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In re Ramlose

November 19, 2003


Appeal from the Circuit Court of Cook County. Honorable E. Kenneth Wright, Jr., Judge Presiding.

The opinion of the court was delivered by: Justice South


These consolidated appeals arise from four orders of the circuit court of Cook County freezing defendant Elmer Haneberg's (Haneberg) assets and accounts and various real estate properties, defaulting him as a discovery sanction pursuant to Supreme Court Rule 219 (166 Ill. 2d R. 219), and transferring all pending matters to the decedent's estate after closure of the guardianship estate. The first appeal arises from an order that was entered on February 14, 2002, freezing all of Haneberg's accounts and assets and an order entered on May 15, 2002, which declined to vacate the February 14, 2002, "freeze" order. The second appeal arises from an order that was entered on September 10, 2002, which closed the guardianship estate and transferred all pending matters, including a default order entered on August 23, 2002, and the February 14, 2002, freeze order, to the decedent's estate for further proceedings. LaSalle Bank was appointed as executor of the estate of Alexander Ramlose, now deceased, and appears in that capacity in this appeal as plaintiff's representative.

The pertinent facts and chronology of events are as follows: On February 8, 2001, plaintiff, Alexander Ramlose, filed a complaint for accounting and injunctive relief alleging that defendant Elmer Haneberg, as trustee of the Alexander O. Ramlose Trust (Ramlose Trust), had breached his fiduciary duties by engaging in a pattern of "manipulation, self-dealing and deceit" with respect to the corpus of the trust by using it to satisfy his personal indebtedness and that of his family members. The complaint further alleged that plaintiff had previously executed a demand for accounting on Haneberg as well as a demand that he turn over any and all documents relative to the Ramlose Trust in order that an accounting by an independent third party could be conducted, but that he never responded or complied with that request. The complaint sought an accounting of the Ramlose Trust and all of Haneberg's financial activity; an order that Haneberg be required to produce all trust documents relating to plaintiff, including bank books, bank records, checkbook records, securities, bonds, promissory notes, mortgages, trust deeds, real estate records, income records, property deeds, and all other documents executed by him as trustee for plaintiff; injunctive relief enjoining Haneberg from "altering, creating destroying, changing, modifying or amending" any of these documents; and a constructive trust for several real estate properties allegedly purchased by Haneberg with funds from the Ramlose Trust.

On March 13, 2001, Patrick Murphy, the Cook County public guardian (Public Guardian), filed a guardianship petition requesting that plaintiff be adjudicated a disabled person and that the office of the Public Guardian be appointed as plenary guardian of the estate and person of Alexander Ramlose. The court appointed the Public Guardian temporary guardian on the grounds that plaintiff was a 95-year-old man who appeared to be suffering from dementia, and that a temporary guardian was needed in order to safeguard his assets and ensure that his estate was being protected in the chancery court matter. Plaintiff was also ordered to submit to a mental examination on or before March 30, 2001.

On March 20, 2001, the chancery court action was consolidated with the guardianship action and transferred to the probate division. At that time, the Public Guardian filed his appearance on behalf of plaintiff, and an agreed order was entered into between Haneberg and the Public Guardian that Haneberg would provide the Public Guardian with a full accounting of all of his actions taken with respect to the Ramlose Trust and produce all tax returns filed on behalf of the estate, trust instruments, powers of attorney, wills and advanced directives. That order gave Haneberg until April 11, 2001, to comply. Additionally, Haneberg agreed not to distribute or draw upon the trust assets except for matters relating directly to plaintiff's personal health.

On April 18, 2001, the Public Guardian was appointed plenary guardian of plaintiff's person and estate and filed an emergency petition seeking to remove Haneberg as trustee, appoint a successor trustee and invalidate all powers of attorney, certain trusts and trust amendments. The petition alleged that plaintiff had been diagnosed as suffering from dementia, which placed him at an extreme risk for self-neglect, abuse and exploitation. The petition also alleged that Haneberg, as trustee, had engaged in highly questionable practices with respect to the trust, such as issuing checks for substantial sums of money to himself and his wife and preparing the "Haneberg Charitable Educational Trust," the stated purpose of which was to provide financial support for him and his family while he pursued a career in the ministry. Allegedly, Alexander Ramlose transferred $700,000 from the Ramlose Trust to fund the Haneberg Trust nine months after he was diagnosed as having significant memory deficits and dementia. Attached to the petition was a copy of plaintiff's mental examination report prepared by a Dr. Steven Fox confirming that diagnosis. The court granted the emergency petition, removed Haneberg as trustee of the Ramlose Trust and appointed LaSalle Bank as successor trustee.

On May 14, 2001, the Public Guardian filed a rule to show cause alleging that Haneberg had never provided an accounting of the Ramlose Trust pursuant to the March 20, 2001, agreed order even though defense counsel had assured him on several occasions that such an accounting would be forthcoming. The Public Guardian maintained that an accounting was necessary to assess and protect the assets in plaintiff's estate.

On May 30, 2001, the Public Guardian filed a petition for the issuance of a citation to recover assets alleging that Haneberg had engaged in a series of actions in his capacity as trustee for the Ramlose Trust, which were done solely for his own benefit, and that as plaintiff's mental and physical health declined, Haneberg had amended the trust several times, resulting in his gaining control of the bulk of plaintiff's estate upon his death. The petition further alleged that Haneberg misappropriated hundreds of thousands of dollars of plaintiff's money in loans and monetary gifts to himself and his family and paid himself almost $100,000 in trustee's fees. The petition realleged many of the same allegations contained in the emergency petition to remove Haneberg as trustee, such as the creation of the Haneberg Charitable Educational Trust (Haneberg Trust), which was funded by $700,000 from the Ramlose Trust. According to the petition, the Haneberg Trust provided no benefits to plaintiff and would most likely result in "serious adverse estate tax consequences" for him and the estate. The petition also identified several real estate properties located in Chicago and Lisle, Illinois, which Haneberg allegedly acquired with proceeds from the Ramlose Trust. The petition sought an invalidation of the amendments to the Ramlose Trust, the rescission of all gift authorizations and of the Haneberg Trust, and the reconveyance to the Ramlose Trust of all moneys obtained from plaintiff by Haneberg.

On June 13, 2001, the Public Guardian filed a motion for summary judgment on the emergency petition to remove Haneberg as trustee and appoint a successor trustee on the grounds that Haneberg had failed to answer or otherwise respond.

On June 22, 2001, Haneberg answered the citation to recover assets and denied all allegations that he had breached his fiduciary duties or exercised undue influence over plaintiff. He maintained that all of the gifts, the Haneberg Trust, and the trustees fees were authorized by plaintiff and prepared at his direction and knowledge without solicitation or duress by him. Haneberg also filed his response in opposition to the emergency petition to remove him as trustee and provided an accounting to the Public Guardian's office.

On July 17, 2001, the Public Guardian filed a motion to compel Haneberg to appear at a deposition and to bring with him certain documents for examination. Haneberg filed an emergency motion to extend the deposition compliance date and attached to that motion a letter from a psychiatrist stating that he was suffering from depression and psychologically unfit to submit to the rigors of a deposition. The psychiatrist opined that Haneberg would start responding to treatment in approximately 6 to 12 weeks.

The court denied Haneberg's motion for an extension and ordered him to submit to his deposition on or before August 3, 2001. Haneberg filed a motion to reconsider that order and attached another letter from the same psychiatrist restating his diagnosis and opinion on Haneberg's inability to participate in a lengthy, contentious and rigorous deposition.

The Public Guardian agreed to continue the deposition to August 10, 2001. However, on that date Haneberg failed to appear without notice. On that same date, the Public Guardian filed an emergency petition for relief pursuant to Illinois Supreme Court Rule 219 (166 Ill. 2d R. 219) requesting that Haneberg be defaulted on "each and every count of each of the three petitions pending against him;" that he be held in contempt; that an order for a body attachment to bring him before the court be entered; that he pay a fine of no less than $500 per day until he submits to his deposition; that sanctions be entered against his attorney for noncompliance with the court's order and for his consistent pattern of delay; and an order for reasonable attorney fees. The trial court granted the Rule 219 petition on August 10, 2001, and held Haneberg in contempt of court for his failure to appear at his deposition and fined him $500 per day until he submitted for his deposition. However, all other relief requested by the Public Guardian, including sanctions and attorney fees, was reserved. On August 13, Haneberg filed a notice of appeal from that ...

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