Spencer v. Di Cola
16 N.E.3d 1
Ill. App. Ct.2014Background
- Trust left both individual and corporate trustees with broad discretion over distributions.
- 1982 order held no obligation to appoint a successor corporate trustee; Murray became sole trustee.
- 1984 reform allowed appointment of successor trustees for trusts, not clearly revoking existing structure.
- 1999 Lyle designated a successor individual trustee (Di Cola) after prior resignations.
- 2009 action: beneficiaries sought to have ATG replace Di Cola via substitute/successor trustee mechanisms; court granted summary judgment for Di Cola; fee award upheld; remanded for fee amount/recipient.
- Appeal followed after partial rehearing and Di Cola’s death; issues focused on substitution vs. successor and the vacancy requirement against appointing ATG.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether substitute trustee power permits corporate appointment | Lyle: substitute permits ATG as complete replacement. | Di Cola: substitute is temporary; cannot replace sitting trustee. | No; substitute is for a specific purpose, not to replace the sitting trustee. |
| Whether an appointable successor trustee exists under VIII(a) | ATG could be appointed as successor despite vacancy. | No vacancy exists; 1982 order eliminated corporate successor. | No vacancy and no authority to appoint ATG as successor corporate trustee. |
| Whether attorney fees to the trustee were proper | Fees should not be borne by beneficiaries under litigious stance. | Trust terms authorize reimbursement of trustee expenses; defense was proper. | Fees properly awarded and remand to determine exact amount and recipient. |
Key Cases Cited
- Mucci v. Stobbs, 281 Ill. App. 3d 22 (1996) (trust provisions and substitution limitations; no unrestricted removal power)
- Northern Trust Co. v. Heuer, 202 Ill. App. 3d 1066 (1990) (fiduciary must treat beneficiaries impartially; fees denied when position favors one beneficiary)
- Harris Trust & Savings Bank v. Donovan, 145 Ill. 2d 166 (1991) (trust interpretation consistent with settlor's intent; language governs distribution discretion)
- Fifth Third Bank, N.A. v. Rosen, 2011 IL App (1st) 093533 (2011) (trust interpretation; avoid surplusage; determine settlor's intent from instrument language)
- Webbe v. First National Bank & Trust Co. of Barrington, 139 Ill. App. 3d 806 (1985) (trustee fees defense when beneficiary challenges administration)