Mahan v. Charles W. Chan Insurance Agency, Inc.

An elderly couple stated an elder abuse claim against an insurance agency that schemed to gut their whole life insurance policies and replace them with a less desirable policy, all for the purpose of earning a larger commission.  An elderly couple stated an elder abuse cause of action against the insurance agency which arranged to gut the whole life insurance policies which the couple had purchased as a means of transferring wealth to their descendants and buying instead more costly and less satisfactory insurance for which the defendants earned large commissions.  The defendant’s scheme deprived the plaintiff couple of property even though they had contributed the life insurance policies to a trust for the benefit of their descendants.  The scheme deprived the trust of the cash surrender value of the original policies and greatly increased the annual premiums that plaintiffs had to pay though for less satisfactory coverage.  The commissions paid defendants were also a deprivation of plaintiffs’ property, even if those commissions were paid by the trust, not plaintiffs.  Defendants knew or should have known that their scheme would harm plaintiffs, and they used their position of trust and expertise to unduly influence plaintiffs to accept the scheme.

California Court of Appeal, First District, Division 4 (Streeter, J.); June 2, 2017; 2017 WL 2391817

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