Houghtaylen v. The Russell D. Houghtaylen By-Pass Trust , 95 N.E.3d 1253 ( 2017 )

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Appellate Court Date: 2018.04.10
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Houghtaylen v. Russell D. Houghtaylen By-Pass Trust, 2017 IL App (2d) 170195Appellate Court GARY HOUGHTAYLEN, KEVIN HOUGHTAYLEN, and DAVID
Caption HOUGHTAYLEN, Plaintiffs and Counterdefendants-Appellees, v.
THE RUSSELL D. HOUGHTAYLEN BY-PASS TRUST; KEVIN C.
McGIRR, Individually and as First Successor Trustee of the Russell
D. Houghtaylen By-Pass Trust; CHICAGO LAND TRUST TITLE
COMPANY, as Trustee of Trust No. 1340586, Successor to De Kalb
Trust and Savings Bank; ST. JUDE’S CHILDREN’S HOSPITAL;
ST. JOHN THE BAPTIST CATHOLIC CHURCH; ST. JOHN THE
BAPTIST CEMETERY; VINCENT K. McGIRR; CONSTANCE M.
BOWMAN, Individually and as Executor of the Estate of Shirley J.
Houghtaylen; JEROME F. LaBOLLE; CRAIG L. McGIRR; and THE
ESTATE OF SHIRLEY J. HOUGHTAYLEN, Defendants (The
Russell D. Houghtaylen By-Pass Trust; Kevin C. McGirr, Individually
and as First Successor Trustee of the Russell D. Houghtaylen By-Pass
Trust; Vincent K. McGirr; Constance M. Bowman, Individually and
as Executor of the Estate of Shirley J. Houghtaylen; Jerome F.
LaBolle; and Craig L. McGirr, Defendants and Counterplaintiffs-
Appellants; Chicago Land Trust Title Company, as Trustee of Trust
No. 1340586, Successor to De Kalb Trust and Savings Bank;
St. Jude’s Children’s Hospital; St. John The Baptist Catholic Church;
and St. John The Baptist Cemetery, Defendants and Counter-
defendants).
District & No. Second District
Docket No. 2-17-0195
Filed December 18, 2017
Decision Under Appeal from the Circuit Court of De Kalb County, No. 16-MR-90; the
Review Hon. Bradley J. Waller, Judge, presiding.
Judgment Appeal dismissed.
Counsel on Craig D. Hasenbalg and William R. Thomas, of Ottosen Britz Kelly
Appeal Cooper Gilbert & DiNolfo, Ltd., of Elburn, for appellants.
Burns, Cronauer & Brown, LLP, of Sycamore (C. Nicholas Cronauer,
of counsel), for appellees.
Panel JUSTICE HUTCHINSON delivered the judgment of the court, with
opinion.
Presiding Justice Hudson and Justice Spence concurred in the
judgment and opinion.
OPINION
¶1 This case presents an issue concerning appellate jurisdiction. Plaintiffs—Gary, Kevin, and
David Houghtaylen—are brothers. Together, they own a one-half interest in the Houghtaylen
Farm, a roughly 150-acre working farm in the city of Sandwich. Plaintiffs sued
defendants—Kevin C. McGirr, as trustee of The Russell D. Houghtaylen By-Pass Trust;
Constance M. Bowman, as executor of the Estate of Shirley J. Houghtaylen; Chicago Land
Trust Title Co.; and additional defendants, which we need not discuss individually—seeking
the other one-half interest in the farm after the death of Shirley Houghtaylen.
¶2 The relevant facts are not in dispute. The farm was deeded into a land trust in 1970 by
brothers Dean and Russell Houghtaylen (and their respective wives). Dean was plaintiffs’
father, and Russell (also known as Dwight) was plaintiffs’ uncle by blood. Ultimately,
plaintiffs came to inherit Dean’s one-half interest in the farm.
¶3 In 2003, Russell executed a revocable living (or bypass) trust, which provided that
Russell’s interest in the land trust would be used for the benefit of his wife, Shirley. Upon
Shirley’s death, the principal of the land trust would pass to Russell’s “then living nieces and
nephews” as appointed by Shirley in her will, with specific reference to “this Power of
Appointment.” Russell died in 2006, and McGirr became the bypass-trust trustee.
¶4 Meanwhile, Shirley executed her will in 2003 and executed a first codicil in 2009. At some
point, when she was in her late eighties, Shirley’s copy of Russell’s bypass trust was stolen
from a safe in her home, along with other valuables. Also around this time, due to “bad blood,”
Shirley stated that she wanted to change her will. Specifically, Shirley wanted to disinherit
McGirr and most of her remaining relatives, except for plaintiffs, because as Shirley put it,
“they never visited [her]” and “were just after her money.” Accordingly, in 2012, Shirley
executed a second codicil in which she described the property in detail and stated her intent to
give “all of [her] interest to the Houghtaylen Farm” to plaintiffs in equal shares upon her death.
In the second section of the codicil, Shirley stated, “I give all the residue of my estate, but
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excluding all property under which I have a power of appointment to the Trustee [of the bypass
trust].”
¶5 Shirley died on April 21, 2015, and the executor of Shirley’s estate filed her will with the
clerk of the circuit court; however, the executor never sought to commence probate
proceedings. Subsequently, when plaintiffs sought to take the interest to the remaining half of
the farm pursuant to Shirley’s second codicil, McGirr rejected their claim and asserted that
Shirley’s second codicil was ineffective because it did not specifically refer to her power of
appointment.
¶6 In March 2016, plaintiffs filed a two-count complaint against defendants. Count I of the
complaint sought a declaratory judgment that Shirley’s second codicil effectively executed her
power of appointment in favor of plaintiffs. Although labeled as a request for declaratory
relief, count I further sought an order requiring the trustee of the land trust—Chicago Land
Trust Title Co.—to transfer Shirley’s beneficial interest in the trust to plaintiffs. Separately,
count II of the complaint asked the court to admit Shirley’s will—and specifically, her second
codicil—to probate.
¶7 The trial court held a bench trial on count I only. At that trial, the court heard from Shirley’s
attorney, Kenneth Poris, regarding the circumstances surrounding the drafting of Shirley’s
second codicil and her relationship with plaintiffs and her relatives, including McGirr. The
court also received in evidence two recordings of Shirley and Poris discussing her intent in
drafting the second codicil. In the recording, Shirley was adamant that she wanted “the farm,”
whatever her interest in it, to go to plaintiffs, and not to her other relatives or to McGirr.
Defendants presented no evidence.
¶8 In argument before the trial court, defendants primarily relied on Yardley v. Yardley, 137
Ill. App. 3d 747, 759 (1985), in which this court stated that “the failure to mention any power
where the instrument creating the power requires ‘specific reference’ ” is a defect so
significant that it cannot be remedied by a court. (Emphasis added.) But, as plaintiffs pointed
out in the trial court, Yardley was distinguishable because the residual clause in Shirley’s
second codicil did mention the power of appointment. In addition, numerous cases explain that
reference to the power itself is “ ‘not essential’ ” if there is evidence of an intent to exercise it.
Hopkins v. Fauble, 47 Ill. App. 2d 263, 265 (1964); see also Funk v. Eggleston, 92 Ill. 515, 536
(1879); In re Estate of MacLeish, 35 Ill. App. 3d 835, 838 (1976); Roberts v. Northern Trust
Co., 550 F. Supp. 729, 735 (N.D. Ill. 1982).
¶9 On December 1, 2016, the trial court issued a three-page, single-spaced memorandum
opinion, in which the court determined that the evidence of Shirley’s intent was “unequivocal”
in demonstrating her desire to transfer her interest in the farm to plaintiffs. Accordingly, the
court granted plaintiffs complete relief under count I of their complaint. (Defendants had
previously filed a countercomplaint for an accounting and partition of the farm; however, due
to the court’s judgment on count I, the countercomplaint was deemed moot.)
¶ 10 This brings us to the jurisdictional issue in this case. Under Illinois Supreme Court Rule
304(b)(1) (eff. Mar. 8, 2016), “[a] judgment or order entered in the administration of an estate,
guardianship, or similar proceeding which finally determines a right or status of a party” is
immediately appealable. Such a judgment must be appealed within 30 days, or within 30 days
after the entry of the order disposing of the last pending motion directed against that judgment
(Ill. S. Ct. R. 303(a)(1) (eff. Jan. 1, 2015)). See In re Estate of Kime, 95 Ill. App. 3d 262, 268
(1981) (“the time for appeal of such orders [is] mandatory, and not optional”). The purpose of
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Rule 304(b)(1) is to provide for the prompt and efficient resolution of specific issues during the
often lengthy process of estate administration. See In re Estate of Thorp, 282 Ill. App. 3d 612,
616 (1996) (explaining that order construing will and approving sale of farm was final and had
to be appealed within 30 days under Rule 304(b)(1)).
¶ 11 Instead of immediately appealing the trial court’s December 1, 2016, judgment under Rule
304(b)(1), defendants filed a motion requesting an immediate-appealability finding under
Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010). At no time did defendants file a
motion directed against the December 1, 2016, judgment. Ultimately, defendants’ Rule 304(a)
motion was not heard until February 10, 2017. At that hearing, the trial court explained that it
had not “willy-nilly” omitted a Rule 304(a) finding from its December 1, 2016, judgment.
Rather, the court explained, it had believed that the judgment was immediately appealable
under Rule 304(b)(1). Without directly responding to the court’s statement, defendants
asserted that they had requested a Rule 304(a) finding “out of an abundance of caution.” The
court issued a Rule 304(a) finding, and defendants filed their notice of appeal on March 8,
2017.
¶ 12 The trial court was correct regarding Rule 304(b)(1). We have an independent duty to
consider our jurisdiction before addressing the merits of a case and to dismiss an appeal where
jurisdiction is lacking. See Almgren v. Rush-Presbyterian-St. Luke’s Medical Center, 162 Ill.
2d 205, 210 (1994). Here, as plaintiffs point out, defendants’ notice of appeal was not filed
within 30 days of the entry of the December 1, 2016, judgment. Moreover, defendants never
filed a timely motion directed against the judgment to toll the time for filing a notice of appeal.
Cf. Ill. S. Ct. R. 303(a) (eff. Jan. 1, 2015). As we explained in In re Estate of Russell, 372 Ill.
App. 3d 591, 595 (2007), when an order is already immediately appealable under Rule
304(b)(1), the rendition of “a superfluous Rule 304(a) finding *** does not extend the time for
appeal.”
¶ 13 The only question then is whether the trial court’s December 1, 2016, judgment was
immediately appealable under Rule 304(b)(1). We find that it was. Defendants claim that count
I of plaintiffs’ complaint sought only declaratory relief, “nothing more, nothing less.” Further,
defendants assert that this case involves “a privately administered trust”—namely Russell’s
bypass trust, to say nothing of the land trust—and thus is not a “formal” or “lengthy” probate
proceeding involving Shirley’s estate. In other words, according to defendants, “this case has
no accountings to resolve, no claims to litigate, and contains nothing characteristic of estate (or
similar) proceedings” and therefore is not subject to Rule 304(b)(1).
¶ 14 Defendants are incorrect on several points. First, plaintiffs’ count I did seek “more” than
merely declaratory relief; it specifically sought an order compelling the land-trust trustee to
transfer Shirley’s beneficial interest to plaintiffs pursuant to the terms of Shirley’s second
codicil. Notably, this required the court to conduct a bench trial to determine Shirley’s
testamentary intent, a legal matter that is practically the quintessence of an estate proceeding.
As was explained in Thorp, a court order construing a will and directing the transfer of
property pursuant to that will must be promptly appealed under Rule 304(b)(1), or not at all,
precisely because the court’s construction of a will is “one of the specific issues in an estate
administration which requires certainty” as it is “binding on all the interested parties.” Thorp,
282 Ill. App. 3d at 617. Here, the court entered a final judgment transferring an interest in a
trust (property) to plaintiffs, pursuant to the terms of Shirley’s will. That order was binding on
all parties. See id.
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¶ 15 In addition, contrary to defendants’ assertion, the bypass trust’s involvement in the
litigation did not insulate these proceedings from the requirements of Rule 304(b)(1). As we
noted in Russell, “[a] proceeding relating to the administration of a trust is a ‘similar
proceeding’ that can generate orders appealable under Rule 304(b)(1)” when the court’s
oversight of the trust is “similar to the comprehensive court proceedings associated with the
administration of an estate.” Russell, 372 Ill. App. 3d at 593 (citing Lampe v. Pawlarczyk, 314
Ill. App. 3d 455, 470-72 (2000)). Here, given the nature of the relief sought in count I, the trial
court was asked to consider whether the trustee of the land trust should transfer the one-half
interest—in what appears to be that trust’s largest if not its only asset—from the bypass trust to
plaintiffs. In other words, by transferring the one-half interest in the land trust’s primary object,
as well as the bypass trust’s most significant asset, and dealing with a contest over Shirley’s
second codicil, the trial court resolved a matter that was a “similar proceeding” to the
administration of an estate under Rule 304(b)(1). In comparison, a court’s removal of a trustee
or involvement in a trust’s day-to-day operations seems downright trivial. See id. (holding that
the court’s replacement of a trustee and its authorization to pay the trust’s routine bills “ma[de]
the proceeding similar to the administration of an estate and so capable of generating orders
appealable under Rule 304(b)(1)”).
¶ 16 In sum, we determine that the proceedings in the trial court were sufficiently similar to the
proceedings associated with the administration of an estate. The December 1, 2016, judgment
was final and immediately appealable under Rule 304(b)(1). Consequently, a Rule 304(a)
finding was superfluous, and defendants’ March 8, 2017, notice of appeal was untimely.
Therefore, we dismiss this appeal. See Ex parte McCardle, 74 U.S. (6 Wall.) 506, 514 (1868)
(without jurisdiction “the only function remaining to the court is that of announcing the fact
and dismissing the cause”).
¶ 17 Appeal dismissed.
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