Court of Appeals of Illinois, First District, Sixth Division
from the Circuit Court of Cook County. No. 17 L 9743
Honorable James E. Snyder, Judge Presiding.
Attorneys for Appellant: Peter Stasiewicz, of Arcturus Law
Firm, of Chicago, for Intervenor-Appellant.
Attorneys for Appellee: Eugene E. Murphy Jr., David F. Hyde,
and Daniel J. Scheeringa, of Murphy Law Group, LLC, of
Chicago, for appellee Katherine Litvak.
brief filed for other appellees.
PRESIDING JUSTICE MIKVA delivered the judgment of the court,
with opinion. Justices Cunningham and Connors concurred in
the judgment and opinion.
1 Unsatisfied with his deceased mother's decision to
leave significant assets to his sister, Joanne Black, who
suffers from a long-standing mental illness, Bernard S. Black
devised a scheme to gain control of Joanne's finances as
her court-appointed conservator. Letting the Colorado probate
court that appointed him to that position believe he would
deposit certain payable-on-death assets left directly to
Joanne into a trust their mother had established for
Joanne's continued care, Mr. Black instead caused the
bulk of those funds to pass through his mother's estate,
where one-third of them-over $1 million-was redirected to a
trust established for the benefit of Mr. Black and his
children, with only the remaining two-thirds going to Joanne.
2 When informed of these events, the Colorado court ordered a
forensic accounting, held a multiday evidentiary hearing, and
ultimately concluded that Mr. Black had misled the court,
breached his fiduciary duties, and committed civil theft. Mr.
Black was enjoined from accessing any trust funds belonging
to his sister and ordered to pay statutory damages of three
times the amount he stole from her. Mr. Black thus found
himself unable-though not for want of trying- to access the
funds held in two trusts established for Joanne's benefit
or in the third trust, set up for the benefit of Mr. Black
and his children, to which funds intended for Joanne had been
3 It is then that Mr. Black's wife, plaintiff Katherine
Litvak, initiated this lawsuit, in which she asserts that all
three trusts are jointly and severally indebted to her for
hundreds of thousands of dollars. Ms. Litvak failed to notify
Joanne's cousin, Anthony Dain, who served as co-trustee
for two of the trusts, or Jeanette Goodwin, Joanne's new
court-appointed conservator, of this lawsuit. One week after
the suit was filed, Ms. Litvak, Mr. Black, and Mr.
Black's son Samuel (also a trustee) asked the circuit
court to enter an agreed judgment against the trusts for the
full amount of the claim. Upon learning of these events, Ms.
Goodwin sought to intervene and vacate the judgment. The
circuit court granted her request with respect to the two
trusts for which Joanne was a beneficiary but allowed the
judgment to stand as to the third trust because that trust
benefitted only Mr. Black and his children.
4 For the reasons that follow, we affirm in part and reverse
in part. We conclude that it was an abuse of discretion not
to vacate the agreed judgment in its entirety.
5 I. BACKGROUND
6 The relevant events preceding the filing of this litigation
were set out quite recently by this court in an opinion
affirming the denial of Mr. Black's motion to vacate the
filing of a foreign money judgment: i.e., the
Colorado court's award of treble damages in favor of
Joanne and against Mr. Black. Those facts bear repeating
"Defendant and his sister Joanne Black are the children
of the late Renata Black, who died in May 2012. Renata's
will provided that her estate assets would be divided into
two trusts. Two-thirds of Renata's estate would be
distributed to a 'Supplemental Needs Trust' for the
benefit of Joanne, who had been diagnosed with schizophrenia.
One-third of Renata's estate would be distributed to a
trust for defendant [Mr. Black] and his children. Defendant
was appointed as the executor of Renata's estate, the
bulk of which consisted of accounts holding nearly $3.5
million. Defendant discovered that, before Renata's
death, she designated Joanne as the payable-on-death
beneficiary of some of Renata's accounts, resulting in
the assets in those accounts passing directly to Joanne
rather than to the Supplemental Needs Trust.
At the time of Renata's death, Joanne was homeless in
Colorado. In December 2012, defendant initiated a proceeding
in the Denver Probate Court seeking appointment as
conservator of Joanne's estate because her 'mental
illness interferes with her ability to manage her assets and
income.' The probate court appointed an attorney and a
guardian ad litem for Joanne and subsequently
appointed defendant as Joanne's conservator. According to
defendant, Joanne's attorney and the guardian ad
litem both expressly consented to defendant's
request that, as conservator, he be permitted to disclaim
Joanne's interest in Renata's payable-on-death
accounts. After a hearing, the probate court specifically
authorized defendant '[t]o disclaim [Joanne's]
interest as beneficiary under all payable on death or
transferable on death accounts *** owned by *** Renata.'
Defendant executed the disclaimer, which resulted in the
assets in the payable-on-death accounts flowing through
Renata's will, with two-thirds going to Joanne's
Supplemental Needs Trust and one-third going to the trust for
the benefit of defendant and his children [the Issue Trust].
In February 2015, Joanne's counsel filed a motion in the
probate court seeking to void the disclaimer. The motion
asserted that defendant breached his fiduciary duties to
Joanne by failing to disclose the effect of the disclaimer on
Joanne's interest in the nearly $3.5 million in assets
from Renata's accounts. At a status conference on the
motion, the probate court ordered an independent accounting
of Joanne's assets, scheduled an evidentiary hearing, and
'advised the parties that it would consider whether
"disgorgement or unwinding of fiduciary actions"
was appropriate.' [Citation.] On the day before the
evidentiary hearing, the guardian ad litem filed a
motion alleging that defendant's conduct amounted to
civil theft under Colorado law and requested that the probate
court award treble damages pursuant to Colorado's civil
theft statute. [Citation.] After the evidentiary hearing, the
probate court concluded that defendant breached his fiduciary
duties to Joanne while serving as the conservator of
Joanne's estate by converting roughly $1.5 million of her
assets for his own benefit. The probate court found that
plaintiff was required to ...