A jury in Alabama has awarded $10 million in damages to an amusement park operator, Apex Parks Group, in a case involving a key man life insurance policy.

The insured, Alexander Weber Jr., who was the chief executive officer of Apex, died in November 2016, while he was in the British Virgin Islands.

Apex has accused the issuer, Protective Life Insurance Company, of breaching a contract when it refused to pay the $10 million in death benefits owed under the key man life insurance policy.

Lawyers for Protective Life say that Weber and Apex failed to disclose important facts during the underwriting process. Protective Life plans to file an appeal with the Alabama Supreme Court, the company’s lawyers say.

Alexander Weber Jr. and Apex Parks

Alexander Weber Jr., who used the nickname “Al,’ worked for decades in the amusement park industry, according to a 2015 biography posted in connection with a seminar organized by the International Association of Amusement Parks and Attractions.

Weber became the chief executive officer of Paramount Parks in 2002; the CEO of Palace Entertainment, a water park and family entertainment center operator, in 2007; and the interim CEO of Six Flags Theme Parks in 2010.

In 2014, he helped start the Aliso Viejo, California-based Apex Parks Group, and he became that organization’s CEO. Apex runs water parks, amusement parks and family entertainment centers. The company’s holdings include the Big Kahuna’s Water and Adventure Park in Destin, Florida, and Martin’s Fantasy Island in Grand Island, N.Y., according to the company’s website.

The Policy

Protective Life Insurance Company is a unit of Birmingham, Alabama-based Protective Life Corp., which is a subsidiary of Dai-ichi Life Holdings Inc. of Tokyo.

Weber applied for a Protective Custom Choice insurance policy in March 2016, according to documents that Apex and Protective Life filed with the Alabama state circuit court in Birmingham.

The policy was a 10-year term life insurance policy with a $10 million death benefit, Protective Life said.

Apex was the policy beneficiary.

The Conflict

Apex said Protective Life Insurance Company failed to honor the terms of the policy, by refusing to pay the death benefit when Weber died.

Protective Life Insurance Company said in pleadings that, because Weber died within two years after the policy was issued, it investigated the policy when the claim came in. The company said its investigators found evidence that Weber had left material health information out of the policy application.

The company has moved to rescind the policy, on the grounds that it would not have issued the policy if it had the information about Weber’s health before issuing the policy that it now has.

Apex has argued that the information allegedly misrepresented or left out of the application was not material to Protective Life Insurance Company’s acceptance of the risk of insuring Weber, and that, if the information allegedly missing had been disclosed, the information would not have affected the company’s decision to issue coverage, the death benefit, or the premiums.

The Jury Verdict

The jury reached its verdict after a seven-day trial, after deliberating for several hours, according to lawyers at McKool Smith, the firm that represented Apex.

Robin Cohen, counsel for Apex and head of McKool Smith’s insurance recovery practice, said in a statement that Apex is pleased with the jury’s decision.

“The jury weighed the evidence carefully, and their verdict affirms our position regarding Protective’s failure to honor its contractual obligations after receipt of substantial premiums,” Cohen said.

Lawyers from Maynard Cooper & Gale PC, the firm that represented Protective Life Insurance Company, said the company has a duty to its policyholders to pay only properly payable claims, and to defend itself against situations where the insured or the policy owner does not disclose all relevant facts concerning the insured.

During the underwriting process for the Weber policy, “neither the insured nor the company fully disclosed the CEO’s actual ownership interest in the company,” Protective Life Insurance Company’s lawyers said. “They also did not tell Protective that the CEO had developed a serious heart condition and that he was planning heart surgery. The CEO died less than six months later of a heart attack, while vacationing abroad. Had Protective known of the CEO’s heart condition, or true financial situation, Protective would not have placed this policy in force.”

Protective Life Insurance Company’s lawyers said Apex sued Protective seeking consequential damages, attorney’s fees and punitive damages, as well as the policy death benefits.

“The jury rejected Apex’s bad faith claim and found that only the policy benefits were payable,” Protective Life Insurance Company’s lawyers said.

“Protective will be appealing this judgment to the Alabama Supreme Court,” the company’s lawyers said.

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