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McCarthy v. Abraham Lincoln Reynolds, III

Court of Appeals of Illinois, First District, Fifth Division

March 30, 2018

GERALD S. McCARTHY, Plaintiff-Appellant,
ABRAHAM LINCOLN REYNOLDS, III, 2006 DECLARATION OF LIVING TRUST; ROZLYN TAYLOR, Individually and as Trustee; and MARVIN GRAY, Defendants (Marvin Gray, Defendant-Appellee).

          Appeal from the Circuit Court of Cook County. No. 14 CH 09651 Honorable Kathleen M. Pantle, Judge, presiding.

          LAMPKIN JUSTICE delivered the judgment of the court, with opinion. Justices Hall and Rochford concurred in the judgment and opinion.



         ¶ 1 Plaintiff, Gerald McCarthy, was the beneficiary of a living trust. After the trustee died, defendant, Marvin Gray, was appointed as the attorney of that trust. Plaintiff filed a complaint against Gray for breach of fiduciary duty and tortious interference with plaintiff's beneficiary interest. Plaintiff's complaint eventually was dismissed. Plaintiff now appeals the order of the circuit court imposing Illinois Supreme Court Rule 137 (eff. July 1, 2013) sanctions against him and awarding attorney fees to Gray, who appeared pro se. Plaintiff contends the circuit court erred in dismissing his tortious interference claim based on res judicata and issuing Rule 137 sanctions because the claim was frivolous. Plaintiff additionally contends the circuit court erred in awarding excessive fees as a sanction against him and in favor of defendant, appearing as a pro se attorney. Based on the following, we affirm in part and reverse in part.

         ¶ 2 FACTS

         ¶ 3 In 2006, plaintiff was named as a beneficiary to the Abraham Lincoln Reynolds, III, Declaration of Living Trust (Trust). Plaintiff filed a complaint in 2013 alleging an amendment to the Trust naming defendant, Rozlyn Taylor, as the trustee was invalid. Gray was presented as a witness in the subsequent trial. The circuit court ultimately ruled against plaintiff, and this court affirmed. McCarthy v. Taylor, 2014 IL App (1st) 132239.

         ¶ 4 On June 9, 2014, plaintiff filed a five-count complaint against defendants. In relevant part, plaintiff presented two counts against Gray (1) alleging Gray breached his fiduciary duty to plaintiff as a beneficiary of the Trust and (2) alleging Gray tortiously interfered with plaintiff's share of the Trust by making false statements and presenting misleading evidence against him in the 2013 case. In response, Gray filed a combined motion to dismiss pursuant to section 2-619.1 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619.1 (West 2012)). On February 27, 2015, the circuit court dismissed the tortious interference claim with prejudice pursuant to section 2-619(a)(4) of the Code (id. § 2-619(a)(4)) based on the doctrine of res judicata, where the cause of action essentially asked the circuit court to relitigate the issues determined in the 2013 case, namely, the veracity of the Trust amendment. The court also dismissed plaintiff's breach of fiduciary duty claim, but on the basis of his failure to present a sufficient claim pursuant to section 2-615 of the Code (id. § 2-615). Plaintiff was granted leave to amend his complaint with regard to the breach of fiduciary duty claim.

         ¶ 5 On March 27, 2015, plaintiff filed an amended complaint containing one count against Gray for breach of fiduciary duty. Plaintiff alleged Gray had a duty to act with due care in providing plaintiff with services related to the Trust, such as an inventory and an accounting. On August 25, 2015, the circuit court again dismissed plaintiff's claim against Gray. In so doing, the court stated:

"McCarthy has not alleged any facts which would establish that Gray owed him a fiduciary duty. McCarthy has cited no legal authority for the proposition that a trust attorney owes a fiduciary duty to the trust's beneficiaries as a matter of law. Since McCarthy and Gray were not otherwise in privity, McCarthy would need to allege facts which would show his eligibility for an exception to the rule. However, McCarthy has failed to allege facts to support that any contract was entered into for his benefit, or the benefit of all the beneficiaries. Since McCarthy has failed to make any more than a bare-bones assertion that a fiduciary duty exists, he has not alleged the essential elements of his cause of action.
McCarthy argues that a court can impose liability upon attorneys who knowingly and substantially assist their clients in causing another party's injury. Thornwood, Inc. v. Jenner & Block, 344 Ill.App.3d 15, 28 (1st Dist. 2003). Though it is true that an 'attorney can be held liable for assisting a client in a conspiracy or knowingly or substantially assisting a client commit a tort (Id. at 28-29), ' McCarthy has not alleged any facts in support of a claim that Gray illegally conspired with Rozlyn Taylor (the trustee) or that he knowingly or substantially assisted Taylor commit a tort. Rather, McCarthy pleads only that Gray failed to respond to McCarthy's requests for an inventory and an accounting without pleading any facts to support his claim that Gray (rather than the trustee) has a duty to provide an inventory and an accounting. McCarthy also complains that Gray failed to reimburse him for part of his expenditures (i.e. $2000.00) without pleading any facts that demonstrate that Gray, as the attorney for the Trust, has the responsibility to make such reimbursement. Needless to say, there are no facts which, if proved, would demonstrate that Gray and Taylor have been illegally conspiring against McCarthy or that Gray has been assisting Taylor [to] commit any torts. Additionally, Gray's legal opinion about whether McCarthy's [sic] is a beneficiary of the Trust is not actionable. Gray's use of the term 'ostensible beneficiary' does not make him liable to McCarthy."

         ¶ 6 Thereafter, Gray filed a motion seeking Rule 137 sanctions, including an award for attorney fees and an award for costs, against plaintiff. In support of his request for sanctions, Gray alleged that plaintiff made false statements in his complaint and that he and plaintiff did not have an attorney-client relationship. Gray requested sanctions in the amount of $11, 232.55 as a result of having to defend against "plaintiff's unfounded, fallacious and specious allegations and pleadings."[1]

         ¶ 7 On March 30, 2016, the circuit court entered an order granting in part and denying in part Gray's motion for Rule 137 sanctions. The court found that, while plaintiff did not plead any false statements of fact in his complaints, his cause of action against Gray for tortious interference was frivolous and, therefore, subject to Rule 137 sanctions. The court, however, concluded that sanctions were not appropriate for the breach of fiduciary duty claim in the original complaint or the amended complaint. Moreover, the court determined that, although Gray proceeded pro se, "the language of Rule 137 supports the notion that sanctions are available because the supreme court made it clear that a sanction may (but does not necessarily have to) include attorney fees." Accordingly, the court found Gray would receive an award in his defense against a frivolous claim. We note that the court's March 30, 2016, order confused the numeration of the counts that were sanctionable and nonsanctionable. The court's ruling, however, is clear from the context of the order. Gray was provided 28 days to file a supplemental petition to support his requested sanctions.

         ¶ 8 Plaintiff then filed a motion to reconsider the March 30, 2016, order. In his motion, plaintiff argued the circuit court misapplied the law where his tortious interference claim was not barred by res judicata and, therefore, was not frivolous. Plaintiff additionally argued the circuit court erred in awarding sanctions based on its res judicata finding because Gray did not raise the issue of res judicata in his motion seeking sanctions. According to plaintiff, he was denied an opportunity to respond to the res judicata argument.

         ¶ 9 On April 28, 2016, Gray filed a supplemental petition reducing his sanction request to $8, 745.58, which included $102.28 in costs for parking and postage fees. In the supplemental petition, Gray argued that if sanctions were appropriate for the breach of fiduciary duty count in the original complaint (as erroneously suggested in the circuit court's March 30, 2016, order) then sanctions should be available for the breach of fiduciary duty count in the amended complaint as well because "the counts were virtually indistinguishable." Gray reasoned that he should ...

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