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Lampe v. Pawlarczyk

May 30, 2000

WARREN R. LAMPE AND W. ROBERT LAMPE, BENEFICIARIES U/T/A OF MABEL R. TRINER, DATED DECEMBER 19, 1990, DECEMBER 19, 1990,
PLAINTIFFS-APPELLANTS, V.
LINDA R. PAWLARCZYK,
DEFENDANT-APPELLEE.



The opinion of the court was delivered by: Justice Gordon

APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE ALBERT GREEN, JUDGE PRESIDING.

In the first of these two consolidated appeals, Warren R. Lampe and W. Robert Lampe (the Lampes) appeal from orders of the Cook County circuit court denying their requests for attorney fees incurred in bringing an action against Linda Pawlarczyk (Linda) and in defending against her counterclaim. The Lampes are nephews of Mabel R. Triner (Mabel) and beneficiaries of the Mabel R. Triner trust (Trust) dated December 19, 1990. In the second appeal, Linda, also a beneficiary of the Trust and formerly trustee, appeals from a circuit court order denying her request for compensation for trustee's fees. For the reasons set forth below, we affirm in part and reverse in part the trial court's judgment in Linda's appeal, and remand the cause. We dismiss the Lampes' appeal for lack of jurisdiction.

BACKGROUND

The Lampes filed a three-count complaint against Linda on September 2, 1997. In that complaint, they alleged that (1) on February 7, 1997, Linda withdrew from the Trust account and paid to herself $5,000; (2) on April 10, 1997, she caused certain Trust assets to be liquidated and withdrew and paid to herself $32,596; and (3) on April 15, 1997, she caused certain Trust assets to be liquidated and withdrew and paid to herself $2,930. The complaint also alleged that Linda made a claim against the Trust in her individual capacity for compensation for services rendered to Mabel during Mabel's life. The Lampes thus allege that Linda put herself in a conflict of interest with the Trust beneficiaries and breached her fiduciary duty as trustee. In count I of their complaint, the Lampes seek Linda's removal as trustee of the Trust; count II seeks an accounting from her of the Trust assets; and count III asks that a constructive trust be imposed over funds she withdrew from the Trust account. Attached to the complaint is a copy of the Trust agreement executed by Mabel on December 19, 1990, naming Warren Lampe (Warren) and Linda as trustees and designating Robert Lampe (Robert) as successor co-trustee if Warren were unable to serve in that role. The trustees were authorized to distribute for Mabel's benefit "as much of the net income and principal of the Trust, even to the extent of exhausting principal, as they may *** determine to be required for [Mabel's] welfare, comfort and support." Upon Mabel's death the Trust principal and any accrued income were to be distributed as follows: $10,000 to Linda, and the remainder in equal shares to Mabel's nephews, the Lampes, and to a third nephew, Harold Richak, who was Linda's father. According to the terms of the Trust, if Richak predeceased Mabel (which he did), his one-third share was to go to Linda.

On December 5, 1997, Linda filed a counter-complaint seeking $98,000 from the Trust as reimbursement for services Linda allegedly rendered to Mabel for 14 years until her death in 1996. *fn1 In her counter-complaint, Linda alleged that she and Warren were co-trustees of the Trust until July 13, 1993, when he resigned, and that Robert then was named successor co-trustee but that he resigned on November 15, 1993, leaving her as the sole trustee. She also alleged that on November 22, 1996, Mabel dictated (to Linda) and signed a "letter of direction" stating that Mabel wanted her entire estate to go to Linda.

The counterclaim also states that in February 1997 Linda made a demand on the Trust in her individual capacity, claiming $98,000 as compensation for services rendered to Mabel. Attached to the counter- complaint is a copy of that demand, which is the same as the one Linda makes in the counter-complaint. In that demand, Linda states that she cared for Mabel from 1982 until her death in December 1996, providing a variety of services including taking Mabel grocery shopping, paying her utility bills, arranging for and providing transportation to and from doctor and dental appointments, and visiting with Mabel on a regular basis. Linda also oversaw Mabel's care after she fell and broke her hip in 1986, and upon Mabel's return home three months later Linda visited her daily for one year, and five times a week for the next five years, during which times she provided various services such as doing Mabel's laundry and cleaning her apartment. Linda also asserts that in September 1996 when plans were being made for Mabel to move to a nursing home, Linda inspected various facilities before deciding on the one best suited to meet Mabel's needs. Linda also visited Mabel every day during the time she was in the nursing home. Also included in the attachments to the counterclaim are copies of the Trust and of Mabel's pourover will, dated December 19, 1990, the date of the Trust agreement. The will names Robert and Warren as co-executors, and names Linda as successor executor if both Warren and Robert are unable to serve. Under the terms of the will, any residue of Mabel's estate and any personal property not disposed of was to be added to the Trust at her death. Finally, the attachments to the counterclaim also included the previously mentioned "letter of direction" allegedly dictated and signed by Mabel stating that Mabel wanted to give $10,000 to each of the Lampes and the rest of her money to Linda.

The Lampes moved for summary judgment on their complaint on January 26, 1998, asking that Linda be removed as trustee, that she be ordered to provide an accounting of the Trust, and that a constructive trust be imposed over the funds Linda had withdrawn from the Trust. According to the Lampes, Linda should be removed as trustee because she put herself in the position of being both trustee of the Trust and an individual claimant against the Trust, thus creating a conflict of interest. They also allege that as beneficiaries they have a right to a full accounting of the Trust plus any other information needed to keep them fully informed. In addition, the Lampes allege that Linda breached her fiduciary duty and thus a constructive trust should be imposed over assets she withdrew from the Trust. The Lampes also move for an award of attorney fees based upon their efforts as beneficiaries to save the Trust from destruction and restore it to its proper purposes. In support of their motion, the Lampes attach a copy of their original complaint and of Linda's answer.

In her response as trustee to the motion, Linda asserted that she had provided the Lampes with copies of the monthly statements of the Trust account. She also stated that as of May 1, 1997, she and the Lampes agreed that she would make no further withdrawals from the Trust without the agreement of the Lampes or a court order, except to pay outstanding Trust bills. She asserts that she made no withdrawals or payments after May 1. 1997, except to pay outstanding bills of the Trust. Included in the attachments to Linda's response is a copy of a letter dated May 1, 1997, from Randy Curato, attorney for the Lampes, to Sandra Burns, the attorney for the Trust, confirming the above-mentioned May 1, 1997, agreement. In an affidavit submitted along with her response, Linda states that her attorney notified the Lampes' counsel on March 24, 1997, that the Trust investments would be converted to cash and that distributions would then be made. According to the affidavit, shortly thereafter attorney Burns told Linda not to convert all the assets to cash because the Lampes' attorney had indicated that they might want to take their distribution in kind. Linda asserts that Burns subsequently made several inquiries of the Lampes as to how they wanted their distribution made, but received no reply. Linda also asserts that at the time of Mabel's death the Trust principal totaled about $180,000, and that all payouts thereafter were for final bills for Mabel's care, taxes due on the Trust or other direct costs, and two payments to herself: $10,000 to pay her specific gift under the Trust, and $35,596 as partial payment of her one-third share under the Trust's residuary paragraph. According to Linda, following those payments, there was about $150,000 remaining in the Trust account.

The trial court granted the Lampes' summary judgment motion on April 21, 1998, ordering Linda removed as trustee and directing her to prepare and submit an accounting of the Trust. (C130) The court also established a constructive trust over the Trust assets that had been withdrawn by Linda. The court found that Linda had breached her fiduciary duty to the Lampes by using her position as trustee "to authorize payments to herself during the course of the trust relationship," and by submitting "a claim in her individual capacity against the Trust in the amount of $98,000.00 for services rendered." Also on April 21, the court took under advisement the Lampes' request for attorney fees.

In June 1998 Linda moved for a ruling on her counter-complaint granting her $98,000 claim, and the Lampes moved for summary judgment on Linda's counterclaim. In July the Lampes made a renewed motion for attorney fees, and in August Linda filed a "petition for compensation to trustee for services rendered to trust and to decedent." In that petition, Linda sought $10,000 per year for the 7.33 years from December 20, 1990 (the inception of the Trust), until April 21, 1998 (the date she was removed as trustee), as compensation for "Trustee's services rendered to the Trust and to MABEL R. TRINER and performing other related services allowed to be paid by the Trust." The amount requested was $73,300 "minus $35,596.00, the amount already paid to [herself] for Trustee's duties," yielding a net request of "$37,704.00 to be paid to [herself] from the Mabel R. [Triner] Trust prior to disbursements of amounts due beneficiaries under the terms of the Trust." The petition also included a listing of her purported services to the Trust, which she termed her "Trustee duties *** from December 20, 1990, until April 21, 1998," many of which were the same services to Mabel that were enumerated in Linda's $98,000 claim. Finally, Linda averred in her petition that Mabel promised her she would be reimbursed for her services when Mabel died, and that Warren had essentially agreed to that promise, telling Linda in December 1990 that she would be "taken care of."

On October 16, 1998, the trial court granted the Lampes' motion for summary judgment on Linda's counterclaim, and denied with prejudice Linda's motion for grant of her $98,000 claim. The court also denied without prejudice Linda's separate ($73,300) petition for compensation to trustee. In denying that petition, the court stated that Linda had mixed together trustee services with non-trust, personal services such as "daily visits to the home, the *** tender loving care that she gave to the deceased," and that the court therefore was unable to determine "how much time [Linda] spent in preserving the assets of the trust." The court explained that the petition was being denied without prejudice until Linda "can spell out how much time [she] spent on the trust." Also on that same date (October 16, 1998), the trial court denied the Lampes' renewed motion for attorney fees.

One month later, Linda filed a five-count amended counter- complaint. Count I purports to seek compensation under the express terms of the Trust for services rendered to the Trust and to the decedent. Included in count I is a listing of services provided by Linda that is similar to the list in her previous, $73,300 petition for compensation to trustee. However, in the amended counter-complaint Linda then breaks those services into three categories. The first category is described by Linda as "services and duties performed [b]y LINDA during the time she acted as Trustee [that] have been acknowledged by WARREN and ROBERT *** to be duties relating to the Trust *** for which LINDA should be reimbursed." Included in that group are the following:

"a. All banking activities, cashing of pension checks, depositing checks, monthly reconciliation of checking account and monthly review of financial statements;

b. Management of household expenses and writing checks for payment of household expenses including food, medication, utilities and all other monthly expenses of MABEL;

c. Paying quarterly deposits for state and federal taxes;

d. Cashing checks for payment of dry cleaning[] [and] laundry expenses;

e. Upon the death of MABEL, coordinating all funeral arrangements including[] purchasing burial clothing, ordering funeral flowers, purchasing the headstone and coordinat[ing] all arrangements with the cemetery." *fn2

The second category is described as "services and duties performed by LINDA relat[ing] to the Trustee's power to 'distribute to MABEL or apply for MABEL's benefit as much of the net income and principal of the Trust as the Trustee may from time-to-time [sic] determine to be required for MABEL's welfare, comfort and support.'" Included in that group are services such as coordinating all doctor and dental appointments, processing Mabel's mail, and "[t]raveling with MABEL and alone" to stores. The third category is described as services performed during Mabel's life "to provide for MABEL's 'maintenance, comfort, companionship, enjoyment and medical care' as provided in the Trust. That language refers to Article III(A)(5)(m) of the Trust agreement, which authorizes the trustees "[t]o employ during [Mabel's] life any person or persons to attend to [her] maintenance, comfort, companionship, enjoyment and medical care." Included in that third group are services such as writing letters for Mabel, reading to her, and visiting her daily.

Counts II through V of the amended counter-complaint are designated as complaints for breach of contract, promissory estoppel, unjust enrichment/contract implied in law, and promissory fraud. In the counter-complaint, Linda seeks $72,960 as compensation for "services and care to MABEL by LINDA as Trustee" from the inception of the Trust until April 1998, when Linda was removed as trustee. *fn3 She also seeks an additional $115,950 as compensation for care and services rendered to Mabel from 1981 to the inception of the Trust in December 1990. Included among the attachments to the amended counter-complaint is an affidavit showing the hours per month and total hours spent in performing various duties and services. Those services are broken into two categories: services performed by Linda for Mabel from 1982 to the inception of the Trust in December 1990, and those performed for Mabel from that date until her death in 1996.

On December 1, 1998, the Lampes filed a motion asking the court to reconsider its denial of the request for attorney fees. On the same date, Warren filed with the court a petition for trustee's fee seeking $7,737.50 as compensation for services rendered when he was co-trustee.

The trial court struck Linda's amended counter-complaint on April 7, 1999, and granted her leave to file an amended petition for trustee's fees to comply with the Trusts and Trustees Act (760 ILCS 5/1 et seq. (West 1993)). Linda filed her "amended petition for compensation to trustee for services rendered to trust" on April 29, 1999. In that petition, she shortened her list of services and duties that Warren and Robert acknowledged as compensable under the Trust. This abbreviated list included only items a, c and e from the previous list in count I of the amended counter-complaint, which were as follows:

"a. All banking activities, cashing of pension checks, depositing checks, monthly reconciliation of checking account and ...


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