Silver v. Horneck

2021 IL App (1st) 201044

216 N.E.3d 970

466 Ill.Dec. 137

Elizabeth SILVER, Plaintiff-Appellant,

v.Peter HORNECK, AS TRUSTEE OF the ROBERT D. SILVER REVOCABLE TRUST, DATED NOVEMBER 10, 1993, and the Corrinne K. Silver Revocable Trust, Dated November 10, 1993, and Geoffrey Silver, Defendants-Appellees.

No. 1-20-1044

Appellate Court of Illinois, First District, SIXTH DIVISION.

Filed October 22, 2021

Daniel S. Ebner, of Prather Ebner LLP, of Chicago, for appellant.

Peter E. Cooper, of Lawrence Kamin, LLC, of Chicago, for appellee Peter Horneck.

Jonathan R. Cantrell, of Hart Cantrell LLC, of Benton, IL, for appellee Geoffrey Silver.

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

¶ 1 Seeking an accounting and to enforce certain provisions of two trusts established by her now-deceased parents, the plaintiff in this case, a resident of Florida, sued her brother and co-beneficiary, a resident of Washington, and her cousin, who serves as trustee of the trusts and resides in Colorado. The circuit court concluded that it lacked personal jurisdiction over these nonresident defendants and dismissed the complaint with prejudice pursuant to section 2-301 of the Code of Civil Procedure (Code) ( 735 ILCS 5/2-301 (West 2018) ). Maintaining that the court had both general and specific jurisdiction over the defendants, the plaintiff now asks us to reverse that ruling and remand the case for further proceedings. For the reasons that follow, we affirm.

¶ 2 I. BACKGROUND

¶ 3 The pleadings, affidavits, and documentary evidence considered by the circuit court during the extensive briefing and argument in this matter established the following facts.

¶ 4 Robert and Corrinne Silver were married and lived in Illinois for many years. With the assistance of their Illinois attorney, Raymond Saunders, they executed the Robert D. Silver Revocable Trust, dated November 10, 1993 (Robert's Trust), and the Corrinne K. Silver Revocable Trust, dated November 10, 1993 (Corrinne's Trust) (collectively, the Trusts). Robert and Corrinne's children, plaintiff Elizabeth Silver and defendant Geoffrey Silver, are the surviving beneficiaries of both trusts. Elizabeth resides in Florida, and Geoffrey, though a longtime resident of Oregon, now resides in Washington.

¶ 5 Robert amended his trust in 1998 to give Corrinne the power to nominate a successor trustee, including herself, in the event of his incapacity or death and to distribute the assets of his trust in her will. Pursuant to these amendments, Corrinne began acting as the successor trustee of Robert's Trust, following his death on April 4, 2000.

¶ 6 Corrinne executed several amendments to her own trust between 2007 and 2012. As amended, it provided that if Geoffrey and Elizabeth both survived Corrinne, certain assets should first be transferred to Elizabeth and the remaining assets distributed in equal parts to Elizabeth's and Geoffrey's respective trusts. Pertinent to the parties’ underlying dispute, Article III, section (c) of Corrinne's Trust also provided that if there was any delay in the distribution of trust assets, the trustee was to pay Elizabeth's "current expenses, including without limitation, repairs, maintenance and capital improvements for [Elizabeth's] residence" from the principal of Corrinne's Trust and that any such payments should not be considered advancements of Elizabeth's one-half share.

¶ 7 In a final amendment to her trust executed on September 13, 2012, and in a separate designation with respect to Robert's Trust executed the same day, Corrinne named her grandnephew, defendant Peter Horneck, as the successor trustee of both Trusts in the event that she ceased to act as trustee. Corrinne also named Mr. Horneck as the executor of her estate.

¶ 8 Sometime in 2014, Corrinne moved from Illinois to Florida, where she continued to serve as trustee of the Trusts. On July 2, 2015, however, Corrinne resigned as trustee and, pursuant to her designation of him on September 13, 2012, Mr. Horneck, a resident of Colorado, began acting as successor trustee for the Trusts.

¶ 9 In February 2017, Mr. Horneck petitioned a Florida probate court for the appointment of an emergency temporary guardian for Corrinne. Corrinne passed away just over two months later, on April 22, 2017.

¶ 10 Several days after Corrinne's passing, Mr. Horneck sent an e-mail to Elizabeth and Geoffrey, expressing his condolences and apprising them of steps he was taking to settle Corrinne's affairs as expeditiously as possible. He informed them that he had retained an Illinois attorney "to make sure the estate [was] settled legally according to Illinois law where the trusts and will were written" and who could put him in touch with Mr. Saunders, the individual most familiar with the trust and estate documents. Mr. Horneck also retained Michael Crowe, an Illinois accountant who had previously been retained by Corrinne, "to assist with any taxes due from the estate or accounting issues that [might] arise."

¶ 11 The following month, Mr. Horneck e-mailed Elizabeth and Geoffrey again to inform them that he had decided it was in the best interests of the estate for him to retain Mr. Saunders directly, because of his "long history with [their] family and its assets," because Mr. Saunders "clearly was trusted by [their] parents," and because in Mr. Horneck's conversations with him, Mr. Saunders had been "helpful, candid, and supportive."

¶ 12 On May 19, 2017, Elizabeth's Florida counsel wrote to Mr. Saunders, asking him to "[p]lease advise as to [his] position regarding future communications with Mr. Horneck"—whether Mr. Saunders preferred that future correspondence be sent directly to him in Illinois or to Mr. Horneck in Colorado with a copy to Mr. Saunders. Elizabeth's counsel also asked, "since *** Corrinne Silver established her domicile in Florida in 2014," if "the estate and trust administration [was] going to be handled in Florida."

¶ 13 Elizabeth's Florida counsel then wrote directly to Mr. Horneck on June 16, 2017, seeking "remittance/payment of Elizabeth's current expenses of $14,739.26" under section III(a)(2) of Corrinne's Trust. On June 23 or July 23, 2017 (both dates appear in the record), Mr. Horneck sent Elizabeth a check for $50,000. Elizabeth elected not to cash the check, however, because she understood that Geoffrey had received an identical payment and insisted that any regular distribution made prior to the payment of her predistribution expenses was premature. Elizabeth was advised to communicate with Mr. Horneck on this and other matters through Mr. Saunders.

¶ 14 From 2017 to the filing of this lawsuit in 2019, Elizabeth and her Illinois counsel did in fact correspond with Mr. Saunders on numerous occasions regarding Elizabeth's continued requests for payment of her predistribution expenses, her eventual demand for an accounting of Mr. Horneck's activities as trustee, and other, non-trust matters relating to Corrinne's estate. Through these exchanges, Elizabeth was ultimately provided with tax returns, investment account statements, and check registers for the Trusts. Mr. Saunders also explained that Elizabeth's right to payment of her expenses under Corrinne's Trust was "not as simple and as clear" as her lawyer believed it to be, both because there had been no real delay before the first distribution checks were issued and because Elizabeth had provided no supporting documentation for her claimed expenses. Mr. Saunders proposed, on behalf of Mr. Horneck, that Elizabeth could preserve her claim for predistribution expenses while still authorizing the distribution of the remaining trust assets. Elizabeth appears not to have agreed to such a proposal.

¶ 15 Later exchanges indicate that the check for $50,000 was reissued to Elizabeth on March 12, 2019, and this time she did cash it. Geoffrey and Elizabeth were encouraged to agree on a plan for distribution of the remaining assets.

¶ 16 What negotiations occurred were unsuccessful, however, and Elizabeth filed her complaint in this matter on November 27, 2019. In it, she alleged that during the 2 ½ years following her mother's death, she had repeatedly and unsuccessfully sought payment of her predistribution expenses from Corrinne's Trust and had initially rejected a partial distribution of trust assets to both her and Geoffrey because she felt it failed to comply with Corrinne's wish that Elizabeth's expenses be paid "off the top." Elizabeth alleged that Mr. Horneck had breached his fiduciary duties to her as a beneficiary of the Trusts. She sought an accounting of his actions as trustee, payment of her unreimbursed expenses (by then totaling $597,064.74), and a final distribution of trust assets.

¶ 17 Elizabeth asserted in her complaint that the circuit court had jurisdiction over this case "because it involve[d] trusts governed by Illinois law with situs in Illinois." As support for her assertion that the trust situs was Illinois, Elizabeth relied on the following language included at article VIII, paragraph (c), of Robert's Trust and article VII, paragraph (c), of Corrinne's Trust (referred to hereinafter as paragraph (c)):

"Illinois Law Governs; Situs and Administration of Trusts; Substitute Trustees. The validity and effect of each trust created hereunder is governed by Illinois law. The situs of any trust created hereunder may, however, be transferred at any time or times to such place or places as the Trustees deem to be for the best interests of such trust."

¶ 18 Defendants disagreed with Elizabeth's reading of this provision. In their motions to dismiss her complaint for a lack of personal jurisdiction under section 2-301 of the Code ( 735 ILCS 5/2-301(a) (West 2018)), they argued that the above language provided only that Illinois law would apply for purposes of interpreting the trust instruments and that the situs of the Trusts could be changed. It did not, in their view, designate a particular place where the Trusts were to be administered. Citing...