Centure Bank v. Voga
81 N.E.3d 104
Ill. App. Ct.2017Background
- Leroy Voga executed a revocable living trust (2003) naming himself trustee and his children Lyle, Larry, Linda (and giving Shirley a life estate); residue to be split 25% each among the four siblings.
- Leroy also executed a durable power of attorney (POA) naming Linda agent; Section 9 of the POA authorized the agent to amend trusts but did not specifically identify the Voga Trust.
- In 2006 Linda, acting under the POA, executed an Amendment adding a cash “Special Gift” to Lois (tied to appraised values of farm parcels) while otherwise preserving real‑estate bequests to Lyle, Larry, Linda.
- Siblings signed a Co‑Trustee Agreement (2007); disputes arose and Centrue Bank filed an interpleader. Lyle later sued, alleging the Amendment was void because the POA failed to specifically reference the Trust and because the POA was invalid if Leroy lacked capacity.
- In July 2011 the trial court entered an order granting Lyle judgment on the pleadings on counts attacking the POA/Amendment; the order was vacated in Jan. 2012 after Linda moved to vacate. Later the trial court dismissed the count challenging the Amendment under the election/estoppel principle, tried remaining counts (accounting, tax apportionment, breach of fiduciary duty), and issued judgment apportioning estate taxes and denying certain remedies to Lyle.
- On appeal the court affirmed vacatur of the July 2011 order, reversed dismissal of the count challenging the Amendment (count V in amended pleading), reversed the bench trial judgment on related counts, remanded for further proceedings, but upheld the trial court’s method of apportioning federal estate tax under the Trust language.
Issues
| Issue | Plaintiff's Argument (Lyle) | Defendant's Argument (Larry/Lois/Linda) | Held |
|---|---|---|---|
| Whether the trial court erred in vacating the July 2011 judgment in Lyle’s favor on counts attacking the Amendment | Vacatur was improper because Linda’s motion came after 30 days and should have required section 2‑1401 proof | Judgment was not final/appealable under Sup. Ct. Rule 304(a); court retained power to revise and may vacate without §2‑1401 | Vacatur affirmed: Rule 304(a) applied (no final judgment), so §2‑1401 was not required and vacatur was permissible |
| Whether the doctrine of election precludes Lyle from challenging the Amendment because he accepted benefits under the Trust | Election/estoppel does not bar him because the Amendment allegedly violates statute (POA failed to specifically reference the Trust); he may challenge illegality/public‑policy defects | Lyle accepted benefits and therefore must be estopped from attacking the instrument (and Boyar I supports election applied to trusts) | Election did not apply on these facts; court reversed dismissal — Lyle may proceed because the challenge fits the exception for claims that a dispositive provision is contrary to law/public policy |
| Whether the broader estoppel principle independently bars Lyle’s challenge after he received trust benefits | Lyle contends the statutory‑violation claim falls within the exception that permits attacking provisions contrary to law/public policy | Lois argues the exception would swallow the doctrine and that Lyle effectively benefitted so cannot attack | Court held the estoppel principle does not bar challenges asserting that a dispositive provision is illegal or contrary to public policy; Lyle’s §2‑9 challenge survives that exception |
| Whether Lyle is entitled to a personal tax offset for electing §2032A special valuation (i.e., should his tax benefit be allocated solely to him) | Lyle argues his reduced valuation produces tax savings that should offset his share of estate tax liability | Defendants rely on Trust language requiring apportionment of taxes to beneficiaries according to share of specifically distributed property | Court affirmed tax treatment: Trust language required apportionment by each beneficiary’s share of estate assets; no individual offset for Lyle’s §2032A election |
Key Cases Cited
- Smith v. Airoom, 114 Ill.2d 209 (Illinois Supreme Court) (elements for 2‑1401 relief)
- Lloyd v. Treasurer of the State, 401 Ill. 520 (Illinois Supreme Court) (doctrine of election described)
- Carper v. Crowl, 149 Ill. 465 (Illinois Supreme Court) (classic statement of election principle)
- Remillard v. Remillard, 6 Ill.2d 567 (Illinois Supreme Court) (election between will benefits and independent homestead right)
- In re Estate of Gowling, 82 Ill.2d 15 (Illinois Supreme Court) (equitable apportionment of federal estate tax where instrument silent)
- Kyker v. Kyker, 117 Ill. App.3d 547 (App. Ct.) (estoppel principle and its exceptions)
- Washington Mutual Bank v. Archer Bank, 385 Ill. App.3d 427 (App. Ct.) (section 2‑1401 inapplicable where court retains power under Rule 304(a))