Opinion
4-23-0297
11-22-2023
KATHERINE LYNN RICE FREDERIKSEN, as Independent Executor of the Estate of Elizabeth M. Rice, Deceased, and KATHERINE LYNN RICE FREDERIKSEN, as Independent Executor of the Estate of Ernest Gregory Rice, Deceased, Plaintiff-Appellant, v. JAMES G. RICE, Defendant-Appellee.
This Order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).
Appeal from the Circuit Court of Stark County No. 12L8 Honorable James A. Mack, Judge Presiding.
JUSTICE DOHERTY delivered the judgment of the court. Justices Cavanagh and Knecht concurred in the judgment.
ORDER
DOHERTY, JUSTICE
¶ 1 Held: The trial court properly applied the presumption of undue influence and its judgment in favor of defendant on count V (breach of fiduciary duty) is not against the manifest weight of the evidence.
¶ 2 This case arises out of a deed of farm property from a father, Ernest Gregory Rice (Greg), to his son, defendant James G. Rice, who was the agent under Greg's power of attorney. The validity of that transaction was challenged below by defendant's sister, plaintiff Katherine Lynn Rice Frederiksen, acting as independent executor of the estates of her parents, Greg and Elizabeth M. Rice (Bette). The only claim at issue here is plaintiff's claim to set aside the transfer of the farm property. Plaintiff argues that (1) the trial court improperly applied the presumption of undue influence in resolving her claim, and (2) alternatively, the court's judgment was against the manifest weight of the evidence. We affirm.
¶ 3 I. BACKGROUND
¶ 4 In 2005, Greg Rice executed a power of attorney for property naming defendant as agent. In 2010, Greg conveyed the family farm to defendant (2010 deed), which defendant subsequently placed in a trust (trust) of which he, as trustee, had discretion to pay the trust's net income to Greg and Bette.
¶ 5 A. Complaints
¶ 6 In August 2012, plaintiff filed a multicount complaint against defendant, and an amended complaint was filed in August 2013. The amended complaint set forth the following claims: an action to quiet title (count I); breach of fiduciary duty arising out of the 2005 power of attorney (count II); breach of fiduciary duty regarding the 2010 deed (count III); breach of duty regarding the trust agreement (count IV); and undue influence regarding the 2010 deed (count V) and 2011 deed (count VI).
¶ 7 B. Motions for Partial Summary Judgment and for Reconsideration
¶ 8 Here, we confine our discussion solely to that portion of the motion and rulings pertaining to the issue before this court concerning count V.
¶ 9 Plaintiff moved for partial summary judgment on count V of the amended complaint, arguing that defendant, at all times subsequent to the execution of the 2005 power of attorney, owed a fiduciary duty to Greg. Plaintiff argues that existence of the fiduciary duty creates a presumption that the 2010 deed conveyance was fraudulent and/or acquired through defendant's undue influence. Plaintiff argued that defendant was required to prove by clear and convincing evidence that the 2010 deed transaction was fair and not the result of any undue influence exerted on Greg.
¶ 10 On March 23, 2020, the trial court denied plaintiff's motion, finding as to count V that defendant was unaware of his appointment under his father's power of attorney and, based on Stahling v. Koehler, 2013 IL App (4th) 120271, "that fiduciary duties cannot be imposed on someone without the person's knowledge."
¶ 11 Plaintiff subsequently moved to reconsider the trial court's order, and following a hearing, the court reversed its position in an order dated August 21, 2020, concluding as follows:
"b The Defendant, James G. Rice, was aware of [his] appointment [as Greg Rice's] attorney-in-fact by Power of Attorney dated April 23, 2005 (the '2005 POA').
c. A fiduciary relationship between the Plaintiff, Ernest Gregory Rice and the Defendant was created on April 23, [2005,] upon the execution of the 2005 [power of attorney] and was in existence on March 10, 2010.
d. The existence of the fiduciary relationship between Greg Rice and the Defendant makes the quit-claim deed executed on March 10, 2010[,] by Greg Rice and transferring Greg Rice's Homestead Property to the Defendant ('the 2010 Deed') is presumptively fraudulent.
e. The Defendant bears the burden of proving, by clear and convincing evidence that the transfer made by the 2010 Deed was the result of an exercise of good faith, or other defenses set forth in the case law."
¶ 12 C. Ruling on Count I-Quiet Title
¶ 13 On February 8, 2022, the trial court granted summary judgment in favor of defendant on count I (action to quiet title), and that ruling is not at issue on appeal.
¶ 14 D. Trial-Counts III, IV, and V
¶ 15 The following testimony and evidence were adduced at the trial of counts III, IV, and V. Counts II and VI were previously dismissed without prejudice. We note that the trial court allowed defendant to proceed first, both in opening statements and in the presentation of evidence, to reflect the shifting of the burden of proof.
¶ 16 1. 1988-Defendant Begins Farming
¶ 17 Defendant graduated high school in 1978 and attended Black Hawk College East Campus, where he studied diesel mechanics. He then went to work as a mechanic for a John Deere dealer in Lacon. During this same period, his father Greg Rice operated a roughly 173-acre family farm in Stark County. According to defendant, "I helped [my father with his farming] after work all through the '70s and '80s, you know, and high school. And then through the '80s when I was working at John Deere," and he "helped him with the harvest and planting." In 1988, following his father's retirement from farming, defendant began farming his father's farm.
¶ 18 Defendant and his father executed an Illinois Cash Farm Lease agreement in April 1988; the terms at that time included an annual cash rent of $20,760 (approximately $120 per acre). A few years later, defendant began renting and working others' farmland as well. Over the years, there were conversations between defendant and Greg about selling the farm to defendant, but nothing ever materialized.
¶ 19 2. Attorney David Cover
¶ 20 Attorney David Cover practiced law in Peoria and Toulon, Illinois, concentrating in estate planning with an emphasis on farm estate planning. Cover had known Greg and Bette Rice for many years and had done some legal work for them prior to 2005. He had also prepared a will for defendant at some point in the 1990s.
¶ 21 3. 2005 Powers of Attorney and Wills
¶ 22 In April 2005, Greg contacted Cover and asked him to prepare a will and power of attorney for property for Greg and Bette. Cover's April 25 bill confirmed the meeting and indicated the two had discussed the proposed wills, drafting a revocable living trust, discussing powers of attorney to avoid public guardianships, and probate avoidance. Greg was apparently going on vacation and needed the documents prepared quickly. Cover said that he also discussed the will with Bette over the phone.
¶ 23 Cover testified that he had met with Greg and Bette about a will in the past and that there "was a lot of starting and stopping with them." At the time he spoke with Greg and Bette in 2005, he did not believe they were under any disability or deficit in their mental capacity. He also saw no indication Greg was under any pressure from defendant about the wills. In fact, defendant "was never mentioned" and Cover had not spoken to him before the wills were executed, other than during the 1990s, when he executed a will for defendant.
¶ 24 a. 2005 Powers of Attorney
¶ 25 Greg's power of attorney named defendant as agent and was effective upon signing. Bette's power of attorney named Greg as her agent with defendant as successor agent.
¶ 26 b. 2005 Wills
¶ 27 Greg's will named defendant as executor and left his "real and personal property wherever situated" to his wife "to use, possess, enjoy and to receive all net income therefrom for and during her lifetime," with the remainder interest in such property to be distributed to defendant "with the hope and intent that all such property shall remain in the Rice family." According to Cover, Greg owned the family farmland and Bette had no legal interest in the property. Bette's will named Greg as her executor and left everything to him, with defendant designated to receive all of the property if Greg did not survive her.
¶ 28 Concerning the wills, especially Greg's, Cover explained that he was familiar with the family history and that defendant "was encouraged to come onto the farm and farm it and someday own it." Cover said that defendant had left his job to become a farmer, "[s]o, it was generally understood that whoever farmed the land and the hog operation and all of that, they were going to get the farm." Cover added, defendant's parents "wanted to keep the farm as a centennial farm and legacy." When defendant's brother left the farm for a job elsewhere, "it was generally understood, nothing in writing I don't think, that [defendant] was going to get the farm." He continued, "And so the wills, when I finally drafted those wills, it was keeping with that general understanding that [defendant] would get the farm." Since Greg owned the farm and not Bette, "the will from Greg was to at least give the income to Bette for her lifetime but then actual ownership to [defendant]."
¶ 29 According to Cover, he spoke with Bette about why she left everything to defendant and not to the other three siblings. "I thought that was a bit unusual, and she *** said that a lot of the kids have already gotten a lot of other things. So, I didn't question that. But I did talk to her about her will before it was signed."
¶ 30 c. Execution of Estate Documents
¶ 31 The 2005 wills and powers of attorney were executed in Toulon at Cover's father's insurance agency, with Larry Wang, then owner of the agency, and Mark Hawk, a customer who happened to be there at the time the documents were to be signed, as witnesses. At trial, plaintiff conceded that she was not claiming her parents were incompetent in 2005, and she did not dispute the validity of the execution or witnessing of the 2005 wills and powers of attorney.
¶ 32 d. Post Document Execution
¶ 33 Defendant testified that he had been unaware that his parents created wills or powers of attorney until his mother called and asked him to come along for their signing. Plaintiff recalled calling defendant once in 2005 to see what he was doing and he responded that "he and dad were getting the wills together." Defendant did not recall any such conversation.
¶ 34 According to defendant, he was not given copies of any of the documents that were signed in 2005 and did not read them at the time they were executed. He said that his parents did not discuss the documents with him either driving to or from the signing. He was further unaware that Greg's 2005 will intended to give him the farm or that the wills had disinherited his siblings.
¶ 35 Concerning the powers of attorney, defendant testified that he believed that he was named in a power of attorney for both of his parents in 2005, but he had been instructed by his father that the powers of attorney were to be used only if they were needed. "I was instructed to look at them after they were incapacitated[,] I guess you should say."
¶ 36 Following the execution of the documents in 2005, Greg placed them in his safe, to which defendant did not have access.
¶ 37 4. 2005-2010
¶ 38 Defendant testified that he did not perform any acts on behalf of his father between the signing of the wills in 2005 and the end of 2009. He further said he had no conversations with his parents during that time about the documents. Cover testified that he had occasional conversations about the estate with Greg and Bette between 2005 and 2010, but that the conversation with Bette concerned probate matters. He also denied having any conversations with defendant about the documents during that same period.
¶ 39 5. 2010 Deed
¶ 40 In February 2010, Greg contacted Cover with concerns about losing the farm to a nursing home. "[H]is parents had some significant expenses, so he was burned from that. So, things emanated from there." Cover said Greg's concern was "what can we do so we don't lose the farm if Bette or I have to go to the nursing home? So, we explored some ideas." Cover explained that Greg's first idea was to simply give the farm outright to defendant. According to Cover, Greg said, "I think I'd just like to give the farm to [defendant] now instead of when I die, so let's just get it over to him now. And that was primarily for the reason of concern about catastrophic illness expense." Cover explained to Greg, "well, you will have to do a gift tax return. You've got a five-year lookback rule."
¶ 41 Cover acknowledged that he and Greg had looked into nursing home insurance, which Wang confirmed, but after inquiring found that it "really wasn't worth it. The premiums would be exorbitant. And Bette had some health issues that would cause the premium to be high or maybe not even eligible at all, so we wrote that off."
¶ 42 As a result, Cover recommended an irrevocable trust whereby Greg would convey the farm to defendant, who would then place it into a trust under which "[t]he parents had no interest in that at all except that there was a provision that the net income could be paid to the parents, either one or both, during their lifetimes based on discretion of the trustee."
¶ 43 Cover said that Greg appeared to understand everything he had explained to him about the trust and that he had no concern that Greg was not competent to undertake his estate plan. He further stated that at that point, defendant was not involved at all. He also said that he had not talked to defendant at the point he was making these recommendations concerning the deed and trust. At the end of their conversations, Greg told Cover that he wanted to proceed with the deed transfer and irrevocable trust. "[A]fter Greg stated he thought that was a good plan, I said, well, we better call [defendant] and inform him because he may not want to go along with it." At that point, Greg added that he wanted defendant to also pay his legal fees for the deed and trust documents.
¶ 44 Cover said he called defendant and explained Greg's proposal of making the gift of the farmland and said that defendant "didn't act like he knew much about what was going on." At that point, Cover scheduled a meeting with defendant and Greg to explain everything. Defendant testified that he did not know that the farm was going to be transferred to him, although there were prior conversations with his father Greg that "indicated the farm was going to go to the farmer." Defendant and Greg met with Cover on February 12, but no documents had yet been created. Cover said that defendant agreed that he would create an irrevocable trust if his father transferred the farm to him.
¶ 45 The farm property was deeded to defendant on March 9, 2010, and the irrevocable trust was executed on May 5, 2010. The farm property was placed into the trust, which gave Greg and Bette a life estate in their residence located on the farm and provided that the trustee (defendant) was to pay Greg and Bette, "in his discretion" and considering all other sources of income, net income from the farming operations. It also stated that "[n]o trust income shall be expended for the ordinary care, comfort and welfare of Greg and Betty [sic] so long as there are sufficient monies available for that purpose from federal, state and local governmental agencies or departments."
¶ 46 Defendant testified that attorney Cover did not represent him when he first met with Cover and Greg in February 2010 or when Cover prepared the 2010 deed. "He represented my dad." Defendant further said that Cover represented Greg when the trust was prepared because "that's what he wanted, my dad wanted." He added, "I'm doing what my dad wanted." Defendant acknowledged that at Cover's request, he had been the one who delivered the 2010 deed to his father. "I took it out to them from David's request. He dropped it off at his office or sent it to his office. And he asked me to take it to my dad and look it over, and if he wanted to sign it he could." Defendant further explained, "I showed up. Mom and dad were both there. And I said, this is the deed to the, you know, what we talked about at Cover's office. And dad understood it. Mom seemed to understand it, so." He said his father signed the deed and he returned it to Cover's office.
¶ 47 6. Defendant's Actions as Power of Attorney and 2011 Deed
¶ 48 Greg was injured in the fall of 2010 and was placed in a health care facility and ultimately assisted living, never returning to the farm. Bette continued to live at the residence until 2011, when she also went into a health care facility. At some point during the summer of 2010, defendant began handling his parents' finances and acknowledged via a stipulation at trial that he was acting as "attorney in fact" at that time. It was at that time in late 2010 when he first reviewed the powers of attorney. Defendant testified that he paid bills for his parents and sold some property, including stocks and a rental house in Toulon (2011 deed), to cover various bills and to repay a loan Greg and Bette owed to defendant. He also used the net income from the trust (described below) to pay his parents' living expenses at the health care facility until Greg passed away in 2014 and Bette was placed on state aid in early 2013. Bette died in 2015.
¶ 49 7. Trust and Subsequent Events
¶ 50 Defendant operated under the trust, paying net income to his parents until March 2012. He acknowledged that attorney Cover was giving advice to him on how to work with the trust. According to the May 2010 trust, defendant, as trustee, had the discretion to pay "all, part, or none of any net income from the Truste Estate" as he determined was necessary. Defendant paid net income to his parents from the time of the execution of the trust until his father passed and his mother qualified for and received state benefits.
¶ 51 Plaintiff was appointed power of attorney for Greg and Bette on February 20, 2012. The parents further executed new wills on that date, revoking all prior wills and leaving their personal effects and residue of their estates to one another, and subsequently to the four children, per stirpes. Plaintiff thereafter assumed the handling of her parents' finances and bank accounts. Defendant continued to write checks from his parents' accounts as power of attorney until March 19, 2012, when he was notified by his mother that he had been replaced as the power of attorney agent by plaintiff, his sister Lynn.
¶ 52 Defendant was asked if he had ever pushed his father "to go to [attorney] Cover to do something?" and he responded, "No, I couldn't." He was then asked, "Was your dad the kind of guy you could push?" He responded, "He would tell me where to go. He was-he was very- you know, he did it his way. I mean, yeah, you didn't argue with my father or push him."
¶ 53 E. Judgment
¶ 54 Following the bench trial, the trial court rendered judgment on count V, finding in favor of defendant and concluding there was no evidence of undue influence. According to the court's oral disposition, there was sufficient evidence of a fiduciary relationship between defendant and Greg Rice as created by Greg's 2005 power of attorney naming defendant as his agent. The court then explained:
"By the evidence presented at trial, I believe that the transfer was accomplished through Greg's own will. And I understand that might not be happy for the Plaintiff and the party's siblings to understand.
I'm not saying it was correct or not antiquated thinking. 300 years ago it went to the eldest son. That usually doesn't happen anymore, but it does happen occasionally. And I'm not saying it's right or it's wrong. I'm not casting [aspersions] on Greg. But I think that's what he wanted to have happen.
For some reason he was concerned about the nursing home costs, and so he accelerated his estate plan and transferred the farm. That was supported through the testimony of Dave Cover.
I understand he was a little bit-I don't want to use-I'm trying to think of the right word to say. He wasn't 100 percent positive on all of his answers, though after the time that's passed that would be difficult for anyone to do. I've had nothing presented that that wasn't a competent estate plan, even if other attorneys may not have accomplished Greg's desires in the way that it was done.
* * *
And I guess I'm confusing sort of some of the counts together. I don't believe there was any undue influence, and that's Count Five of the complaint."
¶ 55 The trial court also found for defendant on count III and for plaintiff on count IV, but no issues relating to those rulings are before this court on appeal.
¶ 56 This appeal followed.
¶ 57 II. ANALYSIS
¶ 58 On appeal, plaintiff argues that the trial court misapplied the presumption of undue influence and, alternatively, contends that the court's finding in favor of defendant on count V was against the manifest weight of the evidence. No other issues are presented.
¶ 59 A. Jurisdiction
¶ 60 First, although neither party has raised jurisdiction, this court has an independent obligation to consider its own jurisdiction. In re Estate of Johnson, 2023 IL App (4th) 220488, ¶ 14. Here, the trial court rendered its oral pronouncement in open court on March 3, 2023, and memorialized this ruling in a written order dated March 24, which is the subject of defendant's appeal. The March 24 written order, however, did not dispose of all issues in the case; instead, it instructed the parties to "work together to calculate the total amount of underpaid rent [owed by defendant under count IV] and to submit a stipulated order or, in the alternative, separate proposed orders for the amount of such damages."
¶ 61 Illinois law is well settled that an order is not final if it finds the defendant liable but does not fix the amount of damages. Lamar Whiteco Outdoor Co. v. City of West Chicago, 395 Ill.App.3d 501, 505 (2009). Here, a separate order on damages, prejudgment interest, and attorneys' fees, none of which are contested on appeal, was subsequently entered on March 31. This order constitutes the trial court's final order, as it "determines the litigation on the merits so that, if affirmed, the only thing remaining is to proceed with execution of the judgment." Id. at 504-05.
¶ 62 We note that the notice of appeal, although timely filed on April 3, 2023, and therefore, within 30 days of the final order, nevertheless does not actually reference the trial court's final order of March 31, 2023. However, courts have routinely held that" 'a notice of appeal "will confer jurisdiction on an appellate court if the notice, when considered as a whole, fairly and adequately sets out the judgment complained of and the relief sought so that the successful party is advised of the nature of the appeal." '" Markel International Insurance Co. Ltd. v. Montgomery, 2020 IL App (1st) 191175, ¶ 29 (quoting In re Marriage of O'Brien, 2011 IL 109039, ¶ 22, quoting Burtell v. First Charter Service Corp., 76 Ill.2d 427, 433-34 (1979)). Therefore, "[w]here the deficiency in notice is one of form, rather than substance, and the appellee is not prejudiced, the failure to comply strictly with the form of notice is not fatal." Id.
¶ 63 In Montgomery, there was a timely notice of appeal which referenced the interlocutory rulings being challenged on appeal but failed to reference the final judgment being appealed from. Montgomery found that the error was one of form and not substance, and it concluded that it had jurisdiction over the appeal. Id.
¶ 64 We find Montgomery persuasive and conclude that we have jurisdiction to address the merits of this appeal. The notice of appeal clearly indicated the order being appealed, in substance and by date. The omission of the entry date of the final order went to form only, and not the substance of the notice of appeal. Moreover, there is nothing indicating that defendant has been prejudiced. Indeed, defendant did not even raise the issue. We remind counsel that inclusion of the date of the final order in future appeals would prevent this type of unnecessary confusion.
¶ 65 B. Existence of a Fiduciary Duty
¶ 66 An individual holding a power of attorney is a fiduciary as a matter of law and owes a common-law fiduciary duty to the principal. Estate of Alford v. Shelton, 2017 IL 121199, ¶ 22. Thus, an agent appointed under a power of attorney has a fiduciary duty to the person who made the designation. See 755 ILCS 45/2-7 (West 2010); Spring Valley Nursing Center, L.P. v. Allen, 2012 IL App (3d) 110915, ¶ 12 (citing Clark v. Clark, 398 Ill. 592, 601 (1947); In re Estate of Rybolt, 258 Ill.App.3d 886, 889 (1994); In re Estate of DeJarnette, 286 Ill.App.3d 1082, 1088 (1997)). Under established law, the fiduciary relationship between the principal and agent begins at the time the power of attorney document is signed. In re Estate of Miller, 334 Ill.App.3d 692, 697 (2002); Rybolt, 258 Ill.App.3d at 889.
¶ 67 The mere existence of a fiduciary relationship prohibits the agent from seeking or obtaining any selfish benefit for himself; if the agent does so, the transaction is presumed to be fraudulent. See Clark, 398 Ill. at 601-02. Thus, any conveyance of the principal's property that either materially benefits the agent or is for the agent's own use is presumed to be fraudulent. Id., at 601; Rybolt, 258 Ill.App.3d at 889. The presumption of fraud, however, is not conclusive and may be rebutted by clear and convincing evidence to the contrary. Clark, 398 Ill. at 601; Rybolt, 258 Ill.App.3d at 889.
¶ 68 Once a fraudulent transaction has been alleged, "the burden then shifts to the agent to prove by clear and convincing evidence that the transaction was fair and did not result from his undue influence over the principal." Alford, 2017 IL 121199, ¶ 22 (citing Miller, 334 Ill.App.3d at 697-98)). If the agent satisfies that burden, the transaction in question will be upheld. See 755 ILCS 45/2-7(a) (West 2020) (an agent who acts with due care for the benefit of the principal will not be held liable merely because the act also benefits the agent); Clark, 398 Ill. at 602 ("If a conveyance was not procured through improper means attended with circumstances of oppression or overreaching, but was entered into by the grantor with full knowledge of its nature and effect and because of his or her deliberate, voluntary and intelligent desire, the existence of a fiduciary relation does not invalidate the transaction.")). However, if the agent fails in that burden, the transaction will be set aside. Alford, 2017 IL 121199, ¶ 22; Clark, 398 Ill. at 601; see 755 ILCS 45/2-7(a), (f) (West 2020).
¶ 69 In Spring Valley Nursing Center, the court outlined some of the significant factors to be considered in determining if the presumption of fraud has been rebutted: "whether the fiduciary made a frank disclosure to the principal of the information he had, whether the fiduciary paid adequate consideration, and whether the principal had competent and independent advice." Spring Valley Nursing Center, 2012 IL App (3d) 110915, ¶ 12 (citing DeJarnette, 286 Ill.App.3d at 1088; In re Estate of Pawlinski, 407 Ill.App.3d 957, 968 (2011)).
¶ 70 C. Did the Trial Court Correctly Apply the Presumption of Undue Influence?
¶ 71 Plaintiff argues that the trial court erred by failing to properly apply the presumption of undue influence arising from defendant's power of attorney agent status. According to plaintiff, the court's ruling did not acknowledge or articulate any analysis of the factors to be considered when determining if the presumption had been rebutted. Plaintiff then argues that even so, defendant failed to satisfy his burden and as a result, the 2010 deed must be set aside.
¶ 72 Whether the trial court applied the presumption of undue influence raised by a fiduciary relationship is a question of law which we review de novo. Pawlinski, 407 Ill.App.3d at 964.
¶ 73 1. The 2005 Power of Attorney Created a Fiduciary Relationship
¶ 74 We begin by noting that the power of attorney for property executed by Greg in 2005 named defendant as agent. The power of attorney contained language stating that the powers and authority granted by the document "shall commence and be in full force and effect on the execution of this instrument." Thus, under prevailing law, defendant was, from the moment of the execution of the power of attorney, under a fiduciary duty to Greg. See Alford, 2017 IL 121199, ¶ 22 ("An individual holding a power of attorney is a fiduciary as a matter of law."). Accordingly, under Alford, a presumption of fraud arises when a fiduciary benefits from a transaction involving the principal, such as a transfer of property from the principal to the agent. Alford, 2017 IL 121199 ¶ 23.
¶ 75 Here, Greg transferred the 2010 deed for the farm property to defendant when defendant was Greg's power of attorney for property. Under Clark, any conveyance of the principal's property that either materially benefits the agent or is for the agent's own personal use is presumed to be fraudulent. Clark, 398 Ill. At 601. Thus, the trial court's August 21, 2020, order granting partial summary judgment properly determined that the presumption of fraud applied and that defendant carried the burden to rebut the presumption by showing he acted in good faith and did not betray the confidences placed in him as agent. Id.; Spring Valley Nursing Center, 2012 IL App (3d) 110915, ¶ 13. This order set the proper framework for trial.
¶ 76 2. Did the Trial Court Apply the Presumption at Trial?
¶ 77 The question remains, however, as to whether this presumption was properly applied throughout the trial. At the recommendation of plaintiff's counsel, who advised the trial court "that because of the burden shift [defendant] will be starting," the initial opening statement was made by defendant, who also went first in the presentation of evidence. This procedure clearly shows the court's understanding that the initial burden was on defendant to rebut the presumption by clear and convincing evidence. See DeJarnette, 286 Ill.App.3d at 1088.
¶ 78 Plaintiff next argues that the trial court did not properly apply the presumption in reaching its conclusions because neither its March 3 oral pronouncement nor its March 24 written order adequately articulates how the presumption was overcome. We find this point unpersuasive. The court's March 3 oral pronouncement, which was incorporated by reference into the March 24 written order, shows that the court thoroughly considered whether Greg Rice acted on his own volition respecting the 2010 deed. The court found that "the transfer was accomplished through Greg's own will." It further found that Greg "was concerned about the nursing home costs, and so he accelerated his estate plan and transferred the farm. That was supported through the testimony of Dave Cover." Finally, it explained that Greg's actions were consistent with the 2005 will, which left the farm property to defendant.
¶ 79 The trial court's wording is wholly consistent with the language used in Clark, where the supreme court found that the presumption of fraud had been overcome. There, the court stated:
"If a conveyance was not procured through improper means attended with circumstances of oppression or overreaching, but was entered into by the grantor with full knowledge of its nature and effect and because of his or her deliberate, voluntary and intelligent desire, the existence of a fiduciary relation does not invalidate the transaction." Clark, 398 Ill. at 602.
¶ 80 The trial court here concluded that Greg executed the 2010 deed with full knowledge of its consequences, using a very similar analysis as used in Clark. Thus, we cannot say that the court failed to properly articulate the basis for its ruling.
¶ 81 We conclude that the trial court's manner of conducting the trial, taken with its oral pronouncements made in open court, show that it properly applied the presumption and associated burden shifting and made the necessary findings in support of its conclusion.
¶ 82 D. Was the Judgment Against the Manifest Weight of the Evidence?
¶ 83 Given that the trial court properly applied the presumption of undue influence and its burden shifting, we now examine the court's actual ruling based on the evidence presented at trial. Plaintiff argues that even if the court properly applied the presumption of undue influence, the judgment in favor of defendant on count V was nonetheless against the manifest weight of the evidence. A trial court's determination as to whether a presumption of fraud has been overcome, made after an evidentiary hearing, is entitled to deference, and will not be reversed on appeal unless it is against the manifest weight of the evidence. See Klaskin v. Klepak, 126 Ill.2d 376, 389 (1989); Clark, 398 Ill. at 600-01; Pawlinski, 407 Ill.App.3d at 964. A ruling is against the manifest weight of the evidence only if it is clearly evident from the record that the opposite conclusion should have been reached or if the ruling itself is arbitrary, unreasonable, or not based on the evidence presented. Best v. Best, 223 Ill.2d 342, 350 (2006); Spring Valley Nursing Center, 2012 IL App (3d) 110915, ¶ 12.
¶ 84 As noted above, the factors to be considered in determining if the presumption of fraud has been rebutted include whether the fiduciary made a frank disclosure to the principal of the information he had, whether the fiduciary paid adequate consideration, and whether the principal had competent and independent advice. DeJarnette, 286 Ill.App.3d at 1088. If sufficient evidence is introduced which is contrary to the presumption, the presumption ceases to operate. In re Guardianship of Spinnie, 2016 IL App (5th) 150564, ¶ 21.
¶ 85 Examining the evidence, the record reveals that the 2010 deed transfer came about at Greg's request and that defendant was brought in to discuss it only after Greg and his attorney had decided to go forward with the transfer. As attorney Cover testified, Greg was concerned about protecting the family farm from creditors in the event that he or Bette needed nursing home care. Moreover, Cover explained that it had long been Greg's plan to (1) keep the farmland in the family and (2) give the farm to the son who farmed it. This plan is likewise consistent with the language of Greg's 2005 will, which left the farm to defendant on Greg's death.
¶ 86 The evidence here supports the conclusion that Greg wanted to avoid any chance that the farm would be sold should he or Bette become ill. Greg had experienced a similar situation when his parents died, and he approached his attorney to avoid a repeat of that circumstance. Indeed, Greg's estate plan further bears this out: he gave the farm to defendant on the condition that it be placed into a trust, which could pay, at the trustee's discretion, net income to Greg and Bette. These discretionary payments, Cover explained, helped protect the net income from possible creditors. Given that the deed and trust were done at Greg's insistence, it is difficult to understand what defendant would have been required to disclose to Greg, given that defendant did not know about the deed and trust until he was asked to come into the attorney's office to meet with Cover and Greg.
¶ 87 The record also supports the conclusion Greg received adequate counsel concerning the 2010 deed transaction. Cover met with Greg and explained the options available to address Greg's concerns, including gifting the farm outright, utilizing a trust, and possibly purchasing nursing home insurance. Counsel then formulated an estate plan and implemented it, partly through the 2010 deed and partly through the 2010 trust.
¶ 88 Concerning adequate consideration for the transfer, although the quit-claim deed states "in consideration of love and affection and other good and valuable considerations," it cannot be overlooked that defendant paid the legal expenses associated with the deed and trust and that defendant, as part of the agreement with his father, placed the farm property into a trust, with the net income payable, at the trustee's discretion, to Greg and Bette. As Cover testified, defendant followed the plan Greg had put in place.
¶ 89 We note that "[p]resumptions are never indulged in against established facts. They are indulged in only to supply the place of facts." Franciscan Sisters Health Care Corp. v. Dean, 95 Ill.2d 452, 461 (1983). A presumption imposes on the party against whom it is directed the burden of going forward with evidence to rebut or meet the presumption, but it does not shift the burden of proof. Illinois Rule of Evidence 301 (eff., Jan. 1, 2011). Where the presumption is of the "bursting bubble" variety, "as soon as evidence is produced which is contrary to the presumption which arose before the contrary proof was offered the presumption vanishes entirely." Franciscan Sisters Health Care Corp., 95 Ill.2d at 461. The amount of evidence required to meet the presumption is not determined by any fixed rule; if a strong presumption arises, the weight of the evidence brought in to rebut it must be great. Id. at 463. As discussed above, where the presumption is one of fraud or undue influence because a transaction benefitted a fiduciary, the fiduciary must rebut the presumption with clear and convincing evidence. DeJarnette, 286 Ill.App.3d at 1088.
¶ 90 There is nothing in the record to suggest that defendant undertook any actions to either bring about the 2010 deed or to unduly influence his father. Undue influence is defined as" 'any improper *** urgency of persuasion whereby the will of a person is overpowered and he is induced to do or forbear an act which he would not do or would do if left to act freely.'" Spinnie, 2016 IL App (5th) 150564, ¶ 28 (quoting Franciscan Sisters Healthcare Corp., 95 Ill.2d at 460). The record here is devoid of any evidence of influence at all, undue or otherwise, and the evidence all supports the conclusion that all actions regarding the 2010 deed were precipitated by Greg, working with his attorney.
¶ 91 According to Cover, he had no knowledge defendant was involved at all in Greg's decision to transfer the farm to defendant via the 2010 deed. He even remarked that defendant seemed surprised by Greg's decision to deed him the farm, which defendant's testimony confirmed. Plaintiff acknowledged that she had no evidence of any undue influence by defendant other than her recollection of a phone call to defendant wherein he purportedly told her that he and his father were "getting the wills together." First, the purported phone call related solely to the 2005 wills and powers of attorney, not the 2010 deed; only the latter, not the former, is at issue on appeal. Second, defendant disputed the call, which made the question one of fact for the trial court to resolve. Spring Valley Nursing Center, 2012 IL App (3d) 110915, ¶ 14. A reasonable trier of fact could have disregarded plaintiff's testimony and concluded that defendant did not, in fact, receive the call.
¶ 92 We also find unpersuasive plaintiff's arguments about two specific ways that she contends the trial court's ruling was unsupported by the evidence. First, plaintiff argues that the court erred because it misstated that defendant was the oldest son. The court, of course, said no such thing. It simply made a historical reference to the fact that inheritance at one time commonly went to only one child; the court said that this notion, while "antiquated," is still something Greg could have elected. There was ample evidence that Greg's real concern was keeping the farm as an active family enterprise in the future, and only one of his children was actively farming the property. Second, plaintiff argues that attorney Cover's testimony was inadequate or contradictory on certain points, but "[i]n a bench trial it is for the trial judge to determine the credibility of witnesses, to weigh evidence and draw reasonable inferences therefrom, and to resolve any conflicts in the evidence." People v. Slim, 127 Ill.2d 302, 307 (1989).
¶ 93 We conclude that there was sufficient evidence presented from which a trier of fact could conclude that defendant proved, by clear and convincing evidence, that he did not exert undue influence over his father's 2010 transfer of the farm to defendant.
¶ 94 III. CONCLUSION
¶ 95 For the reasons stated, we affirm the trial court's judgment.
¶ 96 Affirmed.