Judge Andrew E. Cooper, Case Number: 20CHCV00290, Date: 2023-08-08 Tentative Ruling

Counsel wishing to submit on a tentative ruling may inform the clerk or courtroom assisant in North Valley Department F51, 9425 Penfield Ave., Chatsworth, CA 91311, at (818) 407-2251. Please be aware that unless all parties submit, the matter will still be called for hearing and may be argued by any appearing/non-submitting parties. If the matter is submitted on the court's tentative ruling by all parties, counsel for moving party shall give notice of ruling. This may be done by incorporating verbatim the court's tentative ruling. The tentative ruling may be extracted verbatim by copying and specially pasting, as unformatted text, from the Los Angeles Superior Court’s website, http://www.lasuperiorcourt.org. All hearings on law and motion and other calendar matters are generally NOT transcribed by a court reporter unless one is provided by the party(ies).

The court called the matter of Steinmann v Alhwity. Plaintiff and both Defendants were personally present.

The court indicated it had plaintiff’s trial brief but did not have a trial brief from defendants. Defendants’ counsel indicated he had previously filed a mandatory settlement conference brief which he intended to use as a trial brief.

Counsel for plaintiff gave an overview of the background of life settlements, the sale of life insurance policies, the facts in the case pending before the court and the relief plaintiff was seeking.

Counsel for defendants gave an opening statement regarding defendants’ position in the case. Defense indicated that the case is another litigation by the same Plaintiff against same Defendants and is based on Plaintiff’s bad business investment, and that Plaintiff was suing Defendant because she had not died early so Plaintiff can collect his money. Defense mentioned that both causes of actions lack elements required by law.

Mr. Steinmann gave brief testimony as to his educational and work experience. Plaintiff is a lawyer and CPA. He then testified about the transaction at issue. He testified as to how he became aware of life settlements through an insurance agent with whom he was acquainted and that his father subsequently purchased life insurance for resale through this agent.

Subsequently, a former employee of plaintiff who was then selling insurance-related products contacted him about investing in life settlements and purchasing life insurance policies on the lives of other individuals. After having been presented with a number of policies which were available for purchase, Mr. Steinmann was interested in buying four policies which had been taken out on the life of defendant Jamila Alhwity.

In connection with the purchase of those policies, he was presented with a variety of documents, including applications for life insurance, medical records, and life expectancy reports, which he reviewed and sent them to his counsel and agents to review as well. Mr. Steinmann thereafter proceeded to execute a “Policy Funding Agreement” (Exhibit 7) whereby he deposited with Advanced Life Planning the sum of $1,860,000 to be used toward the purchase of all of ALP’s right, title, and interest in and to the four Alhwity insurance policies. He subsequently opted to purchase only two of the policies – one issued by Pacific Life, and one issued by Life of the Southwest – for a purchase price of $975,000.

Mr. Steinmann identified the Life Settlement Agreement (Exhibit 5) between defendant Alhwity and The Settlement Group, Inc. (“SGI”), for the purchase of the Pacific Life policy. There was a similar agreement for the LSW policy. Mr. Steinmann testified that the Life Settlement Agreement contained a number of provisions regarding the duties of Alhwity to keep SGI and the assignees of the insurance policy and its rights associated therewith informed regarding Alhwity’s medical information and health condition, as well as keep SGI and its assigns informed as to her whereabouts. Mr. Steinmann testified that he relied on those covenants contained in Exhibit 5 when opted to purchase the Pacific Life and LSW policies. He testified that he made a decision to purchase them based on his own investigation, review and advice of his consultants.

Mr. Steinmann also identified the Policy Funding Agreement between SGI and Advanced Life Planning (“ALP”) (Exhibit 6) whereby SGI agreed to sell to ALP all of its right, title and interest in and to the Pacific Life Policy. He testified he had been provided a copy of that agreement before he purchased the policies and that understood all of SGI’s rights were going to be assigned to ALP, which would then be assigned to him, and that he relied on that Agreement as well when electing to purchase the subject policies.

Mr. Steinmann then identified the applications for insurance (Exhibits 1 and 2) which had been submitted by defendant Alhwity to 3^rd party (Not Plaintiff) and provided to him prior to purchasing the policies (by 3^rd party, not Defendants). Applications were filled out in 2007. He noted that defendant Alhwity had represented on both applications that she did not intend to travel or reside outside of the United States (and that such representation was important to him so that he would be able to locate Alhwity and secure a death certificate in the event of her death).

He also identified Exhibits 3 and 4 as the life insurance policies on defendant Alhwity’s life which he had purchased and Exhibits 9 and 10 as the change of ownership for the policies naming him as the owner of the two subject policies.

Mr. Steinmann identified Exhibit 11 as a spreadsheet prepared at his direction which reflected all payments, he had made to purchase the policies, which was the sum of $975,000, all premium payments he had made for the policies since the date of purchase. Defense objected to Exhibit 11, lack of foundation, incomplete, because Exhibit 11 is a combination of more than 30 documents, not signed or executed, excel spread sheets and self-prepared. Court overruled this objection and admitted Exhibit 11 into evidence.

He then identified Exhibit 12 which reflected payments he had made to private investigators in an effort to locate defendant Alhwity, none of whom were successful.

He identified Exhibit 13 reflecting one-time $400,000 payment made to a third party, Frank Castro, who had represented he was close to members of the Saudi royal family and could locate defendant Alhwity, but who was unsuccessful in doing so. Plaintiff also mentioned Orange County Superior Court case where he received a judgment against Frank Castro for $525,000.

Mr. Steinmann testified that he personally never made any attempts to contact defendants Alhwity and Abuyisa via phone, email or otherwise. Mr. Steinmann testified that he had other individuals who worked for him, including attorneys, attempt to locate defendants, but they were similarly unsuccessful in doing so.

On Cross, Plaintiff admitted he heard back from the company he hired to do investigation for him.

Mr. Steinmann testified that, since the purchase of the policies in 2010, neither he nor anyone acting on his behalf was ever successful in attempting to make contact with or locate defendant Alhwity.

Mr. Steinmann also identified Exhibit 15 as a life expectancy report he had received when he was evaluating whether to purchase the life insurance policies and that the report indicated defendant Alhwity was expected to live another 48 months from the date of the report (10/26/2009). When presented with Exhibit 16, which is a second life expectancy report (had life expectancy of 10 years or so), Mr. Steinmann stated he could not recall whether he had seen that report at the time he was evaluating whether to purchase the policies.

Upon cross-examination, Mr. Steinmann testified that other than the instant transaction, he has no other experience in life settlement agreements and does not consider himself knowledgeable in the area. He also agreed that life expectancy reports are not 100% accurate and they always involve a risk.

Plaintiff also agreed that the fact that a person is outside of the United States does not necessarily mean one cannot collect on life policy, but that it would be extremely difficult to get a death certificate from Saudi Arabia based on his experience. Plaintiff never could explain what experience he had though with getting death certificates from any country.

Mr. Steinmann testified that, based on what he knew, it would likely be very difficult determine whether defendant Alhwity had passed away if she were living in Saudi Arabia at the time of her death. He also testified there was a significant difference between an individual dying in a country such as France, as compared to a country such as Saudi Arabia.

Mr. Steinmann further testified that a tracking service he had hired was able to able to make contact with defendant Magdi Abuyisa regarding defendant Alhwity and that he was regularly told she was living in Saudi Arabia.

Mr. Steinmann testified that he filed a lawsuit and recovered a judgment against Frank Castro for $525,000 for the amounts paid to Castro to locate defendant Alhwity, but that he has been unable to collect on the judgment. Mr. Steinmann testified that he recovered nothing from anyone related to the subject transactions.

Mr. Steinmann testified that he believed he had similar case filed in another action in San Bernardino County against defendant Alhwity.

Mr. Steinmann testified that from the date of purchase of the subject policies until his conversation with a person in 2012 or 2013, he never requested any information from defendants. Only after that conversation wherein it was indicated that Dr. Wahab, who had prepared a medical report for Jamila Alhwity in connection with the life insurance applications, was known for his fraudulent activities, Plaintiff decided to start requesting information about defendant Alhwity. Plaintiff testified he never sued Dr. Wahab.

Mr. Gallagher testified that he had been substituted in as counsel of record for plaintiff in place of attorney Aaron Burden and that he was familiar with the pleadings and papers which had been filed and served in the case. He identified Exhibit 17 as a number of discovery documents which had been served on defendants in this matter and defendants’ responses thereto. Those documents consisted of Special Interrogatories, Demand for Production of Documents, Form Interrogatories, Notice of Deposition, Deposition Subpoena for Personal Appearance and Production of Documents, proof of service thereof, and Affidavit of Reporter of Nonappearance from an action in San Bernardino Superior Court, together with defendants’ objections thereto.

Mr. Gallagher testified that defendant Alhwity did not provide substantive responses to any of the discovery, did not appear for her deposition as noticed in this matter, and did not appear for her deposition in an earlier action filed in San Bernardino as mandated by the deposition subpoena.

Mr. Gallagher then testified that he had previously sent an email to defendants’ prior counsel in 2019 requesting information as to defendant Alhwity, but never received any response thereto. He identified Exhibit 14 as a copy of the original email and a follow-up thereto.

Plaintiff called defendant Jamila Alhwity to testify. Ms. Alhwity testified through an Arabic language interpreter who was present throughout her testimony. She is unable to speak, read or write English. She went to school through the 6^th grade and did not go to college.

She was born in Jordan and lived for a time in Palestine. She subsequently emigrated to the United States and has been here for a number of years. She lives with her son, Magdi Abuyisa, in Palmdale, California. She did not know the address of where she lives. She has been a US citizen for past 17 years and is 81 years old.

She did not have any earned income in 2007. She is not a professional investor. She has never worked. Her husband worked and earned money for the family. She had a net worth of approximately $150,000 - $200,000 in 2007.

She did not recognize Exhibits 1, 2, or 5, but acknowledged her signature on all of those documents. She did not read the documents before she signed them and does not recall signing them. She could not remember if any of the documents were explained to her. Defendant testified she cannot recall most of the events 15-12 years ago.

Her nephew, Kamies Elhouty, assisted her with procuring the life insurance policies at issue. She considered him her business partner. She sold the policies in 2010 when she no longer had sufficient funds to pay the premiums.

At the time she signed the applications, she would regularly travel. She goes to Saudi Arabia on a regular basis and will stay for anywhere from a couple of months to seven to nine six months.

When she goes to Saudi Arabia, she stays in different rented apartments that she rents in Jeddah. She does not know the address and does not know how to tell anyone to get to her there. She stays in different apartments when she travels there.

Since 2010, she has never provided any documents to Mr. Steinmann or anyone working on his behalf that refer or relate to her current medical condition, her primary care physician, any physician who treats her other than her primary care physician, the last time she sought medical attention, who is responsible for her financial and/or health care, or where she has lived since 2010. On Cross, Defendant clarified the reason is because she does not know Mr. Steinmann and he never requested anything from her.

Upon the conclusion of Ms. Alhwity’s testimony, it was noted that plaintiff’s counsel had mistakenly not been sworn in the day before when he testified. He was thereafter sworn in and affirmed the truth of all his previous day’s testimony.

Mr. Abuyisa is defendant Alhwity’s son and she lives with him. Mr. Abuyisa understood he had an obligation to provide information relating to his mother in connection with the life settlement agreement whenever it is requested from him, but believes he is the third person in line to do so. He would have expected the main contact persons would be contacted first, and then him. He identified his cousin, Kamies Elhouty, as the principal designated contact. He testified he had no involvement in purchasing of the subject policies or during its sale to Plaintiff. He also identified his brother and Mr. Elhouty’s wife as designated contacts.

Mr. Abuyisa testified that he has been periodically contacted about his mother and that he tells the person that contacts him that his mother is in stable health and what country she is living in. He has never told anyone about any changes in his mother's health condition or residence. At some point, someone showed up at his house and family members asked that person to leave.

Plaintiff next called Aaron Burden to testify. Mr. Burden testified remotely through L.A. Court Connect.

Mr. Burden is an attorney who was employed by Mr. Steinmann or one of the companies of which Mr. Steinmann was the principal. He became a lawyer in December of 2018 and filed the instant action in 2020.

He engaged in a number of activities related to attempting to locate Ms. Alhwity, including employing and interacting with private investigators who were retained to find her, seeking his father-in-law’s assistance in locating her in the Middle East, and driving to Mr. Abuyisa’s house and the kitchen appliance store operated by Mr. Abuyisa.

Mr. Burden could not recall the address of the house and business where he drove on these two occasions and could not recall date.

Mr. Burden stated some search efforts were concentrated on Jordan based on information received that Defendant Alhwity had been living in Jordan during some part of the intervening years.

Mr. Burden could not explain why a search effort were concentrated on Jordan, other than stating Plaintiff had believe Jordan is where Defendant is located. (Defense version)

Mr. Burden mentioned that a few pictures of a person who might have been Defendant Alhwity were taken, and he passed those pictures to Plaintiff when he was substituted out of this case.

Neither Mr. Burden nor anyone employed by him were ever able to locate Ms. Alhwity. After the lawsuit was filed and Mr. Burden learned that Ms. Alhwity was represented by counsel, he stopped attempting to contact her directly.

During the course of the lawsuit, Mr. Burden served special interrogatories upon Ms. Alhwity, among other types of discovery, and identified the first two documents in Exhibit 17 as the interrogatories he had propounded and Ms. Alhwity’s responses thereto. The first eight special interrogatories requested information that was specifically required by the terms of the Life Settlement Agreement. Ms. Alhwity served boilerplate objections to all of the interrogatories and never provided any substantive responses. Plaintiff intended to call Jener Sakiri, but he was scheduled to testify in the afternoon and unavailable in the morning. Because the court had another matter to address in the afternoon, his remote appearance was postponed until the next day.

The court then reviewed the exhibits with both counsel and noted whether there were any objections by defendants to admitting into evidence. Defense raised objections on all Exhibits and the court took it under consideration to render ruling later.

Plaintiff raised a question with the court as to whether, based on the evidence presented, it would entertain a motion to restrict defendant Alhwity’s travel pending the issuance of a final judgment in the matter. The Court indicated this seems to be properly addressed as a noticed motion.

Defense advised that a motion for nonsuit will be filed on July 12 orally. Defense also indicated that Exhibit 5, page 5-29, paragraph 7.6 requires that the subject contract must be interpreted according to the laws of the state of Connecticut. The court stated this is California state and California state law would apply.

The court indicated it had read section 7.6 of the life settlement agreement (Exhibit 5) after the discussion at the end of proceedings the previous day. Court clarifies that section 7.6 of contract is significant because it is not only about applicable state law, but also it states that the lawsuit should have been brought in the State of Connecticut. Court inquired as to why defense counsel had not raised any issue about applicable law or forum earlier.

Counsel for defendants indicated he had not read the agreement, which the court indicated was the focal point of the entire case, until the day before.

From 2019 to 2020, Mr. Sakiri represented Eric Steinmann in connection with his interest in the Alhwity life insurance policies. The issue presented was the inability to locate Ms. Alhwity to assess her and her health and the failure to maintain any contact as required by the life settlement agreement.

During the early part of 2019, he began familiarizing himself with the case and gathered information about Ms. Alhwity in order to find a way to locate her.

On July 1, 2019, he drove to the Los Angeles area with his cousin to perform investigative work in order to learn about the health and medical status of Alhwity.

He first went to LA City Kitchen, the shop of Magdi Abuyisa, who was an alternate designate contact on the policies. No one was there, but a neighboring shop owner directed him to the door of Abuyisa’s shop and said call that number to reach him. He called the number, but Abuyisa said he was driving to a meeting and couldn’t talk right then.

He then drove to the address listed as Alhwity’s home, which was also Abuyisa’s home. He knocked on the door and no one answered. He decided to go to dinner and return after eating.

After returning to the house, he saw a female in her mid-30s in the front yard. He asked if Jamila Alhwity lived there and explained he was hired to look into Alhwity’s whereabouts in regard to an insurance contract. He asked for her name, but she refused to answer and walked inside. An older woman then stepped outside who gave him the impression that she was the mother of the younger woman. She asked what this was regarding, and he told her. She acted as if she had no idea what was going on and told Mr. Sakiri he would have to speak to her husband, Magdi Abuyisa.

He told her he would wait in his car until he came home, and she told him she could call him on the phone. She called Abuyisa on a landline and handed Mr. Sakiri the phone.

He proceeded to talk to Abuyisa who asked him what this was all about and, after Mr. Sakiri answered, he told him Alhwity was in Saudi Arabia and then angrily and repeatedly told him to get off his property and to call Kamies Elhouty, who was the primary contact.

Jener Sakiri also testified that prior to driving to the residence on 7/1/2019, he never made calls or sent mails to ALHWITHY or ABUYISA or prior to driving to City Kitchen store (ABUYISA’s business). He testified he drove to City Kitchen store, and it was closed.

During Cross Examination, Mr. Sakiri mentioned that he never made any other attempts to call Defendants, or sent any certified mail, fedex or fax to Defendants address (in response to defense counsel separate questions about each method of communications outlined in contract paragraph 7.7). He also stated he never asked ABUYISA over the phone on July 1, 2019, to speak directly with ALHWITHY and never asked any questions about health and financials of ALHWITHY. Mr. Sakiri could not recall the address of the residence or the business where he drove to.

Mr. Sakiri tried to get more information from Abuyisa, but he kept repeating the above.

After the phone call, Mr. Sakiri got in his car and left, unable to secure any further information.

By August 2019, Mr. Sakiri had compiled a guide for use by a private investigator in hopes of finding Ms. Alhwity. In September 2019, He hired a professional company to run a background check on Ms. Alhwity and a private investigative company to conduct further research into Ms. Alhwity. The Wilson’s report gave additional insight into Alhwity and her family but did not enable him to find Ms. Alhwity.

In the early part of 2020, Mr. Sakiri assisted in drafting and filing a complaint against Alhwity and Abuyisa. He did a property record search for her address and the property owner was listed as her son, Abuyisa. It was listed for sale at that time. He went to the property again and did not find anyone at the property. He talked to a next-door neighbor and gave the neighbor his contact information and asked him to contact Mr. Sakiri if the neighbor saw Alhwity.

Shortly after that, he stopped working for Mr. Steinmann and had not had involvement in the case until Mr. Steinmann reached out to him on January 21, 2023 regarding his availability to testimony.

On cross-examination, Mr. Sakiri testified that he did not drive to Kamies Elhouty residence because that was not where Alhwity was listed as living. It was represented that she lived in Granada Hills with her son Abuyisa. He testified he was not able to ask Mr. Abuyisa any other questions about Alhwity because he was so agitated and yelling.

On Cross, Defense asked Mr. Sakiri why he made investigations efforts in Jordan if Defendant does not live there, and he says he does not know why Jordan, he just followed Plaintiff's instructions.

Mr. Sakiri testified that Shannon Gallagher and Aaron Burden were involved and assisted him in the drafting of the complaint for the instant case in early 2020.

He also testified he did not attempt to give notice to Alhwity or communicate to her pursuant to the provisions of Section 7.7 of the life settlement agreement.

He also testified that he believed plaintiff’s counsel Shannon Gallagher assisted him and Mr. Burden in preparing the complaint in the action.

Mr. Abuyisa testified that his mother lived with him for a year and a half in 2019 and 2020. He testified Mr. Sakiri went to their home in January 2019 and that Ms. Alhwity was in Saudi Arabia at that time.

Mr. Abuyisa never gave plaintiff notice of any change of address for his mother.

Defendants called plaintiff’s counsel Shannon Gallagher to testify. The parties were granted the courtesy by the Court of testifying remotely during the last session. Mr. Gallagher testified that he did not believe he was involved in drafting the complaint in the action, although he was periodically consulted about the case.[1] After additional questions, Mr. Gallagher testified he did not participate in the drafting of the complaint.

Defense counsel accused Plaintiff’s counsel of perjuring himself. The Court found no bases for this accusation and requested Defense counsel to resume his inquiry.

Shannon Gallagher testified that he does not remember if he participated in drafting the original complaint in this case. He did recall working with Aaron Burden and Jener Sakiri on this case without providing specifics. Defense asked Shannon Gallagher if he read the contract before taking over this case as an attorney of record, and he stated he did, but nonetheless he could not confirm her read the paragraph 7.6 or 7.7 regarding lawsuit being filed in State of Connecticut and regarding the methods of communication under the contract.

The court reviewed the exhibits which had been offered into evidence and overruled all objections made by defendants. All exhibits in the exhibit binder, other than exhibit 8, were admitted into evidence.

Defendants then made a motion for nonsuit pursuant to CCP section 581 for both causes of actions. Defense argued that all elements of breach of contract (breach, damage, and causation) and negligence (existence of an independent duty per Court’s demurrer ruling, breach of duty, causation, and damages) were not present and were not proved by Plaintiff. The court denied the motion on the grounds that there was sufficient evidence to allow the case to move forward on both causes of actions.

The court then considered a motion by plaintiff to restrict the travel of defendant Alhwity. Defendants’ motion for preliminary injunction was denied.

The court ordered defendant Alhwity to personally appear in court on August 8, 2023, at 10:00 a.m.

By July 17 – joint settled statement – Defense counsel suggested that any disagreement in wording the settled statement can be resolved by putting both Plaintiff and Defense version side by side in parenthesis, the court agreed and approved that as a method to overcome disagreements.

Because there was not a court certified interpreter available, the parties stipulated the court could provide a written translation of the order to appear generated by Google, which defendant Alhwity then read and had read to her by her son, defendant Abuyisa, and acknowledged that she understood the order.

[1] Counsel for the defendant states he heard Mr. Gallagher state “yes” when asked if he participated in drafting the Complaint. This Court did not hear that. In fact, at about that time LA Court connect appeared to be having connection issues and the Court asked Mr. Gallagher to log off and re-logon.