A Minnesota judge has denied Sun Life Assurance Co. of Canada's request to amend a complaint in a lawsuit alleging that 7 life insurance policies purchased by an 84-year-old businessman did not have an insurable interest.
Sun Life, Toronto, originally filed the complaint (Civil No. 07-3877) in U.S. District court in Minneapolis on Sept. 4, 2007. The suit named John Paulson, the purchaser of the policies as well as the agents in the transaction and several investors, including Coventry First LLC, Fort Washington, Pa.
Coventry ultimately moved to dismiss the complaint arguing that the complaint did not sufficiently allege that Coventry intended and agreed to purchase the policy when the defendant, John R. Paulson acquired it. The court granted the motion.
Following that dismissal, the other defendants asked for a similar dismissal because of the "identical" nature of the claims.
The latest order, signed on Sept. 3, 2008, states that Sun Life then asked the defendants to agree to an amended complaint and when the defendants declined, filed a request to file an amended complaint with the court.
In denying Sun Life its request, U.S. Magistrate Judge Susan Richard Nelson cited Sun Life's lack of "requisite specificity" that the defendants reached an agreement with defendant Paulson or "intended to purchase the policies at the time they were issued." The order continues, "Indeed, the allegations could refer to any person or entity" and "contains no specific factual allegations of intent."
The court order also notes that "the mere fact that a life settlement company purchased a policy from Paulson after the expiration of the contestability period does not establish that the company intended to purchase the policy when it was issued."
