Appeal from Circuit Court of McLean County. Nos. 11P113, 11P245. Honorable Elizabeth A. Robb, Judge Presiding.
Affirmed in part and vacated in part.
An accounting firm could not claim the accountant-client privilege where petitioner, who did not benefit from her deceased parents' trust created by the accounting firm, sought access to estate-planning documents because, even though estate planning falls under the accountant-client privilege, the testamentary exception exists because here the benefit of disclosure outweighs the injury to the accountant- client relationship and the client's successors, as current holders of the privilege, had waived the privilege for the benefit of the estate.
Robert Marc Chemers (argued), Richard M. Waris, Matthew F. Tibble, and Philip G. Brandt, all of Pretzel & Stouffer, Chtrd., of Chicago, for appellant.
Mercer Turner (argued), of Law Office of Mercer Turner, P.C., of Bloomington, and Darrell E. Dies (argued), of Eureka, for appellees.
PRESIDING JUSTICE APPLETON delivered the judgment of the court, with opinion. Justices Pope and Knecht concurred in the judgment and opinion.
[¶1] An attorney, Matthew F. Tibble, appeals from an order in which the trial court, at his own request, found him to be in direct civil contempt of court and fined him $100 for refusing to comply with a discovery order. Tibble did not really treat the court with contempt (as the court understood, for it found his refusal to be " non-contumacious" ). Rather, the contempt finding was merely a procedural device; without it, he could not have appealed.
See Reda v. Advocate Health Care, 199 Ill.2d 47, 54, 765 N.E.2d 1002, 262 Ill.Dec. 394 (2002).
[¶2] Essentially, Tibble is taking this stand on behalf of his client, an accounting firm, Striegel, Knobloch & Company (Striegel). The discovery order requires Striegel to turn over to petitioner, June Brunton, any documents having to do with estate planning services Striegel provided for her parents, Helen P. Kruger and Gordon J. Kruger, who are now deceased. Striegel believes, however, that the accountant-client privilege in section 27 of the Illinois Public Accounting Act (225 ILCS 450/27 (West 2012)) protects those documents from disclosure in a judicial proceeding. The cases interpreting this statute are rather scarce.
[¶3] We conclude, in our de novo review (see Reda, 199 Ill.2d at 54), that there is a testamentary exception to section 27, as there is to the attorney-client privilege, and that the exception applies to this case, in which Brunton challenges her mother's will. We further hold that, apart from the testamentary exception, the personal representative and heirs of Helen Kruger can waive the privilege in the interest of her estate--and that they have done so. Therefore, we affirm the discovery order of April 11, 2013, but we vacate the contempt order, considering that Tibble has acted in good faith. See Hyams v. Evanston Hospital, 225 Ill.App.3d 253, 259, 587 N.E.2d 1127, 167 Ill.Dec. 512 (1992).
[¶4] I. BACKGROUND
[¶5] As we said, Striegel is an accounting firm, and Helen and Gordon Kruger were its clients. Striegel helped them with their estate planning, and to that end, they gave confidential information to Striegel: information about their family, income, assets, and estate planning goals. On December 7, 2005, Helen and Gordon Kruger implemented the estate plan by executing two wills and two trusts: a will and a trust for each of them.
[¶6] Helen Kruger died on July 30, 2009, and Gordon Kruger died on February 10, 2011. They were survived by a daughter, June Brunton, and three sons: Robert T. Kruger, David G. Kruger, and James J. Kruger. (It appears from the caption that James J. Kruger's real name is Gordon J. Kruger, but apparently he goes by James, and we will call him James to distinguish him from his father.)
[¶7] On May 17, 2011, the trial court admitted Helen Kruger's will to probate. The will named the oldest son, Robert Kruger, as her personal representative. The second section of the will bequeathed all her tangible personal property to her spouse, and the third section bequeathed the residue of her estate in accordance with the terms of the trusts.
[¶8] The trust of Helen Kruger provided that, when she and her spouse died, all of the shares of stock in their farm, K-Farms, Inc., would be distributed to Robert Kruger and that any remaining trust property would be distributed among the sons equally. In both of their trusts, Helen and Gordon Kruger said they were " mindful" of their daughter, June Brunton, but they were " making no provision for her under this Instrument for the reason that [they had] provided for her by other means."
[¶9] On September 14, 2011, Brunton filed a petition contesting the will and trust of Helen Kruger. In her petition, she alleged that Helen Kruger had a diminished mental capacity at the time she executed the trust and that she had executed the trust under the undue influence of Robert Kruger and his spouse, Debra Kruger.
[¶10] On November 23, 2011, Brunton issued subpoenas to Dennis Knobloch, a certified public accountant (CPA) at Striegel, requesting any documents having to do with the estate planning services Striegel had performed for Helen and Gordon Kruger. The subpoenas also sought federal tax documents: gift tax returns, estate tax returns, and income tax returns.
[¶11] The respondents in this case, the parties defending Helen Kruger's will and trust, are her and Gorgon Kruger's sons as well as several other Krugers, presumably grandchildren. On October 18, 2011, respondents issued a deposition subpoena to Knobloch, in which they requested the same documents Brunton had requested in her subpoenas.
[¶12] On October 26, 2011, another CPA at Striegel, Danny Kiedaisch, complied with respondents' subpoena, turning over to them all the documents relating to the estate planning services. Striegel, however, did not provide those documents to Brunton. She filed a motion to compel compliance with her subpoenas of November 23, 2011. In response, Striegel invoked the accountant-client privilege in section 27 (225 ILCS 450/27 (West 2012)).
[¶13] On December 7, 2012, the trial court ordered Striegel to produce the tax documents to Brunton. But the court held the estate planning documents to be privileged under section 27 and accordingly refused to compel the production of them. Striegel complied with the court's order, turning over to Brunton the ...