Dunn v. Patterson

No. 3--07--0881
(Consolidated with No. 3--08--0350)

Filed November 18, 2009
IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

A.D., 2009

CHARLES W. DUNN and CHARLOTTE ) Appeal from the Circuit Court
E. DUNN, ) of the 12th Judicial Circuit
) Will County, Illinois
Plaintiffs-Appellees, )
)
v. ) No. 07--MR--399
)
LAWRENCE F. PATTERSON, )
) Honorable Barbara Petrungaro,
Defendant-Appellant. ) Judge, Presiding.

JUSTICE SCHMIDT delivered the opinion of the court:

Plaintiffs, Charles and Charlotte Dunn, brought a

declaratory judgment action against defendant, Lawrence

Patterson, the attorney who prepared an estate plan for them.

The circuit court of Will County entered judgment on the

pleadings, finding, as a matter of law, that provisions in

certain estate planning documents prepared by defendant were

contrary to public policy and void. The trial court thereafter

awarded attorney fees constituting a Supreme Court Rule 137 (155

Ill. 2d R. 137) sanction against defendant in the amount of
$5,393.75.

Patterson appeals, arguing: (1) the trial court erred in

finding the provisions requiring his consent, or alternatively,

an order of the court to amend or revoke the estate planning

documents to be contrary to public policy; and (2) the trial

court abused its discretion by awarding Rule 137 sanctions. We

reverse and remand.

BACKGROUND

Charles and Charlotte Dunn hired defendant, attorney

Lawrence Patterson, to, inter alia, prepare certain estate

planning documents for them. Patterson prepared the following

documents, all dated June 12, 2006: (1) Charles W. Dunn and

Charlotte E. Dunn joint declaration of trust; (2) living will

declaration of Charles W. Dunn; (3) living will declaration of

Charlotte E. Dunn; (4) limited durable power of attorney of

Charles W. Dunn; and (5) limited durable power of attorney of

Charlotte E. Dunn.

Each of these documents contained a qualified amendment and

revocation provision, which provided that any amendment or

revocation of the documents may only be executed with the written

consent of Patterson or by order of the court. The twelfth

paragraph of the "Joint Declaration of Trust (Conditionally

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Amendable and Revocable)" provides:

"QUALIFIED RIGHT TO AMEND AND/OR REVOKE. Charles W.

Dunn and Charlotte D. Dunn acting jointly or the

survivor of them, may, at any time or times, amend or

revoke this Joint Declaration of Trust, in whole or in

part, by instrument in writing (other than a Will)

delivered to the acting Trustee; subject however to

the receipt of the written consent of Attorney LAWRENCE

F. PATTERSON, whose signature on said written consent

form is Medallion Certified (whether Attorney Lawrence

F. Patterson is then acting as the Attorney at Law for

either one or both of us, or has been discharged as

said Attorney for either one or both of us, orally or

in writing) or, in the alternative, receipt of the

written consent of a Court having jurisdiction, upon

Petition filed by said Attorney or by any other

interested person." (Emphasis in original.)

Both Charles and Charlotte Dunn's limited durable power of

attorney (health care) and living wills contain the following

provision:

"Qualified Amendment and Revocation. SECTION 1. Any

provisions in the Laws of the State of Illinois or

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 in this instrument to the contrary notwithstanding,

I hereby reserve the power to amend or revoke this

Power of Attorney at any time and in any manner

while I have the legal capacity to do so, subject

however, to my receipt of the written consent to

said amendment or revocation of Attorney LAWRENCE

F. PATTERSON, whose signature on said written consent

form is Medallion Certified (whether Attorney LAWRENCE

F. PATTERSON is then acting as the Attorney at Law for

either one or both of us, or has been discharged as

said Attorney for either one or both of us, orally or

in writing) or, in the alternative, without [sic] the

consent of a Court having jurisdiction, upon Petition

filed by said attorney or by any other interested

person." (Emphasis in original.)

Each power of attorney and living will is signed by Charles

or Charlotte Dunn, and each page containing the aforementioned

provision is initialed by Charles or Charlotte Dunn. According

to Patterson, the "qualified amendment and revocation provision"

is something that he routinely inserts in his clients' estate

planning documents to prevent elder abuse.

On November 14, 2006, Patterson received a letter from

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attorney Timothy J. McJoynt, informing Patterson that he had been

retained by the Dunns to modify the estate plan that Patterson

had previously drafted. McJoynt explained that the Dunns no

longer wanted their ability to revoke or amend their estate

planning documents to be contingent on Patterson's approval and,

therefore, wished to remove his name from the documents and make

other minor amendments.

Patterson responded by letter, stating it was necessary for

the Dunns to personally meet with him to discuss this matter.

Patterson's letter, in pertinent part, provided as follows:

"For my clients to make any changes in their plan

it is necessary for both of them to discuss those

changes with me and for me to then determine whether

the changes are consistent with the interests and

protections embodied in the original plan."

He continued by stating that if his clients are unwilling to meet

with him, their only other alternative was to petition the court

for leave to amend.

On April 27, 2007, the Dunns brought suit seeking a

declaratory judgment against Patterson. The Dunns requested the

court to declare, among other things, that they had an absolute

right to revoke and amend the estate planning documents and that

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Rule 1.2(a) of the Rules of Professional Conduct (134 Ill. 2d R.

1.2(a)) required Patterson to abide by their directions.

Patterson was named as a defendant.

In Patterson's answer to the action, he admitted some basic

factual allegations, but responded that he had no knowledge

sufficient to form a belief as to the truth or falsity of a

number of allegations in the plaintiffs' complaint, including

that plaintiffs desired to revoke various estate planning

documents and powers of attorney. In addition to his answer,

Patterson filed an affirmative defense, alleging that the estate

planning documents contained a clause prohibiting the plaintiffs

from amending or revoking the documents without the written

consent of Patterson, whether or not he has been discharged as

the plaintiffs' attorney, or, alternatively, upon order of the

court.

The answer also stated that Patterson met personally with

the Dunns to review the final draft of all the documents in

issue, including the amendment and revocation provisions.

Exhibit No. 7 to the answer is a letter dated July 14, 2006, from

Patterson to the plaintiffs enclosing the original executed

estate plan documents. The letter states, in part, that the

joint declaration of trust, powers of attorney for healthcare,

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and living will are only "conditionally amendable or revocable in

order to ensure that your express intentions will not be

unwittingly changed if you enter into a deteriorating mental

state which compromises your ability to fully understand the

consequences of your decisions at that time."

Defendant alleges that he asked plaintiffs to personally

confirm that he was terminated with respect to estate planning

and trust funding. Exhibit No. 11 is the letter dated February

6, 2007, to the Dunns from Patterson requesting that they execute

a formal notice of termination. No response was received from

plaintiffs.

In another attempt to gauge whether he should consent to the

change in the documents, Patterson served a notice of discovery

deposition for Charles and Charlotte Dunn upon McJoynt and a

notice to produce on the Dunns. When Patterson received no

response to his discovery requests, he filed a motion for

discovery sanctions pursuant to Supreme Court Rule 219 (210 Ill.

2d R. 219).

The plaintiffs filed a motion for judgment on the pleadings,

alleging that no genuine issue of material fact existed in the

cause. In their motion, the plaintiffs argued that the cause

presented a straightforward issue of law: "is an attorney

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obligated to follow the direction of his or her client, even if

the attorney deems the clients' actions unwise, ill-conceived, or

imprudent?" Plaintiffs argued that pursuant to Rule 1.2(a) of

the Rules of Professional Conduct, an attorney is obligated to

abide by his client's decision so long as the direction given by

the client is not contrary to law, unethical, or otherwise in

violation of an ethical or legal obligation. Because plaintiffs

did not request that Patterson act in a way that was unethical,

contrary to law, or otherwise improper, plaintiffs argued that

judgment on the pleadings was proper.

In his response to the motion for judgment on the pleadings,

Patterson argued that issues of fact existed as to whether the

Dunns were and/or are the clients of attorney Timothy J. McJoynt.

Patterson denied that "an attorney does not have the right to

disregard a client's express wishes and instead substitute his or

her own judgment and wisdom as to the client's personal affairs."

Patterson continued, citing text of Rules 1.14(a) and (b) of

the Rules of Professional Conduct (134 Ill. 2d Rs. 1.14(a), (b))

to be in support of his position, due to his alleged belief that

Charlotte Dunn may been impaired in her ability to make

adequately considered decisions. Thus, Patterson claimed to

invoke his responsibility under Rule 1.14 to maintain a normal

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lawyer-client relationship and take protective action because he

reasonably believed that Charlotte could not adequately act in

her own interest.

When the parties appeared for oral argument, Patterson again

expressed that he had no evidence that McJoynt or attorney Frank

Andreano represented plaintiffs. He stated that he needed

further verification because the pleadings were unverified.

McJoynt provided no verification other than the letter he sent,

and the plaintiffs failed to respond to his letter requesting

further verification or his request for discovery depositions.

The discovery sanctions motion was struck without prejudice

because a Supreme Court Rule 201(k) (210 Ill. 2d R. 201(k))

conference had not been held. The court granted the plaintiffs'

motion for judgment on the pleadings and held that the qualified

revocation or amendment provision requiring Patterson's approval

was contrary to public policy because it ignored the provisions

of Supreme Court Rule of Professional Conduct 1.2.

The plaintiffs petitioned the court for assessment of fees

under Illinois Supreme Court Rule 137. Plaintiffs argued that a

reasonable attorney would not have adopted and forwarded the

arguments presented by defendant in the instant case. Said

motion was granted, and plaintiffs were awarded attorney fees and

9
costs in the amount of $5,393.75. Patterson appeals.

ANALYSIS

I. Qualified Amendment and Revocation Provision

Patterson first argues that the trial court erred in

granting judgment on the pleadings and finding the revocation and

amendment provisions in the estate plan documents to be void as

contrary to public policy. He contends that the provisions

requiring the consent of the attorney who prepared the documents,

or, in the alternative, an order from the court are valid and

proper means for the settlors to limit their own future ability

to amend or revoke the trust documents.

The standard of review of a judgment on the pleadings is de

novo. Gillen v. State Farm Mutual Automobile Insurance Co., 349

Ill. App. 3d 779, 782, 812 N.E.2d 595, 598 (2004). Further, an

appellate court reviews a trial court's construction of a trust

instrument de novo. Peck v. Froehlich, 367 Ill. App. 3d 225,

227-28, 853 N.E.2d 927, 931 (2006).

We note at the outset that the plaintiffs challenge

Patterson's standing on review. Plaintiffs do not dispute

Patterson's standing to appeal the imposition of the Rule 137

sanctions. However, plaintiffs assert that Patterson has no

standing to appeal the trial court's holding that the amendment

10
and revocation provisions were void.

We find this contention to be inconsistent with the fact

that plaintiffs named Patterson as the defendant in this suit and

obtained a judgment against him. For a party to have standing,

the party must suffer some injury in fact to a legally cognizable

interest and must have sustained, or be in danger of immediately

sustaining, a direct injury. Department of Transportation v.

Anderson, 384 Ill. App. 3d 309, 313-14, 892 N.E.2d 116, 121

(2008). The entry of a judgment itself constitutes legally

cognizable damages. Schal Bovis, Inc. v. Casualty Insurance Co.,

314 Ill. App. 3d 562, 568, 732 N.E.2d 1082, 1088 (1999).

Furthermore, at least at the outset, Patterson is identified as

plaintiffs' fiduciary in the documents at issue. Thus, Patterson

has standing in this appeal to seek both reversal of the judgment

and reversal of the imposition of sanctions.

Patterson first argues that the consent provisions in the

estate planning documents were merely third-party consent

provisions, which are completely legal in Illinois. The

Restatement (Third) of Trusts recognizes that consent by a third

party to amendment or revocation is a proper and valid measure.

Section 63(1) provides, "the settlor of an inter vivos trust has

power to revoke or modify the trust to the extent that the terms

11
of the trust *** so provide." Restatement (Third) of Trusts

§63(1) at 442 (2003), Comment j on section 63(3), entitled,

"Power to Revoke or Modify with Another's Consent" states, "If

the settlor reserves a power to revoke or modify the trust with

the consent of [another], such as the trustee, [a beneficiary],

or a third party, the power normally cannot be exercised without

that consent." Restatement (Third) of Trusts §63(3), Comment j,

at 448 (2003). The comment explains that a court may intervene

if the person whose concurrence is required improperly withholds

or grants the consent, such as where the person acts in bad faith

or from an improper motive. Restatement (Third) of Trusts §63

(2003).

Plaintiffs stipulate that such limitations are permissible

and appropriate. However, plaintiffs contend that such

limitations are not permissible when the consent required is that

of the drafting attorney, whether or not said attorney is still

representing the parties. This is so, say the plaintiffs,

because that attorney's behavior is held to different standards

than those that apply to a lay third party, that is, the Rules of

Professional Conduct.

Plaintiffs argue that public policy requires lawyers. under

Rule 1.2, to follow the direction of their clients, so long as

12
the client is not asking the attorney to do anything unethical or

illegal. This is due to the fact that clients should be able to

have confidence their lawyer will handle their important, and

often very personal, legal matters pursuant to the clients'

direction. Thus, plaintiffs contend that Patterson's position,

as the plaintiffs' attorney, required him to provide independent

professional judgment. Plaintiffs contend that an attorney's

duty is to identify the person(s) who will act on behalf of

elderly clients if they become disabled, and it is patently

improper for an attorney to draft estate planning documents that

places himself or herself in such a role. See Sherman v.

Klopfer, 32 Ill. App. 3d 519, 336 N.E.2d 219 (1975) (attorney who

drafted various documents for aunt breached attorney-client

relationship by failing to give aunt sufficient control of the

business so as to permit her to sell its assets and refusing to

consent to sale of the business).

Sherman, however, can be distinguished from the case at bar

in two important ways. In Sherman, the court found that the

attorney failed to adequately inform his client of information

necessary for her to understand her ownership interest in the

business. Moreover, the attorney in Sherman was a partner with

the client in the business and, therefore, stood to benefit from

13
the dealing. Sherman, 32 Ill. App. 3d at 534-35. In the instant

case, there is no evidence that Patterson misled the plaintiffs

in any way. He testified that he informed them of the amendment

and revocation clause and that they both signed and initialed

next to the provision in the documents. Additionally, there is

no evidence that Patterson stood to personally benefit from

refusing to consent to the amendment of the plaintiffs' estate

planning documents.

Given that third-party consent is a recognized method of

protecting settlors and principals from making changes based on

mental incompetency or undue influence, Patterson argues that an

attorney may appropriately serve as the third party who is to

give such consent. Patterson contends that such a designation is

actually consistent with the broad fiduciary duties an attorney

owes his or her client, and with the attorney-client

relationship, which is based on duties of loyalty and trust. We

agree.

Out here in the cornfields of Illinois and, we suspect,

sometimes in the large metropolitan areas of Illinois, one's

lawyer is often his or her most trusted friend and advisor with

respect to major life decisions. Where, as here, the lawyer is

given no financial stake in an estate by virtue of his capacity

14
as a fiduciary, we see no reason why the family lawyer cannot act

in such capacity simply because he is drafting a trust document.

Plaintiffs argue that a lawyer should not be able to limit how

his clients spend their money or distribute their assets as long

as it is not illegal. First of all, these documents do not give

the fiduciary such broad powers. Secondly, every time a lawyer

drafts an irrevocable trust for a client, he is limiting his

client's future decisions regarding the distribution of his or

her estate. However, this is done with the client's permission.

Patterson directs us to the single focus of the Rules of

Professional Conduct: the client's best interests. Patterson

argues that the amendment and revocation provisions are not

inconsistent with the right of a client to discharge his or her

attorney. He states that even assuming he was discharged as

plaintiffs' attorney, his only role at that point was to then

consider whether the trust documents and powers of attorney

should be amended and to give or deny such consent on a good-

faith basis. Thus, the ability of the plaintiffs to discharge

Patterson as their attorney was not limited. Again, we agree.

The revocation provisions executed by the plaintiffs are not

inconsistent with the duty of an attorney to follow his clients'

instructions under Rule 1.2 of the Rules of Professional Conduct.

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Patterson followed the explicit instructions of his clients as

expressed by them in the estate planning documents. There is no

allegation that the plaintiffs did not execute or comprehend the

estate plan documents. Alternatively, if we assume Patterson was

terminated as their attorney, he was not acting as their attorney

when he declined to consent to the revocation of the trust and,

therefore, did not violate his duty to follow his clients' wishes

when he declined to consent.

Moreover, Patterson contends that he sought to meet with the

plaintiffs before agreeing to grant or deny consent, but that

through their new attorney, they refused to meet with him.

Attorney McJoynt represented in his letter to Patterson that the

plaintiffs were competent. However, a statement by a third party

alone is not enough for Patterson, whether or not he was the

plaintiffs' attorney, to fulfill his duties to act in their best

interest before offering his consent. Thus, a meeting with the

plaintiffs, at a minimum, was necessary so that Patterson could

assess competency and any possible undue influence, in order to

make a good-faith determination as to whether the amendment was

in the best interest of the plaintiffs.

Furthermore, there is no evidence or even suggestion that

Patterson personally benefitted from or had any financial

16
interest in the estate plan. Patterson testified that he did not

have any relationship with possible beneficiaries of the trust

and, therefore, unlike a family member, had no reason to favor or

disfavor certain changes based on who, other than the plaintiffs,

may benefit from them.

In conclusion, we do not believe that the trust documents

authored by Patterson violate public policy or the Rules of

Professional Conduct. The duty of a fiduciary is consistent with

the role of attorney and counselor and represents its highest

ideals. Plaintiffs point out that Rule 1.2 requires lawyers to

follow the directions of their clients, so long as the client is

not asking the attorney to do anything unethical or illegal. The

trust documents required Patterson to use the utmost good faith

in either granting or withholding consent to a change in the

documents. If he refused to consent, plaintiffs could seek

authority for a change from a court. In fact, plaintiffs could

have gone directly to a court without ever seeking Patterson's

consent. If Patterson unreasonably withheld his consent to a

change, there is an obvious remedy for that breach of fiduciary

duty. We know of no cases that would hold that the Rules of

Professional Conduct require an attorney to follow self-

destructive directions of an incompetent client. Patterson

17
agreed to act as fiduciary for the plaintiffs and to try to

ensure that as they aged, they did not unwittingly make

detrimental changes to their trust documents. At least at this

stage, there is no reason to believe that he has done anything

but keep that promise. Through their new attorneys, plaintiffs

have refused to even meet with Patterson.

We note that Patterson has put himself in a tough and

expensive position here. If he had agreed to the requested

change without first reasonably ascertaining that the plaintiffs

were competent to make the change and that they were not subject

to undue influence, and had the plaintiffs then been duped out of

their assets, Patterson might very well have been called to

answer as to why he consented to the change without having

ascertained the plaintiffs' competency and the absence of undue

influence. We routinely see cases in the court where people take

advantage of the elderly, take them to see a lawyer of their

choice with the end result being that the elderly person's assets

are stolen by the one asserting undue influence. The sad fact is

that the elderly are particularly susceptible to being taken

advantage of and, clearly, the provision in question was tailored

to try to reduce that risk for the plaintiffs. The documents

provided that if the plaintiffs did not want to seek the consent

18
of Patterson, they could have asked the court to authorize the

change. However, the court did not take any evidence as to

whether the change ought to be granted vis-a-vis the plaintiffs'

welfare. Rather, it simply held that the provision requiring

Patterson's consent was against public policy, a violation of the

Rules of Professional Conduct and therefore void. For the

reasons set forth above, we find that it is not void. This

ruling by the trial court is reversed and the matter is remanded

for further proceedings.

II. Sanctions

Patterson next argues that the Supreme Court Rule 137

sanctions award should be reversed. A ruling on Rule 137

sanctions should not be overturned unless the trial court has

abused its discretion. Dismuke v. Rand Cook Auto Sales, Inc.,

378 Ill. App. 3d 214, 217, 882 N.E.2d 607, 610 (2007).

Supreme Court Rule 137 provides in part:

"The signature of an attorney or party

constitutes a certificate by him that he

has read the pleading, motion or other

paper; that to the best of his knowledge,

information, and belief formed after

reasonable inquiry it is well grounded in

19
 fact and is warranted by existing law or

a good-faith argument for the extension,

modification, or reversal of existing law,

and that it is not interposed for any

improper purpose, such as to harass or to

cause unnecessary delay or needless increase

in the cost of litigation." 155 Ill. 2d

R. 137.

The purpose of this rule is to prevent parties from abusing

the judicial process with actions unsupported by fact or law, not

to punish litigants and their attorneys merely because they were

unsuccessful in the litigation. Dismuke v. Rand Cook Auto Sales,

Inc., 378 Ill. App. 3d at 217. In a determination of whether to

impose sanctions, it is not sufficient that the party honestly

believed his or her case was well grounded in fact or law.

Whitmer v. Munson, 335 Ill. App. 3d 501, 514, 781 N.E.2d 618, 628

(2002). Rather, an objective standard is to be employed in

evaluating what was reasonable under the circumstances. Baker v.

Daniel S. Berger, Ltd., 323 Ill. App. 3d 956, 963, 753 N.E.2d

463, 469 (2001).

In the case at bar, Patterson argues that he declined to

consent to the amendment in good faith, given that he had no

20
information regarding whether the proposed amendments were in the

plaintiffs' best interest. Further, Patterson states that he had

no personal interest or ability to benefit from the estate.

Plaintiffs contend that Patterson's conduct simply did not

comport with the actions of a reasonable and prudent attorney.

At the outset, plaintiffs argue that it is oppressive and

unreasonable to suggest that clients need to verify anything with

their former attorney. To suggest that an attorney needs to

prove he or she "really" represents a client is ludicrous, and if

every attorney took such a position the court system would grind

to a halt. Finally, plaintiffs argue that a reasonable and

prudent attorney would not have opposed a request to consent to

an amendment or fought this in the courtroom. We disagree.

There was nothing unreasonable about Patterson's conduct in

this case. As explained above, we find that the qualified

amendment and revocation clause at issue did not violate public

policy. Further, Patterson attempted to visit with the

plaintiffs in order to determine whether there were any

competence/undue influence issues involved. A reasonable and

prudent fiduciary, whether a lay person or attorney, would not

consent to an amendment to these trust documents without first

determining what was in the plaintiffs' best interest. A letter

21
from an attorney alone is not sufficient evidence for a fiduciary

to make a good-faith decision regarding competency and undue

influence. To so hold would render meaningless any attempts to

protect oneself from the possibility of future harm resulting

from diminished mental faculties.

In plain English, it is undisputed that Patterson consulted

with the plaintiffs regarding several estate planning documents.

After consulting with Patterson, the plaintiffs recognized that

with their advancing age, there was a probability of diminished

mental faculties and therefore susceptibly to undue influence or

unsound decisions. They were apparently happy with the documents

when they were written and on advice of counsel agreed to

provisions which indicated that before they changed the

documents, they had to seek the consent of either: (a) their

fiduciary (Patterson); or (b) a court of competent jurisdiction.

Patterson agreed to act as the fiduciary and, in so doing, he

promised to use the utmost good faith with respect to granting or

withholding such consent. This is clearly implicit in the

documents. We see nothing in Patterson's conduct other than an

attempt by a lawyer, at no small expense to himself, to keep a

promise he made to either his clients or former clients. We in

no way mean or intend to impugn the integrity of plaintiffs' new

22
attorneys. However, that being said, it was not unreasonable for

Patterson to withhold his consent when the only thing he had was

a lawyer's letter stating the plaintiffs want to make this

change. Every attempt Patterson made to consult with the

plaintiffs personally was thwarted. We do not find Patterson's

conduct sanctionable. Rather, we find it admirable and

consistent with the highest ideals of the bar. In light of the

obvious expense to Patterson, we will leave it to other estate

planners whether they wish to use this particular method of

estate planning.

For the reasons set forth above, we find that the trial

court abused its discretion in awarding sanctions against

Patterson. That award of sanctions is reversed.

CONCLUSION

For the foregoing reasons the judgment of the circuit court

of Will County is reversed and this matter is remanded for

further proceedings consistent with this opinion.

Reversed and remanded.

O'BRIEN, P.J., and CARTER, J., concur.

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