by Structured Settlement Watchdog
Plaintiffs Made Failed Argument 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. 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 to begin with 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. 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, 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".
"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