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In re Estate of Barth

May 22, 2003

IN RE ESTATE OF CHARLOTTE E. BARTH, A DISABLED PERSON, NOW DECEASED
(JOSEPH A. BENJAMIN AND TEEN LIVING PROGRAMS, INC., APPELLANTS,
v.
ESTATE OF CHARLOTTE E. BARTH; LYNN R. OSTFELD, AS GUARDIAN AD LITEM AND COURT-APPOINTED ATTORNEY FOR CHARLOTTE E. BARTH; ROGER BARTH, INDIV. AND AS GUARDIAN OF THE ESTATE AND PERSON OF CHARLOTTE E. BARTH; AND RONA ROE, INDIV.; AND LASALLE BANK, N.A., AS TRUSTEE OF THE CHARLOTTE E. BARTH TRUST, APPELLEES.
(THE PEOPLE, EX REL. JAMES E. RYAN, ATTORNEY GENERAL OF ILLINOIS, PROSPECTIVE INTERVENOR-APPELLANT)).



Appeal from the Circuit Court of Cook County Honorable Arthur C. Perivolidis and Honorable Robert Cusack, Judges Presiding.

The opinion of the court was delivered by: Justice Karnezis

UNPUBLISHED

In this consolidated appeal, Teen Living Programs, Inc. (TLP), Joseph Benjamin (Benjamin) and the Attorney General of Illinois (the Attorney General), filing on behalf of the People of the State of Illinois as ultimate beneficiaries of any bequest to TLP, a charitable organization, appeal from an order of the trial court denying TLP's and Benjamin's motions to vacate an "Agreed Pre-Trial Settlement Order" (agreed order) and the Attorney General's motion to intervene in the proceedings. The agreed order was entered in guardianship proceedings involving Charlotte E. Barth (Charlotte) and the Charlotte E. Barth Trust (the trust). The parties to the agreed order are Charlotte's guardian ad litem and court-appointed attorney Lynn Ostfeld (Ostfeld), Charlotte's son Roger Barth (Roger), Charlotte's daughter Rona Roe (Rona), and LaSalle Bank, the trustee of the Charlotte E. Barth Trust. The order declared Charlotte incompetent, appointed a guardian for her estate, invalidated an amendment she made to the trust, and made distributions from the trust and from the proceeds of a liquidated annuity. In addition, Benjamin appeals from an order of the trial court in Charlotte's decedent's estate dismissing, on res judicata grounds, his claim against Ostfeld challenging the validity of the agreed order.

On appeal, appellants argue that the court erred in denying their motions to vacate and intervene because the agreed order was void for the following reasons: (1) it affected their rights as beneficiaries under the trust, and therefore, as interested and necessary parties, they were entitled to notice regarding the proceedings which they did not receive; (2) the court lacked subject matter jurisdiction to enter the agreed order because (a) the only pleadings before the court concerned appointment of a guardian, not a petition to take estate planning measures pursuant to the Probate Act of 1975 (755 ILCS 5/1-1 et seq. (West 1998)) (Probate Act) and (b) Ostfeld had no statutory authority to agree to revoke the amendment; and (3) the order was procured by fraud. Benjamin also argues that, because the order denying his motion to vacate entered in the guardianship proceedings was still on appeal when the court dismissed his claim against the decedent's estate, that order was not final and res judicata did not apply. We reverse and remand both the court's order in the guardianship proceedings and the court's order in the decedent's estate proceedings.

Charlotte established the trust in 1992, providing for her care during her lifetime. Upon her death, after certain bequests including a $25,000 bequest to Benjamin, the trust residual would go to Roger and Rona. In 1998, Roger and Rona filed a chancery suit against Charlotte and her then co-trustee Benjamin alleging mismanagement of the trust and breach of fiduciary duty. The court appointed former Illinois Supreme Court Justice Seymour Simon as guardian ad litem for Charlotte to determine her condition.

Justice Simon interviewed Charlotte three times in February 1999 and once in March 1999. On March 10, 1999, Justice Simon filed a report stating that Charlotte was angry with Roger and Rona, she wished to have nothing to do with them because of their allegation in the chancery suit that she was not competent to make decisions, and she was fearful that Roger would assault her. Justice Simon did not think that Charlotte needed a guardian of either her person or her estate. However, because of Charlotte's memory lapses, he recommended that she receive help with her bill paying, an institutional co-trustee be appointed to the trust to serve with her, and an audit of her accounts be conducted. Pursuant to an agreed order, the court dismissed the chancery suit without prejudice on November 22, 1999.

On July 15, 1999, Charlotte changed the beneficiary of a $400,000 annuity from Roger and Rona to Benjamin.

On September 27, 1999, Charlotte executed amendment 3 to the trust, increasing Benjamin's bequest to $50,000 and substituting TLP as residuary beneficiary under trust, thereby eliminating Roger and Rona as beneficiaries.

On March 20, 2000, LaSalle Bank, as trustee of the trust, filed a petition for appointment of a private social service agency as guardian of Charlotte's person, stating that Charlotte was a disabled person due to "dementia" and unable to make responsible decisions concerning her care. On April 11, 2000, Rona filed a cross-petition requesting appointment of Roger as guardian of Charlotte's person.

On April 7, 2000, Charlotte liquidated the annuity of which Benjamin was the beneficiary and on April 19, 2000, deposited the $389,000 proceeds into a joint account she held with Roger.

In connection with the guardianship proceedings, Dr. Steven Fox, D.O., interviewed Charlotte on February 11, 2000, February 23, 2000, and April 24, 2000. In his April 27, 2000, report, Dr. Fox found 90-year-old Charlotte "totally incapable of making financial, personal and medical care decisions," "highly susceptible to patronization, exploitation and undue influence," and likely to require "surrogate decision making for the remainder of her life."

On April 20, 2000, the court appointed Ostfeld as guardian ad litem for Charlotte to determine her condition. Ostfeld interviewed Charlotte on April 26, 2000, and filed a report on April 27, 2000, in which she recommended that the court appoint a plenary guardian for Charlotte's person and estate. Ostfeld stated that her opinion of Charlotte's capabilities was in conformity with Dr. Fox's report. Ostfeld reported that Charlotte expressed to Ostfeld that she would only accept Roger as guardian of her person, she wanted her money to go to her family and any decisions regarding her money should be made by family members who had worked for the money and deserved to have it.

On April 27, 2000, both LaSalle Bank and Rona were allowed to amend their petitions to request appointment of a guardian of Charlotte's estate as well as her person. In the same order, the court appointed Ostfeld as Charlotte's attorney and "her powers and duties [were] expanded accordingly."

On June 5, 2000, Charlotte revoked amendment no. 3.

On June 10, 2000, at Ostfeld's request, Dr. Fox examined Charlotte again to further evaluate her capacity. He filed an addendum report reaffirming the need for a plenary guardian of her estate and person, "in particular the need for a guardian of the estate, due to the overwhelming evidence of patronization, exploitation and undue influence, which rise to the level of reportable elder abuse and professional misconduct."

On September 21, 2000, the probate court transferred the case to calendar 14 for pretrial hearing or settlement. That same day, by agreement of the parties, the court appointed Roger plenary guardian of Charlotte's person. An October 10, 2000, joint pretrial statement filed by the parties makes clear that the only pleadings pending before the court were the petition and cross-petition for appointment of a plenary guardian of the estate. However, the statement also raised issues regarding Charlotte's competence when she executed amendment no. 3, whether legal fees should be paid and whether certain distributions could be made from the trust.

On October 16, 2000, the court entered the agreed pretrial settlement order, thereby appointing Roger as plenary guardian of Charlotte's estate; finding Charlotte incompetent when she executed amendment 3; voiding amendment 3; ordering payment from the proceeds of the liquidated annuity of legal fees to Rona and Roger's attorneys and to Ostfeld; putting the remaining proceeds from the annuity into a trust for Roger's use in his capacity as guardian; providing for payment of a one-time gift of $675,000 to Roger and Rona and yearly $10,000 gifts to Roger, Rona and Rona's daughter; forgiving a $200,000 loan the trust made to Roger and providing that the ...


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