Nat'l All. v. McLaughlin (In re Estate of McLaughlin)

2020 IL App (4th) 200002-U

In re ESTATE OF JOHN RODERICK McLAUGHLIN, Deceased

(National Alliance, a Virginia Nonstock Corporation, Petitioner-Appellant, v. Michael J. McLaughlin and Robert P. McLaughlin, Co-Administrators, Respondents-Appellees).

NO. 4-20-0002

APPELLATE COURT OF ILLINOIS FOURTH DISTRICT

October 14, 2020

NOTICE

This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).

Appeal from the Circuit Court of Piatt County

No. 17P17

Honorable Wm. Hugh Finson, Judge Presiding.

JUSTICE TURNER delivered the judgment of the court.

Presiding Justice Steigmann and Justice Harris concurred in the judgment.

ORDER

¶ 1 Held: The circuit court did not err by barring petitioner's claim against decedent's estate.

¶ 2 In October 2018, petitioner, National Alliance, a Virginia nonstock corporation, filed a claim for $850,000 against the estate of John Roderick McLaughlin, deceased. Respondents, Michael J. McLaughlin and Robert P. McLaughlin, the co-administrators of decedent's estate, filed a motion to bar petitioner's claim pursuant to section 18-12 of the Probate Act of 1975 (Act) (755 ILCS 5/18-12 (West 2016)). After a March 2019 hearing, the Piatt County circuit court granted the co-administrators' motion to bar petitioner's claim. Petitioner filed a motion to vacate the court's judgment barring petitioner's claim, which the court granted in August 2019. After a second hearing on the co-administrators' motion to bar petitioner's claim, the court again barred petitioner's claim. Petitioner filed a motion to reconsider, which the court denied.

¶ 3 Petitioner appeals, asserting (1) the circuit court erred by finding Michael's testimony overcame an admission, (2) the court erred in applying the "reasonably ascertainable" requirement of section 18-12(a)(3) of the Act (755 ILCS 5/18-12(a)(3) (West 2016)), and (3) the court's finding respondents could not have reasonably ascertained petitioner's claim was against the manifest weight of the evidence. We affirm.

¶ 4 I. BACKGROUND

¶ 5 Decedent died on February 22, 2017. At the time of his death, decedent was a farmer and lived in Monticello, Illinois. The co-administrators of decedent's estate are decedent's brothers. Michael lived in Cerro Gordo, Illinois, and assisted decedent with his farming. Robert lived in Seattle, Washington.

¶ 6 Before his death, decedent was represented by Douglas Bywater in Hanover County, Virginia, circuit court case No. CL-16002090-00, in which decedent filed a suit against petitioner. In a July 2019 written evidence deposition, Bywater stated he filed a motion to withdraw as decedent's attorney in the Virginia case, and the court granted his motion by a written order entered on March 3, 2017. Bywater mailed a copy of the March 3, 2017, order to decedent's home address in Monticello, Illinois. Bywater did not have a record showing he mailed the written order. The March 3, 2017, order noted a counterclaim had been filed against decedent by serving decedent's counsel. In the March 3, 2017, order, the court also granted decedent 21 days to (1) file responsive pleadings to the counterclaim and (2) respond to the discovery propounded to him.

¶ 7 In April 2017, the co-administrators filed a petition for letters of administration, which the circuit court granted. The court also entered an order declaring the co-administratorswere decedent's only heirs. The co-administrators published a death and claim notice in the Piatt County Journal Republican on (1) April 26, 2017; (2) May 3, 2017; and (3) May 10, 2017. The notices listed the deadline for filing a claim against the estate as November 1, 2017.

¶ 8 On October 25, 2018, petitioner filed a statement of claim against decedent's estate. The claim sought $850,000 and asserted it arose from decedent's tortious breach of his fiduciary duties owed to petitioner when decedent served as a director on petitioner's board of directors. The claim referenced Hanover County, Virginia case No. CL-16002090-01. In January 2019, the co-administrators filed a motion to bar petitioner's claim under section 18-12 of the Act (755 ILCS 5/18-12 (West 2016)), asserting petitioner's claim was untimely and not known or reasonably ascertainable by the co-administrators.

¶ 9 On March 20, 2019, the circuit court held a hearing on the co-administrators' motion to bar petitioner's claim. Petitioner did not appear at the hearing but had filed a motion to continue. The court denied the motion to continue and heard argument from the co-administrators' counsel. The court barred petitioner's claim on the basis it was not timely filed. The court filed its written order on March 22, 2019. Petitioner subsequently filed a motion to vacate the March 22, 2019, order, asserting petitioner's claim was known or reasonably ascertainable by the co-administrators.

¶ 10 At an August 7, 2019, hearing, the circuit court granted petitioner's oral motion to admit Bywater's evidence deposition. The court also reserved ruling on petitioner's oral motion to show an admission of facts and allowed the co-administrators to file Michael's response to petitioner's request for admission of facts within three days. On August 30, 2019, the court first held a hearing on petitioner's motion to show an admission of facts. The court recognized the co-administrators filed Michael's response to the request within the three days given at the lasthearing but still found Michael's response untimely. Thus, the court granted petitioner's motion and deemed the facts admitted. It specified the admission as follows: "In that, Mr. McLaughlin, Michael, acknowledges receiving mail from Mr. Bywater, the lawyer in Virginia who was representing the decedent." At the hearing, the court also addressed petitioner's motion to vacate. In addition to Bywater's deposition and the deemed admitted fact, petitioner presented the following two documents from the Virginia case: (1) the March 3, 2017, order allowing Bywater to withdraw as decedent's counsel and (2) a February 21, 2017, motion for extension of time to answer and respond to discovery, which was signed by decedent. The co-administrators presented Michael's testimony. After considering the evidence, the court granted petitioner's motion to vacate, noting it was giving petitioner "the benefit of the doubt."

¶ 11 On October 4, 2019, the circuit court held another hearing on the co-administrators' motion to bar petitioner's claim. The co-administrators again presented Michael's testimony. Michael testified he began helping decedent with the farming after their father died. Michael explained decedent was in charge of the farming and made all the decisions. Michael did not discuss decedent's finances with him. When he visited decedent's home, which was about once a month, decedent did not show Michael any documents pertaining to his personal business. Decedent never discussed with Michael a lawsuit with petitioner. At the time of his death, decedent appeared to be preparing his 2016 income taxes. Decedent had paperwork spread out all over his living room floor. In decedent's home, Michael also found large plastic storage bins labeled by the year, which contained documents related to prior years income taxes. Michael did not find any paperwork related to petitioner; petitioner's president, Will Williams; Bywater; or the Virginia lawsuit. Michael testified decedent did not keep extensive records of his bills at his home. Michael explained he was also unaware the IRS had alien on decedent's farmland until he was in the process of selling the land. Michael did find a big stack of farm-related receipts in the glove box of decedent's pickup truck. None of the materials were related to petitioner.

¶ 12 Michael also testified about decedent's mail. He and Robert decided to keep decedent's mail going to decedent's home. Michael checked decedent's mailbox five to six times a week. Michael would review every piece of mail and take the bills back to his home. Michael contacted every entity that sent a bill. He also contacted farm implement companies that he knew decedent conducted business with to see if decedent owed money. Michael would pay all the bills as funds became available. Before its October 2018 claim, Michael did not receive any mail from petitioner or Williams. Michael also did not see the order mailed by Bywater, and he did not receive any court documents from Virginia. Michael testified he had no knowledge of any claim outside of Illinois. He did admit Robert opened the mail when Robert was in the area for decedent's funeral. During that time, Robert gave Michael all the mail. Thus, Michael saw all the mail decedent received after his death. He estimated he reviewed around 100 pieces of mail, most of which came within the first 10 weeks after the death notice went out.

¶ 13 Additionally, Michael testified that, with his second answer to interrogatories, he was attempting to explain how he handled paperwork related to the estate. If Michael received a bill, he contacted the creditor and provided the creditor with any necessary documents. Michael also explained he did not know anyone in Virginia, but decedent's friends knew people in Virginia. Michael further testified decedent's friends did not mention decedent's lawsuit with petitioner and did not mention decedent might owe petitioner money.

¶ 14 Petitioner did not present any testimony. Instead, it asked the circuit court to take judicial notice of the documents it presented at the August 30, 2019, hearing. In addition to thefour documents it presented at the August 2019 hearing, petitioner also presented Michael's second answer to the August 2019 interrogatories. In the second answer, Michael stated he did not specifically recall a letter from Bywater. If Michael did get a letter, then he contacted him and informed him of decedent's death. Michael also stated he was generally aware through decedent's...