Patrick Held v. Robert T. Held, Sr., Individually and as Trustee of Bodee Investment Trust Municipal Bond Portfolio of Patrick Held

Citation: 137 F.3d 998Docket: 96-3648, 97-1125

Court: Court of Appeals for the Seventh Circuit; April 8, 1998; Federal Appellate Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Patrick Held initiated a lawsuit against his uncle, Robert Held, regarding a trust agreement tied to a set of municipal bonds valued at approximately $320,000, which had been given to Patrick by his grandmother with instructions for their use in caring for himself and his mother. The conflict began intensifying in 1976 when Robert pressured Patrick to transfer the bonds to him, threatening to evict Patrick and his ailing mother from the house they lived in, which Robert owned. Under duress, Patrick relinquished the bonds to Robert's lawyer with the understanding that Robert would invest them and return the proceeds.

Following his mother's death, Patrick grew suspicious of Robert's intentions, as Robert repeatedly assured him over the next decade that he would return the bonds or provide the investment proceeds, but failed to do so. By 1986, Robert informed Patrick that the bonds were held in a trust fund and promised annual payments of $15,000 until 1998, along with a down payment for a condominium. Although Robert made a $25,000 down payment in 1987 and a letter from Robert's employee confirmed Patrick's expected trust income, Robert did not provide the promised payments, leading Patrick to demand an accounting in 1995.

In September 1995, Patrick filed a lawsuit alleging breach of fiduciary duty, constructive trust, and conversion, along with a request for accounting. However, Robert successfully moved for summary judgment, arguing that Patrick's claims were barred by the statute of limitations, as he had not filed within the required five-year period. The district court ruled that the ten-year statute for written contracts did not apply, dismissing the relevance of the Lucy Letter as insufficient to trigger that provision.

Patrick appeals the district court's ruling that the Lucy Letter was insufficient to trigger a ten-year statute of limitations, as well as the court's decision to award certain costs to Robert. A jurisdictional issue arose during oral arguments, where it was highlighted that the complaint lacked allegations of citizenship, only stating each party's residence, which is inadequate for establishing diversity jurisdiction. The court indicated that the suit would be dismissed unless Patrick requested leave to amend the complaint under 28 U.S.C. § 1653. Patrick subsequently filed a request, amending the complaint to assert that he is a citizen of Illinois and Robert is a citizen of Florida, leading to the court granting the motion to amend and proceeding with the appeal.

In arguing the merits, Patrick asserts that the ten-year limitation period for his claim against his uncle applies, as per Illinois law regarding written obligations. He contends that the Lucy Letter qualifies as "other evidence of indebtedness in writing," and that his uncle's $25,000 payment in 1987 revived the statute of limitations. The Lucy Letter, of poor quality and on business letterhead from "Investment Trust," confirms Patrick's annual tax-free income from a municipal bond portfolio. Patrick claims Lucy, the letter's signer, is his uncle's agent, and for summary judgment purposes, the facts must be construed in his favor. The letter is deemed written evidence of an oral trust agreement, although Patrick does not assert that a formal trust agreement exists in writing.

Under Illinois law, the distinction between actions based on written contracts and those based on other written evidence of indebtedness is critical. An action must be specifically grounded in a written contract; merely having written evidence does not suffice. The Lucy Letter, which serves only as supporting evidence, does not constitute a trust agreement or contract, meaning Patrick's claim against his uncle cannot invoke the statute of limitations applicable to written contracts. 

Illinois courts define a written contract as one where all essential terms are documented, and if completing the contract requires parol evidence, it is treated as oral under the statute of limitations. Similarly, a document qualifies as "other evidence of indebtedness" only if it requires no parol evidence to establish its essential elements. The requirements for an express trust—disclosure of the property, identification of beneficiaries, and execution methods—are not met by the Lucy Letter, disqualifying it from the ten-year limitations period applicable to written contracts.

Actions stemming from unwritten contracts or civil actions not specifically addressed by statute fall under a five-year statute of limitations, applicable to claims of fraud, deceit, and enforcement of constructive trusts. Consequently, the five-year limit applies to Patrick's action, affirming the district court's summary judgment in favor of Robert.

Additionally, the court's award of costs to Robert, totaling $3,636.47, is under review. Patrick contests the inclusion of costs related to videotaped depositions, which lacked prior court approval, as well as costs for expedited transcripts and deposition attendance fees. The award of costs is subject to an abuse of discretion standard.

Patrick's challenge to the award of costs for expedited transcripts is deemed frivolous, as the district court explicitly denied Robert's recovery of this cost. Regarding deposition attendance fees, although these fees are not specified in the statute, the district court retains discretion to award them under 28 U.S.C. § 1920(2). Previous case law supports this discretionary authority, and Patrick has not provided grounds to claim an abuse of discretion in this instance. The district court's discretion in awarding costs for videotaping an out-of-state witness's deposition is also upheld, as Robert presented valid justifications for the videotaping, which qualifies as "other than stenographic means" and is taxable, despite being costlier than a stenographic transcript. The total costs awarded to Robert amount to $3,636.47. The excerpt references the limitations imposed by statutes of limitation, underscoring their role in preventing stale claims from burdening the courts and protecting defendants from faded memories and lost evidence. This case exemplifies the importance of such statutes, given that the dispute involves an oral agreement from over twenty years ago, with deceased key witnesses and likely diminished recollections. Consequently, the judgment is affirmed.