FKB’S ANDREW KOWLOWITZ AND SHARI SCKOLNICK OBTAIN DISMISSAL OF CLAIMS AGAINST A LAW FIRM ARISING FROM THE DISTRIBUTION OF $10 MILLION IN LIFE INSURANCE PROCEEDS

04/27/2018

FKB successfully obtained a pre-answer dismissal on a motion to dismiss from Justice Saliann Scarpulla, Supreme Court, New York County.

In this matter, FKB’s client represented one of several investors in the purchase of a STOLI (Stranger Originated Life Insurance) Policy obtained from Transamerica Life Insurance Company (“Transamerica”), and was adversarial to Plaintiffs in a dispute regarding the disbursement of $10 million in Policy Proceeds. The dispute over the Policy Proceeds resulted in multiple federal lawsuits across the United States, and the named defendants in this action were all attorneys who represented or worked with Plaintiffs’ adversaries, in some capacity.

After Transamerica received competing claims to the Policy Proceeds, it refused to distribute the Policy Proceeds to Plaintiffs, resulting in Plaintiffs filing a breach of contract claim against Transamerica in the United States District Court for the District of South Dakota.  In response, Transamerica interpleaded the Policy proceeds into the Court and obtained an Order discharging it from the action.  Ultimately, after several years of litigation, the Plaintiffs were awarded the Policy Proceeds.

In this action, the Plaintiffs alleged that FKB’s client and the other defendant attorneys, in the course of representing Plaintiffs’ adversaries in the dispute, engaged in a “conspiracy” to prevent Plaintiffs from obtaining the Transamerica Policy proceeds.  Plaintiffs alleged that the defendant attorneys’ conduct, in representing Plaintiffs’ adversaries, amounted to tortious interference with contract.

In dismissing Plaintiffs’ claims against FKB’s client, the Court agreed with FKB’s argument that Plaintiffs’ claim for tortious interference with contract failed, as a matter of law, because Transamerica did not breach its contract with Plaintiffs by interpleading the Policy proceeds.  The Court held that “[w]here a stakeholder is allowed to bring an interpleader action, rather than choosing between adverse claimants, its failure to choose between the adverse claimants (rather than brining an interpleader action) cannot itself be a breach of a legal duty.”

If you have any questions about this decision, or the defense of attorneys in general, please contact Andrew Kowlowitz or Shari Sckolnick.

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