specially concurring:
I write this concurring opinion only to state that equity ought not necessarily enter at all times where there is a business relationship nor should it be prohibited from entering the decision-making process in all cases where the parties are connected to nonbusiness entities. Citing First Options of Chicago, Inc. v. Stellings (1991), 215 Ill. App. 3d 1093, 576 N.E.2d 103, the majority rests its determination of this case on the fact that the parties have not entered into a business arrangement and that equity will only enter the fray where there is a deadlock in the operation of the "business.”
While this is convenient to bring this case to conclusion, I am unwilling to concede (1) that the relationship among the Rafacz offspring (and their respective executors) is nonbusiness in character and (2) no matter what the relationship is, there is no "management deadlock” of the nature that requires a court of equity to intervene.
As to the first issue, the parties hold property which is readily salable for development for commercial use. They have participated in the process which provided them with a zoning classification that significantly enhanced the value of the property. A number of years ago they sold some of the property for construction of a shopping center. They also pledged the beneficial interest to obtain funds to pay back real estate taxes. Although their parents established the Heritage Bank trust in 1957, the siblings appear to have established the Bank of Evergreen Park trust in 1977 in a trade of real estate with their mother. First Options concerned a residence occupied by one of the owners without any relationship, business or otherwise, between the two owners.
As to the second issue, I do not consider the difficulty encountered by the parties to be "management deadlock.” Here, one side believes that it is a propitious time to effect a sale of the subject property while the other group is convinced that it is wiser to hold on to the property. If the court intervenes and decides that it is wise to effect a sale at this time, then the court has chosen one side over the other and ignored the express provisions of the trust instrument.
Here the trust instruments provide that all of the beneficiaries must join as to one of the trusts and a majority of the beneficiaries must join as to the other to direct the respective trustees to convey the trust real estate. Having ascertained the settlors’ intent, the court is bound to follow it unless it can be shown that there has been a change in circumstances and that adherence to the instrument’s requirements would defeat the settlors’ intent. Durdle v. Durdle (1992), 223 Ill. App. 3d 964, 585 N.E.2d 1171 (declined to order sale where beneficiary desired sale of property to generate more income).
The settlors of the trusts established the decision-making process and the court should not disturb this arrangement unless faced with a situation where the res of the trust is in jeopardy. (American State Bank v. Kupfer (1983), 114 Ill. App. 3d 760, 449 N.E.2d 1024.) In Kupfer, the settlor required both beneficiaries to approve any sale of the movie theater that was the subject matter of the trust. Only after determining that there was a probability that the property would be lost if the advantageous sale was not accepted did the court intervene to direct the sale of the property. Kupfer, 114 Ill. App. 3d 760, 449 N.E.2d 1024.
Generally, the settlor desired that the res of the trust be protected. Thus, upon a showing that the res is at risk, a court of equity could intervene. To illustrate, if the property was to be lost for the nonpayment of real estate taxes because the parties could not agree to their payment or there could be no agreement on the securing of insurance or if the parties could not agree on a course of action in the face of a threatened downzoning, equitable relief would probably be forthcoming. Moreover, the General Assembly has authorized intervention where an interest in land is subject to a future interest or a power of appointment and there is evidence that the "lands or estate are liable to waste or depreciation in value.” 760 ILCS 5/17.1 (West 1992).
No such showing has been made in this case. Perhaps the stand-patters are right and it is not a good time to sell. There may be other reasons not to sell. For example, if the Internal Revenue Service is to value the interests of the parties for the purpose of calculating the Federal estate tax payable, a lower valuation will obtain if the interests are of a percentage of the property rather than an appraisal of the whole property.
The plaintiff has sought to show the sorry financial condition of one of the plaintiffs. However, both Kupfer and Durdle had similar issues presented and both courts rejected the notion that the financial condition of the beneficiary could require the sale of trust property in contravention of the terms of the trust agreement.
The battle of the Rafacz siblings and their heirs is just beginning! This is only the second appellate court decision for this family. The battle will continue even though only one of the original combatants remains alive. But now an observation that will probably sadden the participants and their counsel. It all comes to an end by 1998. The Heritage Bank trust terminates on October 3, 1997, and the Bank of Evergreen Park trust terminates on October 3, 1998. Both trust instruments provide:
"If any property remains in this trust twenty years from this date it shall be sold at public sale by the trustee on reasonable notice, and the proceeds of the sale shall be divided among those who are entitled thereto under this trust agreement.”
It should be comforting to the parties to know that if they are unable to come to some sort of agreement, the respective banks will sell their property.