Durbin v. Durbin

• Court: Appellate Court of Illinois
• Writing for the Court: STEIGMANN, JUSTICE
• Citation: Durbin v. Durbin, 2023 IL App (4th) 210437U, 4-21-0437 (Ill. App. Apr 14, 2023)
• Decision Date: 14 April 2023
• Docket Number: 4-21-0437
• Parties: DAVID S. DURBIN and RICHARD L. DURBIN, Plaintiffs-Appellees, v. NANCY L. DURBIN, Individually and as Trustee of the Virginia Rose Durbin Trust, Defendant-Appellant.

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2023 IL App (4th) 210437-U

DAVID S. DURBIN and RICHARD L. DURBIN, Plaintiffs-Appellees, v. NANCY L. DURBIN, Individually and as Trustee of the Virginia Rose Durbin Trust, Defendant-Appellant.

No. 4-21-0437

Court of Appeals of Illinois, Fourth District

April 14, 2023

This Order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).

Appeal from the Circuit Court of Sangamon County No. 17CH325 Honorable Ryan M. Cadagin, Judge Presiding.

JUSTICE STEIGMANN delivered the judgment of the court. Presiding Justice DeArmond and Justice Zenoff concurred in the judgment.

ORDER

STEIGMANN, JUSTICE

¶ 1 Held: The appellate court (1) affirmed the trial court's judgment finding defendant breached her fiduciary duties to plaintiffs in connection with her administration of a trust; (2) affirmed the court's denial of defendant's posthearing motions; (3) affirmed the court's award of compensatory damages, punitive damages and attorney fees, except for an award of $11,000 for loss of investment income, which the appellate court reversed; and (4) remanded for recalculation of prejudgment interest and punitive damages, taking into account the reversed amount.

¶ 2 In January 2019, plaintiffs, David S. Durbin and Richard L Durbin, filed an amended complaint alleging defendant, Nancy L. Durbin, trustee of the Virginia Rose Durbin trust, breached her fiduciary duties as trustee in multiple ways, resulting in damages. Defendant admitted some of the allegations in her amended answer. After an evidentiary hearing, in which defendant's counsel generally did not dispute or object to much of the evidence, the trial court found in favor of plaintiffs and awarded compensatory damages, punitive damages, and attorney fees. Defendant filed multiple posthearing motions, taking issue with the court's judgment and seeking to reopen the proofs. The court denied the posthearing motions, and this appeal followed.

¶ 3 Defendant appeals, arguing that the trial court (1) erred when it determined that she breached her fiduciary duties, (2) erred in its calculations of damages because those calculations were against the manifest weight of the evidence, and (3) abused its discretion by denying defendant's posthearing motions to reconsider, to reopen the proofs, to strike plaintiffs' amended complaint, to allow leave to file a counterclaim, and for sanctions.

¶ 4 We conclude that the trial court's findings concerning defendant's breach of fiduciary duties and the court's calculations of damages, generally, were not against the manifest weight of the evidence. We also conclude that the court's rulings on defendant's posthearing motions were not an abuse of discretion.

¶ 5 However, we conclude that the trial court's award of compensatory damages for loss of investment income, based on plaintiffs' request that the court take judicial notice of stock market changes, was not based on any evidence in the record, nor does the record contain a basis for any judicial notice. Accordingly, we reverse that award.

¶ 6 We also remand for a recalculation of the award of prejudgment interest, which would have included the reversed amount in its calculation, and for reconsideration of the punitive damages award, which may have been affected by the reversed amount.

¶ 7 I. BACKGROUND

¶ 8 A. The Amended Complaint

¶ 9 David initially filed suit in September 2017. In April 2019, plaintiffs filed an amended complaint adding Richard as a plaintiff and alleging defendant breached her statutory and fiduciary duties as trustee of the trust. In particular, plaintiffs alleged in part that defendant (1) directed trust assets to be spent drafting a disclaimer for David to surrender his farmland back to the trust and producing a declination form to remove the parties' father, Donald Durbin, as cotrustee, instead of following a trust directive to distribute farmland; (2) failed in her duty to respond to requests for updates on the trust during 2016; (3) failed to distribute 2016 farm income from the trust when received, yet distributed K-1 tax forms to plaintiffs as if income had been distributed, causing plaintiffs to incur income tax liabilities; (4) refused to distribute the farmland or 2017 income unless plaintiffs signed a waiver releasing defendant from all liability in the lack of performance or wrongful conduct in her duties as trustee; (5) obstructed distribution of farmland, causing plaintiffs to incur expenses for surveying necessary to prepare deeds for transfer; (6) refused to perform her obligation to routinely provide plaintiffs copies of trust account bank statements for review, resulting in plaintiffs incurring legal expenses to pursue a motion to compel production of the statements; (7) intentionally or recklessly converted trust assets and made unnecessary and wasteful expenditures by using money from the trust for personal expenses related to her personal residence, inappropriately purchasing title searches that she allowed to expire, and by making other wasteful expenditures; (8) failed to provide annual inventories of trust assets as required by statute; and (9) created conflicts of interest and hostility. The petition included specific calculations showing the amounts of damages incurred and included attachments supporting the allegations. Plaintiffs sought specific performance, compensatory damages, punitive damages, and attorney fees.

¶ 10 B. Defendant's Motions, Amended Answer, and Admissions

¶ 11 In May 2019, defendant, through counsel, filed a motion to dismiss, which the trial court denied. Defendant then filed pro se an answer that included multiple comments on the complaint's allegations and explanations for her behavior. The court later granted plaintiffs' motion to strike improper and extraneous matters in the answer.

¶ 12 In December 2019, defendant filed pro se an amended answer removing the comments and extraneous material. In the amended answer, defendant denied many of the allegations but admitted (1) she used trust assets to draft a disclaimer for David to surrender his farmland and (2) Donald resigned as co-trustee. In denying allegations about failures to make distributions, defendant stated she did not fail to make the distributions but was simply late in making them.

¶ 13 Defendant admitted the allegations of a paragraph concerning conversion of assets that consisted of a table with descriptions and amounts of the expenditures totaling $22,489.49. Before trial, plaintiffs filed a trial brief and a document noting the admission to the converted amounts. Defendant did not file a response to that document.

¶ 14 C. The Evidentiary Hearing

¶ 15 In January 2021, the trial court held an evidentiary hearing.

¶ 16 1. Defendant's Admissions

¶ 17 Plaintiffs first drew the trial court's attention to defendant's amended answer in which she admitted the paragraph of the complaint alleging "[d]efendant converted trust assets or income, of at least of $20,834.02 in violation of her fiduciary duties under Illinois law" and then provided a table detailing personal expenditures defendant made using trust funds. Plaintiffs also presented a demonstrative exhibit of those amounts without objection from defendant. In general, there were very few objections to any of the evidence introduced by plaintiffs at the hearing.

¶ 18 2. Defendant 's Background and Testimony

¶ 19 The evidence presented at the hearing showed the parties' mother, Virginia Durbin, died in December 2015, and their father, Donald Durbin, died in July 2017. Defendant was initially listed as co-trustee with Donald, but Donald subsequently signed a document declining to act as co-trustee.

¶ 20 Defendant was initially represented by James Lestikow, who later withdrew as counsel and was deposed in connection with this litigation. After Lestikow's withdrawal, defendant was represented by multiple attorneys for the duration of the litigation, except when she elected to proceed pro se for a short period of time.

¶ 21 Defendant was briefly called as a witness by plaintiffs to lay the foundation for various documents. Defendant testified she read Lestikow's deposition and looked at the exhibits. She identified documents and email exchanges that were entered into evidence. Defendant also identified an email from February 1, 2018, memorializing a voicemail message left for Lestikow stating she wanted the plaintiffs' deeds held until they paid their share of the funeral expenses. She agreed she left the voice mail and stated, "[I]t would have been nice to get a tombstone."

¶ 22 Defendant also identified a check from Donald's account written on September 12, 2016, to pay taxes on defendant's residence. Defendant stated Donald wanted to help with the taxes and she signed the check with Donald's permission. However, the record contains evidence that in September 2016, Donald was in very poor physical condition and suffered from severe dementia.

¶ 23 3. Lestikow 's Deposition

¶ 24 Plaintiffs introduced into evidence Lestikow's deposition and numerous related exhibits. Defendant did not make any attorney-client privilege objections during the deposition or when the deposition was admitted into evidence at the hearing.

¶ 25 In his deposition, Lestikow indicated he represented defendant and Richard jointly regarding the trust based on a representation from defendant that Richard was going to help her in administering the trust. The record contains a letter from Lestikow to defendant, Richard, and Donald, dated January 29, 2016, stating his representation of all three people and disclosing the benefits and risks of joint representation. That letter stated, "Conformation that any of you provide to our firm...