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In re Marriage of Difiglio

Court of Appeals of Illinois, Third District

October 19, 2016

In re MARRIAGE OF STANISLAWA DIFIGLIO, Petitioner,
v.
David Malmstedt, Third-Party Defendant-Appellant). and JAMES DIFIGLIO, Respondent, (Stanislawa DiFiglio, Third-Party Plaintiff-Appellee

         Appeal from the Circuit Court of the 12th Judicial Circuit Will County, Illinois Appeal No. 3-16-0037 Circuit No. 11-D-2194 Honorable Matthew G. Bertani Judge, Presiding.

          JUSTICE LYTTON delivered the judgment of the court, with opinion. Justices Carter and McDade concurred in the judgment and opinion.

          OPINION

          LYTTON, JUSTICE

         ¶ 1 Petitioner Stanislawa DiFiglio filed a petition for dissolution of marriage against respondent James DiFiglio. In the dissolution action, Stanislawa filed a third-party complaint against David Malmstedt, James's brother-in-law and attorney-in-fact, alleging that he owed money to the marital estate. Malmstedt filed a motion to dismiss the complaint for lack of personal jurisdiction. The trial court denied Malmstedt's motion. Malmstedt filed a petition for leave to appeal the trial court's denial of his motion to dismiss. We granted Malmstedt's petition for leave to appeal and affirm the trial court's order.

         ¶ 2 FACTS

         ¶ 3 In 2011, Stanislawa filed a petition for dissolution of marriage against James. The following year, James executed an Illinois statutory short form power of attorney for property, naming Malmstedt as his attorney-in-fact. In 2013, James sold Buchunter Transport, Inc., an Illinois corporation he started during the marriage. Malmstedt participated in the sale and received the proceeds from it.

         ¶ 4 In October 2014, Malmstedt accompanied James to court for a case management hearing in the dissolution action. At the hearing, Malmstedt identified himself as James's "brother-in-law and power of attorney." He stated that he sees and reviews communications that James's attorney sends to James and "go[es] over" the documents with James.

         ¶ 5 Stanislawa filed a petition to join Malmstedt as a third party in the dissolution action, alleging "[t]hat as the power of attorney of the estate of JAMES DIFIGLIO, David Malmstedt received and dispensed well over $575, 000.00 from the sale of a portion of the business known as Buchunter Transport, Inc., which was marital property." The trial court held a hearing on the petition. At that hearing, James's attorney stated that James never possessed any funds from the sale of Buchunter Transport, Inc. because Malmstedt received all of the funds from the sale of the business. He admitted that the funds were marital property. The trial court granted Stanislawa's petition to join Malmstedt as a third party.

         ¶ 6 Stanislawa then filed a third-party complaint against Malmstedt, alleging that he received and dispensed with over $575, 000 of marital property following the sale of Buchunter Transport Inc. The complaint further alleged that Malmstedt owed a fiduciary duty to James and Stanislawa and that he violated his duty by "wrongfully" and "unlawfully" taking funds from the marital estate.

         ¶ 7 Malmstedt filed a motion to dismiss the third-party complaint "for lack of personal jurisdiction." He asserted that he "is a resident and domiciliary of the State of California and has committed no act that would submit him to the personal jurisdiction of the courts of Illinois." He further asserted that "the fiduciary shield doctrine" prevented the court from asserting jurisdiction over him based on acts he performed as James's attorney-in-fact.

         ¶ 8 Attached to Malmstedt's motion was an affidavit in which he averred that since he became a resident of California in 1995, he has "never performed business, or engaged in any transactions of any significance on [his] own or for [his] own personal behalf or gain, in the State of Illinois." He further averred: "I have never appeared before this Court, as power of attorney to transact the affairs of JAMES DIFIGLIO. Rather, on my way to Florida, and at the request of JAMES DIFIGLIO because he was nervous about Court and needed a ride from his residential placement in Huntley, Illinois, I appeared to wheel him in and wheel him out of the courtroom and never testified or acted in any manner on behalf of JAMES DIFIGLIO."

         ¶ 9 Stanislawa filed a response to Malmstedt's motion to dismiss, asserting that the Illinois court had jurisdiction over Malmstedt, pursuant to section 2-209(a)(11) of the Code of Civil Procedure (Code), because he breached his fiduciary duties in this state. 735 ILCS 5/2-209(a)(11) (West 2014) (Illinois courts have jurisdiction over a nonresident defendant in an action arising from "[t]he breach of any fiduciary duty within this State").

         ¶ 10 The trial court denied Malmstedt's motion to dismiss, finding that "the Power of Attorney entered into between JAMES DIFIGLIO & DAVID MALMSTEDT created a fiduciary duty & relationship between DAVID MALMSTEDT & STANISLAWA DIFIGLIO as stated on the record by way of Mr. Malmstedt taking control of marital assets in which Stanislawa DiFiglio has an interest as stated on Record."

         ¶ 11 Malmstedt filed a petition for leave to appeal, pursuant to Illinois Supreme Court Rule 306(a)(3) (eff. Jan. 1, 2016), contesting the trial court's denial of his motion to dismiss Stanislawa's third-party complaint. We ...


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