2014 IL App (1st) 121173
FOURTH DIVISION May 1, 2014
Nos. 1-12-1585 & 1-12-2196 (cons.)
LYLE SPENCER, JR., as Beneficiary of the Lyle ) Appeal from the M. Spencer Trust, ) Circuit Court of ) Cook County. Plaintiffs-Appellants, ) ) v. ) No. 09 CH 41964 ) JOAN DI COLA, as Successor Trustee of ) the Lyle M. Spencer Trust, ) ) Defendant-Appellee ) ) (Loren Spencer, a Minor, Lyle ) Spencer III, a Minor, and Melissa ) Spencer, a Minor, as Beneficiaries of the Lyle ) M. Spencer Trust, ) ) Plaintiffs; ) ) Emily Spencer and Julia Spencer, ) as Beneficiaries of the Lyle M. Spencer Trust, ) and the Spencer Foundation, and Illinois ) Not-For-Profit Corporation, ) The Honorable ) LeRoy K. Martin Jr. Defendants). ) Judge Presiding.
LYLE SPENCER, JR., as Beneficiary of the Lyle ) Appeal from the M. Spencer Trust, ) Circuit Court of ) Cook County. Nos. 1-12-1585 & 1-12-2196 (Cons.)
Plaintiffs-Appellants, ) ) v. ) No. 09 CH 41964 ) JOAN DI COLA, as Successor Trustee of ) the Lyle M. Spencer Trust, ) ) Defendant-Appellee ) ) (Loren Spencer, a Minor, Lyle ) Spencer III, a Minor, and Melissa ) Spencer, a Minor, as Beneficiaries of the Lyle ) M. Spencer Trust, ) ) Plaintiffs; ) ) Emily Spencer and Julia Spencer, ) as Beneficiaries of the Lyle M. Spencer Trust, ) and the Spencer Foundation, and Illinois ) Not-For-Profit Corporation, ) The Honorable ) LeRoy K. Martin Jr. Defendants). ) Judge Presiding.
JUSTICE LAVIN delivered the judgment of the court, with opinion. Justices Fitzgerald Smith and Epstein concurred in the judgment and opinion.
OPINION
¶1 In the matter before us, we confront an appeal by beneficiaries of a trust, who claim that
they ought to be able to appoint a corporate trustee to effectively replace an individual trustee,
without any proof of cause for removal, in a manner that they suggest is consistent with the
trust's terms. The original trust documents provided for both an individual trustee and a
corporate trustee. Many years before the action triggering this appeal was filed, however, the
original corporate trustee filed suit asking to be removed because of a perceived conflict between
the corporate trustee, the appointed individual trustee and several beneficiaries (No. 82 CH 436).
In the 1982 order that granted this request, the trial court specifically found that the relevant will
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creating the trust did not "require the appointment of a successor corporate trustee." Two years
later, pursuant to petition, the trial court reformed a trust provision to grant the adult
beneficiaries the power to appoint successor trustees (No. 84 CH 2159). More than two decades
later, disputes arose concerning the amount of distributions by the individual successor trustee,
which led the beneficiaries to file the present action (No. 09 CH 41964). The beneficiaries, led
by plaintiff Lyle Spencer, Jr., initially wanted to remove the trustee but ultimately changed
course, asserting that they were merely attempting to appoint a corporate trustee, notwithstanding
the 1982 action. The beneficiaries also executed documents attempting to appoint a "successor"
or "substitute" corporate trustee. After cross-motions for summary judgment were filed, the trial
court denied the beneficiaries relief. This appeal followed.
¶2 I. BACKGROUND
¶3 We recite only those facts necessary to resolve the issues raised on appeal. Lyle M.
Spencer, Sr. (the Settlor), died in 1968, leaving an estate in excess of $75 million. The portion of
his estate relevant to this appeal consisted of a family trust, which left $3 million to his four male
children, Lyle Spencer, Jr. (Lyle), Steven Spencer, Richard Spencer and David Spencer, as well
as their descendants. The trust was primarily oriented toward education and housing, with the
possibility of assisting in the start up of businesses. In addition, the trust language empowered
these individual and corporate trustees with great discretion, including the ability to make
unequal distributions to the beneficiaries. As originally drafted, the trust appointed Harlowe E.
Bowes as the individual trustee and Harris Trust and Savings Bank or its corporate successor
(Harris) as the corporate trustee. Article VIII(a) of the trust provided, in pertinent part, as
follows:
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"If at any time no individual hereunder is acting as Trustee, then such individual as shall
be designated by a majority of the partners of Sidley & Austin or of any successor to the
law practice of said firm, shall act as successor individual Trustee."
Thus, the original trust contemplated that an individual successor would be appointed if no
individual was acting as trustee. We note that the trust did not specifically provide for the
appointment of a corporate successor trustee in the event that no corporation was acting as
trustee.
¶4 Moreover, article VIII(e) stated as follows:
"The Trustees shall have power to appoint any bank or trust company wherever
located as substitute Trustee of any trust, if and as often as the Trustees deem it
advantageous; to give the substitute Trustee such titles, powers and discretions as the
Trustees deem advisable; to remove a substitute Trustee; to accept the resignation of a
substitute Trustee; and to give a full release and discharge to a substitute Trustee,
conclusive and binding on all beneficiaries hereunder, by approving its accounts. A
substitute Trustee, upon its resignation or removal, shall transfer all trust property in its
possession as the Trustees direct. The Trustees' power to appoint and remove substitute
Trustees may be exercised in their discretion and shall be exercised if directed in writing
by a majority in interest of the beneficiaries of the trust."
Thus, this provision grants a sitting trustee several distinct powers, one of which must be
exercised at the appropriate direction of the beneficiaries. We further note that while article
VIII(e) provided that a substitute trustee could be removed, no provision in article VIII expressly
provided that the sitting trustee could be removed by the beneficiaries. Cf. Mucci v. Stobbs, 281
Ill. App. 3d 22, 24, 31 (1996) (the trust expressly provided the beneficiary the right to "remove"
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any sitting trustee); see also George G. Bogert et al., The Law of Trusts and Trustees § 520, at 27
(3d ed. 2000) ("If no provision for removal is made in the trust instrument or in the statutes of
the state, neither the settlor, the beneficiary, nor a co-trustee has the power of removal.").
¶5 More than a decade later in 1982, after approximately $1.2 million had been distributed
from the original trust, Harris filed suit asking to resign as the corporate trustee because of
disputes between Harris on one side, and Murray and the Settlor's children on the other (No. 82
CH 436). Harris wanted to deny distribution requests that Murray wanted to grant. Murray also
requested the court to order that he be the sole trustee, which drew no objection from Lyle or the
other beneficiaries. Murray argued that the trust documents envisioned the possibility that there
would not be any need for a corporate trustee and, more specifically, that there was no
"requirement that there always be a corporate trustee." The trial court agreed and ordered that
Murray be the sole trustee of the family trust.
¶6 Two years later, Murray asked the trial court to split the family trust into three individual
trusts to reflect the differing interests of the Settlor's three remaining sons, including Lyle, and
their descendants (No. 84 CH 2159). All three adult beneficiaries and Murray himself were in
agreement on the various changes. Notable to this appeal, Murray also asked to modify article
VIII(a) because Sidley & Austin, which had originally been charged with naming successor
individual trustees, did not wish to remain in that role. Murray, after consulting with each of the
three adult beneficiaries, suggested a modification that would allow the appointment of successor
trustees in any of the individual trusts if a "majority in number of the adult income beneficiaries"
so desired. The resulting trial court order specifically held that, "[t]he court reforms the terms of
clause (a) of Article VIII *** to provide for the appointment of one or more successor trustees of
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any of the three trusts *** by a majority in the number of the adult income beneficiaries of such
trust." The court's order did not, however, recite the modified provision verbatim.
¶7 Over the course of time, individual trustees resigned and individual trustees were
appointed. The last trustee appointed for the trust at issue in this appeal was defendant Di Cola,
a trusts and estates attorney from Boston, Massachusetts. This 1999 appointment came at the
behest of Lyle, who exercised his right under article VIII(a) to designate a successor individual
trustee. Lyle has five children who are beneficiaries of the trust. Some years later, Lyle's current
wife (notably, a nonbeneficiary) requested funds from Di Cola for day care and "pre-
kindergarten tuition," which Di Cola denied on the trust's language and the fact that several
beneficiaries were covered by the trust, which required the trustee to be careful about how funds
were distributed over time. Other conflicts developed over claims that the beneficiaries were
inadequately informed of the performance of investments. These several disagreements
apparently prompted Lyle to file this suit against Di Cola. 1
¶8 II. THE 2009 ACTION
¶9 In Lyle's multicount complaint, he averred that Di Cola should be removed for several
reasons, including for cause. He complained of not receiving requested disbursements, while
admitting that the trust gave the trustee broad discretion in making disbursements from the trust.
He also complained that the trust had not performed well due to a lack of diversification, even
though the trust granted the trustee virtually unfettered power to hire independent investment
advisors along with the power to invest and reinvest in stocks and other investments. The timing
of these alleged performance failures also happened to coincide with the precipitous 2008-09
stock market slump and the ensuing global recession, factors which Di Cola subsequently asked
1 Lyle initially filed the complaint on his own behalf along with his minor children. For the sake of simplicity, we will refer to this family/beneficiary group as Lyle, in deference to his representative capacity.
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the court to take judicial notice of. The trial court dismissed the counts attempting to remove
Di Cola for cause.
¶ 10 Lyle also sought removal of Di Cola pursuant to the terms of the trust. Without reciting
each and every allegation in the several complaints that were filed, the overarching demand of
Lyle was the immediate removal of Di Cola as the trustee, in whose place a corporate trustee,
Attorney's Title Guaranty Trust (ATG), would be named a "successor" trustee under article
VIII(a) or a "substitute" trustee under article VIII(e). Lyle, along with his adult daughters, Julia
and Emily, had executed agreements to that effect.
¶ 11 III. SUMMARY JUDGMENT
¶ 12 The parties then filed cross-motions for summary judgment. Lyle argued he was entitled
to summary judgment because the trust beneficiaries, through the aforementioned agreements,
appointed ATG as a "substitute" and "successor" trustee. In addition, Lyle argued that the Settlor
deliberately provided the beneficiaries with a method for the removal of the trustee. Di Cola
asserted, however, that she was entitled to summary judgment because the substitute trustee
provision did not authorize the removal of a sitting trustee, as opposed to the appointment and
removal of a fill-in trustee. She also argued that the reformed successor trustee provision
changed only the mechanism for appointing a successor trustee, leaving intact the requirement
that a vacancy first occur. Since Di Cola had been the sole trustee for a number of years, she
simply suggested to the court that there was no available vacancy.
¶ 13 Lyle abruptly changed course when responding to the motion for summary judgment
filed by Di Cola. He then stated that he was not attempting to remove Di Cola as trustee, while
reluctantly acknowledging that he was requesting that ATG essentially take over any and all
duties previously assumed by Di Cola. He added that the appointment of ATG would be
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appropriate because of the vacancy caused by the 1982 resignation of Harris. Thus, Lyle gave all
appearances of attempting to accomplish obliquely what he had been unable to achieve directly,
based on the court's earlier rulings that struck the counts geared toward removing Di Cola for
cause. This about-face left the court to decide only which party was entitled to summary
judgment on counts I and II of plaintiff's second-amended complaint.
¶ 14 At a hearing on the cross-motions, the parties each argued that the unambiguous language
of Article VIII(a) and (e) controlled the judge's decision on which party was entitled to summary
judgment. Lyle argued there was no limitations on the authority that can be given to a substitute
trustee and that ATG's appointment would be "a complete substitution." In contrast, Di Cola
argued a substitute was a temporary appointment for a discrete act. As to whether ATG could be
a successor trustee, Lyle argued that a vacancy was created when Harris resigned, whereas
Di Cola argued the court's prior ordered eliminated any vacancy. Di Cola further argued that
Lyle was bound by the trial court's prior determination in 1982 that a corporate trustee was
unnecessary.
¶ 15 After hearing extensive arguments, our learned colleague in the trial court granted
summary judgment to Di Cola and denied Lyle's motion for summary judgment. The court
agreed with Di Cola's analysis of the scope, function and power of a "substitute" trustee based
upon the language of the section itself, along with the normal usage of the term. In essence, the
court found that Lyle's interpretation of this relatively straightforward language would
effectively neuter the broad discretion afforded to the individual trustee who had been properly
appointed back in 1999. Article VIII(e) did not give the beneficiaries the right to tell the trustee
who to appoint but, rather, gave them the right to tell the trustee to exercise her discretion to
appoint or remove a substitute trustee. In addition, the court rejected the suggestion that
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beneficiaries could appoint successors at whim; rather, article VIII(a) was merely a mechanism
to appoint a new trustee where a vacancy existed. Moreover, the court found that it had
previously eliminated the corporate trustee position and thus, there was no vacancy. Following
the entry of summary judgment, the court awarded fees to Di Cola, over Lyle's objection, for her
defense of the claims brought against her. This appeal followed.
¶ 16 IV. ANALYSIS
¶ 17 On appeal, Lyle asserts the trial court erred in granting Di Cola summary judgment.
Specifically, he contends that article VIII(e) of the trust permitted the appointment of a substitute
corporate trustee, or alternatively, article VIII(a) permitted the appointment of a successor. We
begin by considering the former contention.
¶ 18 Summary judgment is warranted where affidavits, pleadings, depositions, admissions and
exhibits, when viewed in the light most favorable to the nonmovant, show that no genuine issue
of material fact exists so that the movant is entitled to judgment as a matter of law. Ruby v.
Ruby, 2012 IL App (1st) 103210, ¶ 13. In addition, where cross-motions for summary judgment
are filed, the parties concede that no genuine issue of material fact exists and invite the court to
determine the issues presented as a matter of law. Alshwaiyat v. American Service Insurance
Co., 2013 IL App (1st) 123222, ¶ 19. Thus, we review the trial court's ruling on the parties'
motions for summary judgment de novo. Ruby, 2012 IL App (1st) 103210, ¶ 13. We also
review the construction of a trust de novo. Dunn v. Patterson, 395 Ill. App. 3d 914, 919 (2009).
¶ 19 The same rules apply to the construction of wills and trusts. Harris Trust & Savings Bank
v. Donovan, 145 Ill. 2d 166, 172 (1991). The goal is to determine the settlor's intent, which the
court will effectuate unless contrary to law or public policy. Fifth Third Bank, N.A. v. Rosen,
2011 IL App (1st) 093533, ¶ 23. In addition, the intent to be determined is not that presumed to
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have been in the testator's mind but, rather, the intent expressed by the instrument's language. In
re Estate of Laas, 134 Ill. App. 3d 504, 509 (1985). Thus, courts consider the plain meaning of
the instrument's words in the context of the entire document (Ruby, 2012 IL App (1st) 103210,
¶ 19), rather than in isolation (Fifth Third Bank, N.A., 2011 IL App (1st) 093533, ¶ 23). If
possible, the court should construe a trust so that no language is treated as surplusage or rendered
insignificant. Ruby, 2012 IL App (1st) 103210, ¶ 19. Furthermore, courts should avoid
constructions which would render language nonsensical. Stein v. Scott, 252 Ill. App. 3d 611,
615-16 (1993).
¶ 20 A. Substitute Trustee
¶ 21 Here, article VIII(e) stated as follows:
"The Trustees shall have power to appoint any bank or trust company wherever
located as substitute Trustee of any trust, if and as often as the Trustees deem it
advantageous; to give the substitute Trustee such titles, powers and discretions as the
Trustees deem advisable; to remove a substitute Trustee; to accept the resignation of a
substitute Trustee; and to give a full release and discharge to a substitute Trustee,
conclusive and binding on all beneficiaries hereunder, by approving its accounts. A
substitute Trustee, upon its resignation or removal, shall transfer all trust property in its
possession as the Trustees direct. The Trustees' power to appoint and remove substitute
Trustees may be exercised in their discretion and shall be exercised if directed in writing
by a majority in interest of the beneficiaries of the trust."
We agree that article VIII(a) is unambiguous. Espevik v. Kaye, 277 Ill. App. 3d 689, 694 (1996)
(A trust provision is not ambiguous solely because the parties do not agree on its meaning.).
That provision is subject to only one reasonable interpretation. Cf. Fifth Third Bank, N.A., 2011
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IL App (1st) 093533, ¶ 24 (Ambiguity exists where the instrument's language is reasonably
susceptible to multiple interpretations.). The provision is not, however, reasonably subject to the
interpretation forwarded by Lyle, as he disregards what it means to be a substitute trustee
pursuant to this trust and that the power to appoint and remove is one of several distinct powers
granted by article VIII(e).
¶ 22 The trust gave the sitting trustee the power to appoint a trust company, if and as often as
the trustee deemed it advantageous. This eloquently demonstrates that the Settlor intended a
substitute trustee to be appointed for a particular purpose. The trust also gave the sitting trustee
the power to give the substitute trustee whatever titles, powers and discretions that the sitting
trustee, not the beneficiaries, deemed advisable. In addition, the trust gave the trustee the power
to accept the substitute trustee's resignation, to remove a substitute trustee, and to release and
discharge the trustee. Thus, the plain language of these provisions demonstrate that the Settlor
intended a sitting trustee to continue to exercise whatever powers were not specifically allocated
to the substitute trustee and to remove a substitute trustee at the sitting trustee's pleasure.
Accordingly, reading this provision in its entirety demonstrates that a substitute trustee is one
appointed for a specific purpose and a limited duration.
¶ 23 While the majority of beneficiaries have the right to require the sitting trustee to exercise
her "power to appoint and remove substitute Trustees," the plain language does not grant them
the right to name the substitute who will be appointed. In addition, no language in this provision
permits the beneficiaries to require a sitting trustee to exercise her power to give the substitute
trustee specific titles, powers and discretions. Lyle's assertion that the beneficiaries have the
power to direct "who, what, where, when and how" a substitute is to be appointed would require
us to graft new language onto this provision. Simply put, the trust does not grant Lyle the right
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to micromanage the sitting trustee or to appoint someone who will. Cf. Mucci, 281 Ill. App. 3d
at 24 (observing the trust provided that " '[t]he Substitute Trustee shall have all the powers and
discretions of the Trustee,' " but that the latter could remove the former at any time).
¶ 24 We also reject Lyle's suggestion that "[f]or the Substitute Trustee Clause to have any real,
consequential import to the beneficiaries, the beneficiaries must be able to appoint a substitute
trustee for the scope that they deem fit." Our construction permits beneficiaries to protect their
interest where a sitting trustee is unable to act to protect the beneficiaries' interests under
particular circumstances, including illness or conflict of interest, but has failed to appoint
someone who can. In addition, our construction does not foreclose beneficiaries from requiring
the appointment of a substitute trustee for a particular purpose but, rather, it forecloses the
beneficiaries from usurping the sitting trustee's role in determining what tools the substitute will
need to perform its function and who is best suited to accomplish that task. Furthermore, a
trustee is always bound by its obligation to carry out a trust's terms with fidelity and good faith.
Farris v. Department of Employment Security, 2014 IL App (4th) 130391, ¶ 30; see also Mucci,
281 Ill. App. 3d at 31 (observing that no trustee has unrestricted authority). Thus, we do not
share Lyle's concerns that abuses will ensue. Moreover, this is consistent with the Settlor's
overall intent to give the sitting trustee immense discretion. Accordingly, the beneficiaries
cannot force a sitting trustee to effectively replace herself by transferring all powers to a
substitute.
¶ 25 Here, Lyle contends that he gave Di Cola notice of the "Agreement to Direct the Trustee
Joan Di Cola of the Lyle M. Spencer Jr. Trust to Appoint a Substitute Trustee." The agreement
between Lyle and his adult children directed Di Cola to appoint ATG as substitute trustee and "to
have all titles, powers and discretions as allowed per the terms of the Will *** [and] the 1984
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Agreed order." Thus, regardless of how the beneficiaries characterized their agreement, they did
not direct Di Cola to appoint a substitute trustee for a specific purpose and for a limited duration;
rather, they directed her to completely replace herself with a substitute of their choosing. See
George W. Howard III, Removal, in Estate Planning for Illinois Attorneys: The Basics and
Beyond § 8.43 (Ill. Inst. for Cont. Legal Educ. 2012) ("[A]n unlimited right of removal can have
the income beneficiaries shopping for a trustee who will favor them."); cf. Mucci, 281 Ill. App.
3d at 31 (the trust expressly provided the beneficiary the right to "remove" any sitting trustee
without stating a reason). While Lyle complains that Di Cola did not appoint a substitute trustee
to act in any capacity, the only capacity for which Lyle requested a substitute trustee to be
appointed was inappropriate. Accordingly, Lyle attempted to exceed the powers granted him by
Article VIII(e).
¶ 26 B. Successor Trustee
¶ 27 We also reject Lyle's contention that article VIII(a) authorizes ATG's appointment as a
successor trustee. Specifically, he argues that a vacancy was not required to appoint a successor
trustee and that even if it was, a vacancy existed due to Harris's resignation more than 30 years
ago. As to the first of these related contentions, Lyle primarily relies on the trial court's 1984
order stating that "[t]he court reforms the terms of clause (a) of Article VIII *** to provide for
the appointment of one or more successor trustees of any of the three trusts *** by a majority in
the number of the adult income beneficiaries of such trust."
¶ 28 We find that the court's order is ambiguous. Reviewing courts generally determine a
court's intention through an order's language, but where such language is ambiguous, it is subject
to interpretation. Twardowski v. Holiday Hospitality Franchising, Inc., 321 Ill. App. 3d 509, 512
(2001). The order should then be construed in the context of the record and the circumstances
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that existed when the order was entered. Id. While Lyle contends this order entirely replaced the
prior article VIII(a), Di Cola argues that the order did not replace the entire provision so that the
two must be read together. In reforming article VIII(a), the court did not recite the new version
of that provision verbatim. In addition, while the order states that it reforms "the terms" of the
provision, the order does not specify whether it purports to reform all or some of those terms.
The language of the order considered alone is susceptible to either meaning. Accordingly, we
consider the relevant procedural circumstances that led to its entry.
¶ 29 As originally drafted by the Settlor, Bowes was the individual trustee. Harris, or the
entity that would become its legal successor in the future, was appointed as corporate trustee.
While the Settlor created a mechanism to appoint an individual successor trustee, through Sidley
& Austin, the Settlor created no mechanism to appoint a corporate successor trustee. The trial
court subsequently granted Harris's request to resign, finding that the will "does not require the
appointment of a successor corporate trustee" and ordering that "Murray II is the sole trustee
under the will." Lyle does not ask this court to directly set aside and disregard this order, rather,
he simply urges us to adopt a meaning that is simply not supported by the record.
¶ 30 Contrary to Lyle's disingenuous suggestion, this order clearly eliminated the corporate
trustee position held by Harris. The order did not qualify its determination by stating that a
successor corporate trustee was not required at this time. In addition, Lyle has failed to articulate
why the Settlor would have intended for a successor corporate trustee to be appointed now when
the Settlor had not intended that a successor corporate trustee be appointed in 1982. The only
difference is that in 1982, Lyle preferred the individual trustee's decisions over the corporate
trustee's decisions, whereas now, Lyle dislikes the individual trustee's decisions. See Gambino v.
Boulevard Mortgage Corp., 398 Ill. App. 3d 21, 59 (2009) (finding that the doctrine of judicial
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estoppel is intended to protect the court system's integrity by preventing litigants from
deliberately shifting their positions to suit the immediate circumstances). This is not an attempt
to impose a corporate check-and-balance, as Lyle suggests; rather it is redolent of
gamesmanship. Furthermore, Lyle argues the trial court's 1982 finding that a successor
corporate trustee was not required, did not prohibit one from being appointed. We find the more
appropriate inquiry to be, however, whether the trust, following that court's order, authorized the
appointment of a successor corporate trustee. We find that it did not. See Andris v. Biehl, 27 Ill.
App. 2d 393, 398-99 (1960) (finding that the court could not appoint a co-trustee or successor
trustee where not provided for in the instrument creating the trust). The trial court clearly stated,
without qualification, that Murray was the sole trustee and the beneficiaries reaped the benefit of
that order. Following the 1982 order, no vacancy existed. See id. at 395-99 (where the
beneficiary failed to show grounds for removing the individual trustees, the trial court erred by
appointing a corporate trustee to serve alongside the existing ones, as no vacancy existed).
¶ 31 This brings us to the catalyst for the ambiguous 1984 order at issue. As stated, Sidley &
Austin had originally been charged with naming successor individual trustees under Article
VIII(a) in the event that "no individual [was] acting as Trustee," language which indisputably
contemplated a vacancy. See 760 ILCS 5/13 (West 2010) (contemplating that a vacancy
requiring the appointment of a successor trustee by a majority of the beneficiaries occurs upon
the last trustee's "death, resignation, refusal or inability to act of any trustee"); George W.
Howard III, Successor Trustees and Cotrustees, in Estate Planning for Illinois Attorneys: The
Basics and Beyond § 8.32 (Ill. Inst. for Cont. Legal Educ. 2012) (discussing the appointment of a
successor trustee due to resignation, death or incapacity). No dispute arose regarding the
circumstances in which a successor would be appointed; rather, in 1984, Sidley & Austin no
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longer wished to be charged with appointing an individual successor should circumstances
require. Murray suggested a modification that would allow the appointment of successor trustees
in any of the individual trusts if a "majority in number of the adult income beneficiaries" so
desired.
¶ 32 In the context in which it arose, it is clear that the court's 1984 order did not intend to
alter article VIII(a)'s proviso that appointing a successor would be appropriate when "no
individual [was] acting as Trustee," nor did it intend to revive the corporate trustee position. It
was solely intended to satisfy what had previously been Sidley and Austin's function: appointing
a successor individual trustee upon a vacancy. In addition, we are not persuaded by Lyle's
suggestion that it would be inappropriate to apply the vacancy qualification to Lyle's attempt to
appoint a corporate trustee because that language expressly applied to an individual trustee. The
reason for this is clear. As the court essentially found in 1982, the Settlor did not contemplate
the appointment of a successor corporate trustee under any circumstances. Moreover, although
Lyle argues that the order permitted the appointment of "one or more successor trustees"
(emphasis added), the order when read in its entirety provided for the appointment "of one or
more successor trustees of any of the three trusts" (emphasis added). This merely reflects that
multiple trusts may require multiple trustees. Thus, the order did not authorize the appointment
of a successor corporate trustee for Lyle's trust. Because Lyle failed to demonstrate the
appointment of a substitute or successor trustee was required, the trial court properly entered
summary judgment in favor of Di Cola.
¶ 33 C. Attorney Fees
¶ 34 Finally, Lyle contends the trial court erred in awarding Di Cola attorney fees because she
failed to remain neutral in this action. Whether the court has authority to grant attorney fees is a
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question of law we review de novo, whereas a court's decision to award authorized fees is
reviewed for an abuse of discretion. Grate v. Grzetich, 373 Ill. App. 3d 228, 231 (2007). We
find no error.
¶ 35 Generally, a trustee found to be faultless is entitled to reimbursement from the trust fund
for his expenses properly incurred in administering or defending the trust. Jewish Hospital of St.
Louis, Missouri v. Boatmen’s National Bank of Belleville, 261 Ill. App. 3d 750 (1994); Webbe v.
First National Bank & Trust Co. of Barrington, 139 Ill. App. 3d 806, 810 (1985). Similarly,
Article VII(b) of the trust specifically authorized Di Cola to employee legal counsel as deemed
advisable and Article VII(e) stated that Di Cola "shall be reimbursed out of the trust for all
expenses incurred in its management and conservation." Lyle asserts, however, that "a
fiduciary's attorney fees will not be awarded when the fiduciary takes a litigious position
favoring one interpretation of the trust, to the detriment of a beneficiary (emphasis added),"
relying on Northern Trust Co. v. Heuer, 202 Ill. App. 3d 1066, 1071 (1990).
¶ 36 First, we correct Lyle's misstatement of law. In Northern Trust Co., the reviewing court
stated that where a trustee favors one beneficiary over another, the trustee is not entitled to
attorney fees and costs. Id. This is due to the trustee's duty to deal impartially with all
beneficiaries. Id. Accordingly, Northern Trust Co. does not prohibit a trustee from interpreting
a trust in a manner that is unfavorable to one beneficiary's wishes but, rather, prohibits a trustee
from favoring one beneficiary over another. Furthermore, while we acknowledge this general
rule, the specific trust before us authorized the trustee to make unequal distributions and, thus,
favor one beneficiary over another where she sees fit.
¶ 37 Before Lyle filed his complaint, Di Cola attempted to conserve the assets of the trust for
the benefit of all beneficiaries, including Lyle, rather than granting every disbursement
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requested. Lyle then commenced the present action naming Di Cola as a defendant and raising
allegations of misconduct that were never proven. See also Webbe, 139 Ill. App. 3d at 810
(where a beneficiary files a groundless complaint against the trustee, the trustee’s attorney fees
and expenses in defending the charge are to be paid out of the complainant’s share of the trust
estate and not charged against the general fund shared by the cobeneficiaries, who did not join
with the plaintiff in his action). Thus, Di Cola would have had no need for counsel but for Lyle's
actions. Although the ultimate issue was whether ATG could be appointed as a second trustee,
Lyle has not explained how anything Di Cola has done with respect to that issue favored one
beneficiary over another. Moreover, we cannot agree with Lyle that Di Cola defending her
position as trustee, a position which was authorized by the trust, was entirely "self-serving." The
trial court properly awarded fees under these circumstances.
¶ 38 In conclusion, the trial court properly granted summary judgment in favor of Di Cola
where the terms of the trust did not grant the beneficiaries the authority to appoint a second
trustee to confiscate Di Cola's duties and authority. The beneficiaries' agreements purporting to
accomplish just that were ineffective. Moreover, the award of attorney fees was entirely
appropriate under these circumstances.
¶ 39 For the foregoing reasons, we affirm the trial court's judgment.
¶ 40 Affirmed.