Sun Life Assurance Company of Canada v. CONESTOGA TRUST SERVICES, LLC, as Trustee of the Conestoga Settlement Trust, dated…

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 18a0173n.06
Nos. 17-5877/5895
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
SUN LIFE ASSURANCE COMPANY OF
CANADA,
Plaintiff-Appellee/Cross-Appellant,
v.
CONESTOGA TRUST SERVICES, LLC, as Trustee
of the Conestoga Settlement Trust, dated May 1,
2010,
Defendant-Appellant/Cross-Appellee.
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ON APPEAL FROM THE
UNITED STATES DISTRICT
COURT FOR THE EASTERN
DISTRICT OF TENNESSEE
Before: KEITH, KETHLEDGE, and THAPAR, Circuit Judges.
KETHLEDGE, Circuit Judge. In this case Conestoga Trust Services, LLC seeks to
recover on a $2 million insurance policy that Sun Life Assurance Company of Canada issued on
the life of Erwin Collins. Collins sold the policy to Life Asset G LLC as soon as the policy was
issued. At the time of Collins’s death, about six years later, Conestoga held the policy as its
sixth assignee. The district court granted summary judgment to Sun Life, holding that the policy
was void from the outset as an illegal “wagering contract” under Tennessee law. We affirm.
We have little to add to the district court’s thorough and soundly reasoned opinion.
Under Tennessee law, a life-insurance policy is void if the insured takes out the policy with a
preexisting agreement to sell the policy to an investor. See Clement v. N.Y. Life Ins. Co.,
46 S.W. 561, 564-65 (Tenn. 1898). The district court held that Collins had a preexisting
agreement with Life Asset here, noting among other things that Collins originally applied for the

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Nos. 17-5877/5895
Sun Life Assur. Co. v. Conestoga Tr. Servs., LLC
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policy using his (actual) Tennessee address, but then reapplied using a phony Georgia address
when Life Asset said that it would not buy Tennessee policies (presumably because wagering
contracts are illegal there); that—once the application was “on Georgia paper”—Life Asset
represented through its broker, David Wolff, that Life Asset would pay $80,000 for Collins’s
interest in the policy; that Collins’s agent, Eugene Houchins, replied that, once the policy was
issued in Georgia, “[w]e will then close with you at 4% [i.e., $80,000]”; that Houchins rather
than Collins fronted the first premium payment for the policy; and that Life Asset in fact paid
$80,000 for the policy, as soon as it was issued, with $60,000 going to Collins’s wife (as the
policy’s formal assignor) and $20,000 going to Houchins (who took the Fifth in his deposition in
this case) as a commission for the deal. We could go on; but suffice it to say that the district
court correctly held as a matter of law that, at the time of the policy’s issuance, Collins had a
preexisting agreement to sell the policy to Life Asset for $80,000.
Conestoga says that Collins did not have an agreement with Life Asset prior to the
policy’s issuance because Life Asset agreed to pay the $80,000 only after the policy in fact
issued. But that means only that Life Asset had a condition precedent to its performance under
the agreement. See 13 Williston on Contracts § 38:7 (4th ed.). And an agreement with a
condition precedent is an agreement nonetheless. See Miller v. Resha, 820 S.W.2d 357, 360
(Tenn. 1991). Nor do we think the district court drew improper inferences in favor of Sun Life.
To the contrary, Conestoga demands that we credit a raft of inferences that in our view no
reasonable jury would make. The reality—on the record here and by all appearances in fact—is
that the agreement between Collins and Life Asset was exactly what the district court said it was.
We also affirm the district court’s order directing Sun Life to repay the premiums that
Conestoga (but not the five other assignees) paid to Sun Life on this policy. In our view the

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Nos. 17-5877/5895
Sun Life Assur. Co. v. Conestoga Tr. Servs., LLC
-3-
district court’s reading of Tennessee law on this issue was correct. See Vinson v. Mills,
530 S.W.2d 761, 763 (Tenn. 1975); Washington v. Atlanta Life Ins. Co., 136 S.W.2d 493, 494
(Tenn. 1940).
The district court’s judgment is affirmed.

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