Golden Rule Insurance Co. v. Widoff

No. 2--96--1206
________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT
________________________________________________________________

GOLDEN RULE INSURANCE COMPANY, ) Appeal from the Circuit Court
) of McHenry County.
Plaintiff-Appellant, )
) No. 96--CH--288
v. )
)
GERSON F. WIDOFF and )
BETTY WAWANNA WIDOFF )
)
Defendants )
)
(Gerson F. Widoff, as )
Personal Representative of the ) Honorable
Estate of Rosemarie Widoff, ) James C. Franz,
Deceased, Defendant-Appellee). ) Judge, Presiding.
________________________________________________________________

JUSTICE INGLIS delivered the opinion of the court:
Plaintiff, Golden Rule Insurance Company, appeals the
dismissal of its action against defendant, Gerson F. Widoff, as the
personal representative of the estate of Rosemarie Widoff (personal
representative). Plaintiff argues that the trial court improperly
found that it did not have jurisdiction to enjoin the personal
representative of a foreign estate from distributing the assets of
that estate.
The facts are drawn from the pleadings. In June 1995,
defendant, Gerson Widoff, was traveling in a car with Rosemarie
Widoff, Valanna Widoff, and defendant, Betty Widoff. Betty is
Gerson's wife and Rosemarie was his mother. The Widoff car was
struck by a vehicle driven by Gary Sokoloski. Amanda Moeller was
a passenger in Sokoloski's vehicle. Both Sokoloski and Rosemarie
died at the accident scene. Gerson and Betty sustained serious
personal injuries.
Gerson and Betty were insured by plaintiff. Pursuant to that
insurance policy, plaintiff paid $184,215.86 towards Gerson's
medical expenses and $48,011.85 towards Betty's.
Eventually, the injured parties entered into a settlement
agreement with State Farm Insurance Company, the insurer of
Sokoloski's vehicle. Pursuant to the agreement, State Farm paid
$1,000 each to Gerson, Betty, Valanna, and Moeller. State Farm
then paid $296,000 to Rosemarie's estate.
After discovering the nature of the settlement, plaintiff
filed suit against Gerson and Betty, individually, and Gerson, as
the personal representative of Rosemarie's estate. The first count
of plaintiff's complaint alleges that the insurance contract
between it and Gerson and Betty provides that, in the case of a
settlement with a tortfeasor, Gerson and Betty must reimburse
plaintiff the lesser of either the amount paid by plaintiff or 50%
of the settlement. Plaintiff's first count alleges that Gerson and
Betty breached their contract with plaintiff by deliberately
structuring the settlement in a manner which prevents plaintiff
from being reimbursed. In particular, plaintiff alleges that both
Gerson and Betty suffered significant injuries yet they received
only $2,000, while Rosemarie had no medical expenses and her estate
received $296,000.
Plaintiff's second count alleges that Gerson and Betty
committed fraud in structuring the settlement agreement. In
support of this allegation, plaintiff alleges that, since Gerson is
one of three beneficiaries of Rosemarie's will, Gerson and Betty
will receive the benefit of the $296,000 paid to Rosemarie's estate
while avoiding having to reimburse plaintiff. Plaintiff's third
count seeks to enjoin Gerson, as the personal representative of
Rosemarie's estate, from distributing the funds received as a
result of the settlement.
Plaintiff alleges that Gerson and Betty were twice served by
substitute service (see 735 ILCS 5/2--203(a)(2) (West 1996)). The
record, however, contains no return of service to support this
allegation. Subsequent to the time plaintiff alleges that service
was made, Gerson, in his individual capacity, and Betty entered a
general appearance. At the same time, Gerson, in his
representative capacity, entered a special appearance (735 ILCS
5/2--301 (West 1996)). The personal representative alleged that
because Rosemarie was a resident of Florida and because her estate
is in Florida, the trial court had no jurisdiction to enjoin the
personal representative from distributing the estate. The trial
court agreed and dismissed the action against the personal
representative. The dismissal order stated that no just reason
existed to delay the enforcement or appeal of the order (see 155
Ill. 2d R. 304(a)). Plaintiff filed a timely notice of appeal.
The question presented here is one of first impression in
Illinois. Moreover, our research has not revealed a similar case
from another jurisdiction. Unfortunately, the arguments presented
by both parties are vague and inadequate to address an issue of
first impression.
Traditionally, the personal representative of a foreign estate
could only be sued in the jurisdiction in which he was appointed.
31 Am. Jur. 2d Executors & Administrators 1333 (1989). In so
holding, the courts reasoned that a personal representative had no
extraterritorial authority and, therefore, could not be sued
outside of the jurisdiction in which he was appointed. 31 Am. Jur.
2d Executors & Administrators 1333 (1989). Of additional concern
was the public policy of not interfering with the administration of
assets in a foreign state. 31 Am. Jur. 2d Executors &
Administrators 1333 (1989).
This traditional rule has been modified by statutes allowing
long arm jurisdiction. 31 Am. Jur. 2d Executors & Administrators
1337 (1989); see, e.g., 735 ILCS 5/2--209 (West 1996) (Illinois
long arm statute). These statutes allow a court to obtain
jurisdiction over the personal representative of a foreign estate
in order to determine whether the estate is liable for a tort
committed by the decedent in the forum state. 31 Am. Jur. 2d
Executors & Administrators 1337 (1989).
Our review of the law in this area reveals that the claims
that typically subject the personal representative of a foreign
estate to jurisdiction are qualitatively different from the claim
plaintiff is asserting against Rosemarie's estate. For example,
the Illinois long arm statute provides a list of 14 different
activities which provide long arm jurisdiction. 735 ILCS 5/2--
209(a) (West 1996). This list encompasses five general categories
of activities: (1) the transaction of business or the making or
performance of a contract in Illinois; (2) insuring a person,
property, or a risk located in Illinois; (3) committing a tortious
act in Illinois; (4) exercising ownership of, use of, or possession
of property in Illinois; and (5) committing certain acts in
Illinois relating to domestic relations. 735 ILCS 5/2--209(a)
(West 1996). Cases from other jurisdictions reveal a similar
pattern. See Annotation, State Statutes or Rules of Court
Conferring In Personam Jurisdiction over Nonresidents on the Basis
of Isolated Acts or Transactions within State as Applicable to
Personal Representative of Deceased Nonresident, 19 A.L.R.3d 171
(1968), for a discussion of actions brought against foreign
personal representatives. Our review of the cases involving long
arm jurisdiction reveals the common thread that the plaintiff seeks
to hold the estate liable for some action or activity performed by
the decedent in the forum state.
In this case, however, plaintiff's claim against Rosemarie's
estate is of an entirely different character. The difference here
is that plaintiff is not seeking to hold Rosemarie's estate liable
for anything. Indeed, plaintiff has not alleged that Rosemarie
committed any act that would render her estate liable to plaintiff.
Instead, plaintiff desires an Illinois court to control the
distribution of the assets of a Florida estate.
Plaintiff argues that the court has jurisdiction to issue the
injunction because it can obtain in personam jurisdiction over the
personal representative, an Illinois resident. An examination of
the varying types of jurisdiction, however, reveals that
plaintiff's claim does not require in personam jurisdiction over
the personal representative, but rather quasi in rem jurisdiction
over the assets of the estate.
The Supreme Court explained in Hanson v. Denckla, 357 U.S. 235, 2 L. Ed. 2d 1283, 78 S. Ct. 1228 (1958), that three possible
types of jurisdiction exist. In personam jurisdiction anticipates
the imposition of "a personal liability or obligation on one person
in favor of another." Hanson, 357 U.S. at 246 n.12, 2 L. Ed. 2d at
1293 n.12, 78 S. Ct. at 1235 n.12. In rem jurisdiction "affects
the interests of all persons in [the] designated property."
Hanson, 357 U.S. at 246 n.12, 2 L. Ed. 2d at 1293 n.12, 78 S. Ct.
at 1235 n.12. Quasi in rem jurisdiction "affects the interests of
particular persons in [the] designated property." Hanson, 357 U.S.
at 246 n.12, 2 L. Ed. 2d at 1293 n.12, 78 S. Ct. at 1235 n.12. Two
types of quasi in rem actions exist. In one, the plaintiff seeks
"to secure a pre-existing [sic] claim in the subject property and
to extinguish or establish the nonexistence of similar interests of
particular persons." Hanson, 357 U.S. at 246 n.12, 2 L. Ed. 2d at
1293 n.12, 78 S. Ct. at 1235 n.12. In the other, the plaintiff
seeks to use the defendant's property to satisfy a judgment or
claim. Hanson, 357 U.S. at 246 n.12, 2 L. Ed. 2d at 1293 n.12, 78 S. Ct. at 1235 n.12.
Plaintiff here is clearly not seeking a "personal" obligation
from either the personal representative or Rosemarie's estate.
Instead, plaintiff seeks to control the distribution of the assets
of Rosemarie's estate. Therefore, plaintiff is attempting to
preclude others, namely, the beneficiaries of Rosemarie's will,
from receiving the money until after this action is resolved. Such
an attempt is intended to establish plaintiff's right to the money
while extinguishing any claim that Rosemarie's beneficiaries have
to the money. Thus, plaintiff's claim requires quasi in rem
jurisdiction.
As the Supreme Court explained, the basis of in rem and quasi
in rem jurisdiction "is the presence of the subject property within
the territorial jurisdiction of the forum State." Hanson, 357 U.S.
at 246, 2 L. Ed. 2d at 1293, 78 S. Ct. at 1236. Here, no credible
argument can be made that the subject property, the money received
by the estate, is present anywhere but in Florida. Since the money
is present only in Florida, an Illinois court has no basis to
exercise quasi in rem jurisdiction over it.
Plaintiff does not argue that the money is in Illinois.
Instead, even though plaintiff does not explicitly state so, it
appears to be attempting to invoke an exception which allows a
court indirectly to exercise control over foreign property by using
its equitable powers to compel a party over whom it has in personam
jurisdiction "to do some act in relation to the property in
accordance with the laws of the State where the property is
situated." Chirekos v. Chirekos, 33 Ill. App. 3d 606, 609 (1975).
This exception may only be exercised, however, if (1) the
equitable order is incidental to the claim being brought; and (2)
the court has in personam jurisdiction over all of the interested
parties. De Licea v. Reyes, 87 Ill. App. 3d 704, 707 (1980);
Chirekos, 33 Ill. App. 3d at 609; In re Estate of Hansen, 109 Ill.
App. 2d 283, 292 (1969).
In this case, the problem is that the court does not have
jurisdiction over all of the interested parties, namely, the
beneficiaries of Rosemarie's will. In addition to Gerson, Gerson's
brother (Michael Widoff) and a trust are beneficiaries of
Rosemarie's will. Not only has plaintiff never attempted to obtain
in personam jurisdiction over Michael, but plaintiff has not even
identified either the trustee or the beneficiary of the trust, let
alone attempted to obtain in personam jurisdiction over either of
them.
Since the court does not have in personam jurisdiction over
all of the interested parties, this exception cannot provide the
court with the jurisdiction necessary to enjoin the distribution of
the assets of Rosemarie's estate.
We may affirm a judgment on any legal grounds that have
factual support in the record, even if those grounds were not
raised before the trial court. Tim Thompson, Inc. v. Village of
Hinsdale, 247 Ill. App. 3d 863, 887 (1993). After reviewing the
record, we conclude that plaintiff is requesting the trial court to
exercise quasi in rem jurisdiction over Rosemarie's Florida estate.
Since an Illinois court has no basis to do so, we must affirm the
trial court's judgment.
The judgment of the circuit court of McHenry County is
affirmed.
Affirmed.
McLAREN and HUTCHINSON, JJ., concur.