Do the right thing, a judge cautions

By Monica Yant Kinney

Inquirer Columnist

As a rule, if you're a defendant in a civil lawsuit, you don't want to hear a judge say he has to restrain himself from whacking you on the head with his gavel.

It means that the facts of the case are so overwhelmingly obvious, the conduct so clearly conniving, that anyone - especially the guy who wears a robe to work - can see it.

Lucky for the lawyer representing Life Partners Inc., then, that his client saw the light before state Superior Court Judge M. Allan Vogelson unleashed his fury.

Regular readers will remember the case of M. Smith v. Life Partners Inc.

Smith is a local woman who learned in the early 1990s she had cancer and AIDS. Given two years to live, she sold her $150,000 life insurance policy to LPI, a Texas company, for $90,000.

It was a moneymaking match made in heaven. Smith would get to spend her last months comfortably at home, and LPI would collect a 66 percent profit when she perished.

But when Smith beat the odds, LPI offered no hearty congratulations.

In the contract, LPI promised to pay Smith's health and life insurance premiums. The longer she lived, the more she cost the company.

After more than a decade, LPI has spent more keeping Smith alive than it stands to make when she dies.

A contract's a contract

Rarely has a contract dispute seemed so ghoulish.

For years, Smith stood by helplessly as LPI threatened to cut off her life support.

Sometimes, company officials denied they had any obligation to fund her health care. Other times, they waited until the last possible minute to pay, as if testing her ability to weather the stress.

"It was crazy, nerve-racking," Smith told me. "Once they'd pay, I'd breathe a little. Then in six months, I'd think, 'Here we go again.' "

It figures that the second Smith haled LPI into court, company officials would have a change of heart.

At Friday's hearing, attorney Joseph Kenney of the Ballard Spahr firm assured Vogelson that LPI had no intent to breach this contract.

No longer would company officials taunt the woman who hurt the bottom line by staying alive. LPI's president had even signed an affidavit promising to do the right thing.

"What you have before you," Kenney said, "is a reaffirmation of the obligation of my client."

It couldn't have come at a better time, given Vogelson's obvious distaste for the morbid matter.

"It takes all the judicial restraint I can muster not to characterize the conduct of this case," he said dryly.

"The payment of the premiums is a cost of doing business," Vogelson reminded Kenney. "It is what it is."

Such are the risks of betting big on matters of life and death.

"As in any business," the judge said, "you win some, you lose some."

Insurance policy

On the other side of the aisle, Smith's attorney, Jacob Cohn, remained concerned.

Given LPI's financial interest in Smith's timely demise, should his client really be expected to take the company at its word?

Especially now that her health insurance costs nearly $30,000 a year?

"AIDS is no longer a death sentence," Cohn argued. "She may be expected to live many more years."

Promises are great, he said, but "we want security."

Vogelson agreed that the case is far from closed.

Sometime before the next premium is due in the fall, both sides will meet to consider having LPI put a lump sum into a trust that will pay the bills until Smith dies.

Smith, 50, knows that could mean having an actuary compute her life expectancy.

Creepy? Sure. But she's hardly a sure thing.

"Honestly, I don't think I'm going to die anytime soon because of HIV," Smith said. "I think I'll live to 70-something and die of a heart attack.

"Or else this could all jinx me," she joked. "I could fall down the stairs tomorrow or get hit by a car."

She may have a death sentence and have earned the contempt of a big company like LPI, but this lost cause hasn't lost her sense of humor.