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FOURTH DIVISION
November 17, 2005

PRESIDING JUSTICE QUINN delivered the opinion of the court:

Plaintiffs Clarence P. Bangert, Thomas J. Beeler, JamesChapman, William Ek, Beat J. Jenni,⁽¹⁾ Ronald J. Jensen, Wayne E.Jones, Dennis Koster, James R. Maurice, Martha Myers, executrix ofthe estate of David F. Myers, Keith A. Pope, Elaine Potter,executrix of the estate of Michael M. Potter, Sr., Robert Randolph,

Sherwood Richardson, Edgar Rose, Edward J. Schroedter, Charles D.Strang, Jr., and Samuel Winett, are former elected officers of theOutboard Marine Corporation (OMC), "a leading worldwidemanufacturer of pleasure boats and outboard marine engines." Plaintiffs appeal from the order of the circuit court grantingsummary judgment (735 ILCS 5/2-1005 (West 2002)), to defendantNorthern Trust Company (Northern Trust). For the followingreasons, we affirm.

BACKGROUND

In order to provide for themselves in retirement, executivesof OMC developed a supplemental employee retirement plan (SERP)that provided monthly benefit payments to certain retiredofficers. In 1987, OMC created a trust, later amended in 1989,to house the monies to pay these SERP benefits. To ensure thatthese benefits would be paid even in the event of a change incontrol at OMC, the trust agreement contained a provisionrequiring OMC to fully fund the trust with a sufficient amount topay the promised benefits once a change in control occurred. Thetrust agreement also provided that the entire trust corpus wouldremain "subject to the claims of the general creditors" of OMCand that, in the event OMC should declare bankruptcy, the trusteewould deliver the entire trust corpus to the bankruptcy court. Defendant Northern Trust Company (Northern Trust) was selected asthe trustee.

In 1997, OMC was acquired by Greenmarine Holdings, L.L.C.,and, pursuant to the trust's "full funding" provision, OMCdeposited nearly $13.8 million in cash into the trust. Soonthereafter, OMC replaced the 13.8 million in cash with an "IOU"in the form of a letter of credit issued by another bank in OMC'sname.

Also in 1997, plaintiffs formed a group known as the "OMCEx-Officer Group" to ensure that "the Trust would remain fullyfunded and that both OMC and [Northern Trust] comply with itsterms." Though they continued to receive their monthly SERPbenefits on time, in late 1999 and early 2000, plaintiffs becameconcerned about OMC's solvency and its future ability to make themonthly SERP payments, so they contacted OMC about the prospectof its members opting for a "lump sum" benefit payment pursuantto section 4.02 of the amended trust, which stated as follows:

"SECTION 4.02 Deliveries to Participants. Subject tosection 4.01, the Trustee shall hold the Trust Corpusin its possession under the provisions of this Trustuntil directed by an Executive and/or Participantpursuant to a written notice (the 'Executive's Noticeand Affidavit'), in a form substantially similar tothat attached hereto as Exhibit V, to pay all or aportion of the amounts allocated to such Executiveand/or Participant under the Trust as specified inExhibits IVA, IVB and IVC and pursuant to the terms andconditions of the schedules, as the case may be."

Plaintiffs also inquired as to why two members of the OMC Ex-Officer Group, William Ek and Sherwood Richardson, were notlisted by OMC as beneficiaries of the trust. OMC suggested thatplaintiffs contact Northern Trust.

After several months of failing to initiate a dialogue withNorthern Trust, plaintiffs received a letter from NorthernTrust's vice president and trust administrator, Eva Bernacki,which stated that she was unable to address their questions. Theletter further informed them that "as trustee of the Trust,[Northern Trust's] relationship is with [OMC] rather than withthe individual plan participants."

In September 2000, plaintiffs' counsel sent a letter to OMCand Northern Trust suggesting that some plaintiffs might seeklump-sum payments pursuant to section 4.02 of the trustagreement. On September 8, 2000, OMC's general counsel respondedby sending a letter to Northern Trust stating its position on thepropriety of any lump-sum payments:

"OMC wants you to be aware that, in its view, noneof the beneficiaries of the Trust Agreement areentitled to current lump sum payments of benefits underany of the underlying plans and arrangements fundedunder the trust.

Accordingly, OMC would object strenuously to thepayment of any amounts out of the trust to anybeneficiary purporting to claim entitlement to a lumpsum payment and would pursue any legal remedy it mayhave in the event of such erroneous and unauthorizedpayment."

Sensing trouble, Northern Trust sent a letter to both OMCand plaintiffs' counsel noting "[t]he conflicting positions of[plaintiffs] and OMC with respect to the proper interpretation ofthe payment and other provisions of the Trust" and lamenting the"untenable position" it was being put in as a result. Accordingto that letter, Northern Trust informed OMC and plaintiffs thatif they could not resolve their differences as soon as possible,Northern Trust would file a demand for arbitration pursuant tosection 7.03 of the trust.

On November 3, 2000, one of the plaintiffs, James Maurice,submitted an "Exhibit V" affidavit to Northern Trust requesting alump-sum payment of over $340,000. True to its word, on November6, 2000, Northern Trust filed a verified petition for trustconstruction and instructions, and for emergency relief in thecircuit court.

In its petition, Northern Trust noted that plaintiff Mauricehad made a demand for a lump-sum payment under the trust and thatOMC disputed his right to that payment. Based upon the "actualcontroversy between OMC and Maurice with respect to their rightsunder the Trust," Northern Trust sought "construction of theTrust provisions bearing on the rights of the Participants(including Maurice) and OMC with respect to payments" under thetrust and a "declaration of those rights and instructions to[Northern Trust], as Trustee, with respect to any such payments." Northern Trust further sought a declaration as to whether the"dispute" between plaintiffs and OMC fell within the trust'sarbitration provision. Finally, Northern Trust sought "the entryof an emergency order directing that until such time as therights of the parties with respect to payment are resolved,either in this proceeding or in arbitration, [Northern Trust] isunder no obligation to, and shall not, make such payment."

On November 13, 2000, the circuit court granted NorthernTrust's request for emergency relief (characterized by NorthernTrust as an "injunction" in its brief), and issued an orderstating that Northern Trust "is not obligated to, and is directednot to" draw on the letter of credit or "make such payments inany other manner from the Trust, until further order of thisCourt." Three days after the circuit court entered this order,on November 16, 2000, 13 additional plaintiffs filed Exhibit Vaffidavits, seeking lump-sum payments. Later, on December 5,2000, another plaintiff (the fifteenth to do so), filed anExhibit V affidavit.

On December 15, 2000, plaintiffs filed a motion to haveNorthern Trust draw on OMC's letter of credit and deposit withthe court an amount equal to the total of their requested lump-sum payments. On December 20, 2000, the circuit court deniedplaintiffs' request and ordered the parties to begin arbitrationwithin 30 days. Two days later, on December 22, 2000, OMC filedfor bankruptcy and the proceeding in the circuit court wasautomatically stayed. The bankruptcy court ordered plaintiffs'monthly SERP benefits suspended and, pursuant to the terms of thetrust, the entire trust corpus was transferred to the bankruptcytrustee.

In February 2001, plaintiffs filed a two-count complaintagainst Northern Trust for breach of fiduciary duty and breach ofthe trust agreement. In their complaint, plaintiffs alleged thatOMC had wrongfully objected to their request for lump-sumpayments "for the purpose of protecting its own financialsituation," despite their "clear right" to such payments undersection 4.02 of the trust. Because of the ongoing businessrelationship between OMC and Northern Trust, plaintiffs averred,Northern Trust "capitulated" to OMC's objections and filed itspetition for instructions "for the benefit of OMC and as apretext to avoid SERP payments."

Specifically, plaintiffs alleged Northern Trust breached itsfiduciary duty to them by (1) failing to advise them of theirright to receive a lump-sum payment; (2) "assuming a relationshiponly with and for the benefit of its paying customer," OMC; (3)refusing to pay plaintiffs lump-sum payments despite the "clearlanguage" of section 4.02 of the trust; (4) qualifying any lump-sum payment on OMC withdrawing its objection; and (5) failing toadd plaintiffs Ek and Metcalf on the list of named beneficiaries.

After the parties filed cross-motions for summary judgment,the circuit court granted Northern Trust's motion for summaryjudgment and denied plaintiffs' motion. In a written order, thecircuit court found that Northern Trust had not breached itsfiduciary duty to plaintiffs. Plaintiffs filed a timely noticeof appeal.

ANALYSIS

On appeal, plaintiffs argue that the circuit court erred ingranting Northern Trust's motion for summary judgment on theirclaim of breach of fiduciary duty.⁽²⁾ According to plaintiffs,their right to lump-sum payments was "clear and uncontested"under the plain language of section 4.02 of the trust. Thus,they claim that Northern Trust breached its fiduciary duty tothem by (1) refusing their demand for such payments and (2)seeking judicial instruction about its obligation to make suchpayments without a bona fide reason to do so. In essence,plaintiffs contend that Northern Trust knew OMC's threat to sueif Northern Trust tendered the lump-sum payments was a bluff, andits decision to seek judicial instructions was a sham, designedto delay those payments from the trust. Plaintiffs also arguethat Northern Trust breached its duty to plaintiffs Ek andMetcalf by failing to include them as trust beneficiaries by"updat[ing] the trust beneficiary list as required under itsterms."

Northern Trust contends that the circuit court's orderbarring it from making any payments "until further order ofcourt" provides it a safe harbor from liability. Northern Trustalso argues that it had reasonable grounds to seek judicialinstruction as to whether it should make any lump-sum payments inlight of OMC's objections to such payments; there was no evidencethat its motivation to seek such instruction was to appease OMCand keep its business; and it had no power under the terms of thetrust agreement to add Ek, Metcalf, or anyone else to the list oftrust beneficiaries.

Summary judgement is appropriate when "the pleadings,depositions, and admissions on file, together with theaffidavits, if any, show that there is no genuine issue as to anymaterial fact and that the moving party is entitled to a judgmentas a matter of law." 735 ILCS 5/2-1005(c) (West 2002). When theparties file cross-motions for summary judgment, they concede theabsence of a genuine issue of material fact and invite the courtto decide the questions presented as a matter of law. SteadfastInsurance Co. v. Caremark RX Inc., No. 1-04-3423, slip op. at 4(August 17, 2005). We review an order granting summary judgmentde novo. Morris v. Margulis, 197 Ill. 2d 28, 35 (2001).

A fiduciary must deal impartially with all beneficiaries andprotect their interests. Northern Trust Co. v. Heuer, 202 Ill.App. 3d 1066, 1070 (1990). As such, a trustee owes the highestduty to his beneficiary to fully and completely disclose allmaterial facts relating to dealings under the trust. Regnery v.Meyers, 287 Ill. App. 3d 354, 363 (1997). To state a claim forbreach of fiduciary duty, a plaintiff must allege that (1) afiduciary duty exists; (2) that duty was breached; and (3) theplaintiff's injuries were proximately caused by that breach. SeeInternational Capital Corp. v. Moyer, 347 Ill. App. 3d 116, 122(2004); Prime Leasing, Inc. v. Kendig, 332 Ill. App. 3d 300(2002).

In arguing that the circuit court's grant of summaryjudgment on plaintiffs' breach of fiduciary duty claim wasproper, Northern Trust relies heavily on the fact that thecircuit court had barred it from making any payments under thetrust until further order of the court. Northern Trust maintainsthat this order provides it with a safe harbor from plaintiffs'claims of breach of fiduciary duty, i.e., since it was merelyfollowing the court's order when it refused to provide plaintiffswith the lump sum payments they sought, it cannot be found tohave breached its fiduciary duty to them.

Northern Trust is certainly on good footing for arguing thatit cannot be held accountable for losses that occurred after andas a direct result of the circuit court's order. First, section5.01(b) of the trust agreement states that, as trustee, NorthernTrust will not be held liable "[i]f all or any part of the TrustCorpus is at any time attached, garnished, or levied by any courtorder, or in case the payment, assignment, transfer, conveyanceor delivery of any such property shall be stayed or enjoined byany court order."

Second, it is well established that a party cannot be heldliable for abiding by a court order. See In re Marriage ofNettleton, 348 Ill. App. 3d 961, 970 (2004) ("No matter howerroneous, a trial court's order made within the proper exerciseof jurisdiction must be obeyed until the order is modified or setaside by the trial court or reversed on appeal"), citingCummings-Landau Laundry Machinery Co. v. Koplin, 386 Ill. 368,385 (1944) ("The principle is of universal force that the orderor judgment of a court having jurisdiction is to be obeyed, nomatter how clearly it may be erroneous"). Thus, Northern Trustcannot be held accountable for the failure to make lump-sumpayments to those plaintiffs who waited to file their affidavitsseeking such payments until after the circuit court entered theinjunction. Had Northern Trust granted their requests, it wouldhave been in direct violation of the circuit court's order.

The entry of that order, however, does not provide NorthernTrust with a complete defense to plaintiffs' breach of fiduciaryduty claim. While part of plaintiffs' theory of breach restedupon Northern Trust's failure to process their lump-sum paymentrequests, plaintiffs' main allegation concerned Northern Trust'svery decision to file the petition for instructions and seek aninjunction in the first place.

It is a well-settled right of a trustee that " '[w]hereverthere is any bona fide doubt as to the true meaning and intent ofthe provisions of the instrument creating the trust or as to theparticular course which he ought to pursue, the trustee is alwaysentitled to maintain a suit in equity at the expense of the trustestate and obtain a judicial construction of the instrument anddirections as to his own conduct.' " Warner v. Mettler, 260 Ill.416, 420 (1913), quoting 3 Pomeroy's Eq. Jur.