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In Re: American Investors

September 16, 2011


The opinion of the court was delivered by: McLaughlin, J.


The defendants, AmerUs Group Company,*fn1 AmerUs Annuity Group Company, American Investors Life Insurance Company, AmerUs Life Insurance Company,*fn2 Creative Marketing International Corporation, and Insurance Agency Marketing Services, Inc., move the Court to enforce its final order and judgment against Orlis

M. Charboneau ("Charboneau"), executor of the estate of class member Paul Eugene Charboneau. The defendants' motion seeks an injunction barring Charboneau from litigating a civil action against Aviva USA Corporation in the District Court for the Thirteenth Judicial District, Civil Department, Butler County, Kansas, styled Orlis M. Charboneau ex rel. Estate of Paul Eugene Charboneau v. Aviva USA Corporation, No. 11-79 ("Kansas Action"). The Court will deny the defendants' motion.

I. Facts

The final order and judgment at issue in the defendants' motion relates to a multidistrict litigation proceeding that consolidated six putative class action lawsuits. The plaintiff class alleged that the defendants misrepresented the characteristics of complex, long-term deferred annuities and targeted their sale to class members despite their lack of liquidity. In re Am. Investors Life Ins. Co. Annuity Mktg. & Sales Practices Litig. (In re Am. Investors), 263 F.R.D. 226, 228-30 (E.D. Pa. 2009).

The plaintiffs filed an unopposed motion on July 16, 2009 for preliminary approval of a class-wide settlement, class certification, and an order directing an issuance of notice to the class, to which they attached a proposed form of class notice and the parties' Stipulation of Settlement ("settlement stipulation"). The Court preliminarily approved the notice and settlement on July 28, 2009. Id. at 229. The settlement stipulation provided for a broad release of claims relating to the transactions that were the subject of the class complaint.*fn3

Following a fairness hearing on the proposed class settlement during which counsel for both the plaintiffs and the defendants appeared and spoke on behalf of their clients, the Court certified the class and approved the settlement as compliant with the United States Constitution and Rule 23 of the Federal Rules of Civil Procedure on December 18, 2009. Id. at 234. The Court's final order and judgment incorporated the release and waiver included in the settlement stipulation. The release in the settlement stipulation read, in relevant part:

1. . . . [t]he Named Plaintiffs and all Class Members, on behalf of themselves, their heirs, assigns, executors, administrators, predecessors, and successors, and any other person or entity purporting to claim on their behalf, hereby expressly and generally release and discharge the Releasees from any and all causes of action, . . . whether such claims are based on federal, state, or local law, statute, ordinance, or regulation . . ., contract, common law, or any other source, relating to any Company Annuities and that were or could have been asserted against Defendants in the Complaint or any other complaint encompassed in the Action, or that could have been asserted against Defendants . . . , or relating in any way to the Released Transactions. . . .

3. Nothing in this Release shall be deemed to alter the contractual rights and benefits of a Named Plaintiff or any other Class Member for the express written benefits that are due or will become due in the future pursuant to the express written terms of a Contract, except to the extent that such rights are altered or affected by the award, election, and/or implementation of Settlement Relief under this Agreement.

Settlement Stip. X.B. The Court entered a permanent injunction barring class members from filing, commencing, prosecuting, and maintaining any lawsuit relitigating the causes of action, or facts and circumstances related to the cause of action. The Court also retained jurisdiction for, among other things, all matters relating to the enforcement and interpretation of the settlement stipulation and final order and judgment. In re Am. Investors, 263 F.R.D. at 250-52.

The class is defined as "[a]ll persons and entities that purchased Company Annuities issued during the Class Period [from January 1, 1998, up to and including July 28, 2009] and all persons and entities to which an ownership interest in such Company Annuities was subsequently assigned or transferred, or that otherwise held any interest as an Owner in Such Company Annuities, during the Class Period." Id. at 230-31.

Charboneau's Petition in the Kansas Action ("Charboneau Pet."), attached to the defendants' motion as an exhibit, seeks payment of the cash surrender value of Paul Charboneau's annuity contract with Aviva USA. The Petition alleges that Paul Charboneau and his wife, Carrie Charboneau, entered into an annuity contract with American Investors Life Insurance Company, Inc. on September 23, 2006; the contract provided that it could be surrendered during the lifetime of either annuitant for a Cash Surrender Value. Charboneau Pet. ¶¶ 5, 9. The parties do not dispute that Paul Charboneau was a member of the settlement class, and that Orlis Charboneau, as executor of his estate, is thus bound by the terms of the Release to the extent they apply to his claims.

Charboneau asserts that on October 10, 2007, Avis A. Deck, acting under power of attorney for Paul Charboneau, contacted Aviva USA to surrender the annuity contract and request payment of the proceeds of the contract to Paul Charboneau. Charboneau alleges that Aviva USA received notice of the request by October 11, 2007 and was thus aware of its obligation to remit the cash surrender value of the contract. Instead, upon learning of the deaths of Carrie Charboneau (which occurred on August 25, 2007) and Paul Charboneau (which occurred on October 12, 2007), Aviva USA paid a death benefit to the named beneficiary on the contract on February 14, 2008. Charboneau Pet. ¶¶ 12-19.

Charboneau asserts that upon Aviva USA's receipt of Ms. Deck's letter, Paul Charboneau was entitled to benefits due under the annuity contract, i.e., the cash surrender value, and that that right passed to his estate upon his death. The Kansas Action asserts that the payment of death benefits to the named beneficiary in lieu of paying the cash surrender ...

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