June 30, 2025 – Orange County, CA. An Orange County Superior Court judge delivered a stinging rebuke to Guaranty Income Life Insurance Company (GILICO), denying their summary judgment motion and calling their legal arguments “contradictory” and “not credible” in a case involving elderly investors who lost substantial retirement savings.
The court also found that GILICO failed to follow basic procedural requirements and could not escape liability for their agent’s sale of both an unsuitable indexed annuity and high-risk private investments that subsequently went bankrupt.
Brandon S. Reif, plaintiffs’ attorney, of Reif Law Group, P.C. in Beverly Hills, California,
described the ruling as “righteous justice for senior citizen victims of abusive, coercive and
unethical sales practices that led to the recommended purchases of an unsuitable annuity and high risk private investments using retirement money.” (Renee M. Montague, et al v. Kevin N. Richards, et al, Orange County Superior Court, Case No. 30-2022-01290148-CU-PN-CJC (trial date is August 4, 2025)).
The case centers on recommendations made to plaintiff Renee Montague, a woman in her 70s, who was advised to liquidate existing investments to purchase both a GILICO indexed annuity with $800,000 and to invest $500,000 into Choice Energy Holdings’ (CEH) PetroRock oil mining investments. According to court documents, Montague now faces substantial surrender penalties to access her retirement funds trapped in the annuity, has incurred significant capital gains taxes, and has seen her Medicare premiums increase as a result of the forced investment liquidations. Her investment in CEH has been lost entirely due to the company’s bankruptcy. Terry Walsh, a man in his 70s, also lost retirement funds following the advice to invest $103,000 into CEH investments.
The court’s ruling highlighted fundamental procedural failures in GILICO’s motion. “The court applied the ‘Golden Rule’ of summary judgment: if it’s not in the separate statement, it doesn’t exist,” explained Mr. Reif, adding, “GILICO’s procedural failures made it impossible for the court to consider the motion for summary judgment, so it was denied.” Central to GILICO’s defense was their claim that agent Kevin Richards was only authorized to sell annuities, not securities investments, and GILICO bore no responsibility for the CEH investment losses. The court found this argument fundamentally flawed.
The court reasoned, “it is undisputed that he [Richards] was an agent for Guaranty when he provided the investment advice to Montague, and there is no evidence Richards or Guaranty limited Richards’ authority only to the sale of the annuity.” The court also found that Richards “recommended … the annuity and CEH investments in one retirement plan.”
According to Mr. Reif, “the ruling provides rich detail to hold GILICO legally responsible for the private placement investments sold by its agent.”
GILICO’s documents identified Richards as “the Agent” and was signed by Richards himself. GILICO’ admitted in testimony that Richards was its appointed sales agent in California. Most damaging to the defense, Richards himself testified that he served in a fiduciary capacity for the plaintiffs and recommended these investments.
Despite the compelling evidence, GILICO attempted to disclaim responsibility by pointing to
language in their forms directing customers to “refer to your agent for advice”, while
simultaneously arguing that Richards was not acting as its agent. The court found this
position “contradictory” and “not credible.”
Under California’s agency law, GILICO created the appearance that Richards had authority
to recommend the complete retirement plan, including both the annuity and the CEH private
investments. The court noted that “Guaranty did not disclose to Montague that the sale of
securities to purchase the annuity plan was outside the scope of the agency.”
GILICO argued that even if they owed a fiduciary duty, Montague suffered no damages because her annuity investment had increased in value and was suitable for her needs. The court rejected this narrow view of damages.
Expert Testimony Establishes Damages and Unsuitability
Expert witness Steven Roth provided testimony that the annuity was unsuitable for Montague given her age and the product’s rate of return. More significantly, Montague’s own declaration detailed the concrete financial harm she suffered: substantial capital gains taxes on forced liquidations, increased Medicare premiums, surrender penalties that trap her largest retirement asset, and lost opportunities for portfolio growth. The court found this evidence “sufficient” to establish damages, rejecting GILICO’s attempt to limit damages to simple investment performance metrics.
“This ruling establishes important precedent for holding insurance companies accountable for the full scope of their agents’ conduct,” stated Reif. “GILICO cannot compartmentalize their agent’s advice when it was presented to the client as a unified retirement strategy.”
Implications for Insurance Industry Supervision Over Investments
The ruling comes amid increased regulatory scrutiny of indexed annuity sales to seniors. The court’s decision reinforces that insurance companies cannot escape liability by claiming their agents exceeded their authority when the companies fail to adequately communicate those limitations to consumers.
“Insurance companies have a duty to supervise their agents and clearly communicate any limitations on their authority,” explained Reif. “They cannot profit from broad agent relationships while disclaiming responsibility when those relationships harm consumers.”
The case proceeds to trial on August 4, 2025, where a jury will determine damages for the alleged financial elder abuse, breach of fiduciary duty, and professional negligence claims. According to court documents filed by plaintiffs, California laws protecting elderly victims entitles plaintiffs to recover up to three times their damages plus attorneys’ fees.
Contact Reif Law Group If You’ve Experienced Misconduct
Pursuing legal claims for financial elder abuse and breach of fiduciary duty involving insurance sales and high risk investment sales requires skilled, experienced and aggressive advocates.
Reif Law Group, P.C., advocates aggressively and strategically for victims of investment and insurance sales misconduct throughout the State of California and elsewhere. If you or your loved ones have faced abusive, unethical or dishonest sales practices, contact us at Reif Law Group, P.C.
Contact Information:
Brandon S. Reif
Reif Law Group, P.C.
315 S. Beverly Drive, Suite 315
Beverly Hills, California 90212
Telephone: 310-494-6500
www.reiflawgroup.com
