LeCrone v. Leckrone

580 N.E.2d 1233, 220 Ill. App. 3d 372, 162 Ill. Dec. 814, 1991 Ill. App. LEXIS 1601

• Court: Appellate Court of Illinois
• Decided: September 19, 1991
• Docket: 1-89-1458
• Status: Published

Opinions

JUSTICE JOHNSON

delivered the opinion of the court:

Respondents, Thomas W. Murphy and Johnson, Cusack & Bell, Ltd., appeal from an order of the circuit court granting petitioner, Harriet Leckrone, sanctions in the amount of $7,000 pursuant to section 2—611 of the Code of Civil Procedure (Ill. Rev. Stat. 1989, ch. 110, par. 2—611). Harriet Leckrone was also one of the defendants in the underlying suit in this appeal. On appeal, respondents raise the following issues: (1) whether the trial court erred in imposing sanctions against them for their filing of the underlying complaint against defendants, Harriet Leckrone and William J. Flotow; and (2) whether the amount of the sanctions imposed was excessive.

We reverse.

The facts, as we can discern from the record, reveal that on August 9, 1974, Anthony J. Lecrone and his wife, Hattie Lecrone, each executed a will. Anthony and Hattie are the parents of Charles Le-crone and Gordon L. Leckrone and the grandparents of the plaintiffs in the underlying suit. The plaintiffs in that suit are Thomas C. Le-crone, Connie Lecrone Loper, Scott H. Lecrone, and Dale E. Lecrone. Plaintiffs’ father, Charles Lecrone, predeceased his parents.

Pursuant to the terms of Anthony’s will, all of his property was bequeathed to his wife, Hattie. In the event she predeceased him, one-half of his estate was bequeathed to his son, Gordon. The other one-half of Anthony’s estate was to be divided, in equal shares, among plaintiffs.

The distribution of the assets in Hattie’s will differed from the distribution in Anthony’s will. Hattie provided that $1,000 was to be left to each of the four plaintiffs. Plaintiffs’ $4,000 was to be paid out of her savings account at York Federal Savings and Loan Association. The balance of the savings account was bequeathed to Gordon. The remainder of her estate was bequeathed to her husband. In the event Anthony predeceased her, the remainder of her estate was left to Gordon. If Gordon did not survive her, plaintiffs were to receive, in equal shares, the remainder of the estate.

When Anthony and Hattie became infirm, they moved in with Gordon and his wife, Harriet Leckrone. Gordon and Harriet then purchased another house, in joint tenancy, from the proceeds of the sale of the Lecrones’ home. The Lecrones resided with Gordon and his wife for approximately six months. The Lecrones were then placed in a nursing home, where they subsequently died.

Prior to the deaths of Anthony and Hattie Lecrone, Gordon allegedly contacted Thomas Lecrone regarding the terms of his parents’ wills. Gordon expressed a concern that his wife, Harriet, and his children would not be provided for in the event he and Anthony predeceased Hattie. According to Gordon, his parents’ entire estate would eventually pass on to plaintiffs to the exclusion of Harriet and his children. Gordon then allegedly entered into an oral agreement in which he agreed to distribute one-half of the property that he would inherit from his parents to plaintiffs.

Plaintiffs alleged that Gordon felt obligated to make such a promise because of the familial ties between himself and plaintiffs. This promised distribution was in spite of the fact that Hattie only bequeathed $1,000 to each of the plaintiffs. In exchange for the promised distribution, plaintiffs alleged that Gordon extracted a promise from them that they would forgo half of their grandparents’ estate to provide for Gordon’s wife and children if Anthony died first and Gordon predeceased Hattie.

It was further alleged that reference is made to this oral agreement in a letter from Gordon dated December 19, 1980. Specifically, the letter states, in pertinent part:

“While [Anthony and Hattie] do have separate wills, they are outdated and could present some problems. There are no provisions for my widow [Harriet] or children in the event anything happened to me. Similarly there are no provisions for you and the other children to share equally with me should I survive them. As I told you, my feelings are that I would see that this was done, and I look to you to see that a similar fair distribution were made if I am not here to do it. I would ask that half of my share go to Harriet and the other half be split equally between my daughter Ginny and my son Don.”

On November 15, 1981, Anthony died and pursuant to the terms of his will he left all his property to Hattie. Approximately four months later, Hattie died, leaving all of her property to Gordon. Plaintiffs did not receive the gifts provided for them in Hattie’s will as her savings account had previously been closed.

In a letter dated July 27, 1982, Gordon informed Thomas Lecrone that Hattie’s estate amounted to approximately $80,000. Pursuant to the parties’ previous agreement, Gordon stated his intention to distribute half of the $80,000 estate to plaintiffs over a period of three years. Gordon’s letter provides, in relevant part:

“The attorney is nearly ready to file the forms with the state and I think the $80,000 figure for the final estate will be very close. What I have in mind is the following: First, each of you will receive the $1,000 as set up in the will, then I plan to send each of you $3,000.

*** If all goes well next year I plan to send each of you another $3,000 and the same the following year.

***

*** Harriet is in complete accord with my plans but by putting it clearly in my will, it leaves no room for any problems.”

In a subsequent letter, dated September 3, 1982, Gordon informed the plaintiffs that his mother’s estate was worth approximately $79,127. He explained that although he was legally entitled to all of the estate, he would send each of the plaintiffs $1,000 after the estate closed. Gordon wrote:

“I still feel as I always have that half of the state [sic] will be considered a moral obligation on my part to divide between the four of you. *** In the meantime, I have drwan [sic] up a new will that sets aside $9,800 for each of you (less any distribution I make to you).”

Plaintiffs allege that this letter also conforms to the parties’ previous agreement that plaintiffs would receive approximately one-half of Hattie’s estate. Under this arrangement, each of the plaintiffs would still receive approximately $10,000. Although the funds were to be distributed prior to Gordon’s death, the will ensured that the agreed upon distributions would be made.

On October 15, 1982, Gordon gave each of the plaintiffs a check in the amount of $1,000. On May 4, 1985, Gordon executed his will in which he provided that each of the plaintiffs would receive $7,500 upon the maturity of a five- or seven-year security instrument.

On October 1, 1986, Gordon Leckrone died. On December 20, 1986, the co-executor of Gordon’s will, William Flotow, sent a letter to plaintiffs informing them that the assets in Gordon’s estate had been depleted to the point where there were no existing funds to make the promised distributions to plaintiffs.

On March 26, 1987, plaintiffs filed a complaint against Harriet Leckrone individually, and Harriet Leckrone and William Flotow as co-executors of the will of Gordon Leckrone. Plaintiffs, through their attorneys, the respondents, sought to impose a constructive trust upon the estate and its executors for the covert dissipation of the funds allegedly earmarked for plaintiffs. Plaintiffs also requested an accounting of Gordon’s estate and injunctive relief to prevent further dissipation of the assets in the estate.

Prior to filing the suit, plaintiffs contacted respondents to determine whether they had a potential cause of action. In an opinion letter dated February 9, 1987, respondent Thomas W. Murphy on behalf of respondent law firm stated that a cause of action for a constructive trust could be maintained based on the case of Labarbera v. Labarbera (1983), 116 Ill. App. 3d 959. Respondents were then retained by plaintiffs to file the action against defendants.

Defendants, in response, proceeded to file a motion to dismiss plaintiffs’ complaint. Prior to the time defendants’ motion to dismiss was heard, respondents withdrew from further representation of plaintiffs. Respondents allegedly withdrew because of plaintiffs’ failure to pay their legal fees. On January 27, 1989, in an ex parte hearing, the trial court dismissed plaintiffs’ complaint with prejudice. The trial court also retained jurisdiction of the case for purposes of hearing Harriet Leckrone's section 2 — 611 petition filed against both plaintiffs and respondents.

On March 29, 1989, plaintiffs and respondents filed a motion to strike and dismiss the section 2—611 petition. In an order dated May 23, 1989, the trial court awarded Harriet $7,000 in sanctions against respondents. Plaintiffs were not sanctioned by the court. The trial court found, inter alia, that the complaint was not well grounded in law or in fact. The court held that a reasonable inquiry into the matters alleged in the complaint would have enabled the respondents to ascertain “the invalidity and lack of merit” of their allegations. The amount of the sanctions was based upon Harriet’s costs in defending against plaintiffs’ suit. It is from this May 23 order that respondents appeal.

Section 2—611 of the Code of Civil Procedure provides, in pertinent part:

“Sanctions. Every pleading, motion and other paper of a party represented by an attorney shall be signed by at least one attorney of record in his individual name ***. *** The signature of an attorney or party constitutes a certificate by him that he has read the pleading ***; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. *** If a pleading *** is signed in violation of this Section, the court, upon motion or upon its own initiative, shall impose *** an appropriate sanction ***.” (Ill. Rev. Stat. 1989, ch. 110, par. 2—611.)

Sanctions may, therefore, be imposed against an attorney where there is insufficient inquiry into the facts of the case or existing law.

Harriet’s petition alleged that the original complaint revealed a lack of good faith on the part of plaintiffs and their attorneys. It further stated that none of the claims advanced by plaintiffs was warranted by existing law nor did the complaint contain good-faith arguments for the extension, modification, or reversal of existing law. The petition alleged that a reasonable inquiry by plaintiffs’ attorneys would have revealed the invalidity of their clients’ claims and the lack of merit in the complaint. Lastly, the petition alleged that as a result of this lawsuit Harriet incurred expenses totaling $7,155.48 and that she was entitled to sanctions against plaintiffs and their attorneys as provided for in section 2 — 611. On appeal, Harriet maintains that the trial court did not err in awarding her $7,000 in sanctions against respondents.

In Chicago Title & Trust Co. v. Anderson (1988), 177 Ill. App. 3d 615, this panel recently held that section 2—611 sanctions may not be imposed to penalize a party because of a failure to prevail in the litigation of their case. (Chicago Title & Trust Co., 177 Ill. App. 3d at 621-22.) The section does not empower the trial court to impose sanctions simply because an argument or theory of recovery is found to be unjustified. Chicago Title & Trust Co., 177 Ill. App. 3d at 622.

The trial court, in the instant case, awarded sanctions against respondents because it found their theory of recovery to be unjustified. The court held that respondents’ reliance on Labarbera v. Labarbera (1983), 116 Ill. App. 3d 959, to support their constructive trust theory was misplaced. The trial court distinguished Labarbera on grounds that Labarbera involved an intestate estate and in the instant case there was a will in existence, the implication being that a constructive trust may not be imposed where there is an existing will. Sanctions were awarded based upon the trial court’s belief that respondents’ theory of recovery was contrived and lacked meaningful investigation of the facts or existing law. The trial court also found that the requested accounting was inappropriate in that an accounting had already been prepared at the time of plaintiffs’ request.

A trial court’s award of fees pursuant to section 2 — 611 sanctions will not be disturbed absent an abuse of discretion. (In re Custody of Caruso (1989), 185 Ill. App. 3d 739, 744.) Although the award of fees is discretionary, we find that the trial court’s sanctioning of respondents was unwarranted in this case.

In Chicago Title & Trust Co. v. Anderson (1988), 177 Ill. App. 3d 615, this panel provided a thorough explanation of what is required of counsel in making a “reasonable inquiry” into the facts and existing law prior to the filing of a complaint. We stated that “[wjhether a particular inquiry was ‘reasonable’ must be determined by an objective standard based upon the circumstances existing at the time the pleading or other legal paper was presented to the court.” (Chicago Title & Trust Co., 177 Ill. App. 3d at 623.) We also found that the advisory committee notes to Federal Rule 11, the Federal counterpart to section 2—611, instructive in ascertaining the purpose of section 2—611. We noted that “ ‘[t]he rule is not intended to chill an attorney’s enthusiasm or creativity in pursuing factual or legal theories.’ ” (Chicago Title & Trust Co., 177 Ill. App. 3d at 623, quoting Advisory Committee Notes to Federal Rule 11, 97 F.R.D. 165, 199 (1983).) Moreover, this panel noted that a trial court is not empowered by section 2—611 to impose a sanction simply because it found an argument or requested ground for relief to be unjustified. Chicago Title & Trust Co., 177 Ill. App. 3d at 622.

Respondents’ argument that a constructive trust should be imposed based upon Labarbera v. Labarbera (1983), 116 Ill. App. 3d 959, may be considered tenuous but would not warrant the imposition of sanctions. In Labarbera, the plaintiff brought an action against his brother’s widow for a constructive trust over funds which belonged to his deceased parents. These funds were allegedly misappropriated by the plaintiff’s brother, who had since died. Apparently, prior to the plaintiff’s brother’s death, the plaintiff and his brother had entered into an agreement in which the plaintiff was to receive certain funds from their parents’ estate. The funds, however, were never given to the plaintiff.

The appellate court, in reversing the trial court’s decision, allowed for the imposition of a constructive trust. The court took into consideration principles of equity and the fact that an agreement had been reached between the plaintiff and his brother regarding the distribution of funds in their parents’ estate. (Labarbera, 116 Ill. App. 3d at 965.) The appellate court held that the funds had been obtained by the plaintiff’s brother by virtue of the familial and confidential relationship between the plaintiff’s brother and his father. Although the court concluded that the plaintiff’s claim was based upon his statutory intestate share of his parents’ estate (Labarbera, 116 Ill. App. 3d at 964 n. 2), its imposition of the constructive trust was due to the misappropriation of the funds by the plaintiff’s brother.

We do not find the trial court’s factual distinguishing of La barbera persuasive. Nor do we find respondents’ theory of recovery so untenable as would warrant sanctions. The fact that Labarbera involved an intestate estate does not rule out the possibility that a constructive trust may be imposed in similar circumstances where there is a will in existence. As respondents argue, constructive trusts and wills need not be mutually exclusive. A constructive trust may be imposed despite the existence of a will. See Hobin v. O’Donnell (1983), 115 Ill. App. 3d 940, 942; Neurauter v. Reiner (1969), 117 Ill. App. 2d 141, 146-47.

A constructive trust is simply a restitutionary remedy which may be imposed to compel one who unfairly holds property to convey it to another to whom it justly belongs. (Zack v. Sims (1982), 108 Ill. App. 3d 16, 29.) “[A] constructive trust may be imposed whenever facts are shown in which a person holding property would be unjustly enriched if he were permitted to retain that property.” (Emphasis added.) (Zack, 108 Ill. App. 3d at 29.) “Constructive trusts are divided into two general groups — one, where actual fraud exists, and the other, where there exists a confidential or fiduciary relationship.” David v. Russo (1980), 91 Ill. App. 3d 1023, 1027.

While fraud is not alleged in the instant case, we find that it is not too far-fetched for respondents to allege that a confidential relationship existed between plaintiffs and Gordon by virtue of their familial relationship. “There are no set bounds as to what type [of] relationship is necessary to invoke such protection. ‘The origin of the confidence and the source of influence are immaterial. It exists when one person trusts in and relies on another.’ ” (David, 91 Ill. App. 3d at 1027, quoting Anderson v. Lybeck (1958), 15 Ill. 2d 227, 232.) Plaintiffs alleged that “Gordon L. Leckrone occupied a special position of confidence and trust with plaintiffs.”

In light of our decision reversing the trial court’s award of sanctions, we need not address' the second issue raised by respondents concerning the excessiveness of the imposed sanctions.

For the foregoing reasons, the decision of the trial court is reversed.

Reversed.

JIGANTI, P.J., concurs.