Date: 06-28-2024

Case Style:

Brandi Czerniewski v. TD Ameritrad, Inc., et al.

Case Number: 2:18-cv-02078

Judge: Kent J. Dawson

Court: United States District Court for the District of Nevada (Clark County)

Plaintiff's Attorney:

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Defendant's Attorney: David M. Doto, Joseph R. Ganley, Lawton Graves, Matthew K. Schriever, Piers R. Tueller

Description:

Las Vegas, Nevada civil litigation business law lawyers represented the Plaintiff who sued on a breach of contract theory.

On August 14, 2006, Schepens created the Trust. [Doc. 1-1, Exhibit "A" to Complaint, pages 19-44]. The Trust is governed by Nevada law and, at the time of its creation, Schepens was a Nevada resident. Id. Schepens created the Trust in contemplation of his upcoming marriage to Keppel. The purpose of the Trust was to segregate and administer Schepens' separate property for his sole benefit during his lifetime. The Trust provides that, as the sole beneficiary during his lifetime, Schepens was entitled to all principal and income of the Trust to the exclusion of Keppel and all others. The Trust provides that, upon Schepens' passing, the Trust would be administered by Keppel as successor trustee, or alternatively by Brandi Czerniewski, Schepens' daughter, if Keppel was deceased or unable or unwilling to serve. [Doc. 1-1, Exhibit "A" to Complaint, at pp. 20-21, Section 7.1]. The Trust also provides that, upon Schepens' death, the Trust would be distributed in two shares consisting of a seventy-five percent (75%) share to Keppel, and a twenty-five percent (25%) share to Brandi. [Doc. 1-1, Exhibit "A" to Complaint, at pp. 19-20, Sections 5.1(a) and (b).] The Trust specifically designates Nevada law to govern the Trust and its administration. Specifically, the Trust contains the following provision:

14.1 Controlling Law. This Trust Agreement is executed under the laws of the State of Nevada and shall in all respects be administered by the laws of the State of Nevada; provided, however, the Trustee shall have the discretion, exercisable at any later time and from time to time, to administer any Trust created hereunder pursuant to the laws of any jurisdiction in which the Trustee may be domiciled, by executing a written instrument acknowledged before a notary public to that effect, and delivered to the then income beneficiaries. If the Trustee exercises the discretion, as above provided, this Trust Agreement shall be administered from that time forth by the laws of the other state or jurisdiction.

[Doc. 1-1, Exhibit "A" to Complaint, at p. 41, Section 14.1].

In order to keep his real property separate from Keppel, on August 15, 2006 Schepens executed a Grant, Bargain, Sale Deed and transferred real property he owned at 6139 Sundown Crest Street, Las Vegas, Nevada ("the Nevada Property"), to the Trust. Similarly, on August 17, 2006 Schepens executed a TD Ameritrade account application by which his TD Ameritrade account ending 0699 would be converted into a Trust account owned by the Trust. The TD Ameritrade Account ending 0699 is hereafter referred to as the "Trust Account." The Trust Account's application contains a provision binding the Trust and the account owner (i.e., Schepens as Trustee of the Trust) to the TD Ameritrade terms and conditions, which includes a provision that Nebraska law governs any future court action brought by Schepens against TD Ameritrade.

On September 16, 2006, Schepens married Keppel in Clark County, Nevada, one month after Schepens created the Trust and the Trust Account. On July 17, 2012, Schepens opened a traditional Individual Retirement Account with TD Ameritrade, account ending 7410 ("IRA"). As with the Trust Account application, the IRA application contained a provision that Nebraska law would govern its terms. The IRA application further provided that Schepens' heirs, executors and administrators are also bound by the agreement. As shown on the TD Ameritrade IRA account application, Schepens designated Keppel, in her capacity as Schepens' "wife," as the beneficiary of the IRA. The uncontroverted evidence demonstrates that, at all relevant times herein, the IRA was owned by Schepens, individually, and not as an asset of the Trust. The IRA statements produced by TD Ameritrade are titled in the name of Bruce Schepens, individually, and not in the name of the "Separate Property Trust," or Schepens as Trustee of the Trust. In contrast, the Trust Account statements are titled in the name of Schepens as Trustee of the Trust.

Further, the TD Ameritrade Account application for the IRA demonstrates that Keppel was the beneficiary of the IRA, not the Trust. On December 27, 2012, Schepens purchased real property located at 11096 Palmerston Avenue, Punta Gorda, Florida 33955 ("the Florida Property") with funds from the Trust Account.

On January 20, 2015, Schepens and Keppel were divorced in Clark County, Nevada as evidenced by the Stipulated Divorce Decree filed that day ("Divorce Decree"). As specifically acknowledged in the Divorce Decree, there were no community assets or debts to be divided between Schepens and Keppel because "...the parties never commingled their money during the marriage." The Divorce Decree additionally provided that Schepens would allow Keppel to reside in the Nevada Property until July 15, 2015.

Following the entry of the Divorce Decree, Schepens relocated to Florida, residing in the Florida Property, while Keppel continued to reside in Nevada. On June 30, 2015, Schepens, as Trustee of the Trust, sold the Nevada Property to Keppel. On April 13, 2016, Schepens created the Bruce Schepens Revocable Trust ("Schepens Revocable Trust" or "the Florida Trust") in Florida.

On March 3, 2018, Schepens died in Florida. Following Schepens' death, Keppel changed ownership of the Trust Account (TD Ameritrade account ending in 0699) to herself under the guise that she was acting as "Trustee" of the Trust. Keppel changed the account title to: "Kristine Keppel TR FBO Bruce Schepens Separate Property Trust UA 08/14/2006." Between July 10, 2018 and July 25, 2018, Keppel withdrew $392,000 in cash from the Trust Account or approximately 85% of the account's value, notwithstanding her claim that her purported beneficial interest in the Trust is only 75%. TD Ameritrade subsequently froze the Trust Account and IRA.

In May of 2018, Brandi initiated a state court action in the Circuit Court of the Twentieth Judicial District for Charlotte County, Florida, Case No. 18000432CA (the "Florida Proceeding"), seeking a determination of ownership of the Trust Account and the IRA. The Florida Proceeding was initiated there under the belief that the TD Ameritrade Trust Account had previously been transferred by Bruce as Trustee of the Trust to be owned by the Schepens Revocable Trust. In fact, the TD Ameritrade Trust Account was never transferred to the Schepens Revocable Trust, but rather continues to be owned by the Trust.

In response to being served with the Complaint in the Florida Proceeding, Keppel filed a Motion to Dismiss, in which she asserted that the Trust specified the governing law as the State of Nevada, that exclusive jurisdiction to determine any issues pertaining to the Trust rests in Nevada, the Trust has assets located in Nevada, Nevada is where the presumptive Successor Trustee resides (referring to Keppel), and that the Nevada courts as opposed to Florida, have "jurisdiction to adjudicate the legal consequences of Nevada law with respect to a Nevada resident's right to a Nevada asset[.]"

In consideration of Keppel's assertions in her Motion to Dismiss in the Florida Proceeding that jurisdiction in Nevada was appropriate, that Nevada law applied, and having learned that the Trust Account was, in fact, owned at all relevant times by the Trust and not the Florida Trust, Brandi voluntarily dismissed the Florida Proceeding and filed the instant lawsuit in the Eighth Judicial District Court, for Clark County, Nevada.16 27. On October 29, 2018, TD Ameritrade removed this lawsuit to the Federal District Court of Nevada. On October 2, 2019, Letters of Special Administration of the Estate of Bruce Schepens were granted to Brandi by the Probate Court for the Eighth Judicial District Court, for Clark County, Nevada.

The parties have now filed competing motions for summary judgment regarding which jurisdictions' law applies to the trusts at issue in this action and the application of that law to the facts.

The claims between Plaintiff and TD Ameritrade are stayed pending resolution of the claims between Plaintiff and Keppel. After resolution of the claims between Brandi and Keppel, those claims will be arbitrated.

Outcome: Settled for an undisclosed sum and dismissed with prejudice.

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