Cincinnati Life Insurance Comp v. Marjorie Beyrer

In the

United States Court of Appeals

For the Seventh Circuit

No. 12-2365

C INCINNATI L IFE INSURANCE C OMPANY,

Plaintiff,

v.

M ARJORIE B EYRER, individually and as

Executrix of the Estate of Kevin Beyrer, and

E STATE OF K EVIN B EYRER,

Defendants-Cross-Plaintiffs-

Third Party Plaintiffs-Appellants,

v.

S TANTON W. G ROTENHUIS and C ASEY S TATE B ANK,

Defendants-

Cross-Defendants-Appellees,

and

M ARK S AVOREE,

Third Party Defendant-Appellee.

Appeal from the United States District Court

for the Southern District of Indiana, Terre Haute Division.

No. 10-cv-00205—Larry J. McKinney, Judge.

A RGUED F EBRUARY 14, 2013—D ECIDED JULY 8, 2013

2 No. 12-2365

Before K ANNE and W ILLIAMS, Circuit Judges, and

Z AGEL, District Judge.Œ

K ANNE, Circuit Judge. In 2006, Kevin Beyrer (“Kevin”)

and his wife Marjorie Beyrer (“Marjorie”) moved to

Terre Haute, Indiana, to manage several car dealerships

owned by Mark Savoree. The next year, Savoree pro-

posed selling the dealerships to the Beyrers through a

series of stock purchases to be financed by a $3.5 million

loan from Casey State Bank (“CSB”). The Beyrers ac-

cepted and began the process of acquiring the dealer-

ships. Soon after negotiating the loan with CSB, Kevin

took out a life insurance policy with Cincinnati Life

Insurance Co. that named Marjorie as the beneficiary.

Two months later, in July 2007, Kevin assigned that life

insurance policy to CSB.

The dealership purchase began to fall apart almost

immediately, however. Eventually the Beyrers declared

bankruptcy, and multiple rounds of litigation between

each of the aforementioned parties ensued. During all

of this, Kevin was diagnosed with terminal cancer.

He passed away in June 2010, which set the stage for an

additional fight over the insurance policy proceeds.

Cincinnati Life deposited the proceeds, some $3 million,

with the Clerk of the Superior Court of Vigo County,

Indiana, and sought judicial determination of the

rightful owner. This appeal represents a culmination of

that quest, including various cross- and third party

claims that have been filed along the way.

Œ

The Honorable James B. Zagel of the United States District

Court for the Northern District of Illinois, sitting by designation.

No. 12-2365 3

I. B ACKGROUND

Presented with a business opportunity for which he

was apparently ill-prepared, Kevin Beyrer decided to

take a chance. Having operated car dealerships for

others, Kevin accepted Mark Savoree’s February 2007

offer to sell several dealerships, primarily Ford, that

Savoree owned in the Terre Haute area. Kevin had, in

fact, been managing these very dealerships for the

better part of the previous year. Kevin and Marjorie did

not have the money on-hand to meet the $5 million pur-

chase price for the dealerships and related assets, so

they arranged to finance the purchase through a series

of loans from Casey State Bank. The loans, totaling over

$3.5 million, were made to Ronin Automotive, Inc., a

company controlled by the Beyrers. The Beyrers closed

on the purchase and the loans in early March 2007.

Soon thereafter—on March 8, 2007—Kevin Beyrer

applied for a life insurance policy with Cincinnati Life

Insurance Company. Cincinnati Life approved Kevin’s

application on April 30, and, by May 8, he had purchased

the policy and named his wife the primary beneficiary.

Later that summer, however, Kevin executed an assign-

ment of the policy to CSB. The assignment stated that

it was made “for [v]alue [r]eceived.” (R. 58-1.) Among

the rights not assigned was the right “to receive . . . any

disability income.” (Id.) Cincinnati Life recorded the

assignment in its corporate records on August 4, 2007.

Although each party paints the picture slightly dif-

ferently, it is apparent that the sale of the dealerships was

troubled from the beginning. For instance, because the

4 No. 12-2365

dealerships were part of the Ford network, Ford had to

approve the Beyrers and the franchise transfer. Though

sought, this approval was never obtained. Further, despite

the loans having been signed in March, it seems that

the terms—particularly who would or should guarantee

the loans—continued to be disputed throughout 2007.

Eventually, CSB restructured the original loans. These

restructured loans, made in January 2008, were in the

name of the Beyrers individually and in companies

they controlled. Very shortly after the restructure, how-

ever, the loans went into default. On March 3, 2008, CSB

called in the loans and began seizing money in the

Beyrers’ personal and corporate accounts. On March 10,

2008, CSB obtained judgments on the restructured loans

against the Beyrers and entities they controlled. On

March 26, CSB assigned its interest in these judgments

and the life insurance policy to Stan Grotenhuis (whom

Marjorie characterizes as the “Founder and . . . owner”

of CSB (Appellant’s Br. at 13)). In the midst of what

was already a difficult time period, Kevin Beyrer was

diagnosed with terminal cancer on May 25, 2008. On

September 11, 2008, the Beyrers filed for Chapter 7 bank-

ruptcy. They were discharged on December 24, 2008.

During most of 2008, there were ongoing court pro-

ceedings involving these same parties (CSB, Savoree, the

dealerships, the Beyrers, and the Beyrers’ companies) in

Clark County, Illinois, based on the March 10 judgment

(Circuit Court of Clark County, Illinois, Case No. 08-L-04).

Although the Beyrers were dismissed from the litiga-

tion by virtue of their bankruptcy filing in Septem-

No. 12-2365 5

ber 2008, the state court continued to sort out the rami-

fications of the failed dealership sale. This process in-

cluded liquidating assets of the dealerships and deposing

various people in an attempt to parse out blame. There

also appears to have been a separate, though related,

fraudulent transfer case brought by CSB against Savoree

in Illinois state court. (R. 154 at 1-2) (referencing Circuit

Court of Clark County, Illinois, Case No. 2010-CH-17).

On May 14, 2010, Kevin Beyrer applied for benefits

under the Cincinnati Life insurance policy. Although

Marjorie described these in an affidavit as “disability

benefits,” (R. 72 at 2), they are more aptly described

as an advance on the standard proceeds of the policy.

The “Accelerated Benefit Rider” allowed an insured

to receive “part of the policy’s death benefit” if a doctor

diagnosed him with a terminal illness that would result

in death within the next twenty-four months. (Id. at 5.)

While this money is likely intended to help cover end-of-

life healthcare costs, it is not separate from the overall pay-

out of the policy. Cincinnati Life refused to release

any part of the proceeds to Kevin because neither CSB

nor Grotenhuis, who now owned the assignment, would

consent.

Kevin Beyrer died on June 17, 2010, triggering the

life insurance policy’s death benefit and a dispute

between the parties over its true owner. Cincinnati

Life filed a Complaint for Interpleader and Declaratory

Judgment in the Superior Court of Vigo County, Indiana,

to determine the proper owner of the funds. On an order

of that court, Cincinnati Life deposited the policy pro-

ceeds with the Clerk of Court.

6 No. 12-2365

Grotenhuis answered the complaint, but Marjorie

removed the case to the U.S. District Court for the

Southern District of Indiana. Once there, she filed her

“Answer and Cross Claim and Third Party Claim”

on August 5, 2010. (R. 6.) This filing attempted to state

Marjorie’s claim for the policy proceeds, as well as

allege various causes of action against CSB, Grotenhuis,

and Savoree. For the next year, the defendants re-

peatedly pointed out the flaws in Marjorie’s filing, she

repeatedly requested leave of the court to amend it, and

the district court granted those requests.

Eventually, in March 2011, Grotenhuis filed a motion

for summary judgment with respect to the policy pro-

ceeds. (R. 54.) Marjorie filed a cross-motion for sum-

mary judgment the next month. (R. 79.) On September 22,

2011, the court granted summary judgment in favor of

Grotenhuis on the limited issue of entitlement to the

policy proceeds (“Proceeds Order”). (R. 127.) Immediately

after the court entered the Proceeds Order, Marjorie

moved to modify the order to award her $250,000, which

she claimed was due her under the “Accelerated Benefit

Rider.” (R. 129.) The next month, Marjorie filed a motion

to reconsider the judgment in its entirety based on

what she claimed was newly discovered evidence.

(R. 149.) The district court rejected both of these motions

on February 8, 2012. (R. 254.)

The week after entering the Proceeds Order, the

district court granted Marjorie’s request to amend her

complaint for the third time. (R. 132.) In so doing, it

admonished her that “no further amendments will be

No. 12-2365 7

permitted.” (Id.) Marjorie’s “Third Amended Answer,

Cross Claims and Third Party Claims” alleged seven

separate claims for relief against CSB, Grotenhuis, and

Savoree. (R. 100.) After briefing, the district court dis-

missed Marjorie’s first, second, third, and seventh

claims with prejudice on February 16, 2012, for failing

to meet pleading standards. (R. 255.) CSB and Grotenhuis

moved for summary judgment on the remaining claims;

Marjorie did not respond to that motion. The district

court entered summary judgment for CSB and Grotenhuis

on the remaining claims on May 7, 2012. (R. 271.)

II. A NALYSIS

Marjorie Beyrer1 has brought this appeal challenging

each of the decisions that the district court decided

against her. By way of review, those decisions are: (1) the

grant of summary judgment on the proceeds issue;

(2) the rejection of the motions to modify and reconsider;

(3) the dismissal of claims one, two, three, and seven; and

(4) the entry of summary judgment on claims four, five,

and six. Because of the rather complicated procedural

history of this case and the large number of issues to be

addressed, we will structure our review as follows: first,

we will consider the dismissals of the Beyrers’ cross-claims

1

Marjorie Beyrer brings this appeal in a variety of capacities—

individually, on behalf of her late husband’s estate, and as the

executrix of that estate. Because she is the only person

bringing the appeal, we will keep things as simple as this

case permits and refer to her as “appellant.”

8 No. 12-2365

and third party claims for failing to meet pleading stan-

dards; second, we will review the district court’s grant of

summary judgment on claims four through six; third, we

will address the district court’s grant of summary judg-

ment on the life insurance proceeds distribution; and

finally, we will review the court’s denial of Marjorie’s

motions for modification and reconsideration. Finding

no merit in any of the issues appealed, we affirm the

district court’s judgments.

A. Dismissal of Cross-Claims and Third Party Claims One,

Two, Three, and Seven

The district court dismissed appellant’s first, second,

third, and seventh claims for failure to comply with

federal pleading standards. (R. 255.) Specifically, the

district court held that the first and second claims

violated Fed. R. Civ. P. 8 and 10(b), and that the third

and seventh claims, being putatively fraud-based, vio-

lated Fed. R. Civ. P. 9(b). We agree with the district court

that appellant’s complaint did not meet the basic

pleading standards envisioned by the Federal Rules.

We review the district court’s dismissal de novo.

Alexander v. McKinney, 692 F.3d 553, 555 (7th Cir. 2012).

When “[e]valuating the sufficiency of the complaint,

we construe it in the light most favorable to the

nonmoving party, accept well-[pled] facts as true, and

draw all inferences in her favor.” Reynolds v. CB Sports

Bar, Inc., 623 F.3d 1143, 1146 (7th Cir. 2010). “Although

for the purposes of a motion to dismiss we must take

all of the factual allegations in the complaint as true, we

No. 12-2365 9

are not bound to accept as true a legal conclusion

couched as a factual allegation.” Ashcroft v. Iqbal, 556 U.S.

662, 678 (2009) (internal quotation marks omitted). The

“complaint must contain sufficient factual matter,

accepted as true, to ‘state a claim to relief that is plausible

on its face.’ ” Id. (quoting Bell Atlantic Corp. v. Twombly,

550 U.S. 544, 570 (2007)). We address each of appellant’s

claims below.

1. Claims one and two

The district court dismissed appellant’s first and second

claims for failure to comply with Fed. R. Civ. P. 8 and 10.

Rule 8 requires “a short and plain statement of the

claim showing that the pleader is entitled to relief.” Fed.

R. Civ. P. 8(a)(2). Rule 10(b) provides that claims should

be set out “in numbered paragraphs, each limited as

far as practicable to a single set of circumstances” and

that “each claim founded on a separate transaction

or occurrence . . . must be stated in a separate count or

defense.” Fed. R. Civ. P. 10(b). The district court

observed that, even after being given multiple oppor-

tunities to revise her complaint, “it is difficult to see

how [appellant’s first two claims] comply with Rule 10(b),

either in technicality or in spirit.” (R. 255 at 7.) We agree.

“The primary purpose of [Fed. R. Civ. P. 8 and 10(b)]

is to give defendants fair notice of the claims against

them and the grounds supporting the claims.” Stanard

v. Nygren, 658 F.3d 792, 797 (7th Cir. 2011). “[W]here

the lack of organization and basic coherence renders a

complaint too confusing to determine the facts that con-

10 No. 12-2365

stitute the alleged wrongful conduct, dismissal is an

appropriate remedy.” Id. at 798. If neither the adverse

party nor the court can make out the essence of the

claims “dismissal of a complaint on the ground that it is

unintelligible is unexceptionable.” United States ex rel.

Garst v. Lockheed-Martin Corp., 328 F.3d 374, 378 (7th

Cir. 2003). That being said, “[a] district court is not autho-

rized to dismiss a complaint merely because it con-

tains repetitious and irrelevant matter.” Id. (internal

quotation marks omitted). Rather, we have found com-

plaints wanting when they present a “vague, confusing,

and conclusory articulation of the factual and legal

basis for the claim and [take] a general ‘kitchen sink’

approach to pleading the case.” Stanard, 658 F.3d at 798.

Such complaints frustrate Rule 8’s objective: “fram[ing]

the issues and provid[ing] the basis for informed

pretrial proceedings.” Id. at 797 (internal brackets omit-

ted). “[J]udges and adverse parties need not try to fish

a gold coin from a bucket of mud,” Garst, 328 F.3d at 378;

dismissal is the appropriate remedy for district courts

presented with “a bucket of mud.”

The first hints that the claims here do not comply

with federal pleading standards come from their titles.

Claim one is labeled: “Breach of Contract, Breach of

Fiduciary Duty, Fraud (Actual and Contructive), Negli-

gence, Promissory Estoppel.” (R. 100 at 8.) Claim two

is titled: “Negligence, Breach of Contract, Breach of

Fiduciary Duties, Actual and Constructive Fraud, Promis-

sory Estoppel (Against Mr. Savoree), Fraud, Breach of

Contract, Conversion (Against CSB).” (R. 100 at 12.) As

the district court noted, the first claim “assert[ed] at

No. 12-2365 11

least five separate causes of action,” (R. 255 at 7), and the

second claim is no better; these are hardly the “separate

count[s]” the Federal Rules envision. Fed. R. Civ. P. 10(b).

And the confusion continues throughout the substance

of the claims, which are laid out in over 88 numbered

paragraphs, each of which can stretch for over a third

of a page. “The [first claim’s] alleged causes of action

are related only insofar as [appellant] allege[s] that

Mr. Savoree undertook the actions in question.” (R. 255

at 7.) The second claim lacks even that modest virtue;

it purports to assert a variety of causes of action against

both Savoree and CSB. Appellant made no attempt

to connect specific facts or events with the various

causes of action she asserted.

Appellant’s complaint strikes us as exactly the type

of “kitchen sink approach to pleading” that we have

previously found to violate the Federal Rules. Stanard,

658 F.3d at 798 (internal quotation marks omitted). At

times, appellant’s convoluted language even renders it

unclear precisely what fact she has attempted to al-

lege. For instance: “Mr. Beyrers [sic] and/or Mrs. Beyrer

never received a copy of this letter and Mr. Savoree and/or

CSB did not disclose it to Mr. and/or Mrs. Beyrer in a

timely fashion.” (R. 100 at ¶ 88.) 2 To this can be added

myriad other syntactical and grammatical errors (e.g., id.

2

To understand the difficulty of adequately responding to

such a complaint, it is worth noting that in this one sentence

alone there are 27 different possible permutations of the

allegation (there are three variables in the sentence, each with

three possible values). This was not appellant’s most complex

sentence.

12 No. 12-2365

at ¶ 46) (“Mr. Savoree and were in CSB, through its

officers and board members including Mr. Wolfe and

Lena Grotenhuis, negotiations between themselves to

materially change the March 2007 loan agreement

and reduce Mr. Savoree’s guarantee.”).

Given this morass, we do not think that the first two

claims “frame[d] the issues and provide[d] the basis

for informed pretrial proceedings.” Stanard, 658 F.3d at

797 (internal brackets omitted). As can be adduced

from the title of the “Third Amended Answer and Cross

Claim and Third Party Claim,” the district court gave

appellant multiple opportunities to bring her pleadings

up to federal standards. (R. 132.) We agree with the

district court that appellant was unsuccessful at accom-

plishing this task. Dismissal of claims one and two

was appropriate.

2. Claims three and seven

Claims three and seven were both dismissed for failing

to meet Fed. R. Civ. P. 9(b)’s heightened pleading standard

for fraud-based claims. We address them in order below.

a. Claim three

Appellant’s third claim was “Conspiracy (Against

Mr. Savoree and CSB and Mr. Grotenhuis).” (R. 100 at 24.)

As the district court pointed out, however, appellant did

“not specify the underlying illegal activity forming the

object of the conspiracy.” (R. 255 at 9.) The court read

No. 12-2365 13

the complaint to “suggest a conspiracy to commit fraud.”

(R. 255 at 9-11.) Fraud-based claims, however, face a

heightened pleading standard. See Fed. R. Civ. P. 9(b).

On that basis, the court found that appellant had failed

to meet the heightened standard, and dismissed the

claim. We agree with the district court’s decision.

As an initial matter, appellant does not challenge, and

indeed appears to confirm, the district court’s under-

standing that her third claim was based in fraud. (Appel-

lant’s Br. at 63-65.) We will therefore presume that the

district court’s interpretation was correct: the con-

spiracy alleged was in fact a conspiracy to commit

fraud, and the third claim should be held to the

heightened pleading standard in Fed. R. Civ. P. 9(b).

Fed. R. Civ. P. 9(b) requires a party alleging fraud to

“state with particularity the circumstances constituting

fraud.” We have read this rule to require “describing

the ‘who, what, when, where, and how’ of the fraud.”

AnchorBank, FSB v. Hofer, 649 F.3d 610, 615 (7th Cir. 2011).

We have noted that the purpose of this particularity

requirement is “to discourage a ‘sue first, ask questions

later’ philosophy.” Pirelli Armstrong Tire Corp. Retiree

Med. Benefits Trust v. Walgreen Co., 631 F.3d 436, 441 (7th

Cir. 2011). “Heightened pleading in the fraud context

is required in part because of the potential stigmatic

injury that comes with alleging fraud and the con-

comitant desire to ensure that such fraught allegations

are not lightly leveled.” Id. at 442. We have also

cautioned, however, that “the exact level of particularity

that is required will necessarily differ based on the

facts of the case.” Hofer, 649 F.3d at 615.

14 No. 12-2365

Emblematic of our desire to balance particularity

with situation-specific flexibility is our treatment of

fraud claims pled on “information and belief.” This

phrase is used by plaintiffs who have a good-faith belief

in the allegations they make, but nevertheless make

those allegations based on secondhand information.

Pirelli, 631 F.3d at 442 (citing Black’s Law Dictionary 783

(7th ed. 1999)). We frown on making allegations “on

information and belief” in the fraud context and

generally find that such claims do not meet Rule 9(b)’s

particularity requirement. Id. at 442-43; Bankers Trust Co.

v. Old Republic Ins. Co., 959 F.2d 677, 683-84 (7th Cir. 1992)

(“The allegations of fraud that it was required to make,

however, are made in its complaint on ‘information and

belief,’ a clearly improper locution under the current

federal rules, which impose . . . a duty of reasonable

precomplaint inquiry not satisfied by rumor or hunch.”).

“[T]he practice is permissible, [however,] so long as

(1) the facts constituting the fraud are not accessible

to the plaintiff and (2) the plaintiff provides the

grounds for his suspicions.” Pirelli, 631 F.3d at 443

(internal quotation marks omitted). Therefore, while we

require a plaintiff claiming fraud to fill in a fairly

specific picture of the allegations in her complaint, we

“remain sensitive to information asymmetries that

may prevent a plaintiff from offering more detail.” Id.

And indeed, appellant argues that she is the victim

of just such an information asymmetry—that she did

not know, and could not have known, the information

that the district court required when it dismissed the

claim. The appellant claims she was waiting for dis-

No. 12-2365 15

covery to access information in the hands of the appel-

lees. As such, she couched her claim in “information

and belief” and made broad generalizations rather than

specific statements.

Undoubtedly, had the appellant had access to more

information, she could have injected more particulars

into her complaint. But that does not suffice to explain

the myriad shortcomings that infected the claim as it

stands. Even with limited information, we expect plain-

tiffs to attempt to describe the “who, what, when, where,

and how” of the fraud, so that opposing parties

can respond effectively, and the trial judge can set an

appropriate course for the litigation process. This was

all but impossible with the third claim as it stood.

There were few specifics offered, even when the infor-

mation should have been available (indeed, perhaps

necessarily available, given the allegations) to the appel-

lant.

To begin, because the “Conspiracy” claim appears to

refer to conspiracy to commit a fraud described in the

first two claims, all of the errors in the first two claims

(described above) also infect the third claim. The first

two claims are a jumble of allegations against multiple

parties, which makes “who” committed the fraud un-

clear. The “when” is no clearer. As the district court

noted, appellant failed “to specify times and dates

any more clearly than ‘from July 2007 through the Janu-

ary 28, 2008 closing on the Second Loan’ or ‘prior to

closing the Second Loan and/or at or around the time of

closing the Second Loan’ or ‘[f]rom August 2007 through

16 No. 12-2365

December 2007.’ ” (R. 255 at 10) (quoting R. 100 at ¶¶ 44, 67,

109).

Most importantly, there was minimal effort to connect

specific behaviors to specific causes of action, which

makes it exceedingly unclear what the fraud actually

was. Rule 9(b) requires particular references to specific

alleged fraudulent activities. Here, appellant spent a

great deal of energy insinuating that fraud occurred, but

failed to identify these all-important details. Even when

the complaint mentions details, there is enough hedging

that they cannot be said to have been identified with

particularity; for example:

CSB and/or Mr. Savoree knew or should have

known at or prior to the closing of the Second Loan

that the debt load for the Second Loan was not

acceptable to Ford and/or Ford would not ap-

prove the transfer of the Franchise without new

equityand/or [sic] Ford was not inclined to

approve the Franchise Transfer for other reasons

such as concerns that a proven positive track

record was not established.

(R. 100 at ¶ 61.) Such a statement could fairly be read to

allege many different things or possibly nothing at all.

Indeed, some of the appellant’s attempts to explain her

complaint to this court end up more confusing than

helpful. (e.g., Appellant’s Reply Br. at 20) (“¶22 the sub-

ject is Mr. Savoree’s induced the Breyer’s to purchase

the property by promising to secure finance with a

2.5 million loan guarantee loan guarantee, the amount,

purpose (secure financing).”). We therefore agree with

No. 12-2365 17

the district court that the third claim does not meet

Rule 9(b)’s heightened pleading standard.

b. Claim seven

The district court also dismissed appellant’s seventh

claim, “Promissory Estoppel and/or Unjust Enrichment

(Against Mr. Savoree and CSB)” for failure to meet the

heightened pleading standard that Rule 9(b) imposes.

Again, we agree.

In its March 23, 2011, order, the district court deter-

mined that the appellant’s promissory estoppel and unjust

enrichment claims “sound[ed] in fraud” and should thus

be held to Fed. R. Civ. P. 9(b)’s heightened pleading

standard. (R. 59 at 15) (citing Borsellino v. Goldman Sachs

Grp., Inc., 477 F.3d 502, 507 (7th Cir. 2007) for the proposi-

tion that Rule 9(b)’s heightened pleading standard is

not restricted to claims of fraud, but may apply to

claims whose factual allegations depend on fraud). Ap-

pellant does not challenge this facet of the district

court’s decision, and, in any case, we agree with the

district court. As best we can tell, appellant’s promissory

estoppel and unjust enrichment claims emerge out of a

pattern of fraudulent conduct that she insinuates the

appellees engaged in. This falls under the Fed. R. Civ.

P. 9(b) requirement that allegations of fraud must be

pled with particularity. See Pirelli, 631 F.3d at 447-48

(holding an unjust enrichment claim to the Rule 9(b)

standard); see also Borsellino, 477 F.3d at 507 (application of

Rule 9(b) depends on facts of the case).

18 No. 12-2365

To remind the reader, to comply with Fed. R. Civ. P. 9(b),

a plaintiff “must state with particularity the circum-

stances constituting fraud.” And that means “describing

the ‘who, what, when, where, and how’ of the fraud.”

Hofer, 649 F.3d at 615. As the district court observed,

appellant failed at this task. The “when” is not described

with any more specificity than in count three: the

relevant events are alleged to have occurred sometime

“beginning in July 2007 and continuing until January 28,

2008.” (R. 100 at ¶ 123.) 3 Appellant’s “and/or” formula-

tions obscure the identifications of the relevant parties

and make deciphering the allegations overly compli-

cated. (R. 100 at ¶ 125) (“CSB and/or Mr. Savoree made

the promise to Mrs. And/or Mr. Beyrer . . . .”)4 More-

over, appellant fails to identify who made these repre-

sentations on CSB’s behalf.

Appellant’s only response is to protest that her

pleadings were sufficiently clear to satisfy the policy

goals of Rule 9. The Rule, appellant says, is “meant to

require the plaintiff to do more than the usual investiga-

tion before filing his complaint.” (Appellant’s Br. at 63)

(citing United States ex rel. Fowler v. Caremark RX, LLC,

496 F.3d 730, 740 (7th Cir. 2007).) And here, appellant

3

Readers should note that this is the “¶ 123” that appears on

page 31 of appellant’s “Third Amended Answer and Cross

Claim and Third Party Claim,” rather than the ¶ 123 that ap-

pears on page 27. The paragraph numbers restart at 119 after

¶ 150, which is yet one more example of how confusingly

this complaint was constructed.

4

Again, please note that this is the ¶ 125 on page 31.

No. 12-2365 19

contends that she (or, more realistically, her counsel) has

done “more than the usual,” including “traveling to the

remote reaches of Illinois.” (Id.) We are sympathetic to

the travel required to find far-off court reporters, and we

do not wish to cast aspersions on the level of effort ex-

pended by appellant or her counsel. But Fed. R. Civ.

P. 9(b) does more than simply mandate that attorneys

show some increased amount of work. Rather, “the rule

requires the plaintiff to conduct a precomplaint investi-

gation in sufficient depth to assure that the charge of

fraud is responsible and supported.” Ackerman v. Nw.

Mut. Life Ins. Co., 172 F.3d 467, 469 (7th Cir. 1999). That

is, the effort must manifest itself in the complaint

through the familiar “who, what, when, where, and how”

requirements. That, appellant did not achieve. We agree

with the district court that dismissal of the seventh claim

for failure to meet Fed. R. Civ. P. 9(b)’s heightened plead-

ing standard was appropriate.

B. Summary Judgment of Cross-Claims and Third Party

Claims Four, Five, and Six

The district court granted summary judgment to the

appellees on the three other claims included in appel-

lant’s “Third Amended Answer and Cross Claim and

Third Party Claim.” (R. 271.) Appellant nominally chal-

lenges this judgment in her brief to this court by listing

the claims among those she appeals in the heading of

Section IX.B: “The District Court Committed Prejudicial

Error in Dismissing Claims One through Four, Six and

Seven From the Complaint With Prejudice.” (Appellant’s

Br. at 62.) As is perhaps evident from this title, how-

20 No. 12-2365

ever, appellant has misidentified the basis for the

district court’s ruling (and altogether dropped claim

five). Claims four through six were not “dismissed” for

failing to state a claim or failing to meet pleading stan-

dards (as claims one, two, three, and seven were); rather,

the district court entered summary judgment because

there was no genuine issue on which a reasonable

jury could return a verdict in appellant’s favor. (R. 271.)

Nothing in Section IX.B indicates that appellant ap-

preciates this distinction: there is no citation to the sum-

mary judgment standard and no discussion of how the

record on these claims might create a triable issue of fact.

Indeed, appellant did not even respond in district court

to the motions requesting summary judgment on these

claims. If a party moving for summary judgment has

properly supported his motion, the burden shifts to the

nonmoving party to “come forward with specific facts

showing that there is a genuine issue for trial.” Matsushita

Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)

(internal quotation marks omitted); accord Carroll v. Lynch,

698 F.3d 561, 564 (7th Cir. 2012). Appellant has not done

so at any point in this case. The district court’s entry of

summary judgment on these claims was correct.

C. Summary Judgment on the Insurance Proceeds Question

The district court also granted summary judgment on

the issue that kicked off this particular round of litiga-

tion: the distribution of the insurance proceeds. (R. 127.)

The court determined that the July 2007 policy assign-

ment from Kevin to CSB was valid, and therefore

No. 12-2365 21

that Marjorie did not have a claim to the proceeds of

the policy. The appellant challenges that determination.

A district court should dispose of an issue on sum-

mary judgment if “there is no genuine dispute as to any

material fact and the movant is entitled to judgment as

a matter of law.” Fed. R. Civ. P. 56(a). To survive a

motion for summary judgment, “the nonmoving party

must establish some genuine issue for trial such that a

reasonable jury could return a verdict in her favor.”

Gordon v. FedEx Freight, Inc., 674 F.3d 769, 773 (7th Cir.

2012). To create a “genuine” issue, the nonmoving party

“must do more than simply show that there is some

metaphysical doubt as to the material facts.” Matsushita,

475 U.S. at 586; accord Carroll, 698 F.3d at 564. On appeal,

“[w]e review a district court’s grant of summary judg-

ment de novo, drawing all reasonable inferences and

viewing all facts in favor of the non-moving party.”

Fitzgerald v. Santoro, 707 F.3d 725, 730 (7th Cir. 2013).

Here, we think the district court was correct to enter

summary judgment in favor of the appellees.

We note, as the district court did, that the assignment

is valid on its face. (R. 127 at 8.) The policy provides

that “[t]he rights of the owner and beneficiary will be

subject to the rights of any assignee,” (R. 1-3 at 10), while

the assignment states that it grants CSB the right “to

collect from [Cincinnati Life] the net proceeds of the

policy when it becomes a claim by death or maturity,”

(R. 1-4.) Furthermore, the assignment specifically pro-

vides that it is being given “for [v]alue [r]eceived.” (Id.)

22 No. 12-2365

In Illinois,5 “any language that demonstrates the intent

to transfer some identifiable property from one party

to another for valuable consideration is sufficient to

establish an assignment.” Martin v. City of O’Fallon, 670

N.E.2d 1238, 1241 (Ill. App. Ct. 1996). And, assignments

of life insurance policies are permissible in Illinois.

215 ILCS 5/245.1. But, appellant argues, this assignment

was not supported by consideration, and the district

court was wrong to hold otherwise.

It is worth pausing at this point to note that, in re-

viewing the district court’s grant of summary judgment,

we are limited to considering the record that the court

had before it at the time. MMG Fin. Corp. v. Midwest

Amusements Park, LLC, 630 F.3d 651, 657 (7th Cir. 2011).

5

Because this is a diversity case, state substantive law applies.

See Blood v. VH-1 Music First, 668 F.3d 543, 546 (7th Cir. 2012). As

the district court correctly noted, assignments of insurance

policies are governed by the law of the place where the assign-

ment is made. (R. 127 at 7). Here, the assignment was made

in Illinois. (Id.) Appellant argued in the district court that the

law of Indiana should govern, as the Beyrers lived in Indiana

during all relevant periods. This formulation of the law was

wrong, but the district court nevertheless indulged appellant

and demonstrated that, even under Indiana law, the assign-

ment would be valid. (Id. at 8-10.) Appellant has abandoned

this line of argument on appeal. Thus, our review of the sub-

stance of the assignment is governed by Illinois law. See Monarch

Discount Co. v. Chesapeake & Ohio Ry. Co. of Ind., 120 N.E. 743,

745 (Ill. 1918) (the effect of a valid assignment on the rights

of the parties depends on the place of assignment).

No. 12-2365 23

In arguing that the entry of summary judgment was in

error, appellant seems to include facts presented for

the first time in her subsequent motions to modify

and reconsider. This is not only unhelpful, it is an imper-

missible argument. Joseph P. Caulfield & Assocs., Inc.

v. Litho Prods., Inc., 155 F.3d 883, 888 (7th Cir. 1998).

Accordingly, we will review the same record that the

district court reviewed in entering summary judgment.

With that in mind, we find that appellant did not

present enough, or any, evidence to the district court to

create a genuine disputed issue of material fact. True,

appellant identified lack of consideration as a potential

disputed fact in her brief in opposition to summary

judgment. (R. 71 at 12-13.) But this assertion was

simply made and repeated without any support or cita-

tion to evidence. (Id.); (id. at 2) (“Mr. Beyrers [sic]

assigned the policy . . . apparently without considera-

tion”); (id. at 5) (“[t]he alleged assignment mentions no

consideration . . .”). 6 The situation presented to us is

therefore essentially this: we have an otherwise valid

assignment that purports to have been made for

valuable consideration, and we have an appellant who

says, in short, “no, it was not.” To us, this seems the

very definition of “[m]ere metaphysical doubt as to the

material facts.” Carroll, 698 F.3d at 564 (internal quota-

tion marks omitted). And that, as we have repeatedly

recognized, is not enough to prevent summary judgment.

6

Note that this last assertion is not true, as the assignment

does state that it was made “for [v]alue [r]eceived.” (R. 1-4.)

24 No. 12-2365

Id. Such is the case here. There was no genuine issue

of material fact appropriate for trial, and the district court

correctly entered summary judgment for the appellees.

D. Motions to Reconsider

Finally, we take up the district court’s denial of appel-

lant’s “motion for modification” and her “motion for

reconsideration” of the insurance proceeds distribution

order. This is the proper juncture at which to consider

the evidence that appellant added to the record after

the entry of summary judgment. See Caulfield, 155 F.3d

at 888.

The district court’s treatment of the motions, which

the court discussed together in a single three-paragraph

section of its order, is not as clear as it might be. While

the district court appeared to analyze both motions

under the Fed. R. Civ. P. 59(e) standard, appellant’s

second motion could theoretically also be construed as a

Rule 60(b) motion. The court never specifically stated

whether it was reviewing either motion under Rule 59(e)

or 60(b), and cites an opinion, Harrington v. City of Chi.,

433 F.3d 542, 546 (7th Cir. 2006), that discusses both. (R.

254 at 4.) Appellant seems to argue that analyzing the

motions under the same standard was improper, but

fails to propose an alternate standard to proceed under

and seems confused about which motion could have

been analyzed under such an alternate standard. (Ap-

pellant’s Br. at 58) (“The district court reasoned that

the Motion to Modify [the first motion] was actually

a motion to reconsider in disguise. However, Counsel

No. 12-2365 25

was not engaging in semantics but, rather, analysis.”).

Ultimately, however, whatever contrast appellant at-

tempts to draw between these motions is inconsequential.

Several factors convince us that it is proper to analyze

both motions under Rule 59(e). First, the district court,

as evidenced by its analysis, apparently understood both

motions to be Rule 59(e) motions. The district court’s

treatment makes procedural sense because both motions

were filed within the 28-day time limit that Rule 59(e)

prescribes. See Fed. R. Civ. P. 59(e); cf. Justice v. Town of

Cicero, Ill., 682 F.3d 662, 665 (7th Cir. 2012) (“an untimely

Rule 59 motion is treated as a motion under Rule 60(b)”).

Further, appellees refer to appellant’s “rule 59 motions,”

which lends credence to the theory that both motions

were understood by the parties and the court as Rule 59(e)

motions at the time. (e.g., Appellee’s Br. at 38.) And

finally, we have previously implied that the threshold

of proof for the moving party is somewhat lower under

Rule 59(e) than under Rule 60(b). See Harrington, 433

F.3d at 546 (describing Rule 59(e)’s standard that a

movant must “clearly establish” grounds for relief as a

“contrast” with the “extraordinary remedy” of Rule 60

relief); see also Romo v. Gulf Stream Coach, Inc., 250 F.3d

1119, 1121 n.3 (7th Cir. 2001) (“Rule 59(e) generally re-

quires a lower threshold of proof than does Rule 60(b)”).

Thus, even if we misapprehend appellant’s argument,

she is not prejudiced by that misunderstanding: if she

could not meet the lower Rule 59(e) burden in the dis-

trict court, she would not have met the higher Rule 60(b)

burden.

26 No. 12-2365

Although the moving party’s burden is different under

each rule, “[r]egardless [of whether one proceeds under

Rule 59(e) or 60(b)], we review decisions under each

rule only for abuse of discretion.” Harrington, 433 F.3d

at 546. An appellant establishes an abuse of discretion

only when “no reasonable person could agree with the

[decision of the district] court.” Jones v. Lincoln Elec. Co.,

188 F.3d 709, 735 (7th Cir. 1999). We conclude that the

district court did not abuse its discretion here.

1. Appellant’s motion for modification

Two days after the district court entered summary

judgment on the issue of the insurance proceeds,

appellant filed a motion for modification, (R. 128), accom-

panied by a three page “Brief in Support of Motion for

Modification of the Court’s Order of September 22, 2011

(Doc. 127) to Give Effect to the First Paragraph of the

Assignment, to wit; the Disability Exclusion,” (R. 129).

Appellant submitted that the court had “overlooked” the

second paragraph of the assignment, which directed that

“any disability income” was not assigned. (R. 129 at 2.)

This clause, appellant argued, entitled Marjorie to the

$250,000 “accelerated death benefit” that the original

policy allowed, even if CSB was due the remainder

under the assignment. (Id. at 2-3.)

The district court rejected appellant’s motion. (R. 254.)

The district court held that appellant had the oppor-

tunity to make this argument during the summary judg-

ment proceedings. Indeed, she made such an argument

in her initial complaint. She did not, however, choose to

No. 12-2365 27

argue it during the summary judgment phase. The

district court noted that motions to reconsider were not

an opportunity to present arguments that could have

been raised previously, (id. at 5) (citing Moro v. Shell Oil

Co., 91 F.3d 872, 876 (7th Cir. 1996)), and rejected the

motion. We do not find that rejection to be an abuse of

the district court’s discretion.

A Rule 59(e) motion will be successful only where the

movant clearly establishes: “(1) that the court committed

a manifest error of law or fact, or (2) that newly dis-

covered evidence precluded entry of judgment.” Blue v.

Hartford Life & Accident Ins. Co., 698 F.3d 587, 598 (7th

Cir. 2012). The appellant’s argument does not fit either

set of circumstances.

The appellant suggests that an argument about the

accelerated death benefit would not have been timely at

the summary judgment phase because “before the ex-

clusion could be decided, ownership needed to be deter-

mined.” (Appellant’s Br. at 59.) This statement is incor-

rect. Grotenhuis moved for summary judgment as to all

of the proceeds of the insurance policy. (R. 54.) Appellant

was therefore on notice that, if she had an argument

about her entitlement to any portion of the policy, she

had to present it. While appellant argued that she was

entitled to the entire policy, an argument about the ac-

celerated death benefit would have been a textbook

example of an argument in the alternative. Appellant

chose not to make this alternative argument, whether

for reasons of strategy or mere oversight.

Rule 59(e) allows the movant to bring to the

district court’s attention a manifest error of law

28 No. 12-2365

or fact, or newly discovered evidence. It does not

provide a vehicle for a party to undo its own

procedural failures, and it certainly does not

allow a party to introduce new evidence or ad-

vance arguments that could and should have

been presented to the district court prior to the

judgment.

Bordelon v. Chi. Sch. Reform Bd. of Trs., 233 F.3d 524, 529

(7th Cir. 2000) (internal citation and quotation marks

omitted). The district court correctly held that a motion

under Fed. R. Civ. P. 59(e) was not the appropriate

forum for appellant’s argument. Under these circum-

stances, we cannot conclude that the district court abused

its discretion.

2. Appellant’s motion for reconsideration

The district court’s ruling on appellant’s motion for

reconsideration is a closer question. Appellant moved for

reconsideration and urged the court to revise its judg-

ment in light of what she described as newly discovered

evidence. Specifically, appellant presented deposition

testimony from a separate case (involving some of the

same parties) that showed CSB had not yet contemplated

a second loan to the Beyrers by September 2007. There-

fore, appellant argued, the district court’s finding that

the second loan was consideration for the assignment,

executed in June 2007, must be incorrect. The court dis-

missed this argument as simply “request[ing] that the

Court re-analyze the Proceeds Order in its entirety

as applied to her interests.” (R. 254 at 5.) While we

No. 12-2365 29

disagree with the district court’s characterization, we

do not think that the court abused its discretion in

rejecting the motion.

As a reminder, “[t]o prevail on a Rule 59(e) motion

to amend judgment, a party must clearly establish (1) that

the court committed a manifest error of law or fact, or

(2) that newly discovered evidence precluded entry of

judgment.” Blue, 698 F.3d at 598 (internal quotation

marks omitted). Here, we are concerned with the

second option: newly discovered evidence.

To succeed on a motion under Rule 59 [by

invoking newly discovered evidence], a party

must show that: (1) it has evidence that was dis-

covered post-trial; (2) it had exercised due dili-

gence to discover the new evidence; (3) the evi-

dence is not merely cumulative or impeaching;

(4) the evidence is material; and (5) the evidence

is such that a new trial would probably produce

a new result.

Envtl. Barrier Co., LLC v. Slurry Sys., Inc., 540 F.3d 598,

608 (7th Cir. 2008); see also Caisse Nationale de Credit

Agricole v. CBI Indus., Inc., 90 F.3d 1264, 1269 (7th Cir. 1996)

(“the moving party must show not only that this

evidence was newly discovered or unknown to it until

after the hearing, but also that it could not with rea-

sonable diligence have discovered and produced such

evidence during the pendency of the motion [for sum-

mary judgment]”) (internal brackets and quotation

marks omitted). We emphasize again that we review

the district court’s denial of a Rule 59(e) motion only for

abuse of discretion. Zivitz v. Greenberg, 279 F.3d 536, 539

30 No. 12-2365

(7th Cir. 2002). Here, we are convinced that the district

court did not abuse its discretion when it denied appel-

lant’s motion.

In the Rule 59 context, the moving party must clearly

establish that the new evidence “would probably pro-

duce a new result” in a new trial. Envtl. Barrier Co., 540 F.3d

at 608; see also Blue, 698 F.3d at 598 (moving party must

“clearly establish” grounds for relief). Certainly, the

evidence that appellant presented to the district court in

her motion for reconsideration casts a new light on

the court’s decision. Indeed, if the testimony is to be

believed, it appears that the court’s finding that the

second loan functioned as consideration for the assign-

ment was erroneous. Note, though, that this deposition

testimony does not clarify whether there actually was

consideration; it tells us only that the district court’s

supposition about the form of the consideration may

have been incorrect. So this new evidence was

potentially useful, even though it was not dispositive.

That is, while the deposition testimony might make a

different outcome in a hypothetical new proceeding

possible, it does not necessarily make such an outcome

probable. See Marcus & Millichap Inv. Servs. of Chi., Inc. v.

Sekulovski, 639 F.3d 301, 314 (7th Cir. 2011) (requiring

probability in the Rule 59 context).

Important to our ultimate decision is the abuse of

discretion standard under which we review the denial

of a Rule 59 motion. “A court abuses its discretion only

when no reasonable person could agree with the deci-

sion to deny relief.” Nelson v. Napolitano, 657 F.3d 586, 591

(7th Cir. 2011). Here, we think the substantive ques-

No. 12-2365 31

tion—whether the evidence would have made a dif-

ferent outcome probable—is a close one. That closeness,

though, speaks to the fact that reasonable people could

come to either conclusion. And because reasonable

people could conclude that the district court’s ultimate

decision was correct, we cannot find that the court

abused its discretion by denying the motion.

Furthermore, the timing is problematic for appellant.

The deposition in question was taken July 27, 2009,

during the course of another lawsuit, involving many

of the same parties as this case, about the fallout from

the failed dealership sale and the final disposition of the

assets involved in the sale. (R. 154 at 1.) Appellant was

a party to that lawsuit prior to filing for bankruptcy.

Though she now pleads ignorance to the developments

in that case after she was excused, appellant was

certainly aware that issues related to her interests were

being litigated and had the opportunity to inquire about

relevant testimony long before the district court entered

summary judgment. She failed to make such inquiries

until well into the litigation process, which does not

demonstrate due diligence on her part. Simply put, “[a]

party may not use a motion for reconsideration to intro-

duce new evidence that could have been presented ear-

lier.” Oto v. Metro. Life Ins. Co., 224 F.3d 601, 606 (7th

Cir. 2000).

The above considerations lead us to the conclusion

that the district court did not abuse its discretion in

denying appellant’s motion to reconsider. To have

abused its discretion, the court must have come to a

32 No. 12-2365

conclusion that no other reasonable person would reach.

Here, we think reasonable people could agree that the

evidence appellant presented did not qualify her for

relief under Fed. R. Civ. P. 59(e). Thus, we conclude

that the court did not abuse its discretion by denying

the motion.

III. C ONCLUSION

For the foregoing reasons, we A FFIRM the judgment of

the district court.

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