Life Insurance Lawsuits

Here is a situation almost never seen.  It involves a case out of the Northern District of Texas, Dallas Division.  It is styled, William M Arrington, Individually, as Beneficiary, and as Representative of the Estate of William L. Arrington v. Jackson National Life Insurance Company, Danny C. Burba, and Gordon B. Richardson.

William applied for a life insurance policy and Burba and he signed the application.  Southwestern accepted the application and issued William a life insurance policy with a face value of $976,500.  The policy was a flexible premium adjustable life insurance policy.  Burba advised William as to the annual premium amount he had to pay to keep the policy in effect.  Burba allegedly told William to make a down payment of $1,100 per month for the life of the policy.  From 1998 to 2015, William paid more than $200,000 toward the policy.

In February 2007, William received notice that Southwestern merged with Valley Forge Live Insurance Company.  In September 2007, Bill received notice that Valley had changed its name to Reassure America Life Insurance Company.  On July 31, 2008, Margarita Arrington requested that Gordon Richardson replace Burba as the agent of record.  However, Burba continued to be copied on correspondence regarding the policy, and internal records referred to Burba as the “active agent.”

If the facts aren’t getting clear, and they probable are confusing, they get more complicated and the case needs to be read to understand the facts.

Having stated the above, this case involves a legal issue as to whether this case, which is in Federal Court can be remanded to the State Court by an amendment to the pleadings bringing in the joinder of a non-diverse defendant.

The Fifth Circuit Court of Appeals looks at four factors discussed in the 1987, Hensgens v. Deere & Co. opinion.  The four factors are “the extent to which the purpose of the amendment is to defeat federal jurisdiction, whether plaintiff has been dilatory in asking for amendment, whether plaintiff will be significantly injured if amendment is not allowed, and other factors bearing on the equities.”  If the court, upon balancing the equities, permits joinder of a non-diverse defendant,it must remand to state court.  If it does not permit joinder, the federal court retains jurisdiction.

This court then discussed the extensive facts in this case and ultimately ruled in favor of Arrington allowing the amendment and subsequently remanded the case back to State Court.