# Pratt v. Safeco Insurance Company of America

> District Court, W.D. Oklahoma · August 14, 2020

URL: https://www.frixlaw.com/law-library/cases/10388457

## Case

- **Court:** District Court, W.D. Oklahoma
- **Decided:** August 14, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA

RANDY PRATT and DEBRA PRATT, )
)
Plaintiffs, )
)
vs. ) Case No. CIV-20-93-D
)
SAFECO INSURANCE COMPANY )
OF AMERICA, )
)
Defendant. )

ORDER
Before the Court is Defendant Safeco Insurance Company of America’s Partial
Motion to Dismiss [Doc. No. 16] filed pursuant to FED. R. CIV. P. 9(b) and FED. R. CIV. P.
12(b)(6). Plaintiffs Randy and Debra Pratt filed a response in opposition [Doc. No. 17], to
which Defendant has replied. [Doc. No. 18].
BACKGROUND
The lawsuit stems from a motor vehicle accident that took place on or about
November 28, 2018. Plaintiffs allege that they were rear-ended through no fault of their
own. Amended Complaint [Doc. No. 15] at 1–2. Plaintiffs allege that, as a result of the
accident, Defendant increased Plaintiffs’ automobile insurance premium, violating OKLA.
STAT. tit. 36 § 941(A). Id. at 3. As a result, Plaintiffsare suing for: 1) breach of contract; 2)
constructive fraud/negligent misrepresentation; and 3) unjust enrichment. Defendant
moves the Court to dismiss with prejudice the second cause of action, arguing that it fails
as a matter of law.
STANDARD OF DECISION
To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain
enough facts that, when accepted as true, “state a claim to relief that is plausible on its

face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see Robbins v. Oklahoma, 519 F.3d
1242, 1247 (10th Cir. 2008). A claim has facial plausibility when the court can draw “the
reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556
U.S. at 678.
“In alleging fraud or mistake, a party must state with particularity the circumstances

constituting fraud or mistake.” FED. R. CIV. P. 9(b). The purpose of Rule 9(b) is “to afford
defendant fair notice of plaintiff’s claim and the factual ground upon which it is based.”
Farlow v. Peat, Marwick, Mitchell & Co., 956 F.2d 982, 987 (10th Cir. 1992). The
complaint must “set forth the who, what, when, where and how of the alleged fraud, and
must set forth the time, place, and contents of the false representation, the identity of the

party making the false statements and the consequences thereof.” United States ex rel.
Sikkenga v. Regence Bluecross Blueshield, 472 F.3d 702, 726–27 (10th Cir. 2006) (internal
quotations and citations omitted). Courts generally review only the text of the complaint to
determine if the factual allegations satisfy Rule 9(b). Id. at 726.
DISCUSSION

Defendant argues that Plaintiffs have not alleged fraud with the level of particularity
required by Rule 9(b). Further, Defendant asserts that Oklahoma does not recognize
negligence as a cause of action against an insurer. Defendant maintains that Plaintiffs’
constructive fraud/negligent misrepresentation cause of action should be dismissed with
prejudice.
Under Oklahoma law, constructive fraud “is the concealment of material facts

which one is bound under the circumstances to disclose.” Specialty Beverages, L.L.C v.
Pabst Brewing Co., 537 F.3d 1165, 1180 (10th Cir. 2008) (listing the elements of a
constructive fraud claim). A constructive fraud claim based on a nondisclosure of
information requires the existence of a duty to disclose the information. See, e.g. Thrifty
Rent-A-Car Systems, Inc. v. Brown Flight Rental One Corp, 24 F.3d 1190, 1195 (10th Cir.

1994) (“Fraud may also be established by showing the concealment of material facts which
one is bound under the circumstances to disclose.” (citing Varn v. Maloney, 516 P.2d 1328,
1332 (Okla. 1973)); Silk v. Phillips Petrol. Co., 760 P.2d 174, 179 (Okla. 1988) (“[T]here
must have been an obligation to speak.”). The duty may flow from a fiduciary relationship
between the plaintiff and defendant. It may also arise once a defendant voluntarily chooses

to speak to the plaintiff about a particular subject matter. Specialty Beverages, L.L.C., 537
F.2d at 1180–81.
Plaintiffs allege that Defendant owed them a fiduciary duty because of the special
business relationship between the parties. Plaintiffs claim that this relationship resulted
from Plaintiffs placing a “high degree of confidence and trust in Defendant.” Amended

Complaint at 5 ¶ 28. Plaintiffs further argue that “a fiduciary relationship springs from an
attitude of trust and confidence and is based on some form of agreement, either expressed
or implied,” and that a fiduciary relationship can arise “anytime the facts and circumstances
surrounding a relationship would allow a reasonably prudent person to repose confidence
in another person.” Response at 8. Defendant contends that in Oklahoma, insurers and
insureds cannot be in a fiduciary relationship.
Under Oklahoma law, an insurer does not owe a fiduciary duty to an insured. In

fact, “[t]here are no Oklahoma cases holding that an insurance agent owes a fiduciary duty
to a prospective insured, or to an established customer with respect to procurement of an
additional policy.” Swickey v. Silvey Cos., 979 P.2d 266, 269 (Okla. Civ. App. 1999).
Recognizing that transactions between an insurer and insured are at an arms’ length, the
Oklahoma Supreme Court noted that the parties “[do] not stand vis-à-vis each other in any

recognized form of special relationship.” Silver v. Slusher, 770 P.2d 878, 882 n.11 (Okla.
1988); see also Cosper v. Famers Ins. Co., 309 P.3d 147, 150 (Okla. Civ. App. 2013).
Defendant directs the Court to Slover v. Equitable Variable Life Ins. Co., 443 F. Supp. 2d
1272, 1281 (N.D. Okla. 2006) and Latta ex rel Latta v. Great American Life Ins. Co., 60
F. App’x 219, 220–21 (10th Cir. 2003). Both cases hold that Oklahoma does not recognize

a fiduciary relationship between an insurer and insured.
Plaintiffs’ attempts to distinguish Defendant’s cited case law from the instant matter
are ineffectual. As Plaintiffs point out, both factual circumstances and legal issues in
Cosper, Slover, and Latta, differ from the case at hand. Plaintiffs, however, fail to refute
the critical principle: that insurers owe no fiduciary duty to insureds.

Further, Defendant owed Plaintiffs no duty to speak. To determine whether there is
a duty to speak, “consideration must be given to the situation of the parties and the matters
with which they are dealing.” Silk, 760 P.2d 174, 179. The duty to speak “may arise if a
party selectively discloses facts that create a false impression.” Specialty Beverages,
L.L.C., 537 F.3d at 1181. If a false impression is conveyed by disclosing some facts and
concealing others, the concealment is in effect a false representation. Uptegraft v. Dome
Petrol. Corp., 764 P.2d 1350, 1353 (Okla. 1988). Plaintiffs do not allege that Defendant

conveyed a false impression by disclosing certain material facts and concealing others.
Rather, Plaintiffs maintain that Defendant remained silent as to the reason for the premium
increase. Defendant’s silence conveyed no false impression to Plaintiffs. The parties were
involved in an arms’ length business transaction and were not in a fiduciary relationship.
Defendant was under no duty to speak in connection with the circumstances of this case.

Plaintiffs’ pleading contains conclusory allegations of trust and confidence reposed
in Defendant. Plaintiffs fail to plead any facts from which the Court could infer that the
auto policy renewal was anything other than an arms’ length transaction between the
parties; no fiduciary duty existed. Further, Defendant did not owe Plaintiffs a duty to speak.
Because Defendant did not owe any legal or equitable duty to Plaintiffs, and such a duty is

an essential element of a constructive fraud/negligent misrepresentation claim, Plaintiffs’
second cause of action fails as a matter of law.
CONCLUSION
For the foregoing reasons, Defendant’s Partial Motion to Dismiss [Doc. No. 16] is
GRANTED. Plaintiffs’ constructive fraud/negligent misrepresentation claim against
Defendant is DISMISSED WITH PREJUDICE.'
IT IS SO ORDERED this 14" day of August, 2020.
AV, Qu
Vdy WO ay ae
i,
TIMOTHY D. DeGIUSTI
Chief United States District Judge

' A dismissal with prejudice is appropriate because allowing Plaintiffs the opportunity to
re-plead the claim would be futile. See Breton v. Bountiful City Corp., 434 F.3d 1213,
1219 (10th Cir. 2006) (“A dismissal with prejudice is appropriate where a complaint fails
to state a claim under Rule 12(b)(6) and granting leave to amend would be futile.”’).

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10388457. Public record. Not legal advice.