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09/24/87 Mary S. Madlener Et Al., v. Morgan M. Finley

September 24, 1987

MARY S. MADLENER ET AL., PLAINTIFFS-APPELLANTS

v.

MORGAN M. FINLEY, CLERK OF THE CIRCUIT COURT, DEFENDANT-APPELLEE



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FOURTH DIVISION

515 N.E.2d 697, 161 Ill. App. 3d 796, 113 Ill. Dec. 712

Appeal from the Circuit Court of Cook County; the Hon. Harold Siegan, Judge, presiding.

As amended January 7, 1988 1987.IL.1416

APPELLATE Judges:

JUSTICE LINN delivered the opinion of the court. JIGANTI, J., concurs. PRESIDING JUSTICE McMORROW, Dissenting.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LINN

Plaintiff Mary S. Madlener brings this appeal seeking reversal of several trial court orders issued in connection with her class action lawsuit. In her lawsuit, Madlener alleges that the defendant, Morgan M. Finley, the clerk of the circuit court of Cook County (the clerk), breached his fiduciary duty when he failed to deposit litigants' funds in interest bearing accounts. Madlener asserts that she, along with other litigants in Cook County who are "trust account beneficiaries" are deprived of any interest which those accounts could accumulate because of the clerk's practice of placing those funds in non-interest bearing accounts. Through her class action, Madlener seeks the interest that she and the members of her class could have earned on their funds had the clerk properly deposited their funds in interest bearing accounts. In addition, Madlener seeks an injunction prohibiting the clerk from continuing to place litigants' funds in non-interest bearing accounts.

Pursuant to the clerk's motion, the trial court dismissed Madlener's amended complaint. The trial court found that no breach of fiduciary relationship occurred, for the clerk, in Madlener's particular case, was not specifically ordered by the trial court to deposit her funds in an interest bearing account.

Madlener now appeals contending: (1) that a fiduciary relationship exists between the clerk and those litigants whose funds he holds; (2) that the clerk breached the aforesaid fiduciary duty when he placed litigants' funds in non-interest bearing rather than interest bearing accounts; and (3) that Madlener's amended complaint sufficiently alleges the requisites for a class action.

We reverse and remand.

Background

This matter is before the court following the trial court's ruling that Madlener's complaint fails to state a cause of action under Illinois law. Accordingly, we must accept as true all of Madlener's well-pled allegations and must draw all reasonable inferences in her favor. Cook v. Askew (1975), 34 Ill. App. 3d 1055, 341 N.E.2d 13.

Madlener's amended complaint reveals that she is the guardian of Scott Madlener, a minor. As guardian, Madlener was named a defendant in an interpleader complaint filed by the Kansas City Life Insurance Company (K.C. Life). On January 13, 1982, K.C. Life was ordered by the trial court to deposit monies in an amount representing its admitted liability with the clerk. The trial court's order did not specifically direct the clerk to place K.C. Life's monies in an interest bearing account.

Soon thereafter, a settlement was reached between Madlener and the other parties to the lawsuit. The trial court approved an order providing for Madlener to receive her share of the funds "plus any interest accrued thereon." The clerk objected to the provision calling for interest and was successful in having it stricken from the order. Thereafter, the clerk paid to Madlener $2,468.65, which the clerk had held on Madlener's behalf for 149 days. Madlener demanded that interest be paid on the sum, but the clerk refused her demands.

In her complaint, Madlener alleges that the clerk's normal practice is to deposit litigants' funds in interest bearing accounts only where a trial court order specifies such. According to Madlener, if a trial court does not specifically order the clerk to place funds in an interest bearing account, the clerk's practice is to merely deposit the funds in a non-interest bearing account. Madlener further alleges that the clerk has several million dollars in non-interest bearing accounts and that there are many financial institutions which would readily pay interest on such a sum. In addition, Madlener alleges that as a fiduciary, the clerk has a duty to act as a reasonably prudent person and that such a person would necessarily place litigants' funds in interest bearing accounts.

The clerk moved to dismiss Madlener's complaint, contending that the clerk has a duty to place litigants' funds in interest bearing accounts only where the trial court has so ordered. Following the trial court's dismissal, Madlener filed this appeal.

Opinion

As set forth above, Madlener raises three arguments on appeal: (1) that the clerk is a fiduciary with regard to those funds deposited with the clerk pursuant to a court order; (2) that the clerk breaches its fiduciary duty when it fails to place those funds in an interest bearing account; and (3) that this is an appropriate circumstance for the utilization of the class action device. I

We first address Madlener's claim that the clerk is a fiduciary with respect to the funds deposited with ...


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