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Lim v. Prudential Insurance Co. of America9/14/2005
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On or about June 15, 1998, Lim received a voice mail message from one of Prudential's senior underwriters informing her the applications for the Lim family policies were declined. According to the message, Prudential declined the applications because its underwriters concluded Lim solicited the policies in the Philippines. Although Lim believed she had a duty to keep her clients informed about major developments concerning their policies -- and she considered the rejection of an application to be a major development -- she never informed the Lim family Prudential had declined to write the policies.
The day Lim received the voice mail message, she sent a letter to Prudential employee Richard Painter in which she appealed the Underwriting Department's decision not to write the Lim family policies. In the letter Lim conceded, during her trip to the Philippines, she told Petrona Lim she worked for Prudential and "may have given Mrs. Petrona Lim the idea of insuring the grandchildren . . . ." But Lim explained she actually wrote the first two applications in San Francisco during a visit with Petrona's son, whom Lim described as a "United States Resident." Lim stated she wrote the other applications in California as well.
Also on June 15, Lim sent a fax to one of the senior underwriters asking him not to withdraw or refund the Lim family cases until he heard from Richard Painter. Unbeknownst to Lim, Prudential issued refund checks and mailed them to the Lim family. Despite the fact Lim had not discussed the matter with her clients, on at least three occasions in July and August 1998, she contacted Richard Painter and informed him the Lim family had not received the refund checks. Prudential stopped payment on the original checks and issued replacement checks in early to mid-August and sent them to Lim's office. Lim did not send the checks to her clients because she was still trying to convince Prudential to accept the Lim family cases.
On or about September 7, 1998, Philip Lim (Petrona's son) wrote a letter to Prudential explaining he had received refund checks and deposited them, but they were "returned with a stop payment." He "demand " Prudential refund the prepaid premiums and claimed Prudential was "unreasonably with ld " his money. The next day, Hsiao told Lim to return the replacement checks she was holding immediately. Lim did not return the checks until the next day she reported to the office which was September 11. Although Lim was in the office all day, she did not return the checks until after the close of business on the 11th.
Prudential's Underwriting Department informed the Agency Relations Department about certain "underwriting irregularities" relating to the Lim family policies. The Agency Relations Department conducted an investigation "into the circumstances surrounding the submission and eventual rejection of the Lim family policies." On October 15, 1998, Marilyn Kustoff, the agency relations specialist who headed up the investigation, sent Hsiao an email asking her to instruct Lim to provide by October 22 "a signed letter of explanation concerning her handling of the Lim [family] transactions." Kustoff set forth three specific questions she wanted Hsiao to ask Lim.
After close of business on October 20, Hsiao handed Lim a letter which instructed Lim to provide by October 22 a written response to the questions posed by Kustoff. The letter states, in pertinent part: "1. On 5/26/98 you submitted 3 pre-paid applications with face amount over one million each on Patrick, Timothy and Jonathan Lim. This clearly violated Prudential underwriting guidelines indicating "Not to accept prepaid applications when life insurance coverage amount
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