In a case that Gilbert LLP has pursued for several years on behalf of a certified class of thousands of policyholders who purchased life insurance from Conseco Life Insurance Company, our clients have just won a significant victory in the U.S. District Court for the Northern District of California.
A U.S. district judge’s July 17 decision to grant a preliminary injunction against Conseco marked a major win for the class, who are contending that Conseco is imposing unaffordable charges on some members of the class.
The Court ordered that Conseco must take immediate action to stop imposing these charges, known as cost-of-insurance charges, on some members of the class pending the outcome of a trial. The Plaintiffs affected are largely elderly policyholders who own life insurance policies called Lifetrend policies and who will lose their life insurance coverage before the end of next year because the cost-of-insurance and expense charges will deplete their policy accumulation accounts.
The Court held that the class is likely to prevail in the case based on the merits of its breach of contract claims against Conseco. The Court also held that the policyholders whose accumulation accounts will be exhausted before the end of next year because of the charges face irreparable harm.
The Court found that the policyholders who are unable to make the payments to sustain their policies will lose the peace of mind that comes with life insurance and that loss, the Court found, “cannot be remedied by money damages after the fact.”
In its opinion, the Court noted the case of a 91-year-old policyholder who already paid hundreds of thousands of dollars for his policy and recently faced deductions of over $7,000 per month in new cost-of-insurance charges.
We believe that this ruling is correct on the law and is also a significant step toward providing fairness and justice to our clients, elderly people whose savings were being depleted by the excessive insurance charges. Partner Craig Litherland says the decision represents “an important milestone in this litigation, and demonstrates that the Judge found the merits of plaintiffs’ case to be compelling.”
Andrea Hopkins, Michelle Price, Emily Grim, and Daniel Wolf also are working on the case.