Hendrick v. Hendrick

Appellate Court of Illinois·Decided July 7, 2026·No. 5-25-0250·Unpublished

Opinion

NOTICE

2026 IL App (5th) 250250-U NOTICE

Decision filed 07/07/26. The This order was filed under text of this decision may be NO. 5-25-0250 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

ELIZABETH HENDRICK, Individually, as co-Trustee ) Appeal from the of a separate trust created for the benefit of Elizabeth ) Circuit Court of Hendrick upon the division of Trust B created under the ) Champaign County. Last Will and Testament of Robert J. Hendrick, Deceased, ) and as co-Trustee of a separate trust created for the ) benefit of Elizabeth Hendrick under the Last Will and ) Testament of Mary Lee Hendrick, Deceased; ) REBECCA ROWE, and HENDRICK DORMS, INC., )

)

Plaintiffs, )

)

v. ) No. 23-LA-94 )

ROBERTA HENDRICK, Individually, as co-Trustee of ) a separate trust created for the benefit of Elizabeth ) Hendrick upon the division of Trust B created under the ) Last Will and Testament of Robert J. Hendrick, Deceased, ) and as co-Trustee of a separate trust created for the benefit ) of Elizabeth Hendrick under the Last Will and Testament ) of Mary Lee Hendrick, Deceased; TERRELL WILLIAMS; ) ALEXANDRA KRUEGER; TIMOTHY KRUEGER; ) and EMILY HENDRICK, )

)

Defendants )

)

(Elizabeth Hendrick, Individually, as co-Trustee of a ) separate trust created for the benefit of Elizabeth Hendrick ) upon the division of Trust B created under the Last Will ) and Testament of Robert J. Hendrick, Deceased, and as ) co-Trustee of a separate trust created for the benefit of ) Elizabeth Hendrick under the Last Will and Testament of ) Mary Lee Hendrick, Deceased, and Rebecca Rowe, ) Plaintiffs-Appellants; Roberta Hendrick, Individually, as ) co-Trustee of a separate trust created for the benefit of ) Elizabeth Hendrick upon the division of Trust B created )

under the Last Will and Testament of Robert J. Hendrick, ) Deceased, and as co-Trustee of a separate trust created for ) the benefit of Elizabeth Hendrick under the Last Will and ) Honorable Testament of Mary Lee Hendrick, Deceased, Defendant- ) Jason M. Bohm, Appellee). ) Judge, presiding.

JUSTICE McHANEY delivered the judgment of the court.

Justices Sholar and Bollinger concurred in the judgment.

ORDER

¶1 Held: Where the circuit court erred in granting the defendants’ motion to dismiss count I of the plaintiffs’ third amended complaint pursuant to section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 2022)), we reverse and remand.

¶2 Robert and Mary Lee Hendrick created wills containing nearly identical trusts. The corpus of both trusts currently consists of 40% of the outstanding shares of Hendrick Dorms, Inc. (Hendrick House). Prior to the deaths of the Hendricks, Robert and Mary Lee established estate plans with separate trusts. The trusts established a plan for their children to manage Hendrick House with the underlying goal to provide a stream of consistent income for their children— Elizabeth (Betsy), Roberta (Bobbie), and James (Jim). ¶3 Robert died in 1978 and Mary Lee died in 1984. Their surviving children were named as co-trustees over the assets in both trusts. Jim died in 2018, and thereafter, Betsy and Bobbie have served as co-trustees. ¶4 In late 2015, Bobbie was instrumental in having her husband Terrell Williams (Terrell) voted in as president of Hendrick House. Betsy contends that with Terrell at the helm, Hendrick House was no longer able to provide income to their families, commercial loans were in default, and property taxes went unpaid. In June 2024, Bobbie allegedly suggested that Hendrick House needed to be sold if loans could not be refinanced by October 31, 2024.

¶5 Betsy and her daughter, Rebecca Rowe (Becky), filed this lawsuit on July 7, 2023, against Bobbie, Terrell, and all other directors (Jim’s surviving daughter and Bobbie’s children) alleging that Bobbie breached her fiduciary duty, both as co-trustee of both trusts and as a director of Hendrick House. The complaint sought damages and an appointment of a receiver for Hendrick House. ¶6 The trial court granted Bobbie’s motion to dismiss counts I, II, IV, V, and VI of the third amended complaint. Betsy and Becky then filed a motion asking the circuit court to dismiss count III of their amended complaint with prejudice, to enable an appeal. The court granted this motion on February 24, 2025. ¶7 On appeal, Betsy and Becky challenge the dismissal of count I of the third amended complaint—the count alleging that Bobbie breached her fiduciary duties as co-trustee of the two trusts. For the following reasons, we reverse and remand for further proceedings. ¶8 I. BACKGROUND ¶9 Hendrick House is a private dormitory on the University of Illinois campus that is owned and operated by a Delaware corporation formed in 1956—Hendrick Dorms, Inc. Robert and Mary Lee Hendrick founded, constructed, and managed the profitable operation of Hendrick House during their lifetimes. ¶ 10 When Robert died in 1978, he owned 207 shares of Hendrick House. When Mary Lee died in 1984, she owned an additional 131 shares. The total shares owned by Robert and Mary Lee— 338 shares—constituted a majority of the 671 total outstanding shares. The remaining 333 shares were equally owned by Robert and Mary Lee’s three children. The estate plans created by Robert and Mary Lee were designed to foster cooperation among their children in managing Hendrick House, and to create a steady income stream for the children and their descendants.

¶ 11 The wills of Robert and Mary Lee each contained a trust to hold the Hendrick House shares during the children’s lives. Robert’s estate plan provided that his 207 shares of Hendrick House stock would be allocated to his three children who were still alive on the date that both he and Mary Lee were deceased. Each designated beneficiary was to be paid annual income for his or her shares during the beneficiary’s lifetime. Robert’s trust directed that if a beneficiary died, his or her share would be distributed to that beneficiary’s living descendants. In his will, Robert also provided that his three children must serve as co-trustees of his trust. Upon Jim’s death in 2018, the remaining two children, Betsy and Bobbie, continued to serve as co-trustees. The only assets in Robert’s trust are the 207 shares of Hendrick House. ¶ 12 Mary Lee’s will was similarly structured in that it created her trust, and her 131 shares were to be allocated equally to Betsy, Bobbie, and Jim. Like Robert’s trust, the net income was to be paid to each beneficiary, and the children were to serve as co-trustees. The will stated that any sale of Hendrick House “shall only be by unanimous agreement.” Mary Lee’s trust maintained its original 131 shares even though Jim had died because her will’s terms require that shares remain “in trust” until disposition of the stock. The only assets in Mary’s trust are the 131 shares of Henrick House. ¶ 13 All directors and officers of Hendrick House are family members. Betsy became the president of Hendrick House after both Robert and Mary Lee died and served in that capacity until 2016. In 2015, Hendrick House’s board of directors was comprised of seven family members: Betsy, Bobbie, Jim, Betsy’s daughter, Becky, Bobbie’s daughter Alexandra Krueger, Bobbie’s son Tim Krueger (Tim), and Jim’s daughter, Emily Hendrick (Emily). Becky, who was hired in May 1998 as the general manager of Hendrick House, continued in that position and served as a corporate director until May 2017.

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