Capra v. Lipschultz

2020 IL App (1st) 192160, 162 N.E.3d 323, 443 Ill. Dec. 689
CourtAppellate Court of Illinois
DecidedJune 30, 2020
Docket1-19-2160
StatusPublished
Cited by4 cases

This text of 2020 IL App (1st) 192160 (Capra v. Lipschultz) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Capra v. Lipschultz, 2020 IL App (1st) 192160, 162 N.E.3d 323, 443 Ill. Dec. 689 (Ill. Ct. App. 2020).

Opinion

2020 IL App (1st) 192160 No. 1-19-2160 Fourth Division June 30, 2020 ______________________________________________________________________________

IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT ______________________________________________________________________________

) DONNA CAPRA, KIM JONES, and DOUGLAS ) KILMAN, Individually and As Beneficiaries of the ) Appeal from the Circuit Court Audrey L. Krone Trust, ) of Cook County. ) Plaintiffs-Appellants, ) No. 2019 CH 05596 ) v. ) The Honorable ) Raymond Mitchell, MARVIN G. LIPSCHULTZ, ) Judge Presiding. ) Defendant-Appellee. ) ) ______________________________________________________________________________

PRESIDING JUSTICE GORDON delivered the judgment of the court, with opinion. Justices Lampkin and Burke concurred in the judgment and opinion.

OPINION

¶1 Plaintiffs, Donna Capra, Kim Jones, and Douglas Kilman, are beneficiaries of the Audrey

L. Krone Trust (trust) and filed suit against defendant Marvin G. Lipschultz, the trustee of the

trust, seeking an accounting. Defendant filed a motion to dismiss the complaint, claiming that

Illinois courts lacked personal jurisdiction over him, a Nevada resident, and the trial court

dismissed the complaint, finding that defendant lacked sufficient contacts with Illinois. On

appeal, plaintiffs claim that defendant’s actions with respect to the trust were sufficient to No. 1-19-2160

confer personal jurisdiction. For the reasons set forth below, we reverse and remand for further

proceedings.

¶2 BACKGROUND

¶3 On April 30, 2018, plaintiffs filed a verified complaint in the circuit court of Cook County,

seeking an accounting from defendant. The complaint alleged that plaintiffs were the nieces

and nephew of Audrey Krone and the beneficiaries of her trust; Krone died in 2012 without

any descendants, leaving an estate in excess of $3 million. The complaint alleged that the trust

provided for annual distributions upon Krone’s death and final distributions of the remainder

upon a young relative’s graduation from college, which occurred in 2017. Subsequently,

defendant informed plaintiffs that the trust assets had been nearly depleted. Plaintiffs requested

an accounting, with supporting documents, but defendant refused to provide the information,

leading plaintiffs to file suit.

¶4 Attached to the complaint was a copy of the trust agreement, as well as six amendments to

the trust agreement. The original trust agreement was dated October 19, 2000, 1 and provided

that, upon Krone’s death, the successor trustee was to divide the trust among several named

beneficiaries; the trust agreement named defendant and the Northern Trust Company as

successor cotrustees. The trust agreement further provided that “[t]he powers and duties of the

Trustee hereunder and all questions of interpretation of this instrument shall be governed by

the laws of the State of Illinois.”

¶5 The amendments to the trust agreement made various changes to its provisions. As relevant

to the instant appeal, the second amendment, dated November 24, 2003, named defendant as

1 The “original” trust agreement was actually the restatement of a trust agreement initially created on December 1, 1986, between Krone and her husband Fred. Fred predeceased Krone, dying on October 4, 2003. 2 No. 1-19-2160

sole successor trustee. The sixth amendment, 2 dated August 1, 2007, added a provision stating

that “[t]he situs of jurisdiction is hereby changed to the State of Nevada, and not Illinois, in

every legal respect referred to throughout this Agreement and Amendments.” However, the

sixth amendment did not expressly remove the provision that “[t]he powers and duties of the

Trustee hereunder and all questions of interpretation of this instrument shall be governed by

¶6 On August 8, 2018, defendant filed a motion to dismiss the complaint due to a lack of

personal jurisdiction, claiming that he was a resident of Nevada and had not resided in Illinois

for 34 years, that he had not committed any acts or conducted any business in Illinois, and that

he had not established sufficient minimum contacts within Illinois to justify the exercise of

personal jurisdiction. Defendant further claimed that the “forum selection clause” contained in

the sixth amendment to the trust agreement designated Nevada as the forum for any litigation,

making jurisdiction in Illinois improper.

¶7 Attached to the motion to dismiss was defendant’s affidavit, in which he averred that he

was a resident of the state of Nevada, where he had resided continuously for 29 years, and had

not resided in Illinois since 1984. Defendant averred that he did not own any real property in

Illinois, did not own or maintain a business office in Illinois, and had not conducted any

business in Illinois since 1985. Defendant averred that he became acquainted with Krone and

her husband in the 1970s and that they lived near each other in San Diego in 1984. At the time

of the initial trust agreement in 1986, defendant was residing in California, near Krone and her

husband; at the time of the restatement of the trust agreement in 2000, defendant was living in

2 Plaintiffs challenge the authenticity of the paragraph containing this language, pointing to a number of anomalies between the paragraph and the rest of the amendment. However, we make no comment as to the paragraph’s authenticity, as such a finding is not necessary to the disposition of the instant appeal. 3 No. 1-19-2160

Nevada, where he was also living at the time of the execution of each of the amendments to

the trust agreement. Defendant averred that he was not present for the execution of any of the

amendments, other than the sixth amendment, which was executed at Krone’s home in

California.

¶8 Defendant averred that, beginning in 2004, he began managing the trust assets from his

office in Las Vegas and had continued to manage the assets in Nevada for the past 14 years.

Defendant averred that portions of the trust assets were invested at financial institutions

including several national banks, but that it was not necessary for him to travel to conduct trust

business and all trust business was conducted from Nevada. Defendant further averred that

“[n]o physical trust assets were located in Illinois.” Defendant also averred that he had not

transacted any trust business in the state of Illinois, but that “[f]rom time to time, [he] would

prepare accountings in Nevada and send them to beneficiaries wherever they resided.”

¶9 The parties engaged in discovery on the issue of jurisdiction, and following discovery,

plaintiffs filed a response to the motion to dismiss, claiming that Illinois had both general and

specific jurisdiction over defendant. 3 Plaintiffs argued that, since 2003, defendant had been the

sole trustee of a trust created under Illinois law, and that he also held power of attorney over

Krone’s healthcare and property, both of which were granted pursuant to Illinois law. Plaintiffs

further argued that defendant had entered into contracts in connection with Krone’s care in

Illinois, namely, a contract with an assisted living facility in Carol Stream to provide care and

housing for Krone and a contract with a funeral home in Itasca for Krone’s funeral. Defendant

also made regular payments to the assisted living facility from 2008 until Krone’s death, made

payments to Illinois healthcare providers for Krone’s care, and made payments to two of the

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2020 IL App (1st) 192160, 162 N.E.3d 323, 443 Ill. Dec. 689, Counsel Stack Legal Research, https://law.counselstack.com/opinion/capra-v-lipschultz-illappct-2020.