NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).
2021 IL App (3d) 200497-U
Order filed November 3, 2021 Modified upon denial of rehearing November 30, 2021 ____________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
KALEIGH MICHELLE ANDERSON and ) Appeal from the Circuit Court JANELLE MARIE ANDERSON ) of the 10th Judicial Circuit, ) Peoria County, Illinois, Plaintiffs-Appellants ) ) (Molly Murphy, individually and as assignee), ) Appeal No. 3-20-0497 ) Circuit No. 16-CH-461 v. ) ) CAROLINE L. ANDERSON and MICHAEL ) Honorable E. ANDERSON, ) Derek Asbury and ) Katherine Gorman Defendants-Appellees. ) Judges, Presiding. ___________________________________________________________________________
JUSTICE HOLDRIDGE delivered the judgment of the court. Justices Daugherity and O’Brien concurred in the judgment. ____________________________________________________________________________
ORDER
¶1 Held: The circuit court (1) did not err as a matter of law when it found that it lacked personal jurisdiction over the out-of-state defendant and dismissed the plaintiffs’ complaint with prejudice and (2) did not abuse its discretion when it denied the plaintiffs’ motion for Rule 137 sanctions.
¶2 The plaintiffs, Kaleigh Michelle Anderson and Janelle Marie Anderson (hereinafter “the
twins”), filed a second amended complaint against the defendants, Caroline L. Anderson (their paternal grandmother) and Michael E. Anderson (their father), alleging that Caroline wrongfully
used funds from custodial accounts she created on their behalf to pay for their college expenses,
which was Michael’s legal obligation to pay per court order. Caroline and Michael filed a motion
to dismiss, arguing that the court lacked personal jurisdiction over Caroline as a resident of
Pennsylvania. The court granted the motion to dismiss. During the litigation of these proceedings,
both sides requested sanctions. The court denied all sanctions. The twins appeal.
¶3 I. BACKGROUND
¶4 This appeal stems from a dissolution action between Michael and Molly Murphy. During
their marriage, they had twin daughters, the plaintiffs. Two appeals followed the dissolution
judgment. In re Marriage of Anderson & Murphy, 405 Ill. App. 3d 1129 (2010); In re Marriage
of Anderson & Murphy, 2016 IL App (3d) 150020-U. Of particular importance is the twins’ college
expenses. The circuit court’s order provided that Michael pay the “hard costs” of the twins’
education and payments by a third party on any of Michael’s financial obligations would be
credited to him. The court ordered that “Michael, or any third party, shall issue a draft made
payable to the respective university so that the account remains credited and paid on time.” This
court held that the circuit court did not abuse its discretion when it determined that Michael would
be responsible for the expenses associated with the twins’ college expenses. 2016 IL App (3d)
150020-U, ¶ 58. Nonetheless, Molly argued that it was error for the circuit court to allow Michael
to pay for the twins’ college expenses via the twins’ custodial accounts that were created by
Caroline. Id. ¶ 62. This court declined to address the argument, stating:
“At no time did Michael have access to his daughters’ custodial accounts; only his
mother did. Use of the twins’ custodial money is a matter between the twins and
their paternal grandmother. It was not a proper matter for either the trial court or
2 this court to address in conjunction with the dissolution action.” Id.
¶5 In December 2016, Molly, as assignee of the twins, brought the instant action founded in
breach of fiduciary duty, conversion, conspiracy, and unjust enrichment. Caroline and Michael
filed a combined motion to dismiss (735 ILCS 5/2-619.1 (West 2016)) arguing, among other
things, res judicata and lack of personal jurisdiction over Caroline, which was supported by
Caroline’s affidavit. As to res judicata, Caroline and Michael stated that the issue raised by Molly
was already decided in the dissolution case when a court order provided that Michael or a third
party pay the twins’ college expenses. Judge James Mack dismissed the complaint without
prejudice. The court found that the complaint’s form prohibited an “ intelligent assessment as to
exactly what’s being asked and for who.”
¶6 In September 2017, Molly filed an amended complaint and petition for accounting. As to
the court’s personal jurisdiction over Caroline, she argued that the Illinois Uniform Transfers to
Minors Act (IUTMA) provided personal jurisdiction over Caroline (citing 760 ILCS 20/3 (West
2016)) and that the Illinois long-arm statute applied (735 ILCS 5/2-209 (West 2016)).
¶7 Caroline and Michael filed a combined motion to dismiss the amended complaint,
continuing their objection that the court lacked personal jurisdiction over Caroline, which was
again supported by Caroline’s affidavit. The affidavit provided that Caroline had been a resident
of Pennsylvania at all relevant times, was never a resident of Illinois, and rarely visited Illinois.
She created the accounts around 1995, shortly after the twins were born, and all efforts to create
the accounts were undertaken by her in Pennsylvania. Caroline stated that she was the sole
custodian of the accounts, which was created with funds and assets from herself and her husband,
Richard Anderson, as residents of Pennsylvania. Further, other than the reinvestment of dividends,
no other person contributed to the accounts except her and Richard. Caroline also stated at no time
3 did she discuss the accounts with the twins. The accounts were held with Mid-Atlantic Capital
Corporation (Mid-Atlantic) and its corporate offices were in Pennsylvania. As sole custodian of
the accounts, Caroline was the only individual with authority to direct any account activity. All
directives to Mid-Atlantic were made by her, in writing or by e-mail, from Pennsylvania.
¶8 Caroline and Michael also filed a motion for sanctions under Illinois Supreme Court Rule
137 (eff. July 1, 2013) against Molly and her attorney Jeffrey Ryva. Caroline and Michael argued
that they were attempting to relitigate the post-dissolution proceedings, misleading the court by
relying on a model act, and bringing meritless claims against Michael.
¶9 In October 2017, the court granted leave to substitute the twins as the plaintiffs. Attorney
Charles Scanlon entered his appearance as co-counsel (the twins’ filings thereafter named both
Scanlon and Ryva as their attorneys). The twins filed a cross motion for Rule 137 sanctions against
Michael, Caroline, and their attorneys, arguing that they deliberately misrepresented court rulings
from the dissolution case. Judge Mack dismissed the complaint without prejudice and reserved
any ruling on sanctions. He noted that the basis for the complaint was probably vindictive but,
regardless, the court lacked personal jurisdiction over Caroline, specifically:
“The [IUTMA] doesn’t get you jurisdiction over Caroline. You have to look
to the long-arm statute. You’re proceeding under the tort theory. You’re looking at
the conversion, apparently; and you’re claiming that the last act that’s necessary for
that was the payment of the tuition in Illinois or to the sorority house in Illinois.
That’s not the last act. The last act is when she took it out, when she paid it out.
Doesn’t matter where she paid it to if it was wrong. So I don’t think you have
jurisdiction over her under the long-arm statute, and you don't have it under the
[IUTMA].
4 So as it’s pled, I'm going to find that you don't have jurisdiction over
Caroline, and I’m going to dismiss the case. I’m going to do it without prejudice.
You can come back and try again.
It seems to me that what you should have done was file an action for
accounting in Pennsylvania where jurisdiction over Caroline wouldn’t have been
an issue. You could have found the answers out that you wanted and then have the
girls pursue it possibly a bit further if Michael was involved with the conspiracy of
unjust enrichment; but without Caroline, I don’t think you get to the other claims
against Michael either. And so, I am going to dismiss the entire case. No jurisdiction
over Caroline.”
¶ 10 In January 2018, the case was reassigned to Judge Katherine Gorman. Attorney Scanlon
moved to withdraw, which the court granted. Attorney Dawn Brewer filed an appearance on behalf
of the twins. Just over a month later, attorney Brewer filed a motion to withdraw as counsel for
Molly as assignee, even though her appearance only stated she was representing the twins. Also,
notice of the motion was only sent to Molly and not the twins. Caroline and Michael objected to
the motion because the twins were substituted as the plaintiffs and there was no motion or order
entered permitting Molly to reenter the case. Also, Caroline and Michael argued that attorney
Brewer’s filings strongly suggested that Molly was using the twins as straw persons and that the
twins had not actually participated in the case in a meaningful way.
¶ 11 In August 2018, Caroline and Michael filed a motion to request an evidentiary hearing
seeking an order compelling the twins to testify as to whether they desired to pursue the litigation.
This request was made based on the twins retaining attorney Brewer, who filed a motion to
withdraw stating she was representing Molly; attorney Brewer’s notice of motion to withdraw that
5 was sent only to Molly and not the twins; and avoiding further deterioration of the twins’
relationship with their father and grandmother. The court granted attorney Brewer’s motion and
ordered the twins to appear in person at the next status hearing. Attorney Angela Evans entered
her appearance on behalf of the twins only. The status hearing was held, without the twins’
presence, and the court provided a filing deadline for a second amended complaint.
¶ 12 In September 2018, the twins filed a second amended complaint and petition for
accounting. They put forth three counts against only Caroline, alleging violations of the IUTMA
(statutory fiduciary duty), common law breach of fiduciary duty, and conversion. The complaint
provided the following facts. Caroline purchased Disney and Guidant stocks for the twins and sent
the certificates to their parents at their home in Morton, Illinois. The stock certificates were in
Molly’s physical possession in Illinois for 22 years. Caroline sent tax information to the twins at
their residence in Illinois. The accounts at issue were brokerage accounts with investments made
with mutual funds and companies located outside of Pennsylvania. Caroline mailed dividend
checks to the twins at their Illinois residence for stocks in their accounts. The accounts Caroline
formed for the twins were national brokerage accounts not limited to Pennsylvania. Caroline sent
documents and written notes to the twins at their residence concerning their investments. Caroline
caused 1099 forms to be sent to Illinois. Also, Caroline sent stock transfer forms to the twins at
their residence in Illinois for these investments. The twins filed taxes in Illinois for their earnings
in the accounts at issue. The mailings ceased once Molly filed for divorce.
¶ 13 The twins alleged that Caroline committed the following tortious acts within Illinois: (1)
transferred funds belonging to Janelle to the University of Illinois; (2) converted funds belonging
to the twins who are Illinois residents; (3) wired money from the twins’ accounts to bank accounts
located in Illinois in 2014 and 2015; and (4) wired funds from Janelle’s account to Heartland Bank
6 in Illinois in December 2015. The twins argued that the court had personal jurisdiction over
Caroline via the Illinois long-arm statute and the IUTMA.
¶ 14 Caroline and Michael filed a supplemental motion for sanctions, in essence adding that the
twins were continuing on theories of personal jurisdiction that the court had already rejected. They
also moved to dismiss the complaint on the same grounds raised in the previous motions to dismiss.
The twins filed a response to the motion to dismiss and attached a variety of exhibits, including
their individual affidavits, to support the added facts.
¶ 15 In December 2018, Judge Gorman dismissed the second amended complaint with
prejudice, finding:
“In [this case], the Second Amended Complaint reverts back in time
alleging various facts that are sprinkled throughout the history of this case in
affidavits in this proceeding and that have previously been considered in 01 D 428,
08 MR 77, and [this case]. These facts and arguments have been considered time
and time again. Illinois does - not - have jurisdiction over Caroline Anderson. Judge
Borden considered this in 08 MR 77 and Judge Mack considered these facts on
December 7, 2017. Judge Brandt considered the underlying divorce in 01 D 428.
Judge Brandt opined that Mr. Anderson gets credit for the monies paid his mother
Caroline towards the girls’ education.
This litigation has been ongoing since the girls, Kaleigh and Janelle, were
seven years of age. During the time of this litigation, Kaleigh and Janelle completed
their grade school, high school, and college educations and by all appearances
appear to be fine young adults in spite of the ongoing acrimony between their
parents. These issues have been fully contemplated over the past seventeen years.
7 Accordingly, the Second Amended Complaint alleges no new facts or theories that
have not been examined and ruled upon.” (Emphasis in original.)
¶ 16 Attorney Michael Fleming filed an appearance on behalf of Molly for the pending motions
for sanctions. Shortly after, attorney Fleming filed a motion to withdraw representation from
Molly, and attorney Evans filed a motion to withdraw from her representation of the twins. Molly
and the twins filed separate pro se responses to the motions to withdraw, where the responses all
appeared to take identical form. The court granted both motions to withdraw. At a status hearing,
the record provided that Molly appeared pro se, the twins were not present, Caroline and Michael
maintained the same representation, and attorney Ryva appeared for his firm and himself.
¶ 17 In September 2019, Caroline and Michael filed an amended supplemented motion for
sanctions against Molly, attorney Ryva, the twins, and attorney Evans. They provided that, after
the twins were substituted as the plaintiffs, they continued to pursue their claims with the second
amended complaint, which added no meaningful facts and only caused unreasonable delay and
expense. They also argued that Molly’s three attempts at establishing the court’s personal
jurisdiction over Caroline without success constituted harassment and demonstrated ill-will. They
added that the twins’ and Molly’s behavior caused unreasonable delay by the hiring and firing of
multiple attorneys who sought to withdraw due to their inability to communicate with their clients
or get paid. Additionally, Caroline and Michael alleged that Molly, on multiple occasions, engaged
in the unauthorized practice of law by acting as legal counsel for the twins. They argued that this
was nothing more than another attempt by Molly to obtain relief against Michael that she failed to
achieve in the divorce case. Further, Molly’s negotiations and arguments on behalf of the twins
violated Illinois law in that she engaged in the practice of law without a license. Attached was an
attorney’s fees affidavit providing that Caroline and Michael incurred $41,031.50 in this action.
8 ¶ 18 In December 2019, attorney Robert Hanauer filed his appearance on behalf of Molly and
filed a motion to join and adopt the twins’ response and cross motion for sanctions that was filed
in October 2017. Soon after, attorney Hanauer filed a motion to withdraw, which the court granted.
The parties engaged in discovery on the issue of sanctions and continued settlement efforts.
Thereafter, the case was reassigned to Judge Derek Asbury.
¶ 19 In June 2020, attorney Jerry Tuffentstamer filed an appearance on Molly’s behalf.
¶ 20 In October 2020, the twins filed pro se motions for sanctions against Michael, Caroline,
and their attorneys. The twins argued that Caroline and Michael falsely stated that (1) the twins
did not give Molly authority to file and pursue the lawsuit and (2) money was taken from college
accounts rather than custodial accounts. Attorney Tuffentsamer entered an appearance for the
twins and adopted their pro se motions for sanctions.
¶ 21 The matter proceeded to hearing where the court noted that the parties agreed to consolidate
the motions and hear evidence and arguments together. The court denied all requests for sanctions.
The court found that the filings in this case were well written, organized, logical, supported by
law, and argued interpretations of the law on each side. The twins appeal.
¶ 22 II. ANALYSIS
¶ 23 A. Motion to Supplement Record and Take Judicial Notice
¶ 24 In February 2020, the parties were in the briefing stage of this appeal. The twins,
represented by attorney Ryva, filed a motion to take judicial notice and supplement the record.
This court denied the motion on grounds of vagueness. In September 2021, nearly a week before
oral argument was scheduled for this case, the twins filed a clarified and renewed motion to take
judicial notice and supplement the record. They asked that this court consider “the entire court
files of common law records and transcripts” from the previous two circuit court cases that arose
9 from the dissolution action (Peoria County case No. 08-MR-77 and Tazewell County case No. 01-
D-428). The twins stated that, when Judge Gorman granted the motion to dismiss, she noted that
the same issues were being raised in these lawsuits, so this court should have the same benefit of
the record for those cases. Supra ¶ 15. This court ordered the motion to be taken with the case.
¶ 25 At the outset, it is troubling that this motion was filed a week before oral argument when
(1) this particular issue was known to the twins as early as December 2018 when Judge Gorman
issued her ruling on the motion to dismiss, (2) briefing for the case at bar was completed months
ago, and (3) the previous version of this motion was denied by this court on vagueness grounds
seven months ago. We recognize that Judge Gorman mentioned these other cases in her ruling, but
even the twins acknowledge that she “never really said what parts of the two records she
reviewed.” Regardless, we find that the records from the other cases are entirely irrelevant to this
appeal and unnecessary in reaching our decision. For these reasons, the twins’ motion is denied.
¶ 26 We next address the merits. The twins raise numerous arguments on appeal relating to the
court’s dismissal of their complaint for lack of personal jurisdiction and denial of sanctions.
¶ 27 B. Personal Jurisdiction
¶ 28 The circuit court dismissed the second amended complaint finding that it lacked personal
jurisdiction over Caroline (735 ILCS 5/2-619)(a)(1) (West 2018)). The plaintiff bears the burden
to establish a prima facie basis for exercising personal jurisdiction over a nonresident defendant.
Rios v. Bayer Corp., 2020 IL 125020, ¶ 16. When the court decides this issue based solely on
documentary evidence, as here, our standard of review is de novo. Id. On review, this court must
resolve in favor of the plaintiff any conflicts in the pleadings and affidavits. MacNeil v. Trambert,
401 Ill. App. 3d 1077, 1080 (2010). However, “a plaintiff’s prima facie case for jurisdiction can
be overcome by a defendant’s uncontroverted evidence that defeats jurisdiction.” Id.
10 ¶ 29 Section 2-209 of the Illinois Code of Civil Procedure (735 ILCS 5/2-209 (West 2016)),
known as the Illinois long-arm statute, consists of three subsections that identify multiple grounds
for Illinois courts to invoke personal jurisdiction over defendants. See 735 ILCS 5/2-209(a), (b),
(c) (West 2016). In this case, the twins claim that subsections (a) (specific personal jurisdiction)
and (c) (the “catch-all provision”) provide personal jurisdiction over Caroline.
¶ 30 Historically, courts applied a two-part analysis in deciding these jurisdictional issues: by
determining whether (1) a specific statutory provision of section 2-209 has been satisfied and (2)
due process requirements have been met. Russell v. SNFA, 2013 IL 113909, ¶ 29. However, this
two-part analysis is not necessary when subsection (c) is invoked because it constitutes an
independent basis for exercising personal jurisdiction over the defendant and “effectively collapses
the jurisdictional inquiry into the single issue of whether a defendant’s Illinois contacts are
sufficient to satisfy federal and Illinois due process.” Id. ¶ 30.
¶ 31 Here, since the twins raise both subsections (a) and (c) we would typically focus our
analysis on due process alone. See id. However, the twins’ argument under subsection 2-209(c)
relies entirely on their arguments raised subsection 2-209(a). Infra ¶¶ 56-57. Further, the bases of
jurisdiction argued under subsection 2-209(a) provide the groundwork for our due process
analysis. Capra v. Lipschultz, 2020 IL App (1st) 192160, ¶ 22. Therefore, we begin our analysis
with subsection 2-209(a) to determine whether the court had personal jurisdiction over Caroline.
¶ 32 Subsection (a) addresses specific personal jurisdiction and requires the defendant’s
activities to be purposefully directed at Illinois, giving rise or relating to the plaintiff’s cause of
action. Aspen American Insurance Co. v. Interstate Warehousing, Inc., 2017 IL 121281, ¶ 14.
Subsection (a) enumerates 14 activities or transactions that cause a nonresident to be subject to the
jurisdiction of Illinois courts. Here, the twins argue that subsections (a)(2), (a)(7), (a)(10), and
11 (a)(11) of the long-arm statute provide specific personal jurisdiction over Caroline in Illinois.
Respectively, these subsections involve the commission of a tortious act within Illinois, making or
performing a contract substantially connected to Illinois, acquiring assets in Illinois, and breaching
a fiduciary duty in Illinois. 735 ILCS 5/2-209 (a)(2), (7), (10), (11) (West 2016).
¶ 33 1. Tortious Act Within Illinois (a)(2)
¶ 34 Subsection (a)(2) allows for specific personal jurisdiction where the cause of action arises
out of the commission of a tortious act within the state. 735 ILCS 5/2-209(a)(2) (West 2016). A
plaintiff pursuing this avenue must allege that the defendant performed an act which caused an
injury in Illinois and was tortious in nature. Arthur Young & Co. v. Bremer 197 Ill. App. 3d 30, 36
(1990). This provision may be satisfied if the plaintiff establishes an economic injury in Illinois
and activity by the defendant “indicating an intent to affect Illinois interests.” Id. The place of the
wrong is the place where the last event necessary to establish the defendant’s liability occurred.
Id. This is referred to as the “last act.” The state where the victim suffered an injury is considered
the state in which the tort occurred. Russell v. SNFA, 408 Ill. App. 3d 827, 833 (2011). However,
where none of the tortious acts occurred in Illinois, an economic loss to the plaintiff is insufficient
to establish jurisdiction. Poplar Grove State Bank v. Powers, 218 Ill. App. 3d 509, 519 (1991).
¶ 35 The twins take issue with the circuit court’s conclusion that the “last act” occurred when
Caroline accessed the custodial accounts in Pennsylvania. Instead, they provide that the last act
did not occur until Caroline actually used the funds for an improper purpose and conducted the
transactions in Illinois. Additionally, they note that Caroline’s activity caused them to be
responsible for capital gains tax in Illinois.
¶ 36 We find the case of Yates v. Muir, 112 Ill. 2d 205 (1986), instructive. The plaintiff was an
Illinois resident who retained services of an attorney who practiced in Kentucky. Id. at 206. The
12 attorney filed a tardy notice of appeal with a federal agency in an administrative hearing located
in Illinois. Id. at 207. The plaintiff brought a legal malpractice claim against the attorney in Illinois
under the long-arm statute’s tortious activity clause. Id. The attorney filed a motion to quash
service of process for want of jurisdiction. Id. The circuit court denied the motion and the appellate
court affirmed. Id. at 207-08. The supreme court reversed the lower courts’ decisions, finding:
“Here, the plaintiff retained services of an attorney who practiced in
Kentucky. The matter on which the attorney represented the plaintiff was a Federal
administrative claim which did not require the attorney to appear in any State court
or Federal court in Illinois, or to have a license to practice here, or, for that matter,
to be present in Illinois. The legal services performed by the defendant were
performed exclusively in Kentucky; if there was any malpractice in rendering those
services it took place in Kentucky. The neglect, if any, of the attorney was his
failure in Kentucky to arrange for the filing of the appeal. When the instruments for
the appeal were tardily prepared they were drawn in Kentucky. Though this may
seem as much a metaphysical point as a legal one, this tardy preparation, as well as
the neglect that was the basis of the malpractice action, took place in Kentucky.”
Id. at 209-210.
¶ 37 Likewise, the twins alleged that Caroline committed a tort in Illinois when she transferred,
converted, and wired funds from the custodial accounts to Illinois. However, the uncontroverted
evidence shows that Caroline, as a resident of Pennsylvania and the custodian of accounts set up
under the Pennsylvania’s version of the UTMA, exercised dominion and control over the accounts
exclusively from Pennsylvania. When she used funds from the accounts to pay for the twins’
college expenses, she did so from Pennsylvania—the money just happened to be sent to Illinois
13 institutions. This is similar to the attorney defendant in Yates where his untimely appeal in Illinois
was insufficient to establish personal jurisdiction over him where the evidence showed that he
worked exclusively from Kentucky but had sent documents to Illinois.
¶ 38 Because we find that the “last act” for the tort allegations occurred in Pennsylvania, this
subsection fails to provide specific personal jurisdiction over Caroline. See Graff v. Leslie
Hindman Auctioneers, Inc., 342 F. Supp. 3d 819, 826 n.3 (N.D. Ill. 2018) (the “last act” needed to
support the conversion claim—taking control over the property—occurred in Arizona, not Illinois,
when a pawnbroker allegedly converted the plaintiff’s paintings by sending them from Arizona to
Illinois to be sold at auction). Thus, the court did not have personal jurisdiction over Carline
pursuant to subsection (a)(2) of the Illinois long-arm statute. 735 ILCS 5/2-209(a)(2) (West 2016).
¶ 39 We also emphasize that, when no tortious acts occurred in Illinois, an economic loss to the
plaintiffs remains insufficient to establish personal jurisdiction. Powers, 218 Ill. App. 3d at 519.
Therefore, the use of the twins’ funds from their Pennsylvania custodial accounts and the resulting
Illinois tax consequences are not enough for the court to invoke personal jurisdiction over Caroline.
Our supreme court has clearly held that Illinois courts do not acquire jurisdiction under the “last
act” theory simply because there were economic consequences in Illinois of the defendant’s
tortious conduct. Green v. Advance Ross Electronics Corp., 86 Ill. 2d 431, 439 (1981).
¶ 40 The twins also argue that Caroline and Michael entered into a joint venture or conspiracy
to raid their custodial accounts to pay his legal obligations and case law provides personal
jurisdiction over a nonresident who commits such tortious conduct with an Illinois resident in
Illinois. However, their second amended complaint contains no allegation that Michael was
involved in any of the activity that occurred in Illinois pertaining to the custodial accounts. In fact,
all of the allegations in the second amended complaint were directed toward Caroline. The counts
14 of unjust enrichment and conspiracy were only brought against Michael in previous versions of
the complaint. Therefore, the twins’ second amended complaint does not support this argument
and cannot provide a basis for personal jurisdiction over Caroline.
¶ 41 2. Contract or Promise Substantially Connected to Illinois (a)(7)
¶ 42 Subsection (a)(7) allows for specific personal jurisdiction where the making or
performance of a contract or promise was substantially connected with the state. 735 ILCS 5/2-
209(a)(7) (West 2016). A nonresident defendant’s contract or promise with an Illinois resident
does not automatically establish jurisdiction. Estate of Isringhausen v. Prime Contractors &
Associates, Inc., 378 Ill. App. 3d 1059, 1065 (2008). Instead, the court must determine whether a
contract or promise is substantially connected with Illinois. The court considers the following
factors: (1) who initiated the transaction, (2) where the contract or promise was negotiated, (3)
where the contract or promise was formed, and (4) where performance was to take place. Cardenas
Marketing Network, Inc. v. Pabon, 2012 IL App (1st) 111645, ¶ 36.
¶ 43 In their second amended complaint, the twins argued that by creating the accounts and
naming herself as custodian, Caroline made a promise substantially connected to Illinois to act as
a fiduciary of Illinois residents. On appeal, they cite Kalata v. Healy, 312 Ill. App. 3d 761 (2000),
for their argument that Caroline made a promise substantially connected to Illinois.
¶ 44 In Kalata, the plaintiff filed a breach of contact claim against the defendant seeking to
recover money the plaintiff placed in an alleged joint bank account for the purpose of funding a
joint venture with the defendant. Id. at 762. The defendant allegedly misappropriated the funds
and refused to return the money to the plaintiff. Id. at 762-63. The defendant was a resident of
California, had been friends with the plaintiff for several years, called the plaintiff in an attempt to
persuade her to form a joint venture to invest money in various projects, and mailed the plaintiff
15 bank documents that he indicated were necessary to open a joint bank account at a California bank.
Id. The plaintiff signed the documents, mailed the defendant a cashier’s check, and wired money
into the joint bank account. Id. Thereafter, the plaintiff discovered that the defendant had
withdrawn all of the funds from the joint bank account and brought the action in Illinois state court.
Id. at 763. The defendant filed a motion to quash service of process and dismiss the complaint for
lack of jurisdiction, which the court granted. Id. at 763-64. The appellate court reversed and found
that the defendant entered into a contract substantially connected with Illinois to satisfy subsection
(a)(7), noting that the defendant conceded that he entered into a contract with the plaintiff and that
he also initiated telephone calls with the plaintiff to negotiate the joint venture agreement and
mailed the plaintiff bank documents from California which the plaintiff relied on when sending
him money. Id. at 766.
¶ 45 The twins argue that Kalata applies because Caroline purposefully directed her activities
at Illinois residents by creating the long-continuing custodial accounts for her granddaughters who
have always been residents of Illinois. We disagree. In contrast to Kalata, Caroline unilaterally
created custodial accounts in Pennsylvania into which she made gifts to the twins by depositing
funds or stocks into the accounts while she was in Pennsylvania. Also, unlike Kalata, any
correspondence sent from Caroline to the twins was not for the purpose of negotiating a contract
or making a promise, and no money from the twins was deposited into the custodial accounts.
Further, any promise or contract under these facts would be between Caroline and the state of
Pennsylvania per its version of the UTMA. Therefore, any alleged promise made by Caroline was
not substantially connected to Illinois, and the court did not have personal jurisdiction over
Caroline pursuant to subsection (a)(7) of the Illinois long-arm statute. 735 ILCS 5/2-209(a)(7)
(West 2016).
16 ¶ 46 3. Acquiring Assets in Illinois (a)(10)
¶ 47 Subsection (a)(10) allows for specific personal jurisdiction through the acquisition of
ownership, possession, or control of any asset or thing of value present within the State when
ownership, possession, or control was acquired. 735 ILCS 5/2-209(a)(10) (West 2016). “[T]he
plain meaning of section 2-209(a)(10) is that, for purposes of in personam jurisdiction, the asset
or thing of value involved must have been present in the State when the defendant acquired his
‘ownership, possession or control’ of it.” Powers, 218 Ill. App. 3d at 520.
¶ 48 The twins argue that In re Marriage of DiFiglio, 2016 IL App (3d) 160037, applies. In
DiFiglio, the out-of-state defendant obtained possession and control of the proceeds from the sale
of an Illinois corporation while in Illinois. Id. ¶ 19. A different panel of this court held that, because
the defendant took possession and control over those funds in Illinois, it satisfied section 2-
209(a)(10) of the Illinois long-arm statute. Id. Specifically noting that “[w]here the defendant
makes trips to Illinois, obtains property, including money, from Illinois residents, and remains in
continual communication with Illinois residents, the minimum contacts requirement is satisfied.”
Id. ¶ 18. This falls in line with Illinois’s manifest interest in providing its residents with a
convenient forum for redressing injuries allegedly inflicted by out-of-state actors. Id. We disagree
that DiFiglio applies to the case at bar. Among other reasons, there is no evidence that Caroline
obtained any property in Illinois, she provided that she rarely made trips to Illinois, and there was
no evidence that any of those trips were made in connection with the custodial accounts.
¶ 49 The twins also argue that Capra, 2020 IL App (1st) 192160, supports their theory of
personal jurisdiction because Caroline acquired control of their property interests in the custodial
accounts and those interests are in Illinois where they retained residency. The twins explain they
are the owners of the custodial accounts per the Pennsylvania Uniform Transfers to Minors Act
17 because once the accounts were made in their names, they were irrevocable and indefeasibly vested
in them. 20 Pa. C.S.A. § 5311(b) (West 2016). Also, they state that the certificates of stock for
their custodial accounts were at all times held in Illinois, which is a tangible representation of their
possession of the custodial accounts.
¶ 50 In Capra, the out-of-state defendant was a trustee and the plaintiffs were beneficiaries and
Illinois residents. Id. ¶ 3. The plaintiffs requested an accounting after the defendant informed them
that the trust assets were nearly depleted, but the defendant refused to provide the information. Id.
The circuit court held that the plaintiffs failed to show that the defendant had purposefully availed
himself of the privilege of conducting activities in Illinois and the cause of action did not arise out
of the defendant’s contacts with Illinois. Id. ¶ 25. The appellate court disagreed, holding:
“ ‘[A] defendant's lack of physical presence in a forum does not defeat
jurisdiction there.’ Aasonn[, LLC v. Delaney], 2011 IL App (2d) 101125, ¶ 23
(citing Burger King [Corp. v. Rudzewicz], 471 U.S. [462,] 476 [(1985)],
and Heritage House Restaurants, Inc. v. Continental Funding Group, Inc., 906 F.2d
276, 281 (7th Cir. 1990)). Thus, the fact that defendant may have operated the trust
from Nevada is not dispositive as to his contacts with Illinois. Indeed, while
defendant’s actions may have been initiated in Nevada, almost all of them were
directed to Illinois—[the decedent who created the trust] lived in Illinois for several
years prior to her death, defendant as trustee entered into a contract to place [her]
in an assisted living facility in Illinois, trust assets were sent to Illinois for [her] care
before her death and for her funeral, distributions were made to Illinois
beneficiaries, and defendant engaged in communications about the trust with
Illinois beneficiaries.
18 Furthermore, the trial court’s statement that ‘no trust assets exist in Illinois’
was accurate at the time of the litigation, but such was not always the case.
Defendant admitted in his deposition and in the financial spreadsheets he provided
that, when he became trustee, trust assets were held in Illinois banks. It was only
later that those assets were transferred elsewhere. The Illinois long-arm statute
specifically provides that the acquisition of ownership, possession, or control of
any asset or thing of value present within Illinois at the time of acquisition subjects
a defendant to jurisdiction.” (Emphasis added.) Id. ¶¶ 26-27.
¶ 51 We also find that Capra does not support the twins’ argument under section 2-209(a)(10).
Again, Caroline created the custodial accounts in Pennsylvania and they were always managed
and controlled from Pennsylvania. Therefore, Caroline did not acquire ownership, possession, or
control of any asset or thing of value present within Illinois at the time of acquisition. Regarding
the twins’ arguments that the stock certificates were held in Illinois and that they are Illinois
residents who legally owned the custodial accounts, they seem to be missing the point. This
provision of the Illinois long-arm statute is unconcerned with when they may have acquired
ownership or possession of the custodial accounts. Instead, our inquiry focuses on Caroline, the
out-of-state defendant they attempt to hale into court. See 735 ILCS 5/2-209(a)(10) (West 2016).
¶ 52 4. Breaching a Fiduciary Duty in Illinois (a)(11)
¶ 53 Section 2-219(a)(11) of the Illinois long-arm statute provides personal jurisdiction over an
out-of-state defendant if she breaches any fiduciary duty within the State. 735 ILCS 5/2-209(a)(11)
(West 2016). Aside from setting forth the elements for breach of fiduciary duty, the entirety of the
twins’ argument on this section is as follows:
“A fiduciary duty breach claim does not arise until the plaintiff is damaged.
19 This means that from the standpoint of the last act necessary to see if the breach
was in Illinois, Plaintiffs’ claim for damages did not crystalize until they had
complete loss of their funds when Caroline not only initially accessed their accounts
but paid Michael’s obligations to their education institutions and caused a large
federal and Illinois tax liability.”
¶ 54 The twins failed to cite any authority in support of this proposition and did not further
develop this argument. Illinois Supreme Court Rule 341(h)(7) (eff. Oct. 1, 2020) states that an
appellant’s argument “shall contain the contentions of the appellant and the reasons therefor, with
citation of the authorities and the pages of the record relied on.” Further, “[a]n issue that is merely
listed or included in a vague allegation of error is not ‘argued’ and will not satisfy the requirements
of the rule.” Vancura v. Katris, 238 Ill. 2d 352, 370 (2010). Failure to comply with
these requirements results in forfeiture. People ex rel. Illinois Department of Labor v. E.R.H.
Enterprises, Inc., 2013 IL 115106, ¶ 56. Based on the foregoing, the twins forfeited this argument.
¶ 55 5. Due Process
¶ 56 We reiterate that the twins rely on their arguments raised under subsection 2-209(a) to
support their contention that there are no due process concerns to invoke personal jurisdiction over
Caroline pursuant to subsection 2-209(c). For example, under a heading entitled “The Due Process
Catch-all,” the entirety of their argument for this subsection provides:
“As shown above, [the twins] did not need to pigeon-hole themselves into a specific
long-arm provision. Any conduct by Caroline if jurisdiction comports with due process
suffices. The case law previously discussed about purposeful activity and intentionally
aiming conduct to affect an Illinois resident’s interests compels a reversal here. Clearly
when Caroline took steps from Pennsylvania (selling stock/accessing liquid funds/then
20 paying Michael’s Illinois obligations here), she knew the effect would be felt upon
Plaintiffs here. Again, whether rightful or wrongful ultimately on the merits is of no
moment at this juncture. For jurisdictional purposes, the rules are no different than if Judge
Brandt had ordered in all caps: NO ONE OTHER THAN [PLAINTIFFS HEREIN] CAN
ACCESS THEIR ACCOUNTS TO PAY ANYTHING FOR COLLEGE. Certainly,
Caroline knew what she was doing was taking Plaintiffs’ custodial accounts and paying for
college expenses assigned to her son and that Plaintiffs were Illinois residents.”
¶ 57 By stating, “as shown above” (referring to the prior arguments raised under section 2-
209(a)), it is clear that the twins are relying entirely on the case law and arguments previously
made that we have rejected. Therefore, we have no other arguments to consider and need not
engage in any further analysis on this issue.
¶ 58 6. IUTMA
¶ 59 The twins also argue that the IUTMA provides jurisdiction over Caroline. They rely on
subsections 20/3(b) and (c), which provide in relevant part, as follows:
“(b) A person designated as custodian under this Act is subject to personal
jurisdiction in this State with respect to any matter relating to the custodianship.
(c) A transfer that purports to be made and which is valid under the Uniform
Gifts to Minors Act, or a substantially similar act, of another state is governed by
the law of the designated state and may be executed and is enforceable in this State
if at the time of the transfer, the transferor, the minor, or the custodian is a resident
of the designated state or the custodial property is located in the designated state.”
760 ILCS 20/3(b), (c) (West 2016).
¶ 60 The twins contend that subsection “(b) obviously provides personal jurisdiction over a
21 custodian no matter where she or the minor is or technically where the custodial property is, if the
custodian is designated as such by reference to the Illinois version of the Uniform Act.”
¶ 61 Determining the meaning of this section presents an issue of statutory construction, which
this court considers de novo. Dew-Becker v. Wu, 2020 IL 124472, ¶ 12. The fundamental rule for
statutory interpretation is to ascertain and give effect to the legislature’s intent. Id. The best
indicator of such intent is the plain and ordinary meaning of the statutory language itself. Id. When
the statutory language is clear and unambiguous, it is given effect as written. Id. Further, “we must
give effect to the entire statutory scheme rather than looking at words and phrases in isolation from
other relevant portions of that statute.” Primeco Personal Communications, L.P. v. I.C.C., 196 Ill.
2d 70, 87-88 (2001). Stated another way, statutes should be construed as a whole with each
provision evaluated in connection with every other section. Id. at 88.
¶ 62 We reiterate that subsection 20/3(b) of the IUTMA provides: “[a] person designated as
custodian under this Act is subject to personal jurisdiction” in Illinois (Emphasis added.) 760 ILCS
20/3(b) (West 2016). Section 20/1 of the IUTMA provides that “[t]his Act shall be known and
may be cited as the ‘Illinois Uniform Transfers to Minors Act.” (Emphasis added.) 760 ILCS 20/1
(West 2016). It is clear that Caroline was not designated as custodian under the IUTMA as the
custodial accounts in question were created under Pennsylvania’s version of the IUTMA. The
twins acknowledge this fact in their pleadings.
¶ 63 Also, when reading section 20/3 as a whole, it is evident that the legislature specifically
provided in subsection 20/3(b) that personal jurisdiction applied to a person designated as a
custodian under “this Act,” which we have already decided is the IUTMA, and subsection 20/3(c)
differentiates by providing that it applies to transfers under the “Uniform Gift to Minors Act, or a
substantially similar act, of another state.” If the legislature intended for subsection 20/3(b) to
22 include persons designated as custodians under any state’s version of the Uniform Gift to Minors
Act, it would have said so, as it did in subsection 20/3(c). Thus, we conclude that the plain and
ordinary meaning of the statutory language only provides personal jurisdiction over persons
designated as custodians under the IUTMA. Because Caroline was designated as a custodian under
Pennsylvania law, this statute does not provide personal jurisdiction over her in Illinois.
¶ 64 7. Various Other Arguments
¶ 65 We also note that the twins raise numerous sub-arguments that the court improperly turned
a jurisdiction motion into one involving motives, credibility, and the underlying merits; relied on
improper caselaw; and made comments that were outside the scope of a proper, limited
jurisdictional inquiry. However, even if we agreed with these arguments, it does not change our
standard of review or our review of Illinois jurisprudence as it applies to this case: the court lacked
personal jurisdiction over Caroline as a matter of law for the reasons already explained.
¶ 66 C. Sanctions
¶ 67 Last, the twins argue that the sanctions ruling should be reversed or remanded for an
evidentiary hearing because Caroline and Michael: (1) continuously attempted to have the courts
believe that the custodial accounts were college accounts; (2) relied on res judicata as a basis for
dismissal; (3) stated that Caroline owned the accounts and could do with them as she pleased; and
(4) filed a motion for an evidentiary hearing seeking an order to compel them to provide testimony
verifying that they wished to continue to pursue the litigation.
¶ 68 Illinois Supreme Court Rule 137 requires that every pleading, motion, and other document
shall be signed by at least one attorney of record or a pro se party. Ill. S. Ct. R. 137(a) (eff. July 1,
2013). The individual’s signature constitutes a certification that he or she has met the duties of
reading, reasonable inquiry, and proper purpose. These duties require that (1) the signer read the
23 document; (2) the signer performed a “reasonable inquiry” and has concluded to the best of his or
her knowledge, information, and belief that the document is well grounded in fact, supported by
existing law, or contains a good-faith basis for modification, reversal, or extension of the law; and
(3) the document is not interposed for any “improper purpose” such as harassment, unnecessary
delay, or needless increase in the cost of litigation. See id.
¶ 69 If a party or an attorney violates Rule 137, the court may, upon motion or sua sponte,
impose sanctions upon the individual who signed the filing, the represented party, or both. Lake
Environmental, Inc. v. Arnold, 2015 IL 118110, ¶ 13. The purpose of Rule 137 is to prevent abuse
of the judicial process by claimants who make vexatious or harassing claims based on unsupported
allegations of fact or law, not to penalize litigants and their attorneys because they were zealous
but unsuccessful. In re Estate of Hanley, 2013 IL App (3d) 110264, ¶ 79.
¶ 70 We review a circuit court’s ruling on sanctions for an abuse of discretion. Commonwealth
Edison Co. v. Munizzo, 2013 IL App (3d) 120153, ¶ 33. An abuse of discretion will be found only
where the court’s ruling is arbitrary, fanciful, unreasonable, or where no reasonable person would
take the view adopted by the court. Blum v. Koster, 235 Ill. 2d 21, 36 (2009). “When reviewing a
decision on a motion for sanctions, the primary consideration is whether the court’s decision was
informed, based on valid reasoning, and follows logically from the facts.” Technology Innovation
Center, Inc. v. Advanced Multiuser Technologies Corp., 315 Ill. App. 3d 238, 244 (2000).
¶ 71 First, the twins argue that Caroline and Michael continuously attempted to have the courts
believe that the custodial accounts were college accounts. Their brief references transcript pages
where Caroline and Michael’s attorney explain that Caroline’s intention for creating the accounts
was always to pay for the twins’ college expenses. We fail to see how this is sanctionable.
¶ 72 Second, the twins argue that Caroline and Michael’s assertion of res judicata is
24 sanctionable. We find that the twins have forfeited this argument as they never raised it before the
circuit court. Arguments not raised before the circuit court are forfeited and cannot be raised for
the first time on appeal. Mabry v. Boler, 2012 IL App (1st) 111464, ¶ 15.
¶ 73 Third, the twins take issue with Caroline’s assertion that she owned the accounts and could
do with them as she pleased. This issue was not raised in their 2017 motion for sanctions or 2020
pro se motion for sanctions. In fact, the alleged statement they complain of did not even occur
until 2018. It appears from the record that this statement was made in response to the twins’
assertion that the custodial accounts were theirs and they could do with the accounts as they
pleased. Caroline and Michael’s counsel stated:
“[T]he money is not the girls[’]. The money is in an account held by a
custodian who may utilize the money in accordance with the law. Counsel cites no
language that the money is theirs to do with what they please. I think that's a -- not
an accurate statement of the law.”
Nonetheless, we find that they forfeited this argument for failure to raise it before the circuit court.
¶ 74 Fourth, the twins argue that Caroline and Michael’s motion to request for an evidentiary
hearing to verify their intentions to sue was sanctionable. We disagree. This motion followed after
attorney Brewer only filed an appearance on behalf of the twins but later filed a motion to withdraw
as counsel for Molly. Also, notice of the motion to withdraw was sent to Molly and not the twins.
The record provides a reasonable basis for Caroline and Michael’s motion. We cannot say that the
motion was filed with an “improper purpose” such as harassment, unnecessary delay, or needless
increase in the cost of litigation, and the court’s decision to deny sanctions was informed, based
on valid reasoning, and followed logically from the facts. Therefore, the court did not abuse its
discretion when it denied the twins’ motion for sanctions.
25 ¶ 75 III. CONCLUSION
¶ 76 For the foregoing reasons, the judgment of the circuit court of Peoria County is affirmed.
¶ 77 Affirmed.