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Minnesota Life Insurance Co. v. D'Agnolo

United States District Court, N.D. Illinois, Eastern Division

January 25, 2017

Minnesota Life Insurance Company, Plaintiff,
v.
Clorinda D'Agnolo, Linda Sullivan as the trustee of the David M. Lipari Trust, Mary A. Lipari, Carol A. Lipari, and P.J.L. a minor, Defendants.

          CORRECTED MEMORANDUM OPINION AND ORDER

          Manish S. Shah United States District Judge

         After David Lipari passed away, a dispute arose over the beneficiary of his life insurance policy. The insurer, Minnesota Life Insurance Company filed a complaint for interpleader and a motion to deposit funds in this action. Defendants Susan, John, Carol, Mary and Paul Lipari, David's ex-wife and children, respectively, filed cross-claims against their co-defendants, Linda Sullivan, David's sister, and Clorinda D'Agnolo, David's significant other. The Liparis move for partial summary judgment regarding the distribution of the Minnesota Life Insurance policy proceeds. The parties have asked the court to resolve: (1) who is the beneficiary of the life insurance policy; (2) which is the controlling document of the trust; and (3) who is the trustee. For the following reasons, the Liparis' motion for partial summary judgment is granted in part and denied in part.

         I. Legal Standards

         Summary 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. Fed.R.Civ.P. 56(a). A genuine dispute as to any material fact exists if the evidence would allow a reasonable jury to return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Justifiable inferences are drawn in the nonmoving party's favor. Id. at 255. The moving party bears 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).

         II. Background

         On October 23, 2001, David Lipari executed the “David M. Lipari Trust Agreement.” [57-12] at 1-5.[1] The subsection “Trustee and Powers” provides, in relevant part:

I shall act as Trustee under this instrument. Upon my death, or if I resign or become incapacitated, my spouse, SUSAN M. LIPARI, shall act as successor Trustee. If SUSAN M. LIPARI is unable or unwilling to act, then CAROL MORIARTY shall act as successor Trustee. If CAROL MORIARTY is unable or unwilling to act, then CAROLYN LINDGREN shall act as Trustee. If CAROLYN LINDGREN is unable or unwilling to act, then LORAINE DILETTI and DENISE SULLIVAN shall act as Co-Trustees. If only one of the aforementioned individuals is able and willing to act, then LINDA SULLIVAN shall act as Co-Trustee with the remaining Co-Trustee. If only one of the aforementioned individuals is able and willing to act, then TERRY SULLIVAN shall act as Co-Trustee with the remaining Co-Trustee. If only one of the aforementioned individuals is able and willing to act, then that individual shall act alone as sole Trustee. If none of the aforementioned individuals are able and willing to act, then NEW YORK LIFE TRUST COMPANY, F.S.B., (or any successor to its trust business) shall act as final Trustee hereunder; provided, however, that the Corporate Trustee shall have no duties under this instrument until it has actual knowledge or has received notice in writing of the death, resignation or incapacity of all of the above named individual Trustees.

[57-12] at 3. Over six years later, David and Susan ended their marriage. [12] ¶ 45. The marriage dissolution order required David to name his four children as sole and exclusive beneficiaries under his wills and trusts. [12] ¶¶ 50-51; [21-3] at 11.

         A document dated February 19, 2011, and titled “First Amendment to the David M. Lipari Trust Agreement Dated October 23, 2001, ” bears David's signature and a notary's signature. [97-2] at 1-2. It purports to delete the original trust's list of successor trustees and replace the relevant language with the following:

I shall act as Trustee under this instrument. Upon my death, or if I resign or become incapacitated, the following named individuals, in the following order, shall serve as successor Trustee: 1. My sister, LINDA SULLIVAN; 2. My sister, DENISE SULLIVAN; 3. My sister, LORI DILETTI; 4. My brother, JOE LIPARI; and 5. My significant other, CLORINDA D'AGNOLO. In the event that CLORINDA D'AGNOLO and I are married at the time of my death, resignation or incapacity, CLORINDA D'AGNOLO's nomination and appointment as successor Trustee shall take priority over any other named individual herein. In the event that my spouse, CLORINDA D'AGNOLO, is unable or unwilling for any reason to so act, the remaining named individuals shall then be nominated, in the same order following her appointment thereof.

[97-2] at 1-2. The Liparis challenge the authenticity of this document. [99] at 8-9. During a deposition in David and Susan's divorce case, David was shown a document titled “First Amendment to the David M. Lipari Trust Agreement Dated October 23, 2001, ” which included the language quoted above and which was identical to the first page of the First Amendment filed as an exhibit in this case. [99] at 8. David testified that he never executed the document.

         David named the David M. Lipari Trust as the sole beneficiary to the proceeds of his Minnesota Life Insurance policy. [57-2] at 3-4. A few weeks after David passed away, the Lipari children claim to have entered into a “Non-Judicial Settlement Agreement Pursuant to 760 ILCS 5/16.1(d)” with their aunt, Carolyn Lindgren, who they say was then the trustee. [107] at 18; [107-1] at 1. It states that the parties to the agreement wish to amend the terms of the administration of the trust, as is permitted under 760 ILCS 16.1(d)(4)(k) & (f) and §§ 11.01, 11.02, 11.08 of the Trust. [107-1] at 1. It then provides that “effective this date, and until such time as she resigns, becomes incapacitated or dies, Susan Lipari shall be delegated all the powers of the position of Trustee.” Id. Thereafter the powers and duties of the Trustee shall revert to Carolyn Lindgren. Id. Sullivan and D'Agnolo challenge the authenticity of the Non-Judicial Settlement Agreement because the Liparis neglected to mention the document in earlier pleadings, including in the Liparis' declaratory judgment claim that Susan is trustee. [111] at 7.

         Several months after David's death and after this litigation had commenced, Sullivan signed a “Trustee Resignation Under the David M. Lipari Trust Agreement, ” which stated that she had not acted as trustee thus far, nor did she intend to act as trustee in the future, and she confirmed that she “do[es] not accept the appointment as trustee under the trust and, if [she is] deemed to be trustee under the trust, [she] hereby resign[s] as trustee effective immediately.” [107-2] at 2. Sullivan's attorney wrote the Liparis a letter, enclosing Sullivan's resignation, and explaining that “[f]or various reasons not related to your aunt's relationship with you she does not believe that it is in your best interests for her to be the successor trustee of your father's trust.” [107-2] at 1. Thereafter, Sullivan claims, the Liparis' attorney solicited similar resignations from the other named trustees in the First Amendment. [97] ¶¶ 9, 11. Denise Sullivan and Loraine/Lori Diletti agreed to not act as successor trustee, but Joe Lipari and Clorinda D'Agnolo have neither agreed nor declined to do so. Id. Believing that no one had been properly installed as trustee, [97] ¶ 10, and due to a change of circumstances and perspective, Linda Sullivan decided she wanted to be the trustee. [97] ¶ 15. On November 4, 2016, Sullivan's lawyer emailed the Liparis' attorney to inform them that “Linda Sullivan hereby revokes the Trustee Resignation and accepts appointment as successor trustee.” [97-4] at 1. The Liparis believe this revocation is ineffective. [99] at 6.

         III. ...


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