John Hancock Life Insurance Company v. Wu

Background

John Hancock Life Insurance Company (U.S.A.) and John Hancock Variable Life Insurance Company, collectively referred to as John Hancock, sued Connie Mei Chuan Wu. They alleged that Wu fraudulently claimed and received $841,881 in long-term-care benefits under a rider to a life insurance policy.

The alleged fraud involved caregiver services provided at Wu’s home by Jane Yu. The complaint alleged that Wu did not qualify for benefits during substantial periods, that Yu was Wu’s sister and therefore ineligible under the policy, that Wu billed for eight hours of daily care even though Yu worked fewer days and hours, that Yu’s work did not constitute assistance with the policy’s defined activities of daily living, and that Wu kept most of the payments rather than paying them to Yu.

Wu did not respond to the complaint, and the clerk entered her default.

Motion

John Hancock moved for default judgment. Default judgment is a judgment entered when a defendant fails to respond, subject to the court’s review. John Hancock requested $841,881, representing the benefits it said Wu obtained through false and fraudulent pretenses, plus $611.03 in costs.

John Hancock also sought a declaration that Policy No. 93 028 454, under which the benefits were paid, and Policy No. 14 190 117, another policy issued to Wu, were terminated and entirely void.

Court’s analysis

Applying the factors identified in Eitel v. McCool, the court found that John Hancock had made an adequate showing that default judgment was warranted at least in favor of John Hancock Life Insurance Company (U.S.A.), the entity that apparently made the benefit payments.

The court did not resolve whether it was appropriate in a default proceeding to declare one or both policies terminated and void. It noted that John Hancock had not explained what death-benefit obligations would remain if the policies were not declared terminated and void. The court also observed that, if John Hancock recovered some or all of the benefits through a money judgment before Wu’s death, it was not self-evident that all death benefits could still be withheld. Finally, the court questioned whether Wu should receive a credit for premiums she had paid if the policies were declared terminated and void, potentially offsetting her repayment obligation.

Order

The court vacated the hearing set for September 21, 2023. It ordered John Hancock to provide supplemental briefing addressing these issues within 14 days of the order. The court stated that the matter would then be considered without oral argument. The opinion does not state that default judgment was entered or that the motion was granted or denied.