United States District Court, N.D. Illinois, Eastern Division
SIMON BERNSTEIN IRREVOCABLE INSURANCE TRUST DTD 6/21/95, et al., Plaintiffs,
HERITAGE UNION LIFE INSURANCE CO., Defendant. HERITAGE UNION LIFE INSURANCE COMPANY, Counter-Plaintiff,
SIMON BERNSTEIN IRREVOCABLE INSURANCE TRUST DTD 6/21/95, Counter-Defendant, and FIRST ARLINGTON NATIONAL BANK, et al., Third-Party Defendants. ELIOT IVAN BERNSTEIN, Cross-Plaintiff,
TED BERNSTEIN, et al., Cross-Defendants, and PAMELA B. SIMON, et al., Third-Party Defendants.
MEMORANDUM OPINION AND ORDER
Robert Blakey United States District Judge
action concerns the distribution of proceeds from a life
insurance policy (the “Policy Proceeds”)
previously held by decedent Simon Bernstein. The principal
parties remaining in the case are: (1) Plaintiff Simon
Bernstein Irrevocable Insurance Trust Dated 6/21/95 (the
“1995 Trust”); (2) the four Bernstein siblings
who believe the Policy Proceeds should be distributed to the
1995 Trust (Ted Bernstein, Lisa Friedstein, Jill Iantoni and
Pam Simon; collectively, the “Agreed Siblings”);
(3) the fifth Bernstein sibling, Eliot Bernstein, a pro
se third-party Plaintiff who disputes that approach
(“Eliot”); and (4) the intervenor estate of Simon
Bernstein (the “Estate”), which contends that the
1995 Trust was never actually created, such that the Policy
Proceeds should default to the Estate.
the Court are two motions for summary judgment. In the first,
 at 1-4, the 1995 Trust and the Agreed Siblings seek
judgment on Eliot's third-party claims. In the second,
 at 1-6, the Estate seeks judgment against the 1995
Trust and the Agreed Siblings on their claims in the Second
Amended Complaint, , and entry of judgment in the
Estate's favor on its Complaint for Declaratory Judgment.
 at 1-17. For the reasons explained below, the former is
granted while the latter is denied.
Simon Bernstein's death on September 13, 2012, the 1995
Trust submitted a death claim to Heritage pursuant to Simon
Bernstein's life insurance policy.  at 15;  at
13. After Heritage failed to pay, the 1995 Trust initiated
this lawsuit in the Circuit Court of Cook County, alleging
that Heritage had breached its contractual obligations. [1-1]
at 1-3. On May 20, 2013, Jackson National Life Insurance
Company (“Jackson”), as successor in interest to
Heritage, removed the case to this Court.  at 1-2.
26, 2013, Heritage, through Jackson, filed a Third-Party
Complaint and Counter-Claim for Interpleader pursuant to 28
U.S.C. § 1335(a) and Federal Rule of Civil Procedure 14,
seeking a declaration of rights under the life insurance
policy.  at 1-10. Heritage was eventually dismissed in
February of 2014 after interpleading the Policy Proceeds.
 at 2.
September 22, 2013, Eliot, a third-party Defendant to
Jackson's interpleader claim, filed a 177-page Answer,
Cross-Claim and Counter-Claim.  at 1-117. Eliot brought
claims against the 1995 Trust, the Agreed Siblings, and
multiple third-party Defendants (including the law firm of
Tescher & Spallina, P.A., The Simon Law Firm, Donald
Tescher, Robert Spallina, David Simon, Adam Simon, S.B.
Lexington, Inc., S.B. Lexington, Inc. Employee Death Benefit
Trust, and S.T.P. Enterprises, Inc.). Id.
January 13, 2014, the Agreed Siblings and the 1995 Trust
filed their First Amended Complaint.  at 1-11. Plaintiffs
alleged that: (1) the 1995 Trust was a common law trust
established in Chicago by Simon Bernstein; (2) Ted Bernstein
is the trustee of the 1995 Trust; and (3) the 1995 Trust was
the beneficiary of Simon Bernstein's life insurance
policy. Id. In addition, Plaintiffs alleged that all
of Simon Bernstein's children, including Eliot,
are equal beneficiaries to the Trust. Id.
March 3, 2014, the Court dismissed Eliot's claims against
Tescher & Spallina, P.A., Donald Tescher, and Robert
Spallina.  at 1-4. The Court explained that Eliot, as a
third-party Defendant to an interpleader claim, was
“not facing any liability” in this action, and he
was accordingly not authorized to seek relief against other
third parties. Id.
5, 2014, the Estate filed its Complaint for Declaratory
Judgment,  at 1-16, and on July 28, 2014, the Court
granted the Estate's motion to intervene.  at 3-4.
discovery closed on January 9, 2015, , and on March 15,
2016 the Court denied Plaintiffs' motion for summary
judgment.  at 1-6. The Court found, inter alia,
that while Plaintiffs were able to adduce “some
evidence that the  Trust was created, ” this
evidence was “far from dispositive.” Id.
Probate Division of the Palm Beach County Circuit Court
recently resolved two other cases related to the disposition
of Simon Bernstein's assets: In re Estate of Simon L.
Bernstein, No. 502012CP004391XXXNBIH (Fla. Cir. Ct.) and
Ted Bernstein, as Trustee of the Shirley Bernstein Trust
Agreement dtd 5/20/2008 v. Alexandra Bernstein, et al.,
No. 502014CP003698XXXXNBIJ (Fla. Cir. Ct.) (collectively, the
John L. Phillips presided over a joint trial of the Probate
Actions in December of 2015. A full recitation of Judge
Phillips' findings is unnecessary here, but relevant
portions of his finals orders include:
• The testamentary document identified as the
“Will of Simon Bernstein” was “genuine and
authentic, ” and “valid and enforceable according
to [its] terms.”
• Ted Bernstein “was not involved in the
preparation or creation of” the Will of Simon
Bernstein, “played no role in any questioned activities
of the law firm of Tescher & Spallina, P.A., ”
there was “no evidence to support the assertions of
Eliot Bernstein that Ted Bernstein forged or
fabricated” the Will of Simon Bernstein, and, in fact,
“Ted Bernstein played no role in the preparation of any
improper documents, the presentation of any improper
documents to the Court, or any other improper act, contrary
to the allegations of Eliot Bernstein.”
• The beneficiaries of the testamentary trust identified
in the Will of Simon Bernstein are “Simon
Bernstein's then living grandchildren, ” while
“Simon's children - including Eliot Bernstein - are
• Eliot “should not be permitted to continue
representing the interests of his minor children, because his
actions have been adverse and destructive to his
children's interest, ” such that it became
necessary to appoint a guardian ad litem.
[240-11] at 2-5; [240-12] at 2-3.
judgment is appropriate if the movant shows that there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law. Spurling v. C
& M Fine Pack, Inc., 739 F.3d 1055, 1060 (7th Cir.
2014). A genuine dispute as to any material fact exists if
“the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The
party seeking summary judgment has the burden of establishing
that there is no genuine dispute as to any material fact.
See Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986). In determining whether a genuine issue of material
fact exists, this Court must construe all facts and
reasonable inferences in the light most favorable to the
nonmoving party. See CTL ex rel. Trebatoski v. Ashland
Sch. Dist., 743 F.3d 524, 528 (7th Cir. 2014).
Motion for Summary Judgment on Eliot's Claims
currently has seven claims pending against the 1995 Trust,
the Agreed Siblings, David Simon, Adam Simon, The Simon Law
Firm, S.B. Lexington, Inc., S.B. Lexington, Inc. Employee
Death Benefit Trust, and S.T.P. Enterprises,
 at 61-117. Eliot's causes of action sound in fraud,
negligence, breach of fiduciary duty, conversion, abuse of
legal process, legal malpractice, and civil
Fraud, Negligence, Breach of Fiduciary Duty & Legal
argue that Eliot's claims for fraud, negligence, breach
of fiduciary duty, and legal malpractice fail because Eliot
“cannot show that he sustained damages or that he has
standing to assert damages on behalf of his children or the
Estate.”  at 14; see also Damato v. Merrill
Lynch, Pierce, Fenner & Smith, Inc., 878 F.Supp.
1156, 1162 (N.D. Ill. 1995) (damages are a requisite element
of a claim for fraud); Elliot v. Chicago Hous.
Auth., No. 98-cv-6307, 1999 WL 519200, at *9 (N.D. Ill.
July 14, 1999) (damages are a requisite element of a claim
for negligence); Pearson v. Garrett-Evangelical
Theological Seminary, Inc., 790 F.Supp.2d 759, 768 (N.D.
Ill. 2011) (damages are ...