Cartwright v. Moore

913 N.E.2d 1163, 394 Ill. App. 3d 1, 332 Ill. Dec. 873, 2009 Ill. App. LEXIS 768
CourtAppellate Court of Illinois
DecidedAugust 10, 2009
Docket1-07-1651
StatusPublished
Cited by6 cases

This text of 913 N.E.2d 1163 (Cartwright v. Moore) 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
Cartwright v. Moore, 913 N.E.2d 1163, 394 Ill. App. 3d 1, 332 Ill. Dec. 873, 2009 Ill. App. LEXIS 768 (Ill. Ct. App. 2009).

Opinions

JUSTICE GARCIA

delivered the opinion of the court:

This appeal and cross-appeal arise from a suit filed by Mary K. Cartwright, one of three daughters of Bethine W Alberding and one of three beneficiaries of Alberding’s 1989 trust (Alberding trust), against C. Tucker Moore, the named trustee. In her third amended complaint, Cartwright alleged, among other claims, that Moore wasted trust assets by refusing to distribute the stock in the Occidental Hotel Company (Occidental) to the beneficiaries upon Alberding’s death as directed by the Alberding trust. The complaint also alleged that Moore sold another trust asset, Alberding’s former residence, at substantially less than market value, without the beneficiaries’ approval. The complaint sought reimbursement from Moore for any compensation received as trustee and for the legal fees paid by the trust on behalf of Moore, based on a claim that he breached his fiduciary duty.

While litigation was ongoing, Cartwright joined a lawsuit filed by her co-beneficiary and sister Beth Ann Mohr (Mohr suit) against trustee Moore, which came to a conclusion before this case, the Cartwright suit. The Mohr suit, which was filed subsequent to the Cartwright suit, sought injunctive relief against Moore plus an award for damages. On February 17, 2005, judgment was entered in the Mohr suit on the injunctive claim. The court dismissed the damages claim without prejudice. The court’s order included Supreme Court Rule 304(a) (210 Ill. 2d R. 304(a)) language to provide for an immediate appeal. On December 21, 2007, Mohr refiled her damages claim in a verified complaint. On November 25, 2008, Judge Dennis D. Burke granted trustee Moore’s motion to dismiss Mohr’s verified complaint as barred by res judicata. Judge Burke rejected Mohr’s contention that the release signed by the parties, pursuant to the 2005 judgment, permitted her to split her claim against trustee Moore. No appeal from Judge Burke’s order was filed.

On November 15, 2005, trustee Moore filed an “Amended Answer and Affirmative Defenses” to Cartwright’s third verified complaint, in which Moore raised the affirmative defense of res judicata based on the final judgment entered in the Mohr suit. Cartwright filed answers to Moore’s affirmative defenses in which she contended res judicata had a limited affect on her suit.

“[Cartwright] admits that the judgment in [the Mohr suit] does in fact bar certain elements of this case based upon the Doctrine of Res Judicata, since the claims involving any delay in distribution and failure to distribute the assets of the Trust have already been adjudicated by final judgment. However, [Cartwright] denies that [Moore] has accurately set forth the impact of the final judgment since the impact would be a finding of liability in favor of [Cartwright].”

On November 28, 2006, Judge David R Donnersberger entered a surcharge judgment of $1.9 million in favor of Cartwright and against trustee Moore, plus prejudgment interest, on Cartwright’s claim regarding Occidental, and a surcharge judgment of $135,000 regarding the sale of Alberding’s personal residence. In postjudgment proceedings, following Judge Donnersberger’s retirement, Judge Mary Ann Mason vacated the surcharge against trustee Moore regarding the sale of the residential property, but granted trustee Moore no further relief.

Moore appeals from the $1.9 million judgment. Cartwright cross-appeals the order vacating the surcharge regarding the sale of the residential property and the denial of her other claims.

We conclude that the order entered in the Mohr suit, which predated the Cartwright suit judgment, triggered res judicata, barring Cartwright from recovery in this case. We therefore vacate the circuit court’s surcharge of $1.9 million, plus the corresponding award of interest. We affirm the circuit court’s judgment in all other respects.

BACKGROUND

In 1989, Bethine Alberding created the trust naming her three daughters — Cartwright, Mohr, and Melissa A. Moore — as beneficiaries and her son-in-law C. Tucker Moore as the Trustee. The trust’s terms required C. Tucker Moore to “distribute the trust estate, as then constituted,” to the beneficiaries upon Alberding’s death. The trust also granted Moore the power to “make full distribution or division of the trust in cash or in kind or in both.”

When Alberding died on December 23, 1993, the trust’s assets included approximately 50 commercial properties across the country. Nearly all of the properties were owned by closely held corporations whose stock was also held by the trust. The various corporations in the trust made a series of loans to each other during Alberding’s lifetime, creating a complex web of debts. The parties do not contest that Moore was required to begin closing out the estate in May 1997, when the Internal Revenue Service (IRS) issued a closing letter, indicating that the trust’s estate taxes had been paid.

The trust’s corpus included the Occidental stock. Occidental’s only asset was the Captain Bartlett Inn, located in Fairbanks, Alaska. Although the Captain Bartlett was appraised at $8 million near the time of Alberding’s death, it was not producing cash flow and had more than $3 million in long-term debt. While Moore distributed most of the trust’s assets in a timely fashion, he did not distribute Occidental’s stock. The Captain Bartlett’s value began to decline sharply. When Moore attempted to sell the hotel in 2004, he could only secure a purchase offer of $3.8 million. The sale was not completed because Cartwright objected.

Another asset in the trust was Alberding’s former home. In a letter dated May 15, 1997, Moore informed the beneficiaries that he would sell Alberding’s home at the earliest opportunity. None of the beneficiaries responded to the letter. Moore sold Alberding’s home in June 1998 for $690,000.

The Cartwright Suit

Cartwright filed this suit in 2000 and filed a third amended complaint on March 14, 2002. In count I of her third amended complaint, Cartwright alleged that Moore breached his duty of loyalty by collecting a salary from many of the trust’s closely held corporations and exacting excessive trustee fees, and sought recovery of that compensation. In count II, Cartwright alleged that Moore wasted the trust’s assets in violation of its terms by refusing to immediately distribute them upon Alberding’s death. Count II included allegations that Moore refused to distribute the Occidental stock or sell the Captain Bartlett upon Alberding’s death, allowing those assets to decline in value. Count II further alleged that Moore sold Alberding’s home without the beneficiaries’ approval for substantially less than its fair market value. Cartwright alleged that Moore’s actions constituted a breach of his fiduciary duty, which entitled her to recoup any legal fees collected by Moore’s attorneys from the trust in connection with the defense of this suit. When Cartwright died in 2003, her son Jay Cartwright was substituted as plaintiff as a special representative of her estate.

The Mohr Suit

While the Cartwright suit was pending, beneficiary Beth Ann Mohr filed a two-count complaint against Moore on October 11, 2001.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Semb's, Inc. v. Gaming & Entertainment Management-Illinois, LLC
2014 IL App (3d) 130111 (Appellate Court of Illinois, 2014)
City of Wheaton v. LOEROP
926 N.E.2d 1004 (Appellate Court of Illinois, 2010)
Comtel Technologies, Inc. v. Paul H. Schwendener, Inc.
710 F. Supp. 2d 704 (N.D. Illinois, 2010)
Cartwright v. Moore
913 N.E.2d 1163 (Appellate Court of Illinois, 2009)

Cite This Page — Counsel Stack

Bluebook (online)
913 N.E.2d 1163, 394 Ill. App. 3d 1, 332 Ill. Dec. 873, 2009 Ill. App. LEXIS 768, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cartwright-v-moore-illappct-2009.