Author: ArentFox Schiff

Geronta Funding v. Brighthouse Life Insurance Company On August 25, 2022, the Delaware Supreme Court adopted a fault-based analysis framed under the Restatement (Second) of Contracts (“Restatement”) to determine if life insurance policy premiums should be returned in a case where the policy is found to be void ab initio for lack of insurable interest. Geronta Funding v. Brighthouse Life Insurance Company, No. 380, 2021 (D. Del. 2022) (“Seck”). In doing so, the Court effectively overruled a number of federal Delaware court decisions that have held that a life insurer is required to return premium to an investor if the…

Estate of Ann Rink, by its Executor, Michael Rink v. VICOF II Trust On May 17, 2022, a jury verdict rejected claims brought by an executor seeking the proceeds of a $1.5 million life insurance policy in the most recent development in so-called “estate cases” brought under Delaware law. Phoenix Home Life issued the policy in 2006, and the insured used a premium finance loan from LaSalle Bank to pay the first two years of premiums. The initial owner of the policy was a Delaware trust, of which the insured’s husband was the beneficiary and her son co-trustee. In 2008,…

Wells Fargo Bank, N.A. and Berkshire Hathaway Life Insurance Company of Nebraska v. Estate of Phyllis M. Malkin On May 26, 2022, the Supreme Court of the State of Delaware issued its decision in Wells Fargo Bank, N.A. and Berkshire Hathaway Life Insurance Company of Nebraska v. Estate of Phyllis M. Malkin (19-14689, 17-cv-23136, 172, 2021) (“Malkin”). The Malkin holding is particularly important for life settlement investors because it categorically rejects the proposition that Section 2704(b) (Delaware’s so-called “estate statute”) forecloses all defenses and does not allow the party being sued to recover premium under any circumstances. Instead, the Court…