Supreme Court Summaries


Opinions filed September 20, 2012


 

 

 

Rush University Medical Center v. Sessions, 2012 IL 112906

Appellate citation: 2011 IL App (1st) 101136.

 

      JUSTICE THOMAS delivered the judgment of the court, with opinion.

      Chief Justice Kilbride and Justices Freeman, Garman, Karmeier, Burke, and Theis concurred in the judgment and opinion.

 

      In 1994, Robert Sessions created a trust for his own benefit. It contained a “spendthrift” provision prohibiting any trust assets from being used to pay creditors of himself or his estate. Beginning in 1995, he promised $1.5 million to plaintiff Rush University Medical Center for the building of a president’s house on its Chicago campus. He made an irrevocable pledge to the plaintiff for this purpose and provided for it in his will. The building was constructed, began operation, and bears his name.

      Sessions later blamed Rush University Medical Center for not diagnosing sooner the late-stage lung cancer of which he ultimately died on April 25, 2005, with no payments having been made on the pledge. Six weeks before his death, he executed a new will making no provision for any payment on the pledge to the plaintiff.

      Plaintiff medical center filed a claim in the probate estate and was awarded a summary judgment that was affirmed by the appellate court, but the assets of the estate were insufficient to fulfill the $1.5 million pledge. The action giving rise to this appeal is a supplemental proceeding in which the plaintiff sought to reach the assets of the 1994 trust, which were worth almost $19 million at the time of Sessions’ demise.

      In the supplemental proceeding, the circuit court of Cook County entered summary judgment for the plaintiff, finding that the trust must pay the pledge, but the appellate court reversed after the trust argued that such a result was in conflict with the Uniform Fraudulent Transfer Act, which is specific as to when a transfer is fraudulent.

      In this decision, the Illinois Supreme Court rejected the ruling of the appellate court and affirmed the circuit court. The supreme court explained that, at common law, a person cannot settle his estate in trust for his own benefit so as to be free from liability for his debts. The fact that the Act specifies certain instances in which transfers can be considered fraudulent does not mean that the statute abrogates the common law rule. The rule and the statute can coexist, and the creditor here was entitled to reach these trust assets.