Lincoln, ex-agent, settle on mediator for lawsuit over FIA returns

Lincoln Financial and nine plaintiffs – including a former Lincoln agent – suing over fixed indexed annuity performance agreed on a mediator to settle the dispute.

Both sides accepted John DeGroote of DeGroote Partners, a Dallas mediation and arbitration firm, according to court documents.

The parties were ordered to name a mediator, or state that they cannot agree on one, by July 11, by U.S. District Judge Ed Kinkeade. The judge closed the case until he rules on motions to dismiss.

The nine plaintiffs – including an ex-Lincoln agent – allege that the insurer misrepresented the potential returns with its OptiBlend fixed indexed annuity. They seek class-action status in a lawsuit filed in the Northern District of Texas.

Former agent Henry Morgan and eight other plaintiffs, all Morgan's clients, signed FIA contracts in February 2020, court documents say. Plaintiffs say Lincoln led them to expect the consistent 6% gains illustrations showed.

The two sides recently opened settlement talks, a move encouraged by the court. While the judge agreed to a timeline that ends with a trial date of April 7, 2025, the parties agreed to hold that schedule in abeyance for now, the judge's order stated.

Longtime mediator

DeGroote is a former global company general counsel "now focused on special business situations, significant matters, and efficient dispute resolution as a trustee, mediator and arbitrator," his company biography reads.

A Duke Law School graduate, DeGroote "served as the neutral intermediary, outside board member or trustee in numerous disputes around the country, and as a mediator and arbitrator in significant litigation," according to his bio.

Plaintiffs in the Lincoln lawsuit claim a marketing consultant "made several oral representations to Henry Morgan and, on information and belief, made the same misrepresentations to other brokers, agents and customers, that when the market was no longer in the bull direction a return would still be generated because of the dividend stock mix in the index."

In its response, Lincoln claimed the marketing information referenced in the lawsuit was emailed to Morgan and other Lincoln agents and marked, “For agent use only. Not for use with the public.”

Lincoln noted that all of the plaintiffs signed an application in which he or she acknowledged that “all payments and values provided by the contract, when based on experience of the index Account, are not guaranteed as a dollar amount.”

Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.