Sanders v. Stasi , 2011 IL App (4th) 100750 ( 2011 )

ILLINOIS OFFICIAL REPORTS
Appellate Court
Sanders v. Stasi, 2011 IL App (4th) 100750
Appellate Court LISA A. SANDERS, Plaintiff-Appellant, v. CAROL K. STASI,
Caption Defendant-Appellee.
District & No. Fourth District
Docket No. 4-10-0750
Argued April 27, 2011
Filed July 12, 2011
Held The trial court erred in dismissing plaintiff’s action seeking an accounting
(Note: This syllabus and inventory of a testamentary trust and the removal of defendant as the
constitutes no part of trustee, since the Trusts and Trustees Act requires that an annual
the opinion of the court accounting be furnished to beneficiaries entitled to receive or receiving
but has been prepared income, or if none, to beneficiaries eligible to have the benefits of the
by the Reporter of income, and although plaintiff was not receiving income from the trust at
Decisions for the the time she filed suit, she was to receive a share of any income generated
convenience of the in excess of the enumerated distributions and she would be unable to
reader.)
enforce her entitlement if she did not receive an accounting, and,
therefore, she was entitled to an accounting under section 11(a) of the
Act.
Decision Under Appeal from the Circuit Court of Champaign County, No. 10-CH-253;
Review the Hon. Michael Q. Jones, Judge, presiding.
Judgment Reversed and remanded.
Counsel on Brett A. Kepley (argued), of Rawles, O’Byrne, Stanko, Kepley &
Appeal Jefferson, P.C., of Champaign, for appellant.
Michael J. Tague (argued), of Flynn, Palmer & Tague, of Champaign, for
appellee.
Panel PRESIDING JUSTICE KNECHT delivered the judgment of the court,
with opinion.
Justices Pope and Cook concurred in the judgment and opinion.
OPINION
¶1 In June 2010, plaintiff, Lisa A. Sanders, filed a two-count complaint against defendant,
Carol K. Stasi, seeking (1) an accounting of the receipts, disbursements, and inventory of a
testamentary trust and (2) the removal of defendant as trustee of that trust. In August 2010,
the trial court granted defendant’s motion for summary judgment, dismissing plaintiff’s
complaint with prejudice. Plaintiff appeals, arguing she is entitled to the requested
accounting under section 11(a) of the Trusts and Trustees Act (Act) (760 ILCS 5/11(a) (West
2008)) and asserting summary judgment is inappropriate. Defendant responds plaintiff is not
entitled to such an accounting. We reverse and remand.
¶2 I. BACKGROUND
¶3 In 2000, defendant’s husband, Otto Stasi, died testate. A trust was created pursuant to his
will. With respect to the trust, the will provided for three regular enumerated distributions
of trust income. Namely, these payments were (1) $150 per week to defendant as trustee’s
fees; (2) $100 per month to Ruth Barnes “for so long as she is living”; and (3) the utilities,
insurance, and taxes incurred by defendant in connection with her personal residence. Any
further income was to be distributed, in relevant part, as follows:
“Any excess income not paid in satisfaction of [the enumerated disbursements] shall
be distributed not less often than annually, one fourth to Ruth Barnes for so long as
she is living; one fourth to Carol Stasi [(defendant)]; and one eighth each to Lisa
Sanders [(plaintiff)], Jodie Stasi, Jamie Stasi, and James Stasi.”
¶4 Defendant was named trustee, and the trust’s corpus consisted of any of Otto Stasi’s
property not specifically bequeathed elsewhere in the will and, especially, certain commercial
property and the income from that property.
¶5 In June 2010, plaintiff filed her two-count complaint. In count I, plaintiff alleged she was
entitled to an accounting of the trust’s receipts, disbursements, and inventory under section
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11(a) of the Act (760 ILCS 5/11(a) (West 2008)). Count I alleged defendant had not provided
plaintiff with such an accounting or any payments of the “excess income” from the trust.
Accordingly, plaintiff sought the accounting to which she claimed she was entitled.
¶6 Plaintiff’s allegations in count II were substantially the same as in count I. Plaintiff
further alleged defendant’s failure to provide plaintiff with annual accountings constituted
a breach of her fiduciary duty. Plaintiff asked the trial court to remove defendant as trustee.
¶7 In July 2010, defendant filed a motion for summary judgment (see 735 ILCS 5/2-1005
(West 2008)) on both counts of the complaint. Defendant’s motion stated (1) the trust did not
earn income in excess of the disbursements enumerated in Otto Stasi’s will as demonstrated
by defendant’s affidavit and other materials accompanying the motion and (2) such excess
income was a prerequisite of plaintiff’s entitlement to annual accountings. Defendant’s
motion was accompanied by defendant’s affidavit, to which the trust’s tax returns were
attached. In her affidavit, defendant averred, in relevant part, (1) defendant had never paid
herself more than she was entitled to receive under Otto Stasi’s will and (2) the attached tax
returns reflected all revenue and expenses of the trust.
¶8 In August 2010, the trial court granted defendant’s motion for summary judgment. The
court determined (1) under the relevant statute and will provisions, plaintiff was entitled to
an accounting only if the trust generated income exceeding the amount of the required
disbursements and (2) defendant’s affidavit and the attached tax returns demonstrated there
was no genuine issue of material fact with respect to whether the trust had excess income.
Since there was no excess income, the court concluded plaintiff was not entitled to an
accounting and defendant was entitled to summary judgment on both counts of the
complaint.
¶9 This appeal followed.
¶ 10 II. ANALYSIS
¶ 11 On appeal, plaintiff argues the trial court erred by granting defendant’s motion for
summary judgment and dismissing her complaint with prejudice. Specifically, plaintiff
maintains she is entitled to an accounting of the trust’s income, expenditures, and assets
under section 11(a) of the Act (760 ILCS 5/11(a) (West 2008)). Defendant responds plaintiff
is not entitled to an accounting because she is not entitled to any distributions from the trust.
We agree with plaintiff.
¶ 12 A. Summary Judgment and the Standard of Review
¶ 13 Summary judgment is appropriate when the pleadings, depositions, admissions, and
affidavits of record, when viewed in the light most favorable to the nonmoving party, show
(1) there is no genuine issue of material fact and (2) the moving party is entitled to a
judgment as a matter of law. Kajima Construction Services, Inc. v. St. Paul Fire & Marine
Insurance Co., 227 Ill. 2d 102, 106, 879 N.E.2d 305, 308 (2007); see 735 ILCS 5/2-1005(c)
(West 2008).
¶ 14 “The burden of proof and the initial burden of production in a motion for summary
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judgment lie with the movant. [Citation.] Where the facts could lead a fair-minded person
to draw more than one conclusion or inference, summary judgment must be denied.”
(Internal quotation marks omitted.) Evans v. Brown, 399 Ill. App. 3d 238, 243, 925 N.E.2d
1265, 1271 (2010). If the defendant raises an affirmative defense and establishes his factual
position with supporting documents, the plaintiff must present a factual basis arguably
entitling him to a judgment. Id. at 244, 925 N.E.2d at 1271. However, the plaintiff is not
required to prove his case at the summary-judgment stage. Id.
¶ 15 We review a trial court’s ruling on a motion for summary judgment de novo. Id.
¶ 16 B. Principles of Statutory Construction
¶ 17 The parties dispute whether plaintiff is entitled to an accounting under section 11(a) of
the Act (760 ILCS 5/11(a) (West 2008)). Our primary aim in interpreting a statute is “to
ascertain and give effect to legislative intent, the surest and most reliable indicator of which
is the statutory language itself, given its plain and ordinary meaning.” People v. Dabbs, 239
Ill. 2d 277, 287, 940 N.E.2d 1088, 1095 (2010). This requires us to “consider the statute in
its entirety, keeping in mind the subject it addresses and the apparent intent of the legislature
in enacting it.” Id. “Where the language of the statute is clear and unambiguous, we must
apply it as written, without resort to extrinsic aids to statutory construction.” Id. One
indicator of the plain meaning of a word used in a statute is its dictionary definition. See id.
at 288, 940 N.E.2d at 1095 (“In determining the plain meaning of a statutory term, it is
entirely appropriate to look to the dictionary for a definition.” (Internal quotation marks
omitted.)).
¶ 18 C. Section 11(a) of the Act
¶ 19 Section 11(a) of the Act requires a trustee to provide an annual accounting to certain
beneficiaries. Specifically, it provides, in relevant part:
“(a) Every trustee at least annually shall furnish to the beneficiaries then entitled
to receive or receiving the income from the trust estate, or if none, then those
beneficiaries eligible to have the benefit of the income from the trust estate a current
account showing the receipts, disbursements and inventory of the trust estate.” 760
ILCS 5/11(a) (West 2008).
Under this provision, the analysis of when and whether a trust beneficiary is entitled to an
accounting is driven by the initial inquiry whether any beneficiary is currently entitled to
receive or is currently receiving trust income. A trustee must report to all beneficiaries who
are entitled to receive or are receiving income. However, if no beneficiaries are entitled to
receive or are receiving income, a trustee must report to any beneficiaries who are “eligible
to have the benefit of the income from the trust estate.” Id.
¶ 20 D. Whether Plaintiff Is Entitled to an Accounting
¶ 21 In this case, plaintiff claims she is entitled to an accounting under section 11(a) of the
Act. The parties both assert the determinative question is whether plaintiff was “then entitled
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to receive *** the income from the trust estate” within the meaning of the statute when she
filed her complaint. We agree with the parties on this point.
¶ 22 The first step of the inquiry is determining whether any beneficiary is entitled to receive
or is receiving trust income. A “beneficiary” is defined as (1) a “person for whose benefit
property is held in trust; esp., one designated to benefit from an appointment, disposition, or
assignment ***, or to receive something as a result of a legal arrangement or instrument”;
or (2) a “person to whom another is in a fiduciary relation, whether the relation is one of
agency, guardianship, or trust.” Black’s Law Dictionary 165 (8th ed. 2004).
¶ 23 When plaintiff filed her lawsuit, defendant was a beneficiary who was then receiving
trust income. Otto Stasi’s will provided one-fourth of any trust income would be distributed
to defendant; in other words, the trust property was held, in part, for defendant’s benefit.
Defendant was therefore a beneficiary of the trust. The parties agree defendant has been
receiving trust income in the form of trustee fees and payments for utilities, insurance, and
taxes on her personal residence since the trust’s inception.
¶ 24 Since at least one beneficiary was receiving income from the trust estate when plaintiff
sued defendant, the second step of the inquiry is determining whether plaintiff was entitled
to receive or was receiving trust income when she filed suit. The parties both assert, and the
pleadings confirm, plaintiff was not receiving trust income. Accordingly, we agree with the
parties the determinative question is whether plaintiff was “entitled to receive *** the
income from the trust estate” within the meaning of the statute.
¶ 25 Dictionaries do not specifically define “entitled.” However, “entitle” is defined,
relevantly, as “[t]o grant a legal right to or qualify for.” Black’s Law Dictionary 573 (8th ed.
2004). Further, “entitlement” is defined as “[a]n absolute right to a (usu. monetary) benefit[ ]
*** granted immediately upon meeting a legal requirement.” Id. These definitions are
germane insofar as “entitled” is the past, passive participle of “entitle” and may plainly be
interpreted as meaning “having an entitlement.”
¶ 26 Our interpretation of “entitled” within this particular statutory context is informed by
Goodpasteur v. Fried, 183 Ill. App. 3d 491, 539 N.E.2d 207 (1989). In that case, a
testamentary trust provided its income would be distributed at the discretion of the trustees
to the plaintiff and three other named beneficiaries “ ‘for the purpose of assisting [them] in
meeting their living expenses which they may be unable to pay for through their own
efforts.’ ” Id. at 493 n.1, 539 N.E.2d at 208 n.1. The plaintiff claimed he was entitled to an
accounting under an earlier version of section 11(a) of the Act as he was “eligible to have the
benefit of the income from the trust.” Id. at 494, 539 N.E.2d at 209.
¶ 27 At that time, the relevant statute provided, “Every trustee at least annually shall furnish
to the beneficiaries then entitled to receive or eligible to have the benefit of the income from
the trust estate an account showing the receipts, disbursements and inventory of the trust
estate.” Ill. Rev. Stat. 1979, ch. 148, ¶ 111. The plaintiff conceded he was not “entitled to
receive” trust income. Goodpasteur, 183 Ill. App. 3d at 494, 539 N.E.2d at 209. The
appellate court construed “eligible” within the meaning of the statute by contradistinguishing
it from “entitled.” The court initially stated, with respect to a definition from Webster’s:
“We cannot accept the definition of ‘eligible’ as ‘entitled to something’ in the
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context of this case. Section 11 of the Act differentiates between beneficiaries who
are entitled to receive income from a trust and those who are eligible to have the
benefit of income from a trust. Were we to adopt the definition of ‘eligible’ as
‘entitled to something,’ we would, in effect, declare that a portion of section 11 is
superfluous.” Id. at 494 n.2, 539 N.E.2d at 209 n.2.
The court differentiated the terms, concluding, “ ‘Eligible’ *** expresses the idea of
potentiality rather than of realization.” (Internal quotation marks omitted.) Id. at 494, 539
N.E.2d at 209. Based on this understanding of “eligible,” the court held the plaintiff was
entitled to an accounting. It stated, “[I]t is clear that plaintiff is eligible to have the benefit
of income from the trust. Plaintiff is one of the beneficiaries with the potential to receive
income from the trust. He may be selected by [the trustees] as a recipient of trust funds.” Id.
¶ 28 In this case, we conclude plaintiff was “entitled to receive” income from the trust within
the meaning of the statute. Under Otto Stasi’s will, plaintiff is to receive a share of any
income generated in excess of the enumerated distributions. Her entitlement to this income
is not predicated upon any event and is not a mere potentiality.
¶ 29 The trustee has a duty to be transparent in the performance of her duties. See Wallace v.
Malooly, 4 Ill. 2d 86, 95, 122 N.E.2d 275, 280 (1954) (“ ‘[T]he beneficiary is always entitled
to such information as is reasonably necessary to enable him to enforce his rights under the
trust or to prevent or redress a breach of trust.’ ” (quoting Restatement of Trusts § 173 cmt.
c (1935))); see also State v. Taylor, 362 P.2d 247, 251 (Wash. 1961) (“ ‘If the cestui is to be
able to hold the trustee to proper standards of care and honesty and procure for himself the
benefits to which the trust instrument and the doctrines of equity entitle him, he must know
of what the trust property consists and how it is being managed.’ ” (Emphasis in original.)
(quoting George Gleason Bogert, Bogert Trusts & Trustees § 961, at 2 (2d ed. 1948))). Here,
plaintiff is unable to enforce her entitlement if she does not receive an accounting of the
trust’s receipts, disbursements, and holdings. We interpret section 11(a) of the Act to entitle
her to such an accounting.
¶ 30 Plaintiff is entitled to an accounting, and defendant is unable to carry her burden on
summary judgment to establish she is entitled to a judgment as a matter of law. Summary
judgment is inappropriate and the trial court’s judgment must be reversed.
¶ 31 III. CONCLUSION
¶ 32 We reverse the trial court’s judgment and remand for further proceedings consistent with
this opinion.
¶ 33 Reversed and remanded.
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