REASSURE AMERICA LIFE INSURANCE COMPANY v. THE GENNARO J. PERILLO & MINNIE PERILLO IRREVOCABLE TRUST
Filing
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OPINION. Signed by Judge Robert B. Kugler on 10/14/2011. (dmr)
NOT FOR PUBLICATION
(Doc. Nos. 54, 55)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
___________________________________
:
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REASSURE AMERICA LIFE
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INSURANCE COMPANY,
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Civil No. 09-1878 (RBK/KMW)
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Plaintiff,
:
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v.
OPINION
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THE GENNARO J. PERILLO & MINNIE :
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PERILLO IRREVOCABLE TRUST f/b/o
THE CHILDREN and THE GENNARO J. :
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PERILLO & MINNIE PERILLO
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IRREVOCABLE TRUST f/b/o THE
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GRANDCHILDREN,
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Defendants.
___________________________________ :
KUGLER, United States District Judge:
This matter arises out of a dispute between the co-Defendant Gennaro J. Perillo & Minnie
Perillo Irrevocable Trust for the Benefit of the Children (“the Children’s Trust”) and the
co-Defendant Gennaro J. Perillo & Minnie Perillo Irrevocable Trust for the Benefit of the
Grandchildren (“the Grandchildren’s Trust”) (collectively, “the Claimants”) over the right to
recover insurance proceeds from a policy issued by Reassure America Life Insurance Company
(“Reassure America”). Reassure America originally brought an interpleader action as a
stakeholder to adjudicate the competing claims of the Children’s Trust and the Grandchildren’s
Trust. Reassure America has since been dismissed from this action after depositing the life
insurance proceeds into an escrow account pending identification of the proper life insurance
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beneficiary.
Before the Court are cross-motions for summary judgment filed by the Children’s Trust
and the Grandchildren’s Trust pursuant to Federal Rule of Civil Procedure 56. The Children’s
Trust seeks enforcement of a settlement agreement that was purportedly entered into by the
Claimants. The Grandchildren’s Trust seeks to have the Court designate it as the sole beneficiary
of the Reassure America life insurance proceeds. For the following reasons, the Court denies
both cross-motions for summary judgment.
I.
BACKGROUND
Reassure America issued a $262,000 life insurance policy on Minnie Perillo
(“Decedent”). Compl. ¶ 12. Decedent designated the “Gennaro J. & Minnie Perillo Irrevocable
Trust” as the policy’s beneficiary. Compl. ¶ 13. After Decedent’s death, Reassure America
received benefit claims from the Children’s Trust and the Grandchildren’s Trust, both of which
share the name “Gennaro J. & Minnie Perillo Irrevocable Trust.” Compl. ¶¶ 2-3, 29.
According to Reassure America, the trustee of the Children’s Trust is Angela Stephan.
Compl. ¶ 2. The beneficiaries of the Children’s Trust are Salvatore Perillo, Angela Stephan, and
Michele Coyne. Id. The trustees of the Grandchildren’s Trust are Salvatore Perillo, Angela
Stephan, and Michele Coyne. Compl. ¶ 3. The beneficiaries of the Grandchildren’s Trust are
Michael and Amy Perillo, Kristen Stephan, Ashley Coyne, and one additional grandchild.
Compl. ¶ 4.
In April 2009, Reassure America filed an interpleader complaint against the Claimants to
determine which is entitled to the policy’s benefits.1 In January 2010, the parties stipulated that
1. On July 20, 2009, Reassure America deposited $306,159.56 (representing the insurance benefits plus interest)
with the Clerk of the Court to be paid to the prevailing party.
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Reassure America be discharged from any further liability arising from the policy and that the
Children’s Trust and that the Grandchildren’s Trust would litigate the question of entitlement to
the policy’s benefits among themselves. Consent Order 2-3, Jan. 4, 2010. The parties have also
stipulated that Reassure America is dismissed from the current action. Id. at 3.
II.
STANDARD OF REVIEW
Summary judgment is appropriate where the Court is satisfied that “there is no genuine
issue as to any material fact and that the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986). A genuine issue
of material fact exists only if the evidence is such that a reasonable jury could find for the
nonmoving party.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
When the
Court weighs the evidence presented by the parties, the Court is not to make credibility
determinations regarding witness testimony. Sunoco, Inc. v. MX Wholesale Fuel Corp., 565 F.
Supp. 2d 572, 575 (D.N.J. 2008). “The evidence of the non-movant is to be believed, and all
justifiable inferences are to be drawn in his favor.” Anderson, 477 U.S. at 255.
However, to defeat a motion for summary judgment, the nonmoving party must present
competent evidence that would be admissible at trial. See Stelwagon Mfg. Co. v. Tarmac
Roofing Sys., 63 F.3d 1267, 1275 n.17 (3d Cir. 1995).
The nonmoving party “may not rest
upon the mere allegations or denials of” its pleadings and must present more than just “bare
assertions [or] conclusory allegations or suspicions” to establish the existence of a genuine issue
of material fact. Fireman’s Ins. Co. of Newark, N.J. v. DuFresne, 676 F.2d 965, 969 (3d Cir.
1982) (citation omitted); see Fed. R. Civ. P. 56(e).
“A party’s failure to make a showing that is
‘sufficient to establish the existence of an element essential to that party’s case, and on which
that party will bear the burden of proof at trial,’ mandates the entry of summary judgment.”
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Watson v. Eastman Kodak Co., 235 F.3d 851, 857-58 (3d Cir. 2000) (quoting Celotex Corp., 477
U.S. at 322).
III.
DISCUSSION
A. The Grandchildren’s Trust’s Motion
The Grandchildren’s Trust asserts that it is entitled to summary judgment on its behalf
because Minnie Perillo’s application for life insurance benefits designated the “‘Gennaro J. &
Minnie Perillo Irrevocable Trust,’ Salvatore Perillo, Trustee,” as the owner and beneficiary of the
policy.
Compl. ¶ 13.
The Grandchildren’s Trust argues that because Salvatore Perillo was
never a trustee of the Children’s trust, and because there are only two trusts with the name
“Gennaro J. & Minnie Perillo Irrevocable Trust,” the policy unequivocally designates the
Grandchildren Trust as its sole beneficiary. See Def. Grandchildren’s Trust Br. 5-6.
However, as the Children’s Trust notes, there is evidence in the record indicating that the
Children’s Trust may have been the intended beneficiary. The Children’s Trust references a
memo prepared by Salvatore Perillo dated November 23, 2005, which states that the “Gennaro J.
& Minnie Perillo Irrevocable Trust . . . . which is funded by insurance policies, creates three
sub-trusts in the name of the three children.” See Applegate Decl. Ex. G (emphasis added). From
this sentence, one can infer that the Children’s Trust, which is under the names of the three
children, may have been the intended beneficiary of the Reassurance America policy. The
Children’s Trust also notes that the Reassure America life insurance policy is the only insurance
policy that has not been paid out. Def. Children’s Trust Br. 9. The other insurance policies were
paid to the Gennaro J. Perillo Irrevocable Life Insurance Trust. Def. Children’s Trust Br. 11.
Therefore, if the Children’s Trust is to be funded by insurance policies, then it is reasonable to
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infer that the Reassure America policy, being the last policy remaining, could have been intended
to benefit the Children’s Trust. Because the Court must draw all reasonable inferences in favor of
the non-moving party, the memo prepared by Salvatore Perillo creates an issue of material fact
that necessarily defeats The Grandchildren’s motion for summary judgment.
The Children’s Trust also notes that an inference can be drawn from the fact that Minnie
Perillo had three other life insurance policies in addition to the Reassure Policy at the time of her
death, all of which were paid to the Gennaro J. Perillo Irrevocable Insurance Trust. See
Applegate Decl. Ex. F. Thus, it would be consistent with Minnie Perillo’s estate plan for the
Reassure policy to be paid over to the Gennaro J. Perillo Irrevocable Insurance Trust, of which
Salvatore Perillo is the sole trustee. Def. Children’s Trust Br. 11. This inference is further
supported by the fact that the Grandchildren’s Trust has three named trustees, and the Reassure
America policy only named one trustee, Salvatore Perillo. Id.
Because the Children’s Trust has successfully raised genuine issues of material fact with
regard to the beneficiary of the Reassure Policy, the Grandchildren Trust’s motion for summary
judgment must be denied.
B. The Children’s Trust’s Motion
The Children’s Trust asserts that a settlement agreement was entered into by the
Claimants, and that the Court should therefore enforce the settlement agreement. The
Grandchildren’s Trust asserts that no valid settlement agreement was entered into, and that, due
to collateral estoppel, the Court should apply the finding of the Superior Court of New Jersey in
which “[t]he Court determine[d] and declare[d] that there was no binding settlement agreement
entered into by the parties.” In re The Perillo Irrevocable Life Insurance Trust, No. 111001 (N.J.
Super. Ct. Ch. Div., Aug. 9, 2011) (order denying cross-motions for summary judgment).
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Because the Grandchildren’s Trust seeks to apply collateral estoppel with respect to a New
Jersey State Court decision, this Court applies New Jersey’s laws on issue preclusion. See
Marrese v. American Academy of Orthopedic Surgeons, 470 U.S. 373, 380 (1985). Under New
Jersey law, the party asserting collateral estoppel to foreclose the relitigation of an issue must
establish the existence of five conditions:
(1) the issue to be precluded is identical to the issue decided in the prior
proceeding;
(2) the issue was actually litigated in the prior proceeding;
(3) the court in the prior proceeding issued a final judgment on the merits;
(4) the determination of the issue was essential to the prior judgment; and
(5) the party against whom the doctrine is asserted was a party to or in privity
with a party to the earlier proceeding.
Olivieri v. Y.M.F. Carpet, Inc., 186 N.J. 511, 521 (2006). Moreover, collateral estoppel “has its
roots in equity” and as such will be applied with a view towards obtaining a fair result for all
parties. See Pace v. Kuchinsky, 347 N.J. Super. 202, 215 (App. Div. 2002)
Of these five factors, only the final factor is in issue.
Regarding the fifth factor, the
parties do not dispute that in both the state court action and the case before this Court, the same
individuals are adverse parties.
In both actions, Angela Stephan adopts the same position and
seeks the same outcome in the litigation involving Salvatore Perillo and Michele Coyne, who
assert identical positions.
However, the Children’s Trust asserts that the parties are nonetheless
different because the action pending before this Court is between both Trusts (the Children’s
Trust and the Grandchildren’s Trust), whereas the state litigation was between each Trust’s
trustees in their individual capacity. Specifically, the action before this Court involves the
Children’s Trust, of which Angela Stephan is the sole trustee, versus the Grandchildren’s Trust,
of which Salvatore Perillo, Michele Coyne, and Angela Stephan are all trustees. The Children’s
Trust notes that “a party appearing in a representative capacity for others is not bound by the
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determination of an earlier suit in which he appeared only in an individual capacity.” Freeman v.
Lester Coggins Trucking, Inc., 771 F.2d 860, 863 (5th Cir.1985).
The Children’s Trust’s argument must fail because while the representative capacity
versus individual capacity distinction can be determinative in collateral estoppel litigation, in the
instant case Angela Stephan’s litigation on behalf of the Children’s Trust involves precisely the
same interests as her litigation in her individual capacity on the same issue. Courts have applied
collateral estoppel in cases where the parties are not identical, but in which the interests of the
“real part[ies] in interest” have been preserved. See in re Bed Bath & Beyond Inc. Derivative
Litigation, 2007 WL 4165389, *7 (D.N.J. 2007) (applying collateral estoppel in a shareholder
derivative suit to preclude another shareholder from relitigating the same issue against the board of
directors); see also Green v. Santa Fe Indus., Inc., 70 N.Y.2d 244, 253, 519 N.Y.S.2d 793, 514
N.E.2d 105 (N.Y.1987) (“Generally, to establish privity the connection between the parties must
be such that the interests of the nonparty can be said to have been represented in the prior
proceeding.”). Here, though Angela Stephan is litigating in a representative capacity on behalf of
the Children’s Trust, Angela Stephan herself is one of the three beneficiaries of the trust. Thus,
Angela Stephan herself is the “real party in interest” in this litigation. Indeed, Angela Stephan,
being a trustee of both the Children’s Trust and the Grandchildren’s Trust, cannot claim that
application of the State Court’s holding, which finds in favor of the Grandchildren’s Trust on the
settlement enforcement issue, would be unjust.
In light of the above analysis, the Court finds that all five collateral estoppel factors have
been established between the state court litigation and the instant litigation. Therefore, the
Children’s Trust motion for settlement enforcement must be denied.
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IV.
CONCLUSION
For the reasons detailed above, the Court denies both Claimants’ cross-motions for
summary judgment.
/s/ Robert B. Kugler
ROBERT B. KUGLER
United States District Judge
Dated: 10/14/2011
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