Court Opinion

ID: 3152806
Source: CourtListenerOpinion
Date Created: 2015-11-06 19:00:49.708267+00
Date Added: 2024-06-11T11:19:40.235239
License: Public Domain

NONPRECEDENTIAL DISPOSITION
                To be cited only in accordance with Fed. R. App. P. 32.1

                United States Court of Appeals
                                 For the Seventh Circuit
                                 Chicago, Illinois 60604

                              Submitted November 6, 2015*
                               Decided November 6, 2015

                                         Before

                           WILLIAM J. BAUER, Circuit Judge

                           JOEL M. FLAUM, Circuit Judge

                           DAVID F. HAMILTON, Circuit Judge

No. 15-2207

ROBERT H. SARVIS,                               Appeal from the United States District
    Plaintiff-Appellant,                        Court for the Northern District of Illinois,
                                                Eastern Division.
      v.
                                                No. 14 C 09143
BMO HARRIS BANK N.A., et al.,
    Defendants-Appellees.                       Edmond E. Chang,
                                                Judge.

                                       ORDER

        Robert Sarvis appeals from the dismissal of his lawsuit claiming that
BMO Harris Bank and several of his relatives mismanaged trusts that were intended to
benefit his brother, Andrew, and also conspired to defraud him and Andrew of their
rights to expected inheritances. Andrew is deceased, but Sarvis asserted that he has
standing to litigate his brother’s claims, which, he insisted, had been assigned to him by
the executor of Andrew’s estate. The district court reasoned that none of the claims

      * After examining the briefs and the record, we have concluded that oral
argument is unnecessary. Thus the appeal is submitted on the briefs and the record.
See FED. R. APP. P. 34(a)(2)(C).
No. 15-2207                                                                          Page 2

belonging to Andrew had been assigned to Sarvis, and that Sarvis did not state any claim
of his own. We affirm the judgment.

       Andrew, who died in June 2014, was among the beneficiaries of separate trusts
created by his maternal grandmother and uncle. The uncle, James Hammond, and
Sarvis’s maternal aunt, Mary Rodman, served as co-trustees of the grandmother’s trust,
along with BMO Harris. The bank also was a co-trustee, with Kenneth Nykiel, of the
uncle’s trust. In addition, Andrew had created a trust for his own benefit, and one of
Mary Rodman’s daughters, Margaret McElrath, was trustee at the time of his death.
Andrew suffered from physical and mental impairments, and under the terms of the
uncle’s trust he was entitled to payments from the income and corpus for his support
and medical care if the trustees determined that his resources were insufficient to cover
those costs. Sarvis, though, was not a beneficiary of any of these trusts.

        Sarvis’s complaint, which relies on the diversity jurisdiction, names as defendants
BMO Harris, Kenneth Nykiel, Margaret McElrath, and McElrath’s two siblings,
Sally Deforest and Thomas Rodman. Sarvis alleges that McElrath, Deforest, and Rodman
conspired to persuade their mother, whom the grandmother’s trust had given discretion
to distribute Michigan real estate that was part of the corpus, to deprive Andrew of a
share of the property. BMO Harris and Nykiel, Sarvis continues, breached their fiduciary
duty as trustees of the uncle’s trust by hoarding assets throughout Andrew’s lifetime
when they knew or should have known that Andrew was in dire need of money to cover
living and medical expenses. McElrath similarly breached her fiduciary duty, says Sarvis
in his complaint, by looting Andrew’s trust.

       All of those allegations would seem to relate exclusively to Andrew. Sarvis
further alleges, though, that McElrath and Rodman pressured Andrew to execute a will
leaving everything to McElrath’s son and nothing to Sarvis. This contention is not new;
Sarvis challenged the will when it was probated in an Illinois circuit court, but he settled
that challenge by agreeing not to “attempt to file any citations on behalf of the Estate, or
oppose the closing of the estate,” in exchange for $10,000 and the assignment equally
with his sister of Andrew’s “personal effects and other tangible personal property.”
Sarvis’s sister reassigned her half to Sarvis, who then filed this action.

       In dismissing the suit on the defendants’ motions, the district court reasoned that
Sarvis lacks standing to complain about conduct that harmed only Andrew because he is
not the executor of Andrew’s estate. The court rejected as unreasonable Sarvis’s
contention that the “personal effects and other tangible personal property” given to him
No. 15-2207                                                                            Page 3

by the settlement agreement include intangible rights of action. What’s more, the court
continued, Sarvis cannot prevail against his cousins, McElrath and Rodman, for
prodding Andrew to disinherit him because Sarvis already had settled that claim when
he challenged Andrew’s will. Sarvis’s factual allegations and legal theories, the court
noted, were the same in state court, and thus the final judgment approving the
settlement agreement and dismissing the will contest with prejudice should be given
“res judicata effect.”

       On appeal Sarvis continues to insist that he may litigate claims for injuries to
Andrew as the assignee of Andrew’s “personal effects and other tangible personal
property.” The district court erred, he says, by misdefining “personal effects” to exclude
rights of action. Sarvis also argues that the district court wrongly assumed that his claim
about the Michigan real estate was brought on Andrew’s behalf. The undue influence
occurred in Texas, Sarvis explains, and thus he has a personal stake because as Andrew’s
heir he is an “interested person” under Texas law. Finally, Sarvis contends that the court
erred in precluding his claim that Andrew was duped into leaving him nothing. This
claim, Sarvis says, is for tortious interference, which is legally distinguishable from a will
contest because the parties and remedy are different. We reject all of these contentions.

        The district court correctly dismissed the claims alleging a breach of a fiduciary
duty running to Andrew because Sarvis does not have standing to bring them. Sarvis
misconstrues the unambiguous language of the settlement agreement, which assigns to
him only Andrew’s “personal effects and other tangible property,” not rights of action or
other intangibles. The settlement agreement provides that Illinois law shall govern
questions of interpretation, and in Illinois the term “personal effects” usually refers to
tangible personal property “worn on, carried by, or otherwise having an intimate
relation to the person.” In re Estate of Goodkind, 827 N.E.2d 6, 13–14 (Ill. App. 2005)
(quoting Landstrom v. Sarvis Krettler, 435 N.E.2d 149, 151 (Ill. App. 1982)). Illinois courts
have recognized that the term may have a broader meaning if its use creates a latent
ambiguity in the contract and the drafter’s “intent suggest[s] a construction beyond the
term’s ordinary meaning.” Id. at 14. But that is not the situation here. The settlement
agreement assigns Andrew’s “personal effects and other tangible personal property” to
Sarvis. On its face the agreement confines itself to the ordinary meaning of “personal
effects.” The text is unambiguous, and it is no less so simply because Sarvis now asserts
that it would have been unreasonable for him to accept a settlement giving him only
Andrew’s minimal tangible items (along with $10,000, which he neglects to mention).
Because Sarvis is not the assignee of any intangible property, he is not the rightful owner
of any legal claim that might have been part of Andrew’s estate.
No. 15-2207                                                                            Page 4

        The district court also correctly dismissed the claim that Sarvis was wrongly
excluded from his brother’s will, as that claim is negated by the settlement agreement.
We agree with Sarvis that, under Illinois law, a will contest is distinct from a tort action
for intentional interference with a testamentary expectation. See Bjork v. O’Meara, 986
N.E.2d 626, 631 (Ill. 2013). Illinois courts will not allow the tort action to proceed,
however, if the practical effect of the action would be to invalidate a will already
recognized as valid under the Probate Act. See Robinson v. First State Bank of Monticello,
454 N.E.2d 288, 294 (Ill. 1983) (“[I]f we were to allow the plaintiffs to maintain their tort
action, we would be giving them a second bite of the apple and defeating the purpose of
the exclusivity of a will contest under [the Probate Act].”). This limitation on the tort
action—what the district court characterized as a “res judicata effect”—applies when the
plaintiff had “an opportunity to contest a probated will but chose not do so, and
subsequently enter[ed] into an agreement to take no further court action.” Bjork, 986
N.E.2d at 632 (quoting In re Estate of Ellis, 923 N.E.2d 237, 242 (Ill. 2009)). In Robinson the
court did not allow the plaintiffs to proceed with their action for tortious interference
because they had previously chosen not to contest the probated will, entering instead
into a settlement agreement for $125,000 in which they agreed to release the other parties
from all claims arising from the will. Id. at 293. As with the plaintiffs in Robinson, Sarvis
not only had notice of Andrew’s probated will, he also challenged the will in state court
and ultimately accepted $10,000 and Andrew’s “personal effects and other tangible
property” in exchange for abandoning his challenge to the will and releasing all claims
against the estate. Sarvis, therefore, fails to state a claim for tortious interference because
that claim is no longer available to him.

       Finally, the district court correctly dismissed for lack of standing Sarvis’s claim of
conspiracy against McElrath, Deforest, and Rodman for unfairly influencing their
mother to deprive Andrew of his share of the real estate in Michigan. Sarvis asserts that
he has standing as an “interested person” because he stood to inherit 50% of the
property as Andrew’s heir. But Sarvis has no interest in Andrew’s estate because he is
not a beneficiary of Andrew’s validly probated will, which Sarvis agreed not to contest.

                                                                                 AFFIRMED.