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Lincoln National Life Insurance Co. has asked a Pennsylvania state court to release it from a heated legal battle involving a $4.5 million life insurance payout, leaving the court to decide between competing claims.

Lincoln Life $4.5M Benefit Trial : Competing Claims Spark Court Battle

In a dramatic turn of events on Monday, Lincoln National’s attorney, Michael J. Joyce, argued before Allegheny County Court of Common Pleas Judge Alan Hertzberg that the insurer is caught in the crossfire of competing claims from Chun Lim Abbott and the Abbott Family Limited Partnership. Both parties are contending for a share of the $7 million policy on the late Dominic Abbott, with each side accusing Lincoln of failing to honor its obligations.

Joyce argued that Lincoln had already deposited the contested funds into escrow, where they accrue interest, and that the insurer’s decision to remain neutral should not be seen as bad faith or a breach of contract. “Lincoln’s stance is simply to wait for the parties to resolve their issues,” Joyce said. “Our decision not to choose sides should not be deemed actionable or indicative of bad faith.”

The Dispute's Origins

Dominic Abbott, who amassed a fortune through his wig business and subsequent investments, passed away in June 2023. Following his death, his widow, Chun Lim Abbott, filed a claim with Lincoln for her share of the $7 million policy. However, the family partnership asserts that it was promised the entire payout as repayment for a loan to Dominic. They argue that a beneficiary change form that split the policy 60-40 between Chun Lim and the partnership was invalid because the manager who signed it allegedly lacked proper authority.

In addition to challenging Lincoln’s handling of the claim, Chun Lim Abbott’s lawsuit also accuses the family partnership, its manager, and Buchanan Ingersoll attorney E. David Margolis of interfering with her claim. Lincoln had already disbursed $3 million, representing the undisputed 40% share, to the partnership.

Lincoln Life $4.5M Benefit Trial: Arguments on Both Sides

Peter St. Tienne Wolff, representing Chun Lim Abbott, contended that Lincoln should be held accountable for honoring the beneficiary designation that was properly filed. “Mrs. Abbott isn’t asking Lincoln to pick sides; she’s asking it to follow its procedures as per the documents on file,” Wolff stated.

Conversely, Carl Misitano of Buchanan Ingersoll & Rooney, representing the family partnership, argued that Lincoln’s failure to investigate the beneficiary change form was a liability issue. He asserted that placing the funds into escrow did not absolve Lincoln of its responsibility to promptly provide the benefits due to the partnership.

Judge’s Decision Pending

Joyce maintained that regardless of how Lincoln distributed the proceeds, the insurer would have faced claims of bad faith and breach of contract from whichever party was dissatisfied. Judge Hertzberg has taken the arguments under advisement and has yet to render a decision.

Lincoln National Life Insurance Co. is represented by Michael J. Joyce and Allison L. Burdette of Saul Ewing LLP. Chun Lim Abbott is represented by William Pietragallo II, Peter St. Tienne Wolff, and Michael O. Bethune of Pietragallo Gordon Alfano Bosick & Raspanti LLP. The Abbott Family Limited Partnership and David Margolis are represented by Stanley J. Parker and Carl A. Misitano of Buchanan Ingersoll & Rooney LLP.