Estate v. Cerami

• Decision Date: 28 September 2018
• Docket Number: No. 1-17-2073,1-17-2073
• Citation: 431 Ill.Dec. 43,127 N.E.3d 576,2018 IL App (1st) 172073
• Parties: IN RE ESTATE OF James F. CERAMI, Deceased (Salvatore Cerami, Executor-Appellant, v. Christina Cerami, Claimant-Appellee).
• Court: United States Appellate Court of Illinois

2018 IL App (1st) 172073

127 N.E.3d 576

431 Ill.Dec. 43

IN RE ESTATE OF James F. CERAMI, Deceased(Salvatore Cerami, Executor-Appellant,

v.Christina Cerami, Claimant-Appellee).

No. 1-17-2073

Appellate Court of Illinois, First District, Fourth Division.

Filed September 28, 2018

Graham B. Schmidt, of Lincoln Law Partners, P.C., of Chicago, for appellant.

Cornelius E. McKnight, Kevin Q. Butler, and Bryan T. Butcher, of McKnight & Kitzinger, LLC, of Chicago, for appellee.

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

¶ 1 The executor, Salvatore Cerami (Executor), appeals from the denial of his section 2-619 ( 735 ILCS 5/2-619 (West 2014) ) motion to dismiss the renunciation of will filed by claimant, Christina Cerami, in the Estate of James F. Cerami, deceased.

¶ 2 The record shows that Christina and James were married for almost 20 years, until James died on January 16, 2013. James was survived by three children from a previous marriage—Salvatore, Lawrence, and Dora Ann.

¶ 3 On August 14, 2013, Christina opened a probate estate and filed a petition for letters of administration in the circuit court. Exhibit A to the petition stated that a "will dated April 13, 1993, apparently executed by the Decedent, James F. Cerami, was filed with the Clerk of the Circuit Court of Cook County" on February 4, 2013, but that Christina "at this time does not have sufficient information with which to make any determination regarding the validity of this will of the Decedent."

¶ 4 On January 15, 2015, Christina filed a claim against her husband's estate for an amount to be determined, in excess of $100,000. She sought compensation for "Custodial Care" pursuant to section 18-1.1 of the Probate Act of 1975 (Probate Act) ( 755 ILCS 5/18-1.1 (West 2014) ) and "common law" and raised a claim "for share of earnings and benefits—Breach of premarital agreement." Christina stated that the parties had entered into a premarital agreement and contended that she had "not received all that she is entitled to under and/or in accordance with the premarital agreement, including * * * income earned during marriage and survivor benefits on any pension, profit-sharing, or retirement plan or account."

¶ 5 Pursuant to the June 7, 1993, premarital agreement, which is included in the record, the parties waived their claims and interests in various property and assets of the other party and agreed on how to separate their assets in the event of divorce or death. Specifically, James agreed to "name CHRISTINA as the person entitled to receive any survivor benefits to which he is or may be entitled as a result of having an interest in any pension, profitsharing, or retirement plan or account." He also agreed to "maintain a life insurance policy on his life in an unencumbered amount not less than $100,000 naming CHRISTINA the sole beneficiary thereunder so long as the parties remain married." The parties agreed to "file State and Federal tax returns as joint or married filing separate, whichever shall create the lesser total tax liability," and agreed to waive certain probate rights, including their rights "to renounce, to elect to take against, or to contest" the other party's will.

¶ 6 On January 30, 2015, James's son, Salvatore, moved to dismiss Christina's letters of administration pursuant to section 2-619 of the Code of Civil Procedure (Code) ( 735 ILCS 5/2-619 (West 2014) ), arguing that, in the premarital agreement, Christina had waived her right to serve as administrator of James's estate. On February 26, 2015, the court entered an order denying Christina's custodial care claims, and granting Salvatore leave to file a cross-petition for probate of will. Salvatore did so on March 24, 2015. Two days later, on March 26, 2015, James's will—dated April 13, 1993—was admitted to probate, and Salvatore was appointed as independent executor of the estate.

¶ 7 On April 23, 2015, Christina filed an "Amended Claim for Share of Earnings and Benefits Due to Breach/Unenforceability of Premarital Agreement." Christina asked the court to reconsider her custodial claim because "[f]or the last five years of their marriage, CHRISTINA sacrificed a successful career to care for JAMES full time" and the "circumstances in hindsight raise an ‘issue of unconscionability’ " regarding the provision of the premarital agreement disallowing such a claim. Christina further contended that James had breached the premarital agreement in a number of ways, including that he failed to name her "as the person entitled to receive survivor benefits" on his "pension, profit-sharing or retirement plan or account"; that he filed "Married Filing Separately" tax returns, despite the fact that filing jointly would have created a lesser tax burden; and that he failed to maintain a life insurance policy, naming her as the sole beneficiary. Christina requested that the court either (1) declare the premarital agreement unenforceable against her or (2) order various documents to be turned over to her so that "forensic accounting c[ould] be conducted."

¶ 8 Thereafter, the parties engaged in extensive litigation regarding Christina's claims, including additional briefing and four days of evidentiary hearings and arguments. The court found that James breached the premarital agreement in several ways, including by failing to name Christina as the beneficiary on two of his retirement accounts, by failing to name her as the sole beneficiary of his $500,000 life insurance policy, and by filing tax returns "married filing separately," when filing jointly would have created a lesser tax liability.

¶ 9 On various occasions during hearings on Christina's claims, the court expressed concern about how to calculate damages, and whether, as a result of James's many breaches, the court should "take the entire premarital agreement and throw it out the window." During a hearing on July 7, 2016, the court noted that Christina waived "her probate rights" in the premarital agreement, and that if the court "thr[e]w out the premarital agreement, she now is a spouse. She has a right to renounce the will."

¶ 10 On August 29, 2016, the following exchange occurred:

"THE COURT: * * * if the person died married, the probate act tells us what rights the spouse has. This probate act enacted in Illinois and at the time of James' death says she was the spouse, she's entitled to inherit from her husband, and it sets forth a formula of how she can inherit, either by will, but no less than her intestate share. And she can renounce the will and take her one-third, and she has rights to a spousal claim. The probate act tells me what to do with spouses' rights and that comes out of the other spouse's, the deceased spouse's estate. In this case I don't get that because they both signed a premarital agreement that waived their right to probate claims, and then this breach happens five, six different times. So what's the benefit to Christina of executing a premarital agreement where she waives all of her probate rights, only to have her spouse violate and breach the premarital agreement?

COUNSEL FOR THE EXECUTOR: Sure. So—

THE COURT: She's getting it on both sides. You're saying it's not marital property, she can't have it, and you're saying there's a premarital agreement, she can't take the probate property. But she's got to be entitled to something somewhere, either the premarital agreement's not valid and she takes her probate rights or the premarital agreement is valid and she only gets those rights. But now James breaches it over and over and over and over again, to the point this is now our fourth or fifth day of trial and we still can't figure out how many breaches there are.

COUNSEL FOR THE EXECUTOR: Well, I can count them up.

THE COURT: But you want me to hold her to her giving away her probate rights.

COUNSEL FOR THE EXECUTOR: No, no.

THE COURT: So you want her to have her probate rights, you want her to be able to renounce the will, you want her to take her statutory share, you want her to have her spousal claim?

COUNSEL FOR THE EXECUTOR: No, I don't want that.

THE COURT: All right.

COUNSEL FOR THE EXECUTOR: I want the agreement to be enforced. Christina should get what she was promised, nothing more or nothing less.

THE COURT: Well, how do I enforce this agreement that James has breached a half dozen times?

* * *

That seems to be the whole problem with this case. You want James to be able to breach it at any drop of a hat and then hold Christina to she's waived her probate rights.

* * *

I don't know how to calculate the damages. I've been trying for six months to come up with a scheme to calculate the damages and I can't do it. But something's going on here. Marital money was diverted to the IRS. Why I don't know, at a time that this agreement says you shall file joint returns. So what's the benefit of that breach? The same—you know, I don't know what to do * * * other than toss out the entire agreement, as if it never existed."

¶ 11 The court then ordered the parties to submit additional briefing on damages stemming from James's failure to file joint tax returns, with proposed findings of facts and calculations of damages.

¶ 12 The parties submitted their proposals on September 19, 2016, with Christina proposing approximately $300,000 in damages for that breach, representing the difference in tax liability that would have been owed by the parties had they filed jointly, plus statutory interest. The Executor argued that no damages existed, because James paid his taxes out of his own funds and Christina would not have benefitted from the money James would have saved by filing jointly. In the alternative, the Executor stated that if the court decided that "nominal damages" were appropriate, he suggested the amount of $10,000.

¶ 13 The court heard argument from the parties on September 22, 2016. Counsel for the Executor argued that Christina had not adequately established damages from James's breaches, and accordingly, only "nominal...