Livoti v. Aycock

Plaintiffs were not entitled to specific performance of a viatical settlement contract in which the defendant assigned his rights and interest in his original life insurance policy since that policy was cancelled and defendant had obtained different life insurance from a different insurer.

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When James M. Aycock was seriously ill and not expected to recover, he sold the right to collect the proceeds of his employer’s supplemental group life insurance benefits to a group of investors in a transaction known as a viatical settlement. Aycock later recovered and returned to work with his original employer and his original coverage was cancelled, but he then qualified for new group life coverage. The question presented is whether the investors acquired a right to the proceeds of Aycock’s new life insurance coverage. The parties agree on most of the facts. Aycock, an employee of Emory University’s School of Medicine, had supplemental group life insurance coverage, through Emory, provided by Life of Georgia Insurance Co. “LOG”, with death benefits of $200,000. In 1995, Aycock, who had been diagnosed with AIDS 11 years earlier, qualified for long-term disability benefits due to his worsening condition. By the fall of 1996, he was on full disability leave from Emory, which triggered a waiver of premium payments on the group life policy. At that time, he was not expected to live much longer.

In October 1996, Aycock entered into a viatical settlement in which, in exchange for $144,000, he assigned “all of his rights, title and interest” in his LOG policy “and all renewals thereof” to a group of investors whose trustee is Anthony M. Livoti, Jr. hereinafter referred to as “Livoti”. Aycock also assigned “the right to change and name any other beneficiary whatsoever” and “the right to exercise all conversion rights that Aycock may have at any time and under any circumstances.” The assignment was prepared by LOG, LOG signed it, and retained a copy.

Livoti v. Aycock

Plaintiffs were not entitled to specific performance of a viatical settlement contract in which the defendant assigned his rights and interest in his original life insurance policy since that policy was cancelled and defendant had obtained different life insurance from a different insurer.

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