Fleisher v. Phoenix Life Ins. Co.

Fleisher v. Phoenix Life Ins. Co.

Opinion

DECISION AND ORDER APPROVING CLASS ACTION SETTLEMENT AND APPROVING MOTION FOR ATTORNEYS' FEES

McMahon, J.:

After three-plus years of hard-fought litigation and one year of arm's-length negotiations conducted with the assistance of a highly experienced mediator, Plaintiffs have agreed to settle this complex insurance class action after [*3]  securing an excellent result for the Class. The Settlement was reached on the eve of trial, after class certification and decertification briefing and rulings, voluminous cross-motions for summary judgment and rulings, and the submission of the Joint Preliminary Trial Report, exhibit and witness lists, objections, and deposition designations, voir dire questions, and proposed jury instructions. Preliminary approval of the Settlement was granted on June 3, 2015, and Notice to the Class was mailed on June 17, 2015. Not a single objection to the Settlement has been filed. Only three requests for exclusion were made by anyone not affiliated with the pending U.S. Bank actions, which were not settled along with the Fleisher and TIGR actions.

The Settlement gives the Class an outstanding recovery. When the monetary and non-monetary benefits are combined, the Class will receive over $130 million in total value. This includes over $40.5 million in cash payments by Phoenix. Checks will be mailed directly to all Class members with no need to submit claim forms. No funds will revert to Defendants.

The non-monetary benefits also provide very substantial benefits to the Class. First, Phoenix has agreed [*4]  to waive any further challenges to the validity of the Class Policies on the grounds of misrepresentations in the application or a lack of insurable interest, permanently giving up the "stranger-originated life insurance" or "STOLI" defense. Phoenix's agreement to end all STOLI challenges represented by these lawsuits, despite having an industry-high rate of resisting payment of claims, will ensure that, upon the occurrence of a maturity event, hundreds of millions in death benefits otherwise owed to members of the Class will be paid. Second, Phoenix has agreed not to impose any additional COI increases through December 31, 2020, even if otherwise permitted by the express language of the policies. Plaintiffs' expert, Ann Juliano from Demeter Investments Ltd., an independent consultant for large, institutional life settlement investors globally, has opined that the net present value of the STOLI and fraud defense waiver and five-year COI freeze creates an additional $94.3 million in value to the Class.

These are exceptional results for the Class in this hotly-contested litigation.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.