Davis v. Scheck

2020 IL App (2d) 190808-U

• Court: Appellate Court of Illinois
• Decided: July 9, 2020
• Docket: 2-19-0808
• Status: Unpublished

Opinion

2020 IL App (2d) 190808-U No. 2-19-0808 Order filed July 9, 2020

NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1). ______________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT ______________________________________________________________________________

ANNE DAVIS, ) Appeal from the Circuit Court ) of Du Page County. Plaintiff-Appellant, ) ) v. ) No. 10-CH-200 ) KEVIN A. SCHECK, Individually and as ) Trustee of the Patricia Scheck Irrevocable ) Trust Agreement, TIMOTHY E. SCHECK, ) CAROLYN SCHECK, and DAWN SCHECK, ) Honorable ) Bonnie M. Wheaton, Defendants-Appellees. ) Judge, Presiding. ______________________________________________________________________________

JUSTICE McLAREN delivered the judgment of the court. Justices Zenoff and Hudson concurred in the judgment.

ORDER

¶1 Held: (1) Appellate court obtained jurisdiction of the appeal pursuant to Supreme Court Rule 304(b)(1); (2) Plaintiff forfeited review of claim regarding the trustee’s calculation and final plan of distribution by failing to raise arguments in the trial court; (3) Defendants’ petition for attorney fees was timely filed, and trial court had jurisdiction to consider it; (4) Trial court did not err in granting defendants’ petition for attorney fees. Judgment affirmed.

¶2 Plaintiff, Anne Davis, is one of the beneficiaries of the Patricia M. Scheck Irrevocable Life

Insurance Trust, Dated April 22, 2002 (“ILIT”). She now appeals from the trial court’s orders

approving the Trustee’s Calculation and Final Plan of Distribution and granting the fee petition of 2020 IL App (2d) 190808-U

defendants Kevin Scheck (individually), Timothy Scheck, Carolyn Scheck, and Dawn Scheck

(“Scheck Defendants”), the other beneficiaries. We affirm.

¶3 I. BACKGROUND

¶4 Patricia Scheck died on October 22, 2009. Anne, her daughter, was named executor of the

estate, while Kevin, Patricia’s son, was the trustee of the ILIT. In January 2010, Anne filed a

complaint in declaratory judgment, seeking to establish which of two versions of an ILIT was the

operative version. Anne and the Scheck Defendants argued that different versions were operative.

Trial was not held on the complaint until January 2018. After a three-day trial, the trial court

entered a directed finding that the Scheck Defendant’s ILIT was the operative ILIT. This court

affirmed that decision in Davis v. Scheck, No. 2-18-0134 (Feb. 13, 2019) (unpublished order

pursuant to Supreme Court Rule 23).

¶5 In June 2019, Kevin, as trustee, filed a Petition for Approval of Trustee’s Calculation and

Final Plan of Distribution. He also filed a petition for attorney fees against Anne pursuant to

Supreme Court Rule 219(c). The Scheck defendants filed a petition for attorney fees and costs,

seeking fees from January 2018 forward. Although a briefing schedule was set, Anne did not file

a written response to the petition for approval. At oral argument, Anne did not address the

proposed calculation of distribution; instead, she argued about discovery issues and other ancillary

matters. After argument on August 15, 2019, the trial court found the petition to be “meticulously

documented” and approved the calculation and the final plan. The court also granted the fee

petitions. The matter was continued until October 15, 2019, for “presentation of the final

accounting.”

¶6 Anne filed her notice of appeal on September 16, 2019. On October 15, the trial court

approved the final accounting. No further notices of appeal were filed.

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¶7 II. ANALYSIS

¶8 We start by considering the Scheck defendants’ claim that this court lacks jurisdiction over

this appeal. According to the Scheck Defendants, Anne’s September 16, 2019 notice of appeal

was from a non-final, non-appealable order and, thus did not confer this court with jurisdiction.

The Scheck Defendants argue that the trial court’s August 15, 2019 order, from which Anne

appealed, did not terminate the litigation, as the trial court continued the case to October 15, 2019,

for the submission of the final accounting. Thus, according to the Scheck defendants, this court

does not have jurisdiction pursuant to Supreme Court Rule 301, as claimed by Anne in her opening

brief. Rule 301 provides in relevant part: “Every final judgment of a circuit court in a civil case is

appealable as of right.” SCR 301 (eff. Feb. 1, 1994). Further, the trial court’s order did not contain

an express written finding that there is no just reason for delaying either enforcement or appeal (or

both) of a judgment that does not dispose of an entire proceeding, pursuant to Rule 304(a) SCR

304(a) (eff. March 8, 2016).

¶9 However, Rule 304(b)(1) provides that an order or judgment entered in the administration

of an estate, guardianship, or similar proceeding that finally determines a right or status of a party

is appealable without the finding required under Rule 304(a). SCR 304(b)(1) (eff. March 8, 2016).

A decision that is within the scope of Rule 304(b)(1) is a final and appealable judgment that must

be appealed within 30 days or be barred. In re Estate of Burd, 354 Ill. App. 3d 434, 439 (2004).

The revised Committee Comments to Rule 304(b)(1) provide that “[s]ubparagraph (1) applies to

orders that are final in character although entered in comprehensive proceedings that include other

matters. Examples are an order admitting or refusing to admit a will to probate, appointing or

removing an executor, or allowing or disallowing a claim.” Ill. S. Ct. R. 304(b) Committee

Comments (rev. Feb.26, 2010). Rule 304(b)(1) is designed to prevent multiple lawsuits and

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piecemeal appeals, while encouraging efficiency and granting certainty as to specific issues during

the often lengthy process of estate administration. Estate of Thorp, 282 Ill. App. 3d 612, 616

(1996). Without Rule 304(b)(1), an appeal would have to be brought after an estate was closed,

which may result in the reopening the estate and marshalling assets that have already been

distributed. Id. at 616–17.

¶ 10 In Lampe v. Pawlarczyk, 314 Ill. App. 3d 455 (2000), the plaintiffs, beneficiaries of a trust,

asked that the defendant be removed as trustee, that she be ordered to provide an accounting of the

Trust, and that a constructive trust be imposed over certain funds that she had withdrawn from the

Trust. The plaintiffs also sought attorney fees. The trial court granted summary judgment in

plaintiffs’ favor but denied the request for attorney fees on October 16, 1998. The plaintiffs filed

a motion to reconsider the denial of attorney fees on December 1, 1998, which the trial court denied

on May 19, 1999. The plaintiffs then appealed both the denial of the fees and the denial of the

motion to reconsider.

¶ 11 The appellate court concluded that Rule 304(b)(1) applied such that the plaintiffs’ appeal

was not timely and the court lacked jurisdiction to consider it. First, the trial court's October 16

decision was similar to an order entered in the administration of an estate; while the trust was a

privately administered trust, to which Rule 304(b)(1) generally does not apply (see In re Estate of

Nicholson, 268 Ill.App.3d 689 (1994)), “there was court involvement of the very type referred to

by the Nicholson court: Linda was ordered by the trial court to submit an accounting of the Trust.”

Lampe, 314 Ill. App. 3d at 471. Further, the trial court’s order finally determined the plaintiffs’

rights as to their request for attorney fees. Id. at 470. The October 16 order “was an order entered

in the administration of an estate, and it finally determined the [plaintiffs’] rights as to their request

for attorney fees.” Id. at 470. The court determined:

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“[T]he trial court's October 16 decision here was a final determination that the [plaintiffs]

had no right to attorney fees. Thus their motion to reconsider, coming more than 30 days

later, was untimely under section 2–1203. It did not toll the time for filing a notice of

appeal, and the [plaintiffs’] subsequently-filed notice of appeal (June 17, 1999) was

therefore untimely as well.” Id. at 473.

We agree with the Lampe court's determination that the order of October 16 was final and

appealable and that the filing of the motion to reconsider did not stay the time to appeal because it

was not filed within 30 days of the entry of the October 16 judgment.

¶ 12 Here, we conclude that Rule 304(b)(1) provides this court with jurisdiction. First, the

proceedings were similar to proceedings in the administration of an estate. A proceeding relating

to the administration of a trust is a “similar proceeding” that can generate orders appealable under

Rule 304(b)(1) when the court's oversight of the trust is similar to the comprehensive court

proceedings associated with the administration of an estate. (Internal quotation marks omitted.)

Houghtaylen v. Russell D. Houghtaylen By–Pass Trust, 2017 IL App (2d) 17019595, ¶ 15. In

Houghtaylen, the relevant count of the complaint sought declaratory judgment that the decedent’s

second codicil “effectively executed her power of appointment in favor of plaintiffs” and further

sought an order requiring the trustee of the land trust to transfer the decedent’s beneficial interest

in the trust to plaintiffs. Id., ¶ 15. This court noted that “this required the [trial] court to conduct

a bench trial to determine Shirley's testamentary intent, a legal matter that is practically the

quintessence of an estate proceeding.” Id., ¶ 14. The magnitude of the trial court’s decision

(transferring a one-half interest in a land trust's primary object, as well as a bypass trust's most

significant asset, and dealing with a contest over a second codicil) made a court's removal of a

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trustee or involvement in a trust's day-to-day operations (see Ill. S. Ct. R. 304(b) Committee

Comments (rev. Feb.26, 2010)) seem “downright trivial” in comparison. Id., ¶ 15.

¶ 13 Here, the trial court was required to issue a decision of comparable magnitude to that issued

in Houghtaylen—which of two competing irrevocable life insurance trusts was operative. We

agree with Houghtaylen analysis that such a decision renders the trial court proceedings similar to

proceedings in the administration of an estate. We also note that this case ultimately led to a court-

ordered accounting, the type of court involvement in trust administration that the Lampe court

found similar to the administration of an estate. See Lampe, 314 Ill. App. 3d at 471.

¶ 14 The trial court’s August 15, 2019 order also finally determined the rights of the claimants

under the ILIT and determined the awarding of attorney fees. All that remained was the

submission of the final accounting. This is clearly a final order pursuant to Rule 304(b)(1). See

Stephen v. Huckaba, 361 Ill.App.3d 1047, 1051 (2005) (“Only final orders fit within Rule

304(b)(1). It is not necessary that the order resolve all matters in the estate, but it must resolve all

matters on the particular issue.)

¶ 15 This is the type of order that must be immediately appealed in the administration of this

trust. See Estate of Kime, 95 Ill. App. 3d 262, 268 (1981) (“in the interests of efficiency and the

sound and practical administration of estates, orders in estate proceedings must be appealed within

30 days from entry when they finally determine the right or status of a party, even though they are

preliminary to a final settlement of estate proceedings.”). The trial court ordered that the attorney

fees were to be assessed “solely against Plainitff's [sic] share of any distribution made to Plaintiff

from the Patricia Scheck Irrevocable Trust.” The court also ordered that: “The Trustee is

authorized to make distributions from the Patricia Scheck Irrevocable Trust pursuant to the

Trustee's Final Plan of Distribution and this Order.” (Emphasis added.) There would be no sense,

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and no judicial economy, in requiring Davis to wait to appeal the trial court’s award of attorney

fees until after the approval of the accounting; such an appeal, if successful, would require the

marshalling assets that have already been distributed. See Thorp, 282 Ill. App. at 616-17. We

conclude that this court obtains jurisdiction over this appeal pursuant to Rule 304(b)(1).

¶ 16 Anne first contends that the trial court erred in approving the Trustee’s Calculation and

Final Plan of Distribution. However, Kevin, as Trustee, argues that Anne failed to preserve the

issue of interpretation of the ILIT and the calculation of the distribution because she failed to

timely object to the calculation in the trial court.

¶ 17 “It is well settled that issues not raised in the trial court are deemed waived and may not be

raised for the first time on appeal.” Haudrich v. Howmedica, Inc., 169 Ill. 2d 525, 536 (1996). An

issue that is not presented to or considered by the trial court cannot be raised for the first time on

review. Id.

¶ 18 Our review of the record on appeal leads us to conclude that Anne has forfeited this issue.

On June 17, 2019, Kevin presented his Petition for Approval of Trustee's Calculation and Final

Plan of Distribution in court. Anne was given until July 15 to file a response, and the case was

continued until August 15 for hearing. Anne never filed a written response. At argument, Anne

stated that she had “not been able to respond meaningfully to this summary of what the supposed

calculations should be,” arguing that she still needed to depose Kevin and that the estate

accountants could not respond to the calculation “without having several fundamental questions

answered by Mr. Scheck.” She then proposed that the court order Kevin to sit for a deposition

within 14 days and the cause continued for an evidentiary hearing. After Kevin argued, the

following colloquy took place:

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“THE COURT: This case has been pending since January of 2010. Nine years. I

will not go through the tortured history of the case, but it is a tortured history. Mr.

Shebar [Anne’s counsel], I think your request for discovery comes too late. If you

needed anything, it was your duty to file a motion to compel or any other

appropriate motion.

I think the motion to approve the calculation and the final plan of

distribution is meticulously documented and it appears to comport with the

distribution scheme in all of the trusts that have previously been presented to the

Court.

I am going to enter an order approving the trustee's calculation and

approving the final plan for distribution subject to minor fluctuations in current

values of all of the assets.

MR. SHEBAR: May I just be heard on one point?

THE COURT: I have ruled, but you may make a statement for the record.

MR. SHEBAR: Your Honor says that the calculation comports in all respects with

the trust and, for the record, that is not the case. The Huck Bouma draft ILIT that

is governing is very clear that the assets that are to be measured-that the assets from

the '96 trust that went to Ms. Davis are assets that were distributed following

Patricia Scheck's death as part of her decedent's estate.

And included in the trustee's calculation are distributions that were made in

2006 and 2007. So, you know, these are evidentiary matters that I just do not

believe it is proper to have this decided on a six-page summary without exploration

of the bases of these numbers.

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I am actually—I am just shocked that this was the anticipation all along that

we need to have a hearing. I need to question Mr. Scheck under oath. I have asked

for dates for his deposition. Motion to compel, your Honor, we are spinning out of

control with motions that are accomplishing everything but the substance of this

case.

So we have a motion to compel heard before you today and where would

we be? I mean, my desire, my goal is not -- you know, I have had to respond to

multiple attorneys' fees petitions, largely unfounded, and it's not to engage in more

motion practice, it is to get this matter resolved.

I believe that what I am proposing is very reasonable and that as a matter of Ms.

Davis's rights that she should be entitled to question Mr. Scheck under oath about

this calculation summary.

THE COURT: I have ruled. You have made your statement for the record.

In addition, I will say that the Code of Civil Procedure and the Illinois

Supreme Court Rules set the roadmap for expeditious termination of litigation.

That's all I will say on that matter.” (Emphases added.)

¶ 19 Anne never presented her arguments about the calculations and distribution to the trial

court for ruling. Instead, she waited until after the trial court had made its ruling and presented

little more than a summary statement addressing the merits of the issue. Anne had the opportunity

to present both written and oral arguments on the issue and failed to present either to the trial court.

As her arguments were not first presented to the trial court, we find these arguments forfeited on

appeal.

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¶ 20 Anne next contends that the Scheck Defendants’ petition for attorney fees was not timely

filed such that the trial court lacked jurisdiction to grant it. According to Anne, a petition for

attorney fees must be brought within 30 days of the entry of the final judgment in the proceeding

from which the petition arises. Here, the directed finding in favor of the Scheck Defendants on

the declaratory judgment was entered on January 22, 2018. Thus, Anne contends, the trial court

had no jurisdiction over the June 11, 2019 fee petition. We disagree.

¶ 21 The final order in this case was not the January 22, 2018 directed finding declaring the

Huck Bouma ILIT as the operative ILIT. In its oral ruling the trial court stated:

“I will continue the case for status as to the rest of the matter. I believe that it is

now incumbent on the parties to determine what distribution that was made from Patricia

Scheck’s revocable trust should be applied to the equalization formula, and I believe the

operative date would be the date of Mrs. Scheck’s death.”

Clearly, the directed finding was not the final judgment in the proceeding from which the petition

arose. The matter was continued for substantial matters, including the calculations regarding the

distribution of the ILIT, now that the operative ILIT had been determined. The Petition for

Approval of Trustee’s Calculation and Final Plan of Distribution was not filed until June 2019 or

approved until August 15, 2019, and the matter was again continued until October 15, 2019, for

presentation of the final accounting.

¶ 22 Anne points to this court’s statement in Davis:

“We first note that the trial court did not decide all issues in this case; it continued

the case for status on issues beyond the declaratory judgment. However, ‘it is well

established that a declaratory judgment has the force of a final judgment with respect to

the rights of the parties subject to that judgment.’ Pritza v. Village of Lansing, 405 Ill.

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App. 3d 634, 639 (2010). Thus, even though the trial court did not provide language

pursuant to Supreme Court Rule 304 (a), we have jurisdiction to address the trial court's

order, as it determined the operative version of the ILIT.” Davis, No. 2-18-0134, ¶16 (Feb.

13, 2019) (unpublished order pursuant to Supreme Court Rule 23).

Anne argues that this statement affirms her assertion that the decision on the declaratory judgment

was the final order in this case for purposes of the fee petition. However, this quotation involved

our analysis regarding finality vis-vis appealability, not finality of the case itself. This is clear in

the quote, as we note that “the trial court did not decide all issues in this case; it continued the case

for status on issues beyond the declaratory judgment.” Id. The final order in this case had not

been issued before the Scheck Defendants filed their June 11, 2019 fee petition, and the trial court

clearly had jurisdiction to rule on that petition.

¶ 23 Anne next argues that the assessment of fees against her share of the trust was improper

because neither the declaratory judgment action nor the appeal from the judgment was groundless,

vexatious, or for the purpose of harassment. The question of whether to award attorney fees is left

to the discretion of the trial court, and its decision will not be disturbed absent an abuse of that

discretion. Hjerpe v. Thoma, 2017 IL App (4th) 160844, ¶ 28. A trial court abuses its discretion

only when its decision is arbitrary, fanciful, or unreasonable or where no reasonable person would

take the view adopted by the trial court. Id.

¶ 24 The fees at issue here involve the trial and appeal of the declaratory action. In the fee

petition, the Scheck Defendants argued that “[b]eginning no later than early January 2018 before

trial commenced, Plaintiff knew or should have known her declaratory judgment claim was

groundless but she pursued the litigation anyway.” This purported knowledge was based on the

trial testimony of Lauren DeJong, the attorney that drafted the ILIT that Anne asserted was the

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operative ILIT. DeJong testified that, at the time that she represented Patricia in relation to the

drafting of an ILIT, Patricia presented her with a signed and notarized version of an irrevocable

trust (the “Huck Bouma” ILIT). DeJong also had filled in some blanks regarding trust amenders

that had been left open on the last page of that ILIT “sometime in early 2003,” months before

Patricia signed the ILIT that DeJong had prepared. This court noted DeJong’s trial testimony and

Anne’s almost complete failure to mention DeJong's testimony in either her statement of facts or

her argument. See Davis, No. 2-18-0134, n.3.

¶ 25 In their fee petition, the Scheck Defendants alleged that, in early January 2018, before the

trial commenced, DeJong's attorney advised Anne’s counsel that DeJong would testify at trial that

original handwriting on the Huck Bouma ILIT was DeJong’s and that it was placed on the ILIT

before DeJong drafted the other ILIT. In light of the impact of DeJong's testimony, the Scheck

Defendants’ counsel made an offer to settle the litigation; however, Anne rejected the offer, did

not make any counter-offer, and advised that she was determined to proceed to trial regardless of

DeJong’s testimony. During argument, the Scheck Defendants noted that, during the trial, Anne’s

counsel admitted how damaging DeJong’s testimony was to Anne’s case. While moving for a

continuance, Anne’s counsel stated that he had a chance to reflect on DeJong’s testimony and he

realized that it was a very difficult fact for them to overcome. The Scheck Defendants also noted

Anne’s failure to address DeJong’s testimony in the appellate court even after the Scheck

Defendant’s had raised it. They sought attorney fees incurred from January 2018 to the filing of

their petition.

¶ 26 Anne argued that her decision to go forward with her declaratory judgment action, which

had been pending for 8 years, could hardly be described as vexatious, harassing, based on false

statements of fact or unfounded in law, especially as DeJong’s testimony was “inconsistent, at

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best.” Further, she questioned the reliability of Kevin’s testimony and noted that there was ample

evidence that Kevin, as Trustee, distributed and acted on the other ILIT as though it were the

operative trust for several years. All of this, and other evidence, provided more than sufficient

“grounds” for Anne to proceed with her case, despite DeJong’s testimony.

¶ 27 In its ruling, the trial court noted that the Scheck defendants did not voluntarily come into

the case but were brought in by Anne. The court also found that, after DeJong’s testimony became

apparent, “any further litigation carried on by [Anne] was at her own peril.” The trial court also

noted this court’s interest in DeJong’s testimony, describing it as “really quite the opposite of the

description of” Anne’s counsel and “absolutely dispositive.” The trial court granted the petition,

approving attorney fees from January 4, 2018 through March 15, 2019 in the total amount of

$256,482.67. The fees were assessed solely against Anne’s share of any distribution made to her

from the Patricia Scheck Irrevocable Trust.

¶ 28 We cannot conclude that the trial court abused its discretion in awarding the fees. Anne

argues that there is no precedent for a finding that her “well-founded” case became groundless “by

virtue of one witness’ belated recollection of events, literally on the eve of trial.” However, as

both the trial court and this court noted, this testimony was of such magnitude that it made Anne’s

entire theory of the case untenable. Anne’s counsel also admitted that DeJong’s testimony was a

very difficult fact for them to overcome. Further, Anne failed to even address this testimony on

appeal after its relevance and importance was revealed at trial and in the appellate briefing. Anne

tried to ignore the importance of this vital testimony and continued to press on with her theory of

the case through the trial and the entire appellate process. We find no error here.

¶ 29 Anne next argues that the fee award should be reduced by either $35,064 or $98,460. The

trial court ordered that the fees would be awarded from the date upon which Anne’s counsel

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received the call from DeJong’s attorney regarding her testimony. According to Anne, the only

evidence of when the call was received was her own counsel’s statement that he received the call

“about a week before trial,” or January 9, which should reduce the fees by $35,064. However, at

argument on the petition, Anne’s counsel stated that he did not remember the date of the phone

call but believed that it came after the trial had commenced. In any event, the phone call was not

the reasonable point at which to begin to assess fees, as she was “entitled to test the hypothesized

testimony by examining the witness under oath, which did not occur until January 17. Using that

date, fees should be reduced by a total of $98,460.

¶ 30 However, the declaration of John Chen, lead counsel for the Scheck Defendants, was

attached to the submitted billing summaries. Chen averred that he spoke with Anne’s counsel

about DeJong’s testimony “prior to the trial in this case.” He also mentioned a “settlement

conference with this Court on or about January 4, 2018.” At argument, Scheck Defendants counsel

(not Chen) stated that “we had a settlement conference before trial started where we specifically

talked about [DeJong’s attorney’s] phone call and Ms. DeJong’s testimony.”

¶ 31 Anne did not raise any such challenge to the calculation of the fees or the correctness of

Chen’s affidavit in her opposition brief to the fee petition. As such, this contention is forfeited.

However, even if we considered the issue, we would not conclude that it was an abuse of discretion

to award the fees beginning January 4, 2018. There was evidence that Anne’s counsel was aware

of DeJong’s proposed testimony at that time and still proceeded through trial and appeal knowing

the import of that testimony and even failing to address it. We find no error here.

¶ 32 III. CONCLUSION

¶ 33 For these reasons, the judgment of the circuit court of Du Page County is affirmed.

¶ 34 Affirmed.

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