Monday, January 27, 2014

No. 25: Recent Developments in the Neasham Case

I devoted the entire eight-page June 2012 issue of The Insurance Forum to the case of Glenn Neasham, a California agent who sold an Allianz annuity to an elderly woman in February 2008. An important issue in the case was whether the woman was suffering from dementia at the time of the sale.

The Conviction
In October 2011, after a ten-day trial in Lake County Superior Court, the jury found Neasham guilty of felony theft with respect to the property of an elder and dependent adult. The judge sentenced Neasham to 90 days in the county jail, and stayed the sentence pending appeal.

The Appeal
On October 8, 2013, a three-judge panel of the California Court of Appeal reversed the conviction. The ruling was prominently marked "Certified for Publication." In blog post No. 6, I identified one point on which I agreed with the panel, six points on which I disagreed, and three lessons to be learned from the case. In No. 8, I discussed three points raised by a reader.

The California Supreme Court
On November 14, 2013, the California Attorney General's office petitioned the California Supreme Court to review the appellate court ruling. On December 16, Neasham answered the petition. On December 24, the Attorney General's office replied to the answer.

On January 15, 2014, Chief Justice Tani Cantil-Sakauye of the California Supreme Court denied the petition for review and depublished the appellate ruling. Here is the full text:
The petition for review is denied. The Reporter of Decisions is directed not to publish in the Official Appellate Reports the opinion in the above entitled appeal filed October 8, 2013, which appears at 220 Cal. App. 4th 375. (Cal. Const., art. VI, section 14; rule 8.1125(c)(1), Cal. Rules of Court.)
An unpublished ruling is not usually cited as precedent in future cases. I think depublication of a ruling certified for publication by an appellate court is not common. I do not know the reason for depublication in this case.

General Observations
Contrary to reports in the insurance trade press, the California Supreme Court did not "uphold" the reversal of Neasham's conviction. Rather, it chose not to review the case. Furthermore, it took the intriguing step of depublishing the appellate court's ruling.

Neasham's agent license reportedly has been reinstated, and he can now try to rebuild his insurance business. I suspect he learned a great deal from his five-year harrowing and expensive experience. Further, I think his case serves as an important warning to agents that they must be diligent when selling life insurance and annuities to elderly prospects who may be suffering from dementia.

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