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01/25/96 CAROL ESPEVIK v. ROSEMARY REINER KAYE

January 25, 1996

CAROL ESPEVIK, FLOYD COOL, MARK COOL, JOHN COOL, PHILIP COOL, AND RICHARD COOL, PLAINTIFFS-APPELLANTS AND CROSS-APPELLEES,
v.
ROSEMARY REINER KAYE, INDIV. AND AS EX'R OF THE ESTATE OF PETER PAUL REINER, DECEASED; ELIZABETH IRVINE; GRETCHEN BLANCHETTE; AND GLORIA CARR, DEFENDANTS AND COUNTER-PLAINTIFFS-APPELLEES AND CROSS-APPELLANTS (MARENGO STATE BANK, DEFENDANT AND COUNTERDEFENDANT-APPELLEE; DOROTHY JEVNE, EX'R OF THE ESTATE OF PAUL W. JEVNE, DECEASED, COUNTERDEFENDANT-CROSS-APPELLEE).



Appeal from the Circuit Court of McHenry County. No. 83-CH-33. Honorable Michael J. Sullivan, Judge, Presiding.

Rehearing Denied March 1, 1996. Released for Publication March 1, 1996.

The Honorable Justice Thomas delivered the opinion of the court: Doyle and Hutchinson, JJ., concur.

The opinion of the court was delivered by: Thomas

The Honorable Justice THOMAS delivered the opinion of the court:

The plaintiffs, Carol Espevik, Floyd Cool, Mark Cool, John Cool, Philip Cool, and Richard Cool, filed a seven-count, sixth amended complaint against the defendants, Rosemary Reiner Kaye, individually and as executor of the estate of Peter Paul Reiner (Peter), Elizabeth Irvine, Gretchen Blanchette and Gloria Carr, alleging, inter alia, that the defendants wasted and mismanaged property held in a land trust by failing to pay real estate taxes on the property. The plaintiffs further sought to impose a constructive trust on the property, alleging that the defendants violated the terms of the trust by conveying trust property and refusing to hold the proceeds from the conveyance in the trust to be distributed to the plaintiffs as beneficiaries upon the death of Peter. Following cross-motions for summary judgment, the trial court granted the defendants' motion for summary judgment and dismissed the plaintiffs' complaint. The court further ordered the plaintiffs to pay the attorney fees of the guardian ad litem appointed to represent Peter in the proceedings. The plaintiffs appeal the summary judgment order and the order to pay the fees of the guardian ad litem. The defendants' cross-appeal the denial of their motion for the imposition of Supreme Court Rule 137 sanctions against the plaintiffs.

On October 22, 1979, Peter and Ethel Reiner (Ethel), husband and wife, accepted the assignment of a beneficial interest in a land trust. At that time, the sole property in the trust consisted of a single parcel of land located in McHenry County, Illinois. Later, Peter and Ethel conveyed two additional parcels of land to the trust. Also on October 22, 1979, Peter and Ethel executed an amendment to the trust which provided that the "entire income, use and benefit from all of the assets" of the trust was to be held for their benefit or for the benefit of the survivor. The amendment further provided that upon their deaths the assets of the trust, if any, were to be divided in two equal parts: one-half to be divided equally between Ethel's two daughters from a former marriage, Helen Schaefer Cool and Carol Schaefer Espevik, or their heirs; the other one-half to be divided equally between Peter's four daughters from a former marriage, Elizabeth Irvine, Gretchen Blanchette, Rosemary Kaye, and Gloria Carr, or their heirs. The amendment concluded by providing that the trust could be amended while both Peter and Ethel were living, but on the death of one of them, the survivor could not alter, amend, or terminate the trust, except that the survivor had the power to direct a sale of the real estate provided "the net proceeds from the sale are held by the trustee and distributed to the provisions of this Trust."

On October 3, 1980, Ethel died. Shortly thereafter, Peter moved to Paxton, Illinois, to live with his daughter, Rosemary Reiner Kaye (Rosemary), and her husband, George Kaye. From that time, until his death at the age 96, on June 18, 1990, Peter was cared for by his four daughters, the defendants in this case.

On January 6, 1982, Peter executed three warranty deeds conveying the three parcels comprising the trust to his four daughters. The deeds recited that consideration for the conveyances was the promise of lifetime care and support from his daughters. On that same day, Peter assigned his beneficial interest in the trust to his daughters. The deeds and assignment were witnessed by two neighbors, Claude Clough and Janet Clough, and then notarized. The deeds were eventually recorded on November 11, 1986. On November 27, 1987, Peter's daughters executed a document directing the trustee to execute and deliver a trustee's deed to two of the parcels.

On July 26, 1982, the circuit court of Ford County found Peter to be a disabled person and appointed Rosemary as Peter's plenary guardian of his estate and person. The plaintiffs do not claim that Peter lacked testamentary capacity at the time he executed the warranty deeds and assignment of beneficial interest on January 6, 1982. The unrebutted affidavits of the Cloughs indicate that Peter appeared to be of sound mind and memory on that date.

After redeeming the delinquent 1980 and 1981 trust real estate taxes, the plaintiffs purchased the delinquent taxes from 1982 through 1988. On January 18, 1983, the plaintiffs filed their initial complaint against Peter, alleging that he committed waste of the trust assets by failing to pay the 1980 and 1981 real estate taxes on the trust property. On March 4, 1983, Rosemary, as Peter's legal guardian, was substituted for Peter as a party defendant. Shortly thereafter, the plaintiffs filed a motion to appoint a guardian ad litem to represent Peter's estate, which motion was granted. The motion indicated that there was a possibility of a conflict of interest on the part of Rosemary, Peter's plenary guardian, based on the fact that the complaint alleged that Peter failed to pay real estate taxes.

The plaintiffs' initial complaint was dismissed without prejudice as moot based on the fact that the 1980 and 1981 taxes had been paid and redeemed. The plaintiffs eventually filed a second amended complaint which alleged seven counts. That complaint alleged that the defendants wasted and mismanaged the trust by failing to pay real estate taxes for 1980 and 1981. The complaint further sought a declaratory judgment to determine the parties rights and duties with respect to the October 22, 1979, amendment to the trust. Additionally, the plaintiffs requested that the court impose a constructive trust on the property, alleging that the defendants violated the terms of the trust by conveying trust property and refusing to hold the proceeds from the conveyance in the trust to be distributed to the plaintiffs as beneficiaries following Peter's death. Although the plaintiffs' complaint was amended six times, it remained essentially unchanged after the second amendment, except the names of parties were added or deleted.

On appeal, the plaintiffs contend that the trial court erred in granting summary judgment in favor of the defendants. The plaintiffs argue that Peter's right to direct a sale of the trust property was limited after Ethel died on October 3, 1980. Specifically, they urge that, while Peter had a right to direct a conveyance of the trust property, he could only do so if the proceeds from the conveyance continued to be held in the trust and, upon Peter's death, were distributed in two equal parts to the settlors' two sets of children. In support of their position, the plaintiffs rely on a portion of the October 22, 1979, amendment to the trust which provides:

"While both beneficiaries, Peter Paul Reiner and Ethel S. Reiner, are living this Trust may be altered, amended, changed or terminated at any time upon the written direction of both, and upon the death of either, the survivor shall not have the right to make any alterations, amendments changes or terminations to this Trust, except the survivor shall have the power to direct sale of said premises providing the net ...


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