This case involves an accumulator universal life insurance policy purchased by Dr. Herbert Wiegand in 2000 when he was 82 years old. The insured was his second wife, Jean Wiegand (nee Walters), who was 80 years old at the time. The policy had a face value (death benefit) of $1.4 million and a maturity date of June 12, 2020. The original owner of the policy was an LLC Dr. Wiegand set up for the benefit of his children from his prior marriage. Dr. Wiegand paid an initial premium which guaranteed coverage for five years. The policy carried a cash value, which fluctuated as a function of interest the policy earned, less the ongoing cost to maintain the insurance policy.
Breach of Contract Claim
Dr. Wiegand died in 2002, approximately two years after purchasing the policy. After Dr. Wiegand’s death, the Policy’s ownership transferred to his revocable trust which he set up for the benefit of all of his children. Plaintiffs are two of Dr. Wiegand’s adult children who serve as trustees of the trust.
Dr. Wiegand’s initial premium payment kept the policy in force for 16 years after purchase until 2016 with no subsequent premiums being paid. Ms. Weigand, however, lived past her 100th birthday until November of 2020, surviving the policy’s maturity date by more than four months. Plaintiffs had no knowledge of Ms. Wiegand’s health condition or status from which they could have assessed whether to maintain or surrender the Policy.
They raised a breach of contract claim based on New York Life’s alleged failure to send them annual statements at their attorney’s address instead of the original address listed on the policy—the residence of Dr. Wiegand and Ms. Wiegand, the insured. Plaintiffs claimed their damages were equal to the cash value of the policy as it existed in 2012—four years prior to the policy lapse. They asserted that they would have exercised their option to surrender the policy for a cash disbursement had New York Life sent them annual statements at their attorney’s address.
Plaintiffs moved to exclude Defendant’s expert, Charles W. Bowden from testifying under Rule 702 and Daubert standards because his report allegedly lacked relevant expert opinions bearing on the ultimate factual issue in this case.
Insurance Expert Witness
Charles W. Bowden has more than 40 years of experience as an independent life, health and disability insurance agent/ broker. He holds two insurance industry recognized certifications, Chartered Life Underwriter (CLU) and his Chartered Financial Consultant (ChFC). His specialties and experience include business continuity planning, using all forms of business life and disability insurance. He has extensive experience in Whole Life, Universal Life and Variable Life in the Business Markets selling COLI, Business Continuity Planning. Group Term Life Insurance and Group Disability and all types of group Health care coverage.
In addition to his practice in estate and business continuity planning, Charlie is a Qualified Continuing Education Instructor, and assists other licensed insurance professionals to keep current with the ever-changing structure of the insurance and investment marketplace using financial and estate planning strategies. Charlie uses his extensive experience to provide expert testimony in legal matters brought to courts around the country and he is a frequent radio guest. Charlie is a member of the South Jersey Chapter of The Society for Financial Service Professionals, as well as a past member of their Board of Directors.
Discussion by the Court
Bowden offered opinions on the following three topics:
- Why was the life insurance policy able to continue from 2000, the effective date of the policy without continuing premium payments?
- Why was the policy initially held in the Family LLC and subsequently moved to the revocable trust?
- What are the administrative issues that allowed the policy to lapse prior to the death of the insured?
Plaintiffs argued that Bowden’s conclusions were merely recaps of factual points discussed in his report, his opinions were lay opinions, and it set out an opinion that was irrelevant in a breach of contract case. Further, Plaintiffs argued that Bowden’s opinions were in reality legal argument, which was not appropriate. Defendants argued that Bowden’s opinions were proper as industry standards could provide assistance to the fact finders.
Industry practices or standards may be relevant in insurance cases, and the Eighth Circuit has upheld the admission of opinion testimony addressing whether an insurance company handled a claim properly under industry standards.
The Court allowed Bowden to explain industry standards regarding policy updates and the like but barred him from giving his legal opinion as to which party was at fault.
Held
The Court granted in part and denied in part Plaintiff’s motion to exclude the testimony of Defendant’s expert, Charles W. Bowden.
Key Takeaway:
- Legal Conclusion: Considering an expert “may not intrude on the Court’s role to instruct the jury as to the law and testify to a legal conclusion,” the Court did not allow Bowden to give his legal opinion as to which party was “at fault.”
- Relevance of Industry practices or standards in insurance cases: The Eighth Circuit has upheld the admission of opinion testimony addressing whether an insurance company handled a claim properly under industry standards.
Case Details:
| Case Caption: | Wiegand Et Al V. New York Life Insurance & Annuity Corporation Et Al |
| Docket Number: | 4:22cv188 |
| Court: | United States District Court, Missouri Eastern |
| Order Date: | March 26, 2024 |
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