Gataric v. Colak , 2016 IL App (1st) 151281 ( 2016 )

2016 IL App (1st) 151281FIFTH DIVISION
July 15, 2016
No. 1-15-1281
) Appeal from the
CEDO GATARIC, ) Circuit Court of
) Cook County
Plaintiff and Citation Petitioner-Appellee, )
)
v. )
)
ADRIAN COLAK, ) No. 12 L 3377
)
Defendant )
)
)
) Honorable
(Vanya Khoury, Citation Respondent-Appellant). ) Alexander P. White,
) Judge Presiding.
)
)
PRESIDING JUSTICE REYES delivered the judgment of the court, with opinion.
Justices Lampkin and Burke concurred in the judgment and opinion.
OPINION
¶1 The citation respondent, Vanya Khoury (Khoury), appeals from the circuit court of Cook
County’s order denying her claim to funds held in a joint checking account with defendant,
Adrian Colak (Colak), and ordering those funds be turned over to plaintiff, Cedo Gataric
(Gataric), in satisfaction of an underlying judgment obtained by Gataric against Colak. On
appeal, Khoury argues that in rendering this determination the trial court applied an improper
burden of proof. Khoury further argues that the trial court’s finding that she was not the sole
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owner of the funds contained in the joint checking account was against the manifest weight of
the evidence. For the following reasons, we affirm.
¶2 BACKGROUND
¶3 In March 2012, Gataric filed a breach of contract action against Colak and other
individuals not parties to this appeal seeking to recover amounts allegedly due pursuant to loans
made to Colak that were never repaid. The circuit court subsequently entered judgment in favor
of Gataric against Colak in the amount of $298,692.78.
¶4 In supplementary proceedings, Gataric issued a citation to discover assets against
JPMorgan Chase Bank, N.A. (JPMorgan). 1 JPMorgan responded to the citation indicating Colak
was the owner of two accounts at its institution: (1) a savings account containing $1198.96; and
(2) a checking account containing $9384.09. JPMorgan listed Khoury as a joint owner of the
checking account. JPMorgan froze the assets contained in these accounts as of April 1, 2014.
Thereafter, Gataric filed a motion requesting JPMorgan turnover the funds contained in the
savings and checking accounts in satisfaction of the judgment.
¶5 On May 19, 2014, Gataric filed a citation to discover assets against Khoury.
Subsequently, on May 29, 2014, the circuit court entered an order requiring Khoury to personally
appear before the court on July 30, 2014. On June 11, 2014, Khoury filed her appearance as a
citation respondent along with a motion for an extension of time to respond to the motion for
turnover of funds. On June 25, 2014, the trial court granted Khoury’s motion for an extension of
time and entered a briefing schedule on the motion for turnover of funds.
¶6 On June 30, 2014, Khoury filed her response to the motion for turnover of funds. In her
response, Khoury asserted she opened the checking account solely in her name on May 12, 2010.
On July 25, 2013, she added Colak as a joint owner of the checking account. Khoury stated that
1
We adopt the spelling of “JPMorgan” as it appears in the record on appeal.
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on March 10 and March 13, 2014, she deposited $6200 and $25,062, respectively, into the joint
checking account for Colak’s use as a short-term loan to Colak. Thereafter, on March 17 and 26,
2014, Colak deposited $6000 and $25,000, respectively, into the checking account as repayment
for the loan. Khoury argued that as of April 1, 2014, none of the funds in the checking account
belonged to Colak. Khoury attached an affidavit in support of her response to the motion for
turnover of funds. In her affidavit Khoury averred the facts as alleged in the response to the
motion were true and correct. Khoury also attached to her response bank statements regarding
the joint checking account for the time period of May 16, 2013, through July 16, 2013 (when she
was the sole owner of the checking account), and January 17, 2014, through April 15, 2014.
Khoury did not include statements from July 17, 2013, through January 16, 2014, in her
response.
¶7 In reply, Gataric argued Khoury failed to establish by clear and convincing evidence that
a gift was not intended when she added Colak as a joint owner of the checking account.
¶8 After numerous continuances, on November 6, 2014, the trial court conducted an
evidentiary hearing on the motion for turnover of the funds contained in the JPMorgan
accounts. 2 Khoury and her husband, Nassar Khoury (Nassar), testified at the evidentiary hearing.
The trial court took the matter under advisement and on December 18, 2014, granted Gataric’s
motion for turnover of funds.
¶9 Khoury then filed a motion to reconsider in which she argued that the trial court made
factual errors in its order, namely that: (1) Colak was referred to as “Ms. Colak” when he is male
and Khoury was referred to as “Mr. Khoury” when she is female; (2) the order referred to an
affidavit from “Nasser [sic] Khoury” that does not exist; and (3) JPMorgan sent an answer to
2
No transcript of the evidentiary hearing is contained in the record on appeal nor has Khoury
provided an agreed statement of facts or a bystander’s report regarding the evidentiary hearing. See Ill. S.
Ct. R. 323 (eff. Dec. 13, 2005).
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Gataric’s attorney listing “Khoury, a/k/a Nassir, Sam [sic]” when Nassar is not an owner of the
checking account. Khoury further argued the trial court did not properly consider the evidence
where Nassar testified that the joint checking account was used for personal and family purposes
only and that deposits into the checking account came from the operations of his business and
from overseas family accounts. Khoury additionally noted Nassar’s testimony regarding how
Colak came to be a joint owner of the checking account. According to Khoury’s motion to
reconsider, Nassar testified “in summer of 2013 he approached Colak to act as an intermediary
for the purchase of a condominium unit in the building in which Nassar and Vanya Khoury
reside. Nassar Khoury wanted Adrian Colak to use the funds in the Chase Account for the
purchase of that condominium unit. That was the only reason that Adrian Colak was added to
Vanya Khoury’s Chase Account. Despite the attempted purchase not being completed, Adrian
Colak was never removed as an owner from the Chase Account.” Khoury’s motion to reconsider
further explained that Nassar was the “primary person to testify at the November 6th hearing due
to Vanya Khoury’s limited use of the English language.”
¶ 10 In response, Gataric noted that while Khoury signed an affidavit which was typed in
English, when called to testify at the evidentiary hearing, Khoury stated in English that she did
not speak English. Gataric further argued that Nassar was the only witness and his testimony
failed to provide clear and convincing evidence that the legal presumption of a gift to Colak was
overcome.
¶ 11 After the matter was fully briefed and argued, the circuit court issued a written order
denying Khoury’s motion to reconsider. The court noted that the misstatements in the order
granting the motion for turnover of funds did not lead to a misapplication of the law. According
to the court, Khoury presented no newly discovered evidence or changes in the law, but instead
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asserted the same arguments she presented at the evidentiary hearing. The court concluded this
was not a proper basis for a motion to reconsider and denied the motion. This appeal followed.
¶ 12 ANALYSIS
¶ 13 Khoury first argues that in its December 18, 2014, order the trial court improperly applied
a higher burden of proof, that of clear and convincing evidence. According to Khoury, in matters
involving the garnishment provisions of the Code of Civil Procedure (garnishment statute), the
“trial shall be conducted as in other civil cases.” 735 ILCS 5/12-711(c) (West 2014). Khoury
maintains that in an ordinary civil case the burden of proof is by a preponderance of the
evidence. Khoury argues that because there was no fiduciary relationship between Khoury and
Colak and the matter did not involve any fraud, therefore, the burden of proof was not clear and
convincing evidence, but instead was “a presumption in favor of Gataric with the burden on
Khoury to prove what interest Khoury had in the Joint Account by a preponderance of the
evidence.”
¶ 14 Gataric argues Khoury forfeited this argument by not raising it before the trial court.
While, generally, a party forfeits issues raised for the first time on appeal (see Mabry v. Boler,
2012 IL App (1st) 111464, ¶ 15), we choose to exercise our discretion and address this claim on
its merits (see CFC Investment, L.L.C. v. McLean, 387 Ill. App. 3d 520, 526 (2008)). Thus, we
turn to examine whether the trial court applied the proper burden of proof in this case. Whether
the circuit court applied the correct burden of proof is a question of law we review de novo. 1350
Lake Shore Associates v. Healey, 223 Ill. 2d 607, 627 (2006). Prior to discussing the proper
burden of proof, however, we find it helpful to explain the process of supplementary
proceedings, particularly where, as here, a citation had been served on a third party and an
adverse claim was asserted as a result.
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¶ 15 In Illinois, civil judgments are enforced through supplementary proceedings pursuant to
section 2-1402 of the Code of Civil Procedure (Code) (735 ILCS 5/2-1402 (West 2014)). Section
2-1402 of the Code “provides a mechanism by which a judgment creditor may initiate
supplementary proceedings against a judgment debtor or a third party to discover the assets of a
judgment debtor and apply those assets to satisfy an underlying judgment.” Stonecrafters, Inc. v.
Wholesale Life Insurance Brokerage, Inc., 393 Ill. App. 3d 951, 958 (2009); 735 ILCS 5/2-1402
(West 2014). The supplementary proceeding is initiated by the service of a citation to discover
assets. 735 ILCS 5/2-1402(a) (West 2014). After the citation is served, the judgment becomes a
lien on all nonexempt personal property belonging to the judgment debtor. 735 ILCS 5/2-
1402(m) (West 2014). During the course of supplementary proceedings, a judgment creditor may
serve a citation to discover assets on a third party, requiring it to freeze the assets belonging to
the judgment debtor. 735 ILCS 5/2-1402(f) (West 2014). The only relevant inquiries in a
supplementary proceeding are (1) whether the judgment debtor possesses assets that should be
applied to satisfy the judgment, and (2) whether a third party is holding assets of the judgment
debtor that should be applied to satisfy the judgment. Schak v. Blom, 334 Ill. App. 3d 129, 133
(2002).
¶ 16 In this case, the parties do not dispute that JPMorgan possessed the assets of Colak, the
judgment debtor, in two accounts at its institution. The parties further do not contest that Colak
and Khoury were listed as the joint owners of the checking account. What is at issue in this
matter is whether Khoury, a third-party garnishee, properly proved that she did not intend to gift
to Colak the funds contained within the joint checking account and that, consequently, the funds
were owned solely by her.
¶ 17 When a third party asserts rights to the property in question, the claimant’s rights shall be
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determined in accordance with the garnishment statute (735 ILCS 5/12-710 et seq. (West 2014)).
Bank of Aspen v. Fox Cartage, Inc., 126 Ill. 2d 307, 314 (1989); 735 ILCS 5/2-1402(g) (West
2014). Section 12-711 of the garnishment statute provides such “trial[s] shall be conducted as in
other civil cases.” 735 ILCS 5/12-711(c) (West 2014). Typically, in civil cases it is the plaintiff’s
burden to prove its case by a preponderance of the evidence. In re Parentage of Rogan M., 2014
IL App (1st) 141214, ¶ 5. In matters involving the ownership of a joint bank account, however,
when a “garnishee answers that a judgment debtor holds money in a joint bank account, this is
sufficient proof to establish a prima facie case for the judgment creditor that the money in the
account belonged to the judgment debtor.” Leaf v. McGowan, 13 Ill. App. 2d 58, 65 (1957). The
burden is then on the garnishee to prove what part, if any, of the funds in the joint bank account
belonged to him or her. Id.¶ 18 Khoury does not contest that the burden has shifted to her, but questions the proper
burden by which she was to prove she alone owned the funds contained in the joint checking
account. Khoury maintains, relying on section 12-711(c) of the garnishment statute, that she
must only prove her burden by a preponderance of the evidence. In support of her stance, Khoury
relies on Leaf and Highsmith v. Department of Public Aid, 345 Ill. App. 3d 774 (2004), which
she contends sets forth her burden of proof is by a preponderance of the evidence.
¶ 19 As previously discussed, in Leaf this court held that a joint bank account may be
garnished by a judgment creditor when one of the parties to the joint account is the judgment
debtor. Leaf, 13 Ill. App. 2d at 65. In so holding, the Leaf court further stated that the burden was
upon the other party to the joint account to establish what part, if any, of the funds in such
account belonged to him or her. Id. In considering the testimony and evidence introduced, the
Leaf court ultimately found the garnishee did not overcome the presumption that the funds
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contained in the joint account belonged to both the judgment debtor and the garnishee. Id. The
court considered the relationship between the parties and that a majority of the deposits in the
account were made by the judgment debtor. Id. The court further observed that the garnishee’s
statements that all the funds in the account was earned by him and that the judgment debtor had
withdrawn all of her funds from the joint account were unsupported. Id. The Leaf court,
however, did not indicate the specific burden of proof of the third-party garnishee; whether it
was by a preponderance of the evidence or by clear and convincing evidence. See id.
¶ 20 In Highsmith, which involved proceedings pursuant to the Administrative Review Law
(735 ILCS 5/3-101 et seq. (West 2000)), the question before the court was whether the Illinois
Department of Public Aid properly concluded, on documentary evidence alone, that the
garnishee was the sole owner of an investment account where his son, the judgment debtor, was
also listed as a joint owner of the account. Highsmith, 345 Ill. App. 3d at 776. The reviewing
court first observed that, under an administrative rule, “ ‘The burden is on the joint owner to
prove his or her share of the personal property or account through the production of documentary
evidence.’ ” Id. at 777 (quoting 89 Ill. Adm. Code 104.110 (2002)). The court further observed
that while the investment account was not held at a bank, “the general principles governing the
determination of interests in joint bank accounts are closely analogous.” Id. at 778. The
Highsmith court then adopted the framework set forth in Leaf and further listed other relevant
factors for the court to consider when determining ownership of a joint account: (1) the exercise
and control over the funds; (2) contributions to the account, specifically whether the contribution
by one codepositor constituted a gift to others and the proprietary source of a given contribution;
(3) who paid taxes on the earnings from the account; and (4) the particular purpose, if any, for
which the account was established. Id. at 780.
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¶ 21 The Highsmith court ultimately concluded that the garnishee met his burden of proof of
sole ownership of the account. Id. Specifically, the garnishee proved through documentary and
testimonial evidence that: the account was held in his name along with his son’s; his son would
have been a young child when the account was establish; only he made contributions to the
account and paid taxes on earnings from the account; his son never exercised any control over
the account; and it was established to finance his son’s education. Id. The court further held that
the administrative procedure restricting proof to documentary evidence was not suitable to the
determination of ownership of a joint bank account and violated due process. Id. at 781.
However, in rendering its opinion, the Highsmith court, like the Leaf court, did not indicate the
garnishee’s specific burden of proof. See id. at 780. Thus, neither Leaf nor Highsmith support
Khoury’s claim that she must prove her sole ownership of the joint checking account by a
preponderance of the evidence.
¶ 22 In contrast, Gataric argues the proper burden of proof, particularly where ownership of
the funds in a joint bank account is involved, is by clear and convincing evidence. Gataric relies
primarily on the cases cited favorably by the trial court in its written order involving the
determination of ownership of joint bank accounts, namely In re Estate of Harms, 236 Ill. App.
3d 630 (1992), and In re Estate of Teall, 329 Ill. App. 3d 83 (2002). In reply, Khoury takes issue
with Gataric and the trial court’s reliance on these cases. According to Khoury, these estate cases
deal with “ ‘convenience accounts’ ” and involve issues of fiduciary duty and fraud. Khoury
argues that based on the facts of these cases, it necessarily follows that the courts would apply a
higher burden of proof. Khoury contends, however, that fiduciary duty and fraud are not issues in
the matter at bar and therefore the lower burden of a preponderance of the evidence applies here.
¶ 23 Notably, Harms does not involve issues of fraud or fiduciary duty. See Harms, 236 Ill.
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App. 3d at 639. In that case, two grandchildren initiated citation proceedings on behalf of their
grandmother’s estate seeking a determination of right and title to various bank accounts held
jointly in the name of the decedent and one or both of her two daughters. Id. at 631. The
grandchildren argued these accounts were “convenience accounts,” which the court described as
“an account, apparently held in some form of joint tenancy, where in fact the creator did not
intend for the other tenant to have any interest, present or future, but had some other intent in
creating the account.” Id. at 634. In determining whether these accounts were convenience
accounts, the court set forth the rule that, “At the creation of a statutory joint tenancy, a
presumption of donative intent arises and a party claiming adversely to the instrument creating
the joint account has the burden of proving by clear and convincing evidence that a gift was not
intended.” Id. The court ultimately concluded that the evidence was insufficient to establish the
accounts were convenience accounts. Id. at 636.
¶ 24 Similarly, In re Estate of Teall also considered the presumption that arises when a party
asserts a joint account is merely a “convenience account.” 329 Ill. App. 3d. at 87-88. The Teall
court reiterated the “presumption of donative intent” as set forth in Harms and that it must be
overcome by a demonstration of “clear and convincing evidence that a gift was not intended.”
(Internal quotation marks omitted.) Id. at 87. The Teall court further stated that “absent evidence
of abuse or betrayal of confidence, a finding of a fiduciary relationship between joint tenants
does not rebut the presumption of donative intent.” Id. at 88.
¶ 25 In this case, Khoury essentially argues that the joint checking account, of which Colak is
a co-owner, is a convenience account. Khoury argued before the trial court and now on appeal
that she added Colak as a joint owner of the checking account in order to transfer funds to him as
part of a short-term loan. Khoury further argued that thereafter, Colak deposited funds into the
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joint checking account as repayment of the loan. Thus, based on Khoury’s own argument, it was
Khoury’s burden by clear and convincing evidence to establish the checking account was one of
convenience. See Harms, 236 Ill. App. 3d at 634; Teall, 329 Ill. App. 3d at 87.
¶ 26 The trial court did not explicitly set forth in its December 18, 2014, order the standard it
utilized when determining whether Khoury met her burden of proof. As noted by Khoury,
however, the trial court cited Teall favorably in its written order denying her motion to
reconsider and, as previously discussed, Teall applied the clear and convincing burden of proof.
See id. at 87. Khoury also acknowledges she has not provided this court with a transcript of the
proceedings, a bystander’s report, or an agreed statement of facts that would further indicate the
burden of proof employed by the trial court. It is Khoury’s burden, as the appellant, to provide us
with a sufficient record on appeal. Foutch v. O’Bryant, 99 Ill. 2d 389, 391-92 (1984). Without
such a record, we must presume the order entered by the trial court was in conformity with the
law. Id. Accordingly, based on the limited record before us, we conclude the trial court used the
proper burden of proof in this case.
¶ 27 Khoury next argues the trial court’s finding that she was not the sole owner of the funds
contained in the joint checking account was against the manifest weight of the evidence. Khoury
maintains that the affidavit she attached to her response to the motion for turnover of funds along
with the bank statements she provided sufficiently demonstrated her sole interest in the joint
checking account. Khoury further argues that at the evidentiary hearing Gataric did not refute the
evidence or present any contradictory evidence and, therefore, the trial court erred in denying her
adverse claim and granting Gataric’s motion to turnover funds.
¶ 28 When a trial of the issues is conducted in a supplementary proceeding, the trial court’s
decision of the issues and contested facts is reviewed under the manifest weight of the evidence
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standard. Buckner v. Causey, 311 Ill. App. 3d 139, 142 (1999); In re Marriage of Eberhardt, 387
Ill. App. 3d 226, 238 (2008). Similarly, a finding regarding the ownership of funds contained in a
joint account is reviewed under the manifest weight of the evidence standard. Teall, 329 Ill. App.
3d at 88. A judgment is against the manifest weight of the evidence only when an opposite
conclusion is apparent or when findings appear to be unreasonable, arbitrary, or not based on
evidence. Buckner, 311 Ill. App. 3d at 143.
¶ 29 Our supreme court has long recognized that to support a claim of error, the appellant has
the burden to present a sufficiently complete record. Corral v. Mervis Industries, Inc., 217 Ill. 2d
144, 156 (2005). “From the very nature of an appeal it is evident that the court of review must
have before it the record to review in order to determine whether there was the error claimed by
the appellant.” Foutch, 99 Ill. 2d at 391. “An issue relating to a circuit court’s factual findings
and basis for its legal conclusions obviously cannot be reviewed absent a report or record of the
proceeding.” Corral, 217 Ill. 2d at 156. Without an adequate record preserving the claimed error,
the court of review must presume the circuit court’s order had a sufficient factual basis and that it
conforms with the law. Id. at 157.
¶ 30 “[W]hen the record on appeal is incomplete, a reviewing court should actually ‘indulge in
every reasonable presumption favorable to the judgment from which the appeal is taken,
including that the trial court ruled or acted correctly.’ ” Smolinski v. Vojta, 363 Ill. App. 3d 752,
757-58 (2006) (quoting People v. Majer, 131 Ill. App. 3d 80, 84 (1985)). This presumption even
operates to the extent that where the record lacks information of evidence presented at a hearing,
a reviewing court will not assume none was heard and that the court’s order, therefore, was
improper. See Webster v. Hartman, 195 Ill. 2d 426, 433 (2001). Instead, “ ‘it [will] presume[ ]
that the court heard adequate evidence to support the decision that was rendered’ unless the
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record indicates otherwise.” Id. (quoting Skaggs v. Junis, 28 Ill. 2d 199, 201-02 (1963)).
¶ 31 Here, the record indicates the trial court conducted an evidentiary hearing and heard
testimony from Khoury and her husband, Nassar. We, however, do not know what their
testimony consisted of nor do we know whether the documents attached to Khoury’s affidavit
were introduced into evidence. There is no transcript of this proceeding in the record and the trial
court made no findings of fact in its written order. As previously discussed, however, this lack of
factual findings does not mean we must reverse the trial court. See Webster v. Hartman, 195 Ill.
2d at 433. Instead, it means we must presume the court heard adequate evidence to support its
decision. See id. Therefore, based on the inadequacy of the record in this case, we must presume
the result below was correct and affirm the trial court’s judgment. See In re Marriage of Gulla,
234 Ill. 2d 414, 423-24 (2009).
¶ 32 We note that Khoury also argues on appeal that the trial court’s factual errors further
support her argument that the trial court’s decision was against the manifest weight of the
evidence. We observe that in its written order denying Khoury’s motion to reconsider, the trial
court indicated that its misstatements of certain facts had no bearing on its decision. In
acknowledging its mistake, the trial court restated the background information and corrected its
prior errors. 3 Furthermore, Khoury cites no authority that would require us to reverse the trial
court’s order under these circumstances. See Ill. S. Ct. R. 341(h)(7) (eff. Feb. 6, 2013).
Accordingly, we affirm the trial court’s judgment.
¶ 33 CONCLUSION
¶ 34 For the reasons stated, we affirm the judgment of the circuit court of Cook County.
3
We note that the April 2, 2015, order denying Khoury’s motion to reconsider continued to state
that Khoury’s adverse claim was supported by the affidavit of Nassar. While Nassar’s affidavit is not
included in the record on appeal, Khoury’s response to the motion for turnover of funds does indicate that
her adverse claim “is supported by the affidavits of Vanya Khoury and Nasser [sic] Khoury and said
affidavits are incorporated herein in their entirety.”
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¶ 35 Affirmed.
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