Federal Appeals Court Revives Life Settlements Claims, On Both Sides Of Lawsuit

Federal Appeals Court Revives Life Settlements Claims, On Both Sides Of Lawsuit

A federal appeals court revived claims on both sides of a disputes over a life settlements transaction.

In an opinion released last week, Sun Life Assurance Co. of Canada v. Imperial Premium Fin., LLC, Nos. 17-10189, 17-10415 (11th Cir. Sept. 18, 2018), the 11th Circuit Court of Appeals reversed a U.S. District’s Court’s rulings, and is now allowing both the insurer and the life settlements company to proceed with previously-dismissed claims.

Summarizing the ruling, the 11th Circuit Court of Appeals opinion began as follows:

These two appeals arise from dueling lawsuits pitting Sun Life Assurance Company of Canada (“Sun Life”), a life insurance company, against Imperial Holdings, Inc. and its affiliates (“Imperial”), a company that offers financing for insureds to pay their monthly premium payments. Both suits relate to life insurance policies that were issued by Sun Life to non-parties and that were subsequently acquired by Imperial. Imperial is therefore a stranger to the insureds, yet, as the owner of the policies, it stands to receive the life insurance benefits upon the deaths of the insureds. Sun Life alleges that Imperial’s ownership of the policies violates state laws that are designed to prohibit wagering on human lives, but, more centrally, that Imperial secured the policies through an unlawful and tortious conspiratorial scheme. Imperial, for its part, contends that its acquisition and ownership of the policies is lawful, and alleges that Sun Life’s attempts to interfere with its ownership of and rights under the policies, including its filing of its lawsuit here, is itself part of Sun Life’s own fraudulent scheme and in breach of the policy contracts. In a series of rulings after consolidating the two cases, the United States District Court for the Southern District of Florida . . . dismissed all claims in both cases, some at the pleading stage and the remainder at summary judgment. We VACATE in part, AFFIRM in part, and REMAND both cases for further proceedings.

The full opinion is available here.  A Law360 article on the ruling is available here.

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