Opinion ID: 2070687
Heading Depth: 3
Heading Rank: 2

Heading: Plaintiffs' Alternative Contentions

Text: Since the appellate court reversed the trial court and remanded on the express charitable trust claim, the appellate court expressly declined to address plaintiffs' alternative claims of relief. 321 Ill.App.3d at 780-81, 254 Ill.Dec. 557, 747 N.E.2d 969. Plaintiffs assert them here; none are meritorious. Plaintiffs contend that we should declare a constructive trust over ATC Inc.'s funds, to ensure that representations to the donating public are carried out and donations are not diverted. A constructive trust is one raised by operation of law as distinguished from an express trust. Suttles v. Vogel, 126 Ill.2d 186, 193, 127 Ill.Dec. 819, 533 N.E.2d 901 (1988). A constructive trust is an equitable remedy that may be imposed to redress unjust enrichment caused by a party's wrongful conduct. Charles Hester Enterprises, Inc. v. Illinois Founders Insurance Co., 114 Ill.2d 278, 293, 102 Ill. Dec. 306, 499 N.E.2d 1319 (1986). The proceeds of the alleged wrongful conduct must exist as an identifiable fund traceable to that conduct, such that it can become the res of the proposed trust. People ex rel. Nelson v. Bates, 351 Ill. 439, 443, 184 N.E. 597 (1933); Moore v. Taylor, 251 Ill. 468, 472-73, 96 N.E. 229 (1911). In this case, the funds at issue are donations not from the public but rather from Theatre operating revenues. As the trial court found: It is also clear to this Court that [defendants] have never    assumed control over any public contributions to the Theatre, never interfered with any of the [appurtenances] of the Theatre, nor jeopardized the Theatre continuing as a cultural center for the public's benefit. Significantly, there has been no injustice nor injury to the public as their monies, gifted upon the Theatre, were expended, for that purpose and that purpose only.    The only thing that cannot be done is spend donations given to the Theatre, by the public, for anything but the Theatre. However, this is not an issue in this case. There is no evidence that Roosevelt ever attempted to do that. No one has ever said that in this lawsuit. They may have said it to the media, but never in this suit. Moreover, the trial court ordered that all donations to the Theatre must be accounted for and restricted to Theatre use. We agree with the appellate court dissent (321 Ill.App.3d at 788, 254 Ill.Dec. 557, 747 N.E.2d 969 (Wolfson, J., dissenting)) that there is no evidence of an identifiable fund traceable to any wrongful conduct in this case. See In re Estate of Franke, 124 Ill.App.2d 24, 33-34, 259 N.E.2d 841 (1970). Accordingly, this claim fails. We consider plaintiffs' next three claims collectively. Plaintiffs claim an express bilateral contract. Plaintiffs contend that the 1960 resolution and the seven-point statement constituted a contract between Roosevelt and the Council, and ATC Inc. as successor, which was later amended by the 1971 and 1983 SOPs. Plaintiffs claim that Roosevelt is equitably estopped to deny the authority of ATC Inc. to operate the Theatre. Plaintiffs contend that although Roosevelt purportedly reserved the right to terminate any allegedly unauthorized conduct by ATC Inc., Roosevelt never took any action. According to plaintiffs, ATC Inc. relied upon Roosevelt's inaction and the University is now estopped from denying ATC Inc.'s continuing right to operate the Theatre. Plaintiffs also claim a license by estoppel. They contend that Roosevelt granted the Council, and now ATC Inc., a license to restore and operate the Theatre and that Roosevelt is estopped from revoking the license. For plaintiffs to prevail on any of these theories of entitlement to control over the Theatre, they must prove that the Council was granted and held rights or interests in the Theatre greater than that retained by Roosevelt, which were then legitimately transferred to ATC Inc., and that those rights were not revocable. With out these legal and factual prerequisites, plaintiffs' claims cannot succeed. Plaintiffs contend that the Council and ATC Inc. became fused. Plaintiffs argue that the role of ATC Inc. gradually expanded subsequently to its creation and eventually took over the rights and duties of the unincorporated Council as its successor. Plaintiffs rely on ATC Inc.'s bylaws as empowering it to operate the Theatre. The bylaws state that ATC Inc.'s purposes are, inter alia, [t]o restore[,] modernize and operate the Auditorium Theatre. As additional proof, plaintiffs point to contracts that ATC Inc. entered into with vendors and others in its own name. We cannot accept this contention. All of plaintiffs' claims of control fail because neither Roosevelt nor the Council ever granted to ATC Inc. the right to restore and operate the Theatre. The trial court found as follows. Although Roosevelt and ATC Inc. were in negotiations regarding their relationship to the Theatre, by the time, the present lawsuit was filed, no transfer of rights to or control of the Theatre, had been accomplished. The trial court found that ATC Inc. was solely a fund-raising arm, initially of the Council, and now of the AT of RU. The court further found: [Plaintiffs] ask this court to assert that ATC, Inc. has ownership rights to all the funds and assets in the Theatre. They maintain that [the Council] and ATC, Inc. were blended together and that they became one and they now own the funds and the assets of the Theatre. It is true the groups usually had the same membership. However, these groups had different minutes, reported to the IRS in different ways, were established for different purposes and were treated differently by the trustees of Roosevelt. Even most of the group opposing Roosevelt, when called upon to testify, indicated that they recognized and reported the differences between the [Council] and ATC, Inc. The overwhelming amount of evidence clearly showed that the groups never merged. ATC, Inc. never had any right to governance. All they could do is raise money for the restoration of the Theatre. They never had any rights to the funds. After reviewing the documents, after hearing the testimony, after examining every piece of evidence, the Court finds that all these counts fail. ATC, Inc. has no ownership rights, there is no equitable or promissory estoppel and the transfer of funds to Roosevelt, from [the Council] and ATC, Inc. is proper. Ample evidence supports the trial court's findings. We earlier recounted the circumstances surrounding the creation of ATC Inc. and its relationship with Roosevelt and to the Theatre. This evidence includes the following By its resolution, Roosevelt's board of trustees expressly authorized the incorporation of ATC Inc. for fund raising purposes only. This sole purpose of ATC Inc. is reflected in its articles of incorporation. The 1983 SOPs distinguished the identity and function of the Council from those of ATC Inc. and expressly stated that the sole purpose of ATC Inc. was to solicit funds for the Theatre. This evidence includes ATC Inc.'s own actions. In 1993, ATC Inc. represented to the IRS that the Council operated the Theatre as a unit of Roosevelt and that ATC Inc. did not operate the Theatre. Indeed, in their trial testimony, members of ATC Inc. admitted that ATC Inc.'s negotiations with Roosevelt to purchase or lease the Theatre from Roosevelt: (1) were attempts to gain the control over the Theatre that it lacked; and (2) would have been unnecessary and superfluous had ATC Inc. actually had control over the Theatre. Indeed, as John Blew, ATC Inc. and Council secretary acknowledged to Roosevelt: There is no question but that the University owns the Theatre and controls the Councilperiod. Also, the trial court found that the language in ATC Inc.'s bylaws, which purportedly allows ATC Inc. to do more than raise funds, was inconsistent with all the other evidence presented. The court found that ATC Inc.'s articles of incorporation limited its corporate purpose to fund raising. Any action by ATC Inc. to operate the Theatre was ultra vires. Ample evidence supported this finding. All of plaintiffs' alternative claims were based on the erroneous factual premise that ATC Inc. legitimately operated the Theatre. More than sufficient evidence supports the trial court's rejection of this premise. The trial court's findings are not against the manifest weight of the evidence. See Leonardi, 168 Ill.2d at 106, 212 Ill.Dec. 968, 658 N.E.2d 450. We find no basis to disturb the trial court's rejection of these claims. See Zych, 186 Ill.2d at 282, 238 Ill.Dec. 23, 710 N.E.2d 820. In response to these findings, ATC Inc. invokes this court's equitable power. Courts of equity possess original and inherent power to recognize, execute and control trusts and trust funds. Village of Hinsdale v. Chicago City Missionary Society, 375 Ill. 220, 233, 30 N.E.2d 657 (1940). Equity considers the general charitable purpose of a settlor as the substance of the gift and the mode indicated in the trust document for effectuating this purpose as a mere incident of the gift. First National Bank of Chicago v. Elliott, 406 Ill. 44, 55-56, 92 N.E.2d 66 (1950); Missionary Society, 375 Ill. at 233, 30 N.E.2d 657. Where a literal execution of a charity becomes impossible, impracticable, or inexpedient, and the settlor has manifested a general intent to create a charitable trust, a court, in the exercise of its ordinary equity powers, will not allow the trust to fail. Rather, the court will execute the trust cy pres, i.e., as near as the court can according to the trust's original purpose. Missionary Society, 375 Ill. at 233, 30 N.E.2d 657; Kemmerer v. Kemmerer, 233 Ill. 327, 338-39, 84 N.E. 256 (1908); accord Restatement (Second) of Trusts § 399 (1959). When a definite charitable trust is created, the failure of the particular mode in which it is to be effectuated does not destroy the charity; equity will substitute some other mode so that the substantial intent of the settlor shall not depend on the insufficiency of the formal expression of the trust document. Webb v. Webb, 340 Ill. 407, 420, 172 N.E. 730 (1930). Accordingly, a court of equity has the power to substitute one trustee in place of another for the purpose of administering a charitable trust. See Mason v. Bloomington Library Ass'n, 237 Ill. 442, 449, 86 N.E. 1044 (1908). These principles make clear, as ATC Inc. concedes, that this court's exercise of its equitable power in this regard is linked to Roosevelt's trust intent. However, as we previously discussed, the trial court found that Roosevelt did not intend to create a trust of any sort, which finding is supported by ample evidence. Since Roosevelt did not intend, by the 1960 resolution, to create a charitable trust, then there is no charitable trust intent for this court to effectuate. As an alternative request for cross-relief, plaintiffs ask that we reassign this case to a new trial judge on remand. Supreme Court Rule 366(a)(5) permits a reviewing court, in its discretion, to make any order or grant any relief that a particular case may require. 155 Ill.2d R. 366(a)(5). This authority includes the power to reassign a matter to a new judge on remand. See, e.g., In re Marriage of Smoller, 218 Ill.App.3d 340, 346-47, 161 Ill.Dec. 129, 578 N.E.2d 256 (1991); People v. Austin, 116 Ill.App.3d 95, 101, 71 Ill. Dec. 625, 451 N.E.2d 593 (1983). Plaintiffs refer to four circumstances that allegedly call into question the trial court's impartiality. The trial court allegedly ignored principles of trust law and excluded relevant evidence. Also, in the course of ruling on Roosevelt's counterclaim, specifically the breach of fiduciary count against Eychaner and Weiss, the trial court commented on plaintiff Eychaner's motive for bringing this litigation. The court found that Eychaner was liable and that Weiss was not. Lastly, subsequent to its decision, the trial court held the Council's executive director in direct criminal contempt, a ruling which the appellate court reversed. We decline plaintiffs' request. A trial judge is presumed to be impartial, and the burden of overcoming this presumption rests on the party making the charge of prejudice. See In re Marriage of Petersen, 319 Ill.App.3d 325, 339, 253 Ill.Dec. 144, 744 N.E.2d 877 (2001); In re Marriage of Hartian, 222 Ill.App.3d 566, 569, 165 Ill.Dec. 66, 584 N.E.2d 245 (1991). To conclude that a judge is disqualified because of prejudice is not, of course, a judgment to be lightly made. People v. Vance, 76 Ill.2d 171, 179, 28 Ill.Dec. 508, 390 N.E.2d 867 (1979). A judge's rulings alone almost never constitute a valid basis for a claim of judicial bias or partiality. Liteky v. United States, 510 U.S. 540, 555, 114 S.Ct. 1147, 1157, 127 L.Ed.2d 474, 490-91 (1994). Allegedly erroneous findings and rulings by the trial court are insufficient reasons to believe that the court has a personal bias for or against a litigant. Hartian, 222 Ill.App.3d at 569, 165 Ill.Dec. 66, 584 N.E.2d 245. Also, it is clear that ordinarily the fact that a judge has ruled adversely to a party in either a civil or criminal case does not disqualify that judge from sitting in subsequent civil or criminal cases in which the same person is a party. Vance, 76 Ill.2d at 178, 28 Ill.Dec. 508, 390 N.E.2d 867; see Nehring v. First National Bank in DeKalb, 143 Ill.App.3d 791, 805, 98 Ill. Dec. 98, 493 N.E.2d 1119 (1986). Rather, the party making the charge of prejudice must present evidence of prejudicial trial conduct and evidence of the judge's personal bias. Petersen, 319 Ill.App.3d at 339, 253 Ill.Dec. 144, 744 N.E.2d 877; Hartian, 222 Ill.App.3d at 569, 165 Ill.Dec. 66, 584 N.E.2d 245. This personal bias can stem from an extrajudicial source. United States v. Grinnell Corp., 384 U.S. 563, 583, 86 S.Ct. 1698, 1710, 16 L.Ed.2d 778, 793 (1966); Petersen, 319 Ill.App.3d at 339, 253 Ill.Dec. 144, 744 N.E.2d 877; Hartian, 222 Ill.App.3d at 569, 165 Ill.Dec. 66, 584 N.E.2d 245. In this case, plaintiffs do not offer any evidence of judicial bias or prejudice stemming from an outside source. Rather, plaintiffs base their claim on the trial itself. Judicial bias or prejudice can also stem from the facts adduced or the events occurring at trial. Liteky, 510 U.S. at 551, 114 S.Ct. at 1155, 127 L.Ed.2d at 488. In this regard, the United States Supreme Court has explained: [O]pinions formed by the judge on the basis of facts introduced or events occurring in the course of the current proceedings, or of prior proceedings, do not constitute a basis for a bias or partiality motion unless they display a deep-seated favoritism or antagonism that would make fair judgment impossible. Thus, judicial remarks during the course of a trial that are critical or disapproving of, or even hostile to, counsel, the parties, or their cases, ordinarily do not support a bias or partiality challenge. They may do so if they reveal an opinion that derives from an extrajudicial source; and they will do so if they reveal such a high degree of favoritism or antagonism as to make fair judgment impossible. (Emphases in original.) Liteky, 510 U.S. at 555, 127 L.Ed.2d at 491, 114 S.Ct. at 1157. Accord Petersen, 319 Ill.App.3d at 340, 253 Ill.Dec. 144, 744 N.E.2d 877; People v. Damnitz, 269 Ill.App.3d 51, 57, 206 Ill.Dec. 460, 645 N.E.2d 465 (1994). The four circumstances to which plaintiffs refer as evidence of judicial bias do not display such deep-seated favoritism or antagonism that would make fair judgment impossible. Rather, the circumstances arise in the context of allegedly erroneous findings and rulings, which are insufficient to show judicial bias against plaintiffs. Further, the trial court expressly based its remarks regarding Eychaner on his credibility as a witness, which is clearly within the purview of the trial court. McCormick v. McCormick, 180 Ill.App.3d 184, 194, 129 Ill.Dec. 579, 536 N.E.2d 419 (1988). Accordingly, we decline plaintiffs' request to reassign this case to another judge on remand.