Nemeth v. Banhalmi

• Decision Date: 21 August 1981
• Docket Number: No. 80-1821,80-1821
• Parties: , 55 Ill.Dec. 14 Vera NEMETH, Plaintiff-Appellant, v. Kornelia BANHALMI and George Banhalmi, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 1187

425 N.E.2d 1187

99 Ill.App.3d 493, 55 Ill.Dec. 14

Vera NEMETH, Plaintiff-Appellant, v. Kornelia BANHALMI and George Banhalmi, Defendants-Appellees.

No. 80-1821.

Appellate Court of Illinois, First District, Fifth Division.

Aug. 21, 1981.

[55 Ill.Dec. 15] Robert T. Palmer, McDermott, Will & Emery, Chicago, for plaintiff-appellant

William J. O'Connor and Barry A. Feinberg, Chicago, for defendants-appellees.

MEJDA, Justice:

Plaintiff filed an amended verified complaint (complaint) alleging in Count I malicious interference with expectancy and in Count II abuse of a confidential relationship. Pursuant to section 45(1) of the Illinois Civil Practice Act (Ill.Rev.Stat.1979, ch. 110, par. 45(1)) defendants filed a motion to dismiss on the grounds that the complaint was substantially insufficient in law and failed to state a cause of action. The court granted defendants' motion and dismissed plaintiff's complaint. Plaintiff appeals.

The issue presented for review is whether the complaint properly pleaded a protectible expectancy and the existence of a fiduciary or confidential relationship.

As the order of dismissal was entered upon allowance of defendants' motion to dismiss, all facts properly pleaded in the complaint must be taken as true. In re Kritsch (1978), 65 Ill.App.3d 404, 21 Ill.Dec. 756, 382 N.E.2d 50.

Count I of the complaint stated that plaintiff was the natural daughter of the late Rose Sternberg. Following the death of plaintiff's father, Rose married the late Paul Sternberg (hereinafter decedent). Rose and decedent then had a daughter Kornelia, stepsister to plaintiff, and a defendant in this action.

Decedent and plaintiff's mother, pursuant to an oral agreement, made and executed identical wills in 1975, each leaving the estate to the other, if surviving, and if the other spouse was not alive, leaving the estate equally divided between plaintiff and defendant Kornelia.

After Rose Sternberg died in 1975, decedent, in his late 80's and in poor health, went to live with Kornelia and defendant George Banhalmi, her husband. While living with them, decedent was induced to supply the down payment for the purchase of a house, to act as a co-signatory of the mortgage loan, and to place title in joint tenancy with them, when told by defendants that unless he did so he would have to go into a nursing home. In July, 1976, decedent made a new will again leaving his estate equally divided between plaintiff and defendant Kornelia. Plaintiff and defendants were present at that time and knew of its provisions. In 1977, decedent had a stroke, suffered diminished mental powers and was dependent on defendants for food, lodging and attention to his personal needs and the handling of his personal and business financial matters. During this period he was induced to transfer valuable personal property to defendants who also commingled the income from his business investments with their own funds. In January, 1977, defendants induced decedent to make a new will leaving almost all his property to Kornelia. In 1978, shortly after being placed in a nursing home, decedent died. Defendants claimed they could not locate the originals of any of decedent's wills and his entire estate passed to defendant Kornelia by intestacy.

Count I alleged damages and prayed that plaintiff be awarded compensatory and punitive damages and the costs of the action.

Count II realleged paragraphs 1-19 of Count I but included the additional allegation that from the time decedent moved in with defendants they had occupied a confidential relationship of trust with him which they subsequently abused. Count II prayed for the imposition of a constructive trust on all assets obtained by defendants as a result of their abuse of their confidential relationship with decedent, any other relief the court deemed equitable and proper, and costs of the action.

Defendants moved to dismiss the complaint. Following arguments of counsel on the motion, the court dismissed the complaint for its failure to show the existence of any expectancy or of any fiduciary or confidential relationship. Plaintiff filed a motion to reconsider and vacate the order which was denied. Plaintiff appeals.

OPINION

Plaintiff seeks damages from defendants for their tortious interference with her expectancy. The "expectancy" upon which plaintiff bases her claim is the bequest made to her in decedent's revoked 1976 will.

Defendants counter, however, that plaintiff, a nonheir, has no recognizable expectancy in the decedent's estate with which they could interfere. Defendants argue that a will has no force to confer any rights until admitted into probate and that the copy of the 1976 will upon which plaintiff relies has never been so admitted. Therefore, plaintiff has no expectancy in decedent's estate upon which her action may be based. While defendants cite no Illinois case which bars plaintiff's action for damages, plaintiff cites Lowe Foundation v. Northern Trust Co. (1951), 342 Ill.App. 379, 96 N.E.2d 831, for support.

In Lowe, the complaint alleged that decedent resided in a home for Christian Scientists maintained by plaintiff in the case. During his residency there decedent called plaintiff's attorney and expressed a desire to bequeath $500,000 to plaintiff. Decedent signed a holographic codicil making this bequest. Another typed codicil was prepared by the plaintiff's attorney and signed by decedent in the presence of witnesses but the amount of the bequest was left blank. Defendant, an attorney and associate of decedent, told him that $500,000 would exhaust his estate, whereupon the typed codicil was destroyed. The next day decedent was removed from the home by certain of his advisors. Plaintiff's complaint also alleged that when removed from the home decedent was kept in isolation and induced to sign a new codicil to his will purporting to cancel all other codicils except for one not pertinent here. Subsequently decedent died. The plaintiff attempted to have the holographic codicil admitted to probate, but it was denied admission. Plaintiff appealed that denial, but the appeal was dismissed upon plaintiff's own motion, whereupon plaintiff instituted the action in Lowe. Included in the relief sought by plaintiff were damages in the amount of $500,000 for wrongful interference with decedent's intended testamentary disposition to plaintiff. The complaint was dismissed.

On appeal, the Lowe court noted that the right of an intended devisee or legatee to relief for such wrongful conduct had never before been passed on in Illinois, but that in other jurisdictions relief had been granted by either declaring a constructive trust in the property received or by awarding damages in an action in tort. The court stated that it had found no cases where a constructive trust had been imposed when the intended disposition had been prevented by a third party, that is a person who had not received the property, as in the action before it. Therefore, the court went on to consider whether the complaint was sufficient to state a cause of action in tort for damages.

The court concluded that the only allegation in the complaint of interference with the intended disposition of the property was defendant's statement that the bequest would exhaust decedent's estate. However, as the complaint did not allege that defendant knew this statement to be false when made, it had not sufficiently alleged defendant acted fraudulently and hence did not state an action against defendant.

Implicit within the Lowe decision is the principle that a nonheir may bring an action for the tortious interference with a decedent's intended testamentary disposition, which supports plaintiff's contention here that she has pleaded a protectible expectancy. The Lowe plaintiff pleaded no more of an "expectancy" than plaintiff in the instant case. The expectancy of the Lowe plaintiff was based on a bequest in an expressly revoked codicil, while here plaintiff's "expectancy" is based on a bequest in a previously revoked will.

Although neither party has directed this court to additional Illinois cases addressing this issue, further support for plaintiff's position can be found in other authorities. The Restatement (Second) of Torts, § 774B (1979) includes the intentional interference with an inheritance or gift as a valid cause of action. The Restatement provides that "(o)ne who by fraud, duress or other tortious means intentionally prevents another from receiving from a third person an inheritance or gift that he would otherwise have received is subject to liability to the other for loss of the inheritance or gift." Comment b to that section defines "inheritance" to include "any devise or bequest that would otherwise have been made under a testamentary instrument or any property that would have passed to the plaintiff by intestate succession." Restatement (Second) of Torts, § 774B, comment b, at 58 (1979).

In Prosser, Torts § 130, at 950, 951 (4th ed. 1971), it is stated that there is no essential reason for refusing to accord to noncommercial expectancies, such as an expected gift or legacy under a will, the protection the courts have generally accorded commercial expectancies, such as the prospect of obtaining employment, employees, or customers. Interference with prospective economic advantage is a recognized cause of action in Illinois (Doremus v. Hennessy (1898), 176 Ill. 608, 52 N.E. 924), the essential allegations of which include plaintiff's reasonable expectancy of entering into a valid business relationship, the defendant's knowledge of this expectancy, an intentional interference by the defendant which prevents the expectancy from ripening into a valid business relationship and damage to the plaintiff from such interference. Tom Olesker's Exciting World of Fashion, Inc. v. Dun & Bradstreet, Inc. (1973), 16 Ill.App.3d 709, 306 N.E.2d 549, modified on other grounds, 61 Ill.2d 129, 334 N.E.2d 160 ...