text:
      In re ESTATE OF SOPHIE FRIEDMAN, Deceased (Helen Shafton, Petitioner-Appellee, v. Joan Morris, Respondent-Appellant).
    First District (2nd Division)
    Nos. 82 — 3068, 83 — 1335 cons.
    Opinion filed March 27, 1984.

      Larry S. Kajfes, Ltd., Frederick F. Cohn, and Robert Freeman, all of Chicago, for appellant.
    Johnson & Armel, of Chicago, for appellee.
   JUSTICE STAMOS

delivered the opinion of the court:

Petitioner Helen Shafton initiated a citation proceeding to recover the monies from certain bank accounts which had been held jointly by the deceased, Sophie Friedman, and the respondent, Joan Morris. After a bench trial, the court ruled that the proceeds of the accounts belonged to Sophie Friedman’s estate and ordered respondent to repay to the estate the balances of these accounts plus various sums expended from these accounts on deceased’s behalf. Respondent appeals from this order.

While this appeal was pending, respondent filed a claim against the estate to recover those sums of money expended by respondent on decedent’s behalf. The court denied the claim and respondent appealed from this order also. The appeals have been consolidated.

Prior to her husband’s death on February 20, 1976, Sophie Friedman established several bank accounts in her name alone. Up until August 1976, Friedman was in good health and managed her own affairs. On August 5, 1976, she became ill and was hospitalized. During this hospitalization, Friedman asked Joan Morris, her daughter, to bring a joint tenancy agreement for one of her accounts containing about $13,500. Morris brought the agreement and she and her mother executed it. The account bore Friedman’s social security number and Friedman reported the interest for income tax purposes.

Friedman was released from the hospital on October 5, 1976, and she began living with Morris and her husband. Friedman stayed with Morris until March 9, 1977, when she again became ill and required hospitalization. Following this hospitalization, Friedman required constant care and was admitted to a nursing home. During the final 2Vz years of her life, Friedman lived in either nursing homes or hospitals. During this period, Friedman requested that Morris acquire joint tenancy agreements for several of her bank accounts. These accounts were converted to joint accounts with Friedman and Morris as owners between the end of June 1977 and the middle of September 1977. Each account bore Friedman’s social security number, and Friedman reported the interest on these accounts for income tax purposes.

During the final 21h years of her life, Friedman directed Morris as to which deposits and withdrawals to make from the joint accounts. Morris did, however, make two withdrawals for her personal use. On May 16, 1979, Morris withdrew $7,270 from one of the accounts and purchased a grand piano for her home. And on November 1, 1979, eight days before Friedman died, Morris withdrew $10,000 and purchased a certificate of deposit in her name alone. On November 9,1979, Friedman died at the age of 71.

It is not disputed that during the final years of Friedman’s life, respondent Morris devoted a great deal of time to looking after Friedman’s well-being and affairs. Friedman lived with Morris for six months and Morris maintained a room in her home for her mother until Friedman died. During Friedman’s lengthy stay in hospitals and nursing homes, Morris and her husband visited Friedman twice weekly and took her on numerous outings. Morris also ran errands for her mother and, at her mother’s direction, handled most of her financial affairs.

It is also not disputed that Friedman was estranged from her only other child, petitioner Helen Shafton. The evidence revealed that Shafton and Friedman had not seen or talked to each other in the six years prior to Friedman’s death.

On July 25, 1980, Shafton was appointed administratrix of what was then believed to be Friedman’s intestate estate. A will was later located in which Joan Morris was named executrix of the estate and letters of office were issued to Morris on June 12, 1981. Shafton then filed a citation petition to compel Morris to pay into the estate the sums contained in the joint accounts. Following a bench trial, the court ordered Morris to pay into the estate all sums which were in the accounts at Friedman’s death, including those sums expended for Friedman’s funeral. Following a denial of her motion for a new trial, Morris appealed.

During the pendency of that appeal, Morris filed a claim against Friedman’s estate seeking to recover those sums expended exclusively for Friedman’s care and funeral expenses. The claim was denied, and Morris instituted an appeal which was consolidated with the appeal from the order in the citation proceeding.

Initially, we will address respondent’s contention that the trial court erred in holding that decedent did not intend to make a gift of the accounts she held jointly with respondent.

Between August 1976 and November 1979 the deceased, Sophie Friedman, converted several of her savings accounts into joint accounts with Joan Morris as the joint owner. Morris contends that, at the time the joint accounts were established, Friedman intended that Morris should keep any balance remaining in the accounts at Friedman’s death. Helen Shafton, petitioner, contends that the joint accounts were established merely for Friedman’s convenience and were not intended as a gift.

The creation of a joint account by a parent with the right of survivorship in a child creates a presumption of a valid gift to the child as the surviving joint tenant. In re Estate of Guzak (1979), 69 Ill. App. 3d 552, 554-55, 388 N.E.2d 431.

“The presumption is not conclusive but the burden is upon the one who challenges the gift to present clear and convincing evidence of the absence of a donative intent. [Citations.] In determining whether the donor actually intended to transfer his interest in the account at his death to the surviving joint tenant, it is proper to take into consideration the facts surrounding the creation of the joint account and all circumstances and events occurring after the creation of the joint account. [Citations.] Especially relevant to such a determination is the exercise of authority and control over the joint account. [Citations.] The fact that the surviving joint tenant did not consider himself as having any ownership in the account may be considered in determining the intent of the creator of the account. [Citation.] Evidence that the transfer was made for the mere convenience of the creator of the account is an indication of lack of donative intent. [Citations.] Another factor to be considered is the quantity of personal property involved in comparison to the total assets of the estate. [Citations.]” 69 Ill. App. 3d 552, 555.

In the instant case, petitioner produced substantial evidence that by establishing the joint accounts, the deceased did not intend to make a gift of the accounts to Joan Morris. The evidence revealed that, after establishing the joint accounts, the deceased retained exclusive authority and control over the accounts by directing that the passbook for the accounts be kept in a lock-box in her room at Joan Morris’ home. The fact that Morris dealt with the accounts only at Friedman’s direction and in furtherance of Friedman’s personal affairs indicates that Morris did not consider herself as having any ownership in the accounts. Moreover, there was evidence which strongly indicates that Friedman established the accounts for her convenience.

Prior to her convalescence in hospitals and nursing homes, Sophie Friedman personally handled her financial affairs. After her first hospitalization, however, Friedman increasingly relied upon Morris to handle her financial affairs until, finally, Morris handled all of Friedman’s affairs. It was at the time of her first hospitalization that Friedman established the first joint account with Morris. The accounts were apparently opened with Friedman’s personal funds. Morris deposited no more than $100 in these accounts. The foregoing is strong evidence that the joint accounts were established merely for Friedman’s convenience. We find that petitioner overcame the presumption of donative intent through clear and convincing evidence. Thus, the burden shifted to respondent to prove that decedent established the accounts with donative intent. (See Dixon National Bank v. Morris (1964), 51 Ill. App. 2d 307, 310, 201 N.E.2d 248, affd (1965), 33 Ill. 2d 156, 210 N.E.2d 505.) The record on appeal, however, does not reveal that respondent met this burden.

Respondent testified that decedent intended that she keep the balance in the joint accounts for herself. The balance of respondent’s evidence revealed the close relationship between respondent and her mother and the amount of care respondent gave decedent during the final 2V2 years of decedent’s life. From this evidence, one would presume that decedent would be grateful and would reward respondent accordingly. But it does not necessarily follow that decedent expressed her gratitude by establishing the joint accounts with the intent that respondent retain the balances. It is just as reasonable to conclude that decedent’s gratitude to respondent was manifested in decedent’s will. If the will contained a bequest to respondent which was large in proportion to the other bequests, this would be a strong indication that the joint accounts were established merely for decedent’s convenience. Conversely, if respondent’s bequest was proportionately small, this would indicate that perhaps decedent intended that respondent keep the joint accounts for herself. All this is mere conjecture, however, because decedent’s will was not made a part of the record on appeal.

We are aware that the will was entered into evidence in the proceedings below, but as a court of review, we may consider only that which has properly been made a part of the record on appeal. (See Gille v. Winnebago County Housing Authority (1970), 44 Ill. 2d 419, 427, 255 N.E.2d 904.) As appellant, it was respondent’s responsibility to supply this court with everything in the record necessary to decide the issues on appeal. (See Heritage Shelter Care Home, Inc. v. Miller (1975), 31 Ill. App. 3d 700, 703, 334 N.E.2d 355.) Despite our musings as to what the will would have revealed as to decedent’s intentions, we are bound to review the judgment of the circuit court solely in light of the evidence contained in the record on appeal. In the absence of a contrary indication in the record, we must presume that the circuit court acted properly. (See Coombs v. Wisconsin National Life Insurance Co. (1982), 111 Ill. App. 3d 745, 746, 444 N.E.2d 643.) Based on the record before us, we cannot say that the circuit court’s finding that the joint accounts in the instant case were established merely for decedent’s convenience and without donative intent was erroneous. Our finding on this issue makes it unnecessary to address the propriety of the court’s finding of a fiduciary relationship between respondent and the deceased.

Respondent next contends that “[t]he trial court erred in ordering respondent to pay back to the estate monies expended solely on behalf of deceased.” Under this contention, respondent itemizes 38 separate expenditures made on deceased’s behalf. Upon examining these expenditures, however, it is not apparent that the court’s order requires respondent to pay back into the estate all of the expenditures listed.

Thirty-four of the expenditures cited by respondent were made after April 8, 1978, but before Sophie Friedman died on November 10, 1979. During this period, it is undisputed that such expenditures were made from accounts held jointly by Sophie Friedman and respondent Joan Morris and were deducted from the balances in those accounts. Thus, at Friedman’s death, the balances in the joint accounts did not include those sums expended on Friedman while she was alive.

The order of the trial court in the instant citation proceeding required respondent to pay back to Sophie Friedman’s estate the balances in the joint accounts plus some $17,000 withdrawn from one of those accounts by respondent for her personal use. The balances to be returned were those which remained in the joint accounts at the time of Sophie Friedman’s death. These date-of-death balances obviously did not include expenditures made during Friedman’s life, and respondent is therefore mistaken in her belief that the court’s order requires her to pay back such expenditures.

The four remaining expenditures, totalling $2,949.60, were made from the joint accounts in issue after Friedman’s death. All four expenditures were directly related to Friedman’s funeral and burial expenses. We find that respondent, by making these expenditures, was acting in the good faith belief that she was properly satisfying the debts of the estate. (See In re Estate of Hale (1983), 111 Ill. App. 3d 962, 964, 444 N.E.2d 1370.) It would be unjust to penalize respondent for benefitting the estate by paying a necessary cost of administration, and we therefore order a reduction of $2,949.60 in the amount of respondent’s judgment debt.

Respondent also appeals from an order denying her request for reimbursement from Friedman’s estate of certain expenditures made on Friedman’s behalf. Respondent has failed, however, to include in the record on appeal a report of proceedings which led to that order. In the absence of such a report, we must presume that the trial court heard sufficient evidence to support its decision. (Nelson v. Nelson (1974), 17 Ill. App. 3d 651, 656, 308 N.E.2d 132.) We decline, therefore, to consider this portion of respondent’s appeal.

For the reasons expressed herein, the sum which respondent is directed to reimburse to the estate of Sophie Friedman shall be reduced by $2,949.60. In all other respects, the judgment of the circuit court is affirmed.

Affirmed.

BERLIN and DOWNING, JJ., concur.


source: Caselaw Access Project

author: PRESIDING JUSTICE HARTMAN

license: Public Domain

text:
    NATIONAL BEN FRANKLIN INSURANCE COMPANY, Plaintiff-Appellant, v. PETER DAVIDOVITCH, Adm’r of the Estate of Mary Davidovitch, et al., Defendants (Employers Insurance Company of Wausau, Defendant-Appellee).
    First District (2nd Division)
    No. 83 — 562
    Opinion filed March 27, 1984.
    Rehearing denied April 23, 1984.

      Clausen, Miller, Gorman, Caffrey & Witous, P.C., of Chicago (James T. Ferrini and Frank L. Schneider, of counsel), for appellant.
    Schaffenegger, Watson and Peterson, Ltd., of Chicago (Jack L. Watson, of counsel), for appellee.
   PRESIDING JUSTICE HARTMAN

delivered the opinion of the court:

Plaintiff National Ben Franklin Insurance Company (National) appeals from a summary judgment granted to defendant Employers Insurance Company of Wausau (Employers). The issue on appeal is whether the circuit court erred by denying retroactive reformation of an erroneous endorsement in an insurance policy so as to exclude coverage to an individual mistakenly classified as an insured by the endorsement.

On or about April 6, 1974, Dr. Henry Chan was “moonlighting” in the radiology department of Palos Community Hospital (Palos) as an employee of Radiology and Nuclear Association, S.P., an independent contractor serving Palos under an oral agreement. On that date, Chan interpreted certain X rays of Mary Davidovitch, who subsequently died, allegedly as a result of Chan’s negligent failure to diagnose a cancerous lesion. In March 1976 a wrongful death action was filed on her behalf, naming as defendants Palos, Chan and Dr. John H. Pai, an emergency room physician.

Palos then possessed a hospital professional liability insurance policy issued by National as contracted for by National and the St. George Hospital Corporation (St. George), Palos’ parent corporation. A policy endorsement provided that its “definition of insured” included “any employees * * * staff members *** and others performing services” for Palos. Chan carried his own professional liability insurance with Employers, which provided basic coverage in the absence of other insurance, but coverage only in excess of the maximum provided by other insurance if available.

On April 30, 1976, National notified Chan by letter that it would defend him in the suit because he was a “salaried employee at the hospital” under Palos’ policy. National also advised Chan to contact his own attorney and insurance carrier because of potential excess liability exposure. National’s attorneys subsequently appeared for Chan.

Following Chan’s notification, Employers began an investigation. On May 5, 1976, Chan told Employers’ adjuster he was an employee of “Radiology Associates” and an independent contractor. Employers notified National of the excess coverage, but did not appear for Chan.

In May 1978, Michael Ehrens, Chan’s personal attorney, inquired of Rudolph Schade, one of National’s attorneys, as to Chan’s status as Palos’ employee at the time of the subject incident. Schade then requested verification of Chan’s status from Underwriters Adjusting Company, which, in turn, was informed by Palos on May 30, 1978, that Chan was not its employee. On July 3, 1978, Underwriters wrote to Ehrens that Chan was never Palos’ employee and was not entitled to be defended by National. By copy of the letter sent to Employers, National advised it was “tendering all further defense of Dr. Chan to Employers.” The letter noted that National would continue defending Chan “on an accommodation basis only,” until a substitution of attorneys could be effected, and that National’s continued defense was “not to be construed as an admission *** of any obligation to defend Dr. Chan.”

Notwithstanding the foregoing events, National made no effort to withdraw its appearance for Chan until August of 1979, some 15 months after it learned of Chan’s employment status at Palos, when the cause was already on the trial assignment call. Its motion to withdraw at that time was denied by the circuit court as coming too late. At some point prior to November 28, 1978, William J. Harte, another of Chan’s personal attorneys, appeared for Chan and subsequently demanded that National settle the suit for $200,000; National refused. Although Employers initially refused to assume Chan’s defense, Chan on March 7, 1980, entered an agreement with Employers under which Employers settled all claims of the Davidovitch estate against Chan for $190,000 and thereby became subrogated to all of Chan’s rights.

Meanwhile, prior to Employers’ settlement, National initiated the present declaratory action on March 2, 1979, seeking only to deny coverage to Chan under its policy. Employers filed a counterclaim on April 30, 1980, alleging that Chan was an insured under Palos’ policy and Employers, as Chan’s subrogee by virtue of the settlement, was entitled to reimbursement for the $190,000 it expended. National thereafter amended its complaint on September 18, 1981, in which it averred that policy coverage by endorsement of “staff members” was a mistake and was never intended by the contracting parties and prayed for policy reformation to exclude such persons.

National and Employers filed cross-motions for summary judgment on July 6, 1982. On August 9, 1982, the circuit court granted Employers’ motion and National’s motion was denied. The court asserted that reformation was prospective only and could not affect Chan’s status because “*** [Chan] relied to his detriment on the coverage.” National’s motion to vacate the summary judgment was denied and judgment for $190,000 entered in Employers’ favor.

National contends that despite apparent coverage for Chan, no actual coverage existed since the parties to the insurance agreement, National and St. George, properly reformed the policy by deleting the mistaken endorsement and substituting the corrected one. The asserted reformation is undated; however, the affidavit to which it is attached is dated February 26, 1982. The reformation of a written contract is premised upon mutual mistake by the contracting parties, among other reasons, in reducing their agreement to writing; reformation permits amendment in order to conform the written instrument to the actual agreement reached. (Harley v. Magnolia Petroleum Co. (1941), 378 Ill. 19, 28, 37 N.E.2d 760.) Such contracts include insurance policies. (17 Couch on Insurance Reformation sec. 66:1, at 280 (2d ed. 1983).) Equity cautions, however, that reformation if misapplied can lead to more damage than that caused by its denial. (Booth v. Cole Corp. (1970), 121 Ill. App. 2d 77, 83, 257 N.E.2d 265.) For that reason, mutual mistake must be clearly and convincingly proven. (All Brake & Drive Unit Service, Inc. v. Peterson (1979), 69 Ill. App. 3d 594, 596, 388 N.E.2d 93.) In the instant case, that burden has been fulfilled in showing that the subject endorsement was mutually mistakenly included by the parties in the policy and was thus a proper subject for reformation. Sister Margaret Wright, president of St. George, averred that the policy was never intended to provide professional liability coverage for nonemployee staff physicians, as did Richard Coglianese, one of National’s underwriters, who swore that Chan was not an intended hospital policy beneficiary.

National’s argument, that the policy should be reformed ab initio, thereby denying coverage to Chan under the erroneous endorsement, however, must be rejected. In L. E. Myers Co. v. Harbor Insurance Co. (1978), 67 Ill. App. 3d 496, 384 N.E.2d 1340, affd (1979), 77 Ill. 2d 4, 394 N.E.2d 1200 (Myers), cited by both parties, the appellate court focused on whether the third person there involved had actually relied upon the erroneously drafted instrument. Harbor, the excess insurance carrier, admittedly had not seen the primary policy until after suit had been brought; it could not have relied upon it in issuing its own policy. (L. E. Myers Co. v. Harbor Insurance Co. (1978), 67 Ill. App. 3d 496, 504.) Therefore, reformation was permitted to relate back. The supreme court likewise stressed Harbor’s lack of notice as to the primary policy’s exact terms at the time Harbor issued its excess policy. (L. E. Myers Co. v. Harbor Insurance Co. (1979), 77 Ill. 2d 4, 10.) Certain factual differences between Myers and the case sub judice are evident. Reformation in Myers resulted in policy coverage; here reformation would deny coverage. One of the parties in Myers seeking reformation was itself thereby incurring a financial obligation, which militated against the possibility of collusion; National here is trying to absolve itself of liability by reformation. In Myers, the reformation was effected while the underlying litigation there was still pending; the instant reformation was not attempted until after the original suit had been already settled.

It is significant that in Myers the third party was an additional insurer; here the third party was an additional insured. Because of this crucial difference, estoppel was not an issue in Myers-, here, because National assumed Chan’s defense early on, and thereby assertedly led him to rely to his injury upon the existence of coverage, estoppel may be raised as an effective defense to the retroactive effect of the reformation with respect to Chan. (Maryland Casualty Co. v. Peppers (1976), 64 Ill. 2d 187, 195, 355 N.E.2d 24.) In the instant case, National conducted Chan’s defense without reserving its rights for more than two years after entering the case. (Gibraltar Insurance Co. v. Varkalis (1970), 46 Ill. 2d 481, 487, 263 N.E.2d 823; Apex Mutual Insurance Co. v. Christner (1968), 99 Ill. App. 2d 153, 161-62, 240 N.E.2d 742.) The case cited by National, New York Life Insurance Co. v. Rak (1961), 30 Ill. App. 2d 86, 173 N.E.2d 603, affd (1962), 24 Ill. 2d 128, 180 N.E.2d 470, is not helpful. There a life insurance policy was reformed to conform to the insurance application made part of the policy, notwithstanding the fact that such reformation took place after the death of the insured, is inapposite to the facts in the case at bar.

A party claiming the benefit of an estoppel must prove reasonable reliance upon the acts or representations of the party sought to be es-topped, without knowledge of or convenient means of learning the true facts. (Allstate Insurance Co. v. National Tea Co. (1975), 25 Ill. App. 3d 449, 462, 323 N.E.2d 521; Meakens v. City of Chicago (1980), 86 Ill. App. 3d 60, 63, 407 N.E.2d 893.) The “true facts” here are that the policy, as it then existed, expressly provided Chan with coverage. National insists that Chan knew National’s defense was based upon the faulty premise that he was Palos’ employee; thus, he had no right to rely upon National’s conduct of his defense in order to assert an estoppel. We disagree. National’s April 30, 1976, letter to Chan, which advised him of his defense by National because he was “a salaried employee at the hospital,” cannot be said to have put Chan on notice as to National’s error; he was in fact a “salaried employee,” a resident radiologist who worked “at” the hospital. He performed the same functions in substitution for the staff radiologist on weekends, and, in fact, provided services for the hospital at the hospital, utilizing the hospital’s equipment and facilities in diagnosing the hospital’s patients. A subsequent letter to Chan from National’s attorneys notes that Chan’s interests are the same as those of Palos, since he was “an employed physician of the hospital.” This letter also fails to specify that Chan was being defended because he was a hospital employee. That Palos required Chan to carry his own liability insurance need not be construed as notice of noncoverage. Notably, Michael Ehrens, Chan’s personal attorney, inquired of National’s attorneys representing Chan as to his hospital employee status. Had Chan indeed been aware of noncoverage, his attorney would not have raised this question. Contrary to National’s contentions, therefore, the undisputed facts do not establish that Chan was aware of National’s mistake.

Estoppel arises only where the party asserting it has relied to its prejudice or detriment on the other party’s conduct. (Old Mutual Casualty Co. v. Clark (1977), 53 Ill. App. 3d 274, 279, 368 N.E.2d 702.) The mere appearance and assumption of the defense by an insurer of its insured does not presume prejudice; where, however, the insured is induced by the insurer’s actions “to surrender his right to control his own defense, he has suffered a prejudice which will support a finding that the insurer is estopped to deny policy coverage.” (Maryland Casualty Co. v. Peppers (1976), 64 Ill. 2d 187, 196, 355 N.E.2d 24.) In Maryland, no prejudice was found where the insurer defended the insured, who was also represented by private counsel, for three months. Contrariwise, in Textile Machinery, Inc. v. Continental Insurance Co. (1980), 87 Ill. App. 3d 154, 409 N.E.2d 1, appeal denied (1980), 81 Ill. 2d 606, the insurer’s mistaken defense of the insured for 2V2 years, in which action the insured’s own attorney did not participate, was held to be sufficiently prejudicial to support an estoppel. The instant facts closely parallel those in Textile, and that case is dispositive.

National defended Chan for over two years before notification of withdrawal. Of what that defense consisted, specifically, is unknown in the absence of the full record. It is nevertheless apparent that the Davidovitch case was not defaulted for any lack of defense nor dismissed for noncompliance with rules or law. The defense was sufficiently vital, substantial and effective to provide a basis for compromise of the ad damnum for less than two-fifths of the amount asked. While National’s attorneys were defending Chan, they acted in his behalf as though policy coverage by National existed, thereby permitting him to rely entirely upon National for his defense. (Gibraltar Insurance Co. v. Varkalis (1970), 46 Ill. 2d 481, 488; Textile Machinery, Inc. v. Continental Insurance Co. (1980), 87 Ill. App. 3d 154, 157.) Chan was not represented in the litigation by his own attorney during this time. William J. Harte did not enter his appearance on Chan’s behalf until some point around November 28, 1978, when he promptly demanded that National settle the suit for $200,000. National refused. Whether Chan would have settled earlier or for a lesser amount, or any, had his personal attorney represented him from the outset of the litigation is moot. The controlling fact, establishing Chan’s surrendering his defense to National, is that for over two years the decision not to settle was made by National’s attorneys. Chan’s right to estop National from denying him coverage was thus sufficiently established.

The remaining issue is whether Employers, by reason of its own conduct in this matter, may stand in Chan’s shoes as his subrogee. National contends that Employers’ knowledge of Chan’s true employment status should have alerted Employers to National’s mistake, since it was “common knowledge in the insurance industry” that a hospital’s liability policy does not extend to cover the professional services of staff physicians. Chan, however, was not a mere “staff physician” attending to his own patients while utilizing hospital facilities, but provided services there only for Palos, doing part-time the same work as its full-time employee. As excess insurer who was not privy to the actual terms of National’s policy, Employers’ knowledge of Chan’s specialized status cannot be said to have put it on notice of National’s error. Moreover, even if Employers had seen the policy, it would have found that coverage was in fact provided to “staff members” and “others performing services for” Palos. In an effort to show Employers’ bad faith, National points to internal memoranda which speculate upon provisions of National’s policy. They suggest no firm knowledge, however, of National’s mistake, and Employers owed no duty to National to inform it otherwise. An employee’s recommendation that Employers “just lay back in the weeds and only communicate with the policyholder alone” was rejected. National was informed of Employers’ excess coverage. As excess insurer, Employers was not obliged to defend Chan in court. There is no indication that Employers affirmatively promoted National’s error. Employers’ actions were consistent with its position as excess insurer and do not bar its subrogation to Chan’s rights.

The record demonstrates no basis upon which to disturb the decision of the circuit court. Accordingly, the judgment of the circuit court is affirmed.

Affirmed.

DOWNING and BERLIN, JJ., concur.


author: JUSTICE JONES

text:
    PHILLIPS AND ARNOLD, INC., Plaintiff-Appellant, v. FREDERICK J. BORGSMILLER, INC., et al., Defendants-Appellees.
    Fifth District
    No. 5 — 83—0378
    Opinion filed April 10, 1984.

      Kimmel, Huffman, Prosser & Kimmel, Ltd., of Carbondale, for appellant.
    Wolff, Jones, Lawder & Elmore, of Murphysboro, for appellee.
   JUSTICE JONES

delivered the opinion of the court:

The plaintiff, Phillips and Arnold, Inc., brought an action in the trial court to recover $15,000 on a contract for $30,000 between plaintiff and the defendants, Frederick J. Borgsmiller and Frederick J. Borgsmiller, Inc. The defendant Frederick J. Borgsmiller was a shareholder of the defendant corporation, which was dissolved shortly before suit was brought. Following a bench trial the court entered judgment ordering that the plaintiff take nothing by its suit. The plaintiff has appealed raising two issues, which we quote:

“1. Whether, under the facts as presented, a valid and enforceable [sic] contract was entered into between the Plaintiff and the Defendant, entitling the Plaintiff to recover the full contract price of $30,000.
2. Whether, under the facts as presented, any defense, enforceable at law, was presented by the Defendant which would preclude the Plaintiff from recovering the full contract price for the work done.”

Plaintiff alleged in its complaint that on October 8, 1980, the plaintiff, called Phillips Lathing Company, Inc., at that time, had entered into a contract with the defendant corporation for the installation of insulation and 30,000 square feet of acoustical ceilings and that the plaintiff had subsequently performed the contract. The defendants concede that the plaintiff and the defendant corporation entered into a contract on October 8, 1980.

The evidence showed that the work was to be performed on a Grandpa Jone’s store to be constructed in Johnston City for the defendant corporation as owner. On or about September 8, 1981, while the building was under construction, the defendant corporation sold the building in question to Grandpa John’s, Inc., which undisputedly had possession and control of the building after that time. When the building was sufficiently constructed that the plaintiff could begin its work on it, the plaintiff did so. Plaintiff’s secretary and treasurer, Paul Phillips, testified that, according to the plaintiff’s records, it had begun work on the building on September 18, 1981. One of the defendants’ witnesses, Ron Williams, testified that the plaintiff had begun work on the building “after the middle of September” in 1981; another of the defendants’ witnesses, Wayne Taylor, testified that the plaintiff had begun work on the building before September 1, 1981. Plaintiff completed the work in October of 1981.

The contract provided for payment of the entire sum of $30,000 “within 30 days of invoice date.” A statement dated October 30, 1981, for the amount of $30,000 was sent to the defendant corporation at P.O. Box 649, Murphysboro, Illinois. Having received no payment, the plaintiff sent a letter dated January 11, 1982, to the defendant corporation at the same address concerning the amount of $30,000 due on the contract and the necessity of the plaintiff’s filing a lien on the property if the bill were not paid within the next 15 days. On January 14, 1982, the plaintiff received a check from Grandpa John’s, Inc., dated November 17, 1981, in the amount of $15,000. Grandpa John’s, Inc., had drawn another check to the plaintiff on the same date in the amount of $15,000, but had never released that check. The plaintiff received no further payment. On April 30, 1982, the defendant corporation was dissolved. Upon dissolution assets of the corporation were distributed to the defendant Borgsmiller, a former director of the corporation. The following July the plaintiff brought suit to recover the remaining $15,000.

The evidence in no way suggests that the work plaintiff performed was unsatisfactory. The defendant Borgsmiller testified that the post office box the defendant corporation had used, that is, the box to which the plaintiff had sent the statement of October 31, 1981, and the letter of January 11, 1982, was not used by the defendant corporation after September 8, 1981, but was used, instead, after that time by Grandpa John’s, Inc. The defendant Borgsmiller had not notified plaintiff of the change of address and was not aware that any employee of the defendant corporation had done so. The defendant Borgsmiller indicated that he had received no correspondence from plaintiff after September 8, 1981, and had become aware that the plaintiff had not been paid when suit was brought against him. The defendant Borgsmiller testified that he had not instructed the plaintiff not to commence work on the project.

Wayne Taylor, a carpenter who had been employed by the defendant corporation from September of 1980 to September of 1981 and by Grandpa John’s, Inc., from September of 1981 to May of 1982, testified that he had superintended the construction of the store in question, which had commenced around June of 1981, and that during the construction by plaintiff of the accoustical ceilings, when the witness was employed by Grandpa John’s, Inc., he had had a conversation with Paul Phillips in which “Paul asked me if I thought he would have any problems getting his money being it had changed hands.” Asked the question, “At that time did he indicate who he was concerned about getting his money from?” The witness answered, “The new man that had taken over.” Later, on cross-examination, the witness stated that Paul Phillips had not expressly referred to Grandpa John’s, Inc., but that the witness “took it for granted that he was talking about Grandpa Johns [sic].” The witness testified concerning defendant’s exhibit No. 1, a copy of a purchase order dated November 9, 1981, and signed by the witness, from Grandpa John’s, Inc., to the plaintiff with respect to “contract on putting [sic] in ceiling tile, [sic] at. [sic] G.J.J.C.” He testified to having submitted the order, which indicates a “unit cost” of $30,000, to a secretary for Grandpa John’s, Inc. He had, he said, no knowledge of what had happened to the original or any copies of the purchase order after having given it to the secretary. The secretary did not testify. He testified further that as an employee of the defendant corporation he had had the authority to accept proposals for construction and to submit them to the defendant Borgsmiller and that as an employee of Grandpa John’s, Inc., he had had the same kind of authority for that corporation. He stated that he had obtained the proposal from plaintiff that was accepted by the defendant Borgsmiller and that he had not obtained such a proposal from the plaintiff while he was an employee of Grandpa John’s, Inc. In his position, he said, he was aware of any contracts between Grandpa John’s, Inc., and contractors working on new construction and that he was unaware of any contracts whatever between the plaintiff and Grandpa John’s, Inc.

In rebuttal Paul Phillips denied having talked with Wayne Taylor at the job site about payment for the work being performed. He testified that, as one of the plaintiff’s officers, he was unaware of any agreement between the plaintiff and Grandpa John’s, Inc., concerning the work at the store in Johnston City. He stated that he had not seen the purchase order about which Wayne Taylor had testified until the afternoon of trial.

Upon the conclusion of trial the court stated that it was going to reserve ruling for seven days. In response to a question from counsel for plaintiff concerning novation, the court responded:

“Whether he has agreed to it or not [sic] but you can understand from me there is no novation. I don’t think that there is any question. I just don’t think so. You will hear from me within seven days on this.”

In its written judgment the trial court made several findings of fact, including the finding that plaintiff’s predecessor, Phillips Lathing Company, Inc., had entered into a contract with the defendants on October 8, 1980; to install insulation and acoustical tile in the Grandpa John’s store in Johnston City for $30,000. In paragraph five of its findings the court stated:

“Although there is some evidence that Mr. Phillips had a conversation with Mr. Wayne Taylor indicating that he was aware of the transfer of ownership, there is no evidence as to the date of the conversation. The evidence is clear that no one on behalf of FREDERICK J. BORGSMILLER officially notified Phillips Lathing Company, Inc. that the contract between FREDERICK J. BORGSMILLER, INC. and FREDERICK J. BORGSMILLER and Phillips Lathing Company, Inc. was being cancelled or that FREDERICK J. BORGSMILLER, INC. and FREDERICK J. BORGSMILLER would not be responsible for the amount of the contract. Also, there is no evidence that at any time anyone from Phillips Lathing Company, Inc. notified FREDERICK J. BORGSMILLER, INC. or FREDERICK J. BORGSMILLER that they were looking to Defendants for payment of the contract.”

In paragraph nine of the findings, the court stated that “[b]ased upon all of the evidence before the Court, it is the finding of the Court that the work done by Plaintiff in September and October of 1981 was not in performance of the proposal and acceptance of October 8, 1980.” The court was silent on the question of novation.

In their brief the defendants maintain that “the Contract performed by the Plaintiff was performed for another and not for the Defendants and that the Defendants’ Contract may still exist. The findings of the Trial Court and its order in this regard are clearly not against the manifest weight of the evidence.” In the alternative the defendants contend that they proved the affirmative defense of novation, saying, “[T]he decision of the Trial Court that there was a novation is also fully sustained by the evidence of the record.”

We must disagree with the defendants’ contention that the work plaintiff performed was pursuant to a contract with another and not the contract of October 8, 1980, between plaintiff and defendants. The proposal together with its acceptance, which is included in the record, shows that the materials specified and the labor were for “Grandpa John’s” in Johnston City. The testimony showed that the items specified were installed in the Grandpa John’s store under construction there. No one informed the plaintiff not to proceed according to the agreement, and plaintiff did so at the appropriate time in the construction of the building. Wayne Taylor, who, by virtue of his position with Grandpa John’s, Inc., would have known of any contract for construction between the plaintiff and that corporation, knew of none, and Paul Phillips testified similarly that there was none. There was no evidence that Grandpa John’s, Inc., had sent the purchase order of November 9, 1981, to the plaintiff. The plaintiff sought payment only from the defendant corporation, addressing both the statement and the subsequent -letter to the postal box it must have believed the corporation still used, having received from defendant no notice of a change of address. Even if the trier of fact chose to believe the testimony of Wayne Taylor rather than that of Paul Phillips, the evidence showed only that the plaintiff had knowledge of the transfer of ownership at some unknown time during the course of its performance. There is no evidence of when the plaintiff actually learned of the transfer and, hence, no evidence of how long the plaintiff worked on the building in the knowledge that the ownership of it had been transferred. Evidence that the plaintiff, possessed of the knowledge of the transfer, continued to work on the building for an unknown period of time, whether alone or coupled with the other evidence in the case, is inadequate to show that the plaintiff was working at any time pursuant to a contract, either express or implied, with Grandpa John’s, Inc.

Findings of the trier of fact will not be disturbed on appeal unless they are plainly contrary to the manifest weight of the evidence, that is, unless conclusions opposite to those reached by the trier of fact are plainly evident. (Emmenegger Construction Co. v. King (1982), 103 Ill. App. 3d 423, 431 N.E.2d 738.) Our review of the record in the case at bar persuades us that the trial court’s finding in paragraph nine of the judgment, namely, that the work done by the plaintiff in September and October of 1981 was not in performance of the proposal and acceptance of October 8, 1980, is plainly contrary to the manifest weight of the evidence.

A novation is the substitution by mutual agreement of one debtor or of one creditor for another, whereby the old debt is extinguished, or the substitution of a new debt or obligation for an existing one which is thereby extinguished. (Printing Machinery Maintenance, Inc. v. Carton Products Co. (1957), 15 Ill. App. 2d 543, 147 N.E.2d 443; Lechleiter v. Lechleiter (1947), 330 Ill. App. 517, 71 N.E.2d 845.) Whether a novation has been accomplished depends upon the intention of the parties. (Lechleiter.) The essential elements of a novation are a previous, valid obligation; a subsequent agreement of all the parties to the new contract; the extinguishment of the old contract; and the validity of the new contract. (Faith v. Martoccio (1974), 21 Ill. App. 3d 999, 316 N.E.2d 164.) To constitute novation by the substitution of debtors, it is essential that the creditor shall have consented to the substitution of a new debt and debtor and shall have agreed to release his original debtor and to accept in his stead the new party. (Burnett v. West Madison State Bank (1940), 375 Ill. 402, 31 N.E.2d 776.) The assent of the creditor to the novation may be express or implied from the facts and circumstances attending the transaction or from the subsequent conduct of the creditor. (Burnett.) However, that a creditor has knowledge of the assumption of his debtor’s obligation by a third person does not necessarily establish such assent. (Walker v. Wood (1897), 170 Ill. 463, 48 N.E. 919.) Nor does partial payment of the debt by the third person to the creditor, alone or in combination with the creditor’s knowledge of the third person’s assumption of the debtor’s obligation, necessarily establish such assent on the part of the creditor (Walker) or constitute a novation as a matter of law (see Burnett). Otherwise stated, the rules concerning a creditor’s knowledge of a third person’s assumption of the debtor’s obligation and a third person’s partial payment of the obligation appear in 6 A. Corbin, Contracts sec. 1297, at 214 (1962):

“When a third party contracts with a debtor or obligor to assume his obligation and perform it in his place, the mere acquiescence in such an assumption by the creditor (obligee) is not an assent to a novation, nor is his mere acceptance of a part payment made by the third party.”

Novation is an affirmative defense. (Burnett.) The party seeking to prove the novation has the burden of proof and must establish it by a preponderance of the evidence. (Greenbaum & Browne, Ltd. v. Braun (1980), 88 Ill. App. 3d 210, 410 N.E.2d 303.) It is for the trier of fact to determine from all the facts and circumstances of the case whether the creditor has impliedly assented to the discharge of the original debtor. (Walker.) A court of review will not disturb the findings of the trial court unless such findings are clearly contrary to the probative force of the evidence. (See Faith v. Martoccio (1974), 21 Ill. App. 3d 999, 316 N.E.2d 164.) In the absence of clear proof of novation, the third person’s assumption of the debt would make the third person merely an additional debtor. (See Burnett.) By accepting part payment from the additional promisor, the creditor does not relinquish his claim against the original debtor. Burnett.

We must likewise disagree with the defendants’ contention that they proved their affirmative defense of novation. The evidence is insufficient to show either an intention on the part of the plaintiff to substitute Grandpa John’s, Inc., as debtor or an agreement between the plaintiff and Grandpa John’s, Inc., that created a new debt extinguishing the old one. What we have said with regard to the defendants’ contention that the plaintiff’s work was in performance of a contract with Grandpa John’s, Inc., applies equally to the assertion of any agreement between the plaintiff and Grandpa John’s, Inc., creating a new debt that extinguished the old one. With respect to evidence that might indicate the plaintiff’s intent to substitute Grandpa John’s, Inc., as debtor, the plaintiff’s knowledge of the transfer of ownership at some time during the course of its work on the building is no more persuasive in this context than it was in our prior consideration. Furthermore, the plaintiff’s acceptance of partial payment from Grandpa John’s, Inc., may be seen as consistent with a view by the plaintiff of that corporation as an additional debtor rather than as a substituted one, given the paucity of other evidence of the plaintiff’s intent to substitute it as debtor.

The trial court indicated immediately after trial that it did not think a novation had occurred. The defendants appear to have concluded that the result reached by the trial court in its judgment implied a finding of novation and a changed mind on the part of the trial court. Although the judgment of the trial court does not address the question of novation, its findings are not, however, inconsistent with the view the court had expressed earlier. The oral observation of the court concerning novation was, we think, entirely correct. On the basis of the record presented for review, the trial court’s oral statement was in accord with the evidence, the defendants having failed to establish novation by a preponderance of the evidence even when all of the evidence they offered is considered in the light most favorable to them.

For these reasons we reverse the judgment of the trial court, and, pursuant to our power under Supreme Court Rule 366 (87 Ill. 2d R. 366), we hereby enter judgment for the plaintiff and against the defendants in the amount of $15,000 plus the costs of suit.

Reversed; judgment entered for plaintiff and against defendants in the amount of $15,000 plus the costs of suit.

WELCH, P.J., and EARNS, J., concur.


author: JUSTICE KASSERMAN

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. TERRY STEVEN CAMPBELL, Defendant-Appellant.
    Fifth District
    No. 82 — 255
    Opinion filed April 10, 1984.
    Rehearing denied May 9, 1984.

      Randy E. Blue and Susan A. Diehl, both of State Appellate Defender’s Office, of Mt. Vernon, for appellant.
    Gerald A. Sims, Jr., Special Prosecutor, of Pinckneyville (Stephen E. Norris and Raymond F. Buckley, Jr., both of State’s Attorneys Appellate Service Commission, of counsel), for the People.
   JUSTICE KASSERMAN

delivered the opinion of the court:

Defendant, Terry Steven Campbell, has perfected this appeal from the trial court’s finding that he was guilty of criminal contempt of court. Defendant, who was charged with the offense of rape, was tried on two prior occasions in Jefferson County, and both trials resulted in mistrials because the jury was unable to agree upon a verdict. The cause was called for trial for the third time, and the jury was selected on April 6, 1982, and impanelled at 11 a.m. on April 7, 1982. Within the next few hours, defendant filed a civil complaint seeking recovery of: (1) $20,000 compensatory damages and $500,000 punitive damages from the assistant State’s Attorney who prosecuted the three trials and (2) $20,000 compensatory and $1,000,000 punitive damages from the complaining witness. The trial court was informed of the filing of the civil suit, and, on motion of the State and over defendant’s objection, the court ordered the rape trial jury sequestered at the Mt. Vernon Holiday Inn for the remainder of the trial. The third trial concluded with the jury acquitting defendant of rape. Thereafter, on April 10, 1982, before the jury was discharged, the trial court served upon defendant and his attorney a rule to show cause, charging each with contempt of court. The court also specified: “Bond not to be refunded at this time.” Subsequently, the contempt charge against defendant’s attorney was dismissed with leave to reinstate and is not involved in this appeal.

After a hearing on May 7, 1982, at which evidence and arguments of counsel were presented both in support of the contempt charge and by defendant, the court found defendant guilty of contempt as charged. The court thereupon sentenced defendant to 90 days in jail and ordered him to pay a fine of $3,275.29, which apparently represented the costs of jury sequestration plus $200. The fine was ordered to be paid from defendant’s bail deposit, with the $575.29 unpaid balance to be paid within six months. Defendant was released from custody on May 10, 1982, after he posted an appeal bond in the sum of $5,000 by depositing $500 cash. Defendant has perfected this appeal, contending that he was not proved guilty of contempt and that, if he was, the sentence was inappropriate.

The record indicates that prior to the first trial, the State moved in limine to prohibit defendant from introducing any evidence regarding any prior sexual relations between defendant and the complaining witness without leave of court after an appropriate offer of proof was made in camera to the trial court. Prior to the third trial, the State moved in limine for an order to prohibit defendant from mentioning or eliciting mention of the two prior trials and their outcomes. Both motions were granted.

Defendant alleged in his civil complaint that he had been tried twice for rape, both trials having ended in hung juries; that the prosecutor had, “with malice and forethought,” brought him to trial, knowing there was insufficient evidence to sustain a conviction, in order to embarrass, harass, and harm him; and that the complaining witness had fabricated her account of the acts alleged “to save herself the embarrassment resulting from adultery, unfailthfulness [sic], and total lack of moral character had the true incidents of her relationship with [defendant] been admitted to.”

The rule to show cause directed to defendant charged defendant with “having filed certain lawsuit [sic] on April 7, 1982 being cause No. 82 L 16 to hinder and obstruct this court in the administration of Justice and/or lessen the dignity of the court.”

At the contempt hearing which was held on May 7, 1982, Emma Gockel, deputy circuit clerk, testified that defendant and William Kruger, an arcade owner and a part-time employee of defendant’s rape trial counsel, delivered for filing defendant’s civil complaint against the assistant State’s Attorney and the complaining witness in the rape trials. According to Ms. Gockel, there were no members of the press in the clerk’s office at that time. She further testified that she had not furnished any copies of defendant’s complaint to the press, although members of the press normaEy knew where to look, which they were free to do because the files were open to the public.

William Kruger testified that he first became aware of the civil complaint just minutes before it was filed when defendant handed it to him on the second floor of the county courthouse and asked the witness how to file it. Mr. Kruger related that defendant paid the filing fees. According to Mr. Kruger, it was he, and not defendant, who gave a copy of the complaint to a reporter for the Mt. Vernon Register-News at about 1 p.m. on April 7, 1982, the day it was filed. The witness stated that he had no knowledge of defendant having contacted the press regarding the civil suit.

During defendant’s testimony, when he was asked why he had filed the civil complaint, defendant replied that he had been out of work almost a year and a half and needed the money. Asked why he selected the particular time that he did to file the complaint, defendant stated that he had considered filing sooner but that he did not have the $92 filing fee until after noon on April 7, 1982. Defendant stated that he had lived in Jefferson County all his life and, as far as he knew, the Register-News was the county’s only daily paper. Defendant related that he had consulted his attorney regarding the civil complaint just after hiring him and that his attorney had advised him that “it probably wouldn’t be the proper thing to do until after the trial.” According to defendant, his relatives had advised him not to consult with his attorney about the civil complaint. Defendant stated that he knew that the criminal case was being covered intensively by the press and knew that the press would probably report anything related to the criminal case.

There was also testimony concerning the costs incurred to feed and house the jury at the Holiday Inn while sequestered, including overtime pay for the sheriff’s deputies on duty. Included in the record on appeal, as exhibits in evidence at the contempt hearing, are bills from Holiday Inn and two sheriff’s deputies and a copy of the April 8, 1982, Mt. Vernon Register-News. The latter exhibit includes two pertinent front-page stories. The more lengthy of the two set forth, inter alia, that there had been two previous trials of the criminal charge resulting in hung juries. This story also set forth summaries by both the prosecutor and defense counsel of their respective views as to what the evidence at the third trial would show. The summary attributed to defense counsel referred to prior sexual relations between defendant and the complaining witness.

The second, shorter story concerned defendant’s civil complaint. It referred to the two prior trials and the results thereof and quoted the civil complaint allegations regarding the complaining witness’ motivation in prosecuting defendant in order to save herself from the embarrassment of having committed adultery.

On appeal, defendant first contends that the record does not establish that he was proved to be guilty of “criminal contempt by proof beyond a reasonable doubt.” This issue raised by defendant on appeal requires a consideration of the fundamental aspects of contempt proceedings; and, in this regard we note that since there is no statutory provision relating to the conduct of contempt proceedings, they are governed by common law.

In People ex rel. Kunce v. Hogan (1977), 67 Ill. 2d 55, 59-60, 364 N.E.2d 50, 51, the court, quoting from In re Estate of Melody (1969), 42 Ill. 2d 451, 452, 248 N.E.2d 104, 105, stated that contempt of court has been defined as being conduct calculated to: (1) embarrass, hinder or obstruct a court in its administration of justice or to derogate from the court’s authority or dignity, or (2) to bring the administration of law into disrepute. The Illinois courts have drawn a distinction between “criminal” contempt and “civil” contempt and have indicated that criminal contempt is to be distinguished from civil contempt solely by reason of the fact that in the former the purpose is to punish the alleged contemnor for his past actions while in civil contempt the court is attempting to coerce compliance with an order of the court. (See Harvey v. Carponelli (1983), 117 Ill. App. 3d 448, 452, 453 N.E.2d 820, 824; Pabst Brewing Co. v. Brewery Workers Local Union No. 77 (7th Cir. 1977), 555 F.2d 146, 149.) Furthermore, the cases have drawn a distinction between “direct” and “indirect” contempt of court and have indicated that such distinction results in a difference in the proof required to establish the guilt of the alleged contemnor. While direct contempt, having taken place in the presence of the judge or in an integral part of the court, requires no further proof, evidence must be introduced to establish a defendant’s guilt of an alleged indirect contempt, which is based on acts alleged to have taken place out of the presence of the judge and not within an integral part of the court. As stated by the court in People ex rel. Kunce v. Hogan (1977), 67 Ill. 2d 55, 364 N.E.2d 50:

“Direct criminal contempt may occur in either of two ways. The contemptuous acts may all take place in the presence of the judge so that all of the elements of the offense are within his personal knowledge. Alternately, the direct contempt may be committed out of the immediate physical presence of the judge but within an integral part of the court. [Citation.]” (67 Ill. 2d 55, 60, 364 N.E.2d 50, 51.)

In the case at bar, it is obvious that the trial court was proceeding against defendant on a charge of criminal contempt of court because the court’s purpose in the proceeding was to punish defendant for past conduct rather than to coerce compliance with an order of the court.

Defendant, citing People v. Javaras (1972), 51 Ill. 2d 296, 299, 281 N.E.2d 670, 672, first urges that his alleged conduct could not be considered to be direct contempt of court and that, as a consequence, proof of his guilt must be established beyond a reasonable doubt. If in fact the instant proceedings must be viewed as a charge of indirect criminal contempt, the decision of the court in People v. Edwards (1979), 69 Ill. App. 3d 626, 629, 387 N.E.2d 969, 971, dictates that in order to sustain a finding of guilty, the evidence is required to establish a defendant’s guilt beyond a reasonable doubt. Regarding the issue of whether defendant’s alleged conduct in the instant case constituted a “direct” contempt or an “indirect” contempt, it is noteworthy that the court in People ex rel. Kunce v. Hogan stated:

“The very act of filing a document [with the court] which tends to produce a result within the above-stated Melody definition [42 Ill. 2d 451, 452, 248 N.E.2d 104, 105] constitutes a contempt. ***
*** [T]he failure of the prosecution to affirmatively prove the state of mind of the defendant is not fatal.” (67 Ill. 2d 55, 60, 364 N.E.2d 50, 52.)

Thus, it is apparent that our supreme court would view defendant’s conduct in filing the civil complaint in the case at bar as being per se an act of direct criminal contempt of court. Nevertheless, we deem it unnecessary for us to determine whether the conduct of defendant in the instant case could be the basis of a direct contempt proceedings. It is our conclusion that defendant’s guilt of criminal contempt of court was established beyond a reasonable doubt.

It is noteworthy that the court in the case at bar, as did the court in People ex rel. Kunce v. Hogan, conducted the proceedings as a charge of indirect criminal contempt, thus permitting the introduction of evidence both in support of and in defense of the charge. Defendant concedes in his brief that before the matter was set for hearing, defendant was furnished with a copy of the show cause order, was advised that there was probable cause to believe defendant was in contempt of court, and was advised of his rights. Defendant makes no claim that he was denied any of his procedural or substantive due process rights so far as the adjudicatory process of his contempt charge was concerned, and we find none.

We first note that the general doctrine that a reviewing court will ordinarily sustain a proper ruling of a trial court although the ground assigned for the ruling was erroneous does not apply in the review of direct contempt orders. An order imposing punishment for direct contempt must be sustained upon the ground upon which it is imposed, or not at all. Otherwise, a contempt judgment might be affirmed upon the basis of conduct which the trial court did not find offensive. (People v. Miller (1972), 51 Ill. 2d 76, 78, 281 N.E.2d 292, 293.) We conclude that the rationale of Miller is applicable to the instant indirect contempt proceedings.

Although the grounds assigned by the trial court in the case at bar for the finding of contempt are not set forth in the written contempt order, the trial court’s comments at the conclusion of the contempt hearing were in part as follows:

“*** ]y[n Campbell admits that this particular third trial was covered intensively by the Mt. Vernon Register News and other newspapers perhaps and that he had talked to the reporter up here by the name of Mr. Felts who covered the story at least from the beginning he did and somehow a copy of the lawsuit, file-stamped and everything and next day it appeared in the paper. [Sic.] The Court feels that the law is that the proven man’s intention by the surrounding acts, circumstances and facts, I think this case clearly indicates that the lawsuit was filed for one purpose or multiple purposes basically one overall purpose and that was to obstruct the administration of justice by one filing a lawsuit to influence the jury which he knew of some of them from the very next day in the newspaper. [Sic.] Did it to emotionally shake up and disturb the Assistant State’s Attorney because who enjoys being sued for half a million dollars? And did it — doing the same thing to the alleged victim and I have one thought of the fact it is bringing the State’s Attorneys office of this county in a bad light with the citizens and perhaps [the prosecutor] in particular. *** I do have one particular comment on one thing that any action from malice does not lie prior to a finding of not guilty at the time it was filed. [Sic.] In that respect I think considering only it had no validity whatsoever at the time the lawsuit was prepared on April 5th, at least that is what it is dated and signed by the Defendant pro se and filed by him. *** But the most telling thing of all today is the fact when you presented this lawsuit you admitted telling [defense counsel] about it beforehand sometime beofre [sic], but at the time you were preparing and ready to file it you [sic] kin folks or relatives told you not to consult your attorney. Why? Because you knew any attorney would have told you not to file it at that time. You knew it was wrong to do it, that’s all. ***.”

Thus, it appears from the comments of the trial court that defendant was found guilty of criminal contempt of court for filing the civil complaint for the purpose of obstructing the administration of justice by influencing the jury in the rape case and by intimidating the assistant State’s Attorney and complaining witness.

The court in People ex rel. Kunce v. Hogan was presented with a case similar to the case at bar; however, it involved a contempt proceedings arising out of the filing of a civil suit by the attorney for a criminal defendant. The court there determined that the trial court did not err in finding that the complaint in the civil case was not filed in good faith but was filed by defendant to hinder, delay, or impede the administration of criminal justice, and to interfere with the judicial process and to embarrass the court so as to lessen the court’s dignity and authority. Defendant in the instant case seeks to distinguish the decision in People ex rel. Kunce v. Hogan by pointing out that in that case the defendant, who was the attorney for the defendant in a criminal case, filed a civil suit against the presiding judge in the criminal proceedings, two other judges of the circuit court, and the State’s Attorney of the county in which the criminal case was pending for sentencing. Defendant urges that the case at bar should be distinguished because here the judge presiding over defendant’s rape trial was not made a defendant in the civil suit. Since the prosecuting attorney and complaining witness were made defendants in the civil suit in the instant case, we do not perceive any distinction arising from defendant’s decision not to include the presiding judge as a party defendant.

The evidence adduced at the hearing on the rule to show cause establishes that defendant disclosed the civil complaint that he was about to file to a nonlawyer employee of his defense counsel; that he filed the civil suit during his criminal trial; and that the resulting newspaper publication of the allegations of the civil suit and the facts surrounding its filing was calculated by defendant to embarrass, hinder or obstruct the criminal court in its administration of justice and to derogate from its authority and dignity, and to bring the administration of law into disrepute. We agree with the trial court that the acts found to have been committed by defendant were contemptuous. The obvious purpose and effect was to intimidate the complaining witness and the assistant State’s Attorney in the prosecution of the rape charge. Counsel are officers of the court, and threatening opposing counsel in order to intimidate counsel with respect to the handling of a pending case is contempt of court because it tends to deprive the court of the services of one of its officers. (In re Bowers (1918), 89 N.J.Eq. 307, 309, 104 A. 196, 197.) Likewise, it may be contempt to threaten or to intimidate a witness. (See Anderson v. Williard (1971), 11 N.C.App. 70, 75, 180 S.E.2d 410, 413-14, cert. denied (1971), 279 N.C. 348, 182 S.E.2d 580.) That defendant intended to intimidate the complaining witness and the assistant State’s Attorney by filing the civil contempt complaint is shown, not only by the naming of those two individuals as civil defendants, but more conclusively by the timing of the filing of the complaint, i.e., as the third trial commenced. As such acts pertain to the complaining witness, that such was their intended effect is further shown by the allegation as to her “adultery, unfaithfulness [sic] and total lack of moral character ***.” This allegation was without significance with respect to the issues-raised by the complaint and could only have been stated to disgrace and intimidate her. See State ex rel. Porter v. First Judicial District (1950), 123 Mont. 447, 455-56, 215 P.2d 279, 284.

Likewise, the disclosure of alleged prior sexual relations between defendant and the complaining witness, which had been the subject of the trial court’s motion in limine, was an act of direct criminal contempt of court, designed to circumvent the court’s order. These facts appeared in both of the newspaper articles to which we have previously alluded; one reference was attributed to defendant’s civil complaint, the other to defendant’s rape trial defense counsel, who was also charged with contempt. The. evidence at the contempt hearing established that defendant realized that his civil complaint would be reported by the local newspaper without action on his part beyond the filing of the complaint. The natural effect of such publicity would be to disseminate the allegation as to prior sexual relations within the community and possibly to the unsequestered jury. Thus, on this basis, we conclude that defendant was properly found guilty of criminal contempt for wilful disobedience of the trial court’s order concerning references to the complaining witness’ prior sexual contact.

Defendant argues that the State has failed to prove: (1) the state of mind of the assistant State’s Attorney and the complaining witness as a result of being sued, and (2) that the jury would have learned of the matters in the newspaper which were subject of the motions in limine. We conclude that it sufficed to prove defendant’s overt acts evidencing a contemptuous intent, without proof that the desired effeet occurred. (See People ex rel. Kunce v. Hogan; State v. Weinberg (1956), 229 S.C. 286, 292, 92 S.E.2d 842, 845; Brewer v. State (1936), 176 Miss. 803, 809, 170 So. 540, 541; 17 C.J.S. Contempt sec. 8b (1963).) It has been said that failure of the design becomes immaterial except with respect to the punishment for contempt. (Brewer v. State.) In any event, the effects which defendant contends were not proved could properly have been inferred from the mere filing of the complaint under the existing circumstances thereof. Cf. People ex rel. Kunce v. Hogan (1977), 67 Ill. 2d 55, 60, 364 N.E.2d 50, 52.

We conclude, therefore, that the evidence adduced in the case at bar establishes beyond a reasonable doubt that defendant was guilty of criminal contempt of court; and we now consider the issues raised by defendant regarding the penalty assessed.

Defendant contends that since he neither received a jury trial on the contempt charge nor waived one, the trial court should not have sentenced him to a fine in excess of $500. We agree. (County of McLean v. Kickapoo Creek, Inc. (1972), 51 Ill. 2d 353, 356, 282 N.E.2d 720, 723; see also Cheff v. Schnackenberg (1966), 384 U.S. 373, 380, 16 L. Ed. 2d 629, 634, 86 S. Ct. 1523, 1526.) The State urges that Kickapoo Creek was implicitly overruled in Muniz v. Hoffman (1975), 422 U.S. 454, 477, 45 L. Ed. 2d 319, 335-36, 95 S. Ct. 2178, 2190-91. We view Muniz as not being controlling in the case at bar but as creating an exception to the general rule set forth in Cheff. The exception has no application here. The Muniz court concluded that a fine in excess of $500 (there, $10,000) for contempt was minor since the contemnor was an organization having about 13,000 members. We conclude that the instant fine must be reduced to $500.

Defendant further contends that the trial court erred in failing to consider defendant’s financial means to pay the fine imposed. Defendant has waived this issue by failing to bring it to the attention of the trial court. (See People v. Wilson (1980), 87 Ill. App. 3d 544, 549, 408 N.E.2d 1209, 1213, cert. denied (1981), 451 U.S. 989, 68 L. Ed. 2d 848, 101 S. Ct. 2327-28; People v. Pearson (1982), 108 Ill. App. 3d 241, 244, 439 N.E.2d 31, 33.) However, had the defendant preserved this issue, the record sufficiently discloses defendant’s ability to pay the fine assessed. Defendant was able to obtain the $92 in filing fees for the civil complaint on April 7, 1982. He paid $500 cash bond on the contempt charge on May 10, 1982, at which time his total bail deposits equalled $3,500. Had defendant been convicted of rape, his bail deposit on that charge could have been retained under the provisions of section 110 — 7(i) of the Code of Criminal Procedure of 1963 to pay any fine assessed. Ill. Rev. Stat. 1981, ch. 38, par. 110 — 7(i).

Finally, defendant contends that the trial court erred in failing to afford defendant an opportunity to offer evidence in mitigation of punishment, citing People ex rel. Kunce v. Hogan. In that case, after a contempt hearing, the trial court took the issue of guilt under advisement, then issued a written order stating his finding of guilt and the sentence imposed therefor. Thus, in Kunce, as in the instant case, the contemnor was not afforded an opportunity to present either evidence or argument in mitigation of punishment. We recognize that here, unlike Kunce, defendant at least had opportunity to object as the trial court orally proceeded to sentence him. However, that difference notwithstanding, we view Kunce as requiring the trial court to afford the defendant an opportunity to present mitigating evidence or argument prior to imposing a sentence of confinement for contempt, unless the charges are prosecuted as a direct criminal contempt permitting the summary determination of guilt and imposition of sanctions without a hearing. Accordingly, we reverse the jail sentence imposed by the trial court.

For the foregoing reasons, that portion of the judgment of the circuit court sentencing defendant to confinement for a term of 90 days is reversed and the fine imposed in the instant case is reduced to $500.

Affirmed and modified in part; reversed in part.

JONES and HARRISON, JJ., concur.


author: JUSTICE MILLER

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. JOSEPH R. EADES, Defendant-Appellant.
    Fourth District
    No. 4 — 83—0344
    Opinion filed April 4, 1984.

      Daniel D. Yuhas and Karen Munoz, both of State Appellate Defender’s Office, of Springfield, for appellant.
    Ronald C. Dozier, State’s Attorney, of Bloomington (John X. Breslin, of State’s Attorneys Appellate Service Commission, of counsel), for the People.
   JUSTICE MILLER

delivered the opinion of the court:

The defendant, Joseph Eades, was convicted in a bench trial of criminal damage to property for vandalizing some handicap parking signs owned by the town of Normal. He was placed on probation for one year, with 90 days’ periodic imprisonment in the county jail, and ordered to pay restitution of $131.76 to the town of Normal and a $750 fine. On appeal the defendant argues that the record fails to show that he made a knowing waiver in open court of his right to a jury trial, that the State failed to prove his guilt beyond a reasonable doubt, and that the trial court imposed the financial conditions of the probation order "without first determining his ability to pay them. We affirm.

The record contains only two references to the defendant’s waiver of his right to a jury trial. One is a form that expresses the defendant’s intentions to plead not guilty to the charge and to waive a jury trial; it bears the defendant’s signature and is dated December 3, 1982, and file stamped December 9, 1982. The other reference is contained in a docket entry for December 6, 1982, which says, “Jury waiver filed,” and goes on to give the date scheduled for the defendant’s bench trial. The defendant was represented by counsel throughout this period and also at trial.

The defendant argues that these references in the record are insufficient to show that he made a valid waiver of this right. Section 103 — 6 of the Code of Criminal Procedure of 1963 says, “Every person accused of an offense shall have the right to a trial by jury unless understandingly waived by defendant in open court.” (Ill. Rev. Stat. 1981, ch. 38, par. 103 — 6.) Compliance with the statute cannot be found in or inferred from a silent and otherwise complete record. (People v. Ceaser (1974), 17 Ill. App. 3d 650, 307 N.E.2d 753.) The defendant cites People v. Clay (1974), 19 Ill. App. 3d 296, 311 N.E.2d 384, and People v. Gaston (1971), 132 Ill. App. 2d 900, 270 N.E.2d 846, for the proposition that a jury waiver form signed by a defendant is no improvement on a silent record, that the form does not by itself show compliance with section 103 — 6.

The State argues that the defendant has waived this issue because he did not raise it in his post-trial motion. We choose instead to treat it on its merits, for any error in this regard is arguably an exception to the waiver rule.

In People v. Oatis (1977), 47 Ill. App. 3d 229, 361 N.E.2d 1146, this court held that a defendant’s waiver of his right to a jury trial was established by a signed waiver appearing in a record that did not contain the transcripts of any pretrial proceedings. The defendant was basing his attack on the jury waiver on the insufficiency of the record, and the court observed that it was the duty of the defendant, as the party bringing the appeal, to supply the reviewing court with an adequate and complete record. The court then said:

“Accordingly, we determine that in a criminal case when the common law record shows that the defendant has waived jury trial, on appeal after a bench trial, a defendant claiming error in the jury waiver must cite the specific error that occurred and substantiate that claim by the presentation of a sufficient record. If the claim is that the jury waiver was not made in open court or that it was not understandingly made, the record should be sufficient to cover all proceedings which involved the waiver.” (47 Ill. App. 3d 229, 232, 361 N.E.2d 1146, 1148.)

The circumstances and argument here are similar. The defendant argues only the inadequacy of the record — that it fails to show his waiver of the right to a jury trial. The record contains transcripts only of the trial and of the sentencing hearing; the only memorials of the pretrial proceedings are contained in the common law record, with its docket entries and filed documents. As Oatis suggests, we must distinguish between an incomplete record, such as the one here, and a complete record, which was present in both Clay and Gaston. In each of those cases the appellate court had before it a transcript of the court proceeding in which the defendant was believed to have waived his right to a jury trial, and the failure to satisfy section 103 — 6 was evident from the transcript.

The record here is incomplete. It contains no transcript or report of any pretrial proceeding. Thus, we have nothing before us except the signed jury waiver form to show whether the defendant, in open court, understanding^ waived his right to a jury trial, and nothing in the record contradicts the validity of the form. Under the circumstances here, the signed form alone establishes the defendant’s valid waiver. Oatis.

The defendant also argues that the State failed to prove his guilt for the offense beyond a reasonable doubt. Specifically, the defendant questions the identification of him by the State’s eyewitness and asserts the defense of alibi that he and some friends testified to at trial.

Robert Keith, who witnessed part of the occurrence, testified in the State’s behalf. On the night of the offense, August 28-29, 1982, Keith was serving as a watchman at the Tent of Flowers in Normal. The Tent of Flowers, as its name suggests, was an outdoor tent covering a display of flowers. Keith was there that evening guarding the inventory. He testified that around 10 or 11 p.m. he heard a metallic scraping sound; he looked across the street toward the First National Bank of Normal and saw a handicap parking sign lying on the pavement and a group of between seven and ten persons gathered around another sign. Keith identified the defendant as the larger of two persons that were rocking the sign back and forth. The defendant was wearing blue jeans and a black tee shirt, which Keith knew bore the words “Jack Daniel’s” because he had seen the shirt at closer range several minutes earlier, when the defendant arrived. The post of the sign broke, and it was discarded next to the other one. The group then gradually dispersed.

Keith testified that he walked across the street to Garcia’s Restaurant and telephoned the police, who arrived several minutes later. As Keith described to an officer what he had seen, the defendant walked by; in response to the officer’s question, Keith identified the defendant as one of the persons that had broken the sign.

Keith acknowledged at trial that several years before this incident his car and the defendant’s car were in a collision, which Keith blamed on the defendant. Keith said that he has never been compensated for the damage to his car.

Ralph Ebert, a police officer for the town of Normal, testified that he was sent to the area at 12:24 a.m. on August 29, 1982, in response to Keith’s telephoned report. Keith described to him a big, bearded man wearing a tee shirt with the words “Jack Daniel’s” on it. The defendant, who was nearby, matched this description. Ebert also testifled that he found two handicap parking signs lying on the sidewalk in front of the bank; the jagged appearance of the posts suggested to him that the signs had been rocked back and forth until they broke.

The defendant testified. He denied having anything to do with wrecking the handicap parking signs. On August 28, 1982, he arrived at Garcia’s in Normal around 7:30 in the evening. At that time one of the signs in front of the bank was bent over and the other was straight. He and a group of friends then drove to Lake Bloomington, where they stayed until 11:30; they were back at Garcia’s at 11:50. The defendant noticed a group of persons gathered around the handicap parking signs; at that time one of the signs was broken off and the other was bent over. The defendant joined the group but did nothing. He then went to Garcia’s and ate; when he left about a half hour later police officers were outside.

The defendant testified that another person matching the description given by Keith was present in the group around the handicap parking signs. According to the defendant, the other person, Jeff Belcher, resembles him and they were dressed similarly that night. The defendant did not see Belcher do anything to the signs. The area was well lighted. The defendant was impeached by two theft convictions.

Several of the defendant’s friends testified in his behalf. Tammi Rippon said that she had a date with the defendant on August 28, 1982, beginning at 7:30 p.m. She met him at Garcia’s, and they went to Lake Bloomington with some other persons, staying there until 11:30. The group then returned to Normal and Garcia’s, arriving shortly before midnight. At that time the handicap parking signs in front of the bank were down. Rippon denied that the defendant had any part in breaking the signs.

James Hodge was one of the friends who accompanied the defendant and Rippon to Lake Bloomington on August 28. Hodge testified that he and the defendant, in separate vehicles, returned to Garcia’s at the same time, about midnight. Hodge saw five or six persons gathered around the handicap parking signs in front of the bank. One of the signs was lying on the pavement, and the other was standing, apparently undamaged. Hodge denied that the defendant did anything to break the one sign.

Dennis Gurley, another member of the Lake Bloomington group, testified that they returned in several vehicles to Garcia’s around midnight; he was five or six minutes behind the defendant. Gurley noticed upon their return that one of the handicap parking signs was lying on the pavement. Gurley denied that the defendant had anything to do with that.

Finally, Gregory Adams testified that he was in the neighborhood of Garcia’s and the bank beginning at 5:30 or 6 p.m. on August 28, 1982. At 7:30 or 7:45 that evening he noticed that the posts of the two handicap parking signs in front of the bank were bent. As he tried to straighten one it broke off, and he placed it on the sidewalk. He left the other sign as it was, bent backwards. According to Adams, the defendant arrived at Garcia’s sometime after 12:30 and the police arrived later.

The defendant argues that the evidence was insufficient to convict him. According to the defendant, the identification of him as one of the persons destroying the signs was undermined by defense evidence that the signs were already down when he returned that night from Lake Bloomington and by the witness’ bias against him, which stemmed from their automobile collision. Also, the defendant points to his testimony about Jeff Belcher, who resembles him and was dressed similarly that night.

As the defendant acknowledges, a conviction may be based on positive identification by one eyewitness. (People v. Vriner (1978), 74 Ill. 2d 329, 385 N.E.2d 671; People v. Clarke (1971), 50 Ill. 2d 104, 277 N.E.2d 866.) Keith had the opportunity to identify the defendant accurately, for the area was brightly lighted. Furthermore, the weaknesses that the defendant finds in the State’s case — Keith’s possible bias, and the contradiction of his testimony by the defense — depended on the credibility of the witnesses, a matter specially reserved to the trial judge’s role here as trier of fact (People v. Kline (1982), 92 Ill. 2d 490, 442 N.E.2d 154; People v. Hammond (1970), 45 Ill. 2d 269, 259 N.E.2d 44). We cannot say that the trial judge’s determination was wrong. The evidence against the defendant was proof beyond a reasonable doubt.

The defendant argues last that the trial court erred in imposing financial conditions of the probation order without determining his ability to pay them; the defendant concludes that the record fails to justify those conditions of his probation. The court ordered the defendant to pay restitution of $131.76 and a fine of $750.

Section 5 — 5—6 of the Unified Code of Corrections (Ill. Rev. Stat. 1981, ch. 38, par. 1005 — 5—6) provides in part:

“If restitution is part of the disposition, the defendant shall make restitution to the victim in accordance with the following:
(a) A pre-sentencing hearing shall be held to assess the financial capacity of the defendant to make restitution as well as to determine the amount and conditions of payment at the court’s discretion.”

The trial court may do this at the sentencing hearing rather than at a presentencing hearing. (People v. House (1981), 98 Ill. App. 3d 304, 424 N.E.2d 412; People v. Abraham (1980), 89 Ill. App. 3d 786, 412 N.E.2d 45.) Similarly, in imposing a fine the court must consider “the financial resources and future ability of the offender to pay the fine” (Ill. Rev. Stat. 1981, ch. 38, par. 1005-9-l(d)(l)).

The sentencing hearing in this case was held immediately after the denial of the defendant’s post-trial motion and began with testimony from the defendant about his employment. By the time of the hearing he had worked two months for Professional Drive Away Service, which involved driving trucks. His hours were irregular — he was on call — and he expected the work to grow more frequent. At the same time, he was on seasonal layoff — this was April — from the Unit Step Company and expected to be recalled to work when the weather improved.

The State recommended the maximum term of imprisonment, 364 days, and defense counsel recommended a combination of jail, probation, and restitution. The court imposed the restitution and fine as conditions of the defendant’s probation without making either of the required statutory findings.

The State correctly points out that the defendant has waived these objections because he did not raise them at the sentencing hearing. (People v. Davis (1982), 93 Ill. 2d 155, 442 N.E.2d 855; House.) In Davis the court dealt with sections 5 — 4—1(c) and 5 — 8—1(b) of the Unified Code of Corrections (Ill. Rev. Stat. 1979, ch. 38, pars. 1005 — 4— 1(c), 1005 — 8— 1(b)), which require that in felony cases the trial judge explain for the record his reasons for imposing a particular sentence. Davis held that objection to the trial judge’s failure to make the required explanation is waived if not raised in the trial court. The same result should control the statutory provisions at issue here.

Furthermore, defense counsel specifically recommended restitution along with time in the county jail and probation in contrast to the State’s recommendation of the maximum term in the penitentiary. Defense counsel knew what the amount of restitution would be, and the defendant cannot argue now that the trial court had to make an express finding of his ability to pay restitution. People v. Wilson (1980), 87 Ill. App. 3d 544, 408 N.E.2d 1209.

Affirmed.

MILLS, P.J., and GREEN, J., concur.