Dunn v. Patterson

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Dunn v. Patterson

State: Illinois

Court: 3rd District Appellate

Docket No: 3-07-0881 & 3-08-0350

Case Date: 11/18/2009

Preview:No. 3--07--0881 (Consolidated with No. 3--08--0350) Filed November 18, 2009 IN THE APPELLATE COURT OF ILLINOIS THIRD DISTRICT A.D., 2009 CHARLES W. DUNN and CHARLOTTE ) E. DUNN, ) ) Plaintiffs-Appellees, ) ) v. ) ) LAWRENCE F. PATTERSON, ) ) Defendant-Appellant. ) Appeal from the Circuit Court of the 12th Judicial Circuit Will County, Illinois No. 07--MR--399 Honorable Barbara Petrungaro, Judge, Presiding.

JUSTICE SCHMIDT delivered the opinion of the court:

Plaintiffs, Charles and Charlotte Dunn, brought a declaratory judgment action against defendant, Lawrence Patterson, the attorney who prepared an estate plan for them. The circuit court of Will County entered judgment on the pleadings, finding, as a matter of law, that provisions in certain estate planning documents prepared by defendant were contrary to public policy and void. The trial court thereafter

awarded attorney fees constituting a Supreme Court Rule 137 (155 Ill. 2d R. 137) sanction against defendant in the amount of

$5,393.75. Patterson appeals, arguing: (1) the trial court erred in finding the provisions requiring his consent, or alternatively, an order of the court to amend or revoke the estate planning documents to be contrary to public policy; and (2) the trial court abused its discretion by awarding Rule 137 sanctions. reverse and remand. BACKGROUND Charles and Charlotte Dunn hired defendant, attorney Lawrence Patterson, to, inter alia, prepare certain estate planning documents for them. Patterson prepared the following We

documents, all dated June 12, 2006: (1) Charles W. Dunn and Charlotte E. Dunn joint declaration of trust; (2) living will declaration of Charles W. Dunn; (3) living will declaration of Charlotte E. Dunn; (4) limited durable power of attorney of Charles W. Dunn; and (5) limited durable power of attorney of Charlotte E. Dunn. Each of these documents contained a qualified amendment and revocation provision, which provided that any amendment or revocation of the documents may only be executed with the written consent of Patterson or by order of the court. The twelfth

paragraph of the "Joint Declaration of Trust (Conditionally 2

Amendable and Revocable)" provides: "QUALIFIED RIGHT TO AMEND AND/OR REVOKE. Charles W.

Dunn and Charlotte D. Dunn acting jointly or the survivor of them, may, at any time or times, amend or revoke this Joint Declaration of Trust, in whole or in part, by instrument in writing (other than a Will) delivered to the acting Trustee; subject however to the receipt of the written consent of Attorney LAWRENCE F. PATTERSON, whose signature on said written consent form is Medallion Certified (whether Attorney Lawrence F. Patterson is then acting as the Attorney at Law for either one or both of us, or has been discharged as said Attorney for either one or both of us, orally or in writing) or, in the alternative, receipt of the written consent of a Court having jurisdiction, upon Petition filed by said Attorney or by any other interested person." (Emphasis in original.)

Both Charles and Charlotte Dunn's limited durable power of attorney (health care) and living wills contain the following provision: "Qualified Amendment and Revocation. SECTION 1. Any provisions in the Laws of the State of Illinois or 3

in this instrument to the contrary notwithstanding, I hereby reserve the power to amend or revoke this Power of Attorney at any time and in any manner while I have the legal capacity to do so, subject however, to my receipt of the written consent to said amendment or revocation of Attorney LAWRENCE F. PATTERSON, whose signature on said written consent form is Medallion Certified (whether Attorney LAWRENCE F. PATTERSON is then acting as the Attorney at Law for either one or both of us, or has been discharged as said Attorney for either one or both of us, orally or in writing) or, in the alternative, without [sic] the consent of a Court having jurisdiction, upon Petition filed by said attorney or by any other interested person." (Emphasis in original.)

Each power of attorney and living will is signed by Charles or Charlotte Dunn, and each page containing the aforementioned provision is initialed by Charles or Charlotte Dunn. According

to Patterson, the "qualified amendment and revocation provision" is something that he routinely inserts in his clients' estate planning documents to prevent elder abuse. On November 14, 2006, Patterson received a letter from 4

attorney Timothy J. McJoynt, informing Patterson that he had been retained by the Dunns to modify the estate plan that Patterson had previously drafted. McJoynt explained that the Dunns no

longer wanted their ability to revoke or amend their estate planning documents to be contingent on Patterson's approval and, therefore, wished to remove his name from the documents and make other minor amendments. Patterson responded by letter, stating it was necessary for the Dunns to personally meet with him to discuss this matter. Patterson's letter, in pertinent part, provided as follows: "For my clients to make any changes in their plan it is necessary for both of them to discuss those changes with me and for me to then determine whether the changes are consistent with the interests and protections embodied in the original plan." He continued by stating that if his clients are unwilling to meet with him, their only other alternative was to petition the court for leave to amend. On April 27, 2007, the Dunns brought suit seeking a declaratory judgment against Patterson. The Dunns requested the

court to declare, among other things, that they had an absolute right to revoke and amend the estate planning documents and that 5

Rule 1.2(a) of the Rules of Professional Conduct (134 Ill. 2d R. 1.2(a)) required Patterson to abide by their directions. Patterson was named as a defendant. In Patterson's answer to the action, he admitted some basic factual allegations, but responded that he had no knowledge sufficient to form a belief as to the truth or falsity of a number of allegations in the plaintiffs' complaint, including that plaintiffs desired to revoke various estate planning documents and powers of attorney. In addition to his answer,

Patterson filed an affirmative defense, alleging that the estate planning documents contained a clause prohibiting the plaintiffs from amending or revoking the documents without the written consent of Patterson, whether or not he has been discharged as the plaintiffs' attorney, or, alternatively, upon order of the court. The answer also stated that Patterson met personally with the Dunns to review the final draft of all the documents in issue, including the amendment and revocation provisions. Exhibit No. 7 to the answer is a letter dated July 14, 2006, from Patterson to the plaintiffs enclosing the original executed estate plan documents. The letter states, in part, that the

joint declaration of trust, powers of attorney for healthcare, 6

and living will are only "conditionally amendable or revocable in order to ensure that your express intentions will not be unwittingly changed if you enter into a deteriorating mental state which compromises your ability to fully understand the consequences of your decisions at that time." Defendant alleges that he asked plaintiffs to personally confirm that he was terminated with respect to estate planning and trust funding. Exhibit No. 11 is the letter dated February

6, 2007, to the Dunns from Patterson requesting that they execute a formal notice of termination. plaintiffs. In another attempt to gauge whether he should consent to the change in the documents, Patterson served a notice of discovery deposition for Charles and Charlotte Dunn upon McJoynt and a notice to produce on the Dunns. When Patterson received no No response was received from

response to his discovery requests, he filed a motion for discovery sanctions pursuant to Supreme Court Rule 219 (210 Ill. 2d R. 219). The plaintiffs filed a motion for judgment on the pleadings, alleging that no genuine issue of material fact existed in the cause. In their motion, the plaintiffs argued that the cause

presented a straightforward issue of law: "is an attorney 7

obligated to follow the direction of his or her client, even if the attorney deems the clients' actions unwise, ill-conceived, or imprudent?" Plaintiffs argued that pursuant to Rule 1.2(a) of

the Rules of Professional Conduct, an attorney is obligated to abide by his client's decision so long as the direction given by the client is not contrary to law, unethical, or otherwise in violation of an ethical or legal obligation. Because plaintiffs

did not request that Patterson act in a way that was unethical, contrary to law, or otherwise improper, plaintiffs argued that judgment on the pleadings was proper. In his response to the motion for judgment on the pleadings, Patterson argued that issues of fact existed as to whether the Dunns were and/or are the clients of attorney Timothy J. McJoynt. Patterson denied that "an attorney does not have the right to disregard a client's express wishes and instead substitute his or her own judgment and wisdom as to the client's personal affairs." Patterson continued, citing text of Rules 1.14(a) and (b) of the Rules of Professional Conduct (134 Ill. 2d Rs. 1.14(a), (b))

to be in support of his position, due to his alleged belief that Charlotte Dunn may been impaired in her ability to make adequately considered decisions. Thus, Patterson claimed to

invoke his responsibility under Rule 1.14 to maintain a normal 8

lawyer-client relationship and take protective action because he reasonably believed that Charlotte could not adequately act in her own interest. When the parties appeared for oral argument, Patterson again expressed that he had no evidence that McJoynt or attorney Frank Andreano represented plaintiffs. He stated that he needed

further verification because the pleadings were unverified. McJoynt provided no verification other than the letter he sent, and the plaintiffs failed to respond to his letter requesting further verification or his request for discovery depositions. The discovery sanctions motion was struck without prejudice because a Supreme Court Rule 201(k) (210 Ill. 2d R. 201(k)) conference had not been held. The court granted the plaintiffs'

motion for judgment on the pleadings and held that the qualified revocation or amendment provision requiring Patterson's approval was contrary to public policy because it ignored the provisions of Supreme Court Rule of Professional Conduct 1.2. The plaintiffs petitioned the court for assessment of fees under Illinois Supreme Court Rule 137. Plaintiffs argued that a

reasonable attorney would not have adopted and forwarded the arguments presented by defendant in the instant case. Said

motion was granted, and plaintiffs were awarded attorney fees and 9

costs in the amount of $5,393.75.

Patterson appeals.

ANALYSIS I. Qualified Amendment and Revocation Provision Patterson first argues that the trial court erred in granting judgment on the pleadings and finding the revocation and amendment provisions in the estate plan documents to be void as contrary to public policy. He contends that the provisions

requiring the consent of the attorney who prepared the documents, or, in the alternative, an order from the court are valid and proper means for the settlors to limit their own future ability to amend or revoke the trust documents. The standard of review of a judgment on the pleadings is de novo. Gillen v. State Farm Mutual Automobile Insurance Co., 349 Further, an

Ill. App. 3d 779, 782, 812 N.E.2d 595, 598 (2004).

appellate court reviews a trial court's construction of a trust instrument de novo. Peck v. Froehlich, 367 Ill. App. 3d 225,

227-28, 853 N.E.2d 927, 931 (2006). We note at the outset that the plaintiffs challenge Patterson's standing on review. Plaintiffs do not dispute

Patterson's standing to appeal the imposition of the Rule 137 sanctions. However, plaintiffs assert that Patterson has no

standing to appeal the trial court's holding that the amendment 10

and revocation provisions were void. We find this contention to be inconsistent with the fact that plaintiffs named Patterson as the defendant in this suit and obtained a judgment against him. For a party to have standing,

the party must suffer some injury in fact to a legally cognizable interest and must have sustained, or be in danger of immediately sustaining, a direct injury. Department of Transportation v.

Anderson, 384 Ill. App. 3d 309, 313-14, 892 N.E.2d 116, 121 (2008). The entry of a judgment itself constitutes legally Schal Bovis, Inc. v. Casualty Insurance Co.,

cognizable damages.

314 Ill. App. 3d 562, 568, 732 N.E.2d 1082, 1088 (1999). Furthermore, at least at the outset, Patterson is identified as plaintiffs' fiduciary in the documents at issue. Thus, Patterson

has standing in this appeal to seek both reversal of the judgment and reversal of the imposition of sanctions. Patterson first argues that the consent provisions in the estate planning documents were merely third-party consent provisions, which are completely legal in Illinois. The

Restatement (Third) of Trusts recognizes that consent by a third party to amendment or revocation is a proper and valid measure. Section 63(1) provides, "the settlor of an inter vivos trust has power to revoke or modify the trust to the extent that the terms 11

of the trust *** so provide."

Restatement (Third) of Trusts

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