Spencer Fane LLP Logo

The SFBB trial team wins defense verdict, rejecting plaintiff’s claims seeking $5 million plus punitive damages.

Plaintiff alleged that Spencer Fane’s client, Guardian Life Insurance Company, through its agents, breached a fiduciary duty by failing to ensure payment of the premiums on a life insurance policy issued to her deceased husband pending the issuance of a replacement life insurance policy.

After deliberating less than 30 minutes, a St. Louis City jury delivered a defense verdict in favor of Guardian Life Insurance Company of America, rejecting plaintiff’s claim for $5 million in damages and bringing an end to more than seven years of litigation.

Plaintiff and her husband each purchased a whole life insurance policy from Guardian’s agents with a death benefit of $250,000. When Guardian’s agents left to join a new insurance company, plaintiff and her husband decided to replace their Guardian policies with similar policies from a new company. Plaintiff’s husband’s insurance application was denied by the new company. However, while the application was pending, plaintiff and her husband failed to continue to pay premiums on his Guardian policy, which resulted in the policy lapsing. Shortly thereafter, plaintiff’s husband was diagnosed with terminal cancer and died. Guardian denied plaintiff’s claim for the insurance proceeds because the policy had lapsed for failure to pay premiums.

At trial, plaintiff argued that Guardian never should have sold the policy to her husband because they could not afford the premiums. Plaintiff also argued that the Guardian agents owed her and her husband certain fiduciary duties, which were breached by failing to ensure payment of the premiums on her husband’s life insurance policy and failing to advise her husband that his premiums were in arrears. Plaintiff further argued that, even after leaving Guardian, the agents that attempted to replace her husband’s policy were continuing to act as actual or apparent agents of Guardian.

Guardian presented evidence at trial which clearly demonstrated that plaintiff and her husband knew or should have known that it was their responsibility to ensure that the premiums were paid, and that Guardian’s agents had no authority to enter into any agreements or arrangements to ensure the payment of husband’s insurance premiums. Guardian demonstrated that, even though it never sent a lapse notice to plaintiff’s husband, several notices were sent advising plaintiff’s husband that certain payments had been reversed for insufficient funds and that the policy premiums were unpaid, but such notices were never opened by plaintiff or her husband prior to his death.

Finally, plaintiff attempted to establish her emotional distress damages claim through Dr. Larry Kiel, who testified that he diagnosed plaintiff with Major Depression and Dependent Personality Disorder caused by Guardian. In response, Guardian introduced evidence that plaintiff never sought medical treatment until she was advised to do so by her attorney, which was approximately four years after her husband died and her death claim had been denied by Guardian. On cross-examination, Dr. Kiel acknowledged that he never treated plaintiff, and that his file for plaintiff contained no evidence of him ever having made a diagnosis because his forensic evaluation of plaintiff was still a “work in progress.”