Court Opinion

ID: 4258671
Source: CourtListenerOpinion
Date Created: 2018-03-27 22:10:03.955046+00
Date Added: 2024-06-11T14:26:17.477492
License: Public Domain

2018 IL App (3d) 170229

                                Opinion filed March 27, 2018
     _____________________________________________________________________________

                                                 IN THE

                                     APPELLATE COURT OF ILLINOIS

                                           THIRD DISTRICT

                                                   2018

     SUZETTE R. MOOK and RACHEL M.                   )       Appeal from the Circuit Court
     TRAVELSTEAD, as Independent Executor            )       of the 21st Judicial Circuit,
     of the Estate of Jeremy S. Travelstead,         )       Kankakee County, Illinois.
                                                     )
            Plaintiffs-Appellants,                   )
                                                     )       Appeal No. 3-17-0229
            v.                                       )       Circuit No. 11-L-158
                                                     )

     ROBIN R. JOHNSON and JAMY C.                    )

     JOHNSON,                                        )

                                                     )       Honorable Michael D. Kramer,
            Defendants-Appellees.                    )       Judge, Presiding.
     _____________________________________________________________________________

            JUSTICE SCHMIDT delivered the judgment of the court, with opinion.
            Justices Lytton and Wright concurred in the judgment and opinion.

                                                OPINION

¶1          Plaintiffs, Suzette R. Mook and Rachel M. Travelstead, as independent executor of the

     estate of Jeremy S. Travelstead, filed suit against defendants, Robin R. Johnson and Jamy C.

     Johnson, alleging that defendants committed fraud by fraudulently concealing the surrender of a

     life insurance policy. As a result of surrendering the policy, the insurance company issued a

     check payable to the seven co-owners of the policy in the amount of $612,542.81. After forging

     at least one of the plaintiffs’ signatures and cashing the check, defendants unevenly distributed

     the funds, keeping $317,440.93 for themselves while distributing $295,101.88 to the other five
     beneficiaries under the policy. Following a trial, the jury returned a verdict in favor of both

     plaintiffs and against each defendant awarding both compensatory and punitive damages.

     Specifically, the jury awarded (1) Mook a total of $44,960.56 in compensatory damages

     ($22,480.28 against each defendant) and $254,491.44 in punitive damages ($127,519.72 against

     each defendant) and (2) Jeremy’s estate a total of $65,508.56 in compensatory damages

     ($32,754.28 against each defendant) and $254,491.44 in punitive damages ($127,519.72 against

     each defendant).

¶2          Thereafter, the circuit court of Kankakee County remitted Mook’s and Jeremy’s estate’s

     punitive damage awards to $20,000 and $10,000 respectively. Plaintiffs appeal the court’s

     judgment remitting their punitive damage awards. We reverse and remand with directions.

¶3                                                FACTS

¶4          In February 2017, plaintiffs filed an amended two-count complaint against defendants in

     the circuit court of Kankakee County. The complaint alleged that defendants committed fraud by

     concealing the surrender of a life insurance policy, insured upon the lives of June R. Lackey and

     Robert C. Lackey, by (1) forging their signatures on the request for policy surrender form, (2)

     using the ability to receive the only notice and communication from the life insurance company

     in order to deceive them, and (3) pursuing a course of conduct designed by artifice and trick to

     deceive them. Plaintiffs each sought $500,000 in compensatory damages plus statutory interest,

     $1 million in punitive damages, and attorney fees and costs associated with their suit.

¶5                                          I. Undisputed Facts

¶6          Jamy is an insurance agent. In August 1999, Jamy sold the life insurance policy at issue,

     which provided a benefit of $3.5 million upon the death of the last Lackey. Jamy’s agency

     received a commission of $112,000 on the initial sale of the policy. Initially, Lackey’s four

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     daughters and three son-in-laws, Aloha M. and Edwin L. Travelstead, defendants Robin R. and

     Jamy C. Johnson, Brenda G. and David R. Zack, and Suzette R. Mook were the owners of the

     policy. Pursuant to the policy, upon the death of the last of the insured, the proceeds were

     payable in one lump sum to the above-named owners, as beneficiaries, per stirpes. As of October

     21, 2002, the owners and beneficiaries of the policy included defendants, plaintiffs, the Zacks,

     and Jeremy’s sister Shannon Oddera. Jeremy and Shannon replaced their parents on the policy

     following their deaths. Jamy sent a letter to the insurance company informing it that Robin was

     the “main owner” of the policy and that all bills and information should be sent to her and any

     questions directed to him. He did not send this document to any of the other policy owners.

¶7          The policy’s annual premium, due in August, was $140,000. Each of the seven owners

     paid the annual premium via a $20,000 gift they received from the Lackeys through the August

     2006 payment. Following the August 2006 premium payment, John Lackey announced that he

     would no longer fund his half of the owners’ annual premium payment and, commencing with

     the August 2007 payment, the owners could either make a loan from the policy against the cash

     surrender value to pay the premiums or surrender the policy.

¶8          In early March 2007, Robin called the insurance company to inquire about surrendering

     the policy. At that time, the insurance company informed her that all seven policy owners needed

     to sign the surrender form. The insurance company then followed up with Robin by letter, dated

     March 9, 2007, indicating that surrendering the policy may not be in her best interest and that

     other options were available. The letter further noted that if the policy was surrendered that day,

     the early surrender charges would be $126,000 and its net cash surrender value would be

     $618,720.30.

                                                     3

¶9            On March 20, 2007, Robin submitted a “request for policy surrender form” to the

       insurance company with only her signature. In an April 2, 2007, letter, the insurance company

       denied Robin’s request to surrender the policy because “[t]he signatures of all [seven co-]owners

       are required to complete the request.” Later that month, Robin submitted additional forms that

       purportedly bore the signatures of all seven co-owners of the policy. On April 27, 2007, Robin

       negotiated a check payable to all seven co-owners in the amount of $612,542.81. She distributed

       those funds as follows:

            $35,000.00             Robin and Jamy Johnson           Account No. 304-093
            $23,403.90             Robin Johnson                    Account No. 139-149
            $7,084.76              Aaron Johnson                    Account No. 173-592
            $60,000.00             Robin Johnson                    Certificate of Deposit
            $15,084.76             Robin Johnson                    Account No. 7252
            $6,000.00              Aaron Johnson                    Account No. 7250
            $45,254.29             Robin Johnson                    Account No. 2128
            $9,916.00              Robin Johnson                    Account No. 7252
            $30,000.00             Robin and Jamy Johnson           Account No. 5407
            $1,000.00              Aaron Johnson                    Account No. 7250
            $25,000.00             Jeremy Travelstead               Check
            $25,000.00             Shannon Odera                    Check
            $24,000.00             Edwin Travelstead                Check
            $25,000.00             Chad Travelstead                 Check
            $90,508.56             Brenda Zack                      Check
            $90,508.56             David Zack                       Check
            $15,084.76             Matt Zack                        Check
            $79,697.22             Centrue Bank                     Check to pay off the balance of
                                                                    a note secured by a mortgage on
                                                                    Robin and Jamy Johnson’s
                                                                    home
            $5,000.00              Robin Johnson                    Cash

       Aaron Johnson is Robin and Jamy Johnson’s son. Edwin and Chad Travelstead are Aloha and

       Edwin L. Travelstead’s sons. Matt Zack is Brenda and David Zack’s son.

¶ 10          Robert and June Lackey died prior to trial on April 3, 2009, and October 21, 2009,

       respectively.

¶ 11                                          II. Trial Testimony

                                                      4

¶ 12          Robin testified that she did not inform Mook of any alternatives to surrendering the

       policy prior to submitting the request to surrender forms to the insurance company. Robin gave

       the surrender form to her mother, June, and she received it back from June with Mook’s

       signature on it. She obtained permission from Jeremy to sign his name on the surrender form

       after telling him that his grandmother wanted to surrender the policy. Robin could not recall

       having any conversation with Jeremy regarding alternatives to surrendering the policy.

¶ 13          Jamy testified that he knew more than $300,000 of the $612,542.81 check received as a

       result of surrendering the life insurance policy was distributed to either himself, Robin, Aaron, or

       to the bank to pay off the mortgage on their home.

¶ 14          Mook testified that she first became aware that the policy had been surrendered when her

       sister, Brenda Zack, told her so in May 2008. Mook called the insurance company to report that

       she had not signed a surrender form. The insurance company then faxed a copy of the surrender

       forms. Mook denied that the signatures on the surrender form or the subsequent check belonged

       to her. After Mook spoke with her niece, Shannon Oddera, and found out that she received

       $25,000, Mook confronted Robin. Within one week of the confrontation, Robin presented Mook

       with a cashier’s check for $45,000 and a check from June for $45,000, which Mook accepted.

       Mook further testified that the signature on the policy surrender check purporting to be Jeremy’s

       signature did not belong to Jeremy. In addition, neither the check nor the policy surrender form

       bore Mook’s signature.

¶ 15          Jeremy’s testimony from his discovery deposition was then read into evidence. Jeremy

       was Aloha and Edwin L.’s son. He also had two brothers, Chad and Edwin, and a sister, Shannon

       Oderra. He gave Robin permission to sign his name on the surrender form after she told him his

       grandmother needed his signature. He assumed the money was going to his grandmother. The

                                                        5

       signature on the back of the surrender check was not his. He was not in the state of Illinois in

       April 2007 and could not have signed the check. He did not give anyone else permission to sign

       the check on his behalf. Jeremy received $25,000 from defendants.

¶ 16                         III. Closing Arguments, Jury Instruction, and Verdict

¶ 17           During closing argument, plaintiffs’ counsel reiterated that the face value of the policy

       was $3.5 million. He noted that had the policy been in effect at the time of June’s death, each

       owner would receive $434,000 after deducting for their loans. Counsel sought compensatory

       damages in the amount of $434,000 and punitive damages in the amount of $868,000 for each

       plaintiff.

¶ 18           Following arguments, the trial court instructed the jury regarding punitive damages. The

       court informed the jury that it should consider the following questions when determining the

       propriety of punitive damages: (1) how reprehensible defendants’ conduct was, including (a) the

       facts and circumstances of their conduct, (b) the financial vulnerability of plaintiffs, (c) the

       duration of the conduct, (d) the frequency of the conduct, (e) whether defendants attempted to

       conceal their misconduct, and (f) whether plaintiffs put their trust in defendants; (2) the actual

       and potential harm caused by defendants; and (3) the amount of money necessary to punish

       defendants and deter others from future wrongful conduct.

¶ 19           Thereafter, the jury returned a verdict in plaintiffs’ favor. Specifically, the jury awarded

       (1) Mook a total of $44,960.56 in compensatory damages ($22,480.28 against each defendant)

       and $254,491.44 in punitive damages ($127,519.72 against each defendant) and (2) Jeremy’s

       estate a total of $65,508.56 in compensatory damages ($32,754.28 against each defendant) and

       $254,491.44 in punitive damages ($127,519.72 against each defendant).

¶ 20                                       IV. Postjudgment Motions

                                                        6

¶ 21          On March 3, 2017, defendants filed (1) a motion for judgment notwithstanding the

       verdict, or in the alternative, a motion for a new trial and (2) a motion for remittitur of punitive

       damages and a motion for stay of judgment. Regarding their motion for remittitur, defendants

       asserted “the award for punitive damages *** was so excessive that it indicated that the jury was

       moved by passion and prejudice and the verdict exceeds the necessary limits of flexible limits of

       fair and reasonable compensation. Further the judgment for punitive damages was so large that it

       shocks the judicial conscience and should be reduced.”

¶ 22          In a written March 30, 2017, order, the trial court denied the motion for judgment

       notwithstanding the verdict, or in the alternative, a motion for a new trial. However, the court

       granted the motion for remittitur of punitive damages and for stay of judgment. Following a

       hearing, the court found that the punitive damage awards were improper and excessive. In the

       oral pronouncement of its decision, the court stated, in part, as follows:

                      “In considering this motion the Court has carefully considered the

                      facts of this case which is a private matter between family

                      members, and there are many factual aspects of this case that

                      would support the defendants’ position that to award punitive—

                      punitive damages is improper. Among those facts is the fact that

                      neither defendant signed the name of Suzette Mook on the request

                      for surrender of the policy or on the policy proceeds check. And

                      there is circumstantial evidence that the signature was put there by

                      the mother of Robin Johnson, also the mother of Suzette Mook.

                      There’s the circumstantial evidence that Robin Johnson may have

                      been acting on behalf of her mother in *** surrendering the policy

                                                         7

and distributing the proceeds in the manner that she did. Plaintiff

Travelstead testified that he understood the money involved was

his grandparents’ money and that his grandparents’ could do with

it what they wanted. And there was unrebutted testimony that

Jeremy Travelstead gave permission for his signature to be added

to the policy surrender request.

       Now, we are taught as children to honor our parents and to

be patient with them when they get older. Robin Johnson may have

been simply honoring her mother’s wishes in taking the action that

she did, but one of those actions was—was to present a document

to the insurance company that she knew had a false signature on it,

and she presented a check for payment that she knew had a false

signature on it, and she and her husband distributed proceeds

unequally despite knowing they were joint owners with the other

family members. This conduct is wrong no matter what the

motivation, though Ms. Johnson was in a difficult position in

trying to follow the law with regard to distribution of these

proceeds and her mother’s wishes. Difficult position, but given that

wrong there should be some punishment beyond simple restitution,

but that punishment must be in proportion to the wrongful conduct.

[The] Court notes that a conviction for forgery in Illinois carries a

jail sentence and may require restitution and a possible maximum

fine of $25,000. Plaintiff Suzette Mook testified she presented this

                                   8

                     case to the State’s Attorney and no criminal charges were ever

                     brought against the defendants. As we know the standard of proof

                     in a criminal case is known as beyond a reasonable doubt. A much

                     higher standard than the civil preponderance of the evidence

                     standard.

                             In this civil case the jury awarded substantial punitive

                     damages that the Court finds were not warranted by the evidence

                     and the jury awarded similar punitive damages—damage amounts

                     to each plaintiff which the Court finds was also not supported by

                     the evidence. The amount of punitive damages appears especially

                     excessive give that the plaintiff’s attorney argued for punitive

                     damages equally double the amount of actual damages and the jury

                     went well beyond even the plaintiff’s attorney’s request for

                     punitive damages.”

¶ 23          In sum, the court pointed to what it considered circumstantial evidence that June Lackey

       forged Mook’s signature and that Robin was simply “honoring her mother’s wishes” by

       surrendering the policy and distributing the funds as she did. The court then opined that the

       punitive damages awarded by the jury were “especially excessive” because (1) a conviction for

       forgery carries a possible maximum fine of only $25,000 and (2) plaintiffs’ attorney only sought

       punitive damages in an amount double to the amount of compensatory damages. Accordingly,

       the court remitted Mook’s punitive damage award to a total of $20,000 ($10,000 against each

       defendant) and Jeremy’s estate’s punitive damage award to a total of $10,000 ($5,000 against

       each defendant).

                                                      9

¶ 24           Plaintiffs appeal.

¶ 25                                                 ANALYSIS

¶ 26           Plaintiffs assert that the trial court abused its discretion by remitting their respective

       punitive damage awards.

¶ 27           Punitive damages, unlike compensatory damages, serve to punish the wrongdoer and to

       deter that party and others from committing similar acts of wrongdoing in the future. Slovinski v.

       Elliot, 237 Ill. 2d 51, 57-58 (2010). “Punitive damages may be awarded when the defendant’s

       tortious conduct evinces a high degree of moral culpability, that is, when the tort is ‘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 of the rights of others.’ ” Id. at 58

       (quoting Kelsay v. Motorola, Inc., 74 Ill. 2d 172, 186 (1978)). Because punitive damages are

       penal in nature, courts must take caution to see that they are not improperly or unwisely awarded.

       Id. To that end, a “trial court may, in its discretion, with respect to punitive damages, determine

       whether a jury award for punitive damages is excessive, and if so, enter a remittur and a

       conditional new trial.” 735 ILCS 5/2-1207 (West 2016). However, a reviewing court is not free

       to reweigh the evidence and reduce a jury award merely because it may have arrived at a

       different verdict. Snelson v. Kamm, 204 Ill. 2d 1, 37 (2003). Rather, a jury’s punitive damages

       award should not modified unless it is so excessive that it must have been a result of passion,

       partiality, or corruption. Blount v. Stroud, 395 Ill. App. 3d 8, 22 (2009).

¶ 28           We review a trial court’s remittitur of a jury’s punitive damages award for an abuse of

       discretion. Slovinski, 237 Ill. 2d at 58. Ultimately, we must determine whether there is a basis in

       the record to support the trial court’s remittitur. Id. at 62.

                                                          10 

¶ 29           In granting defendants’ motion for remittitur and reducing the punitive damages in this

       case, the trial court essentially reweighed the evidence and then, based on its assessment of the

       facts, including some irrelevant facts not of record, determined that the punitive damages

       awarded were excessive. Based on our review of the evidence, we find no basis in the record to

       support the trial court’s remittitur.

¶ 30           In this case, the jury had evidence before it which supports its award of punitive

       damages. The record shows that reasonable jurors could conclude that the conversion in this case

       actually started in August 1999, when Jamy sold the policy to his in-laws and received a large

       commission. Defendants began their quest to commit fraud by concealment against their family

       members when, as early as October 21, 2002, they attempted to restrict all information pertaining

       to the policy from the other five owners by asserting that Robin was the “main owner” of the

       policy and that all billings, information, and questions should be directed to her or Jamy.

       Approximately 4½ years later, Robin attempted to surrender the policy on her own despite

       knowing that all policy owners were required to sign the surrender form. After her attempt to

       surrender was denied, she obtained Jeremy’s permission to sign his signature on the surrender

       form under what the jury could have found to be false pretenses, i.e., by telling Jeremy that his

       grandmother wanted to surrender the policy. Next, Robin submitted the surrender form knowing

       that Mook’s signature had been forged. Finally, after negotiating the policy proceeds check with

       Mook’s and Jeremy’s forged signatures, defendants distributed more than half of the proceeds to

       themselves and their son and paid off the mortgage on their house, despite the fact that there

       were five other owners on the policy. Defendants distributed nothing to Mook until she

       confronted Robin, after which Robin gave her a check for $45,000. In addition, while the jury

       determined plaintiffs’ compensatory damages based on the actual surrender value of the policy, it

                                                      11 

       had evidence before it that had the policy been in effect at the time of June’s death, each owner

       would have received approximately $434,000. Thus, the jury clearly could have found

       defendants’ conduct reprehensible enough and the need for deterrence sufficient to warrant the

       punitive damages it awarded.

¶ 31          We further note that the punitive damages awarded by the jury were only 5.66 times the

       amount of Mook’s compensatory damages and 3.88 times the amount of Jeremy’s estate’s

       compensatory damages. Defendants cite no authority in which a reviewing court reduced

       punitive damages which were single-digit multipliers on a motion for remittitur, nor did our

       research discover any. In fact, it appears that punitive damage awards in single-digit multipliers

       generally comport with due process. For example, in State Farm Mutual Automobile Insurance

       Co. v. Campbell, 538 U.S. 408, 425 (2003), the United States Supreme Court declined to impose

       a bright-line ratio between punitive and compensatory damages but hinted that punitive damages

       in the single-digit ratio will generally satisfy due process. Specifically, the Court noted that “few

       awards exceeding a single-digit ratio between punitive and compensatory damages, to a

       significant degree, will satisfy due process”; that “an award of more than four times the amount

       of compensatory damages might be close to the line of constitutional impropriety”; and that

       “[s]ingle-digit multipliers are more likely to comport with due process, while still achieving the

       State’s goals of deterrence and retribution, than awards in range of 500 to 1, [citation], or, in this

       case, of 145 to 1.” Id. Based on the facts of this case, we find the punitive damages awarded by

       the jury are appropriate.

¶ 32          Moreover, as indicated earlier, the trial court considered facts not in evidence in support

       of its decision to grant the remittitur in this case. Specifically, the court considered evidence that

       it heard during previous proceedings but which were deemed inadmissible at trial, including, for

                                                        12 

       example, the fact that the State declined to prosecute defendants criminally or that Robin was

       merely following her mother’s wishes. This was clearly error. Although a trial judge, acting as

       trier of fact, is presumed to consider only admissible evidence, that presumption is necessarily

       rebutted where, as here, the record affirmatively shows otherwise. People v. Wallenberg, 24 Ill.
2d 350, 354 (1962).

¶ 33          Accordingly, we find the trial court abused its discretion in granting the remittitur and

       reducing the punitive damage awards.

¶ 34                                           CONCLUSION

¶ 35          For the foregoing reasons, we reverse the judgment of circuit court of Kankakee County

       and remand with directions to enter judgment on the jury award.

¶ 36          Reversed and remanded with directions.

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