February 13, 2010

Declaratory Judgment Sufficient To Establish Appellate Standing

The Dunns sued Lawrence Patterson, their lawyer, claiming estate documents Patterson drafted contained certain provisions that were void because they were against public policy. After the Dunns won a declaratory judgment in the trial court, Patterson appealed.

The Dunns argued that Patterson did not have standing to appeal the declaratory judgment. The Third District Illinois Appellate Court made short work of the argument. The court politely found “this contention to be inconsistent with the fact that plaintiffs named Patterson as the defendant in this suit and obtained a judgment against him.” The appellate court stated the “entry of a judgment itself constitutes legally cognizable damages,” which was sufficient to establish standing.

I can’t say it is a singular example, but I do not recall reading about a plaintiff arguing that a party he sued did not have standing. Patterson got a reversal of the judgment, too. Read the whole case, Dunn v. Patterson, Nos. 3-07-0881, 3-08-0350 (11/18/09), by clicking here.

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February 12, 2010

Doctor’s Appeal Not Moot Despite Assignment And Forbearance Agreement

Marsha Dienstag sued her doctor, Lawrence Margolies, for medical malpractice. She claimed that Margolies did not timely diagnose her cancer. A jury agreed, and gave her a verdict for more than$5.9 million.

Margolies had an “assignment and forbearance” contract with Dienstag. Dienstag agreed not to seek payment of the judgment in excess of Margolies’s malpractice policy limits directly from Margolies. In return, Margolies assigned his claim against his malpractice insurer for “bad faith refusal to settle” within Margolies’s policy limits to Dienstag.

Margolies appealed the judgment. Dienstag pointed to the “forbearance and assignment” agreement and asked the court to dismiss the appeal. She argued that the agreement “renders the instant appeal moot because there is no longer a ‘live controversy’ between the parties.”

The First District Illinois Appellate Court disagreed with Dienstag. The court ruled that Margolies still could be liable to his insurer for an amount in excess of his policy limits, so his appeal was not moot. Here is what the court said:

… [I]t is in Dr. Margolies' interest to seek reversal or reduction of the judgment. Although the terms of the assignment and forbearance agreement would preclude the Dienstags from seeking payment of the excess judgment from Dr. Margolies, he could face financial liability from his insurance carrier if it is required to pay the entire judgment. Moreover, there is nothing contained in the assignment and forbearance agreement that requires Dr. Margolies to drop this appeal. Therefore, we conclude that the present appeal is not moot.

The appellate court ultimately affirmed Dienstag’s judgment. The whole case, Dienstag v. Margolies, No. 1-06-1558 (9/30/09), is available by clicking here.

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February 10, 2010

No Standing To Appeal Order Allowing Estate To Re-Write Will

Richard Henry, then 89 years old, signed a will in 2004 that overrode all of his previous wills and codicils. The 2004 will left a substantial part of Henry’s estate to Peter Wemple and Mick Zawierucha. Henry’s prior will did not. Wemple was named executor of the 2004 will; Zawierucha was Henry’s caretaker.

About two years later, an Illinois trial court ruled that Henry was disabled, and J.P Morgan Chase Bank was named executor of Henry’s estate. The bank claimed that the 2004 will was procured through Zawierucha’s undue influence, so it asked the trial court for permission to change the terms of the document to reflect Henry’s last-known wishes.

Wemple and Zawierucha objected, but the trial court granted the bank’s request. Wemple and Zawierucha appealed. The bank then asked the appellate court to dismiss the appeal because, it argued, neither Wemple nor Zawierucha had standing to bring the appeal.

The First District Illinois Appellate Court agreed with the bank and dismissed the appeal. Wemple and Zawierucha did not have standing because, as yet, they did not have a legally protectable interest in the 2004 will. This is how the appellate court explained the ruling.

[A] will confers no rights upon a legatee until the death of the testator …

Consequently, the dispository provisions of the 2004 will cannot provide standing for appellants: since appellants enjoyed no vested rights under the 2004 will, they cannot claim any injury in fact from the granting of the estate's petition. Our adjudication of this appeal would not result in an "immediate and definitive determination" of appellants' [Wemple and Zawierucha] rights, as is required for standing …

The appellate court stated that Wemple’s and Zawierucha’s recourse would be to file a will contest at the proper time. Read the whole opinion, In re Estate of Henry, Nos. 1-08-3398, 1-08-3479 (10/16/09), by clicking here.

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February 9, 2010

Order Upholding Guardian’s Refusal To Sell Ward’s House Reviewed For Abuse Of Discretion

Rosa Neal was guardian of a disabled person’s estate. On behalf of her ward, Rosa contracted to sell the ward’s home to Damon Perry. Damon asked for, and received, approval from the probate court of the contract for sale of the property.

The contract had a mortgage contingency clause. Damon asked for a 30-day extension a day before the contingency was set to expire. The estate refused Damon’s request. Damon then said he would waive the contingency and that he intended to purchase the house as planned. But the estate had received a better offer, so its attorney told Damon that his inability to get a mortgage commitment by the contingency deadline rendered the contract null and void.

Damon then asked the probate court to enforce his contract to purchase the house. But the probate court agreed with the estate, and ruled “that the contract was null and void due to the mortgage contingency provision, and, moreover, because of equitable considerations the contract was not in the best interests of the estate.”

Damon appealed. The parties argued over the correct standard of review. Damon wanted a de novo standard; the estate wanted review by a manifest weight of the evidence.

The First District Illinois Appellate Court chose a third ground. Because the probate court’s decision was “rooted on equitable grounds,” the appellate court chose to review the decision with an “abuse of discretion” standard. Here’s the court’s thinking:

Our reference to the [Illinois] Probate Act of 1975 … does not reflect a clear statement of the standard of review to be applied to probate court orders generally. Although de novo review would be proper if we were interpreting the Probate Act, here we are not presented with a matter of statutory interpretation … While issues concerning the construction, interpretation, or legal effect of contracts are subject to de novo review, it has long been recognized that decisions rooted on equitable grounds should only be disturbed when there is a clear abuse of discretion in the judgment rendered by the lower court … Where a party seeks confirmation of an offer to purchase the assets of an estate, the court, as de facto vendor, may enter or withhold consent, in its discretion … Accordingly, we will review the decision in the case sub judice under that standard.

In the end, Damon’s contract was tossed. Read the whole opinion, Perry v. Estate of Carpenter, No. .1-09-0312 (11/13/09), by clicking here.

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