Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Campbell v. Campbell

Court of Appeals of Illinois, Third District

September 14, 2017

RUSSELL B. CAMPBELL, BARBARA A. DETERMAN, and GREG E. CAMPBELL, as Trustees of the Clyde E. Campbell Declaration Trust Dated March 29, 1999, as Amended and Restated, Plaintiffs,
v.
RUSSELL B. CAMPBELL and GREG E. CAMPBELL, Defendants (Russell B. Campbell, Defendant and Cross-Defendant-Appellant; Greg E. Campbell, Defendant and Cross-Plaintiff-Appellee).

         Appeal from the Circuit Court of the 9th Judicial Circuit, Warren County, Illinois. Circuit No. 14-MR-68, The Honorable Heidi A. Benson, Judge, presiding.

          JUSTICE CARTER delivered the judgment of the court, with opinion. Justice Schmidt concurred in the judgment and opinion. Justice O'Brien specially concurred, with opinion.

          OPINION

          CARTER, JUSTICE

         ¶ 1 Plaintiffs, as trustees of the Clyde E. Campbell Declaration of Trust, brought a declaratory judgment action against two of its beneficiaries, Russell B. Campbell and Greg E. Campbell, seeking to have the trial court determine which of the two beneficiaries was entitled to certain current or former trust property. During pretrial proceedings, the two beneficiaries filed cross-motions for partial summary judgment. After a hearing, the trial court granted Greg's motion for partial summary judgment and denied Russell's motion. Russell appeals. We affirm the trial court's ruling.

         ¶ 2 FACTS

         ¶ 3 The dispute in this case involves the estate plan of Clyde Campbell. Clyde was married to Helen Campbell and had three children: Barbara Determan, Greg Campbell, and Russell Campbell. In 1999, as part of his estate plan, Clyde executed a declaration of trust, which established the instant living trust (Clyde's trust or the trust). Clyde also executed a will and other documents to form a land trust (farm trust) and a limited liability company (LLC).[1] The farm trust was owned equally by Clyde's trust, Helen's trust (a trust that was established by Clyde's wife), and Greg. Each owned a one-third interest. The LLC was owned in the same manner.

         ¶ 4 In February 2012, Clyde amended and restated the declaration of trust (amended declaration). Of relevance to this appeal, the amended declaration provided that (1) Clyde was the trustee of the trust; (2) as long as he was acting as the trustee, Clyde had the power to withdraw any part or all of the net income and principal of the trust; (3) Clyde could make gifts of "trust property" to such persons and entities and subject to such terms and conditions as Clyde deemed appropriate; and (4) upon Clyde's death, any interest that Clyde's trust owned in the farm trust and the LLC was to be distributed to Helen first (either directly or in trust) and then to Greg, if Helen died before Clyde or if Helen disclaimed her interest.

         ¶ 5 In April 2012, while Clyde was residing in a retirement community but still serving as the trustee of his own trust, Russell's attorney drafted two assignments at Russell's direction, which purported to transfer the interest of Clyde's trust in the farm trust and the LLC to Russell. A secretary or assistant for Russell's attorney took the assignments to Clyde at the retirement community, and Clyde signed the assignments in his own name individually. Clyde did not sign the assignments in his capacity as the trustee of his trust. The assignments specifically stated that they were to be effective upon Clyde's death, and the secretary was the only person who witnessed the assignments. Clyde passed away in July 2012, and his will was subsequently admitted to probate.

         ¶ 6 After Clyde's death, a dispute arose as to whether Clyde's trust or Russell owned the one- third interests in the farm trust and the LLC that was the subject of the assignments. If Clyde's trust was the owner, pursuant to the terms of that trust, the one-third interests would pass to Greg upon Clyde's death. If Clyde's trust did not own the one-third interests, the interests would not pass to Greg, and Russell would remain the owner pursuant to the assignments.

         ¶ 7 In September 2014, plaintiffs filed the instant declaratory judgment action seeking to have the trial court determine whether Clyde's trust (and, ultimately, Greg) or Russell owned the one-third interests in the farm trust and the LLC. The complaint was later amended, and both Russell and Greg were named as defendants. Russell and Greg both filed answers to the complaint. In his answer, Greg asserted, among other things, that Clyde lacked the mental capacity to make the assignments and that the assignments were the product of undue influence on the part of Russell. In addition to an answer, Greg also filed a cross-claim.

         ¶ 8 In November 2015, Russell and Greg both filed cross-motions for partial summary judgment. Russell argued in his motion that the assignments were valid and that he was the rightful owner of the one-third interests in the farm trust and the LLC. Greg argued that the assignments were void; that Clyde's trust was the rightful owner of the one-third interests; and that pursuant to the terms of Clyde's trust, those interests passed to Greg upon Clyde's death.

         ¶ 9 In December 2015, a hearing was held on the cross-motions for partial summary judgment. By the time of the hearing, the matters at issue before the trial court had been fully briefed by the parties, and the trial court had before it as part of the pleadings or supporting documents the amended declaration of trust, a portion of Clyde's will, the two assignments, two certificates showing the interest of Clyde's trust in the farm trust and the LLC, a portion of the operating agreement for the LLC, and some deposition transcripts. Of relevance to this appeal, the certificates for both the farm trust and the LLC provided that a transfer of the interest in either of the two entities could be made on the books of that entity by surrendering the properly endorsed certificate for that entity. In addition, the farm trust certificate and the LLC's operating agreement both provided a right of first refusal to the other beneficiaries or members before a transfer of an interest in that particular entity could be made. At the hearing, the trial court listened to the arguments of the attorneys and then took the case under advisement.

         ¶ 10 The trial court later issued a ruling by letter, granting Greg's motion for partial summary judgment and denying Russell's motion. In the letter ruling, the trial court found that: (1) the assignments were invalid as inter vivos gifts because there was no present delivery or transfer since the assignments were not to take effect until Clyde's death and Clyde had not issued a certificate for the one-third interest in the farm trust to Russell; (2) even if the assignments were properly delivered gifts, those gifts were void (at least as to the farm trust interest) because the transfer did not comply with the requirements contained in the farm trust certificate (the right of first refusal); (3) the assignments were also invalid as testamentary transfers because the assignments had not been witnessed by two witnesses as required by statute (see 755 ILCS 5/4-3 (West 2012)); (4) the fact that there was an amended declaration of trust that gave Clyde the power to make gifts did not change the outcome of this case because the power to make gifts of trust property was different from the power to make gifts of trust shares and Clyde could not make gifts of trust shares that he did not own; (5) the purported assignment made no mention that Clyde was attempting to make the transfer in his capacity as trustee of his trust; and (6) the assignment of the LLC interest was void because the LLC never came into existence since the members of the LLC had never signed the operating agreement. In addition, in setting forth the factual history of this case, the trial court made a statement (statement of factual history) that Clyde had invited his children's input into his estate plan and had engaged the services of a mediator to assist in working out the details of that plan in a vain attempt to promote family unity after his death.

         ¶ 11 After the trial court's ruling, Russell promptly filed a motion to reconsider (titled as a motion to vacate) and challenged all or most of the findings that the trial court had made in its letter ruling and the statement that the trial court had made about the factual history of the case. Greg filed a response and opposed the motion to reconsider. Following a hearing, the trial court denied the motion. In so doing, the trial court stated, among other things, that (1) it was not changing any of its previous findings of fact but was expanding upon some of those findings and upon some of its prior reasoning; (2) while Clyde was a beneficiary, he was also subject to the restrictions in the instruments he was signing; (3) the attempted assignment was an ineffective attempt at an inter vivos transfer, which made the assignment a testamentary disposition under Illinois law; (4) although the LLC was in existence, a point upon which the trial court revised its previous conclusion, the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.