Rush University Medical Center v. Sessions
2011 IL App (1st) 101136
Ill. App. Ct.2011Background
- Decedent Robert W. Sessions created the Sessions Family Trust in 1994, offshore Cook Islands.
- Decedent pledged $1.5 million to Rush University in 1995 to build a president’s house; 1996 letter confirmed the pledge.
- Rush built the president’s house in reliance on the pledge, cost over $1.5 million.
- In 2005 decedent created a revocable living trust and died April 25, 2005; no payments toward the pledge were made before death.
- Rush asserted claims against the estate and, later, against the trusts; partial summary judgment against the estate was affirmed on appeal; the trusts then faced counts alleging fraudulent transfers and a bound pledge.
- The circuit court granted Rush’s summary judgment on count II (pledge bound decedent’s assigns), and later granted summary judgment on count III against the trusts; the trusts sought substitution of judges and review on counts II and III.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Judge Budzinski's substitution for cause was proper | Rush argues no bias; no extrajudicial prejudice shown | Sessions contend prejudice and partiality | Substitution denied; no deep-seated bias shown |
| Whether self-settled trusts remain per se fraudulent after the Fraudulent Transfer Act | Crane/Barash control; trusts per se fraudulent | FT Act controls; must plead 5(a)(1) or (5)(2) elements | Count III pleaded under FT Act elements; per se rule rejected; reversed as to count III |
| Whether the denial of summary judgment on count II was reviewable; jurisdiction | Rush sought appellate review of denial | Order is interlocutory and not appealable | Lacked jurisdiction to review the count II denial; that portion dismissed |
| Whether the circuit court erred in granting summary judgment on count III | Assets of self-settled trusts should be reachable | No proper FT Act pleading for fraudulent transfer | Reversed; summary judgment on count III vacated |
Key Cases Cited
- Eychaner v. Gross, 202 Ill. 2d 228 (2002) (judicial impartiality and bias standard; extrajudicial sources preferred)
- In re Estate of Wilson, 238 Ill. 2d 519 (2010) (bias findings must show deep-seated favoritism or antagonism)
- Liteky v. United States, 510 U.S. 540 (1994) (trial judge’s opinions during proceedings do not mandate recusal unless extreme)
- Barth v. State Farm Fire & Casualty Co., 371 Ill. App. 3d 498 (2007) (standard for reviewing judicial partiality claims)
- In re Estate of Hoellen, 367 Ill. App. 3d 240 (2006) (impartiality must be shown to warrant reversal)
- Arangold Corp. v. Zehnder, 187 Ill. 2d 341 (1999) (interlocutory orders reviewed under Rule 304/308 framework)
- Crane v. Illinois Merchants Trust Co., 238 Ill. App. 257 (1925) (self-settled trusts per se fraudulent under common law)
- Barash v. McReady, In re Morris, 151 B.R. 900 (1993) (Bankruptcy/insolvency context; per se fraud notions discussed)
- Dexia Credit Local v. Rogan, 624 F. Supp. 2d 970 (N.D. Ill. 2009) (FT Act analysis and pleading requirements in fraudulent transfers)
- Moore v. Green, 219 Ill. 2d 470 (2006) (legislature not to render preexisting common-law rights superfluous)