PHL Variable Insurance v. Jolly
2011 U.S. Dist. LEXIS 85821
N.D. Ga.2011Background
- Trust created Oct. 10, 2006, with Jolly as insured and ownership vested in the Trust; policy No. 97519549 issued March 2007.
- Application for the policy identified the Trust as owner and Jolly as proposed insured, with statements attributed to Jolly.
- Underwriting relied on multiple documents beyond the application, including emeralds’ appraisals and Block correspondence; most were provided by the agent, not the Trust.
- Trustee Shapiro had no direct knowledge contradicting Jolly’s representations and did not verify net worth, income, or criminal history, nor discuss with Jolly prior to issuance.
- Plaintiff alleges misrepresentations about Jolly’s net worth and income and contends Trust affirmed these representations; policy later rescinded ab initio.
- Final proceedings granted summary judgment for the Trust on Counts II and IV, ordered exclusion of further disbursement, and preserved funds in registry pending appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Trust liable for negligent misrepresentation | Trust negligently affirmed the statements without basis. | Trust had no knowledge contradicting Jolly’s statements and did not control those statements. | Trust not liable; summary judgment for Trust on Count II. |
| Whether Trust conspired with Jolly | Plaintiff seeks to prove a mutual understanding between Trust and Jolly. | No evidence of any agreement or communication; Trustee denied conspiracy. | Conspiracy claim dismissed; summary judgment for Trust on Count IV. |
| Whether plaintiff may recover policy premiums or require disbursement from registry | Premiums should be recoverable or offset against damages. | No judgment in plaintiff’s favor on Counts II or IV; funds remain in registry pending appeal. | Premiums remain in registry; denial of immediate disbursement pending appeal. |
Key Cases Cited
- William Penn Life Ins. Co. v. Sands, 912 F.2d 1359 (11th Cir. 1990) (what applicant believed to be true governs misrepresentation analysis in best-knowledge context)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (burden on movant to show absence of genuine issue of material fact)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (prima facie case requires evidence that a reasonable jury could return a verdict for the nonmovant)
- Fin. Sec. Assur., Inc. v. Stephens, Inc., 500 F.3d 1276 (11th Cir. 2007) (Georgia due diligence standard for reasonable reliance in fraud cases)
- Hardaway Co. v. Parsons, Brinckerhoff, Quade & Douglas, Inc., 267 Ga. 424 (Ga. 1997) (due diligence requirements for reasonable reliance in professional misrepresentation)
- White v. American Family Life Assurance Co., 284 Ga.App. 58 (Ga. App. 2007) (best knowledge and belief language shields applicant but not insurer’s duties in misrepresentation)