Opinion ID: 2782885
Heading Depth: 2
Heading Rank: 2

Heading: The Guild Policy

Text: In September of 2005, insurance broker Gary Richardson persuaded octogenarian Rosalind Guild to participate in a $10 million STOLI scheme by offering her free life insurance and monetary compensation. To implement the scheme, Richardson established an irrevocable trust to hold the Guild policies. Richardson then submitted two life insurance applications to Pruco, each seeking a $5 million policy and listing Guild’s daughter as primary beneficiary and the trust as contingent beneficiary. It was understood that Guild’s daughter would not receive the death benefit from the policies and that any beneficial interest would eventually be sold to an investor with no insurable interest in Ms. Guild’s life. In support of the applications, Richardson submitted a fraudulent financial statement portraying Guild’s net worth as $19.2 million and annual income as $345,000. Pruco issued the Guild policies on October 21, 2005. A third party paid over $2 million in premiums over the course of the next few years. Then, on February 13, 2008, Pruco received a request to change the ownership and beneficiary of the policies from the Guild Trust to securities intermediary, U.S. Bank, N.A., in connection with the sale of the beneficial interest in the policies to an investor. Pruco made the requested change. 7 Case: 13-12135 Date Filed: 02/27/2015 Page: 8 of 21 On December 17, 2012, approximately seven years after it had issued the Guild policies and almost five years after it had approved the change in beneficiary and ownership to U.S. Bank, Pruco filed suit against U.S. Bank asserting that the policies were void ab initio under § 627.404. U.S. Bank filed a motion to dismiss Pruco’s complaint. Analyzing the interplay between the two Florida statutes differently than did the district court in the Berger case, the district court in Guild found that, because Pruco had run afoul of the two-year time limit provision to contest the policy, Pruco’s claim was barred. Accordingly, the district court granted U.S. Bank’s motion to dismiss Pruco’s claim. See Pruco Life Ins. Co. v. U.S. Bank, No. 12-24441-CIV, 2013 WL 4496506, at ,  (S.D. Fla. Aug. 20, 2013) (Moreno, J.).