Court Opinion

ID: 4341349
Source: CourtListenerOpinion
Date Created: 2018-11-14 18:09:15.329514+00
Date Added: 2024-06-11T14:48:53.736812
License: Public Domain

Digitally signed by
                                                                      Reporter of Decisions
                                                                      Reason: I attest to the
                       Illinois Official Reports                      accuracy and
                                                                      integrity of this
                                                                      document
                              Appellate Court                         Date: 2018.11.01
                                                                      15:50:27 -05'00'

                  Mook v. Johnson, 2018 IL App (3d) 170229

Appellate Court   SUZETTE R. MOOK and RACHEL M. TRAVELSTEAD, as
Caption           Independent Executor of the Estate of Jeremy S. Travelstead,
                  Plaintiffs-Appellants, v. ROBIN R. JOHNSON and JAMY C.
                  JOHNSON, Defendants-Appellees.

District & No.    Third District
                  Docket No. 3-17-0229

Filed             March 27, 2018

Decision Under    Appeal from the Circuit Court of Kankakee County, No. 11-L-158;
Review            the Hon. Michael D. Kramer, Judge, presiding.

Judgment          Reversed and remanded with directions.

Counsel on        Alan F. Smietanski, of Bradley, for appellants.
Appeal
                  Robert A. Regas, of Regas, Gubbins, and Regas, of Kankakee, for
                  appellees.

Panel             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
     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.

                                                -2-
¶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.
¶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

                                                  -3-
       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
¶ 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
       Odera. 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
       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

                                                    -4-
       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
¶ 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 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

                                                    -5-
               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 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).
¶ 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).

                                                   -6-
¶ 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.
¶ 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 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

                                                   -7-
       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 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.

                                                     -8-