by John Darer CLU ChFC CSSC RSP CLTC
The California First Appellate District Court of Appeal found that the 2012 case against Glenn Neasham lacked evidence that he had taken an elderly woman's money for his own use or anyone else's, and that there also wasn't proof that he had made any misrepresentations in selling her an annuity in February 2008.
Jury Was Incorrectly Instructed
The appellate court also concluded that Neasham's jury “was incorrectly instructed that to convict it need find only that the purchase of the annuity deprived the elder of a major portion of the value or enjoyment of her property, eliminating the necessity of proving that defendant had any such intention.”
Unless the state appeals the decision the matter will be returned to the Lake County Superior Court in the next few months, at which time the District Attorney's Office will have to decide to retry or dismiss the case.
Why the Neasham case is significant?
The Neasham annuity case chilled agents in the insurance industry with the thought that agents could be at risk for prosecution for similar sales to seniors. There were also whispers in the structured settlement community about what long term impact, if any, such a decision would portend for both the structured settlement primary and secondary market, which includes seniors and claimants who may have cognitive impairments.
The case arose from Neasham's February 2008 sale of a $175,000 annuity – set to mature in 15 years – to then-83-year-old Fran Schuber of Lucerne, CA whose boyfriend Louis Jochim had been a longtime Neasham client.
According to the court documents, Schuber purchased a “MasterDex 10 Annuity” issued by Allianz Life Insurance Co. of North America, which is approved by the California Department of Insurance for sale to persons through the age of 85 years. Neasham made an 8-percent commission.
After meeting with Neasham, Schuber and her boyfriend, Louis Jochim, then 82, went to the Savings Bank of Mendocino County to withdraw the money (for the annuity), and Neasham called the bank to advise Schuber was coming, telling the bank employee “he would report the matter to the district attorney if there was any delay in making the withdrawal,” the court documents stated.
Based on past dealings, the bank employee believed Schuber had memory problems, and when Schuber and Jochim arrived, the bank employee became concerned “that Schuber was confused and was being influenced by Jochim,” according to the appellate court narrative.
The bank employee would call a Lake County Department of Social Services social worker to advise of the bank withdrawal and that she felt Schuber's boyfriend “was exerting undue influence on her,” the appellate court document explained.
An investigation resulted, led by the California Department of Insurance after the agency said it received a report from the Savings Bank of Mendocino County. The Lake County District Attorney's Office filed the case based on the state investigation.
At trial, prosecutors alleged that Neasham was aware that Schuber had dementia. Neasham denied this.
Schuber did not testify during Neasham’s trial because she was placed into a conservatorship due to advanced dementia, officials said at the time.
The finding of the trial court was further notable because Schuber had actually made money on her annuity investment.
After being found guilty by a jury, Neasham was sentenced in February 2012 to 300 days in jail by Judge Richard Martin. Neasham immediately pursued an appeal and posted bail.