Roundup: Ameriprise Wins ‘Fiduciary Case’ Before Pa. Supreme Court
June 29, 2017 by Alex Padalka
View the original story at Roundup: Ameriprise Wins ‘Fiduciary Case’ Before Pa. Supreme Court
An advisor who sold an underfunded life insurance policy did not breach fiduciary duty, the Pennsylvania Supreme Court has ruled. The decision represents a legal victory for Ameriprise Financial, which employed the advisor at the time of the disputed action.
In a new judgement, the state’s top justices found that plaintiffs claiming breach of fiduciary duty must first prove that they gave up decision-making to their insurance broker or financial advisor, the Legal Intelligencer writes.
Justice Christine Donohue, in issuing the majority opinion, said that in order to claim a fiduciary breach, the plaintiffs must prove that decision-making was ceded to the advisor or broker and not merely demonstrate that they relied on the broker’s expertise, according to the publication. The Supreme Court’s ruling reverses a 2015 decision by the Superior Court to allow plaintiffs suing former Ameriprise Financial advisor Bryan Holland to proceed on claims of a fiduciary duty breach, according to the publication.
The case involves plaintiffs Eugene and Ruth Yenchi who claimed that Holland sold them an underfunded life insurance policy in 1996, the Legal Intelligencer writes. Holland recommended that the couple consolidate separate life insurance policies into one and assured them that their premiums would stay the same and end in 11 years, according to the publication. He also recommended that they buy a deferred variable annuity that he saw would mature by the time Ruth Yenchi turned 65, the Legal Intelligencer writes.
The Yenchis did as Holland advised but then learned from an independent review that the life insurance policy was underfunded and that their premiums would go up and never stop, according to the publication. They also learned that the annuity, meanwhile, would only mature when Ruth Yenchi turned 84, according to court papers cited by the Legal Intelligencer. They sued Holland for breach of fiduciary duty, as well as for bad faith, negligent supervision, fraudulent misrepresentation and more, according to the publication.
Ameriprise told the Legal Intelligencer in an emailed statement that they were pleased with the high court’s “assessment of the facts.” Lawyers for Holland, Ameriprise and the Yenchis didn’t respond to the publication’s requests for comment.