Court of Appeals of Illinois, First District, Fourth Division
PETER SMITH ELY, as Executor and Successor Trustee of the MSA Trust; THE MSB TRUST; THE CADE FAMILY TRUST; and THE MARY CADE SMITH TRUST; PETER SMITH ELY, as Successor Trustee of the Mary Cade Smith Declaration of Trust of 1985; PETER SMITH ELY; BRUCE GRAHAM ELY; SUSAN BURCH; KAREN ANDERSON DAVIS; STEVEN J. ANDERSON; and STANLEY G. CADE, Plaintiffs-Appellants
RUTH PIVAR, DLA PIPER, LLP, UNGARETTI & HARRIS, QUARLES AND BRADY, LLP, ROBERT WILNEFF, CBIZ MHM, LLC, MAYER HOFFMAN MCCAIN, P.C., and WILLIAM PAUL ROGERS Defendants Quarles and Brady, LLP, Defendant-Appellee.
from the Circuit Court of Cook County No. 15L8387 Honorable
Brigid M. McGrath, Judge Presiding.
PRESIDING JUSTICE BURKE delivered the judgment of the court,
with opinion. Justices McBride and Gordon concurred in the
judgment and opinion.
1 On August 17, 2015, plaintiffs filed a complaint in the
circuit court of Cook County naming, among others, Ruth Pivar
and Quarles and Brady, LLP (Quarles and Brady) as defendants.
Quarles and Brady filed a motion to dismiss and, in response,
plaintiffs filed an amended complaint. The allegations in
plaintiffs' first amended complaint (FAC) related to five
trusts that were created in 1966 by Wilmuth and Carroll Cade.
Plaintiffs are the current executor of the trusts and the
beneficiaries of at least one of the five trusts. Mary Cade
Smith was an initial beneficiary of each of the five trusts.
The gravamen of plaintiffs' first amended complaint
relates to misconduct by Philip Rootberg, the initial trustee
of the five trusts; Robert Wilneff, who became the trustee of
the five trusts in 2001; Pivar, who was retained as counsel
for the trusts in 2001; and Cade Smith. Plaintiffs alleged in
the complaint that prior to Cade Smith's death in 2014,
Wilneff, Pivar, Cade Smith, and defendant William Paul Rogers
improperly disbursed the trusts' assets through
promissory notes and gifts to Cade Smith. Plaintiffs
contended that the entirety of the trusts' assets were
disbursed to Cade Smith by 2009, before the other
beneficiaries were ever informed of their beneficiary status.
2 Specifically, with regard to Pivar, plaintiffs contended,
inter alia, that she failed to disclose the breaches
of fiduciary duty by Rootberg and Wilneff, that she failed to
advise the other trust beneficiaries of their beneficiary
status, that she represented Cade Smith to the detriment of
the trusts' other beneficiaries, and that she made false
representations regarding the trusts in Cade Smith's
will. Plaintiffs contended that Pivar joined Quarles and
Brady in 2013, and that the law firm was, therefore,
vicariously liable for her misconduct. As such, plaintiffs
alleged claims of legal malpractice (count II), breach of
fiduciary duty (count III), and conspiracy (count V) against
Quarles and Brady.
3 Quarles and Brady filed a motion to dismiss the claims
against it in plaintiffs' FAC pursuant to section 2-615
of the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West
2014)). The court granted that motion with prejudice with
regard to plaintiffs' claim for legal malpractice, but
without prejudice for plaintiffs' claims for breach of
fiduciary duty and conspiracy. The court held, however, that
plaintiffs would be required to seek leave of court before
repleading its claims for breach of fiduciary duty and
conspiracy against Quarles and Brady. Plaintiffs filed a
motion for leave to amend the complaint, and attached a
proposed second amended complaint (SAC), which included a
single claim against Quarles and Brady for breach of
fiduciary duty. The circuit court denied plaintiffs'
motion for leave to amend, and found that there was "no
just reason to delay enforcement or appeal of this order
pursuant to Rule 304(a) [(Ill. S.Ct. R. 304 (eff. Mar. 8,
4 On appeal, plaintiffs contend that the court abused its
discretion in denying their motion to file the amended claim
against Quarles and Brady where the proposed SAC cured the
defects of the prior pleading. Plaintiffs also contend that
the court erred in granting Quarles and Brady's motion to
dismiss the claims against it in the FAC. For the reasons
that follow, we find that we lack jurisdiction to consider
plaintiffs' claims regarding the dismissal of the FAC and
the circuit court's order denying plaintiffs leave to
file an amended complaint.
5 I. BACKGROUND
6 A. Plaintiffs' First Amended Complaint
7 In their FAC, plaintiffs contended that, in 1966, five
trusts were created with Rootberg as the initial trustee.
Cade Smith was named the initial beneficiary in each of the
trusts. With the exception of one of the five trusts, each
trust had at least one additional initial beneficiary.
Plaintiffs asserted that by 1989, Cade Smith, with the
assistance of Rootberg, began taking disbursements from the
trusts without any notification to the other beneficiaries.
Cade Smith continued receiving disbursements from the trust
through 2001 when Rootberg retained Pivar as counsel.
Plaintiff contended that, after being retained as counsel,
Pivar knew that Cade Smith was receiving disbursements from
the trusts, knew or should have known of the additional
beneficiaries, and knew or should have known that the
additional beneficiaries had not been informed of their
beneficiary status. Despite this knowledge, Pivar did not
notify any of the additional beneficiaries of Cade
Smith's receipt of disbursements from the trusts or of
their beneficiary status.
8 Later in 2001, Wilneff succeeded Rootberg as trustee. From
2003 to 2009, Cade Smith received more than $1.6 million from
the trust. By 2009, the trusts' assets had been
exhausted. During this period, neither Wilneff nor Pivar
informed any of the other beneficiaries of their rights, or
of Cade Smith's receipt of disbursements. In 2007, Pivar
drafted a will for Cade Smith, which included an in
terrorem clause, which excluded from the trusts any
beneficiary who challenged the conduct of the trustees.
Plaintiffs alleged that Pivar joined Quarles and Brady as
"of counsel" in 2013. On May 1, 2014, Cade Smith
9 In their allegation for legal malpractice against Quarles
and Brady, plaintiffs contended that Pivar-as an attorney for
each of the five trusts and as an agent, employee, partner,
or apparent agent of Quarles and Brady-had a duty to the
beneficiaries. Plaintiffs contended that Pivar breached that
duty by failing to disclose the breaches of fiduciary duty by
Rootberg and Wilneff, failing to advise the additional
beneficiaries of their beneficiary status under the trusts,
putting the interests of herself and Quarles and Brady ahead
of the interests of the additional beneficiaries, and falsely
claiming that the other initial beneficiaries knew of the
trusts and their beneficiary status. Plaintiffs contended
that one or more of these breaches "were made, and
perpetuated through December 23, 2014, so as to fraudulently
conceal from the beneficiaries" their causes of action
relating to the breaches. Plaintiffs contended that as a
"direct and proximate result" of Pivar's breach
of duty as an agent of Quarles and Brady, the trusts and the
beneficiaries had been deprived the benefits of their status
in an amount in excess of $2.8 million.
10 In contending that Quarles and Brady breached its
fiduciary duty, plaintiffs contended that Pivar-as attorney
for each of the five trusts and an agent or employee of
Quarles and Brady-owed a fiduciary duty to the trusts and the
intended beneficiaries. Plaintiffs contended that Pivar
drafted a will for Cade Smith that included an in
terrorem clause, which dissuaded the beneficiaries from
challenging the actions of the trustees and also treated any
beneficiary who did raise a challenge as having predeceased
Cade Smith, which was a breach of her fiduciary duty.
11 Finally, plaintiffs alleged a count of conspiracy,
contending that all defendants worked in concert to conceal
from plaintiffs that they were the beneficiaries of the
trusts and had a right to disbursements therefrom. Plaintiffs
contended that Rogers, Pivar, and Wilneff discussed and
agreed upon a course of conduct to conceal their improper
disbursements to protect defendants from liability.
Plaintiffs contended that Pivar knowingly acted in
furtherance of that agreement by failing to disclose
Rootberg's breach of fiduciary duty, failing to disclose
Wilneff's breach of fiduciary duty, failing to advise the
additional beneficiaries of their status as beneficiaries,
falsely claiming that the other initial beneficiaries knew
about the trusts, and failing to notify the additional
beneficiaries after Cade Smith's death about the will and
trusts. Plaintiffs contended that defendants undertook these
illegal acts in furtherance of their conspiracy to conceal
their wrongdoing from plaintiffs.
12 B. Quarles And Brady Motion to Dismiss
13 Quarles and Brady filed a motion to dismiss
plaintiffs' complaint pursuant to section 2-615 of the
Code. Quarles and Brady contended that plaintiffs failed to
sufficiently allege facts establishing that an
attorney-client relationship existed to support
plaintiffs' claim for legal malpractice. Quarles and
Brady contended that plaintiffs' complaint alleged that
Pivar did not join Quarles and Brady until 2013, years after
any of the alleged misconduct took place. Quarles and Brady
asserted that, in any event, Pivar's representation of
the trusts did not create an attorney-client relationship
between her and the ...