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Ding Dong The Risk (Lawsuit) Is Dead

by Structured Settlement Watchdog

A disgruntled former structured settlement broker's quest to take down AIG, has been nailed shut as the deadline to file Writ Certiorari has come and gone

"Writs Thirtanly Over"

So a quest that started January 3, 2017 with Richard B. Risk, Jr, hitched up to a stud attorney, whose track record was promoted as if he was Seattle Slew, and failed like a wilted asparagus.

They failed again on Appeal and finally collapsed entirely. The problem with promoting a stud is that the stud still has to perform and in this case, Risk just had no case, no room for the stud to gallop. It was more like a scene from "The Galloping Blase".

The law suit, formerly the " AiG structured settlement class action",  was so poorly pleaded in my opinion, for reasons that I've articulated here over the past two years. Even a layperson could figure that it wouldn't succeed.  The Appeal saw the lower court's dismissal affirmed in AIG's favor, with an opinion written by former Supreme Court Justice David Souter. Appellants did not ask for an en banc review of  the First Circuit's decision and now, according to  Supreme Court Docket September 13, 2019, they have not pursued the last remedy, writ of certiorari to see if the United Supreme Court would review the case. 

What is Writ of Certiorari?   

A Writ of Certiorari orders a lower court to forward all documents in a case it has heard to the higher court for review. While this is most commonly used by the U.S. Supreme Court, other courts, such as the U.S. Court of Appeals, state supreme courts, and state courts of appeal, may issue such a writ. The U.S. Supreme Court is very selective about which cases it will hear, accepting cases only when at least four of the justices believe the case raises a significant federal question that is in the public’s interest.

Supreme Court Rule 13.1 states that the deadline to file a petition for a writ of certiorari is 90 days from the date of entry of judgment by the the Court of Appeals.  The deadline was September 9, 2019.

Risk Law Firm website has previously attempted to drum up business with the misrepresentation about a class action lawsuit against The Hartford that "His class action lawsuit was followed by the insurer’s exit from the structured settlement annuity marketplace. The insinuation is  (and continues to be as it is still posted) that it was the reason for he insurer's withdrawal.  In " Credit Check for Attorney Dick Risk", I pointed out that the reason they withdrew was for reasons other than Risk and "his class action lawsuit". Unlike the Spencer case, the  Risk's lawsuit against AIG was never certified as a class action.

Risk won't get the chance to gloat about AIG. Au revoir Monsieur Risk!

RI Lawyers Weekly Whiffs 1st Circuit Affirmation Of AIG Structured Settlement Lawsuit Dismissal With Prejudice

by Structured Settlement Watchdog

The Rhode Island Lawyers Weekly isn't going to make the legal media all-star team this quarter.

"Where a defendant insurance company agreed as part of structured settlement agreements to purchase annuities that would make periodic payments to the plaintiffs, the insurance company cannot be held liable for fraudulent misrepresentation based on the fact that the insurer deducted four percent commissions owed to the brokers who arranged the annuity transactions. A judgment dismissing …"

One needn't go past the snippet from the opening paragraph to realize that whoever wrote it for Rhode Island Lawyers Weekly (a) isn't dealing with a full deck of information (b) didn't take the time to understand the history of Ezell v Lexington insurance Company case and how a structured settlement transaction works, or (c) is intellectually dishonest and leaves the reader with false reality.

Consider these quotes from the Affirmation by the 1st Circuit in Ezell v Lexington insurance Company

1 "the four­ percent commission payment would have been paid by the life insurance companies that sold the annuities, and would have been accounted for as a standard element of the cost of doing business by the life insurance companies and reflected in the market prices that Lexington paid"

2. "the annuity companies' payment of brokers' commissions from out of the money Lexington paid for the annuities does not belie the facts that Lexington paid the amounts it quoted and that appellants received exactly those specific annuity payments the agreements had promised, payments that the appellants have not alleged that they failed to receive".

and the underscoring conclusory statements...

3. "Because there is no dispute that appellants did receive the periodic payment amounts they were promised in agreements containing no uncorrected misrepresentations, there is no allegation in the pleadings that appellants suffered the kind of harm necessary to make out a case of the statutory or common-law violations claimed".

4. "The basic problem with appellants' complaint is not that they failed to state some facts "with particularity." Fed. R. Civ. P. 9(b). Rather, it is that the facts they  (Plaintiffs/ Appellants) have pleaded "with particularity" on the matters discussed here demonstrate the absence of any "circumstances constituting fraud.

• Lexington insurance Company did not deduct a 4% commission.
• Commissions are paid by the life insurance companies (Lexington is not a life insurer) issuing structured settlement annuities to licensed agents.
• Rebating of commissions is unlawful under the insurance laws of most states. A 2007 opinion letter from the Office of General Counsel of the new York Insurance Department (now Department of Financial Services) even opined that it was unlawful for licensed insurance agents to advertise contributions to an association of trial lawyers.
• The largest representative case in the Ezell matter involved annuity issuers that were not even related to Lexington and the representative plaintiff Erica Biddings, expressly chose annuity issuers not related to Lexington insurance Company or AIG. 
• All the representative plaintiffs were represented in the structured settlement transactions by notable, experienced law firms like Beasley Allen and Krupnick Campbell, which firms had extensive prior history handling settlements that included structured settlements for their clients. I am aware of multiple structured settlement firms that have done plaintiff work for Beasley Allen lawyers. A Beasley Allen lawyer spoke at an October 2018 meeting of the National Structured Settlements Trade Association and another appeared on a podcast produced by a structured settlement brokerage firm.

 

via GIPHY  

Rhode Island Lawyers Weekly Whiffs on AIG Appellate victory

Appeal of AIG Class Action Dismissal Fails | Ezell v Lexington Insurance et al a Resounding Failure

by Structured Settlement Watchdog

Plaintiffs Made a Failed Argument that Structured Settlement Broker Commission Paid by Annuity Issuer Shortchanged Plaintiffs

Efforts by a disgruntled former structured settlement broker Richard B Risk Jr., to get another big payday off the backs of an insurance company have ended in resounding failure.

Appeal of Ezell Lawsuit against AIG

The 1st Circuit Court of Appeals dismissed the Appeal from the United States District Court for the District of Massachusetts in NORMA EZELL, LEONARD WHITLEY, and ERICA BIDDINGS, on behalf of themselves and others similarly situated, Plaintiffs, Appellants, v. LEXINGTON INSURANCE COMPANY; AMERICAN INTERNATIONAL GROUP, INC.; AIG ASSURANCE COMPANY; AIG INSURANCE COMPANY; AIG PROPERTY CASUAL TY COMPANY; AIG SPECIAL TY INSURANCE COMPANY; AMERICAN GENERAL LIFE INSURANCE COMPANY; NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURG, PA.; AGC LIFE INSURANCE COMPANY; AMERICAN GENERAL ANNUITY SERVICE CORPORATION; AIG CLAIMS, INC., f/k/a AIG Domestic Claims, Inc., Defendants, Appellees.  The analysis and decision was written by Retired United States Supreme Court Justice David Souter appears below. Disgruntled Dick bringing in "The Big Stick, Steven Berman of Hagens Berman, who had a string of 9 figure recoveries didn't do the trick. The lawsuit was poorly pleaded from the outset, and the class representative cases were poorly chosen, in my opinion, for reasons I have explained in prior posts.

Souter wrote "Appellants conceded in their complaint that it is "[i]ndustrywide" practice for brokers to be paid "a standard sales commission of four percent (4%) of the annuity's cost," Amended Complaint ,Paragraph 31, and that the commission would be paid by the annuity issuer, id. , Paragraphs 35, 99(b), 100(b), 120(b), 121(b). Assuming that these allegations are true, as we must at the motion-to-dismiss stage, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) ,

The four­ percent commission payment would have been paid by the life insurance companies that sold the annuities, and would have been accounted for as a standard element of the cost of doing business by the life insurance companies and reflected in the market prices that Lexington paid.

• The commission, in other words, was included in the price of a given annuity in the marketplace, and the appellants have provided no basis to infer that liability insurers in Lexington's position were under any obligation to inform a settlement party of the items of overhead that it was the annuity industry's continuing practice to account for in pricing their products, the annuity companies' payment of brokers' commissions from out of the money Lexington paid for the annuities does not belie the facts that Lexington paid the amounts it quoted and that appellants received exactly those specific annuity payments the agreements had promised, payments that the appellant.
• Because the words "annuitized" and "total present value" simply committed Lexington to pay the amounts stated as necessary to produce the periodic payments specified in the agreements have not alleged that they failed to receive". 
• "Because there is no dispute that appellants did receive the periodic payment amounts they were promised in agreements containing no uncorrected misrepresentations, there is no allegation in the pleadings that appellants suffered the kind of harm necessary to make out a case of the statutory or common-law violations claimed".
• "The basic problem with appellants' complaint is not that they failed to state some facts "with particularity." Fed. R. Civ. P. 9(b). Rather, it is that the facts they have pleaded "with particularity" on the matters discussed here demonstrate the absence of any "circumstances constituting fraud." !Q,_ Accordingly, we affirm the District Court's decision dismissing the amended complaint with prejudice."

Dick Risk's Resounding Failure to Bag the Big One Is Proof of Waning Relevance

Plaintiffs' Appeal in AIG Structured Settlement Class Action Cracks Me Up | Co-Counsel's 2005 and Prior Writing Undermines Advocacy  12/28/2018

AIG Structured Settlement Class Action Dismissed With Prejudice | Ezell v Lexington Insurance et al. September 28, 2018

Structured Settlement Reform | "The Hill Is Alive With The Sound of Musing" 5/23/2017

AIG Structured Settlement Class Action | To Gun Jumpers' Dismay Plaintiff HAD Own Broker | Two Factored Payments  4/13/2017

Structured Settlement Reform | It's Not His Party But He Can Cry If He Wants To 4/21/2015

AIG Structured Settlement Class Action | Old Dick Attempts To Swing "Big Stick"   

 

 

 

 

 

 

 

 

 

Big Claims by Big Contributors to Trial Lawyer Associations Weaken Plaintiffs' Arguments vs AIG

by Structured Settlement Watchdog

In bringing the structured settlement class action case against AIG (which was dismissed with prejudice in September 2018 and now on Appeal in the First Circuit), I previously opined that  Plaintiffs'' weakest argument has to do with undisclosed broker compensation and their choice of representative plaintiffs who were represented by sophisticated juggernaut law firms which makes their theory less credible.

The "Mean Monkey Illusion"

Notwithstanding their lack of accounting for anti-rebating laws, Plaintiffs in Ezell v Lexington insurance have selectively omitted from their prosecution certain large contributors to trial lawyer associations who have made claims that seem to undermine the plaintiffs' arguments, so that they could paint their "mean monkey illusion".

Fact: A review of plaintiff structured settlement brokers and settlement planners who contribute to state trial lawyer associations and AAJ, reveals many are silent on commissions on their websites.

Fact: A website for the Beirut Bombing lawsuit settlement fund reveals a copy of a June 2, 2016, letter to Maria T. Vullo of the New York Department of Financial Services, part of the efforts of one plaintiff firm to get a waiver or exception to reduce commissions, evidence of the awareness of the anti-rebating law. The anti-rebating laws kill the damages valuation. 

Then there is this...

Here's one from a plaintiff exclusive structured settlement expert whose statement speaks for itself

" Unlike many other investment vehicles and products, structured settlements do not charge management fees, commissions, or expenses"

Then there are these...

"There are no costs to create a structured settlement to the plaintiff attorney or injured party. The insurance broker's commission to arrange and purchase the structured settlement annuity is paid by the life insurance company".

One of the largest partners for justice with the New York State Trial Lawyers Association which includes structured settlements and attorney fees as part of its defined services states on its home page that these are "structured settlement services provided free of charge", However the subject firm does provide an affidavit that does disclose the commissions.

"We are paid directly by the life insurance company where the annuity is placed. Life insurance companies pay a 4% commission based on the amount that is put into the structured settlement. Normally, we are paid a portion of that commission percentage, usually 2%, while the remaining 2% goes to defense's structured settlement broker. Ours is a one-time commission payment. Also, we will never bill you for our time when we help you with servicing your annuity in the future".

Then there is this disclosure made on the website of a firm that does both plaintiff and defense...

"They earn a commission on the sale of the funding instruments used to fund the structured settlement*. This commission is built into the price of the annuity such that no fee is paid outright by either party. If the case fails to settle or settles without a structure, no fee is charged"

All of these quotes appeared on websites of structured settlement brokerage firms in the week of January 11, 2019.

My November 6, 2010 post  How Does Structured Settlement Broker Get Paid? Who Pays It?

Structured Settlement Broker Affidavit Bronx County New York   Download IA-21StructureBrokersAffidavit

 

Beasley Allen Partner Rhon Jones Speaks at NSSTA Fall Educational Meeting

by Structured Settlement Watchdog

I attended the NSSTA Fall Educational Meeting at the Loews Coronado in San Diego last week where Beasley Allen Partner Rhon Jones, who specializes in Toxic Torts, gave a very interesting presentation about the Opioid Crisis and efforts that he and Beasley Allen are making, to fight the good fight for individuals and state governments dealing with the lingering side effects alleged to be the result of the prescribed addictive pain medications.

The Photo Bombing Kite Surfer

It was a beautiful day for sailing under the midday sun with a bay traversing kite surfer periodically "photo bombing" Mr. Jones as he delivered his speech. It's nice to see that a highly successful law firm as Beasley Allen has such a good relationship with the National Structured Settlements Trade Association and longtime relationships with multiple NSSTA members. Beasley Allen partners have not only spoke at this meeting but have also spoken on a radio show sponsored by one of the NSSTA member firms.

Yet a disgruntled former structured settlement broker and his big stick, named a former Beasley Allen client as one of the lead plaintiffs in a legal complaint against AIG filed in 2017 and dismissed with prejudice in September 2018, and expected you to believe that Beasley Allen knows diddly squat about structured settlement brokers and how they get paid.  I've said it before and I will say it again with respect to that dismissed AIG Structured Settlement Class Action lawsuit,  "Something just doesn't jive".

The Appeal and the Delicious Pun

"To the tune of song from a parody made famous by Michael Jackson and Diana Ross",  two weeks ago Disgruntled Dick and the Big Stick filed notice of appeal.  You know the lyrics, a parody of course, "Ezell down, Ezell down the road".

 

AIG Structured Settlement Class Action | To Gun Jumpers' Dismay Plaintiff HAD Own Broker | 2X Factored Factor

by Structured Settlement Watchdog

 

Perhaps some commentators and industry colleagues jumped the gun on their assumptions about what happened to the lead plaintiffs

Now that AIG has responded to the Class Action Complaint my industry colleagues would do themselves and their clients a service by reviewing case documents which show that all is not what it seemed.

 One commentator had this to say when the lawsuit was filed:

"As the authors and owners of The Settlement Channel, we've spent the better part of 30 years fighting against the concept of approved lists of brokers, life markets and other unreasonable restrictions which we feel prevented claimants from choosing the design, funding company and guarantor of their annuity payments. It has been our long held opinion, shared publicly for decades, that these strong arm deals and tactics were anti-consumer and a vestige of the dark ages of the early days of structured settlements when even the true cost of annuity programs were denied to claimants"   January 10, 2017

In my January 7, 2017 commentary  AIG Structured Settlement Class Action | Old Dick Attempts To Swing "Big Stick", I remarked with respect to lead plaintiff Erica Biddings (Erica Major)

"One class representative plaintiff in this class action was represented in the lawsuit that gave rise to a structured settlement, by the law firm of Krupnick Campbell Malone Buser Slama Hancock Liberman in Ft. Lauderdale, FL   According to his bio on the Krupnick Campbell website, Joseph J. Slama who represented Erica Biddings (formerly Erica Major) has been licensed for over 35 years! 

Krupnick Campbell is no babe in the woods when it comes to structured settlements and they represented class representative plaintiff Erica Bidding"

Having reviewed some of the recently filed public case documents, including AIG's memorandum in support of its motion to dismiss, here's what the evidence shows:

FACT: Lead plaintiff Erica Biddings DID have a structured settlement broker of her own, Black Holcomb Smith & Associates, who I confirmed WAS introduced by HER lawyer.

Ms. Bidding's structured settlement consultant is a very capable structured settlement industry veteran and her attorney was a well seasoned personal injury attorney of over 35 years, neither of whom would qualify as a babe in the woods between them. It would be unreasonable to assume that in his 35 years experience Mr. Slama had no idea that the broker he introduced to his client was earning a commission.  It would be highly unusual for the question "how do you get paid?" not to be asked.

FACT: Florida statutes require individuals involved in the transaction of insurance to be licensed and appointed, and insurance agencies to be licensed or registered.  Unlicensed Individuals are not allowed to discuss coverages or sell insurance.

FACT: Per Florida Statute 626.794(1) No person other than a licensed and appointed life agent shall accept any commission or other valuable consideration, except as provided in subsection 626.794(1).

FACT: Lead plaintiff Erica Biddings DID choose her own structured settlement plan design and funding companies.

FACT:  By her own admission she was willing to accept less total benefits in order to execute on her plan design. According to Erica Bidding's signed and notarized statement dated July 23, 2009  (see link below), lead plaintiff Erica Biddings (then Erica Major) chose to shun an annuity with American General that would have paid her more than all of the three companies she selected, Allstate Life Insurance Company, New York Life Insurance Company and Hartford Life Insurance Company.Download Erica Major notarized letter refusing Am Gen structure in favor of three quotes provided by Black Holcomb Smith.  The letter was notarized by an admin for Black Holcomb Smith.

FACT:  AIG's broker Jeff Brooks of EPS notified the Lexington claims rep of Erica's decision and AIG did not object to this.  Download Brooks to AIG claims re plaintiff's selection of markets 7-23-2009.

Even through the Brooks communication includes Pacific Life, I confirmed today that Allstate Life was the third annuity issuer of the three companies chosen, in lieu of Pacific Life. The checks were issued and receipts totaling the amount represented in the settlement agreement were distributed by the companies to the broker.

FACT:  On two other occasions Erica Biddings took somewhat less than her structured settlement was worth when Erica Biddings sold her New York Life payments in a structured settlement factoring transaction Broward County in June 2013 [Case13CACE010961] with an effective discount rate of 10.65% and Allstate payments in a structured settlement factoring transaction using Allstate's Advance Funding Exchange in December 2016 [CACE-16-023143], with an effective discount rate of 8.8% only two weeks before the AIG class action was filed January 3, 2017. She waived independent financial advice according to transaction documents.

Sources: Pacer.gov, Broward County, FL Case Look Up