Danley v. Zydlo

Filing 97

MEMORANDUM Opinion and Order: This Court denies Defendant's Motion for Summary Judgment 74 as to Plaintiff's entire Third Amended Complaint. Signed by the Honorable Sharon Johnson Coleman on 3/29/2018. Mailed notice.(ym, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
DEWINA L. DANLEY,
Plaintiff,
v.
JOYCE R. ZYDLO, individually and as
Trustee of the Stanley M. Zydlo Trust,
Date[d] May 26, 1981,
Defendants.

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Case No. 16-cv-2872
Judge Sharon Johnson Coleman

MEMORANDUM OPINION AND ORDER
Plaintiff, Dewina Danley (“Danley”), brings this suit against Defendant, Joyce R.
Zydlo (“Zydlo”), for failure to distribute specified assets pursuant to her obligations as (1)
the executor of her late ex-husband, Stanley M. Zydlo’s (“Decedent”) estate, and (2) the
Trustee of the Stanley M. Zydlo 1981 Trust (“Trust”). Defendant now moves for summary
judgment pursuant to Federal Rule of Civil Procedure 56 for all claims in Plaintiff’s
Complaint. After reviewing the Parties’ submissions and the evidence before it, the Court
finds that there are disputes as to material fact that affect all claims. Accordingly,
Defendant’s Motion is denied.
Background
The following facts are undisputed unless noted. Danley married Decedent on
September 1, 1957, and they divorced about 17 years later. The two entered into Divorce
Property Settlement Agreements in 1972 and 1973 (“PSA”). Paragraph (H)(7) of the PSA
provided that if a modification was required at a later date, that it would need to be in
writing, signed, and acknowledged by both Danley and the Decedent. The PSA also stated
that the agreement was an absolute and irrevocable contract that was binding on the parties,
their executors, administrators, heirs, beneficiaries, and other legal representatives for the

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purpose of carrying out its terms. Decendent and Danley agreed to amend the PSA in 1975,
which changed certain specified terms of the previous agreement, but did not invalidate it.
The amendment required Decedent to maintain certain “Term Insurance” policies totaling
$150,000 and to designate Danley as the beneficiary. The amendment also required the
replacement of certain employment-related insurance policies in the event that any were ever
terminated.
Zydlo married Decedent in August of 1976 and they remained married for 39 years
until his death on June 3, 2015. Zydlo was eventually named Decedent’s Executor. While
Zydlo knew that the PSA agreements existed, she testified that she never saw any PSAs
during her marriage. Additionally, Zydlo stated that she did not understand what, if any,
obligations to Danley were created by the PSAs until Danley brought the instant suit.
Plaintiff disputes Zydlo’s lack of awareness and understanding of the PSAs.
From the time of the PSAs until Decedent’s death, all of the referenced policies were
terminated, which Danley later became aware of. In November 1991, Danley sent a letter to
Decedent’s lawyer complaining about how Decedent had allowed two of the term Home
Life Insurance Policies, in which Danley had an interest, to lapse and how he had not named
Danley or their children as irrevocable beneficiaries in the succeeding policies. Decedent’s
attorney responded in a letter that reiterated Decedent’s intent to honor his obligations to
Danley under the PSAs and provide at least $150,000 of life insurance on his life with her as
the primary beneficiary. Danley contends that the subsequent Aurora Life Insurance Policy
should have been a succeeding substitute policy under the PSA amendment and thus, she
should have been named beneficiary. Defendant disputes this assertion.
On July 25, 1995, Decedent executed a Restatement of his 1981 Trust and
bequeathed $150,000 to Danley minus any insurance proceeds she might have received on

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his life. The Trust was fully revocable and subject to any change that the Trustee at the time
desired. Pursuant to the Restatement, Zydlo was to be the Successor Trustee upon
Decedent’s death. Zydlo contends that she was not aware of the terms of the Trust and did
not read any of the Trust documents until after her husband’s death. Plaintiff disputes this
fact.
On October 17, 2000, Decedent executed another trust, the “Stanley M. Zydlo
Irrevocable Insurance Trust” (“Irrevocable Trust”). He named Zydlo as Trustee and
primary, irrevocable beneficiary. He also sent a request to to change the owner of his Ohio
National Financial Services policy to the Irrevocable Trust. Plaintiff questions whether these
actions were taken by Decedent or Zydlo. After Decedent’s death, the Ohio National policy
paid out $25, 647.18 to the Irrevocable Trust, to which Zydlo was Trustee and beneficiary.
Zydlo testified that she only learned that the original Trust was possibly a beneficiary of the
Ohio National policy at her deposition. Plaintiff disputes this fact. The Jackson National
Life policy also designated the Irrevocable Trust as its beneficiary. After Decedent’s death, it
paid out a check for $151,661.28 to the Irrevocable Trust.
In 2003, Decedent sent Aurora Life Insurance Company a hand-written letter
requesting cancellation of the policy and a check for its entire value. Plaintiff disputes
whether Decedent wrote this letter himself, whether he cancelled it unilaterally, and whether
there was any legal basis for terminating the policy without providing notice to Danley.
Zydlo maintains that she did not ever discuss the decision to cancel the policy with
Decedent. In February of 2003, Decedent received the Aurora Life Insurance policy’s
surrender check for $59,032. He endorsed it to Zydlo, and she deposited the check into her
personal account. Plaintiff also questions whether Zydlo used the proceeds to pay family
bills and living expenses as she testified.

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Upon Decedent’s death, Zydlo assumed duties as Executor and did not distribute
any part of Decedent’s estate to Danley. Zydlo maintains that Decedent never funded the
original Trust, and it remained unfunded when she assumed the role as Successor Trustee.
Zydlo represented that at the time of Decedent’s death, the Trust’s only assets were four
vacant parcels of real estate. Zydlo cites the Small Estate Affidavit (“Affidavit”) that she
prepared following Decedent’s death as proof of the available assets, but Plaintiff questions
the authenticity of this document’s content as it was never filed, witnessed, stamped, or
certified. The Affidavit did not mention any debt of $150,000 to Danley. Danley disputes
that all of Decedent’s debts and assets were listed accurately, as his estate was never
accounted for or verified by any source other than Zydlo.
Danley brought this Complaint against Zydlo for various breaches of duty and
contract. As executor of Decedent’s estate and as Trustee of Decendent’s Trust, Danley
alleges that Zydlo used her influence to self-deal and deprive Danley of her entitlements
under the PSA agreements with Decedent, to include the bequest Decedent made to Danley
in the original Trust.
Legal Standard
Summary judgment is appropriate “if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is
no genuine issue as to any material fact and that the moving party is entitled to a judgment as
a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265
(1986); see also Fed. R. Civ. P. 56(c). The moving party bears the initial burden of
demonstrating that there is no genuine issue of material fact, and if done, judgment as a
matter of law should be granted in its favor. Vision Church v. Vill. of Long Grove, 468 F.3d 975,
988 (7th Cir. 2006). “To determine whether genuine issues of material fact exist, we ask if

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‘the evidence presents a sufficient disagreement to require submission to a jury or whether it
is so one-sided that one party must prevail as a matter of law.’” Adeyeye v. Heartland Sweeteners,
LLC, 721 F.3d 444, 449 (7th Cir. 2013) (citing Anderson, 477 U.S. at 251-52). All evidence
and inferences must be viewed in the light most favorable to the non-moving party. Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).
Discussion
Danley’s suit involves six claims against Zydlo for Zydlo’s failure to distribute
specific assets to Danley that Danley maintains she was entitled to under the PSA
agreements upon Decedent’s passing. Defendant moves for summary judgment on
Plaintiff’s entire Third Amended Complaint based on the evidence presented. The Court,
however, finds that the evidence does not resolve the material issues in Defendant’s favor.
At the crux of all of Danley’s claims are the questions of whether there was a
continued obligation to pay her $150,000 under the Amended PSA upon Decedent’s death;
whether the term insurance policies in question applied to these obligations; whether Zydlo
was aware of these obligations under the PSAs and was aware of her responsibilities as
executor and trustee; whether there were actually any funds or assets in Decedent’s estate
and/or Trust to distribute to Danley; and whether Zydlo had any involvement in the
cancellation of insurance policies and liquidation of assets in the estate prior to distribution.
Danley continues to dispute Zydlo’s responses to these issues, which are material to
resolving this matter. The only evidence Zydlo offered to cure the inconsistencies is her
own testimony from her deposition. She offers nothing to corroborate her position.
Unfortunately for Zydlo, this showing is not enough to meet her burden at the summary
judgment stage because the Court cannot rely exclusively on assertions that can be construed
as “self-serving” to make its ruling. It is well-established that uncorroborated, self-serving,

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conclusory assertions cannot defeat a motion for summary judgment. Berry v. Chi. Transit
Auth., 618 F.3d 688, 691 (7th Cir. 2010). Reaching a conclusion based only on this type of
evidence would require the Court to enter into the purview of a jury—weighing the value of
the evidence and making a credibility determination about the witnesses. This is not
appropriate for summary judgment. Payne v. Pauley, 337 F.3d 767, 771 (7th Cir. 2003)(finding
it to be “dangerous territory” for a court to weigh conflicting evidence during summary
judgment).
Conclusion
Based on the foregoing, this Court denies Defendant’s Motion for Summary
Judgment as to Plaintiff’s entire Third Amended Complaint.
IT IS SO ORDERED.

ENTERED:

SHARON JOHNSON COLEMAN
United States District Court Judge

Dated: 3/29/2018

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