Woolfson v. Chicago Title and Trust Company

2022 IL App (1st) 210868-UNo. 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
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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
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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
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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
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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
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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
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¶ 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:
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“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
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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
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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
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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.
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