Florida/Georgia Personal Injury & Workers Compensation

...tiff makes no allegation that the Delaware Trust Defendants themselves made any misrepresentations. The motion to dismiss Count I will be denied. Count II alleges that the insurance policies are void for lack of an insurable interest. See Fla. Stat. § 627.404 (1) (“[N]o person shall procure or cause to be procured or effected an insurance contract on the life or body of another individual unless the benefits under such contract are payable to the individual insured or his or her personal repr...

...The Delaware Trust Defendants emphasize the last sentence in subsection (1) — that the insurable interest need not exist after the inception date of coverage. They argue that because the amended complaint alleges that the insureds procured the insurance before assigning them to the Delaware Trusts, no violation of § 627.404 has been pled....

...The premise of the claim is that the policies owned by Imperial are unlawful in light of state law prohibiting the procurement of life insurance policies in which the beneficiary lacks an "insurable interest" in the insured individual at the time the policy is issued. See Fla Stat. § 627.404(1)....

...See No. 17-10415 Reply Br. of Appellant at 2 n.2; Pruco , 200 So.3d at 1205-06 (concluding that policies procured in the precise manner in which Sun Life alleges Imperial procured its Sun Life policies here "have the insurable interest required by section 627.404," because the policies, " at their inception , benefitted individuals with insurable interests" (emphasis added) )....

...designated period of time, whether a particular policy is subject to that or any other challenge? 3 Florida law does not definitively answer these questions, and federal district courts have disagreed when asked how to interpret the above Florida 1 Fla. Stat. § 627.404 (2008). 2 Fla....

...atute requiring an insurable interest in the insured trumps the statute requiring an insurer to challenge a policy’s validity within two years of issuance, a second question arises as to the Berger policy, discussed infra. That question is whether § 627.404, the insurable interest statute, is violated when the individual who procures the insurance has the required insurable interest at the time of issuance, but nonetheless has procured the policy in bad faith....

...The policy was ultimately sold to a client of Wells Fargo. On July 9, 2010, approximately four years after it had issued the Berger policy, Pruco filed suit against Wells Fargo asserting that the policy was void ab initio for lack of an insurable interest, as required by § 627.404....

...Adopting its previous analysis of this issue in an order denying Wells Fargo’s motion to dismiss, the court held that there was no valid insurable interest in the life of the insured by the party procuring the insurance, 5 meaning that the policy ran afoul of Florida Statute § 627.404’s requirement of such an interest at the time an insurance policy is issued. See Pruco Life Ins....

...On December 17, 2012, approximately seven years after it had issued the Guild policies and almost five years after it had approved the change in beneficiary and ownership to U.S. Bank, Pruco filed suit against U.S. Bank asserting that the policies were void ab initio under § 627.404....

...Policies Here Declared Void Pruco argues that the Berger and Guild life insurance policies should be declared void because the purchasers of these policies lacked an insurable interest in the persons insured. Pruco relies on Florida Statute § 627.404 (the “insurable interest statute”), which bars the purchase of a life insurance policy on another individual unless the benefits of the insurance contract are payable to the insured individual, his or her personal representative, or a person having an insurable 8  Case: 13-12135 Date Filed: 02/27/2015 Page: 9 of 21 interest in the insured individual. 6 Section 627.404 defines “insurable interest” to include “the life, body, and health of another person to whom the individual is closely related by blood or by law and in whom the individual has a substantial interest engendered by love and affection.” Fla. Stat. § 627.404(2)(b)(2)....

...627.455 (“the incontestability statute”). Section 627.455 states that “[e]very insurance contract shall provide that the policy shall be incontestable after it has been in force during the lifetime of the insured for a period of 2 years from its date 6 Section 627.404 provides: Any individual of legal capacity may procure or effect an insurance contract on his or her own life or body for the benefit of any person, but no person shall procure or cause to be procured or effected...

...esentatives, or to any person having, at the time such contract was made, an insurable interest in the individual insured. The insurable interest need not exist after the inception date of coverage under the contract. Fla. Stat. § 627.404(1). 9  Case: 13-12135 Date Filed: 02/27/2015 Page: 10 of 21 of issue[.]” Fla....

...t the answer is not clear cut, and this has proven to be the case. The district court that ruled on the validity of the Berger policy (hereinafter, “the Berger court”) held that the STOLI policy at issue was void ab initio because it violated § 627.404, the insured-interest statute....

...Brasner, 2011 WL 134056, at *4–6. The district court that adjudicated the validity of the Guild policy (“the Guild court”) took a different view of the interplay between the two relevant statutes, concluding that Pruco’s tardy insurable-interest claim under § 627.404 was barred by the incontestability provision called for by § 627.455....

...n for their decision. If, however, the Florida Supreme Court decides that, notwithstanding Pruco’s failure to contest the policies within two years of their issuance, Pruco may still seek to invalidate those policies as being non-compliant with § 627.404, then we must ask the court one more question regarding the validity of the Berger policy. 9 Specifically, as set out above, Florida Statute § 627.404(1) permits a third party to procure an insurance policy on the life of another so long as the benefits under that policy are payable either to the named insured, her personal 9 There has been no briefing on whether the...

...representative, or a person who, at the time the insurance contract is made, has an “insurable interest” in the insured individual. Further, an insurable interest is not required to exist after the “inception date of coverage.” Fla. Stat. § 627.404(1). One can be said to have an “insurable interest” in the life of another individual to whom one is closely related by blood or by law and in whom one has a substantial interest engendered by love and affection. Fla. Stat. § 627.404(2)(b). Although the Berger policy was eventually assigned to Wells Fargo, Mrs. Berger was listed as the owner and Mr. Berger was named as the beneficiary at its inception. Clearly, both of those individuals had an insurable interest in Mrs. Berger’s life. Thus, Wells Fargo argued before the Berger court that the insurance contract complied with § 627.404’s requirement that there be an insurable interest at the inception of the policy. The Berger court rejected that argument....

...Yet, citing authority from other federal Southern District of Florida cases interpreting Florida law, the court held that such assignments must be made in good faith, and not as sham assignments seeking to circumvent Florida’s law prohibiting a wagering contract on the life of another, as embodied in § 627.404....

...the insurance salesman, had created an “elaborate scheme” to make it look as if Mrs. Berger was paying the premiums. Wells Fargo argues that Florida law does not support the importation of a good faith requirement into the insurable interest statute. It notes that § 627.404 only requires an insurable interest “at the moment of the policy’s inception.” Fla. Stat. § 627.404(1)....

...no insurable interest. Fla. Stat. § 627.422 (1982). In support of this argument, Wells Fargo cites decisions from courts in other states that have refused to graft a good faith requirement onto similar statutory language. Finally, even if § 627.404 contains an implied good faith requirement subject to the standards articulated by the Berger court, there is one potential factual wrinkle in this case....

...husband, the beneficiary of the policy, would have received the $10 million--does this fact undermine an argument that an insurable interest was lacking at the inception of the policy? In short, the parties cite no controlling Florida legal authority concerning whether § 627.404 contains an implied good faith requirement and whether under 19  Case: 13-12135 Date Filed: 02/27/2015 Page: 20 of 21 the facts of the cases before us, such a requirement wou...

...preme Court of Florida, we respectfully certify the following questions for a determination of state law: 1. Can a party challenge an insurance policy as being void ab initio for lack of the insurable interest required by Fla. Stat. § 627.404 if that challenge is made after expiration of the two-year contestability period mandated by Fla. Stat. § 627.455? 2. Assuming that a party can do so, does Fla. Stat. § 627.404 require that an individual with the required insurable interest also procure the insurance policy in good faith? The phrasing of the above questions should not restrict the Florida Supreme Court’s consideration of the issues presented in these appeals....

...As the district court noted, and as the parties to the appeal concede, there exists no statutory or case law directly addressing the issue presented. Florida law prohibits issuance of an insurance policy to one who has no insurable interest in the thing insured. § 627.404, Fla....

...Fowler, 166 So.2d 206 (Fla. 2d DCA 1964). It does not follow, however, that the issuance of a life insurance policy without inquiry into the nature and extent of the beneficiary's interest in the insured creates a tort cause of action in favor of the insured. Section 627.404, Florida Statutes (1979), provides: An insurer shall be entitled to rely upon all statements, declarations and representations made by an applicant for insurance relative to the insurable interest which such applicant has in the insur...

...Such public policies, however, involve relatively complex issues and are not well suited to judicial solution. They also require input from the insurance companies that must assess underwriting considerations, such as insurable interest, before marketing affordable coverage specifically suited for these needs. See generally § 627.404, Fla....

...the central and determinative question. The complaint alleges breaches of several duties. We find it necessary to examine only one. Florida law requires that an individual contracting for insurance on the life of another have an insurable interest. § 627.404 Fla....

...and for which that court has indicated there appears to be no controlling precedent. 1 *1203 In this dispute over the validity of three stranger-originated life insurance (STOLI) policies, the certified questions involve two Florida statutes, namely section 627.404(1), requiring that an insurable interest exist at the inception of each life insurance policy, and section 627.455, providing that an insurance policy is incontestable two years after its issuance. Specifically, the Eleventh Circuit , certified the following, questions: 1. Can a party challenge an insurance policy as being void ab initio for lack of the insurable interest required by Fla. Stat. § 627.404 if that challenge is made after expiration of the two-year contest-ability period mandated by Fla. Stat. § 627.455 ?, 2, Assuming that a party can do so, does Fla. Stat. § 627.404 require that an individual with the required insurable interest also procure the insurance policy in good faith? Pruco Life Ins....

...The policy was ultimately sold to a client of Wells Fargo. On July 9, 2010, approximately four years after it had issued the Berger policy, Pruco filed suit against Wells Fargo asserting that the policy was void ab initio for lack of an insurable interest, as required by § 627.404....

...Adopting its previous analysis of this issue in an order denying Wells Fargo’s motion to dismiss, the court held that there was no valid insurable interest in the life of the insured by the party procuring the insurance, meaning that the policy ran afoul of Florida Statute § 627.404’s requirement of such an interest at the time an insui’ance policy is issued....

...On December 17, 2012, approximately seven years after it had issued the Guild policies and almost five years after it had approved the change in beneficiary and ownership to U.S. Bank, Pruco filed suit against U.S. Bank asserting that the policies were void ab initio under § 627.404....

...red or his or her personal representatives, or to- any person having, at the time such contract was made, an insurable interest in the individual insured. The insurable interest need not exist after the inception date of coverage under the contract. § 627.404(1), Fla. Stat. Section 627.404(2)(b) 2....

...surance specifically against death by accident or accidental means. § 627.455, Fla. Stat. The Berger and Guild policies at issue contained the statutorily-required incontestability clause. Under the plain language of the insurable interest statute, section 627.404, the policies on the lives of Ms....

...in the first place. Thus, as a result of STOLI schemes, life insurance policies like the Berger and Guild policies, which at their inception named members of the insureds’ immediate family as beneficiaries, have the insurable interest required by section 627.404....

...means [that,] within the limits of the coverage the, policy shall stand, unaffected by any defense that it was invalid at its inception”) (emphasis added) (citation omitted). CONCLUSION Because STOLI policies like the Berger and Guild policies at issue have the insurable interest required by section 627.404(1) at their inception, they become incontestable two years after their issuance under the plain language of section 627.455....

...The Court agrees with Kowalski that the Insured was not a party to the insurance policy. Although the Insured did sign the insurance policy application, as Kowalski points out, her consent was required under Florida law for her son, Edward, to obtain a policy on her life. Kowalski Response at 7 n. 8 (citing Fla. Stat. § 627.404 (5))....

...n having an insurable interest in the life of a minor younger than 15 years of age or any person upon whom a minor younger than 15 years of age is dependent for support and maintenance may effectuate a policy of insurance on the minor.” Fla. Stat. § 627.404 (5)....

...revent STOLI transactions by requiring purchasers of insurance policies to have an insurable interest in the insured’s life. See, e.g., Ala. Code § 27-14-3(f) (requiring an insurable interest at the time a policy becomes effective); Fla. Stat. § 627.404(1) (requiring a person purchasing insurance on “the life or body of another individual” to have “an insurable interest in the individual insured”); Ga....

...At the trial level, TTSI argued that Ms. Tennant was a “key client” of Mr. Moses and therefore it had an insurable interest in Ms. Tennant’s life. The trial court rejected TTSI’s argument and determined that no insurable interest existed. See § 627.404, Fla....

...The owners of the policies relied on a second Florida statute that requires all insurance ∗ Honorable Kristi K. DuBose, United States District Judge for the Southern District of Alabama, sitting by designation. 1 Fla. Stat. § 627.404. 2  Case: 13-12135 Date Filed: 01/25/2017 Page: 3 of 5 policies to include a clause providing that the policy is incontestable after it has been “in force” for two years....

...by district courts within our circuit, we certified the following questions to the Supreme Court of Florida: 1. Can a party challenge an insurance policy as being void ab initio for lack of the insurable interest required by Fla. Stat. § 627.404 if that challenge is made after expiration of the two-year contestability period mandated by Fla. Stat. § 627.455? 2. Assuming that a party can do so, does Fla. Stat. § 627.404 require that an individual with the required insurable interest also procure the insurance policy in good faith? See Pruco Life Ins....

...§ 627.455. 3  Case: 13-12135 Date Filed: 01/25/2017 Page: 4 of 5 policy like the two policies at issue in this consolidated appeal, an insurable interest exists in the life of the insured at the inception of the policy, as required by Florida Statute § 627.404....

...provided in Florida Statute § 627.455. Wells Fargo Bank, N.A. v. Pruco Life Ins. Co., 200 So.3d 1202, 1206 (2016). The court stated: Because STOLI policies like the Berger and Guild policies at issue have the insurable interest required by section 627.404(1) at their inception, they become incontestable two years after their issuance under the plain language of section 627.455....

...revent STOLI transactions by requiring purchasers of insurance policies to have an insurable interest in the insured’s life. See, e.g., Ala. Code § 27-14-3(f) (requiring an insurable interest at the time a policy becomes effective); Fla. Stat. § 627.404(1) (requiring a person purchasing insurance on “the life or body of another individual” to have “an insurable interest in the individual insured”); Ga....

...Lincoln’s motion argued that the plaintiffs’ recovery under the policy was barred because Van Do did not sign the policy documents and did not provide any other form of written consent to the policy and its terms prior to issuance of the policy. Specifically, Lincoln argued that there had been no compliance with section 627.404(5), Florida Statutes (2011), which required written consent to the insurance contract and its terms....

...Thi Do and Thai Ha countered that Van Do had signed the ExamOne consent form and that the form was part of the insurance application. They argued Van Do’s signature on the ExamOne form was tantamount to his signature on the applica *912 tion, thereby satisfying the requirements of section 627.404(5)....

...rguments, the Parties contested whether VAN DO’s execution/signing of the EXAMONE Form constitutes “written consent” by the insured to legally procure life insurance, regardless if the EXAMONE Form is part or not part of the Application, under section 627.404(5), Florida Statutes (2012).......

...Second, the trial court erred in entering summary judgment based upon the issue of whether Van Do “applied for” the life insurance policy because that issue was not presented to the court for determination. For the reasons explained below, we reject both arguments. Section 627.404(5), Florida Statutes (2011), reads: A contract of insurance upon a person ......

...d. at 192. We agree with the reasoning in Hilfiger and conclude that Van Do’s written consent to the paramedical exam provided by a third party, ExamOne, was not “consent in writing” to the life insurance contract and its terms, as required by section 627.404(5)....

...We also agree with Hilfiger ⅛ reasoning on the second issue and conclude that Van Do’s purported oral authorization of Thai Ha to sign the insurance application on his behalf did not constitute “applying for” the insurance policy as contemplated by section 627.404(5) and, consequently, cannot be the basis of a contract for life insurance....

...r Van Do had “consented in writing” to the insurance contract and its terms, but was astutely argued. We also note that several cases have rejected Appellants’ contention that the phrase “in writing” only modifies the word “consent” in section 627.404(5) and that nothing in the statute requires the application for insurance to be in writing....

...ce would not be effectuated unless the individual insured “applies for or consents in writing thereto”). Here, it is undisputed that Van Do did not sign the insurance application itself. We agree with the reasoning in Alleman that the purpose of section 627.404(5) is to put the issue of the insured’s consent beyond all doubt. To hold that Van Do could have applied for insurance verbally would seriously undermine the purpose of the statute. At oral argument, Appellants noted the language of section 627.404(6), which reads, “For purposes of this section, the signature of the proposed insured ......

...be that section (6) confirmed that one can “apply” for insurance without doing so in writing. Therefore, they argued, the term “in writing” in the statute only modified the word “consent” and any other interpretation made the language in section 627.404(6) redundant. We are not persuaded by Appellants’ argument because sections 627.404(5) and (6) can be reconciled without undermining the purpose of the statute and without deviating from the conclusion that the statute requires an insured to either apply in writing or consent in writing to the insurance contract and its terms....

...ance. See Craig E. Behrenfeld, Employer-Owned, Life Insurance After The Pension Protection Act of 2006, 88 Fla. Bar. J. 47 (Feb. 2009). The employee upon whom the policy is taken need not sign the insurance application — the employer signs it. But section 627.404(5) still requires the employee to consent in writing to the insurance contract and its terms. See generally id.; Tresa Baidas, “Secret” Life Insurance Triggers Suits; Employees Claim Lack of Consent, The National Law Journal (Feb. 2, 2009). But this case involves an individual policy, not a corporate-owned life insurance policy. Section 627.404(6) simply clarifies that if a person signs the insurance application, that signature constitutes written consent to the insurance contract and its terms. Therefore, under section 627.404(5), the insured has to either apply in writing or consent in writing to the insurance contract and its terms....

...WHETHER POLICY LACKED AN INSURABLE INTEREST AT ITS INCEPTION 1. IS GOOD FAITH REQUIRED? As a preliminary matter, this Court must consider whether there is a “good faith” requirement attached to Florida’s statute regarding insurable interests. Fla. Stat. § 627.404 (2011) provides: Any individual of legal capacity may procure or effect an insurance contract on his or her own life or body for the benefit of any person, but no person shall procure or cause to be procured or effect an insurance contract...

...person in the position of the recipient would be expected to investigate.’ ” (DE 72 at 5-6). However, Florida statutory and case law clearly indicates that Lincoln had no duty to investigate the information provided in the Policy. See Fla. Stat. § 627.404 (3) (2011) (“An insurer shall be entitled to rely upon all statements, declarations, and representations made by an applicant for insurance relative to the insurable interest which such applicant has in the insured .......