Nessler v. Nessler ( 2008 )

Filed 3/14/08 NO. 4-07-0220
IN THE APPELLATE COURT
OF ILLINOIS
FOURTH DISTRICT
JILL D. NESSLER, n/k/a JILL D. EGIZII, ) Appeal from
Plaintiff-Appellant, ) Circuit Court of
v. ) Sangamon County
FREDERIC W. NESSLER, ) No. 05CH253
Defendant-Appellee. )
) Honorable
) Theodis P. Lewis,
) Judge Presiding.
_________________________________________________________________
JUSTICE COOK delivered the opinion of the court:
Plaintiff Jill D. Nessler, now known as Jill D. Egizii,
brought an action for money damages proximately caused by defen-
dant Frederic W. Nessler's alleged fraudulent inducement of her
execution of a marital settlement agreement (MSA) and other
ancillary documents. The agreement was incorporated in a judg-
ment of dissolution. Defendant moved pursuant to section 2-619
of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West
2006)) to dismiss plaintiff's action as an attack upon the
judgment of dissolution in violation of sections 2-1203 (735 ILCS
5/2-1203 (West 2006)) and 2-1401 (735 ILCS 5/2-1401 (West 2006))
of the Code. The trial court granted defendant's motion.
Plaintiff appeals. We reverse and remand.
I. BACKGROUND
Plaintiff alleged the following in her second amended
complaint.
Defendant and plaintiff were married on January 16,
1983. The couple was married in and resided in Sangamon County.
During their marriage, defendant was a licensed attorney in
Illinois and actively engaged in the practice of law. Plaintiff
was not an attorney but worked at her husband's law firm.
Plaintiff claimed she knew nothing about the investment and
management of the couple's assets and allowed defendant to
exercise absolute influence and control over all of their assets.
During the marriage, the couple acquired substantial real and
personal property and the acquisition of the property was at the
direction and under the control of defendant.
In 1996, plaintiff spoke to defendant about a separa-
tion or divorce. At that time, plaintiff claimed she had no
knowledge of her rights upon dissolution of their marriage, and
she had no knowledge of the nature and extent of the parties'
marital property. According to plaintiff, once she brought up
separation or divorce, defendant began a plan to secure title,
control, and sole benefit of all of the couple's marital assets
in violation of her rights upon dissolution. To further his
plan, defendant told plaintiff he still loved her and did not
want to dissolve their marriage.
Plaintiff claimed she believed defendant still loved
her, and based upon that belief she continued to trust him
regarding his representations about the dissolution of the
marriage and management of their joint assets. According to
plaintiff, defendant made the following misrepresentations to
her: (1) upon a dissolution of their marriage the court could
and likely would place substantially all of their marital assets
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in trust for their children; (2) since he had earned the money
giving rise to the acquisition of the assets, he would be awarded
all of the assets not placed in a trust for the parties' chil-
dren; and (3) she would not receive any marital assets or income
upon a dissolution of the parties' marriage. Defendant then told
plaintiff he would be willing to enter into an agreement with her
giving her one half of all of their property if she agreed to
continue to live in a separate residence on the couple's marital
property and not publicly disclose any change in their status as
husband and wife in furtherance of his attempt to reconcile their
marriage. Plaintiff agreed to defendant's proposal relying upon
defendant's misrepresentations.
Defendant then engaged an attorney to prepare various
documents that plaintiff claimed effectively denied her title to
any of the couple's marital property upon the dissolution of
their marriage. The documents were (1) the MSA, which deposited
all of the couple's property into two trusts with plaintiff and
defendant as trustees but with defendant maintaining absolute and
exclusive control for his lifetime; (2) the Nessler living trust
agreement, which named plaintiff and defendant trustees but which
gave plaintiff no rights until defendant's death; (3) the Nessler
children's trust, which named plaintiff and defendant as trustees
but which gave plaintiff no interest of any kind; and (4) com-
plaints for dissolution of marriage and ancillary documents
captioned in various counties.
Defendant told plaintiff that the MSA provided for the
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couple's common ownership of all of their marital assets as equal
trustees and would divide the assets equally upon the failure of
the parties to reconcile their marriage. Plaintiff claims
defendant did not present the MSA to her until October 18, 1996,
when he took her to the courthouse in Virginia, Illinois, to
secure a judgment of dissolution. Defendant counters that the
MSA shows that both parties appeared before a notary public on
October 15, 1996, and signed the MSA.
Plaintiff stated she did not engage or retain counsel
relative to the preparation or review of the MSA and trusts and
signed the documents without the benefit of counsel. Plaintiff
also did not have counsel at the court appearance for the disso-
lution. Despite plaintiff being the petitioner for the dissolu-
tion, she claimed defendant presented the judgment of dissolution
of marriage (judgment) adopting the MSA. The judgment was
entered the same day. Defendant then took plaintiff to Quincy,
Illinois, and filed the judgment under seal in the circuit court
of Adams County. Plaintiff claimed she never received a copy of
the documents she signed or any of the documents relative to the
court's order.
After the court appearance, the couple returned home
and continued to live as husband and wife in the couple's marital
residence. According to plaintiff, defendant concealed the true
impact of the documents and judgment relative to their reconcili-
ation. Defendant told plaintiff that the documents were of no
practical effect by virtue of their immediate reconciliation and
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that they remained married by virtue of the resumption of their
marital relationship. Defendant prepared joint income-tax
returns on behalf of the couple representing that they were still
married for the years 1996, 1997, 1998, and 1999. Defendant
presented the returns to plaintiff. Defendant also submitted
documents to State agencies representing the couple's marriage
existed after the judgment order had been entered. Defendant
told plaintiff that in light of their reconciliation, the prop-
erty acquired since their 1983 marriage remained their common
property. Defendant did not prepare any documents transferring
the marital property to either of the trusts referenced in the
MSA or take any action to effectuate the terms of the MSA until
October 4, 2004. Plaintiff represented that defendant knew that
she mistakenly believed the following: (1) the effect of the
documents she signed was the division of the parties' marital
assets equally between the parties; (2) that by virtue of the
parties' reconciliation said documents were of no force and
effect; and (3) the parties continued to be married.
In 2000, defendant told plaintiff it was necessary to
formally reaffirm their de facto marriage relationship. The
couple was remarried in Tennessee on September 2, 2000.
In 2004, plaintiff advised defendant that she wanted to
dissolve their marriage. Defendant told plaintiff that because
of the documents she signed in 1996, they could divide assets
equally, with each having full ownership and access to their
share, by placing all of their assets in trusts jointly owned by
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them. Sometime in September 2004, defendant had his attorney
prepare documents, including (1) a petition for declaration of
invalidity of marriage; (2) appearance and consent; (3) judgment
for declaration of invalidity of marriage; (4) four warranty
deeds in trust conveying four parcels of property to plaintiff
and defendant as trustees; and (3) three warranty deeds of trust
conveying three parcels of property to plaintiff and defendant as
trustees. Defendant and his counsel presented the documents to
plaintiff and defendant advised her she was obligated to sign to
effectuate the equal division of their property. On or about
September 23, 2004, plaintiff signed the documents, including the
deeds transferring title to various real properties comprising a
portion of the parties' marital assets to irrevocable trusts
designating plaintiff and defendant as trustees but giving
defendant exclusive control. Again, plaintiff did not engage
counsel to represent her or review the documents.
On October 4, 2004, the trial court in Cass County
declared the September 2, 2000, marriage invalid.
Sometime in 2004, plaintiff discovered the true nature
of the documents she signed and that defendant's representations
to induce her to sign were fraudulent. Plaintiff filed suit on
April 27, 2005.
Defendant adds that plaintiff filed the petition for
dissolution on October 18, 1996. Further, plaintiff originally
filed a complaint for declaratory judgment on April 27, 2005,
seeking the following: (1) to declare the MSA and all deeds
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executed under cover of said agreement null and void; (2) to
direct defendant to account to plaintiff and the court of all
disposition of marital property; and (3) in the alternative,
award plaintiff damages in an amount equal to plaintiff's loss of
marital property and/or maintenance proximately caused by the
agreement executed by the plaintiff as a result of defendant's
fraud.
Defendant filed a combined motion to dismiss under
sections 2-615 and 2-619 of the Code (735 ILCS 5/2-615, 2-619
(West 2006)). Plaintiff then filed an amended complaint for
accounting and damages. Count I sought an accounting for all
assets comprising the parties' marital property as it existed on
October 18, 1996, and the disposition of said property in any
manner. Count II sought an accounting of all assets received as
cotrustee of the trusts and disposition of all said assets.
Count III was an action based on fraud seeking that defendant be
ordered to account to her and the court on all of the parties'
marital assets and all disposition of said property and award
plaintiff damages in an amount equal to plaintiff's loss of
marital property and/or maintenance proximately caused by the MSA
executed by plaintiff as a result of defendant's fraud.
Defendant responded to the amended complaint with a
motion to dismiss and a motion for sanctions pursuant to Supreme
Court Rule 137 (155 Ill. 2d R. 137) for plaintiff's false plead-
ings. Attached to the motion for sanctions was the transcript of
the 1996 dissolution of marriage proceedings. The transcript
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showed plaintiff told the court that she talked to an attorney
and he reviewed all the paperwork, she was paying her own attor-
ney fees, she and her attorney read through the division of
property, she understood that defendant was representing his own
interests and she had her own interests, she reaffirmed she
sought legal counsel, and she stated she was clear on the MSA.
The trial court dismissed all three counts of the
amended complaint holding that Pollard v. Pollard, 12 Ill. 2d
441, 147 N.E.2d 66 (1957), made it clear that a fiduciary rela-
tionship does not exist from the mere fact of a marriage alone.
The court went on to note that no authority existed that a
fiduciary relationship was established where the parties were
involved in dissolution proceedings, and the court noted that
once the parties became involved in adversary proceedings, it was
inconsistent that a fiduciary relationship could have been
created. Because the complaint alleged a fiduciary relationship
because of the marital relationship, the complaint was insuffi-
cient at law.
Plaintiff filed the second amended complaint on June
22, 2006, alleging a breach of fiduciary duty and fraud, asking
for an order directing defendant to account for all marital
assets in existence as of October 18, 1996, and asking that the
court award defendant damages equal to her interest in the
property. Defendant filed a motion to dismiss under section 2-
619 of the Code (735 ILCS 5/2-619 (West 2006)) alleging that the
complaint was an attempt to collaterally attack the judgment for
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dissolution of marriage and the complaint was not filed in the
judgment for dissolution of marriage proceedings within the time
frame required by law under sections 2-1203 or 2-1401 of the Code
(735 ILCS 5/2-1203, 2-1401 (West 2006)).
On February 21, 2007, the trial court ruled that the
second amended complaint was a reiteration of allegations in
prior complaints and that there was no independent cause of
action available to plaintiff outside the parameters of section
2-1401 of the Code (735 ILCS 5/2-1401 (West 2006)). The trial
court entered final judgment against plaintiff upon defendant's
section 2-619 motion (735 ILCS 5/2-619 (West 2006)), finding that
an MSA induced by fraud cannot sustain a separate tort action for
money damages and the only available remedy to plaintiff was to
attack the judgment of dissolution of marriage. This appeal
followed.
II. ANALYSIS
Plaintiff argues the trial court erred in finding that
no independent tort action seeking money damages for defendant's
fraudulent inducement of an MSA exists as a matter of law.
Defendant responds that the court was correct that no independent
tort action for fraud exists between former spouses in a dissolu-
tion of marriage proceeding in Illinois.
Plaintiff claims she is not attacking the judgment of
dissolution because her complaint is predicated upon the MSA
underlying the judgment and by extension based upon the judgment
itself. Plaintiff's tort action affirms the existence of the MSA
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and judgment entered therein and seeks money damages proximately
caused by the fraudulently induced MSA and judgment adopting it.
According to plaintiff, where fraud induces a contract, the
defrauded party may elect one of two remedies: (1) rescind the
contract or (2) accept the contract and pursue a cause of action
in tort for damages. Plaintiff elected to accept the contract
induced by defendant's fraud and the judgment of dissolution
adopting it and sue in tort on a fraud theory for money damages
she proximately sustained by virtue of the MSA. Because plain-
tiff did not discover the fraud until 2004, section 13-215 of the
Code (735 ILCS 5/13-215 (West 2006)) applied, allowing her to
commence her suit at any time within five years after she discov-
ered her cause of action.
Defendant argues once the parties to a dissolution
secure a final judgment for the dissolution of the marriage and
that judgment incorporates the MSA, the parties' only redress for
allegations of wrongdoing connected to the MSA is by an attack on
the final judgment under section 2-1203 or 2-1401 of the Code
(735 ILCS 5/2-1203, 2-1401 (West 2006)).
Defendant attacked plaintiff's petition through a
section 2-619 motion (735 ILCS 5/2-619 (West 2006)). A section
2-619 motion "admits the legal sufficiency of the complaint, but
raises defects, defenses, or other affirmative matter apparent on
the face of the complaint or established by external submissions
which defeat the action." Crusius ex rel. Taxpayers of the State
of Illinois v. Illinois Gaming Board, 348 Ill. App. 3d 44, 48,
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807 N.E.2d 1207, 1212 (2004).
The "affirmative matter" defendant raises is that
plaintiff's cause of action is actually an attack on the judgment
of dissolution, was not filed in the dissolution of marriage
proceedings, and was not filed within the time frame required by
section 2-1203, 30 days after the entry of the final judgment, or
section 2-1401, within two years from the date of the entry of
the dissolution judgment. Defendant's section 2-619 motion does
not dispute the elements of fraud in plaintiff's second amended
complaint.
Because parties to a divorce have a cause of action if
they are fraudulently induced to enter an MSA and because plain-
tiff has alleged fraudulent inducement in entering the MSA, we
find that she has a cause of action and the trial court must hear
the parties' evidence to decide whether the evidence is suffi-
cient to grant the relief requested.
In the context of a section 2-619 motion, this court
must accept as true all well-pled facts and all reasonable
inferences from those facts as established in plaintiff's com-
plaint. Crusius, 348 Ill. App. 3d at 48, 807 N.E.2d at 1212.
Plaintiff alleged that she was fraudulently induced to enter into
the MSA that defendant presented to her. A party to a divorce
who signs an MSA and subsequently proves that he or she was
fraudulently induced to sign the MSA has a remedy. See In re
Marriage of O'Brien, 247 Ill. App. 3d 745, 750, 617 N.E.2d 873,
876 (1993) ("A party contending fraudulent inducement in the
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making of a property settlement agreement which is incorporated
into a decree of dissolution may properly obtain relief pursuant
to section 2-1401"); In re Marriage of Hawkins, 106 Ill. App. 3d
68, 70-71, 435 N.E.2d 786, 788 (1982) ("a settlement agreement
procured by fraud, coercion, or one that is contrary to any rule
of law, public policy, or morals, will be set aside and va-
cated").
If a party is fraudulently induced to enter an MSA but
does not discover the fraud until the expiration of the two-year
statute of limitations in section 2-1401, the party is not
without a remedy as the limitations period is tolled during the
time that the grounds for relief are fraudulently concealed. In
re Marriage of Morreale, 351 Ill. App. 3d 238, 241, 813 N.E.2d
313, 317 (2004).
Assuming plaintiff's allegations are true, as we must
at this stage of the proceedings, she may bring an action that
she was fraudulently induced to sign the MSA. Even the passing
of 8 1/2 years from the entry of the 1996 judgment of dissolution
would not bar a section 2-1401 petition if she shows evidence of
fraudulent concealment. See In re Marriage of Halas, 173 Ill.
App. 3d 218, 223-24, 527 N.E.2d 474, 478 (1988). Also, we are
not convinced that the statute of limitations began to run in
1996 when the judgment of dissolution was entered because the
couple remarried in 2000 and the second marriage was declared
invalid in 2004 when the trusts, the subjects of the MSA, were
funded for the first time. This leaves open the question as to
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what effect the remarriage had on the unfunded MSA and what
effect the declaration of invalid marriage has on the then-funded
MSA. See In re Marriage of Parks, 258 Ill. App. 3d 479, 484, 630
N.E.2d 509, 513 (1994) (remarriage of the parties renders a prior
divorce decree unenforceable to the extent the judgment was
unexecuted or incomplete). Defendant has not shown that the
statute of limitations definitively bars plaintiff's fraud claim.
As plaintiff's allegations of fraud support a cause of
action, the trial court erred in dismissing her petition under
section 2-619. Expiration of a statute of limitations is prop-
erly raised under section 2-619, but the allegations of fraud
here are sufficient to toll the running of the statute. A
complaint should not be dismissed for failure to state a cause of
action under section 2-615 unless "it clearly appears that no set
of facts could be proved under the pleadings which would entitle
the plaintiff to relief." City of North Chicago v. North Chicago
News, Inc., 106 Ill. App. 3d 587, 594, 435 N.E.2d 887, 892
(1982); see also In re Marriage of Hoppe, 220 Ill. App. 3d 271,
285, 580 N.E.2d 1186, 1195 (1991) ("A motion to dismiss should
not be granted unless it clearly appears that no set of facts
could ever be proved that would entitle the petitioner to re-
cover"). "A pleading alleging fraud should not be dismissed on
its face if the allegations contained therein establish one
person made a false promise as part of an overall scheme to
defraud, and another was induced to act to her detriment." In re
Marriage of Fricke, 174 Ill. App. 3d 191, 195, 528 N.E.2d 370,
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372-73 (1988); see also Harris v. Harris, 45 Ill. App. 3d 820,
825, 360 N.E.2d 113, 117-18 (1977) (defendant wife's allegations
"although unartful, when combined with the claim that [wife's]
trust in her husband and his implied threat of nonpayment of
legal fees induced the defendant not to retain her own counsel,
are sufficient to allow defendant to present testimony and
evidence in support of the amended petition so that questions of
whether [husband] was guilty of fraud and coercion which induced
the defendant to enter into an inequitable martial settlement
agreement can be resolved by the proofs").
We note that we are not convinced that a fiduciary duty
could not exist according to plaintiff's allegations. This is
not a case of a divorcing husband and wife on level footing. In
this case, defendant husband is an attorney and plaintiff wife is
not. Plaintiff alleges defendant advised her regarding Illinois
divorce laws. Defendant clearly knew his wife was not an attor-
ney and might have known that she would trust his legal advice.
While a marital relationship alone may not establish a fiduciary
relationship, a fiduciary relationship may arise in a marital
relationship as the result of special circumstances of the
couple's relationship, where one spouse places trust in the other
so that the latter gains superiority and influence over the
former. See generally Gonzalzles v. American Express Credit
Corp., 315 Ill. App. 3d 199, 210, 733 N.E.2d 345, 353-54 (2000)
(discussing when a fiduciary relationship exists generally). An
attorney who is asked to represent both parties to effect an
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"agreed" settlement in a dissolution of marriage case has an
obligation to both parties. "Even the attorney who undertakes
his own divorce can encounter liability problems." 2 R. Mallen &
J. Smith, Legal Malpractice §22.1, at 330 (3d ed. 1989), citing
Anderson v. Anderson, 399 N.E.2d 391 (Ind. App. 1979). Under the
facts and circumstances of this case, plaintiff may be able to
establish a fiduciary relationship.
Plaintiff's complaint, while perhaps not well pled,
should not have been dismissed based on a section 2-619 motion as
her allegations establish a cause of action for fraud. We remand
for further proceedings to determine whether defendant fraudu-
lently induced plaintiff to enter into the MSA and, if so, what
relief will appropriately compensate plaintiff. We express no
opinion as to the merits of the parties' claim.
III. CONCLUSION
For the reasons stated, we reverse the trial court's
judgment and remand for further proceedings.
Reversed and remanded with directions.
McCULLOUGH and KNECHT, JJ., concur.
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