EAST ST. LOUIS – Wealthy widow Marcia Billhartz asserts Illinois citizenship in a suit against stepson Ward Billhartz, who claims she lives in Florida.
Chief U.S. District Judge Nancy Rosenstengel must place Marcia’s domicile in one state or the other in order to determine jurisdiction.
Marcia seeks an order allowing her to sell shares of First Collinsville Bank as she sees fit or requiring the bank to buy them.
She owns about 45 percent of the bank’s common shares.
Her counsel Christopher Byron of Edwardsville claims Ward froze Marcia out of a trust that her late husband Warren Billhartz established.
Warren made enough money to earn a Wikipedia entry.
He ran First National Bank of Collinsville as principal shareholder, sold it to United Missouri Bank, and founded First Collinsville Bank.
He divorced Ward’s mother Norma in 1978, and married Marcia in 1979.
He died in 2006.
Byron filed Marcia’s suit on Aug. 11, in Madison County court where his late father Nicholas Byron presided as circuit judge from 1988 to 2008.
Along with Ward, Marcia sued the bank’s holding company, bank director Mark Zavaglia, and Ward’s trust.
According to Byron’s complaint, Marcia owns 8,194 Class B shares and Ward’s trust owns 1,671 Class A shares.
Byron wrote that Class B shareholders don’t have a vote.
He claimed Ward and Zavaglia made decisions affecting the value of shares without apprising her of the decisions.
He claimed they failed to pay her a dividend, compensated themselves in excess of industry standards, wasted assets, and shifted earnings into their own pockets.
He asked for an accounting back to 2006, payment of dividends, and authority to sell shares to third parties or have the bank buy them at fair market value.
Bank counsel Brian Lamping of St. Louis removed the suit to district court on Aug. 23, on the basis of diverse citizenship.
“Plaintiff is a resident and citizen of the state of Florida,” Lamping wrote.
He moved to dismiss her complaint on Aug. 24, claiming Marcia’s trust held shares for 13 years and she never challenged restrictions on transfers.
He claimed the bank provided all the information she requested and it provided liquidity by redeeming certain of her shares.
Byron moved to remand the suit to Madison County on Sept. 23, claiming Marcia’s domicile is in Illinois.
He wrote that she splits her time almost evenly between Illinois and Florida but her center of gravity is Illinois.
He wrote that she lived in Illinois her entire life, owns a home in Illinois, and holds family gatherings at her Illinois home.
He wrote that she keeps most of her belongings and property at the home, that her doctors and bank accounts are in Illinois and that she maintains a vehicle in Illinois with an Illinois plate.
He admitted she owns a Florida house, obtained a Florida license and registered vehicles there, and asserted Florida residency for tax purposes.
Ward Billhartz and Zavaglia retained Daniel Nester of St. Louis, who had not answered the complaint as of Sept. 27.
Ward and Marcia, current adversaries, litigated together after Warren died.
As executors of his estate, they filed a tax return claiming a $14 million deduction for $3,500,000 payments to Ward and his three sisters.
Internal Revenue rejected the deduction, and the estate sued in U.S. Tax Court.
Judge Maurice Foley set trial in 2012, but canceled it when the estate and Internal Revenue settled on a deduction of $7,350,000.
Through the proceedings Ward and his sisters learned that the divorce of their parents provided half of his estate for them to share evenly.
The daughters sued Marcia in St. Clair County circuit court in June 2012, claiming Marcia concealed the provision.
Ward sued her too, after resigning as executor of Warren’s estate.
Marcia settled, and among other terms the estate paid each daughter $1,450,000.
The distribution didn’t include Ward, who had originally received $6 million more than his sisters.
Marcia sought to soften the blow by having the tax court recalculate the deduction.
The revenue commissioner moved to enforce the settlement, and Foley granted the motion in 2013.
Marcia appealed to Seventh Circuit appellate judges in Chicago, and the revenue commissioner prevailed in 2015.
Justice Joel Flaum wrote, “Settlements are meant to substitute certainty for risk, but that does not make them risk free.”
Settlements close the door to new information, he wrote, and that’s risky.