Cori v. Schlafly

• Decision Date: 22 January 2021
• Docket Number: 5-20-0246
• Parties: Anne Schlafly CORI, Individually and as a Beneficiary of the John Fred Schlafly Testamentary Trust, Petitioner-Appellee, v. John F. SCHLAFLY, Individually and as Co-Trustee of the John Fred Schlafly Testamentary Trust; Roger Schlafly, Individually and as Co-Trustee of the John Fred Schlafly Testamentary Trust; Bruce S. Schlafly; Andrew L. Schlafly; and Liza Schlafly Forshaw, Respondents (Roger Schlafly, Individually and as Co-Trustee of the John Fred Schlafly Testamentary Trust, Respondent-Appellant; Liza Schlafly Forshaw, Respondent-Appellee).
• Court: United States Appellate Court of Illinois

2021 IL App (5th) 200246
182 N.E.3d 776
450 Ill.Dec. 964

Anne Schlafly CORI, Individually and as a Beneficiary of the John Fred Schlafly Testamentary Trust, Petitioner-Appellee,
v.
John F. SCHLAFLY, Individually and as Co-Trustee of the John Fred Schlafly Testamentary Trust; Roger Schlafly, Individually and as Co-Trustee of the John Fred Schlafly Testamentary Trust; Bruce S. Schlafly; Andrew L. Schlafly; and Liza Schlafly Forshaw, Respondents

(Roger Schlafly, Individually and as Co-Trustee of the John Fred Schlafly Testamentary Trust, Respondent-Appellant;

Liza Schlafly Forshaw, Respondent-Appellee).

NO. 5-20-0246

Appellate Court of Illinois, Fifth District.

January 22, 2021

Laura E. Schrick, of Mathis, Marifian & Richter, Ltd., of Belleville, for appellant.

Ann E. Callis, of Holland Law Firm, of Granite City, and Matthew J. Rossiter, Timothy J. Lemen, and Maxwell G. Murtaugh, of Rossiter & Boock, LLC, of St. Louis, Missouri, for appellee Anne Schlafly Cori.

Kelley F. Farrell, of Capes, Sokol, Goodman & Sarachan, P.C., of St. Louis, Missouri, for other appellee.

OPINION

JUSTICE MOORE delivered the judgment of the court, with opinion.

450 Ill.Dec. 966

¶ 1 The respondent, Roger Schlafly, individually and as co-trustee of the John Fred Schlafly Testamentary Trust (Trust), appeals, pursuant to Illinois Supreme Court Rule 307(a)(1) (eff. Nov. 1, 2017), the July 20, 2020, order of the circuit court of Madison County. This order granted a partial summary judgment in favor of the petitioner, Anne Schlafly Cori, individually, as a beneficiary of the Trust, as well as the respondent, Liza Schlafly Forshaw. As a result, the order required Roger to make an accounting and to submit a schedule for the distribution of the Trust assets, including a one-sixth share of the trust assets to Anne and a one-sixth share to Liza. For the following reasons, we affirm.

¶ 2 I. BACKGROUND

¶ 3 On September 29, 2017, Anne filed a petition in the circuit court of Madison County, seeking to have the circuit court adjudicate her rights as a beneficiary of the Trust. According to Anne's petition, John Fred Schlafly Jr. (Mr. Schlafly) and Phyllis Schlafly (Mrs. Schlafly) were husband and wife. Mr. Schlafly executed his last will and testament (Will) on December 10, 1982. The Will created the Trust, providing that the residue of Mr. Schlafly's estate be held in trust for the benefit of

182 N.E.3d 779

450 Ill.Dec. 967

Mrs. Schlafly and naming Roger, as well as John F. Schlafly, as co-trustees.

¶ 4 Anne's petition states that the Trust terminated upon Mrs. Schlafly's death and, pursuant to the terms of the Will and Trust, the remaining Trust assets were to be divided into equal shares for each of Mr. Schlafly's six children: (1) Roger, (2) John, (3) Anne, (4) Liza, (5) Bruce, and (6) Andrew. Anne's petition alleges that Mrs. Schlafly died on September 5, 2016, and Roger and John had not terminated the trust and distributed its assets as required by the Will. Anne's petition names Roger and John as respondents, as well as Liza, Bruce, and Andrew, based on their status as co-beneficiaries. Paragraph 12 of Anne's petition alleges that the court has personal jurisdiction over the parties "as John and Roger are the [c]o-trustees of the Trust which is being administered in Madison County, Illinois, and because [Anne] and Andrew, Bruce, and Liza are beneficiaries of said Trust."

¶ 5 Count I of the petition requests an accounting of Trust assets. Count II requests that Roger and John be compelled to terminate the Trust and distribute its assets equally and outright to the beneficiaries. Count III requests money damages from Roger and John based on breach of trust and count IV requests that Roger and John be removed as co-trustees of the Trust. Anne attached the Will to her petition. The Will bears a file stamp evidencing it was probated in Madison County in 1993. We will refer to the terms of the Will where necessary throughout the remainder of this order.

¶ 6 On January 9, 2018, Roger filed, pursuant to section 2-301 of the Code of Civil Procedure (Code) ( 735 ILCS 5/2-301 (West 2016) ), a special and limited appearance for the purpose of contesting personal jurisdiction. On January 19, 2018, Roger filed a motion to dismiss Anne's petition for a lack of personal jurisdiction. In support of his motion, Roger attached an affidavit in which he avers as follows: (1) he is a resident of California; (2) he has not been a resident of Illinois since 1983; (3) he has not conducted business in Illinois in any way that is relevant to the current lawsuit; (4) he does not own any real property in Illinois; (5) he is not licensed or registered to do business in Illinois; (6) he has not "at any relevant time" had an address, office, telephone number, bank account, employee, agent, or representative in Illinois; (7) he is the trustee of the Trust; (8) he has managed the Trust from California; and (9) the Trust does not have any assets in Illinois. According to Roger's motion, the circuit court does not have personal jurisdiction over him, and Anne's petition fails to allege facts demonstrating the circuit court has jurisdiction over the Trust.

¶ 7 In response to Roger's motion, Anne filed a counteraffidavit. In her counteraffidavit, Anne avers as follows: (1) Anne is a resident of Missouri; (2) Roger is a co-trustee of the Trust with John, who is a resident of Illinois; (3) "[b]ecause [John] resides in Illinois, it is inevitable that some Trust business and administration is being conducted in Illinois which Roger, as a co-trustee either partook in, acquiesced in, or ratified"; (4) the Trust has paid taxes to Illinois; (5) the Will that created the Trust was executed and probated in Illinois; and (6) because Roger and John have refused to provide Anne with a full accounting detailing how the trust is being administered and the location of all the Trust's assets, Anne is unable to accurately ascertain the truth of the statements in John's affidavit regarding the location of the Trust's assets.

¶ 8 On June 14, 2018, the circuit court held a hearing on Roger's motion to dismiss and took the motion under advisement

450 Ill.Dec. 968

182 N.E.3d 780

"pending further discovery and argument." On October 5, 2018, Anne filed a taxpayer's statement from the Illinois Department of Revenue, dated December 1, 2017, reflecting that the Trust owed unpaid Illinois taxes for the year 2006, as well as the years 2009-2015. The statement was addressed to the Trust, in care of John, at an Alton address. Anne also filed a letter from John to Roger, dated December 21, 2017, wherein John notifies Roger that he has decided to resign as co-trustee of the Trust effective December 31, 2017. The letter continues by stating, "I have provided you with books and records of the Trust so that you can fully manage the Trust beginning on January 1, 2018, and I will complete the transfer of any remaining books and records in my possession prior to December 31."

¶ 9 On November 1, 2018, Anne filed further documentation in response to Roger's motion to dismiss. She filed correspondence from John at his address in Alton to the IRS, dated April 18, 2017, attaching full payment for several years of income tax on behalf of the Trust. A copy of the check used to make the payment listed the Trust's address in Alton. Similarly, she filed copies of Illinois tax returns for the years 2009 through 2016, all of which listed the mailing address of the Trust in Alton. She filed the Trust's 2017 Illinois tax return, filed after this lawsuit was instituted, which listed the address of the Trust as Roger's address in California. She filed copies of several checks written on behalf of the Trust that listed that same Alton address, dated on various days in 2012 and 2017, as well as statements from securities brokerage firm Scottrade, dated in various months from 2010 until 2017 addressed to the Trust at that address. A brokerage account application for Scottrade dated in 2018 was completed by Roger at the California address.

¶ 10 In December of 2018, Anne requested a full evidentiary hearing on Roger's motion to dismiss and motion to supplement the record with John's discovery deposition, which was taken on December 14, 2018. The circuit court granted Anne's motion, and an evidentiary hearing was set for January 10, 2019. During his deposition, John testified that he resides in Alton and was co-trustee of the Trust from its inception in 1993 until December 31, 2017. He authenticated the tax documents mentioned above and admitted to having prepared them. However, he testified that Roger made the investment decisions for the Trust from California throughout the Trust's existence. While there is no report of proceedings as to any evidentiary hearing on Roger's motion to dismiss, the circuit court entered an order on January 10, 2019, denying Roger's motion as to his capacity as trustee of the Trust. However, the circuit court granted Roger's motion as to his individual capacity.

¶ 11 On August 30, 2019, Anne filed a motion for partial summary judgment "on the interpretation of [T]rust terms" and on count II of her...