On October 22, 2020, Reem filed a declaratory relief action, seeking a judicial declaration that: (1) she had purchased three life insurance policies issued to her sister Rehab pursuant to a November 22, 2018 Purchase and Sale Agreement (PSA), and (2) her nephew and designee, Kameel Reehani, was the sole owner of record of the policies in accordance with change of ownership forms submitted to the life insurance companies.[1] In her complaint, Reem alleged that in 2015, Rehab and her son Shadi asked her to purchase life insurance policies insuring Rehab. In exchange for paying all policy premiums, Reem would receive 80 percent of the death benefits, of the premiums she paid. Shadi was designated the beneficiary of the remaining 20 percent interest. Rehab subsequently obtained three life insurance policies, and Reem made various payments to her, which were used to pay the premiums.
The complaint further alleged that in 2017, Rehab and Shadi sought to renegotiate the parties’ agreement, and in response Reem stopped making payments, which resulted in two policies lapsing. Subsequently, in 2018, the parties entered into the PSA, wherein Reem agreed to reinstate the lapsed policies and continue to pay all premiums in exchange for a 70 percent interest in the death benefits. Shadi was designated the beneficiary of the remaining 30 percent interest. In accordance with the PSA, Rehab executed change of ownership forms for the policies, changing the owner of record to Reem. But the forms were never submitted to the insurers due to Shadi’s threats against Reem. During this period, Reem’s daughter, Sandra Rabadi, and Rehab opened a joint bank account, and Reem began making payments into this account instead of directly to Rehab.
The complaint alleged that in 2019, after Rehab was diagnosed with cancer, Shadi began pressuring Reem to sell the policies so he could cash out. Shadi and his wife Maha also began contacting the insurers to change the policy information. In response Reem and Rehab agreed to make Reehani the mediator and new owner of record. In August 2020, Rehab executed several change of ownership forms changing the record owner of the policies to Reehani and submitted the forms to the insurers. The complaint further alleged that Shadi then contacted the insurers, claiming Rehab’s signature on the change of ownership forms were forged and requesting they reverse any changes to the record owner. Subsequently, the insurers either refused to confirm whether they have processed the change of ownership forms or advised Reem they had reversed the change of ownership.
B. Answer and Cross-Complaint
Rehab, represented by LLG, filed an answer generally denying the allegations. She also asserted numerous affirmative defenses, including fraud and duress, based on allegations that Reem threatened or tricked her to sign the documents.
On June 22, 2021, the Nasrawis, represented by LLG, filed a cross-complaint against Reem and her son Salameh Rabadi (collectively the Rabadis), and Reehani. The cross-complaint alleged causes of action for false impersonation and elder abuse, and sought restitution, quiet title and declaratory relief.
The cross-complaint alleged that in 2015, the Rabadis enticed Rehab, who does not read or speak English, to apply for life insurance. She agreed to allow Salameh to apply for life insurance on her behalf and “to fund all insurance premiums to repay prior debts owed to Rehab by his family.” Rehab would be the insured and sole owner, and Shadi would be the sole beneficiary.
In May 2017, Salameh informed Shadi he had a buyer for one of the policies, but Rehab refused to sell. In retaliation, Salameh stopped paying premiums on two policies, causing them to lapse. During the following years, defendants or their agents began impersonating Rehab and contacting the various life insurance companies to change the owner of record or beneficiary. On Thanksgiving evening in 2018, Reem’s daughter and another member of Reem’s family fraudulently induced Rehab to sign the PSA.
The cross-defendants filed an answer, generally denying the allegations and raising numerous affirmative defenses.
C. Motion to Disqualify Attorney
On July 16, 2021, Reem moved to disqualify LLG from representing the Nasrawis because LLG previously had represented Reem on an allegedly substantially related matter. The motion alleged that LLG represented Reem, her husband Josef, her daughter Sandra and her son Nidal from April 2013 through April 2014. In that matter, LLG prepared a complaint asserting causes of action relating to their interests in life insurance policies of others, including misappropriation of commission, attempting to sell the policies without the Rabadis’ consent and misappropriation of the interests of others in the policies. The motion to disqualify alleged the prior matter involved similar factual allegations including: “(1) misappropriation of commissions in connection with the sale of life insurance policies, (2) the secret selling of life insurance policies without the owners’ consent, (3) impersonating other parties in efforts to deceive insurers and other owners of interests in life insurance policies, (4) false reports, misrepresentations, and forgeries of life insurance documentation presented to insurers of policies in which the Rabadis hold an interest, (5) the financing of premiums on life insurance policies owned by the Rabadis, (6) elder abuse, (7) the inability to speak or understand English, (8) solicitations of other Jordanians in Orange County to invest in life insurance, (9) misappropriating others’ interests in life insurance policies, (10) taking advantage of unsophisticated elderly middle easterners through trickery and deceit by using their family members as agents and accomplices, and (11) conspiracies between Jordanian insureds and brokers to defraud those holding contractual interests in life insurance policies of others.”
The motion to disqualify further alleged that during the year-long representation, LLG’s attorneys exchanged more than 1,100 e-mails with Sandra and Nidal, who were the primary client contact due to Reem’s limited English; participated in 50 conference calls with Sandra and Reem; and met in person with the Rabadis numerous times. The motion asserted that LLG obtained confidential information from Reem and her family, including the Rabadis’ strategies for acquiring
[1] The insurers also were named as defendants, but because they are not parties to this appeal we will only refer to them when necessary.
