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08/08/97 GOLDEN RULE INSURANCE COMPANY v. GERSON F.

August 8, 1997

GOLDEN RULE INSURANCE COMPANY, PLAINTIFF-APPELLANT,
v.
GERSON F. WIDOFF AND BETTY WAWANNA WIDOFF, DEFENDANTS (GERSON F. WIDOFF, AS PERSONAL REPRESENTATIVE OF THE ESTATE OF ROSEMARIE WIDOFF, DECEASED, DEFENDANT-APPELLEE).



Appeal from the Circuit Court of McHenry County. No. 96--CH--288. Honorable James C. Franz, Judge, Presiding.

Rehearing Denied September 8, 1997. Released for Publication September 8, 1997.

The Honorable Justice Inglis delivered the opinion of the court. McLAREN and Hutchinson, JJ., concur.

The opinion of the court was delivered by: Inglis

The Honorable Justice INGLIS delivered the opinion of the court:

Plaintiff, Golden Rule Insurance Company, appeals the dismissal of its action against defendant, Gerson F. Widoff, as the personal representative of the estate of Rosemarie Widoff (personal representative). Plaintiff argues that the trial court improperly found that it did not have jurisdiction to enjoin the personal representative of a foreign estate from distributing the assets of that estate.

The facts are drawn from the pleadings. In June 1995, defendant, Gerson Widoff, was traveling in a car with Rosemarie Widoff, Valanna Widoff, and defendant, Betty Widoff. Betty is Gerson's wife and Rosemarie was his mother. The Widoff car was struck by a vehicle driven by Gary Sokoloski. Amanda Moeller was a passenger in Sokoloski's vehicle. Both Sokoloski and Rosemarie died at the accident scene. Gerson and Betty sustained serious personal injuries.

Gerson and Betty were insured by plaintiff. Pursuant to that insurance policy, plaintiff paid $184,215.86 towards Gerson's medical expenses and $48,011.85 towards Betty's.

Eventually, the injured parties entered into a settlement agreement with State Farm Insurance Company, the insurer of Sokoloski's vehicle. Pursuant to the agreement, State Farm paid $1,000 each to Gerson, Betty, Valanna, and Moeller. State Farm then paid $296,000 to Rosemarie's estate.

After discovering the nature of the settlement, plaintiff filed suit against Gerson and Betty, individually, and Gerson, as the personal representative of Rosemarie's estate. The first count of plaintiff's complaint alleges that the insurance contract between it and Gerson and Betty provides that, in the case of a settlement with a tort-feasor, Gerson and Betty must reimburse plaintiff the lesser of either the amount paid by plaintiff or 50% of the settlement. Plaintiff's first count alleges that Gerson and Betty breached their contract with plaintiff by deliberately structuring the settlement in a manner which prevents plaintiff from being reimbursed. In particular, plaintiff alleges that both Gerson and Betty suffered significant injuries yet they received only $2,000, while Rosemarie had no medical expenses and her estate received $296,000.

Plaintiff's second count alleges that Gerson and Betty committed fraud in structuring the settlement agreement. In support of this allegation, plaintiff alleges that, since Gerson is one of three beneficiaries of Rosemarie's will, Gerson and Betty will receive the benefit of the $296,000 paid to Rosemarie's estate while avoiding having to reimburse plaintiff. Plaintiff's third count seeks to enjoin Gerson, as the personal representative of Rosemarie's estate, from distributing the funds received as a result of the settlement.

Plaintiff alleges that Gerson and Betty were twice served by substitute service (see 735 ILCS 5/2--203(a)(2) (West 1996)). The record, however, contains no return of service to support this allegation. Subsequent to the time plaintiff alleges that service was made, Gerson, in his individual capacity, and Betty entered a general appearance. At the same time, Gerson, in his representative capacity, entered a special appearance (735 ILCS 5/2--301 (West 1996)). The personal representative alleged that because Rosemarie was a resident of Florida and because her estate is in Florida, the trial court had no jurisdiction to enjoin the personal representative from distributing the estate. The trial court agreed and dismissed the action against the personal representative. The dismissal order stated that no just reason existed to delay the enforcement or appeal of the order (see 155 Ill. 2d R. 304(a)). Plaintiff filed a timely notice of appeal.

The question presented here is one of first impression in Illinois. Moreover, our research has not revealed a similar case from another jurisdiction. Unfortunately, the arguments presented by both parties are vague and inadequate to address an issue of first impression.

Traditionally, the personal representative of a foreign estate could only be sued in the jurisdiction in which he was appointed. 31 Am. Jur. 2d Executors & Administrators § 1333 (1989). In so holding, the courts reasoned that a personal representative had no extraterritorial authority and, therefore, could not be sued outside of the jurisdiction in which he was appointed. 31 Am. Jur. 2d Executors & Administrators § 1333 (1989). Of additional concern was the public policy of not interfering with the administration of assets in a foreign state. 31 Am. Jur. 2d Executors & Administrators § 1333 (1989).

This traditional rule has been modified by statutes allowing long arm jurisdiction. 31 Am. Jur. 2d Executors & Administrators § 1337 (1989); see, e.g., 735 ILCS 5/2--209 (West 1996) (Illinois long arm statute). These statutes allow a court to obtain jurisdiction over the personal representative of a foreign estate in order to determine whether the estate is liable for a tort ...


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