Case 1:08-cv-01747-SEB-TAB Document 15 Filed 05/01/09 Page 1 of 18

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF INDIANA
INDIA1~APOLIS DIVISION

AMERICAN GENERAL LIFE INSURANCE )

COMPANY, )
)
Plaintiff, )
)
v. ) Civil Action No. 1:08-CV-1747-SEB-JMS
)
GERMAINE TOMLINSON INSURANCE )
TRUST, DATED JANUARY 23, 2006, by and )
through its Trustees J.B. CARLSON, )
MICHELE HARRAAND WILMINGTON )
TRUST COMPANY, as Trustees ofthe )
Germaine Tomlinson Trust, dated January 23, )
2006; THE CARLSON MEDIA GROUP, as )
beneficial owner of the Germaine Tomlinson )
Insurance Trust, dated January 23, 2006; and )
GEOFFREY A. VANDERPAL, )
)
Defendants. )

ANSWER, AFFIRMATIVE DEFENSES AND COUNTERCLAIMS BY

DEFENDANTS GERMAINE TOMLINSON INSURANCE TRUST DATED JANUARY
23, 2006, by J. B. CARLSON, TRUSTEE, AND THE CARLSON MEDIA GROUP

COME NOW Defendants, Germaine Tomlinson Insurance Trust dated January 23,

2006 (the "Tomlinson Trust"), by its Trustee, lB. Carlson, and the Carlson Media Group

(collectively referred to hereinafter as "Defendants"), by their counsel and make their Answer,

Affirmative Defenses and Counterclaims to the Plaintiff's Amended Complaint for Declaratory

Relief and Disgorgement, and say:

1. Defendants admit that Plaintiff American General issued a life insurance

policy (the "Policy") insuring the life of Germaine "Suzy" Tomlinson ("Ms. Tomlinson") in

January, 2006, having a face amount of$15,000,000, based upon a factually appropriate

application. Defendants further admit JB Carlson is the trustee of the Tomlinson Trust, which

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was designated as the owner ofthe Policy. Defendants deny all the remaining allegations set

forth in rhetorical paragraph 1 of the Amended Complaint.

2. Defendants deny all allegations set forth in rhetorical paragraph 2 of the

Amended Complaint.

3. Defendants admit that the Court has jurisdiction over this matter, as

averred in rhetorical paragraph 3 of the Amended Complaint.

4. Defendants admit that venue is proper in the United States District Court,

Southern District ofIndiana, as averred in rhetorical paragraph 4 of the Amended Complaint.

Defendants are without sufficient information to admit or deny the remainder of the allegations

set forth in rhetorical paragraph 4 in the Amended Complaint and accordingly deny same.

5. Defendants admit that the Plaintiff has pled this action as a declaratory

judgment action under 28 U.S.C. §2201, as set forth in rhetorical paragraph 5 of the Amended

Complaint. Defendants are without sufficient information to admit or deny the remainder of the

allegations set forth in rhetorical paragraph 5 in the Amended Complaint and accordingly deny

same.

6. Defendants admit that Plaintiff, American General, is an insurance

company licensed to do business in the State ofIndiana. Defendants are without sufficient

information to admit or deny the remainder of the allegations set forth in rhetorical paragraph 6

in the Amended Complaint and accordingly deny same.

7. Defendants are without sufficient information to admit or deny the

allegations set forth in rhetorical paragraph 7 in the Amended Complaint and accordingly deny

same.

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8. Defendants deny the Tomlinson Trust is dated August 23, 2006.

Defendants admit the remaining allegations set forth in rhetorical paragraph 8 in the Amended

Complaint.

9. Defendants admit J.B. Carlson is a citizen ofIndiana, but deny the

remainder of the allegations as set forth in rhetorical paragraph 9 of the Amended Complaint.

10. Defendants admit the Carlson Media Group has its principal place of

business in Indianapolis, Indiana, but deny the remaining allegations set forth in rhetorical

paragraph lOin the Amended Complaint.

11. Defendants are without sufficient information to either admit or deny the

allegations set forth in rhetorical paragraph 11 in the Amended Complaint and accordingly deny

same.

12. Defendants are without sufficient information to either admit or deny the

allegations set forth in rhetorical paragraph 12 in the Amended Complaint and accordingly deny

same.

13. Defendants are without sufficient information to either admit or deny the

allegations set forth in rhetorical paragraph 13 in the Amended Complaint and accordingly deny

same.

14. Defendants are without sufficient information to either admit or deny the

allegations set forth in rhetorical paragraph 14 in the Amended Complaint and accordingly deny

same.

15. Defendants are without sufficient information to either admit or deny the

allegations set forth in rhetorical paragraph 15 in the Amended Complaint and accordingly deny

same.

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16. Defendants are without sufficient information to either admit or deny the

allegations set forth in rhetorical paragraph 16 in the Amended Complaint and accordingly deny

same.

17. Defendants are without sufficient information to either admit or deny the

allegations set forth in rhetorical paragraph 17 in the Amended Complaint and accordingly deny

same.

18. Defendants are without sufficient information to either admit or deny the

allegations set forth in rhetorical paragraph 18 in the Amended Complaint and accordingly deny

same.

19. Defendants are without sufficient information to either admit or deny the

allegations set forth in rhetorical paragraph 19 in the Amended Complaint and accordingly deny

same.

20. Defendants are without sufficient information to either admit or deny the

allegations set forth in rhetorical paragraph 20 in the Amended Complaint and accordingly deny

same.

21. Defendants are without sufficient information to either admit or deny the

allegations set forth in rhetorical paragraph 21 in the Amended Complaint and accordingly deny

same.

22. Defendants are without sufficient information to either admit or deny the

allegations set forth in rhetorical paragraph 22 in the Amended Complaint and accordingly deny

same.

23. Defendants admit that an application for a Policy of life insurance was

prepared and submitted to American General by Ms. Tomlinson which Policy had a face value of

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$15,000,000, as set forth in rhetorical paragraph 23 in the Amended Complaint. Defendants

deny all the remaining allegations set forth in rhetorical paragraph 23 in the Amended

Complaint.

24. Defendants admit that on or about January 28,2006, Plaintiff, American

General, issued Policy No. UM0036206L on the life of Ms. Tomlinson pursuant to the

application for insurance tendered by Ms. Tomlinson to American General. Defendants further

admit that the application for the Policy was dated January 23,2006. Defendants further admit

that the face amount ofthe Policy was $15,000,000.00. Defendants expressly deny that the

representations contained in the application for the Policy were false, Defendants are without

information to admit or deny the basis for Plaintiffs reliance on any information set forth in the

application for insurance submitted by Ms. Tomlinson, as averred in rhetorical paragraph 24 in

the Amended Complaint, and accordingly deny same. Defendants deny all remaining allegations

set forth in rhetorical paragraph 24 ofthe Amended Complaint.

25. Defendants admit the allegations set forth in rhetorical paragraph 25 in the

Amended Complaint.

26. Defendants deny the allegations set forth in rhetorical paragraph 26 in the

Amended Complaint and further show the court that the application for insurance.speaks for

itself.

27. Defendants deny the allegations set forth in rhetorical paragraph 27 in the

Amended Complaint.

28. Defendants deny the allegations set forth in rhetorical paragraph 28 in the

Amended Complaint. Defendants further show the court that the Tomlinson Trust speaks for

itself.

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29. Defendants admit that the beneficial owner of the Trust is the Carlson

Media Group. Defendants deny the remaining allegations set forth in rhetorical paragraph 29 of

the Amended Complaint.

30. Defendants deny the allegations set forth in rhetorical paragraph 30 in the

Amended Complaint.

31. Defendants deny the allegations set forth in rhetorical paragraph 31 in the

Amended Complaint.

32. Defendants deny the allegations set forth in rhetorical paragraph 32 in the

Amended Complaint Defendants further show the court that the Tomlinson Trust speaks for

itself.

33. Defendants deny the allegations set forth in rhetorical paragraph 33 in the

Amended Complaint.

34. Defendants.are without sufficient information to either admit or deny the

allegations set forth in rhetorical paragraph 34 in the Amended Complaint and accordingly deny

the allegations set forth in rhetorical paragraph 34 in the Amended Complaint.

35. Defendants are without sufficient information to either admit or deny the

allegations set forth in rhetorical paragraph 35 in the Amended Complaint and accordingly deny

same.

36. Defendants deny the allegations set forth in rhetorical paragraph 36 in the

Amended Complaint.

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COUNT ONE

37. Defendants incorporate by reference their answers to rhetorical paragraphs

1-36, above, as if set forth fully herein.

38. Defendants deny the allegations set forth in rhetorical paragraph 38 in the

Amended Complaint.

39. Defendants deny the allegations set forth in rhetorical paragraph 39 in the

Amended Complaint.

40. Defendants deny the allegations set forthin rhetorical paragraph 40 in the

Amended Complaint.

41. Defendants deny the allegations set forth in rhetorical paragraph 41 in the

Amended Complaint.

42. Defendants deny the allegations set forth in rhetorical paragraph 42 in the

Amended Complaint.

43. Defendants deny the allegations set forth in rhetorical paragraph 43 in the

Amended Complaint.

44. Defendants are without sufficient information to comment on the tender of

premiums by Plaintiff American General into the Court but states that the Policy is enforceable

according to its terms. Defendants further deny that American General is entitled to deny the

validity of the Policy issued on the life of Ms. Tomlinson. Defendants deny the remaining

allegations set forth in rhetorical paragraph 44 in the Amended Complaint.

WHEREFORE, Defendants request the Court enter judgment for Defendants and

against Plaintiff on Count I in Plaintiff's Amended Complaint and declare that the Policy of

Insurance on the life of Germaine Tomlinson which issued on January 28, 2006, is valid and

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enforceable according to its terms and not the product of fraud, misrepresentation or deceit, and

for all other just and proper relief in the premises.

COUNT TWO

45. Defendants incorporate by reference their answers to rhetorical paragraphs

1-36, above, as if set forth fully herein.

46. Defendants are without sufficient information to either admit or deny the

allegations set forth in rhetorical paragraph 46 in the Amended Complaint and accordingly deny

same.

47. Defendants deny that the Policy is void under Indiana law. Defendants are

without sufficient information to either admit or deny the remaining allegations set forth in

rhetorical paragraph 46 in the Amended Complaint and accordingly deny same.

WHEREFORE, Defendants request the Court enter judgment for Defendants and

against Plaintiff on Count II in Plaintiff's Amended Complaint and declare that the Policy of

Insurance on the life of Germaine Tomlinson which issued on January 28,2006 is valid and

enforceable according to its terms and not the product of fraud, misrepresentation or deceit, and

for all other just and proper relief in the premises.

AFFIRMATIVE DEFENSES

First Affirmative Defense

American General cannot contest the Policy through this action because the

Policy was in force for more than two years during Ms. Tomlinson's lifetime.

Second Affirmatiye Defense

American General is barred from obtaining the requested relief because ofthe

doctrine of estoppel.

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Third Affirmative Defense

American General is barred from obtaining the requested relief because of the

doctrines of waiver and assumption ofthe risk.

Fourth Affirmative Defense

American General is barred from obtaining the requested relief because any

alleged damages were caused by American General's own conduct, including its own negligence,

or the conduct of a third-party not in the control of the Defendants .

. Fifth Affirmative Defense

American General is barred from obtaining the requested relief in who Ie or in part

because all conduct complained of by American General was in compliance with the Policy.

Sixth Affirmative Defense

American General has failed to mitigate any damages it allegedly has sustained.

Seventh Affirmative Defense

Defendants reserve the right to amend their Answer and assert any and all

Affirmative Defenses that may become apparent during the course of their investigation and

discovery.

WHEREFORE, Defendants request the Court enter judgment for Defendants and

against Plaintiff on all counts in Plaintiff's Amended Complaint and declare that the Policy of

Insurance on the life ofGerrnaine Tomlinson which issued on January 28,2006 is valid and

enforceable according to its terms and not the product of fraud, misrepresentation or deceit, and

for all other just and proper relief in the premises.

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COUNTERCLAIM

For their counterclaim against American General Life Insurance Company

("American General"), the Germaine Tomlinson Insurance Trust, dated January 23,2006 (the

"Tomlinson Trust"), by its Trustee JB Carlson, and the Carlson Media Group (collectively

referred to herein as the "Counter-claimants") state as follows:

l. This Court has jurisdiction over this action under 28 U.S.C. §1332(a)

because there is complete diversity among the parties and the amount in controversy exceeds

$75,000, exclusive of interests and costs.

2. Venue in this judicial district is proper under 28 U.S.C.§1391(a)(2)

because a substantial part of the events or omissions giving rise to the claims herein occurred in

this judicial district in the County of Marion.

3. The Tomlinson Trust is a Delaware statutory trust created under a Trust

Agreement dated January 23,2006, as amended, with its situs located in Newark, Delaware.

4. The Carlson Media Group is a corporation organized under the laws of the

State of Delaware with its principal place of business in Indianapolis, Indiana.

5. American General is an insurance company organized under the laws of

the State of Texas with its principal place of business in Houston, Texas.

6. Beginning in approximately November 2002, Germaine Tomlinson ("Ms.

Tomlinson") began attending the Carlson Media Group Board of Directors' meetings.

7. In late 2002, Ms. Tomlinson was elected to the Carlson Media Group

Board of Directors.

8. During her time on the Board of Directors, Ms. Tomlinson served as the

Vice Chairman.

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9. Ms. Tomlinson took an active role as a member of the Carlson Media

Group Board of Directors. She was also active in the promotion and business development of

the company.

10. In 2005, the Carlson Media Group Board of Directors discussed and

approved the purchase of a life insurance contract on Ms. Tomlinson and other directors and

employees.

11. On or about January 23, 2006, the Tomlinson Trust was created. The trust

agreement was signed by Ms. Tomlinson as settlor and Michele C. Harra, Financial Services

Officer of the Wilmington Trust Company and Jason C. Bolf, as co-trustees. Jason C. Bolf is

now known as JB Carlson, Defendant and Counter-claimant.

12. The Tomlinson Trust agreement identifies and designates the Carlson

Media Group as the beneficial owner of life insurance proceeds on the life of Ms. Tomlinson.

13. On or about January 28,2006, American General issued life policy No.

UM0036206L (the "Policy") to the Tomlinson Trust. A true and accurate copy ofthe Policy is

attached as Exhibit 1.

14. The policy is an Indiana insurance policy governed by Indiana law. See

Exhibit 1, Policy, Page 3.

15. The Policy Application identifies Ms. Tomlinson as the Primary Proposed

Insured, the Tomlinson Trust as the Policy owner and beneficiary, and the Wilmington Trust

Company as the Trustee. A true and accurate copy of the Policy Application is attached as

Exhibit 2.

16. The Policy states: "If the Insured dies prior to the Maturity Date and

while this policy is in force, We will pay the Death Benefit Proceeds to the Beneficiary." Exhibit

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1, Policy, Page 5, Death Benefits and Death Benefit Options. The Death Benefit Proceeds as of

September 30,2008 totaled $15,000,000.

17. The Policy further states: "The Beneficiary as named in the application, or

later changed by You, will receive the proceeds upon the death of the Insured." Exhibit 1,

Policy, Page 12, Beneficiaries and Proceeds.

18. The Policy further provides: "Except as stated below, We cannot contest

this policy afterit has been in force during the insured's lifetime for 2 years." Exhibit 1, Policy,

General Provisions, Page 15.

19. The maturity date of the Policy is January 28,2035.

20. Since the inception of the Policy in January 2006, all Policy premiums

have been paid in full. Annual premiums were $387,274.85. All Policy premiums were

accepted and retained by American General.

21. At the time the Policy was issued, Ms. Tomlinson was an active member

of the Carlson Media Group Board of Directors and was active in promoting the company and

participating in its business development activities.

22. From 2004 to 2008, Ms. Tomlinson would, on occasion borrow funds

from the Carlson Media Group.

23. On or about September 29,2008, Ms. Tomlinson died unexpectedly at her

residence.

24. Policy premiums. were current as of September 29, 2008, Ms. Tomlinson's

date of death.

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25. On December 4,2008, the Wilmington Trust Company filed the Death

Claim with American Generalregarding Ms. Tomlinson's death and policy number

UM0036206L.

26. With no advance notice, American General filed its declaratory judgment

action with this Court on or about December 31, 2008. American General has refused to pay the

death benefit proceeds to the Tomlinson Trust as required by the Policy.

27. Like other states, Indiana expressly authorizes by statute corporations to

insure the lives of its directors. Indiana Code § 27-1-12-17 authorizes corporations to insure the

lives of its directors, officers, agents and employees.

28. Indiana Code § 27-1-12-17.1 requires a corporation to have an insurable

interest at the time a life insurance contract on its employee becomes effective, but the insurable

interest need not exist at the time the loss occurs.

29. The Carlson Media Group had an insurable interest in the life of Ms.

Tomlinson at the time the policy was issued.

30. On or about March 26,2009, the Counter-claimants provided American

General with unrefuted evidence of the Carlson Media Group's insurable interest in the life of

Ms. Tomlinson.

31. After the Counter-claimants provided American General with evidence of

the Carlson Media Group's insurable interest in the life of Ms. Tomlinson, American General

continued to litigate this action after its position was clearly frivolous, unreasonable and

groundless.

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32. American General has engaged in unfair claims settlement practices by not

attempting in good faith to effectuate a prompt, fair and equitable settlement of the Tomlinson

Trust claim after American General's liability became reasonably clear.

Count I - Breach of Contract

33. Counter-claimants incorporate by reference the allegations in paragraphs 1

through 32 of this Counterclaim as if fully set forth herein.

34. American General has breached the terms of the Policy by refusing to pay

the death benefits to the Tomlinson Trust when due in accordance with the plain and

unambiguous terms of the Policy..

35. All conditions precedent to the Counter-claimants' rights to receive the

Policy's death benefit have been performed or excused by American General's own conduct and

failure to perform.

36. As a result of American General's breach of contract, the Tomlinson Trust

has been deprived ofthe benefits of the Policy. The Tomlinson Trust has not received the death

benefits as stated in the terms of the Policy and Counter-claimants have been forced, without

justification to spend substantial amounts of time and money defending American General's

declaratory judgment action and prosecuting this counterclaim.

37. As a proximate result of American General's breach, the Tomlinson Trust

has been damaged in an amount exceeding $15,000,000, but to be proven at trial. Damages,

including but not limited to, prejudgment interest are ongoing and continue to accrue.

WHEREFORE, Counter-claimants request the Court order an entry of a money

judgment againstAIG in an amount to be proven at trial, but exceeding $15,000,000, to

adequately compensate them for American General's breach of contract, plus attorneys' fees,

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prejudgment interest, post-judgment interest, and costs of this action, and for all other just and

proper relief.

Count II - Bad Faith

38. Counter-claimants incorporate by reference the allegations in paragraphs 1

through 32 of this Counterclaim as if fully set forth herein.

39. American General owes the Tomlinson Trust a duty of good faith in

performing its obligations under its insurance contract with Germaine Tomlinson based on the

fiduciary relationship established by the Policy, which lists the Tomlinson Trust as the owner.

40. American General has breached its duty to deal with the Tomlinson Trust

in good faith by, among other things:

(a) Refusing to pay, without any reasonable basis, the Policy benefits

to the Tomlinson Trust as required by the Policy.

(b) Continuing to assert in this action and elsewhere that there existed

a lack of insurable interest defense despite the Counter-claimants demonstrating by compelling

and overwhelming evidence the Carlson Media Group's insurable interest in the life of Ms.

Tomlinson at the time the Policy was issued.

41. Counter-claimants have provided American General with unrefuted

information indicating the Carlson Media Group had an insurable interest in the life of Ms.

Tomlinson at the time the Tomlinson Trust was established and at the time the Policy was issued

by American General.

42. American General's denial of coverage for lack of an insurable interest is

without justification and has no legitimate basis.

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43. As a proximate result of American General's breach of duty owed to the

Tomlinson Trust, the Trust has been damaged and is entitled to compensatory damages resulting

from American General's breach.

44. American General's denial of coverage is willful and in bad faith.

45. American General's actions entitle the Tomlinson Trust to attorneys' fees

incurred in defending the declaratory judgment action and prosecuting this counter-claim.

WHEREFORE, Counter-claimants request the Court enter a money judgment in

an amount to adequately compensate it for actual damages resulting from American General's

bad faith denial of its obligation to pay death benefit proceeds under the policy plus attorneys'

fees, prejudgment interest, post-judgment interest and costs ofthis action, and for all other just

and proper relief

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Respectfully submitted,

BAKER & DANIELS LLP

/s/ Kyle B. Osting

Kevin M. Toner, #11343-49

300 North Meridian Street, Suite 2700
Indianapolis, Indiana 46204-1782
(317) 237-0300
(317) 237-1000 (fax)
kevin. toner@bakerd.com

Kyle B. Osting, #26532-02

III East Wayne Street, Suite 800
Fort Wayne, Indiana 46802
(260) 424-8000
(260) 460-1700 (fax)
kyle.osting@bakerd.com

Dennis F. McCrosson, # 10240-49

6249 U.S. Highway 31 South, Suite A
Indianapolis, Indiana 46227
(317) 791-7800
dmccross@mccrossonlaw.com

Attorneys for Defendants Germaine Tomlinson

Insurance Trust Dated January 23, 2006;
JB Carlson, Trustee; and Carlson Media Group,
Beneficial Owner

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CERTIFICATE OF SERVICE

I certify that on May 1, 2009, a copy of the foregoing, ANSWER,

AFFIRMATIVE DEFENSES AND COUNTERCLAIMS BY DEFENDANTS GERMAINE
TOMLINSON INSURANCE TRUST DATED JANUARY 23, 2006, by J. B. CARLSON,
TRUSTEE, AND THE CARLSON MEDIA GROUP, was sent via electronic notification and/or
via first class, United States mail, postage prepaid, to the following parties in interest:

Andrew J. Dorman
RemingerCo., LPA
101 Prospect Avenue, West
1400 Midland Building
Cleveland, OR 44115

Todd J. Kaiser
Ogletree, Deakins, Nash, Smoak
& Stewart, P.C.
III Monument circle, Suite 4600
Indianapo lis, IN 46204

Michael D. Mulvaney
David P. Donahue
MAYNARD COOPER & GALE, PC
1901 Sixth Avenue North, Suite 2400
Birmingham, Alabama 35203

Is! Kyle B. Osting

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