EFG Bank AG, Cayman Branch v. AXA Equitable Life Insurance Company

Background

The court addressed Plaintiffs’ motions in limine—pretrial requests asking the court to limit or exclude evidence—in two consolidated breach-of-contract cases against AXA Equitable Life Insurance Company. The claims concern AXA’s increase of the “cost of insurance,” a monthly charge deducted from the value of a policyholder’s account, on some Athena Universal Life II policies. Trial was scheduled to begin on October 30, 2023. The court had previously ruled on AXA’s motions in limine and then ruled on Plaintiffs’ motions.

Rulings on Plaintiffs’ Motions

- Motion 1: The court stated that it was inclined to find a state insurance regulator’s “No-Objection Letter” relevant to evidence about industry custom and usage concerning the meaning of “given class,” and not hearsay when used for that purpose. The court directed the parties to address whether the evidence should nevertheless be excluded under Evidence Rule 403, which concerns confusion, wasted time, and unfair prejudice. The court reserved judgment on this motion.

- Motion 2: The court granted the motion to the extent Plaintiffs sought to prevent AXA from asserting a defense based on stranger-originated life insurance, or from presenting evidence specifically about how Plaintiffs’ policies originated. The court stated that limited evidence about concerns associated with that practice might still be relevant as context for AXA’s cost-of-insurance increase, including to respond to Plaintiffs’ argument that AXA improperly targeted investor-owned policies and to show that such practices could be expected to increase mortality experience.

- Motion 3: The court granted the motion to the extent Plaintiffs sought to exclude evidence about the ethics or morality of their investments in life insurance and their internal controls for preventing criminal activity. The court found those subjects irrelevant to the issues at trial. The court denied the request to exclude evidence concerning Plaintiffs’ investment strategies and business models without prejudice to particularized objections at trial, because Plaintiffs’ own models could be relevant. The court reserved judgment on the motion in its concluding order.

- Motion 4: The court denied the motion. It relied substantially on AXA’s opposition and on an earlier ruling that a reasonable factfinder could rely on evidence that AXA’s mortality assumptions were consistent with, or lower than, assumptions used by some institutional investors, including some Plaintiffs, when deciding to purchase the policies. The court also found that Plaintiffs had not shown a basis for reconsidering that ruling or for making what the court viewed as an untimely challenge to AXA’s expert testimony under the standards governing expert evidence. The court noted that Plaintiffs could object to particular questions at trial.

- Motion 5: The court agreed that evidence about Plaintiffs’ financial status, ownership, sophistication, other investments, due diligence, advisors, and subjective understanding of the policies was almost certainly irrelevant to whether AXA breached the contracts. But it denied the motion without prejudice to particularized objections at trial because some evidence, such as Plaintiffs’ places of business, appeared innocuous and some evidence might bear on industry custom and usage of “given class.”

- Motion 6: The court denied the motion. It relied on an earlier ruling that mortality experience after the cost-of-insurance increase was relevant, though not conclusive, to whether AXA’s earlier projection or prediction was reasonable. The court found that Plaintiffs had not provided a basis to reconsider that ruling at the pretrial stage.

- Motion 7: The court rejected AXA’s argument that evidence about lapse-protection riders was relevant because policyholders had been told that cost-of-insurance increases were possible. The court stated that the trial question was whether AXA breached the contracts, not whether Plaintiffs knew such increases were possible. It also stated that any relevance was outweighed by the risks of confusion, wasted time, and unfair prejudice. The court reserved judgment, however, on whether and to what extent the evidence might be relevant to damages.

- Motion 8: The court stated that one of three referenced emails might be relevant to industry custom and usage concerning “given class,” while the other two did not appear relevant. The court directed the parties to address the admissibility of the potentially relevant email under Evidence Rule 403 and to clarify whether any other third-party views were at issue. The court reserved judgment on this motion.

Disposition and Significance

The concluding order states that Plaintiffs’ second motion in limine was granted, Plaintiffs’ fourth, fifth, and sixth motions were denied, and the court reserved judgment on Plaintiffs’ first, third, seventh, and eighth motions. The opinion therefore resolved some evidentiary issues before trial while leaving others for the final pretrial conference or trial. It did not decide whether AXA actually breached the insurance contracts.