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    PATRICK T. MALONEY, Plaintiff and Counterdefendant-Appellee and Cross-Appellant, v. JAMES PIHERA, Defendant and Counterplaintiff-Appellant and Cross-Appellee (Lake Carlyle Development Company, Inc., Defendant).
    Fifth District
    No. 5—89—0475
    Opinion filed June 19, 1991.

      Kevin F. Lynch, of Wheaton, for appellant.
    Katherine A. Williams, of Chicago, for appellee.
   JUSTICE CHAPMAN

delivered the opinion of the court:

This appeal arises from a dispute as to business dealings between Patrick Maloney and James Pihera. Between Maloney and Pihera, the parties purchased six parcels of real estate: (1) the Moak property, by Pihera; (2) the Wesley Griffin property, by Maloney; (3) the Ceretta property, by Pihera; (4) the Ballance property, by Maloney in his mother’s name; (5) the Victor Griffin property, by Maloney, subject to a nomineeship agreement; and (6) the Belcher property on a contract for deed to the parties as tenants in common. It was the parties’ intention to develop these parcels into condominium-campsites and camping-related endeavors. For the purpose of developing the properties, construction equipment was purchased and placed in the Lake Carlyle Development Company, Inc. (the corporation), an entity created by the parties. A rough illustration of the location of the properties is as follows:

In 1981 Maloney and Pihera had a falling out. Maloney filed a three-count complaint in the circuit court seeking (1) a mandatory injunction to enforce the Victor Griffin property nomineeship agreement, an accounting, and damages for its breach by the nominee James Pihera; (2) liquidation and appointment of receiver of Lake Carlyle Development Company, Inc.; and (3) a declaration of the parties’ equitable interest in the Belcher property. Pihera filed an answer and counterclaim seeking a finding of an oral partnership agreement between the parties as to all properties, a dissolution of the partnership, and a settlement of the partnership accounts between the parties.

After a bench trial, the court entered judgment in favor of Maloney and against Pihera in the amount of $27,067.63 for unjust enrichment and $50,000 for breach of contract. The court found that while the parties attempted to form a partnership, there never was a true meeting of the minds on the terms and conditions of said partnership. The court ordered the corporation property sold and the net proceeds divided equally between the parties. The court also ordered the Belcher property sold and the net proceeds divided equally between the parties after a credit of $3,892 was given to Pihera. On Pihera’s counterclaim, the court awarded Pihera damages arising from an oral lease agreement on the Belcher property.

Following a hearing on Pihera’s post-trial motion, the court entered an amendment to judgment which stated that there was no basis in the pleadings for Maloney to claim damages upon a theory of unjust enrichment and denied Maloney damages upon that theory. The court also struck that portion of its original judgment awarding damages for breach of contract. Maloney was thereafter granted leave to file a fourth count to his complaint, which sounded in unjust enrichment. Following the addition of count IV to Maloney’s complaint, the court entered a second amendment to judgment. The second amendment to judgment vacated those portions of the amendment to judgment which denied relief based upon the theory of unjust enrichment. In addition, the second amendment to judgment awarded Maloney $27,067.63 based upon the theory of unjust enrichment. Both parties appeal from the trial court’s judgment. Both raised the issue of whether an error in integration was made in the judgment entered by the trial court. Pihera’s appeal presents the following issues for review: (1) whether the trial court erred in finding that no partnership existed; (2) assuming a partnership existed, whether pursuant to the Uniform Partnership Act the court should have ordered a dissolution of the partnership; and (3) whether the court erred in its assessment of damages. Maloney’s cross-appeal raises the issue of whether Maloney should be entitled to damages for funding the down payment on the Belcher property and for his maintenance of a business presence on the Belcher property. As both parties concede that an error was made in the trial court’s amendment to judgment, we will dispose of that issue first.

The transcript of the hearing on Pihera’s post-trial motion clearly establishes that at that hearing the dispute was over damages concerning Maloney’s unjust enrichment claim. The introductory remarks to the findings in the court’s amendment to judgment refer only to the award of damages for unjust enrichment. It is paragraph 2 of the court’s findings which we are asked to concern ourselves with here:

“Plaintiff is denied damages upon a theory of unjust enrichment and Subparagraph b. of Paragraph 1. of Paragraph I. of the Judgment is stricken.”

Both parties agree that the trial court erroneously struck subparagraph b of paragraph 1, which is the breach of contract award, instead of subparagraph a of paragraph 1, which is the unjust enrichment award.

Based on our review of the record, the court’s failure to strike subparagraph a instead of subparagraph b is clearly an error of form, not substance. To remand this cause for the trial court to correct the technical inconsistency would serve no purpose but to delay the ultimate disposition of the litigation. (Hough v. Mooningham (1986), 139 Ill. App. 3d 1018, 1021, 487 N.E.2d 1281, 1284.) Pursuant to our authority under Supreme Court Rule 366(a)(5) (134 Ill. 2d R. 366(aX5)), the circuit court’s amendment to judgment is hereby modified, substituting an a for the b designated in paragraph 2 as indicated.

With regard to the remaining issues, a detailed account of the parties’ testimony at trial is unavoidable.

PATRICK MALONEY’S TESTIMONY

Maloney testified that he was from the Chicago area. He met Pihera in 1979, and shortly thereafter they discussed investments. Maloney traveled by airplane on several occasions to meet Pihera in the Lake Carlyle area. On an initial visit in June 1979, they discussed the possibility of investing in a motel with the intention of remodeling it into office space. The men viewed two motels and Pihera drove Maloney around Lake Carlyle. The prospect of purchasing and developing property around the lake was not discussed during this visit.

During another trip to the Lake Carlyle area in the summer of 1979, Pihera once again drove Maloney around the lake. He showed Maloney camping projects that had developed on the west side of the lake and told Maloney that he had purchased a parcel of real estate on the east side of the lake, referred to as the “Moak” property. Pihera expressed his desire to develop the east side of Lake Carlyle, and he indicated that there were other properties available in the area that could be purchased for that purpose. Maloney insists on appeal that no formal business relationship was created between the parties during the summer of 1979.

On a subsequent trip to the Lake Carlyle area, Pihera showed Maloney the Wesley Griffin property and advised Maloney that it was something that could be purchased. Maloney purchased the property in his name alone around September of 1979. Although Maloney testified that at the time he purchased the property the parties had only discussed the possibility of entering into a business relationship for the purpose of development, he believed that he was buying the Wesley Griffin property for the purpose of developing condominium campsites.

During the ensuing months the parties discussed purchasing other parcels of property that would be acquired by each of them in their individual names and eventually brought together in “some sort of entity.” Approximately three to six months after the purchase of the Wesley Griffin property, Maloney and Pihera came to an oral agreement as to how Pihera would be compensated if the parties’ business came into existence. They agreed that Pihera would receive $100 per week, representing wages for a nine-hour work week and gasoline expenses of $10 per week. The parties agreed that the $100 compensation was to come out of the profits of the business only if the business was successful.

In accordance with their tentative plan to develop the area on the west side of Lake Carlyle, Pihera purchased the Ceretta property in Pihera’s name, and Maloney purchased the Ballance property in Maloney’s mother’s name. Maloney testified that sometime in late 1979, or early 1980, their relationship had evolved to the point that they considered putting the four parcels into a corporation or land trust or some other business entity. No formal action was taken, however.

At this time Pihera advised Maloney that because Pihera had found certain properties, he should receive a finder’s fee. Pihera also desired compensation for expenses he had incurred in acquiring the properties and for his general experience in development projects such as the one they contemplated. The parties agreed that should they merge their assets into a land trust or other entity, Pihera’s contribution at this point was equal to $100,000. This figure was calculated as follows:

Fair Market Value of Moak Property —$46,000
Fair Market Value of Ceretta Property —$46,000

Finder’s Fee, Travel Expenses, and Experience —$8,000 Maloney and Pihera determined that once Maloney had expended $100,000 toward the purchase of property and the payment of expenses, the parcels of real estate acquired by the parties would be put into a corporation, joint venture, or other business entity. Until Maloney expended $100,000, the properties were to be owned individually, and all activities between the parties were to be conducted on an individual basis. Maloney’s expenditure of $100,000 included, but was not limited to the following:

Purchase Price of Wesley Griffin Property —$40,000
Purchase Price of Ballance Property —$35,000
Down-payment on Victor Griffin Property —$12,500

In order to reach his goal, Maloney bore the cost of expenditures incurred by both him and Pihera until approximately February 26, 1981, when the parties began sharing expenses.

Admitted into evidence were Maloney’s ledger and exhibits which Maloney contend support his testimony as to his expenditures on the various properties. These documents list the following expenses which Maloney contends he personally paid for:

Lake Carlyle Development Corporation
$676 — incorporation expenses
$9,000 — tree spade
Ceretta property
$600 — mowing, tractor, rubbish
$2,561 — taxes, surveying costs, repairs to shed
$2,706 — cedar fence, road
Moak property
$780 — trees, discing, mowing, tractor, rubbish
$256 — real estate taxes
$300 — road
Wesley Griffin
$5,413 — labor costs, rental of equipment, interest expense, repair and maintenance of property, surveying costs, real estate taxes
Maloney general expenses
$15,778 — expenses incurred in the initial acquisition and development of the properties

In 1980 the parties discussed developing an additional piece of property for the purpose of taking in outside investors to raise capital for use in developing the parcels they had already acquired. They agreed to purchase the Victor Griffin property to achieve this purpose. Maloney paid the down payment of $12,500 because he was still trying to meet his goal of $100,000, but the property was purchased in Pihera’s name subject to a nomineeship agreement naming Pihera as nominee for Maloney. The purchase of the property was done in this manner so as to protect Maloney’s assets in connection with an unrelated investigation being conducted against Maloney. Maloney eventually paid the mortgage on the Victor Griffin property in full. Pihera’s monetary contribution to the Victor Griffin property consisted of one tax payment.

In the late fall of 1980, the parties discussed the purchase of the Belcher property, which included a bait shop, campground, boat dock, and package liquor store. Maloney testified that Pihera kept holding up the final negotiations on the purchase by insisting that they hire a manager for the property before they bought it. In July 1981 they hired Bill Hahn to serve as manager of the Belcher property. Hahn was a high school friend of Maloney’s who agreed to relocate his family from Wisconsin to Lake Carlyle to assume the position of manager.

Maloney testified that originally Pihera alone was supposed to purchase the Belcher parcel. However, sometime prior to closing the deal, both agreed to pay one-half of the purchase price. Maloney thought that both he and Pihera would pay one-half of the $25,000 down payment on the day of closing, but Pihera brought a check for only $500 and advised Maloney that Maloney should pay the balance of the down payment because Maloney owed him money. Not wishing the purchase to fall through, Maloney paid the $24,500, and in August 1981, the parties became owners of the Belcher property.

There was a package liquor facility on the Belcher property, and in order to acquire and maintain a liquor license, Maloney agreed to set up full-time residence on the Ceretta property. From July 1981 until approximately December 1981, Maloney lived in a house on the Ceretta property. During that time Bill Hahn also lived there. This was prior to Hahn’s family joining him from Wisconsin.

Maloney agreed to lease the Belcher bait shop for the first year, and he paid Pihera $200 per month in accordance with the leasing terms he and Pihera had discussed. Maloney was never presented with a written leasing agreement even though he continually asked Pihera for the document. Hahn and Maloney shared the work load on the Belcher property. In 1981 Pihera contributed minimal effort, even though he and Maloney agreed that Maloney would tend to the bait shop and Pihera would handle the campground and other “outside” tasks. While Maloney worked on the property full-time from July 1981 to December 1981, he worked there only on weekends during 1982 and 1983. Pihera did no work on the property during 1982 and 1983.

Turning to the Wesley Griffin property, Maloney’s ledger shows an expenditure on the Wesley Griffin property in the amount of $52,261.63, which Maloney contends he personally expended. Most of this amount was for the construction of the Crackerneck Sportsmen’s Club, which Maloney established. In 1981 Maloney mortgaged the Wesley Griffin property to obtain $57,000 which was used to purchase the Belcher property and to pay off small improvement loans on the Wesley Griffin property. Foreclosure on the Wesley Griffin property occurred in 1984, and a deficiency judgment of $4,806.44 was entered against Maloney.

Maloney testified that while farm rental income was generated from the Moak, Ceretta, and Wesley Griffin properties, no money was received directly by the parties. Any rental income was used to pay expenses and the only exception to this arrangement was once when Maloney received $50 for rent due on the Wesley Griffin property.

As for the Ceretta property, Maloney testified that he paid for the repairs to the shed, construction of a cedar fence around the property, and surveys conducted on the property. The ledger admitted into evidence shows an expenditure of $5,867 on the Ceretta property, which Maloney contends represents the amounts personally expended by him. Maloney spent weekends at the Ceretta property cutting trees and preparing a roadway and campsites. Maloney was never paid for the physical work he performed.

JAMES PIHERA’S TESTIMONY

James Pihera met Patrick Maloney in April of 1979. After a few meetings to discuss various investment opportunities, they decided to form a partnership. Pihera testified that after he showed Maloney the property around Lake Carlyle and told him of his desire to develop a campground, Maloney expressed an interest in becoming a partner in the project. Pihera accepted Maloney’s offer to become a partner on June 2, 1979, and the men agreed that the details of their partnership would be worked out at a later date. They agreed at that time to work together to develop all of the property from the boat launch out to the main road.

Pihera’s contention that a partnership agreement exists is based largely on certain statements made by Maloney on June 2, 1979, which led Pihera to believe that they were going to carry on a business as partners. Among the statements were the following: On June 2, 1979, Maloney agreed to reimburse Pihera $8,000 for the expenses Pihera incurred in locating the property. Maloney also agreed to pay Pihera a “finder’s fee” of $30,000 before Maloney would be allowed to enter the partnership. Beginning on June 2, 1979, Maloney was to pay one-half of all the expenses incurred by the parties on behalf of their business endeavor. At the inception of the partnership, therefore, Maloney bore the full cost of expenditures, crediting one-half of these amounts toward his $38,000 obligation.

The parties further agreed that Maloney would continue to operate his chiropractic office in Chicago, and Pihera would handle the property development. Maloney volunteered to pay Pihera $20 per day to cover Pihera’s expenses from June 2, 1979, until the time they were “open for business.” Pihera explained that they “opened for business” on August 6, 1981, the date the Belcher property was purchased.

The parties agreed to purchase alternate parcels of property. A few weeks after their June 2, 1979, meeting they decided that after they purchased the parcels for the development, they would put them into a land trust. In order to equalize their investment in the partnership, they would contribute all four parcels, and the person who purchased the parcels of lesser value would reimburse the other for the difference. Pihera testified that even though he paid $16,000 for the Moak property at a distress sale, he and Maloney assigned the value of $44,000 to the property. The Ceretta parcel was assigned a value equal to its purchase price of $44,000. The Wesley Griffin property and Ballance property were assigned values equal to their respective purchase prices, $40,000 and $35,000. Although the land trust was never created, Pihera insists that the four parcels were included in the partnership.

Pihera testified that both he and Maloney filed individual assumed name affidavits under the name Fish and Feather Campground. Pihera contends that the Fish and Feather Campground partnership was in fact formed on June 2, 1979, even though the parties: never had a joint checking account; never had stationery printed designating their partnership; never utilized a reference to the partnership in any advertising; never jointly registered the Fish and Feather Campground as a partnership; and never retained an attorney for the purpose of formally preparing a partnership agreement.

With regard to the Belcher property boat dock, Pihera testified that he and Maloney each separately applied for a boat dock license with the Department of Conservation. Pihera did not know why the only signature on the application was his. He acknowledged that he was the only person to sign the application even though it provides that “if the bidder is a partnership both partners must sign.”

Pihera’s testimony regarding Lake Carlyle Development Company, Inc., parallels that of Maloney. Pihera testified that he and Maloney owned equal interests in the corporation. With the exception of a tree spade purchased by Maloney, both parties put in equal amounts of money to purchase the items of equipment that became the working tools of the corporation.

With regard to contributions made by Pihera on behalf of the partnership, Pihera testified that during 1979 he did not personally expend any money for partnership purposes because Maloney was to contribute $38,000 to equalize the parties’ investment in the creation of the partnership. In 1980 the parties purchased equipment, and Pihera paid one-half of the purchase price.

As to the Belcher property, Pihera confirmed that the cashier’s check for $12,500 he produced at the closing of the property was funded to the extent of $12,000 by Maloney’s money. Pihera contends that Maloney still had his initial monetary obligation to fulfill and, therefore, the $12,000 was simply credited to the amount Maloney owed. Pihera acknowledged that after the Belcher property was purchased and remodeling of the bait shop was completed, he spent very little time there. In fact, from 1982 until the time of trial, Pihera did nothing in and around the Belcher property. Pihera testified that from 1983 through 1987, he personally paid the yearly payments required on the Belcher property installment contract. These payments totalled $51,943. Pihera paid the taxes on the property for those years, total-ling $3,892, and also paid closing costs of $792 and remodeling expenses of $6,255.

With regard to the Victor Griffin property, Pihera does not dispute that he and Maloney signed a nomineeship agreement. Pihera testified that at no time did he direct his attorney to prepare an assignment of the Victor Griffin property. Pihera eventually bought the property from the mortgagee for $50,000.

Pihera testified that for the years 1983 and 1984, he paid $856 in property taxes on the Wesley Griffin property because Maloney had allowed the tax payments to fall into arrears. In 1984 Maloney defaulted on the Wesley Griffin property loan. Subsequent to the foreclosure sale, Pihera purchased the property from the savings and loan.

As for income, from 1979 through 1980 there was farm crop rental income from the Moak, Ceretta, Griffin, and Ballance properties. The money received was split evenly between Maloney and Pihera. Pihera testified that the reason they split the proceeds was because they were to be partners on all properties under the partnership.

After the Belcher property was acquired, Maloney asked to lease the bait shop for one year. Contrary to Maloney’s testimony, Pihera contends that they agreed that Maloney would pay $100 per month for the first six months of operation and $300 per month for the remaining six months of operation. Because Maloney paid only $500, Pihera argues that he is entitled to an award of $1,900. Pihera testified that his attorney represented both him and Maloney in preparing the lease. He also contends that Maloney owes him $5,874, which represents 11% on the stock at the bait shop calculated at $979 for six years.

LARRY STOCK’S TESTIMONY

Larry Stock was called to testify by Maloney. He testified that he is a designer, builder, and contractor. He worked for both Maloney and Pihera in remodeling the bait shop and doing various construction projects. He and his crew did nothing without the consent of both Maloney and Pihera. Both Maloney and Pihera directed Stock as to what work was to be done at the bait shop. They also directed Stock to construct a fence on the Ceretta property.

Opinion

A partnership is an association of two or more persons to carry on as co-owners a business for profit. (Ill. Rev. Stat. 1989, ch. IO6V2, par. 6.) The elements of a partnership are that the parties have joined together to carry on a trade or venture for their common benefit, with each contributing property or services to the enterprise, and with the parties having a community of interest in the profits. (Peck v. Peck (1959), 16 Ill. 2d 268, 280, 157 N.E.2d 249, 257.) The testimony of the parties in this case was markedly inconsistent as to whether a partnership was established. In such cases the trial court is in a superior position to make determinations on the credibility of the evidence, and only where the trial court’s findings are against the manifest weight of the evidence will a reviewing court overturn the trial court’s decision. McCorkle v. Tyler Reporting Co. (1987), 159 Ill. App. 3d 62, 68, 512 N.E.2d 25, 28.

In the absence of a written partnership agreement, we must ascertain the intent of the parties to determine whether a partnership was formed, and when making this determination, we must also examine the facts and circumstances surrounding the alleged formation of such an entity. (McCorkle, 159 Ill. App. 3d at 68, 512 N.E.2d at 29; Olson v. Olson (1965), 66 Ill. App. 2d 227, 213 N.E.2d 95.) In the instant case, we have carefully reviewed the evidence in the record and find that the court’s determination that no partnership was formed is supported therein.

In Olson v. Olson, the court set forth some of the indicia of the existence of a partnership. While by no means exhaustive, we find them helpful in the instant case:

“the manner in which the parties have dealt with each other; the mode in which each has, with the knowledge of the other, dealt with persons in a partnership capacity; whether they have filed with the county clerk, a certificate setting forth the name of the partnership, in event the firm name does not include the true name of the persons transacting such partnership business [citation]; whether they have carried telephone listings and signs on trucks, etc., using the firm name; and whether they have shared the profits of the partnership.” Olson, 66 Ill. App. 2d at 233, 213 N.E.2d at 98.

With these indicia in mind we note the following undisputed items of evidence. With the exception of the Belcher property, the parties purchased and held title to the parcels of property individually. The parties filed separate assumed name certificates. With the exception of an application to the Illinois Department of Conservation prepared by Maloney listing Pihera as a co-investor, neither party produced any documentary evidence showing that they held themselves out as partners. Although both Maloney and Pihera.may have hired Bill Hahn to serve as manager of the Belcher property, Maloney testified that he personally paid Hahn’s salary. The evidence shows that Hahn took orders from Maloney and did not follow directions from Pihera. Larry Stock and other witnesses who testified could not unequivocally state that they knew or were certain that the parties were partners.

Regarding profit sharing between Maloney and Pihera, the parties equally divided the trailer-rental proceeds on the Belcher property. This alone is an insufficient sharing of profits to establish a partnership because the parties purchased the Belcher property as tenants in common and the trailer-rental proceeds accrued prior to purchase were given to Maloney and Pihera as co-purchasers. Both the testimony of the parties and the documents admitted into evidence show that no profit was made as to the bait shop and campground operation on the Belcher property. The only income, the farm crop rental income generated on the Ceretta, Moak, and Wesley Griffin properties, was equally divided between the parties. The sharing of this nominal income alone is insufficient evidence that a partnership was created. Mere participation in the profits of a business does not create a partnership. Schumann-Heink v. Folsom (1927), 328 Ill. 321, 328, 159 N.E. 250, 253.

A partnership between two or more persons is a contractual relationship. There must be a meeting of minds of the parties to create a partnership. The intention of one party cannot create a partnership. (Ramacciotti v. Simpkins (1970), 130 Ill. App. 2d 733, 735, 266 N.E.2d 700, 702.) We find that there never was any agreement on several vital terms of the alleged partnership. For instance, no agreement was made as to the scope of the parties’ duties both before and after the purported partnership was formed, and no agreement was made as to the duration of the purported partnership. The absence of a meeting of the minds relating to such critical terms leads to the conclusion that the parties did not create a partnership. (McCorkle, 159 Ill. App. 3d at 69, 512 N.E.2d at 29.) In the instant case, there is no basis to overturn the court’s finding that a partnership was not established. While the parties’ intended goal may have been to form a partnership, we agree with the trial court that no partnership was established.

As for the issue of damages, Pihera first contends that the trial court erroneously assessed damages. Pihera argues that the court erred in not finding that a partnership was formed, and that the measure of damages should have been based upon a dissolution of the alleged partnership. We disagree. In this case there are no partnership accounts or expenses because no partnership was ever formed. See Rankin v. Hojka (1976), 42 Ill. App. 3d 440, 448, 355 N.E.2d 768, 774.

Pihera next argues that the court erred in allowing Maloney to amend his pleadings to allege unjust enrichment, and that an award of unjust enrichment was erroneous. Section 2 — 616(c) of the Code of Civil Procedure provides that “[a] pleading may be amended at any time, before or after judgment, to conform the pleadings to the proofs, upon terms as to costs and continuance that may be just.” (Ill. Rev. Stat. 1989, ch. 110, par. 2 — 616(c).) The trial court in this case, after initially denying Maloney’s motion to amend because of a concern about timeliness, reversed its decision and assessed fees against Maloney in the amount of $200 to compensate for attorney fees expended with regard to the motion to amend. While recognizing that an amendment should not ordinarily be permitted to set up matters of which the pleader had full knowledge at the time of filing the original pleading, such an amendment will be allowed where justice is served by allowing leave to amend. (Lawson v. Hill (1979), 77 Ill. App. 3d 835, 845, 396 N.E.2d 617, 625.) After reviewing the record, we cannot say that the trial court abused its discretion in allowing Maloney leave to amend his complaint.

Pihera maintains that the evidence presented did not support a finding of unjust enrichment. Maloney cites M.J. McCarthy Motor Sales Co. v. Van C. Argiris & Co. (1979), 78 Ill. App. 3d 725, 396 N.E.2d 1253, in support of his argument that the trial court properly awarded him damages based on the theory of unjust enrichment. Pihera argues that because Maloney was not acting under a mistake of fact, as was the plaintiff in McCarthy Motor Sales, Maloney is not entitled to an award based on the theory of unjust enrichment. Pihera’s argument is not well taken. It is not necessary that a plaintiff maintaining an action for unjust enrichment prove a mistake in fact. An action for money had and received is maintainable where defendant has received money which in equity and good conscience belongs to the plaintiff. Drury v. County of McLean (1982), 89 Ill. 2d 417, 425-426, 433 N.E.2d 666, 670; Cohon v. Oscar L. Paris Co. (1958), 17 Ill. App. 2d 21, 26, 149 N.E.2d 472, 475.

Maloney is not asking to be reimbursed for the time and effort he expended, but he is asking to be reimbursed for the money that he paid for Pihera’s benefit. Maloney agreed to pay all expenses in order to reach a level of parity with Pihera’s contribution. When the partnership failed to come into fruition, Maloney was in the unenviable position of having made expenditures on property from which he could not benefit. As a result, Pihera received money for which in equity and good conscience Maloney should be reimbursed. We find, therefore, that the court did not err in awarding damages to Maloney for unjust enrichment.

We now turn to the question of whether the calculation of damages under the theory of unjust enrichment was proper. The trial court awarded Maloney $27,067.63. This figure represents Maloney’s expenditures on improvements to properties belonging to Pihera ($19,177.17) and one-half of the “general expenditures” Maloney made to which Pihera did not contribute ($7,890.46). The calculation of the unjust enrichment award is illustrated as follows:

Maloney’s Expenditures:
Moak Property...............................$1,336.10
Ceretta Property.............................$5,268.26
Wesley Griffin Property........................$6,015.36
Other expenditures as to all three properties......$6,557.45
Subtotal: $19,177.17
One-half of the general expenditures Maloney paid to which Pihera did not contribute...........$7,890.46
Subtotal: $7,890.46
Total: $27,067.63

The parties stipulated to the accuracy of the above figures as representing the expenditures made by Maloney as they appear in the ledger admitted into evidence. Under the circumstances of this case, Maloney’s expenditure of money on the Moak and Ceretta properties unjustly enriched Pihera, and the trial court did not err in ordering Pihera to reimburse Maloney for those expenditures.

As for the money spent on the Wesley Griffin property, we must address the issue raised by Pihera of whether Maloney is entitled to recover for both unjust enrichment and breach of contract. It is true that a claim for unjust enrichment cannot stand where an express contractual agreement governs the relationship between the parties. (Batler, Capitel & Schwartz v. Tapanes (1987), 164 Ill. App. 3d 427, 430, 517 N.E.2d 1216, 1219.) However, this maxim does not apply here because the unjust enrichment claim is made as to the Wesley Griffin property, while the breach of contract claim is made as to the Victor Griffin property. We can find no rule of law which precludes a party from recovering under the theory of unjust enrichment as to one transaction, and recovering under a breach of contract theory as to another transaction. We conclude, therefore, that the trial court did not err in its assessment of damages awarded for unjust enrichment.

The next issue is whether the trial court erred in holding that Maloney’s damage for breach of the Victor Griffin nomineeship agreement was $50,000, the value of the Wesley Griffin property lost to foreclosure. Maloney purchased the Victor Griffin property for $50,000 and entered into a nomineeship agreement which provided that Pihera would act as record owner of the property. Despite repeated requests, Pihera refused to assign the property to Maloney. Maloney testified that he was unable to make the mortgage payments on the Wesley Griffin property. He wanted to use the Victor Griffin property as collateral for a loan to protect the Wesley Griffin property from default. Maloney testified that because Pihera would not assign the Victor Griffin property, Maloney was unable to use the Victor Griffin property as collateral to forestall foreclosure on the Wesley Griffin property. The Wesley Griffin property was foreclosed upon, and Maloney lost the property to the bank. Pihera subsequently bought the Wesley Griffin property from the bank for $50,000.

Pihera argues that the measure of damages for breach of the nomineeship agreement should not be measured by the value of the Wesley Griffin property. He argues that Maloney’s damages consist of the expenditures incurred by him in performing his obligations under the nomineeship agreement and any profit which he would have received as determined by the difference between the contract price for the property at the time the nomineeship agreement was entered into and the fair market value of the property at the time of the breach. Pihera cites no authority for this proposition.

A person breaching a contract can be held liable for such damages as may fairly and reasonably be considered as naturally arising from the breach thereof, in light of the facts known or which should have been known or such as may reasonably be supposed to have been within the contemplation of the parties as a probable result of a breach thereof. (Case Prestressing Corp. v. Chicago College of Osteopathic Medicine (1983), 118 Ill. App. 3d 782, 788, 455 N.E.2d 811, 816.) In this case it was reasonably foreseeable that if Pihera failed to assign the Victor Griffin property pursuant to the nomineeship agreement, the Wesley Griffin property would go into foreclosure. Pihera’s conduct caused a chain reaction which resulted in Maloney’s loss of the Wesley Griffin property. When a contract is breached, the injured party is entitled to be placed in the position he would have been in had the contract been performed and is entitled to whatever net gain he would have made under the contract. (Case Prestressing, 118 Ill. App. 3d at 788, 455 N.E.2d at 816; Rankin v. Hojka, 42 Ill. App. 3d at 447, 355 N.E.2d at 773.) Had the trial court not awarded Maloney the value of the Wesley Griffin property as calculated from the amount received upon its sale, then Maloney would not have been put in the position he would have been in had the nomineeship agreement been fully performed. We find that the trial court’s award of $50,000 as damages for Pihera’s breach of the nomineeship agreement was not against the manifest weight of the evidence.

Turning to Maloney’s cross-appeal, we are asked to determine whether the trial court erred in failing to credit Maloney for: (1) funding the down payment on the Belcher property; and (2) increasing the value of the Belcher property by his maintenance of a business presence from 1982 through 1987. In finding for Maloney on count III of his complaint, wherein Maloney requested that the court declare the parties’ equitable interest in the real estate, the trial court ordered that the parties’ interest as tenants in common be sold and that the net proceeds be equally divided, after Pihera was credited for the real estate taxes he paid in the amount of $3,892.

Pihera testified that he personally paid $51,943 in installment payments and $3,892 for real estate taxes on the Belcher property. Maloney testified that he paid an equal share of installment payments. The testimony of the parties was that Pihera expended $6,225 in remodeling costs and that Maloney expended $2,000 in improvements to the Belcher property. Comparing these figures, it appears that Pihera paid $8,117 more than Maloney: $3,892 for real estate taxes and $4,225 for improvements. If all remaining expenditures were equal, we believe that Pihera would be entitled to a credit of $8,117, because a cotenant who pays more than his share of a debt secured by a mortgage on the commonly owned property is entitled to reimbursement by contribution from his cotenants to the extent to which he paid their share of the indebtedness. (Olson v. Olson (1965), 66 Ill. App. 2d 227, 235, 213 N.E.2d 95, 99.) However, we agree with Maloney that the trial court erred in not taking into consideration the $12,000 paid by Maloney as Pihera’s share of the down payment. Pihera concedes that $12,000 of the $24,500 down payment paid by Maloney represented Pihera’s share of the total down payment. In order to avoid Pihera’s unjust enrichment at Maloney’s expense, we find that Maloney is entitled to a $12,000 credit. Therefore, considering the $8,117 credit due Pihera and the $12,000 credit due Maloney, the judgment is modified to show that as to count III Maloney is entitled to a credit of $3,883, and the remaining net proceeds are then to be divided equally between the parties after the Belcher property is sold.

As for Maloney’s argument that he should receive credit for the increase in the value of the property by reason of his maintenance of a business presence thereon, no evidence was presented as to the measure of the purported increase in value. Counsel argues, nonetheless, that Maloney should receive $25,000 as an equitable sum. A party seeking to recover has the burden to establish not only that he sustained damages, but also to establish a reasonable basis for computing those damages. A court may not award damages based on speculation or conjecture. (Beaton & Associates, Ltd. v. Joslyn Manufacturing & Supply Co. (1987), 159 Ill. App. 3d 834, 845, 512 N.E.2d 1286, 1292.) We find that the trial court did not abuse its discretion in not awarding Maloney a credit for his maintenance of a business presence on the Belcher property.

Based on the foregoing, we modify the circuit court’s amendment to judgment, substituting an a for the b designated in paragraph 2 of the amendment to judgment. (134 Ill. 2d R 366.) With respect to count III of Maloney’s complaint, we modify the circuit court’s judgment to reflect that the parties are to divide the net proceeds of the sale of the Belcher property, after a credit of $3,883 is given to Maloney. We affirm the decision of the trial court in all other regards.

Affirmed as modified.

HOWERTON and LEWIS, JJ., concur.


source: Caselaw Access Project

author: JUSTICE LEWIS

license: Public Domain

text:
    NANCY WHITE, as Ex’r of the Estate of Juel Clark, Deceased, Plaintiff-Appellee, v. TOMMIE RAINES, Defendant-Appellant.
    Fifth District
    No. 5—90—0173
    Opinion filed June 20, 1991.

      W.A. Armstrong, of Mitchell & Armstrong, Ltd., of Marion, for appellant.
    Patrick J. Hewson and Edward J. Heller, both of Reed, Heller & Mansfield, of Murphysboro, for appellee.
   JUSTICE LEWIS

delivered the opinion of the court:

The plaintiff, Nancy White, as executor of the estate of Juel Clark, deceased, brought an action in two counts to recover assets from the defendant, Tommie Raines. She alleged in the first count that the defendant had exerted undue influence upon the decedent and in the second count that the decedent had lacked the mental capacity to conduct his affairs. Following a bench trial, judgment was entered in favor of the plaintiff and against the defendant as to count I, and the defendant was ordered to convey and transfer the property and accounts in question to the plaintiff. With respect to count II, the trial court expressly found that the plaintiff did not establish by a preponderance of the evidence that the decedent lacked mental capacity on the specific dates of the transfers of assets in question. Upon the trial court’s denial of his post-trial motion, the defendant perfected this appeal, presenting two issues for our review: (1) “Was it error for the Trial Court to fail to apply the law to the facts, fail to consider all the evidence and make findings not supported by the evidence?” and (2) whether the trial court improperly applied the Dead Man’s Act (Ill. Rev. Stat. 1989, ch. 110, par. 8 — 201) in ruling that the testimony of the defendant’s wife was incompetent.

The decedent died testate on September 24, 1988, at the age of 88. His wife, Emma Clark, had died in August of 1987. The couple had had no children. On March 27, 1981, Juel Clark executed a will in which he devised and bequeathed all of his property to his wife if she should survive him and, if she should not, to 11 relatives, including his own siblings, his wife’s siblings, and a number of his and Emma’s nieces and nephews. According to the terms of Juel Clark’s will, the defendant, who is Emma Clark’s nephew, was to receive 10% of the decedent’s property after the payment of debts and funeral expenses.

Following Emma Clark’s death, Juel Clark became despondent and his physical health deteriorated. He suffered from prostate problems and congestive heart failure. On a number of occasions beginning in November of 1987 until his death, he was required to be hospitalized, including the period from February 17, 1988, until March 9, 1988; from September 3, 1988, until September 8, 1988; and from September 23, 1988, until his death the following day. The defendant testified, in response to questioning by the trial court, that in March of 1988 he knew the contents of Juel Clark’s will and that he knew then that he had not received the decedent’s “Hill Farm,” which he had hoped to receive. Earlier he had testified, concerning his knowledge of the contents of the will: “When we went to Steeleville in January I think I looked at it.” He admitted in this earlier testimony that he had seen the will well before the decedent’s hospitalization extending from February into March and well before the decedent’s execution of both a power of attorney and a deed to Hill Farm in March of 1988. Asked by the trial court when he had become aware of the decedent’s savings account and certificates of deposit, the defendant answered, “[P]robably March too.” Cheryl Kimmel, the defendant’s sister, testified that “probably” after the decedent’s hospitalization in December of 1987 the defendant had told her that he knew the contents of the decedent’s will.

In approximately January of 1988, the decedent executed a deed conveying Hill Farm, consisting of approximately 125 acres, to the defendant, who testified that he subsequently destroyed the deed:

“Well, my uncle got upset after he had signed this and said everybody had got what they wanted and just take him home and let him die. So I got the deed out and I tore it up and I told him I didn’t want his property, that I would rather for him to live.”

On March 3, 1988, while in the hospital, the decedent executed a power of attorney granting to the defendant this power. Having obtained the document from the decedent’s attorney, Donald Elmore, the defendant brought it to the decedent’s hospital room where it was executed in the defendant’s presence. Prior to this date the decedent had conveyed some of his real property to Lawrence White. Cheryl Kimmel testified that after the power of attorney had been executed, the defendant told her that it “was to take care of Uncle’s business, to pay bills and to make sure there was no more land transactions.”

After the decedent was discharged from the hospital on March 9, 1988, he came to live with the defendant and his family in Steeleville, Illinois. Upon questioning by the trial court, the defendant indicated that it was fair to say that from March to September of 1988, except for a period of five or six weeks around June when the defendant’s son was in the hospital following an injury, defendant and his wife had essentially constant contact with the decedent, who no longer drove an automobile. On March 10, 1988, the defendant had his name “put on” the decedent’s checking account. On March 19, 1988, the decedent executed a warranty deed conveying the Hill Farm to the defendant, who did not record the deed until September 27, 1988, three days after the decedent’s death. The decedent signed the deed at the home of and in the presence of the defendant, who had asked a notary public whom he knew to come to his house for the purpose of notarizing the deed. The defendant had asked the decedent’s attorney to prepare the deed and had obtained the deed from the attorney’s office. Upon questioning by the trial court, the defendant indicated that he was the person who had instructed Mr. Elmore to prepare a deed to Hill Farm again and that the decedent had not communicated with Mr. Elmore concerning this deed, executed on March 19, 1988. The defendant paid no consideration for the deed.

The decedent resided with the defendant and his family until his death. At the end of the school year they lived together in the decedent’s home in Sand Ridge, Illinois. On May 16, 1988, the decedent, a retired railroad employee, executed a “Designation and Change of Beneficiary Form” naming the defendant as the beneficiary of his employment-related insurance policy. The defendant had invited to his house a coemployee, David Jones, who witnessed the decedent’s signing of this form. The defendant never sent the form or apparently made any claim with respect to these benefits, which have a value, according to the defendant, of $2,000.

On September 14, 1988, the defendant and the decedent engaged in a number of transactions that, together with the conveyance to defendant of Hill Farm in March of 1988, put the defendant in possession of virtually all of the decedent’s assets of any value. The defendant testified twice concerning these transactions, first as an adverse witness called by the estate pursuant to section 2 — 1102 of the Code of Civil Procedure (Ill. Rev. Stat. 1989, ch. 110, par. 2 — 1102) and second as a witness testifying in his own behalf.

As an adverse witness the defendant testified that on September 14, 1988, he and his wife had taken the decedent to the doctor and then proceeded to the office of the decedent’s attorney in Murphysboro, Illinois. The defendant had “called ahead and had Mr. Elmore to fix up a deed for [the decedent’s] house.” The defendant testified that he “was told to” make the call. The defendant had instructed Mr. Elmore as to what he wanted done and, upon arriving at Mr. Elmore’s office, went inside to pick up the deed while the decedent waited outside with defendant’s wife in a pickup truck. The defendant indicated that two trips to Mr. Elmore’s office were made that day because Mr. Elmore was not there the first time they went to his office. Apparently, upon returning to Mr. Elmore’s office the defendant told personnel there that the decedent was too tired to come inside. For that reason and because “there was no parking,” the notary public came outside to the pickup truck, where the decedent, in the presence of the defendant and his wife, signed the warranty deed conveying his home to the defendant. The decedent did not speak with or see Mr. Elmore that day. The defendant did not record the deed until after the decedent’s death. To the knowledge of the defendant, the real estate so conveyed on September 14, 1988, comprised the remainder of the real estate owned by the decedent. Upon questioning by the trial court, the defendant indicated that although the deed to Hill Farm had originally been prepared in approximately December of 1987, the deed to this property had not been prepared at that time.

Defendant testified, upon further examination by the estate, that from the attorney’s office he, his wife, and the decedent proceeded to the City National Bank in Murphysboro before returning to Mr. Elmore’s office. With the decedent’s three certificates of deposit and apparently his passbook in his pockets, the defendant, together with his wife, seems to have assisted the decedent in walking into the bank. The defendant “|jp]robably” “pulled the C.D.’s and passbook out and put it [sic] on the counter.” The defendant, not the decedent, explained to the teller what needed to be done. Asked, “Fact of the matter was he [decedent] was hunched over the counter, leaning on the counter to balance himself, wasn’t he?” the defendant answered, “Could have been.” Thereafter, the decedent and defendant’s wife sat in the hall while the defendant discussed the transactions with bank personnel. The decedent signed the documents while seated. As a consequence of these transactions, the defendant’s name was added to the decedent’s certificates of deposit and savings account as an owner in joint tenancy. The value of the savings account at the time was, in the words of the defendant, “Fifteen, sixteen thousand. I’m not sure.” The three certificates of deposit, in the amounts of $30,000, $19,000, and $17,000, had a combined value of $66,000. The defendant told no one about these transactions until after the decedent’s funeral.

The plaintiff’s exhibit No. 6 consists of photographic copies of the three certificates of deposit. We note that, according to this exhibit, on April 14, 1988, City National Bank issued a certificate of deposit in the amount of $30,000 in the name of “Juel Clark or, Tommie D. Raines,” which certificate replaced a prior one bearing the name of the decedent or Emma Clark and to which the name of the defendant had been added. On that same date, April 14, 1988, another certificate of deposit in the amount of $30,000, replacing the one in the name of “Juel Clark or Tommie D [sic] Raines,” was issued in the name of “Tommie D. Raines or Harriet L. Raines.” Harriet Raines is the name of the defendant’s wife. Similarly, City National Bank issued a certificate of deposit in the amount of $19,000 on May 1, 1988, in the name of “Juel Clark or Tommie D. Raines,” which certificate replaced an earlier one in the same amount bearing the names of the decedent and Emma Clark and to which the name of the defendant had been added. On that date, May 1, 1988, another certificate of deposit in the amount of $19,000, replacing the one in the name of “Juel Clark or Tommie D. Raines,” was issued to the bank in the name of “Tommie D. Raines or Harriet Raines.” Similarly, City National Bank issued a certificate of deposit in the amount of $17,000 on May 2, 1988, in the name of “Juel Clark or Tommie D. Raines,” which certificate replaced an earlier one in the same amount bearing the names of the decedent and Emma Clark and to which the name of the defendant had been added. On that date, May 2, 1988, another certificate of deposit in the amount of $17,000, replacing the one in the name of “Juel Clark or Tommie D. Raines,” was issued by the bank in the name of “Tommie D. Raines or Harriet L. Raines.” Testifying in his own behalf, the defendant indicated that he had used the power of attorney only to write checks “to pay doctor bills” and that he had not transferred any of the decedent’s property, real or personal, using his own name with or without a power of attorney: “Just the checks that we talked about this morning to pay doctor bills. That’s all we ever done.” Asked, “With a power of attorney did you ever transfer anything else or do anything else, gain some kind of right to control or use his property?” the defendant responded, “All we done was wrote the checks to pay the bills. I didn’t transfer no property or nothing to my name. No, sir.”

Testifying in his own behalf, the defendant stated that the decedent had not told him that he intended to give him the “other farm” and the money in the bank “until the day we done it,” September 14, 1988. The defendant described how he learned of the decedent’s intentions on that day:

“We had a doctor’s appointment that day. We took him to the doctor at Carbondale and on the way back through Murphysboro he said he wanted to stop at the bank and stop at Mr. Elmore’s. So on the way back we stopped at Mr. Elmore’s and he wasn’t there, so from there we went to the City Bank. We went inside and done the transactions of the bank account, whatever.”

The defendant testified that the decedent had not said to him on a previous occasion that he might give him this real property or money. Later, when the trial court inquired of the defendant, “[W]as it you that initiated the contact with Mr. Elmore regarding the deed to the homestead property?” he answered, “Probably so. I think.” Asked by the trial court, “So Mr. Elmore got the instructions on September 14th deed from you, is that correct?” the defendant responded, “I guess so.” Questioned by the trial court whether he knew when he had initiated the contact with Mr. Elmore concerning the deed executed on September 14, 1988, the defendant answered, “Not exactly.” In response to further questioning by the trial court, the defendant indicated that he had done so before the decedent entered the hospital on September 3, 1988. Upon still further questioning by the trial court, the defendant testified that when they left on the morning of September 14, 1988, to go to the doctor’s office, he did not know they were going to go to Mr. Elmore’s office and to the bank.

Cheryl Kimmel, a beneficiary of 15% of the decedent’s estate under his will, testified that during the hospitalization of the decedent in November 1987, the defendant stated in a discussion at which the witness and the decedent’s doctor were present that he would never let the decedent go to a nursing home “[b]ecause he said they’d take everything he got,” that is, “Everything that Uncle had” by way of property. During this hospitalization the defendant advised the witness that the decedent was not physically or mentally capable of handling his business affairs any longer, that the defendant felt that a power of attorney was necessary “[bjecause Uncle Juel had made some land transactions,” and that the defendant should be the grantee of the decedent’s power of attorney “[because [defendant] said everybody was taking advantage of [decedent] and taking him for everything he had.” After the decedent was discharged from the hospital in November of 1987, the defendant took care of him at his home in Steeleville.

Cheryl Kimmel testified that she knew that the decedent had a will and had seen it. She stated that during a visit in July of 1988 the defendant told her, “we should get Uncle to sign everything over to us,” that is, to defendant and the witness, “so no one else could come in, that his side didn’t deserve anything,” namely, the decedent’s nieces and nephews. She testified that she then told the defendant “Uncle had a will, to leave it just like it was and everybody would get a share.” The defendant responded, “We’ll see about that.” The day after the decedent’s funeral the defendant told her that decedent had signed everything over to him prior to his death. When the witness asked why decedent had done so, the defendant answered that he “deserved it.” The defendant said, “nobody was going to get anything,” and he told her that if she had played her cards right she would have been the one getting it all, not him. The witness testified that in approximately March of 1988 the defendant told her “that he had finally got Uncle to agree to sign the 130[-]acre farm over to him.” The witness further testified that later, in April of 1988, the defendant told her concerning the conveyance of the farm that “Uncle Juel had went into a rage and told him he didn’t want him to have it and so Tommie told me he tore the deed up.” “Over the years,” the witness said, the defendant had expressed the wish several times to have the Hill Farm “and build a log cabin on it.”

Charlotte McMannis, the wife of Leon McMannis, who is Emma Clark’s nephew and a beneficiary of 10% of the decedent’s estate under his will, testified that she works in the office of the supervisor of assessments in Jackson County and that she saw the defendant in that office on two occasions in March of 1988, on March 7 and 14. On March 7 defendant had come in to check the deed that Lawrence White had received from the decedent and said that he was going to the decedent’s attorney “to see if anything could be done about that deed.” On March 14 the defendant said he came in to get a legal description because he had someone interested in buying the farm. The defendant also said he did not realize how easy it was to get in someone’s accounts. The witness described defendant’s statement: “You could go to the bank with a power of attorney, no questions asked.” The defendant testified that he did not know of anyone who wanted to buy the Hill Farm in March of 1988.

The discovery deposition of Charles Johnson was admitted into evidence. The witness is the vice-president and cashier at City National Bank and had been acquainted with the decedent for over 20 years. He described the conversation he had had with the decedent on September 14, 1988, which lasted “[pjrobably a minute”:

“Just as a matter of operating procedure our girls normally bring any instruments of substantial amount to my attention. They brought these and said these were going to be changed, just a routine matter of procedure. They indicated they were going to go into joint tenancy with Juel and Tommie Rains [sic]. Juel was sitting in front of my desk and I asked him if he wanted these put into joint tenancy with Tommie and he said yes, and I asked him if he understood that if something happened to him that this money would become Tommie’s, and he said yes. I said, ‘Fine, that’s all I need to know.’ ”

The defendant called as an adverse witness June Raines, who is his mother, the mother of Cheryl Kimmel, the decedent’s sister-in-law, and a beneficiary of 10% of the decedent’s estate under his will. She testified that in October of 1987 she had a conversation with the decedent concerning making a change in his will after Cheryl Kimmel had received benefits from his wife’s insurance policy that, according to the witness, he felt he ought to have received. The witness had indicated that she did not think it was feasible for him to change his will at his age. The witness described the decedent’s response: “ ‘If I don’t change my will,’ he said, T can still sign my name and I’ll change things before I die.’ ” Later, during the summer of 1988, he offered the witness his house, which she declined, and she suggested that he give it to his brother Jack. Again the witness related the decedent’s response:

“ ‘No. I’ve discussed this with Jack several times and he said he didn’t want anything because it would just mess him up with his pension and his free help he got.’ He said, ‘I’ll just sign it all over to Tom. He’s always been here for us when we needed help.’ ”

The testimony of the defendant and of the decedent’s attorney, Donald Elmore, given in a discovery deposition admitted into evidence, indicates that in approximately December of 1987, while discussing another matter, the decedent addressed with his attorney in the presence of the defendant the matter of a power of attorney and a deed to Hill Farm. The defendant had been assisting the decedent in a small claims matter in which the decedent had been defendant. Mr. Elmore stated that the last personal contact that he really remembered having with the decedent was around Christmas in 1987. Early in 1988 he had spoken on the telephone about the power of attorney and deeds with the decedent, who, he thought, had called him. He said that the last time he had spoken with the decedent on the telephone was sometime early in 1988, in January or February. Later he indicated that it was possible that he had talked with the decedent “in the month or so” before the deed was executed in September of 1988, but the witness could recall only a conversation in February of 1988.

In an evidence deposition, Dr. Courtland Monroe, who began to treat the decedent on November 17, 1987, testified that the decedent’s problems when he was hospitalized on September 3, 1988, were in large part affected by his “profound depression.”

In its 12-page judgment, the trial court expressly found “[t]hat by ■virtue of the Power of Attorney as well as the trust and confidence that JUEL CLARK reposed in the Defendant, a fiduciary relationship existed between JUEL CLARK and the Defendant, TOMMIE D. RAINS.” The court found further:

“That when this Court considers the totality of the evidence; the fiduciary relationship, the physical and mental weakness of the decedent, his age, disease, depression, living arrangements, the dependence of the decedent on the Defendant, lack of independent counsel since January-February, 1988, and the circumstances surrounding the execution of the deeds and transfer of accounts, this Court finds that the Defendant, TOMMIE RAINS [sic], at the time of the transfers of assets exerted undue influence upon JUEL CLARK which caused JUEL CLARK to make dispositions of his property that was [sic] not his free and voluntary act.”

The trial court stated as well that

“[u]nder the circumstances herein, this Court finds that the Defendant breached his fiduciary duty in causing the bank accounts to be transferred into joint tenancy with himself and that the presumption of donative intent is effectively rebutted. This Court finds that JUEL CLARK lacked the donative intent to transfer said bank accounts by reason of the undue influence exerted by the Defendant, TOMMIE RAINS [sic]. Coupled with all the other surrounding circumstances and events since March, 1988, the Court finds that the executor has sustained the burden of proving by clear and convincing evidence that a gift was not intended by JUEL CLARK when he transferred his bank accounts into joint tenancy with the Defendant.”

The trial court wrote:

“The fact that none of the property in question was transferred pursuant to the Power of Attorney does not lessen the burden on Defendant to show by clear and convincing evidence that none of the transactions were the result of undue influence.”

In his brief the defendant asserts with respect to the first issue presented for review that the trial court imposed a greater burden on the defendant in this case than is required by law and, in effect, required him “to disprove some kind of presumption that exists apart from evidence giving rise to the presumption and its reasonable inferences.” The defendant maintains that

“[t]he Court has misconstrued and misapplied the law of the State of Illinois and the concept of fiduciary relationships and the presumption of undue influence in such a way as to alter the burden of proof and improperly change the focus of evidence from a determination of the free will and agency of transferor based upon intention and conduct of the transferor and toward the knowledge of or physical presence of the transferor.”

A power of attorney gives rise to a general fiduciary relationship between the grantor of the power and the grantee as a matter of law. (Lemp v. Hauptmann (1988), 170 Ill. App. 3d 753, 525 N.E.2d 203.) Once the petitioner has shown that a fiduciary relationship exists, the presumption is that a transaction between the dominant and servient parties which profits the dominant party is fraudulent. (Lemp v. Hauptmann (1988), 170 Ill. App. 3d 753, 525 N.E.2d 203.) The dominant party then has the burden of proving by clear and convincing evidence that the transaction was fair and equitable and did not result from his undue influence over the servient party. Lemp v. Hauptmann (1988), 170 Ill. App. 3d 753, 525 N.E.2d 203.

The transactions between the defendant and the decedent occurred after the grant of the power of attorney by the decedent to the defendant on March 3, 1988, and the termination of that power upon the death of the decedent on September 24, 1988. Therefore, the presumption is that the transactions are fraudulent because of the fiduciary relationship between decedent and defendant. Thus, the defendant has the burden of proving by clear and convincing evidence that the transactions were fair and equitable to the decedent and that the transactions did not result from his undue influence over the decedent.

The creation of a joint tenancy account gives rise to the presumption that a gift to the surviving joint tenant is intended. (In re Estate of Clements (1987), 152 Ill. App. 3d 890, 505 N.E.2d 7.) To rebut this presumption, the party contesting the transfer must establish by clear and convincing evidence that a gift was not intended. (In re Estate of Clements (1987), 152 Ill. App. 3d 890, 505 N.E.2d 7.) Clear and convincing evidence is that which leaves no reasonable doubt in the mind of the trier of fact as to the truth of the proposition in question. In re Estate of Clements (1987), 152 Ill. App. 3d 890, 505 N.E.2d 7.

In the instant case, the trial court found that the executor has sustained the burden of proving by clear and convincing evidence that a gift was not intended by the decedent when he transferred his savings account and certificates of deposit into joint tenancy with the defendant. The trial court indicated further that the defendant’s burden, in view of the fiduciary duty imposed by the grant of the power of attorney to him, was to show that none of the transactions were the result of undue influence. The record here is replete with evidence showing that the plaintiff met her burden of proof, whereas the defendant failed to meet his.

The findings of the trial court are not to be disturbed unless they are against the manifest weight of the evidence. (In re Estate of Kaminski (1990), 200 Ill. App. 3d 309, 558 N.E.2d 142.) The trial court is in the best position to make a determination as to the credibility of witnesses and the weight to be afforded testimony. (In re Estate of Kaminski (1990), 200 Ill. App. 3d 309, 558 N.E.2d 142.) In light of the record before us, the findings of the trial court in its carefully considered judgment may hardly be said to be against the manifest weight of the evidence and, hence, may not be disturbed.

With regard to the other issue defendant raises for review, he contends that the trial court improperly excluded as incompetent, pursuant to the Dead Man’s Act, the testimony of his wife, Harriet Raines. He does not urge that the exclusion of her testimony resulted in prejudice to him. A party is not entitled to reversal based on rulings on evidence unless the error was substantially prejudicial and affected the outcome of the trial. (Cairns v. Hansen (1988), 170 Ill. App. 3d 505, 524 N.E.2d 939.) The burden is on the party seeking reversal to establish prejudice. (Cairns v. Hansen (1988), 170 Ill. App. 3d 505, 524 N.E.2d 939.) The instant defendant has failed to assert, much less to demonstrate or to establish, prejudice as a result of this exclusion. It is within the trial court’s discretion to determine whether such testimony is necessary to a full and fair presentation of the facts of the case. (In re Estate of Kaminski (1990), 200 Ill. App. 3d 309, 558 N.E.2d 142.) There has been no showing that the trial court abused its discretion in this regard.

Affirmed.

RARICK, P.J., and CHAPMAN, J., concur.


author: JUSTICE HAASE

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellant, v. ROBERT D. FALETTI, Defendant-Appellee.
    Third District
    No. 3—90—0645
    Opinion filed June 12, 1991.
    Rehearing denied July 15, 1991.
    Joseph Navarro, State’s Attorney, of Ottawa (Terry A. Mertel, of State’s Attorneys Appellate Prosecutor’s Office, of counsel), for the People.
    Perona Law Offices, of Peru (Gary L. Peterlin, of counsel), for appellee.
   JUSTICE HAASE

delivered the opinion of the court:

The defendant, Robert D. Faletti, was charged with the offense of driving under the influence of alcohol. (Ill. Rev. Stat. 1989, ch. 95V2, par. 11 — 501.) Prior to trial, the defendant filed motions to quash the arrest and suppress evidence. He claimed that the police lacked reasonable grounds to stop his auto. Following a hearing, the trial court granted the defendant’s motion to suppress. The State appeals. We affirm.

At the hearing on the defendant’s motion, Oglesby police officer Russel Lemmer testified that on May 19, 1989, he made a traffic stop on Route 351 in La Salle County, Illinois, when he noticed a car heading for the rear of his squad car. At that time, the officer and the driver of the stopped vehicle, John Gordan, were standing in front of the officer’s squad car. When the officer saw the approaching auto, it was about IV2 car lengths away from the rear of his squad car. The officer then grabbed Gordan and pulled him some six feet away from the roadway, towards a drainage ditch that ran along the roadway. The officer noted that he took this action to prevent either himself or Gordan from getting pinned between the squad car and Gordan’s auto.

Officer Lemmer further testified that he observed the oncoming auto almost strike the rear of his auto, then go off the roadway and over the center line. The officer then returned to his squad car and took after the vehicle. As he followed the auto, he noticed it cross the center line. The officer then stopped the vehicle and placed the defendant, who was the driver, under arrest for driving under the influence of alcohol.

On cross-examination, Officer Lemmer admitted that he could not accurately gauge the speed of the defendant’s auto when it approached, but he opined that it did not slow down. The officer also admitted that he heard no squealing of tires and that he had made up his mind to stop the vehicle after it passed his squad car.

John Gordan testified that he had been stopped by Officer Lemmer on May 19, 1989. Gordan stated that he was speaking with the officer at approximately 11:30 p.m. when the officer grabbed him, told him to get down, and pulled him some six feet off the roadway. Gordan related that he immediately looked back toward the road and observed an automobile almost strike his automobile. The auto then went off the roadway and over the center line. Officer Lemmer thereafter took off after the vehicle.

David Emat, an employee of L.T.V. Steel and a police commissioner for the city of Oglesby, testified that he was on his way to work at approximately 11:20 p.m. on May 19, 1989, when he came upon Officer Lemmer’s squad car. Emat stated that the officer’s squad car was parked partially on the road with its emergency lights activated. Emat noted that in order to safely pass the officer’s vehicle, it was necessary to cross the center line that divided the two lanes of traffic.

The defendant testified the squad car was partially blocking his lane of traffic and that he drove his car momentarily over the center line so as to avoid the auto. He denied that he narrowly missed the squad car. He stated that the officer and Gordan were not around their vehicles when he passed them, but were in the field that abuts the roadway.

Robert Faletti, the defendant’s son, also testified. Robert stated that he was driving behind his father and that his father did not narrowly miss the squad car. Robert related that the officer’s squad car was parked partially on the roadway and his father safely crossed the center line so as to avoid the officer’s auto. Robert did not believe his father was driving under the influence of alcohol.

Following the presentation of evidence, the trial court found that: (1) the officer’s squad car was parked in such a manner that vehicles approaching from the south would have to cross into the northbound lane of traffic to safely pass the officer’s auto; (2) the officer believed that he was going to be struck by the defendant’s automobile and jumped out of the way; (3) the defendant’s auto did not appear to slow as it approached the officer’s car; and (4) there was no evidence presented as to the speed of the defendant’s vehicle and no evidence of the squealing of tires.

The trial court further found that although some testimony was presented that the defendant crossed the center lane of traffic while the officer was following his vehicle, this evidence should not be considered because the officer had already made up his mind to stop the vehicle. The court concluded that the officer lacked reasonable grounds to stop the defendant’s vehicle and ordered all evidence obtained after the stop suppressed.

The issue presented on appeal is whether the trial court’s determination that the officer lacked reasonable grounds to stop the defendant’s vehicle was against the manifest weight of the evidence.

The correct standard to be applied in ascertaining whether an investigative stop is justified is not probable cause to arrest or search, but rather a less exacting standard. (People v. Repp (1988), 165 Ill. App. 3d 90, 518 N.E.2d 750.) To stop an automobile, a police officer must have an articulable and reasonable suspicion that the motorist is unlicensed, that the automobile is not registered, or that either the vehicle or an occupant is otherwise subject to seizure for violation of a law. (Delaware v. Prouse (1979), 440 U.S. 648, 59 L. Ed. 2d 660, 99 S. Ct. 1391.) This is the “reasonable grounds” test. (People v. Collins (1987), 154 Ill. App. 3d 149, 506 N.E.2d 963.) Erratic driving, such as weaving across a roadway or even weaving within a lane, may provide a sufficient basis for an investigative stop of a motor vehicle. (People v. Loucks (1985), 135 Ill. App. 3d 530, 481 N.E.2d 1086.) However, an automobile’s single, momentary crossing of the center line, without more, does not necessarily provide a sufficient basis for an investigatory stop. People v. Collins (1987), 154 Ill. App. 3d 149, 506 N.E.2d 963.

The State argues that the officer possessed a reasonable and articulable reason for stopping the defendant’s auto. It also argues that the trial court erred in failing to consider the officer’s observations during the time he was following the defendant.

A trial court’s decision regarding a motion to suppress will not be disturbed unless it is determined to be manifestly erroneous. (People v. Lillig (1988), 174 Ill. App. 3d 647, 529 N.E.2d 256.) Initially, we note that the important question is the correctness of the trial court’s ruling and not the correctness of its reasoning in reaching that result. (Scott v. Association for Childbirth at Home, International (1980), 85 Ill. App. 3d 311; Hickey v. Illinois Central R.R. Co. (1964), 30 Ill. 2d 163.) Although the trial court should have factored into its decision the later observed crossing of the center line, we nevertheless find that, under the circumstances, the court’s decision was not manifestly erroneous.

Here, both the defendant and his son testified that the defendant safely passed the officer’s squad car and posed no danger to either the officer or his vehicle. Although Gordan and the officer testified differently, it is the trial court’s function, as the trier of fact, to determine the credibility of the witnesses, the weight to be accorded their testimony, and the inferences to be drawn from the evidence. People v. Jackson (1987), 161 Ill. App. 3d 573, 515 N.E.2d 219.

Based on the record before us, we cannot say that the trial court’s finding was manifestly erroneous. The court simply resolved a conflict in the evidence in favor of the defendant. Accordingly, the judgment of the circuit court of La Salle County is affirmed.

Affirmed.

GORMAN and SLATER, JJ., concur.


text:
    MARGE DUNKIN, Plaintiff-Appellee, v. SILVER CROSS HOSPITAL, Defendant-Appellant.
    Third District
    No. 3-90-0801
    Opinion filed June 6, 1991.

      Theodore J. Jarz, of McKeown Law Offices, of Joliet (Michael R. Lucas, of counsel), for appellant.
    Thomas P. Naughton, of Law Offices of Naughton & Markese, of Joliet (Paula A. Gomora, of counsel), for appellee.
   JUSTICE HAASE

delivered the opinion of the court:

The plaintiff, Marge Dunkin, brought a negligence action against the defendant, Silver Cross Hospital (the hospital), alleging that she sustained injuries when she fell on a stairway at the hospital. During the pretrial discovery stages of the lawsuit, the trial court held the hospital’s counsel in contempt of court for refusing to produce certain reports. The hospital appeals the 'court’s order requiring it to produce those reports. It also appeals the court’s order of contempt.

The record reveals that the plaintiff filed a motion to compel the hospital to produce any “incident” reports within its possession involving slip-and-fall accidents on a certain stairway at the hospital. The hospital objected to the discovery request, contending that the reports were privileged under section 8 — 2101 et seq. of the Code of Civil Procedure (the Medical Studies Act or Act) (Ill. Rev. Stat. 1989, ch. 110, par. 8 — 2101 et seq.).

In support of its contention that the reports were not discoverable, the hospital filed an affidavit from Michael Deming, the hospital’s vice-president and chief operating officer. In his affidavit, Deming stated that the “incident” reports recorded any unusual occurrences at the hospital. The reports were also used in analyzing any problem areas and in determining the necessary steps to improve the quality of care and service.

The record further reveals that the reports were mainly used by the hospital’s quality assurance department. Information from the reports and any corrective action plans arising therefrom. could have been disseminated to any of 70 different departments within the hospital.

The reports, which were made part of the record on appeal, indicated that visitors, patients, and volunteer workers used the stairway in question. However, only visitors and volunteer workers were actually injured while using it. At the time of the alleged injury, the plaintiff was not a patient at the hospital.

After a hearing on the plaintiff’s motion to compel production of the reports, the trial court found that the reports were not privileged from disclosure under the Medical Studies Act and ordered the hospital to produce them. The hospital’s counsel refused to produce the documents. The trial court subsequently held him in contempt of court and ordered him to pay a $100 fine. The hospital appeals from the court’s rulings.

As a preliminary matter, we address the plaintiff’s contention that the hospital’s appeal is moot because the hospital made the reports part of the record on appeal.

We note that section 8 — 2102 of the Medical Studies Act provides that in addition to being nondiscoverable, privileged documents under the Act are also inadmissible. (Ill. Rev. Stat. 1989, ch. 110, par. 8 — 2102.) Accordingly, even though the information in the report was disclosed, a question remains as to whether the documents are admissible into evidence. Thus, we find that the decision will have a direct impact on the rights and duties of the parties and therefore the appeal is not moot. See Bluthardt v. Breslin (1979), 74 Ill. 2d 246, 384 N.E.2d 1309.

The hospital first argues on appeal that the trial court erred in finding that the Medical Studies Act did not protect the reports from discovery. It contends that the reports were covered by the Act because they were used in the course of internal quality control and related to the improvement of hospital conditions.

Section 8 — 2101 of the Act reads in relevant part:

“All information, interviews, reports, statements, memoranda or other data of *** committees of licensed or accredited hospitals or their medical staffs, including Patient Care Audit Committees, Medical Care Evaluation Committees, Utilization Review Committees, Credential Committees and Executive Committees, (but not the medical records pertaining to the patient), used in the course of internal quality control or of medical study for the purpose of reducing morbidity or mortality, or for improving patient care, shall be privileged, strictly confidential and shall be used only for medical research, the evaluation and improvement of quality care, or granting, limiting or revoking staff privileges ***.” (Emphasis added.) Ill. Rev. Stat. 1989, eh. 110, par. 8-2101.

The terms of a statute must be construed with reference to the purposes and objectives of the statute. The purpose of the Medical Studies Act is to encourage candid and voluntary studies and programs used to improve hospital conditions and patient care or to reduce the rates of death and disease. (Niven v. Siqueira (1985), 109 Ill. 2d 357, 487 N.E.2d 937.) To promote these goals, the legislature provided that any materials used in such studies or programs shall be confidential. (Niven v. Siqueira (1985), 109 Ill. 2d 357, 487 N.E.2d 937.) However, the Act makes confidential only information used “in the course of internal quality control or of medical study for the purpose of reducing morbidity or mortality, or for improving patient care.” (Ill. Rev. Stat. 1989, ch. 110, par. 8 — 2101; Niven v. Siqueira (1985), 109 Ill. 2d 357, 487 N.E.2d 937.) The Act is premised on the belief that, absent a statutory peer-review privilege, physicians would be reluctant to sit on peer-review committees and engage in frank evaluations of their colleagues. (Jenkins v. Wu (1984), 102 Ill. 2d 468, 468 N.E.2d 1162.) Whether the privilege is applicable is a matter of law for the court to determine, yet whether specific materials are part of internal quality control or part of a medical study is a factual question within that legal determination. (Flannery v. Lin (1988), 176 Ill. App. 3d 652, 531 N.E.2d 403.) The party asserting the privilege has the burden of establishing its applicability. Ekstrom v. Temple (1990), 197 Ill. App. 3d 120, 553 N.E.2d 424.

Applying the above principles to the instant case, we find that the trial court properly determined that the reports did not fall within the statutory privilege. Although Deming’s affidavit alleged that the reports related to internal quality control and hospital conditions, nothing in his affidavit related the reports to patient medical care. The legislature’s intent in enacting the statute was to protect with privilege those reports and studies on quality control and hospital conditions that relate to patient medical care. All of the cases cited by the parties on appeal involved materials that related to patient medical care. Here, the reports compiled by the hospital did not relate to such care in the same medical sense that the legislature was concerned about. The reports are the same kind of incident reports which any business might have. Accordingly, we hold that the reports were discoverable and are admissible, assuming they meet other evidentiary tests.

The hospital next argues that the trial court’s contempt order should be vacated.

We agree. It is well settled that a contempt citation is an appropriate method for testing the propriety of a discovery order. People ex rel. General Motors Corp. v. Bua (1967), 37 Ill. 2d 180, 226 N.E.2d 6; Sakosko v. Memorial Hospital (1988), 167 Ill. App. 3d 842, 522 N.E.2d 273; Flannery v. Lin (1988), 176 Ill. App. 3d 652, 531 N.E.2d 403.

In Sakosko v. Memorial Hospital (1988), 167 Ill. App. 3d 842, 522 N.E.2d 273, the reviewing court vacated a trial court’s contempt order against a hospital attorney, seeking review of the same privilege at issue in the case at bar. In so doing, the court noted that the attorney acted in good faith and did not hold the court in disdain or subject it to scorn.

In the present case, the record shows that the hospital’s attorney acted in good faith and did not hold the court in disdain or subject it to scorn. Under these circumstances, we find that the contempt order and fine should be vacated.

The judgment of the circuit court of Will County pertaining to the plaintiff’s motion to compel discovery is affirmed; the court’s order holding the hospital’s attorney in contempt of court and fining him $100 is vacated.

Affirmed in part; vacated in part.

STOUDER, P.J., and GORMAN, J., concur.