Appeal from the Circuit Court of Cook County, Probate Division No. 05 P 003595 Honorable Henry Budzinski Judge James Kennedy Judges Presiding
The opinion of the court was delivered by: Justice Cahill
JUSTICE CAHILL delivered the judgment of the court, with opinion Presiding Justice Garcia and Justice McBride concurred in the judgment and opinion.
¶ 1 Defendants Roger Sessions and James L. Arnold (trustees) appeal orders of summary judgment entered against them and in favor of plaintiff Rush University Medical Center (Rush). Defendants also appeal the court's refusal to order the recusal of Judge Budzinski. We affirm in part, dismiss in part and reverse and remand in part.
¶ 2 In 1994, Robert W. Sessions (decedent) created the Sessions Family Trust, maintained in an offshore account in the Cook Islands. In 1995, decedent made an irrevocable pledge to Rush by letter for $1.5 million to build a new president's house. In 1996, decedent sent Rush another letter, confirming the pledge:
"I agree to provide in my will, living trust and other estate planning document *** that (1) this pledge, if unfulfilled at the time of my death, shall be paid in cash upon my death as a debt and (2) that if this pledge is unenforceable for any reason, a cash distribution shall be made under such will, living trust or other document to Rush University in an amount equal to the unpaid portion of such pledge at the time of my death."
Decedent executed successive codicils to his will, providing that any amount remaining unpaid on his $1.5 million pledge as of his death would be given to Rush on his death. In reliance on decedent's pledge, Rush built a president's house on the Rush University campus in 1996 at a cost in excess of $1.5 million.
¶ 3 In February 2005, decedent was diagnosed with cancer. He then executed the Robert W. Sessions Revocable Living Trust. On March 10, 2005, decedent executed a new will, revoking all previous wills and codicils. Decedent died on April 25, 2005. Before his death, decedent had made no payments toward the $1.5 million pledge to Rush.
¶ 4 Rush filed a claim against the Sessions estate (estate) to enforce the $1.5 million pledge. The estate contested Rush's claim to the $1.5 million and litigation ensued. Rush moved for summary judgment against the estate on it's claim, which was granted on August 31, 2005. The estate appealed, and we affirmed the circuit court in a summary order (In re Estate of Sessions, No. 1--07--0202 (2007) (unpublished order under Supreme Court Rule 23).
¶ 5 The Sessions estate was found to contain less than $100,000. On April 4, 2006, Rush filed a supplementary claim against the Sessions Family Trust and the Robert W. Sessions Revocable Living Trust (trusts). Count I alleged that decedent transferred assets to the trusts with the actual intent to hinder, delay and defraud Rush in the collection of its claim against the estate. Count I was based on section 5(a)(1) of the Illinois Uniform Fraudulent Transfer Act (Fraudulent Transfer Act) (740 ILCS 160/1 et seq. (West 2006)). Count II alleged that decedent's pledge to Rush was a valid, binding and enforceable contract that bound decedent as well as his "assigns" and sought to reach the assets of the trusts.
¶ 6 Count III alleged that decedent's transfer of assets to his self-settled trust was per se fraudulent under the holdings in Crane v. Illinois Merchants Trust Co., 238 Ill. App. 257 (1925), and Barash v. McReady (In re Morris), 151 B.R. 900, 906-07 (Bankr. C.D. Ill. 1993), and that Rush should be entitled to reach the assets of the trusts to satisfy the $1.5 million pledge.
¶ 7 The trusts filed motions for summary judgment on counts II and III of Rush's complaint. Rush filed a cross-motion for partial summary judgment on count II. The supplemental proceeding was stayed pending the outcome of the estate's appeal. Rush later added a fourth count to its amended complaint, alleging constructive fraud under section 5(a)(2) of the Fraudulent Transfer Act. Counts I and IV were not part of the parties' motions for summary judgment.
¶ 8 As a result of the estate's appeal decided in favor of Rush, Rush became a creditor of the estate. After mediation failed, the court set a hearing date for the trusts' motion for summary judgment on counts II and III and Rush's cross-motion for partial summary judgment on count II.
¶ 9 On October 21, 2008, the trial court, with Judge Budzinski presiding, heard oral argument on the parties' cross-motions for summary judgment. The court granted Rush's cross-motion for summary judgment on count II, finding that the pledge bound decedent's "assigns." The court explained that "[t]he language is clear *** that in [decedent's] letter to the hospital he indicated that [the] pledge was binding on his heirs, successors and assigns. And even the trust provides the payment of the pledge if it hasn't been satisfied." The court denied the trusts' motion for summary judgment on counts II and III.
¶ 10 On November 25, 2008, the trusts filed a petition under section 2--1001(a)(3) of the Code of Civil Procedure (735 ILCS 5/2--1001(a)(3) (West 2006)) to substitute judge for cause. The trusts argued that allowing Judge Budzinski to continue hearing the matter would prejudice defendants because he appeared to have reached a conclusion on counts I and IV of plaintiff's complaint without having heard evidence on those issues or allowing defendants to complete discovery. The trusts pointed to Judge Budzinski's finding at the October 21 proceeding that decedent had intended to defraud Rush, though counts II ...