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Zalman Silber, Plaintiff-Appellant v. New York Life Insurance Company

February 7, 2012

ZALMAN SILBER, PLAINTIFF-APPELLANT,
v.
NEW YORK LIFE INSURANCE COMPANY, DEFENDANT-RESPONDENT.



Silber v New York Life Ins. Co.

Decided on February 7, 2012

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Gonzalez, P.J., Tom, Catterson, Richter, Roman, JJ.

Order, Supreme Court, New York County (O. Peter Sherwood, J.), entered on or about April 18, 2011, which, inter alia, upon a search of the record, granted defendant summary judgment dismissing the complaint, unanimously affirmed, with costs.

The determination of this appeal requires the Court to invoke the most basic tenets of contract law. Plaintiff worked as a life insurance agent for defendant from 1987 until his agency contract was terminated on July 16, 2008. By summons and verified complaint dated May 12, 2010, plaintiff commenced this breach of contract action. Plaintiff claims that defendant's termination of plaintiff and refusal to reinstate him or credit him with service time towards his retirement benefit violated an oral agreement between the parties, which caused plaintiff approximately $3,000,000 in damages.

Prior to discovery, plaintiff moved for summary judgment as to liability, arguing that the parties had entered into an oral agreement "that [p]laintiff would resign from [d]efendant pending the sale of his interest in a life settlement company . . . following which he was to be reinstated." Plaintiff asserted that the agreement was then memorialized in a letter from defendant to plaintiff. Plaintiff also argued that defendant should be equitably estopped from denying that it agreed to reinstate plaintiff if he divested himself of his outside interests.

In opposition to the motion, defendant submitted an affidavit attesting to the following: In November 2007, defendant learned that plaintiff had an ownership interest in a life settlement company, which purchased blocks of life insurance policies previously viaticated by their owners and then sold them to other financial institutions, including several prominent hedge funds.*fn1

Defendant asserts that it prohibits its agents from participating in such business because the industry is underregulated, with significant potential for fraud and abuse. Defendant further asserts that plaintiff never disclosed his interest in this business to defendant nor secured approval as required by defendant's company rules. In a March 2008 meeting, plaintiff was advised that he would be required to divest himself of his interest in the business. Defendant states that despite subsequent efforts to discuss the outstanding issue of his life settlement business, plaintiff failed to respond.

In support of his motion, plaintiff submitted, among other documents, correspondence between himself and defendant. In a letter to plaintiff, dated May 29, 2008, defendant's senior vice president (Senior VP) stated, in pertinent part: "As we discussed, you agreed that you would resign as an agent of New York Life and that once your [life settlement] business was sold you would apply for reinstatement of your contract. I agreed that we would review your application for reinstatement at that time, and so long as all of your other outside business activities were acceptable to the Company, and there were no intervening compliance issues, we would reinstate your contract.. . . "If you are in agreement with the terms set forth in this letter, please sign below and return a copy of this letter to me." It is undisputed that plaintiff did not sign and return the letter or resign. In a June 12 letter, the Senior VP stated that he had not received a response to the May 29 letter, and that he had unsuccessfully attempted to reach plaintiff by telephone. The Senior VP wrote that he was suspending plaintiff, and, unless he heard from him by June 16, he would terminate his agency contract. He also stated that the letter served as plaintiff's 30 days notice. The delivery receipt in the record indicates, and plaintiff does not dispute, that the letter was delivered to plaintiff's home the following day.

On June 13, plaintiff was arrested on felony criminal charges of impersonating a doctor and performing gynecological examinations on young women [FN2]. Plaintiff responded to the Senior VP by letter dated June 16, 2008, explaining that he had been "tied up" and unable to respond sooner. Plaintiff's letter suggested that they address issues such as whether defendant would agree to certain underwriting concessions, the need to review plaintiff's other insurance products, credit of his service time upon reinstatement, and the sale of his life settlement business.

In a June 17, 2008 letter, before he received plaintiff's June 16 letter, the Senior VP again wrote to plaintiff to confirm that he was suspended as of June 16, and that his contract was being terminated effective July 16, 2008. Plaintiff responded by letter on June 20, 2008, claiming that he did not receive the June 12 letter and that their "correspondences must have crossed in the mail."

In a June 26, 2008 letter, the Senior VP terminated plaintiff and advised him that the allegations of plaintiff's recent arrest "raise serious compliance issues" and preclude his reinstatement. On July 18, defendant notified the New York Insurance Department that it had terminated plaintiff effective July 16, 2008 because of his "participat[ion] in life settlements in violation of Company policy" and his "arrest[] for impersonating a doctor."

Plaintiff alleges that after dismissal of the criminal charges a year later, his license to sell insurance was renewed by the New York Insurance Department, and in 2010 he applied for reinstatement with defendant. Defendant denied ...


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