Tummelson v. White

• Decision Date: 30 December 2015
• Docket Number: No. 4–15–0151.,4–15–0151.
• Citation: 47 N.E.3d 579
• Parties: Anthony P. TUMMELSON, Plaintiff–Appellee, v. Elizabeth Ann WHITE, n/k/a Elizabeth Ann Beauregard, Defendant–Appellant.
• Court: United States Appellate Court of Illinois

47 N.E.3d 579

Anthony P. TUMMELSON, Plaintiff–Appellee

v.Elizabeth Ann WHITE, n/k/a Elizabeth Ann Beauregard, Defendant–Appellant.

No. 4–15–0151.

Appellate Court of Illinois, Fourth District.

Dec. 30, 2015.

David R. Moore (argued), of Prillaman & Moore, Ltd., Urbana, for appellant.

Michael J. Tague (argued), of Flynn, Palmer, Tague, Lyke & Jacobson, Champaign, for appellee.

OPINION

Justice APPLETON delivered the judgment of the court, with opinion.

¶ 1 Plaintiff, Anthony P. Tummelson, and defendant, Elizabeth Ann Beauregard, lived together, unmarried, for years. Plaintiff claims that defendant has been unjustly enriched by funds he contributed to the purchase of a house titled solely in her name and which he cohabited until she made him move out. The trial court agreed with plaintiff and imposed a constructive trust on $17,015.71 of the equity in the house, with him as the beneficiary. Defendant appeals.

¶ 2 We hold the trial court was within its discretion to impose a constructive trust to the extent of $7,000, the amount of the down payment plaintiff's parents made on the house, presumably as a gift to him. But a trust in any greater amount was an abuse of discretion, considering that the mortgage payments were made out of a joint account and that any amounts plaintiff had deposited into that account were gifts from him to defendant. Therefore, we affirm the trial court's judgment in part and reverse it in part.

¶ 3 I. BACKGROUND

¶ 4 Plaintiff, 46 years old, was a restaurant manager, and defendant, 57 years old, worked for a doctor and, later, for a hospital. They both had a few years of college education and were in sound health. Plaintiff testified he had diabetes but that his health was fine.

¶ 5 Sometime in the 1990s, the parties began living together in Philo, Illinois. Initially, they lived in a house on Harrison Street, which defendant rented from her aunt. Plaintiff's attorney asked plaintiff:

“Q. And did you have an arrangement relative to finances during that period?

A. Yeah. Everything went in the kitty. I mean my money was her money and vice-versa. I mean we paid the bills.

Q. Okay. You had a joint account?

A. Absolutely.

Q. And your paycheck went into that account?

A. Absolutely.

Q. As did hers?

A. Absolutely, sure.”

¶ 6 In approximately 1999, defendant bought a house on East Jefferson Street, making a down payment of $6,500, which she had obtained from her parents. The parties moved out of the rental house and into the house on East Jefferson Street. During the five or six years they lived on East Jefferson Street, the mortgage payments were made out of the joint account.

¶ 7 Plaintiff testified that, throughout their entire relationship, the parties' earnings went into the joint account, out of which they paid the household bills and the mortgages. According to defendant's testimony, she and plaintiff “never had a deal or discussed how much relative money [she] would be putting into the account.” They “never had a particular conversation on [she] was going to do this much, he was going to do that much.” Nor did they ever discuss how much plaintiff should contribute toward the purchase of any house. And in his own testimony, plaintiff did not contradict defendant in that respect.

¶ 8 Apparently without any importuning on defendant's part and without any consideration of who should pay what, bills indiscriminately were paid out the joint account, including the house payments. Naturally, these house payments out of the joint account built up equity. But defendant was always the sole titleholder of record. Plaintiff's attorney asked plaintiff:

“Q. Okay. And the—but [the East Jefferson house] was titled in the Defendant's name?

A. Correct.

Q. Why was that?

A. You know, I'm really not sure. I know her credit was a little better at the time. I think that was always—I was unselfish; I was trying to get her credit better than mine and always worried about her. You know, that was my objective.”

¶ 9 In 2006, defendant sold the house on East Jefferson Street, and using the equity from the sale, $19,838.62, supplemented by a loan of $155,000, she had a new house built at 502 Cleveland Street. There were two mortgages on the Cleveland Street property: the first mortgage was in favor of Option One, and the second mortgage was in favor of the builder, C & C Properties, L.L.C. (C & C). Even though the house on Cleveland Street was titled solely in defendant's name, plaintiff was a guarantor on the second mortgage, the one in favor of C & C. In addition, he made a down payment to C & C in the amount of $7,000—or, more precisely, his parents did so in his behalf, by issuing a cashier's check to C & C. Defendant testified she thereafter made 17 monthly payments of $391.11 on the second mortgage. Then, in July 2007, she refinanced the Cleveland Street house and, out of the refinancing proceeds, paid C & C in full.

¶ 10 According to defendant's testimony, the Cleveland Street house was now underwater, figuratively speaking. The house was worth $160,000 to $165,000, but the pay-off on the mortgage (that is, what she currently owed) was $189,884. She had moved out of the house and was renting it out.

¶ 11 After hearing this evidence, the trial court entered a judgment in plaintiff's favor on count I of his complaint, the count seeking the establishment of a constructive trust. (The remaining count of the complaint, count II, was entitled “Separate Cause of Action in Law—Loan” and was alternative to count I.) In the court's opinion, a fiduciary relationship between the parties warranted the imposition of a constructive trust. The court reasoned as follows:

“I then need to assess whether the nature of this relationship gives rise to inference of a fiduciary relationship, and there the lynchpin of all fiduciary relationships I think is the notion of some dominance by one party over the other. If I accept, for instance, the threshold decision that things would be in her name was made because, (1), his credit wasn't good, I haven't heard any evidence to [contradict] that, and (b), that whether it was nobility or some other personal desire to do good by her, I obviously accept the facts which are—the fact that is undisputed that things were always titled in her. Then this supports a fiduciary relationship between the two. [Plaintiff], who was kicking in money at least during some periods of time on a regular basis, must have relied on her continuing acceptance of the nature of their relationship.”

¶ 12 Finding defendant to be the dominant party and plaintiff to be the subservient party in a fiduciary relationship, the trial court ruled that defendant held $17,015.71 of the equity in 502 Cleveland Street, Philo, Illinois, as a constructive trustee and that plaintiff was the beneficiary. This $17,015.71 consisted of three items: (1) $6,691.31, representing half the equity realized on the sale of the house on East Jefferson Street, less the down payment of $6,500 defendant had made on that house; (2) $3,324.40, representing half the pay-down of the second mortgage on the Cleveland Street house ($391.11 times 17 months divided by 2); and (3) the down payment of $7,000 that plaintiff's parents had made on the Cleveland Street house.

¶ 13 This appeal followed.

¶ 14 II. ANALYSIS

¶ 15 A. Defendant's Motion To Supplement the Record

¶ 16 On June 8, 2015, defendant filed a motion to supplement the record on appeal with defendant's exhibit Nos. 1 to 18, which the trial court had admitted, on her motion, in the trial. See Ill. S.Ct. R. 329 (eff. Jan. 1, 2006). Because plaintiff has not responded, we infer he has no objection to defendant's motion. See Ill. S.Ct. R. 361(b)(2) (eff. Jan. 1, 2015). Therefore, we grant defendant's motion to supplement the record on appeal with defendant's exhibit Nos. 1 to 18.

¶ 17 B. The Question of a Fiduciary Relationship

¶ 18 As we said, the trial court ruled that defendant held $17,015.71 of the equity in 502 Cleveland Street as a constructive trustee and that plaintiff was the beneficiary. See People ex rel. Hartigan v. Candy Club, 149 Ill.App.3d 498, 502, 103 Ill.Dec. 167, 501 N.E.2d 188 (1986) (“Two essential elements of a constructive trust action are the existence of identifiable property to serve as the res upon which a trust can be imposed and possession of that res or its product by the person who is to be charged as the constructive trustee.”). The court imposed this constructive trust because it found that when plaintiff made $17,015.71 in contributions to real estate titled solely in defendant's name, there was a “fiduciary relationship between the two.”

¶ 19 The supreme court has said: “Constructive trusts are divided into two general classes: one in which actual fraud is considered as equitable grounds for raising the trust, and the other, where there exists a fiduciary relationship and subsequent abuse of such relationship.” (Internal quotation marks omitted.) Charles Hester Enterprises, Inc. v. Illinois Founders Insurance Co., 114 Ill.2d 278, 293, 102 Ill.Dec. 306, 499 N.E.2d 1319 (1986). Therefore, strictly speaking, the existence of a fiduciary relationship between plaintiff and defendant would not justify the imposition of a constructive trust; defendant also would have had to abuse the fiduciary relationship. See id.; Jones v. Washington, 412 Ill. 436, 441, 107 N.E.2d 672 (1952). The argument, apparently, is that defendant abused her fiduciary relationship with plaintiff by demanding that he leave her house while she retained the financial contributions he had made toward that house. A fiduciary may not profit at the expense of the party dominated. See id.; In re Estate of Miller, 334 Ill.App.3d 692, 698, 268 Ill.Dec. 276, 778 N.E.2d 262 (2002).

¶ 20 Obviously, defendant could not have abused a fiduciary relationship with plaintiff unless she actually was in a fiduciary relationship with him. What is a fiduciary relationship? There are two kinds: (1) a fiduciary relationship as a matter of law and a (2)...