# Morris

> District Court, N.D. Oklahoma · January 23, 2026

URL: https://www.frixlaw.com/law-library/cases/11245621

## Case

- **Full name:** Sidney Morris v. Standard Guaranty Insurance Company, et al.
- **Court:** District Court, N.D. Oklahoma
- **Decided:** January 23, 2026
- **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/11245621

## How later opinions describe it (automated extraction)

- 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.”
- noting that a court may only “refer to extrinsic evidence to interpret the insurance policy” if a term is ambiguous

## Opinion text

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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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11245621. Public record. Not legal advice.