                             2019 IL App (2d) 180505
                                  No. 2-18-0505
                         Opinion filed September 10, 2019
______________________________________________________________________________

                                               IN THE

                               APPELLATE COURT OF ILLINOIS

                              SECOND DISTRICT
______________________________________________________________________________

In re MARRIAGE OF                      ) Appeal from the Circuit Court
DONNA SLESSER,                         ) of Du Page County.
                                       )
      Petitioner-Appellee,             )
                                       )
and                                    ) No. 15-D-2434
                                       )
JAMES D. SLESSER,                      ) Honorable
                                       ) John W. Demling,
      Respondent-Appellant.            ) Judge, Presiding.
______________________________________________________________________________

       JUSTICE HUTCHINSON delivered the judgment of the court, with opinion.
       Presiding Justice Birkett and Justice Schostok concurred in the judgment and opinion.

                                             OPINION

¶1     Respondent, James D. Slesser, appeals the trial court’s findings in its judgment for the

dissolution of his marriage to petitioner, Donna Slesser. Specifically, respondent contends that

the trial court (1) incorrectly interpreted his authority pursuant to his father’s trust, the Revocable

Living Trust of James A. Slesser; (2) incorrectly interpreted his authority under his mother’s

trust, the Revocable Living Trust of Dorothy M. Slesser; (3) ignored his responsibilities as

trustee of both trusts; (4) applied the wrong legal standard when it looked beyond the “four

corners” of lien documents in determining that the validity of alleged loans had not been shown

by a preponderance of the evidence; and (5) erred in determining the fair-market value of marital

property known as Lot 7. For the reasons that follow, we affirm.
2019 IL App (2d) 180505


¶2                                     I. BACKGROUND

¶3     Petitioner and respondent were married on September 27, 1980. In late 1991 or early

1992, respondent incorporated JDS Homes, a construction business. In 2006, JDS Homes

purchased a parcel of land in Burr Ridge known as the Crosscreek Subdivision. The land was

divided into 10 separate lots. With the exception of Lot 7, all of the lots were developed and

sold. In 2012, respondent incorporated JDS Home Builders. Lot 7 is the primary asset of JDS

Homes and JDS Home Builders.

¶4     On December 1, 2015, petitioner filed for dissolution of the marriage. On July 27, 2017,

respondent filed an amended petition for declaratory judgment. In his petition, respondent

alleged:

       “During the development of the Crosscreek Subdivision, hundreds of thousands of dollars

       were loaned to JDS by two trusts established by [respondent’s] parents, the Revocable

       Living Trust of James A. Slesser dated December 13, 1991[,] and the Dorothy M. Slesser

       Trust dated December 13, 1991, *** and were used by JDS to make interest and required

       principal payments on the Hinsdale Bank loan, real estate tax payments on the Crosscreek

       Subdivision property, and fees and miscellaneous expenses related to the Hinsdale Bank

       loan.”

Respondent further alleged that the funds from his parents’ trusts were “transferred to collateral

accounts established at Wayne Hummer for the benefit of each trust, then to a holding account at

Hinsdale Bank and, finally, disbursed as needed for the various expenses related to the Hinsdale

Bank loan and the development of the Crosscreek Subdivision property.” Respondent then

averred that “the loans from the Slesser Trusts to JDS were memorialized in two separate

mortgages for $300,000 each, both of which were recorded against the undivided Crosscreek



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land parcel on or about February 5, 2010.” Respondent sought a declaration that the funds

transferred from his parents’ trusts created valid and enforceable liens for $300,000 each against

Lot 7, “as marital liabilities subject to equitable allocation between the parties as part of the

overall division of the marital estate.”

¶5     On August 23, 2017, petitioner filed her response to respondent’s petition. She denied its

allegations and demanded strict proof, as respondent had not provided copies of bank statements

reflecting that the funds were loaned from the trusts and that deposits were made into either a

collateral account or a holding account. Petitioner further stated that the mortgages recorded

against Lot 7 were not legitimate loans, because they were intended to benefit respondent.

¶6     The trial court ordered respondent’s petition for declaratory judgment to be taken with

the trial. The trial was held October 2 through 5, 2017. The trial court’s findings on the effect

and validity of the liens recorded against Lot 7 are the crux of this appeal. We will limit our

recitation of the facts and the evidence presented at trial to those surrounding that issue.

¶7     Respondent’s Exhibit No. 30 was his father’s trust. Respondent’s father was named

trustee, with respondent named as trustee in the event that his father was unable to properly

manage his affairs. Under article I of the trust, the trustee was provided with the power to

“withdraw any part of all of the net income or principal of the trust.”

¶8     Respondent’s Exhibit No. 31 was the first amendment to his father’s trust, dated July 2,

1998. The amendment replaced the second paragraph of article V with the following provision:

“If I predecease my spouse, at the time of my death the trustee shall divide the trust property into

two separate trusts known as the Marital Trust and the Family Trust ***.”

¶9     Respondent’s Exhibit No. 32 was a 2005 amendment to his father’s trust. In that

amendment, respondent’s father changed the trustee designation to name himself and respondent



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as co-trustees. That amendment also deleted article I of the trust in its entirety and replaced it

with the following:

       “The trustee shall have the power to withdraw any part or all of the net income and

       principal of the trust for any benefit. Any net income not withdrawn shall be added to the

       principal. *** In all cases, any acting trustee may sign for my trust, solely and without

       the signature of the other trustee. Only one signature of an acting trustee is necessary to

       transfer property or conduct any of the business of my trust ***.”

¶ 10   Respondent’s Exhibit No. 270 was his mother’s trust. Respondent’s father was named

trustee of that trust and respondent was named trustee if his father was unable to properly

manage his financial affairs. Article I of the trust stated that the trustee “shall have power to

withdraw any part or all of the net income and principal of the trust for my benefit.”

Respondent’s Exhibit No. 38 was the July 2, 1998, first amendment to his mother’s trust, which

detailed circumstances if his father predeceased her.

¶ 11   Respondent testified at trial that JDC Homes purchased the Crosscreek Subdivision in

2006 with a loan from Suburban Bank for $1.7 million. However, that amount did not equal the

total purchase price of Crosscreek, because the then-owner took back a note. On December 31,

2017, JDS Homes received a loan from Hinsdale Bank & Trust (Hinsdale Bank) for, according

to respondent, $4,780,634. The note showed an original indebtedness of $1,746,791.30.

According to respondent, this amount was used to pay off the loan from Suburban Bank. During

2007 and 2008, all payments on the Hinsdale Bank loan increased JDS Homes’ indebtedness,

due to what respondent characterized as an interest reserve. Respondent stated that the increases

reflected interest, property tax payments, and improvements to the subdivision. At the end of

2008, the amount due on the loan was $3,301,509.18.



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¶ 12    At the end of 2009, the amount due on the loan had increased to $3,587,634. Respondent

testified that, at the end of 2009 and the beginning of 2010, he made payments to Hinsdale Bank

on the loan with transfers from his parents’ trusts. However, respondent was unable to provide

evidence of these transfers. The only evidence he provided concerning payments to the bank was

Exhibit No. 44, a running balance sheet with handwritten notes detailing large payments made

from the sale of lots from the Crosscreek Subdivision. The balance sheet shows an ultimate loan

payoff on June 5, 2015, which was accomplished through two payments, in the amounts of

$136,000 and $27,975.47. No notes on the balance sheet, or any other bank or business records,

were provided to show the source of those funds.

¶ 13    Respondent’s father died in April 2008. Respondent testified that he did not make the

requisite transfers into a family trust, pursuant to article V of his father’s trust, because he did not

“understand it that way.” No funds were withdrawn and no loans were made from the trust

before his father died. In October 2009, respondent’s attorney prepared two mortgages. The first

mortgage listed JDS Homes as the lender and the Dorothy M. Slesser Trust as the borrower of

$300,000. The second mortgage listed JDS Homes as the lender and the James A. Slesser Trust

as the borrower of $300,000. Respondent characterized the transposition of the lenders and the

borrowers on the mortgages as “in error.” The mortgages were recorded on February 5, 2010.

¶ 14    Respondent admitted that, when the mortgages were recorded, $300,000 had not been

paid from either trust to JDS Homes or himself. Respondent testified that he filed the mortgage

liens for those amounts because he “knew money was being taken out and being borrowed ***.”

He further admitted that he had not made any repayments on the alleged loans.

¶ 15    Respondent testified that the Hinsdale Bank loan was paid down with either proceeds

from the sale of Crosscreek Subdivision lots or funds from his parents’ trusts. He averred that



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2019 IL App (2d) 180505


Hinsdale Bank’s lien on Lot 7 was purchased by his parents’ trusts on June 5, 2015. This

agreement was memorialized through an “Assignment of Mortgage and Assignment of Rents”

between Hinsdale Bank, the “James D. Slesser Trust,” and the Dorothy M. Slesser Trust.

Respondent testified that the reference to the James D. Slesser Trust was in error, as no such

entity exists. The agreement denotes that the trusts agreed to purchase certain documents in

connection with the Hinsdale Bank loan and reflects a purchase price of $240,000. Respondent

stated that Hinsdale Bank’s lien against Lot 7 was never released but, rather, was assigned to the

trusts, as they had bought the right to enforce its terms. The “Assignment of Mortgage and

Assignment of Rents” was recorded on July 30, 2015.

¶ 16   Petitioner testified that she did not believe that any money was owed to respondent’s

parents’ trusts regarding Lot 7. Her belief was based on the “use of collateral that [respondent’s]

father allowed him to use and also the fact he didn’t sign anything to repay it.” She stated that

she did not hear or participate in any conversation in which respondent discussed repaying the

trusts. She admitted that Lot 7 was a marital asset but said that she was unaware of the existence

of any liens on that property.

¶ 17   The trial court made the following findings regarding the mortgages and liens on Lot 7:

       “[T]he most contentious issue at trial was the value of JDS Homes and JDS Home

       Builders. It is acknowledged that the primary asset of JDS Homes is a real estate lot, one

       single real estate lot with a value of between [$400,000] and $450,000. The lot is the last

       in a subdivision that has been developed and the respondent has been holding that lot to

       use as a design build contract.

               There is no dispute with respect to the value of the lot. The dispute lies with the

       efficacy and validity of certain liens which have been placed on the real estate.



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             ***

             The collateralization with respect to the acquisition of the initial land was through

      Hinsdale Bank. Actually it was through Suburban Bank and then finally Hinsdale Bank

      collateralized it to pay off the Hinsdale Bank.

             In addition to the land acquired, *** the loan was collateralized by certain trusts

      and the parties’ marital real estate, marital home.

             At some point, Hinsdale Bank drew payments from the trusts. These trusts

      eventually negotiated a purchase of the Hinsdale Bank collateralization.

             Under the terms of [respondent’s] father’s trust, [respondent] had the power to

      withdraw income and principal for any purpose. The money withdrawn was moved to an

      account operated under his name. The documents prepared for the purchase of the

      Hinsdale loan were in [respondent’s] name, not the trust.

             The evidence is not clear and does not show by the preponderance of the evidence

      that the transactions were actual loans or funds which [respondent] was authorized under

      the trust documents to withdraw, as opposed to withdrawals on his own behalf for his

      own benefit.

             Again, the evidence was not clear that the transactions were actual loans or funds,

      but rather were moneys [sic] which [respondent] authorized under the trust documents to

      withdraw *** on his own behalf for his own benefit.

             While the liens on the property on behalf of the trust may be effective and

      technically valid, [respondent’s] personal obligation on the loans and the actual validity

      of the loans themselves has not been shown by a preponderance of the evidence.

      ***



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               Respondent *** is awarded JDS Homes and JDS Home Builders, which has a

       collective value of between [$400,000] and $450,000. [Respondent] is ordered to pay

       [petitioner] $125,000 for her interest in JDS Homes and JDS Home Builders.

               Judgment will enter against [respondent] and constitute a lien on the property held

       by JDS Homes. ***

               [Petitioner] is awarded a less disproportionate amount of the business, which is

       between 31 and 27 percent based on the fact that JDS Homes and JDS Home Builders

       represents the primary asset that [respondent] utilizes to generate his income, a portion of

       which he will pay as maintenance.”

¶ 18   On May 31, 2018, the trial court issued its written judgment for dissolution of marriage.

The judgment reflects the findings above, although it places a value of between $400,000 and

$425,000 on Lot 7. This appeal followed.

¶ 19                                     II. ANALYSIS

¶ 20   On appeal, respondent contends that the trial court (1) incorrectly interpreted his

authority pursuant to his father’s trust; (2) incorrectly interpreted his authority under his mother’s

trust; (3) ignored his responsibilities as trustee of both trusts; (4) applied the wrong legal

standard when it looked beyond the “four corners” of the lien documents in determining that the

validity of the alleged loans had not been shown by a preponderance of the evidence; and (5)

erred in determining Lot 7’s fair-market value. We begin our analysis with respondent’s first

three contentions.

¶ 21   In his amended petition for declaratory judgment, respondent requested the trial court to

declare that the funds transferred from his parents’ trusts created valid and enforceable liens for

$300,000 each against Lot 7, “as marital liabilities subject to equitable allocation between the



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2019 IL App (2d) 180505


parties as part of the overall division of the marital estate.” The trial court ordered respondent’s

petition to be taken with the trial. Section 2-701(a) of the Code of Civil Procedure provides:

       “No action or proceeding is open to objection on the ground that a merely declaratory

       judgment or order is sought thereby. The court may, in cases of actual controversy, make

       binding declarations of rights, having the force of final judgments, whether or not any

       consequential relief is or could be claimed, including the determination *** of any ***

       contract or other written instrument, and a declaration of the rights of the parties

       interested.” 735 ILCS 5/2-701(a) (West 2016).

No technical form is prescribed for a declaration of rights in a suit for declaratory judgment, and

it is sufficient if the rights can be ascertained from the court’s findings in view of the controversy

presented. City of Quincy v. Sturhahn, 18 Ill. 2d 604, 610-11 (1960). “It is not necessary that a

declaratory judgment shall use the phrase ‘the court declares that rights of plaintiffs (or

defendants) to be,’ as long as the court actually passes upon or adjudicates the issues raised by

the pleadings.” Id. at 611. Arguments not raised in a declaratory judgment petition are forfeited

on appeal and this court will not address whether the trial court’s findings were erroneous. See In

re Marriage of Heinrich, 2014 IL App (2d) 121333, ¶ 62.

¶ 22   In finding that respondent did not show by a preponderance of the evidence that the

recorded mortgages represented actual loans from the trusts to respondent as opposed to just

money respondent withdrew for his own benefit, the trial court adjudicated the issues raised in

the declaratory judgment petition. Respondent’s petition did not raise any issues related to the

language of the trusts or his obligations as trustee under that language. Therefore, respondent’s

first three contentions are forfeited, as they were never raised before the trial court.




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¶ 23   Respondent next contends that the trial court “applied the wrong legal standard when it

looked beyond the four corners of the lien documents in determining that [respondent’s] personal

obligation on the loans and the actual validity of the loans themselves had not been shown by a

preponderance of the evidence.” Respondent’s argument here seems to be that the mortgage

documents contain no ambiguity and must, therefore, be considered only on their face. He asks

this court to apply the de novo standard of review to this issue, as it involves the interpretation of

mortgage language. See 3432 West Henderson Building, LLC v. Gizynski, 2017 IL App (1st)

160588, ¶ 22 (a reviewing court must interpret the language of a mortgage under the de novo

standard of review, which is applied to all contracts).

¶ 24   To contend that the mortgage documents contain no ambiguity strikes us as slightly

disingenuous, considering the fact that the documents list JDS Homes as the lender and

respondent’s parents’ trusts as the borrower. That point notwithstanding, the trial court’s findings

on the validity of the alleged loans were based upon a preponderance of the evidence. When a

trial court makes findings by a preponderance of the evidence in a civil matter, a reviewing court

will reverse those findings only if they are against the manifest weight of the evidence. Best v.

Best, 223 Ill. 2d 342, 348-49 (2006). A decision is against the manifest weight of the evidence

only when an opposite conclusion is clearly apparent or when the court’s findings appear to be

unreasonable, arbitrary, or not based on the evidence. In re Marriage of Romano, 2012 IL App

(2d) 091339, ¶ 44.

¶ 25   Respondent presented no evidence to illustrate any obligation to repay his parents’ trusts.

The trial court was presented with evidence that respondent, at some point, exercised his

authority as trustee under each trust to withdraw funds and that he did so to purchase the

Hinsdale Bank loan documents. Those funds were moved to an account in respondent’s name,



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not in the names of his parents’ trusts. When asked to provide proof of an actual loan, respondent

could not do so. The mere fact that respondent had his attorney draft and record mortgages,

without evidence of an obligation to actually repay the trusts any amount of money, is not

sufficient to create an encumbrance on Lot 7 and reduce its value. As such, we agree with the

trial court’s determination that “the evidence is not clear and does not show by the

preponderance of the evidence that the transactions were actual loans or funds which

[respondent] was authorized under the trust documents to withdraw, as opposed to withdrawals

on his own behalf for his own benefit.”

¶ 26   We now come to respondent’s final contention. Respondent believes that the trial court’s

determination that Lot 7’s fair-market value was between $400,000 and $450,000 was against

the manifest weight of the evidence. Again, respondent directs us to acknowledge $600,000 in

debt obligations to the trusts. The evidence presented at trial does not support this assertion.

¶ 27   The evidence respondent presented at trial indicated that Lot 7 was listed for sale at

$440,000. The evidence does not show that respondent had any actual obligation to repay a loan

or any other indebtedness. Without such evidence, there is nothing to suggest that the mortgages

actually encumbered or reduced the value of Lot 7. The trial court found that the mortgages,

while potentially valid, do not show any obligation for respondent to repay a valid loan. This

finding is not against the manifest weight of the evidence, and we will not disturb the trial court’s

valuation of Lot 7.

¶ 28   For the foregoing reasons, the judgment of the circuit court of Du Page County is

affirmed.

¶ 29   Affirmed.




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