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In Re Estate of Nuyen





Appeal from the Circuit Court of Kane County; the Hon. John A. Leifheit, Judge, presiding.


Rehearing denied January 25, 1983.

Petitioner Elinor Nuyen appeals from the denial of her amended petition to remove the Old Second National Bank of Aurora (OSNB) from its position as executor of her deceased husband's estate, pursuant to section 23-2 of the Probate Act of 1975 (Ill. Rev. Stat. 1979, ch. 110/2, par. 23-2). The petition was brought in her capacity as representative of the beneficiaries of the estate and contended that OSNB had a conflict of interest, had wasted assets and had mismanaged the estate. After a hearing the circuit court of Kane County ruled in favor of OSNB.

Judson B. Nuyen died testate on April 30, 1973. His will, which was admitted to probate, nominated the appellee OSNB as executor. The will had been executed 10 years earlier in 1963 and left one-third of the estate to petitioner and two-thirds to decedent's father, Fred Nuyen. Charles Myler, who was retained as attorney for OSNB following decedent's death, had also been the family attorney for the Nuyens for many years. He advised petitioner to renounce the will and accept her statutory share. Myler assisted petitioner in seeking to have the will renounced, though the renunciation was filed late. He did not receive fees from petitioner for the advice that he gave her through the years. In March of 1981 petitioner did retain counsel and the renunciation was deemed effective by the court at that time. Upon renunciation the estate was divided so that the petitioner received one-third, each child received two-ninths and the remaining two-ninths was placed in trust for the benefit of the children. One of the children, Carey Nuyen, has reached the age of majority and has filed a supplemental brief. His brief urges that the previous orders of this court are not res judicata as to him, because he was a minor at the time those orders were entered.

Decedent's estate consisted mainly of an orthodontics practice and two parcels of realty, Wellwood and Molitor Road. Despite this there was no cash in the estate, and the record indicates that the estate property did not produce sufficient income to meet the expenses that arose soon after decedent's death.

Petitioner contends that OSNB should be removed as executor for the following reasons: (1) It dealt with trust assets for its individual benefit; (2) it failed to prove that petitioner's consent to the various real estate transactions was validly obtained; (3) OSNB committed acts of waste and mismanagement in that it disposed of the dental practice without consideration, failed to secure an extension for payment of Federal estate tax, renegotiated a real estate contract improperly and mortgaged the assets of the estate for $320,000; and (4) petitioner also contends the court erred in denying her request for OSNB's counsel to produce all its records regarding the administration of this estate. Petitioner also contends that the doctrines of res judicata, collateral estoppel and laches do not operate to insulate the executor from accountability for its waste and mismanagement.


The orthodontics practice earned gross income of $92,500 in the year preceding decedent's death. At trial Dr. George Osterberger testified, as an expert witness, that he had taught orthodontics at the University of Illinois for 10 years and one of his students had been the decedent. He indicated that petitioner had called him soon after Dr. Nuyen's death and she had asked him to help work with the patients that continued to come into decedent's office. Dr. Osterberger arranged for four local doctors to come in on various days and try to keep decedent's orthodontics practice going. He tried to find someone to take over decedent's practice and made an effort to evaluate what the practice was worth. He and the other doctors made this evaluation on the basis of the work that was left to do on the patients that were coming in and the amount of money remaining to be collected to do the work. They evaluated 90% of the patients. Dr. Osterberger worked with his accountant to evaluate the value of the practice. Dr. Osterberger testified that he was not working for OSNB but that he was helping the petitioner.

Dr. Osterberger's opinion was that quite a bit of the money had been prepaid and quite a bit of the work had yet to be done on decedent's patients. He indicated that one could get an orthodontist to come in and take over the practice by deceiving him — but that once he got into the practice and found out how much work there was to do, he would probably leave the practice. He foresaw a problem if patients who had already paid came in and were told they would have to pay additional money for further treatment. At a meeting with decedent's father, Fred Nuyen, and petitioner, Dr. Osterberger advised them he had found an orthodontist who had only been out of school for two years who would be willing to take over the practice. He suggested that the equipment and the office itself were furnished frugally and that the practice could not be sold but could be transferred to the new orthodontist in exchange for his assumption of decedent's obligation to perform the prepaid services. Although petitioner and Fred Nuyen objected to this, they consented to the transfer of the practice to Dr. Douglas Prince, the orthodontist recommended by Dr. Osterberger. They also consented to having the estate assume the $3,896.20 debt due on dental equipment.

Richard Kropp, trustee for OSNB, testified that Dr. Osterberger was a kingpin in keeping the office open. He testified that at a meeting he attended on May 23, 1973, Charles Myler was present. Myler, attorney for OSNB, indicated that if the parties did not act quickly some patients would sue the estate. Kropp testified that after the May 23 meeting it was basically understood that the only way to avoid the problem with the patients who had paid but had not been treated was to transfer the practice to the new doctor. Thus, Dr. Prince took over the practice almost immediately without payment.


Wellwood was a 152-acre farm in Sugar Grove that decedent had purchased on contract. In 1971 decedent had obtained a mortgage for $147,370 and applied this to his contract to purchase Wellwood. Three months before his death he agreed to sell Wellwood on contract for $639,000. They put $190,000 down with the remainder due in three years. The purchaser of Wellwood borrowed $200,000 from Aurora National Bank for a down payment. However, decedent did not actually receive the $190,000 because he secured the purchasers' loan by taking $145,970 of the $190,000 down payment and investing it in 2,350 shares of AT&T stock and pledging the stock as collateral. The purchasers defaulted on the loan in 1974. This necessitated some action by the executor; OSNB petitioned the court for approval of a renegotiation of the contract. Under the terms of the new agreement Aurora National Bank would sell the security on the original note, $44,030, and a new note between purchasers and the estate would be executed. Purchasers thereby agreed to pay the full original purchase price less the amount that had been held as security. A guardian ad litem was appointed to represent the minor children, and all parties agreed to the new contract. The court approved the petition on April 8, 1974. Until now no appeal was made.

One important event that occurred at the time of the renegotiation of the Wellwood contract occurred at a meeting between attorney Myler, petitioner and Fred Nuyen. At that time Fred Nuyen objected to personally signing the mortgage. Myler advised Fred Nuyen that he should get his own attorney if he and petitioner had any ...

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