Posts tagged #Ringler

Structured Settlement Broker in Texas Indicted for Fraud

Woodyard, 65, a well-known structured settlement broker, was a long time broker and associate of the parent company in this case, called Ringler Associates Incorporated, or RAI. Under RAI was a company called Ringler Associates of North Texas Incorporated, or RANT, as well as another company called Ringler Insurance Agency, and others doing insurance business on behalf of RAI. RANT would settle insurance claims mostly by selling structured settlements through annuities that were being sold through Ringler Insurance Agency. Annuities are commonly used in structured settlements to compensate personal injury victims or workers’ compensation claimants.

ACE entered the picture because of insurance policies covering United Nations employees who were killed or injured on the job. ACE used Roger Rich & Co. and Vanbreda International to handle beneficiary claims against ACE. Roger Rich and Vanbreda purchased several annuities from RANT. The indictment alleges that Woodyard’s misconduct came into play at that point. Woodyard allegedly instructed Roger Rich and Vanbreda to send funds directly to him, instead of MetLife, to purchase annuity contracts. By gaining unlawful access to ACE funds like this, Woodyard was able to bypass the normal role of the insurance company, preventing MetLife from not only issuing legitimate annuity contracts to make agreed upon payments, they also circumvented the Ringler Insurance Agency and depriving them of commissions on annuity contracts they would typically receive on legitimate sales. Woodyard would thus retain all commissions PLUS the premium which was to have been paid to Met Life. Wired funds from London are reported to total over $4.6 million. 

In an effort to conceal his theft, Woodyard, according to the article in InsuranceNewsnet.com, would make occasional "lulling" payments to beneficiaries who were supposed to receive regular annuity payments, giving them the false impression that the source of the money was an insurance company. Those payments reportedly add up to over $800,000. “The indictment alleges that Woodyard used the majority of ACE funds for his own personal financial benefit, including paying for personal living expenses, gambling habits, travel expenses, and the purchase of four vehicles, including three Mercedes Benz and one Corvette, as alleged in Counts seven through ten of the indictment.

If Woodyard is convicted on all counts, he could be sentenced to as up to 160 years in prison and $2.5 million in fines.

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Posted on April 27, 2016 .

Westrope and Kelly v. Ringler Associates Inc, regarding ELNY structured settlement shortfall. A win for the plaintiffs

In a decision dated 12/5.14 in US District of Oregon, in the case of Marie Westrope and Reggie Kelly v Ringler Associates Inc, Paul Hoffman, and DOES 1-100, for the first time in my professional life I saw a court dismiss the arguments of defense brokers regarding no statutory or fiduciary duty of care to plaintiffs and instead determined, that under Oregon law, that defense structured settlement brokers owed plaintiffs a special duty of care under a third party beneficiary theory. 

A full copy of the the decision is available here, or you can search under Case No. 3:14-cv-00604-ST, USDC, Oregon, Portland Division, Magistrate Judge Janice M. Stewart. 

What does this all mean for plaintiffs in the Executive Life of New York litigation which seeks' class status in 26 states, where it is alleged that Ringler Associates brokers sold ELNY contracts using qualified assignments which exposed plaintiffs to excessive financial risk and which relieved defendants of liability to fund payments in the event of an insolvency, which in fact is what occurred in 2013. 

What is stunning about this to me is that for the first time in decades we had a major annuity brokerage firm arguing passionately that when they are working on a structured settlement, they are in fact working specifically on behalf of the defendants and "that defendants (Ringler) owed no fiduciary duty to plaintiffs as their broker", a finding the court agreed with factually and which should be a reminder to trial lawyers all over the country that just because a defense broker says he is working for you, when pressed in court they will vehemently deny that they have ANY duty to you or your injured client what so ever.

Instead of fiduciary standards of care, the Court this time found that Oregon law provided a level of care responsibility for the broker to be held, as the annuity, while purchased and funded by the defendants, was an " annuity intended to benefit plaintiffs and the broker signed both applications". ( emphasis added by the court). This status as benefits intended for plaintiffs thus demanded a heightened duty of care from defendants and to exercise reasonable care in the procuring of structures settlement annuities. As such the negligence claim asserted by the plaintiffs survived under Oregon law due to their status as third party beneficiaries. Again, what this means is that a standard of care was recognized by the court in this decision that prevented the standard industry defense that their client is the defendant and they have no duty to the plaintiff, an argument plaintiff experts have been pointing out to trial lawyers for decades as to why they must engage their own experts to protect their clients in a structured settlement negotiation. 

Not all the news was bad for the defense as the court found that Ringler did NOT have a continuing duty to inform plaintiffs over time of ELNY's declining financial condition, as their was no way the contracts could be surrendered or replaced after issuance. However, I do find it interesting that no one raised the issue that a robust secondary market for the sale of ELNY contracts existed for much of the later part of the 1990's and early 2000's based on the fact it was protected income under the supervision of the NYLB at that time. Possibly that will be pled again at a future date, or the more likely the plain language prohibiting surrender and commutation, will be sufficient to win this argument every time for defense brokers. 

Also, another clear win was on the statutory issue of whether or not brokers have liability for contracts written on behalf of beneficiaries in states where Executive Life of NY was not approved for sale. The court found clearly that was a violation of statutory law and allowed it to go forward as part of the case and complaint as well. 

I will cover this case again later this week in a video commentary, but suffice it to say that ELNY class action litigation was not killed in motions to dismiss and now will move to a district judge, with objections due Monday, December 22, 2014, and with responses due with in 14 days after that. 

The bottom line here is that the mythology that defense brokers working for defendants will be able to safely hide behind the "no fiduciary duty" argument in perpetuity, has for the first time been exposed. Whether the magistrate judges ruling and thinking on this carries forward to US District Court and to trial remains to be seen. However, I will state again the key point for trial lawyers and that is you need to get your own advisor and stop using defense brokers if you want to make sure that if something like this ever occurs again, that they don't immediately dive for cover behind the kind of arguments which were made in this case so far.

Our profession has come a long, long way since the early to mid 1980's when these contracts were sold, but one area we need to further bolster is greater clarity on who actually has a duty to protect the future of the plaintiff as it is abundantly clear that defense broker argue that they have no such duty in cases such as this. 

Posted on December 9, 2014 .