Chief technology officer dies, company tries to collect on life insurance policies but is told they have lapsed.
Marc D. Adelman, San Diego.
Lewis Brisbois Bisgaard & Smith LLP by Joseph C. Campo and David B. Shapiro, Los Angeles.
Brian P. Brinig, JD, CPA/ABV, ASA, forensic accounting, damages, San Diego.
Craig R. Applefield, broker negligence, San Diego.
Harold Fairman III, broker negligence, San Marcos.
Plaintiff GroundMetrics, Inc. (GMI) purchased two key person life insurance policies (for $1 million each) on its Chief Technology Officer through Wells Fargo Insurance Services (WFIS). After the policies were placed, GMI moved its headquarters and requested that WFIS update the address on GMI's policies. WFIS did not update the address on GMI's life insurance policies.
As a result of these actions, GMI was never notified about pending payments due on their policies, nor were they notified when these policies lapsed for non-payment. Shortly after the policies lapsed, GMI's Chief Technology Officer passed away. When GMI put in a claim on the insurance proceeds, they were advised that the policies had lapsed.
GMI brought suit against WFIS and Wells Fargo Bank for negligence in the preparation of the policy applications and for failing to update the address as represented.
That the agent responsible for placing the policies was negligent in the preparation of both applications. That Wells Fargo was negligent in failing to update plaintiff's new address on the life insurance policies after numerous requests in writing to do so.
That plaintiff was comparatively negligent in monitoring when the premiums were due.