Savage v. Cochran

JUSTICE LUND delivered the opinion of the court: Defendants Sharon Cochran and David Cochran appeal from a judgment of the circuit court of Macon County awarding each plaintiff, Dewey Savage, Jr., and Robert Savage, $31,354.61 compensatory damages and $5,000 punitive damages. Plaintiffs are Sharon’s brothers, and the cause of action was based upon alleged fiduciary violations involving their father’s assets. The allegations of fiduciary violations involved Sharon and David using, for their own use, funds placed in a joint account by the father, Dewey Savage, Sr. The funds were removed from the account by Sharon after her father designated her his power of attorney. The accounts containing the funds were joint tenancy accounts with right of survivorship. The trial court specifically found the accounts were convenience accounts, thus limited to the father’s expenses and not subject to the survivorship provision. The conclusion of convenience accounts destroys the survivorship provision of the accounts and requires one with a power of attorney to act as a fiduciary. (In re Estate ofBlom (1992), 234 Ill. App. 3d 517, 519, 600 N.E.2d 427, 429.) Evidence established that from April 1987, the time of the power of attorney designation, until his death in March 1991 at age 92, total assets, savings, and income of Dewey, Sr., in these accounts totaled approximately $154,000. At the time of his death, the accounts had been totally depleted. Approximately $53,000 had been spent for the benefit of the father and the balance used for the benefit of Sharon and David. A debt for the father’s nursing home treatment was unpaid. Once the power of attorney was executed, Sharon was responsible as a fiduciary to her father. (White v. Raines (1991), 215 Ill. App. 3d 49, 59, 574 N.E.2d 272, 279.) A presumption of fraud would attach to a transfer made by the fiduciary for her own use. (Franciscan Sisters Health Care Corp. v. Dean (1983), 95 Ill. 2d 452, 464, 448 N.E.2d 872, 877-78.) However, a conflicting presumption arose from the joint tenancy with survivorship creation and this presumption, like the fraud presumption, can only be rebutted by clear and convincing evidence. Murgic v. Granite City Trust & Savings Bank (1964), 31 Ill. 2d 587, 590-91, 202 N.E.2d 470, 472; Blom, 234 Ill. App. 3d at 519, 600 N.E.2d at 429. The issue of importance before our court is whether the trial court’s decision of convenience accounts is against the manifest weight of the evidence, considering the presumption of donative intent as described in Murgic. The trial court’s findings of fact will not be disturbed unless they are contrary to the manifest weight of the evidence. (White, 215 Ill. App. 3d at 60, 574 N.E.2d at 280.) However, the clear and convincing test must be satisfied. Evidence established that Dewey, Sr.’s wife died in 1985 and that he enjoyed a close relationship with Sharon. He visited with Sharon, and she assisted him with his meals. She was principally responsible for handling his financial matters until his death. His son Dewey, Jr., lived on the west coast and was seldom in Macon County. His son Roger was a certified public accountant (CPA), and he completed income tax returns for his father. Roger left Decatur in 1988 and, at the time of trial, lived in Virginia. Prior to the power of attorney, the father made gifts to Sharon of approximately $11,000. Part of this amount may have been repayment for improvements made by Sharon and David to her parents’ home prior to the death of her mother. Dewey, Sr., indicated by letter his deep feelings for Sharon and his preference for her. The joint accounts were created before the power of attorney, and both Sharon and Roger were named on the accounts. Roger considered this was done for convenience purposes. Sometime after Roger’s move in 1988, his name was removed from the accounts. This was after Sharon had her father’s power of attorney. Evidence of how Roger’s name was removed was not presented. David’s name was subsequently placed on the accounts, but he did not participate in check writing. He was given checks signed by Sharon to pay his personal debt at a credit union and debts he owed for child support. The father’s home was sold and funds from the sale were placed in the joint accounts, along with all his pension and retirement income. All his assets were eventually deposited to these accounts. His living arrangements were varied, but he finally entered nursing home care. Public assistance was requested but denied, due to lack of information. Dewey, Sr., stopped writing checks on the account after March 27, 1988. Dewey, Sr., had executed a will in 1980, leaving all his assets equally to his three children. A very few of the many checks written by Sharon were signed "Sharon Cochran[,] P.O.A.,” but all except one so signed preceded execution of the power of attorney. The fact that all assets of Dewey, Sr., were deposited to the joint accounts adds to evidence rebutting a donative intent. He knew these accounts would be necessary for his continuing expenses, as he was at an age where considerable expenses could be incurred for special care. To conclude that a donative intent existed would require a belief that others could use funds necessary for his care. The donative presumption was also in conflict with the indications of Dewey, Sr.’s will. Moreover, the existence of Roger’s name on the accounts would have indicated Roger was to share in the account. No adequate explanation is given for the removal of Roger’s name (after Sharon was changed to a fiduciary) from the account. No explanation was given as to how or why David’s name was added to the account. The conclusion reached by the court that the accounts were convenience accounts was not against the manifest weight of the evidence. A contrary conclusion would indicate a lack of concern by Dewey, Sr., for his own financial security. Sharon’s presumed use of the account funds while acting as a fiduciary was fraudulent. David contends he did not have a fiduciary or confidential relationship with Dewey, Sr., and any judgment against him is in error. David was given funds from the joint accounts to pay off his credit union and child support indebtedness. He benefited from funds used to pay home mortgage payments and utility bills. This type of benefit continued almost to his father-in-law’s death. The trial court was correct in holding that David knowingly received benefits from the wrongful conduct of his wife and that he knowingly aided and abetted Sharon in her activities; thus, he was legally responsible. The court will not be misled by mere devices and subterfuges where fraudulently obtained funds are transferred from one spouse to another. Liability will extend to both. (Roth v. Carlyle Real Estate Limited Partnership VII (1984), 129 Ill. App. 3d 433, 438, 472 N.E.2d 836, 839.) While Roth involved a constructive trust, the policy equally applies to the current fact situation. Defendants also contend the trial court erred in awarding $5,000 in punitive damages against each of them. The purpose of awarding punitive damages is to punish the offender and to deter that party and others from committing similar acts of wrongdoing in the future. Punitive damages may be awarded when torts are committed with fraud, actual malice, deliberate violence or oppression, or when the defendant acts willfully or with such gross negligence as to indicate a wanton disregard for the rights of others, or for conduct involving some element of outrage similar to that found in crime. Because of their penal nature, punitive damages are not favored in the law and caution must be used to see that they are not unwisely awarded. (Homewood Fishing Club v. Archer Daniels Midland Co. (1992), 239 Ill. App. 3d 102, 115, 605 N.E.2d 1140, 1148.) However, a trial court’s decision to award punitive damages will not be reversed absent an abuse of discretion. (Hagshenas v. Gaylord (1990), 199 Ill. App. 3d 60, 78, 557 N.E.2d 316, 328.) Under the facts in this case, we find no abuse of discretion. Defendants also contend the trial court erred in admitting plaintiffs’ exhibit Nos. 1 through 7, 17, and 43 through 50, over defendants’ objection as to their lack of foundation. Exhibit Nos. 1 through 7 and 17 were summaries of Dewey, Sr.’s bank records prepared by Roger. Roger testified he was a CPA licensed in Illinois and that the summaries were based upon a complete audit of decedent’s bank records. Plaintiffs’ exhibit Nos. 43 through 50 were the actual records upon which these summaries were based. The records were present in court and were at all times accessible to defendants. The court was careful to check the accuracy of the summaries and questioned Roger extensively regarding his compilation of the exhibits. Following the court’s questioning, plaintiffs’ attorney questioned Roger in order to lay a foundation for their admission into evidence. In allowing the exhibits to be admitted, the trial court stated specifically that reliance upon these summaries was necessary because the actual bank records were so voluminous. The admission of exhibits is largely within the discretion of the trial court. Where a proper foundation is laid for the admission of summary evidence, the trial court does not abuse its discretion. WThen original documents are voluminous and cannot be conveniently examined to extract the fact to be proved, any competent witness who has seen the originals may testify to the fact, provided it is capable of being determined by calculation. The documents summarized must be available in court or made available to the opponent. (Landmark Structures, Inc. v. F.E. Holmes & Sons Construction Co. (1990), 195 Ill. App. 3d 1036, 1051, 552 N.E.2d 1336, 1345.) We find no abuse of the trial court’s discretion. Finally, defendants contend the trial court erred in admitting into evidence plaintiffs’ exhibit No. 20, a form letter to Dewey, Sr., from the Macon County Department of Public Aid stating that public aid had been formally denied because he failed to appear at the eligibility hearing. Pam Grider testified she regularly received documents of this nature at Woodlawn and forwarded them to the families. She handled Dewey, Sr.’s original application for public aid and processed the denial letter in question. Defendants objected on the basis that Grider is no longer custodian of these records. Illinois Supreme Court Rule 236 (134 Ill. 2d R. 236) provides an exception to the hearsay rule for records of regularly conducted activities of any business. A sufficient foundation for admitting records of regularly conducted business activities may be established through testimony of the custodian of these records or another person familiar with the business and its mode of operation. Neither the original entrant nor an individual possessing personal knowledge of the event need be produced. (M. Graham, Cleary & Graham’s Handbook of Illinois Evidence § 803.10, at 650-51 (5th ed. 1990).) The fact that Grider is no longer employed at Woodlawn does not affect the admissibility of these records. Her familiarity with preparation of public aid applications and her role in processing the results were part of her regular duties at Woodlawn. We find no abuse of the trial court’s discretion in admitting plaintiffs’ exhibit No. 20. Affirmed. GREEN, J., concurs.