Adames v. Florey (In re Adames)
| Citation | 178 N.E.3d 235,448 Ill.Dec. 911,2020 IL App (1st) 190573 |
| Decision Date | 20 October 2020 |
| Docket Number | No. 1-19-0573,1-19-0573 |
| Parties | IN RE ESTATE OF Fermin G. ADAMES, Deceased, (Fermin A. Adames, Petitioner-Appellee, v. Lawrence Florey, as Trustee of the Kyle Adames Trust; Janell Adames; Kyle Adames; Maquis Tolari; Leo Adames; Jennifer Smith; and John Mohan, Executor, Respondents (Lawrence Florey, Janell Adames, and Kyle Adams, Respondents-Appellants; Maquis Tolari, Leo Adames, Jennifer Smith, and John Mohan, Respondents-Appellees)). |
| Court | United States Appellate Court of Illinois |
James E. Dahl and Christopher J. Miller, of Dahl & Bonadies, LLC, of Chicago, for appellants.
Joseph D. Newbold, Christa D. Wittenberg, and Joseph E. Gumina, of O'Neil, Cannon, Hollman, DeJong & Laing S.C., of Milwaukee, Wisconsin, for appellee Fermin A. Adames.
Jared R. Cloud, Jeanette S. Hunter, and Agnieszka Kawecki, of McDermott Will & Emery LLP, of Chicago, for appellee John Mohan.
No brief filed for other appellees.
¶ 1 Respondents-appellants, Lawrence Florey (Florey), Kyles Adames (Kyle), and Janell Adames (Janell), appeal from the judgment of the circuit court granting a motion by petitioner-appellee Fermin A. Adames (Fermin Jr.) to enforce a settlement agreement pertaining to the estate of Fermin G. Adames. On appeal, respondents argue that the circuit court erred in enforcing the settlement agreement where (1) John Mohan (Mohan), as executor and successor trustee of the Fermin G. Adames Trust (Decedent's Trust), repudiated his obligations under the settlement documents by proposing an additional agreement; (2) Florey, as trustee of the Kyle Adames Trust (Kyle's Trust), did not participate in the settlement negotiations nor sign the settlement agreement and related documents; (3) the validity of the settlement documents was contingent upon their execution and delivery; and (4) the settlement agreement violated the statute of frauds. For the reasons that follow, we reverse.
¶ 3 On January 29, 2012, decedent Fermin G. Adames passed away. Decedent was previously married to Leslie Adames (Leslie). Following his divorce from Leslie, decedent married Janell. Decedent had three children: Fermin Jr., Maquis Tolari (Maquis), and Kyle.1 Decedent also had at least one niece and one nephew, Jennifer Smith (Jennifer) and Leo Adames (Leo).
¶ 5 Prior to his death, on August 4, 2008, decedent executed a will. Pursuant to "Article Sixth" of the will, Mohan was appointed as the executor. The will "poured over" the residue of decedent's estate, after specific bequests, into Decedent's Trust.2
¶ 6 Decedent's Trust provided for a distribution of the residue of the estate, which included (1) 100% of the stock in Tempco Electric Heater Corporation (Tempco) and (2) 100% of the interest in two parcels of real estate located at 607 and 610 North Central Avenue in Wood Dale, Illinois (Properties), which were leased by Tempco. The distribution of the Tempco stock was directed as follows: 52% to Fermin Jr.; 21% to Kyle, held in Kyle's Trust; 21% to Maquis; 3% to Jennifer; and 3% to Leo. Decedent's Trust also provided for the distribution of the Properties: 40% to Janell, held in trust (Marital Trust); 20% to Fermin Jr.; 20% to Kyle, held in Kyle's Trust; and 20% to Maquis.
¶ 7 The agreement for Decedent's Trust stated that Kyle's shares were to be "held by a trustee and administered as set forth in Article Sixth." Pursuant to "Article Sixth" of the agreement for Decedent's Trust, the income from Kyle's shares were to be paid to him in "convenient installments, at least quarterly" during his lifetime or until there was complete distribution of the shares. The agreement for Decedent's Trust also reserved for the trustee the ability to "pay to or on behalf of Kyle such sums from the principal of his share as the trustee deems necessary or advisable from time to time for [Kyle's] heath, maintenance in reasonable comfort, education (including postgraduate) and best interests." Additionally, Kyle could withdraw "any part" of the principal of his shares at any time after reaching the age of 25. However, such withdrawal could "not exceed in the aggregate ½ in value thereof prior to reaching the age of 30 years."
¶ 8 Similarly, the agreement for Decedent's Trust provides that Janell's shares be "held by a trustee" of the Marital Trust and "administered as set forth in Article Fifth." Pursuant to "Article Fifth," Janell would receive income from the trust in "convenient installments, at least quarterly" during her lifetime, and the trustee may pay Janell "such sums from principal as the trustee deems necessary *** for her health, maintenance in reasonable comfort, and best interests, considering her income from all sources known to the trustee."
¶ 9 Lastly, the agreement for Decedent's Trust provided that decedent was to serve as trustee of Decedent's Trust during his lifetime. In the event of decedent's death, resignation, or inability to manage affairs, the agreement designated Mohan as the trustee. Edmund P. Burke was designated as successor trustee to Mohan, and "Harris, N.A." was designated as Burke's successor trustee. The agreement provided that, in the event of "resignation, refusal or inability to act of the last successor trustee," decedent, "if living, otherwise the beneficiary or a majority in interest of the beneficiaries then entitled to receive or have the benefit of the income from[ the trust" would have the power to appoint another successor trustee.3
¶ 11 On February 29, 2012, the will was admitted to probate, and "letters of office" were issued to Mohan "as independent executor." On October 4, 2016, Mohan, through counsel, notified Tempco as well as the beneficiaries that he intended to file with the probate court "documents necessary to request approval to distribute the assets of the Estate and Trust to the beneficiaries, close the Estate and discharge Mr. Mohan." According to Mohan, such filing was necessary, as efforts to arrange a settlement among the parties regarding both the estate and the trust had failed. Specifically, Mohan provided that, since 2015, several drafts of a proposed term sheet were circulated but the parties were unable to resolve the issues in a "mutually amicable way and/or [failed to] respond to requests for feedback."
¶ 12 On December 2, 2016, Mohan as executor of the estate and successor trustee of Decedent's Trust concurrently filed a "Verified Petition For Approval of Plan of Distribution and Exoneration of Executor and Trustee" and "Verified Petition For Approval of Interim Accounts" (collectively, the Verified Petitions).
¶ 13 The distribution petition provided that, "[a]s of the date of Decedent's Death, the Estate and the Trust did not have sufficient cash or marketable securities" to pay decedent's "outstanding debts." The petition further stated that because of this, the estate was left with no residue given that "all of Decedent's assets not specifically bequeathed [would be] used to pay Decedent's outstanding debts, federal, and Illinois estate taxes, administration expenses and federal and state income taxes." The distribution petition sought the court's approval of Mohan's proposed plan of distribution of the estate's remaining assets as well as an entry of an order "[e]xonerating [Mohan], as executor of the Estate and as trustee of the Trust, for the period beginning with the date of [Decedent's death] and continuing up to and including the completion of all distributions."
¶ 14 The interim accounts petition, on the other hand, noted that Tempco made substantial distributions to the estate so that the estate could pay the outstanding debts, including "federal and Illinois estate tax bills, federal and state income tax bills and administration expenses in full." The interim accounts petition sought approval of Mohan's accounts for his administration of the estate and his accountings of receipt and disbursements of the estate from January 29, 2012, through November 30, 2016.
¶ 15 Janell and Kyle, through counsel, subsequently filed a motion for leave to take discovery and set a briefing schedule on the petitions, arguing that discovery was proper given that Mohan refused to provide financial information necessary to evaluate the proposed accounting of the estate. Janell and Kyle also argued, inter alia , that the petitions were premature because (1) the distribution petition acknowledged that Mohan did not fully discharge his duties with respect to the estate's tax obligations and (2) Mohan refused to cooperate with them regarding the proposed accounting for the estate and their requests for additional information pertaining to expenditures.
¶ 16 On January 4, 2017, the circuit court ordered the parties to engage in informal discovery, subject to entry of a protective order. On July 31, 2017, Janell, Kyle, and Fermin Jr. filed objections to Mohan's accounting. In its June 25, 2018, order, the circuit court ruled on the objections and ordered Mohan to file a final accounting and amended plan of distribution. On July 12, 2018, Mohan timely filed the final accounting and amended plan of distribution.
¶ 18 In July 2018, the parties, via e-mail, confirmed reaching an "agreement in principle" on the terms governing the amount of distribution and dividend payments to Tempco's shareholders. The e-mail exchange showed that the parties agreed, inter alia , that (1) no transfers of Tempco's shares would be made for a period of five years following the execution of the settlement agreement, (2) the shareholders for Tempco would each receive distributions sufficient to satisfy the tax liability owed by each shareholder, (3) Kyle and his trustee would not sell Kyle's shares for a period of five years following the agreement's execution, (4) Kyle would annually receive...
To continue reading
Request your trial
-
Grove v. Morton Cmty. Bank
...legal title holder of the trust property and is a "necessary part[y] to actions involving [the] trust property." See In re Estate of Adames , 2020 IL App (1st) 190573, ¶¶ 59, 70, 448 Ill.Dec. 911, 178 N.E.3d 235. ¶ 26 From these authorities, we conclude that Grove, as co-successor trustee o......