Malik v. Lashkariya ( 2006 )

FIRST DIVISION
December 26, 2006
No. 1-05-1607
ESTATE OF ARSHAD MALIK ) Appeal from
) the Circuit Court
Plaintiff-Appellant, ) of Cook County
)
v. ) No. 95 P. 4347
)
JAFAR LASHKARIYA, ) Honorable
) Henry A. Budzinski,
Defendant-Appellee. ) Judge Presiding.
JUSTICE CAHILL delivered the opinion of the court:
Arshad Malik (decedent) died testate in 1995. His estate was opened by plaintiff Sohail
Khan, his executor. The first provision of decedent's will provided: "If my estate is subject to any
taxes, Federal Estate Tax or any inheritance tax, all taxes shall be paid by my estate.” Decedent's
fiancée, Zarka Khan, also known as Afshan Khan, was named as the sole beneficiary of his estate.
Other persons, including defendant Jafar Lashkariya, received nonprobate assets. The estate filed
an amended petition in the probate court to apportion taxes between the estate and the recipients
of nonprobate assets. The trial court dismissed plaintiff's petition for apportionment, finding that
taxes were to be paid from the residue of the estate under the language of the will based on the
"burden of the residue" rule. We affirm.
Plaintiff alleged in his petition for apportionment that the beneficiaries and value of the
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nonprobate assets were: (1) to defendant - $139,300 from a 50% interest in a real estate contract
and $202,402 from a life insurance policy; (2) to decedent's brother Parunez Malik - $300,180
from a life insurance policy; and (3) to decedent's fiancée Zarka - a residence owned in joint
tenancy with decedent with a net value of $94,000. Plaintiff stated the probate estate's assets as
$185,000, derived from a 50% interest in real estate, 500 shares of stock in the decedent's retail
business and his personal property. Plaintiff claimed that after $112,845 in claims and
administrative expenses, the estate was worth $72,155. Plaintiff alleged that the estate had paid
$54,605.79 in federal taxes and $23,137.65 in state taxes. Plaintiff asked that the estate be
reimbursed under the principle of equitable apportionment for its payment of taxes in the amounts
of $33,196 by defendant, $19,154 by Parunez and $15,393 by Zarka.
“ 'Equitable apportionment' is the term *** used to describe the process of distributing
the burden of certain estate expenses among those beneficiaries in the same proportion as they
respectively cause such expenses to be incurred." Landmark Trust Co. v. Aitken, 224 Ill. App. 3d
843, 852, 587 N.E.2d 1076 (1992). Illinois has no statutory provisions on equitable
apportionment, but our supreme court has allowed the apportionment of taxes among probate and
nonprobate assets where the decedent died intestate or did not provide direction for the payment
of taxes in his will. Landmark, 224 Ill. App. 3d at 852. Where the decedent specifically directs
that taxes be paid from his residuary estate, the direction has the same effect as the application of
the burden-of-the-residue rule and renders the equitable apportionment doctrine inapplicable.
Landmark, 224 Ill. App. 3d at 854. The residuary estate must be used to satisfy taxes without
contribution from the recipients of tax-generating nonprobate property, including joint tenancy
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interests or life insurance proceeds. Landmark, 224 Ill. App. 3d at 854.
Defendant filed a motion to dismiss plaintiff's petition for apportionment under section 2-
619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2004)). The circuit court
granted the motion, denied apportionment and ordered the estate to pay all taxes, including
federal estate tax, inheritance tax and state tax. The court relied on In re Estate of Maierhofer,
328 Ill. App. 3d 987, 989-90, 767 N.E.2d 850 (2002), for the rule that taxes are to be treated as
expenses of administration and paid from the residue of the estate unless there is a contrary
indication in the will. Plaintiff appeals.
We review de novo the dismissal of a complaint under section 2-619 of the Code (735
ILCS 5/2-619 (West 2004). King v. First Capital Financial Services Corp., 215 Ill. 2d 1, 12, 828
N.E.2d 1155 (2005). Dismissal is proper under section 2-619 where the complaint raises only
issues of law or easily proven issues of fact. Wright v. Pucinski, 352 Ill. App. 3d 769, 772, 816
N.E.2d 808 (2004). The complaint is properly dismissed where there is no genuine issue of
material fact and the defendant is entitled to judgment as a matter of law. Wright, 352 Ill. App.
3d at 773.
"The cardinal rule of will construction *** is the ascertainment of a testator's intention
from the will itself." In re Estate of Smith, 107 Ill. App. 3d 1038, 1042, 438 N.E.2d 553 (1982).
The testator's intent must be drawn from the language of the will and, if the language has a settled
legal meaning, that meaning must be applied. Smith, 107 Ill. App. 3d at 1042. Surrounding
circumstances may not be considered so as to give a meaning other than that expressed in the will
unless the language is ambiguous or uncertain. Smith, 107 Ill. App. 3d at 1042. "The intention of
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the testator is determined by ascertaining the actual meaning of the words used in the will before
applying rules of construction." Smith, 107 Ill. App. 3d at 1042. "[W]here the language on its
face has a clear and unmistakable meaning, that meaning will be taken as the expression of the
[testator's] intention." In re Estate of Wheeler, 65 Ill. App. 2d 201, 205-06, 213 N.E.2d 35
(1965). "Tortured constructions will not negate the intention expressed on the face of the will."
Wheeler, 65 Ill. App. 2d at 206.
Here, decedent directed: "all taxes shall be paid by my estate." The question we must
answer is whether the phrase "my estate" contained in the will is broad enough to include the
recipients of nonprobate assets in determining liability for estate taxes. No precise answer is
readily apparent in Illinois case law. In the absence of a statutory or precedential direction, we
believe, as did the trial court, that the word "estate" used in a will without a modifier means the
assets passing under the will, and should not be broadened to include assets not passing under the
will.
Plaintiff disputes this result by arguing that Maierhofer does not control because the estate
there contained only probate assets, while here, there were both probate and nonprobate assets.
Plaintiff's characterization of the facts in Maierhofer is not quite accurate. The court in
Maierhofer characterized the estate as consisting "almost entirely of probate assets." (Emphasis
added.) Maierhofer, 328 Ill. App. 3d at 991. That detail aside, there is nothing in Maierhofer or
in other authority cited by plaintiff to support the conclusion that an estate with probate and
nonprobate assets is subject to equitable apportionment even if the testator manifested a clear
intent that estate taxes be paid by the estate. The language of the will here precludes
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apportionment of the tax burden.
Plaintiff argues that under In re Estate of Rosta, 111 Ill. App. 3d 786, 444 N.E.2d 704
(1982), and In re Estate of Fender v. Fender, 96 Ill. App. 3d 1029, 422 N.E.2d 107 (1981), the
burden of the residue rule should not be applied. In Rosta, the court concluded that the doctrine
of equitable apportionment applied where there were nonprobate assets in an estate which
generated federal estate taxes and there was no direction from the decedent that precluded
apportionment. Rosta, 111 Ill. App. 3d at 799. Here, there was direction from the decedent that
estate taxes were to be paid by the estate. In Fender, the court determined that the decedent's
provision that the executrix pay all legitimate debts " 'out of the first monies available therefore' "
was not a clear direction to exhaust the residue and so estate taxes were subject to apportionment
among the beneficiaries of the probate and nonprobate estates. Fender, 96 Ill. App. 3d at 1034.
Here, there was a clear direction from the decedent that estate taxes were to be paid from the
estate. Neither Rosta nor Fender requires equitable apportionment of the taxes here.
Plaintiff's cause of action was properly dismissed under section 2-619 of the Code. 735
ILCS 5/2-619 (West 2004). The judgment of the circuit court is affirmed.
Affirmed.
R. GARCIA and R.E. GORDON, JJ., concur.
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