In re Estate of Ramlose

Case Date: 11/19/2003
Court: 1st District Appellate
Docket No: 1-02-1689, 1-02-2792  Cons. Rel

THIRD DIVISION
November 19, 2003




Nos. 1-02-1689, 1-02-2792 (Consolidated)

 

In re ESTATE OF ALEXANDER RAMLOSE, ) Appeal from the
a Disabled Person ) Circuit Court of
) Cook County.
(ALEXANDER O. RAMLOSE, )
)
                                 Plaintiff-Appellee, )
)
           v. )
)
ALEXANDER O. RAMLOSE TRUST, and )
ELMER HANEBERG, Individually and as ) Honorable
Trustee of the Alexander O. Ramlose Trust, ) E. Kenneth Wright, Jr.,
) Judge Presiding.
                               Defendants-Appellants). )



JUSTICE SOUTH delivered the opinion of the court:

These consolidated appeals arise from four orders of the circuit court of Cook Countyfreezing defendant Elmer Haneberg's (Haneberg) assets and accounts and various real estateproperties, defaulting him as a discovery sanction pursuant to Supreme Court Rule 219 (166 Ill.2d R. 219), and transferring all pending matters to the decedent's estate after closure of theguardianship estate. The first appeal arises from an order that was entered on February 14, 2002,freezing all of Haneberg's accounts and assets and an order entered on May 15, 2002, whichdeclined to vacate the February 14, 2002, "freeze" order. The second appeal arises from an orderthat was entered on September 10, 2002, which closed the guardianship estate and transferred allpending matters, including a default order entered on August 23, 2002, and the February 14,2002, freeze order, to the decedent's estate for further proceedings. LaSalle Bank was appointedas executor of the estate of Alexander Ramlose, now deceased, and appears in that capacity in thisappeal as plaintiff's representative.

The pertinent facts and chronology of events are as follows: On February 8, 2001,plaintiff, Alexander Ramlose, filed a complaint for accounting and injunctive relief alleging thatdefendant Elmer Haneberg, as trustee of the Alexander O. Ramlose Trust (Ramlose Trust), hadbreached his fiduciary duties by engaging in a pattern of "manipulation, self-dealing and deceit"with respect to the corpus of the trust by using it to satisfy his personal indebtedness and that ofhis family members. The complaint further alleged that plaintiff had previously executed ademand for accounting on Haneberg as well as a demand that he turn over any and all documentsrelative to the Ramlose Trust in order that an accounting by an independent third party could beconducted, but that he never responded or complied with that request. The complaint sought anaccounting of the Ramlose Trust and all of Haneberg's financial activity; an order that Hanebergbe required to produce all trust documents relating to plaintiff, including bank books, bankrecords, checkbook records, securities, bonds, promissory notes, mortgages, trust deeds, realestate records, income records, property deeds, and all other documents executed by him astrustee for plaintiff; injunctive relief enjoining Haneberg from "altering, creating destroying,changing, modifying or amending" any of these documents; and a constructive trust for severalreal estate properties allegedly purchased by Haneberg with funds from the Ramlose Trust.

On March 13, 2001, Patrick Murphy, the Cook County public guardian (Public Guardian),filed a guardianship petition requesting that plaintiff be adjudicated a disabled person and that theoffice of the Public Guardian be appointed as plenary guardian of the estate and person ofAlexander Ramlose. The court appointed the Public Guardian temporary guardian on the groundsthat plaintiff was a 95-year-old man who appeared to be suffering from dementia, and that atemporary guardian was needed in order to safeguard his assets and ensure that his estate wasbeing protected in the chancery court matter. Plaintiff was also ordered to submit to a mentalexamination on or before March 30, 2001.

On March 20, 2001, the chancery court action was consolidated with the guardianshipaction and transferred to the probate division. At that time, the Public Guardian filed hisappearance on behalf of plaintiff, and an agreed order was entered into between Haneberg and thePublic Guardian that Haneberg would provide the Public Guardian with a full accounting of all ofhis actions taken with respect to the Ramlose Trust and produce all tax returns filed on behalf ofthe estate, trust instruments, powers of attorney, wills and advanced directives. That order gaveHaneberg until April 11, 2001, to comply. Additionally, Haneberg agreed not to distribute ordraw upon the trust assets except for matters relating directly to plaintiff's personal health.

On April 18, 2001, the Public Guardian was appointed plenary guardian of plaintiff'sperson and estate and filed an emergency petition seeking to remove Haneberg as trustee, appointa successor trustee and invalidate all powers of attorney, certain trusts and trust amendments. The petition alleged that plaintiff had been diagnosed as suffering from dementia, which placedhim at an extreme risk for self-neglect, abuse and exploitation. The petition also alleged thatHaneberg, as trustee, had engaged in highly questionable practices with respect to the trust, suchas issuing checks for substantial sums of money to himself and his wife and preparing the"Haneberg Charitable Educational Trust," the stated purpose of which was to provide financialsupport for him and his family while he pursued a career in the ministry. Allegedly, AlexanderRamlose transferred $700,000 from the Ramlose Trust to fund the Haneberg Trust nine monthsafter he was diagnosed as having significant memory deficits and dementia. Attached to thepetition was a copy of plaintiff's mental examination report prepared by a Dr. Steven Foxconfirming that diagnosis. The court granted the emergency petition, removed Haneberg astrustee of the Ramlose Trust and appointed LaSalle Bank as successor trustee.

On May 14, 2001, the Public Guardian filed a rule to show cause alleging that Haneberghad never provided an accounting of the Ramlose Trust pursuant to the March 20, 2001, agreedorder even though defense counsel had assured him on several occasions that such an accountingwould be forthcoming. The Public Guardian maintained that an accounting was necessary to assess and protect the assets in plaintiff's estate.

On May 30, 2001, the Public Guardian filed a petition for the issuance of a citation torecover assets alleging that Haneberg had engaged in a series of actions in his capacity as trusteefor the Ramlose Trust, which were done solely for his own benefit, and that as plaintiff's mentaland physical health declined, Haneberg had amended the trust several times, resulting in hisgaining control of the bulk of plaintiff's estate upon his death. The petition further alleged thatHaneberg misappropriated hundreds of thousands of dollars of plaintiff's money in loans andmonetary gifts to himself and his family and paid himself almost $100,000 in trustee's fees. Thepetition realleged many of the same allegations contained in the emergency petition to removeHaneberg as trustee, such as the creation of the Haneberg Charitable Educational Trust(Haneberg Trust), which was funded by $700,000 from the Ramlose Trust. According to thepetition, the Haneberg Trust provided no benefits to plaintiff and would most likely result in"serious adverse estate tax consequences" for him and the estate. The petition also identifiedseveral real estate properties located in Chicago and Lisle, Illinois, which Haneberg allegedlyacquired with proceeds from the Ramlose Trust. The petition sought an invalidation of theamendments to the Ramlose Trust, the rescission of all gift authorizations and of the HanebergTrust, and the reconveyance to the Ramlose Trust of all moneys obtained from plaintiff byHaneberg.

On June 13, 2001, the Public Guardian filed a motion for summary judgment on theemergency petition to remove Haneberg as trustee and appoint a successor trustee on the groundsthat Haneberg had failed to answer or otherwise respond.

On June 22, 2001, Haneberg answered the citation to recover assets and denied allallegations that he had breached his fiduciary duties or exercised undue influence over plaintiff. He maintained that all of the gifts, the Haneberg Trust, and the trustees fees were authorized byplaintiff and prepared at his direction and knowledge without solicitation or duress by him.Haneberg also filed his response in opposition to the emergency petition to remove him as trusteeand provided an accounting to the Public Guardian's office.

On July 17, 2001, the Public Guardian filed a motion to compel Haneberg to appear at adeposition and to bring with him certain documents for examination. Haneberg filed anemergency motion to extend the deposition compliance date and attached to that motion a letterfrom a psychiatrist stating that he was suffering from depression and psychologically unfit tosubmit to the rigors of a deposition. The psychiatrist opined that Haneberg would startresponding to treatment in approximately 6 to 12 weeks.

The court denied Haneberg's motion for an extension and ordered him to submit to hisdeposition on or before August 3, 2001. Haneberg filed a motion to reconsider that order andattached another letter from the same psychiatrist restating his diagnosis and opinion onHaneberg's inability to participate in a lengthy, contentious and rigorous deposition.

The Public Guardian agreed to continue the deposition to August 10, 2001. However, onthat date Haneberg failed to appear without notice. On that same date, the Public Guardian filedan emergency petition for relief pursuant to Illinois Supreme Court Rule 219 (166 Ill. 2d R. 219)requesting that Haneberg be defaulted on "each and every count of each of the three petitionspending against him;" that he be held in contempt; that an order for a body attachment to bringhim before the court be entered; that he pay a fine of no less than $500 per day until he submits tohis deposition; that sanctions be entered against his attorney for noncompliance with the court'sorder and for his consistent pattern of delay; and an order for reasonable attorney fees. The trialcourt granted the Rule 219 petition on August 10, 2001, and held Haneberg in contempt of courtfor his failure to appear at his deposition and fined him $500 per day until he submitted for hisdeposition. However, all other relief requested by the Public Guardian, including sanctions andattorney fees, was reserved. On August 13, Haneberg filed a notice of appeal from that contemptorder pursuant to Supreme Court Rule 304(b)(5) (155 Ill. 2d R. 304(b)(5)). Haneberg also filedin this court a motion to stay enforcement of the attachment for contempt order. Subsequently,the Public Guardian filed a motion to dismiss that appeal as moot and for lack of jurisdiction.

On August 16, 2001, the Public Guardian filed a motion in the circuit court to modifyand/or vacate that portion of the order which denied the requested sanctions. On August 23,2001, the court entered the first order that is a subject of these appeals. In that order, the courtvacated the August 10, 2001, order pursuant to Supreme Court Rule 303(a)(2) and declared thatHaneberg's notice of appeal regarding that order "shall have no effect." In addition, pursuant toSupreme Court Rule 219, the court defaulted Haneberg on "each and every count of the threepetitions pending against him" and set out in detail what it perceived to be evidence of hisconsistent pattern of delay and lack of diligence in presenting himself for a discovery depositionbased upon the chronological history of the case.

In that order, a body attachment was to be issued against Haneberg on August 28, 2001,unless he sat for his deposition on or before that date. On August 27, 2001, Haneberg filed anemergency motion for reconsideration of the August 23, 2001, order, and on August 28, 2001, hefiled an emergency motion to stay enforcement of the August 28, 2001, attachment for contemptorder, both of which were denied. On that same date, August 28, 2001, Haneberg filed a secondnotice of appeal from the attachment for contempt order and the underlying August 23, 2001,order finding him in default on each and every count of the three petitions pending against him. On September 27, 2001, this court dismissed that appeal for lack of jurisdiction on the groundsthat the August 28, 2001, attachment order was a not a contempt order, but a discovery orderissued pursuant to Supreme Court Rule 219, making it interlocutory and nonappealable. On thesame date that this court issued its ruling, September 27, 2001, plaintiff, Alexander Ramlose, died. On February 13, 2002, the Public Guardian filed a motion for an order requiring Hanebergto deposit $1,647,526.20 into a court-supervised account, to produce a complete and accurateaccounting with supporting documentation within 14 days and to freeze all of his accounts andassets and those of his family on the grounds that during their depositions, Haneberg and his wifemade certain admissions which indicated that the bulk of the Ramlose Trust had been utilized bythem for their ongoing living expenses in the amount of $1,647,526.20. The motion furtheralleged that while Haneberg had finally submitted an accounting, it was inadequate because it didnot account for all of the Ramlose Trust money.

On February 14, 2002, the court, without conducting an evidentiary hearing, granted thatmotion and entered the second order that is a subject of this appeal, the "freeze" order and readsas follows:

"All of the assets and accounts, whether involving real or personalproperty of Elmer Haneberg, including all such assets and accountsheld individually or jointly with any person or held in a trustwherein he is named as a trustee for any family member, includinghimself, his wife, *** his mother, *** and his children *** or anytrust in which Elmer Haneberg has any beneficial interest are herebyfrozen and may not be accessed for any reason without furtherorder of Court."

The order froze several bank accounts in the names of Haneberg and his wife, as well asbank accounts in the names of the Haneberg Children's Trust and the Haneberg CharitableEducational Trust. Additionally, the order included several real estate properties, some of whichwere listed in the Public Guardian's petition for the issuance of a citation to recover assets andsome of which were not. For example, the order froze all time shares owned by Haneberg as wellas property located in Harshaw, Wisconsin, a time share in Park City, Utah, and "any other realproperty in which Elmer Haneberg has any interest either individually, jointly, as trustee for anyfamily member or in which Elmer Haneberg has any beneficial interest."

On March 15, 2002, Haneberg filed a motion to vacate the February 14, 2002, freezeorder on the grounds that it was an equitable attachment and that the court lacked jurisdictionbecause it was entered 4