Eizenga v. Unity Christian School of Fulton, Illinois , 2016 IL App (3d) 150519 ( 2016 )


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  •                                   
    2016 IL App (3d) 150519
    Opinion filed May 6, 2016
    ____________________________________________________________________________
    IN THE
    APPELLATE COURT OF ILLINOIS
    THIRD DISTRICT
    2016
    DALE A. EIZENGA, as Trustee of the Walter )         Appeal from the Circuit Court
    B. Westendorf Trust dated August 27, 1997,     )    of the 14th Judicial Circuit,
    )    Whiteside County, Illinois.
    Plaintiff,                             )
    )
    v.                                     )
    )
    UNITY CHRISTIAN SCHOOL OF FULTON, )
    ILLINOIS, an Illinois Not-For-Profit           )
    Corporation; THE CITY OF MORRISON,             )
    ILLINOIS, a Municipal Corporation; ODELL )
    PUBLIC LIBRARY, a Local Public Library;        )
    SHRINERS HOSPITALS FOR CHILDREN, a )
    Colorado Nonprofit Corporation; CAMP           )
    COURAGEOUS OF IOWA, an Iowa Not-For- )
    Profit Corporation; FULTON ASSOCIATION )
    FOR COMMUNITY ENRICHMENT (FACE), )
    an Illinois Not-For-Profit Corporation;        )    Appeal No. 3-15-0519
    MORRISON EDUCATION FOUNDATION, )                    Circuit No. 13-CH-133
    a Private Foundation; LYNDA ENDRESS;           )
    PEGGY JEAN WEAVER; LISA MADIGAN, )
    Attorney General of the State of Illinois; and )
    HEIRS AT LAW OF WALTER B.                      )
    WESTENDORF, deceased,                          )
    )
    Defendants                             )
    )
    (Camp Courageous of Iowa,                      )
    )
    Petitioner-Appellee,                   )
    )
    v.                                     )
    )
    Russell Holesinger,                        ) The Honorable
    ) William S. McNeal,
    Respondent and Contemnor-Appellant). ) Judge, presiding.
    )
    ____________________________________________________________________________
    JUSTICE McDADE delivered the judgment of the court, with opinion.
    Presiding Justice O’Brien and Justice Schmidt concurred in the judgment and opinion.
    ____________________________________________________________________________
    OPINION
    ¶1          The plaintiff, Dale A. Eizenga, as the Trustee of the Walter B. Westendorf Trust, filed an
    interpleader action against numerous defendants, including Unity Christian School of Fulton and
    Camp Courageous of Iowa, and alleged that Westendorf’s attorney, Russell J. Holesinger,
    exerted undue influence over Westendorf regarding the gift of nearly the entirety of the Trust
    estate to Unity Christian School. Holesinger refused to disclose certain documents in discovery,
    alleging that they were protected by the attorney-client privilege and the work product doctrine.
    The circuit court disagreed and ordered Holesinger to produce the documents. Holesinger
    appealed after he was found in contempt for failing to comply with the court’s order. On appeal,
    Holesinger argues that the circuit court erred when it ruled that the documents were not protected
    by the attorney-client privilege or the work product doctrine. He also requests that we vacate the
    order finding him in contempt for failing to comply with the circuit court’s order to disclose the
    documents. We affirm in part and vacate in part.
    ¶2                                                FACTS
    ¶3          Westendorf created the Trust on August 27, 1997. The Trust provided that while
    Westendorf was living, the trustee would pay Westendorf all of the Trust’s net income and any
    of the principal that Westendorf requested in writing. Westendorf was to act as trustee unless he
    died, resigned, became incapacitated, or otherwise. Eizenga was named as the successor trustee.
    2
    ¶4            At Westendorf’s death, the Trust estate was to “consist of the principal together with any
    accrued and undistributed income of the trust at the time of [Westendorf’s] death, plus any
    property added to the trust estate by [Westendorf’s] Will, or payable to the Trust by reason of the
    death of [Westendorf], reduced by the payment and gifts provided for under the preceding
    Articles.”
    ¶5            The Trust also provided that upon Westendorf’s death, $50,000 of the balance of the
    Trust estate would be paid to Peggy Jean Weaver, unless the balance was less than $100,000, in
    which instance the entire balance would be paid to her. That provision would lapse in the event
    that Weaver predeceased Westendorf. After that distribution, the remainder of the Trust estate
    was to be paid in three equal parts to Odell Public Library (in memory of Mable Baker
    Westendorf), Shriners Hospital for Children, and the City of Morrison (to be used by the Parks
    and Recreation Committee and with a focus on planting sugar maple trees in certain areas of the
    city).
    ¶6            The first amendment to the Trust was executed on July 16, 2004, and provided new
    distribution instructions. First, Westendorf’s property at 223 East Main in Morrison was to be
    given to his friend, Lynda Endress. In the event that she predeceased him, the property was to be
    sold and distributed in equal shares to Shriners Hospital for Children, Camp Courageous, and the
    Morrison Education Foundation. After that distribution, the remainder of the Trust estate was to
    be paid in equal shares to those three entities. The first amendment also named Endress as
    successor trustee and Eizenga as second successor trustee.
    ¶7            The second amendment to the Trust was executed on November 5, 2004, and contained
    changes to the instructions regarding the Trust’s expenses.
    3
    ¶8            The third amendment to the Trust was executed on December 13, 2006, and provided
    modified distribution instructions. The Morrison Education Foundation was removed from the
    distribution and replaced with Unity Christian School. Also added in that distribution to Unity
    Christian School was the following statement:
    “It is my hope and desire that a portion of these funds be used to
    further the business curriculum of Unity with a special emphasis
    on financial planning, personal finance, and investing. I have been
    blessed by investing on a regular basis. I was assisted by a mentor,
    and I have seen the benefits of learning the skills necessary to be
    successful in obtaining financial freedom. The above directions
    are not mandatory, but they are intended to provide a direction for
    the use of a portion of this gift as determined by the Unity
    Christian School board.”
    ¶9            In addition, the third amendment changed the trustee designation to Endress and
    Holesinger as successor co-trustees, and Eizenga as second successor trustee.
    ¶ 10          The fourth amendment to the Trust was executed on March 6, 2009, and provided
    modified distribution instructions. The property distribution to Endress was retained, but the
    residual balance was to be split equally between Shriners Hospital for Children and Unity
    Christian School. The above-quoted statement regarding the distribution to Unity Christian
    School was also retained.
    ¶ 11          The fifth amendment to the Trust was executed on June 10, 2010, and provided modified
    distribution instructions. The property distribution to Endress was retained, but one-third of the
    residual balance was to be paid to the Fulton Association for Community Enrichment (FACE),
    4
    and the other two-thirds to Unity Christian School. With regard to FACE, the distribution was
    “to be used for the maintenance, support, promotion and growth of Fulton’s Heritage Canyon as
    a means of recognizing our ancestors for the contributions they have made for the greater good
    of our communities. Preserving our past helps us to remember and celebrate our heritage.” With
    regard to the distribution to Unity Christian School, the accompanying statement was changed to
    read: “It is my hope and desire that a portion of these funds be used to further the business
    curriculum of Unity with a special emphasis on financial planning, personal finance, and
    investing. The above directions are not mandatory, but they are only intended to provide a
    possible direction for the use of a portion of this gift.”
    ¶ 12           The sixth amendment to the Trust was executed on April 15, 2011, and provided several
    changes. First, with regard to distribution, the property distribution to Endress was removed and
    replaced with a distribution of $5,000. Second, Eizenga was named as successor trustee and
    Chris Hawkins as second successor trustee. Third, some changes were made to the instructions
    regarding the Trust’s expenses.
    ¶ 13           The seventh amendment to the Trust was executed on October 5, 2012, and provided
    several changes. First, the $5,000 distribution to Endress was retained, but the remainder of the
    Trust estate was to be distributed to Unity Christian School. The accompanying statement
    regarding the distribution to Unity Christian School, as it appeared in the fifth amendment, was
    retained. Second, Holesinger replaced Hawkins as second successor trustee. Third, some
    changes were made to the instructions regarding the Trust’s expenses. Fourth, a small provision
    was added regarding the trustee’s management of Westendorf’s commercial building.
    ¶ 14           Westendorf died on July 10, 2013, and on August 13, 2013, Eizenga filed an interpleader
    action regarding the Trust. Eizenga stated in the complaint that he was “well and personally
    5
    acquainted” with Westendorf, whom Eizenga did not believe to be a religious person or to have
    any connection to Unity Christian School. The complaint alleged that Holesinger exercised
    undue influence over Westendorf with regard to the Trust, as Holesinger “was and is an avid
    booster of the school.”
    ¶ 15          The complaint was amended on January 29, 2014, and added more specific allegations
    regarding Holesinger. The complaint alleged that Holesinger was Unity Christian School’s
    attorney and that, inter alia, he promised to waive his fee for administering the Trust to induce
    Westendorf to contribute to Unity Christian School.
    ¶ 16          Counterclaims were also filed by several defendants that had been listed as beneficiaries
    of the Trust at various times between its creation and Westendorf’s death.
    ¶ 17          A subpoena for production of certain documents was served on Holesinger in July 2014.
    He refused to produce numerous documents, and he filed a motion to quash the subpoena,
    alleging that the documents were protected by the attorney-client privilege and the work product
    doctrine. In the privilege log Holesinger filed with the circuit court, he listed documents
    spanning from 1996 to 2014, including, inter alia, letters to Westendorf, notes on estate planning
    matters, notes from calls, notes regarding communications about potential beneficiaries of the
    Trust, notes on calculations and valuations, and timesheets. Nearly all of the documents that
    were dated after the complaint was filed in this case on August 13, 2013, were timesheets.
    ¶ 18          On April 10, 2015, the circuit court held a hearing on the document production matter.
    After hearing arguments, the court took the matter under advisement and issued a written
    decision five days later. The court denied Holesinger’s motion to quash, finding:
    “The Court *** concludes the attorney-client privilege does
    not survive the death of Walter Westendorf as it applies to the
    6
    documents at issue, because privilege does not apply to
    communications relevant to an issue between parties who claim
    through the same deceased client, regardless of whether claims are
    by testate or intestate succession, or by inter vivos transaction.
    Lamb v. Lamb, [
    124 Ill. App. 3d 687
    , 693 (1984)]. This case is
    very similar to a will contest, but it is not a will contest. The issues
    in this case are between parties who claim to be the beneficiaries
    under the Walter Westendorf trust and amendments thereto, and
    interested parties are seeking to have various trust provisions set
    aside alleging undue influence by the settlor/decedent’s attorney.
    In summary, this action contests the validity of certain trust
    amendments executed by Walter Westendorf and falls within the
    above exception to survival of attorney-client privilege.”
    The court also ruled that the work product doctrine did not apply because the documents
    Holesinger refused to produce “do not appear to be related to theories, mental impressions, or
    litigation plans prepared by Attorney Holesinger in anticipation of pending or threatened
    litigation.”
    ¶ 19           Holesinger refused to comply with the circuit court’s order, and on June 26, 2015, he was
    found in indirect civil contempt and assessed a penalty of $1 per day for any continued refusal to
    produce the documents.
    ¶ 20           Holesinger appealed.
    ¶ 21                                               ANALYSIS
    7
    ¶ 22          First, Holesinger argues that the circuit court erred when it ruled that the documents were
    not protected by the attorney-client privilege. Specifically, he contends that the only exception
    to the rule that the attorney-client privilege survives the client’s death exists when a will is
    contested. Because this case involves a trust and not a will contest, he claims the court erred
    when it extended the exception to a trust.
    ¶ 23          In relevant part, Illinois Supreme Court Rule 201(b)(2) (eff. Jan. 1, 2013) provides that
    “[a]ll matters that are privileged against disclosure on the trial, including privileged
    communications between a party or his agent and the attorney for the party, are privileged
    against disclosure through any discovery procedure.” The attorney-client privilege “is intended
    to encourage ‘full and frank communication between attorneys and their clients and thereby
    promote broader public interests in the observance of law and the administration of justice.’ ”
    Swidler & Berlin v. United States, 
    524 U.S. 399
    , 403 (1998) (quoting Upjohn Co. v. United
    States, 
    449 U.S. 383
    , 389 (1981)). The privilege is the exception and the duty to disclose is the
    rule; accordingly, the privilege should be confined as narrowly as possible. Waste Management,
    Inc. v. International Surplus Lines Insurance Co., 
    144 Ill. 2d 178
    , 190 (1991). Additionally,
    Illinois “adhere[s] to a strong policy of encouraging disclosure, with an eye toward ascertaining
    that truth which is essential to the proper disposition of a lawsuit.” 
    Id.
     We review de novo the
    question of whether the attorney-client privilege prohibits the disclosure of sought-after
    information. Center Partners, Ltd. v. Growth Head GP, LLC, 
    2012 IL 113107
    , ¶ 65.
    ¶ 24          In general, the attorney-client privilege survives death. Swidler, 
    524 U.S. at 404
    .
    However, an exception to the general rule has been recognized in testamentary contexts. 
    Id. at 404-05
    . Both the attorney-client privilege and the testamentary exception arose from the
    common law (Brunton v. Kruger, 
    2015 IL 117663
    , ¶ 55), and the testamentary exception was
    8
    recognized by our supreme court in the nineteenth century. Fossler v. Schriber, 
    38 Ill. 173
    , 173-
    74 (1865); Scott v. Harris, 
    113 Ill. 447
    , 454 (1885) (noting that while the attorney-client
    privilege typically survives the client’s death, “[i]n cases of testamentary disposition, the rule
    seems to be otherwise”); see also Wilkinson v. Service, 
    249 Ill. 146
    , 150-51 (1911) (holding that
    “[w]hile [attorney-client] communication might be privileged if offered by third persons to
    establish claims against the estate, when the contest is between the heirs or next of kin of the
    testator the rule is otherwise”); Mason v. Willis, 
    326 Ill. App. 481
    , 487 (1945) (noting that
    “although statements made by a testatrix to her attorney would be privileged if offered in
    evidence in a suit against her, they are not privileged after her death”).
    ¶ 25          We acknowledge the case law in this state that has described the testamentary exception
    to the attorney-client privilege as applying only in the context of a will contest. See Hitt v.
    Stephens, 
    285 Ill. App. 3d 713
    , 717 (1997) (holding that “[t]he only context in which a client’s
    death might affect the viability of the privilege is a will contest”); DeHart v. DeHart, 
    2013 IL 114137
    , ¶ 69 (holding that the attorney-client privilege does not survive the client’s death with
    respect to a will); Adler v. Greenfield, 
    2013 IL App (1st) 121066
    , ¶ 62 (holding that “the
    attorney-client privilege survives the death of the client, except in the case of a will contest”
    (citing Hitt, 285 Ill. App. 3d at 717)). However, none of these cases had to address the situation
    presented by this case. See Hitt, 285 Ill. App. 3d at 714-15 (involving a replevin action in which
    the sole heirs of the decedents sought the disclosure of the estate files from the decedents’ law
    firm 13 and 40 years after the estates were closed); DeHart, 
    2013 IL 114137
    , ¶¶ 69-73
    (involving a will contest and “claims of testamentary capacity and undue influence”); Adler,
    
    2013 IL App (1st) 121066
    , ¶¶ 62-63 (refusing to apply the testamentary exception in a legal
    malpractice case in which the a trustee of a decedent’s trust sought the disclosure of
    9
    communications the decedent’s attorney made to a third party). In fact, a closer examination of
    the exception leads us to the conclusion that it is the rationale behind it that is of paramount
    importance, rather than the question of whether the situation involves a will contest.
    ¶ 26          In United States v. Osborn, the United States Court of Appeals stated:
    “The rationale behind the exception to the general rule is that the
    privilege itself is designed for the protection of the client, and it
    cannot be said to be in the interests of the testator, in a controversy
    between parties all of whom claim under the testator, to have those
    confidential communications of the testator and attorney excluded
    which are necessary to a proper fulfillment of the testator's intent.”
    United States v. Osborn, 
    561 F.2d 1334
    , 1340 n.11 (9th Cir. 1977).
    See also Glover v. Patten, 
    165 U.S. 394
    , 406-08 (1897); Swidler, 
    524 U.S. at 404-05
    .
    ¶ 27   While we are unaware of any Illinois cases that have applied the testamentary exception to the
    attorney-client privilege in a case involving a trust, there is ample persuasive authority for doing
    so.
    ¶ 28          The Restatement (Third) of the Law Governing Lawyers states that “[t]he attorney-client
    privilege does not apply to a communication from or to a decedent relevant to an issue between
    parties who claim an interest through the same deceased client, either by testate or intestate
    succession or by an inter vivos transaction.” Restatement (Third) of the Law Governing
    Lawyers § 81 (2000); see also Michael H. Graham, Graham’s Handbook of Illinois Evidence §
    505.7, at 372 (10th ed. 2010) (stating that the attorney-client privilege “does not apply to a
    communication relevant to an issue between parties who claim through the same deceased client,
    regardless of whether the claims are by testate or intestate succession or by inter vivos
    10
    transaction”). The comments to section 81 of the Restatement (Third) are instructive: comment
    (a) states that this section “is relevant, for example, in will-contest and similar litigation.”
    (Emphasis added.) Restatement (Third) of the Law Governing Lawyers § 81 cmt. a (2000).
    Comment (b) states:
    “The exception in the Section is sometimes justified on the ground
    that the decedent would have wished full disclosure to facilitate
    carrying out the client's intentions. The dispute might involve
    either testate or intestate succession or claims arising from inter
    vivos transactions to which the decedent was a party. The witness
    will most often be the decedent's lawyer, who is in a position to
    know the client's intentions and whose testimony ordinarily will
    not be tainted by personal interest. Suppressing such testimony
    would hamper the fair resolution of questions of testator intent in
    will-contest and similar types of cases. It is therefore probable that
    the exception does little to lessen the inclination to communicate
    freely with lawyers [citation].” (Emphasis added.) Restatement
    (Third) of the Law Governing Lawyers § 81 cmt. b (2000).
    This rationale has been repeatedly cited in cases discussing the testamentary exception. See,
    e.g., Swidler, 
    524 U.S. at 404-05
    ; Lamb v. Lamb, 
    124 Ill. App. 3d 687
    , 693 (1984); Zook v.
    Pesce, 
    91 A.3d 1114
    , 1120 (Md. 2014) (noting that the rationale behind the exception was to
    ensure the decedent’s donative intent was honored, and holding that the exception can apply “in
    a dispute between putative heirs or devisees under a will or trust”). Our supreme court also
    reiterated this rationale in DeHart: “a decedent would (if one could ask him) forgo the privilege
    11
    so that the distribution scheme he actually intended can be given effect.” DeHart, 
    2013 IL 114137
    , ¶ 69 (citing Hitt, 285 Ill. App. 3d at 717-18, and Glover, 
    165 U.S. at 406-08
    , as
    supporting authority).
    ¶ 29          Even if a will contest is the primary circumstance under which this exception can apply,
    certainly it is not the only circumstance. In this case, Westendorf created the Trust during his
    life—an inter vivos transaction. He changed the beneficiaries of the Trust several times before
    he died. A dispute has arisen between former beneficiaries of the Trust and the current
    beneficiary, Unity Christian School, based on undue influence that attorney Holesinger allegedly
    exerted over Westendorf. The documents Holesinger claims are privileged are relevant to the
    resolution of that dispute. As the circuit court indicated, this case presents no material difference
    between a will contest for purposes of the testamentary exception to the attorney-client privilege.
    Because this case fits squarely within the purview of the rationale behind the testamentary
    exception (see, e.g., Swidler, 
    524 U.S. at 404-05
    ; DeHart, 
    2013 IL 114137
    , ¶ 69), we hold that
    the circuit court did not err when it ruled that Holesinger’s documents were not protected by the
    attorney-client privilege.
    ¶ 30          Second, Holesinger argues that the circuit court erred when it ruled that his documents
    were not protected by the work product doctrine. Holesinger claims that the documents he
    withheld include his “notes, memos, and correspondence to the client relative to legal services
    *** which documents contain Holesinger’s confidential theories and mental impressions.” In
    addition, Holesinger claims that the documents he withheld also include “invoices, timesheets,
    and calendar entries, which contain Holesinger’s thoughts and mental impressions in that they
    reflect the legal work he decided to perform on Westendorf’s behalf, which decisions could only
    be made by an attorney.”
    12
    ¶ 31          In relevant part, Illinois Supreme Court Rule 201(b)(2) (eff. Jan. 1, 2013) provides that
    “[m]aterial prepared by or for a party in preparation for trial is subject to discovery only if it does
    not contain or disclose the theories, mental impressions, or litigation plans of the party's
    attorney.” We review de novo the question of whether the work product doctrine protects the
    disclosure of sought-after information. Shields v. Burlington Northern & Santa Fe Ry. Co., 
    353 Ill. App. 3d 506
    , 508 (2004).
    ¶ 32          In Waste Management, our supreme court stated the following with regard to the work
    product doctrine:
    “The work-product doctrine provides a broader protection than the
    attorney-client privilege, and is designed to protect the right of an
    attorney to thoroughly prepare his case and to preclude a less
    diligent adversary attorney from taking undue advantage of the
    former's efforts. See Hickman v. Taylor, [
    329 U.S. 495
     (1947)].
    Illinois has taken a narrow approach to the discovery of
    attorney work product. The overriding considerations under our
    discovery rule are ascertainment of the truth and expedited
    disposition of the lawsuit. (Monier v. Chamberlain, [
    35 Ill. 2d 351
    , 361 (1966)]). Thus, under our rule, ordinary work product,
    which is any relevant material generated in preparation for trial
    which does not disclose ‘conceptual data’ (Monier, 
    35 Ill. 2d at 360
    ), is freely discoverable (134 Ill. 2d R. 201(b)(2)). Opinion or
    ‘core’ work product, which consists of materials generated in
    preparation for litigation which reveal the mental impressions,
    13
    opinions, or trial strategy of an attorney, is subject to discovery
    upon a showing of impossibility of securing similar information
    from other sources. Monier, 
    35 Ill. 2d at 360
    .” Waste
    Management, 
    144 Ill. 2d at 196
    .
    ¶ 33          Our review of the record in this case reveals no error in the circuit court’s decision that
    the work product doctrine did not apply to the documents listed in Holesinger’s privilege log.
    Again, the privilege log listed documents spanning from 1996 to 2014, including, inter alia,
    letters to Westendorf, notes on estate planning matters, notes from calls, notes regarding
    communications about potential beneficiaries of the Trust, notes on calculations and valuations,
    and timesheets. Essentially the only documents that were dated after the complaint was filed in
    this case on August 13, 2013, were timesheets. As the circuit court found, there is no indication
    that any of the documents listed in the privilege log were created in preparation for any
    impending or pending litigation. We are unpersuaded by Holesinger’s claims to the contrary,
    and we therefore hold that the circuit court did not err when it ruled that Holesinger could not
    assert the work product privilege with regard to the documents listed in the privilege log. See,
    e.g., Lawndale Restoration Ltd. Partnership v. Acordia of Illinois, Inc., 
    367 Ill. App. 3d 24
    , 32-
    33 (2006).
    ¶ 34          Lastly, Holesinger asks this court to vacate the order finding him in contempt for failing
    to comply with the circuit court’s order to disclose the documents.
    ¶ 35          “A finding of contempt against an attorney will not stand if the attorney acted in good
    faith to serve his client and the court.” Adler, 
    2013 IL App (1st) 121066
    , ¶ 72. Contempt
    proceedings are an appropriate method of challenging the propriety of a circuit court’s discovery
    ruling. Reda v. Advocate Health Care, 
    199 Ill. 2d 47
    , 54 (2002). In this case, the issue of
    14
    whether the exception to the post-death viability of the attorney-client privilege extends to trusts
    was unclear and the basis for the contempt order against Holesinger was an apparent good faith
    attempt to serve his client and the court. Accordingly, we vacate the circuit court’s order finding
    Holesinger in contempt. See Adler, 
    2013 IL App (1st) 121066
    , ¶ 72.
    ¶ 36                                             CONCLUSION
    ¶ 37           The judgment of the circuit court of Whiteside County is affirmed in part and vacated in
    part.
    ¶ 38           Affirmed in part and vacated in part.
    15