Warranty Deed Was Found Invalid Because Guardianship Was Never Canceled

Jose Adame paid $145,000 for a house that was being sold by joint tenants, Arnold and Arthur Lynch. There was a problem with the warranty deed that Arnold signed in June 2005.

In 2002, Arnold was in a coma following a car accident. The judge appointed James Brya as plenary guardian of Arnold’s estate and person. Arnold eventually regained consciousness. But the guardianship was never canceled. This meant that the warranty deed signed by Arnold, who was still under the court’s guardianship orders, was invalid or void.

Arnold died intestate ten months after the closing, leaving Arthur as the sole heir. In 2009, the Cook County public guardian was appointed as plenary protector of Arthur’s estate and person.

The public guardian and the public administrator filed recovery citations against Adame, a title insurance company and the plenary guardian of Arnold’s estate, Brya.

As to Adame, the petitioners argued that Arnold’s incapacity meant the conveyance of Arthur’s interest was void. The public administrator also alleged Brya converted the net proceeds of the sale, $78,707.

This case was one of first impression on appeal to the Illinois Appellate Court. A Cook County circuit court judge ordered Adame to return the real estate.

The Illinois Appellate Court reversed, concluding: (1) the sale as to Arnold’s joint tenancy interest is void; (2) the sale of Arthur’s joint tenancy interest is valid; and (3) Adame is a tenant in common with Arthur’s estate.

Section 11a-22 of the Probate Act of 1975 provides that “every note, bill, bond or other contract by any person for whom a plenary guardian has been appointed or who is adjudged to be unable to so contract is void as against that person and his estate.”

Absent a court order directing a guardian to dispose of a ward’s real property, an adjudicated incompetent person and his guardian have no power to convey any real property interest held by a disabled person’s estate. Pursuant to the act, the conveyance of Arnold’s interest in the property to Adame was void as a matter of law.

The next issue to be addressed was whether the conveyance of Arthur’s interest was void. At the time of the real estate closing, Arthur had not yet been adjudicated a disabled person. Although contracts executed by a person later adjudicated disabled by the probate courts may be voidable, upon proving mental incapacity to contract at the time of the transaction, the petitioner’s did not move to invalidate the sale on that basis.

The argument for invalidating Arthur’s conveyance has been waived and we consider the petitioner’s argument, adopted by the circuit court, that the entire transaction is void because Arthur and Arnold executed the same deed and conveyance documents. On appeal, Adame argued that even though Arnold’s conveyance is void, the entire transaction is not void and Arthur’s conveyance of his interest was valid.

Adame maintained in the motion for summary judgment that he had no notice of Arnold’s disability prior to the 2005 closing. He was a bona fide purchaser who paid the fair market value for the property. Petitioners have made no offer to restore him to his original position. Adame also stated that he acted in good faith when purchasing the property. He had no reason to believe that either of the Lynch brothers were disabled persons.

The appellate court reversed the circuit court’s judgment declaring the sale void in its entirety and found: (1) the sale as to Arnold’s joint tenancy interest is void; (2) the sale of Arthur’s joint tenancy interest is valid; and (3) Adame is a tenant in common with Arthur’s estate. The court remanded this case back to the circuit court for proceedings to determine whether Adame is a bona fide purchaser entitled to a return of ½ of the purchase price attributed to the purchase of Arnold’s interest in the property and further, to determine whether Adame is entitled to monetary relief from the monies he paid for real estate taxes and other expenses to maintain the property attributed to Arnold’s half interest in the property, including the share held by Arnold’s estate, since 2005. Accordingly, the case was reversed and remanded for further proceedings consistent with the Illinois Appellate Court’s order.

Harris v. Adame, 2015 IL App (1st) 123306 (Sept. 30, 2015).

Kreisman Law Offices has been handling civil litigation matters, probate litigation, business disputes, commercial litigation and real estate litigation for individuals, families and businesses for more than 40 years, in and around Chicago, Cook County and its surrounding areas, including Bannockburn, Long Grove, New Lenox, Beecher, Crete, Matteson, Worth, Blue Island, Crystal Lake, Wheaton, Warrenville and Melrose Park, Ill.

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