Preview:

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND DONALD G. FARB * * v. * Civil No. JFM-01-0007 * FEDERAL KEMPER LIFE * ASSURANCE CO., et al. * ***** MEMORANDUM Plaintiff, Donald G. Farb, moves for leave to amend his complaint. Plaintiff seeks to amend his complaint by adding a count against Defendant, Federal Kemper Life Assurance Co. ("Kemper"), in his capacity as successor trustee to a life insurance policy issued by Kemper to Charlotte Katz Shaffer. For the reasons that follow, I will grant the motion. I. On May 22, 1997, Leonard Kopp and Joseph DiPietro, as trustees of the "Shareholders Cross Purchase Agreement dated 11/17/92" ("SCPA"), applied for a life insurance policy with Kemper. The proposed insured was identified as Charlotte Shaffer. The owner/applicant was identified as SCPA. The beneficiary was designated as SCPA. No contingent beneficiaries were identified. Additionally, Kopp and DiPietro signed the application on the line for "Signature of Owner/Applicant, if other than Proposed Insured" as "Trustees." The SCPA is an agreement between Farb and Mrs. Shaffer, which provided in part that upon the death of either Farb or Shaffer, certain jointly owned business interests would be transferred from the decedent's estate to the surviving partner.1 The SCPA required the parties to

In March 1997, the SCPA was amended to reflect Shaffer's acquisition of Farb's interest in their kennel business, Ovation Kennels, Inc. Farb and Shaffer continued to jointly own certain real property. -1-

1

maintain life insurance on each party's life in order to compensate the decedent's estate for its interest in the jointly owned property. On August 15, 1997, Kemper issued policy number FK2447591 (the "policy") to Kopp and DiPietro, insuring the life of Mrs. Shaffer. The policy contained a suicide provision stating that: We will limit the proceeds we pay under this policy if the insured commits suicide, while sane or insane: 1. within 2 years from the Date of Issue; and 2. after 2 years from the Date of Issue, but within 2 years from the effective date of the last reinstatement of this policy. The limited amount will equal all premiums paid on this policy. (Def.'s Ex. 3 at FK000461.) On July 7, 1998, Mrs. Shaffer was found dead in the bedroom of her Damascus, Maryland home. The cause of death was a single gunshot wound to the head from a .45 caliber colt revolver. Shaffer's body, which was unclothed, was discovered by her husband, Richard Shaffer on the couple's bed. Upon discovering the body, Richard Shaffer contacted the Howard County Police Department and reported that his wife had committed suicide. Both the Howard County Police, after an investigation, and the doctor who performed the autopsy concluded that Mrs. Shaffer committed suicide. On July 23, 1998, Sean Walsh, the general agent for the Shaffer policy notified Kemper that Mrs. Shaffer had died. Kemper advised Walsh that because the policy had been in effect for less than two years, an investigation was required. Additionally, Kemper advised Walsh that the beneficiary was the SCPA. On August 12, 1998, Kopp and DiPietro completed a claimant's statement for the

-2-

proceeds of the policy and submitted the necessary paperwork. Kopp and DiPietro's claim noted that they were the beneficiaries of the policy as the trustees under the SCPA. On April 15, 1999, Kemper advised Kopp and DiPietro that it had denied their claim pursuant to the suicide exclusion in the policy and tendered $1,149.60, the amount of premiums paid under the policy. Kopp and DiPietro deposited the check issued by Kemper. On July 1, 1999, Kopp and DiPietro resigned as co-trustees. On January 3, 2001, Farb brought this suit in his individual capacity. Essentially Farb alleged that Shaffer did not commit suicide and, therefore, he was entitled to the full value of the Kemper policy. Farb alleged that he had suffered $400,000 in damages (the amount of the policy) because "[a]ll persons and entities having any interest in the proceed of the Federal Kemper contract have, for value received, assigned any interest in the Federal Kemper contract to Plaintiff, who is solely entitled to payment thereof." (Compl

Download Donald G. Farb v Federal Kemper Life Assurance Co., et al..pdf

Maryland Law