In re Estate of Goldstein
Annotate this Case
Fourth Division
November 20, 1997
No. 1-97-1183
IN RE THE ESTATE OF MAX GOLDSTEIN, Deceased )
-------------------------------------------- )
ANN J. GOLDSTEIN, Independent Administrator ) APPEAL FROM THE
of the Estate of Max Goldstein, Deceased, ) CIRCUIT COURT
) OF COOK COUNTY.
Petitioner-Appellant, )
)
v. )
)
JOSEPH GOLDSTEIN and BESSIE GOLDSTEIN, ) HONORABLE
) JEFFREY MALAK,
Respondents-Appellees. ) JUDGE PRESIDING.
PRESIDING JUSTICE WOLFSON delivered the opinion of the
court:
Shortly before his death, Max Goldstein told his wife Ann
his brother Joseph would care for her financially when Max died.
Ann Goldstein received only some furniture and a car after Max's
death.
Ann, as independent administrator of Max's estate, now
appeals the trial court's rejection of her amended three-count
citation to recover assets from Joseph and Bessie Goldstein, her
husband's siblings.
FACTS
The relevant facts come from the amended citation to recover
assets and from the trial testimony of Joseph, Bessie, and Ann
Goldstein.
In the 1920s, Benjamin Goldstein opened a family business
selling candy in Forest Park. After several years, Benjamin
converted the candy store into a restaurant/gas station.
Benjamin and his wife Flora had eight children: Jacob, Mathilda,
Barney, Harry, Eva, Joseph, Bessie, and Max. All the Goldstein
children, except Jacob, worked in the family business as they
matured. Eventually, the Goldstein family also owned other
properties including a commuter parking lot in Forest Park, a
vacant lot in Maywood, and the family residence in River Forest.
The Goldstein family created what they termed a "family pot"
for the businesses, the properties, and the family earnings. The
expenses of the businesses and properties, as well as the
expenses of individual family members, were paid from this fund.
The family pot included bank accounts at several area banks.
In time, Jacob and Mathilda drifted from the family
businesses. Barney married and continued to work in the
restaurant. Harry worked in the gas station. Eva worked at a
department store in Chicago, but remained involved in the family
businesses. Bessie cared for the Goldstein parents, Benjamin and
Flora. Joseph managed the restaurant. Max managed the gas
station and the parking lot, and acted as treasurer of the family
pot.
According to Bessie, the Goldstein family had an unwritten
rule: before any sibling married, that sibling's share of the
family pot would be transferred to the remaining unmarried
siblings. Apparently, the existence of this unwritten rule was
not shared with the sibling's bride or groom to be.
Shortly before Max's marriage in 1966, Max conveyed, without
consideration, his joint tenancy interest in four family
properties to his unmarried siblings--Joseph, Bessie, and Eva.
Joseph, Bessie, and Eva remained joint tenants in the family
properties. When Eva died, Joseph and Bessie assumed Eva's joint
tenant interests. Ann never knew of these conveyances. Max
continued working in the family businesses and controlling the
expense payments from the family pot.
In 1993, when Max died, he left only a car and some
furniture to Ann. Joseph and Bessie told Ann she would receive
no more money. Ann filed her three-count citation as independent
administrator of Max's estate to recover assets from Joseph and
Bessie.
On July 2, 1996, the trial court dismissed counts I and II
for failure to state a cause of action (section 2-615). On
October 25, 1996, at the close of Ann's evidence at trial, the
court dismissed count III for failure to present sufficient
evidence for a prima facie case (section 2-1110). This appeal
followed.
DECISION
On appeal, Ann makes three arguments. First, Ann contends
the trial court should not have dismissed count I because it
stated a cause of action for invalidly defeating a marital right
by a transfer of property immediately before marriage. Second,
Ann contends the trial court should not have dismissed count II
because it stated a cause of action for invalidly defeating a
marital right by colorable or illusory transfer of property.
Third, Ann contends the trial court should not have dismissed
count III at trial because an oral partnership existed between
Max and his siblings.
The trial court dismissed counts I and II for failure to
state a cause of action under section 2-615(a), finding Ann had
failed to allege sufficiently that Max's 1966 transfers of
property invalidly defeated her marital rights. See 735 ILCS
5/2-615(a) (West 1992).
A motion to dismiss under this section "tests the legal
sufficiency of a pleading and a court must accept all well-
pleaded facts as true." Doe v. Calumet City, 161 Ill. 2d 374,
381, 641 N.E.2d 498, 503 (1994). On appeal, the standard of
review for a section 2-615 dismissal is de novo. Hough v.
Kalousek, 279 Ill. App. 3d 855, 665 N.E.2d 443 (1996).
In count I, Ann pleaded the following facts: Max and Ann
became engaged on February 23, 1966. For some time before their
engagement, Max and some combination of his siblings owned four
parcels of land as joint tenants: a restaurant/gas station, a
commuter parking lot, a vacant lot, and the family residence.
In 1959, Max, Joseph, Bessie, and Eva conveyed the vacant
lot to a land trust, which sold this parcel in 1966. On March 3,
1966, pursuant to an informal family agreement, Max conveyed his
interests in the restaurant/gas station, the commuter parking
lot, and the family residence to his siblings Joseph, Bessie, and
Eva as joint tenants. Max made these conveyances without
consideration and without the knowledge or consent of his then-
fiancé Ann.
Eva predeceased Max, and her joint tenant interest in these
parcels passed to Joseph and Bessie. Joseph and Bessie still own
the residence. Joseph and Bessie eventually sold the
restaurant/gas station and the commuter parking lot. They
continue to receive proceeds from the sale of the restaurant/gas
station, and they have invested the proceeds from the other
sales.
Ann contends Max intended to defraud her of her martial
rights despite his repeated assurances that his siblings would
care for her after his death.
In count II, Ann pleaded the following additional facts:
After the conveyances to his siblings, Max continued to own these
parcels. Max still controlled the checking account for the
family pot. Max paid the maintenance costs on these parcels, as
well as the living expenses of his siblings, himself, and Ann.
Max's social security income was deposited into this account.
Ann contends the conveyances were "colorable and illusionary
[sic]" and fraudulent as to her marital rights.
Count I attempts to state a claim for invalidly defeating a
marital right by a transfer of property immediately before
marriage. Illinois courts have long recognized this cause of
action. See Lill v. Lill, 18 Ill. 2d 393, 164 N.E.2d 12 (1960);
Moore v. Moore, 15 Ill. 2d 239, 154 N.E.2d 256 (1958); In re
Estate of Tomaso, 82 Ill. App. 3d 286, 402 N.E.2d 702 (1980);
Michna v. May, 80 Ill. App. 2d 281, 225 N.E.2d 391 (1967);
Stathos v. La Salle National Bank, 62 Ill. App. 2d 398, 210 N.E.2d 828 (1965). See also Bozarth v. Bozarth, 399 Ill. 259, 77 N.E.2d 658 (1948); Ellet v. Farmer, 384 Ill. 343, 51 N.E.2d 570
(1943); Jarvis v. Jarvis, 286 Ill. 478, 122 N.E. 121 (1919);
Dunbar v. Dunbar, 254 Ill. 281, 98 N.E. 563 (1912); Higgins v.
Higgins, 219 Ill. 146, 76 N.E. 86 (1905); Jones v. Jones, 213 Ill. 228, 72 N.E. 695 (1904); Daniher v. Daniher, 201 Ill. 489,
66 N.E. 239 (1903); Freeman v. Hartman, 45 Ill. 57 (1867).
In Moore, the court held a transfer of real estate by one
spouse "on the eve of marriage, is a fraud upon the marital
rights of the other [spouse], and such conveyance may be set
aside as fraudulent and void ***." Moore, 15 Ill. 2d at 241, 154 N.E.2d at 257. In Lill, the court modified this rule:
"[A] voluntary conveyance by either party to a marriage
contract, of his or her real estate, made without the
knowledge or consent of the other on the eve, or in
contemplation, of marriage, is prima facie a fraud upon
the other's marital rights, and the burden is upon the
grantee to establish its validity. *** Not every
voluntary conveyance is in fraud of the rights of the
intended spouse, and if it be the intent of the grantor
to provide for his children, and not to defraud his
wife, such conveyance will not be held to be fraudulent
where the advancement is reasonable, when considered
with reference to the grantor's property." Lill, 18 Ill. 2d at 398, 164 N.E.2d at 15-16.
Count II attempts to state a claim for invalidly defeating a
marital right by an illusory or colorable transfer of property.
Illinois courts have more recently recognized this cause of
action. See Johnson v. La Grange State Bank, 73 Ill. 2d 342, 383 N.E.2d 185 (1978); Vitacco v. Eckberg, 271 Ill. App. 3d 408, 648 N.E.2d 1010 (1995); In re Estate of Chester Mocny, 257 Ill. App.
3d 291, 630 N.E.2d 87 (1993); Payne v. River Forest State Bank &
Trust Co., 81 Ill. App. 3d 1128, 401 N.E.2d 1229 (1980). See
also Montgomery v. Michaels, 54 Ill. 2d 532, 301 N.E.2d 465
(1973).
In Johnson, the court held an inter vivos transfer of
personal property by one spouse, when intended to defeat a
statutory marital interest of the other spouse, is voidable if a
present donative intent does not exist. Johnson, 73 Ill. 2d at
361, 383 N.E.2d at 194. However, the court also held an inter
vivos transfer into joint tenancy carries a presumption of
present donative intent. Johnson, 73 Ill. 2d at 368, 383 N.E.2d
at 197. This presumption can be overcome only by clear and
convincing evidence the transfer was made solely to establish a
convenience account. Johnson, 73 Ill. 2d at 369, 383 N.E.2d at
197. "A convenience account is an apparent joint account which
the creator of an account established to enable another tenant to
write checks from the account at the direction and for the
benefit of the creator." Mocny, 257 Ill. App. 3d at 296, 630 N.E.2d at 92.
While property owners generally have the right to dispose of
their property in any manner they wish, there are some narrow,
well-defined limits. A claim for transfer of property
immediately before marriage protects the non-transferring
spouse's marital rights before marriage. A claim presented for
illusory or colorable transfer of property protects the non-
transferring spouse's marital rights before and during marriage.
Although both counts I and II purport to state well-
established claims for invalidly defeating marital rights, both
counts share a similar problem. Joseph and Bessie did not owe
Ann a duty to protect her marital rights from Max's 1966
conveyances. If there was any fraud, it was Max's.
The Probate Act of 1975 provides for independent
administration of decedents' estates. See 755 ILCS 5/28-1 et
seq. (West 1992). An independent administrator can administer
the decedent's estate without court supervision. 755 ILCS 5/28-1
(West 1992). As independent administrator, Ann represented Max's
estate. However, counts I and II of Ann's amended citation state
her individual claims against the estate for invalidly defeating
her marital rights.
A defrauded wife may, as an individual creditor, bring a
citation proceeding within her deceased husband's probate case,
while administration of the estate is underway. Rozycki v.
Gitchoff, 180 Ill. App. 3d 523, 536 N.E.2d 130 (1989). Thus, if
the defrauded wife is also the administrator, she should bring a
personal citation proceeding within the probate case. See
Stathos, 62 Ill. App. 2d at 398, 210 N.E.2d at 828 (allowing a
defrauded spouse to sue as an individual and as administrator of
her deceased husband's estate). Ann could wear both hats:
independent administrator and estate creditor.
Ann contends she was the only one involved in counts I and
II, which presumably means her status as independent
administrator allows her to assert her marital rights claims in
this case. We disagree. Because Ann failed to name herself as
an individual, as well as an independent administrator, counts I
and II are, in effect, by the estate against the estate. In
truth, Max's estate, through Ann, sued Max's estate to invalidate
Max's conveyances.
"Estoppel by deed is a bar which precludes a party
to a deed from asserting as against the other party any
right or title in derogation of the instrument or from
denying the truth of any material fact asserted in it."
18 Illinois Law & Practice Estoppel 4 (1958).
In 1966, Max conveyed his joint tenant interests in the
restaurant/gas station, the commuter parking lot, and the family
residence by quit-claim deed to Joseph, Bessie, and Eva.
Clearly, Max's estate cannot assert any rights against these
grantees. Requiring an individual plaintiff to assert individual
claims does not elevate form over substance. It is not a
technical matter.
There is no real plaintiff here. For that reason alone the
trial court's judgments on counts I and II should be affirmed.
Additionally, as the trial court indicated, Max did not own
the property in fee simple before conveying his interests to his
siblings. Instead, Max was a joint tenant in each of these
parcels before conveying his interests. The issue becomes
whether counts I and II present valid claims where the
transferring spouse who later died conveyed property he held as a
joint tenant. Our research has revealed no authority with facts
similar to this case.
A joint tenancy is "a present estate in all of the joint
tenants, each being seized of the whole ***." Partridge v.
Berliner, 325 Ill. 253, 257, 156 N.E. 352, 353 (1927). "An
inherent feature of the estate of joint tenancy is the right of
survivorship, which is the right of the last survivor to take the
whole of the estate." Harms v. Sprague, 105 Ill. 2d 215, 224,
473 N.E.2d 930, 934 (1984); In re Estate of Regelbrugge, 225 Ill.
App. 3d 593, 588 N.E.2d 351 (1992); In re Estate of Martinek, 140
Ill. App. 3d 621, 488 N.E.2d 1332 (1986).
If Ann's complaint sufficiently alleged claims for invalidly
defeating her marital rights, the remedy would be invalidating
the 1966 conveyances from Max to his siblings. But voiding these
conveyances would merely place the parcels back into pre-1966
joint tenancies. Max owned the restaurant/gas station as a joint
tenant with Joseph. Max owned the commuter parking lot, the
vacant lot, and the family residence as a joint tenant with
Joseph, Bessie, and Eva.
These pre-1966 joint tenancies never included Ann. Ann has
no right of survivorship, and thus no marital right, in this
property even if Max's conveyances are set aside. See Prewitt v.
Prewitt, 397 Ill. 178, 73 N.E.2d 312 (1947) (a wife has marital
interest in her husband's joint tenancy property only where joint
tenancy is extinguished, allowing husband to assume property in
fee simple).
Ann contends Max's siblings severed these pre-1966 joint
tenancies. First, Ann contends Joseph severed the pre-1966 joint
tenancy in the restaurant/gas station in 1966 by conveying his
joint tenant interest to himself, Bessie, and Eva in the same
deed used by Max. But counts I and II seek to invalidate this
exact conveyance. Ann cannot insist on the validity of Joseph's
conveyance while disputing Max's conveyance.
Second, Ann contends Joseph, Bessie, and Eva severed the
pre-1966 joint tenancies in the commuter parking lot and the
family residence by conveying their joint tenant interests to
land trusts. But Joseph, Bessie, and Eva did not convey their
interests in these parcels to land trusts until 1981. While the
1981 transfers did destroy the joint tenancies between Joseph,
Bessie, and Eva, these transfers do not affect the pre-1966 joint
tenancies which included Max.
Third, Ann contends Max and his siblings severed all the
pre-1966 joint tenancies because the unwritten rule was an
agreement contrary to joint tenancy. See Dompke v. Dompke, 186
Ill. App. 3d 930, 542 N.E.2d 1222 (1989). But Max and his
siblings never agreed to dissolve all common ownership. Rather,
the unwritten rule showed the Goldsteins' intent to create and to
recreate common ownership among unmarried siblings. Once Max
married, he transferred his interest into the common ownership of
his unmarried siblings.
Finally, the record disputes Ann's claims as to the vacant
lot. Max, Joseph, Bessie, and Eva bought the vacant lot in 1959
and transferred their interests to a land trust in 1960, long
before Ann and Max were engaged in 1966. The vacant lot was sold
by the trustee in 1966, and the proceeds from the sale went into
the family pot. Ann cannot claim Max invalidly transferred the
vacant lot in derogation of her marital rights six years before
they were engaged.
The trial court correctly dismissed counts I and II.
The trial court dismissed count III at the close of Ann's
evidence under section 2-1110, finding Ann had failed to present
sufficient evidence of a partnership between Max and his
siblings. See 735 ILCS 5/2-1110 (West 1992).
When ruling on a section 2-1110 motion, the trial court must
apply a two-part analysis. Kokinis v. Kotrich, 81 Ill. 2d 151,
407 N.E.2d 43 (1980); Evans v. Gurnee Inns, Inc., 268 Ill. App.
3d 1098, 645 N.E.2d 556 (1994). First, the court must determine
as a matter of law whether the plaintiff has presented a prima
facie case. Kokinis, 81 Ill. 2d at 154-55, 407 N.E.2d at 45.
That is, did the plaintiff present some evidence on each of the
elements of her case? Second, if the plaintiff has presented a
prima facie case, the court must consider and weigh all the
evidence offered by the plaintiff, including evidence favorable
to the defendant, to determine whether the prima facie case
survives. Kokinis, 81 Ill. 2d at 155, 407 N.E.2d at 45.
"This weighing process may result in the negation
of some of the evidence necessary to the plaintiff's
prima facie case, in which case the court should grant
the defendant's motion ***." Kokinis, 81 Ill. 2d at 154,
407 N.E.2d at 45.
If the trial court finds the plaintiff has failed to present
a prima facie case as a matter of law, the appellate standard of
review is de novo. Evans, 268 Ill. App. 3d at 1102, 645 N.E.2d
at 559. If the trial court moves on to consider the weight and
quality of the evidence, finding no prima facie case remains, the
appellate standard of review is the deferential "manifest weight
of the evidence" standard. Evans, 268 Ill. App. 3d at 1102, 645 N.E.2d at 559.
Under the Uniform Partnership Act (UPA), "[a] partnership is
an association of two or more persons to carry on as co-owners a
business for profit." 805 ILCS 205/6(1) (West 1993). A
partnership is a contractual relationship and must stem from
mutual consent of the alleged partners. Maloney v. Pihera, 215
Ill. App. 3d 30, 573 N.E.2d 1379 (1991). "A partnership arises
when (1) parties join together to carry on a venture for their
common benefit, (2) each party contributes property or services
to the venture, and (3) each party has a community of interest in
the profits of the venture." Kennedy v. Miller, 221 Ill. App. 3d
513, 582 N.E.2d 200 (1991).
The burden of proving a partnership exists rests on the
party asserting it. Seidmon v. Harris, 172 Ill. App. 3d 352, 526 N.E.2d 543 (1988). In determining the existence of a
partnership, the trial court should consider the following
factors: how the alleged partners have dealt with each other; how
each of the alleged partners have dealt with third persons;
whether the alleged partners have advertised using a firm name;
and whether the alleged partners have shared profits. Rizzo v.
Rizzo, 3 Ill. 2d 291, 120 N.E.2d 546 (1954). "Whether a
partnership exists is a question to be determined by the fact
finder from all the facts and circumstances presented." Argianas
v. Chestler, 259 Ill. App. 3d 926, 942, 631 N.E.2d 1359, 1369
(1994).
Here, the trial court, after careful consideration of the
evidence, determined the estate "has not submitted proof that
would establish each of the elements of a partnership ***"
between Max and his siblings. This court would overturn the
ruling if it were against the manifest weight of the evidence.
The trial court found the following facts:
The family never clearly delineated between business and
personal expenses. All the business expenses, as well as the
personal expenses of the family members, were paid from the
family pot. No family member ever mentioned the word partnership
to describe the family businesses or the family pot, and no
formal partnership documents existed. Max shared in the profits
from the businesses and administered the family pot bank accounts
held in joint tenancy.
While all the Goldstein children except Jacob and Mathilda
contributed their services to the family businesses, only some of
the siblings had a share of the family pot. Notably, though
Barney and Harry worked in the family businesses, they were
merely employees. Eva did not work in the family businesses, but
shared in the family pot because she never married. Bessie did
not work in the family businesses, but shared in the family pot
because she never married and because she took care of the
Goldstein parents.
Max and Joseph did work in the family businesses, and also
shared in the family pot. Max was the treasurer of the family
businesses, allegedly an insider until his death. However, Max
was married. Seemingly, family members dealt with each other
more like concerned siblings and less like business partners.
The record does not contain significant evidence on how the
family members dealt with third persons. The alleged partnership
did not operate under a firm name. While the restaurant/gas
station had a name, the remainder of the family businesses did
not operate under this name.
Ann alleges Max and his siblings shared profits from the
family businesses through the family pot bank accounts. While
the primary checking account named Max, Joseph, and later Bessie,
another checking account listed only Max and Joseph. Other bank
accounts named different combinations of Max, Joseph, Bessie, and
Eva. Tracking profits from the family businesses through the
maze of these accounts, the profits from the family businesses
were shared to some extent. The family members all filed
individual tax returns listing different amounts of income.
The UPA provides, "The receipt by a person of a share of the
profits of a business is prima facie evidence that he or she is a
partner in the business ***." 805 ILCS 205/7(4) (West 1993).
However, "[j]oint tenancy *** does not of itself establish a
partnership, whether such co-owners do or do not share any
profits made by the use of the property." 805 ILCS 205/7(2)
(West 1993).
Informal sharing of profits through a family bank account
does not create a partnership, unless the parties explicitly
agree. In re Estate of Kime, 42 Ill. App. 3d 505, 356 N.E.2d 350
(1976); In re Marriage of Hassiepen, 269 Ill. App. 3d 559, 646 N.E.2d 1348 (1995). In Kime, the decedent operated a family
farm. The decedent's children all contributed to the operation
of the farm. The proceeds from grain sales and all other funds
collected from the farm went into the decedent's bank account.
The decedent's children took what they needed to live from this
account, and the decedent used the balance of the account for the
farm. The court held a partnership did not exist between the
decedent and his children. Kime, 42 Ill. App. 3d at 510, 356 N.E.2d at 354.
Instead, the court found the relationship between the
decedent and his children was:
"[A]n undefined, hit or miss, arrangement, not clearly
thought out or enunciated by the parties, based upon
an unverbalized meeting of the minds that the specific
amounts [of money] anyone took [from the farming
operation] were not of great importance, since it all
remained in the family." Kime, 42 Ill. App. 3d at 509, 356 N.E.2d at 353. While each item of evidence did not establish
conclusively the absence of a partnership, the evidence
collectively showed the decedent and his children did not intend
to form a partnership. Kime, 42 Ill. App. 3d at 509, 356 N.E.2d
at 353-54.
In Hassiepen, a husband and wife decided to start an
electrical contracting business. The husband contributed labor
and a truck for the business. The wife provided capital for
tools and supplies and handled the general office work for the
business. The husband and wife opened a joint checking account,
which they used for all business and personal expenses. The
court held a partnership did exist between the husband and wife.
Hassiepen, 269 Ill. App. 3d at 566, 646 N.E.2d at 1354. The
court focused on the couple's intent to form a business, as well
as their joint provision of services and assets to the business.
Hassiepen, 269 Ill. App. 3d at 555-56, 646 N.E.2d at 1354.
The instant case more closely resembles Kime than Hassiepen.
Unlike the husband and wife in Hassiepen, the Goldstein siblings
did not show any intent to form a business. Instead, like the
family farming business in Kime, the Goldstein conglomerate was
"an undefined, hit or miss, arrangement" which merely carried on
what Benjamin started. The trial court, relying upon Kime, said:
"Quite frankly, I don't like what happened here.
I think that Ben started the family out on something
which really became somewhat self-defeating for various
and sundry members of the family. But it was his
property and he was obviously the head of the family
and they carried through on it.
***
The elements of sharing are there. There are many
elements that you need to define a partnership that
aren't. Who is in the partnership?
***
There is not continuity, there is nothing that one
can look at and say what is it, when did it start, when
is it supposed to end, and who's involved in it?
It was somewhat of a catch as catch can. It was
intended so that the family members would be able to
live their lives within that context and there was
really little thought given to what happens when all
the various family members die."
Under the UPA, mere joint tenancy does not signal the
existence of a partnership, regardless of shared profits. Here,
the siblings held the parcels and the family pot bank accounts in
joint tenancy. Additionally, the family members never had a
written partnership agreement. Any oral agreement among the
siblings neglected important provisions about whom the
partnership included, the creation and dissolution of the
partnership, and the distribution of partnership assets after
dissolution. While other evidence leads to conflicting
inferences on the partnership issue, we cannot say the manifest
weight of the evidence requires us to overturn the trial court's
conclusion that the Goldstein siblings did not intend to create a
partnership.
The trial court correctly found for the defendants on count
III.
CONCLUSION
We affirm the dismissal of counts I and II because Ann did
not bring individual claims against the estate and because the
properties were held in joint tenancy by Max before the 1966
conveyances to his siblings.
We also affirm the dismissal of count III because the
manifest weight of the evidence supports the trial court's
finding that a partnership did not exist between Max and his
siblings.
AFFIRMED.
McNAMARA and BURKE, JJ., concur.
November 20, 1997
No. 1-97-1183
IN RE THE ESTATE OF MAX GOLDSTEIN, Deceased )
-------------------------------------------- )
ANN J. GOLDSTEIN, Independent Administrator ) APPEAL FROM THE
of the Estate of Max Goldstein, Deceased, ) CIRCUIT COURT
) OF COOK COUNTY.
Petitioner-Appellant, )
)
v. )
)
JOSEPH GOLDSTEIN and BESSIE GOLDSTEIN, ) HONORABLE
) JEFFREY MALAK,
Respondents-Appellees. ) JUDGE PRESIDING.
PRESIDING JUSTICE WOLFSON delivered the opinion of the
court:
Shortly before his death, Max Goldstein told his wife Ann
his brother Joseph would care for her financially when Max died.
Ann Goldstein received only some furniture and a car after Max's
death.
Ann, as independent administrator of Max's estate, now
appeals the trial court's rejection of her amended three-count
citation to recover assets from Joseph and Bessie Goldstein, her
husband's siblings.
FACTS
The relevant facts come from the amended citation to recover
assets and from the trial testimony of Joseph, Bessie, and Ann
Goldstein.
In the 1920s, Benjamin Goldstein opened a family business
selling candy in Forest Park. After several years, Benjamin
converted the candy store into a restaurant/gas station.
Benjamin and his wife Flora had eight children: Jacob, Mathilda,
Barney, Harry, Eva, Joseph, Bessie, and Max. All the Goldstein
children, except Jacob, worked in the family business as they
matured. Eventually, the Goldstein family also owned other
properties including a commuter parking lot in Forest Park, a
vacant lot in Maywood, and the family residence in River Forest.
The Goldstein family created what they termed a "family pot"
for the businesses, the properties, and the family earnings. The
expenses of the businesses and properties, as well as the
expenses of individual family members, were paid from this fund.
The family pot included bank accounts at several area banks.
In time, Jacob and Mathilda drifted from the family
businesses. Barney married and continued to work in the
restaurant. Harry worked in the gas station. Eva worked at a
department store in Chicago, but remained involved in the family
businesses. Bessie cared for the Goldstein parents, Benjamin and
Flora. Joseph managed the restaurant. Max managed the gas
station and the parking lot, and acted as treasurer of the family
pot.
According to Bessie, the Goldstein family had an unwritten
rule: before any sibling married, that sibling's share of the
family pot would be transferred to the remaining unmarried
siblings. Apparently, the existence of this unwritten rule was
not shared with the sibling's bride or groom to be.
Shortly before Max's marriage in 1966, Max conveyed, without
consideration, his joint tenancy interest in four family
properties to his unmarried siblings--Joseph, Bessie, and Eva.
Joseph, Bessie, and Eva remained joint tenants in the family
properties. When Eva died, Joseph and Bessie assumed Eva's joint
tenant interests. Ann never knew of these conveyances. Max
continued working in the family businesses and controlling the
expense payments from the family pot.
In 1993, when Max died, he left only a car and some
furniture to Ann. Joseph and Bessie told Ann she would receive
no more money. Ann filed her three-count citation as independent
administrator of Max's estate to recover assets from Joseph and
Bessie.
On July 2, 1996, the trial court dismissed counts I and II
for failure to state a cause of action (section 2-615). On
October 25, 1996, at the close of Ann's evidence at trial, the
court dismissed count III for failure to present sufficient
evidence for a prima facie case (section 2-1110). This appeal
followed.
DECISION
On appeal, Ann makes three arguments. First, Ann contends
the trial court should not have dismissed count I because it
stated a cause of action for invalidly defeating a marital right
by a transfer of property immediately before marriage. Second,
Ann contends the trial court should not have dismissed count II
because it stated a cause of action for invalidly defeating a
marital right by colorable or illusory transfer of property.
Third, Ann contends the trial court should not have dismissed
count III at trial because an oral partnership existed between
Max and his siblings.
The trial court dismissed counts I and II for failure to
state a cause of action under section 2-615(a), finding Ann had
failed to allege sufficiently that Max's 1966 transfers of
property invalidly defeated her marital rights. See 735 ILCS
5/2-615(a) (West 1992).
A motion to dismiss under this section "tests the legal
sufficiency of a pleading and a court must accept all well-
pleaded facts as true." Doe v. Calumet City, 161 Ill. 2d 374,
381, 641 N.E.2d 498, 503 (1994). On appeal, the standard of
review for a section 2-615 dismissal is de novo. Hough v.
Kalousek, 279 Ill. App. 3d 855, 665 N.E.2d 443 (1996).
In count I, Ann pleaded the following facts: Max and Ann
became engaged on February 23, 1966. For some time before their
engagement, Max and some combination of his siblings owned four
parcels of land as joint tenants: a restaurant/gas station, a
commuter parking lot, a vacant lot, and the family residence.
In 1959, Max, Joseph, Bessie, and Eva conveyed the vacant
lot to a land trust, which sold this parcel in 1966. On March 3,
1966, pursuant to an informal family agreement, Max conveyed his
interests in the restaurant/gas station, the commuter parking
lot, and the family residence to his siblings Joseph, Bessie, and
Eva as joint tenants. Max made these conveyances without
consideration and without the knowledge or consent of his then-
fiancé Ann.
Eva predeceased Max, and her joint tenant interest in these
parcels passed to Joseph and Bessie. Joseph and Bessie still own
the residence. Joseph and Bessie eventually sold the
restaurant/gas station and the commuter parking lot. They
continue to receive proceeds from the sale of the restaurant/gas
station, and they have invested the proceeds from the other
sales.
Ann contends Max intended to defraud her of her martial
rights despite his repeated assurances that his siblings would
care for her after his death.
In count II, Ann pleaded the following additional facts:
After the conveyances to his siblings, Max continued to own these
parcels. Max still controlled the checking account for the
family pot. Max paid the maintenance costs on these parcels, as
well as the living expenses of his siblings, himself, and Ann.
Max's social security income was deposited into this account.
Ann contends the conveyances were "colorable and illusionary
[sic]" and fraudulent as to her marital rights.
Count I attempts to state a claim for invalidly defeating a
marital right by a transfer of property immediately before
marriage. Illinois courts have long recognized this cause of
action. See Lill v. Lill, 18 Ill. 2d 393, 164 N.E.2d 12 (1960);
Moore v. Moore, 15 Ill. 2d 239, 154 N.E.2d 256 (1958); In re
Estate of Tomaso, 82 Ill. App. 3d 286, 402 N.E.2d 702 (1980);
Michna v. May, 80 Ill. App. 2d 281, 225 N.E.2d 391 (1967);
Stathos v. La Salle National Bank, 62 Ill. App. 2d 398, 210 N.E.2d 828 (1965). See also Bozarth v. Bozarth, 399 Ill. 259, 77 N.E.2d 658 (1948); Ellet v. Farmer, 384 Ill. 343, 51 N.E.2d 570
(1943); Jarvis v. Jarvis, 286 Ill. 478, 122 N.E. 121 (1919);
Dunbar v. Dunbar, 254 Ill. 281, 98 N.E. 563 (1912); Higgins v.
Higgins, 219 Ill. 146, 76 N.E. 86 (1905); Jones v. Jones, 213 Ill. 228, 72 N.E. 695 (1904); Daniher v. Daniher, 201 Ill. 489,
66 N.E. 239 (1903); Freeman v. Hartman, 45 Ill. 57 (1867).
In Moore, the court held a transfer of real estate by one
spouse "on the eve of marriage, is a fraud upon the marital
rights of the other [spouse], and such conveyance may be set
aside as fraudulent and void ***." Moore, 15 Ill. 2d at 241, 154 N.E.2d at 257. In Lill, the court modified this rule:
"[A] voluntary conveyance by either party to a marriage
contract, of his or her real estate, made without the
knowledge or consent of the other on the eve, or in
contemplation, of marriage, is prima facie a fraud upon
the other's marital rights, and the burden is upon the
grantee to establish its validity. *** Not every
voluntary conveyance is in fraud of the rights of the
intended spouse, and if it be the intent of the grantor
to provide for his children, and not to defraud his
wife, such conveyance will not be held to be fraudulent
where the advancement is reasonable, when considered
with reference to the grantor's property." Lill, 18 Ill. 2d at 398, 164 N.E.2d at 15-16.
Count II attempts to state a claim for invalidly defeating a
marital right by an illusory or colorable transfer of property.
Illinois courts have more recently recognized this cause of
action. See Johnson v. La Grange State Bank, 73 Ill. 2d 342, 383 N.E.2d 185 (1978); Vitacco v. Eckberg, 271 Ill. App. 3d 408, 648 N.E.2d 1010 (1995); In re Estate of Chester Mocny, 257 Ill. App.
3d 291, 630 N.E.2d 87 (1993); Payne v. River Forest State Bank &
Trust Co., 81 Ill. App. 3d 1128, 401 N.E.2d 1229 (1980). See
also Montgomery v. Michaels, 54 Ill. 2d 532, 301 N.E.2d 465
(1973).
In Johnson, the court held an inter vivos transfer of
personal property by one spouse, when intended to defeat a
statutory marital interest of the other spouse, is voidable if a
present donative intent does not exist. Johnson, 73 Ill. 2d at
361, 383 N.E.2d at 194. However, the court also held an inter
vivos transfer into joint tenancy carries a presumption of
present donative intent. Johnson, 73 Ill. 2d at 368, 383 N.E.2d
at 197. This presumption can be overcome only by clear and
convincing evidence the transfer was made solely to establish a
convenience account. Johnson, 73 Ill. 2d at 369, 383 N.E.2d at
197. "A convenience account is an apparent joint account which
the creator of an account established to enable another tenant to
write checks from the account at the direction and for the
benefit of the creator." Mocny, 257 Ill. App. 3d at 296, 630 N.E.2d at 92.
While property owners generally have the right to dispose of
their property in any manner they wish, there are some narrow,
well-defined limits. A claim for transfer of property
immediately before marriage protects the non-transferring
spouse's marital rights before marriage. A claim presented for
illusory or colorable transfer of property protects the non-
transferring spouse's marital rights before and during marriage.
Although both counts I and II purport to state well-
established claims for invalidly defeating marital rights, both
counts share a similar problem. Joseph and Bessie did not owe
Ann a duty to protect her marital rights from Max's 1966
conveyances. If there was any fraud, it was Max's.
The Probate Act of 1975 provides for independent
administration of decedents' estates. See 755 ILCS 5/28-1 et
seq. (West 1992). An independent administrator can administer
the decedent's estate without court supervision. 755 ILCS 5/28-1
(West 1992). As independent administrator, Ann represented Max's
estate. However, counts I and II of Ann's amended citation state
her individual claims against the estate for invalidly defeating
her marital rights.
A defrauded wife may, as an individual creditor, bring a
citation proceeding within her deceased husband's probate case,
while administration of the estate is underway. Rozycki v.
Gitchoff, 180 Ill. App. 3d 523, 536 N.E.2d 130 (1989). Thus, if
the defrauded wife is also the administrator, she should bring a
personal citation proceeding within the probate case. See
Stathos, 62 Ill. App. 2d at 398, 210 N.E.2d at 828 (allowing a
defrauded spouse to sue as an individual and as administrator of
her deceased husband's estate). Ann could wear both hats:
independent administrator and estate creditor.
Ann contends she was the only one involved in counts I and
II, which presumably means her status as independent
administrator allows her to assert her marital rights claims in
this case. We disagree. Because Ann failed to name herself as
an individual, as well as an independent administrator, counts I
and II are, in effect, by the estate against the estate. In
truth, Max's estate, through Ann, sued Max's estate to invalidate
Max's conveyances.
"Estoppel by deed is a bar which precludes a party
to a deed from asserting as against the other party any
right or title in derogation of the instrument or from
denying the truth of any material fact asserted in it."
18 Illinois Law & Practice Estoppel 4 (1958).
In 1966, Max conveyed his joint tenant interests in the
restaurant/gas station, the commuter parking lot, and the family
residence by quit-claim deed to Joseph, Bessie, and Eva.
Clearly, Max's estate cannot assert any rights against these
grantees. Requiring an individual plaintiff to assert individual
claims does not elevate form over substance. It is not a
technical matter.
There is no real plaintiff here. For that reason alone the
trial court's judgments on counts I and II should be affirmed.
Additionally, as the trial court indicated, Max did not own
the property in fee simple before conveying his interests to his
siblings. Instead, Max was a joint tenant in each of these
parcels before conveying his interests. The issue becomes
whether counts I and II present valid claims where the
transferring spouse who later died conveyed property he held as a
joint tenant. Our research has revealed no authority with facts
similar to this case.
A joint tenancy is "a present estate in all of the joint
tenants, each being seized of the whole ***." Partridge v.
Berliner, 325 Ill. 253, 257, 156 N.E. 352, 353 (1927). "An
inherent feature of the estate of joint tenancy is the right of
survivorship, which is the right of the last survivor to take the
whole of the estate." Harms v. Sprague, 105 Ill. 2d 215, 224,
473 N.E.2d 930, 934 (1984); In re Estate of Regelbrugge, 225 Ill.
App. 3d 593, 588 N.E.2d 351 (1992); In re Estate of Martinek, 140
Ill. App. 3d 621, 488 N.E.2d 1332 (1986).
If Ann's complaint sufficiently alleged claims for invalidly
defeating her marital rights, the remedy would be invalidating
the 1966 conveyances from Max to his siblings. But voiding these
conveyances would merely place the parcels back into pre-1966
joint tenancies. Max owned the restaurant/gas station as a joint
tenant with Joseph. Max owned the commuter parking lot, the
vacant lot, and the family residence as a joint tenant with
Joseph, Bessie, and Eva.
These pre-1966 joint tenancies never included Ann. Ann has
no right of survivorship, and thus no marital right, in this
property even if Max's conveyances are set aside. See Prewitt v.
Prewitt, 397 Ill. 178, 73 N.E.2d 312 (1947) (a wife has marital
interest in her husband's joint tenancy property only where joint
tenancy is extinguished, allowing husband to assume property in
fee simple).
Ann contends Max's siblings severed these pre-1966 joint
tenancies. First, Ann contends Joseph severed the pre-1966 joint
tenancy in the restaurant/gas station in 1966 by conveying his
joint tenant interest to himself, Bessie, and Eva in the same
deed used by Max. But counts I and II seek to invalidate this
exact conveyance. Ann cannot insist on the validity of Joseph's
conveyance while disputing Max's conveyance.
Second, Ann contends Joseph, Bessie, and Eva severed the
pre-1966 joint tenancies in the commuter parking lot and the
family residence by conveying their joint tenant interests to
land trusts. But Joseph, Bessie, and Eva did not convey their
interests in these parcels to land trusts until 1981. While the
1981 transfers did destroy the joint tenancies between Joseph,
Bessie, and Eva, these transfers do not affect the pre-1966 joint
tenancies which included Max.
Third, Ann contends Max and his siblings severed all the
pre-1966 joint tenancies because the unwritten rule was an
agreement contrary to joint tenancy. See Dompke v. Dompke, 186
Ill. App. 3d 930, 542 N.E.2d 1222 (1989). But Max and his
siblings never agreed to dissolve all common ownership. Rather,
the unwritten rule showed the Goldsteins' intent to create and to
recreate common ownership among unmarried siblings. Once Max
married, he transferred his interest into the common ownership of
his unmarried siblings.
Finally, the record disputes Ann's claims as to the vacant
lot. Max, Joseph, Bessie, and Eva bought the vacant lot in 1959
and transferred their interests to a land trust in 1960, long
before Ann and Max were engaged in 1966. The vacant lot was sold
by the trustee in 1966, and the proceeds from the sale went into
the family pot. Ann cannot claim Max invalidly transferred the
vacant lot in derogation of her marital rights six years before
they were engaged.
The trial court correctly dismissed counts I and II.
The trial court dismissed count III at the close of Ann's
evidence under section 2-1110, finding Ann had failed to present
sufficient evidence of a partnership between Max and his
siblings. See 735 ILCS 5/2-1110 (West 1992).
When ruling on a section 2-1110 motion, the trial court must
apply a two-part analysis. Kokinis v. Kotrich, 81 Ill. 2d 151,
407 N.E.2d 43 (1980); Evans v. Gurnee Inns, Inc., 268 Ill. App.
3d 1098, 645 N.E.2d 556 (1994). First, the court must determine
as a matter of law whether the plaintiff has presented a prima
facie case. Kokinis, 81 Ill. 2d at 154-55, 407 N.E.2d at 45.
That is, did the plaintiff present some evidence on each of the
elements of her case? Second, if the plaintiff has presented a
prima facie case, the court must consider and weigh all the
evidence offered by the plaintiff, including evidence favorable
to the defendant, to determine whether the prima facie case
survives. Kokinis, 81 Ill. 2d at 155, 407 N.E.2d at 45.
"This weighing process may result in the negation
of some of the evidence necessary to the plaintiff's
prima facie case, in which case the court should grant
the defendant's motion ***." Kokinis, 81 Ill. 2d at 154,
407 N.E.2d at 45.
If the trial court finds the plaintiff has failed to present
a prima facie case as a matter of law, the appellate standard of
review is de novo. Evans, 268 Ill. App. 3d at 1102, 645 N.E.2d
at 559. If the trial court moves on to consider the weight and
quality of the evidence, finding no prima facie case remains, the
appellate standard of review is the deferential "manifest weight
of the evidence" standard. Evans, 268 Ill. App. 3d at 1102, 645 N.E.2d at 559.
Under the Uniform Partnership Act (UPA), "[a] partnership is
an association of two or more persons to carry on as co-owners a
business for profit." 805 ILCS 205/6(1) (West 1993). A
partnership is a contractual relationship and must stem from
mutual consent of the alleged partners. Maloney v. Pihera, 215
Ill. App. 3d 30, 573 N.E.2d 1379 (1991). "A partnership arises
when (1) parties join together to carry on a venture for their
common benefit, (2) each party contributes property or services
to the venture, and (3) each party has a community of interest in
the profits of the venture." Kennedy v. Miller, 221 Ill. App. 3d
513, 582 N.E.2d 200 (1991).
The burden of proving a partnership exists rests on the
party asserting it. Seidmon v. Harris, 172 Ill. App. 3d 352, 526 N.E.2d 543 (1988). In determining the existence of a
partnership, the trial court should consider the following
factors: how the alleged partners have dealt with each other; how
each of the alleged partners have dealt with third persons;
whether the alleged partners have advertised using a firm name;
and whether the alleged partners have shared profits. Rizzo v.
Rizzo, 3 Ill. 2d 291, 120 N.E.2d 546 (1954). "Whether a
partnership exists is a question to be determined by the fact
finder from all the facts and circumstances presented." Argianas
v. Chestler, 259 Ill. App. 3d 926, 942, 631 N.E.2d 1359, 1369
(1994).
Here, the trial court, after careful consideration of the
evidence, determined the estate "has not submitted proof that
would establish each of the elements of a partnership ***"
between Max and his siblings. This court would overturn the
ruling if it were against the manifest weight of the evidence.
The trial court found the following facts:
The family never clearly delineated between business and
personal expenses. All the business expenses, as well as the
personal expenses of the family members, were paid from the
family pot. No family member ever mentioned the word partnership
to describe the family businesses or the family pot, and no
formal partnership documents existed. Max shared in the profits
from the businesses and administered the family pot bank accounts
held in joint tenancy.
While all the Goldstein children except Jacob and Mathilda
contributed their services to the family businesses, only some of
the siblings had a share of the family pot. Notably, though
Barney and Harry worked in the family businesses, they were
merely employees. Eva did not work in the family businesses, but
shared in the family pot because she never married. Bessie did
not work in the family businesses, but shared in the family pot
because she never married and because she took care of the
Goldstein parents.
Max and Joseph did work in the family businesses, and also
shared in the family pot. Max was the treasurer of the family
businesses, allegedly an insider until his death. However, Max
was married. Seemingly, family members dealt with each other
more like concerned siblings and less like business partners.
The record does not contain significant evidence on how the
family members dealt with third persons. The alleged partnership
did not operate under a firm name. While the restaurant/gas
station had a name, the remainder of the family businesses did
not operate under this name.
Ann alleges Max and his siblings shared profits from the
family businesses through the family pot bank accounts. While
the primary checking account named Max, Joseph, and later Bessie,
another checking account listed only Max and Joseph. Other bank
accounts named different combinations of Max, Joseph, Bessie, and
Eva. Tracking profits from the family businesses through the
maze of these accounts, the profits from the family businesses
were shared to some extent. The family members all filed
individual tax returns listing different amounts of income.
The UPA provides, "The receipt by a person of a share of the
profits of a business is prima facie evidence that he or she is a
partner in the business ***." 805 ILCS 205/7(4) (West 1993).
However, "[j]oint tenancy *** does not of itself establish a
partnership, whether such co-owners do or do not share any
profits made by the use of the property." 805 ILCS 205/7(2)
(West 1993).
Informal sharing of profits through a family bank account
does not create a partnership, unless the parties explicitly
agree. In re Estate of Kime, 42 Ill. App. 3d 505, 356 N.E.2d 350
(1976); In re Marriage of Hassiepen, 269 Ill. App. 3d 559, 646 N.E.2d 1348 (1995). In Kime, the decedent operated a family
farm. The decedent's children all contributed to the operation
of the farm. The proceeds from grain sales and all other funds
collected from the farm went into the decedent's bank account.
The decedent's children took what they needed to live from this
account, and the decedent used the balance of the account for the
farm. The court held a partnership did not exist between the
decedent and his children. Kime, 42 Ill. App. 3d at 510, 356 N.E.2d at 354.
Instead, the court found the relationship between the
decedent and his children was:
"[A]n undefined, hit or miss, arrangement, not clearly
thought out or enunciated by the parties, based upon
an unverbalized meeting of the minds that the specific
amounts [of money] anyone took [from the farming
operation] were not of great importance, since it all
remained in the family." Kime, 42 Ill. App. 3d at 509, 356 N.E.2d at 353. While each item of evidence did not establish
conclusively the absence of a partnership, the evidence
collectively showed the decedent and his children did not intend
to form a partnership. Kime, 42 Ill. App. 3d at 509, 356 N.E.2d
at 353-54.
In Hassiepen, a husband and wife decided to start an
electrical contracting business. The husband contributed labor
and a truck for the business. The wife provided capital for
tools and supplies and handled the general office work for the
business. The husband and wife opened a joint checking account,
which they used for all business and personal expenses. The
court held a partnership did exist between the husband and wife.
Hassiepen, 269 Ill. App. 3d at 566, 646 N.E.2d at 1354. The
court focused on the couple's intent to form a business, as well
as their joint provision of services and assets to the business.
Hassiepen, 269 Ill. App. 3d at 555-56, 646 N.E.2d at 1354.
The instant case more closely resembles Kime than Hassiepen.
Unlike the husband and wife in Hassiepen, the Goldstein siblings
did not show any intent to form a business. Instead, like the
family farming business in Kime, the Goldstein conglomerate was
"an undefined, hit or miss, arrangement" which merely carried on
what Benjamin started. The trial court, relying upon Kime, said:
"Quite frankly, I don't like what happened here.
I think that Ben started the family out on something
which really became somewhat self-defeating for various
and sundry members of the family. But it was his
property and he was obviously the head of the family
and they carried through on it.
***
The elements of sharing are there. There are many
elements that you need to define a partnership that
aren't. Who is in the partnership?
***
There is not continuity, there is nothing that one
can look at and say what is it, when did it start, when
is it supposed to end, and who's involved in it?
It was somewhat of a catch as catch can. It was
intended so that the family members would be able to
live their lives within that context and there was
really little thought given to what happens when all
the various family members die."
Under the UPA, mere joint tenancy does not signal the
existence of a partnership, regardless of shared profits. Here,
the siblings held the parcels and the family pot bank accounts in
joint tenancy. Additionally, the family members never had a
written partnership agreement. Any oral agreement among the
siblings neglected important provisions about whom the
partnership included, the creation and dissolution of the
partnership, and the distribution of partnership assets after
dissolution. While other evidence leads to conflicting
inferences on the partnership issue, we cannot say the manifest
weight of the evidence requires us to overturn the trial court's
conclusion that the Goldstein siblings did not intend to create a
partnership.
The trial court correctly found for the defendants on count
III.
CONCLUSION
We affirm the dismissal of counts I and II because Ann did
not bring individual claims against the estate and because the
properties were held in joint tenancy by Max before the 1966
conveyances to his siblings.
We also affirm the dismissal of count III because the
manifest weight of the evidence supports the trial court's
finding that a partnership did not exist between Max and his
siblings.
AFFIRMED.
McNAMARA and BURKE, JJ., concur.
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