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Reply Brief of Appellant - Funk _ Bolton

VIEWS: 2 PAGES: 37

  • pg 1
									                          TABLE OF CONTENTS

I.     SUMMARY OF ARGUMENT                                             1

II.    ARGUMENT                                                       2
       A.   Appellees Seek To Re-Litigate Facts Rejected By The
            District Court And To Affinn Summary Judgment
            Based On Disputed Facts                                   2
       B.   The Policy Owner Negotiated The Rescission Check,
            Thereby Consenting To A Mutual Rescission                 5
            1.    First Penn Did Not Waive The Issue Of Mutual
                  Rescission Because The Pertinent Facts Were Pled
                  In The Complaint And The Complaint Sought
                  Rescission                                           5
            2.    Appellees Cannot Avoid Mutual Rescission
                  Based On Facts Rejected By The District Court        7
            3.    As A Matter Of Law, Evans's Endorsement And
                  Delivery Of The Check To Answer Care Was A
                  Negotiation And Effected A Mutual Rescission
                  Of The Policy                                        9
       C.   The Policy Was Not Purchased In Good Faith And Was
            Purchased With The Intent To Viaticate, Proving A Lack
            Of Insurable Interest                                     10
            1.    The Good Faith Requirement For Insurable Interest
                  Is Supported By Recent District Court Decisions     10
            2.    A Policy Issued Without An Insurable Interest Is
                  Void Ab Initio And Cannot Be Rendered Valid By
                  An Incontestability Clause                          20
            3.    As A Matter Of Law, First Penn Did Not Waive
                  The Right To Rescind Based On The Policy's Lack
                  Of Insurable Interest.                              25

III.   CONCLUSION                                                     28
                          TABLE OF AUTHORITIES

Cases

Aetna Life Ins. Co. v. Hooker, 62 F.2d 805 (6th Cir. 1933)                    21

Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986)                            3

Bacon v. City ofRichmond, 475 F.3d 633 (4th Cir. 2007)                     passim

Bankers' Reserve Life Co. v. Matthews, 39 F.2d 528 (8th Cir. 1930)         passim

Barclay White Skanska, Inc. v. Battelle Mem'l Inst., No. 07-1084,
 2008 WL 238562 (4th Cir. Jan. 29, 2008)                                        6

Beard v. Am. Agency Life Ins. Co., 550 A.2d 677 (Md. 1988)                 passim

Bogacki v. Great-West Life Assur. Co., 234 N.W. 865 (Mich. 1931)           24, 25

Bromley's Adm 'r v. Wash. Life Ins. Co., 92 S.W. 17 (Ky. 1906)                 22

Carter v. Cont'l Life Ins. Co., 115 F.2d 947 (D.C. Cir. 1940)                  21

Chantberlain v. Butler, 86 N.W. 481 (Neb. 1901)                                14

Chao v. Rivendell Woods, Inc., 415 F.3d 342 (4th Cir. 2005)                     6

Chawla v. Transamerica Occidental Life Ins. Co., 440 F.3d 639
 (4th Cir. 2006)                                                               28

Chicago Fire & Marine Ins. Co. v. Sharpensteen, 289 P. 985 (Ariz. 1930)        26

Church v. Maryland, 180 F. Supp. 2d 708 (D. Md. 2002)                           7

Commonwealth Life Ins. Co. v. George,28 So.2d 910 (Ala. 1947)              21, 22

Conn. Mut. Life Ins. Co. v. Schaefer, 94 U.S. 457 (1876)                       13

Crump v. Nw. Nat'l Life Ins. Co., 45 Cal. Rptr. 814 (Cal. Ct. App. 1965)       20


                                         11
Erickson v. Pardus, 127 S. Ct. 2197 (2007)                                         6

Fidelity Bankers Life Ins. Co. v. Dortch, 348 S.E.2d 794 (N.C. 1986)               10

Fisher v. Metro. Life Ins. Co., 895 F.2d 1073 (5th Cir. 1990)                    6, 7

Flanagan v. Republic Am. Life Ins. Co., No. CIV-93-1934, 1994
 U.S. Dist. LEXIS 19479 (D. Ariz. Dec. 30, 1994)                               23, 24

Gilmour v. Gates, McDonald & Co., 382 F.3d 1312 (11th Cir. 2004)                    6

Grigsby v. Russell, 222 U.S. 149 (1911)                                            17

Gristy v. Hudgens, 203 P. 569 (Ariz. 1922)                                         13

Hall v. Coppell, 74 U.S. 542 (1868)                                               22

Henderson v. Life Ins. Co. of Va., 179 S.E. 680 (S.C. 1935)                ~      22

Home Life Ins. Co. ofN.Y. v. Masterson, 21 S.W.2d 414 (Ark. 1929)              22, 26

Horne v. Timbanard, 434 P.2d 520 (Ariz. Ct. App. 1967)                            23

Ky. Cent. Life Ins. Co. v. McNabb, 825 F. Supp. 269 (D. Kan. 1993)             passim

Lazard Freres & Co. v. Protective Life Ins. Co., 108 F.3d 1531
 (2d Cir..1997)                                                                     4

Life Product Clearing, LLC v. Angel, 530 F. Supp. 2d 646
 (S.D.N.Y. 2008)                                                               passim

McKee v. Penick (In re Al Zuni Trading, Inc.), 947 F.2d 1403
 (9th Cir. 1991)                                                                   13

Miguel v. Metro. Life Ins. Co., 200 F.App'x 961 (11th Cir. 2006)                   27

Motor Club ofAm. Ins. Co. v. Haniji, 145 F.3d 170 (4th Cir. 1998)                   4

Nat 'I Life & Cas. Ins. Co. v. Blankenbiller, 360 P.2d 1030 (Ariz. 1961)           23


                                          111
Nat 'I Producers Life Ins. Co. v. Rogers, 442 P.2d 876 (Ariz. Ct. App. 1968)       23

Nat 'I Union Indem. Co. v. Bruce Bros., Inc., 38 P.2d 648 (Ariz. 1934)         20, 22

New England Mut. Life Ins. Co. v. Caruso, 535 N.E.2d 270 (N.Y. 1989)           24, 25

Nyonteh v. Peoples Sec. Life Ins. Co., 958 F.2d 42 (4thCir. 1992)              20, 23

Obartuch v. Sec. Mut. Life Ins. Co., 114 F.2d 873 (7th Cir. 1940)              21, 22

Paul Revere Life Ins. Co. v. Fima, 105 F.3d 490 (9th Cir. 1997)                    21

Philp v. Jackson Nat'l Life Ins. Co., No. 95-56408, 1997 WL 90370
 (9th Cir. Feb. 5, 1997)                                                           28

Princess Plaza Partners v. Arizona, 928 P.2d 638 (Ariz. Ct. App. 1995)             20

Prudential Ins. Co. ofAm. v. Stephens, 498 F. Supp. 155 (E.D. Va. 1980)            10

Ring v. Arizona, 536 U.S. 584 (2002)                                                8

Rubenstein v. Mut. Life Ins. Co. ofN.Y., 584 F. Supp. 272 (E.D. La. 1984)          26

Seabulk Offshore, Ltd. v. Am. Home Assur. Co., 377 F.3d 408
 (4th Cir. 2004)                                                               passim

Sempione v. Provident Bank ofMaryland, 75 F.3d 951 (4th Cir. 1996)               4, 5

Shanahan v. City ofChicago, 82 F.3d 776 (7th Cir. 1996)                             6

State Farm Life Ins. Co.v. Gutterman, 896 F.2d 116 (5th Cir. 1990)                  9

Sun Life Assur. Co. v. Paulson, No. 07-3877,2008 WL 451054
 (D. Minn. Feb. 15, 2008)                              ~                       passim

Thompkins v. Lil' Joe Records, Inc., 476 F.3d 1294 (11th Cir. 2007)                 6

Tucker v. Union ofNeedletrades, Industrial and Textile Employees,
 407 F.3d 784 (6th Cir. 2005)                                                       6


                                        IV
Verex Assur., Inc. v. John Hanson Sav. & Loan, Inc., 816 F.2d
 1296 (9th Cir. 1987)                                                          28

Walton v. Arizona, 497 U.S. 639 (1990)                                          8

Wharton v. Home Sec. Life Ins. Co., 173 S.E. 338 (N.C. 1934)                   22

World-Wide Rights Ltd. P'ship v. Combe, Inc., 955 F.2d 242
 (4th Cir. 1992)                                                                5

Wuliger v. Mfrs. Life Ins. Co., No. 3:03-7457,2008 WL 397591
 (N.D. Ohio Feb. 11, 2008)                                                  18, 19

Yank v. Juhrend, 729 P.2d 941 (Ariz. Ct. App. 1986)                            21

Zurich Life Ins. Co. v. Zoo Stage, Inc., 186 F. App'x 768 (9th Cir. 2006)   21, 24


Statutes

Ariz. Rev. Stat. § 20-1204                                                     22

Md. Code Ann., Com. Law § 3-201                                                10

Md. Code Ann., Corps. & Ass's. § 1-502(f)( 1)                                   7


Other Authority

44 C.J.S. Insurance § 353 (2007)                                               11

Lee R. Russ, Couch on Insurance § 240:88 (3d ed. 2005)                         21

Lee R. Russ, Couch on Insurance § 41: 1 (3d ed. 2005)                       21, 26




                                         v
                      I.     SUMMARY OF ARGUMENT

      First Penn, on appeal, does not take issue with the district court's factual

findings. Rather, First Penn contends the judgment should be vacated because the

district court reached the wrong legal conclusion. Appellees essentially concede

legal error, arguing the judgment should be affirmed based on facts rej ected by the

district court and disputed by First Penn. On appeal from a grant of summary

judgment, the Court must view the undisputed facts and all inferences in the light

most favorable to First Penn.     If a genuine dispute of material fact exists, as

appellees argue, then the judgment must be vacated because issues of material fact

cannot be resolved on summary judgment.

      Appellees mistakenly claim the issue of mutual rescission was not raised by

the pleadings. In fact, First Penn's complaint pled the facts relied upon and sought

rescission. Still further, the issue was fully briefed below and both sides had a full

opportunity to be heard. No grounds exist for finding a waiver of the mutual
    . . .
reSCISSIon Issue.

      Appellees further contend First Penn is advocating a "subjective-intent"

standard for purposes of determining whether a life insurance policy is a wagering

contract.   Although intent to viaticate is a necessary element of a wagering

contract, subjective intent alone is insufficient. A lack of insurable interest exists

when, as here, the insured's conduct prior to policy issuance objectively and


                                          1
manifestly demonstrates the intent to procure and sell a wagering contract on his

life. Such conduct should be sufficient to prove a lack of insurable interest because

(i) the case law makes clear that good faith is an integral component of insurable

interest; (ii) the agreement for sale requirement posited by appellees and amici is

contrary to existing precedent and recent decisions; and (iii) a ready market exists

for the sale of such policies.

      Appellees also argue the incontestability provision in the Policy cures the

lack of insurable interest. A policy issued without an insurable interest is void, not

voidable. Arizona's incontestability statute only applies to "in force" policies, not

policies void for lack of insurable interest. Arizona's statute is consistent with the

majority rule holding a policy issued without an insurable interest is void and

cannot become valid based on an incontestability provision. Moreover, wagering

contracts are against public policy, and the parties cannot by consent or waiver

affirm a policy lacking an insurable interest.

                                 II.   ARGUMENT

      A.     Appellees Seek To Re-Litigate Facts Rejected By The
             District Court And To Affirm Summary Judgment Based
             On Disputed Facts

      In preface to its recitation of facts, the district court notes "there is no

genuine dispute of material fact as to the nature and character of the scheme to

defraud which resulted in the issuance and delivery of the subject policy of


                                          2
insurance, nor as to the specifics of the fraud practiced upon First Penn/' JA 966;

see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (summary

judgment is appropriate only when there is no genuine issue of material fact).

Despite this, appellees contend Moore applied "for the Policy to 'make sure that

his family was financially comfortable if something happened to him. '"        Evans

Br. 7. Appellees further contend Moore initially wanted to keep the Policy and

only later decided to assign the policy. Evans Br. 9-10. The district court found

otherwise, concluding that "[i]n or about September 1997, Stanley Moore, a 51-

year-old resident of Arizona, undertook the scheme, which was designed to enable

him falsely to represent that he suffered from a terminal illness, and thereby to

permit him to 'viaticate' numerous insurance polices he purchased on his own

life." JA 966.

      The district court's decision is supported by the record. Before the Policy

was issued, Moore's scheme and intent to viaticate is evident based on Moore's

(i) obtaining a terminal illness certification form (JA 150); (ii) providing that form

to Dr. Hovan and asking Dr. Hovan to certify he had a terminal illness (JA 86,

967); (iii) altering his medical records to conceal the terminal illness form and his

request to Dr. Hovan (JA 102-09, 968; compare JA 85-89 with JA 187-200);

(iv) meeting with four different insurance agents to purchase $7 million in

coverage (JA 165-70,176-77,178-81,184-86,967-68 (four brokers); JA262, 309-


                                          3
11 ($7 million in coverage)); (v) calling a viatical settlement broker in order to

initiate the viatication process (JA 239);1 (vi) meeting with a viatical settlement

broker at least once (JA 238-39, 717, 969-70); (vii) viaticating two policies

(JA 265, 969-71); and (viii) agreeing to convert his policies to 20-year terms after

learning viatical settlement companies preferred 20-year terms (JA 296-297, 298-

299, 304, 309-311, 685, 970).

      Appellees further argue the issue date of the Policy was January 5, 1998

(Evans Br. 9), which conflicts with the express Policy terms and the record below.

JA 274. Indeed, the district court found "[t]he parties agree that the issue date of

the First Penn policy is February 5, 1998." JA 973; see also Lazard Freres & Co.

v. Protective Life Ins. Co., 108 F.3d 1531, 1538 (2d Cir. 1997) (accepting as true

the contract date offered by the non-prevailing party).

      Appellees' factual arguments ignore the procedural posture of this appeal,

including the fact that appellees prevailed on summary judgment below. If the

district court erred by rejecting appellees' version of the facts and these facts are

material, as appellees argue (Evans Br. 18-23, 32, 43-45), then the judgment must

be vacated and the matter remanded for trial. See Motor Club ofAm. Ins. Co. v.

Hanifi, 145 F.3d 170, 176-77 (4th Cir. 1998) (vacating summary judgment and

remanding for trial based on genuine dispute of material fact); Sempione v.

1 The advertisement Moore responded to promised "helping you sell your life
insurance for the highest cash amount." JA 166, 714.
                                          4
Provident Bank ofMaryland, 75 F.3d 951, 957-59 (4th Cir. 1996) (same); World-

Wide Rights Ltd. P'ship v. Combe, Inc., 955 F.2d 242,246 (4th Cir. 1992) (same).

Similarly, all reasonable inferences from the evidence must be drawn in favor of

First Penn, the non-prevailing party. See, e.g., Bacon v. City of Richmond, 475

F.3d 633, 637-38 (4th Cir. 2007); Seabulk Offshore, Ltd. v. Am. Home Assur. Co.,

377 F.3d 408,418 (4th Cir. 2004).

      B.    The Policy Owner Negotiated The Rescission Check,
            Thereby Consenting To A Mutual Rescission

      Mutual rescission of the Policy occurred when William R. Evans, Chartered

("Evans"), the Policy owner, endorsed the premium rescission check and delivered

it to Answer Care. First Penn's claim for mutual rescission was timely raised and

properly considered by the district court. JA 20 (CompI.   ~~   56-58).

            1.     First Penn Did Not Waive The Issue Of Mutual
                   Rescission Because The Pertinent Facts Were Pled In
                   The Complaint And The Complaint Sought
                   Rescission

      First Penn's complaint alleged the Policy was rescinded by letter dated

October 12, 1999, which provided written notice of rescission to Evans and

refunded all premiums paid. JA 20. The complaint further alleged Evans initially

refused to accept the refund of premiums but subsequently requested reissuance of

the refund check. JA 20. The complaint alleged Evans endorsed the check or

ratified the endorsement of the check over to Answer Care. JA 20. First Penn

                                        5
requested reSCISSIon. . JA 22-26.       First Penn's complaint, therefore, alleged

sufficient facts to prqvide appellees with fair notice of a claim for mutual
                   1




reSCISSIon.     Set! ~ric.kson v. Pardus, 12,7. S. Ct. 2197, 2200 (2007); Chao v.

Riv~ndell     Wo04s, ,Il1C., 415 F.3d 342, 349 (4th Cir. 2005) (complaint "need only

'allege facts ~~fficient to state elements' 9fthe claim").

      Appellees' citat!ons are i,napplicable here because t1:ley all involve facts first

raised on summary judgment and not alleged in the complaint. See Barclay White

Skanska, Inc. v. Battelle Mem 'I Inst., No. 07-1084,2008 WL 238562, at *5-7 (4th

Cir. Jan. 29, 2008) (refusing to consider additional change orders because

complaint only included three change orders); Thompkins v. Lil' Joe Records, Inc.,

476 F.3d 1294, 1310 (11th Cir. 2007) (refusing to consider trademark claim where

complaint never used the words trademark, ownership of trademark, or

infringement of trademark); Tucker v. Union of Needletrades, Industrial and

Textile Employees, 407 F.3d 784, 788 (6th Cir. 2005) (refusing to consider claim

for promissory estoppel where complaint claimed coverage under collective

bargaining agreement); Gilmour v. Gates, McDonald & Co., 382 F.3d 1312, 1315

(11 th Cir. 2004) (prohibiting contractual claim because defendants had no notice

based on tort claims in complaint); Shanahan v. City ofChicago, 82 F.3d 776,779-

81 (7th Cir. 1996) (refusing claim of improper politically-motivated hirings based

on union membership because complaint did not plead union membership); Fisher


                                           6
v. Metro. Life Ins. Co., 895 F.2d 1073, 1078 (5th Cir. 1990) (refusing claim for

improper calculation of disability benefits because complaint only alleged

wrongful overpayment and fraudulent reduction of benefits); Church v. Maryland,

180 F. Supp. 2d 708, 732 (D. Md. 2002) (refusing to consider new allegations of

improper lapse of employment benefits).

            2.     Appellees Cannot Avoid Mutual Rescission Based On
                   Facts Rejected By The District Court

       Appellees argue (i) First Penn has no support for Evans's consent to

rescission by endorsing the premium refund check and delivering the endorsed

check to Answer Care; and (ii) Mr. Evans did not personally endorse or authorize

endorsement of the rescission check. Evans Br. 12-13. Appellees' arguments are

legally and factually in error. Indeed, the district court rejected these arguments,

finding William R. Evans, Chartered endorsed the rescission check. JA 971-72

(note 5).

      William R. Evans asked insurers to reissue rescission checks and make them

payable to his own name.     JA 387, 846.     Sometimes he succeeded (JA 847-48

(Zurich Kemper check)) and sometimes not, as with First Penn (JA 388-89). First

Penn's rescission check remained payable to "William R. Evans, Chartered," not

William R. Evans personally.      JA 389.     "William R. Evans, Chartered"     IS   a

corporation. See Md. Code Ann., Corps. & Ass'ns § 1-502(£)(1) (2008).           The

district court, therefore, must have concluded a personal endorsement by

                                          7
Mr. Evans was irrelevant because the payee was William R. Evans, Chartered. See

Walton v. Arizona, 497 U.S. 639, 653 (1990) Gudges are presumed to know and

correctly apply the law), overruled on other grounds, Ring v. Arizona, 536 U.S.

584 (2002).

      Further, Mr. Evans never testified the signature of William R. Evans,

Chartered was unauthorized or forged. JA 693-94. Indeed, Mr. Evans was asked

why the check was endorsed to Answer Care, and he testified, "[p]robably Answer

Care instructed me to do so." JA 693. Further, Mr. Evans testified that "this is the

check that eventually was forwarded in May, May 15th, and was endorsed over to

Answer Care." JA 693. Mr. Evans understood the check was endorsed over to

Answer Care and was not disputing the propriety of that endorsement by William

R. Evans, Chartered. JA 693. He simply made clear it was not his signature on the

endorsement. JA 694. Indeed, the endorsement of checks by William R. Evans,

Chartered to Answer Care was part of the ordinary business process. JA 846-49,

387-90.

      Answer Care returned the check to First Penn and requested reissuance in its

own name.     JA 850.   Answer Care, therefore, asserted its rights based on the

endorsement by William R. Evans, Chartered. JA 850. The pre-lawsuit record is

consistent with only one conclusion-William R. Evans, Chartered endorsed and

delivered the check to Answer Care. JA 387-90,850-51,971-72 (note 5).


                                         8
      Appellees assert there was no "consent" to rescission because Evans was

Answer Care's agent and any endorsement to Answer Care was for the purpose of

transferring the check to continue to contest the rescission. Evans Br. 23 (note 5).

Appellees are again asking the Court to draw factual inferences in their favor,

which the Court cannot do. See Bacon, 475 F.3d at 637-38; Seabulk, 377 F.2d at

418. Any attempt to limit the legal effect of the endorsement based on the intent of

Evans presents a genuine dispute of material fact and, therefore, the judgment of

the district court must be vacated.

             3.     As A Matter- Of Law, Evans's Endorsement And
                    Delivery Of The Check To Answer Care Was A
                    Negotiation And Effected A Mutual Rescission Of The
                    Policy

      Appellees argue the rescission check was not accepted because the district

court found "defendants" rejected the rescission.      Evans Br. 18 (referring to

JA 971).   The district court explained this conclusion in a footnote stating that

"[a]lthough Evans endorsed the check to the order of Answer Care, Inc., the

beneficial owner of the policy, Answer Care never manifested an intention to

accept the refund of the premiums and, through its attorney, disputed First Penn's

attempt to rescind the policy." JA 971-72 (note 5). The district court's conclusion,

therefore, was premised on the legally erroneous view that the beneficial owner's

consent was necessary to rescind.      Once the policy owner, Evans, agreed to

rescind, the elements of mutual consent were satisfied, regardless of Answer

                                         9
Care's intent. See, e.g., State Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 119

(5th Cir. 1990); Prudential Ins. Co. of Am. v. Stephens, 498 F. Supp. 155, 157

(E.D. Va. 1980); Fidelity Bankers Life Ins. Co. v. Dortch, 348 S.E.2d 794, 797

(N.C. 1986).

      Appellees further argue the Policy was not rescinded because the check was

not "cashed." Evans Br. 20. Endorsement and delivery of a check to a third party

is negotiation under Maryland law. See Md. Code Ann., Com. Law § 3-201 (2008)

("[N]egotiation requires transfer of possession of the instrument and its

indorsement by the holder."). The rescission check was negotiated by endorsing

and delivering it to Answer Care. JA 971-72 (note 5), 850-51, 389-90.

      c.       The Policy Was Not Purchased In Good Faith And Was
               Purchased With The Intent To Viaticate, Proving ALack
               Of Insurable Interest

               1.   The Good Faith Requirement For Insurable Interest
                    Is Supported By Recent District Court Decisions

      Appellees and amici rely on Sun Life Assurance Co. v. Paulson, No. 07-

3877, 2008 WL 451054 (D. Minn. Feb. 15, 2008), arguing this case is "nearly

identical to the present dispute" and First Penn is advancing "precisely the same

unsupported argument." Evans Br. 35-36; Amici Br. 15-16. Although First Penn

disagrees with these characterizations, the court's legal analysis in Paulson

actually supports First Penn.



                                        10
      In Paulson, the complaint alleged the policy was purchased with the intent to

sell the policy after expiration of the contestable period. See Paulson, 2008 WL

451054 at * 1. Predicting Minnesota law, the court determined "that the Minnesota

Supreme Court would consider a life insurance policy void as against public policy

if the policy was 'procured under a scheme, purpose, or agreement to transfer or

assign the policy to a person without an insurable interest in order to evade the law

against wagering contracts.'" Id. at *2 (quoting 44 C.l.S. Insurance § 353 (2007))

(emphasis added). Although the court determined the "most important factor in

determining the parties ' intent" was whether the insured had an agreement to

assign the policy to a third party, the court did not hold this was the only relevant

factor in determining the intent of the insured and did not preclude consideration of

other factors. Id. at *2. Based on the "complaint's cursory allegations," the court

simply concluded ascribing intent to procure the policy for purposes of sale was

"purely speculative." Id.

      The facts alleged in Paulson are not remotely similar to the facts proven

with respect to Moore. Before issuance of the Policy on February 5, 1998, Moore

obtained a terminal illness certification form (IA 150), sought a terminal illness

certification from his physician (IA 86, 967), altered his medical records to conceal

the terminal illness form and his physician's refusal to certify a terminal illness

(IA 968), obtained $4 million of life insurance in three months (IA 31 (Answer


                                         11
~~   23, 24, 25, 27, 28), 262, 967-69), employed four different insurance agents

(IA 165-70, 176-77, 178-81, 184-86), called a viatical settlement broker to initiate

the viatication process (IA 239), met at least once with the viatical settlement

broker that sold the Policy (IA 238-39, 717, 969-70), viaticated two policies

(IA 265, 969-71), and changed the Policy to a 20-year term after learning it was

easier to sell 20-year term policies to a viatical settlement company (IA 685, 970).

Moreover, unlike Paulson, Moore completed his scheme by viaticating all of the

policies within one year. These facts are not "nearly identical" to Paulson, as

appellees assert.

        From a legal perspective, Paulson provides little succor for appellees and

their amici.   Paulson focused on the allegations of an agreement to viaticate

because the allegations suggested this was the purported predicate for finding a

lack of insurable interest. The court, however, explained that a lack of insurable

interest also could be proven by a "scheme" to evade the insurable interest

requirement and create a wagering contract. See Paulson, 2008 WL 451054 at *2.

In First Penn's case, the district court correctly concluded Moore embarked on a

scheme to viaticate the policies and intended to viaticate the policies at the time he

applied for them. IA 974 (note 7). Based on the law of insurable interest stated in

Paulson, the district court should have found in favor of First Penn and concluded

the Policy was a wagering contract.


                                         12
      Arizona law is even more favorable to First Penn than the Minnesota law

applied in Paulson. Under Arizona law, a policy will not be deemed void for lack

of insurable interest "when it appears that the person whose life is insured was

acting for himself and in good faith paid the premiums for the purpose of

promoting the interest and welfare of the beneficiary...." See Gristy    v.   Hudgens,

203 P. 569, 572 (Ariz. 1922) (emphasis added); McKee v. Penick (In re Al Zuni

Trading, Inc.), 947 F.2d 1403, 1405 (9th Cir. 1991) (applying Arizona law and

finding insurable interest present because evidence did not suggest procurement of

policy was lacking good faith); see also Conn. Mut. Life Ins. Co. v. Schaefer, 94

U.S. 457, 460 (1876) ("The essential thing is, that the policy shall be obtained in

good faith, and not for the purpose of speculating upon the hazard of a life in

which the insured has no interest."). Moore indisputably was not acting in good

faith and was not paying premiums for the purpose of promoting the interest and

welfare of his sister, the named beneficiary of all seven viaticated policies. In less

than one year, Moore's scheme left his sister without any life insurance benefits

under any of the seven policies. JA 330,331,333,350,378-79,812,813,815.

      Both appellees and amici argue that an agreement to transfer a policy before

issuance is the sine qua non for finding a lack of insurable interest and a lack of

good faith. Evans Br. 39; Amici Br. 9. The law imposes no such requirement; the

law requires a lack of good faith. See Bankers' Reserve Life Co. v. Matthews, 39


                                          13
F.2d 528, 529 (8th Cir. 1930) ("In short, the test is the good faith in taking out the

policy for the benefit of one having an insurable interest."). Indeed, the Nebraska

case cited by amici supports this conclusion, holding a policy validly taken out "in

good faith" without "intention or design" to assign may be validly assigned after

issuance. See Chamberlain v. Butler, 86 N. W. 481, 482 (Neb. 1901). Moreover,

the cases cited by appellees either support a good faith requirement (Evans Br. 28-

31 (Travelers, Anderson, Hardy, St. John, Lawrence, Davis)), or offer no serious

consideration of the issue because the facts did not support the lack of insurable

interest claim (Evans Br. 28-31) (Fyffe, Burton, Harrison's Adm 'r, Midland, Nat 'I

Life)).

          The assignment In Chamberlain was proper and presented no issue of

insurable interest because the agreed upon statement of facts admitted the policy

was properly issued and in force at the time of assignment. See id. The law set

forth in Chamberlain, however, compels the conclusion that no insurable interest

existed in the First Penn Policy because Moore failed to act in good faith and

purchased the Policy with the intent and design to assign.

          Still further, First Penn is not advancing the same argument advanced in

Paulson.      First Penn does not contend subjective intent to viaticate alone is

sufficient to prove a lack of insurable interest. Insurable interest is lacking when,

prior to policy issuance, the insured intends to viaticate, the insured initiates a


                                          14
scheme to viaticate, and the insured takes demonstrable and objectively verifiable

steps toward viaticating the policies. The insured must promptly carry his scheme

through to fruition by viaticating the policy.

         The safe harbor sought by the viatical settlement industry is contrary to

existing law requiring good faith intent to obtain life insurance for a legitimate

purpose. Indeed, if the only means of proving lack of insurable interest is through

an advance agreement of sale, then this new rule would legitimize all other viatical

settlement schemes, including Moore's.           Although this bright-line rule would

bolster the viatical settlement industry, it also would encourage wagering contracts

and serve the ends of the unscrupulous. The creativity of the unscrupulous knows

few bounds, and the Court should not write the viatical settlement industry a blank

check.      See, e.g., "Settlement Forecast," http://www.habershamfunding.com/

stl_forecast.html (a member of LISA) (predicting likelihood of purchase of life

insurance policies based on risk and policy terms) (last visited April 13, 2008); see

also http://www.peachtreelifesettlements.com/real_life_cases.asp (a member of

LISA) (detailing risk and policy terms successfully transferred in secondary

market) (last visited April 13, 2008).

         The court's decision in Life Product Clearing, LLC v. Angel, 530

F. Supp. 2d 646 (S.D.N.Y. 2008), a published decision not cited by appellees or

their amici, is particularly relevant here. In Angel, a retiree (Lobel) was informed


                                          15
by an insurance agent that he could take out a life insurance policy on himself and

receive a cash payment by transferring the policy to an investor. Id. at 648-49.

Lobel created a trust, and on the same day applied for a $10 million life insurance

policy. Id. at 649-50. The policy was issued on December 14,2005, with the trust

as owner and beneficiary. Id. at 650. On December 20, 2005, Lobel transferred

his beneficial interest in the trust and the obligation to pay premiums to Life

Product Clearing LLC ("LPC"), a viatical settlement company, in exchange for

$300,000. Id. Lobel died five days after receiving the $300,000. Id. at 651. The

insurer paid death benefits to the trust. Id.

      LPC filed a declaratory judgment action claiming the corpus of the trust. Id.

The Estate filed a counterclaim asserting the trust was void for lack of insurable

interest. Id. LPC moved for judgment on the pleadings arguing the insured signed

the application, could retain the policy if he chose to, established the trust to hold

the insurance, named himself the sole beneficiary of the trust, and the trust was the

sole beneficiary of the policy. Id. at 656. Rejecting LPC's argument, the court

explained "[t]hese facts, even if true, ... do not contradict Lobel's alleged intent to

sell the policy to LPC before the Policy was procured." Id. Further, the court

explained, "cases that tum on the issue of intent are generally not appropriate for

summary disposition." Id. "Because Lobel's pre-assignment intent is central to




                                           16
LPC's claim, and Angel's claim-that Lobel never intended to obtain life

insurance ... , LPC cannot prevail as a matter of law...." Id.

      In reaching this result, the court, citing Grigsby v. Russell, 222 U.S. 149

(1911), explained the Supreme Court's holding as follows: "[W]hile the lack of

insurable interest in the insured on the part of the assignee was not a bar to

subsequent assignment, there must be an insurable interest in the first instance, as

well as good-faith intent to obtain insurance for the benefit of one's own family or

business." Angel, 530 F. Supp. 2d at 653 (citing Grigsby, 222 U.S. at 156-57).

The court further explained the insurable interest rule as follows:

      Only one who obtains a life insurance policy on himself 'on his own
      initiative' and in good faith-that is, with a genuine intent to obtain
      insurance protection for a family member, loved one, or business
      partner, rather than an intent to disguise what would otherwise be a
      gambling transaction by a stranger on his life-may freely assign the
      policy to one who does not have an insurable interest in him.

Angel, 530 F. Supp. 2d at 653 (citations omitted).

      In assessing whether a policy was procured with a view toward assignment,

the court should consider "the intent of the insured ... at the time the policy is

procured." Id. at 654. In considering the issue of intent, "[c]ourts consider factors

such as whether the insured paid premiums and the length of time the insured held

the policy before assigning it when deciding whether an arrangement is simply a

sham transaction designed to evade the insurable interest rule or a genuine, good-

faith assignment." Id. at 654.

                                          17
       The court in Angel unquestionably recognized an agreement of sale prior to

issuance is not the only means of proving a lack of good faith. Indeed, the court

did not include a pre-issuance agreement as one of the "factors" to consider, but

makes clear the "factors" listed for evaluating good faith are only examples. Id.

       Notably, the court in Angel, like the district court below, rejected the

argument that "single contractual steps in a sequence must be considered as

separate legal transactions and not as a single, sham transaction...." ld. at 656.

The Angel court declared, "[t]he law prohibits gaming the system to procure wager

policies, regardless of the creativity of form." Id. The same rule should apply to

the arguments of appellees.

       In another recent decision on insurable interest, which again is omitted from

the briefs of appellees and their amici, the United States District Court for the

Northern District of Ohio considered whether life insurance policies purchased

with the intent to assign to a viatical settlement company were void ab initio. See

Wuliger v. Mfrs. Life Ins. Co., No. 3:03-7457, 2008 WL 397591 (N.D. Ohio

Feb. 11, 2008).    Although the court recognized the general right to take out

insurance on one's own life, the complicating factor was the insured's

predisposition to assign the policies in return for a fee. Id. at *8.

      The court recognized the test for a wager contract was articulated in

Bankers' Reserve Life Co. v. Matthews, 39 F.2d 528 (8th Cir. 1930). "[T]he crux


                                           18
is whether the policy was a wagering contract at the time it became effective as a

contract. If, at the time, such assignment was contemplated by the insured, it is a

wagering contract, otherwise, it is not." Id. at *9 (quoting Matthews, 39 F.2d at

529). The court went on to find that "the insurer does not dispute that the viators

undertook [to] secure policies in their name with the intent of assigning them for a

fee." Id. For this reason, the court found no genuine issue of material fact existed

"regarding the viator's predisposition to sell the policies upon procurement of the

same." Id. at   * 10.   "As the procurement of these policies was tantamount to

wagering contracts, the Court finds that the policies at issue are void ab initio and

subject to rescission." Id.

      The reasoning of the NorthemDistrict of Ohio should apply with equal force

here. The district court below concluded, "the evidence shows indisputably that

Moore planned to sell all or most of his life insurance policies at the time he

applied for them, but the scheme did not involve other parties working together

with him to procure policies and immediately effect their assignment." JA 974

(note 7) (emphasis added).     The district court correctly concluded Moore was

engaged in a scheme with the intent of viaticating the policies, but erred in holding

Moore's actions in furtherance of that scheme were insufficient to prove a lack of

insurable interest. See Angel, 530 F. Supp. 2d at 656; Paulson, 2008 WL 451054

at *2-3; Wuliger, 2008 WL 397591 at *10.


                                         19
             2.     A Policy Issued Without An Insurable Interest Is
                    Void Ab Initio And Cannot Be Rendered Valid By An
                    Incontestability Clause

      Appellees inaccurately claim the "district court correctly held that First

Penn's lack of insurable interest claim is barred by the incontestability clause in the

Policy." Evans Br. 46 (citing JA 981). The district court's conclusion was limited

to finding the incontestability clause barred the rescission claim based on Moore's

misrepresentations. JA 981, 973 (note 7) (recognizing separate claim based on

insurable interest). On the issue of insurable interest, the district court recognized

a policy "purchased by a person without an insurable interest in the life being

insured ... is void." JA 973 (note 7). The district court did not conclude an

incontestability clause could breathe life into a void policy. See id.

      Whether a policy is void or voidable is a critical distinction because an

incontestability clause or statute does not apply to a void policy. 2 See Nyonteh

v. Peoples Sec. Life Ins. Co., 958 F.2d 42,44 (4th Cir. 1992) ("An incontestability

clause normally presupposes a valid contract; a determination that the contract was

void thus renders the clause inapplicable."); Crump v. Nw. Nat 'I Life Ins. Co., 45

Cal. Rptr. 814, 819 (Cal. Ct. App. 1965) ("Incontestability does not apply to a

2 "A 'voidable' agreement would be one subject to rescission or ratification
whereas a 'void' agreement would be incapable of ratification or disaffirmance."
Princess Plaza Partners v. Arizona, 928 P.2d 638, 646 n.5 (Ariz. Ct. App. 1995).
A void contract "is one which never had any legal existence or effect, and it cannot
in any manner have life breathed into it." Nat 'I Union Indem. Co. v. Bruce Bros.,
Inc., 38 P.2d 648,652 (Ariz. 1934).
                                          20
policy which is void ab initio. The invocation of an incontestability provision

presupposes a basically valid contract."); Lee R. Russ, Couch on Insurance

§ 240:88 (3d ed. 2005).

      Arizona adheres to the general rule that "when a contract is made in

contravention of a statute, that contract is illegal and void." See Yank v. Juhrend,

729 P.2d 941, 944 (Ariz. Ct. App. 1986). Accordingly, a life insurance policy

procured in violation of Arizona's insurable interest statute is void. See Zurich

Life Ins. Co. v. Zoo Stage, Inc., 186 F. App'x 768, 769 (9th Cir. 2006) (applying

Arizona law); see also Couch on Insurance § 41: 1 ("In the absence of an insurable

interest, an insurance contract is regarded as a void and unenforceable wagering

contract.").

       Although the Supreme Court of Arizona has not considered whether an

incontestability clause can breathe life into a policy lacking an insurable interest,

nearly every jurisdiction that has addressed the issue holds that a policy lacking an

insurable interest is void and is not rendered valid by an incontestability provision.

See, e.g., Paul Revere Life Ins. Co. v. Fima, 105 F.3d 490, 492 (9th Cir. 1997);

Carter v. Cont'! Life Ins. Co., 115 F.2d 947, 948 (D.C. Cir. 1940); Obartuch v.

Sec. Mut. Life Ins. Co., 114 F.2d 873, 878 (7th Cir. 1940); Aetna Life Ins. Co. v.

Hooker, 62 F.2d 805, 805-06 (6th Cir. 1933); Ky. Cent. Life Ins. Co. v. McNabb,

825 F. Supp. 269,273 (D. Kan. 1993); Commonwealth Life Ins. Co. v. George, 28


                                         21
So.2d 910, 914-15 (Ala. 1947); Home Life Ins. Co. of N.Y v. Masterson, 21

S.W.2d 414, 417 (Ark. 1929); Bromley's Adm 'r v. Wash. Life Ins. Co., 92 S.W. 17,

18 (Ky. 1906); Wharton v. Home Sec. Life Ins. Co., 173 S.E. 338, 339 (N.C. 1934);

Beard v. Am. Agency Life Ins. Co., 550 A.2d 677, 688-89 (Md. 1988); Henderson

v. Life Ins. Co. of Va., 179 S.E. 680, 692 (S.C. 1935).

       As the insurable interest requirement is a statutory mandate, parties cannot

by agreement create insurance without an insurable interest. A contract that is void

because it violates public policy cannot be made valid by an incontestability

provision. See Obartuch, 114 F.2d at 878; Commonwealth Life Ins., 28 So.2d at

915 ("[I]f the contract is against public policy the court will not lend its aid to its

enforcement; that the parties to an illegal contract cannot by stipulating that it shall

be incontestable, tie the hands of the court and compel it to enforce contracts which

are illegal and void...."); see also Home Life Ins., 21 S.W.2d at 417 ("The contract

being one that was contrary to public policy, the defense that it was void is

allowed, not for the sake of the defendant, but for the law itself.") (citing Hall

v. Coppell, 74 U.S. 542, 558-59 (1868)).

       Moreover, the Arizona incontestability statute only applies to policies that

have "been in force ... for a period of two years." See Ariz. Rev. Stat. § 20-1204.

A void contract has no "legal existence or effect." Nat'l Union Indem., 38 P.2d at

652.   Arizona's incontestability statute, therefore, is never applicable to void


                                           22
policies (e.g., lacking an insurable interest) because such policies are never "in

force."

      The Arizona cases relied upon by appellees are inapposite.       In National

Producers Life Insurance Co. v. Rogers, 442 P.2d 876 (Ariz. Ct. App. 1968), the

court held Arizona's prior incontestability statute did not nullify a suicide

exclusion. See id. at 877-89. Whether a void policy could be rendered valid by an

incontestability provision was not considered by the court. Indeed, the language

relied upon by appellees is dicta and taken out of context.      Moreover, unlike

Arizona's current incontestability statute, the obsolete statute analyzed in Rogers

did not require an "in force" policy.

      Similarly, in National Life & Casualty Insurance Co. v. Blankenbiller, 360

P.2d 1030 (Ariz. 1961), the Court held a policy procured by fraud was subject to

an incontestability provision. See id. at 1032. Unlike a void policy lacking an

insurable interest, a policy procured by fraud is voidable. See, e.g., Nyonteh, 958

F.2d at 44-45; see also Horne v. Timbanard, 434 P.2d 520, 522 n.l (Ariz. Ct. App.

1967). Blankenbiller did not consider whether a void policy could be rendered

valid by an incontestability provision. Indeed, the dicta appellees rely upon in

Blankenbiller presupposes a valid, voidable contract.

      In Flanagan v. Republic American Life Insurance Co., No. CIV-93-1934,

1994 U.S. Dist. LEXIS 19479 (D. Ariz. Dec. 30, 1994) (JA 859-68), the court


                                        23
considered an action for rescission based on misrepresentations in the application.

Recognizing the policy was voidable, the court held the incontestability provision

barred rescission. See ide at * 10. The court did not consider whether a void policy

could become valid by an incontestability provision.

      A policy lacking an insurable interest is not analogous to a policy procured

by fraud. Misstatements in the application are irrelevant to whether an insurable

interest exists in the life of the insured. Moreover, an insurer bears the burden of

proving fraud, but the burden of proving insurable interest is on the party asserting

coverage. See Zurich Life, 186 F. App'x at 769. For these additional reasons, case

law applying incontestability provisions to policies procured by fraud is

inapplicable to policies lacking an insurable interest.

      Only two states-Michigan and New York-have held a policy lacking an

insurable interest is subject to an incontestability provision. See Bogacki v. Great-

West Life Assur. Co., 234 N.W. 865,866-67 (Mich. 1931); New England Mut. Life

Ins. CO.   V.   Caruso, 535 N.E.2d 270, 273-75 (N.Y. 1989). When Bogacki was

decided, Michigan did not have an insurable interest statute but did have an

incontestability statute.    The court held the public policy supporting the

incontestability statute must prevail over the common law.        See Bogacki, 234

N. W. at 866-67. Given that Arizona has an insurable interest statute, the analysis

in Bogacki is inapplicable.     See Beard, 550 A.2d at 690 (declining to follow


                                          24
Bogacki because Maryland, unlike Michigan, has insurable interest statute

indicating strong public policy underlying insurable interest requirement).

      In New England Mutual Life Insurance Co. v. Caruso, 535 N.E.2d 270, the

Court of Appeals of New York recognized that New York was not in conformity

with the weight of authority in other states, but declined to overrule New York

precedent.   See id. at 271.   Notably, the court concluded a policy lacking an

insurable interest was not void under New York law. See id. at 273. Arizona, of

course, has no such precedent and has not adopted the holdings of Bogacki or

Caruso.

             3.    As A Matter Of Law, First Penn Did Not Waive The
                   Right To Rescind Based On The Policy's Lack Of
                   Insurable Interest

      Appellees again ask this Court to affirm the district court's judgment based

on facts and inferences rejected by the district court. Evans Br. 48-54. Indeed, the

district court rejected appellees' argument that First Penn waived the right to

rescind based on its purported knowledge of Moore's scheme. JA 981-82 (note

13) ("There has been no waiver here."). Appellees' unfounded argument was the

subject of extensive briefing below,3 and the district court properly concluded First

Penn did not waive the right to rescind. Id.




3First Penn Mem. Supp. Summ. 1. (Docket no. 30) pp. 3-14; First Penn Reply
Mem. Supp. Summ. J. (Docket no. 43) pp. 34-40.
                                         25
      Even if the version of the facts recited by appellees were true, which it is

not, appellees' waiver argument must fail as a matter of law. A policy void for

lack of an insurable interest cannot be rendered valid by an insurer's action or

inaction. See, e.g., Ky. Cent. Life Ins., 825 F. Supp. at 273 ("Waiver and estoppel

do not bar plaintiff from raising the defense of lack of insurable interest.");

Rubenstein v. Mut. Life Ins. Co. of NY., 584 F. Supp. 272, 279 (E.D. La. 1984)

(same); Beard, 550 A.2d at 688 (same); Home Life Ins., 21 S.W.2d at 417 ("Since

it is the law which, upon grounds of public policy, pronounces the policy to be

void, the doctrine of estoppel has no application."); Lee R. Russ, Couch on

Insurance § 41:7 (3d ed. 2005).

      Appellees have not identified a single case supporting their argument that a
                                                                         4
lack of insurable interest in a life insurance policy can be waived.         Thus, if the

Court finds a lack of insurable interest, then it must vacate the decision of the

district court and enter judgment in favor of First Penn.




4 Although appellees cite Chicago Fire & Marine Insurance Co. v. Sharpensteen,
289 P. 985 (Ariz. 1930), this case is easily distinguishable. The issue in Chicago
Fire was whether the insurer waived an express warranty in an automobile
insurance policy. Per the policy, the insured warranted the car was registered with
the department of motor vehicles and was titled in his name. In fact, the car was
not registered and the insured did not hold title. Recognizing '''a warranty is
inserted in the policy in the interest of the insurer, and he may waive or insist on it,
as he elects,,,, the court held there was sufficient evidence for the trial court to find
waiver of the warranty_ See id. at 988. The presence of an insurable interest in a
life insurance policy is not a warranty and is not waivable.
                                           26
      Even if insurable interest could be waived, multiple disputes of fact exist

concerning First Penn's purported knowledge of Moore's scheme and all factual

inferences must be drawn in favor of First Penn. See Bacon, 475 F.3d at 637-38;

Seabulk, 377 F.3d at 418. First Penn, for example, limited the authority of the

agent taking the application to information revealed in the written application.

JA 291. Still further, at the time the Policy was issued on February 5, 1998, First

Penn did not know Moore had obtained a terminal illness certificate (JA 102-09,

150); asked his physician to certify he had a terminal illness (JA 86, 967); altered

his medical records (JA 102-09, 968); met with four different insurance agents

seeking to purchase $7 million of life insurance (JA 165-70, 176-77, 178-81,184-

86, 967-68 (four brokers), JA 262, 309-11 ($7 million in coverage)), called a

viatical settlement broker in order to initiate the viatication process (JA 239); met

with a viatical settlement broker at least once (JA 238-39, 717, 969-70); agreed to

viaticate the Transamerica and Jackson National policies (JA 265); and was in the

process of converting all of his policies to 20-year terms after learning this made

the policies more attractive for sale to viatical settlement companies (JA 296-297,

298-299, 304, 309-311, 685, 970).

      Moreover, contrary to appellees' unsupported assertion, an insurer does not

have a duty to investigate the truth of representations made in an insurance

application. See Miguel v. Metro. Life Ins. Co., 200 F. App'x 961, 969 (11 th Cir.


                                         27
2006) (applying Florida law); Chawla v. Transamerica Occidental Life Ins. Co.,

440 F.3d 639,647 (4th Cir. 2006) (applying Maryland law); Philp v. Jackson Nat 'I

Life Ins. Co., No. 95-56408, 1997 WL 90370, at *3 (9th Cir. Feb. 5, 1997)

(applying California law); Verex Assur., Inc. v. John Hanson Sav. & Loan, Inc.,

816 F.2d 1296, 1305 (9th Cir. 1987) (applying Oregon law).

      Appellees' waiver argument is little more than an effort to blame the victim,

First Penn, for not discovering sooner the viatical scheme engaged in and

concealed by Moore, Evans, and Answer Care. The mere fact that this scheme did

not unravel for a number of years is not a waiver.

                              III.   CONCLUSION

      For the foregoing reasons, First Penn-Pacific Life Insurance Company

respectfully requests that this Court vacate the district court's judgment and direct

the entry of a judgment in favor of First Penn based on its motion for summary

judgment. In the alternative, the Court should vacate and remand this case for trial.




                                         28
                                          Respectfully submitted,

                                          ~-,~
                                          Bry; n . Bolton
                                          bb lto @fblaw.com
                                          Michael P. Cunningham
                                          mcunningham@fblaw.com

                                          Funk & Bolton, P.A.
                                          Twelfth Floor
                                          36 South Charles Street
                                          Baltimore, Maryland 21201-3111
                                          410.659.7700 (telephone)
                                          410.659.7773 (facsimile)

                                          Attorneys for Appellant, First
                                          Penn-Pacific Life Insurance Company
Dated:              April 16, 2008

20044.001: 114132




                                     29
                          UNITED STATES COURT OF APPEALS
                              FOR THE FOURTH CIRCUIT

No. 07-2020             Caption: First Penn-Pacific Life Insurance Co. v. Evans et al.

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Attorney for First Penn-Pac'   Life Ins. Co.

Dated: April 16, 2008
                         CERTIFICATE OF SERVICE
      I HEREBY CERTIFY that, on this 16th day of April, 2008, two copies of
the foregoing Reply Brief of Appellant First Penn-Pacific Life Insurance Company
weremailed.firstclass.postageprepaid.to:
                   Paul S. Caiola, Esquire
                   David G. Sommer, Esquire
                   Gallagher Evelius & Jones LLP
                   218 North Charles Street, Suite 400
                   Baltimore, Maryland 21201
                   Attorneys for William R. Evans, Chartered and Invotex, Inc.
                   Eric A. Kuwana, Esquire
                   Katten Muchin Rosenman LLP
                   1025 Thomas Jefferson Street, N.W.
                   East Lobby, Suite 700
                   Washington, D.C. 20007
                   Nathaniel S. Shapo, Esquire
                   Jenny R. Leifer, Esquire
                   Katten Muchin Rosenman LLP
                   525 West Monroe Street
                   Chicago, Illinois 60661
                   Attorneys for Amicus Curiae,
                   Life Insurance Settlement Association

      Additionally, on the same date, eight copies of Reply Brief of Appellant
First Penn-Pacific Life Insurance Company were sent by Federal Express
overnight delivery to:

                         Office of the Clerk
                         United States Court of Appeals for the Fourth Circuit
                         1100 East Main Street, Suite 501
                         Richmond, Virginia 23219-3517

								
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