2013 0905 - LC - Johnston & Johnston v Conseco - 5th Circuit Court of Appeals - 13-30010 - Oral Argument - mp3

    • 41:00-43:00 - Defense Attorney - re: Planned Premium / Required Premium
      • Well, your Honor, when I first started I said that this is a very simple and straightforward issue.
        • The question is when was the policyholder required to pay a premium under the terms of the policy. 
      • All opposing council had to do was come up here and tell you where in the policy it says that Johnston and Johnston was required to make a premium payment before the end of the Grace Period.  And he didn't do it.  It's because he can't do it.
        • Instead what you heard were analogies about gas tanks.
        • The general definition of Grace period that is used in other policies.
        • You didn't get any reference to the terms of the policy.
      • Judge Carl Stewart to you point you mentioned that the payment of premium shouldn't be a mystery.  What did they bargain for?
        • This is exactly what they bargained for.  They bargained to have a planned annual premium.  It's not required to be paid.
          • ⇒  The plan when the policy is issued is pay this premium every year and that will sustain the policy.
          • You can pay more than that or you can not pay at all.
        • It gives the policyholders, and this is a sophisticated policyholder who had an accountant running the transaction for then assume that discretion.
          • And then the policyholder failed to make that premium payment.
          • And this is whats on the Policy Data Page, Bold all Capital Letters "IT IS POSSIBLE THAT COVERAGE WIll EXPIRE PRIOR TO THE MATURITY DATE SHOWN WHERE EITHER NO PREMIUMS ARE PAID FOLLOWING THE INITIAL PREMIUM OR SUBSEQUENT PREMIUMS ARE INSUFFICIENT TO CONTINUE COVERAGE TO SUCH DATE."
  • 11-blank
  • **12-Policy Mechanics
  • **13-Generic Dictionary Definitions vs Contract Definitions, Contractual Interpretation vs Statutory Interpretation
  • 14 - Turner v OMB, Louisiana Case, was there a premium ever tried to pay, accountant tried to pay after the policy was terminated, never sent to conseco, Boring Case (19 ),
  • **15 - no obligation to pay until the grace period began and paid before the end of the Grace period,  if anything was past due it was the monthly deduction premium payment,
  • absurd consequences, increase / decrease cash holdings,
  • Adam -
  • Legally incorrect, Due date, incorrect terms,
  • Legally incorrect use of the terms, calculation of premium, strange creature, there's no premium due date, only continues as long as it has , akin to a car/gas tank,
  • 20 - Judge Carl Stewart - usually the Policy Due Date is not a mystery.  The amount of the premium.  What did the parties bargain for….drain cash surrender policy… what was the point of the buying the policy…. You just have a piece of paper…..
  • 21 - ADAM:
  • 22-Adam
  • 23-Judge Questions Adam  -Turner case - Flexible Premium policy, Grace notice,
  • 24 - Adam - Payable- "Anytime we will accept premiums", Boring Case , (Default, lapse, termination), First American Case,
  • (29) - **25 - ADAM: Definition "Grace Period" - Woman Judge - That's not how it's used in this policy, you hav
  • 26 - Woman Judge - Idea came from the Head of Zeus (District Court Judge) - Yep, that's resonsponsive
  • 27 -
  • **28 - Judge - How much was this policy for ….. Grace period… 22 times….
  • 30 - Lapse issue - Woman Judge - Yeah, straighten me out on that
  • 40 -Judge- You got your Moneys worth.
  • 40:30 - - Straighten us out here - Judge: Who wrote this policy.
  • 40 - Judge Carolyn King: My Father said - Don't ever buy a Flexible Premium policy, he was right on the money.
  • 4 - Attorney: Simple, required premium payment. This is exactly what the parties bargained for, sophisticated policyholder, Policy Data Page- lapse
    • This is exactly what the parties bargained for. They bargained for Planned Annual Premium.
  • 41 - Defense - What did they bargain - Planned Premium - Will Sustain the policy. Policy Data Page -
  • 41 - Defense Attorney -  
  • 43 - Defense...-when payable due
  • 45:30 - Judge - What are you asking us to do?