Woolfson v. Chicago Title and Trust Company

2022 IL App (1st) 210868-U

• Court: Appellate Court of Illinois
• Decided: June 2, 2022
• Docket: 1-21-0868
• Status: Unpublished

Opinion

2022 IL App (1st) 210868-U No. 1-21-0868 Order filed June 2, 2022

Fourth Division

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT

AARON WOOLFSON, as ) Appeal from the Independent Executor of the Estate of ) Circuit Court of MARGARET L. STENBERG, deceased, ) Cook County. ) Petitioner-Appellant, ) ) vs. ) No. 20 P 801 ) CHICAGO TITLE & TRUST COMPANY ) a Delaware LLC, KATHERINE STENBERG, ) KEITH STENBERG, JEFFERY KRUPP, ) and JULIUS JACOB KRUPP, ) ) Honorable ) Terrence J. McGuire, Respondents-Appellees. ) Judge Presiding.

JUSTICE MARTIN delivered the judgment of the court. Presiding Justice Reyes and Justice Rochford concurred in the judgment.

ORDER

¶1 Held: The circuit court properly entered summary judgment in favor of respondents on their joint counter-petition for declaratory judgment.

¶2 This appeal arises from a dispute between contingent beneficiaries of a land trust and

residual-estate beneficiaries under the will of Margaret L. Stenberg (Stenberg), the decedent. The No. 1-21-0868

dispute concerns whether the real property in question, a residential building located at 4319-21

North Dayton Street in Chicago (the Dayton Property), is an asset of the land trust or of the

decedent’s estate.

¶3 I. BACKGROUND

¶4 Until the time of her death, Stenberg resided at the Dayton Property. On July 23, 1974,

Stenberg deeded the Dayton Property into a land trust with the Bank of Ravenswood as land

trustee. The trust was designated as Trust No. 001042-7-3 and Stenberg retained the beneficial

interest in the property, naming Keith Stenberg, Katherine Stenberg, Julius Krupp, Jr., and Jeffery

Krupp as successor beneficiaries of the land trust (collectively, trust beneficiaries).

¶5 The trust agreement contained the following language at issue:

“If any property remains in this trust twenty years from this date it shall be sold at

public sale by the trustee on reasonable notice, and the proceeds of the sale shall be

divided among those who are entitled thereto under this trust agreement.”

¶6 On March 20, 1995, some twenty years after the trust’s creation, Stenberg and then-trustee

American National Bank & Trust Company of Chicago executed an amendment to the trust

agreement which extended the agreement for an additional 20 years from July 23, 1994 to July 23,

2014. The amendment contained the same terms and conditions as the pre-amended version of the

trust agreement.

¶7 Chicago Title and Trust Company (Chicago Title) eventually became successor trustee in

October 2005. The record demonstrates that from the time Chicago Title became successor trustee,

until Stenberg’s death in October 2019, Stenberg regularly paid the annual trust administration

fees.

¶8 Stenberg executed her will on August 17, 2012. Article Five of the will directed that any

2 No. 1-21-0868

real estate Stenberg owned at the time of her death, including her current residence in Chicago,

was to be sold, and the net proceeds from the sale made a part of her residuary estate. Article Six

of the will directed that Stenberg’s residuary estate was to be distributed in equal shares to Portia

Iverson, Lenore Iverson, Sarah Jones, Lloyd Iverson, and Aaron Woolfson (collectively, estate

beneficiaries).

¶9 Approximately five years after executing her will, Stenberg received a satisfaction of

mortgage for the Dayton Property, which was recorded in May 2017. The Dayton Property

remained in the trust.

¶ 10 Stenberg died on October 29, 2019. Her will was admitted to probate on February 14, 2020,

and Aaron Woolfson (Woolfson) was appointed independent executor of her estate.

¶ 11 On March 23, 2020, Woolfson, on behalf of Stenberg’s estate, filed a petition in the circuit

court of Cook County seeking to recover the Dayton Property as an asset of the estate. The petition

alleged that under the terms of the amended land trust agreement, the trust expired July 23, 2014,

and thereafter, Chicago Title was required to sell the Dayton Property and distribute the proceeds

to Stenberg. The petition asserted that Chicago Title’s failure to do so was a breach of its fiduciary

duty.

¶ 12 The trust beneficiaries and Chicago Title (collectively, respondents) each initially filed

separate responses to the petition. Later, respondents filed a joint counter-petition seeking a

declaration that the Dayton Property was owned by and was an asset of the trust, free and clear of

any claims or interests of Stenberg’s estate. The respondents alleged that Stenberg’s conduct

evidenced her intent that the Dayton Property should remain an asset of the trust.

¶ 13 In support of this allegation, respondents pointed to the fact that after the trust purportedly

expired July 23, 2014, Stenberg continued to live in the Dayton Property, and she continued to pay

3 No. 1-21-0868

the annual trust administration fees, without interruption, until her death. Respondents also noted

that at various times Stenberg directed the trustees to perform certain acts in connection with the

Dayton Property, but never directed the trustees to remove the property from the trust, even after

she received the satisfaction of mortgage. Respondents further noted that the property remained in

the trust subsequent to Stenberg executing her will.

¶ 14 The parties ultimately filed cross-motions for summary judgment on their respective

petitions. In addressing the cross-motions, the circuit court determined that the trust language was

ambiguous.

¶ 15 The circuit court found that the ambiguity arose because the trust provided for the sale of

any property remaining in the trust upon expiration of twenty years from the date of the agreement,

while at the same time, it provided that the trustee would deal with the real estate only when

authorized to do so in writing. The court found it was unclear whether Stenberg intended the trust

to terminate upon expiration of the second twenty-year period, thereby requiring the trustee to sell

the Dayton Property and distribute the proceeds, or whether Stenberg’s conduct evidenced her

intent to require her written direction to the trustee before the trustee could sell the property.

¶ 16 The circuit court concluded that Stenberg’s “intention was to require her written direction

to the Trustee in order to sell the property, or for the Trustee to take any other action related to the

property.” The court highlighted actions that demonstrated Stenberg’s intent. First, the Dayton

Property was—from before the execution of the trust agreement and its subsequent amendment

through to her death—Stenberg’s primary residence. Second, the trust agreement explicitly

provided that the trustee was authorized to deal with the Dayton Property only upon the written

direction of Stenberg and she never directed the trustee to remove the property from the trust. The

court reasoned that if the trustee could have sold the Dayton Property without Stenberg’s written

4 No. 1-21-0868

authorization, she would have been removed from her home without her approval. The court found

that Stenberg could not have intended such a result.

¶ 17 In an order entered March 25, 2021, the circuit court granted the respondents’ motion for

summary judgment on their joint counter-petition for declaratory judgment and denied petitioner’s

motion for summary judgment. On June 15, 2021, the court issued its order and final judgment,

finding that the trust “was never terminated,” and therefore the Dayton Property remained an asset

of the trust, free and clear of any claims of Stenberg’s estate. The court held that the trust

beneficiaries could take any and all actions with respect to the assets of the trust in furtherance of

their powers as successor beneficiaries.

¶ 18 On July 14, 2021, petitioner filed his notice of appeal challenging the circuit court’s

findings. The court subsequently granted petitioner’s request to stay enforcement of its orders

pending appeal. The court ordered that the Dayton Property “shall not be removed or sold prior to

resolution of the appeal.”

¶ 19 II. ANALYSIS

¶ 20 We consider the following issues on appeal: (1) whether the circuit court correctly

determined that Stenberg did not intend for the trust to expire after July 23, 2014; and (2) in the

alternative, whether the circuit court erred by failing to consider Stenberg’s written will when

interpreting her intent.

¶ 21 When parties file cross-motions for summary judgment they agree that there are only

questions of law to decide, and they invite the court to decide the issues based on the record. Pielet

v. Pielet, 2012 IL 112064, ¶ 28; Millennium Park Joint Venture, LLC v. Houlihan, 241 Ill. 2d 281,

308-09 (2010). Summary judgment should be granted where the pleadings, depositions, and

admissions on file, together with any affidavits, show that there are no genuine issues of material

5 No. 1-21-0868

fact and that the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c)

(West 2010); Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992).

Our court reviews a circuit court’s rulings on cross-motions for summary judgment and the

construction of trust language under a de novo standard of review. Schroeder v. Sullivan, 2018 IL

App (1st) 163210, ¶ 25.

¶ 22 Our primary objective in construing language in a trust is to ascertain and give effect to the

intent of the settlor, provided that intent does not conflict with the law or public policy of the State.

Chicago Police Sergeants’ Association, Policemen’s Benevolent & Protective Association, Unit

156A v. Pallohusky, 2019 IL App (1st) 181194, ¶ 19; In re Estate of Lee, 2017 IL App (3d) 150651,

¶ 32. We determine the settlor’s intent by examining the language of the trust itself, and if there is

no ambiguity, we construe the language according to its plain and ordinary meaning. Schroeder,

2018 IL App (1st) 163210, ¶¶ 26-27; In re Estate of Lee, 2017 IL App (3d) 150651, ¶ 32. “In

determining the intent of a settlor, the rules of construction which apply to the interpretation of

contracts apply to the construction of trust instruments.” Goddard v. Continental Illinois National

Bank & Trust Company of Chicago, 177 Ill. App. 3d 504, 509 (1988).

¶ 23 Here, the circuit court found there was an ambiguity in the trust agreement as to whether

Stenberg intended for the trust to expire after July 23, 2014. “The determination of whether

contract language is ambiguous is a question of law.” 1000 Condominium Association v. Carrier

Corp., 180 Ill. App. 3d 467, 469 (1989). Language in a trust instrument is ambiguous when it is

reasonably susceptible to more than one meaning. McCarthy v. Taylor, 2014 IL App (1st) 132239,

¶ 58. Where the language of a trust is ambiguous and the settlor’s intent cannot be determined

from the language of the trust document alone, a circuit court may rely on extrinsic evidence to

aid construction. Id.

6 No. 1-21-0868

¶ 24 However, even if the circuit court finds there is an ambiguity “and other extrinsic facts are

introduced to ascertain the contract’s true meaning, the meaning of the contract may still be

determined as a matter of law where the facts are uncontroverted or show the contract to have but

one meaning.” Kellner v. Bartman, 250 Ill. App. 3d 1030, 1033-34 (1993). Here, the facts are

uncontroverted. Moreover, we find that the language in the trust agreement pertaining to its

duration is unambiguous. As the circuit court noted, the parties merely have “conflicting views as

to whether the Trust terminated upon expiration of the second twenty-year period.” “A contract is

not rendered ambiguous merely because the parties disagree on its meaning.” Central Illinois Light

Company v. Home Insurance Company, 213 Ill. 2d 141, 153 (2004).

¶ 25 In the instant case, there are no genuine issues of material fact in dispute. This case

concerns the construction of an unambiguous trust agreement, which is a matter of law. Schroeder,

2018 IL App (1st) 163210, ¶ 25. We now turn to the merits of the appeal.

¶ 26 Petitioner contends the circuit court erred by ruling that Stenberg did not intend the trust to

terminate upon expiration of the 20-year period provided in the amended trust agreement. The trust

language at issue provides:

“If any property remains in this trust twenty years from this date it shall be sold at

public sale by the trustee on reasonable notice, and the proceeds of the sale shall be

divided among those who are entitled thereto under this trust agreement.”

¶ 27 Nearly identical trust language was considered by our court in Heritage County Bank &

Trust Company v. State Bank of Hammond, 198 Ill. App. 3d 1092, 1096 (1990). In Heritage

County, the father entered into a trust agreement with the trustee-bank and deeded a parcel of land

as the trust res. The trust was for the sole benefit of the father during his lifetime, with his brother

as contingent beneficiary. Id. at 1094. The trust provided:

7 No. 1-21-0868

“If any property remains in this trust twenty years from this date it shall be sold at

public sale by the trustee on reasonable notice, and the proceeds of the sale shall be

divided among ‘the beneficiaries.’ ” Id. at 1096.

¶ 28 “The trust did not specify any other expiration or termination date or event.” Id. at 1094.

In addition, “the land remained in the trust res and the trust terms were not amended in writing.” Id.

¶ 29 After expiration of the twenty-year period, the trustee-bank did not attempt to sell the land

and the father did not renew the trust agreement in writing as required under the terms of the trust.

However, the father continued to pay the trust fees. The father died testate, leaving his estate to his

children. At the brother’s request, the trustee-bank conveyed legal title to him. Id.

¶ 30 The trustee-executor of the father’s estate filed suit to quiet title to the land. The trustee-

executor claimed that pursuant to the terms of the trust agreement, the trust terminated upon

expiration of the 20-year period. Id. at 1095. On cross-motions for summary judgment, the circuit

court granted summary judgment for the brother and denied summary judgment for the trustee-

executor. Id. at 1093.

¶ 31 The trustee-executor appealed, arguing that upon expiration of the 20-year period in the

trust agreement, the father acquired a vested, indefeasible beneficial interest in the trust res because

the trust provided that the property was to be sold and the proceeds distributed at that time. Id. at

1093-94. The Heritage County court disagreed with the trustee-executor’s arguments and affirmed

the judgments of the circuit court.

¶ 32 The Heritage County court, citing our supreme court’s decision in Breen v. Breen, 411 Ill.

206, 211-12 (1952), held that when a land trust containing no specific termination date empowers

the trustee to sell the trust res and distribute the proceeds of the sale upon expiration of a certain

period, the trust does not terminate if the trustee fails to perform these tasks upon expiration of that

8 No. 1-21-0868

period, where the settlor manifests an intent that the trust should continue. Id. at 1096-98. In such

cases, language providing that the trust will expire upon a certain period is construed as directory

and does not cause the trust to terminate. Breen, 411 Ill. at 210.

¶ 33 The Heritage County court determined that the father’s conduct in continuing to pay the

trust fees after expiration of the 20-year period indicated that he did not intend for the trust to

terminate upon expiration of this period, but that it should continue until his death, at which point

his brother would be entitled to the trust res. Heritage County, 198 Ill. App. 3d at 1097. The court

held that the trust terminated when the brother requested the trustee-bank to convey to him legal

title to the trust res. Id.

¶ 34 Like the trust agreement in Heritage County, the trust agreement in this case does not

contain a specific termination date. The trust agreement provides that if any property remains in

the trust at the expiration of twenty years from the date of the agreement, it shall be sold at public

sale by the trustee on reasonable notice and the proceeds divided among those entitled under the

trust agreement. Stenberg was alive at the expiration of the second twenty-year period. She never

directed the trustees to sell the Dayton Property, transfer the property out of the trust, or dissolve

the trust. Moreover, and importantly, Stenberg, like the father in Heritage County, continued to

pay the annual trust administration fees without interruption until her death. Attorney Robert

Kuzma, vice president and counsel for Chicago Title, averred that “[f]rom 2006 to 2019, payment

of Chicago Title’s annual fee for trust administration was paid by [Stenberg] without interruption.”

He went on to state that “Chicago Title never received any written direction from [Stenberg] to

remove the land trust property out of the Trust.”

¶ 35 These facts clearly demonstrate that Stenberg manifested an intent that the trust should

continue past expiration of the second twenty-year period. Therefore, we find the circuit court

9 No. 1-21-0868

correctly determined that Stenberg did not intend for the trust to expire after July 23, 2014.

¶ 36 Lastly, petitioner alternatively argues that if the circuit court had considered Stenberg’s

written will when it interpreted her intent, the court would have found that she intended for the

trust to terminate upon expiration of the second twenty-year period, so that the Dayton Property

could pass through her will. In support of this argument, petitioner points to Article Five of the

will which directs that any real estate Stenberg owned at the time of her death, including her current

residence in Chicago, was to be sold and that the net proceeds from the sale made a part of her

residuary estate.

¶ 37 Unlike a conventional trust, where the trustee holds legal title to the property, and the

beneficiary holds equitable title—in a land trust, the trustee holds both the legal and equitable title

to the property. Campbell v. Campbell, 2017 IL App (3d) 160619, ¶ 17. “[T]he beneficiary’s

interest in the real property changes to a personal property interest in the trust.” Financial Freedom

Acquisition, LLC v. Standard Bank & Trust Co., 2015 IL 117950, ¶ 33. As a result, “[a] beneficiary

cannot transfer legal title to property held in trust because the beneficiary does not hold that

interest; only the trustee holds that interest.” Id. ¶ 20.

¶ 38 Here, Stenberg did not have legal or equitable title to the Dayton Property at the time she

executed her written will in 2012, codicil thereto in 2013, nor at the time of her death in 2019.

Stenberg, as the settlor-beneficiary, could have issued a written directive to the trustee to transfer

legal title of the Dayton Property to her, which would have allowed her to pass title to the property

through her will. In a land trust, the trustee derives all of their power from the beneficiary and acts

solely at the beneficiary’s request and solely on their behalf. Podvinec v. Popov, 168 Ill. 2d 130,

137 (1995). However, Stenberg never issued such a directive to the trustee and therefore the

Dayton Property remained in the trust at the time of her death. As a result, Stenberg’s written will

10 No. 1-21-0868

provided no legal basis or authority for trustee Chicago Title to sell the property. Thus, there was

no breach of fiduciary duty on the part of Chicago Title for not selling the Dayton Property. Under

these circumstances, we find the circuit court did not err by failing to consider Stenberg’s written

will in determining whether she intended for the trust to expire after July 23, 2014.

¶ 39 III. CONCLUSION

¶ 40 We affirm the circuit court’s ruling granting summary judgment in favor of respondents on

their joint counter-petition for declaratory judgment. We affirm the court’s denial of petitioner’s

motion for summary judgment on his petition.

¶ 41 We find that the circuit court correctly determined that Stenberg did not intend for the trust

to expire after July 23, 2014, and therefore Chicago Title did not breach its fiduciary duty by not

selling the Dayton Property at that time and disturbing the proceeds to Stenberg. We also find that,

for the same reasons, Chicago Title did not breach its fiduciary duty by failing to sell the Dayton

Property under the terms of Stenberg’s written will and distributing the proceeds to the estate

beneficiaries. Accordingly, we affirm the circuit court’s judgments and remand with directions

that the court dissolve its order staying enforcement of its judgments.

¶ 42 Affirmed and remanded with directions.