Failure of Proposed Insured Stay Alive Until Policy Delivered Costs Fiance Almost $5 Million
Barry Zalma
Jun 20, 2023
Read the full article at https://lnkd.in/gbYdZiau and see the full video at https://lnkd.in/gRxPxBft and at https://lnkd.in/gStMDxfn and at https://zalma.com/blog plus more than 4500 posts.
On January 27, 2021, Dr. Travis Richardson completed an application for an individual life insurance policy with Pacific Life seeking $4,816,949.00 in coverage. Blevins was Dr. Richardson’s fiancé and was listed as the primary beneficiary of the policy. Lamar Breshears was the insurance agent for Pacific Life. Champion Agency (“Champion”) handled details. Dr. Richardson died unexpectedly before the policy was delivered and the insurer refused to pay.
In Pacific Life Insurance Company v. Katie Blevins, No. 3:21-CV-00143 JM, United States District Court, E.D. Arkansas, Northern Division (June 15, 2023} the USDC resolved the claim of the beneficiary.
FACTS
On February 1, 2021, Champion transmitted Dr. Richardson’s application to Pacific Life with the instructions to process the application and to mail the policy to Champion at its office in Albuquerque, New Mexico. Pacific Life received Dr. Richardson’s application on February 2, 2021. On March 11, 2021, Pacific Life’s underwriting department approved Dr. Richardson for Policy and the initial monthly premium of $16,668.68 was paid. The same day that the policy was approved, Pacific Life uploaded an electronic copy of the policy to its Planned Performance Tracking portal (the “PPT portal”).
On March 12, 2021, Dr. Richardson emailed Breshears and asked him when the policy was active. Breshears responded the same day, stating, “Today. If you were to die today, the policy would pay out a death benefit.” Breshears was wrong because Dr. Richardson died unexpectedly on March 14, 2021.
The physical policy was received by Champion March 15, 2021. Pacific Life refunded the initial premium payment on March 25, 2021, taking the position that the policy was not “in force” at the time of Dr. Richardson’s death because it had not been “delivered” as required by the application and policy.
ANALYSIS
It was undisputed that delivery of the policy was a valid condition precedent to Blevins being entitled to receive payment under the policy. The application states that: “[c]overage will take effect when the Policy is delivered and the entire first premium is paid only if at that time each Proposed Insured is alive, and all answers in this Application are still true and complete.” (emphasis added.).
The policy, which incorporates the application, states that a Policy is in effect and provides a Death Benefit on the Insured on the date the Policy and associated riders become effective. The Policy Date for this policy was March 11, 2021 a date before Dr. Richardson died.
Pacific Life claimed that delivery of the policy required Dr. Richardson to have received and accepted a physical copy of the policy. It is undisputed that this did not happen, and Pacific Life sought summary judgment. The Court found that there were no material facts in dispute and agreed that the policy was not delivered.
The fact that the challenged terms are not defined does not make them vague and ambiguous.
Importantly, the USDC noted that the policy must be read as a whole, and effect given to all provisions. Construction that neutralizes any provision of a contract should never be adopted if the contract can be construed to give effect to all provisions. The policy in question unambiguously state that it is in force (defined as meaning in effect and paying death benefits), “subject to your acceptance of the delivered policy and payment of the initial premium.” (emphasis added).
While the term “policy date” clearly was confusing even to Breshears, it did not neutralize the delivery and acceptance requirements.
In addition to the delivery requirement, the application stated that coverage under the policy would take effect when it was delivered “only if at that time” the proposed insured was alive and “all answers in this Application are still true and complete.” Under Arkansas law, “if the policy was mailed [to the agent] unconditionally for the sole purpose of delivery to the assured,” the mailing of the policy from the insurance company to the agent would constitute constructive delivery. The burden of proof to show that the policy was unconditionally delivered to the agent for delivery to the insured is on the plaintiff.
Breshears testified that he understood delivery of the policy to mean “physically sending the policy to the client,” and that a “hundred percent of his policies have been delivered by paper.” Pacific Life has established that it physically mailed the policy to Champion pursuant to the instructions it received with the transmittal of Dr. Richardson’s application. Included with the mailed policy were a delivery receipt and an amendment to the application to correct minor inaccuracies. Blevins did not establish that there is a genuine issue of material fact on the issue of constructive delivery of the policy.
Since at that time the outstanding delivery requirements had not been communicated to Breshears or Champion at that time, she argues that those delivery requirements were waived. However, that does not support her claim that the precondition of delivery itself was waived.
The Court has no doubt that Dr. Richardson, Breshears, and Blevins believed that Dr. Richardson was covered under the policy as of March 11, 2021. However, Pacific Life’s motion for summary judgment was granted.
ZALMA OPINION
People buy life insurance because they recognize that life is a disease from which all humans suffer. We all, eventually, die. Dr. Richardson wanted to protect his fiance and applied for a life insurance policy that he expected to have for many years only to die before the policy was delivered to him. Insurance policies must be read as a whole. In this case, the policy never came into effect because he was not alive when the policy was delivered. A sad result but on its face a correct decision.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.
Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808
Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01
Barry Zalma, Esq., CFE, is available at http://www.zalma.com and [email protected]
Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257
Write to Mr. Zalma at [email protected]; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe and receive videos limited to subscribers of Excellence in Claims
Handling at locals.com https://lnkd.in/gfFKUaTf.
Consider subscribing to my publications at substack at https://lnkd.in/gcZKhG6g
Go to Newsbreak.com https://lnkd.in/g8azKc34
Go to the Insurance Claims Library – https://lnkd.in/gWVSBde.
Insurance Expert May Not Testify to Speculative and Contains Unsupported Conclusions.
Posted on September 18, 2026 by Barry Zalma
See the full video at and at https://rumble.com/v7fmifw-expert-may-only-testify-to-what-experience-supports.html
In Michele A. Over, and The Estate Of Paul R. Over v. State Farm Mutual Automobile Insurance Company, and State Farm Fire And Casualty Company, Civil Action No. 23-cv-02243-PAB-STV, United States District Court, D. Colorado (September 14, 2026) Michele and Paul Over sued State Farm Fire and State Farm Auto over hail-damage and stolen-vehicle claims.
The operative dispute concerned State Farm Auto’s motion to exclude or limit opinions from plaintiffs’ insurance-industry expert, Aaron Castillo. Castillo.
Law
The proponent of expert testimony must establish by a preponderance of the evidence that an expert is qualified and that the opinions are helpful, sufficiently grounded, and reliably derived and applied. Experience-based opinions must explain how the...
150 Months in Prison for Tax Fraud
Post 4846
Posted on September 17, 2026 by Barry Zalma
See the full video at https://lnkd.in/g8rh3JBX and https://lnkd.in/gmkdy-9C, In United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
In United States Of America v. Thomas Addaquay, United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
Thomas Addaquay controlled United Consolidated Accounting and Business Services (UC), nominally a check-cashing business.
The government proved a three-stage tax-refund scheme that converted the resulting refund checks into usable funds through ...
Major Fraud Perpetrator Asserts Fifth Amendment Privilege to Avoid Prosecution
Post 5489
Posted on September 14, 2026 by Barry Zalma
Fraudster Refuses to Answer Questions About His Alleged Fraud
See the full video at https://lnkd.in/gvicAMDr and at https://lnkd.in/gvicAMDr
In Great American Insurance Co. v. Gemstone Property Management, LLC, et al., No. 23-cv-9100 (LJL), United States District Court, S.D. New York (September 8, 2026) Great American Insurance Company alleged that it was defrauded through a scheme in which Subin Associates, LLP recruited individuals to stage construction-site injuries, arranged unnecessary medical treatment and litigation funding, and pursued fraudulent personal-injury claims.
Luis Manuel Garcia Salcedo, resulted in a $6 million settlement. Non-party Jose Hernandez allegedly worked as an assistant manager at Subin, operated Hernandez Associates, and owned litigation-funding companies that shared office space with Subin and provided services to its clients.
After Great American ...
Theft of Confidential Information
Post 4581
Posted on November 12, 2026 by Barry Zalma
In People Center, Inc. v. Deel, Inc., et al., No. 25-cv-02576-CRB (LJC), United States District Court, N.D. California (November 7, 2026) People Center, doing business as Rippling, and Deel compete in payroll and human-resource management software. Rippling alleges that Deel and its executives recruited Rippling employee Keith O’Brien, based in Ireland, to disclose confidential information and trade secrets.
THE IRISH SUIT
Rippling sued O’Brien in Ireland and Deel in the United States. O’Brien subsequently retained separate counsel, supplied an affidavit describing the alleged espionage, and entered into a Cooperation Agreement with Rippling. In exchange for his cooperation, Rippling agreed to provide financial assistance, indemnification, and conditional dismissal of the Irish proceedings. The agreement also permitted renewed proceedings or a monetary judgment upon a material breach.
The Irish proceedings against O’Brien were dismissed...
A Proposed Amended Complaint That Includes New Factual Allegations to Remedy Pleading Deficiencies
Posted on November 11, 2026 by Barry Zalma
After Dismissal Fraud Victim May Amend Complaint After Dismissal
Post 4580
If A Proposed Amendment Is Not Clearly Futile, Then Denial Of Leave To Amend Is Improper
In John Hancock Life & Health Insurance Company v. Caring Connections LLC, Arthur Feldheim, and Blime a/k/a Vera Feldheim, Civ. No. 25-7574 (MAS)(JBD), United States District Court, D. New Jersey (November 6, 2026) John Hancock sued Caring Connections LLC, Arthur Feldheim, and Blime a/k/a Vera Feldheim on June 5, 2025, asserting thirteen claims, including fraud, breach of contract, and aiding and abetting fraud.
On March 26, 2026, this Court entered an order granting Caring Connections’ motion to dismiss and granting in part and denying in part the Feldheims’ motion to dismiss. The dismissed claims were dismissed without prejudice, and John Hancock timely sought leave to amend.
They also argued that the New ...
Is Exhaustion Required to Seek Declaratory Relief From an Excess Insurer?
Post 4578
Posted on November 9, 2026 by Barry Zalma
In Fox Paine & Company, LLC, et al. v. Twin City Fire Insurance Company et al., S287404, 593 P.3d 832, 593 P.3d 838, 346 Cal.Rptr.3d 541, Supreme Court of California, (July 27, 2026) the Supreme Court noted that Insurance is sometimes procured in a series of layers, with an insured acquiring a primary insurance policy that provides an initial layer of coverage for loss or liability and an excess insurance policy or policies that provide additional coverage in the event the underlying coverage is exhausted. Usually, the first layer of coverage must be exhausted before the excess layers are available to the insured.
Exhaustion
Fox and Paine’s investment-firm dispute generated extensive litigation and competing insurance claims. Their insurance tower consisted of a $10 million primary policy and four $10 million excess layers.
The Fox Parties alleged that insurers paid their rivals, withheld information,...