Appeal from the Circuit Court of De Kalb County. No. 02-MR-57. Honorable Kurt P. Klein, Judge, Presiding.
The opinion of the court was delivered by: Justice Hutchinson
Plaintiff, National City Bank of Michigan/Illinois (National City), in its capacity as trustee under the will of Genevieve O. Vrba, deceased, appeals from the trial court's order granting summary judgment in favor of defendants, Northern Illinois University (NIU), DePaul University (DePaul), Loyola University (Loyola), the Catholic Diocese of Rockford (the Diocese), Harvey Share, and the People of the State of Illinois ex rel. Attorney General James E. Ryan (Attorney General), on National City's complaint for declaratory judgment. In its complaint, National City requested the trial court to declare null and void a purported amendment (the amendment) to "The Vrba-O'Brien Scholarship Trust" (the Scholarship Trust) approved by defendants NIU, DePaul, the Diocese, and Share, in their capacity as members of the Scholarship Trust's "Advisory Committee" (Advisory Committee). The amendment directed National City to divide the corpus of the Scholarship Trust among defendants NIU, DePaul, Loyola, and the Diocese for the award of college scholarships at their individual direction. The trial court found that the amendment was valid and ordered that the Scholarship Trust's corpus be divided pursuant to the terms of the amendment. On appeal, National City argues (1) the amendment was contrary to the provisions of Vrba's will; (2) the trial court erred in concluding that the amendment was binding; and (3) the trial court erred in relying upon certain conclusory statements contained in the affidavits supporting the motion for summary judgment. We reverse and remand with instructions that judgment be entered in National City's favor.
The following facts are relevant to the disposition of this appeal. Genevieve Vrba died on September 1, 1989. In her will, Vrba bequeathed a substantial portion of her estate to be held in trust as the Scholarship Trust. The DeKalb Bank was named in the will as the original trustee. National City is a successor to The DeKalb Bank by operation of law. According to article V(C)(2) of Vrba's will, the purpose of the Scholarship Trust was as follows:
"It is my wish that this Scholarship Trust shall be administered primarily to provide scholarships to deserving persons from rural areas of certain midwestern states of the Catholic Faith, but not exclusively, to enable such persons to acquire and complete their undergraduate degrees, or their masters or doctors degrees, primarily in Catholic, but also in public and private colleges and universities. It is also my wish that those distributions made for purposes other than scholarships (which distributions shall not constitute ten (10%) percent of the distributions made annually) to deserving persons, shall include distributions to any kind of religious, charitable, scientific, literary, or educational institutions, including distributions to assist teachers in the primary and secondary educational institutions, to enhance the quality of the education in said institutions, but in no event shall such distributions be used to pay the salaries of any teachers or administrators. The Advisory Committee is also authorized to make distributions to the Newman Foundation, located at the Northern Illinois University in DeKalb, Illinois, in order to carry on their work in assisting students at the University. For purposes of the operation of this Scholarship Trust, it is anticipated that the majority of the persons receiving scholarships from this Scholarship Trust, shall reside in the states of Illinois, Iowa, Indiana, Wisconsin, or Michigan."
Article V(C)(3) of Vrba's will provides that the Scholarship Trust shall terminate 50 years after Vrba's death. Vrba's will provides that, at the time of termination, all accumulated corpus shall be distributed to the Diocese to be used for "providing scholarships to deserving persons."
Vrba's will also established the Advisory Committee to oversee the Scholarship Trust. Vrba's will provided that the Advisory Committee would consist of the following people: (1) a person appointed by the president of DePaul; (2) a person appointed by the president of NIU; (3) a person appointed by the senior judge in age of the United States District Court having jurisdiction in DeKalb; (4) a person appointed by the Catholic Bishop of the Diocese; and (5) a person appointed by the president of Loyola. Article V(E)(1) of Vrba's will provided that a majority of the members of the Advisory Committee could amend the Scholarship Trust whenever, in their opinion, "it [was] necessary or advisable to enable the Trustee to carry out the purpose of the Scholarship Trust Estate more effectively." Vrba's will also authorized National City to use the assets of the Scholarship Trust to pay all administrative fees, including trustee fees and the meeting expenses of the Advisory Committee.
Between 1991 and 2001, the Advisory Committee awarded approximately $1.5 million in scholarships to students attending various universities. Some of the scholarships were awarded to students attending DePaul, Loyola, and NIU. However, scholarships were also awarded to students attending other universities.
On March 1, 2002, a majority of the members of the Advisory Committee executed an amendment agreement that purported to amend the terms of the Scholarship Trust. The amendment agreement was signed by the Advisory Committee members appointed by DePaul, NIU, the Diocese, and the senior United States District Court judge (collectively referred to as "the majority defendants"). The amendment directed National City to divide the Scholarship Trust's corpus into four separate shares and deliver shares to DePaul, NIU, and Loyola for use as scholarships to students attending only those universities. The remaining share was to be delivered to the Diocese to award scholarships consistent with the provisions of Vrba's will. DePaul, NIU, and Loyola were each to receive an 11.11% share of the Scholarship Trust's corpus, and the Diocese was to receive a 66.67% share. The amendment provided that "[e]ach separate share shall be held as a separate trust or similar permanent endowment fund by the institution so indicated, with the named institutions as sole Trustee or fiduciary."
On April 1, 2002, National City filed a complaint for declaratory judgment, seeking a declaration that the amendment exceeded the Advisory Committee's authority under the terms of Vrba's will. Specifically, National City alleged that the amendment was void because it was an improper termination of the Scholarship Trust and because it was contrary to the provisions of Vrba's will.
On May 8, 2002, the majority defendants filed a collective answer denying that they lacked authority to make the amendment. Loyola answered separately on May 22, 2002. Throughout the proceedings, Loyola has taken a position of neutrality with respect to the validity of the amendment.
On August 3, 2002, the majority defendants moved for summary judgment. In their motion, the majority defendants argued that the Advisory Committee had the authority to execute the amendment in question. The majority defendants further argued that the amendment did not improperly terminate the Scholarship Trust but, instead, separated the Scholarship Trust's corpus into "separate trust accounts." The majority defendants claimed that the division of the corpus in such a manner would eliminate the annual federal excise taxes, trustee fees, and meeting expenses incurred by the Scholarship Trust. These taxes and fees averaged $38,000 annually. The majority defendants argued that the money saved would permit the award of a greater number of scholarships, thereby more effectively achieving Vrba's purpose in creating the Scholarship Trust. In support of the motion, each of the majority defendants submitted an affidavit executed by an institutional official averring that each institution was "capable of efficiently and effectively carrying out the intentions of the Vrba-O'Brien Scholarship Trust."
On September 17, 2002, National City filed its own motion for judgment on the pleadings. In its motion, National City argued that the amendment was void because it constituted an improper termination of the Scholarship Trust and because it was contrary to the language of Vrba's will. National City also filed a motion to strike the affidavits accompanying the majority defendants' motion for summary judgment as conclusory, in violation of Supreme Court Rule 191(a) (Official Reports Advance Sheet No. 8 (April 17, 2002), R. 191(a), eff. July 1, 2002).
On November 4, 2002, the Attorney General filed an appearance and a statement of support for the majority ...