Sue Agent - Breach Fiduciary Duty

A Morris County jury has awarded $14.2 million to a Mendham Township man and his wife, who sued a division of Goldman Sachs over its mishandling of their $95 million life insurance policy, according to their attorney.

In the trial before Judge Hunt Dumont in Superior Court in Morristown, Nacchio and his wife, Anne, sued Ayco Co., a division of Goldman Sachs, and David Weinstein, who was their former financial advisor, according to their attorney, Bruce Nagel. The case involved the sale of $95 million in variable life insurance to Nacchio and his wife in 2000.

Nacchio claimed that their financial advisor "breached his fiduciary duty" by failing to explain that the life insurance policies would expire when he and his wife were in their 70s. They had expected the policies to last their entire lives, or until they reached 100, Nagel said.

The huge amount of life insurance was needed to help the couple's children pay estate taxes when their parents died, Nagel said.

Nacchio and his wife initially paid $4.5 million for the $95 million policy, but then were forced to cancel the policies and paid $26 million in order to replace the policies they thought they had initially purchased, Nagel said. However, Nagel added, the policy "should have cost $16 million."

With the couple having paid a total of more than $30 million for the policies, the jury on Thursday awarded the couple $14.2 million, or the equivalent of $30 million minus the $16 million they should have paid, Nagel said.