Appeal from Circuit Court of Pike County No. 09MR47 Honorable Thomas J. Brannan, Judge Presiding.
The opinion of the court was delivered by: Justice Pope
JUSTICE POPE delivered the judgment of the court, with opinion.
Presiding Justice Turner and Justice Steigmann concurred in the judgment and opinion.
¶ 1 Plaintiffs appeal, arguing (1) the trial court's determination the Maleta Maxine Schnepf February 2001 Trust (Trust) is an amendable Illinois land trust was erroneous as a matter of law based upon the pleadings in this case; (2) the court erred in denying plaintiffs' motion for judgment on the pleadings and motion for summary judgment; and (3) the court erred in ruling on the competing motions for summary judgment because plaintiffs were denied an opportunity to be heard on either of the competing motions. We reverse the court's orders granting defendant Raymond Schnepf's motions to dismiss and motions for summary judgment and remand this case for further proceedings with directions to reconsider plaintiffs' motions for judgment on the pleadings and summary judgment based on our finding the Trust was not an amendable land trust.
¶ 3 As this appeal does not involve counts II through V of plaintiffs' complaint, we will not discuss those portions of plaintiffs' complaint. In December 2009, plaintiffs filed a complaint for declaratory judgment against defendants. In count I, plaintiffs alleged Maleta created the Trust on February 1, 2001. Maleta transferred certain property into the Trust by a deed in trust. Plaintiffs and defendants are all of Maleta's living children. Plaintiffs allege they were beneficiaries of the Trust.
¶ 4 On May 12, 2005, Maleta purportedly executed a modification to the Trust, which modified the beneficiaries of the Trust. This modification removed plaintiffs as beneficiaries of the Trust. The Trust did not contain an express provision granting any person the power to alter, amend, or modify the trust. As a result, plaintiffs argued the modification should be ignored and the Trust read as it was originally drafted, with the plaintiffs as beneficiaries of the trust.
¶ 5 Plaintiffs' complaint also contained alternate counts. In plaintiffs' alternate count I, plaintiffs alleged the act of crossing out the names of the plaintiffs and defendant Carolyn Schaffer was not a valid method of removing plaintiffs and Carolyn Schaffer as beneficiaries of the Trust, assuming Maleta had the legal authority to execute the modification. In plaintiffs' second alternate count I, plaintiffs alleged: "even if Maleta *** had the legal authority to execute the Modification to Trust Agreement and Declaration of Trust, said Modification, on the information and belief of Plaintiffs, was not the free and voluntary act of Maleta *** in that Defendants John Schnepf or Raymond Schnepf pressured and forced her into executing the said Modification."
In plaintiffs' third alternate count I, plaintiffs alleged Maleta was either pressured to execute the modification or she neither personally crossed out plaintiffs' names nor initialed the same. On information and belief, plaintiffs alleged the initials were forgeries done by an unknown third party.
¶ 6 In April 2010, plaintiffs filed a motion for judgment on the pleadings with regard to count I. According to the motion, the allegations denied by defendants were matters that could be determined by the trial court after the court reviewed the relevant trust documents. Plaintiffs argued the trust could not be modified because the trust did not reserve the right to modify.
¶ 7 On May 17, 2010, Raymond filed a motion for summary judgment as to count I. Raymond agreed with plaintiffs' motion for judgment on the pleadings no genuine issues of fact existed. The court only needed to decide "the narrow legal issue of whether the Modification to Trust Agreement and Declaration of Trust dated May 12, 2005[,] *** was a valid amendment" to the Trust. According to Raymond's motion, the Trust was a specialized " 'Illinois land trust' " in which the trustee held both legal and equitable title to the farmland with the interest of the beneficiary being personal property. Raymond argued the Trust was readily amendable during Maleta's lifetime despite the lack of a reservation of the right to modify because it was an Illinois land trust.
¶ 8 Raymond also filed a motion for summary judgment on plaintiffs' alternate count I, stating the only issue in dispute was a legal question, i.e., whether the act of crossing out the names of plaintiffs and defendant Carolyn Schaffer was a valid method of removing the same individuals as beneficiaries. According to defendant's motion:
"It is the sworn testimony of Attorney John Coonrod that when he met with Maleta Maxine Schnepf to sign the Modification to Trust Agreement and Declaration of Trust, she understood that her actions in crossing out the names of Plaintiffs and Defendant Carolyn Shaffer [sic] and initialing those changes immediately prior to signing the modification was an effective way to amend the document and that she intended for the deletions to be recognized as controlling."
¶ 9 Raymond also filed a motion to dismiss plaintiffs' second alternate count I, alleging an absence of well-pleaded facts.
¶ 10 In addition, Raymond filed a motion for summary judgment on plaintiffs' third alternate count I, arguing "the cause of action asserted in Paragraph 16A of Plaintiffs' Third Alternate Count I is the same cause of action asserted in Plaintiffs' Second Alternate Count I and should be stricken from Plaintiffs' Third Alternate Count
I." Raymond again cited to the sworn testimony of attorney John Coonrod quoted above.
¶ 11 On May 18, 2010, plaintiffs filed a motion for summary judgment as to count I. Plaintiffs restated and incorporated the statements and arguments contained in their motion for judgment on the pleadings.
¶ 12 In August 2010, the trial court found the Trust was an amendable land trust. The court stated the term "land trust" is given the same definition by the Land Trust Beneficial Interest Disclosure Act (765 ILCS 405/1 to 3 (West 2008)), the Land Trustee as Creditor Act (765 ILCS 415/0.01 to 4 (West 2008)), the Land Trust Recordation and Transfer Tax Act (765 ILCS 420/1 to 4 (West 2008)), and the Sale of Residential Property Subject to Land Trust Act (765 ILCS 430/0.01 to 2 (West 2008)). The trial court stated in its order all four of these Acts define the term "land trust" as follows:
" 'Land Trust' means an arrangement under which the title, both legal and [equitable], to real property, is held by a trustee and the interest of the beneficiary is personal property and under which the beneficiary or any person designated in writing by the beneficiary, has the exclusive power to direct or control the trustee in dealing with the title and the exclusive control of the management, operation, renting, and selling of the trust property together with the exclusive right to earnings, avails and proceeds of said property is in the beneficiary of the trust." (We note this is the definition of the term "Land Trust" for purposes of the Sale of Residential Property Subject to Land Trust Act (765 ILCS 430/0.01 to 2 (West 2008)), but it is not the definition provided for the term "Land Trust" by the other three Acts. See 765 ILCS 405/1 (West 2008); 765 ILCS 415/2(a) (West 2008); 765 ILCS 420/2 (West 2008).) While the court mistakenly found the four acts all provide the same definition for the term "land trust," the court appears to have ruled based on the following elements it found constitutes a land trust.
¶ 13 The trial court stated the four common elements of a land trust are:
"1. The legal and equitable title to the real estate is held by a trustee;
2. The trustee has no duties or powers other than to follow the directions of the beneficiaries with respect to the title of the real estate[;]
3. The beneficiaries are entitled to sole possession, control and management of the real estate and to all of the income ...