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Reich v. W.f. Hall Printing Co.





APPEAL from the Circuit Court of Du Page County; the Hon. JAMES E. FITZGERALD, Judge, presiding.


The executor of the estate of Daro C. Gregson, deceased, by a citation petition (Ill. Rev. Stat. 1973, ch. 3, pars. 183-185) filed in the Circuit Court of Du Page County, Probate Division, sought to recover retirement benefits which had accrued as a result of Gregson's employment with the W.F. Hall Printing Company, defendant. Edward DeGraff, who claimed that he was the named beneficiary of Daro C. Gregson under the employees retirement plan, was permitted to intervene.

The intervenor moved to dismiss the proceedings claiming that the court had no jurisdiction to hear the matter because the assets were non-probate assets, citing sections 601 and 602 of the Probate Act (Ill. Rev. Stat. 1973, ch. 3, pars. 601, 602). Without ruling on the objection, but apparently without objection by the intervenor, the court conducted an evidentiary hearing pursuant to the citation. On April 22, 1975, the court entered an order that the pension annuity payments under the W.F. Hall Printing Company retirement plan fund be paid to the executor of the estate of Daro C. Gregson. The intervenor filed a post-trial motion again raising the question of jurisdiction. The judge, persuaded that he had no jurisdiction to hear the motion in the citation proceedings, vacated his previous order and dismissed the petition by order dated June 13, 1975. The executor appeals from the June 13 order. The intervenor cross-appeals seeking judgment in his favor rather than a dismissal of the citation proceedings.

We conclude that the trial judge possessed the authority to hear and decide in the citation proceedings the question whether the estate or the intervenor was entitled to the pension fund accruals.

The contention of the intervenor that the trial court lacked jurisdiction to adjudicate the title to the company pension plan, a non-probate asset, is founded on his reading of the provisions of the act concerning the rights of a person entitled to succeed upon the death of another person to an interest in certain third-party beneficiary contracts and assignments. (Ill. Rev. Stat. 1973, ch. 3, pars. 601, 602.) Section 601 provides as pertinent:

"[T]he designation under a pension, retirement, * * * contract, plan, system or trust, of any person to be a beneficiary, payee or owner of any right, title or interest thereunder upon the death of another, or any assignment of rights under any of the foregoing, shall not be subject to or defeated or impaired by any statute or rule of law governing the transfer of property by will, gift or intestacy, even though such designation or assignment is revocable or the rights of such beneficiary, payee or owner or assignee are otherwise subject to defeasance."

Section 602 provides as pertinent:

"* * * This act shall not be deemed to create any implication of invalidity as to any designation, of the nature herein described, made by any person who dies before said date or as to any declaration, agreement or contract for the payment of money or other transfer of property at death not specifically described herein."

• 1, 2 However, citation proceedings are authorized under section 183 et seq. of the Probate Act (now Ill. Rev. Stat. 1975, ch. 3, pars. 16-1 et seq.). Citation proceedings under the Probate Act are a procedure for litigating controversies in which the estate seeks to recover assets and do not involve any substantive provisions relating to the transfer of property. They may be either in the nature of discovery or adversary proceedings, here undertaken, which may determine all questions relating to the right to property of any kind in which the estate may claim an interest. (In re Estate of Garrett, 81 Ill. App.2d 141, 146-47 (1967).) The title to non-testamentary assets has often been litigated through citation proceedings. (See, e.g., In re Estate of Baxter, 56 Ill.2d 223 (1974); Montgomery v. Michaels, 54 Ill.2d 532 (1973); In re Estate of Wright, 17 Ill. App.3d 894 (1974).) Sections 601 and 602 are merely legislative assurances that certain transfers which take effect at death based on contract, gift or trust will not be deemed invalid even though the statutory requirements for wills and other testamentary dispositions are not met. See Zartman, An Illinois Critique of the Uniform Probate Code, 1970 U. Ill. L.F. 413, 463.

• 3, 4 The merits of the claim to a non-testamentary asset litigated in citation proceedings are therefore not controlled by any provision of the Probate Act which specifies the manner in which testamentary assets may be transferred or assigned. However, the citation proceedings provided a proper forum to conduct an evidentiary hearing to determine whether the estate or the intervenor had the right to testamentary pension plan benefits accrued by the decedent. The trial court therefore erred in concluding that it did not have jurisdiction to hear the controversy. The order entered to that effect on June 13, 1975, which vacated the previous judgment entered on April 22, 1975, is reversed.

We then must decide whether either the estate or the intervenor is entitled to judgment on the merits of the controversy.

The decedent was enrolled in the W.F. Hall Printing Company Retirement Plan for salaried employees on November 9, 1945. This was evidenced by the face of a card produced from the company's files: *fn1

And the reverse side:

Gregson died on June 11, 1974. There was actuarial evidence that the beneficiary was to receive payments of $449.62 per month beginning on July 1, 1974, to June 1, 1984. The calculation was made under the retirement plan as amended effective March 1, 1972. Under that plan if the designated beneficiary is not ...

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