Trzop v. Hudson

• Decision Date: 30 September 2015
• Docket Number: No. 1–15–0419.,1–15–0419.
• Citation: 43 N.E.3d 178
• Parties: Jagoda TRZOP, Jessica Trzop, Brian Trzop and Maria Barbar Horoszko, Plaintiffs–Appellants, v. Anna M. HUDSON, Individually and Successor Trustee of the Halicki Family Trust, Defendant–Appellee (Zygmunt Halicki, Intervenor–Appellee).
• Court: United States Appellate Court of Illinois

43 N.E.3d 178

Jagoda TRZOP, Jessica Trzop, Brian Trzop and Maria Barbar Horoszko, Plaintiffs–Appellants

v.Anna M. HUDSON, Individually and Successor Trustee of the Halicki Family Trust, Defendant–Appellee (Zygmunt Halicki, Intervenor–Appellee).

No. 1–15–0419.

Appellate Court of Illinois, First District, Fifth Division.

Sept. 30, 2015.

E. William Maloney, Jr., Maloney & Craven, P.C., Des Plaines, for appellants.

Wayne T. Lofthouse, Park Ridge, for appellee Anna M. Hudson.

Shari A. Shapiro, Northfield, for appellee Zygmunt Halicki.

OPINION

Justice GORDON

delivered the judgment of the court, with opinion.

¶ 1 On September 28, 2007, intervenor Zygmunt Halicki (Zygmunt) and his now-deceased wife Jadwiga signed a trust declaration with themselves as grantors and primary beneficiaries and with 11 successor beneficiaries, including the four plaintiffs. On February 6, 2014, while residing with defendant Anna M. Hudson, Zygmunt, who was 92 years old and the sole surviving grantor, reduced the number of successor beneficiaries to two, namely, defendant Hudson and Marian Halicki, who are Zygmunt's daughter and son, respectively. Plaintiffs, who were now eliminated from the trust, sued defendant Hudson; and the trial court ruled that plaintiffs lacked standing to challenge the validity of the amendment and dismissed their suit. For the following reasons, we reverse and remand.

¶ 2 BACKGROUND

¶ 3 I. Declaration of Trust

¶ 4 On September 28, 2007, intervenor Zygmunt and his wife signed a document entitled “Declaration of Trust.” The declaration named Zygmunt and Jadwiga as both the trustors and the trustees, and named the trust the “Halicki Family Trust.” The declaration stated that if Zygmunt or his wife ceased to act, the other shall act alone. If both Zygmunt and his wife ceased to act, then Anna Hudson was appointed as successor trustee. Marian Halicki was appointed as successor trustee, if Anna Hudson ceased to act.

¶ 5 The declaration named Zygmunt and his wife as the initial beneficiaries: and they placed in the trust a “single family house at 602 Council Trail, Mount Prospect, Illinois.” The declaration stated that Zygmunt and his wife had four children now living: Marian Halicki, plaintiff Jagoda Trzop, plaintiff Maria Barbara Horoszko, and defendant Anna Hudson.

¶ 6 After the death of both Zygmunt and his wife, the declaration provided that the trustees shall distribute the trust as follows to:

(1) defendant Anna Hudson, their daughter, the entire real property at 602 East Council Trail;

(2) Marian Halicki, their son, $25,000;

(3) Jadwiga Halicki, their daughter-in-law, $15,000;

(4) Paul Halicki, their grandson, $20,000;

(5) Michael Halicki, their grandson, $15,000;

(6) Matthew Halicki, their grandson, $15,000;

(7) plaintiff Jagoda Trzop, their daughter, $20,000;

(8) plaintiff Brian Trzop, their grandson, $20,000;

(9) plaintiff Jessica Trzop, their granddaughter, $10,000;

(10) Maximillian Emil Hudson, their grandson, $20,000;

(11) plaintiff Maria Barbara Horoszko, $2,000 (whom the declaration states “has already received three real properties in Poland, four cars, and a lot of money which [Zygmunt and his wife] sent to Poland”); and

(12) Marek Frackiewicz, $5,000.

Thus, the total distribution to the four plaintiffs in the initial declaration was $52,000.

¶ 7 The declaration described the trustors' powers, including the power to amend. The document provides their power to amend, in full as:

“3.1 POWER TO AMEND: During the joint lifetime of the trustors, this trust may be amended in whole or in part by an instrument in writing, signed by both trustors, and delivered to the trustees. After the death of the first trustor to die, the surviving trustor may amend the trust, in whole or in part, by an instrument in writing, signed and delivered to the trustees. After both of the trustors cease to act as the trustee, no amendment may alter the trustees' duties or discretion without the trustees' written consent.”

¶ 8 The declaration also contained the following “no contest clause,” which provides in full:

“NO CONTEST CLAUSE: If any beneficiary, other than a trustor, shall in any manner, directly or indirectly, attempt to cancel or oppose the validity of this agreement, including any amendments thereto, or commences or prosecutes any legal proceedings to set aside this agreement, then in such event such beneficiary shall forfeit his or her share, cause to have any right or interest in the trust property, and shall be deemed to have predeceased the trustors.”¹

¶ 9 The declaration was signed by both Zygmunt and his wife, as both trustors and trustees, and it states that they both “read the foregoing declaration of trust” and that it “correctly states the terms and conditions under which the trust estate is to be held, managed and distributed by the trustees.”

¶ 10 II. Amendment

¶ 11 On February 6, 2014, Zygmunt signed a document entitled “Amendment and Restatement of the Halicki Family Trust.” The amendment stated that his wife had died and that he was now the sole trustor and the sole trustee.

¶ 12 The amendment stated that it eliminated the prior beneficiary paragraph and substituted instead the following:

“Upon the death of the survivor of [Zygmunt and his wife], the trustee(s) shall distribute the entire HALICKI FAMILY TRUST equally to my daughter, ANNA HUDSON, and my son MARION HALICKI.”

The original declaration spelled the son's name as “Marian,” whereas the amendment spells it as “Marion.” In this opinion, we will use the original “Marian.”

¶ 13 Even to the untrained eye, the signature of Zygmunt on the 2014 amendment appears shaky, as compared to his signature on the 2007 declaration. After his signature on the 2014 document appears the following paragraph:

“The Sole Trustor and Sole Trustee, [Zygmunt], signed this AMENDMENT AND RESTATEMENT OF THE HALICKI FAMILY TRUST, in our presence on the date it bears. Immediately thereafter and in his presence and in the presence of each other, and in the presence of the Notary Public, we signed our names as witnesses. We certify that we believe [Zygmunt] understood what and why he was signing the document and to be of sound mind and memory at the time of the signing.”

¶ 14 This paragraph is followed by the signatures and addresses of three witnesses: Marc Johnson, Mary T. Mueller and Lukas Stasiczak. The document states that it was prepared by attorney Richard N. Mueller, and it does not indicate whether he is related to witness Mary T. Mueller who shares the same last name. The amendment does not indicate whether the witnesses are employed by or related to the preparing attorney, who was also the notary public who notarized the document.

¶ 15 III. The Complaint

¶ 16 On March 31, 2014, a little over a month after the amendment was signed, plaintiffs filed a complaint which alleged the following:

¶ 17 Plaintiffs are the children of Zygmunt and his wife Jadwiga, who died on August 16, 2013. Zygmunt is 92 years old and in poor health. He is believed to be seriously ill and has been losing weight rapidly. He cannot be alone and cannot care for himself. Since December 2013, he has resided with defendant Hudson, upon whom he is totally dependent for his daily needs and medical care.

¶ 18 The principal and sole asset of the trust at this time is believed to be the real property on East Council Trail in Mount Prospect, Illinois, since Hudson has dissipated all the cash assets after their mother's death. Hudson hired an attorney, who had a long-standing relationship with Hudson but no prior relationship with the Halicki family, to draft an trust amendment for Zygmunt to sign which bequeathed all the trust's assets to her and another relative.

¶ 19 Zygmunt fears displeasing defendant Hudson, who has isolated him from the rest of the family, despite plaintiff Jagoda Trzop's offer to share his care. Zygmunt was not advised by Hudson's personal attorney to seek independent counsel. Hudson is the designated agent under durable powers of attorney for property and health care for Zygmunt and, as a fiduciary, owed the highest standard of care.

¶ 20 The complaint alleged counts of (I) undue influence, (II) tortious interference with inheritance expectancy, (III) fiduciary fraud, and (IV) declaration of constructive trust. Plaintiffs asked for a declaration that the amendment is void, for damages and attorney fees, and for the appointment of a successor trustee other than Hudson.

¶ 21 IV. Hudson's Answer

¶ 22 On May 7, 2014, defendant Hudson filed her answer in which she asserted that Zygmunt was mentally competent. She agreed with plaintiffs that the sole asset left in the trust was the Council Trail property and that Mueller, who drew up the amendment, was “her attorney.” The answer further alleged that her attorney “sensed that a Trust Contest may result from [Zygmunt's] decision to disinherit two of his children and several of his grandchildren. A Polish interpreter was hired and the complete trust execution was videotaped to preserve [Zygmunt's] peace of mind and voluntary action at the time of the Trust Amendment execution. Three witnesses (although not required by law) were present at the execution of the Amendment and each attested that they believed that [Zygmunt] understood what and why he was signing the documents and that he was of sound mind and memory at the time of the signing.”

¶ 23 V. Discovery and Motions

¶ 24 Defendant Hudson moved promptly to proceed with discovery, filing a motion on the same day as her answer for court approval to take an evidence deposition of Zygmunt.

¶ 25 On May 12, 2004, five days after the filing of defendant's answer, plaintiffs moved to disqualify Richard Mueller as attorney for defendant Hudson. Mueller had prepared and notarized the trust amendment which was the subject of the complaint. In support of their motion, plaintiffs submitted the affidavit of their attorney, E. William Mahoney, Jr., who swore that “[m]ore than a decade ago, [h]e personally recommended” attorney Mueller to defendan...