Marcus v. LifePoint Wealth Mgmt.
| Decision Date | 19 January 2021 |
| Docket Number | B293837 |
| Parties | MARLENE MARCUS, Plaintiff and Appellant, v. LIFEPOINT WEALTH MANAGEMENT, INC., et al., Defendants and Respondents. |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. BC650318)
APPEAL from a judgment of the Superior Court of Los Angeles County, Terry A. Green, Judge. Affirmed.
Sanford M. Passman for Plaintiff and Appellant.
Markun Zusman Freniere & Compton, Jeffrey K. Compton and Daria D. Carlson for Defendants and Respondents.
____________________ Marlene Marcus appeals from a judgment entered after the trial court granted the summary judgment motion filed by insurance broker Roderick Uy and his company LifePoint Wealth Management, Inc. (LifePoint). Marcus sued Uy and LifePoint for breach of fiduciary duty, fraud, negligence, and related claims, alleging Uy induced her to purchase three life insurance policies that were unnecessary and ill-suited to her needs. The trial court found Marcus's claims were time-barred because they accrued when the policies were issued, outside of all applicable limitations periods. On appeal, Marcus contends triable issues of material fact existed whether the delayed discovery of her injuries deferred accrual and preserved her claims. We affirm.
Uy is a California licensed insurance agent and wealth advisor doing business through LifePoint. In mid-2011 Uy contacted Marcus by telephone following a referral from Marcus's tax accountant. At that time Marcus was in her late 50's and unmarried, with two adult children, Branden and Michelle. Marcus, who holds a law degree, owned a fabric store and several real estate investments, and she had an annual income of approximately $472,000.
Following Uy's initial contact, Marcus and Uy met several times, telephonically and later in person, and they discussedMarcus's financial planning goals and concerns at length. Marcus told Uy she had been engaged in bitter litigation with her siblings for many years over the disposition of her parents' estate, and she had a dispute with the Internal Revenue Service regarding the estate taxes. Marcus therefore wanted to create a wealth plan to manage her affairs upon her death or disability, to protect the family business, to minimize the estate taxes, and to prevent her children from becoming embroiled in disputes over her estate. Because Marcus had been forced to sell off real estate to pay the estate taxes on her inheritance, Marcus was interested in life insurance with a benefit sufficient to cover the taxes on her own estate. Marcus also wanted her children to have access to funds that would allow them, if she became ill, to pay her medical expenses without having to rely on their own money.
When Marcus met Uy, she had a $6 million life insurance policy with Lincoln National Life Insurance Company and paid premiums on two $2 million policies with Jefferson Pilot Life Insurance, one held by her daughter Michelle and one held by her son Branden. Marcus was unsure of her net worth and did not know how much additional life insurance she would need to meet her goals. Accordingly, upon Uy's recommendation, Marcus sent information concerning her finances to GamePlan Financial Marketing, a field marketing organization Uy regularly used, to prepare an estimate of her net worth. GamePlan estimated Marcus's current net worth was about $24.7 million, comprised largely of real estate holdings, and it estimated the net value of her estate at death would exceed $51 million based on a standard asset growth rate of 5 percent and the assumption Marcus would die in 2027 at age 75. Marcus received a copy of GamePlan's written estimate, assumptions, and calculations datedNovember 26, 2012. Marcus's estate planning attorney, Fred Corbalis, calculated the same future value of Marcus's estate.
Uy relied on the GamePlan and Corbalis evaluations and applied a 40 percent effective tax rate to the $51 million future valuation of Marcus's estate, less the $5 million exclusion in effect at the time, to calculate Marcus would need approximately $18 million in life insurance to guarantee the death benefit would cover her estate taxes. At the time of her deposition in January 2018, Marcus admitted she "really [didn't] know" whether any of the numbers and analyses were inaccurate.
The two $2 million Jefferson policies held by Michelle and Branden included an accelerated death benefit (that is, the benefit payable before Marcus's death) of $25,000 for each qualifying event, including specified illnesses, with a $250,000 cap. In mid-2010, prior to meeting Uy, Marcus considered replacing the Jefferson policies with policies from Pacific Life Insurance Company, but Marc Jacoby, the insurance broker who sold her the Jefferson policies in 2005, dissuaded her from replacing them. Jacoby explained to Marcus that the Jefferson policies only required premium payments for 10 years from the date of issuance and, therefore, the death benefit would vest in 2015 without any further premium payments.
Sometime in mid-2011, Uy gave a presentation to Marcus and her children in which he proposed replacing the Jefferson policies with policies from Life Insurance Company of the Southwest that he believed would better address Marcus's desire to protect her children from paying her medical expenses. Incontrast to the Jefferson policies, the Southwest policies offered an accelerated death benefit of up to $1 million, with a minimum $500,000 benefit payable if Marcus suffered a terminal illness, chronic illness, or critical illness.2
Around September 15, 2011, Jacoby learned upon receiving an insurance replacement form that Marcus intended to replace the Jefferson policies with the Southwest policies sold by Uy. Jacoby spoke with Marcus on multiple occasions, again advising her not to replace the Jefferson policies because they would be fully paid up in 2015, whereas Marcus would have to pay premiums on the new Southwest policies indefinitely. Jacoby asked to see the Southwest policy documents, and at his urging, Marcus delayed switching the policies until Jacoby could meet with both Uy and Marcus in person. At the meeting Jacoby again stressed that replacing the policies would require more premium payments without increasing the $2 million death benefit, and the Jefferson policies had been purchased as a tax-planning investment, not for their ancillary benefits.
Following the meeting with Jacoby and Uy, Marcus nonetheless proceeded to replace the Jefferson polices with the Southwest policies. Michelle signed a replacement notice dated February 17, 2012; Branden signed a replacement notice dated December 1, 2012.
Uy recommended Marcus purchase an additional $8 million life insurance policy to meet her goal of paying her estate taxes with her death benefits. Marcus and Uy discussed the idea for more than two years from their initial meeting, during which period Uy presented Marcus with a variety of options for different levels of coverage and premiums. Marcus ultimately chose to purchase an $8 million flexible premium adjustable life insurance policy with an index benefit3 from Allianz Life Insurance Company that required an annual premium of $258,240. On May 23, 2013 Marcus paid $258,240 as the first annual premium. Shortly thereafter, Marcus spoke telephonically with agents at Allianz and told them her estate was worth $25 million and she would be able to pay the sizable annual premiums with cash or by selling assets, rather than financing them.
On June 11, 2013 Uy personally delivered the Allianz policy documents to Marcus at her home. Uy reviewed the basic terms of the policy with Marcus, offered to answer any questions, and advised Marcus she could back out if she did not want to go through with the enrollment. Marcus did not have any questions, and she signed the policy documents. Among the documents,Marcus signed a statement of benefits that illustrated possible benefit scenarios based upon policy and index variables and stated, The first page of the policy document stated Marcus had 30 days in which to cancel the policy without any penalty. The policy also described the grace periods applicable to untimely premiums and warned that if the policy lapsed, it could only be reinstated once.
The policy documents also included an application questionnaire, signed by Marcus, with boxes checked "yes" in response to the following questions: "Do you believe this life insurance policy that you are applying for will meet your insurance needs and financial objectives?"; "Did the agent discuss with you your current life insurance policies and other assets prior to your decision to purchase this life insurance policy?"; and "Do you feel you have sufficient liquid assets available for living expenses and emergencies in addition to the money allocated to pay the life insurance policy?"
Marcus admitted in her deposition she would have read these questions when she signed the document and she would not have signed a document that was incorrect. She also admitted she was capable of understanding the Allianz policy and the benefit illustrations. Marcus knew she needed to pay minimum premiums to avoid...
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