No.  2--03--0361

	IN THE

	APPELLATE COURT OF ILLINOIS

	SECOND DISTRICT

BANK ONE, N.A., as Trustee of the Anton G.    	)	Appeal from the Circuit Court

Borse Amended and Restated Declaration of	)	of Du Page County.

Trust,	)

	)	

	Plaintiff and 	)

	Counterdefendant-Appellee,	)

	)

v.	)	Nos. 97--CH--1048

	)	        99--L--1288

GARY BORSE, GAIL ROACH, MARY	)

BORSE, MARK BORSE, LAURIE BORSE, 		)

NANCY BETH, and BETTE BORSE,	)

	)

	Defendants,	)	Honorable

	)	Robert E. Byrne and

(Susan Clontz, Defendant and	)	Edward R. Duncan, Jr.,

Counterplaintiff-Appellant).                                	)	Judges, Presiding.

	JUSTICE HUTCHINSON delivered the opinion of the court:

	Following a bench trial, the trial court entered judgment in favor of plaintiff, Bank One, N.A.

(Bank One), on defendant Susan Clontz's counterclaim alleging breach of fiduciary duty.  In her

counterclaim, Clontz alleged that Bank One breached its fiduciary duty as the trustee of the Anton

G. Borse Amended and Restated Declaration of Trust (the trust).  Clontz alleged that Bank One

failed to properly manage the assets of the trust and failed to deal fairly with all of the trust's

beneficiaries.  On appeal, Clontz contends that (1) the trial court abused its discretion in refusing to

extend the discovery cutoff date; (2) the trial court erred in striking her written demand for a jury

trial; (3) the trial court's finding that Bank One did not breach its fiduciary duty as trustee was against the manifest weight of the evidence; and (4) the trial court abused its discretion in awarding attorney fees.  We affirm.

I.  Factual and Procedural Background

	On January 7, 1994, Anton G. Borse (decedent) executed the trust, naming Clontz and his

other seven children as beneficiaries.  Upon decedent's death on February 1, 1994, the trust appointed

Bank One as trustee.  The trust called for the establishment of three separate trusts:  (1) the "Borse

Industries Trust," which was to hold 100% of the stock of Borse Industries, Inc., a plastics molding

company founded by decedent; (2) the "Borse Leased Real Estate Trust," which was to hold title to

all of the trust's real property that was leased to Borse Industries; and (3) the "Family Trust," which

was to hold the remainder of decedent's assets.  The trust provisions required that, upon decedent's

death, the trustee pay all resulting estate and inheritance taxes from the "principal of the trust estate." 

The trust further provided that the trustee could not pay the estate and inheritance taxes using the

stock of Borse Industries or "the real estate which is leased to [Borse Industries]."

	On November 28, 1994, Bank One filed a federal estate tax return on behalf of decedent's

estate.  The return reported a gross estate of $16,083,920.  The two largest assets of the estate were

Borse Industries, valued at $4,100,000, and the real estate leased to Borse Industries, which was

valued at $4,880,000.  The Family Trust was valued at negative $2,652,506, as the estate's unpaid

tax liabilities exceeded the assets of the Family Trust.  The estate's federal tax liability was

$6,193,728.  The available cash assets were insufficient to pay all of the estate taxes.  Bank One paid

$2,500,000 of the estate tax and obtained an extension for the payment of the remaining balance of

the tax. 

	Pursuant to the directives of the trust, Bank One oversaw the management of Borse Industries

between the date of decedent's death in 1994 and the ultimate sale of the business in 1997.  The trust

directed Bank One to vote the shares of Borse Industries to elect the same six-member board of

directors that was in place at the time of decedent's death.  These directors included two of decedent's

sons, Gary Borse and Mark Borse, and decedent's son-in-law, Brian Beth.  The other directors were

Robert Tylutki, Joseph Nuzzo, and the company's general counsel, Edmund P. Boland.  Boland was

decedent's personal attorney and he also drafted the trust.  Bank One retained Boland as counsel for

the trustee.  Bank One voted the shares of the company to retain each of the six directors.  The trust

further provided that Bank One could choose a seventh director at its discretion.  Bank One did not

exercise this power of appointment until 1996, when it appointed William Welnhofer to serve as the

seventh director.

	During Bank One's oversight of Borse Industries, sales increased at an annual rate of 7.4%. 

During this same time, however, net operating income declined from $1.4 million in 1993 to $456,000

in 1995.  In 1996, Bank One retained the consulting firm of Starshak & Associates (Starshak) to

determine the reason for the decrease in the company's profitability.  Starshak produced a written

report and made several recommendations for improving the management of the company.  Bank One

acted on some, but not all, of the recommendations.  Following Bank One's assumption of the

trusteeship in 1994, Borse Industries applied for a commercial loan from Bank One's loan department. 

After performing its own inquiry into the company's finances, Bank One's loan department declined

to extend Borse Industries a loan.

	In 1997, with the unanimous approval of the directors, Bank One sold Borse Industries to

Madison Capital Partners for $7.8 million.  At the time of the sale, each of the six original directors received "golden parachutes."  Gary Borse, Mark Borse, and Brian Beth each received $300,000, and

Edmund Boland, Joseph Nuzzo, and Robert Tylutki each received $50,000.  The golden parachutes

were paid pursuant to a resolution of the board of directors ratified by decedent prior to his death. 

Receipt of each director's payment was contingent upon the individual director remaining with Borse

Industries until such time as the company was sold by Bank One.

	The net cash proceeds from the sale of Borse Industries, after all closing adjustments, was

approximately $4,500,000.  As the trust's provisions prohibited the payment of the estate taxes from

the sale of Borse Industries stock, Bank One sought consent from the trust beneficiaries to use the

proceeds from the sale to pay the unpaid taxes.  Clontz refused to consent and also objected to the

trustee's accountings.

	On October 8, 1997, Bank One filed a chancery action seeking a construction of the trust's

provisions regarding payment of the estate taxes and approval of Bank One's accountings.  On

December 10, 1998, the trial court entered an order allowing Bank One to pay the outstanding federal

estate taxes from the proceeds of the sale of Borse Industries.  The trial court also permitted Bank

One to pay the $1,105,701.01 in interest charges that had accumulated on the outstanding taxes.  In

permitting these payments, the trial court reserved for later determination the issue of the proper

allocation of these payments among the three separate trusts.

	Clontz subsequently filed a complaint against Bank One in the law division, alleging breach

of fiduciary duty.  As amended, the complaint alleged that Bank One breached its fiduciary obligations

to the beneficiaries in that Bank One (1) failed to exercise reasonable business judgment in the

operation and sale of Borse Industries; (2) failed to fully inform itself of the business dealings,

management, and financial status of Borse Industries; (3) failed to timely appoint a seventh director, as required under the trust;  (4) failed to take timely corrective action once it discovered that Borse

Industries had been mismanaged; (5) failed to remove the board of directors and permitted the

payment of the golden parachutes; (6) failed to remove Boland as attorney for the trust despite his

status as a director of Borse Industries and a recipient of a golden parachute; (7) violated the

"prudent investor rule" (760 ILCS 5/5 (West 1998)) by failing to sell Borse Industries immediately

following decedent's death; (8) failed to distribute the income and profits of Borse Industries to the

trust beneficiaries; (9) failed to file an action to construe the trust's provisions governing the payment

of estate taxes immediately following decedent's death; (10) filed the estate tax return, knowing that

its reported valuation of Borse Industries was substantially undervalued; and (11) failed to amend the

federal estate tax return to reduce the amount of the gross estate by the golden parachutes that had

yet to be paid to the directors.  Clontz requested the trial court to order Bank One to pay her

damages as compensation for the diminution of her share of the trust assets resulting from Bank One's

breach of fiduciary duty.  She also requested the trial court to order Bank One to return its trustee

and attorney fees.  Clontz's complaint was accompanied by a written jury demand.

	At the onset of Clontz's case, the trial court entered a scheduling order setting April 30, 1999,

as the deadline for the completion of all fact discovery.  On Clontz's motion, the trial court extended

this deadline to June 18, 1999.  On July 21, 1999, Clontz moved again for an extension of the

discovery deadline.  In her motion, Clontz argued that she had been unable to take any depositions

due to Bank One's delay in responding to her production requests.  Clontz further explained that she

recently had to retain new counsel after her prior counsel withdrew as a result of a conflict.  The trial

court denied the motion,  explaining, "There has got to be a day, Rule 219.  Otherwise any discovery order I enter would have no significance at all."  The trial court also denied Clontz's two other

requests to reopen discovery.

	Bank One subsequently moved to strike Clontz's jury demand.  Bank One argued that Clontz's

claim alleging breach of fiduciary duty was an equitable action despite her request for money

damages.  Bank One argued that the Illinois Constitution does not provide the right to a jury trial in

equitable proceedings.  On October 4, 2001, following a hearing, the trial court granted Bank One's

motion to strike Clontz's jury demand.

	On January 10, 2002, on Clontz's motion, the trial court entered an order consolidating her

complaint with Bank One's pending action in the chancery division.  The trial court's order provided

that Clontz's complaint would be deemed a counterclaim to Bank One's chancery action. 	          

	Trial commenced on May 6, 2002.  On the first day of trial, Clontz stipulated to the

correctness of Bank One's accountings and withdrew her objection to using the proceeds from the

sale of Borse Industries to pay the estate taxes.  As a result of the resolution of these issues, the only

matter left for trial was Clontz's counterclaim.  The trial lasted two weeks and encompassed the

testimony of 21 witnesses.  Due to the large amount of testimonial evidence, we will incorporate the

relevant evidence within our analysis of each of the contentions raised on appeal.

	Following the trial, the trial court found that Bank One had not breached its fiduciary duty

and entered judgment in favor of Bank One on the counterclaim.  Specifically, the trial court found

that Bank One had exercised appropriate judgment in its decision not to pay the remaining balance

of the estate taxes until after the sale of Borse Industries in 1997.  The trial court found that Bank

One had exercised appropriate business judgment in its oversight and management of Borse Industries

between 1994 and 1997.  The trial court further found that Bank One had not breached its fiduciary duty in its administration of the trust or breach its duty to treat the beneficiaries fairly.  The trial court

also found that Bank One did not breach its fiduciary duty through its decision to retain Edmund

Boland as the trustee's attorney.  Finally, the trial court denied Clontz's request for attorney fees and

her request that Bank One be required to reimburse the trust for the attorney fees it incurred in the

litigation.  Clontz filed this timely appeal.

II.  Analysis

	On appeal, Clontz raises four primary contentions.  First, Clontz contends that the trial court

abused its discretion in refusing to extend the discovery cutoff date.  Second, Clontz contends that

the trial court erred in striking her jury demand.  Third, Clontz contends that the trial court's judgment

in Bank One's favor on her counterclaim was against the manifest weight of the evidence.  Finally,

Clontz contends that the trial court abused its discretion in permitting trust assets to be used to pay

Bank One's attorney fees and in denying her request that the trust pay her attorney fees.  Only the jury

demand issue is addressed in the published portion of this opinion (in section B); our discussion of

the remaining issues is designated as nonpublishable pursuant to Supreme Court Rule 23 (166 Ill. 2d

R. 23).

	[Nonpublishable material pursuant to Supreme Court Rule 23 removed here.]

	B.  Right to a Jury Trial

	Clontz's next contention on appeal is that the trial court erred in striking her demand for a jury

trial on her counterclaim.  Clontz argues that her counterclaim was initially filed in the law division

of the circuit court and sought money damages from Bank One.  Clontz thus argues that her

complaint sought a legal remedy and that she was entitled to a jury trial pursuant to article I, section

13, of the Illinois Constitution (Ill. Const. 1970, art. I, §13).  Bank One responds that a complaint alleging breach of fiduciary duty is an equitable action for which no constitutional right to a jury trial exists.

	Section 13 of article I of the Illinois Constitution provides: "The right of trial by jury as

heretofore enjoyed shall remain inviolate."  Ill. Const. 1970, art. I, §13.  Our supreme court has

construed this provision as guaranteeing the right of trial by jury as it existed at common law.  Martin v. Heinhold Commodities, Inc., 163 Ill. 2d 33, 72 (1994).  The Illinois Constitution thus provides a right to a jury trial only in those cases where such right existed at common law at the time the

constitution was originally adopted.  Martin, 163 Ill. 2d at 72-73.  Contrary to Clontz's assertions, the right to a jury trial does not depend on whether money damages are sought.  Martin, 163 Ill. 2d at 74-75.  Instead, the right to a jury trial requires an examination of English common law.  Martin, 163 Ill. 2d at 72.  A litigant's right to a jury trial is a legal determination that we review de novo.  Martin, 163 Ill. 2d at 74-77.

	At common law, equitable claims were creations of the courts of chancery and were tried

without the right to a jury.  Martin, 163 Ill. 2d at 78.  As our supreme court has previously noted, at common law, actions brought against a trustee by beneficiaries seeking damages resulting from the

trustee's breach of trust could be heard only in a court of equity.  Hopkins v. Granger, 52 Ill. 504, 510 (1869) ("It is one of the oldest heads of chancery jurisdiction, to execute and control trusts and trust

funds"); see also Maguire v. City of Macomb, 293 Ill. 441, 453 (1920).  Article 197 of the Restatement (Second) of Trusts acknowledges this historical classification for such an action, stating

that "the remedies of the beneficiary against the trustee are exclusively equitable."  Restatement

(Second) of Trusts §197 (1959).  Legal scholars have similarly noted that courts of equity have

original and complete jurisdiction over trusts and are the sole forum to enforce the rights of a beneficiary because they arose out of a trust.  See G. Bogert & G. Bogert, Trusts & Trustees §870,

at 136 (rev. 2d ed. 1995).

	In more recent decisions, Illinois courts have similarly recognized that an action seeking

damages for breach of fiduciary duty is an equitable action.  For example, in Kinzer v. City of Chicago, 128 Ill. 2d 437, 445 (1989), our supreme court expressly rejected the Restatement's view that an action for breach of fiduciary duty is a tort (see Restatement (Second) of Torts §874 (1979)). 

Instead, the supreme court regarded a claim for breach of fiduciary duty as controlled by the

substantive laws of agency, contract, and equity.  Kinzer, 128 Ill. 2d at 445.  Relying on Kinzer, reviewing courts have consistently characterized complaints for breach of fiduciary duty as equitable

actions.  See Martin v. Heinold Commodities, Inc., 240 Ill. App. 3d 536, 540 (1992), aff'd in part,  163 Ill. 2d 33 (1994); Capitol Indemnity Corp. v. Stewart Smith Intermediaries, Inc., 229 Ill. App. 3d 119, 124 (1992).

	Relying on In re Estate of O'Donnell, 8 Ill. App. 2d 348 (1956), Clontz argues that courts of equity do not have exclusive jurisdiction over all actions for breach of trust against trustees.  In

O'Donnell, the reviewing court held that a beneficiary's action seeking damages for breach of trust against the deceased trustee's estate was a legal action and that the beneficiary was entitled to a jury

trial.  O'Donnell, 8 Ill. App. 2d at 352-53.  In O'Donnell, the trustee's alleged breach was her failure to place the trust corpus in an interest bearing account.  O'Donnell, 8 Ill. App. 2d at 352.

	As exemplified in O'Donnell, modern courts have been more willing to permit beneficiaries to pursue actions at law for certain types of breaches of trust.  See Restatement (Second) of Trusts

§198 (1959) (providing that a beneficiary may maintain an action at law against the trustee if the

trustee has breached its duty to pay money or transfer property immediately and unconditionally to the beneficiary); G. Bogert & G. Bogert, Trusts §157, at 563 (5th ed. 1973).  However, this modern

trend was not the law at the time that the Illinois Constitution was originally adopted; instead, as

detailed above, actions for breach of trust were equitable proceedings to which the right to a jury trial

did not attach.  See Hopkins, 52 Ill. at 510.  We note that the reviewing court in O'Donnell did not review English common law in reaching its decision and instead limited its inquiry to the relief

requested in the beneficiary's complaint.  O'Donnell, 8 Ill. App. 2d at 352.  Courts must not focus on the nature of the remedy sought by the litigant in determining whether the right to a jury trial attaches. 

See Martin, 163 Ill. 2d at 74-75.  Because the reviewing court in O'Donnell did not limit its inquiry to the status of the law at the time the Illinois Constitution was adopted, we decline to follow that

court's resolution of this issue.  Instead, we conclude that Clontz did not have a constitutional right

to a jury trial on her counterclaim alleging breach of fiduciary duty.  Therefore, we affirm the trial

court's order striking her jury demand.

	[NThe following material is designated nonpublishable material pursuant pursuant to Supreme Court Rule 23 removed here.]

C.  Breach of Fiduciary Duty

	Clontz's next contention on appeal is that the trial court's judgment in Bank One's favor on

her counterclaim for breach of fiduciary duty was against the manifest weight of the evidence. 

Initially, Clontz argues that, in determining that Bank One did not breach its fiduciary duty as trustee,

the trial court misconstrued the terms of the trust and improperly applied the "business judgment rule"

in assessing Bank One's performance as trustee.  Additionally, Clontz argues that the evidence

presented at trial established that Bank One breached its fiduciary duty as trustee in the following

ways: (1) Bank One allowed Borse Industries to operate in a "general management vacuum"; (2) Bank One failed to follow all of Starshak's recommendations regarding the management of Borse

Industries; (3) Bank One failed to timely appoint a seventh director for Borse Industries; (4) Bank

One permitted the directors of Borse Industries to waste the company's assets; (5) Bank One delayed

the sale of Borse Industries despite its knowledge of management problems at the company; (6) Bank

One retained Boland as its counsel despite his position as a director of Borse Industries and a

recipient of a $50,000 golden parachute; (7) Bank One failed to administer the trust according to its

terms; (8) Bank One failed to consider the golden parachutes in its valuation of Borse Industries for

estate tax purposes; and (9) Bank One failed to provide the beneficiaries complete and accurate

information concerning the performance of Borse Industries.

	When reviewing the findings of a trial court in a bench trial, a reviewing court should not

disturb a trial court's findings unless they are against the manifest weight of the evidence.  Spec-Cast, Inc. v. First National Bank & Trust Co., 128 Ill. 2d 167, 177 (1989).  The trial court, as the trier of fact, is in a superior position to observe the conduct of witnesses while testifying, to determine their

credibility, and to weigh the evidence and determine the preponderance thereof.  Spec-Cast, 128 Ill. 2d at 177.  We may not overturn a judgment merely because we might disagree with it or might, had

we been the trier of fact, have reached a different conclusion.  Spec-Cast, 128 Ill. 2d at 177.  However, to the extent that the trial court interpreted the provisions of the trust or made other legal

determinations in making its findings, we will review those judgments de novo.  Northern Illinois Medical Center v. Home State Bank of Crystal Lake, 136 Ill. App. 3d 129, 142 (1985).

1.  Legal Determinations

	We initially review several of the trial court's legal determinations.  Clontz first argues that

the trial court misconstrued the trust's provisions establishing the priority of the payment of federal estate taxes.  Clontz argues that the trust required that payment of the estate taxes took priority over

all of the other aspects of trust administration.  Clontz relies on article 2 of the trust in support of her

assertion, which provides:

	"Upon my death the trustee shall pay from the principal of the trust estate all expenses

of my last illness and funeral, costs of administration including ancillary, costs of safeguarding

and delivering legacies, claims allowed against my estate, and estate and inheritance taxes

assessed by reason of my death ***.

	Shares of stock of Flo-temp, Inc., d/b/a Borse Industries, Inc., an Illinois corporation,

any interest, including a beneficial interest in any trust, in the real estate which is leased to

[Borse Industries] and assets or funds otherwise excludable in computing federal estate taxes

shall not be used to make the foregoing payments. ***

	The trustee shall make such elections under the tax laws as the trustee deems

advisable, without regard to the relative interests of the beneficiaries.  No adjustment shall be

made between principal and income or in the relative interests of the beneficiaries to

compensate for the effect of elections under the tax laws made by the legal representative of

my estate or by the trustee.

	The succeeding articles of this Declaration shall be subject to the trustee's making or

providing for the foregoing payments."

Relying on the final sentence of this language, Clontz argues that the trust required the trustee to

immediately pay the estate taxes prior to performing any other trust administration.  In essence,

Clontz argues that the trustee was without authority to seek extensions from the Internal Revenue

Service for the payment of estate taxes.  In light of the trust's other provisions precluding payment of the estate taxes from the trust's primary liquid assets, Clontz argues that Bank One was obligated

as a matter of law to immediately file an action in the trial court for construction of the trust's

provisions.  The trial court rejected these arguments.

	A reviewing court's primary concern in construing a trust instrument is to ascertain and carry

out the settlor's intent.  Northern Illinois Medical Center, 136 Ill. App. 3d at 145.  In determining the settlor's intent, the reviewing court must consider the plain and ordinary meaning of the words used,

and the intent must be ascertained by considering the entire document.  Northern Illinois Medical Center, 136 Ill. App. 3d at 145.  As already noted, the construction of a trust document is a question of law subject to de novo review.  Northern Illinois Medical Center, 136 Ill. App. 3d at 145-46.

	After reviewing the language contained in article 2, and considering the language within the

context of the entire document, we agree with the trial court that the trust did not require the trustee

to immediately pay the estate taxes but that it granted the trustee the option of seeking an extension

of time from the Internal Revenue Service.  Although article 2 provides that the remaining articles

of the trust are subject to the trustee's payment of the estate taxes and other payments, it further

provides that "the trustee shall make such elections under the tax laws as the trustee deems advisable,

without regard to the relative interests of the beneficiaries."  Clontz does not dispute that one of the

elections available under the tax laws is an election to defer the payment of taxes.  Although deferral

of tax payment resulted in the Internal Revenue Service assessing interest penalties, the trust

document plainly permits the trustee to make any election without regard to the resulting financial

impact upon the beneficiaries.

	Additionally, a consideration of the other trust provisions indicates the decedent's expectation

that Borse Industries would continue to do business under the oversight of the trustee after his death.  Article 2 forbids the sale of shares of Borse Industries or trust real estate to pay estate taxes.  Section

7 of article 5 requests the trustee to retain the same directors of Borse Industries upon decedent's

death.  Section 8 of article 5 forbids the sale of Borse Industries absent the written approval of a

majority of the directors.  Excluding the value of Borse Industries and the trust real estate, the trust

lacked sufficient assets to pay the entire amount of the estate taxes.  Lacking sufficient assets, the

trustee had little alternative but to seek an extension of time to raise sufficient cash to pay the balance

of the taxes.  Decedent's attorney, Edmund Boland, testified that decedent understood that the way

the trust was crafted may require a delay in the payment of estate taxes.  Boland also testified that

decedent expressed his intention that Borse Industries would continue operations under the trust's

ownership for 3 or 4 years after his death.  The plain language of the trust's provisions reflect this

understanding and intent.  We therefore agree with the trial court that decedent intended in article 2

to grant the authority to defer payment of the estate taxes.  Because we reject Clontz's argument that

Bank One had a legal obligation to immediately pay the estate taxes, we also reject Clontz's

conclusion that Bank One breached its fiduciary duty, as a matter of law, by waiting to pay the estate

taxes until four years after the decedent's death.

	We also conclude that the trial court correctly determined that Bank One did not breach its

fiduciary duty as a matter of law by failing to immediately file a suit seeking construction of the trust

following the death of decedent.  As detailed above, Bank One did file such a suit upon the sale of

Borse Industries.  Before the sale of the company, the trust lacked any liquid assets to pay such taxes. 

Clontz has failed to offer any compelling explanation in either her appellate brief or during oral

argument as to how the trust or the beneficiaries were damaged as a result of Bank One's decision

to wait to file the construction action until after the sale of Borse Industries.  Although Clontz has cited to authority noting a trustee's duty to file a construction suit when the trust agreement is

insufficiently definite to permit proper administration, such authority is silent as to when such

proceedings must be commenced.  See Steburg v. Swanson, 198 Ill. App. 3d 636, 638-39 (1990).  We thus conclude that the timing of such a suit is a matter for the trustee and that the question of

whether the trustee breached its fiduciary duty by failing to timely file such an action is a

determination for the trial court.  Here, the trial court found that Bank One did not breach its

fiduciary duty in waiting to bring the instant action until after the sale of the business.  As we will

discuss in greater detail below, we conclude that the trial court's determination that Bank One did not

breach its fiduciary duties in its administration of the trust and its management of the business was

supported by the manifest weight of the evidence.

	Clontz next argues that the trial court adopted an incorrect legal standard to determine

whether Bank One breached its fiduciary duties in regard to its management and oversight of Borse

Industries.  Clontz argues that the trial court improperly applied the "business judgment rule," rather

than the "prudent investor rule," as the appropriate legal standard to judge Bank One's actions. 

Clontz also argues that the trial court erred in declining her request to strike the testimony of Bank

One's retained expert, Bernard Wall, predicated upon the business judgment rule.

	The business judgment rule provides that directors must exercise the same degree of care in

the management of corporate affairs as would prudent individuals prompted by self-interest in the

management of their own affairs.  Stamp v. Touche Ross & Co., 263 Ill. App. 3d 1010, 1015 (1993).  Under this rule, directors who have been diligent and careful in performing their duties are shielded

from liability for honest errors or mistakes in judgment. Stamp, 263 Ill. App. 3d at 1015.  The rule creates a rebuttable presumption that corporate officers and directors make business judgments on an informed basis, in good faith, and with the honest belief that the course taken is in the best interests

of the corporation.  Ferris Elevator Co. v. Neffco, Inc., 285 Ill. App. 3d 350, 354 (1996).  The "prudent investor rule," as expressed in section 5 of the Trust and Trustees Act (760 ILCS 5/5 (West

2000)), imposes a duty upon all trustees to invest and manage trust assets as a prudent investor would

considering the purposes, terms, distribution requirements, and other circumstances of the trust.  This

standard requires the trustee to exercise reasonable care, skill, and caution and "is to be applied to

investments not in isolation, but in the context of the trust portfolio as a whole and as a part of an

overall investment strategy that should incorporate risk and return objectives reasonably suitable to

the trust."  760 ILCS 5/5 (West 2000).  The trustee has a duty of protecting and preserving trust

property from loss and injury and is liable for loss resulting from his or her failure to exercise

reasonable care, prudence, and diligence.  In re Hartzell's Will, 43 Ill. App. 2d 118, 134-35 (1963).

	Section 5 of the Trust and Trustees Act holds all trustees managing trust assets to the prudent

investor rule.  However, section 5 further provides that "the provisions of this Section may be

expanded, restricted, eliminated, or otherwise altered by express provisions of the trust instrument." 

760 ILCS 5/5(b) (West 2000).  Section 6(a) of article 5 of the trust granted Bank One the right to

hold the stock of Borse Industries and to participate and oversee management of the company.  After

elaborating Bank One's powers to participate in the management of Borse Industries, section 6(a)

concludes by stating that, "in the exercise of any power granted in this subparagraph, [Bank One will]

be held to such standards as are common in the general business community."  Relying on this trust

language, both Bank One's retained expert, Bernard Wall, and Clontz's retained expert, David Strom,

testified that decedent intended to hold Bank One to the business judgment rule in regard to its

oversight and participation in the management of Borse Industries.

	After reviewing the language of the trust document, and considering the testimony of the

retained experts, we agree with the trial court that decedent intended to hold Bank One to the

business judgment rule rather than the prudent investor rule in performing its duties in regard to the

management of Borse Industries.  As already noted, decedent had the authority under section 5 of

the Trust and Trustees Act to alter the standard of care to be applied to the trustee.  We therefore

reject Clontz's argument that the trial court applied the incorrect legal standard in assessing Bank

One's management of Borse Industries, and we decline to disturb the trial court's ruling denying

Clontz's request to strike Wall's opinion testimony predicated upon the business judgment rule.

2.  Factual Determinations

	Having disposed of these initial legal questions, we turn to a consideration of whether the trial

court's judgment in favor of Bank One on Clontz's breach of fiduciary duty claim was against the

manifest weight of the evidence.  To recover on an action for breach of fiduciary duty against the

trustee of a trust, Clontz was required to establish the existence of a fiduciary relationship between

the parties, that the trustee owed certain, specific duties to Clontz, that the trustee breached those

duties, and that there were resulting damages.  See Chicago City Bank & Trust Co. v. Lesman, 186 Ill. App. 3d 697, 701 (1989).  Here, the parties do not dispute the existence of a fiduciary relationship

between Bank One and the trust beneficiaries.  Instead, the parties focus upon the trial court's finding

that Bank One did not breach its fiduciary obligations.

	Our supreme court has stated that an action for breach of fiduciary duty "is sufficiently

comprehensive to include every violation by a trustee of a duty which equity lays upon him, whether

willful and fraudulent, or done through negligence, or arising through mere oversight."  Stuart v. Continental Illinois Bank & Trust Co., 68 Ill. 2d 502, 523 (1977), quoting Chicago Title & Trust Co. v. Chief Wash Co., 368 Ill. 146, 155 (1938).  As trustee, Bank One had a duty to carry out the trust according to its terms, using care and diligence in protecting and investing the trust property, and to

exercise good faith.  See Stuart, 68 Ill. 2d at 523.

	As detailed above, we will apply the business judgment rule in assessing Bank One's actions

in managing and selling Borse Industries.  To assess whether Bank One has breached its other

fiduciary duties in administrating the trust, we will apply the standards imposed by the common law. 

At common law, trustees are obligated to employ the same level of diligence and prudence as

reasonable persons would employ in carrying out their own similar affairs.  McCormick v. McCormick, 180 Ill. App. 3d 184, 197 (1989).  In determining whether a trustee has acted prudently, courts look at the facts as they existed at the time the action was taken, unaided by subsequent

events.  McCormick, 180 Ill. App. 3d at 184.  Ordinarily, trustees who act honestly, prudently, and in good faith are not liable for errors of judgment.  McCormick, 180 Ill. App. 3d at 197.  Provided the trustee acts within the powers delegated by the trust, the trustee's liability is limited to loss

occasioned only through fraud or negligence.  McCormick, 180 Ill. App. 3d at 197.

a.  Bank One's Oversight and Management of Borse Industries

	The majority of Clontz's allegations of breach of fiduciary duty relate to Bank One's oversight

and management of Borse Industries.  As noted above, Clontz contends that the evidence established

that Bank One breached its fiduciary duty in permitting Borse Industries to operate in a general

"management vacuum"; in failing to fully inform itself of the business dealings, management, and

financial status of Borse Industries; in failing to enact all of Starshak's recommendations regarding

the management of Borse Industries; in failing to timely appoint a seventh director; and in permitting

the directors of Borse Industries to waste the company's assets.  As already noted, in assessing Bank One's oversight and management of Borse Industries, we will apply the business judgment rule.  See Stamp, 263 Ill. App. 3d at 1015.

	After reviewing the evidence presented at trial, we conclude that the trial court's determination

that Bank One did not breach its fiduciary duties in its oversight and management of Borse Industries

was supported by the manifest weight of the evidence.  We reject Clontz's assertions that Bank One

permitted Borse Industries to operate in a "management vacuum."  Clontz's own expert, Thomas

Jordan, testified that, at the time of decedent's death in 1994, Borse Industries had a stable and

proven management team in place.  In the two years preceding 1994, Borse Industries enjoyed

tremendous success and earned record profits.  Section 7 of article 5 of the trust directed Bank One

to retain the same directors that were in place at the time of decedent's death, including decedent's

two sons and son-in-law.  Additionally, the evidence demonstrated that Borse Industries had

developed a strong customer base, including General Motors, Navistar, and Rubbermaid.  Bank One

could have reasonably concluded that a change in management might have jeopardized its relationship

with its established customers.  The record also does not support Clontz's assertions that Bank One

turned a "blind eye" to the company's management.  We note that Bank One trust officer Robert

Cellini regularly attended the meetings of the board of directors to keep abreast of the company's

management and regularly received the company's financial reports.  When viewed as a whole, the

evidence supported the trial court's determination that Bank One exercised proper business judgment

in retaining the management of Borse Industries as it existed at the time of decedent's death. 

	The evidence also supported the trial court's conclusion that Bank One took affirmative steps

to address the company's performance following decedent's death.  As Clontz notes, beginning in

1994, Borse Industries's profit margins began to decline.  The evidence presented at trial indicated that, although the number of sales continued to grow during this time, production costs increased

dramatically.  Bank One's expert witness, Jeffrey Gordan, testified that one of the reasons for the

increased production costs was that the company lost a large percentage of its employees after a raid

in late 1994 by the United States Immigration and Naturalization Service.  The trial court found that

this event could not have been foreseen by Bank One and that the company's reduced profits were

not the result of Bank One's management or oversight of the business.  We believe such findings were

supported by the evidence.

	The evidence at trial further indicated that, in 1995, upon learning of the company's decreased

profits in the preceding year, Bank One interviewed various management consulting firms and

eventually hired Starshak to conduct an in-depth review of the company's financial and business

condition.  Starshak's investigation was conducted by William Welnhofer, who testified that he was

given complete autonomy from Bank One to perform a thorough and unbiased investigation. 

Welnhofer summarized his findings and recommendations in a written document that the parties have

referred to as the "Starshak Report."  As noted by Clontz in her appellate brief, Welnhofer explained

that the most serious problem with the management of the company was that it had operated without

a president or general manager since decedent's death.  Welnhofer stated that the lack of central

managing authority caused the "lines of authority to become blurred" and encouraged "turf wars." 

Welnhofer also criticized the directors' decision to hire a new controller for the company who, in his

experience, lacked sufficient expertise to perform the job.

	In addition to its criticisms, however, the Starshak report approved of certain aspects of the

company's operation.  Welnhofer endorsed the retention of decedent's sons Gary and Mark Borse,

and his son-in-law Brian Beth.  Welnhofer also concluded that the company's business remained fundamentally sound.  Welnhofer testified that company revenues were consistent and that the

company had retained its market share.  At trial, Welnhofer testified that Borse Industries acted upon

many of the recommendations that he suggested in the Starshak Report and that he was not critical

of their response to his report.  Welnhofer was subsequently appointed by Bank One to act as a

seventh director of the company.  Based upon such evidence, the trial court could have reasonably

concluded that Bank One took sufficient action to attempt to address and remedy the company's

decline in performance.  Indeed, we note that during the entire period of Bank One's oversight, Borse

Industries continued to earn profits, albeit on a much smaller scale.

	We also believe that the evidence supported the trial court's conclusion that Bank One

exercised reasonable business judgment in not appointing a seventh director to the company until

1996.  As noted by the trial court, section 7 of article 5 of the trust granted Bank One the power to

appoint a seventh director "in its discretion."  Based upon such language, the trust clearly did not

require Bank One to immediately exercise its appointment power.  Although Welnhofer criticized the

lack of central management in the Starshak report, he testified at trial that the appointment of a

seventh director in 1994 would not have significantly changed the operation or direction of the

company.  Additionally, the record contains no proof of damages resulting directly from Bank One's

failure to immediately appoint a seventh director.  While Clontz argued below that the company's net

value decreased as a result of Bank One's oversight, she failed to provide direct evidence that the

company's diminished performance was the result of mismanagement as opposed to other outside

factors, such as the raid by the immigration authorities.

	Clontz's final criticism of Bank One's oversight of Borse Industries is that Bank One permitted

the company's directors to waste the company's assets.  Specifically, Clontz complains of the payment of $1,050,000 in golden parachutes to the board of directors and $276,512 in bonuses, pay raises,

and benefit awards.  Clontz's appellate brief fails to provide any specific argument relating to the

alleged improper payment of  $276,512 in bonuses, and we therefore decline to consider that issue. 

See Official Reports Advance Sheet No. 21 (October 17, 2001), R. 341(e)(7), effective October 1,

2001 (providing that points not argued are waived).  As to the payment of the golden parachutes, the

trial testimony reflected that the golden parachute payments were explicitly authorized by decedent

during a meeting of the board of directors prior to decedent's death.  Decedent intended the golden

parachutes to provide an incentive for the directors of Borse Industries to remain with the company

following decedent's death.  Bank One trust officer Cellini testified that Bank One hired the law firm

of Schiff, Hardin & Waite as outside independent counsel to secure a legal determination of whether

the golden parachutes were a legitimate obligation of the company.  After performing its own

investigation, Schiff, Hardin & Waite advised Bank One that the golden parachutes were legitimate

obligations of the company and recommended Bank One to honor them.  Based upon such evidence,

the trial court could have reasonably concluded that Bank One exercised reasonable business

judgment when it relied on outside counsel's advice and permitted the golden parachutes to be paid.

	Additionally, the plain language of the trust supports the trial court's conclusion that Bank

One did not waste company assets by honoring the golden parachutes.  In describing the trustee's

power to oversee the operation of Borse Industries, section 6(a) of article 5 of the trust authorizes

Bank One "to make any decision or exercise any discretion which the trustee believes to be in the

Company's best interest, and in any case where the trustee determines that there may be a possible

conflict between the interests of the trust beneficiaries and the corporate interests of the business and

its stockholders or other owners, the interest of the trust beneficiaries shall be considered subordinate."  This provision clearly directed Bank One to consider the corporate interests over the

interests of the trust beneficiaries.  Noting that decedent himself directed and authorized payment of

the golden parachutes, and in light of independent legal counsel's advice that the company was legally

obligated to honor the payments, we agree with the trial court that Bank One acted reasonably in

honoring the golden parachutes even though it reduced the trust's assets for the remaining trust

beneficiaries.

	Clontz also asserts that the board minutes from the meeting during which decedent approved

the golden parachutes were "highly irregular."  These minutes were taken by Edmund Boland.  Clontz

explains that, although Boland was listed as one of the recipients of a $50,000 golden parachute in

the minutes, a secretary's written notes from the meeting do not explicitly state that Boland was to

receive a $50,000 parachute.  Additionally, Cellini testified at trial that decedent did not mention

during the board meeting that Boland would receive a golden parachute.  Despite these alleged

"irregularities," however, Bank One introduced into evidence the original minutes of the board

meeting.  These minutes were signed and expressly ratified by decedent.  See Williams v. Magnafici, 77 Ill. App. 3d 1035, 1038 (1979) (holding that ratification by sole shareholder cures any allegation

that action taken by directors was unauthorized).  Lacking any direct evidence that the minutes from

the board meeting were incorrect or that the ratification was illegitimate, we conclude that the trial

court's finding that the golden parachutes were legal obligations of the company was supported by

the evidence.  Additionally, for all of the reasons stated, we hold that the trial court's determination

that Bank One did not breach its fiduciary duty in its oversight and management of Borse Industries

was supported by the manifest weight of the evidence.

b.  Bank One's Handling of the Sale of Borse Industries

	We next turn to a consideration of whether Bank One breached its fiduciary duty in the

manner in which it conducted the sale of Borse Industries.  Clontz argues that Bank One breached

its fiduciary duty in waiting to sell the company until 1997 and incurring in excess of $1 million in

interest charges on the unpaid balance of the estate taxes.  Clontz argues that the company was more

valuable in 1994 prior to its decline in profitability and could have been sold for a much higher price

then.  Since this question relates to Bank One's oversight and management of the business, we will

again apply the business judgment rule as required by section 6(a) of article 5 of the trust.  See Stamp, 263 Ill. App. 3d at 1015.

	After reviewing the record, we conclude that the evidence supported the trial court's finding

that Bank One's decision to wait until 1997 to sell the business was appropriate under the business

judgment rule.  Welnhofer testified that the business climate in the early 1990s was unfavorable for

selling a business.  Welnhofer explained that an economic recession and new banking regulations had

significantly slowed merger and acquisition activity.  Bank One trust officer Cellini testified that,

against this backdrop, he determined that the trust might be benefitted by waiting to sell the business

until economic conditions improved.  Cellini also feared that an immediate sale following decedent's

death could be perceived as a "fire sale" and could jeopardize the company's relationship with its

established customers and reduce the company's overall value.  Cellini testified that the company had

been operating successfully since 1989 and he saw no reason why this could not continue given the

company's solid customer base and a proven management team.

	Following decedent's death, Cellini obtained an appraisal of the company for the purpose of

completing the estate's tax return.  The appraisal valued the company at $4.1 million.  Cellini believed

that this valuation was low and the company could be sold for a greater sum.  Cellini determined that the trust could benefit by the low appraisal because the total estate tax would be correspondingly

reduced.  Cellini also believed that the trust could benefit if the company was sold for a greater sum

after the expiration of the Internal Revenue Service auditing period.  Cellini thus concluded that the

wisest course was to delay payment of the taxes even though the trust would incur interest charges. 

As confirmed by Boland's testimony, such a strategy was consistent with decedent's wishes.

	The evidence presented at trial demonstrated that Bank One's strategy was successful.    In

1997, Bank One sold Borse Industries to Madison Capital Partners for $7.8 million.  Welnhofer

testified that this was "a very good deal" and reflected the gross enterprise value of the company. 

Additionally, as part of the sale, the trust did not have to sell the real property on which the company

operated.  Instead, Madison Capital Partners agreed to lease the real property from the trust.  This

arrangement provided additional income to the trust and the beneficiaries.

	Clontz argues that Bank One should not have waited to sell the company in light of evidence

of decreased profitability in the years following decedent's death.  Clontz notes that Bank One's loan

department refused to loan additional money to the company because of the company's performance. 

Clontz argues that Bank One's trust department should not have retained the company as an

investment when its own loan department determined that the company was not creditworthy. 

Thomas Jordan, Clontz's expert witness, testified that, based on his analysis, the value of Borse

Industries decreased $4.4 million between 1994 and 1997.

	The trial court clearly considered this evidence in making its findings.  The trial court

indicated that it had given little weight to Jordan's testimony because it questioned Jordan's methods

of valuation.  The trial court instead relied on Welnhofer's testimony, which it determined was much

more credible.  Additionally, the trial court found that, even assuming that the company's value had diminished between 1994 and 1997, the factors responsible for causing this loss were primarily out

of Bank One's control.  For example, the trial court noted that Bank One could not have foreseen the

immigration raid that depleted a substantial amount of the company's workforce.  The trial court

concluded that Bank One could not have reasonably foreseen in 1994 that its production costs would

increase dramatically as a result of a sudden and unexpected loss of workforce.  The trial court was

in the best position to weigh the evidence and consider the credibility of the witnesses, and we decline

to disturb its determination.  See Spec-Cast, 128 Ill. 2d at 177.

	Additionally, as noted by the trial court, the provisions of the trust did not give Bank One

unfettered discretion as to when to sell the company.  Section 8 of article 5 of the trust forbade Bank

One from selling the company "without the written approval of a majority of the then duly elected

and acting Directors of the Company."  The trust gave Bank One unilateral authority to sell the

company only in an instance where the directors become deadlocked on the issue.  The evidence was

undisputed that the directors of Borse Industries did not give written approval to sell the company

until 1997.    As already noted, section 6(a) of article 5 of the trust directed Bank One to place the

interests of the business and its stockholders ahead of the interests of the trust beneficiaries.  Pursuant

to this provision, Bank One could have reasonably concluded that waiting to sell the company was

necessary to obtain the highest sale price, even if the delay caused the estate to incur interest charges

that would lessen the amount the beneficiaries would receive.

	Finally, the trial court found that, even if Clontz had proved that Bank One breached its

fiduciary duty in conducting the sale of the company, she could not recover because she did not prove

that trust was damaged as a result of the breach.  The trial court explained that Clontz had failed to

present any evidence that Bank One could have sold the company in 1994.  Indeed, the record contains no evidence that Bank One ever received any prospective offers for the company following

decedent's death that could have established an alternative sale price for the company.  Lacking any

evidence that Bank One could have sold the company in 1994, Clontz cannot establish that the trust

was damaged and is not entitled to any recovery.  See Lesman, 186 Ill. App. 3d at 701.  Rather, we conclude that the trial court's determination that Bank One did not breach its fiduciary duty by waiting

until 1997 to sell the company was supported by the manifest weight of the evidence.

c.  Bank One's Retention of Edmund Boland as Counsel for the Trustee

	Clontz next argues that Bank One breached its fiduciary duty by retaining Boland as counsel

for the trustee.  Clontz argues that Boland had a conflict of interest because of his role as a director

of Borse Industries and a recipient of a $50,000 golden parachute.  Clontz concludes it was improper

for Bank One to retain an attorney whose own personal interests might conflict with those of the trust

beneficiaries.  See In re Estate of Hawley, 183 Ill. App. 3d 107, 109-10 (1989).

	As Clontz correctly notes, a trustee is under a duty to serve the interests of the beneficiaries

with complete loyalty, excluding all self interest, and is prohibited from dealing with the trust property

for its individual benefit.  In re Estate of Halas, 209 Ill. App. 3d 333, 344 (1991).  This rule, however, is not without exception.  A trustee may occupy conflicting positions in handling the trust where the

trust instrument contemplates, creates, or sanctions the conflict of interest.  Halas, 209 Ill. App. 3d at 344.  The settlor of the trust can waive the rule of undivided loyalty by expressly conferring upon

the trustee the power to act in a dual capacity, or the settlor can waive the rule by implication where

he or she knowingly places the trustee in a position which might conflict with the interests of the

beneficiaries.  Halas, 209 Ill. App. 3d at 344-45.  Where a conflict of interest is approved or created by the settlor, the fiduciary will not be held liable for its conduct unless the fiduciary has acted

dishonestly or in bad faith.  Halas, 209 Ill. App. 3d at 345.

	Here, decedent expressly waived the rule of undivided loyalty by expressly conferring upon

Bank One in section 6(a) of article 5 the power to elect its own employees and agents to act as

directors of Borse Industries.  Section 6(a) further granted Bank One as trustee the power to "permit

any directors who are agents or employees of the trustee to act as officers of the Company and, as

directors, to vote for the payment of reasonable compensation to themselves as directors or officers

and concerning all matters relating to the policies or management of the Company."  These provisions

clearly authorized Bank One to permit Boland, as its attorney and agent, to serve on the company's

board of directors and to receive compensation for his services.  The trust documents expressly

consented to and waived any resulting conflict of interest.  See Halas, 209 Ill. App. 3d at 345.

	Additionally, based upon our review of the record, we conclude that the evidence supported

the trial court's decision that Bank One did not act dishonestly or fraudulently in retaining Boland as

counsel for the trustee.  Boland had a life-long relationship with decedent and was intimately involved

in the operation and management of the Borse Industries from the onset of business operations. 

Boland had been general counsel for Borse Industries and had served as a director since 1991. 

Boland was decedent's personal attorney and drafted the trust agreement.  Based upon Boland's

relationship with decedent and his substantial knowledge about the operations of the trust's primary

asset, Borse Industries, Bank One could have reasonably concluded that the retention of Boland to

represent the trust would result in the most efficient administration.  We also note that Bank One's

retained expert witness, trust attorney David Strom, testified that it was not per se impermissible for a lawyer to simultaneously serve as counsel for a trustee and also to serve on the board of directors of an asset owned by the trustee.  Although Strom recognized the potential for a conflict of interest,

he testified that any conflict could be waived by the client.

	In selecting Boland to serve as attorney for the trustee, Bank One may have reasonably

concluded that it was effectuating the decedent's intent to include Boland in the administration of the

trust and the operation of Borse Industries.  Boland had participated in many estate planning

discussions with the decedent and was ultimately responsible for drafting the trust document.  The

trust directs Bank One to elect Boland to the board of directors following the decedent's death. 

Although Clontz argues that Boland's position as attorney for the trust presented an irreconcilable

conflict of interest, we believe that the plain language of the trust document evidences the decedent's

awareness of and express waiver of such potential conflicts.  Indeed, when viewed as a whole, the

trust reflects that the decedent's intent that the beneficiaries' interests were subordinate to the efficient

administration of the trust and the operation of Borse Industries.  Article 2 of the trust directs the

trustee to make any elections under the tax laws without regard to the relative interests of the

beneficiaries; article 5 directs the trustee to place the corporate interests of Borse Industries above

the interests of the beneficiaries; and article 8 provides that the trustee's distribution of principle and

income among the beneficiaries shall not be "subject to question by any beneficiary."

	Moreover, we note that, despite the trust's express waiver of any conflict of interest, Bank

One nonetheless retained the law firm of Schiff, Hardin & Waite to provide independent counsel on

various matters relating to the administration of the trust and the operation of Borse Industries.

Independent counsel advised Bank One that, in light of the language of the trust agreement, payment

of the $50,000 golden parachute to Boland did not present a conflict of interest to the trustee.  We agree with the trial court that Bank One did not breach its fiduciary duty in relying on the advice of

independent legal counsel and retaining Boland as counsel.

	In holding that Bank One did not breach its fiduciary duty in retaining Boland, we expressly

note that we have not considered whether Boland breached any ethical duty by accepting employment

as the trustee's counsel.  Boland is not a party to this proceeding and the question of whether Boland

breached any fiduciary obligations is not before us.  See Golden Rule Insurance Co. v. Schwartz, 203 Ill. 2d 456, 469 (2003) (holding that Illinois courts must not issue advisory opinions to guide future

litigation).  In making its findings, the trial court commented that it viewed Boland's acceptance of

the $50,000 golden parachute as an individual conflict in his role as attorney.  We do not comment

on that finding here.

d.  Bank One's Failure to Pay Trust Income to the Beneficiaries

	Clontz next argues that Bank One breached its fiduciary duty because it failed to pay the trust

beneficiaries the income derived from the trust's real estate holdings in quarterly installments as

required by article 6 of the trust.  At trial, Bank One argued that it was not required to make these

payments under article 2 of the trust, which provided that "the succeeding articles of this Declaration

shall be subject to the trustee's making or providing for the foregoing payments."  One of the

"foregoing payments" referred to in article 2 was the payment of estate taxes.  Bernard Wall, Bank

One's expert witness on trust administration, testified that Bank One would have exposed itself to

liability if it had distributed assets to the beneficiaries before paying the estate tax owed.  Wall opined

that Bank One distributed sufficient income for the beneficiaries to pay their income taxes resulting

from corporate income, but that Bank One properly withheld other sums pending the payment of all

federal estate tax liabilities.  Based on the language of the trust and the foregoing testimony, the trial court found that Bank One did not breach its fiduciary duty by failing to make quarterly income

payments to the beneficiaries.  On our review of the record, we hold that the trial court's

determination in this regard was supported by the manifest weight of the evidence.  See Spec-Cast, 128 Ill. 2d at 177.

e.  The Estate Tax Return

	Clontz next argues that Bank One breached its fiduciary duty when it failed to consider the

golden parachute obligations in valuing Borse Industries for the purposes of filing the estate tax

return.  At trial, Bank One presented the testimony of Richard Sanfratello, the appraiser it retained

in 1994 to perform an appraisal of the company.  Sanfratello testified that he could not have properly

included the golden parachutes in the 1994 valuation of Borse Industries because they were

contingent liabilities at that time.  Sanfratello explained that there were no offers to purchase the

company in 1994 and that there was no discussion to sell the business at that time.  Sanfratello

testified that reducing the value of the company by the amount of the golden parachutes "would have

probably triggered an audit."  On our review, we uphold the trial court's finding that Bank One did

not breach its fiduciary duty by failing to include the golden parachutes in valuing the company for

purposes of the estate tax return.  See Spec-Cast, 128 Ill. 2d at 177.

f.  Bank One's Failure to Exercise Good Faith Administration

	Clontz next argues that Bank One breached its fiduciary duty in the manner it administered

the trust.  As examples of its lack of good faith, Clontz argues that Bank One failed to provide the

trust beneficiaries complete and accurate information regarding the operation of Borse Industries;

Bank One breached its duty of impartiality when it asked the trial court to adopt a specific

construction of the trust; and Bank One joined other beneficiaries in opposing Clontz's requests to extend the discovery deadlines.  After a careful review of the record, we hold that the evidence

supported the trial court's determinations that Bank One did not breach its fiduciary duty to provide

the beneficiaries accurate information about the company.  We find no support in the record for

Clontz's assertions that Bank One's trust officers deliberately misled the beneficiaries about the

performance of the company during a meeting in September 1994.  We also reject Clontz's assertions

that Bank One breached its fiduciary duty of impartiality through the actions it took in litigating this

case.  We find no breach of fiduciary duty in the manner that Bank One pleaded its original chancery

action.  Bank One simply requested the trial court to permit it to pay the estate taxes from the only

liquid assets available in the trust.  Additionally, we note that Bank One was named by Clontz as a

counterdefendant and charged with committing numerous wrongful acts and breaching its fiduciary

obligations.  Bank One had a right to defend itself in the litigation and to advance its position on the

issues raised in the counterclaim.  Because we find no merit to Clontz's assertions, we affirm.

D.  Attorney Fees

	Clontz final contentions on appeal relate to the payment of attorney fees.  First, Clontz

contends that the trial court abused its discretion in denying her request to order Bank One to

reimburse the trust the $1 million in attorney fees it incurred in the instant litigation.  Clontz argues

that the trust should not be responsible for paying Bank One's attorney fees in defending against the

counterclaim on account of Bank One's conduct in administering the trust.

	Generally, the costs of litigation to construe a trust in which there are adverse claims are paid

by the trust estate.  Northern Trust Co. v. Heuer, 202 Ill. App. 3d 1066, 1071 (1990).  However, where the trustee breaches a duty to administer the trust according to its terms and performs in a

manner that favors one beneficiary over another, the trustee is not entitled to attorney fees and costs, even if the breach is technical in nature, done in good faith, and causes no harm.  Heuer, 202 Ill. App. 3d at 1071.  The award of attorney fees to the trustee is a matter within the trial court's discretion,

and its determination will not be reversed absent an abuse of discretion.  Heuer, 202 Ill. App. 3d at 1071.

	Here, the trial court rejected Clontz's claim that Bank One breached its fiduciary duty as

trustee in administering the trust.  As detailed at length above, we conclude that the trial court's

decision was not against the manifest weight of the evidence.  Lacking a finding of a breach of

fiduciary duty, we hold that the trial court did not abuse its discretion in denying Clontz's motion that

Bank One be ordered to repay attorney fees.  The trial court was in the best position to determine the

propriety of Bank One's attorney fees, and we decline Clontz's request to disturb that determination. 

See Heuer, 202 Ill. App. 3d at 1071.  In so holding, we note that the sizeable attorney fees reflect the complexity and exhaustive scope of Clontz's counterclaim, which contained scores of allegations of

wrongdoing.  The trial itself lasted approximately two weeks and the record on appeal is in excess

of 12,000 pages.  Given the profusion of arguments presented, we are not surprised by the sizeable

fees incurred.  In her appellate brief, Clontz does not argue that Bank One's fees were excessive or

otherwise unreasonable.  We thus affirm the trial court's ruling that Bank One's attorney fees be paid

by the trust.

	Clontz's second contention relating to attorney fees is that the trial court abused its discretion

in denying her motion that her attorney fees incurred in litigating Bank One's original construction

action be paid by the trust.  Clontz argues that she incurred approximately $136,000 in attorney fees

prior to filing her own counterclaim for breach of fiduciary duty.  The trial court denied her request for fees, finding that Clontz's litigation fees were primarily incurred in prosecuting her allegations of

breach of fiduciary duty.

	Ordinarily, all parties to a suit must bear their own attorney fees and litigation costs absent

a contract or statute providing for the recovery of fees.  Merchant's National Bank v. Old Second National Bank, 164 Ill. App. 3d 11, 16 (1987).  An exception to this general rule permits the recovery of fees from an estate where the testator expressed his or her intentions so ambiguously that judicial

construction of the will is required to resolve adverse claims to the property.  Merchant's National Bank, 164 Ill. App. 3d at 16.  In such a case, fees will be awarded to a party even if the construction adopted by the court is adverse to the party's claim.  Merchant's National Bank, 164 Ill. App. 3d at 16.  While the issue rests in the sound discretion of the trial court, attorney fees should be awarded

only if a construction of the instrument is, in fact, necessary.  Merchant's National Bank, 164 Ill. App. 3d at 16.  If construction is unnecessary, those seeking unsuccessfully to enforce their own interests

are not entitled to receive attorney fees from the estate.  Merchant's National Bank, 164 Ill. App. 3d at 16.  The relevant inquiry is whether the parties have an honest difference of opinion regarding the

proper construction of the instrument.  Merchant's National Bank, 164 Ill. App. 3d at 16.

	We hold that the trial court did not abuse its discretion in denying Clontz's request for an

award of attorney fees.  Bank One initiated this action in chancery seeking a construction of the

language of the trust concerning the payment of estate taxes.  Bank One also sought entry of an order

approving of its accountings.  Early in the litigation, the trial court entered an order permitting Bank

One to pay the estate taxes and reserved the construction issue for later determination.  Prior to trial,

Clontz stipulated to the correctness of Bank One's accountings and withdrew her objection to using

the proceeds from the sale of Borse Industries to pay the estate taxes.  Therefore, the only matter that proceeded to trial was Clontz's counterclaim alleging Bank One's breach of fiduciary duty.  Although

the trial court was required to construe certain provisions of the trust during the trial, such

construction occurred in the context of determining whether Bank One breached its fiduciary duty

as trustee.  The trial court did not construe the language of the trust because of an honest difference

of opinion among the parties as to the disposition of adverse claims to trust property.  See Merchant's National Bank, 164 Ill. App. 3d at 16.  Indeed, in light of Clontz's stipulations prior to trial, construction of the trust was unnecessary to resolve the issues raised in Bank One's chancery action. 

In essence, there was no ultimate difference of opinion as to the issues raised in Bank One's complaint

concerning the meaning of the trust.  Therefore, there was evidence to support the trial court's finding

that Clontz's attorney fees were incurred to prosecute her own allegations of breach of fiduciary duty

against Bank One.  As Clontz was unsuccessful in proving that Bank One had breached its fiduciary

duty, we do not believe that the trial court abused its discretion in denying her request for attorney

fees.  See Merchant's National Bank, 164 Ill. App. 3d at 16.

	[The preceding material is designated nonpublishable pursuant to Supreme Court Rule 23.]  

III.  Conclusion

	For the foregoing reasons, we affirm the judgment of the circuit court of Du Page County.

	Affirmed.

	McLAREN and CALLUM, JJ., concur.