Principal Life Insurance v. Lawrence Rucker 2007 Insurance Trust, 869 F. Supp. 2d 556

Principal Life sues Christiana Bank as trustee for the Lawrence Rucker 2007 Insurance Trust seeking declaratory relief and damages for alleged voiding of a life policy due to lack of insurable interest and misrepresentations.
The Insurance Trust substituted as defendant in lieu of Christiana Bank; Principal seeks a judgment voiding the Policy for lack of insurable interest and for fraud.
A prior Delaware district court ruling (2010) held the Policy void for lack of insurable interest; Delaware Supreme Court later addressed insurable interest questions in Price Dawe v. 2006 Insurance Trust.
This federal diversity action applies Delaware law; material issues involve whether Rucker procured the Policy and whether the funding/trust structure invalidates insurable interest.
There are genuine issues of material fact as to who funded the Policy, whether a third party induced the insured, and whether the Trust was properly created and funded by the insured.
The court denies Principal’s motion for summary judgment on insurable interest.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Is there a genuine issue about who procured the Policy and who paid the premiums?	Principal contends Rucker procured the Policy with third-party funding and Aery loan funds.	Insurance Trust asserts Rucker paid or funded via loan arrangements; third-party investors may not have funded.	Genuine issues of material fact preclude summary judgment.
Does the Policy constitute a mere cover for a wager lacking insurable interest?	Principal argues a third party used Rucker as an instrument to obtain the policy for wagering.	Insurance Trust/GUI deny such an arrangement and contend there is no proven third-party funding.	Material facts in dispute; cannot grant judgment.
Was the Insurance Trust properly created and funded by the insured, affecting insurable interest?	Principal challenges whether Rucker funded the Trust or whether GUI improperly formed/funded it.	Insurance Trust and affiliates dispute improper creation/funding; contested facts exist.	Genuine issues of material fact remain; summary judgment denied.

PHL Variable Ins. Co. v. Price Dawe 2006 Insurance Trust, 28 A.3d 1059 (Del. 2011) (insurable interest issues in STOLI cases; impact of funding on validity)
Principal Life Ins. Co. v. Lawrence Rucker 2007 Insurance Trust, 735 F. Supp. 2d 130 (D. Del. 2010) (previous holding that policy lacked insurable interest at inception)