Opinion ID: 781284
Heading Depth: 2
Heading Rank: 1

Heading: The Chamness Policy

Text: 20 On February 11, 1993, Srein, as Plan Administrator, directed Daly to forward $72,500 from the Money Purchase Pension Plan to Findco's escrow agent, Neil Katim, to invest in a Participation Agreement for a 100% interest in the Chamness policy. As instructed, Frankford forwarded the $72,500 to Findco's escrow agent, who paid it to Chamness. (JA 1569.) Pursuant to the Agreement, Chamness conveyed the policy, including a right to its proceeds to Findco. 21 The Agreement's terms required Findco to obtain an insurance change of beneficiary form from Philadelphia Life naming the Escrow Account and the Participant as the proportional, percentage, irrevocable beneficiaries of the Policy.... (JA 1569.) Findco failed to do so. Meanwhile, Frankford placed the Agreement in its vault and assigned it an arbitrary, random number[] because the participation agreements were not registered investments, [and] they did not have pre-existing numbers assigned to them. (JA 25.) Then, on February 17, 1993, unbeknownst to either Srein or Frankford, Findco entered into a second participation agreement with D.P. Partnerships for a 100% interest in the same Chamness policy. (JA 25.) 22 After Chamness passed away, on August 31, 1994, Philadelphia Life forwarded the proceeds of that policy to Findco's escrow agent. At Findco's direction, the escrowee divided the net proceeds from the Chamness policy between D.P. Partnership and Findco (for its commission); Srein's Plan received nothing. (JA 738.) Nevertheless, Frankford, apparently oblivious of Chamness' death and the distribution of the policy proceeds to D.P. Partnership, continued to list the Chamness policy as an asset of the Srein Money Purchase Plan and continued to charge the Plan a trustee fee based upon the value of that asset through the year 1999. (JA 119, 1123.)