Lesch v. Mccauley & Nisen & Elliott, LLC (In re Estate of Zagaria), Docket No. 1–12–2879.

• Court: United States Appellate Court of Illinois
• Writing for the Court: Justice DELORT delivered the judgment of the court
• Citation: 2013 IL App (1st) 122879,997 N.E.2d 913,375 Ill.Dec. 602
• Decision Date: 30 September 2013
• Docket Number: Docket No. 1–12–2879.
• Parties: In re ESTATE OF Samuel N. ZAGARIA, Jr. (John F. Lesch, Thomas V. McCauley and Nisen and Elliott, LLC, Petitioners–Appellees, v. Samuel N. Zagaria, Jr., Respondent–Appellant).

2013 IL App (1st) 122879
997 N.E.2d 913
375 Ill.Dec. 602

In re ESTATE OF Samuel N. ZAGARIA, Jr. (John F. Lesch, Thomas V. McCauley and Nisen and Elliott, LLC, Petitioners–Appellees, v. Samuel N. Zagaria, Jr., Respondent–Appellant).

Docket No. 1–12–2879.

Appellate Court of Illinois,
First District, First Division.

Sept. 30, 2013.

[997 N.E.2d 916]

Mayfield/Broderick, of Northfield (William J. Broderick, of counsel), for appellant.

Nisen & Elliott, LLC, of Chicago (Michael J. Daley and Carly V. Gibbs, of counsel), for appellees.

OPINION
Justice DELORT delivered the judgment of the court, with opinion.

¶ 1 After Samuel N. Zagaria, Jr. disappeared from all contact with his family and friends for over seven years, a probate court declared that he was “presumed dead” and appointed his sister as administrator of his estate. The main asset transferred into the estate was a stock account worth about $500,000 that Zagaria had apparently abandoned years before. During the course of the estate administration, attorneys for the administrator serendipitously found him, alive, through a contact at a homeless shelter. The trial court revested him with title to his own assets, but the attorneys who handled the estate administration during his absence later sought compensation for their efforts. The court awarded the fees and ordered Zagaria to pay them from the assets that had been returned to him from the estate. In this case of first impression, we affirm the court below by finding that it did not err in ordering Zagaria to return a portion of the assets to the estate for the purpose of paying the attorney fees.

¶ 2 BACKGROUND

¶ 3 Samuel Zagaria's sister, Joanne Corlett, hired John F. Lesch and Thomas V. McCauley of Nisen & Elliott, LLC (hereinafter, the attorneys) to assist her with her brother's affairs. The attorneys filed a petition for letters of administration upon presumption of death. The petition alleged that there was a long period of unexplained absence during which Zagaria had no dealing with his Merrill Lynch stock brokerage account and no communication with Corlett, nor any other family member. On July 6, 2009, the trial court entered an order finding that Zagaria disappeared from his last known place of residence on August 10, 2000, that he had not been seen or heard from since, and upon diligent inquiry could not be found. The court found that the facts created a presumption in law that Zagaria died intestate on August 10, 2007 and that due notice to all interested persons had been given as required by law. The court issued letters of office of the presumed-dead estate of Zagaria and appointed Corlett as independent administrator. Between July 10, 2009 and July 24, 2009, notice was published that the court had issued letters of office to Corlett. Corlett submitted an administrator's bond in the amount of $625,000. Corlett is Zagaria's only heir at law.

[997 N.E.2d 917]

¶ 4 During the administration of Zagaria's estate, the attorneys prepared Zagaria's missing personal tax returns and recovered unclaimed assets he owned that the State of Illinois was holding. The attorneys also attempted to collect benefits for the estate under an annuity contract between Zagaria and Transamerica Insurance Company, but learned they would have to obtain a “presumed-dead death certificate.” The attorneys contacted governmental officials regarding how to obtain such a certificate and through that contact learned that someone had filed an application for public assistance using Zagaria's social security number. The address on the application was that of PADS to Hope, a homeless shelter near Zagaria's last known address (hereinafter, the homeless shelter or the shelter). On December 10, 2009, the attorneys contacted the shelter and were informed someone using the name Samuel Zagaria had visited the shelter. The shelter refused, however, to provide additional information about Zagaria to the attorneys without information about the value of Zagaria's assets. The attorneys, in turn, refused to disclose information regarding the value of Zagaria's assets to the shelter, and communications ceased.

¶ 5 On December 28, 2009, the attorneys, who still had no confirmation whether Zagaria was alive or that someone was falsely using his identity, issued a subpoena to the shelter commanding the executive director to appear and to bring the complete file on “Samuel N. Zagaria, Jr.” After receiving the subpoenaed documents, the attorneys learned that a person using Zagaria's identity information last visited the shelter six months earlier, in June 2009. On March 3, 2010, the attorneys wrote the shelter thanking staff for giving this person their contact information, but stating that because no one had contacted the attorneys, they needed the shelter's assistance with making contact. The letter also stated that the attorneys had taken steps to assure that Zagaria's Merrill Lynch account did not escheat to the State and that the funds were being held in an account covered by a surety bond. The letter stated the money should be used for Zagaria's benefit but that “it would seem imprudent to just send a check to an occasional address.” On May 12, 2010 the attorneys wrote the shelter again, stating Corlett held substantial funds and would like to meet with Zagaria regarding safeguarding those funds. The letter states that the shelter had previously informed the attorneys that Zagaria did not wish to meet with his sister. The letter suggested a meeting with the attorneys with shelter staff present.

¶ 6 From the record, it appears that the attorneys were not able to confirm that Zagaria was actually alive until June 8, 2010, when they met him face-to-face for the first time, along with Zagaria's counselor, representatives of the shelter, and an attorney whom they understood to represent Zagaria. The discussion centered around protecting Zagaria's assets and providing for his needs. The parties decided the estate should immediately provide $5,000 for Zagaria's needs and discussed creating a trust. On June 22, 2010, the attorneys wrote to the shelter to inform it of difficulties in securing the funds and to attempt to initiate discussions regarding creating a trust for Zagaria instead of a guardianship.

¶ 7 On August 4, 2010, counsel filed an appearance in the estate case on behalf of Samuel N. Zagaria, Jr. On August 26, 2010, Zagaria, through counsel, filed a motion to revoke letters of administration. The motion requested the court revoke the letters of office issued to Corlett on July 6, 2009, order Corlett to provide a full and complete accounting of the “estate” of

[997 N.E.2d 918]

Samuel N. Zagaria, Jr., and to grant additional appropriate relief. Counsel attached Zagaria's affidavit stating that he is alive and has one sister, Joanne Corlett of Shelbyville, Indiana. On September 1, 2010, the trial court entered an order revoking the presumption of death and the letters of administration. The court ordered Corlett to provide a full accounting of the estate. The court also ordered Corlett to turn over all funds in the original Merrill Lynch account to Zagaria. The attorneys did not make a request for attorney fees at that time, but they did continue to work to close the estate. The attorneys' billing statement reflects that they sent the final accounting of the estate to the court on November 4, 2010.

¶ 8 On April 21, 2011, the attorneys filed a petition for attorney fees and costs totaling $30,859.21. The attorneys' services to the estate included, among other things, court appearances, preparation of pleadings to open the estate, preparing individual tax returns for Zagaria for 2001 through 2008, inclusive, and a fiduciary tax return for 2008; contacting the homeless shelter; discussing a guardianship for Zagaria; and meeting with him and speaking to his attorney. The attorneys provided a detailed statement of their time and disbursements, and Zagaria has not challenged the reasonableness of the fees.

¶ 9 On September 6, 2011, Zagaria filed pleadings opposing the fee petition. Zagaria argued, in part, that the attorneys were entitled to no compensation because they breached their fiduciary duty to the estate. Also on September 6, 2011, Zagaria filed a petition to surcharge the attorneys based, in part, on an allegation that the attorneys owed Zagaria a fiduciary duty. On March 8, 2012 the court denied Zagaria's petition to surcharge ¹. Zagaria did not appeal that order.

¶ 10 On April 11, 2012, the trial court entered an order finding that the attorneys' fees and expenses were fair and reasonable for the administration of the estate and imposed a judgment against the estate for $27,359.21. The attorneys issued a citation to Zagaria to recover assets for the estate to satisfy the judgment. In response, the attorneys received information that Zagaria had a new Merrill Lynch account with a balance of $366,096, created from the funds in the Merrill Lynch account previously held by the estate. In June 2012, the attorneys filed a motion for turnover of funds to satisfy the fee award judgment pursuant to section 16–1(d) of the Probate Act of 1975 (Probate Act) (755 ILCS 5/16–1(d) (West 2010)).

¶ 11 On June 1, 2012, the trial court entered an agreed order freezing the amount of the judgment in Zagaria's Merrill Lynch account until the court resolved the turnover motion. On August 29, 2012, the trial court allowed the motion for turnover against Zagaria. This appeal only seeks review of the August 29, 2012 order.

¶ 12 Zagaria argues the trial court erred because (1) petitioners failed to show cause to attach his nonprobate assets; (2) his claim to the estate property is superior to the attorneys' claim; and (3) the trial court's order is not supported by any existing law. Alternatively, Zagaria argues that if he is liable for attorney fees incurred in the administration of the estate, the attorneys for the estate owed him a fiduciary duty, and the trial...