In re Estate of Pellico

SUPREME COURT CASES

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State: Illinois

Court: 2nd District Appellate

Docket No: 2-07-1045 & 2-07-1058, Cons. Rel

Case Date: 09/10/2009

Preview:Nos. 2--07--1045 & 2--07--1058 cons. Filed: 9-10-09 ______________________________________________________________________________ IN THE APPELLATE COURT OF ILLINOIS SECOND DISTRICT ______________________________________________________________________________ In re ESTATE OF EVELYN PELLICO ) Appeal from the Circuit Court ) of Du Page County. ) ) No. 06--P--725 ) (Gregory Pellico, Plaintiff-Appellee, v. ) Robert I. Mork, Public Guardian for ) Du Page County and Temporary Guardian ) Honorable of Evelyn Pellico, and Alfred A. Spitzerri, ) Kenneth L. Popejoy, Guardian ad Litem, Defendants-Appellants). ) Judge, Presiding. _________________________________________________________________________________ In re ESTATE OF EVELYN PELLICO ) Appeal from the Circuit Court ) of Du Page County. ) ) No. 06--P--725 ) (Gregory Pellico, Plaintiff-Appellant, v. ) Robert I. Mork, Public Guardian for ) Du Page County and Temporary Guardian ) Honorable of Evelyn Pellico, and Alfred A. Spitzerri, ) Kenneth L. Popejoy, Guardian ad Litem, Defendants-Appellees). ) Judge, Presiding. ______________________________________________________________________________ JUSTICE McLAREN delivered the opinion of the court: In appeal No. 2--07--1045, defendants Robert I. Mork, public guardian for Du Page County (Public Guardian) and temporary guardian of Evelyn Pellico, now deceased (Evelyn), and Alfred A. Spitzzeri, guardian ad litem (GAL), appeal part of the circuit court's order of March 23, 2007, which denied their petition for fees, and part of the circuit court's judgment of September 17, 2007, which denied the Public Guardian's motion to reconsider and vacate the March 23, 2007, order and denied

Nos. 2--07--1045 & 2--07--1058 cons. the GAL's notice of equitable lien. In appeal No. 2--07--1058, plaintiff, Gregory Pellico (Gregory), appeals part of the circuit court's judgment of September 17, 2007, in which the circuit court ordered that "there shall be no withdrawals, transfers or financial transactions on any accounts involving or titled, in whole or in part, to Evelyn Pellico or Peter Pellico." We consolidated these appeals. Regarding appeal No. 2--07--1045, we affirm in part and reverse in part the circuit court's March 23, 2007, order; we dismiss as moot the appeal as it relates to the September 17, 2007, order; and we remand for further proceedings. Regarding appeal No. 2--07--1058, we dismiss the appeal as moot. Regarding appeal No. 2--07--1045, the Public Guardian and the GAL first argue that the circuit court erred by not ordering payment of their reasonable and necessary guardianship fees. They assert that, contrary to its determination, the circuit court had subject matter jurisdiction to order payment of guardianship fees because: (1) the statutory scheme sets forth the duties of a public guardian, allows for appointment of a temporary guardian on an emergency basis, and provides for payment of guardianship fees accordingly; (2) a plain reading of section 11a--18(d) of the Probate Act of 1975 (755 ILCS 5/11a--18(d) (West 2006)) reveals that it does not apply; (3) the use of the word "estate" in the Probate Act and in the court's order of July 31, 2006, is not meant to exclude trusts, but rather the assets in the ward's trust estate are meant to be directly and immediately protected under a temporary guardianship pursuant to section 11a--4 of the Probate Act (755 ILCS 5/11a--4 (West 2006)); (4) if section 11a--18(d) does indeed apply, the Probate Act does not and cannot require the filing of a separate action beyond a temporary guardianship in order to protect the assets of a disabled adult; and (5) the remainder of the circuit court's March 23, 2007, order is not based upon good authority. Second, the Public Guardian and the GAL argue that the circuit court erred in determining it had no personal jurisdiction over Gregory, including as trustee.

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Nos. 2--07--1045 & 2--07--1058 cons. Regarding appeal No. 2--07--1058, Gregory argues: I. "The court below correctly ordered that it had no jurisdiction over the Evelyn Pellico and Peter Pellico trusts. Having no jurisdiction, the circuit court erred by entering an order prohibiting [him] from accessing or otherwise managing, controlling or disbursing assets of the trusts on behalf of the trusts or its beneficiaries pending the outcome of the appeal. A. The court below correctly ruled that it had no subject matter jurisdiction over the Evelyn Pellico or Peter Pellico trusts at the time of the guardian's appointment. *** B. Even if the court had jurisdiction over the trusts at the time of the appointment of the guardian, any powers the guardian had over the trusts terminated upon the death of [Evelyn]. *** C. The court below correctly determined that it had no personal jurisdiction over the trustee. *** D. Because the court order declining jurisdiction was correct, the court below erred when it imposed a stay against the trustees' unfettered right to access, manage, control or distribute the assets of the trusts according to their terms." I. FACTS

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Nos. 2--07--1045 & 2--07--1058 cons. On July 28, 2006, the Public Guardian filed an emergency petition for guardianship over the person and estate of Evelyn. The petition was filed at the request of Du Page County Senior Services, Anthony Pellico (one of Evelyn's sons), Manor Care Nursing Home of Hinsdale, and Hinsdale Hospital. The petition alleged the following. At the time of the filing of the petition, Evelyn was a gravely ill, 84-year-old patient at Hinsdale Hospital, suffering from dementia and advanced myelodysplastic syndrome, requiring frequent blood transfusions, and also suffering from a huge bed sore. Physicians deemed her condition terminal, and she was unable to make personal or financial decisions on her own due to her dementia. Evelyn was due to be discharged from the hospital as early as July 31, 2006. She had been a resident of Manor Care, a skilled nursing care facility in Hinsdale. Medical caregivers agreed, based upon Evelyn's medical needs, that upon release from the hospital, she should return to Manor Care. The emergency petition also alleged that Evelyn had two sons, Anthony and Gregory Pellico. Anthony concurred with the medical caregivers that Evelyn should return to Manor Care and remain there for the remaining days of her life. However, Gregory wanted Evelyn to return to her apartment after her release from the hospital. The emergency petition alleged that two trusts named Evelyn as beneficiary: the Evelyn Pellico Trust (purportedly worth $850,000 several years before the emergency petition was filed), and the Peter Pellico Trust 1 (purportedly worth $975,000 several years before the emergency petition was filed). Anthony and Gregory were co-trustees of both trusts at some point, but Gregory and his attorney denied Anthony access to those trusts and to any trust documents.2 Gregory, who had been
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Peter Pellico was Evelyn's predeceased husband and father to Anthony and Gregory.

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The trust documents were not attached to the emergency petition and are not part of the -4-

Nos. 2--07--1045 & 2--07--1058 cons. unemployed for several years, had been living in Evelyn's house and had complete access to the trusts. Anthony feared that Gregory had been living off the trusts and had been misappropriating the trust assets. Therefore, on July 25, 2006, Anthony contacted Du Page County Senior Services, which in turn contacted the Du Page County Public Guardian. Hinsdale Hospital, Manor Care, and Anthony all believed the emergency petition needed to be filed. Because Evelyn was due to be discharged from the hospital as early as July 31, 2006, the Public Guardian had no other means to guarantee Evelyn's welfare beyond filing the emergency petition for guardianship to protect her health and assets. Gregory received notice of the emergency petition and appeared in open court on July 31, 2006, for the scheduled hearing. Gregory appeared pro se, representing himself to be Evelyn's son, power of attorney for Evelyn's property, and trustee for a trust of which Evelyn was the beneficiary. Gregory confirmed that he had been served. Gregory disputed that there was an emergency and requested "a continuance so I can get an attorney to represent my position." That same day, Gregory filed a pro se responsive pleading entitled "Responsive Declaration of Gregory Pellico to Robert I. Mork's Emergency Petition for Guardianship of the Person and Estate of Evelyn Pellico." Gregory's pleading alleged that he had a discussion with a physician who stated that Evelyn's release from the hospital was not imminent and that Manor Care had previously abused Evelyn. Gregory's pleading denied that he was misappropriating funds and concluded that if any guardian were appointed for Evelyn it should be her sister, Lorraine Frederick.

appellate record. -5-

Nos. 2--07--1045 & 2--07--1058 cons. On July 31, 2006, the circuit court, Judge Edward R. Duncan presiding,3 appointed the Public Guardian as the temporary guardian over both the person and the estate of the ward. The circuit court order stated: "[T]his Court finds due cause to authorize the Public Guardian to access and control funds from any and all Trusts which name EVELYN PELLICO as beneficiary, including, but not limited to, the EVELYN PELLICO TRUST and the PETER PELLICO TRUST, and to freeze and prohibit any further financial activity, transactions, and withdrawals pertaining to the Trusts by the Co-Trustees, ANTHONY PELLICO and GREGORY PELLICO. *** 4. ROBERT I. MORK, Public Guardian for Du Page County and Temporary Guardian of the Person and Estate of EVELYN PELLICO, is hereby authorized to access and control any and all Trusts which name EVELYN PELLICO as beneficiary, including but not limited to, the EVELYN PELLICO TRUST and the PETER PELLICO TRUST, for the purpose of withdrawing and disbursing funds therefrom for the benefit and well-being of EVELYN PELLICO and her Estate, and for the purpose of opening Guardianship accounts with said funds, if the Public Guardian sees fit. *** 6. GREGORY PELLICO is hereby ordered to provide copies of any Trusts naming EVELYN PELLICO as the beneficiary to the Court, the Public Guardian, and ANTHONY PELLICO, along with a disclosure as to the location(s) of the funds in the Trusts, the

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Judge Kenneth Popejoy was on vacation at this time. -6-

Nos. 2--07--1045 & 2--07--1058 cons. amounts held in the Trusts, and copies of any and all bank or financial statements pertaining to the Trusts on or before August 7, 2006. 7. GREGORY PELLICO is further ordered to provide an Accounting to the Court, the Public Guardian, and ANTHONY PELLICO on or before August 21, 2006, concerning any and all disbursements from and financial transactions involving the Trusts for the past five (5) years." The order also suspended any purported powers of attorney executed by Evelyn "pending further hearing regarding the validity of said Powers of Attorney." The order also appointed Fred Spitzzeri to act as guardian ad litem for Evelyn. On August 9, 2006, the Public Guardian filed an emergency petition for rule to show cause against Gregory, alleging that Gregory refused to provide, inter alia, the trust and financial documents as ordered by the circuit court. The petition also alleged that Gregory had withdrawn funds from Evelyn's several accounts both before and after the circuit court's order of temporary guardianship. On August 29, 2006, Gregory, now represented by counsel, filed an "emergency" motion to vacate the circuit court's order and an "emergency" motion to amend the circuit court's order. In the motion to vacate, Gregory argued that the Public Guardian had no authority under the Probate Act to serve as guardian over any estate assets covered by a power of attorney. In the motion to amend the circuit court's order, Gregory argued that the circuit court lacked both subject matter and personal jurisdiction over the two trusts and that it lacked personal jurisdiction over Gregory in his capacity as trustee. The case was continued three times by agreed orders. Sometime before September 20, 2006, the Public Guardian secured Evelyn's return and readmission to Manor Care. On September 20, 2006, at the express request of Evelyn's physician,

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Nos. 2--07--1045 & 2--07--1058 cons. the Public Guardian filed a petition in the circuit court for a "Do Not Resuscitate" (DNR) order on the ward's behalf. The petition alleged that the ward's blood platelet count had become "lifethreateningly low," that further emergency surgeries were not advisable, and that in the opinion of all treating physicians and healthcare workers, a DNR order was in the ward's best interests. The GAL agreed. After a hearing, the circuit court granted the petition. On September 22, 2006, and again on October 23, 2006, agreed orders were entered reappointing the Public Guardian as temporary guardian of the ward, with letters of office to remain in full force and effect. On October 27, 2006, over Gregory's objection, the circuit court granted the Public Guardian's petition to place the ward in hospice care. On November 14, 2006, the Public Guardian filed a petition, amended on January 3, 2007, seeking his guardian fees for necessary work in this matter. The GAL also filed a petition seeking his fees. On November 19, 2006, Evelyn passed away. On December 14, 2006, the circuit court ordered the guardianship of Evelyn terminated due to her death. However, the circuit court ordered the guardianship of the estate to remain open until further order of the court. The circuit court, Judge Popejoy presiding, ordered that no disbursements were to be made from Evelyn's assets that were placed in the control of the guardianship under the July 31, 2006, order. On December 13, 2006, Gregory filed an objection to the petitions for fees, challenging the jurisdiction of the circuit court to award fees from either the Evelyn Pellico or the Peter Pellico Trust to either the Public Guardian or the GAL, citing section 11a--18(d) of the Probate Act (755 ILCS 5/11a--18(d) (West 2006)). Gregory argued that the Public Guardian was required to file a separate

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Nos. 2--07--1045 & 2--07--1058 cons. "action" on behalf of the ward to compel distributions of assets from trusts. Gregory also argued that the circuit court did not have jurisdiction over the trusts through the guardianship because jurisdiction had terminated, along with the guardianship, upon the death of Evelyn. On January 3, 2007, the Public Guardian filed an amended petition for fees, seeking $35,856. On January 5, 2007, letters of office were issued in the probate division of the circuit court of Du Page County in a case entitled In re Evelyn Pellico, Deceased, No. 06--P--1225, appointing Gregory as representative of Evelyn's estate. (We note here that Gregory filed with this court a motion to take judicial notice of the Public Guardian's claim against Evelyn's estate in the abovementioned case. We grant Gregory's motion and also take judicial notice of the case and its pleadings in their entirety as filed with the probate division of the circuit court of Du Page County. See TurnerEl v. West, 349 Ill. App. 3d 475, 481 (2004) (appellate courts may take judicial notice of public records). On January 31, 2007, Gregory filed an objection to fees, citing jurisdictional prohibitions; a motion to vacate the July 31, 2006, order of temporary guardianship; and a motion to confirm the termination of guardianship due to the death of Evelyn. On February 5, 2007, the circuit court entered an order regarding the petitions for fees. Regarding the Public Guardian, the circuit court found that all hours expended and all work performed were "reasonable, appropriate, and necessary." The circuit court found that the problems created by Gregory caused the Public Guardian's bill to be greater than otherwise and that the hours spent by the Public Guardian were "absolutely necessary to get us to a reasonable level in this case to get some resolution." The circuit court approved the Public Guardian's requested fees and expenses in the amount of $35,856. The circuit court also found the fees of the GAL reasonable and

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Nos. 2--07--1045 & 2--07--1058 cons. necessary and approved the GAL's fees in the amount of $7,000. However, the circuit court stayed any payment of the Public Guardian and GAL fees pending its determination "as to [the] jurisdictional issues raised by Gregory Pellico." On February 15, 2007, the circuit court modified its February 5, 2007, order nunc pro tunc, to provide that no judgment be entered with respect to the award of guardianship fees and costs to either the Public Guardian or the GAL, pending its later ruling upon Gregory's objections to jurisdiction. In its March 23, 2007, judgment (part of which the Public Guardian and the GAL appeal), the circuit court issued a memorandum and order ruling, in part, that it lacked subject matter jurisdiction over the trusts and that it lacked personal jurisdiction over Gregory in his capacity as trustee of the trusts. The circuit court reasoned that, while the Probate Act authorizes a temporary guardian to exercise control over the estate of a ward, a trust that names the ward as a beneficiary is not part of the ward's estate. The circuit court stated that such a trust is a separate legal entity that may be sued only through its trustee acting in his representative capacity. Citing section 11a--18(d) of the Probate Act, the circuit court reasoned that the only way a court and guardian can force distribution of funds from a trust is for the guardian to "bring an action of behalf of the ward to compel the trustee to exercise the trustee's discretion or to seek relief from an abuse of discretion." The circuit court interpreted the "bring an action" language within section 11a--18(d) to mean "bring a separate lawsuit." In the same March 23, 2007, judgment, the circuit court deemed portions of Judge Duncan's judgment of July 31, 2006, void and vacated the portions of the judgment that authorized the Public Guardian to make distributions from the trusts, granted the Public Guardian control over the trusts,

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Nos. 2--07--1045 & 2--07--1058 cons. and restricted the trustee's powers. The March 23, 2007, judgment further stated that when Gregory appeared at the July 31, 2006, hearing, filed his pro se response, and asked for a continuance to obtain an attorney, he did not waive an objection to personal jurisdiction because, later, with the benefit of counsel, he filed a motion objecting to personal jurisdiction. However, the circuit court rejected Gregory's argument that Evelyn's death precluded it from awarding guardianship fees. The circuit court cited section 13--5(l) of the Probate Act (755 ILCS 5/13--5(l) (West 2006)) as providing for the award of reasonable and appropriate fees to a temporary guardian. The circuit court also cited In re Estate of Wellman, 174 Ill. 2d 335 (1996), to support its ruling that the circuit court retains jurisdiction to award GAL fees. Nevertheless, the circuit court ruled that it lacked the authority to award such fees to the Public Guardian and the GAL because it lacked subject matter jurisdiction over the trusts and the funds from those trusts. On April 3, 2007, the GAL moved to impose an equitable lien or constructive trusts on the trust funds to satisfy his fees. On April 20, 2007, the Public Guardian filed a motion to reconsider or vacate the circuit court's March 23, 2007, order. Gregory then filed a motion to clarify the circuit court's March 23, 2007, order to allow him immediate access to and control of the trust assets, or to compel the Public Guardian to turn over the assets. On July 13, 2007, the Public Guardian filed a claim for guardianship fees against Evelyn's estate in the probate court proceeding. On August 27, 2007, the circuit court ordered that no further financial transactions take place on any of the ward's accounts, including the guardianship account established by the Public Guardian at LaSalle Bank pursuant to the circuit court's July 1, 2006, order. On September 10, 2007, the

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Nos. 2--07--1045 & 2--07--1058 cons. Public Guardian filed a petition for rule to show cause against Gregory for his continuing actions to attempt to wrongfully access funds and shares of stock, despite the court's order to the contrary. On September 12, 2007, Gregory, as representative for Evelyn's estate, disallowed the Public Guardian's and the GAL's claims for fees in the probate court proceeding. On September 17, 2007, the circuit court denied the GAL's notice of equitable lien. The circuit court also denied the Public Guardian's motion to reconsider and vacate its March 23, 2007, order. Upon its own motion, the circuit court ordered: "There shall be no withdrawals, transfers, or financial transactions from any accounts involving or titled, in whole or in part, to Evelyn Pellico or Peter Pellico, including, but not limited to, any trust accounts, and the guardianship checking account at LaSalle Bank, for a period of 30 days or as otherwise ordered by this Court, pending an appeal by any party in 30 days." The circuit court stated that its order that day was "final and appealable." All parties appeal the circuit court's September 17, 2007, order. See 210 Ill. 2d R. 304(b)(1). The Public Guardian and the GAL filed timely notices of appeal from the orders of March 23, 2007, and September 17, 2007. They both moved for a stay pending appeal. On September 24, 2007, the Public Guardian filed a supplemental petition for an additional $27,825.75 in guardianship fees incurred for time expended meeting the directives of the circuit court and fully briefing all pending pleadings. The circuit court granted the Public Guardian's motion for a stay pending appeal. II. ANALYSIS

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Nos. 2--07--1045 & 2--07--1058 cons. On appeal, the Public Guardian and the GAL argue primarily that the circuit court erred by not ordering payment of their reasonable and necessary guardianship fees. They base their argument on two separate subarguments: (1) that the circuit court had subject matter jurisdiction to order payment of guardianship fees; and (2) that the circuit court had personal jurisdiction over Gregory, including as trustee. We will address each argument separately. However, before we address the merits of this appeal, we address Gregory's contention that the Public Guardian and GAL's "[b]rief makes inaccurate assertions concerning the rulings of the court below and improperly casts appellee, Gregory Pellico, in an unfavorable light based upon allegations not supported by the record." First, Gregory contends that the Public Guardian and GAL inaccurately assert in their brief that "the court below determined that it was without jurisdiction to award fees to the Public Guardian or the [GAL]" when actually the circuit court "ruled it was without jurisdiction to order those fees to be paid from the assets of the Trusts." Because Gregory does not cite a page in the Public Guardian and GAL's brief, we cannot find where they made this alleged inaccurate statement. However, on page 22 of the Public Guardian and GAL's brief we have found an accurate representation of the circuit court's ruling, wherein they state: "In reaching its determination that it lacked subject-matter jurisdiction over the trusts, and therefore could not order payment to the Public Guardian and GAL or their necessary and reasonable fees, the circuit court based its ruling on its interpretation of section 11(a)--18(d) of the Probate Act of 1975 (the Probate Act)." Accordingly, we disagree with Gregory that the Public Guardian and GAL inaccurately represented the circuit court's holding. Next, Gregory asserts that the Public Guardian and GAL inaccurately state in their brief that the circuit court "ordered the payment of [their] fees, but stayed enforcement of that order until the

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Nos. 2--07--1045 & 2--07--1058 cons. final determination of the jurisdictional issues." Again, Gregory fails to cite to any page in the Public Guardian and GAL's brief. However, a statement we found in the Public Guardian and GAL's brief regarding this issue does not differ from Gregory's version and is supported by the record. On page 16 of the Public Guardian and GAL's brief, they state: "The court therefore by order of February 5, 2006, approved the fees and expenses of the Public Guardian in the amount of $35,856 as fair and reasonable. [Citation to the record.] The court further approved the petition for fees of the [GAL] in the total sum of $7,000, as likewise reasonable and necessary. [Citation to the record.] Nevertheless, the court 'stayed' any payment pending its determination 'as to [the] jurisdictional issues raised by Gregory Pellico.' [Citation to the record.]" This statement is supported by the record and the circuit court's February 5, 2006, order. While Gregory is correct that no judgment was entered on the award of fees, Gregory fails to cite to any place in the Public Guardian and GAL's brief where they make an assertion to the contrary. Therefore, Gregory's complaint is meritless. Next, Gregory contends that the Public Guardian refers to allegations made against Gregory in the petition for temporary guardianship. Gregory specifically objects to the allegations that he misappropriated funds of the trusts and "that he will not reveal any information to Anthony [Gregory's brother and co-trustee] regarding the trusts." Gregory argues that these allegations were not verified. Gregory also complains that the Public Guardian refers to allegations in petitions for rules to show cause filed by the Public Guardian but never heard by the circuit court. We assure Gregory that when analyzing the issues of this appeal we will consider only the facts relevant to those issues. We now address the merits of this appeal.

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Nos. 2--07--1045 & 2--07--1058 cons. A. The Circuit Court Had Original Subject Matter Jurisdiction Over the Trusts Essentially, the Public Guardian and the GAL argue that the circuit court erred when it ruled in its March 23, 2007, judgment that it lacked subject matter jurisdiction to order payment of guardianship fees from the funds of the trusts. 4 Gregory argues, both in his appellee's brief and in his own appeal, that the circuit court correctly ruled that it lacked subject matter jurisdiction over the trusts because section 11a--18(d) of the Probate Act restricted its power over the trusts at the time of the Public Guardian's appointment.

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The subarguments of the Public Guardian and the GAL are as follows: (1) the statutory

scheme sets forth the duties of a public guardian, allows for appointment of a temporary guardian on an emergency basis, and provides for payment of guardianship fees accordingly; (2) a plain reading of section 11a--18(d) of the Probate Act (755 ILCS 5/11a--18(d) (West 2006)) reveals that it does not apply; (3) the use of the word "estate" in the Probate Act and in the court's order of July 31, 2006, is not meant to exclude trusts, but rather the assets in the ward's trust estate are meant to be directly and immediately protected under a temporary guardianship pursuant to section 11a--4 of the Probate Act (755 ILCS 5/11a--4 (West 2006)); (4) if section 11a--18(d) does indeed apply, the Probate Act does not and cannot require the filing of a separate action beyond a temporary guardianship in order to protect the assets of a disabled adult; and (5) the remainder of the circuit court's March 23, 2007, order is not based upon good authority. Similarly, Gregory's subarguments address how section 11a--18(d) limited the circuit court's subject matter jurisdiction. We do not specifically address these subarguments, except for the Public Guardian and GAL's first subargument, because we agree with their main argument that the circuit court had subject matter jurisdiction over the trusts, notwithstanding section 11a--18(d) of the Probate Act. -15-

Nos. 2--07--1045 & 2--07--1058 cons. Subject matter jurisdiction refers to a court's power to adjudicate the general question involved and to grant the relief requested. In re M.M., 156 Ill. 2d 53, 64 (1993); In re Dontrell H., 382 Ill. App. 3d 612, 616-17 (2008). In the general civil context, circuit courts enjoy, with limited exceptions, "original jurisdiction of all justiciable matters." Ill. Const. 1970, art. VI,

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