WILMINGTON TRUST NATIONAL ASSOCIATION v. AMERITAS LIFE INSURANCE CORP (2026)

ORDER

This matter is before the Court on Plaintiff/Counterclaim-Defendant Wilmington Trust, N.A. (“Plaintiff” or “Wilmington Trust”) and Defendant Ameritas Life Insurance Corp.'s (“Defendant” or “Ameritas”) Supplemental Briefs (Docs. 127, 128) in support of their respective Motions for Summary Judgment (Docs. 85, 89). Having reviewed the parties' arguments, the record, and the decision from the Supreme Court of Georgia, Defendant Ameritas's Motion for Summary Judgment is granted, and Plaintiff Wilmington Trust's Motion is denied.

I. Background

This case arises out a dispute over a life insurance policy issued by Union Central Life Insurance Company (currently and collectively, “Ameritas”), in the amount of $6 million (the “Policy”). (“Am. Compl.,”Doc. 21 ¶ 1). The Court issued a detailed recounting of the factual record in its March 25, 2025 Order. (See Doc. 121). The Court relies on the factual history included therein and will not fully recount those facts here. However, the Court briefly summarizes the relevant facts and procedural history.

Wilmington Trust alleges that Defendant Ameritas failed to pay the death benefit due and owing under the Policy and that the Policy is valid and enforceable under either and both Florida and Georgia law. (Doc. 21 ¶ 2). This is because, according to Wilmington Trust, the Policy was not procured or caused to be procured upon the insured, and the Policy was supported by an insurable interest at its issuance. (See Doc. 85-1 at 12–16). In its Answer, Ameritas asserts counterclaims against Wilmington Trust, alleging that the Policy involves a stranger-originated life insurance (“STOLI”) that was manufactured on the life of Jacqueline Leone (the “Insured”) and is therefore in violation of Georgia's insurable interest laws and public policy. (Doc. 27 at 45). Specifically, Ameritas argues that the Policy issued by its predecessor on the life of Mrs. Leon was procured or caused to be cured by third-party investors who lacked an insurance interest in the Insured. (Doc. 90 at 9).

On March 25, 2025, the Court entered an Order (“Certifying Order”) analyzing the parties' positions. Having determined that there was “substantial doubt” as to the controlling legal standard on when a third party is complicit in the procurement of a policy, the Court certified the following three questions to the Supreme Court of Georgia:

1. Can a life insurance policy be void as an illegal wagering contract if, at the time the policy was procured, a third party was complicit in the procurement of the policy?

2. If the answer to the first question is “Yes,” under what circumstances would a third party be considered “complicit” such that it “procured or caused to be procured” a personal insurance contract upon another individual?

3. Can a life insurance policy be deemed to constitute an unlawful wagering contract if the complicity of the third party does not rise to the level of “procured or caused to be procured?” If so, then the Court respectfully seeks further guidance as to the circumstances that determine when the “complicity” of the third party rises to the level of violating Georgia public policy prohibiting illegal human life wagering and when it does not.

(Doc. 121 at 39); see also Crum v. Jackson Nat'l Ins. Co., 315 Ga. 67, 880 S.E.2d 205, 214 n.9 (2022). In response to the first question, the Georgia Supreme Court held that “a policy procured or caused to be procured upon another person would be void unless the benefits under the contract are payable to someone with an insurable interest in that life at that time, which would include, among others, the person whose life is insured.” Wilmington Trust, Nat'l Ass'n v. Ameritas Life Ins. Corp., 323 Ga. 657, 926 S.E.2d 635, 643–44 (2026). In other words, “if a policy on a person's life is ‘procured' by a third party (someone other than the person whose life is insured) or ‘caused to be procured' by that third party, it is void unless the benefits are payable to someone with an insurable interest in the life.” Id.

Then, turning to the second question, the Georgia Supreme Court concluded that “the procured or caused to be procured language of O.C.G.A. § 33-24-3(i)(2006) means that a third party has effectively obtained or acquired a life insurance contract on the life of another or has serve[d] as cause for obtaining such a contract, when circumstances indicate that the insured is acting as an instrumentality for a third party.” Id. at 646. In other words, the Supreme Court explained, “the ultimate question is who obtained the policy.” Id. (citing PHL Variable Ins. Co. v. Price Dawe 2006 Ins. Tr., 28 A.3d 1059, 1079 (Del. 2011) (“Price Dawe”)). The Supreme Court further concluded that a “third party may be said to have procured or caused to be procured a life insurance contract on the life of another even if the person whose life is insured played some part in the transaction, if that insured is ultimately determined to be merely an agent or strawman for the third party.” Id. To determine whether that is so, the Supreme Court instructed courts to consider the totality of relevant circumstances, including those discussed in Union Fraternal League v. Walton, 109 Ga. 1, 34 S.E. 317 (1899)¹ and Rylander v. Allen, 125 Ga. 206, 53 S.E. 1032 (1906).²

The Supreme Court declined to reduce the inquiry to a multi-factor test and did not assign any particular weight to the various relevant circumstances. Instead, it instructed courts to “consider the totality of the circumstances, and determine, in light of those circumstances, whether the policy was effectively obtained by the insured himself or by a third party.” Id. at 648. Thus, if a court concludes that, under the totality of the circumstances, a third party procured or caused to be procured the policy on the life of another, the policy is an illegal wager unless it determines that “at the time when the contract was made,” “the benefits under the contract are payable to the individual insured or such individual's personal representative or to a person having ․ an insurable interest in the individual insured.” Id. at 648 (citing O.C.G.A. § 33-24-3(i)). Because the answer to the second certified question addressed the third question as well, the Supreme Court concluded its analysis. In light of the Supreme Court's binding interpretation of Georgia law, this Court ordered the parties to file supplemental briefing applying the guidance from the Supreme Court to the factual record.

The Court considers the parties' arguments in further detail below.

II. Discussion

Wilmington Trust contends in its Motion for Partial Summary Judgment that summary judgment is warranted on its first cause of action for breach of contract because the Policy was valid and enforceable under Georgia law. (Doc. 85). To support this contention, Wilmington Trust puts forth two arguments: (1) the Policy was not procured or caused to be procured upon the Insured, and (2) the Policy was supported by an insurable interest at issuance. (See Doc. 85-1). In addition, because the Policy's beneficiary was a Trust, the beneficiary of which was William Leone, the Insured's husband, Wilmington Trust asserts that there was plainly an insurable interest in Mrs. Leone's life. (Id. at 16). In its supplemental brief, Wilmington Trust argues that the totality of the circumstances points to a reasonable conclusion that the Insured, with her husband, and not the lender, procured the Policy. (Doc. 128 at 5). Wilmington Trust contends, nonetheless, that an evaluation of the totality of the circumstances lies within the province of a jury. (Id.). However, even if the Court were to find that a third party procured the Policy, Wilmington Trust argues, the Policy is not void because “the initial beneficiary of the Policy was a trust —of which the insured was the settlor and her husband was the beneficiary.” (Id.).

In its cross Motion for Summary Judgment, Ameritas argues that the Policy issued by its predecessor on the life of Mrs. Leone was procured or caused to be procured by third-party investors who lacked an insurable interest in the Insured. (Doc. 90 at 9). In its supplemental briefing, Ameritas asserts that the undisputed facts are sufficient to find, based on the totality of the circumstances, that the Policy was effectively obtained or acquired by third-party investors. (Doc. 127 at 8–20). Because the material facts are not in dispute, Ameritas argues that the Policy is void ab initio under Georgia law and summary judgment should be entered in its favor.

As instructed by the Georgia Supreme Court in Wilmington Trust, in order to determine whether a third party “procured or caused to be procured” a policy on the life of another, a court must consider the totality of the relevant circumstances. The Court does so below.

A. The “Totality of the Circumstances” Test

To determine whether a third party “procured or caused to be procured” a policy on the life of another, a court must consider the following relevant factors:

who paid the premiums on the policy; who located the potential insured; who participated in the formation of the policy; who prepared and controlled the content of the relevant documents; whether the policy was created for the benefit of the insured or investors; who had the power to name the trustee of a life insurance trust if one was created and who had control over the trust; the sophistication of the insured on financial matters; and the extent of the insured's participation in the insurance application process.

Wilmington Trust, 926 S.E.2d at 647 (collecting cases). The Court considers each factor below.

1. Who Paid the Premiums on the Policy

In the Certifying Order, the Court detailed the complex web of agreements executed before the Leones ever applied for a life insurance policy from Ameritas. Relevant to this factor is the “Peachtree Program,” a set of agreements between Settlement Funding, LLC d/b/a Peachtree Settlement Funding (“Peachtree”) and Barclays Bank PLC (“Barclays”). (Doc. 121 at 2; “Def. SMF,” Doc. 90-1 ¶ 2). Under the Program, Peachtree and Barclays entered into a “Premium Finance Facility” and as a part of that Facility, a Loan Origination Agreement (“Origination Agreement”). (Doc. 121 at 2). Pursuant to the Origination Agreement, Peachtree was the “Originator” of life insurance policies and Barclays agreed to provide up to $50 million of premium financing to certain life insurance trusts that met the definition of “Eligible Borrower” for the payment of premiums. (Id. at 3).

The Peachtree Program was in place when the Leones applied for life insurance at some point in the latter half of 2006. (Id. at 6). On November 28, 2006, the Jacqueline Leone Irrevocable Trust (the “Trust”) was formed. (Id. at 8). The trustee of the Trust was Ken Shapiro. (Id.). On December 20, 2006, Mr. Shapiro and the Trust applied for a premium financing loan from Barclays. (Id. at 9). On January 4, 2007, Ameritas received a formal application for a $6 million dollar policy on Mrs. Leone's life whereby Mr. Shapiro, as trustee on behalf of the Trust, was the policyowner and beneficiary. (Id.). On February 1, 2007, Ameritas issued a universal life insurance policy on the Insured's life under policy number U000036824 (the “Policy”), in the face amount of $6,000,000. (See id. at 7).³ On February 16, 2007, the Insured and her husband executed a Disclosure Statement, Representations and Warranties, and Consent, in connection with a Loan and Security Agreement to pay for the Policy premiums. (Id. at 11).⁴ On February 28, 2007, the Trust, as Borrower, entered into a Loan and Security Agreement with Barclays as Lender “to borrow certain funds from Lender, which funds shall be used to pay the premium due ․ for not less than the first two (2) years on the Policy” (the “Loan”). (Id. at 11; “Pl. SMF,” Doc. 87 ¶ 29). In order to secure the Trust's repayment and performance obligations with respect to the Loan, the Trust granted a lien in favor of Barclays of all of the Trust's assets and collaterally assigned the Policy to Barclays' Collateral Agent. (Doc. 121 at 11; Pl. SMF ¶ 29). The principal amount of the Loan was $375,276.67. (Doc. 121 at 11). The initial premium payment was made on February 28, 2007. (Id. at 12; Doc. 89-30 at 2).

Critically, Mrs. Leone was not a signatory to the Loan Agreement, and she was not responsible for paying any premiums. (Doc. 121 at 12). The Loan was nonrecourse as to Mrs. Leone and only recourse as to the Trust's nominal assets. (Id.). The Trust had no financial ability to repay the Loan, making the Loan nonrecourse. (Id.; Def. SMF ¶ 65). On February 28, 2007, the same day that the Loan Agreement was executed and the Policy issued, an Assignment of Life Insurance Policy as Collateral was executed whereby the Trust, as borrower and assignor, assigned all of its rights and interests in the Policy to Barclays, as lender and assignee (“Collateral Assignment”). (Doc. 121 at 13; Def. SMF ¶ 70). Under the Collateral Assignment, Barclays had the “sole right” to collect the death benefits, surrender the Policy, further assign the Policy, and request that the insurer amend the Policy, since the first day that the Policy was issued. (Doc. 121 at 13).

Wilmington Trust's argument that the Leones sought and received a premium finance loan from Barclays ignores the realities of the Peachtree Program and the factual record. Mrs. Leone never paid any premium. As such, this factor weighs in favor of third-party procurement.

2. Who Located the Potential Insured

Wilmington Trust is correct that neither party presented competent evidence on the question of who located the potential insured. (Doc. 128 at 11). In the Certifying Order, the Court explained that in 2006, Chris Feery, an insurance agent, marketed the Peachtree Program referenced above, as cost-free and risk free because all premiums would be paid by a third-party investor through a nonrecourse premium finance loan. (Doc. 121 at 5). Mr. Feery further promised the insured parties free insurance for two years and the possibility of financial compensation to induce them to participate in the program. (Id.). Moreover, the Court found that “Peachtree was responsible for originating life insurance policies at its own expense, including ․ locating potential insured through its agents,” under the Origination Agreement. (Id. at 3). The record further indicates that at some point in the latter half of 2006, the Leones and Mr. Feery got into contact regarding the Peachtree Program. (Id. at 6; Doc. 86-6 at 8). The record does not, however, explain how the parties came into contact and the Court is not permitted to infer that Mr. Feery contacted the Leones, simply because he was soliciting insureds like Mrs. Leone. (Doc. 86-6 at 8). Nor can the Court speculate, as Mrs. Leone's son, Joe Leone does, that “[o]bviously, someone brought this opportunity” to his parents. (Doc. 85-4 at 11). His estimation that “someone” brought this “opportunity” to his parents is insufficient to identify precisely who did for the purposes of this factor. As such, the Court cannot say with the requisite certainty that Mr. Feery, or any other person associated with the Peachtree Program, “located” the Leones. This factor weighs against third party procurement.

3. Who Participated in the Formation of the Policy

The parties do not dispute that multiple individuals and companies were involved in the formation and issuance of the Policy. (Doc. 128 at 9; Doc. 127 at 12–16). Peachtree was responsible for the entire origination process under the Origination Agreement. (Doc. 121 at 3). And, as the Court explained above, under the Origination Agreement, Barclays provided the funding necessary to underwrite nonrecourse premium finance loans to newly created life insurance trusts. (Id.). Mr. Feery and Bradley Gee, through the insurance agency “The Virtual Group,” were responsible for connecting the Insured to the Peachtree Program and ultimately were the insurance agents who sold the Policy to Mrs. Leone. (Id. at 5). Mr. Shapiro, an individual completely unknown to anyone in the Leone family,⁵ was the trustee of the Trust that owned the Policy from the outset. Attorney Ian Chaikin was referred by Peachtree to act as the Leones' counsel in connection with their execution of a Disclosure Statement. (Id. at 11). Accordingly, and because so many individuals and companies that lacked an insurable interest in the Insured were involved in the formation of the Policy, this factor weighs in favor of third-party procurement.

4. Who Prepared and Controlled the Content of the Relevant Documents

Again, this factor weighs in favor of third-party procurement because the relevant documents were boilerplate documents created by Peachtree and Barclays through the Peachtree Program. These documents could not be altered or amended by the Leones. (Doc. 121 at 10). Specifically, the Origination Agreement required that each policy and each loan use the same form transaction documents. (Id. at 3). For example, the boilerplate trust agreement (“Form Trust Agreement”) created a new Georgia trust in the insured's name, was nominally funded with $10 and contemplated the ownership of a future life insurance policy in the insured's name. (Id. at 4; Def. SMF ¶ 8). Only Ken Shapiro and Michael Braun could serve as trustees of the new Georgia trusts under the Origination Agreement. (Id.; Def. SMF ¶ 9). And, according to the Form Trust Agreement, the intent of both the insured and trustee was that the insured never own or control the policy, and the insured disclaimed and relinquished all rights and powers in such policy. (Id.; Def. SMF ¶¶ 10, 11). Relatedly, the Origination Agreement included provisions that required Peachtree, and not the Trust, to make monthly interest payments to Barclays as a “Usage Fee.” (Doc. 121 at 4). There were no cure periods in the Form Loan Agreement, meaning that the loans automatically went into default at maturity. (Id.).

In addition, Mrs. Leone's “Insured Designation of Contacts” form designated Ric Pertierra, a purported “friend” of Mrs. Leone, as one of her contacts. (Doc. 121 at 14). Mr. Pertierra testified that he “did not personally know Ms. Leone, her husband, or anyone in the Leone family.” (Id.; Def. SMF ¶ 78). Instead, Mr. Pertierra testified that he was a former colleague of Bradley Gee, Mrs. Leone's other designated contact. (Doc. 121 at 14).

Taken together, it is clear that the relevant documents were prepared and controlled by Peachtree and Barclays, with minimal input, if any, by the Leones. Wilmington Trust argues that even if Peachtree and/or Barclays drafted the loan and trust documents, that does not and cannot change the indisputable fact that the Leones could have paid off the loan and kept the Policy if they wanted. (Doc. 128 at 14). For support, Wilmington Trust cites Sun Life Assurance Co. of Can. v. Bank of Utah, wherein the court found that there was “evidence from which a reasonable trier of fact could determine that default was not a foregone conclusion, as Mr. Krasnoff testified that his net worth during the relevant time period was well over the amount necessary to pay off the loan should he have chosen to do so.” No. 1:21-cv-03973-LMM, 2023 WL 7449951, at *4 (N.D. Ga. Nov. 6, 2023). There, the court held that the existence of loan documents did not demonstrate that the lender was the de facto purchaser and beneficiary of the policy. Id. Instead, the court construed the loan agreement as indicating that the assignment was collateral for the loan and that the pledged and assigned interests were to be terminated or released upon repayment of the loan. Id.

Wilmington Trust's reliance on Sun Life is misplaced for two reasons. First, under the Form Loan Agreement, default occurred automatically and immediately on the maturity date. (Doc. 121 at 13; Def. SMF ¶ 69). Second, whether “the Leones also plainly had the means to pay off the loan and keep the Policy had they chosen to do so” is not relevant to the Court's current inquiry. (Doc. 128 at 14). The Supreme Court of Georgia did not instruct the Court to inquire into hypothetical outcomes borne out of speculation. The question here is “who prepared and controlled the content of the relevant documents.” Wilmington Trust, 926 S.E.2d at 637. The parties agree that Peachtree, Barclays, and their associates prepared and controlled the relevant documents. (Doc. 127 at 16; Doc. 128 at 13). Accordingly, this factor weighs in favor of third-party procurement.

5. Whether the Policy was Created for the Benefit of the Insured or Investors

As the Court explained in its analysis of previous factors, policies that originated under the Peachtree Program were created as investment vehicles for the benefit of investors. (Doc. 121 at 5; Def. SMF ¶ 25). As the lender, Barclays benefited from Peachtree Program, and in turn, the Policy. During the term of the loans, Peachtree was required to make monthly interest payments to Barclays as a “Usage Fee” under the Origination Agreement. (Doc. 121 at 4; Def. SMF ¶ 18). In addition, Peachtree was responsible for paying monthly interest to Barclays. (Doc. 121 at 23). Further, as designed, the Policy's beneficiary, the Jacqueline Leone Irrevocable Trust, was formed specifically so that that Mrs. Leone could not jeopardize the investors' rights to the policy. (Doc. 121 at 9). This was done by ensuring that Mrs. Leone relinquished her right to ever own or control the Policy through the Trust Agreement. (Doc. 121 at 9; Def. SMF ¶ 39). Thus, whatever benefit Mrs. Leone might have expected, by participating in the Peachtree Program, she signed it away.

Ameritas points the Court to Joe Leone's testimony that his mother would likely not have needed the policy for estate planning because estate tax would not be a “major concern” given his parent's net worth and that his mother would likely not have needed it for survivorship reasons because they had no dependents. (Def. SMF ¶ 52). On the other hand, Joe Leone also testified that his parents sought to buy “some type of life insurance policy and then basically sell[ ] it.” (Doc. 86-1 at 9). While this testimony helps the Court assess the Leones' state of mind in seeking the Policy, it does not speak to the question of whether the Policy was created for the benefit of the Insured. The undisputed evidence in this case demonstrates that the Policy was created specifically to benefit the investors. Accordingly, this factor weighs in favor of third-party procurement.

6. Who had the Power to Name the Trustee of the Life Insurance Trust and who had Control Over the Trust

The Origination Agreement between Peachtree and Barclays required that each policy and each loan use the same form transaction documents without alteration or amendment. (Doc. 121 at 4; Def. SMF ¶ 7). Under those terms, only Ken Shapiro and Michael Braun could serve as trustees of the trusts. (Def. SMF ¶ 9). The Origination Agreement defines “Eligible Trustee” as “the attorneys, law firms, or other Persons set forth in Schedule 4, or such other Persons as have been agreed to by the Bank and the Originator, which agreement by the Originator or the Bank shall not be unreasonably withheld or delayed.” (Doc. 90-2 at 13). Schedule 4 then provides that Michael R. Braun, esq. and Kenneth Shapiro, esq. are the only individuals eligible to serve as trustees pursuant to the Agreement. (Id. at 51).

Wilmington Trust argues that, as the settlor of the Trust, Mrs. Leone alone had the legal power to name the trustee. (Doc. 128 at 16). Moreover, Wilmington Trust asserts that she was not required to name Mr. Shapiro, but rather “she decided to do so” in order to secure the loan. (Doc. 127 at 19). But Wilmington Trust offers no facts to support this conclusion. Further, it is not clear to the Court how a reasonable factfinder could determine that Mrs. Leone chose to name Mr. Shapiro as trustee where the facts clearly demonstrate that Mr. Shapiro had never met or spoken to Mrs. Leone and did not know anyone in the Leone family. (Doc. 121 at 9; Def. SMF ¶ 45; Doc. 89-6 ¶ 5). Further, it is immaterial to the Court's present inquiry whether Mr. Shapiro would have followed the terms of the Trust. Wilmington Trust nonetheless concedes that after the Trust was created, it was “controlled” by Mr. Shapiro. (Id.). Accordingly, Mrs. Leone had no power to name a trustee of her choosing under the Peachtree Program. This factor weighs in favor of third-party procurement.

7. The Sophistication of the Insured on Financial Matters

The evidence in the record suggests that the Insured, Mrs. Leone, was not sophisticated on financial matters. Joe Leone testified that he could not “imagine it was [Mrs. Leone's] idea” to initiate and create the Trust because it sounded “like a fairly sophisticated financial transaction” which was not of the kind that she typically engaged in. (Id. at 11). He went on to explain that Mrs. Leone “would not be as in-tuned to these types of transactions.” (Id. at 18). Rather, it seems that Mr. Leone, her husband, was the individual who wanted to pursue the life insurance policy. This is supported by further testimony of Joe Leone, who stated that his father, Mr. Leone, was “the financial guy” and that he “was the one who was always coming up with financial plans and investments.” (Doc. 86-1 at 12).

Wilmington Trust also argues that the Court should consider the Leone's wealth to “infer that they were sophisticated investors, and not mere, unwitting strawmen or innocent instrumentalities.” (Doc. 128 at 14) (citing Sun Life, 2023 WL 7449951, at *3). Ameritas contends that to the extent the Court relies on Sun Life, it should do so only to distinguish it from the instant case. (Doc. 127 at 22). This is because in Sun Life, the insured had “decades of experience in the financial and real estate industries, during which time he was an employee, officer, and investor for several different companies involved in residential and commercial real estate, finance, and sales” and “he was still working in those areas at the time.” 2023 WL 7449951, at *4. Alone, the Court could easily conclude that Mrs. Leone was not “sophisticated” in financial matters. However, because Mr. and Mrs. Leone initially sought to purchase the life insurance policies together, the Court cannot say with the requisite certainty that this factor weighs toward third-party procurement. (See Doc. 85-18 at 16; Doc. 87 ¶ 14). As Joe Leone explained, his father was seeking an opportunity to make money until the insurer determined that he was “uninsurable” and declined to issue a policy to him. (Doc. 89-17 at 8). Therefore, a reasonable jury could infer that the Leones, together, were financially sophisticated, even if Mrs. Leone, by herself, was not. Accordingly, this factor weighs against third-party procurement.

8. The Extent of the Insured's Participation in the Insurance Application

The parties agree that Mrs. Leone participated in the insurance application. In connection with the application, Mrs. Leone underwent a medical examination in Miami, Florida (Pl. SMF ¶ 10). She and her medical professional signed the insurer-issued “Part II-Medical” portion of the life insurance application form dated September 29, 2006. (Id. ¶ 11). Mrs. Leone provided her blood and urine samples to the insurer. (Id. ¶ 13). In addition, she and her husband provided their financial information to Ameritas and underwent a telephone interview. (Pl. SMF ¶ 15). Accordingly, Mrs. Leone unquestionably participated in the application for the Policy. The Court declines Wilmington Trust's invitation to accord this factor “strong” weight (Doc. 128 at 18), because the Georgia Supreme Court did not “assign any particular weight to the various potential circumstances.” Wilmington Trust, 926 S.E.2d at 648. This factor weighs against third-party procurement.

In sum, the majority of the factors weigh in favor of third-party procurement. Accordingly, even though the Insured played some part in the transaction, the Court concludes that the Policy was procured by third-party investors that effectively obtained or acquired the policy.

B. Whether the Benefits are Payable to Someone with an Insurable Interest in the Insured's Life

Under O.C.G.A. § 33-24-3(i), determining whether the Policy was “procured or caused to be procured upon another individual” is only the first part of the analysis. The Court must next determine whether “the benefits under the contract are payable to the individual insured or such individual's personal representative or to such person having, at the time when the contract was made, an insurable interest in the individual insured.” O.C.G.A. § 33-24-3(i).

As trustee on behalf of the Trust, Mr. Shapiro was the policyowner and beneficiary of the Policy. (Doc. 121 at 9). Accordingly, Wilmington Trust argues that the Court should find that the Trust had an insurable interest for two reasons: the identity of the settlor and the identity of the beneficiary. Under O.C.G.A. § 33-24-3(c), the “trustee of a trust established by an individual settlor has an insurable interest in the life of that individual settlor.” Since the settlor of the Trust was Mrs. Leone, Wilmington Trust argues that the trustee, Mr. Shapiro, had an insurable interest under the statute. (Doc. 128 at 20). Second, because the beneficiary of the Trust was William Leone, the Trust has an insurable interest. Accordingly, Wilmington Trust argues that the Policy benefits must be considered payable to someone with an insurable interest in the Insured's life. See Viva Cap. Trust v. Garrett, 38 N.W.3d 159, 174 (S.D. 2026).

Ameritas agrees that the operative question is whether the trustee—Mr. Shapiro—had an insurable interest in Mrs. Leone's life. (Doc. 127 at 26). However, Ameritas asks the Court to interpret the language of the operative statute differently. Specifically, Ameritas requests that the Court read “the relevant language in its most natural and reasonable way given the context in which it appears, including the surrounding statutory language, the statute's structure and history, and other law that makes up the legal backdrop against which the language was enacted.” Wilmington Trust, 926 S.E.2d at 644 (quoting Docs of CT, LLC v. Biotek Servs., LLC, 321 Ga. 588, 916 S.E.2d 383, 386 (2025)). In light of that directive, Ameritas argues that in order for the trustee to have an insurable interest in the individual settlor, Wilmington Trust must come forth with admissible evidence to demonstrate that the Trust was “established by” Mrs. Leone. To Ameritas, “established by” must mean more than simply consent to the trust instrument. (Doc. 127 at 26). This is because a settlor's consent to a Trust is already a requirement under Georgia law. See O.C.G.A. § 53-12-20(a) (“an express trust shall be created or declared in writing and signed by the settlor or an agent for the settlor acting under a power of attorney containing authorization”). Moreover, Ameritas underscores that the Georgia Supreme Court made clear that “the statutory requirement of insurable interest was intended to prevent wagering on human lives,” Crum v. Jackson Nat'l Life Ins. Co., 315 Ga. 67, 880 S.E.2d 205, 208 (2022), and that the principles of Rylander and Walton—specifically that “one cannot do indirectly what the law prohibits him from doing directly” and that transactions that are “a cover for a mere wagering contract” lack insurable interest—inform the meaning of Georgia's insurable interest statute. (Doc. 127 at 27) (citing Wilmington Trust, 926 S.E.2d at 645–46). Ameritas also points the Court to Georgia's trust code, which states that a trust must be funded in order to take effect, and trusts are valid only if they are formed for a lawful purpose. O.C.G.A § 53-12-20(b) (“An express trust shall have ․ (2) Trust property.”); O.C.G.A. § 53-12-22 (“A trust may be created for any lawful purpose.”). And, under a related Georgia statute, “[t]rusts that are created to give the appearance of insurable interest and are used to initiate policies for investors violate insurable interest laws and the prohibition against wagering on life.” O.C.G.A. § 33-59-2(24) (2009). Against this backdrop, Ameritas argues that “established by” must mean more than consent to the trust instrument.

To bolster its conclusion, Ameritas relies on other courts' interpretations of similarly-worded statutes. For example, in Price Dawe, the Supreme Court of Delaware held that under 18 Del. C. § 2704(c)(5),⁶ the trustee of a Delaware trust has an insurable interest in the insured only where the trust is “established” by the individual insured. 28 A.3d 1059, 1078 (Del. 2011). The court found that “established” meant that the insured must both create and initially fund the trust corpus. The Delaware court further found that the requirement was not satisfied where the trust was created through nominal funding as a mere formality. Id. The Supreme Court of New Jersey held similarly in Sun Life Assurance Co. of Can. v. Wells Fargo Bank, N.A., 238 N.J. 157, 208 A.3d 839, 841 (2019). There, the court found that although the insurable interest requirement appeared to be satisfied the moment the policy was purchased, since the plan was to transfer the benefits to strangers soon after the policy was issued, the policy was a “STOLI” and therefore against public policy. Id. As the Supreme Court of New Jersey explained, “[i]t would elevate form over substance to conclude that feigned compliance with the insurable interest statute -- as technically exists at the outside of a STOLI transaction -- satisfied the law. Such an approach would upend the very protections the statute was designed to confer and would effectively allow strangers to wager on human lives.” Id.

The Court finds Ameritas's argument persuasive. The undisputed facts of the case demonstrate that the Jacqueline Leone Irrevocable Trust was not “established by” Mrs. Leone. The Trust was executed on the Peachtree Program's boilerplate Form Trust Agreement. (Doc. 121 at 3). It named Mr. Shapiro, a stranger to Mrs. Leone and the Leone family, as trustee. (Id.). Neither Mrs. Leone nor anyone in the Leone family had control over the Trust. (Doc. 92-2 at 8). It is unclear if Mrs. Leone ever even funded the Trust. (Def. SMF ¶ 35). In signing the Trust Agreement, Mrs. Leone expressly waived all rights and powers with respect to the Trust. (Doc. 121 at 8). And though the Peachtree Program required Mr. Leone to be named as a Trust beneficiary, the Court declines to “elevate form over substance” to ignore the carefully curated scheme organized by Peachtree, Barclays, and their agents to evade Georgia's laws on life wagering contracts.

Accordingly, Wilmington Trust failed to provide the Court with any evidence that Mrs. Leone “established” the Trust. Instead, the record clearly demonstrates that Peachtree used the Trust to cover its wager on Mrs. Leone's life. Therefore, Mr. Shapiro, as trustee and beneficiary of the Policy, lacked insurable interest in Mrs. Leone's life and the Policy is void ab initio. Ameritas is entitled to summary judgment.

C. Wilmington Trust is Entitled to a Refund of the Premiums Paid

Under O.C.G.A. § 33-24-3(i), if the contract is determined to be void, as here, “the insurer shall not be liable on the contract but shall be liable to repay to the person or persons who have paid the premiums all premium payments without interest.” Wilmington Trust argues that its customer succeeded to, among other things, “all income, payment and proceeds relating to or arising out of the purchase and sale of the Policy and all rights of recourse or recovery against any third party, and all other claims, rights and causes of action, relating to or arising out of the purchase and sale of the Policy” due to the Purchase and Sales Agreement, executed with BMJ Capital, the Policy's prior owner. (Doc. 21 ¶ 91; see Doc. 90-17).

In response, Ameritas does not dispute that some premiums should be returned but instead argues that Wilmington Trust is not entitled to premium payments made by prior owners. (Doc. 90 at 47). As such, Ameritas argues that Wilmington Trust is only entitled to receive the premiums it paid (~$500,000) plus those paid after November 15, 2021. The Court finds no support for this in the language of the Purchase and Sales Agreement or the statute. The assignment language that Ameritas attempts to parse is intentionally sweeping. Specifically, Section 2.1 of the Purchase and Sales Agreement defines “Purchased Assets” as

(a) each Policy (including, but without limiting Section 2.7 or Article III in any respect, if (x) such Policy has lapsed, is in a state of default, lapse pending or grace, or is not otherwise in full force or effect, on the Closing Date or (y) any or all of the Insureds thereunder died on or prior to the Closing Date, whether or not prior to, on or after the Cut-off Date) including:

(i) all death benefits paid or payable, and all other proceeds and other amounts paid or payable on or after the Cut-off Date, by the related Insurer under or otherwise with respect to such Policy;

(ii) all prepaid premiums with respect to such Policy that were paid prior to the Cut-off Date and pertain to a time period on or after the Cut-off Date, and any right to the return thereof pursuant to such Policy or Law

(Doc. 90-17 at 13). Moreover, Ameritas has presented no evidence of competing claims for the Policy or any plausible risk of double liability—the concern that undergirds Ameritas's attempt to limit Wilmington Trust's retention of all premiums paid. The plain language of O.C.G.A. § 33-24-3(i) directs the insurer to repay all premium payments. The Court finds no reason to insert the additional language Ameritas attempts add to the statute. Accordingly, Wilmington Trust is entitled to return of all premiums paid on the Policy.

III. Conclusion

For the reasons given above, Defendant Ameritas Life Insurance Corp.'s Motion for Summary Judgment (Doc. 89) is GRANTED and Plaintiff Wilmington Trust, National Association's Motion for Partial Summary Judgment (Doc. 85) is DENIED. It is

FURTHER ORDERED that the Clerk is DIRECTED to enter judgment in favor of Ameritas Life Insurance Corp. DECLARING that the $6 million Policy at issue on Mrs. Leone's life is VOID AB INITIO.

It is FURTHER ORDERED that Wilmington Trust is entitled to recover from Ameritas Life Insurance Corp. ALL PREMIUMS paid on the Policy without interest.

There being no further issues before the Court, the Clerk is DIRECTED to close the case.

SO ORDERED this 25th day of August, 2026.

FOOTNOTES

1.   In Walton, Plaintiff R. Annie Walton filed an action against Union Fraternal League to recover the $2,000 life insurance policy taken out on the life of Sid A. Pughsly Jr. (the “Policy”). 34 S.E. at 317. The Policy specifically prohibited the payment of Policy benefits to anyone “other than blood relatives, or dependents.” Id. As such, Union Fraternal League filed a demurrer to the petition because it argued that Plaintiff Walton, the named beneficiary, did not have an insurable interest in the life of the insured. Id. There, the Court held, among other things, that a valid contract of insurance cannot lawfully be taken on the life of another by one who has no insurable interest in that life. Id. at 318.

2.   In Rylander, the administratrix of Thomas M. Allen brought an action against Travelers' Insurance Company and Hattie Rylander to recover the amount of the life insurance policy issued on Mr. Allen's life. 53 S.E. at 1032. Mr. Allen procured an insurance policy on his own life through Travelers' Insurance Company. Id. at 1032–33. Thereafter, Mr. Allen assigned the policy to Mrs. Rylander, who had no interest, as a relative, creditor, or otherwise in the continuance of his life. Id. at 1033. Mr. Allen paid no premiums on the policy. Id. Instead, the premiums were paid for by Mrs. Rylander. Id. Because Mrs. Rylander had no counterbalancing interest in Mr. Allen's life, the petitioner argued that the policy was an impermissible life wagering contract and therefore void. Id. The Court concluded that the rule that “it is unlawful for a person to effect insurance upon the life of another in the continuance whose life has no interest” could not be evaded “by the issue of a policy to one who has an insurance interest, and its immediate assignment, pursuant to a preconceived intent, to one without such interest, who undertakes to pay the premiums for his chance of profit upon his investment.” Id. at 1037.

3.   The Policy was reissued on February 28, 2007. (Doc. 121 at 10; Def. SMF ¶ 56).

4.   This was done with the assistance of attorney Ian Chaikin. (Doc. 121 at 11; “Pl. SMF,” Doc. 87 ¶ 28; Def. SMF ¶ 46). Mr. Chaikin testified that he did not personally know Mrs. Leone, Mr. Leone, or anyone in the Leone family, until he was referred by Peachtree to act as the Leones' counsel. (Doc. 89-7 ¶ 23).

5.   That Mr. Shapiro was unknown to anyone in the Leone family contradicts Mr. Feery's attestation otherwise during the Policy's underwriting. On January 19, 2006, Mr. Feery told Ameritas that Mr. Shapiro was Mrs. Leone and her husband's “accountant and trusted advisory.” (Doc. 121 at 9; Def. SMF ¶ 44).

6.   Section 2704(c)(5) provides, in pertinent part:The trustee of a trust created and initially funded by an individual has an insurable interest in the life of that individual and the same insurable interest in the life of any other individual as does any person who is treated as the owner of such trust for federal income tax purposes without regard to:a) The identity of the trust beneficiaries;b) Whether the identity of the trust beneficiaries changes from time to time; andc) The means by which any trust beneficiary acquires a beneficial interest in the trust.The trustee of a trust has the same insurable interest in the life of any individual as does any person with respect to proceeds of insurance on the life of such individual (or any portion of such proceeds) that are allocable to such person's interest in such trust.

Victoria Marie Calvert, United States District Judge