2019 IL 123264

IN THE

SUPREME COURT

OF

THE STATE OF ILLINOIS

(Docket No. 123264)

JoANN SMITH, Appellant, v. THE VANGUARD GROUP, 

INC., et al. (Scott Smith et al., Appellees).

Opinion filed January 25, 2019.

JUSTICE GARMAN delivered the judgment of the court, with opinion.

Chief Justice Karmeier and Justices Thomas, Kilbride, Burke, Theis, and 

Neville concurred in the judgment and opinion.

OPINION

¶ 1 JoAnn Smith, Donald Smith’s widow, brought an action seeking to be declared 

the rightful beneficiary of Donald’s individual retirement account after his passing. 

Donald initially listed no beneficiary who would take any funds remaining in that 

account at his death. In 2013, he was hospitalized. During his hospitalization, 

someone designated JoAnn as beneficiary. When Donald was released from the 

hospital, he filed an action for a temporary restraining order and injunction. The 
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spouses stipulated to an injunction ordering that neither party engage in any 

transaction regarding the parties’ financial accounts. That injunction action was 

later combined with a dissolution action. While still bound by the injunction, 

Donald changed the beneficiary designation to his sons, Scott and Jeffrey Smith. 

After the combined actions were dismissed, Donald passed away. JoAnn 

subsequently brought this underlying action, alleging that the beneficiary change 

was in violation of the injunction and that the change was therefore void. The 

circuit court granted Scott and Jeffrey’s motion to dismiss, and the appellate court 

affirmed. We granted JoAnn’s petition for leave to appeal. Ill. S. Ct. R. 315 (eff. 

Nov. 1, 2017).

¶ 2 BACKGROUND

¶ 3 JoAnn and Donald married in 1974. The couple had several individual and joint 

financial accounts, including retirement accounts. Among those accounts was an 

individual retirement account with the Vanguard Group (the Vanguard IRA) solely 

in Donald’s name. Donald had not listed a beneficiary who would receive any 

funds remaining in that account at his death. In 2013, Donald was hospitalized from 

July 21 to August 2. On July 31, 2013, someone designated JoAnn as beneficiary. 

¶ 4 On August 6, 2013, Donald filed a petition for issuance of temporary 

restraining order and for preliminary injunction against JoAnn. Donald alleged that 

JoAnn would not allow him access to the marital residence and that JoAnn made 

various unauthorized withdrawals from Donald’s financial accounts during the 

time Donald was hospitalized, depositing the funds into her personal account. He 

also alleged that she attempted to liquidate another of his brokerage accounts with 

an invalid power of attorney. Donald sought the temporary restraining order “to 

maintain the status quo of the parties prior to the withdrawal[s] and deposits.” He 

also sought return of the withdrawn funds and to prevent JoAnn “from further 

converting [Donald’s] assets.” 

¶ 5 On August 8, 2013, the circuit court entered a stipulated preliminary injunction 

providing that the funds withdrawn during Donald’s hospitalization would be 

restored. Donald was to temporarily “reside with his son,” Scott. Donald had 

another adult son, Jeffrey. The record implies that Scott and Jeffrey are not JoAnn’s 

children but does not definitively so indicate. The injunction further provided that 
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each spouse would be allowed certain funds for living expenses and that the 

spouses’ financial accounts were otherwise “closed to any transactions.” On 

September 6, 2013, Donald filed a dissolution action, and the two actions were 

consolidated. The injunction remained in effect. 

¶ 6 On March 13, 2014, while the combined actions were still pending and the 

injunction was still in effect, Donald designated Scott and Jeffrey as the primary 

and only beneficiaries of the Vanguard IRA. On October 29, 2014, Donald and 

JoAnn stipulated to the dismissal of the dissolution and injunction actions. The 

injunction was dismissed along with the underlying actions. Donald passed away 

on March 30, 2015.

¶ 7 Shortly after Donald’s passing, JoAnn discovered the beneficiary change. She 

filed this underlying action in the Madison County circuit court seeking a 

declaratory judgment in the first count and alleging that Donald committed fraud 

by changing the beneficiary designation in violation of the injunction in the second 

count. Scott and Jeffrey filed a motion to dismiss under sections 2-615 and 

2-619(a)(4) and (9) of the Code of Civil Procedure. 735 ILCS 5/2-615, 2-619(a)(4), 

(9) (West 2014). The court dismissed the fraud count under section 2-615 with 

leave to refile and took the declaratory count under advisement. It later dismissed 

the declaratory count as well, finding that the beneficiary change became effective 

upon dismissal of the dissolution action, even if it arguably violated the terms of the 

injunction. JoAnn’s motion to reconsider was denied. A divided appellate court 

affirmed in an unpublished order, finding that “a mere beneficiary change did not 

violate the terms of the injunction.” 2018 IL App (5th) 160024-U, ¶ 17. JoAnn did 

not refile the count alleging fraud. Instead, she petitioned for leave to appeal, and 

we allowed her petition. See Ill. S. Ct. R. 315 (eff. Nov. 1, 2017).

¶ 8 ANALYSIS

¶ 9 The claim at the heart of this appeal was dismissed under section 2-619 of the 

Code of Civil Procedure. 735 ILCS 5/2-619 (West 2012). This court reviews a 

section 2-619 dismissal of a cause of action de novo. King v. First Capital 

Financial Services Corp., 215 Ill. 2d 1, 12 (2005). “A motion to dismiss under 

section 2-619 admits the legal sufficiency of the plaintiff’s complaint, but asserts 

affirmative matter that defeats the claim.” Id.
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¶ 10 We note first that “[t]he purpose of a preliminary injunction is to preserve the 

status quo pending a decision on the merits of a cause.” Hartlein v. Illinois Power 

Co., 151 Ill. 2d 142, 156 (1992). “A party may refuse to obey an order where the 

court had no jurisdiction to make it, but not on the ground that it was erroneously 

made.” Cummings-Landau Laundry Machinery Co. v. Koplin, 386 Ill. 368, 384 

(1944). “An order made in the exercise of jurisdiction, though erroneous, must be 

obeyed until modified or set aside by the court making it or reversed by an appellate 

court.” Id. Neither party has argued that the circuit court lacked jurisdiction when it 

issued the injunction. Thus, if the injunction prohibited the change of beneficiary, 

any change made in violation of that injunction was invalid irrespective of the 

subsequent dismissal of the combined injunction and dissolution actions. 

¶ 11 Deciding this matter depends on an interpretation of the circuit court’s 

injunction. That injunction was a stipulation. “The primary rule in the construction 

of stipulations is that the court must ascertain and give effect to the intent of the 

parties.” People v. Woods, 214 Ill. 2d 455, 468-69 (2005) (citing In re Marriage of 

Galen, 157 Ill. App. 3d 341, 344-45 (1987)). “[W]ords therein must be given their 

natural and ordinary meaning.” Galen, 157 Ill. App. 3d at 345. To decide this case, 

therefore, we must determine what Donald and JoAnn intended when they 

stipulated to the injunction, giving the words therein their natural and ordinary 

meaning. 

¶ 12 The injunction does not mention beneficiaries or beneficiary designations, 

despite the fact that someone designated JoAnn beneficiary of the Vanguard IRA 

only eight days prior to its issuance. The record before us does not indicate who 

made that designation. JoAnn argues that Donald made it. Scott and Jeffrey argue 

that it was likely JoAnn: the change was made during Donald’s hospitalization and 

around the same time that, according to Donald’s petition, JoAnn attempted to 

liquidate another brokerage account with an invalid power of attorney. Indeed, it 

does seem improbable that Donald, an attorney, would designate his wife 

beneficiary and then six days later file an injunctive action seeking that she be 

ordered to return certain other funds but not revoke or change that beneficiary 

designation.1

 1

We note that this initial designation had no effect anyway; according to section 4.4(a) of the 

Vanguard Traditional and Roth IRA Custodial Account Agreement, “[i]f no beneficiary designation 
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¶ 13 JoAnn argues that paragraph 9 of the injunction prohibits the beneficiary 

change. Paragraph 9 reads:

“9. Pursuant to the parties’ stipulation, all other bank accounts, credit union 

accounts, investment accounts (including the Scottrade account), and any other 

accounts holding funds or investments of the parties shall be closed to any 

transactions and no trades, transfers, transactions, buy orders or sell orders, 

withdrawals or deposits shall be made from any accounts without the written 

agreement of both Petitioner and Respondent or further Court order.”

¶ 14 In discerning Donald and JoAnn’s intent, we note that, by way of the inclusive 

list of accounts, both intended that the injunction include all financial accounts 

owned by either or both spouses. The Vanguard IRA falls within that inclusive list. 

¶ 15 During oral argument, both parties argued that our decision turns on whether 

we define the term “transaction” to include a beneficiary change. Yet they devote 

very little of their briefs to defining a “transaction” or advocating for this court to 

adopt a particular definition. JoAnn, the appellant, spent but three lines of her brief 

quoting Black’s Law Dictionary in part. 

¶ 16 The spouses use the word “transaction” twice in paragraph 9. They state that 

their accounts “shall be closed to any transactions” and that “no trades, transfers, 

transactions, buy orders or sell orders, withdrawals or deposits shall be made from 

any accounts.” The listed actions from which the spouses were prohibited all have 

an immediate effect on the respective account composition or balances. Paragraphs 

3 and 4, ordering JoAnn to restore certain withdrawn funds to certain accounts, 

further demonstrate the type of actions the spouses contemplated in drafting their 

stipulation. The purpose of the injunction was to keep the spouses’ funds intact and 

in the accounts within which they had been prior to Donald’s hospitalization. Thus, 

the spouses intended to prohibit only actions that immediately affected the 

accounts. A beneficiary change does not immediately affect an account, especially 

an account such as an IRA, for which a beneficiary designation is merely a 

contingency in case the individual fails to outlive the funds in the account. 

 is in effect *** at the time of Investor’s death, the beneficiary shall be the Investor’s surviving 

spouse, if any.”
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¶ 17 Based on the spouses’ stipulation to the return of funds previously withdrawn, 

the limitation on funds spent in the future, and their use of language prohibiting 

only actions that immediately affect the respective accounts, we find that the 

spouses were concerned only with the immediate restoration and maintenance of 

the accounts. They did not intend to prohibit a change in beneficiary. 

¶ 18 JoAnn cites New York Life Insurance Co. v. Sogol, 311 Ill. App. 3d 156 (1999), 

In re Marriage of Ignatius, 338 Ill. App. 3d 652 (2003), and Southern Illinois 

Medical Business Associates v. Camillo, 208 Ill. App. 3d 354 (1991), for the 

proposition that injunctions issued by a court properly exercising jurisdiction must 

be obeyed. We agree. See Koplin, 386 Ill. at 384 (reaffirmed today). Beyond that, 

however, the cases are distinguishable.

¶ 19 In Sogol, the court granted a stipulated injunction prohibiting the husband from 

“ ‘transferring, encumbering, concealing, damaging or otherwise disposing of the 

property of Linda Muslin or any other property of the parties.’ ” 311 Ill. App. 3d at 

157. Thereafter, the husband changed the beneficiary designation of two life 

insurance policies and an annuity from the wife and children to his girlfriend. Id. at 

158. He died two months later, while the dissolution action was ongoing and the 

injunction still in effect. Id. That court noted that the case was one of first 

impression in Illinois and held that the husband was prohibited from changing the 

beneficiary designation. Id. at 158-59. 

¶ 20 Ignatius did not deal with a beneficiary change but rather a modified injunction 

permitting an ailing wife to transfer all jointly held assets into tenancy in common 

for estate planning purposes. 338 Ill. App. 3d at 654. The wife passed away before 

the transfer occurred and before a final judgment (id.), and that court held that,

while the injunctive order terminated with the dissolution action’s dismissal, the 

alleged violation of the injunction might still be “viable for resolution in a probate 

action” (id. at 661). 

¶ 21 In Camillo, the appellate court upheld a damage award for violation of an 

injunction that prohibited a former employee from competing with the employer, 

despite the subsequent termination of that injunction. 208 Ill. App. 3d at 366. The 

dissent below cited Camillo in support of the proposition that termination of an 

injunction does not retroactively defeat the injunction. 2018 IL App (5th) 

160024-U, ¶ 23 (Chapman, J., dissenting). Camillo, however, does not deal with a 
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comparable situation and is thus inapt to the current dispute. The majority of the 

appellate court below distinguished Sogol and Ignatius on the fact that one of the 

parties involved died while the injunction was still in effect. Id. ¶¶ 15-16. The 

majority below thus held that, because the ownership change in this case did not 

occur during the life of the injunction, as in Sogol and Ignatius, Donald did not 

violate the injunction. Id. ¶ 16. We agree.

¶ 22 Donald sought the injunction because he was concerned that JoAnn was 

converting his assets. Thus, once he filed his actions, the current status of the 

spouses’ assets and account balances was an issue before the court. Neither Donald 

nor JoAnn could dissipate the assets. That said, Donald did not do so by merely 

changing the contingent beneficiary of his IRA.

¶ 23 The purpose of the injunction was to preserve the current state of the spouses’ 

funds and accounts pending a final judgment. The cases never proceeded to a final 

judgment but were instead dismissed. The court never adjudicated what amount, if 

any, of the Vanguard IRA was Donald’s, JoAnn’s, or marital property. Had Donald 

passed away during the life of the injunction, this matter would be on point with 

Sogol. Because Donald outlived the injunction and the underlying actions, 

however, ownership of the funds in the account did not change until after they were 

dismissed. This fact distinguishes Sogol. 

¶ 24 Ignatius is similarly distinguishable. That court held that a probate action might 

have been appropriate to enforce the injunction. 338 Ill. App. 3d at 661. In that 

case, the wife died before the court-ordered property transfer could take place and 

while the dissolution action was still pending. Id. at 654. Thus, in both Sogol and 

Ignatius, the parties’ property and accounts were before the court pending 

adjudication at the time ownership changed hands. In this case, a change in 

beneficiary was not prohibited under the limited terms of the spouses’ stipulated 

injunction. A change of ownership was prohibited, but since ownership did not 

transfer during the time the spouses’ accounts were before the court, the 

designation was valid. 

¶ 25 Although not cited by either party, we find support for our opinion today from 

another decision of our appellate court, In re Marriage of Centioli, 335 Ill. App. 3d 

650 (2002). In that case, the wife sought to have the husband restrained from

changing the beneficiary designation of his revocable trust, into which his estate 
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would pour over at his death. Id. at 652. The Centioli court held that although the 

term “property” is broadly defined, it does not include an expectancy interest such 

as a beneficiary designation and that such a designation thus cannot be protected by 

an injunction under the Illinois Marriage and Dissolution of Marriage Act (750 

ILCS 5/101 et seq. (West 2000)). Centioli, 335 Ill. App. 3d at 656. 

¶ 26 We agree. The circuit court could have distributed whatever amount of the 

Vanguard IRA that it found equitable had the dissolution action proceeded to a final 

judgment. An individual does not, however, have the same interest in her spouse’s 

property at probate that she does at dissolution. See Centioli, 335 Ill. App. 3d at 657 

(describing a spouse’s potential property rights under probate law if the other 

spouse dies while a dissolution action is pending). We thus find that Donald’s 

change of beneficiary, because it did not vest during the pendency of the injunction 

or the combined underlying actions, was not prohibited by the injunction.

¶ 27 CONCLUSION

¶ 28 We hold that, because the change of ownership did not occur until after the 

injunction had been dismissed, Donald did not violate the injunction when he 

changed the beneficiary designation of the Vanguard IRA to Scott and Jeffrey.

¶ 29 Affirmed.