Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 IN THE COURT OF COMMON PLEAS OF MONTGOMERY COUNTY, KAY GUZMAN VS. NO. 2012-17197 FIRST SENIOR FINANCIAL GROUP LLC NOTICE TO DEFEND - CIVIL You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this complaint and notice are served, by entering a written appearance personally or by attorney and ?ling in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the complaint or for any other claim or relief requested by the plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. LAWYER REFERENCE SERVICE MONTGOMERY BAR ASSOCATION 100 West Airy Street (REAR) NORRISTOWN, PA 19404-0268 (610) 279?9660, EXTENSION 201 PRIF0034 10/ Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 IN THE COURT OF COMMON PLEAS OF MONTGOMERY COUNTY, JAMES LEWIS HESS, in his capacity as Trustee of THE ELIZABETH K. HESS IRREVOCABLE TRUST, V. No. 2012?17197 FIRST SENIOR FINANCIAL GROUP, LLC dbe?a First Senior Financial Group, PHILLIP CANNELLA, JOANNE SMALL, and LARRY SNYDER Civil Action Law Jury Trial Demanded NOTICE TO DEFEND You have been sued in Court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Third Amended Complaint and Notice are served, by entering a written appearance personally or by an attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Third Amended Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Lawyer Referral Service 100 West Airy Street (rear) Norristown, PA 19401?0268 (610) 279-9660, Ext. 201 Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 KEEN BUCKMAN By: Glenn S. Gitoiner, Esquire Attorney ID. No. 1928'? Benjamin R. Picker, Esquire Attorney ID. No. 93089 Raduor Court, Suite 160 259 North RadnonChester Road Radnor, 19087-5257 (610) 341-1000 (telephone) (610) 341-1099 (facsimile) bpickera?mk'battornevscom Attorneys for Piaimi? IN THE COURT OF COMMON PLEAS OF MONTGOMERY COUNTY, JAMES LEWIS HESS, in his capacity as Trustee of THE ELIZABETH K. HESS IRREVOCABLE TRUST, 4224 Chatham Circle Aston, PA 19014, Plaintiff, V. FIRST SENIOR FINANCIAL GROUP, LLC dbea First Senior Financial Group, PHILLIP CANNELLA, and JOANNE SMALL 2700 Horizon Drive, Suite 300 King of Prussia, PA 19406, and LARRY SNYDER 449 Windy Hill Road Gilbertsville, PA 19525, Defendants. No. 2012?17197 Civil Action Law Jury Trial Demanded THIRD AMENDED COMPLAINT Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 Plaintiff, James Lewis Hess, in his capacity as Trustee and bene?ciary of The Elizabeth K. Hess Irrevocable Trust, by his attorneys, McCausland Keen Buckrnan, hereby files this Third Amended Complaint and alleges the following in support thereof: The Parties 1. Plaintiff, James Lewis Hess (hereinafter ?Plaintiff?) is an adult individual and is the sole Trustee, and is a bene?ciary, of The Elizabeth K. I-Iess Irrevocable Trust (hereinafter, the ?Trust?). The Trust was established on December 11, 1997, for the benefit of Kimberly K. Hess (hereinafter ?Kim?) and Plaintiff. Kim unexpectedly passed away on April 11, 2015. The settler of the Trust is Kay B. Guzman (hereinafter formerly known as Elizabeth Kay Hess and E. Kay Hess, is an adult individual residing at 4224 Chatham Circle, Aston, 19014, and is nearly seventy (70) years old. At all times relevant hereto, Kay has also acted as an agent for the Trust and its Trustees. 2. Defendant, First Senior Financial Group, LLC di?bi?a First Senior Financial Group (hereinafter, is a Limited Liability Company with its principal place of business at 2700 Horizon Drive, Suite 300, King of Prussia, Montgomery County, 19406. FSFG is in the business of providing financial advice and retirement planning services and products. At all times material hereto, FSFG acted through its agents, servants and employees who acted in the course of mission, business and affairs. 3. Defendant, Phillip J. Carmella, (hereinafter, ?Cannella?) is an adult individual, and is the founder, a member, an owner, and an agent and representative of FSFG. Cannella is also the Founder and CEO of Retirement Media, Inc. Plaintiff maintains a business address of 2700 Horizon Drive, Suite 300, King of Prussia, PA 19406. Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 4. Joanne Small (hereinafter, ?Small?) is an adult individual, and is a member, an owner, and an agent and representative of SFG. Small maintains a business address of 2700 Horizon Drive, Suite 300, King of Prussia, PA 19406. 5. Defendant, Larry Snyder, (hereinafter, ?Snyder?) is an adult individual residing at 449 Windy Hill Road, Gilbertsville, Montgomery County, 19525 who, at all times relevant hereto was an employee and/or agent of Defendant, FSFG with actual or apparent authority to act and speak on behalf of FSFG. At all times relevant hereto, Snyder was a Senior/Lead Adviser with Defendant FSFG. 6. At all times relevant hereto, Carmella, Small and Snyder were acting in the scope and course of their employment with FSFG, and in furtherance of mission, business and affairs, and?or were acting as agents and representatives of FSFG with actual or apparent authority to act and speak on behalf of FSFG. 7. Plaintiffs assert a claim for monetary damages only with regard to the improper recommendation to surrender the $1 million Penn Mutual life insurance policy referred to herein. Factual Background 8. On January 21, 2010, Kay responded to an invitation from FSFG to attend a seminar on retirement planning for senior citizens. 9. It is a common practice for Carmella and FSFG to market their financial and retirement planning services to senior citizens through Cannella?s radio show, ?The Crash Proof Retirement Show? (which is owned and produced by Retirement Media, Inc, an entity controlled by Cannella), through seminars, and through print, radio, and television advertisements. Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 10. One slogan that Defendants FSFG and Carmella use to entice senior citizens to come to one of their ?nancialfretirement planning seminars is: ?come in, get educated, and learn about our do no harm policy?. 11. Kay and her husband became familiar with FSFG and Cannella by listening to Cannella?s radio show, during which he gave advice to senior citizens regarding ?nancialtretirement planning. 12. After attending the aforementioned FSFG seminar with her husband, Kay decided that she was interested in getting further information on ?nancial and retirement planning and, therefore, she later contacted FSFG to schedule an appointment. 13. From the outset, FSFG and its agents and representatives engaged in a course of conduct designed to take advantage of Kay, who was simply trying to obtain help with her ?nancial and retirement planning to provide for her future needs. 14. FSFG, Carmella and Small set up an appointment for Kay to meet with Snyder on June 11, 2010. Cannella and Small represented that Snyder held the position of SeniorfLead Executive Adviser with FSFG and, therefore, Kay was reasonably led to believe that Snyder was an employee, agent and representative of FSFG with actual or apparent authority to act and speak on behalf of FSFG, who would implement ?do no harm? retirement investment strategies. 15. It is believed and therefore averred that Snyder was trained by FSFG, Cannella and Small, and, at all times relevant hereto, Snyder was acting under the supervision of Carmella and Small. 16. On June 11, 2010, Kay met with Snyder and Paul Martin (another employee agent of FSFG), who advised Kay that Snyder was an employee of FSFG and was based out of Delaware of?ce. Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 17. At the June 11, 2010 meeting, Kay provided Snyder with information about her ?nancial situation and holdings. 18. In addition, at the June 11, 2010 meeting, Kay advised Snyder that she had previously established the Elizabeth K. Hess Irrevocable Trust, which was funded with a life insurance policy issued by Penn Mutual that had a death bene?t of $1 million (the ??Policy?). The Policy was a terri?c product at a great price. 19. The Policy was owned by the Trust and the Trust was the sole bene?ciary of the Policy. The bene?ciaries of the Trust were Kay?s children, Kimberly K. Hess and James Lewis Hess. The Trust was funded by Kay who gave completed gifts to the Trust each year. The Trust then paid the annual $9,200.00 Policy premium. 20. At the time of June 11, 2010 meeting, the Policy had a cash surrender value of approximately $150,000.00. 21. At the meeting, Snyder, acting as an agent for FSFG, initiated a plan to surrender the Policy as part of a larger ?nancial plan that included the purchase of certain other ?nancial products, including annuities (called the ?Navigator? plan). 22. Snyder then instructed Kay to contact Penn Mutual to take the steps to surrender the Policy. 23. Snyder told Kay that if she surrendered the Policy, she could use the cash value to pay off her debts and FSF would use the remaining funds to purchase annuities for Kay that would provide additional income to Kay while still providing a substantial inheritance for her children. Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 24. Defendants, through Snyder and Small, subsequently advised Kay that they would have no problem obtaining a replacement life insurance policy with the same death bene?t and at a similar premium. 25. The Defendants knew or should have known that Kay did not have the authority to surrender the Policy given that the Policy was owned by the Trust and not by Kay. Defendants also knew or should have known that Kay would not be entitled to receive the surrender value of the Policy upon surrender thereof and, instead, such funds would be owned by the Trust. 26. Defendants also knew or should have known that the standard in the industry was to have a replacement life insurance policy in place before surrendering an existing life insm?ance policy. Indeed, Defendants should have assisted Kay with obtaining a new in?force life insurance policy, ?led the replacement forms with the state, and then surrendered the existing Policy. However, Defendants directed and advised Kay to surrender the Policy before obtaining a replacement policy 27. Plaintiff believes and therefore avers that Defendants did not follow the standard and accepted practice regarding the surrendering of life insurance policies because doing so would have impeded their plan to replace all of Plaintiff? s, and Kay?s, ?nancial assets very quickly. 28. Plaintiff believes and therefore avers that Defendants were primarily interested in creating cempensation for themselves instead of acting appropriately and in the best interests of Kay, and the Trust and its trustees and beneficiaries. 29. Defendants knew that a key part of the ?nancial and retirement plan that they were selling to Kay involved the use of the surrender value of the Policy. To get those funds, Defendants had to convince Kay, and ultimately the trustees of the Trust, to do whatever was necessary to surrender the Policy. Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 30. Defendants knew or should have known that Kay would not be able to obtain a new life insurance policy at a standard rate because of a pre?existing medical condition. 31. Defendants did not want to slow up the receipt of their commissions from the new products they sold her, nor did they what her to communicate with anyone in the industry which might have caused her to reconsider and use her free look period under insurance law to return all the new ?xed income annuities and get her money back, including not surrendering the Policy in the ?rst place. 32. Defendants instructed Kay not to talk to her prior ?nancial advisors, Henrickson, or the life insurance company that issued the Policy, Penn Mutual, about the plan because Defendants did not want anyone to try to convince Kay to abort the plan. 33. Snyder explained to Kay what he claimed to be the bene?ts of surrendering the policy and advised her that she could do so and Still leave a substantial inheritance for her children. 34. Snyder told Kay that she should use some of the proceeds of the cash value of the Policy to pay off debts and to invest the balance through FSFG, Snyder and an outside broker- dealer. However, payment of Kay?s debts was not an advisable or suitable reason to surrender the Policy under the circumstances, and the assets of the Trust could not be used for that purpose. 35. Snyder convinced Kay to follow Defendants? directions to take steps to cancel the policy. 36. Defendants, convinced Kay to contact the Trustees of the Trust which owned the policy and to persuade them to surrender the Policy and turn the proceeds over to Kay, without explaining the income, gift and estate tax transfer implications of a surrender and who is to get the surrender proceeds. Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 37. Kay, relying on the advice of Defendants, who had represented themselves to be quali?ed ?nancial advisors, contacted Penn Mutual. She was told that only the Trustees could cancel the life insurance policy. 38. Snyder then gave Kay four scripted questions for the Trustees to ask of Penn Mutual so that the Policy could be surrendered. 39. On June 17, 2010, Snyder came to Kay?s home to have her sign some additional papers related to an annuity. At that time, Synder asked if the Trustees had contacted Penn Mutual about surrendering the life insurance policy. 40. Before meeting with FSFG, Kay had obtained some of her investments, including the Penn Mutual Life Insurance policy through Hendrickson Associates. 41. On July 7, 2010, Hendrickson Associates sent Kay a letter questioning the decision to surrender the Policy and noting that there was no replacement policy in place. Defendants instructed Kay not to respond to or return any phone cails about the Policy. 42. On July 8, 2010, Kay met with Snyder at office in Baton, At that meeting, Snyder directed Kay sign additional papers and re-emphasized the bene?ts of surrendering the Policy. 43. On July 14, 2010, Snyder spoke with Kay and advised her that there was no need for her to talk with Hendrickson Associates. 44. Defendant Snyder, at the directiOn of the other Defendants, also repeatedly advised Kay and the Trustees of the Trust not to talk with the investment advisers who had set up the Trust and who had sold Plaintiff Guzman the Policy and other investments. 45. Pursuant to Snyder?s advice and instruction, Kay requested that the Trustees take steps to surrender the Policy. Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 46. Defendants made false representations to Kay, as agent for the Trustees of the Trust, with the speci?c intention that the Trustees would reasonably rely thereon. 47. The Trustees of the Trust relied upon the representations that Defendants made to Kay, which she, in turn, conveyed to the Trustees to the Trust?s detriment in that it caused and convinced them to surrender the Policy. 48. Shortly after the Policy was surrendered, Kay determined that the advice that she had been given by Defendants to surrender the Policy was not in the Trusts?, and its bene?ciaries?, best interests, was not suitable, and would not accomplish what Defendants said that it would. 49. Kay had purchased the Policy and set up the Trust for the purpose of providing an inheritance for her children. 50. The Trust was funded by the Policy with a face value of $1 million, which provided Kay with peace of mind knowing that her children were provided for. Thus, she was free then to use her remaining funds as she saw fit without worrying about what would be left for the children when she passes away. 51. Kay realized, after the Policy was surrendered, that she had lost that critical part of her estate plan because of the surrender of the Policy. Because of the advice given by Defendants and the failure of Defendants to ensure that she had a replacement life insurance policy in place before she surrendered the existing policy, Kay had lost the personal security and peace that she had previously had when she knew that her children were properly provided for, the Trust, and ultimately the bene?ciaries thereof, had lost the benefit of the Policy. 52. Kay contacted Penn Mutual and attempted to reinstate the Policy, but Penn Mutual would not do so. Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 53. Defendants knew or should have known that under law, Kay could not reinstate the Policy mere than thirty days after surrender. 54. Kay has attempted to obtain a new life insurance policy similar to the one that she had through Penn Mutual. However, because she is a cancer survivor, she is unable to obtain a policy as favorable to her as the one she had through Penn Mutual and the ones that she is able to obtain would have a premium almost double what she was paying for the Penn Mutual policy. 55. After learning that the Policy could not be reinstated, or replaced because of Kay?s pie-existing cancer, Kay complained to Defendant, FSFG. 56. A meeting was held on August 12, 2010, with Kay and Defendant, FSFG. At that meeting Kay learned that FSFG had terminated Snyder as her financial adviser. 57. On August 16, 2010, Kay attended a meeting at of?ce with, inter alto, Defendants, Carmella and Small, to discuss the investment plan that Defendants had recommended. 58. During the course of the meeting, Defendants, Small and Carmella, sought to lay the blame for the recommendation to sell the Policy on Defendant Snyder and sought to convince Kay that Defendants, FSFG, Camrella and Small were acting in her best interests to address the issue of Defendant Snyder?s conduct. 59. Defendants Small and Cannella sought to convince Kay that they were sorry for what had happened and offered to help her ?le complaints with the state. 60. Defendant Cannella asked Kay to meet with corporate counsel so that they could gather all the information about her interactions with Defendant Snyder, including any statements, suggestions and recommendations made by Snyder. 10 Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 61. Defendants told Kay that they were going to assist her in pursuing a claim against Defendant Snyder with the Department of Insurance and went so far as to provide her with information about how to ?le a claim. 62. FSFG, through Defendants Carmella and Small, even directed corporate counsel to assist Kay with answering questions about the complaint process and even helped her to complete and ?le forms with the State. 63. At the direction of Defendants, corporate counsel sat down with Kay and gathered information from her about her complaints and concerns. 64. Throughout this time FSFG, through its corporate counsel, made it clear to Kay that it would help her address the issues and concerns that she had with the appropriate state authorities. At the direction of SF G, FSFG corporate counsel talked with Kay about actions she could take and even helped her with preparing complaints to send to the Fraud Department of the Of?ce of the Attorney General and the Department of Insurance. However, Defendants knew or should have known that ?ling the above?referenced complaints could not undo the surrender of the Policy. 65. In any event, FSFG and its corporate counsel addressed with Kay only the misconduct by Defendant Snyder, misled Kay into believing that FSFG was not responsible for the conduct of Defendant Snyder, and steered Kay and, by extension, the Trust, away from pursuing a complaint and taking action against Defendants FSFG, Carmella and Small. 66. In essence, FSFG, through its agents and representatives, intentionally andr?or negligently misrepresented that they would assist Kay in remedying the improper conduct of Defendant Snyder, with a real purpose of preventing Kay from learning of and exercising her rights. 11 Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 67. The actions of Defendants FSFG, Carmella and Small were intended to provide false assurances to Kay that they were concerned about her and were trying to help her so that Kay would not seek outside counsel and learn about her rights, including the right to bring civil claims against Defendants. 68. After contacting the state authorities herself, Kay realized that contrary to what she had been told by Defendants, FSFG, Cannella and Small, there was really nothing that the state could do to help correct what had been done. 69. Kay then decided that she would confront FSFG, Cannella and Small at a Crash Proof Retirement seminar that they were holding at Ruth?s Chris Steakhouse in King of Prussia, on November 30, 2010. 70. At the seminar, Guzman spoke with Defendant Carmella and told him that she had learned that the state authorities could not help her. She also showed him a document that she had prepared documenting her experiencing with Defendants. 71. Defendant Cannella appeared to be upset. Rather than taking further steps to help Kay, Defendants Cannella and Small referred Kay to one of attorneys. 72. Defendant Cannella then told the attorney, who was an employee of FSFG, about Kay?s situation and the concerns that she had. 73. Defendant Cannella then gave instructions to the attorney to add language to the end of Kay?s document stating that Kay was satisfied with the advice that Defendants had given to her and with the products that they sold to her. 74. Defendants Cannella and Small then watched over the attorney to make sure that the language was added correctly and immediately. 12 Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 75. From the foregoing, it later became clear later that Defendants? real motive was to keep Kay from cancelling her investments with Defendants, thereby costing Defendants significant fees and commissions. 76. While Defendants, FSFG, Cannella, and Small were supposedly helping Kay, they were continuing to process the applications for the various products they had sold to Kay so that they would receive the fees and eclnmissions from the sales. COUNT I BREACH OF FIDUCIARY DUTY 77. Plaintiffs hereby incorporate the foregoing paragraphs by reference as if set forth in full. 78. As a result of the advice provided to the Trust, through Kay as agent for the Trustees, Defendants owed a ?duciary responsibility and duty to the Trust, and owed a duty to deal with the Trust fairly and in good faith. 79. This duty included the responsibility and duty to make full and complete disclosure of the risks and bene?ts of the advice that Defendants were providing. 80. Defendants knew or should have known that the advice to surrender the life insurance policy was not sound advice nor was it in the Trust?s or its beneficiaries? best interests. Instead, Defendants misled Kay into thinking that she was the decision maker relating to the Policy and that she could order that the Policy be surrendered to provide her personally with over $133,000. In fact, Defendants knew or should have known that Kay was not the owner of the policy (the Trust was), or the decision maker of the policy (the Trustees were), and, therefore, she could not surrender it. Nonetheless, Defendants assured Kay that she was the decision maker and she could surrender it so that she would adopt the overall ?nancial plan created and recommended by Defendants. 13 Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 82. Convincing Kay to cause the Trustees to surrender the Policy and turn the proceeds over to her was a key component of Defendants? strategy. Without the proceeds from the Policy, Defendants knew that Kay would not consider the Navigator plan that they wanted to recommend and sell to her, and she would instead have used the proceeds placed into the Navigator plan for other purposes, including the payment of debt. 83. Defendants also failed to explain the tax implications to her and to the Trust arising from the surrender of the Policy. 84. Defendants failed to arrange for a replacement life insurance policy. 85. Defendants failed to exclude the potential surrender funds of the policy of $133,000.00 from the plan Defendants were proposing to Kay, but instead included them in their investment plan even though Defendants knew that the funds did not belong to Kay and instead belonged to the Trust for the bene?t of the bene?ciaries. 86. Defendants misled Kay about the true status of the surrendered funds from the Policy and convinced her not to have any contact with Penn Mutual or Hendrickson Associates because without the funds from the Policy the entire Navigator plan would not have been viable and Defendants would have lost signi?cant commissions. 87. Defendants failed to disclose to Kay the substantial commissions Defendants would earn by selling the various investments to Kay, investments that were not better than the investments that Kay already owned. 88. Kay, as an agent for the Trust, justi?ably relied on the advice given to her by Defendants and Defendants knew or should have known that she would rely on that advice. 89. As a result of Defendants? actions, the Trust and its bene?ciaries lost the bene?t of the Policy. 14 Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 90. In excess of $173,000 in premiums for the Policy was paid through Kay?s completed gifts to the Trust, which was an important part of Kay?s estate and ?nancial plan. 91. As a result of Defendants? actions, the Trust and its bene?ciaries lost the bene?t of the death bene?t under the Policy. 92. Defendants failed to follow insurancefbrolrer guidelines and the standards of the industry. 93. Defendants? conduct was a breach of the duty that Defendants owed to Kay of good faith and fair dealing. 94. Defendant?s overall conduct was intended solely for the ?nancial bene?t of Defendants and was without concern for the detrimental ?nancial impact it would have on the Trust and its bene?ciaries. 95. Defendants? actions were in bad faith, outrageous and with reckless indifference to Kay?s interests and justify an award of punitive damages. WHEREFORE, Plaintiff demands that judgment be entered in his favor (in his capacity as Trustee for the Trust), and against Defendants, jointly and severally, in an amount in excess of $50,000.00, together with punitive damages, interest, and costs. COUNT II - FRAUD 96. Plaintiffs hereby incorporate the foregoing paragraphs by reference as if set forth in full. 97. Defendants knew that the advice provided to Kay, as agent for the Trust, to surrender the Policy was not sound advice, was not in the Trust?s or its bene?ciaries? best interests. 98. Defendants fraudulently and deceit?Jlly induced, through Kay, the Trustees of the Trust to surrender the Policy, as explained hereinabove. '15 Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 99. Defendants made the false representations described hereinahove to Kay, with the speci?c intention that the Trustees would rely on such false representations. 100. The Trustees relied upon the representations that Defendants made to Kay, which she, in turn, conveyed to the Trustees, to their detriment in surrendering the Policy. 101. Defendants also fraudulently omitted material information, including the income tax implications of surrendering the Policy and the substantial commissions being earned by Defendants, which omissions were intended to assist withtheir fraudulent scheme. 102. The Trustees of the Trust reasonably relied on the false representations of Defendants. 103. Defendants? actions as set forth above were improper and deceitful. 104. Defendants? actions were in bad faith, outrageous and with reckless indifference to Plaintiffs rights and interests, and justify an award of punitive damages. WHEREFORE, Plaintiff demands that judgment be entered in his favor (in his capacity as Trustee for the Trust), and against Defendants, jointly and severally, in an amount in excess of $5 0,000.00, together with punitive damages, interest, and costs. COUNT - SUITABILITY 105. Plaintiffs hereby incorporate the foregoing paragraphs by reference as if set forth In full. 106. As explained hereinabove, the purpose of the Policy owned by the Trust was to provide an inheritance to Kay?s children, who were also the Trustees and bene?ciaries of the Trust. 107. Defendants knew or should have known that the Trustees, and Kay, as an agent for the Trust, would rely on their advice regarding the Policy and other investment decisions. 108. Defendants knew or should have lmown that the recommendation to surrender the Policy was not appropriate or suitable for the reasons set forth hereinahove. 16 Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 109. Defendants? actions were in bad faith, outrageous and with reckless indifference to Plaintiffs interests and justify an award of punitive damages. Plaintiff demands that judgment be entered in his favor (in his capacity as Trustee for the Trust), and against Defendants, jointly and severally, in an amount in excess of $50,000.00, together with punitive damages, interest, and costs. COUNT IV NEGLIGENT MISREPRESENTATION 110. Plaintiffs hereby incorporate the foregoing paragraphs by reference as if set forth in full. 11 1. Defendants knew or should have known that the advice provided to Kay regarding the Policy would be relayed to the Trustees and that it was the type of advice that the Trustees would rely upon when deciding whether to surrender the Policy. 112. Defendants owed a duty to Kay, as an agent of the Trustees, and to the Trustees and the Trust, to exercise reasonable care in providing investment advice concerning the Policy. 113. Defendants negligently misrepresented the benefits of surrendering the Policy, and negligently omitted material information regarding the disadvantages and detriments relating thereto. Defendants also made other material misrepresentations and omissions as described hereinabove. Defendants should have known of the falsity of their representations. 114. Defendants? conduct was intended to induce Kay and the Trustees to rely upon such representations and to otherwise induce the surrender the Policy. 115. Defendants? actions were in bad faith, outrageous and with reckless indifference to Kay?s interests and justify and award of punitive damages. 1? Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 Plaintiff demands that judgment be entered in his favor (in his capacity as Trustee for the Trust), and against Defendants, jointly and severally, in an amount in excess of $50,000.00, together with punitive damages, interest, and costs. COUNT VIOLATION OF THE UNF AIR TRADE PRACTICES AND CONSUMER PROTECTION LAW 116. Plaintiffs hereby incorporate the foregoing paragraphs by reference as if set forth in full. 117. Plaintiffs? bring a claim under the Unfair Trade Practices and Consumer Protection Law, 73 PS. (the ?catchall provision?). 118. Defendants knew that with regard to the Policy, Kay was acting as an agent for the Trust and Trustees. Therefore, Defendants provided services to the Trust and Trustees. 119. Defendants engaged in deceptive conduct by misleading Kay, as agent for the Trust and Trustees, into thinking that she was the owner of the Policy when, in fact, she was merely the insured. Defendants advised Kay that She could personally receive the $133,000.00 surrender value of the Policy. In other words, Defendants included the $133,000.00 from the surrender of the Policy in Kay?s investment plan even though they knew that the funds belonged to the Trust, of which Kay was not a bene?ciary, because without those funds the entire investment plan would not have been viable and Defendants would have lost signi?cant commissions. 120. Defendants also engaged in deceptive conduct by making false representations relating to the Policy to Kay, as agent for the Trust and Trustees, as aforesaid, with the intention that the Trustees would rely thereon. 121. The Trustees relied upon the representations that Defendants made to Kay, which she, in turn, conveyed to the Trustees, to their detriment in surrendering the Policy. 18 Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 122. It was Defendants? intention in making these misrepresentations to induce Kay to cancel the life insurance policy and to invest the funds from the policy as well as her other investments with Defendants. 123. Plaintiffs justifiably relied on the misrepresentations made by Defendants. 124. As a result of Defendants? acts and omissions, the Trust suffered damages. 125. The deceptive services provided by Defendants were provided for personal, family or household purposes. 126. Defendants? conduct was such that the Trust should be awarded treble dmnages pursuant to 73 PS. 201~9.2. 127. Defendants? actions were in bad faith, outrageous and with reckless indifference to the interests of the Trust and justify an award of punitive damages. 128. Plaintiff is entitled to recover reasonable attorneys? fees and costs pursuant to '73 PS. 201-92. Plaintiff demands that judgment be entered in his favor (in his capacity as Trustee for the Trust), and against Defendants, jointly and severally, in an amount in excess of $50,000.00, together with treble damages, punitive damages, reasonable attorneys? fees, interest, and costs. JURY DEMAND Plaintiff hereby demands a jury trial on all claims. KEEN BUCKMAN I mun-? I By: BEN PICKER ?ttorney LD. No. 93 089 Date: July 24, 2015 19 Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 VERIFICATIGN I, Kay Guzman, hereby verify, subject to the penalties of ?l 3 Pa, 0.3. 4904 relating to tho unsworn falsification to authorities, that the facts oontninod in tho foregoing Third Amended Complaint are true and correct to the best of my knowledge, information and bnliof. I take this Veri?cation pursuant to N0. 1024(0) because tho Plaintiff lacks suf?cient knowledge or as to certain moments of fact in the Third Amended Complaint. Date: Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 VERIFICATION James Lam/is Hess, as Trustee of the Elizabeth K. Hess I'rreveeabie Trust, hereby verify. Subject to the penalties of 18 Pa. (LS. 4904 relating te the unewern falsi?eatien ta authorities, that the facts set forth in the foregoing Third Amended Complaint to whieh I have pereenal knowledge are true and correct to the beet ef my knowledge, information and belief. 7.1g es Lewie Hess Date: Case# 2012-17197-173 Docketed at Montgomery County Prothonotary on 07/24/2015 10:19 AM, Fee $0.00 KEEN BUCKMAN By: Glenn S. Gitomer, Esquire Attorney ID. No. 1928? Benjamin Picker, Esquire Attorney ID. No. 93089 Radnor Court, Suite 160 259 North Radnor-Chester Road Radnor, 19087-5257 (610) 34l~1000 Attorneys for Plaintijjir IN THE COURT OF COMMON PLEAS OF MONTGOMERY COUNTY, JAMES LEWIS HESS, in his capacity as Trustee of THE ELIZABETH K. HESS IRREVOCABLE TRUST, v. No. 2012-17197 FIRST SENIOR FINANCIAL GROUP, LLC Civil Action - Law dfb! a First Senior Financial Group, PHILLIP CANNELLA, JOANNE SMALL, and LARRY SNYDER .Jury Trial Demanded CERTIFICATE OF SERVICE I, Benjamin R. Picker, Esquire, hereby certify that on July 24, 2015, I caused a true and correct copy of Plaintiffs? Third Amended Complaint, with Notice to Defend, to be served upon the following counsel of record via the Court?s electronic ?ling system, US. First Class Mail, and electronic mail: Albert L. Piccerilli, Esquire James P. Ricciardi, Jr., Esq. Montgomery McCracken White Fleischner Fino LLP Walker Rhoads LLP Holmdel Corporate Plaza 123 South Broad Street 2137 Route 35 Avenue of the Arts Holmdel, NJ 07733 Philadelphia, PA 19109-1099 MCCAUSLAND, KEEN BUCKMAN a Benjal Edang Picker, Esquire Atto ey ID. No. 93089 #rI' I Date: July 24, 2015