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In Re Estate of Worrell



Appeal from the Appellate Court for the Fifth District; heard in that court on appeal from the Circuit Court of Madison County, the Hon. P.J. O'Neill, Judge, presiding.


Rehearing denied November 24, 1982.

A dramshop action filed in the circuit court of Madison County by Dennis Barnes against tavern owner Mary Worrell was a prelude to these proceedings in probate. After the filing of the dramshop action and service of summons on Mrs. Worrell, but before it was tried, she died intestate on July 19, 1978. Apparently, however, Barnes did not learn of her death until approximately nine months later. In the meantime, the following events transpired in the probate division of the Madison County circuit court:

August 22, 1978 Letters of administration were issued to Mrs. Worrell's son-in-law, Dawson Cooper, and publication for claims of creditors was made in accordance with the Probate Act of 1975. Ill. Rev. Stat. 1977, ch. 110 1/2, par. 18-3.

December 19, 1978 The initial inventory of Mrs. Worrell's property, including her tavern and a motel she owned, was filed in the probate proceeding.

February 22, 1979 The statutory period for claims against the estate as originally inventoried provided for in section 18-12 of the Probate Act of 1975 (Ill. Rev. Stat. 1977, ch. 110 1/2, par. 18-12) expired.

April 30, 1979 Mr. Barnes, now aware of Mrs. Worrell's death, sent notice of his claim for the first time to the administrator. Apparently this was the first knowledge the administrator had of the dramshop action.

June 5, 1979 Notice of Barnes' claim to the administrator was filed in the probate proceedings.

At the same time he filed his claim in the probate proceedings, Barnes filed a motion to substitute the administrator as the party defendant in his still-pending dramshop action. In November of that year the case was tried, and a judgment was entered in favor of Barnes in the amount of $15,000. Of that amount, $5,000 was paid by the tavern's insurance carrier. In order to satisfy the remaining balance, Barnes could look only to the estate.

Two substantive issues are presented. The first is whether Barnes' claim against the estate was properly made within the limitations period provided for in section 18-12 of the Probate Act of 1975 (Ill. Rev. Stat. 1977, ch. 110 1/2, par. 18-12), and thus eligible to be satisfied from inventoried assets. The other is whether, if Barnes' claim was not made within the proper period, profits made from operating the decedent's motel and tavern businesses after her death can be used to satisfy the debt, since only the businesses themselves and not the income from them had been formally inventoried.

The circuit court rejected Barnes' claim for payment of the balance of his judgment out of the estate assets, ruling that his claim was presented to the administrator too late to be satisfied from inventoried assets and that profits made from operating Mrs. Worrell's businesses should be regarded as part of the inventoried assets that generated them. This decision was reversed by the appellate court with one judge dissenting. (100 Ill. App.3d 566.) The appellate court held that any profits generated by the tavern and motel while operated by the administrator were the equivalent of newly discovered assets and thus subject to creditors' claims, even if those claims were filed late. We allowed the administrator's petition for leave to appeal.

Before considering the respective merits of the position of the parties, we deal briefly with a jurisdictional issue raised by the administrator. It concerns whether the claimant's notice of appeal from the circuit court to the appellate court was timely.

On August 29, 1979, the probate division allowed the administrator's motion to bar payment of Barnes' claim out of the assets of the estate included in the original inventory because the claim was filed late. On January 17, 1980, the same court ordered that Barnes' claim could not be satisfied out of the income from the inventoried assets and that payment of the claim was limited to assets and income from assets inventoried after the expiration of the time for claims against the assets as originally inventoried. The circuit court refused to vacate its January order on February 28, 1980, but on that date it did allow a motion by Barnes for an accounting of all funds subject to his claim. In response to that the administrator on April 1, 1980, filed his final report of assets inventoried after the original claim period. The assets so inventoried were sufficient to satisfy only $1,000 of the balance of the dramshop judgment, leaving $9,000 unsatisfied. That report was approved by the court on May 16, 1980, by an order that also approved the sale of certain of the late-inventoried assets, so that Mr. Barnes could be given his partial satisfaction in cash. He appealed that order.

Supreme Court Rule 304(b)(1) states that "[a] judgment or order entered in the administration of an estate, guardianship, conservatorship, or similar proceeding which finally determines a right or status of a party" is appealable. (73 Ill.2d R. 304(b)(1).) None of the orders of the probate division until its May 16 order finally determined the claimant's position. Mr. Barnes wanted one thing from the estate of Mary Worrell: He wanted his judgment against it paid. He did not care which fund the money was paid from so long as it was fully paid. The August 1979 order stated only that he could not be paid from inventoried assets. There was still the possibility his claim could be satisfied out of the profits generated by the motel and tavern businesses or out of assets inventoried after the six-month period. The January 1980 order eliminated the profits as a source of satisfying the claim, but still there were the assets inventoried after the end of the claims period to be reckoned with. The value and extent of these assets were unclear. Although one supplemental inventory had been filed in July of 1979, no final inventory had been filed. Some of ...

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