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In re Gerald L. Pollack Trust

Court of Appeals of Michigan

January 29, 2015

In re GERALD L. POLLACK TRUST. LOREN POLLACK, Petitioner-Appellant, and LESLIE POLLACK, Petitioner,
v.
RONALD M. BARRON and JPMORGAN CHASE, Respondents-Appellees, and CHERYL POLLACK and JUSTIN POLLACK, Appellees, and LORI EPSTEIN, MICHAEL MCEVILLY, ALEX KOCOVES, and LISA CHABEN, Interested Persons. In re Estate of GERALD L. POLLACK. LOREN POLLACK and LESLIE POLLACK, Appellants,
v.
RONALD M. BARRON, JPMORGAN CHASE, and CHERYL POLLACK, Appellees, and LISA CHABEN, LORI POLLACK a/k/a LORI EPSTEIN, and JUSTIN POLLACK, Interested Persons. LOREN POLLACK and LESLIE POLLACK, Petitioners-Appellants,
v.
RONALD M. BARRON and JPMORGAN CHASE, Respondents-Appellees, and CHERYL POLLACK and JUSTIN POLLACK, Appellees, and LORI EPSTEIN, MICHAEL MCEVILLY, ALEX KOCOVES, and LISA CHABEN, Interested Persons. LOREN POLLACK and LESLIE POLLACK, Petitioners-Appellants,
v.
RONALD M. BARRON, Respondent-Appellee, and JPMORGAN CHASE, Respondent, and LORI EPSTEIN, CHERYL POLLACK, MICHAEL MCEVILLY, ALEX KOCOVES, LISA CHABEN, and JUSTIN POLLACK, Interested Persons

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Oakland Probate Court. LC No. 2010-328587-TV. Oakland Probate Court. LC No. 2009-324651-DE. Oakland Probate Court. LC No. 2010-328587-TV. Oakland Probate Court. LC No. 2010-328587-TV.

For LOREN POLLACK, Co-Counsel, Petitioner-Appellant: ALLAN S FALK, OKEMOS MI; TAMMIE J TISCHLER, ANN ARBOR MI.

For LESLIE POLLACK, Retained, Petitioner: MARK GRANZOTTO, BERKLEY MI.

For RONALD M BARRON, Retained, Respondent-Appellee: ANDREW W MAYORAS, TROY MI.

For CHERYL POLLACK, Retained, Appellee: SHAHEEN I IMAMI, BLOOMFIELD HILLS MI.

POLLACK JUSTIN, Appellee, Pro Per.

Before: Karen M. Fort Hood, P.J., and Joel P. Hoekstra and O'CONNELL, JJ. O'CONNELL, J. (dissenting).

OPINION

Page 889

[309 Mich.App. 130] Karen M. Fort Hood, P.J.

In Docket No. 309796, petitioner Loren Pollack appeals as of right an order granting cotrustee Ronald M. Barron's motion for summary disposition of Loren's petition to set aside the Gerald L. Pollack Trust (the Trust or the October Trust), entered on March 15, 2012. In Docket No. 310844, Loren and petitioner Leslie Pollack appeal as of right an order [309 Mich.App. 131] granting Cheryl Pollack's motion for summary disposition on Loren and Leslie's petition to set aside Gerald L. Pollack's will (the Will or the October Will), entered on May 29, 2012. In Docket No. 310846, Loren and Leslie appeal as of right an order granting Barron's motion for summary disposition regarding Leslie's petition to set aside the Trust, Loren's amended petition to modify or reform the Trust, and Leslie's petition to modify or reform the Trust, entered on May 29, 2012. In Docket No. 318883, Loren and Leslie appeal as of right an order granting Barron's motion for summary disposition on Loren and Leslie's petition for removal of Barron as cotrustee of the Trust, entered on October 10, 2013. The four appeals were consolidated to advance the efficient administration of the appellate process.[1] We affirm.

I. UNDERLYING FACTS

These cases involve extremely contentious probate court litigation arising out of the death of Gerald L. Pollack on June 27, 2009, following a protracted battle with brain cancer. Gerald was the owner and director of Gerald L. Pollack & Associates, Inc. (GLP), GLP Investment Services (Investment Services) and GLP Specialty Services (Specialty Services). GLP and Investment Services are investment firms that specialize in selling annuities, insurance products, and securities to public schools and school systems in Michigan. GLP and Investment Services are the primary assets of Gerald's estate. Gerald was survived by his second wife, Cheryl. Justin Pollack is the child of Gerald and Cheryl. Loren, Leslie, Lisa Chaben, and Lori Pollack are Gerald's [309 Mich.App. 132] children from his first marriage. Barron has served as general legal counsel to GLP and Investment Services since the 1980s and was a personal friend of Gerald's. Barron and JPMorgan Chase (JPMC) are cotrustees of the trust at issue in this case and copersonal representatives of Gerald's estate. According to Loren, Loren and a GLP employee named Alex Kocoves were part of Gerald's succession plan for his businesses; Loren and Kocoves were each sold GLP stock by Gerald.

Gerald was diagnosed with brain cancer in the summer of 2008. Following this diagnosis, Barron wrote an August 5, 2008 letter to Gerald recognizing that Loren and Kocoves would continue to comanage GLP after Gerald's death, that Cheryl and each of Gerald's children would share in the profitability of the businesses, and that Cheryl and each of Gerald's children would receive a portion of the ownership and income from the businesses. In September 2008, Gerald executed a will (the September Will) and a trust (the September Trust). Barron drafted both of these documents at Gerald's direction and with input from Gerald. According to Loren, the September Will and the September Trust were the culmination of a lengthy and detailed process of preparation by Gerald for the continued well-being of his family and businesses following his death, and both September documents carried out Gerald's intent as set forth in numerous other documents prepared as part of his estate plan. According to Barron, however,

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the August 5, 2008 letter was merely a temporary " Band-Aid" until formal estate planning documents could be prepared; likewise, the September estate planning documents were merely interim documents prepared until proper and permanent documents could be put in place.

In October 2008, attorney Charles Nida was hired to prepare a second will and trust for Gerald. According [309 Mich.App. 133] to Loren, it was Barron who recruited Nida, and Gerald had no contact with Nida until the October Will and the October Trust were executed on October 30, 2008. Loren alleged that Nida took direction from Barron or other attorneys at Barron's law firm. Barron denied Loren's allegations, and asserted that Nida had been in contact with Gerald before the execution of the October estate planning documents. Nida had conversations not only with Barron but also with Gerald's former estate planning attorney, Don L. Rosenberg, and Gerald's personal banker and former cotrustee, David Clark. On October 30, 2008, Nida visited with Gerald at Gerald's home. The estate documents were already finalized at that point, and Nida reviewed a written summary of the documents with Gerald. Gerald executed the October Will and the October Trust on that date.

Loren alleges that the October Trust differs significantly from the September Trust; in particular, Gerald's children do not receive any immediate benefit from the October Trust until Cheryl's death; Cheryl's life expectancy is 20 years. Also, Loren contends, the October Trust does not provide for the succession planning desired by Gerald in that it does not distribute shares of GLP to Loren or provide for the continued operation of GLP by Loren and Kocoves. Rather, the October Trust directs Gerald's assets to a marital share for Cheryl's benefit up to $10 million; until this marital share is completely funded, or Cheryl dies, Gerald's children may receive nothing. Even after Cheryl dies, Loren would receive only a beneficial share of the trust corpus rather than stock in GLP.

Four actions in relation to Gerald's Will and Trust were filed in the trial court and form the basis of this [309 Mich.App. 134] appeal. The trial court ultimately granted summary disposition in each case, and dismissed the actions. Petitioners now appeal.

II. DOCKET NO. 309796--STATUTE OF LIMITATIONS

In Docket No. 309796, Loren argues that the trial court erred by granting Barron's motion for summary disposition on the basis of the expiration of the statute of limitations. We disagree.

" This Court reviews de novo a trial court's decision on a motion for summary disposition." Hackel v Macomb Co Comm, 298 Mich.App. 311, 315; 826 N.W.2d 753 (2012). Summary disposition may be granted under MCR 2.116(C)(7) when a statute of limitations bars a claim. Prins v Mich. State Police, 291 Mich.App. 586, 589; 805 N.W.2d 619 (2011). If the facts are not in dispute, the issue whether a claim is barred by the applicable statute of limitations presents a question of law that is reviewed de novo. Trentadue v Buckler Automatic Lawn Sprinkler Co, 479 Mich. 378, 386; 738 N.W.2d 664 (2007). Questions of statutory interpretation are likewise reviewed de novo. Id. " If the language in a statute is clear and unambiguous, this Court assumes that the Legislature intended its plain meaning, and the statute must be enforced as written. This Court may read nothing into an unambiguous statute that is not within the manifest intent of the Legislature as derived from the words of the statute itself." Bay City v Bay Co Treasurer, 292 Mich.App. 156, 166-167;

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807 N.W.2d 892 (2011) (quotation marks and citations omitted). In addition, this Court " review[s] de novo constitutional issues and any other questions of law that are raised on appeal." Cummins v Robinson Twp, 283 Mich.App. 677, 690; 770 N.W.2d 421 (2009).

[309 Mich.App. 135] The trial court properly granted Barron's motion for summary disposition because Loren's petition to set aside the October Trust was barred by the statute of limitations in the Michigan Trust Code (MTC).

The MTC, MCL 700.7101 et seq, which concerns trusts, is Article VII of the Estates and Protected Individuals Code (EPIC), MCL 700.1101 et seq ; the MTC became effective on April 1, 2010, which was 10 years after EPIC itself went into effect. See MCL 700.7101; MCL 700.7102; 2009 PA 46; 1998 PA 386; Indep. Bank v Hammel Assocs., LLC, 301 Mich.App. 502, 509; 836 N.W.2d 737 (2013). MCL 700.7604(1) is a provision of the MTC that prescribes limitation periods for bringing a challenge to the validity of a trust:

A person may commence a judicial proceeding to contest the validity of a trust that was revocable at the settlor's death within the earlier of the following:
(a) Two years after the settlor's death.
(b) Six months after the trustee sent the person a notice informing the person of all of the following:
( i ) The trust's existence.
( ii ) The date of the trust instrument.
( iii ) The date of any amendments known to the trustee.
( iv ) A copy of relevant portions of the terms of the trust that describe or affect the person's interest in the trust, if any.
( v ) The settlor's name.
( vi ) The trustee's name and address.
( vii ) The time allowed for commencing a proceeding.

Therefore, under the MTC, a challenge to the validity of a trust must be brought within two years after the settlor's death or six months after the provision of a notice containing statutorily prescribed information, whichever is earlier.

[309 Mich.App. 136] It is undisputed that, if the statute of limitations in MCL 700.7604(1) applies, then Loren's petition was not timely filed. The settlor, Gerald, died on June 27, 2009. On May 6, 2010, the trustees sent to Loren and the other beneficiaries a written notice containing all the statutorily prescribed information concerning the Trust. Loren concedes that the notice contained all the information required by MCL 700.7604(1)(b). The notice explicitly advised Loren: " You have six months to contest the validity of the Trust pursuant to MCL 700.7604(1)(b)(vii). Any contest filed after the six-month period will be time-barred." In the summer of 2010, during settlement negotiations that were ultimately unsuccessful, the parties twice expressly agreed to toll the six-month limitations period for bringing a challenge to the Trust, each time for a period of 30 days. In effect, then, the six-month limitations period in MCL 700.7604(1)(b) was tolled for 60 days, moving the statutory deadline for filing a petition challenging the validity of the Trust from November 6, 2010, to January 5, 2011. Loren commenced this proceeding on September 23, 2011, by filing his petition challenging the validity of the Trust. See MCL 700.1106(r) (defining a " proceeding" for purposes of EPIC to include, inter alia, a petition); MCR 5.101(B) (" A proceeding [in probate court] is commenced by filing an application or a petition with the court." ). The proceeding was therefore commenced more than two years after Gerald died and more than eight months

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(the six-month statutory period and the 60-day tolling period) after the statutory notice concerning the Trust was sent to the beneficiaries. Loren concedes that his petition would be untimely under the MTC limitations period.

Loren contends, however, that the MTC statute of limitations does not apply in this case. In particular, Loren asserts that because the MTC became effective [309 Mich.App. 137] after Loren had already acquired his right to challenge the validity of the Trust, the MTC limitations period cannot apply. It is true that statutes of limitations are generally limited to prospective application unless the Legislature clearly and unequivocally manifests a contrary intent. Davis v State Employees' Retirement Bd, 272 Mich.App. 151, 161; 725 N.W.2d 56 (2006). " The legislature may pass statutes of limitation and give them retroactive effect." Evans Prod Co v State Bd of Escheats, 307 Mich. 506, 546; 12 N.W.2d 448 (1943). In assessing whether this case involves an improper retroactive application of a statute of limitations, it must be remembered that the six-month statutory period set forth in MCL 700.7604(1)(b) did not commence to run until after the MTC's effective date. That is, the six-month period was triggered when the trustees sent to Loren and the other beneficiaries the statutorily prescribed notice concerning the Trust. This notice was sent on May 6, 2010, after the April 1, 2010 effective date of the MTC, and explicitly advised Loren of the six-month statutory period. Because the limitations period did not begin to run until after the MTC's effective date, Loren had the full six-month period to file suit that all other beneficiaries have after the provision of notice under the MTC. Therefore, the statute of limitations in this case did not fail to provide a reasonable time after its passage for the commencement of suit. Cf. Price v Hopkin, 13 Mich. 318, 324-325 (1865) (" It is of the essence of a law of limitation that it shall afford a reasonable time within which suit may be brought; and a statute that fails to do this cannot possibly be sustained as a law of limitations, but would be a palpable violation of the constitutional provision that no person shall be deprived of property without due process of law." ) (citations omitted).

[309 Mich.App. 138] Moreover, the Legislature has clearly and unequivocally manifested its intent to apply the MTC statute of limitations in the circumstances of this case, when the proceeding was commenced after the effective date of the MTC. MCL 700.8206(1) provides, in relevant part:

Except as otherwise provided in article VII [i.e., the MTC], all of the following apply on the effective date of the amendatory act that added this section:
(a) The amendments and additions to article VII enacted by the amendatory act that added this section apply to all trusts created before, on, or after that effective date.
(b) The amendments and additions to article VII enacted by the amendatory act that added this section apply to all judicial proceedings concerning trusts commenced on or after that effective date.

This provision states that the MTC applies to trusts that were created before, on, or after the effective date of the MTC, thereby encompassing all trusts, and that the MTC applies to all judicial proceedings concerning trusts that are commenced on or after the MTC's effective date. As discussed, the MTC went into effect on April 1, 2010. Loren commenced this proceeding on September 23, 2011, by filing his petition challenging the validity of the Trust. Therefore, this proceeding was commenced after the effective date of the MTC. It follows, then, that under MCL 700.8206(1),

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the MTC, which includes the limitations periods set forth in MCL 700.7604(1), applies to this case.[2]

[309 Mich.App. 139] Loren contends, however, that the MTC statute of limitations cannot apply in this case in light of MCL 700.8206(2), which states:

The amendments and additions to article VII enacted by the amendatory act that added this section do not impair an accrued right or affect an act done before that effective date. If a right is acquired, extinguished, or barred upon the expiration of a prescribed period that has commenced to run under any other statute before that effective date, that statute continues to apply to the right even if it has been repealed or superseded.

See also Indep. Bank, 301 Mich.App. at 509 (" The MTC applies to trusts created before its enactment, but does not impair accrued rights or affect an act done before its effective date." ), citing MCL 700.8206(1)(a) and (2). Loren argues that application of the MTC statute of limitations in this case would impair his accrued right to challenge the validity of the Trust. We disagree and hold that Loren's right to challenge the validity of the Trust did not accrue before the effective date of the MTC, and, even if the right had accrued, the application of the six-month statutory period did not impair that right.

Loren did not have an accrued right to bring his Trust challenge petition before the effective date of the MTC. Neither the MTC nor EPIC defines the term [309 Mich.App. 140] " accrued right." However, this Court has addressed the meaning of " accrued right" in cases concerning EPIC.

In In re Smith Estate, 252 Mich.App. 120, 124-125; 651 N.W.2d 153 (2002), this Court addressed the applicability of an EPIC provision allowing the admission of extrinsic evidence to prove the existence of testamentary intent with respect to a purported codicil to an existing will. The action was commenced before the effective date of EPIC, but the case remained pending when EPIC took effect. Id. at 127. This Court held that the EPIC provision was applicable. Id. at 126. This Court noted that under MCL 700.8101(2)(b), EPIC applied to a proceeding pending on the date that EPIC became effective, but that under MCL 700.8101(2)(d), EPIC " 'does not impair an accrued right or an action taken before that date in a proceeding.'" I ...


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