This action arose from the filing of two citation to recover assets petitions in the probate division of the circuit court of Cook County. One petition was filed by the guardian for a disabled person, Arthur Lynch. The other petition was filed by the administrator of the decedent estate of a disabled person, Arnold Lynch. The petitions alleged that prior to Arnold's death he was an adjudicated disabled person who, along with his brother Arthur, conveyed their home to a third party without approval from the probate court. The circuit court entered summary judgment on those petitions in favor of Arthur and Arnold's estates, finding that the warranty deed (and thus the conveyance) is void in its entirety. The court ordered title to the home restored to the estates of Arthur and Arnold. The circuit court allowed the third party buyer, Jose Adame, to appeal.
¶ 3 Arnold and Arthur were brothers who owned a home as joint tenants, each owning an undivided one-half interest. The home was encumbered by a mortgage. The brothers lived in the home until 2002, when, as a result of an auto accident, Arnold fell into a coma. On Arthur's petition, Arnold was adjudicated a disabled person and a guardian was appointed. Later that year, the probate court adjudicated Arnold incompetent and James Brya was appointed plenary guardian of Arnold's estate and person. Arnold eventually recovered but Brya remained his guardian.
¶ 4 Three years later, in 2005, Brya helped facilitate the sale of Arnold and Arthur's home to a third party, Jose Adame. Brya intended to sell his own home to Adame, however, he suggested to Adame that he also look at the Lynch property as an alternative. Brya then facilitated a viewing of the Lynch home. Adame and the Lynch's real estate agent negotiated the sale price. At the closing, Arthur and Arnold were represented by attorney Elizabeth Mann. Adame had his own attorney at the closing.
¶ 5 Professional National Title Network, Inc. (PNTN) prepared the title commitment policy issued to Adame. Elizabeth Mann, Arthur and Arnold's attorney, prepared and sent the title commitment packet to PNTN. The title commitment packet included a “Property Insight” form which showed Arnold's open guardianship case in probate court with an entry of “GDN OF THE EST & PERSON.” This term is not explained by the parties, however, for the purpose of our decision we consider this sufficient to indicate the existence of a guardian of the estate and person of Arnold. The title commitment policy issued by PNTN made no reference to Arnold's probate estate.
¶ 6 In June 2005, Arthur and Arnold conveyed the home to Adame by way of a warranty deed. Adame obtained a mortgage from respondent, T & H Mortgage, Inc., using the property as security for the loan. Brya, Arnold's guardian, was present at the closing but did not sign the closing documents. The property sold for $145,000. The sale proceeds were used to pay off the brothers' mortgage. Pursuant to a letter of direction, signed by Arnold and Arthur, PNTN disbursed $34,750 to Brya and the remaining proceeds of $43,957.48 to Arnold and Arthur. Petitioners contend that Brya immediately took the $43,957.48 from Arnold and Arthur. The probate court was not informed of and did not approve the sale or the disbursement of the sale proceeds.
¶ 7 Ten months later, in April 2006, Arnold died intestate. Arthur is the sole surviving heir of Arnold's estate.
¶ 8 In July 2008, the Cook County public guardian petitioned for the appointment of a guardian for Arthur. In April 2009, Arthur was declared a disabled person and the public guardian was appointed plenary guardian over Arthur's estate and person.
¶ 9 In late 2009, the public guardian, as plenary guardian for Arthur, and the public administrator of Arnold's estate, filed separate citations to recover assets against Adame, Brya and PNTN. Relevant to this appeal, the petitions alleged that Brya took advantage of his position as Arnold's guardian and converted the proceeds of the real estate sale for his own use. The petitions sought an order declaring the entire 2005 conveyance void ab initio; restoring title to the estates of Arthur and Arnold; setting aside Adame's mortgage against the property; and entering judgment against Brya for the misappropriated funds.
¶ 10 Adame responded to the petition and argued that: he was a bona fide purchaser who paid valuable consideration for the property; he has continuously resided at the property since the closing; and if the sale is deemed void, he should be restored to his original position and repaid his purchase price plus all taxes, water bills and maintenance costs he has paid since the closing.
¶ 11 Petitioners jointly moved for summary judgment against Adame arguing that the warranty deed and conveyance are void on the sole basis that Arnold, a disabled person without the legal capacity to contract, personally executed the deed without previous court approval or guardianship involvement. Petitioners argued that Arthur's signature and conveyance appeared in the same warranty deed and, therefore, Arthur's conveyance to Adame is also void. Petitioners also argued that, based on the “property insight” form provided by Mann to PNTN (Adame's title insurer), Adame should be charged with notice of the public record that Arnold was adjudicated an incompetent person.
¶ 12 In the alternative, petitioners also sought judgment against PNTN for violating the Probate Act in “allowing the sale of the property to proceed” when PNTN was on notice of Arnold's disability and for disbursing the sale proceeds pursuant to a “ Letter of Direction” signed by Arnold and Arthur.
¶ 13 The petitioners requested alternative relief from the circuit court, either: (1) enter judgment against PNTN for the funds misappropriated by Brya or (2) restore title in the home to the Estates of Arnold and Arthur and divest Adame of his title in the property and remove Adame's mortgage lien against the property.
¶ 14 Adame responded to the motion for summary judgment arguing: he had no notice of Arnold's disability prior to the 2005 closing; he was a bona fide purchaser who paid fair market value for the property; and, petitioners have made no offer to restore him to his original position. Attached to his response was an affidavit wherein he averred that he was not aware of Arnold's probate case until this citation action; he acted in good faith when purchasing the property; based on Arthur and Arnold's conduct at the closing, he had no reason to believe that either of the Lynch brothers were disabled persons; he hired an attorney to represent him in purchasing the property; Arnold and Arthur were represented by their own counsel during the sale; and, he paid a fair purchase price for the property.
¶ 15 PNTN responded to the petitioners' motion by filing its own cross motion for summary judgment arguing that petitioners' damages were not proximately caused by PNTN.
¶ 16 On October 1, 2012, the circuit court held a hearing on the motions for summary judgment. At the hearing, the petitioners and Adame disputed whether Adame had either actual or constructive notice of Arnold's disability. The circuit court informed the parties that, because the determination of whether the conveyance was void did not depend on a finding of whether Adame was an innocent purchaser, the court would make that determination in separate proceedings, after the disposition of any appeal of its ruling on the validity of the conveyance.
¶ 17 On October 4, 2012, the circuit court granted petitioners' joint motion for summary judgment against Adame. The circuit court found that Arnold had no authority to execute the warranty deed and, because Arnold executed the same warranty deed as Arthur, the warranty deed as to both brothers is void in its entirety. The circuit court ordered title to the home restored to the estates of Arthur and Arnold. Rather than ruling on the issue of whether Adame was a bona fide purchaser or whether he is entitled to monetary relief, the circuit court left this issue unresolved and entered and continued the case generally.
¶ 18 As to the requested alternative relief, the circuit court granted petitioners' joint motion for summary judgment against PNTN, finding the judgment would not be entered “unless and until Respondent Jose Adame successfully appeals the judgment” against him. The court continued generally the remaining claims and issued a Rule 304(a) (Ill.S.Ct. R. 304(a) (eff. Feb. 26, 2010)) finding only as to the entry of summary judgment against Adame. Adame timely filed this appeal. Accordingly, as a final order disposing of fewer than all of the parties' claims with other claims that remain undecided, we have jurisdiction pursuant to ...
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