Hagney v. Lopeman

590 N.E.2d 466, 147 Ill. 2d 458, 168 Ill. Dec. 829, 1992 Ill. LEXIS 63, 1992 WL 57438
CourtIllinois Supreme Court
DecidedMarch 26, 1992
Docket71326
StatusPublished
Cited by66 cases

This text of 590 N.E.2d 466 (Hagney v. Lopeman) is published on Counsel Stack Legal Research, covering Illinois Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hagney v. Lopeman, 590 N.E.2d 466, 147 Ill. 2d 458, 168 Ill. Dec. 829, 1992 Ill. LEXIS 63, 1992 WL 57438 (Ill. 1992).

Opinion

JUSTICE CUNNINGHAM

delivered the opinion of the court:

Plaintiffs appeal from an order of the appellate court reversing the judgment of the circuit court of Menard County. (203 Ill. App. 3d 1108 (unpublished order under Supreme Court Rule 23).) The issue presented is whether the statute of limitations in a constructive trust action (Ill. Rev. Stat. 1981, ch. 110, par. 13 — 205) is tolled under section 13 — 215 of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 13 — 215) where plaintiffs have not specifically alleged in their pleadings that the fraud complained of was not discovered, or discoverable, within the limitations period. The appellate court held that plaintiffs’ pleadings were insufficient to toll the operation of the limitations period. This court granted leave to appeal, pursuant to our Rule 315 (134 Ill. 2d R. 315). We reverse and remand this cause to allow plaintiffs an opportunity to amend their pleadings to conform to the requirements herein set forth.

This action was filed by the relatives of Catherine Stevens, deceased, acting on behalf of her estate and in their individual capacity. The defendant, Andrew W. Peters, known in his professional capacity as Warren Peters, is an attorney. He became acquainted with Catherine Stevens and her family in 1945 or 1946. Soon thereafter, the defendant began to handle the family’s legal affairs, including drafting a will for the mother of Catherine Stevens. This document gave Catherine a life estate in certain properties held by her mother and created the remainder interests in Andrew and Reiner On-ken, family cousins.

After the death of her mother, Catherine Stevens began to explore the possibility of purchasing these remainder interests from her cousins and asked the defendant to represent her in this acquisition. On behalf of Catherine Stevens, the defendant had contact with the Onkens’ attorney on several occasions to inquire about this transaction. There is some evidence to indicate that the defendant was only known by the Onkens’ attorney as Warren Peters.

Defendant eventually purchased these remainder interests for himself for a sum of $10,000 in December of 1971. Approximately six months later, defendant recorded these deeds, using the name Andrew W. Peters.

The evidence is unclear as to whether Catherine Stevens knew of this transaction. However, Stevens did continue to hire defendant Peters to complete her income tax returns until the time of her death.

Catherine Stevens died intestate on October 15, 1981. Upon her death, the defendant took title to 230 acres of farmland. At that time, this property was valued at $366,000.

The estate of Catherine Stevens sought to have a constructive trust imposed to recover the farmland and therefore filed this action in November 1982. In their pleadings, plaintiffs alleged that a fiduciary relationship existed between the defendant and Catherine Stevens, and asked the trial court to impose a constructive trust such that the defendant would be required to convey the remainder interests back to the Stevens estate.

Plaintiffs’ pleadings read in pertinent part:

“31. That for many years prior to her death, Catherine Stevens frequently contacted Defendant Andrew W. Peters for legal and financial advice.
32. That the aforesaid Decedent, Catherine Stevens ■ came to repose trust and confidence in her attorney, the aforesaid Defendant Andrew W. Peters, and a relationship of trust and confidence developed between the Decedent and Defendant Andrew W. Peters.
33. That while Defendant Andrew W. Peters was acting in his capacity as attorney for the Decedent, Catherine Stevens, and at a time an attorney-client relationship existed between Defendant Andrew W. Peters and Catherine Stevens, Defendant Andrew W. Peters acquired the remainder interest in the real estate hereinbefore described in Paragraph Twenty (20).
34. That a fiduciary relationship existed between Defendant Andrew W. Peters, as attorney, and his client, Catherine Stevens.
35. That Defendant Andrew W. Peters acquired the aforesaid remainder interest at a time when Catherine Stevens was attempting to acquire the same aforesaid remainder interest.
36. That Defendant Andrew W. Peters was aware of the fact that Catherine Stevens was attempting to acquire the remainder interest.
* * *
40. That in acquiring the aforesaid remainder interest in violation of his fiduciary duty to his client, Defendant Andrew W. Peters holds the property described herein as constructive trustee for the Estate of Catherine Stevens.”

The trial court found for the plaintiffs, holding that the defendant held the property in constructive trust, and directed the defendant to reconvey his interests in the farmland to Catherine Stevens! estate. The appellate court reversed, finding the action precluded by the statute of limitations, as plaintiffs’ pleadings were insufficient to invoke the provisions of section 13 — 215 (also known as the discovery rule) to toll the statute of limitations.

In Illinois, a five-year statute of limitations applies to an action for constructive trusts. (Chicago Park District v. Kenroy, Inc. (1980), 78 Ill. 2d 555, 560-61; Ill. Rev. Stat. 1981, ch. 110, par. 13 — 205.) However, the operation of the statute of limitations is tolled if a party can prove that some fraud prevented the discovery of the cause of action. (Ill. Rev. Stat. 1981, ch. 110, par. .13— 215.) Section 13 — 215 (the discovery rule) states:

“13 — 215. Fraudulent concealment. If a person liable to an action fraudulently conceals the cause of such action from the knowledge of the person entitled thereto, the action may be commenced at any time within 5 years after the person entitled to bring the same discovers that he or she has such cause of action, and not afterwards.” Ill. Rev. Stat. 1981, ch. 110, par. 13 — 215.

The provisions of the discovery rule may come into play where either fraud or the breach of a fiduciary relationship, by which the fiduciary profits at the expense of the other party, is alleged. (See Kenroy, 78 Ill. 2d at 561-62.) Generally, where one alleges that the concealment of a cause of action tolls the statute of limitations, it is necessary to show affirmative acts by the fiduciary designed to prevent the discovery of the action. (Kenroy, 78 Ill. 2d at 561; Skrodzki v. Sherman State Bank (1932), 348 Ill. 403, 407.) However, as this court stated in Kenroy.

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Cite This Page — Counsel Stack

Bluebook (online)
590 N.E.2d 466, 147 Ill. 2d 458, 168 Ill. Dec. 829, 1992 Ill. LEXIS 63, 1992 WL 57438, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hagney-v-lopeman-ill-1992.