RICO Claims in Bonus Annuity Case Headed for Trial?

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On October 13, 2011, the United States District Court for the Central District of California denied defendant’s renewed motion for summary judgment in Negrete v. Allianz Life Ins. Co. of North America (No. CV 05-6838) and Healey v. Allianz Life Ins. Co. of North America (No. CV 05-6838), two consolidated certified class actions that have been pending since 2005. The insurer’s motion challenged the plaintiff class’s RICO claims, which allege that the company and its field marketing organizations (FMOs) fraudulently marketed bonus deferred annuities to senior citizens. The court held, among other things, that plaintiffs had advanced adequate evidence of a RICO enterprise and an injury to the plaintiff class by reason of the RICO violation to present a triable issue of fact precluding summary judgment.

According to the court, the insurer’s bonus deferred annuity marketing strategy emphasized “no sales charges,” an “immediate bonus,” and payment of “full value” after certain deferral requirements were met, but the full value of an annuity, including the bonus, could only be obtained if the annuity was held in deferral for at least 10 years and payments were withdrawn for another 10 years. When selling the annuities, agents were required to provide each purchaser with a sales brochure containing the allegedly offending representations and a statement of understanding (SOU), which the purchaser was required to sign, acknowledging that he/she had received and read the brochure.

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Published In: Civil Procedure Updates, Communications & Media Updates, Criminal Law Updates, Personal Injury Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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