A judge in The U.S. District Court in Honolulu ruled that those who lost in annuities cannot bring a class-action suit against the annuity insurer, despite potential misleading and deceptive actions by the insurance firm. [Yokoyama et al. vs. Midland National Life Insurance Company.]
Lawyers representing the plaintiffs in the case alleged the defendant, Midland National Life Insurance Company, sold elderly Hawaiians inherently unsuitable, deceptive indexed annuity products that were designed to hide the true cost of an early contract cancellation.
The court cited two reasons it denied the class action against Midland. The first was that, whether or not Midland’s actions were misleading or deceptive, different sales pitches by different insurance salespersons were made to those purchasing the annuities, therefore the investors did not have similar claims. The second, said the judge, was that the losses were not caused by the alleged misleading actions, but by changes in the securities market.
A comparison would be to say that: Although batches of tires were defective, the tire salespersons made different statements about how good the tires were and, although the tires exploded in the summertime, it was the heat not the tires that caused the explosions.
Sound Stupid? It is!
Yet, this is just another blow to investors who have been decimated court rulings over the past few years which have denied their claims against large financial firms. Once again, as the judge admitted, the court decision was based solely on procedural grounds, without any consideration of the actions which are claimed to have harmed those sold the annuities.
This is what those crying for “tort reform” and against “frivolous law suits” have been seeking all along: Change the law so insurance companies will not have to pay grandpaw when he is sold an annuity as a safe place for his pension savings, only to have the annuity lose half its value.
This may not have what you had in mind when you voted for those who said the the court system should be changed – but it is what you got. The question now is: How many legal rights will Americans have to give up before they “Get it?”
By: William S Shepherd
William Shepherd is the founder of the law firm of Shepherd Smith and Edwards a securities law firm that represents investors seeking recovery of losses in their accounts at investment firms. Cases such as these DO NOT prevent nvestors from seeking their own indivisual cliams against those who have decieved them. If you or someone you know has suffered investment losses, contact Shepherd Smith and Edwards today.