Opinion ID: 2977962
Heading Depth: 2
Heading Rank: 2

Heading: The Receiver’s Suit Against MLIC

Text: On July 30, 2003, the Receiver initiated this suit against MLIC before the same district court presiding over the Liberte-related litigation, seeking rescission of the three fraudulently procured insurance policies and the return of the premiums Liberte had paid through VES before the premium payments lapsed, plus interest. In the complaint, the Receiver sought a declaratory judgment that the policies are void ab initio. The Receiver identified himself in the complaint as “the Receiver for the investors’ interests” in both the forfeiture action against Liberte and Liberte’s action against the escrow entities. The complaint then referred to the previous orders establishing the 3 Liberte’s action against VES, CFL and Capwill, and the government’s civil forfeiture action have already led to numerous appeals before this Court. See Mohnkern v. Prof’l Ins. Co., 542 F.3d 157 (6th Cir. 2008); Liberte Capital Group, LLC v. Capwill, 248 F. App’x 650 (6th Cir. 2007); Liberte Capital Group, LLC v. Capwill, 462 F.3d 543 (6th Cir. 2006); United States v. Jamieson, 427 F.3d 394 (6th Cir. 2005); Liberte Capital Group, LLC v. Capwill, 421 F.3d 377 (6th Cir. 2005); Liberte Capital Group, LLC v. Capwill, 148 F. App’x 426 (6th Cir. 2005); Liberte Capital Group, LLC v. Capwill, 148 F. App’x 413 (6th Cir. 2005); Liberte Capital Group, LLC v. Capwill, 126 F. App’x 214 (6th Cir. 2005); Liberte Capital Group, LLC v. Capwill, 99 F. App’x 627 (6th Cir. 2004); Javitch v. First Union Sec., Inc., 315 F.3d 619 (6th Cir. 2003). No. 08-3342 Wuliger v. Manufacturers Life Ins. Co. (USA) Page 5 receiverships in the United States’ action against Jamieson and Liberte, as well as Liberte’s action against Capwill, VES and CFL; the complaint “incorporated [the orders] by reference[.]” (Joint Appendix (“J.A.”) at 45.) The Receiver’s complaint against MLIC conceded that Liberte “solicited previously uninsured individuals who were terminally ill and/or senior citizens in poor health to engage in ‘wet ink’ viatical sales,” and described this conduct as “a fraud perpetrated by Liberte[.]” (J.A. at 46, 48.) The Receiver claimed that MLIC “has been unjustly enriched through the premium payments made with funds obtained from the investors because it assumed no risk with regard to the polic[ies].” (J.A. at 52-53.) The complaint demanded that the insurance premiums already paid to MLIC “be returned to the Receiver for distribution to the Liberte investors.” (J.A. at 53-54.) On August 23, 2004, MLIC filed a motion for summary judgment seeking to dismiss the action against it, and on September 10, 2004, the Receiver cross-moved for summary judgment seeking relief pursuant to its rescission claim. On February 11, 2008, approximately three and one-half years after the parties filed their motions, the district court granted summary judgment to the Receiver and denied MLIC’s motion; the court ordered the rescission of the fraudulent policies and the return of the insurance premiums MLIC had received to date, plus interest. In granting summary judgment to the Receiver, the district court first found that the Receiver had standing to sue MLIC, as the representative of “Liberte and the Capwill entities.” (J.A. at 85.) The court noted that Liberte was paying MLIC the insurance premiums of the three fraudulent policies after purchasing the policies from the viators, and stated, “[t]o the extent that the [R]eceiver represents the interests of Liberte and seeks to recover those premiums [from MLIC’s policies] on its behalf, the Plaintiff has alleged an injury in fact.” (J.A. at 85.) After finding that the Receiver had standing to sue, the district court then found that the insurance policies were void ab initio and subject to rescission, because the viators lacked an insurable interest when they procured the policies. The court also found the Receiver was entitled to a return of the premiums under a theory of unjust enrichment, because “[t]he payment of premiums on a void policy and retention of those premiums by [MLIC] is contrary to the notions of fairness.” (J.A. at 93.) MLIC timely appealed. No. 08-3342 Wuliger v. Manufacturers Life Ins. Co. (USA) Page 6