Royal Alliance hit with $884,222.55 Arbitration Award for Breach of Fiduciary Duty Related to the Surrender of a Variable Universal Life Policy.

Orphaned Children from Los Angeles, California, Made Whole, Receive Full Life Insurance Death Benefit and Costs of Arbitration

Royal Alliance Associates, Inc. (“Royal Alliance), sold Michael and Gail Lenvin a Variable Universal Life (“VUL”) policy with a guaranteed death benefit of $1 million for their two children. The Lenvins funded the policy for 14 years, until it became a self-sustaining policy. Immediately after taking over Mr. Lenvin’s account, and despite the fact the policy was self-sustaining, Derrigan Corbett Sheedy and Kevin Thomas Ryan advised Mr. Lenvin to surrender the policy and use the cash value to purchase a replacement policy for which they would have received a commission. Despite being denied for replacement insurance, Royal Alliance surrendered Mr. Lenvin’s VUL, leaving him without any life insurance at his death in 2012.

A Los Angeles, California arbitration panel agreed with the Lenvins’ claims that Royal Alliance failed to properly advise their deceased father regarding the surrender of his Variable Universal Life Policy, which Royal Alliance had previously sold him. The panel ordered Royal Alliance to pay $884,222.55. The award included the full death benefit of $870,000, plus $14,222.55 in costs. The panel also ordered Royal Alliance to pay 100% ($12,900.00) of the arbitration forum fees.

“The evidence showed that Royal Alliance repeatedly failed to follow its own compliance procedures and failed to disclose all material information to their client,” says Jon C. Furgison, Esq., of Furgison Law Group, PC, the Hermosa Beach, California attorney. Mr. Furgison pointed out, Mr. Sheedy and Mr. Ryan admitted they had never even read the complete investment contract at issue. “It is truly unfortunate that when an investor was wronged, Royal Alliance refused to voluntarily step up to the plate and do the right thing,” says Mr. Furgison.

Documents Enclosed

1.              Arbitration Award issued January 9, 2015, Case #14-00982 (click here for copy).

Attorneys for Claimants, David Lenvin and Amanda Lenvin
Jon C. Furgison, Esq.
Furgison Law Group, PC
444 Longfellow Avenue
Hermosa Beach, CA 90254-2118
Phone: (310) 356-6890
Fax: (310) 356-7812
E-mail: jon@furgisonlawgroup.com
www.theinvestmentattorneys.com    
www.furgisonlawgroup.com 

Attorneys for Respondent, Royal Alliance Associates, Inc.
Gail E. Cohen, Esq.
Misty A. Murray, Esq.
Hinshaw & Culbertson LLP
633 West 5th Street
Forty-Seventh Floor
Los Angeles CA 90071-2043
Direct: (213) 614-7310 (Cohen)
Direct: (213) 614-7337 (Murray)
gcohen@mail.hinshawlaw.com
mmurray@mail.hinshawlaw.com