Fairbanks v. Farmers New World Life

  • 2xxx- LC - Fairbanks v. Farmers New World Life  ---  [BonkNote]
    • 2008 - LC - Fairbanks v. Farmers New World Life, California Superior Court
    • 2011 - LC - Fairbanks v. Farmers New World Life Ins. Co.
      • 197 Cal. App. 4th 544, 128 Cal. Rptr. 3d … - Cal: Court of Appeal, 2nd …, 2011 - [link-Google Scholar] 
    • 2016 - LC - Fairbanks v. Farmers New World Life Ins. Co.
    • CASE NO. BC305603 - (The Honorable Anthony Mohr, Presiding)
  • A survey was used in Fairbanks v. Farmers New World Life Insurance Co.85 to defeat a showing of materiality.
    • In that case, defendants relied on a survey commissioned by plaintiff’s counsel, in which 500 policyholders were asked if they would have purchased their policies had it been disclosed that the policies were not permanent.
    • A total of 47.4% of the respondents said they would still have purchased the policies.86
    • Citing the survey results, the court found that the materiality issue was subject to individual proof, and affirmed the lower court’s denial of class certification.87
    • <WishList - Survey?

2016 - LR - Recent Trends in the Use of Surveys in Advertising Law Disputes; an Update on the Case Law, by Kenneth Plevan - 45p

 

  • 2008 0703 - ACLI - Amicus Brief - Fairbanks v Sup. Ct. - Am. Council of Life Insurers (ACLI) - 26p 
  • 2. As admitted by Joel Kuni, Farmer’s Product Development Actuarial Manager, in his deposition of 5-7-2003, at page 53, (a true and correct copy of Mr. Kuni’s depo excerpt is attached hereto as Exhibit 3), “the minimum premium is not sufficient and never was sufficient to keep the policy in force all the way to maturity.”
    • In spite of the fact that Farmers knew that policies would self-destruct and it was discussed at the highest levels of the company in Interest Committee meetings, as shown by the Interest Committee minutes of 2-17-1993, Farmers took no action, other than to continue to take policyholder’s money, which continues until today.
    • A true and correct copy of the 2-17-1993 Interest Committee minutes is attached hereto as Exhibit 4. - <WishList>
  • 3. Even if the policyholder paid the target premium, which is the amount an agent can collect full commission on (which Plaintiff alleges has the effect of dissuading the agent to sell at a higher premium) the policy will still lapse.
    • Mr. Kuni admits at page 109 of his deposition (a true and correct copy is attached hereto as Exhibit 7) that “. . . the target premium, again, did not guarantee that the policy would last all the way to maturity under any given assumption.” - <WishList>
  • 7. By failing to define the above terms, the relationship or similarity of those terms in simple language, without a large and effective warning, Farmer’s effectively misled and defrauded policyholders and hid the fact that all policies where anything below the maximum premium was paid would self-destruct (lapse).
    • This is exactly what will happen to Ms. Fairbanks, individually and/or has happened or will happen to all other FFUL policyholders.

--  Second Amended Class Action Complaint for Compensatory and Punitive Damages and Injunctive Relief For:

  • The complaint set forth a litany of alleged facts misrepresented or concealed from policyholders, including,..... (d) Farmers encouraged setting the premium for FFUL policies no higher than a "target" rate, by its commission structure; however, policies would lapse when only the target premium was paid;
  • Plaintiffs also noted that Farmers's computerized rate-setting program would inform agents of the minimum and target premiums, thus suggesting that the premium be set between these two numbers, and no higher.
  • Plaintiffs' argument regarding the underfunding of the FUL policies was more direct.
    • As Farmers set the premiums on these policies, it was solely within Farmers's control to establish initial premiums high enough to accrue sufficient interest so that the policies would be on track to last until maturity. 
    • Farmers set the premiums based on a presumed 11.5 percent interest rate, which plaintiffs argued was unrealistically high, and would result in the policies lapsing.

2011 - LC - Fairbanks v. Farmers New World Life Insurance - Scholar.google.com

  • The CLRA prohibits certain “unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer.” Cal. Civ. Code § 1770(a) (emphasis added).
  • The CLRA defines “goods” as “tangible chattels bought or leased for use primarily for personal, family, or household purposes,” and “services” as “work, labor, and services for other than a commercial or business use, including services furnished in connection with the sale or repair of goods.” Cal. Civ. Code § 1761(a), (b). Interpreting these definitions, the California Supreme Court held that the CLRA’s protections do not extend to the sale of life insurance. Fairbanks v. Superior Court, 46 Cal. 4th 56, 61 (2009).
  • The Court reasoned life insurance contracts are not “tangible chattels,” and therefore not “goods” under the CLRA. Id. The plaintiffs in that case also argued the work and labor in connection with helping consumers select insurance policies, assisting policyholders to maintain their policies, and processing claims were all “services” under the CLRA. Id. at 65. The Court rejected that argument, as well: “Using the existence of these ancillary services to bring intangible goods within the coverage of the [CLRA] would defeat the apparent legislative intent in limiting the definition of ‘goods’ to include only ‘tangible chattels.’” Id.
  • Following Fairbanks, the California Court of Appeal concluded the CLRA’s prohibitions do not extend to mortgage loans or the ancillary services connected with servicing home loans. Alborzian v. JP Morgan Chase Bank, N.A., 235 Cal. App. 4th 29, 33 (2015) (“Fairbanks applies with equal force to lenders.”).
    • Similarly, “[m]ost federal district courts that have considered the issue since Fairbanks likewise have held that the CLRA does not apply to mortgage loan servicing.” Jamison v. Bank of Am., N.A., 194 F. Supp. 3d 1022, 1031 (E.D. Cal. 2016). 

2022 - LC - Case No. 21-cv-04539-SK - DAVID SUSKI, et al., Plaintiffs,
v. MARDEN-KANE, INC., et al., Defendants. - ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTIONS TO DISMISS - Regarding Docket Nos. 87, 88  - (p333--) - 408p