Lincoln National Life Insurance Co v. Retirement Value LLC

• Court: Court of Appeals for the Third Circuit
• Decided: June 10, 2026
• Docket: 24-2663
• Status: Unpublished

Opinion

U.S. COURT OF APPEALS FOR THE THIRD CIRCUIT No. 24-2663

LINCOLN NATIONAL LIFE INSURANCE CO

v.

RETIREMENT VALUE LLC, Appellant

_____________________________ On Appeal from the U.S. District Court, D.N.J. Judge Robert Kirsch, No. 3:21-cv-20438

Before: RESTREPO, MCKEE, AND AMBRO, Circuit Judges Submitted: Nov. 14, 2025; Filed: June 10, 2026 _________ NONPRECEDENTIAL OPINION* _________

RESTREPO, Circuit Judge.

Appellant, Retirement Value, LLC, sought to collect payment on life insurance

policies issued by Appellee, Lincoln National Life Insurance Company (“Lincoln”).

Lincoln, believing the policies to be void ab initio, filed a lawsuit and was eventually

granted summary judgment. Retirement Value now appeals that judgment and the

dismissal of its counterclaims. For the reasons that follow, we will affirm the District

Court’s order.

* This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7, does not constitute binding precedent. I.

By way of background, stranger-originated life insurance policies (STOLIs) are

life insurance policies “procured and financed by investors—strangers—who have no

insurable interest in the life of the insured yet, from the outset, are the ultimate intended

beneficiaries of the policy.” Sun Life Assurance Co. of Canada v. Wells Fargo Bank,

N.A., 208 A.3d 839, 850 (N.J. 2019). STOLIs are void ab initio under New Jersey law.

Id. at 857 (“When an insurance policy violates public policy, it is as though the policy

never came into existence.”); N.J. Stat. Ann. § 17B: 24-1.1(b).

This case involves STOLI policies procured to insure the life of Haya Majerovic.

In 2007, her son Moshe Majerovic entered into an agreement with investors whereby he

would secure an insurance policy on his mother’s life and the investors would pay the

premiums on the policy until it either matured or was sold. The agreement was that

Moshe Majerovic would get 10% of the policy’s value at the time of sale or maturity,

minus the amount paid for the premiums, and the remaining 90% would be paid to the

investors. The investors in Mrs. Majerovic’s life insurance policy were two

organizations: Congregation Sons of Ateres Joshua and Congregation Beis Shloma.

The agreement was memorialized in a document titled the Haya Majerovic Family

Trust Agreement, which was dated February 1, 2007. The situs of the Haya Majerovic

Family Trust (the “Trust”) was Lakewood, New Jersey. On or about March 8, 2007,

Jefferson Pilot Life Insurance Company (“Jefferson Pilot”), a predecessor entity to

Lincoln, received an initial application for an $8 million insurance policy on Mrs.

Majerovic’s life. The application, signed in Lakewood, New Jersey, listed the Trust as

2 the owner and beneficiary of the policy. A financial supplement to the application, also

signed in Lakewood, New Jersey, falsely represented that Mrs. Majerovic had a net worth

of $13 million. While the application was pending, an amendment was submitted

requesting that the policy be split into two policies: a $5 million policy with the benefit

going to the Congregation Beis Shloma, and a $3 million policy with the benefit going to

the Congregation Sons of Ateres Joshua. Jefferson Pilot/Lincoln granted the request and

issued the two policies for delivery to the Trust at its Lakewood, New Jersey address.

The Majerovics never paid any of the premiums for the policies.

In 2010, the Trust sold the policies to James Settlement Services (“JSS”). The

proceeds of the sale were paid to the Trust at the New Jersey address, and the money was

distributed to the Trust’s investors. The Majerovics received nothing. JSS then sold the

policies to Retirement Value, which continued to pay the premiums on the policies. In

November 2019, Mrs. Majerovic passed away, and Retirement Value submitted a claim to

Lincoln requesting payment of the death benefits.

On December 9, 2021, Lincoln filed a lawsuit in the District Court seeking a

declaratory judgment that the policies were void ab initio because they lacked an

insurable interest when issued and were illegal human life wagers. Retirement Value

answered, pleading affirmative defenses as well as counterclaims for breach of contract,

fraud, negligent misrepresentation, bad faith, promissory estoppel, and alleged violations

of Texas’s Deceptive Trade Practices Act. Retirement Value also asserted a counterclaim

to obtain a refund of the premiums it paid if the policies were deemed void ab initio.

3 On May 31, 2022, Lincoln moved to strike Retirement Value’s affirmative

defenses and dismiss its counterclaims. On December 9, 2022, District Judge Michael A.

Shipp partially granted Lincoln’s motion, striking Retirement Value’s defenses except for

unjust enrichment and incontestability, and dismissing its counterclaims except for breach

of contract, bad faith, and premium recoupment. In so doing, Judge Shipp applied New

Jersey law. On January 13, 2023, Retirement Value moved for reconsideration of the

order, arguing that Judge Shipp’s decision to apply New Jersey law was premature given

new evidence that one of the trustees had lied to Lincoln about signing documents in

New Jersey. The case was reassigned to District Judge Robert A. Kirsch, who denied the

motion for reconsideration. Judge Kirsch ruled that the choice-of-law decision was not

premature, and the new evidence did not alter the court’s ruling.

On September 18, 2023, the parties cross-moved for summary judgment. Lincoln

sought declaratory judgment on the grounds that the policies were void ab initio under

New Jersey law because the policies’ owners lacked an insurable interest in the life of the

insured. Retirement Value again argued that New Jersey law should not apply, this time

under the theory that the two policies constituted a group policy. Because the alleged

group policy insured the life of New York resident Ms. Majerovic, Retirement Value

claimed that New York law should apply.

On August 20, 2024, Judge Kirsch rejected Retirement Value’s group policy

argument, finding that the policies “operate, for all intents and purposes, as insurance

policies.” A25. Judge Kirsch found Judge Shipp’s decision that New Jersey law applies

to be “legally correct” because New Jersey “has the most significant relationship to the

4 Policies.” A28. Applying New Jersey law, Judge Kirsch found that the insurance

policies were STOLIs and therefore void ab initio for lack of insurable interest. He

therefore granted Lincoln’s motion for summary judgment, and denied Retirement

Values’ premium refund claim in full, finding inter alia, that the record refuted any claim

that “Retirement [Value] was an innocent purchaser with no knowledge as to the STOLI

arrangement.” A47.

Retirement Value appeals the order granting judgment in favor of Lincoln, raising

arguments similar to those raised before the District Court: that the two life insurance

policies constitute a group policy that should be litigated under New York law, and the

District Court erred by imposing New Jersey’s insurable interest requirement on the

policies because such a requirement does not apply to group policies. We will affirm the

District Court.

II.1

A. New Jersey Law Governs

Retirement Value argues that New York law should govern this dispute because the

Majerovic policies were certificates to a group policy rather than individual insurance

policies. It claims that a New York statute provides that certificates issued to a group

policy insuring a New York resident, which Ms. Majerovic was, are deemed to be

delivered in New York and therefore must comply with New York insurance law. N.Y.

1 The District Court had diversity jurisdiction under 28 U.S.C. § 1332, and we have appellate jurisdiction pursuant to 28 U.S.C. § 1291.

5 Ins. Law § 3201(b)(1). We disagree that this statute, even if applicable to the Majerovic

policies, mandates the application of New York law.2

A federal court with diversity jurisdiction must apply the choice of law principles

of the forum state. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496–97 (1941).

As this lawsuit was filed in New Jersey, we apply New Jersey’s choice of law rules to

determine which state’s substantive law applies. Where, as here, a claim alleges breach

of an insurance policy, “the law of the place of the contract ordinarily governs the choice

of law.” State Farm Mut. Auto. Ins. Co. v. Est. of Simmons, 417 A.2d 488, 492 (N.J.

1980). The place of contract is where “the contract was negotiated, executed and

performed.” NL Indus., Inc. v. Com. Union Ins. Co., 65 F.3d 314, 325 (3d Cir. 1995).

Once the place of contract has been established, courts look to see if another state has a

more significant relationship to the coverage action. Id. Such a relationship is

determined by examining the factors in Restatement (Second) of Conflicts § 188(2),

which includes, inter alia, “the location of the subject matter of the contract” and “the

domicile, residence, nationality, place of incorporation, and place of business of the

parties.” Id.

2 Alternatively, Retirement Value argues that if New York law does not apply, the Court should apply Rhode Island law because provisions in the policies state that the contracts are “‘subject to the laws of the Governing Jurisdiction,’ which [was] Rhode Island.” Brief for Appellant 24 (quoting A216). This provision is not an unambiguous choice-of- law provision and, even assuming it was, New Jersey law gives courts the authority to refuse to apply the chosen state’s law if it has no substantial relationship to the parties. Instructional Sys. v. Comput. Curriculum Corp., 614 A.2d 124, 133 (N.J. 1992). Here, Retirement Value does not contend that the policies had any relationship with Rhode Island. 6 Assuming arguendo that the policies could be deemed certificates to a group

policy, it does not follow that New York law applies. We agree with the District Court

that N.Y. Ins. Law § 3201(b)(1)’s mandate that policies delivered in New York must

comply with New York’s insurance code does not mean that New York law must apply to

any subsequent litigation. The District Court correctly stated that where group policies

are delivered “should simply be one factor in the Court’s choice of law analysis.” A28.

Given the facts before us, this factor does not result in New York law governing this

dispute.

Here, New Jersey was plainly the place of contracting. The policies were applied

for by a New Jersey-based trust, the application was signed in New Jersey, the policies

were issued for delivery to the Trust at its New Jersey address, and the Trust received the

policies in New Jersey. Moreover, the application’s cover letter stated that the application

“has been signed in NJ because it will be owned by a NJ trust.” A12. The application

also included an “Out-of-State Sale Verification Form,” which identified New Jersey as

the “State of Residence of Owner” and provided that the policy was “principally

negotiated, issued and delivered” in New Jersey. Id. In looking to whether New York

had a more significant relationship to the coverage action, we conclude that only Ms.

Majerovic’s place of residence favored New York law. This relationship is diminished by

the fact that the Trust was the applicant and owner of the policies while Ms. Majerovic

was merely a pawn used by the investors to implement their money-making scheme. We

will therefore affirm the District Court’s decision that New Jersey law should apply.

7 B. Under New Jersey law, the Grant of Summary Judgment was Proper

Next, we address whether summary judgment was properly awarded to Lincoln

under New Jersey law. Retirement Value contends that the District Court applied the law

incorrectly because New Jersey’s laws governing group life insurance policies “say

nothing about insurable interest.” Brief for Appellant, 38 (emphasis omitted). Again

assuming arguendo that New Jersey’s group life insurance law applies to the policies, this

contention misses the mark. New Jersey law deems STOLI policies, regardless of

whether they are individual or group insurance policies, to be violative of public policy

and therefore void ab initio. See N.J. Stat. Ann. § 17B:24-1.1(b); Sun Life Assurance Co.

of Canada v. Wells Fargo Bank, N.A., 208 A.3d 839 (N.J. 2019). We will therefore affirm

the District Court’s grant of summary judgment for Lincoln.

We exercise plenary review over the grant of summary judgment. Razak v. Uber

Techs., Inc., 951 F.3d 137, 144 (3d Cir. 2020), amended, 979 F.3d 192 (3d Cir. 2020).

Summary judgment is appropriate when the record shows “no genuine dispute as to any

material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.

56(a). “For purposes of summary judgment, . . . we must view the evidence in the light

most favorable to the non-moving party.” Mellott v. Heemer, 161 F.3d 117, 120 n.2 (3d

Cir. 1998). Because this action is based on diversity jurisdiction, we apply state

substantive law when exercising review. Chamberlain v. Giampapa, 210 F.3d 154, 158

(3d Cir. 2000).

We agree with the District Court that the policies were “undoubtedly” STOLI

policies, A39–40, and note that Retirement Value did not meaningfully challenge that

8 conclusion on appeal. The investors were strangers to the insured, and the Majerovics

never paid any of the premiums for the policies. The investors were entitled to 90% of

the policies’ death benefits, and when the policies were sold, the Majerovics did not

receive the proceeds they were promised. The investors had no insurable interest in the

life of the insured but yet were the intended beneficiaries of her life insurance policies.

Because such policies are deemed to violate public policy, “it is as though [they] never

came into existence.” Sun Life, 208 A.3d at 187 (citing D'Agostino v. Maldonado, 78

A.3d 527, 543 n.4 (N.J. 2013) (“A void contract is a contract that is of no legal effect, so

that there is really no contract in existence at all.” (citation modified))).

Retirement Value’s contention that these policies, which are not supported by an

insurable interest, would become valid if found to be part of a group policy is

unpersuasive. Following the Sun Life decision, the New Jersey legislature enacted

amendments to its Viatical Settlement’s Act that state “[a] contract, agreement,

arrangement, or transaction, including, but not limited to, a financing agreement or any

other arrangement or understanding entered into . . . for the furtherance or aid of a

stranger-originated life insurance policy . . . shall be void and unenforceable at the

outset.” N.J. Stat. Ann. § 17B:30B-18(b).3 Given that the policies were purchased

through a financing agreement, namely the Trust, which was intended to benefit third-

party investors who had no insurable interest in Ms. Majerovic’s life, they were instantly

3 The next paragraph of the statute specifically addresses trusts, stating that “[a] trust that is created to give the appearance of an insurable interest and that is used to initiate or procure policies for investors shall be in violation of the insurable interest laws of this State and the prohibition against wagering on life.” N.J. Stat. Ann. § 17B:30B-18(c). 9 unenforceable under section 17B:30B-18(b). There is nothing in the statute’s plain

language that excludes group policy insurance certificates from its purview. Instead, the

Act defines “policy” as either “an individual or group policy, group certificate, contract

or arrangement of life insurance.” N.J. Stat. Ann. § 17B:30B-2; see also S. Commerce

Comm. Statement to Assemb. No. 1263, 219th Leg., 1st Sess., at 2 (N.J. 2020) (Section

17B:30B-1 et seq. “is intended to codify [the] holding” of Sun Life, which “reaffirmed the

long-standing tenet” that life insurance policies procured to benefit those “without an

insurable interest in the life of the insured” are “void at the outset”); Sun Life, 208 A.3d at

845 (noting that “all New Jersey insurance policies must be based on an insurable

interest” (emphasis added)). Because the STOLI policies never existed under New Jersey

law, Lincoln was properly awarded declaratory judgment on this issue.

Finally, we conclude that Retirement Value waived its claim that it was entitled to

a refund of the premiums paid toward the policies. Retirement Value failed to respond to

Lincoln’s arguments addressing its premium recoupment counterclaim below and thus

failed to preserve the matter for appeal. We agree with the District Court that Retirement

Value’s “passing references” to its recoupment claim, made without reference to any legal

authority, are not entitled to appellate review. A46; see also Garza v. Citigroup Inc., 881

F.3d 277, 284 (3d Cir. 2018) (“It is well established that arguments not raised before the

District Court are waived on appeal.” (citation modified)); John Wyeth & Bro. Ltd. v.

CIGNA Int’l Corp., 119 F.3d 1070, 1076 n.6 (3d Cir. 1997) (“[A]rguments raised in

passing . . . but not squarely argued, are considered waived.”). We will therefore affirm

10 the District Court’s ruling that Lincoln was entitled to summary judgment on the

premium refund claim.

*****

For the foregoing reasons, we will AFFIRM.