## I L L I N O I S 

## O F F I C I A L 

## R E P O R T S Appellate Court

In re Estat

e of Stahlin g , 2013 IL App (4th) 120271

Appellate Court Caption I n re: the Estate of MARTI N STAHL I

NG, SR., Dec eased
, M AR T I N STAHL I NG, J R., Petitioner-Appellee
, v. MARTI E KOEHL ER, Respondent-Appe llant.

District & N o. Four th District Docke t No. 4-12-0271

Filed April 3, 2013

Held (Note : T

his syl lab us

con st it ute s n o par t of the opi nio n of the cour t but has bee n pre

par ed by the Rep o rt er of D e c i s i o n s f

o r t h e

c o n v e n i e n c e o

f t h e

rea der

. ) I n addre ssing a cer tified question pursuant to S upreme Court Rule 308, the appellate court responde d that the exis tence of a health car e power of attorney does not cre ate a fiduciar y relationship which, as a matter of law, raises a presumption of undue influence in the principal’s execution of a deed that names the ag ent und er the health car e power of attorney as a joint tenant with the principal in a deed, si n ce , b y i t self, a health car e power of attorney does not g ive the ag ent authority to manag e or control the principa l’s proper

ty

.

Dec ision Under
Review Appea l from the Circuit Court of Jersey County , No. 08-P-14; the Hon. Eric S. Pistorius, J udg e, pre siding.

J udg ment Certified que stion answere d.Counsel on

Appea l Michae l J

. McDona ld and Anita G. Cooper, both of Cooper & McDona ld, of Godfr ey , for a

ppellant.

Sandra J

. Tatoian, of Mathis, Marifia n & Richter, L td., of Edwar dsville, for a ppellee.

Panel J USTI CE HARRI S delivered the judgme nt of the cour t, with opinion.
J ustices Appleton and T urner concur red in the judg ment and opinion.

OP INION

¶ 1 Respondent, Martie Koehler (Koe hler), and petitioner, Martin Stahling, J r. (Stahling Jr.),

ar e the children of dece dent, Martin Stahling, Sr., and the coadministrators of h i s es t at e. During probate proce eding s, Koehler filed a petition to ex p en d es t ate funds to investigate d ec ed en t’s execution of a deed which transfe rre d land to himself and Stahling J r. as j o i n t tenants with rig hts of s u rv i v o rs hip. The trial court g rante d the petition and appointed an attorney to investigate the possibili ty of the estate filing an action to rec over the proper ty at issue in the deed. Following that invest ig a ti on, the court deter

mined reta ining specia l counsel
to pursue a claim on behalf of the est ate and at the estate’ s expense was unwar rante d. Howeve r, on Koe hler’s motion and pursua nt to I llinois Supreme Court Rule 308 (ef f. Fe b. 26, 2010), the c ourt ce rtified the f ollowing que stion for revie w: “Whether the exis tence of

a Hea lth Car e Power of Attorney cre ates a fiduciar y relationship which, as a matter of law, raises a presumption of u n d u e influence in the execution of a deed that names the ag ent

u n d er the Hea lth Care Power of Attorney as a joint tenant in the deed.” We answe r t h e

cer tified question in the neg ative.

¶ 2 I . BA CKGROUND ¶ 3 On September 6, 2005, dece dent executed a deed tr ansfe rring sever al hundre d acr es of land to himself and Stahling J r., as joint tenants with rights of survivor ship. On November 7, 2007, dece dent died and, on April 14, 2008, his will was admitted to probate

. On J une 17, 2009, Koehler filed a petition in the probate proce eding s to expend estate funds to investigate the possibili ty of the estate filing an action to rec over the proper ty transfe rre d to dece dent and Stahling Jr. a s joint tena

nts. She sug g ested dece dent was unduly influence d by

Stahling Jr.

an d al l ege d
, at the time the September 2005 deed was signe d, dece dent had rec ently been rele ased from the hos pital and w as t ak i ng numerous prescribe d medications. Koehler also

asser ted her belief that Stahling J r. was prese nt “at least part of the time” when dece dent met with his attorney

reg ardingthe pre paringand sig ning of the dee d.

-2-¶ 4 On J une 26, 2009, the trial court g rante d Koehler ’s petition, and on J uly 14
, 2 0 0 9
, i t

appointed attorne y

Phil Hamilt on to investigate the potential of a leg al ac tion by

the estate
to re co v er the proper

ty

. On October 23, 2009, Hamilton filed a repor t on the matter. He attache d aff

idavits from Stahling J r.; Stahling J r.’s wife; Geor g e Wit tm a n , th e in d iv id

u al who
prepa red the deed at issue; a

nd Koehler

. Acc ording to Wit tman, dece dent was 79 y ear s old
at the tim e t h e deed at issue was executed. Wit tman asser ted dece dent expressed a clea r intent that he wanted the proper ty to g o to Stahling J r. afte r dece dent’s death

. Ha m i lton
repor ted “Wittm an was familiar with the dece dent’s health situation and was convince d that the dece dent knew wh at he was doing and understood he was making a g ift to his son.” Stahling J r. was prese nt at a meeting betwee n Wit tman and dece dent when dece dent first discussed his intention to transfe r the proper ty but Stahling J r. was not prese nt when dece dent ulti m at el y signe d the deed. Wit tman did not believe dece dent was unduly influence d. Stahling Jr. denied attempting to influence dece dent re g ardingwhat to do with the prope rty

and asse rted he was surpr ised dec edent wa nted to transfe r the prope rty

. ¶ 5 Koehler related conce rns reg arding dece dent’s mental and phy sical health at the time he signe d the deed, noting he suffe red a sever e b ea t i ng approximately two months prior, was hospitaliz ed, and und er we nt hear t surg ery

. Koehler believed Stahling J r. administered dece dent’s medication, controlled dece dent’s aff airs, and car ed for dece dent on a regular basis. She asser

ted that neither she nor her m o t h er , dece dent’s live-in companion, had knowledg e of the deed pr ior to dece dent’s death and that S tahling J r. was not forthcoming about the dee d. ¶ 6 Hamilton deter mined that, while the inf o rm at i o n h e o b t ai n ed could “ra ise at least a question as to whether the dece dent was unduly influence d” by Stahling J r., such information

was insufficient to establish a presumption o f undue influence

. He noted that, without a power of attorney n am i n g Stahling J r. as dece dent’s ag ent, there was no fiduciar y relationship as a matter of law and t hat, ot herw ise, proof of a fiduciary relationship had to be “ ‘cle ar, convincing
, and so strong , unequivoca l, and unmistakable a s to lead to but one conclusion.’ [C itation.] ” Hamilton conclude d that reta ining specia l counsel to pursue a claim on behalf of the e state and at the estate’ s expense was unwa rra nted. ¶ 7 On November 4, 2009, Stahling J r. filed a petition for court direc tio n , as k i n g the trial court to orde r that the estate’ s coadministrators expend no further estate funds pursuing an investigation into the joint tenanc y deed or pursuing rec overy of the rea l estate that was the subject of the deed. On November 24, 2009, a hear ing was held in the matter a nd the cour

t order ed that the coadministrators expend n o fu rt her estate funds pursuing a suit based on

rec overing the proper

ty that was the subject of the joint tenanc y deed. Ho we v er , it noted nothing in its order

prohibited Koehle r fr om pursuing the matter at her own e x pense. ¶ 8 On Dec ember 15, 2010, Koehler filed a motion as k i n g t h e t rial court to rec onsider its decision. She alleg ed Hamilton’s repor t was based up o n h i s b el i ef that dece dent had not executed a po we r of attorney naming Stahling J r. as his ag ent. However, Koehler asserte d a health car e power of attorney , signe d by dece dent and namin g S t ah l ing J r. as dece dent’s
ag ent, had rec ently been d i s co v er ed by Wit tman and reve aled during his deposition on September 16, 2010. Koehler maintained the health car e power of attorney , dated Aug ust 26, 2005, would have had a m at er i al impact on Hamilton’s opinions and the court’s ultimate

-3-ruling

. Koehler asked that the court authorize Hamilton to rec onsider his repor t based upon the discovery of the health car e power of attorney and file an amende d repor t. She reque sted the court also authorize additional pay ment to Hamilton out of estate funds and that the court

rec onsider its previous orde r. ¶ 9 On Fe bruar

y 9, 2011, the trial court order ed additional fac ts to be prese nted to H amilton
reg arding the health car e power of attorney and direc ting Hamilton to advise the court if such additional fac ts would alter Hamilton’s previous opinion. On Fe bruar y 18, 2011, Hamilton filed a supplemental repor t. He noted a p roperty power of attorney cre ates a fiduciar y relationship as a matter of law but stated he found no I llinois case holding the same reg arding

a health car e power of attorney

. Hamilto n d et er m i n ed that the exis tence of a health car e power of attorney “would appe ar to be some evidenc e potentially supporting the exis tence of a fiduciar

y relationship, but *** standing alone would not meet the burden of establishing the exis tence of a fiduciar y relationship by clea

r and convincing proof.” Hamilton further stated that it did not appea r the deed at issue was procur ed in any way by Stahling J r. and that “[o] bviously

a hea lth care power

of attorne y

would have been no use in handling f inancial aff airs of the dece dent.” He stated his opin i o n re m ained unchang ed and reta ining specia l counsel to pursue a claim on behalf of the estate and at the estate’ s expense was unwar rante d. ¶ 10 On April 28, 2011, the trial c ourt enter ed the f ollowing or der: “Supplem ental Report prepa red by attorney *** Hamilton, court appointed investigator, *** revie wed an d co n s i dere d. Ba sed upon the rec ommendation of *** Hamilton, as well as the court’s revie w of the case authority cited there in, this court finds that reta ining specia l counsel to pursue a claim on behalf of the estate, at the expense of the estate, i s not war

rante d. This decision, of course , does not fore close heirs of [decede nt’s] estate from pursuing such an a ction at their own e x pense.” ¶ 11 On Aug ust 18, 2011, Koehler f iled a motion to cer

tify a question to this court pursuant
to I llinois Supreme Court Rule 308 (ef f. Fe b. 26, 2 0 1 0 ). On Marc h 14, 2012, the court enter ed an order cer

tify ing the following question for appellate revie w: “Whether the exis tence of a Hea lth Care Power of Attorney cre ates a fiduciar y relat i o n s hip which, as a matter of law, raises a presumption of undue influence in the execution of a deed that names the ag ent under

the Hea lth Care Power

of Attorney

as a joint tenant in the de ed.” O n April 18, 2012, we a llowed an a pplication for lea

ve to appe al pursuant to Rule 308.

¶ 12 I I . ANAL YSI S ¶ 13 Prior to addre ssi n g th e c e r ti f ie d q uestion, we are compelled to note rese rvations re g arding the propriety of an interlocutory appea l under the ci rc u m s t an ces prese nted by this case

. Appellate courts “have power to ensure that the authority to pursue interlocutory appea ls is
not abused.” Voss v. Lincoln Mall Managem ent Co.
, 166 I ll. App. 3d 442, 445, 519 N.E.2d 1056, 1058 (1988). Pursuant to Rule 308(a)
, this court may , in its discretion, allow appea ls from interlocutory order s that are not otherwise appea lable. Howeve r, such appea ls may only be had afte r finding s that (1) “the order i n v o l v es a q uestion of law as to which there is substantial gr ound for diff ere nce of opinion” and (2) “an immediate appea l from the or der
may materia lly advanc e the ultimate termination of the litigation.” I ll. S. Ct. R. 308(a) (ef f.

-4-Fe b. 26, 2010).

¶ 14 “Appe als under [R ule 308] should be available only in the exceptional case wher e there

are compelling rea sons for rende ring an ear ly deter mination of a critica l question of law and wher e a deter

mination of the issue would materia lly advance t h e litigation.” Kincaid v. Smith , 252 I ll. App. 3d 618, 622, 625 N.E.2d 750, 753 (1993). “ The rule should be strictly construed and sparing ly exercised.” Kincaid
, 252 I ll. App. 3d at 622-23, 625 N.E.2d at 753. ¶ 15 Under the circ umstances prese nted, we question whether an immediate appea l of the trial court’s April 28, 2011, ruling materia lly advanc es the ultimate termination of the litigation. The cer tified question relates to presumptions of undue influence in the execution of a deed. Ho we v er , the order from which Koehler seeks immediate revie w involved her attempt s during probate proce eding s to use estate funds to investigate or pursue such a claim. Contrary
to Rule 308’s require ments, Koehler failed to show how an immediate appea l and resolution of the cer tified question would materia lly advanc e the termination of the underly ing probate
proce eding s. Although we have conce rns as to whether this case prese nts the exceptional circ umstances nece ssary for ear ly revie w, we note this court allowed Koehler ’s application for leave to appea l in April 2012, and the matter has been pending on appea l since that date. Given this delay and that the cer tified question prese nts a question of law about which there is substantial g round for differ ence s of opinion, we exercise our discretion under Rule 308 and choose to answer

the ce rtified question. ¶ 16 As stated, the cer tified question conce rns whether a health car e power of attorney cre ates a fiduc iary

relationship which, as a matter of l aw, raises a presumption of undue influe nce in the execution of a deed. Koehler arg ues a principal-a g ent relationship stems from a health

car e power of attorney and g ives rise to a presumption of undue influence in any transac tion betwee n the principal and ag ent. She notes case law providing that a proper ty p o we r of attorney establishes a fiduciar y relationship as a matter of law and results in a presumption of undue influence

. Although Koehler acknow ledg es no I lli n o i s case holds the same with
respe ct to a health car e power of attorney , she points out that neither is there a case that holds the contra ry position. Fur

ther, she cites case law and portions of the Powers of Attorney for Hea lth Care L aw (755 I L CS 45/4-1 to 4-12 (West 2004)) to support her p o s i t i o n t hat the relationship b etwee n the principal and ag ent to a health car e power of attorney is one involving trust and confide nce which must g ive rise to a presumption of undue influence in
transac tions between the parties. ¶ 17 Conversely
, Stahling J r. argues a health car e power of attorney does not cre ate a fiduciar y relationship wher e there has been no evidenc e of acc eptanc e by the ag ent of duties deleg ated
pursua n t to the power

. Additionally
, he contends that, even when a fiduciar y rela tionship exis ts as the result of a health car e power of attorney , that relationship extends only to health

car e matters within the scope of the power of attorney

. Thus, Stahling J r. argues a health car e power of attorney cannot c reate a pr esumption of undue influence in proper ty transac tions betwee n the power ’s principa l and ag ent. We ag ree with Stahling J r. ¶ 18 Gene rally
, a presumption of fr aud or undue influence exis ts “ wher e there is a fiduciar y relationship betwee n the parties and the fiduciar y has benef

itted by virtue of his fi duciar y status.” In re Estate of De Ja r n et te , 286 I ll. App. 3d 1082, 1088, 677 N.E.2d 1024, 1029

-5-(1997). “A confide ntial or fiduciar y relationship exis ts in a ll c a s e s where trust and confide nce

are repose d in another who there by g ains a resulting influence and superiority .” Apple v. Apple
, 407 I ll. 464, 468-6 9
, 95 N.E.2d 334, 337 (1950). Fiducia ry relationships may be shown to exi st either as a matter of la

w or a s a matter of

fac t. In re Estate of L ong , 311 I ll. App. 3 d 9 5 9, 963, 726 N.E.2d 187, 190 (2000). A fiduciar y relationship “may exis t as a matter of law betwee n p a

r tn e r s , joint adventur ers, trustee and benef iciary
, g uardia

n and war d, attorney and client, and principal and age nt.” Carroll v. C aldwell
, 12 I ll. 2d 487, 495, 147 N.E.2d 69, 73 (1957). “Where the alleg ed rela tion does not exis t as a matter of law, it must be prove d by

clea r and c onvincing evidenc e.” Apple , 407 I ll. at 469, 95 N.E.2d at 337. ¶ 19 The parties eac h note s ever al cases for the proposit ion that a power of attorney cre ates

a fiducia ry re l at i onship as a matter of law. See DeJ arnette , 286 I ll. App. 3d at 1088, 677 N.E.2d at 1029; In re Estate of Miller
, 334 I ll. App. 3d 692, 697, 778 N.E.2d 2 6 2, 266 (2002); In re Estate of

Rybolt
, 258 I ll. App. 3d 886, 889, 631 N.E.2d 792, 795 (1994); W hite

v. Raines
, 215 I ll. App. 3d 49, 59, 574 N.E.2d 272, 279 (1991); Lemp v. Hauptmann
, 170 I ll. App. 3d 753, 757, 525 N.E.2d 203, 205 (1988). Howeve r, as the pa rties also note, rele vant

case law conc erns only

power s of attorne y

dealing with property

and fina ncial matter s and their eff ect on proper

ty and financ ial transac tions betwee n the parties. Case law does not simil arly addre ss the issue prese nted by this case as to wh et h er a health car e power of attorney , alone, can cre ate a presumption of u n d u e influence in proper ty and financ ial
transac tions between the power ’s principa l and ag ent. ¶ 20 I n this case, de cede nt executed a statutory short form powe r of attorney for he alth car e pursuant to section 4-10 of the Powers of Attorney for Hea lth Care L aw (755 I L CS 45/4-10 (West 2004)) and appoint ed S t ah l i n g J r. as his ag ent. The power of attorney authorized Stahling J r. to make health car e decisions on dece dent’s behalf

. Gene rally
, we ag ree that an individual may cre ate a health car e p o we r o f att orney that results in a principal-a g ent relationship which, in turn, may cre ate a fiduciar y relationship. Specifica lly
, the P o we r o f Attorney for Hea lth Car e L aw provides that its purpose is to ensure that, a n “individual, as principal
, can deleg ate * * * d ec i sion making power to a trusted agent and be sure that the agent’s power to make persona l and health car e decisions for the principal will be eff ective
to the s ame ex tent as t houg h made by the principal .” (Emphases added.) 755 I L CS 45/4-1 (West 2004). As stated, a principal-a g ent re lationship creates a fiduc iary relationship. ¶ 21 Howeve r, “to establish a fiduciar y relationship, the tr

u s t a n d c o n f id e n c e a ll e g e d ly

r eposed by the first party must actua lly be acc epted by the second party .” Hensler v. Busey Bank
, 231 I ll. App. 3d 920, 928, 596 N.E.2d 1269, 1275 (1992). Although “ [t ]he statutory short form
power o f attorney for health car e *** authorizes the ag ent to make any and all health car e decisions on behalf of the principal which the principal could make if prese nt and under no disability ,” the named ag ent is “under no duty to exercise g ranted p o we rs or to assume control of or responsibility for the principal’s h ealth car e.” 755 I L CS 45/4-10(b) (West 2004). The fac e of the document does not require the ag ent’s signature (755 I L CS 45/4-10(a) (West 2004)) and it is only upon exercising g rante d power s that the ag ent is “re quired to use due ca re to a ct for the benef

it of the principal in a ccor dance with the terms of the statutory health ca re pow er” (755 I L CS 45/ 4-10(b) (West 2004)). ¶ 22 To cre ate a fiduciar y relationship, an ag ent must acc ep t t h e p o we rs deleg ated by the

-6-principal. The execution of a s t at utory short form power of attorney , alone and without

evidenc e of acc eptanc e by the named ag ent, is insufficient to cre ate a fiduciar y rela tionship betwee n the principal and that ag ent. I n eac h of the case s Koehler relies upon, evidenc e d emonstrated the ag ent’s acc eptanc e of a fiduciar y relationship by showing his o r h er perf ormanc e of acts authorized under the proper ty power s of attorney

. Mere execution of the statutory short form power of attorney for health car e by a principal does not simil arly demonstrate an ag ent’s acc eptanc e. In the ca se at bar, Stahling J r. claimed he was unawa re that dece dent had ex ec u t ed t h e statutory short form and the rec ord failed to show he ever exercised any authority under the health car e power of attorney

. Under such circ umstances, there was no acc eptanc e of the ag ency rela tionship and, as a result, no fiduciar y relationship. ¶ 23 We further ag ree with Stahling J r. that, even when a health car e power of attorney cre ates

a fiduciar y rela tionship betwee n ind ividuals, that relationship does not extend to matters outside t h e s cope of the power of attorney

. Moreove r, a health car e power of attorney , by itself, does not cre ate a presumption of undue influence in proper ty or financ ial transac tions betwee n the power ’s principa l and ag ent. ¶ 24 I n McD onald v. Mc Donald , 408 I ll. 388, 394, 97 N.E.2d 336, 339 (1951), the supr eme court he ld that “whe re a convey ance arises outside the s cope of a fiduc iary relation shown
to exis t only as a matter of law, there is no presumption th at t he transac tion resulted from undue influence.” I n that case , the pl aintiff b rought an action ag ainst his brother and t hree sisters to s et aside five deeds eff ecting the partition of a far m on the basis of fra

ud. McD onald
, 408 I ll. at 389, 97 N.E.2d at 33 7. The plainti ff arg ued that, beca use he and his brother had been partne rs in a farming operation, his brother “occ upied the position of fiduciar y ” and, as a result, the challeng ed transac tion was presumptively fr au dulent. McD onald
, 408 I ll. at 393, 97 N.E.2d at 339. The court acknow led ged t h at , wher e a convey ance arises out of a fiduciar y relationship, bene fitting parties wer e require d to show that the transac tion was fair and equitable. McD onald
, 4 0 8 I ll. at 394, 97 N.E.2d at 339. Howeve r, it conclude d “the partne rship rela tion [di d] not exte n d t o al l aff airs and
transac tions betwee n partne rs, and a convey ance outside the relationship [ wa s ] not presumptively

fra udulent.” McD onald , 408 I ll. at 394, 97 N.E.2d at 339. ¶ 25 The parties ag ree that no I llinois case specific ally addre sses whether a health car e powe r of attorney results in a presumption of frau d o r u n d u e influence in proper ty or financ ial
transac tions. Howeve r, Stahling J r. cites In re Sechre st , 537 S.E.2d 511, 517 (N.C. Ct. App. 2000), a North Carolina C o u rt o f Appea ls case , for the proposition that “an ag ent is a fiduciar y only perta ining to matters within the scope of hi s ag ency .” I n that case , the court held that beca

use a health ca

re pow er of

attorney dealt exclusively with me dical decisions, it did not cre ate a fiduciar y relationship betwe en the power ’s named ag ent and its principal

conce rning the principa l’s will. Sechre st , 537 S.E.2d at 517. ¶ 26 Sechre

st is con s i s t en t wi t h o u r supreme court’s decision in McD onald and both are rele vant to the issue prese nted her e. Althoug h a health car e power of attorney may cre ate a fiduciar y relationship betwee n the power ’s principal and ag ent, the scope of that rela tionship is limit ed solely to matters involving the principal’s health ca re

. T h e ag ent under a health

car e power of attorney would have no authority to manag e or control the principal’s proper ty

or financ ial matters. I n acc ord with McD onald , we f ind a hea lth care power

of attorne y , by

-7-itself
, does not result in a presumption of undue influence betwee n the power ’s principal and
ag ent in transac tions invol ving pr operty or financ ial matters.

¶ 27 I I I . CONCL USI ON ¶ 28 For

the re asons stated, we answe r the trial c ourt’s ce rtified question in the neg ative.

¶ 29 Certified que stion answere d.

-8-