Cori v. Schlafly

2021 IL App (5th) 200342-U
Appellate Court of Illinois·Decided November 17, 2021·No. 5-20-0342·Unpublished·Cited by 1 cases

Opinion

NOTICE 2021 IL App (5th) 200342-U NOTICE Decision filed 11/17/21. The This order was filed under text of this decision may be NO. 5-20-0342 Supreme Court Rule 23 and is changed or corrected prior to the filing of a Petition for not precedent except in the

Rehearing or the disposition of IN THE limited circumstances allowed the same. under Rule 23(e)(1).

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT ________________________________________________________________________

ANNE SCHLAFLY CORI and EAGLE ) Appeal from the FORUM, ) Circuit Court of ) Madison County. Plaintiffs-Appellees, ) ) v. ) No. 16-MR-111 ) JOHN F. SCHLAFLY, ) Honorable ) David W. Dugan, Defendant-Appellant. ) Judge, presiding. ________________________________________________________________________

JUSTICE CATES delivered the judgment of the court. Presiding Justice Boie and Justice Welch concurred in the judgment.

ORDER

¶1 Held: The trial court did not abuse its discretion in finding defendant John Schlafly in indirect civil contempt for failing to comply with provisions of an amended temporary restraining order that directed him to deliver (a) specific contacts lists, and (b) Eagle Forum corporate records. The trial court’s order finding John Schlafly in statutory contempt for filing an affidavit in bad faith was not immediately appealable under Supreme Court Rule 304(b)(5) where the contempt order did not impose a penalty. The appellate court lacked jurisdiction under Supreme Court Rule 304 to consider Eagle Forum’s cross- appeal in the absence of a Rule 304(a) finding.

¶2 Defendant John F. Schlafly appeals from orders of the trial court finding him in

indirect civil contempt for failure to comply with provisions in a temporary restraining order

and in statutory contempt for filing an affidavit in bad faith and for purposes of delay. For 1 the reasons that follow, the appeal from the order finding John Schlafly in statutory civil

contempt is dismissed for lack of appellate jurisdiction under Illinois Supreme Court Rule

304(b)(5) (eff. Mar. 8, 2016), and the order finding John Schlafly in indirect civil contempt

is affirmed in part and vacated in part. Eagle Forum’s cross-appeal is dismissed for lack of

appellate jurisdiction under Illinois Supreme Court Rule 304(a) (eff. Mar. 8, 2016).

¶3 I. BACKGROUND

¶4 This case arose out of a dispute over the ownership and control of the assets of Eagle

Forum. Eagle Forum is a not-for-profit, tax-exempt organization under § 501(c)(4) of the

Internal Revenue Code (26 U.S.C. § 501(c)(4) (2016)). It was founded by Phyllis Schlafly

to advance conservative causes. The first four years of this litigation have been contentious,

and the record on appeal is lengthy, containing over 25,000 pages. This appeal is limited

to the propriety of the trial court’s rulings on motions for indirect civil contempt against

defendant John F. Schlafly. A discussion of the facts and procedural history are centered

on those rulings.

¶5 When this litigation commenced in 2016, the plaintiffs, Anne Schlafly Cori (Cori),

Eunie Smith, Cathie Adams, Carolyn McLarty, Rosina Kovar, and Shirley Curry, were

serving as Directors of Eagle Forum. 1 Defendant John F. Schlafly (John) was the Treasurer

and a Director of Eagle Forum. Defendant Edward R. Martin Jr. (Martin)2 was the

President of Eagle Forum. Martin was also the President of the Eagle Forum Education and

1 These plaintiffs, collectively, are also referred to as the “Majority Directors.” 2 For clarity, we refer to Anne Schlafly Cori as “Cori,” John F. Schlafly as “John,” and Edward Martin Jr. as “Martin” throughout this disposition. 2 Legal Defense Fund (EFELDF). 3 Phyllis Schlafly, a nonparty, served as a Director,

Chairman, and Chief Executive Officer of Eagle Forum until her death on September 5,

2016.

¶6 A. The Rift in Eagle Forum’s Leadership

¶7 According to the allegations in the original complaint, Martin was elected as

President of Eagle Forum on January 31, 2015. During Martin’s tenure as President,

discord developed among Eagle Forum’s national organization, its state affiliates, and its

membership base, and a rift arose within the leadership of Eagle Forum. On March 29,

2016, Cathie Adams, Shirley Curry, and Eunie Smith mailed a notice to all of the directors

of Eagle Forum, advising them that a meeting would be held by teleconference on April

11, 2016.

¶8 On April 9, 2016, Martin emailed more than 41,000 individuals, using a “contacts

list” that Eagle Forum often used for its mass mailings. In the email, Martin claimed that

six directors of Eagle Forum were going to hold a “rogue meeting.” He implored the email

recipients to urge those directors not to “hijack” Eagle Forum for their own purposes. That

same day, the plaintiffs received a letter, ostensibly from Phyllis Schlafly, asking them to

resign their positions immediately. On April 10, 2016, the plaintiffs received a letter from

the Runnymede Law Group. Runnymede stated that it had been retained as legal counsel

3 Eagle Forum Education and Legal Defense Fund is a not-for-profit, tax-exempt entity under § 501(c)(3) of the United States Code (26 U.S.C. § 501(c)(3) (2016)). This organization was referred to as “EFELDF” in the trial court and that designation will be retained in this disposition for consistency. 3 for Eagle Forum, and it directed the plaintiffs to stop acting in violation of their fiduciary

duties to Eagle Forum.

¶9 On April 11, 2016, the Eagle Forum Board of Directors met via teleconference. The

plaintiffs were on the call. Phyllis Schlafly and John were also present, but the other three

directors, Andy Schlafly, Kathleen Sullivan, and LaNeil Wright Spivy, were absent. Martin

was also on the call. According to the Eagle Forum Bylaws, the presence of 6 of the 11

directors constituted a quorum. When the Board moved into executive session, Martin was

not allowed to participate because he was not a director. During the executive session, a

majority of the Board members approved a motion to immediately terminate Martin as

President of Eagle Forum. The majority members also approved motions to terminate the

Runnymede Law Group as legal counsel for Eagle Forum, revoke all signatories on Eagle

Forum financial accounts, and conduct an audit of Eagle Forum assets. All motions passed

by a margin of 6-2, with the plaintiffs voting in favor of each motion, and John and Phyllis

Schlafly objecting to and opposing each motion. Immediately after the Board meeting,

Runnymede Law Group was notified that it no longer represented Eagle Forum, and Martin

and the Eagle Forum staff were notified that Martin had been terminated from his role as

President of Eagle Forum.

¶ 10 On April 22, 2016, the plaintiffs filed a verified complaint against defendants John,

Martin, and Eagle Forum. 4 The plaintiffs alleged that John and Martin refused to

4 Eagle Forum was sued as a nominal defendant. Eagle Forum was later realigned as a party plaintiff and was given leave to file its own complaint in this action. Eagle Forum Education and Legal Defense Fund, Eagle Trust Fund, Phyllis Schlafly’s American Eagles, the Estate of Phyllis Schlafly, Andrew Schlafly, Bruce Schlafly, and Kathleen Sullivan were added as party defendants. 4 acknowledge Martin’s termination as President of Eagle Forum, and that John and Martin

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