Opinion ID: 2709519
Heading Depth: 3
Heading Rank: 1

Heading: Presumption Background

Text: The parties agree that the outcome of this case hinges on the interpretation and interplay of two “strong” presumptions arising in agency law that directly relate to the Administrators’ breach of fiduciary claim against Kotter: the presumption of undue influence and the presumption of fraud. The presumption of undue influence has been defined as “any improper . . . urgency of persuasion whereby the will of a person is overpowered and he is induced to 5 (...continued) fiduciary duty to Hedstrom because of her position as his real estate agent, as well as because of the agency relationship between Kotter and Hedstrom that “went beyond a typical real estate broker-client relationship.” See Ball, 2012 U.S. Dist. LEXIS 38739, at -33 (citing Ioerger v. Halverson Constr. Co., 902 N.E.2d 645, 648 (Ill. 2008)). Our analysis does not require us to resolve the question as to what relationship between the parties or underlying fact establishes the fiduciary duty as a matter of law. 28 No. 12-1969 do or forbear an act which he would not do or would do if left to act freely.” Franciscan Sisters Health Care Corp. v. Dean, 448 N.E.2d 872, 875 (Ill. 1983) (hereinafter Franciscan Sisters). Similarly, the presumption of fraud is generally understood to mean as follows: “[w]here the existence of a fiduciary relationship has been established, the law presumes that any transactions between the parties, by which the dominant party has profited, are fraudulent.” Jones v. Washington, 107 N.E.2d 672, 674 (Ill. 1952). Under Illinois law, the names of each presumption are used almost interchangeably, see Hofert v. Latorri, 174 N.E.2d 866, 869 (Ill. 1961) (“The defendants made no effort to rebut the presumption of fraud and undue influence that arose from the proof that a confidential relationship existed and that the dominant party had gained from the transaction.”) (emphasis added), and the principles underlying each overlap. Compare Long v. Lyon, 726 N.E.2d 187, 193 (Ill. App. Ct. 4th Dist. 2000) (explaining that the defendant “did not meet his burden of showing that he exercised good faith and did not betray the confidence reposed in him” during the transaction), with Franciscan Sisters, 448 N.E.2d at 877 (stating that attorneys who stand to gain from wills they prepared for their clients must demonstrate “they are not defrauding or unduly influencing their clients”). To the extent the Administrators contend there are two completely separate lines of authority—one for will contests and one for transactions—we disagree. Both presumptions arise from a fiduciary’s general duty to “refrain from seeking a selfish benefit during the relationship,” see Neade, 739 N.E.2d at 500 (internal quotation marks omitNo. 12-1969 29 ted), be it in a transaction, the drafting of a will, or the preparation of a trust. When applicable, these presumptions create a prima facie case as to the disputed issue; they do not shift the burden of proof in the case. Franciscan Sisters, 448 N.E.2d at 876. Rather, “the presence of a presumption in a case only has the effect of shifting to the party against whom it operates the burden of going forward and introducing evidence to meet the presumption.” Diederich v. Walters, 357 N.E.2d 1128, 1131 (Ill. 1976). But once the party on the adverse side of the presumption introduces sufficient evidence to rebut the presumption, the “bubble bursts” and the presumption vanishes. Dep’t of Cent. Mgmt. Servs. v. Ill. Labor Relations Bd., 902 N.E.2d 1122, 1134 (Ill. App. Ct. 4th Dist. 2009). The issue is then decided as if no presumption ever existed. Lipscomb v. Sisters of St. Francis Health Servs., Inc., 799 N.E.2d 293, 298 (Ill. App. Ct. 1st Dist. 2003). Illinois courts have required “clear and convincing” evidence to overcome the presumptions of fraud and undue influence. Franciscan Sisters, 448 N.E.2d at 878; see R.J. Mgmt. Co. v. SRLB Dev. Corp., 806 N.E.2d 1074, 1081 (Ill. App. Ct. 2d Dist. 2004) (explaining that the “clear and convincing” standard applies to “strong” presumptions that typically arise “where the party challenging the presumption was a fiduciary of the party receiving the favor of the presumption”). Conversely, if the party is unable to offer “clear and convincing” evidence to the contrary of the presumption, the prima facie case will support a finding as to the issues involved. See Franciscan Sisters, 448 N.E.2d at 876 (citations omitted); Diedrich, 357 N.E.2d at 1132. 30 No. 12-1969