Dilenbeck v. Dilenbeck-Brophy , 2020 IL App (3d) 190541 ( 2020 )

2020 IL App (3d) 190541Opinion filed December 18, 2020
____________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
2020
KAREN K. DILENBECK, as Sole Trustee of ) Appeal from the Circuit Court
the Duane W. and Beverly A. ) of the 14th Judicial Circuit,
Dilenbeck Living Trust Dated ) Henry County, Illinois.
02/03/1994, )
)
Plaintiff-Appellant, )
) Appeal No. 3-19-0541
v. ) Circuit No. 17-MR-73
)
DENNA DILENBECK-BROPHY and )
NANCY DILENBECK-DEDECKER, )
) Honorable Terence M. Patton,
Defendants-Appellees. ) Judge, Presiding.
____________________________________________________________________________
JUSTICE SCHMIDT delivered the judgment of the court, with opinion.
Presiding Justice Lytton and Justice McDade concurred in the judgment and opinion.
OPINION
¶1 Following admittedly contentious attempts to distribute assets of a trust established by her
late parents, plaintiff Karen Dilenbeck, acting as trustee, filed a complaint for declaratory judgment
seeking the disinheritance of her sisters, defendants Denna Dilenbeck-Brophy and Nancy
Dilenbeck-Dedecker pursuant to an in terrorem clause within the trust. The lower court interpreted
the language of the trust and ruled Karen was without authority to file the claim in a court of law.
The court found that all claims needed to be submitted to a special cotrustee. The court dismissed
the complaint without prejudice, stating Karen could file a complaint after the matter was
submitted to a special cotrustee. Karen never submitted the matter to a special cotrustee.
Undeterred, she filed a similar complaint, which the court also dismissed. Karen now appeals. We
dismiss her appeal as untimely.
¶2 I. BACKGROUND
¶3 Duane and Beverly Dilenbeck executed documents effectuating the Duane W. and Beverly
A. Dilenbeck Living Trust. Duane and Beverly acted as the initial trustees. Their daughters, Karen
Dilenbeck, Denna Dilenbeck-Brophy, and Nancy Dilenbeck-Dedecker, are the sole living children
of Duane and Beverly, as well as the only beneficiaries under the trust. The assets of the trust
include, among other things, farmland, equipment, vehicles, stock, and personal property. Of note,
the language of the trust contains “Special Co-Trustee Provisions” as well as an in terrorem clause.
¶4 The “Special Co-Trustee Provisions” are meant to resolve disputes and conflicts of interest
and to protect trust assets. Subsection h. of the provisions titled “Resolution of Disputes” provides:
“The Special Co-Trustee may unilaterally resolve any dispute, claim or
conflict between beneficiaries *** between a beneficiary and a trustee, or
between trustees. Such resolution shall be binding on all parties to our Trust
and shall not be subject to review. No one may file or instigate a claim in a
court of law without first submitting the claim to the Special Co.-Trustee for
resolution ***. The Special Co-Trustee may submit the claim or dispute for
mediation and/or binding arbitration. Subsequent to his or her review, the
Special Co-Trustee may give any claimant the authority to file and maintain
an action in a court of law.” (Emphasis added.)
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¶5 The in terrorem clause provides that, “[n]otwithstanding the ‘Resolution of Disputes’
provisions under [the Special Co-Trustee Provisions] of our Trust,” certain enumerated conduct
would result in disinheritance of a beneficiary. The clause also provides that “[t]he authority of the
Special Co-Trustee appointed under [the Special Co-Trustee Provisions] to resolve disputes
between *** beneficiary and Trustee *** in no way nullifies the provisions of this Section.”
¶6 Subsequent to the enactment of the trust, Beverly passed away, leaving Duane as the sole
trustee. Pursuant to the provisions of the trust, Duane executed an amendment naming himself and
his daughter Karen as cotrustees. Duane, prior to his death in August 2016, resigned as cotrustee,
leaving Karen as the sole trustee.
¶7 After Duane’s death, in an attempt to begin distributing assets from the trust, Karen decided
to rely upon an appraisal report provided by Sikich LLP for the valuation of the Geneseo
Communication stock held within the trust. The appraisal was prepared for Geneseo
Communication Inc., for corporate planning purposes and annual reporting to shareholders. The
appraisal specifically provided, “[t]he resulting conclusions presented herein should not be used
for any other purpose or by any other party for any purpose.” Denna and Nancy objected to the
use of the appraisal. Instead, they wanted to appoint a special cotrustee to value the stock. The
terms of the trust allowed for a special cotrustee to be designated by a majority vote of the
beneficiaries.
¶8 On April 17, 2017, Karen, in her capacity as trustee, filed a complaint for declaratory
judgment seeking to enforce the trust’s in terrorem clause and disinherit Denna and Nancy from
all bequests under the trust. Karen alleged that Denna and Nancy had engaged in 15 separate acts
that violated the clause. Denna and Nancy’s acts included:
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“a. Objected to the allocation of the Geneseo [Communication]
Company stock to [Nancy] asking that the trust be disregarded in this
respect and that one-third of the Geneseo Telephone Company stock be
allocated to each beneficiary so that she would receive more of the other
liquid assets;
b. Objecting to [Karen’s] determination to use the appraised valuation
as of December 31, 2015 of the Geneseo Communications stock based upon
the appraised per share value determined by the expert selected by the
company, [Sikich LLP];
c. Objected to [Karen] having the authority to select the appraiser to
appraise the trust real estate and asking that Defendants also be involved in
all interviews of appraisers.
***
n. [Denna] entered into a cash-rent farming agreement(s) ***,
executed a lease, or leases, and accepted a down payment of funds in this
regard, thereby wrongfully exerting control over trust assets, without the
input or consent of [Karen];”
¶9 In response, Denna and Nancy filed a motion asking the circuit court to compel alternative
dispute resolution or, alternatively, to dismiss Karen’s complaint pursuant to section 2-615 of the
Code of Civil Procedure (735 ILCS 5/2-615 (West 2016)) for failing to allege actions that would
subject them to the in terrorem clause. Relevant here, Denna and Nancy requested that the court
force Karen to bring the matter before a special cotrustee as they alleged the provisions in the trust
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mandated. Karen then filed a motion for “Turnover of Funds and to Invalidate Lease Agreement”
related to the cash-rent farming agreements allegedly entered into by Denna.
¶ 10 After hearing arguments on the motions, the court interpreted the trust, finding that Karen
was required to bring any claim before a special cotrustee prior to a court of law hearing the matter.
The court stated,
“But what I really focus on is on the top of page 3-8 [Special Co-
Trustee Provisions, subsection h., Resolution of Disputes]. It says—and this
is a quote—‘No one may file or instigate a claim in a court of law without
first submitting the claim to the Special Co-Trustee for resolution together
with detailed supporting information and a detailed supporting
memorandum of law,’ closed quote. That seems pretty clear to me. Whoever
you are, if you want to file something in court, you first have to take it to a
special co-trustee for resolution.”
The court dismissed the complaint without prejudice.
¶ 11 Karen then filed a motion to reconsider. The court denied the motion on January 9, 2018,
stating,
“All right, looking at the trust document *** and this is the section
we’re talking about, the special co-trustee, it says, ‘No one may file or
instigate a claim in a court of law without first submitting the claim to the
Special Co-Trustee for resolution.’ That, in my opinion, can’t be any
clearer. No one may file or instigate a claim. It doesn’t limit and say certain
claims have to be submitted to the special co-trustee and certain don’t. It
says no one may file or instigate a claim.
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***
So the way I read this is that you must first submit it to the special
co-trustee before you can instigate or file a claim in a court of law, and that’s
why I granted the motion to dismiss. That’s the defect in the pleading, and
there’s no allegation that this was first submitted to the special co-trustee or
no allegation that the plaintiff made good-faith efforts to submit it to the
special co-trustee and the defendants refused to cooperate. ***
So once that’s done, I mean, an amended pleading can be filed
alleging ‘we did submit this to a special co-trustee’ or—or what have you.
But that was the defect in the pleading, and that was the basis of the
motion—the granting of the motion to dismiss.”
Karen never submitted the claim to a special cotrustee.
¶ 12 On March 16, 2018, Karen, in her capacity as trustee, filed a two-count, amended complaint
for declaratory judgment under the same case number as the previous complaint. Karen, again,
alleged her sisters had violated the in terrorem clause of the trust and, as a result, should be
disinherited. In addition, Karen sought the assistance of the circuit court in “enforcing her authority
as trustee.” Explicitly, Karen stated that, pursuant to certain provisions of the trust, she had the
authority to have the Geneseo Communication stock valued by an appraiser of her choosing.
Despite Denna and Nancy’s refusal to accept the appraisal by the selected appraiser, Karen alleged
“[t]here is no basis for the appointment of a Special Trustee” absent evidence showing a need to
protect assets or the interests of the beneficiaries.
¶ 13 Denna and Nancy requested the court dismiss the complaint, asserting that Karen failed to
allege any actions committed by them that would compel the use of the in terrorem clause.
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Furthermore, they argued that all disputes needed to be brought before the special cotrustee, as
previously ordered by the court.
¶ 14 The circuit court heard arguments, after which it entered judgment in favor of Denna and
Nancy. The court, again, found that Karen needed to submit her claims to a special cotrustee. The
court stated,
“My belief is the same now as it was before. This is a claim that must be
submitted to the special co-trustee before anyone can file an action in court,
and it specifically provides that the special co-trustee, they can interpret or
decide what the trust says, and if they wish, if the special co-trustee wishes,
the special co-trustee can file a declaratory judgment action or instruct the
trustee to do so.”
¶ 15 Karen sought reconsideration of the court’s ruling. The court heard arguments on the
motion to reconsider and on a motion for sanctions filed by Denna and Nancy. The court denied
the motion to reconsider and took the motion for sanctions under advisement. Karen filed her
notice of appeal on September 12, 2019. The motion for sanctions remains pending in the circuit
court.
¶ 16 In this court, Denna and Nancy filed a motion to dismiss the appeal, arguing that we lacked
jurisdiction to review the matter on numerous grounds. The sisters requested that we enter
judgment “promptly” and not review the motion to dismiss with the appeal. We denied the motion
to dismiss, ordering the parties to address the issue of subject-matter jurisdiction in their briefs.
¶ 17 II. ANALYSIS
¶ 18 Karen counters Denna and Nancy’s arguments in the motion to dismiss asserting that this
court has jurisdiction to hear her appeal. She argues that (1) the lower court’s August 13, 2019,
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order was a final judgment that disposed of a definite and separate portion of the controversy,
(2) the words “without prejudice” in the lower court’s order does not strip us of jurisdiction,
(3) Illinois Supreme Court Rule 304(b)(1) (eff. Mar. 8, 2016) bestows jurisdiction upon this court,
and (4) in the alternative, even if her appeal is premature, we should hold the matter in abeyance
until the motion for sanctions is disposed of below pursuant to Illinois Supreme Court Rule
303(a)(2) (eff. July 1, 2017).
¶ 19 Denna and Nancy respond by arguing that (1) the lower court orders were not substantively
final, (2) the words “without prejudice” in the most recent order require a finding that the order
was interlocutory, (3) Rule 304(b)(1) does not confer jurisdiction, and (4) Karen’s appeal is
untimely or, in the alternative, premature.
¶ 20 Appellate jurisdiction is a question of law that we review de novo. People v. Salem, 2016
IL 118693, ¶ 11. We turn our attention to whether the lower court’s orders were final or
interlocutory, as we find this issue decisive.
¶ 21 The difference between final and interlocutory orders has not been “scientifically
prescribed.” Ylonen v. Ylonen, 2 Ill. 2d 111, 116 (1954). In a civil case, every final judgment
rendered in the circuit court is appealable as a matter of right by the parties. Ill. S. Ct. R. 301 (eff.
Feb. 1, 1994). A final order has been defined as one that “ascertains and fixes absolutely and finally
the rights of the parties in the lawsuit.” Flores v. Dugan, 91 Ill. 2d 108, 112 (1982). Courts have
also found that a final judgment is one that ultimately disposes of the rights of the parties, either
on the entire controversy or some definite and separate part of it. See In re Marriage of Gutman,
232 Ill. 2d 145, 151 (2008); Roddy v. Armitage-Hamlin Corp., 401 Ill. 605, 609-10 (1948); see
also A.J. Smith Federal Savings Bank v. Sabuco, 2013 IL App (3d) 120578, ¶ 14.
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¶ 22 Generally, the dismissal of a complaint “without prejudice” makes such an order
interlocutory and unappealable. See DeLuna v. St. Elizabeth’s Hospital, 147 Ill. 2d 57, 76 (1992).
However, it is well established that, in determining whether an order is final, we look to its
substance and effect rather than simply relying on its form. See Clemons v. Mechanical Devices
Co., 202 Ill. 2d 344, 350 (2002); In re J.N., 91 Ill. 2d 122, 128 (1982); Mills v. Ehler, 407 Ill. 602,
609 (1950); Altschuler v. Altschuler, 399 Ill. 559, 570 (1948); Krause v. USA DocuFinish, 2015
IL App (3d) 130585, ¶ 16. An order meant to be interlocutory and directing for further proceedings
may nonetheless “so completely adjudicate the rights of the parties as to constitute a final and
appealable order.” Altschuler, 399 Ill. at 570; Groves v. Farmers State Bank of Woodlawn, 368 Ill.
35, 45 (1937). “The question of finality must be considered with reference to the particular facts
and circumstances of each case.” Clemons, 202 Ill. 2d at 350 (citing Mills, 407 Ill. at 609; Roddy,
401 Ill. at 610).
¶ 23 Karen contends that, once the circuit court interpreted the trust, thereafter requiring her to
submit all claims to a special cotrustee as a prerequisite of seeking judicial intervention, the court
“clearly entered a final order disposing of some definite and separate portion of the controversy.”
(Emphasis in original.) We agree. The court’s order was a substantive disposition regarding the
interpretation of trust provisions. The court adjudicated Karen’s rights as trustee to bring suit under
the in terrorem clause. The court also settled the dispute as to whether a special cotrustee was
required. By its plain language, the trust provided for the disinheritance of beneficiaries under the
in terrorem clause in the presence of certain conduct, “[n]otwithstanding” the special cotrustee
provision concerning resolution of disputes. The lower court relied on the resolution of disputes
provision, denied Karen the authority to bring a suit under the in terrorem clause and, instead,
vested that authority within the special cotrustee.
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¶ 24 By vesting the authority in the special cotrustee, the lower court also adjudicated the rights
of Denna and Nancy. Karen had been resisting attempts by her sisters to have a special cotrustee
appointed. By the terms of the trust and the circumstances at the time of this litigation, Denna and
Nancy were able to designate a special cotrustee of their choosing by voting together. In
interpreting the trust, the court resolved the matter by finding Karen lacked the authority to bring
the cause and that Denna and Nancy would get to select a special cotrustee to hear the matter.
While it is clear the circuit court intended that Karen could bring her claims before the court again
if allowed by the special cotrustee, by ruling Karen lacked authority to pursue the claim and
enforcing a condition precedent of bringing all claims before the special cotrustee, the court
entered a final disposition in the matter at hand. Per the provisions of the trust, once Karen submits
a claim to the special cotrustee, there is the distinct possibility that the claim may never see the
inside of a courtroom, given the binding impact the trust gives to the special cotrustee’s decisions.
¶ 25 In light of the analysis above, we find the language “without prejudice” in the orders
granting dismissal of Karen’s complaints is not determinative of whether they were final in nature.
The words “without prejudice” are not talismanic and do not require blind deference when
determining the effect of the lower court’s order. See United States v. City of Milwaukee, 144 F.3d
524, 531 (7th Cir. 1998) (stating that the phrase “without prejudice” is not accorded “talismanic
importance” and instead “the totality of the circumstances” dictates whether an order satisfies the
final judgment rule); accord Altschuler, 399 Ill. at 570. Here, after the lower court’s ruling, there
was no amendment to the pleadings that would allow Karen to pursue her claim without
accomplishing the condition precedent the lower court established through interpretation of the
trust.
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¶ 26 Under these specific facts and circumstances, we find that, when the lower court interpreted
the trust, adjudicated certain powers of the trustee, and settled the underlying dispute concerning
the special cotrustee, its ruling constituted a final judgment.
¶ 27 However, that does not end the inquiry into our jurisdiction over this matter. The circuit
court made the abovementioned substantive finding not once but twice. When reviewing the circuit
court’s separate findings, they are substantively identical. Denna and Nancy point this out and
argue that if we find persuasive Karen’s argument that the circuit court’s order is a final
judgment—which we do—then this appeal is untimely due to the failure to appeal the lower court’s
original order. We find this argument dispositive.
¶ 28 The timely filing of a notice of appeal is both mandatory and jurisdictional. Secura
Insurance Co. v. Illinois Farmers Insurance Co., 232 Ill. 2d 209, 213 (2009). Pursuant to Illinois
Supreme Court Rule 303(a)(1) (eff. July 1, 2017), “[t]he notice of appeal must be filed with the
clerk of the circuit court within 30 days after the entry of the final judgment appealed from,” or in
the case of a timely posttrial motion “within 30 days after the entry of the order disposing of the
last pending postjudgment motion” directed against the judgment.
¶ 29 The court denied Karen’s motion to reconsider the original order on January 9, 2018. The
court’s judgment was final in nature, giving Karen 30 days to file her notice of appeal. Karen
allowed the 30 days to pass without filing a notice of appeal, and instead, on March 16, 2018, she
opted to file an amended complaint under the same case number. When faced with this new
complaint, the circuit court reiterated, “[m]y belief is the same now as it was before. This is a claim
that must be submitted to the special co-trustee before anyone can file an action in court[.]” The
court’s original order was a final judgment, determining the parties’ rights in this matter. See
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Altschuler, 399 Ill. at 570. At oral arguments, Karen’s counsel acknowledged the original order
was final in nature. As a result, the appeal before us is untimely.
¶ 30 Accordingly, we dismiss this appeal for a lack of jurisdiction.
¶ 31 III. CONCLUSION
¶ 32 For the foregoing reasons, we dismiss the appeal for lack of jurisdiction.
¶ 33 Appeal dismissed.
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No. 3-19-0541
Cite as: Dilenbeck v. Dilenbeck-Brophy, 2020 IL App (3d) 190541Decision Under Review: Appeal from the Circuit Court of Henry County, No. 17-MR-73;
the Hon. Terence M. Patton, Judge, presiding.
Attorneys Katherine Varlas Teel, of Pepping, Balk, Kincaid & Olson, Ltd.,
for of Silvis, for appellant.
Appellant:
Attorneys Julie L. Galassi and Melinda L. Mannlein, of Hasselberg, Rock,
for Bell & Kuppler, LLP, of Peoria, for appellees.
Appellee:
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