# Morgan v. Provident Life and Accident Insurance Company

> District Court, W.D. Oklahoma · March 26, 2021

URL: https://www.frixlaw.com/law-library/cases/10388939

## Case

- **Court:** District Court, W.D. Oklahoma
- **Decided:** March 26, 2021
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10388939

## Opinion text

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

RICHARD R. MORGAN, )
)
Plaintiff, )
)
vs. ) Case No. CIV-20-180-D
)
PROVIDENT LIFE AND ACCIDENT )
INSURANCE COMPANY, )
)
Defendant. )

O R D E R
Before the Court is Defendant’s Motion to Dismiss [Doc. No. 8], filed pursuant to
Fed. R. Civ. P. 12(b)(6). Defendant seeks the dismissal of all claims asserted by Plaintiff
in this diversity case regarding insurance coverage. Plaintiff has filed a response [Doc.
No. 10] in opposition to the Motion, and Defendant has replied [Doc. No. 11]. Thus, the
Motion is fully briefed and ripe for decision.
Factual and Procedural Background
Plaintiff, a medical doctor, brings suit to recover damages for breach of contract and
breach of an insurer’s duty of good faith and fair dealing based on allegations that
Defendant failed to pay and failed properly to investigate and adjust his claim under a
disability income insurance policy issued in July 1987, amended in 2001, and effective
when he became disabled in March 2019. See Compl. [Doc. No. 1], ¶¶ 4-5. Plaintiff
also claims Defendant’s soliciting agent fraudulently misrepresented in June 1987 the
coverage provided by the policy to a physician working in a recognized medical specialty
who became disabled from the specialty occupation but continued to work as a licensed
physician in another practice. Id. ¶ 13. By its Motion, Defendant asserts that the

Complaint fails to state any claim on which relief can be granted because 1) no breach of
contract can be established under the unambiguous language of the insurance policy, 2) no
plausible claim of insurer’s bad faith is stated, and 3) no fraud claim arises from the alleged
statements of Defendant’s agent, which did not misrepresent any facts and were consistent
with the policy. Plaintiff contends the factual allegations of the Complaint are sufficient
to state claims for breach of contract, bad faith, and fraud.

Standard of Decision
“To survive a motion to dismiss [under Rule 12(b)(6)], a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its
face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)); see Robbins v. Oklahoma, 519 F. 3d 1242, 1247 (10th

Cir. 2008). “A claim has facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 556 U.S. at 678. Determining whether a complaint states a
plausible claim for relief is a “context-specific task that requires the reviewing court to
draw on its judicial experience and common sense.” See id. at 679. Thus, for example,

“[a] simple negligence action based on an automobile accident may require little more than
the allegation that the defendant negligently struck the plaintiff with his car while crossing
a particular highway on a specified date and time.” Robbins, 519 F.3d at 1248.
However, a claim of fraud must be pleaded with particularity. See Fed. R. Civ. P. 9(b).
The question to be decided is “whether the complaint sufficiently alleges facts supporting
all the elements necessary to establish an entitlement to relief under the legal theory

proposed.” Lane v. Simon, 495 F.3d 1182, 1186 (10th Cir. 2007).
“Generally, the sufficiency of a complaint must rest on its contents alone.” Gee v.
Pacheco, 627 F.3d 1178, 1186 (10th Cir. 2010). There is a well-recognized exception,
however, for “documents referred to in the complaint if the documents are central to the
plaintiff’s claim and the parties do not dispute the documents’ authenticity.” Id. (quoting
Jacobsen v. Deseret Book Co., 287 F.3d 936, 941 (10th Cir. 2002)); see also Smith v.

United States, 561 F.3d 1090, 1098 (10th Cir. 2009) (quoting Alvarado v. KOB-TV, L.L.C.,
493 F.3d 1210, 1215 (10th Cir. 2007)). In this case, Plaintiff bases his case on an
insurance policy specifically described in his Complaint but not attached to his pleading.
See Compl. ¶ 4. Defendant has submitted a copy of the policy with its Motion. See
Def.’s Mot., Ex. 1 [Doc. No. 8-1] (hereafter, the “Policy”).1 Because Plaintiff does not

dispute the authenticity of this document, the Court may properly consider it under
Rule 12(b)(6). See GFF Corp. v. Assoc. Wholesale Grocers, Inc., 130 F.3d 1381, 1384
(10th Cir. 1997); see also Hampton v. Root9B Tech., 897 F.3d 1291, 1297 (10th Cir. 2018).

1 Exhibit 1 contains multiple documents that combine to constitute the Policy as provided
by its “Entire Contract” provision, which states: “This policy with the application and attached
papers is the entire contract between you and us. No change in this policy will be effective until
approved by one of our officers.” See Policy at 30 (ECF page numbering). For ease of reference,
the Court uses the page numbers assigned by the electronic case filing system because the pages
of the document are not sequentially numbered.
Plaintiff’s Allegations
Accepting the allegations of the Complaint, Plaintiff resides in Oklahoma and was

insured at all relevant times under the Policy issued by Defendant in this state on July 7,
1987.2 Defendant marketed this type of disability income policy to physicians who
wanted coverage for occupations in a recognized medical specialty. The Policy provides
monthly benefits for total disability if the insured is not able to perform the material duties
of his recognized specialty, even if he remains capable of performing another occupation
as a licensed physician.3 Since July 1987, Plaintiff has worked as both a specialist in

emergency medicine and a clinician in another non-specialty practice. The Policy
expressly covered Plaintiff’s duties as an emergency room physician in that it incorporated
an application executed in 2001 that identified these duties.4
In March 2019, Plaintiff suffered a myocardial infarction that caused him to be
totally disabled from performing his specialty occupation. Plaintiff timely submitted a

loss claim under the Policy. Defendant allegedly breached the insurance contract by
denying the claim. Defendant also allegedly breached its duty of good faith and fair
dealing by the manner in which it investigated, handled, and denied the claim.

2 Under these circumstances, the parties agree that Oklahoma law governs their dispute.

3 The language of the coverage provision is set forth infra in discussing the parties’
arguments.

4 The allegation of the Complaint that the Policy expressly covered Plaintiff’s specialty
practice necessarily refers to the 2001 application because it contains the only statement regarding
this practice and was expressly approved by an officer of the company. See Policy at 6-8; see
also note 2 supra; Pl.’s Resp. Br. at 1-2, 16.
In support of a claim for false representation and deceit, Plaintiff alleges that
Defendant’s agent, Earl Chambers, personally met with Plaintiff in June 1987 at the

hospital where he was completing a residency program. Mr. Chambers touted the type of
policy offered by Defendant as better than other physician disability policies “because it
provided coverage specifically for your duties in your specialty, if you worked in a
recognized medial specialty.” See Compl. ¶ 13. The alleged sales pitch went as follows:
Mr. Chambers explained that many doctors may become disabled from their
principal occupation in a recognized specialty, but still be able to perform
some duties as an office physician. He explained that, if Dr. Morgan was
working in a recognized specialty, then the Defendant would view that
specialty as his occupation and he would receive the full disability benefits
of the policy, even if he were able to continue working in some other duties
as a physician. This policy would, in effect, provide coverage for the loss
of the extra income that would be expected from his specialty occupation,
even if he continued to work as a physician in some other capacity. This
was explained as the principal benefit and special feature of this disability
policy, as compared to competitor’s [sic] products. The agent explained
that as [Plaintiff’s] income grew, he would be entitled to increase the monthly
disability benefits and that he should increase those monthly benefits as much
as he was able so that he would always have sufficient coverage in the event
he became unable to work in his specialty.

Id. Although Plaintiff did not have a specialty practice at the time,5 Plaintiff alleges that
he relied on these representations in purchasing the Policy and later deciding to renew it:
In reliance upon these representations, Dr. Morgan did increase his benefits
in May of 2001 and in October of 2001. These applications for the
increased coverage were written and made a part of his insurance policy and
specify that the exact duties of his covered occupation was [sic] as an
emergency room physician. In reliance upon the Defendant’s promises, he
maintained this disability coverage for thirty-three years in order to insure
his recognized specialty as an ER physician.

5 In addition to alleging that Mr. Chambers met with him while he was a resident,
Plaintiff’s original application in 1987 identified his duties as “usual to profession, Resident.” See
Policy at 31.
Id. Despite statements in the renewal applications, Plaintiff’s work was not limited to
practicing emergency medicine during the term of the Policy. Plaintiff “also worked a
second job most of those same years with a physician team doing clinical work,” and “he
normally had group disability coverage through that employment for that work.” Id.

Plaintiff alleges that Mr. Chambers “made these promises [regarding total disability
payments if Plaintiff became unable to perform the duties of a specialty but continued to
work] without any disclosure that [Defendant] would attempt to handle the claims in any
other manner, if [Plaintiff] was working in multiple occupations.” Id. According to
Plaintiff, “[a]t the time of the original sale of the policy and the amendments of the same,
no one ever disclosed anything different with regard to multiple occupations or partial

disabilities. . . . The representations were always on the one-hundred percent total disability
payments being tied precisely to his duties as an emergency room physician, rather than to
any duties of a physician generally.” Id.
Discussion
Defendant contends Plaintiff’s claims that he was entitled to total disability

payments and that Mr. Chambers misrepresented the available coverage are defeated by
the language of the Policy, which provides coverage for a physician with a specialty
practice in the way Mr. Chambers described it but operates differently when a physician
has a dual practice and works simultaneously in both a recognized specialty and another
area or field. This contention impacts all Plaintiff’s asserted theories of recovery.
A. Breach of Contract
The Oklahoma Supreme Court has summarized the applicable legal rules as follows:

Oklahoma law governing insurance coverage disputes is well-
established. The foremost principle is that an insurance policy is a contract.
Parties are at liberty to contract for insurance to cover such risks as they see
fit and they are bound by terms of the contract. It necessarily follows that
courts are not at liberty to rewrite the terms of an insurance contract. When
addressing a dispute concerning the language of an insurance policy our first
step is to determine as a matter of law whether the policy language at issue
is ambiguous. If it is not ambiguous, we accept the language in its plain,
ordinary and popular sense. If the language is ambiguous, we apply well-
settled rules of construction to determine the meaning of the ambiguous
language: we construe the policy to give a reasonable effect to all of its
provisions, and we liberally construe words of inclusion in favor of the
insured and strictly construe words of exclusion against the insurer.

Cranfill v. Aetna Life Ins. Co., 49 P.3d 703, 706 (Okla. 2002) (citations omitted); accord
BP Am., Inc. v. State Auto Prop. & Cas. Ins. Co., 148 P.3d 832, 835-36 (Okla. 2005)
(footnotes omitted); see Phillips v. Estate of Greenfield, 859 P.2d 1101, 1104 (Okla. 1993)
(“An insurance policy is a contract. If the terms are unambiguous, clear and consistent,
they are to be accepted in their ordinary sense and enforced to carry out the expressed
intentions of the parties.”). The Oklahoma Statutes codify these rules: “The language of
a contract is to govern its interpretation, if the language is clear and explicit, and does not
involve an absurdity.” Okla. Stat. tit. 15, § 154. “The words of a contract are to be
understood in their ordinary and popular sense, rather than according to their strict legal
meaning, unless used by the parties in a technical sense, or unless a special meaning is
given to them by usage, in which case the latter must be followed.” Id. § 160.
A court’s role in resolving a contractual dispute is also well settled. “If language
of a contract is clear and free of ambiguity the court is to interpret it as a matter of law,
giving effect to the mutual intent of the parties at the time of contracting.” Pitco Prod.
Co. v. Chaparral Energy, Inc., 63 P.3d 541, 545 (Okla. 2003) (footnotes omitted).

Further, the question of “[w]hether a contract is ambiguous and hence requires extrinsic
evidence to clarify the doubt” is a matter of law for the courts. Id.; BP Am., 832 P.3d at
836; Cranfill, 49 P.3d at 706; Dodson v. St. Paul Ins. Co., 812 P.2d 372, 376 (Okla. 1991).
In this case, the coverage provision of the Policy obligates Defendant to pay a
“Monthly Benefit for Total Disability.” See Policy at 15, 19. These are defined terms.

Total Disability or totally disabled means that due to Injuries or Sickness:

1. you are not able to perform the substantial and material duties of your
occupation; and

2. you are receiving care by a Physician which is appropriate for the
condition causing the disability.

your occupation means the occupation (or occupations, if more than one) in
which you are regularly engaged at the time you become disabled. If your
occupation is limited to a recognized specialty within the scope of your
degree or license, we will deem your specialty to be your occupation.

Policy at 18 (emphasis added).
Neither party contends there is any ambiguity in the Policy’s definition of “Total
Disability,” and the Court finds it to be unambiguous.6 Plaintiff asserts that he satisfies
the definition because he was unable to perform the duties of his occupation as an
emergency room physician, regardless of whether he could continue to work as a physician.
Thus, the focus of Plaintiff’s coverage claim is the last, emphasized sentence of the

6 “A contract is ambiguous if it is reasonably susceptible to at least two different
constructions.” Pitco Prod. Co., 63 P.3d at 545-46 (footnote omitted).
definition, which deems his specialty practice to be his occupation “[i]f [his] occupation is
limited to a recognized specialty within the scope of [his] degree or license.”

The parties, and thus the Court, assume that emergency medicine is a recognized
specialty within the scope of Plaintiff’s degree or license as a medical doctor. The
contractual question is whether Plaintiff’s occupation was limited to this specialty. The
allegations of the Complaint seem to answer this question in the negative. Plaintiff states
he worked simultaneously in two occupations, one as an emergency room physician and
another as a clinical doctor. Plaintiff seeks to avoid this conclusion in two ways: 1) he

argues that he had an oral contract with Defendant that incorporated the coverage
representations of its agent (see Resp. Br. at 16-18); and 2) he argues the last sentence
applies to him because the Policy – through incorporation of the 2001 application, see
supra notes 2 and 5 – expressly limited his occupation to the duties of an “emergency room
physician.” Id. at 16, 19-20. The Court addresses Plaintiff’s arguments in reverse order.

1. Contract Interpretation
Although difficult to follow, Plaintiff’s contract-based argument seems to be that an
insured physician’s occupation “is limited to a recognized specialty” if the physician has a
specialty practice when he purchases coverage or if the policy is written to cover a specialty
practice through the application process. See id. at 19 (arguing “that the policy was sold

to him as covering his recognized specialty and that it was explicitly written to cover his
duties in that specialty”); see also id. at 1-2 (stating “the policy in force at the time of his
claim expressly states that [Plaintiff’s] ‘occupation’ is ‘M.D.’ with the ‘exact duties’ of
‘Emergency Room Physician,’” quoting the 2001 application, and arguing that “his
occupation under this policy contract was specifically limited to a recognized specialty,
that of ‘Emergency Room Physician’”) (emphasis omitted); id. at 20-21 (arguing that the

word “limited” should be read “to mean limited by the policy to [Plaintiff’s] specialty
duties, precisely as the policy was sold to him”). Either way, Plaintiff’s position views
the single sentence regarding a specialty occupation in isolation and ignores the context in
which it appears.
The Policy does not treat an insured’s occupation as fixed or unchanging but,
instead, expressly defines the insured’s occupation to mean the one (or ones) in which he

is regularly engaged when he becomes disabled. Thus, the key to coverage of Plaintiff’s
disability claim is his occupation or occupations in March 2019. The only factual
allegations regarding Plaintiff’s occupation in March 2019 are that he was both an
emergency room physician and a clinician in another practice. Plaintiff does not explain
how his occupation could possibly be “limited to a specialty practice” within the meaning

of the contract under these factual circumstances.
For these reasons, the Court rejects Plaintiff’s argument that he was entitled to a
monthly benefit for total disability under the Policy based on the alleged fact that “he was
totally disabled from his specialty as an E.R. physician.” See Compl. ¶ 5. The Court
finds that the Plaintiff has failed to state a plausible breach of contract claim based on the

written Policy.
2. Oral Contract
Plaintiff’s primary argument seems to be that the written text of the Policy does not
matter because the selling agent, Mr. Chambers, represented that the coverage would apply
in a particular way to a specialty occupation. See id. at 3 (arguing “the representations
and promises of the insurance company through their [sic] authorized insurance

representatives in issuing the policy are the contract”) (emphasis in original). Plaintiff
contends “the coverage representations of [Defendant’s] statutory agent, [Plaintiff’s]
acceptance thereof, and his payment of premiums (including additional premiums for the
increased coverage [in 2001] . . .) constitute, at the least, an oral contract for insurance.”
Id. at 17-18 (emphasis omitted). Plaintiff’s oral contract argument relies, in part, on his
claim of misrepresentation and its corollary that “[a]ny coverage of the policy is reformed

to that which was mutually intended by the parties when the contract was made.” Id. at 3.
Setting aside the question of whether Plaintiff has stated a claim of fraud or deceit,
discussed infra, the thrust of Plaintiff’s argument is that the Policy should be read in a way
that conforms its coverage provisions to what Mr. Chambers said, instead of relying on the
language of the written Policy.7 Plaintiff argues that Defendant represented, and thus

agreed, it would provide coverage for his specialty occupation because Mr. Chambers both
promised specialty coverage and advised Plaintiff to increase the income benefit in future
years if his specialty practice grew; Plaintiff allegedly acted on this advice, applied for
increased coverage in 2001, and Defendant accepted his application as an “Emergency
Room Physician.” See Resp. Br. at 3-4, 5.

7 As pertinent to his contract claim, Plaintiff’s fraud allegations allegedly permit him to
avoid an insured’s duty to read the written policy and the parole evidence rule. See Resp. Br. at
8-10 & n.3, 11-12.
Upon consideration, the Court finds that Plaintiff’s argument regarding an oral
contract is not supported by the factual allegations of the Complaint or his cited legal

authorities. Plaintiff does not allege in the Complaint the existence of an oral contract to
provide disability coverage for his specialty occupation, nor does he seek reformation of
the Policy to conform to such an oral contract. Plaintiff cites cases in which an agent with
authority to bind the insurance company orally agreed to procure an insurance policy on
specific terms but failed to do so. See Resp. Br. at 16-18. Plaintiff also relies on
inapposite case law, such as cases where an agent misrepresented a fact material to the

insured risk due to mistake, negligence, or fraud. See, e.g., Resp. Br. at 8-10 (discussing
Bus. Interiors, Inc. v. Aetna Cas. & Sur. Co., 751 F.2d 361, 363 (10th Cir. 1984) (agent
“represented that coverage for employee dishonesty was $30,000, not the $10,000 listed in
the written policy”), and Pac. Nat’l Fire Ins. Co. v. Smith Bros. Drilling Co., 162 P.2d 871,
873 (Okla. 1945) (agent delivered policy “under the mistaken belief that it contained a

provision which protected the extra tools and equipment” purchased by the insured).
“The rule [correcting a misstatement or misrepresentation] has been applied to a
misdescription of the property insured, and to misstatements as to title or interest,
encumbrances, other or additional insurance, and the value of the property insured.”
Smith Bros., 162 P.2d at 873 (internal quotation omitted).

In contrast, Plaintiff does not allege that Mr. Chambers orally agreed to procure an
insurance policy on specific terms that differ from the written Policy. Plaintiff also does
not allege facts showing that Mr. Chambers orally agreed to provide disability insurance
coverage for Plaintiff’s specialty occupation or practice. Plaintiff was not a specialist in
1987 but met with Mr. Chambers as a resident (Compl. ¶ 13); Plaintiff completed an
application stating he was a physician engaged in duties “usual to [the] profession.” See

Policy at 31. Plaintiff does not identify any fact material to the risk that Mr. Chambers
misrepresented. Therefore, the Court finds that Plaintiff has failed to state a plausible
claim for breach of an oral insurance contract.
B. Bad Faith
To establish a breach of Defendant’s duty of good faith and fair dealing with its
insured, Plaintiff must show that Defendant breached the insurance contract and, in so

doing, acted in a manner constituting bad faith. See Brown v. Patel, 157 P.3d 117, 121
(Okla. 2007); see also Ball v. Wilshire Ins. Co., 221 P.3d 717, 724 (2009) (essential element
of bad faith claim for nonpayment of first-party coverage is “the claimant was entitled to
coverage under the insurance policy”); Badillo v. Mid Century Ins. Co., 121 P.3d 1080,
1093 (Okla. 2005) (per curiam) (essential element of bad faith claim is coverage under the

policy). According to the Oklahoma Supreme Court, “a determination of liability under
the contract is a prerequisite to a recovery for bad faith breach of the insurance contract.”
Davis v. GHS Health Maint. Org., Inc., 22 P.3d 1204, 1210 (Okla. 2001); see Oldenkamp
v. United Am. Ins. Co., 619 F.3d 1243, 1249 (10th Cir. 2010) (where court finds an insurer
did not breach the insurance contract by denying coverage, it necessarily follows that

insurer’s denial of coverage was not unreasonable) (applying Oklahoma law).
In this case, the Court has found that Plaintiff fails to allege facts showing a right to
total disability benefits under the Policy and thus showing Defendant breached the Policy
by failing to pay his insurance claim. Defendant’s denial was not unreasonable or done
in bad faith if Defendant had no liability to Plaintiff under the Policy. Plaintiff’s only
disagreement with Defendant’s position regarding bad faith is to assert that he has

sufficiently stated a claim for breach of contract. See Resp. Br. at 20-21. Having
rejected this assertion, the Court finds that the Complaint also fails to state a claim of
insurer’s bad faith.8
C. Fraud or Deceit
Plaintiff’s claim of fraud rests on allegations, discussed supra, that Mr. Chambers
misled Plaintiff concerning the availability of monthly income benefits for total disability

if he worked in a recognized medical specialty and became unable to perform the duties of
the specialty practice but continued to work as a physician. See Resp. Br. at 4-6.
Plaintiff allegedly relied on Mr. Chambers’ representations by purchasing the policy,
maintaining it for 33 years, and increasing his coverage in 2001. Id. at 5. Plaintiff also
seems to assert a claim of fraud by omission, arguing that Mr. Chambers did not disclose

(that is, they never discussed) a different coverage situation if a physician worked in more
than one practice or had multiple occupations. Id. at 6. Plaintiff asserts that the
Complaint “states a claim for false representation, deceit and concealment.” Id. at 7.
Defendant’s position is that Plaintiff’s allegations do not show a misrepresentation of fact
or reasonable reliance on any misstatement that was made.

8 Plaintiff makes other arguments in response to Defendant’s alternate contention that,
even if a contract claim is stated, the Complaint fails to state a plausible bad faith claim because it
contains only conclusory “boilerplate” allegations. Some of Plaintiff’s arguments concern
“residual disability benefits” and a waiver of premium benefit, and appear to rely on factual
allegations outside his pleading; the Complaint is not cited in his brief. See Resp. Br. at 24-25.
Therefore, these arguments are disregarded.
Plaintiff appears to base his tort claim on two alternate theories – one requires a
false statement of fact, and the other requires a suppression of true facts by a person with

a duty of disclosure. See Resp. Br. at 12-13 (citing Okla. Stat. tit. 15, § 58; Okla. Stat.
tit. 76, § 3). In his argument, however, Plaintiff fails to identify a statement of fact that
Mr. Chambers made or omitted. Mr. Chambers allegedly misstated how Defendant’s
policy would apply to future events, that is, if Plaintiff had a specialty practice or
occupation and if Plaintiff became unable to work in the specialty but could continue to
work as a physician. Even viewed as a factual description of the coverage provided by

the Policy, Mr. Chambers’ statement was accurate if Plaintiff limited his work to a
specialty practice, as discussed infra. Mr. Chambers’ statement was only inaccurate in
the circumstances that developed, where Plaintiff decided to engage in dual occupations
and to perform non-specialty work before becoming disabled from his specialty practice.
Plaintiff’s position regarding Mr. Chambers’ failure to anticipate this development,

and thus render a more accurate description of the coverage provided by the Policy, relies
on “an exception to the general rule of non-liability for misrepresentations concerning
future events” or statements of opinion where a speaker has special or superior knowledge
of the facts or the subject matter. See Resp. Br. at 13-15. Plaintiff argues that this case
presents such circumstances because he did not have “the same knowledge as did the

Defendant or [Mr. Chambers] as to how its disability policies worked, what the coverage
requirements were, or how the policy addressed the situation when a physician was no
longer able to perform the duties of [his] recognized specialty . . . but could continue in a
less stressful clinical practice.” Id. at 15.
The primary case cited by Plaintiff for his argument regarding superior knowledge
is Hall v. Edge, 782 P.2d 122, 127 (Okla. 1989), which involved a claim of fraud by an

investor in limited partnerships. The investor claimed that an accountant for the limited
partnerships induced him to invest by misrepresenting the quality of the investment. The
Oklahoma Supreme Court held that the accountant’s representations were sufficient to
constitute actionable fraud and reversed a summary judgment in the accountant’s favor.
In so doing, the supreme court reasoned that Oklahoma law recognizes “[r]eliance on an
opponent’s knowledgeable opinion as an element of fraud,” that the accountant “was

represented to [the investor] as having superior knowledge of the financial worth of [the
limited] partnerships,” and that his “opinion as an accountant might be found to ‘become
in effect an assertion summarizing his knowledge.’” Id. at 127-28 (quoting W. Keeton
and W. Prosser, Prosser and Keeton on the Law of Torts, § 109 at 760-61 (5th ed. 1984)).
As applied here, Plaintiff argues, in effect, that Mr. Chambers presented himself as

having superior knowledge of the disability income coverage provided by Defendant’s
policy for physicians with a recognized specialty and that Mr. Chambers’ representations
regarding the unique benefit provided by the policy should be considered an assertion
summarizing his knowledge. Defendant makes no reply to this argument. Upon
consideration, the Court finds that Plaintiff’s allegations, viewed in the light most favorable

to him as required by Rule 12(b)(6), are minimally sufficient to state a plausible fraud claim
under this theory.
An element of Plaintiff’s fraud theory also requires facts to show he acted in
reasonable reliance on Mr. Chambers’ false representation or omission regarding the
specialty coverage provided by the Policy. See Varney v. Maloney, 516 P.2d 1328, 1332
(Okla. 1973). Defendant contends Plaintiff could not have reasonably relied on any

misstatement by Mr. Chambers “given the opportunity and duty to review the policy” and
the fact that Plaintiff purchased additional income benefits under the Policy in 2001. See
Def.’s Mot. at 20-21.9 Defendant concedes, however, that Oklahoma case law supports
Plaintiff’s position that allegations of fraud may overcome an insured’s duty to read his
policy and discover a discrepancy between it and the agent’s representation. See Reply
Br. at 2; see also Resp. Br. at 8-10. The Court finds that Plaintiff’s factual allegations,

viewed in the light most favorable to him, provide a sufficient basis for a finding of
reasonable reliance.10 Therefore, the Complaint states a plausible fraud claim.
Conclusion
For these reasons, the Court finds that the Complaint fails to state claims for breach
of contract or bad faith and that these claims should be dismissed. The Court further finds

that Plaintiff need not be granted leave to amend his Complaint at this time.11

9 Defendant also argues that Plaintiff was a “sophisticated insured” by virtue of his level
of education and profession, and thus could not reasonably rely on Mr. Chambers’ statements. Id.
at 21. Defendant provides no persuasive legal authority for this contention.

10 Plaintiff specifically alleges that he increased his coverage in 2001 in reliance on
Mr. Chambers’ advice. Defendant’s argument that Plaintiff could not reasonably have relied on
Mr. Chambers’ statements at that time depends on facts not alleged in the Complaint.

11 In a footnote on the last page of his brief, Plaintiff makes a conclusory request for leave
to amend his pleading if the Court finds a deficiency. See Resp. Br. at 25, n.10. The court of
appeals has held that such bare requests, which fail to comply with Fed. R. Civ. P. 15(a) and
LCvR15.1, “do not rise to the status of a motion and do not put the issue before the district court.”
See Brooks v. Mentor Worldwide LLC, 985 F.3d 1272, 1283 (10th Cir. 2021). Under Brooks, a
district court need “not recognize Plaintiffs’ single sentence as a cognizable motion” and does “not
IT IS THEREFORE ORDERED that Defendant’s Motion to Dismiss [Doc. No. 8]
is GRANTED in part and DENIED in part. This action shall proceed only on Plaintiff’s
claim of false representation or omission.
IT IS SO ORDERED this 26" day of March, 2021.

\ by Q
TIMOTHY D. DeGIUSTI
Chief United States District Judge

abuse its discretion in denying that request.” Jd. Here, the Court declines to consider Plaintiff’ □
single-sentence footnote as a motion to amend.

18

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10388939. Public record. Not legal advice.