Tuesday, March 15, 2016

Judge John Robert Blakey Order; "Based on the evidence in the record, and “construing all facts and reasonable inferences in the light most favorable to the nonmoving party,” the Court finds that there are genuine issues of material fact as to whether the Trust was executed and, if so, upon what terms. There remains a triable issue of fact such that a “reasonable jury could return a verdict for the non-moving party,”

MEMORANDUM Opinion and Order Signed 
by the Honorable John Robert Blakey on 3/15/2016.

Summary Judgement for Plaintiff DENIED, Proceed to Trial;

"Here, there is a genuine dispute of fact concerning the existence of the Trust
and its terms. To establish the existence of the Trust, Plaintiffs rely primarily on
testimony from Ted Bernstein and David Simon. According to that testimony,
Simon Bernstein executed the trust documents as set out in Plaintiffs’ Exhibits 15
and 16. However, the testimony of David Simon and Ted Bernstein, along with the
testimony of the other Plaintiffs, is barred by the Illinois Dead Man’s Act to the
extent it relates to conversations with the deceased or to any events which took
place in the presence of the deceased. See 735 ILCS 5/8-201.1 This dramatically
limits the testimony upon which Plaintiffs may rely in support of their motion, and
leaves the Court without any direct testimony describing the Trust’s creation."

In addition to testimony, Plaintiffs rely on a series of documents purporting
to show that the Trust was created. As mentioned above, Plaintiffs offer Exhibits
15 and 16 as unexecuted versions of the Trust. Yet those documents offer Plaintiffs
little support in the absence of the testimony from David Simon and Ted Bernstein
describing how some form of those exhibits was executed by Simon Bernstein. In
addition to Exhibits 15 and 16, Plaintiffs offer the following:

• Ex. 19 – A 6/21/95 IRS Form SS-4 “Application for Employer Identification
Number” on behalf of the “Simon Bernstein Irrevocable Insurance Trust.”
The Form SS-4 purports to be signed by Shirley Bernstein, Simon’s wife.
It is unclear from the face of the document whether it was submitted to or
approved by the IRS.

    1. There is an exception to the Dead Man’s Act that reads: “If any person testifies on behalf of the
representative to any conversation with the deceased . . . or to any event which took place in the
presence of the deceased . . . any adverse party or interested person, if otherwise competent, may
testify concerning the same conversation or event.” This exception does not apply to the testimony
cited by the Intervenor here because that testimony was given by Ted Bernstein and David Simon on
behalf of the Plaintiffs. It was not given on behalf of the estate’s representative. The Intervenor
merely cited to Plaintiffs’ evidence as a way of showing that the resolution of this matter would
involve credibility determinations with regard to Plaintiffs’ witnesses.

• Ex. 18 – An 8/8/95 “Request for Service” asking to transfer the ownership
of Simon Bernstein’s life insurance policy to the “Simon Bernstein
Irrevocable Insurance Trust dtd 6/21/1995.” This document refers to
“ownership” of the policy, and does not affect the policy’s beneficiaries.

• Exhibit 4 – An “Employee Death Benefit Plan and Trust . . . Beneficiary
Designation” in which Simon Bernstein designated the “Simon Bernstein
Irrevocable Insurance Trust” as the beneficiary to receive his death
benefits. Note that this document does not refer to the Trust at issue
here, the “Simon Bernstein Irrevocable Insurance Trust dated 6/21/95.” It
is unclear from the record if that was an oversight, or was intentionally
done to refer to a distinct trust. This document is dated 8/26/1995.

• Exhibit 8 – An 11/7/95 “Request Letter” asking to change the successor
beneficiary of Simon Bernstein’s life insurance policy to the “Simon
Bernstein Irrevocable Insurance Trust Dated June 21, 1995.” This
document includes a response from the insurance company stating that
the “Simon Bernstein Ins. Trust” had been named a contingent

• Exhibit 36 – A 4/23/2010 letter from Heritage Union Life Insurance to
Simon Bernstein that lists the contingent beneficiary of Simon Bernstein’s
life insurance policy as “Simon Bernstein Trust, N.A.” However, the
insurance company’s representative explained that no one had ever
submitted a change of beneficiary request designating “Simon Bernstein
Trust, N.A.” as a beneficiary of the policy. That representative explained,
without apparent firsthand knowledge, that he thought that the “Simon
Bernstein Trust, N.A.” name was used by mistake by an employee of the
insurance company. Don Sanders Aff. at ¶¶ 69-71.

While the above sources do provide some evidence that the Trust was created,
as Plaintiffs contend, that evidence is far from dispositive of the issue. In fact, the
Intervenor has presented argument and evidence casting material doubt on
whether: (1) the Trust was actually created; and (2) the terms of the Trust are as
explained by Plaintiffs. The Intervenor argues as follows:

• The results and timing of the Plaintiffs search for the Trust raise doubts
about their version of events. Plaintiffs claim that David Simon found
both a hard copy and an electronic version of the Trust in his office. David
Simon has offered testimony here that he aided Simon Bernstein in
creating the Trust, and then kept both versions of the unexecuted Trust.

However, David Simon’s search for the Trust documents occurred approximately a year after Simon Bernstein had died. Almost a year earlier, immediately after Simon Bernstein’s death, the family had conducted an “exhaustive search” for the Trust, and none was found.

Between the two searches, the Bernstein siblings and their former
attorney exchanged many emails addressing how best to obtain the
insurance proceeds. Intervenor’s Ex. A, Dep. Exs. 1-5, 8-18. Many of the
emails reference the inability to locate the Trust document. Id. David
Simon was a participant in those emails, but he did not relate a
recollection of the critical facts from his affidavit regarding his memory of
Simon Bernstein executing the Trust. Nor did those emails cause David
Simon to search his own office for the missing documents. That search did
not occur until after David Simon’s brother (Adam Simon) and his firm
were retained as counsel in this matter.

• In the course of their attempts to obtain the policy proceeds, the Bernstein
siblings discussed using a different trust that had been established by
Simon Bernstein – the “2000 Trust.” Intervenor’s Ex. A at 37:4-18; 48:21-
49:19; Dep. Ex. 1. That option was rejected because Pam Simon was not
included as a beneficiary of that trust. Id. The 2000 Trust is important,
however, in that it identifies the proceeds of the policy at issue here as an
asset of that trust. Intervenor’s Ex. A, Dep. Ex. 23 at Schedule A. The
2000 Trust does not refer to an alleged 1995 trust, which the 2000 trust
would have superseded.

• The original complaint in this matter does not refer to a written trust.
Despite David Simon’s statement that he recalls having created the trust
on his own computer and having seen it after execution, the original
Complaint in this matter makes no reference to the execution of a written
trust. Instead, it refers only to the existence of a “common law trust.” [1].
It makes no mention of the trust documents from Exhibits 15 and 16.

• Plaintiffs have offered testimony that, when Simon Bernstein took his
trust to be executed at his law firm (then Hopkins & Sutter), the firm
changed the identity of the successor trustee. This implies that the firm
would have had an electronic version of the Trust, and possibly a hard
copy. David Simon testified that the firm was contacted to see if it had a
copy of the executed trust and did not; but David Simon could not recall
who contacted the firm, which attorneys were contacted, or if he himself
reached out to the firm at all. Intervenor’s Ex. B at 44:12-45:15; 46:22-

• David Simon also testified that when Simon Bernstein returned from
executing the Trust he helped Mr. Bernstein prepare documents to be
submitted to the insurance company in order to give effect to the Trust.

He also testified that he would have expected the insurance company to retain copies. 

David Simon does not remember any details about who contacted the insurance company. But it is clear that the company retained no copies of documents relevant to the Trust. Intervenor’s Ex. B
at 43:10-44:2.

• The purported trust documents, Exhibit 15 and 16, contain
inconsistencies as to who would serve as the trustee.

Exhibit 16 lists the potential trustees as “Shirley,” “David,” and an illegible name. It then
lists the successor trustees as “Pam, Ted.” Exhibit 15 lists Shirley as the trustee, and David B. Simon as the successor trustee. However, when the Trust first made a claim to the insurance company, it represented that an attorney by the name of Spallina was the trustee. Intervenor’s Ex. B at
59:13-60:3; 81:15-83:12.

Despite all of this, in the current proceeding
the Plaintiffs claim that Ted Bernstein is the trustee.

Based on the evidence in the record, and “construing all facts and reasonable
inferences in the light most favorable to the nonmoving party,” the Court finds that
there are genuine issues of material fact as to whether the Trust was executed and,
if so, upon what terms. There remains a triable issue of fact such that a “reasonable
jury could return a verdict for the non-moving party,” Liberty Lobby, 477 U.S. at
255, and therefore summary judgment is inappropriate. Plaintiffs’ motion is denied
with regard to Count II.


Dated: March 15, 2016
Judge John Robert Blakey
United States District Court

Source and to Read Order

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