Pendleton v. Pendleton

50 F. App'x 770
CourtCourt of Appeals for the Seventh Circuit
DecidedOctober 25, 2002
DocketNos. 01-1315, 01-1618, 02-2255, 02-2395
StatusPublished

This text of 50 F. App'x 770 (Pendleton v. Pendleton) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pendleton v. Pendleton, 50 F. App'x 770 (7th Cir. 2002).

Opinion

ORDER

In 1987 Esther Pendleton died leaving an irrevocable trust as the beneficiary of her estate and her three children Richard, Marcia, and Brian as equal beneficiaries of the trust. In 1998 Richard and Marcia (“plaintiffs”) sued Brian for waste and mismanagement of the estate and sued LaSalle National Bank, the trustee and administrator of the estate, for state-law tort claims. The district court entered judgment against Brian for $491,377.20 and granted summary judgment for LaSalle. Before us now are four consolidated appeals: Brian appeals the denial of his two motions for relief from judgment under Federal Rule of Civil Procedure 60(b) (Nos. 01-1315 & 01-1618); plaintiffs appeal the summary judgment for LaSalle on their negligence and breaeh-of-fiduciaryduty claims (No. 02-2255), as well as the partial summary judgment for LaSalle on their conversion claims (No. 02-2395). [772]*772With respect to Brian’s appeals, we affirm and dismiss; with respect to plaintiffs’ appeals, we reverse and remand in part and affirm in part.

In September 1987 Brian, along with an associate, was named co-administrator of Esther’s open estate. The estate’s primary asset was a house, which Brian immediately began living in without paying rent. Then, in order to delay sale of the house, Brian undertook a “rehabilitation” project that resulted in damage to the house and encumbered the property with a $200,000 mortgage. He also converted limited-partnership assets belonging to the estate to his own name. In 1991 plaintiffs successfully petitioned to have Brian and his associate removed as administrators and to have LaSalle, which also acted as trustee and had previously administered Esther’s disabled estate in 1986, appointed instead as administrator. Brian meanwhile continued to live in the house until he was forcibly ejected in 1993. During this interval and following his removal he filed a number of frivolous motions to further delay sale of the house. These efforts notwithstanding, the house was sold later that year at auction in a “gutted,” “as is” condition for $816,000 (subject to the $200,000 mortgage). In July 1998 plaintiffs sued Brian for fraud and breach of fiduciary duty for wasting the estate’s assets.

At the same time the plaintiffs also sued LaSalle for negligence and breach of fiduciary duty. They alleged that LaSalle was negligent and breached its fiduciary duties as trustee and as administrator of the estate by (1) not protecting the estate’s assets from depletion by Brian; (2) investing the estates assets in money-market accounts managed by LaSalle rather than in more profitable investments; and (3) failing to close the estate and distribute its assets in a timely manner. The plaintiffs also added two conversion claims based on LaSalle’s failure to distribute the trust’s assets following the closing of the estate.

In January 1999 the district court granted plaintiffs’ motion for a default judgment against Brian after he failed, despite repeated continuations, to answer their complaint. On September 23, the district court, following a hearing, entered judgment against Brian for $491,377.20. After filing multiple post-judgment motions Brian appealed the judgment to this court, but we dismissed the appeal for want of prosecution on December 6, 2000. Brian then filed a number of motions in district courb-two of which are relevant here. First, he filed a Rule 60(b) motion on December 21, 2000, which the district court denied on January 9, 2001. Brian appealed that decision on February 8 (this is No. 01-1315). Second, he filed another Rule 60(b) motion (to reconsider his previous 60(b) motion) on February 16, which the district court denied on February 26. He appealed that decision on April 12 (this is No. 01-1618).

Meanwhile, in February 2000 the district court denied motions for partial summary judgment that both the plaintiffs and LaSalle had filed on the conversion claims. After LaSalle distributed some of the trust’s assets to the plaintiffs, the parties again filed motions for partial summary judgment on the conversion claims. In June the district court denied plaintiffs’ motion but granted LaSalle’s motion. Then, in April 2002, the district court granted LaSalle’s motion for summary judgment on the remaining claims of negligence and breach of fiduciary duty, concluding that the claims were barred by Illinois’s five-year statute of limitations.

Brian’s appeals require brief discussion. The notice for Brian’s second appeal was filed more than 30 days after the district court denied his second Rule 60(b) motion; this appeal is untimely and [773]*773therefore dismissed. Fed. R.App. P. 4(a)(1)(A); Berwick Grain Co., Inc. v. Ill. Dep’t of Agric., 189 F.3d 556, 558 (7th Cir.1999). The first appeal was timely but only as to the denial of his initial Rule 60(b) motion. In addition to making legal arguments attacking the underlying judgment, Brian contends that the judgment is void for lack of subject matter jurisdiction based on a failure to satisfy the amount-in-controversy requirement. 28 U.S.C. § 1332(a). But Rule 60(b) is not a vehicle for correcting putative legal errors in an underlying judgment or errors that could have been challenged on direct appeal. Bell v. Eastman Kodak Co., 214 F.3d 798, 800-01 (7th Cir.2000). And while a void judgment may be a valid ground for relief under Rule 60(b), see Marques v. Fed. Reserve Bank of Chicago, 286 F.3d 1014, 1018 (7th Cir.2002), a collateral challenge to subject matter jurisdiction, such as Brian’s here, is not valid because it could have been raised on direct appeal, Bell, 214 F.3d at 801. Therefore, the district court correctly denied Brian’s motion.

Turning to the plaintiffs’ appeals, we first discuss the summary judgment for LaSalle on the negligence and breach-offidueiary-duty claims. We review the district court’s grant of summary judgment de novo. Traylor v. Brown, 295 F.3d 783, 787 (7th Cir.2002). Under Illinois law, which applies in this diversity jurisdiction case, the applicable statute of limitations for these claims is five years.1 735 ILCS 5/13-205; Armstrong v. Guigler, 174 Ill.2d 281, 220 Ill.Dec. 378, 673 N.E.2d 290, 292-97 (1996); Havoco of America, Ltd. v. Sumitomo Corp. of Am., 971 F.2d 1332, 1337 (7th Cir.1992). Claims accrue, commencing the limitations period, when “the party seeking relief knows or reasonably should know of an injury and that it was wrongfully caused.” Belleville Toyota, Inc. v. Toyota Motor Sales, Inc., 199 Ill.2d 325, 264 Ill.Dec. 283, 770 N.E.2d 177, 192 (2002); Knox Coll. v. Celotex Corp.,

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

Related

Cite This Page — Counsel Stack

Bluebook (online)
50 F. App'x 770, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pendleton-v-pendleton-ca7-2002.