APPEAL from the Circuit Court of Cook County; the Hon. DANIEL
J. O'BRIEN, Judge, presiding.
MR. JUSTICE MEJDA DELIVERED THE OPINION OF THE COURT:
Plaintiff, decedent's daughter, sought declaratory and injunctive relief to declare an alleged 1978 beneficiary designation of decedent's interest under a private retirement plan invalid and legally ineffective to revoke decedent's prior beneficiary designation of plaintiff. At a bench trial the court found for plaintiff. Mary Connelly, Michael Connelly, John D. Connelly, Lorraine Grau, and Herbert Jackson, as special administrator of the estate of Hope Jackson, deceased (collectively referred to herein as defendants), all claimants under the alleged 1978 designation, appeal. The James A. Dooley Associates Employees Retirement Plan and Joseph Reynolds, and Virginia P. Dooley, as trustees of the James A. Dooley Associates Employees Retirement Trust, also named as defendants in the trial court, do not appeal.
The issue raised on appeal is whether the trial court's finding that decedent did not effect a beneficiary change in 1978 was against the manifest weight of the evidence.
In 1962, the late James A. Dooley organized his law firm into a professional association, James A. Dooley Associates (JADA). He was assisted by Joseph Reynolds of St. Louis, a CPA and close personal friend. Reynolds counseled decedent with regard to JADA's organization. Additionally, at decedent's request, Reynolds designed the original 1962 JADA retirement plan, known as James A. Dooley Associates Employees Retirement Plan and the James A. Dooley Associates Employees Retirement Trust. The original retirement plan was adopted in August 1963, effective retroactively to October 1, 1962. JADA paid money into the fund each year on behalf of its participants. Each participant's account was separately maintained. The retirement plan provided that each participant could retire at age 65 and receive benefits. If the participant died, his interest in the fund would go to either a beneficiary of his designation or, if no beneficiary was designated, to the participant's spouse, if living, or to the participant's estate.
In 1973, decedent made a beneficiary designation of his interest under the JADA Retirement Plan. Decedent's 1973 designation named plaintiff, his only child, the beneficiary of his interest in the JADA trust, revoked any prior designation, but did not name a contingent or successive beneficiary nor make any provision for the timing of payments. There were two slightly different versions of this 1973 designation. One was handwritten and the other was typewritten and both bore decedent's signature. The authenticity and validity of these designations, however, are not disputed.
In 1976, upon becoming a supreme court justice, decedent moved his office files and his secretary to a small space in the offices of another attorney located at 111 West Washington Street for the purpose of winding up JADA affairs. A locked steel cabinet was also maintained in this office.
In April 1977, decedent requested that Reynolds meet with him regarding a number of matters. Reynolds, who at that time did not know of the 1973 designation, asked decedent if he had done anything with respect to the beneficiary designation of his JADA trust interest. In response, decedent asked for pen and paper and wrote out a distribution of his trust estate to plaintiff and defendants. Decedent changed the amounts of these specific bequests before arriving at a final distribution which he then gave to Reynolds. Reynolds objected because the bequests were made in specific dollar amounts. Decedent charged Reynolds to work on it further and get back to him. Subsequently Reynolds and decedent discussed the matter over several telephone conversations. Decedent told Reynolds to put all of it in writing.
One month after their April 1977 luncheon meeting, Reynolds wrote decedent a four-page letter explaining the various possibilities of this "proposed distribution" and its tax consequences. Page 1 of the letter stated: "Your beneficiary designation would appear along the lines following based on the information you wished included * * *." Page 2 of the letter contained a proposed designation beginning "Upon my demise, any unpaid balance in my account shall be paid as follows:" and embodying the distribution decedent had specified at the luncheon meeting "convert[ing] the dollar amounts * * * into percentages * * *."
Over the ensuing nine months Reynolds frequently spoke with decedent over the telephone and "would always ask him if he were ready to finalize this thing." Reynolds also prepared an amended JADA retirement trust plan which was adopted on September 28, 1977, effective retroactively to October 1, 1976. Under the amended plan decedent and Reynolds were the named trustees. The amended trust plan altered the method by which beneficiaries could be changed. The original plan stated, "The beneficiary * * * may be changed * * * at the election of the Participant, but only by his filing a new designation with the Company and by revoking all prior designations." Under the 1977 amendment,
"A participant may designate the beneficiary of his choice to receive payments of amounts credited to his Company Contribution Account, his Employee Contribution Account, if any, and his Rollover Account, if any, at his death. The Beneficiary Designation must be in writing and filed with the Company and may include contingent or successive beneficiaries. A Participant's Beneficiary Designation may be changed at any time or from time to time by the Participant's filing a new Beneficiary Designation form with the Company. The revocation of a beneficiary's designation shall not require the consent of any beneficiary."
The amended plan does not explain what "filed with the Company" means, nor did anyone testifying have any knowledge of a specific "Beneficiary Designation form" which was to be used in making or altering the designation.
Approximately five months after the 1977 Trust Amendment and nine months after Reynolds' letter to decedent proposing a percentage beneficiary distribution, decedent and Reynolds met on February 21, 1978, at decedent's request to discuss a number of tax matters. During lunch decedent mentioned to Reynolds that he would like to do something for his sister and for charity, and that he felt that he should leave his nephews something. John Adams, decedent's accountant, was waiting for the two men upon their return from lunch. In the presence of Adams and Reynolds, decedent on his own initiative brought out Reynolds' May 1977 letter from his desk, studied it for a minute, turned to page 2 which contained the proposed percentage beneficiary distributions, and wrote in several changes. When finished he gave the letter to Reynolds. Reynolds read the notations, got up, went around the desk where decedent was sitting, and asked decedent several clarifying questions regarding the percentage to be distributed to plaintiff and whether certain payments were to be paid quarterly, monthly or annually. Finally, Reynolds noted at the bottom of page 2, "PER J.A.D. instructions on 2/21/78. JHR."
At trial Adams, who was present during the course of these events, stated that he saw decedent make the notations, identified the handwriting on the letter as decedent's, and witnessed the discussion of the changes between Reynolds and decedent. Adams also testified that he heard decedent say he wanted 10 percent to go to each of his nephews, eight percent to his sister and five percent each to Lorraine Grau and Hope Jackson. Adams stated that there was no doubt in his mind that decedent had so stated to Reynolds in Adams' presence. He also testified that decedent handed the document back to Reynolds and asked him to have it typed. Adams left the meeting some time before it ended.
Reynolds also testified to this meeting. The only discrepancy between his testimony and that of Adams was that Reynolds stated he offered to take the alleged designation back to the office and "put it in formal style for [decedent] to prepare it for his signature * * *" to which decedent responded that there wasn't any particular hurry because he was more interested in the other matters central to Reynolds' visit than he was in "finishing this up." Reynolds took the letter along with other ...