{
  "id": 2841538,
  "name": "In re Estate of Don R. Phillips, Deceased-(Edna S. Phillips, Plaintiff-Appellee, v. Evan Mallon, Defendant-Appellant.)",
  "name_abbreviation": "Phillips v. Mallon",
  "decision_date": "1972-03-01",
  "docket_number": "No. 71-220",
  "first_page": "1085",
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  "last_updated": "2023-07-14T16:53:03.474127+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
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  "casebody": {
    "judges": [],
    "parties": [
      "In re Estate of Don R Phillips, Deceased\u2014(Edna S. Phillips, Plaintiff-Appellee, v. Evan Mallon, Defendant-Appellant.)"
    ],
    "opinions": [
      {
        "text": "Mr. JUSTICE THOMAS J. MORAN\ndelivered the opinion of the court:\nThe defendant appeals from an order by which he was removed as administrator with will annexed of the estate of Don R. Phillips.\nThe issue on appeal is whether defendant had a conflict of interests with the estate sufficient to constitute \u201cother good cause\u201d for removal under the Probate Act, Ill. Rev. Stat. 1969, ch. 3, par. 276(a) (10).\nThere was an interdependent relationship of decedent\u2019s will to an inter vivos trust of which he was grantor, and a corporation founded by him and his wife. The residuary clause of the will left the remainder of the estate to the Don R PhiUips Trust. The corpus of that trust was composed primarily of the stock of Don R. PhiUips, Inc.; its primary beneficiary, plaintiff, widow of the decedent. After decedent\u2019s death, defendant became one of the four successor trustees of the Don R. Phillips Trust. Defendant was also an officer of Don R. PhiUips, Inc., and one of its five directors, as were two other trustees \u2014 Henry Levin and Charles F. Meyers. These men, among others, were contingent beneficiaries under the terms of the trust.\nThe executor named under the w\u00fcl declined to act and plaintiff, in a petition filed on August 18, 1969, nominated defendant as administrator with wiU annexed. Defendant was so appointed on August 25, 1969.\nSubsequent to the death of Don R. PhiUips, plaintiff was given $5,000 from corporate funds. The vouchers for this disbursement refer to the sum as a \u201cwidow\u2019s award,\u201d although during the course of administration, plaintiff and defendant differed as to whether the money was paid in Ueu of a \u201cwidow\u2019s award\u201d from estate assets. This disagreement appears to have been the immediate motivation for plaintiffs filing of the petition for removal which alleged mismanagement and conflict of interests on the part of defendant.\nOn July 27, 1971, the trial court removed defendant as administrator with w\u00fcl annexed, and entered an order which found, in parts relevant, that;\n1) Although plaintiff had not waived her right to a widow\u2019s award from estate assets, defendant was not culpable for his fa\u00fcure to apply for such award;\n2) Failure of defendant to file his accounting within the statutory Umit was not sufficient cause for removal;\n3) While payment of partial fees and specific legacies without prior court approval was a matter warranting criticism, it was not, in itself, sufficient basis for removal;\n4) Defendant had a conflict of interests which prevented him from objectively carrying out his responsibihties because of his conflicting capacities as administrator with will annexed, a trustee of the Don R. PhUHps Trust, and former director of Don R. PhiUips, Inc.\nOn appeal defendant argues that there was no basis for his removal as legal representative, asserting that his failure to apply for a widow\u2019s award is not a subject of this appeal, that he has not \u201cin other respects mismanaged the estate,\u201d and that his status as a contingent beneficiary of the Don R. PhiUips Trust was not a sufficient conflict of interests to justify removal. Whfle these were grounds alleged in plaintiff\u2019s petition for removal, the order of the trial court exonerated defendant of any culpability in these areas.\nDefendant also contends that he does not have a conflict of interests which did or may interfere with the proper administration of the estate, arguing that the trial court\u2019s decision was baseless since he did not personally benefit from his administration and since his accounting was approved by the court. These factors, however, are not relevant to the finding that defendant had a conflict of interests resulting from his holding incompatible offices. The findings do not bring defendant\u2019s fidelity into question. The court, in approving the administrator\u2019s account, sanctioned only those acts reported by defendant. It could not evaluate any possible omissions arising from a conflict.\nThe findings of the trial court reveal a situation in which defendant, because of his concurrent fiduciary obligations to the estate, the corporation, and the trust, was rendered incapable of objectively determining his duty and acting in the best interest of the estate. In response to questions by plaintiffs attorney, defendant\u2019s testimony exemplified this conflict of duties detrimental to the estate:\n\u201cq * \u00ab # Following your appointment as Administrator have you made any attempt to collect items of income of any kind owed to the Estate of Don R Phillips?\nA. Not really.\nQ. Why?\nA. Because we felt the corporation needed it more than Mrs. Phillips did.\nQ. Who felt this?\nA. The Board of Directors.\n\u00bb \u00ab \u00ab\nQ. Did you make the decision?\nA. Not by myself.\nq. * * * Who made the decision?\nA. As I said the Board of Directors and I was one of the Board.\n\u00bb # *\nQ. Do you feel today as Administrator you could collect income owed to the Estate?\nA. As purely as an Administrator.\nQ. Well, aren\u2019t you a pure Administrator?\nA. Yes.\nQ. But?\nA. But also I\u2019m on the Board of Directors and I have to look out for the company from that standpoint. # # \u00bb\nQ. You have made a determination as a Director of Don R. Phillips, Inc., that the corporation needs the money more than the Estate, is that correct?\nA. Yes.\u201d\nThe failure of defendant to collect debts due the estate from the corporation constitutes more than a merely hypothetical conflict of interests and one which is not diminished by the interrelationship of the will with the trust and the corporation. The trial court noted in its ruling that the argument that defendant\u2019s conflict affected only the trust (the corpus of which is predominantly composed of the stock of the corporation), ignores the duties which defendant, as administrator, owed to possible creditors of the estate and to the widow should she have chosen to renounce the will.\nEvidence does not support the contention that any conflict has been removed because defendant is no longer on the Board of Directors:\n\u201cQ. You are no longer associated with Don R. Phillips, Inc. * * *\nA. That is right. .\nQ. When did you leave Don R. Phillips, Inc.?\nA. March 1st of this year.\nQ. March 1st of \u201971? What attempts have you made, I mean since March 1st \u201971 to collect monies due Don R. Phillips from Don R. Phillips, Inc.?\nA. No efforts.\nQ. No efforts? Do you still work with the members of the Board of Don R. Phillips, Inc. with respect to decisions of the Estate?\nA. Yes, I see Mr. Meyers from time to time.\nQ. Do they still participate in the decisions you make?\nA. Yes, I assume so.\u201d\nAs previously noted, Mr. Meyers is, with defendant, one of the successor trustees and contingent beneficiaries under the Don R. Phillips Trust, and was a director of Don R. Phillips, Inc. at the time defendant held that position. From the testimony it appears that Mr. Meyers, who represented defendant in the present case, is still on the board of directors. It seems obvious that, within the small group of persons involved in the affairs of Don R. Phillips, defendant formed relationships which were not broken by his disassociation from the corporation. The objectivity which defendant lost through his dual status as director and administrator has not been restored by his mere surrender of the former office. It is evident that the interrelationship between the entitites of the corporation, the trust, and the personal estate of Don R. Phillips resulted in a confusion of duties which rendered defendant incapable of acting in the best interests of the estate.\nAn administrator or executor may be removed only for reasons set forth in Ill. Rev. Stat. 1969, ch. 3, par. 276. (In re Estate of Breault (1963), 29 Ill.2d 165, 180, In re Estate of Kuhn (1967), 87 Ill.App.2d 411, 416.) An administrator will be removed, and a special administrator appointed, where there is conflict of interests between the estate and the personal interest of the administrator, Estate of Storer v. Storer (1971), (Ill.App.2d), 269 N.E.2d 352, or between positions held by the executor or administrator, In re Estate of Benson (1969), 111 Ill.App.2d 251. The Illinois Supreme Court has noted that, \u201cUnsuitableness to administer may well consist in an adverse interest of kind * * *\u201d In re Estate of Abell (1946), 395 Ill. 357, 346.\nCertainly, under Sec. 276(a) (10) of the Probate Act, \u201cother good cause for removal\u201d may be seen in the conflict of interest which interferes with the objective administration of the estate. We find that the determination of such a conflict in this case was not against the manifest weight of the evidence. The decision of the trial court is therefore affirmed.\nJudgment affirmed.\nSEIDENFELD, P. J., and GUILD, J., concur.",
        "type": "majority",
        "author": "Mr. JUSTICE THOMAS J. MORAN"
      }
    ],
    "attorneys": [
      "Charles F. Meyers, of Chicago, and William T. Meyers, of Elgin, for appellant.",
      "Joslyn & Green, of Woodstock, for appellee."
    ],
    "corrections": "",
    "head_matter": "In re Estate of Don R Phillips, Deceased\u2014(Edna S. Phillips, Plaintiff-Appellee, v. Evan Mallon, Defendant-Appellant.)\n(No. 71-220;\nSecond District\nMarch 1, 1972.\nRehearing denied March 30, 1972.\nCharles F. Meyers, of Chicago, and William T. Meyers, of Elgin, for appellant.\nJoslyn & Green, of Woodstock, for appellee."
  },
  "file_name": "1085-01",
  "first_page_order": 1105,
  "last_page_order": 1110
}