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Kelleher v. Hickey (In re Estate of Schefdore)

APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT FOURTH DIVISION
Mar 29, 2018
2018 Ill. App. 171843 (Ill. App. Ct. 2018)

Opinion

No. 1-17-1843

03-29-2018

In re ESTATE OF HAROLD SCHEFDORE, Deceased, (Megan Kelleher, Plaintiff-Appellant, v. Barbara Hickey, Individually as Successor Trustee Of the Hardold Schefdore 1994 Trust as Amended, and As nominated Executor of the State of Harold A. Schefdore, deceased; Robert Hickey, Gina Hickey, Neil Collignon, Alison Collignon, Rachel Hickey, Rebecca Hickey, Riley Hickey, and Ryan Hickey, Defendants-Appellants), (Ann Marino, Mercy Home for Boys and Girls, St. Paul Of the Cross Church, Mundelein College, Society Of the Little Flower, St. Boniface Catholic Church, Sandra Schefdore, and St. Benedict the African, Defendants.)


NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1). Appeal from the Circuit Court of Cook County. Nos. 14 P 4237 14 CH 7985 Honorable Karen O'Malley, Judge Presiding. PRESIDING JUSTICE BURKE delivered the judgment of the court.
Justices McBride and Ellis concurred in the judgment.

ORDER

Held: We affirm the circuit court's decision to grant defendants' motion to dismiss pursuant to section 2-619(a)(9) and deny plaintiff's motion for reconsideration. Plaintiff's claims are barred by the equitable principle of estoppel and defendants are not bound by the trustee's agreement to waive the doctrine of election as a defense. ¶ 1 This case concerns Plaintiff Megan Kelleher's challenge to the validity of the seventh and eigth amendments of the trust of decedent Harold Schefdore. Plaintiff, Schefdore's grand-niece, appeals the circuit court's dismissal of her complaint with prejudice pursuant section 2-619 of the Illinois Code of Civil Procedure (the Code) (735 ILCS 5/2-619 (West 2014)) as to certain defendants on grounds of equitable estoppel.

¶ 2 I. BACKGROUND

¶ 3 Schefdore initially created the Hardold E. Schefdore 1994 Trust (the Trust) in 1994 and executed eight amendments over the years. His will "poured over" the assets of his estate into the Trust. Each of the third through the eighth amendments to the Trust provided that a specific condominium located in Park Ridge, Illinois, would be conveyed to Kelleher upon Schefdore's death. ¶ 4 In addition, the sixth amendment to the Trust, executed on September 11, 2012, provided that Kelleher would receive 20% of Schefdore's substantial residuary estate upon his death. However, the seventh and eight amendments, executed on October 21 and 31, 2013, respectively, reduced this share to 5%, and the remaining residuary was reallocated. According to Kelleher's allegations, Schefdore was 95 years old and in ill health when the seventh and eight amendments were executed. The beneficial interest of Neil and Alison Collignon (the Collignons) increased from 4% to 10% of the Trust residue under the eighth amendment. Robert and Gina Hickey were not named beneficiaries in the sixth amendment, but the seventh and eighth amendments allocated them 5% of the residuary, while their children Rachel, Rebecca Riley, and Ryan (collectively, the Hickeys), received an increase from 2% to 3% of the trust residue. ¶ 5 Schefdore died on November 6, 2013, and his final will was admitted to probate. On March 5, 2014, Barbara Hickey (Barbara), the executor and successor trustee of the Trust, conveyed the condominium by trustee's deed to Kelleher. The deed was recorded on May 12, 2014. ¶ 6 On May 9, 2014, Kelleher filed her initial complaint in chancery seeking to invalidate the seventh and eighth amendments to the Trust. She named as a defendant only Barbara, as trustee and individually. She added other Trust beneficiaries as defendants, the Colllignons and the Hickeys (collectively, defendants), in her second amended complaint filed on May 7, 2015. She filed a third amended complaint on June 24, 2015, which is the subject of this appeal. Kelleher alleges in count I undue influence against Barbara with respect to the seventh and eighth amendments of the Trust, and in count II, tortious interference against Barbara, individually. ¶ 7 On October 4, 2016, the Collignons filed a motion to dismiss under section 2-619.1 of the Code (735 ILCS 5/2-619.1 (West 2014)) with respect to the third amended complaint. Among their several arguments for dismissal, they asserted that counts I and II should be dismissed under section 2-619(a)(9) (735 ILCS 5/2-619(a)(9) (West 2014)) based on the doctrine of election. The Hickeys later joined the motion on December 6, 2016. The motion to dismiss also sought dismissal of count I under section 2-615 for failure to state a claim. ¶ 8 In opposing the motion to dismiss, Kelleher asserted that the deed for the condominium was delivered pursuant to an agreement between the attorney for the Trust, Curtis Edlund, and Kelleher's attorney, Robert Held, that the doctrine of election would not be invoked against her. Kelleher argued that Barbara's waiver, as trustee, applied to defendants. Kelleher further asserted that she never "accepted" the condominium property as it was transferred by trustee deed and did not require her signature. She also argued that the doctrine of election applied only to wills, and even if it applied to trusts, it did not apply to this particular case as it was applicable only where a person is entitled to two different benefits, the testator did not intend for the beneficiary to take both benefits, and inequity would result to other beneficiaries. ¶ 9 In support, Kelleher attached the affidavit of her attorney, Held, who averred that he communicated with Edlund when Edlund represented Barbara and the Trust. Held averred that in the "late summer of 2014, Edlund and I agreed that Barbara Hickey would not raise the Doctrine of Election as a defense to distributions made to the Plaintiff, Megan Kelleher. Mr. Edlund agreed that the Doctrine of Election would not be made in this case. Later, when a distribution of personal property was to be made, Mr. Edlund confirmed his agreement in an e-mail to me which I have attached hereto." In the series of emails dated September 9, 2014, Edlund writes that his client is holding "personal property which was distributable to [Kelleher]. If she wishes to claim these items have her do so immediately." Held responds that, "my recollection is we have a joint stipulation that allows for [Kelleher] to accept the personal property without prejudice. That is, the doctrine of election cannot be applied on the basis of her accepting the property." Edlund writes, "I won't try to use this against you or your client." ¶ 10 Defendants asserted in response that (1) the purported agreement occurred after the condominium was transferred in March 2014; (2) the emails referenced by Held only referred to "personal property" and not to the condominium; (3) defendants were never made parties to the attorneys' agreement and were not bound by it; (4) Kelleher accepted the property as the deed was recorded and she is the record owner; and (5) the doctrine of election can and should be applied to trusts and it applied in this case. ¶ 11 Kelleher thereafter filed an amended affidavit from Held in which he averred that he spoke with Edlund over the telephone and/or in person on March 10, 11, 12, and 13, 2014, and during these conversations he expressed his concern that the doctrine of election would be applied in this case and he wanted to obtain an agreement to "eliminate any potential doctrine of election issues related to a contemplated trust contest proceeding." Held averred that Edlund stated, "We will not be invoking the doctrine of election." ¶ 12 On March 8, 2017, the circuit court granted the section 2-619(a)(9) motion to dismiss both counts as to the Collignons and the Hickeys. It held that the undue influence claim was barred as to the Collignons and Hickeys by the doctrine of election as (1) the doctrine of election applies to trusts, (2) any waiver by Edlund did not apply to defendants, and (3) Kelleher accepted the property as she lives on it and the deed was executed and recorded. In addition, the court concluded that the general equitable principle that "once one accepts some benefit, one cannot then challenge the validity of the thing by which the benefit was conferred" applied to trusts, and this general equitable principle applied here because Kelleher accepted the condominium while attempting to reject other distributive provisions of the Trust, which impacted the equitable rights of the other beneficiaries. The court also dismissed the tortious interference claim in count II because it was premised on the allegation of undue influence. ¶ 13 Kelleher filed a motion to reconsider on March 24, 2017. She argued that the doctrine of election did not bar her claims because she was entitled to receive the condominium under any set of facts as the sixth, seventh, and eighth amendments all conveyed the condominium to her. She asserted that she did not elect to accept the condominium under the seventh or eighth amendments to the Trust, the validity of which she was challenging. Rather, she accepted the condominium under the sixth amendment to the Trust, the version which she claimed was the operative version. Her acceptance also had no effect on the rights of other beneficiaries because she was entitled to the condominium under all possible scenarios. She further argued that the trustee had broad administrative authority to waive the doctrine of election without other beneficiaries' consent. She also argued that the circuit court erroneously held that the equitable principle of estoppel barred her claims. ¶ 14 On June 30, 2017, the circuit court denied the motion to reconsider. The court found that it erred in its application of the doctrine of election and held that the doctrine did not bar plaintiff's claims. However, it held that, as it had previously determined in the March 8, 2017, order, the equitable principle applied in that "when one accepts a conveyance under an instrument, one cannot then seek to challenge that instrument." As Kelleher had accepted the condominium conveyed by the eighth amendment of the Trust, she was equitably estopped from challenging its validity. ¶ 15 Kelleher filed a timely notice of appeal from the circuit court's March 8 and June 30, 2017, orders.

The chancery case was subsequently transferred to the probate division where the probate matter was pending.

The doctrine of election is triggered where a beneficiary is entitled to two different benefits under a will, and the "testator did not intend the beneficiary to take both benefits and allowing the beneficiary to claim both would be inequitable to others having claims upon the same property or fund." In re Estate of Boyar, 2013 IL 113655, ¶ 28. The beneficiary must be "presented with the choice between two inconsistent or alternative claims to property devised by the testator and elect to accept benefits pursuant to the provisions of the will," and will then be estopped from "challenging the will or any part of it." Id. ¶ 31.

On September 30, 2016, Barbara filed a motion to strike and dismiss the third amended complaint pursuant to section 2-615 of the Code. The court granted the motion, and Kelleher thereafter filed a fourth amended complaint which did not name the instant defendants on appeal. Barbara filed a motion for summary judgment. The circuit court imposed a stay pending this appeal and the motion for summary judgment remains pending.

The circuit court also granted a motion to dismiss as to Neil Collignon under Illinois Supreme Court Rule 103(b), which Kelleher has not appealed. --------

¶ 16 II. ANALYSIS

¶ 17 A. Standard of Review

¶ 18 In a motion to dismiss under section 2-619(a)(9) of the Code, a defendant admits the legal sufficiency of the complaint, but asserts that the plaintiff's claim "is barred by other affirmative matter avoiding the legal effect of or defeating the claim." 735 ILCS 5/2-619(a)(9) (West 2012); Smith v. Waukegan Park District, 231 Ill. 2d 111, 120 (2008). "The motion should be granted only if the plaintiff can prove no set of facts that would support a cause of action." In re Estate of Boyar, 2013 IL 113655, ¶ 27. "Section 2-619 motions present a question of law, and our review is de novo." Id.

¶ 19 B. Equitable Estoppel

¶ 20 On appeal, Kelleher reiterates her argument that the equitable principle of estoppel does not apply because she was entitled to receive the condominium under the sixth, seventh, and eighth amendments to the Trust, she never elected to accept the condominium under the seventh or eighth amendments, and she instead accepted it under the sixth amendment to the Trust, which she contends is the operative version. She argues that her acceptance of the property did not injure or prejudice the equitable rights of the other beneficiaries, and defendants actually benefited from the conveyance because the Trust was no longer responsible for expenses associated with the condominium. ¶ 21 Defendants argue that the eighth amended Trust was the only operative document which could have transferred the condominium at the time of death, and Kelleher therefore accepted the beneficial interest under the eighth amendment of the Trust and is estopped from setting up any right or claim which would defeat or prevent full operation of the Trust, regardless of whether she would have received the condominium under prior versions. Defendants further assert that they are not required to show prejudice in order for equitable estoppel to apply, but they and the Trust have incurred fees and costs in litigating the trust contest. ¶ 22 In Boyar, our supreme court explained the general equitable principle of estoppel at issue here, which is distinct from the doctrine of election, "which holds that once one accepts some benefit, one cannot then challenge the validity of the thing by which the benefit was conferred. *** It is based on principles of logic, fairness and consistency which are self-evident: Unless you acknowledge that a decree, statute, contract, etc., is valid, then by what right can you claim the benefit you accepted under its terms?" Boyar, 2013 IL 113655, ¶ 40. ¶ 23 As the appellate court in Kyker v. Kyker, 117 Ill. App. 3d 547, 551 (1983) expounded:

"The well-settled equitable doctrine in this State, which the parties to this appeal recognize, is that any person who voluntarily accepts a beneficial interest under a will is held thereby to ratify and confirm the entirety of the will which conferred the benefit. In other words, the beneficiary may not accept a bequest of the testator and at the same time set up any right or claim which would defeat or prevent the full operation of the will. [Citations.] By accepting the benefits, the legatee admits the instrument to be the will of the testator, and she cannot both take under it and make a claim against its terms. [Citations.] The result is that once a beneficiary has accepted a bequest under the will, she will be estopped from asserting any claim inconsistent with the validity of that will. [Citations.]" Kyker, 117 Ill. App. 3d at 551.
¶ 24 The supreme court in Boyar observed that this principle has been "applied in a variety of contexts, including challenges to divorce decrees [citation] and other judgments [citation], contract disputes [citations], and statutory challenges [citation]." Id. The general principle of equity has also been applied to will contests. Id. As the Second District Appellate Court has observed, in Boyar, 2013 IL 113655, ¶ 38, our supreme court "appeared to accept that the estoppel principle, already so widely applied, should operate in trust challenges as well." Centrue Bank v. Voga, 2017 IL App (2d) 160690, ¶ 48. The equitable principle has "broader application" than the doctrine of election. Id. ¶ 49. Both the doctrine of election and the general equitable principle of estoppel share two recognized exceptions: (1) where acceptance of a bequest was not made with full knowledge of the relevant facts and circumstances, including the contents of the will, circumstances of its execution, and acceptance of the bequest was procured by fraud or mistake, or (2) where it is alleged that any of the provision are contrary to law or public policy. Kyker, 117 Ill. App. 3d at 551-52; Voga, 2017 IL App (2d) 160690, ¶ 51. ¶ 25 Our supreme court in Boyar illustrated the application and overlap of these doctrines. The court held that even if the doctrine of election applied to trusts, it would not apply to the circumstances in Boyar because the plaintiff was never presented with a choice between two inconsistent or alternative rights or claims to property from the trust, as he merely shared with his siblings their father's personal possessions as the trust provided and was challenging the non-substantive trust provision appointing a trustee. Boyar, 2013 IL 113655, ¶¶ 38-39. Further, accepting the personal effects as provided in the trust while allowing the plaintiff to challenge the non-substantive trustee appointment provision would not upset the property distribution contemplated by the decedent or compromise anyone's rights. Id. ¶ 39. The Boyar court observed that equity demands a beneficiary be estopped from "challenging the will or any part of it" once he has elected to accept benefits pursuant to the provisions of a will in order to (1) "honor the testator's intent" and (2) "protect the equitable rights of all the others who stand to benefit under the will." Id. ¶ 31. ¶ 26 Alternatively, the supreme court in Boyar concluded that the "general principle of equity" also did not prohibit the plaintiff's challenge because he was "not attempting to accept a benefit while at the same time challenging the validity of the provisions by which the benefit was conferred"; he was not challenging any substantive dispositions in the trust or the decedent's competence when drafting those provisions. Id. ¶ 41. Rather, he challenged the provision appointing the trustee, which was not relevant to the decedent's intended division of property and, regardless of the identity of the trustee, the substantive terms of the trust would remain unchanged. Id. ¶ 27 The two doctrines were also at play in Voga 2017 IL App (2d) 160690. There, the trust provided the plaintiff and two of his siblings with parcels of real estate, and all four siblings received 25 percent each of the residuary of the estate. Id. ¶ 5. The defendant sibling and trustee of the trust subsequently utilized the power of attorney previously executed by the decedent to amend the trust to provide the sibling who was not gifted any real estate with a substantial cash payment, which would thereby impact the residuary. Id. ¶ 5. The plaintiff alleged that the amendment was void because the power of attorney did not comply with statutory requirements. Id. ¶ 9. The Voga court held that, even if the doctrine of election applies to trusts, it would not apply in Voga because the plaintiff had not made an election between inconsistent and alternative benefits or claims to trust property, " 'one founded on the trust document and the other predicated on some right existing independent of the document.' " Id. ¶ 47 (quoting Boyar, 2013 IL 113655, ¶ 38). Turning to the defendant's alternative contention that the "general rule of preclusion or estoppel" or "estoppel principle" would bar the claim, the plaintiff argued that his challenge was not precluded because he had not received any distribution from the trust remainder. Id. ¶ 50. The Voga court found that according to the record, the plaintiff "has indeed received interests under the Trust," but it nevertheless concluded the plaintiff's claim was not barred by the estoppel principle because it fell within one of the two exceptions, i.e., plaintiff alleged that the amendment was void because the power of attorney was contrary to law. Id. ¶¶ 51, 58. ¶ 28 In the case at bar, we find the circuit court did not err in determining that Kelleher's challenge was barred by the general equitable principle of estoppel. Kelleher alleged that Barbara exerted undue influence on Shefdore in executing the seventh and eighth amendments of the Trust, amendments which significantly altered, as compared to the sixth amendment of Trust, the division of the trust remainder to Kelleher and other beneficiaries, including the Collignons and the Hickeys. In contrast to Boyar, Kelleher's challenge did not concern merely a non-substantive provision of the trust, such as appointment of a trustee. Rather, it related directly to the trust's provisions concerning distribution of the trust assets. As such, Kelleher's challenge would violate the doctrine's chief purposes—to protect the distribution intended by the decedent and protect the equitable rights of the other residuary beneficiaries under the Trust. Boyar, 2013 IL 113655, ¶ 31. Kelleher was "attempting to accept a benefit while at the same time challenging the validity" of the Trust's substantive provisions. Id. ¶ 41. Unlike in Boyar, Kelleher's claims challenge substantive dispositions and Shefdore's competence in executing the amendments. Also, in contrast to the circumstances in Voga, Kelleher not only "received interests under the Trust" but her challenge to the Trust does not fall within one of the two exceptions which would prevent her challenge from being estopped, i.e., that a provision is contrary to law or public policy, or that acceptance of the property was procured by fraud or not made with full knowledge of the facts. Voga 2017 IL App (2d) 160690, ¶¶ 51, 58. See Kyker, 117 Ill. App. 3d at 552 (assertion that the testator was under undue influence or lacked testamentary capacity did not constitute a challenge that a will provision was contrary to law or public policy.) ¶ 29 Despite Kelleher's contention on appeal that she accepted the condominium under the sixth amendment to the Trust, the only legally operative document at the time of conveyance was the eighth amendment to the Trust. As defendants point out, the eighth amendment to the Trust provided that any previous amendments "are a nullity and of no further force and effect." Thus, any previous amendments were rendered a legal nullity. Moreover, Kelleher fails to point to any documentation or any evidence that when she accepted and recorded the deed, she specifically accepted it or made acceptance of it contingent upon it being under the terms of the sixth amendment to the Trust. Rather, she received the deed on March 5, 2015, which was recorded on May 12, 2014. At that point, only the eighth amendment of the Trust was legally operative. ¶ 30 Moreover, the fact that Kelleher would receive the condominium under other amendments of the Trust did not prevent the principle of estoppel from operating to prohibit plaintiff's challenge to other provisions of the Trust. See Schlimme v. Schlimme, 364 Ill. 303, 305 (1936) (where will beneficiary challenged only a specific devise of real estate, but accepted a partial distribution from the residuary clause, beneficiary was "estopped from setting up any adverse claim to defeat the operation of any of [the will's] other terms of provisions.") ¶ 31 Additionally, we disagree with plaintiff's assertion that the Collignons and the Hickeys must show they were injured or prejudiced in order for the equitable principle to prohibit her claims. The appellate court in Kyker rejected a similar argument. In Kyker, the petitioner received $500 pursuant to a bequest in the decedent's will but filed a will contest alleging lack of testamentary capacity and undue influence. Kyker, 117 Ill. App. 3d at 550. When the petitioner subsequently deposited the $500 check, the respondent moved to dismiss the petition based on estoppel. On appeal, the petitioner contended that because she tendered back the bequest and no one was prejudiced, estoppel should not apply. Id. at 553. The court held that lack of prejudice to a beneficiary was insufficient to allow rescission of an election to accept a benefit under the will made with "full knowledge of the circumstances" and without "that election being induced by fraud or mistake." Id. at 554. See also In re Estate of King, 245 Ill. App. 3d 1088, 1099-100 (rejecting argument that lack of prejudice or harm to the defendants should preclude application of doctrine of election).

The case cited by Kelleher, Geddes v. Mill Creek Country Club, 196 Ill. 2d 302, 313-314 (2001), is distinguishable from the present circumstances because it did not involve application of the same general principle of equity at play in Kyker, Voga, and Boyar, that is, a party accepting a benefit under a will or trust and then contesting the validity of that will or trust. Rather, Geddes involved application of equitable estoppel in the context of a property dispute wherein a party, by statements or conduct, induced another party to do something that he would not have done but for the first party's actions, and the first party then attempted to deny his words or actions to the detriment of the other party. Id. at 313.

¶ 32 C. Trustee's Agreement

¶ 33 Kelleher next contends on appeal that the circuit court erred in concluding that the agreement between Kelleher and Barbara, through their attorneys, not to invoke the doctrine of election against a trust contest was not binding on the other trust beneficiaries. Citing provisions of the Trust and Trustees Act (the Act) (760 ILCS 5/1 (West 2014)), section 4.11 (760 ILCS 5/4.11 (West 2014)), Kelleher asserts that Barbara, acting through her attorney as agent, had broad authority to take this action and bind the other beneficiaries. She argues that defendants suffered no inequity as they were not entitled to the condominium in any event and it did not adversely affect their interests under the Trust. Kelleher argues that although the agreement dealt with the doctrine of election, it also encompassed the equitable estoppel principle at issue on appeal. ¶ 34 Defendants contend that because they had no control over the trustee or the management of the Trust's business, the trustee was not their agent, and her agreement with Kelleher did not bind them. Defendants assert that they were necessary parties to any suit or agreement which would foreclose on their interests in the eighth amendment of the Trust. Barbara lacked authority to bind them to such an agreement. Defendants alternatively argue that the agreement did not bind them because the agreement provided that the trustee would not invoke the doctrine of election. ¶ 35 Generally, the trust instrument itself sets forth the rights and obligations arising thereunder. Bangert v. Northern Trust Co., 362 Ill.App.3d 402, 412-13 (2005). We note that the decedent's Trust provided in section 5.04(j) that the trustee had the power to "collect, pay, contest, compromise or abandon claims of any kind," and in section 5.04(q) to "exercise any powers granted by the Illinois Trust and Trustees Act not inconsistent with the powers specifically granted herein." ¶ 36 Section 4.11 of the Act grants trustees authority to "compromise, contest, prosecute or abandon claims or others charges in favor of or against the trust estate." 760 ILCS 5/4.11 (West 2014). A trustee has the power to manage and control trust property in order to make it productive and safe, in addition to pursuing actions for redress against third parties who wrongfully interfere with the property. In re Estate of Zivin, 2015 IL App (1st) 150606, ¶ 23. ¶ 37 Illinois courts have outlined the differences between trustees and agents. "[A] trustee as such is not subject to the control of his beneficiary, although he is under a duty to deal with the trust property for his benefit in accordance with the terms of the trust and can be compelled by the beneficiary to perform his duty." Merchants National Bank of Aurora v. Frazier, 329 Ill. App. 191, 200-01 (1946). A trustee holds title to trust property but does not have the power to subject beneficiaries to liability in contract and tort. Id. Thus, "[l]iabilities which are imposed by law upon the owners of property are imposed upon * * * the trustee and not upon the beneficiary." Id. On the other hand, an agent does not hold title to the principal's property but may subject the principal to liability in contract or tort when acting within the scope of his agency and will not be held personally liable. Id. A trustee "acts in his own name, while an agent represents and acts for his principal." Id. ¶ 38 "Illinois law makes clear that a trustee does not act as an agent for a beneficiary." Schmitz v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 405 Ill. App. 3d 240, 245 (citing Kessler, Merci, & Lochner, Inc. v. Pioneer Bank & Trust Co., 101 Ill. App. 3d 502, 505 (1981)). "Unless a trustee is also acting as an agent, he has no power to subject a beneficiary to liability in contract or in tort." Id. (citing Frazier, 329 Ill. App. at 201).

" 'Where the trustee is given full control in the management of the business of the trust, then the beneficiaries have no personal liability. Where, however, the beneficiaries retain control over the trustee and the management of the business in relation thereto, a different result is warranted. [Citations.] The trustee is regarded as the agent of the beneficiaries and they will be liable upon his contracts.' " Id. (quoting Kessler, 101 Ill. App. 3d at 505-06).
¶ 39 In Schmitz, the court held the trustees were not acting as the plaintiff beneficiaries' agents in executing contracts where the beneficiaries "did not have any control over the trustees or the management of the Trust"; thus, the plaintiffs were not bound by the terms of the contracts. Id. ¶ 40 Here, there was no evidence presented that defendants had any control over Barbara or the management of the Trust. Indeed, they were not even named as defendants until the second amended complaint. Nor was there any evidence that they were informed of or included in the discussions and ultimate agreement to waive the doctrine of election defense. Accordingly, we find the circuit court properly granted the section 2-619 motion to dismiss on grounds that defendants were not bound by Barbara's agreement with plaintiff. Under the circumstances of the present case, Barbara was not acting as defendants' agent. ¶ 41 Our holding is congruent not only with Schmitz and Frazier, but also with the general rule that "in all suits respecting trust property, * * * the beneficiaries are necessary parties. The trustee is a necessary party because he holds the legal title. The beneficiary is a necessary party because he has the equitable and ultimate interest to be affected by the decree." Illinois National Bank of Springfield v. Gwinn, 390 Ill. 345, 356 (1945). See In re Estate of Barth, 339 Ill. App. 3d 651, 664-65 (2003) (trust beneficiaries are necessary parties to an action to foreclose their interest and failure to name them renders a judgment void); In re Estate of Ostern, 2014 IL App (2d) 131236, ¶ 18 (same). Similarly, "settlements of testamentary disputes which materially change the testamentary plan cannot be imposed, even where the settlement appears to be in the best interest of the parties, where one of those parties finds the settlement objectionable." Scott v. Perona, Perona & Tonozzi, 115 Ill. App. 3d 76, 80 (1983). ¶ 42 In addition, we observe that the alleged agreement between the trustee's attorney and Kelleher's attorney related to waiver of the doctrine of election as a defense. The emails submitted by attorney Held do not include any discussions involving waiver of the equitable principle of estoppel at issue on appeal. Additionally, although Kelleher claims defendants would suffer no prejudice if the agreement was enforced against them, we again disagree. As we previously observed, Kelleher's challenge to undo the seventh and eighth amendments of the Trust would significantly alter the amounts to which the residuary beneficiary defendants are entitled.

¶ 43 D. Tortious Interference Claim

¶ 44 Defendants assert that count II alleging tortious interference against Barbara should not be reinstated as it relied on the allegation of undue influence pleaded in count I, and also was pleaded only against Barbara in her individual capacity, and not against defendants. We agree.

¶ 45 III. CONCLUSION

¶ 46 For the reasons stated above, we affirm the circuit court's decision to grant defendant's section 2-619 motion to dismiss and deny Kelleher's motion for reconsideration. ¶ 47 Affirmed.


Summaries of

Kelleher v. Hickey (In re Estate of Schefdore)

APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT FOURTH DIVISION
Mar 29, 2018
2018 Ill. App. 171843 (Ill. App. Ct. 2018)
Case details for

Kelleher v. Hickey (In re Estate of Schefdore)

Case Details

Full title:In re ESTATE OF HAROLD SCHEFDORE, Deceased, (Megan Kelleher…

Court:APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT FOURTH DIVISION

Date published: Mar 29, 2018

Citations

2018 Ill. App. 171843 (Ill. App. Ct. 2018)

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