United States District Court, D. Idaho
RON LANCASTER, an individual, and DONITA LANCASTER, an individual, Plaintiffs,
ROBERT KORDSIEMON, an individual, Defendant.
MEMORANDUM DECISION AND ORDER
Lynn Winmill Chief Judge United States District Court
before the Court is a Motion for Summary Judgment filed by
plaintiffs Ron and Donita Lancaster (Dkt. 37) (collectively
"the Lancasters") and a Motion for Summary Judgment
(Dkt. 45) filed by defendant Robert Kordsiemon
proceeding involves a series of life insurance policies sold
by Kordsiemon to the Lancasters. The Lancasters allege that
the life insurance policies and financial advice was
fraudulent and that the Lancasters relied upon Kordsiemon in
purchasing the allegedly fraudulent policies.
Donita Lancaster are an elderly married couple, ages 79 and
78 respectively. Statement of Material Facts, at 3,
¶ 1, Dkt. 45-1. Kordsiemon is an independent sales agent
who has worked for several insurance and annuity companies
through his own business venture, Kordsiemon, LLC. Beginning
in 2004, Kordsiemon began making house calls to the
Lancaster's home and established a friendly business
relationship. Id. at 5, ¶ 4. In approximately
June 2007 Kordsiemon sold the Lancasters a "relatively
small" annuity contract that was listed in Ron
Lancaster's name and had an initial premium of $60, 000.
Id. at 7, ¶ 6. This annuity was sold by the
year later, Kordsiemon sold the Lancasters a second financial
package for a $1.5 million life insurance policy on
Donita's life, from the insurance company ReliaStar.
Based on discussions between the parties, the Lancasters
allegedly purchased the ReliaStar policy with the primary
intention of selling the policy for profit at a later time.
Id. at 7, ¶ 7. The Lancasters allege that they
relied upon Kordsiemon's financial advice that purchasing
the policy and reselling it was in their financial interest.
While Donita's application for the policy expressly
denied that they intended to resell the policy, the
Lancasters did not fill out the policy themselves.
policy application "sat" for over a year because
the Lancasters could not afford the premium associated with
the life insurance policy. Id. at 9, ¶ 9. At
Kordsiemon's suggestion, the Lancasters obtained a
reverse-mortgage to help pay for the new life insurance
policy through a third party. Id. at 8, ¶ 7.
Although the reverse-mortgage was purchased through a
separate agent, Kordsiemon helped fill out at least portions
of the reverse mortgage application on the Lancaster's
behalf. After obtaining the reverse mortgage, the Lancasters
continued to work with Kordsiemon to obtain the second life
insurance policy. In order to obtain the lowest premium
price, Donita Lancaster applied for a "super
preferred" health rating. Id. at 11, ¶ 12.
Although such a rating secured a lower premium price, Donita
Lancaster's good heath ultimately made the policy very
difficult to sell, at least for the profit they intended to
make. Id. The Lancasters provided an initial payment
of $71, 860.64 that ensured the policy would survive the
period of contestability. Id. at 12, ¶ 13.
2010, Kordsiemon sold the Lancasters a second life insurance
policy worth approximately $1.3 million-this time on the
"borrowed life" of one of the Lancaster's
daughters. Id. at 12, ¶ 14. The policy was also
purchased from Athene. Id. at 14, ¶ 17. The
Lancasters allegedly bought this second policy on the
understanding that the value of the policy would grow, and
that their daughters would be able to draw from the funds
without paying taxes on the investment. Id. at 12,
¶ 13-14. Kordsiemon also sold the Lancasters three
additional Athene annuity products into which they diverted
many of their remaining liquid assets. Id. at 13,
¶ 16. The Lancasters invested significant funds up front
into these policies, including $50, 791.22 on the Athena
"borrowed life" policy, $50, 000 on Athene annuity
policy 203502, $14, 562.29 on Athene annuity policy 205528,
$16, 654.87 on Athene annuity policy 205529. Id. at
13, ¶ 16.
this time, the Lancasters tried to sell the original $1.5
million insurance policy, but could not find a buyer at a
desirable price, apparently because of Donita Lancaster's
good health. Instead, the Lancasters were paying monthly
premiums of approximately $1260 on Donita'
Lancaster's policy, and $870 on the "borrowed
life" policy, totaling $2, 170 per month in premium
payments. Id. at 15, ¶ 20. Over the next two
years the premiums continued to rise. Id. at 21,
2014, the Lancasters claim they began to feel as though they
had been "deceived." Id. 16, ¶ 22.
The Lancasters were having difficulty paying the rising
monthly premium payments, and eventually their insurance
policies lapsed. Id. at 17, ¶ 23. The
Lancasters claim they were unable to pay the premiums because
they had committed "over half of their entire liquid net
worth.. .to various indexed and fixed annuities with
high-surrender schedules and life insurance."
Id. at 17, ¶ 23. The Lancasters estimate they
spent approximately $290, 563.78 on the products sold by
Lancasters filed lawsuit against Kordsiemon and the insurance
companies, which was removed to this Court on June 30, 2015.
The Lancasters allege claims for fraud, grand theft, and
racketeering. See Am. Compl, Dkt. 9. Athene is no
longer party to this litigation, pursuant to an out-of-court
settlement agreement. Id.
judgment is appropriate where a party can show that, as to
any claim or defense, "there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a
matter of law." Fed.R.Civ.P. 56(a). One of the principal
purposes of the summary judgment "is to isolate and
dispose of factually unsupported claims Celotex Corp. v.
Catrett, 477 U.S. 317, 323-24 (1986). It is "not a
disfavored procedural shortcut, " but is instead the
"principal tool [ ] by which factually insufficient
claims or defenses [can] be isolated and prevented from going
to trial with the attendant unwarranted consumption of public
and private resources." Id. at 327. "[T]he
mere existence of some alleged factual dispute between the
parties will not defeat an otherwise properly supported
motion for summary judgment." Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 247-48 (1986). There must be
a genuine dispute as to any material fact - a fact
"that may affect the outcome of the case."
Id. at 248.
cross-motions for summary judgment are filed, the Court must
independently search the record for factual disputes.
Fair Housing Council of Riverside County, Inc. v.
Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001). The
filing of cross-motions for summary judgment - where both
parties essentially assert that there are no material factual
disputes - does not vitiate the court's responsibility to
determine whether disputes as to material fact are present.
moving party bears the initial burden of demonstrating the
absence of a genuine dispute as to material fact.
Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir.
2001) (en banc). To carry this burden, the moving party need
not introduce any affirmative evidence (such as affidavits or
deposition excerpts) but may simply point out the absence of
evidence to support the nonmoving party's case.
Fairbank v. Wunderman Cato Johnson, 212 F.3d 528,
532 (9th Cir.2000).
shifts the burden to the non-moving party to produce evidence
sufficient to support a jury verdict in her favor.
Deveraux, 263 F.3d at 1076. The non-moving party
must go beyond the pleadings and show "by her [ ]
affidavits, or by the depositions, answers to
interrogatories, or admissions on file" that a genuine
dispute of material fact exists. Celotex, 477 U.S.
the Court is "not required to comb through the record to
find some reason to deny a motion for summary judgment."
Carmen v. San Francisco Unified Sch. Dist, 237 F.3d
1026, 1029 (9th Cir. 2001) (quotation omitted). Instead, the
"party opposing summary judgment must direct [the
Court's] attention to specific triable facts."
Southern California Gas Co. v. City of Santa Ana,
336 F.3d 885, 889 (9th Cir. 2003).
Cross-Motions for ...