Opinion ID: 1103328
Heading Depth: 2
Heading Rank: 3

Heading: Tom Dake and Patti Dake

Text: Tom Dake has a bachelor's degree in accounting and a master's degree in business administration. In March 1983, the Dakes purchased a Whole Life 110 policy with a face amount of $75,000 from Alfa agent Neil Lord. Tom Dake and Lord knew each other because they had been classmates in a master-of-business-administration program. Tom Dake testified that Lord told him that he could pay premiums for an undetermined period and that the policy would then sustain itself from that period forward. Tom Dake also testified that Lord told him that the period during which he would pay premiums would depend on Alfa's earnings and the dividends Alfa paid on the policy. Lord provided Tom Dake with a spreadsheet and his own handwritten notes, in which Lord had written that after the tenth year the policy would become self-sustaining by virtue of its dividends. Lord, who is no longer associated with Alfa, testified that he did not inform the Dakes that the minimum-deposit payment plan used policy loans because he was not trained to describe the plan in such a manner. [2] The Dakes paid premiums for six years. Patti Dake testified that in February 1989 Lord told her that at that point the policy had become self-sustaining and that she needed to sign some paperwork relating to the self-sustaining aspect of the policy. Although the Dakes did not specifically submit a form requesting the minimum-deposit payment plan, Patti Dake signed a consent form, which provided that the premiums would be paid with the proceeds of the policy by an automatic premium loan. Patti Dake testified that she did not remember this transaction. According to Alfa, the Dakes received loan checks from Alfa; however, the Dakes did not use the loan proceeds to pay the premiums on their policy. Alfa also claims that the Dakes were sent notices indicating that their premiums were being paid by automatic loans as well as notices that explained the dividend and loan interest aspects of the policy. Tom Dake testified that he did not understand the notices and that he disregarded them because his agent told him to do so. The Dakes' policy is still in force and it has a death benefit in excess of $92,004. After the plaintiff policyholders purchased their policies and arranged to pay their premiums pursuant to the minimum-deposit payment plan, the Tax Reform Act of 1986 phased out the deduction for interest on consumer loans. Pub.L. No. 99-514, 100 Stat.2085 (1986). The plaintiff policyholders contend that this change in the tax laws eliminated the benefits of the minimum-deposit payment plan. On April 2, 1999, the plaintiff policyholders filed their complaint, and on September 21, 2000, they filed a motion for class certification. A class-certification hearing was held on March 19, 2001. No witnesses testified at the hearing. On January 23, 2002, the trial court entered an order striking 14 of the affidavits the plaintiff policyholders presented as evidence of Alfa's alleged misrepresentations. However, based upon the parties' briefs, other exhibits, and arguments at the hearing, the trial court concluded that the plaintiff policyholders met the requirements of Rule 23(a) and 23(b)(3), Ala. R. Civ. P. The trial court certified the following class: Every present or former Alfa policyholder who purchased a Whole Life 110 policy that has been placed on the Minimum Deposit Option or any beneficiary who received death benefits under a Whole Life 110 policy that had been placed on the Minimum Deposit Option. The trial court excluded from the class officers, agents or employees of Alfa or any entity in which Alfa has a controlling interest and members of their immediate family and the legal representatives, heirs, successors-in-interest or assigns of any excluded party. Alfa appeals pursuant to § 6-5-642, Ala. Code 1975, which authorizes an immediate appeal of a class-certification order. [3]