Kanfer v. Busey Trust Co.
| Decision Date | 25 November 2013 |
| Docket Number | Docket No. 4–12–1144. |
| Citation | 2013 IL App (4th) 121144,1 N.E.3d 61,376 Ill.Dec. 728 |
| Parties | In re Ruby KANFER, a Disabled Adult, Lawrence Kanfer and Ruth Kanfer, Co executors Under the Last Will and Testament of Ruby Kanfer, Deceased, Plaintiffs–Appellants, v. BUSEY TRUST COMPANY, Former Guardian of the Estate of Ruby Kanfer, a Disabled Adult, Defendant–Appellee. |
| Court | United States Appellate Court of Illinois |
OPINION TEXT STARTS HERE
Robert A. Stuart, Jr. (argued) and Emmet A. Fairfield, both of Brown, Hay & Stephens, LLP, of Springfield, for appellants.
Edward M. Wagner and Tamara K. Hackmann (argued), both of Heyl, Royster, Voelker & Allen, of Urbana, for appellee.
¶ 1 Plaintiffs, Lawrence Kanfer and Ruth Kanfer, are the coexecutors of Ruby Kanfer's will. She was their mother. During the final 2 1/2 years of her life, Main Street Bank and Trust Company (Main Street) and, later, its successor, Busey Trust Company (Busey), were the guardians of her estate. Plaintiffs seek to surcharge Busey for mismanaging the estate. On Busey's motion (735 ILCS 5/2–619.1 (West 2012)), the trial court struck some of the paragraphs of the second amended petition for surcharge. The court made a finding pursuant to Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010), and plaintiffs appeal.
¶ 2 We affirm the trial court's judgment in part and reverse it in part, and we remand this case for further proceedings. We agree that section 24–11(b) of the Probate Act of 1975 (Probate Act) (755 ILCS 5/24–11(b) (West 2012)) and res judicata bar plaintiffs from recovering management fees, the hourly charges for work a contractor did on a condominium in Champaign, and losses from the failure to implement an investment model. Plaintiffs are not barred, however, from recovering any losses that resulted from failing to keep Ruby Kanfer's condominiums in adequate repair.
¶ 5 On February 23, 2005, Lawrence Kanfer petitioned the trial court to appoint him as Ruby Kanfer's personal guardian and to appoint Main Street as the guardian of the estate. He alleged that Ruby Kanfer had been diagnosed with depression, memory disturbance, and diabetes and that she had deteriorated mentally and physically to the point that she no longer could use sound judgment regarding her personal care, medical needs, and financial affairs.
¶ 6 On February 28, 2005, the trial court appointed an attorney, Andrew Bequette, as guardian ad litem.
¶ 7 On March 2, 2005, Ruth Kanfer filed a counterpetition to be appointed the guardian of Ruby Kanfer's person and estate.
¶ 8 On March 2, 2005, the trial court appointed Lawrence Kanfer as the temporary guardian of the person of Ruby Kanfer and Main Street as the temporary guardian of her estate. Main Street accepted the appointment.
¶ 9 On March 17, 2005, Ruby Kanfer and an attorney, Arthur M. Lerner, petitioned that the trial court “confirm and allow Ruby Kanfer to employ Lerner Law Offices as her attorney to defend her” in this matter. On March 22, 2005, the court authorized the hiring of Lerner as Ruby Kanfer's attorney while keeping in force the appointment of Bequette as the guardian ad litem.
¶ 10 On May 9, 2005, the trial court appointed Lawrence Kanfer as the permanent guardian of Ruby Kanfer's person.
¶ 11 On May 10, 2005, the trial court entered an “Interim Order for Guardianship of the Estate,” in which the court found that although Ruby Kanfer still was disabled by moderate dementia, it was in her best interest “that she be allowed to continue to trade securities on a limited basis.” Therefore, the court authorized Main Street to “set up a trading account for Ruby Kanfer at Wachovia with a beginning balance of $100,000.00.” Ruby Kanfer was to be allowed to “use the funds within this account to make securities trades as she wishe[d],” but she would not be allowed to make withdrawals from the account without further court order. Main Street would have no fiduciary duty with respect to the account. For the time being, until the court made a final decision as to who was to be the permanent guardian of Ruby Kanfer's person, the court prohibited Main Street, without the prior approval of all parties, from moving any of her funds from the institutions where they currently were located. (Even though, on May 9, 2005, the court appointed Lawrence Kanfer as the permanent guardian of Ruby Kanfer's person, apparently the permanency of his appointment was in question.) Main Street could, however, move funds into different accounts within the same institutions.
¶ 12 On May 19, 2005, Ruby Kanfer, through her attorney, Lerner, moved to set aside the order appointing Lawrence Kanfer as the permanent guardian of her person.
¶ 13 On July 13, 2005, the trial court found that Ruby Kanfer was “not totally lacking in the capacity to make or communicate responsible decisions regarding the care of her person.” The court further found it was in Ruby Kanfer's best interest that Ruth Kanfer be appointed the guardian of her person. Therefore, the court revoked its order appointing Lawrence Kanfer as the guardian of the person, and the court appointed Ruth Kanfer as the limited guardian of the person, ordering her to “exercise her statutory power of guardianship only to the extent necessitated by [Ruby] Kanfer's actual mental, physical and adaptive limitations.” At its conclusion, the order added: “The appointment of the GAL is to continue until further order as is the attorney-client relationship between the ward and Mr. Lerner.” Joseph Pavia later replaced Lerner as Ruby Kanfer's personal attorney.
¶ 14 On September 23, 2005, in view of the appointment of Ruth Kanfer as the permanent guardian of Ruby Kanfer's person, Main Street filed a motion to lift the restrictions on its authority as guardian of the estate. Main Street explained that “[t]he Ward [was] anxious to move funds which exceeded FDIC [ (Federal Deposit Insurance Corporation) ] limits from banks and to have additional funds added to her Court authorized trading account” and that, without the full powers of a guardian of the estate, Main Street was unable to “respond to the requests of the Ward or to adequately manage her Estate.”
¶ 15 In a hearing on October 27, 2005, attended by Bequette, Ruth Kanfer, Lawrence Kanfer, and the attorneys for Ruth, Ruby, and Lawrence Kanfer, the trial court granted Main Street's motion, lifting the restrictions on its authority as guardian of the estate.
¶ 16 The trial court directed Main Street to continue charging an hourly fee for its work until all of Ruby Kanfer's assets were consolidated at Main Street. After the consolidation, Main Street would be paid monthly in the amount of
¶ 17 In addition, the docket entry for October 27, 2005, reads:
¶ 20 On May 3, 2006, Busey, the successor of Main Street, filed a “Petition To Approve [the] Annual Accounting” for the period of March 1, 2005, to March 31, 2006. The petition notes: “The Annual Report and Accounting reflects the numerous accounts and holdings in this Estate[,] and since the assets have not yet been combined in one wealth management account, it contains Exhibits showing the status of accounts at different banks.” This account, which was more than 400 pages long, listed the disbursements and receipts and identified all of Ruby Kanfer's assets, including bank accounts, stocks, and bonds.
¶ 21 In a verified narrative prefacing the account, Kathleen Moore, a trust officer, explained that Busey had maintained many of Ruby Kanfer's assets in liquid form “in case it became necessary to fund the trusts” that Ruby Kanfer's deceased husband, Fred Kanfer, had created.
¶ 22 In its brief, Busey describes the hundreds of pages of documentation attached to Moore's narrative, a description that plaintiffs do not appear to dispute:
“Attached to Moore's narrative were documents identifying: (1) the Initial Balances of Kanfer's accounts at various banking institutions; (2) the Estate Summary as of March 31, 2006 (including the identity of banks where funds were located and the type of asset held (i.e. checking account, savings account, [individual retirement account (IRA) ], bonds)); (3) disbursements paid from, deposits into, and interest earned on, various accounts by account and date; (4) appraisals of coins and jewelry; (5) inventory of stock certificates in Ruby's safe deposit box # 18; (6) account holdings as of March 31, 2006; (7) statement of transactions, by date; (8) monthly account statements from TD Waterhouse, showing investment by stock and market value; (9) monthly account statements from Wachovia Securities, showing investment by stock and market value; and (10) the blue book value for Ruby's 1999 Chevrolet Malibu.”
¶ 23 On May 4, 2006, Busey served a copy of the petition and accounting on Bequette as well as on the attorneys for Ruth, Lawrence, and Ruby Kanfer. On May 11, 2006, Busey served upon them a notice of hearing. The notice informed them that the hearing on the account was scheduled for May 26, 2006.
¶ 24 The trial court held the scheduled hearing. Finding that the account “show[ed] Mrs. Kanfer's original and current assets, holdings, and expenditures made on her behalf,” the court approved the...
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