Illinois Appellate Court Finds Trust Dispute Can Remain in Cook County Court

In an Illinois Appellate Court decision, it was found that a trust’s beneficiaries had sufficient minimum contact with the state simply through their ownership interest of a trust administered by an Illinois resident.

In May 2012, a Cook County associate court judge dismissed the trust dispute case for lack of jurisdiction. 

The trial judge had relied on an opinion that lacked precedential value that undermined that court’s holding, so said the opinion of appellate court Justice Robert E. Gordon. The Illinois Appellate Court reversed the trial court’s ruling dismissing the case.

Gerald Kaufman was the sole trustee of a trust that owned a historic office building in Philadelphia since 1983.  Kaufman was an Illinois resident.  The original trust agreement was signed in New York by Kaufman’s father and four other trustees in 1959.  The trust agreement required the trustee to get written approval from 600 beneficiaries to mortgage or sell the real estate.

One of the property’s mortgages matured and entered default in 2009. Kaufman filed a lawsuit in August 2012 against three objecting beneficiaries who were blocking Kaufman’s attempt to pay them back the debt. 

In an attempt to modify the trust agreement, Kaufman filed a class-action lawsuit in the state court in Cook County, Ill.  One of the defendants, a New York resident, disputed the jurisdiction of Cook County and moved to dismiss.In his motion to dismiss, defendant Anthony V. Barbiero cited an unpublished 1991 federal case from the Northern District of Illinois. The trial judge in Cook County agreed with Barbiero’s position and the authority he relied on and dismissed Kaufman’s case.

The Illinois Appellate Court refused to include the unpublished ruling in its analysis and ruled that trust ownership qualifies as minimum contact under Illinois’ “long-arm” statute, which governs jurisdiction over nonresidents.

It was further determined that the lawsuit did not violate Barbiero’s federal right to due process. As Kaufman was named as trustee more than 30 years ago, it should come as no surprise that the administration of the trust and any resulting litigation would lie in Illinois courts. The case was returned to the Cook County trial court for further disposition. 

Gerald S. Kaufman, et al. v. Anthony V. Barbiero, No. 2013 IL App. (1st) 132068.

Kreisman Law Offices has been handling trust and probate disputes and civil litigation matters and business litigation for individuals, businesses and for more than 37 years in and around Chicago, Cook County and its surrounding areas, including Rosemont, Richton Park, Libertyville, Lincolnwood, Morton Grove, Park Ridge, Chicago Ridge, Winnetka, Winfield, Chicago (Wrigleyville, Wicker Park, Logan Square, Little Italy, Lincoln Square) and Buffalo Grove, Ill.

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