Morris

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF OKLAHOMA

SIDNEY MORRIS, )

)

Plaintiff, )

v. ) Case No. 25-CV-275-MTS

)

STANDARD GUARANTY )

INSURANCE COMPANY, et al., )

)

Defendants. )

OPINION AND ORDER

Before the Court are Defendant Standard Guaranty Insurance Company’s Motion to

Dismiss and Brief in Support (Docket No. 19), Defendant PHH Mortgage Corporation’s Motion

to Dismiss Plaintiff’s First Amended Complaint (Docket No. 25), and Defendant PHH Mortgage

Corporation’s Memorandum of Law in Support of its Motion to Dismiss Plaintiff’s First Amended

Complaint (Docket No. 26). After considering the parties’ briefing and relevant caselaw, the Court

hereby GRANTS Defendant Standard Guaranty’s Motion to Dismiss and PHH Mortgage

Corporation’s Motion to Dismiss.

Background and Procedural History

Plaintiff Sidney Morris (“Plaintiff”) commenced this action against Defendant Standard

Guaranty Insurance Company (“Standard Guaranty”) in Tulsa County District Court on April 3,

2025, alleging state law claims for breach of contract and bad faith. (Docket No. 2-2). On June

10, 2025, Standard Guaranty filed a Motion to Dismiss, which the Court deemed moot due to

Plaintiff’s filing an Amended Complaint on June 30, 2025. (Docket Nos. 9, 17, 18). Plaintiff now

alleges claims against Standard Guaranty and PHH Mortgage Services (“PHH”) (collectively,

“Defendants”).1 (Docket No. 17). Plaintiff’s claims include: (1) breach of contract, brought

against both Defendants; (2) breach of the implied duty of good faith and fair dealing, brought

against Standard Guaranty; and (3) breach of fiduciary duty, brought against PHH. Id. Plaintiff

also seeks punitive damages against both Defendants. Id.

According to the Amended Complaint, PHH is the mortgagee via assignment under

Plaintiff’s mortgage for the property located at 9020 E. 28th Street in Tulsa, Oklahoma. (Docket

No. 17 at 2). The mortgage required Plaintiff to obtain insurance on his property or the lender

could do so on his behalf. Id. Plaintiff alleges PHH purchased a homeowner’s insurance policy

(the “Policy”) from Standard Guaranty on his behalf but without Plaintiff’s “input.” Id. Plaintiff

asserts he is a third-party beneficiary to the Policy and paid monthly premiums. Id. at 2-3.

The Amended Complaint sets forth that on or about June 18, 2023, the insured property

suffered storm damage. Id. at 3. Plaintiff submitted a claim for damage to Standard Guaranty

under the Policy. Id. According to Plaintiff, he was treated as the insured throughout Standard

Guaranty’s2 handling of the claim and that such conduct “evince[s] that, at the time of contracting

and claims handing, [Standard Guaranty] intended [] Plaintiff [to be] a beneficiary of the []

[P]olicy.” Id. He contends that all correspondence was sent to him, all requests for information

were directed to him, and he was listed as an insured on Standard Guaranty’s correspondence. Id.

Plaintiff further asserts that throughout the handling of the claim, he relied on PHH to “advocate

on behalf of their common interest” in the property and that PHH had a duty under the insurance

1 According to PHH, it is improperly named in Plaintiff’s First Amended Complaint. (Docket No.

26 at 1 n.1). Its correct name is “PHH Mortgage Corporation d/b/a PHH Mortgage Services.” Id.

2 The claim was handled by Global P&C Claims (“Global”) and Wardlaw Claims Services

(“Wardlaw”) on behalf of Standard Guaranty.

policy to notify Standard Guaranty about his claim and ensure it would be handled reasonably. Id.

at 3-4.

Plaintiff alleges that Standard Guaranty “unreasonably failed and refused to pay” him for

the damage under the Policy in breach of their contract. Id. at 5. Plaintiff also contends that

Standard Guaranty breached its duty to act in good faith and deal fairly in handling his claim,

including withholding, refusing, and unreasonably delaying payment to Plaintiff under the Policy.

Id. at 6. Plaintiff alleges that Standard Guaranty failed to properly investigate the claim, evaluate

the investigation done for the claim, used a virtual claim handling process, and used third parties

with the intent to “undervalue and/or delay the claim.” Id. at 7. Further, Plaintiff asserts that

Standard Guaranty failed to adopt and implement reasonable standards for investigating and

handling his claim and to effect a prompt and fair settlement of the claim. Id.

As to PHH, Plaintiff alleges that a contract existed between him and PHH “whereby []

PHH agreed to pursue a claim under the [] insurance policy” on his behalf, and PHH breached the

contract by “failing to act in any way” regarding the claim. Id. at 5. Plaintiff further asserts he

had a fiduciary relationship with PHH, and PHH breached its fiduciary duty by “allowing Plaintiff

to be taken advantage of by [] Standard Guaranty.” Id. at 8. According to Plaintiff, PHH purchased

the Policy on his behalf, and PHH had a duty under the Policy to “submit and enforce a claim,” as

well as to act with due regard to Plaintiff’s interests and to advocate and protect those interests.

Id. at 8.

Standard Guaranty removed the case to the Northern District of Oklahoma on June 3, 2025.

(Docket No. 2). On July 14, 2025, it filed a Motion to Dismiss Plaintiff’s Amended Complaint.

(Docket No. 19). Plaintiff filed his Response on August 4, 2025. (Docket No. 20). On August

18, 2025, Standard Guaranty filed its Reply (Docket No. 22). PHH filed its Motion to Dismiss

and Memorandum in Support on August 19, 2025. (Docket Nos. 25, 26). Plaintiff filed his

Response on September 9, 2025 (Docket No. 30), and PHH filed its Reply on September 18, 2025.

(Docket No. 31). As such, the instant motions are now ripe for decision.

Legal Standard

Defendant seeks dismissal of Plaintiffs’ claims for failure to state a claim upon which relief

can be granted under Federal Rule of Civil Procedure 12(b)(6). In Bell Atlantic Corp. v. Twombly,

550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009), the United States Supreme Court

set forth the plausibility standard applicable to a motion to dismiss filed under Rule 12(b)(6). Bell

Atlantic stands for the summarized proposition that “[t]o survive a motion to dismiss, a complaint

must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible

on its face.’” Ashcroft, 556 U.S. at 678, quoting Bell Atl., 550 U.S. at 570. “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.” Id., citing Bell Atl., 550 U.S. at

556; see also Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (interpreting the

plausibility standard as referring “to the scope of the allegations in the complaint: if they are so

general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs have

not nudged their claims across the line from conceivable to plausible.”) (quotation omitted).

However, a court need not accept as true allegations that are conclusory in nature. Id. at 678

(“[T]he tenet that a court must accept as true all the allegations contained in a complaint is

inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action,

supported by mere conclusory statements, do not suffice.”), citing Bell Atl., 550 U.S. at 555.

Discussion

A. Standard Guaranty’s Motion to Dismiss

As an initial matter, the Court notes that Standard Guaranty attached an incorrect copy of

the insurance policy at issue to its Motion to Dismiss. Plaintiff argues that Standard Guaranty’s

motion should be denied on that basis alone. (Docket No. 20 at 4-5). While Standard Guaranty

concedes that it attached the wrong policy (Docket No. 19-2), it did attach the correct policy to its

reply. (Docket No. 22-1). After comparing the two policies, the Court finds the policy period is

the only difference. Thus, because Plaintiff referenced the Policy in the First Amended Complaint

and has not disputed the authenticity of the Policy attached to Standard Guaranty’s reply, the Court

will consider the Policy attached to the reply. See J.H. v. Anthem Blue Cross Life and Health Ins.

Co., 137 F.4th 1147, 1150 (10th Cir. 2025) (“In addition to the complaint, [a court] ‘may consider

documents attached to or referenced in the complaint if they are central to the plaintiff’s claim and

the parties do not dispute the documents’ authenticity.’”), quoting E.W. v. Health Net Life Ins. Co.,

86 F.4th 1265, 1286 n.3 (10th Cir. 2023); see also GFF Corp. v. Assoc. Wholesale Grocers, Inc.,

130 F.3d 1381, 1384-85 (10th Cir. 1997) (finding that even if a plaintiff does not attach such a

document to its complaint, “a defendant may submit an indisputably authentic copy to the court to

be considered on a motion to dismiss.”) (citations omitted). However, the Court will not consider

the letter attached before the Policy, entitled “Notice of Lender Placed Hazard Insurance Coverage

Renewal,” as it does not appear to be incorporated into the Policy. (See Docket No. 22-1 at 2-3).

In its motion, Standard Guaranty argues Plaintiff lacks standing to assert claims for breach

of contract and bad faith under the insurance policy because he is not a named insured or additional

insured to the lender-placed policy, nor does he qualify as a third-party beneficiary. (Docket No.

19 at 4-9). It contends the Policy’s sole purpose was to protect PHH’s interest in the insured

property, and the terms of the Policy are unambiguous as to the parties’ intentions. Id. at 5-9.

Plaintiff responds that Standard Guaranty treated him as a third-party beneficiary under the Policy,

which created a latent ambiguity as to whether he was to receive the benefit of the Policy.3 (Docket

No. 20 at 5-10). He contends such latent ambiguity allows the Court to rely on extrinsic evidence

to determine the intent of the parties, and as pleaded in the First Amended Complaint, such

evidence establishes that Plaintiff was a third-party beneficiary to the insurance contract between

Standard Guaranty and PHH. Id. In its reply, Standard Guaranty maintains its position that the

Policy’s terms are unambiguous, making it inappropriate for the Court to consider any extraneous

evidence of the parties’ intentions. (Docket No. 22 at 2-4).

Since Plaintiff is neither a named insured nor an additional insured, he only has standing

to bring his claims against Standard Guaranty if he qualifies as a third-party beneficiary under the

Policy.4 The right of a third-party beneficiary to enforce a contract is controlled by Okla. Stat. tit.

15, § 29, which provides that “[a] contract, made expressly for the benefit of a third person, may

be enforced by him at any time before the parties thereto rescind it.” Id. “A third-party beneficiary

of an insurance contract may also sue for breach of the duty of good faith and fair dealing inherent

in insurance contracts.” Lumpkins v. Balboa Ins. Co., 812 F. Supp. 2d 1280, 1282 (N.D. Okla.

2011), citing Roach v. Atlas Life Ins. Co., 769 P.2d 158 (Okla. 1989).

To determine whether a party is a third-party beneficiary under a contract, “‘[a court] must

consider the contracting parties’ primary intent as reflected in the policy.’” Colony Ins. Co. v.

3 Plaintiff does not argue that he is a named insured or additional insured under the Policy. For

this reason, the Court only addresses whether Plaintiff is a third-party beneficiary under the Policy.

4 Because this is a diversity action, the Court relies upon Oklahoma law to address Plaintiff’s

claims for breach of contract and bad faith. See Dish Network Corp. v. Arrowwood Indem. Co.,

772 F.3d 856, 867 (10th Cir. 2014).

Burke, 698 F.3d 1222, 1230 (10th Cir. 2012), quoting Anderson ex rel. Anderson v. American Int’l

Specialty Lines Ins. Co., 38 P.3d 240, 241 (Okla. Civ. App. 2001); see also Lumpkins, 812 F. Supp.

2d at 1283 (“‘The real test is said to be whether the contracting parties intended that a third person

should receive a benefit which might be enforced in the courts. Thus, it is often stated that the

contract must have been intended for the benefit of the third person in order to entitle him to

enforce it.’”), quoting G.A. Mosites Co. of Ft. Worth, Inc. v. Aetna Cas. & Sur. Co., 545 P.2d 746,

749 (Okla. 1976). While it is unnecessary for a party asserting third-party status to be specifically

named as such in the contract, it is required that the contract “be made ‘expressly’ for the third

party’s benefit[.]” Colony Ins. Co., 698 F.3d at 1230, quoting Keel v. Titan Const. Corp., 639 P.2d

1228, 1231 (Okla. 1981). In this context, “[e]xpressly” means “in an express manner; in direct or

unmistakable terms; explicitly; definitely; directly.” Keel, 639 P.2d at 1231. Thus, the benefit

from the contract “‘cannot be enforced if it has to be implied from the terms of the contract or

result incidentally from its performance.’” Colony Ins., 698 F.3d at 1230, quoting Oil Cap. Racing

Ass’n, Inc. v. Tulsa Speedway, Inc., 628 P.2d 1176, 1179 (Okla. Civ. App. 1981); see also Copeland

v. Admiral Pest Control Co., 933 P.2d 937, 939 (Okla. Civ. App. 1996) (addressing status as a third-

party beneficiary to a contract and finding “incidental benefit is insufficient”).

1. The Policy Provisions Relevant to the Parties’ Intentions Are Unambiguous.

Whether a contract was intended to benefit a third party is generally a question “of

construction of the contract” based upon “the terms of the contract[,]” Shebester v. Triple Crown

Insurers, 974 F.2d 135, 138 (10th Cir. 1992), citing G.A. Mosites Co. of Ft. Worth, 545 P.2d at 749,

and the interpretation and determination of whether the insurance contract is ambiguous “is a

matter of law for [a court] to determine and resolve accordingly.” Dodson v. St. Paul Ins. Co., 812

P.2d 372, 376 (Okla. 1991). If policy terms are clear, consistent, and unambiguous, such terms

“are accepted in their plain and ordinary sense, and the contract will be enforced to carry out the

intention of the parties as it existed at the time the contract was negotiated.” Id. at 376; see also

May v. Mid-Century Ins. Co., 151 P.3d 132, 140 (Okla. 2006) (“Where the language of a contract

is clear and unambiguous on its face, that which stands expressed within its four corners must be

given effect.”). “A court should not create an ambiguity in the policy by ‘using a forced or strained

construction, by taking a provision out of context, or by narrowly focusing on a provision.’”

Pennsylvania Mfrs. Ass’n Ins. Co. v. Lechner, 910 F. Supp. 2d 1291, 1297 (N.D. Okla. 2012),

quoting Wynn v. Avemco Ins. Co., 963 P.2d 572, 575 (Okla. 1998).

The Court begins its analysis of whether Plaintiff is a third-party beneficiary to the

insurance contract with a brief discussion of the relevant policy provisions to ascertain the parties’

intent and to determine whether ambiguity exists in the Policy’s terms.

The loss payment provision included in the “Conditions” of the Policy provides: “We will

adjust all losses with the named insured[,]” and “Loss will be made payable to the named insured

and the borrower as their interests appear, [] payable respectively to the named insured and the

borrower, at our option.” (Docket No. 22-1 at 18). “We,” “us” and “our” are defined in the Policy

as “refer[ing] to the Company providing this insurance,” herein Standard Guaranty. Id. at 6. “You”

and “your” refer to “the financial institution as named insured and the borrower shown in the

Declarations.” Id. at 18. The “borrower” is defined as the “person [] who ha[s] entered into a lien

or mortgage agreement with the named insured for the property shown as the described location

in the Declarations.” Id. at 6. The Declarations list PHH as the “named insured” and Plaintiff

Sidney Morris and Helen Morris as “borrower” for the “described location,” 9020 E 28th St. Tulsa,

OK 74129-6802. Id. at 4, 6.

The Declarations provide coverage to the residential property listed as the “described

location” and expressly limits any other coverage unless a “premium is shown for the coverage.”

Id. at 4. The coverage includes a premium for the “residential property” with a limit of liability of

$184,063. Id. This is the only premium listed as both “commercial property” and “optional

coverages, assessments, surcharges, taxes, fees” remain blank. Id. The “Residential Dwelling

Certificate” expressly states that it “only covers buildings and structures.” Id. at 5. Consistent

with such limitation, the policy coverage provision excludes coverage for “personal property of

any kind.” Id. at 6.

The Policy states “[n]o coverage will be available to any mortgagee other than that shown

as the named insured on the Declarations.” Id. at 18. Therein, no coverage would be available to

any person under the Policy other than PHH, the named insured.

Considering the aforementioned provisions, the Court does not find any direct or express

intent by the contracting parties to confer a direct benefit to Plaintiff under the Policy. While the

loss payment provision contemplates a situation in which the borrower, Plaintiff, may be paid, it

conditions payment at the named insured, Standard Guaranty’s “option.” Standard Guaranty’s

option cannot be said to provide a “direct” or “express” benefit to Plaintiff. See Bednasek v. Std.

Guar. Ins. Co., No. 1:18-cv-01574-RM-SKC, 2019 WL 10255249, at *2 (D. Colo. Feb. 28, 2019)

(finding that a loss payment provision with similar language providing the named insured and

borrower payments “as their interests appear” did not confer a direct benefit as to qualify the

borrower as a third-party beneficiary). While this language may not be as explicit in limiting

Plaintiff’s benefits as language in other cases such as the loss payment provision in Lumpkins,

stating “other than the potential right to receive [] payment, the B[orrower] has no rights under

[the policy],” the option itself still fails to provide any direct benefit to Plaintiff. Lumpkins, 812

F. Supp. 2d at 1284, 1286 (interpreting a loss payment provision which provided the borrower

with a potential right to receive payment and concluding the quoted exclusion expressed a clear

intention not to confer direct benefit to the borrower); see also May, 151 P.3d at 140-42

(considering policy language which granted insurer an option to settle losses either directly with

owners or Association and finding such option did not create an enforceable obligation in favor of

owners and the policy’s provisions “specifically bar[red] [] owners from any direct contractual

benefit from [i]nsurer.”). As further support for the absence of intent to confer a direct benefit to

Plaintiff under the Policy, the policy language specifically excludes coverage for “personal

property of any kind” and coverage to anyone under the Policy other than PHH, the named insured.

Here, the language of the Policy is clear in providing benefits to PHH, the named insured,

and limiting any coverage to Plaintiff beyond a possible payment at Standard Guaranty’s option.

There is no direct benefit to Plaintiff either in loss payment or personal coverage under the Policy,

nor can the Court find any direct benefit from the Policy’s terms. In the absence of any direct

benefit from the Policy, the Court finds Plaintiff does not qualify as a third-party beneficiary under

Oklahoma law.

2. Consideration of Extrinsic Evidence is Unnecessary.

Plaintiff argues the Court should look beyond the Policy’s terms and provisions and

consider extrinsic evidence as to the parties’ intentions. He relies upon Hensley v. State Farm Fire

& Cas. Co., 398 P.3d 11 (Okla. 2017), wherein the Oklahoma Supreme Court reversed the lower

courts’ decisions granting/affirming the insurer summary judgment, finding there was a question

of fact whether the purchaser of the property by a contract for deed (the mortgagor) was a third-

party beneficiary to the insurance contract between the insurer and the named insured or seller of

the property (the mortgagee). Id. at 14. In Hensley, the court considered extrinsic evidence of the

insurer’s conduct, noting that such conduct created a latent ambiguity as to whether the insurer and

the mortgagee intended for the contract to benefit the mortgagor.5 Id. at 24.

Plaintiff maintains that the First Amended Complaint contains allegations consistent with

the extrinsic evidence considered in Hensley.6 (Docket No. 20 at 5-9). He urges the Court to apply

Hensley’s “more fact specific inquiry” and consider extrinsic evidence of the parties’ intent, instead

of relying upon Lumpkins, which was decided before Hensley, and Bednasek, which was decided

under Colorado law. (Docket No. 20 at 8-10). For several reasons, the Court finds it unnecessary

to consider extrinsic evidence in this case. First, as discussed herein, the Policy is unambiguous,

and the parties’ intent is clear from its “four corners” that it was to benefit PHH only. See

Pennsylvania Mfrs. Ass’n Ins. Co., 910 F. Supp. 2d at 1297 (noting that a court may only “refer to

extrinsic evidence to interpret the insurance policy” if a term is ambiguous), citing Pierce Couch

Hendrickson Baysinger & Green v. Freede, 936 P.2d 906, 912 (Okla. 1997). Applying Hensley

would require a strained construction of the Policy’s provisions and terms, which the Court will

not do. See Druggists’ Mut. Fire Ins. Co. of Iowa v. Shaw, 41 P.2d 69, 70 (Okla. 1935) (“The

parties may not insist upon a strained construction of [a] contract in order to claim a patent

ambiguity in its terms; nor may they, under the guise of a latent ambiguity, contradict the plain

terms of the written instrument.”).

5 Hensley considered facts regarding “the insurer’s treatment of the mortgagor as its insured during

the claim process, the mortgagor being named as the insured in the correspondence, the mortgagor

having an equitable interest in the property, the mortgagor being entitled to insurance proceeds, . .

. the mortgagor paying the premium through its monthly payments to the mortgagee[,] . . . and the

policy[‘s] cover[ing] the entire value of the property, not just the mortgagee’s interest[.]” 398 P.

3d at 23-24.

6 Plaintiff’s allegations include that: (1) he paid the premiums for the Policy; (2) he submitted the

claim; (3) Standard Guaranty treated Plaintiff as the named insured in correspondence and requests

for information; and (4) the benefits from the Policy were tendered to Plaintiff. (Docket No. 20 at

7-8) (citing Docket No. 17 at 3-4).

Second, the lender-placed policy between Standard Guaranty and PHH is more akin to the

policies at issue in Lumpkins and Bednasek than the policy in Hensley. Hensley did not involve a

lender-placed policy between an insurer and a mortgagee such as PHH; thus, the intent of the

parties when entering into the insurance contract in Hensley was different. See Bednasek, 2019

WL 10255249, at *2 (“[Lender-placed insurance policies] provide a means for a mortgage

company to protect its own interest in the covered property.”), citing Lumpkins, 812 F. Supp. 2d at

1285; see also Rainey v. Std. Guar. Ins. Co., No. 20-CV-03112-SRB, 2020 WL 5536486, at *5

(W.D. Mo. Sept. 15, 2020) (“The [] Policy is a lender-placed insurance policy secured by a

mortgagee or lender [] to protect its interest in a property when the borrower or mortgagor fails to

secure or maintain insurance coverage.”) (citations omitted).

Third, the loss payment provision in this case merely provides an option for payment to the

borrower, which does not create a “direct” benefit to the borrower. See Lumpkins, 812 F. Supp. 2d

at 1286, citing May, 151 P.3d at 140-41. Additionally, the Policy provisions in the insurance

contract between Standard Guaranty and PHH specifically contemplate Plaintiff’s participation in

the claims process (Docket No. 22-1 at 10, 18), but they also clearly express the intent of the parties

that the named insured (PHH) receives the benefit of the contract. Id. at 4 (Declarations listing

PHH as the only named insured); 18 (“No coverage will be available to any mortgagee other than

that shown as the named insured on the Declarations.”). Finally, the policy in Hensley covered

personal property, while the Policy in this case clearly excludes “[p]ersonal property of any kind.”

(Docket No. 22-1 at 6).

As determined herein, the Policy is unambiguous and the parties’ intent is clear from its

“four corners” that the insurance contract would only directly benefit PHH, not Plaintiff. Because

the Policy is unambiguous, the Court need not consider extrinsic evidence. Accordingly, Plaintiff’s

claims for breach of contract and bad faith against Standard Guaranty must fail, and Standard

Guaranty’s Motion to Dismiss is therefore granted.

B. PHH’s Motion to Dismiss

PHH seeks dismissal of Plaintiff’s claims for breach of contract, breach of fiduciary duty,

and punitive damages. (Docket Nos. 25, 26). It contends Plaintiff has failed to allege facts

supporting a breach of contract under either the Policy or the mortgage contract. (Docket No. 26

at 6-9). PHH also contends that Plaintiff’s breach of fiduciary duty claim fails as a matter of law,

as “the Amended Complaint contains no allegations that would establish the existence of a

fiduciary relationship between Plaintiff and PHH outside of the traditional creditor-debtor

relationship.” Id. at 10-12. Moreover, PHH maintains that Plaintiff’s claim for punitive damages

should be dismissed because such a claim is not a standalone cause of action but a prayer for relief.

Id. at 12-13.

Plaintiff responds that the allegations contained in the Amended Complaint are sufficient

to state plausible claims for breach of contract and breach of fiduciary duty against PHH. (Docket

No. 30). Regarding the breach of contract claim, he asserts that “PHH breached its duties owed

to Plaintiff under the Policy when it failed to participate in the loss adjustment and failed to reach

an agreement with Standard Guaranty regarding the loss.” Id. at 6. Regarding the breach of

fiduciary duty claim, Plaintiff asserts that his relationship with PHH went beyond that of the

traditional creditor-debtor and that he has alleged sufficient facts to establish a fiduciary

relationship with PHH “within the broad meaning of the term” under Oklahoma law. Id. at 7-9.

Finally, Plaintiff contends he is entitled to seek punitive damages in conjunction with his claims.

Id. at 9.

1. Breach of Contract Claim

A “breach of contract is a ‘material failure of performance of a duty arising under or

imposed by agreement.’” Petsmart, Inc. v. Dancor Constr., Inc., No. 17-CV-0361-CVE-JFJ, 2018

WL 5260027, at *4 (N.D. Okla. Oct. 22, 2018), quoting Milroy v. Allstate Ins. Co., 151 P.3d 922,

926 (Okla. Civ. App. 2006) (citations omitted). To state a claim for breach of contract under

Oklahoma law, a party must prove the following: (1) the formation of a contract; (2) a breach of

the contract; and (3) damages directly resulting from the breach. Digital Design Grp., Inc. v. Info.

Builders, Inc., 24 P.3d 834, 843 (Okla. 2001). However, “contracts are binding only upon those

who are parties thereto, and are enforceable only by the parties to a contract, or those in privity

with it, unless the contract is made for the express benefit of a third party, in which case the third

party beneficiary may enforce the same.” Drummond v. Johnson, 643 P.2d 634, 639 (Okla. 1982)

(citations omitted); see also Wells Fargo Bank, N.A. v. Heath, 280 P.3d 328, 334 (Okla. 2012).

Although PHH contends that Plaintiff’s Amended Complaint does not specifically identify

the alleged contractual agreement between Plaintiff and PHH – only that there is one – the Court

finds that Plaintiff sufficiently identifies the Policy as the contractual agreement. (See Docket No.

17 at 5) (“Plaintiff was, at all times relevant hereto, an intended beneficiary of the policy written

by Defendant Standard Guaranty”); (“A contract existed between Plaintiff and Defendant PHH

whereby Defendant PHH agreed to pursue a claim under the applicable insurance policy on behalf

of Plaintiff.”).7 However, considered in context with the other allegations of the Amended

7 In addition to its argument that PHH did not breach the Policy as to Plaintiff, PHH also asserts

that Plaintiff does not have a breach of contact claim against it based upon the mortgage contract.

(Docket No. 26 at 8-9). While it does not appear Plaintiff is basing his breach of contract claim

against PHH on the mortgage contract, such claim would fail for two reasons. First, mortgage

servicers, such as PHH, are generally not considered parties to the mortgage contract. See Denton

v. Nationstar Mortg. LLC, No. 18-CV-241-GKF-JFJ, 2020 WL 1919133, at *4 (N.D. Okla. Apr.

20, 2020) (“As a general principle, mortgage servicers are not parties to a mortgage contract.”),

Complaint, Plaintiff’s breach of contract claim is clearly based upon Plaintiff’s alleged status as a

third-party beneficiary under the Policy. (See Docket No. 30 at 5) (“Plaintiff was an ‘intended

beneficiary of the policy,’ and PHH breached its duties under the Policy by ‘failing to act in any

way with regard to Plaintiff’s insurance claim.’”). In fact, Plaintiff argues that his status as a third-

party beneficiary under the Policy established PHH’s duties to participate in the loss adjustment

and to reach an agreement with Standard Guaranty about the loss. Id.

As previously noted herein, Plaintiff must be a party to the contract between Standard

Guaranty and PHH in order for the policy provisions to be binding between Plaintiff and PHH.

See Drummond, 643 P.2d at 639. The Court has already determined that Plaintiff is not a third-

party beneficiary under the Policy, as the policy language is unambiguous that Standard Guaranty

and PHH had no intent for the Policy to directly benefit Plaintiff, and any benefit to Plaintiff under

the Policy was merely incidental. Thus, because Plaintiff was not a party to the contract, PHH

could not breach any of the policy provisions as to Plaintiff, including any alleged duty to

participate in the loss adjustment and to reach an agreement with Standard Guaranty about the loss.

Accordingly, Plaintiff’s breach of contract claim against PHH fails, and PHH’s motion is therefore

granted on this claim.

2. Breach of Fiduciary Duty Claim

In Oklahoma, four elements are necessary to establish a claim for breach of fiduciary duty,

including: “(1) the existence of a fiduciary relationship; (2) a breach of a fiduciary duty; and (3)

citing Bigsby v. Barclays Cap. Real Estate, Inc., 391 F. Supp. 3d 336, 351 (S.D.N.Y. 2019).

Second, even if PHH was considered a party to the mortgage contract, the mortgage provisions

place no duties upon the lender to advance Plaintiff’s insurance claim or assist in the claims

process. (See Docket No. 26-1 at 6) (“In the event of loss, Borrower shall give prompt notice to

the insurance carrier and Lender. Lender may make proof of loss if not made promptly by

Borrower.”).

the breach of a fiduciary duty was the direct cause of damages.” Graves v. Johnson, 359 P.3d 1151,

1155 (Okla. Civ. App. 2015). A fiduciary relationship exists when “one person acquires influence

over another [person] such that the influenced allows the influencer to substitute his or her will for

the influenced’s own.” Gray v. Acadia Healthcare Co., Inc., No. 19-CV-00338-JFH, 2020 WL

5996418, at *9 (E.D. Okla. Oct. 9, 2020), quoting Horton v. Hamilton, 345 P.3d 357, 364 (Okla.

2015). Oklahoma law recognizes a fiduciary relationship in a broad set of circumstances, noting

such a relationship may arise in “legal, contractual, formal, and informal relations and exists when

one person trusts and relies upon another.” Horton, 345 P.3d at 364. However, the relationship

must be based on “some form of agreement, either expressed or implied, from which it can be said

the minds have been met to create a mutual obligation.” ATS Grp., LLC v. Legacy Tank & Indus.

Servs. LLC, 407 F. Supp. 3d 1186, 1192-93 (W.D. Okla. 2019), quoting Lowrance v. Patton, 710

P.2d 108, 112 (Okla. 1985).

Under Oklahoma law, a common law relationship between a bank and its customer is not

fiduciary in nature but that of a creditor-debtor. First Nat. Bank & Trust Co. of Vinita v. Kissee,

859 P.2d 502, 510 (Okla. 1993); see also Malcom v. Wells Fargo Bank, N.A., No. CIV-13-0754-

HE, 2014 WL 5780712, at *5 n.16 (W.D. Okla. Nov. 5, 2014) (relying on First Nat. Bank and

recognizing that “the bank/borrower relationship is ordinarily not fiduciary in nature, but is one of

debtor and creditor”). However, a fiduciary duty can arise out of a commercial contract “if the

transaction involved facts and circumstances indicative of the imposition of trust and confidence,

rather than facts and circumstances indicative of an arms length commercial contract.” Quinlan v.

Koch Oil Co., 25 F.3d 936, 942 (10th Cir. 1994), citing Devery Implement Co. v. J. I. Case Co.,

944 F.2d 724, 730 (10th Cir. 1991).

The Court must first determine whether Plaintiff has sufficiently alleged the existence of a

fiduciary relationship with PHH. See ATS Grp., LLC, 407 F. Supp. 3d at 1192, citing Graves, 359

P.3d 1155 (“Before a plaintiff may proceed on a claim for breach of fiduciary duty the allegations

in the complaint must be sufficient to allege the existence of such a duty.”). Plaintiff alleges a

fiduciary relationship with PHH based upon “the insurance policy [PHH purchased] on Plaintiff’s

behalf,” which Plaintiff contends created a duty by PHH under the Policy to submit and enforce

Plaintiff’s claim. (See Docket Nos. 17 at 2, 8; 30 at 8). Plaintiff asserts that as the intended

beneficiary of the Policy, he “placed trust and confidence in [] PHH to act with due regard to [his]

interests in the . . . claim made to [] Standard Guaranty” and that “PHH had a duty to advocate for

and protect [his] interests in the . . . claim[.]” (Docket Nos. 17 at 3-4, 8; 30 at 8). Conversely,

PHH contends that Plaintiff’s allegations fail to establish the existence of a fiduciary relationship

with PHH “outside of the traditional creditor-debtor relationship.” (See Docket Nos. 26 at 11; 31

at 4-5).

Here, Plaintiff has not alleged facts or circumstances establishing a fiduciary relationship

with PHH. He has failed to allege facts where “influence has been acquired and abused and

confidence reposed and betrayed,” to establish a fiduciary relationship with PHH. See White v.

CitiMortgage, No. CIV-12-531-R, 2012 WL 13024694, at *1 (W.D. Okla. June 15, 2012) (holding

that plaintiffs failed to allege such facts or circumstances or any authority establishing the existence

of a fiduciary relationship between a lender or mortgagee and borrower); see also Malcom, 2014

WL 5780712, at 5 n.18 (rejecting plaintiff’s assertions that “a special relationship of trust and

confidence was created between defendant and plaintiff upon defendant’s purchase of the

mortgage[,]” and noting that “the bank/borrower relationship is ordinarily one of debtor and

creditor”). But see Bank of Am., N.A. v. Roberts Auto Ctr., LLC, No. 19-CV-00634-GKF-JFJ, 2021

WL 6050388, at *4 (N.D. Okla. May 14, 2021) (allowing defendants to proceed on their breach of

fiduciary duty counterclaim against their bank, as they had plausibly alleged the existence of a

special relationship with the bank giving rise to a fiduciary duty because the bank had acted as a

financial adviser and “directed their clients as to the attorneys and other agents to retain.”).

Moreover, “there is a broad distinction between causes of action arising ex contract and ex

delicto, and a mere matter of contract cannot be converted into tort.” Advance Rsch. Chemicals,

Inc. v. Praxair, Inc., No. 03-CV-0867-CVE-PJC, 2005 WL 8175015, at *4 (N.D. Okla. Mar. 30,

2005), quoting Okla. Nat. Gas Co. v. Pack, 97 P.2d 768, 770 (Okla. 1939). A claim for breach of

fiduciary duty must be based on facts independent from the facts giving rise to a breach of contract

claim. Traditions Health, LLC v. Huffman, No. 24-CV-0163-CVE-MTS, 2024 WL 5078110, at

*11 (N.D. Okla. Dec. 11, 2024) (citations omitted).

Plaintiff’s claim for breach of fiduciary duty rests solely on facts supporting the breach of

contract claim. In other words, the facts supporting the breach of fiduciary duty claim are not

independent of the breach of contract claim, as there is little distinction between the allegations

supporting either claim. Though Plaintiff characterizes PHH’s “agree[ment] to pursue a claim” as

a “duty” under the Policy, such semantics do not automatically create a “fiduciary duty”

independent of the contract Plaintiff alleges existed between them. See Swimwear Sol., Inc. v.

Orlando Bathing Suit, LLC, 309 F. Supp. 3d 1022, 1033 (D. Kan. 2018) (finding allegations that a

fiduciary relationship existed between the parties only because they entered into a contractual

relationship “[i]nsufficient to establish the plausible existence of a fiduciary relationship.”); see

also Traditions Health, LLC, 2024 WL 5078110, at *11 (dismissing a breach of fiduciary duty

claim where the plaintiff failed to distinguish its breach of fiduciary duty claim from its breach of

contract claim by characterizing the same conduct as a breach of fiduciary duty rather than a breach

of contract). As discussed, Plaintiff is not a party to the contract so, even disregarding the fact that

no contract exists with PHH, any allegation of “duty” or “agreement” to take some action is based

in whole on the bargained for duties contained within the Policy. Id. at 1032 (interpreting Kansas

law, stating “[T]ort claims such as breach of fiduciary duty can be pleaded in parallel with breach-

of-contract claims only if the tort is independent of the bargained-for duties in the contract.”).

Further, the Court cannot ascertain how a contract existing between Standard Guaranty and

PHH could impose a fiduciary duty by PHH to Plaintiff. As discussed, Plaintiff was not party to

the Policy, and although some provisions may have discussed mutual modes of action in pursuance

of a claim, the Policy provisions cannot be said to have imposed some extra contractual duties on

PHH resulting in a fiduciary duty to Plaintiff. (See Docket No. 17 at 8). At issue here is not any

action by PHH but rather sheer inaction that Plaintiff believes resulted in a breach of fiduciary duty

to him. Id. at 5-6, 8. As such, Plaintiff has failed to show how he was owed any fiduciary duty by

PHH.

Since Plaintiff has failed to establish the existence of a fiduciary relationship with PHH

and a fiduciary duty arising from that relationship, his claim for breach of fiduciary duty must be

dismissed. The Court need not reach the element of damages. Accordingly, Plaintiff’s breach of

fiduciary duty claim against PHH fails, and PHH’s motion is therefore granted on this claim.

3. Punitive Damages Claim

In the Amended Complaint, Plaintiff also includes a claim for punitive damages against

Standard Guaranty and PHH. (Docket No. 17 at 8). PHH seeks dismissal of the claim, arguing

that it is not a standalone cause of action and does not survive if Plaintiff’s substantive claims are

dismissed. (Docket No. 26 at 12-13). PHH is correct.

“A punitive damage claim is not an independent cause of action or issue separate from the

balance ofa plaintiff’s case.” Mason v. Texaco, Inc., 948 F.2d 1546, 1554 (10th Cir. 1991). Instead,

is part and parcel of a liability determination’ that ‘does not have any independent being until

a jury has decided’ in the affirmative on a predicate cause of action.” Terry v. Ely, No.: 19-CV-

00990-PRW, 2020 WL 9074888, at *10-*11 (W.D. Okla. Sept. 8, 2020), quoting Mason, 948 F.2d

at 1554.

Because Plaintiff has failed to state claims for relief against both Standard Guaranty and

PHH, he is unable to recover punitive damages against either defendant in this case. Thus,

Plaintiff’s claim for punitive damages is dismissed.

Conclusion

For the reasons discussed herein, the Court hereby GRANTS Defendant Standard

Guaranty Insurance Company’s Motion to Dismiss (Docket No. 19) and Defendant PHH Mortgage

Corporation’s Motion to Dismiss Plaintiff's First Amended Complaint (Docket No. 25).

IT IS SO ORDERED this 23rd day of January, 2026.

UNITED STATES DISTRICT COURT

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