LOS ANGELES, October 30, 2020. Reif Law Group, P.C., California’s preeminent boutique trial and litigation law firm for securities and business disputes, today announced a jury trial is set for a financial elder abuse action against American General. In the case, a 78 year-old customer was promised over $350,000 in commission rebates in exchange for buying a $10 million life insurance policy from American General Life Insurance Company (American General). American General agents David Stuart Cohen and Jerome Sullivan induced the plaintiff, an elderly California customer, to buy the life insurance policy in exchange for rebating 50% of the sales commissions, but the defendants failed to remit any commissions once the plaintiff paid his premiums.
Commission rebating has been common practice since its legalization in California in 1988 (Insurance Code sec. 751). Insurers are responsible for the acts of their appointed agents during the application and sales process (Insurance Code sec. 1704.5).
“This is a classic bait and switch act from insurance agents, and we plan to prove that financial elder abuse has significant financial and legal repercussions,” said Brandon S. Reif, Managing Partner at Reif Law Group, P.C.
American General claims it prohibited its agents from rebating commissions, but it has failed to produce written notice to applicants prohibiting commission rebating. In addition, a senior executive at American General admitted she was unaware that California permitted commission rebating. She admitted that she had no knowledge whether American General internally investigated the elder abuse alleged in this lawsuit.
On October 15, 2020, the Court found that American General “failed to meet its burden” that its agents were without authorization to “agree to refund or rebate 50 percent of their earned commissions” to the customer. The Court also found that American General “failed to meet its burden” to avoid a trial by jury on breach of oral contract, financial elder abuse and for punitive damages.
The lawsuit has severe consequences for American General including a 3x damages multiplier, attorneys’ fees and punitive damages if found to have engaged in unlawful conduct with a senior citizen. The plaintiff seeks more than $2,000,000 from American General. The jury trial is set to begin on January 4, 2021. For more details of the case, see James W. Braswell v. Jerome H. Sullivan, et al., San Bernardino Sup. Ct., Case No. CIVDS1912296.
About Reif Law Group, P.C
Reif Law Group, P.C. is California’s preeminent boutique trial and litigation law firm for securities and business disputes. The firm prosecutes and defends court and arbitration actions involving securities, investments and real estate; professional liability; shareholder derivative; workplace harassment, discrimination, recruitment and Form U5; and business disruption and restraining order actions involving non-compete, non-solicit and confidentiality clauses. www.reiflawgroup.com