Strickland et al v. Broome
Filing
68
MEMORANDUM OPINION AND ORDER denying 50 Motion for Reconsideration ; declining to address 50 Motion to Amend/Correct. Signed by District Judge Keith Starrett on 3/14/18. (cb)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
EASTERN DIVISION
ELIZABETH L. STRICKLAND, et al.,
v.
PLAINTIFFS
CIVIL ACTION NO. 2:16-CV-124-KS-MTP
AMY ALYECE BROOME, et al.
DEFENDANTS
MEMORANDUM OPINION AND ORDER
For the reasons below, the Court denies in part and declines to address in
part Plaintiffs’ Motion for Reconsideration [50].
I. BACKGROUND
The Court provided the factual background of this case in its earlier opinion. See
Strickland v. Broome, No. 2:16-CV-124-KS-MTP, 2017 WL 4707032, at *1 (S.D. Miss.
Oct. 19, 2017). The Court granted USAA’s Motion to Dismiss [37] Plaintiffs’ claims of
breach of fiduciary duty and constructive trust. Id. at *3. First, the Court held that
Plaintiffs had not pleaded sufficient facts to demonstrate that this case falls within the
category of rare cases where an insurance transaction creates a fiduciary relationship.
Id. at *2-*3. Second, the Court held that it could not impose a constructive trust on
USAA because 1) USAA has no legal right to the proceeds of the insurance policy, and
2) USAA no longer possesses the funds at issue. Id. at *3. Plaintiffs filed a Motion for
Reconsideration [50] of the Court’s ruling, which the Court now addresses.
II. DISCUSSION
Plaintiffs seek reconsideration of the Court’s prior opinion under Rule 54(b),
which “allows parties to seek reconsideration of interlocutory orders and authorizes the
district court to ‘revise[ ] at any time’ ‘ any order or other decision . . . [that] does not
end the action.’” Austin v. Kroger Texas, L.P., 864 F.3d 326, 336 (5th Cir. 2017)
(quoting FED. R. CIV. P. 54(b)). “Under Rule 54(b), the trial court is free to reconsider
and reverse its decision for any reason it deems sufficient, even in the absence of new
evidence or an intervening change in or clarification of the substantive law.” Id. The
Rule’s flexible standard reflects “the inherent power of the rendering district court to
afford such relief from interlocutory judgments as justice requires.” Id. at 337 (quoting
Cobell v. Jewell, 802 F.3d 12, 25-26 (D.C. Cir. 2015)).
First, Plaintiffs argue that the Court erroneously assumed that Steven Broome
changed the beneficiary of the policy to Defendant Amy Broome. As the Court noted
in its prior opinion, Plaintiff alleged both that no one changed the policy beneficiary,
and that Amy Broome induced Steve Broome to change it. Amended Complaint at 4-6,
Strickland v. Broome, No. 2:16-CV-124-KS-MTP (S.D. Miss. June 21, 2017), ECF No.
31. But this factual issue is wholly irrelevant to the bases of the Court’s decision.
Regardless of whether Steven Broome changed the policy beneficiary, there was still
no fiduciary relationship between USAA and Plaintiffs, and the Court can not impose
a constructive trust on USAA for funds it no longer possesses.
Next, Plaintiffs again argue that the divorce judgment gave them an equitable
interest in the life insurance policy’s proceeds. As the Court previously held, it is not
necessary for the Court to address whether Plaintiffs actually possessed such an
equitable interest because they cited no authority in support of the proposition that an
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insurer becomes the trustee of a beneficiary once the policy benefits are due. In other
words, even if Plaintiffs had an equitable interest in the policy proceeds, it does not
necessarily follow that USAA was their fiduciary. As the Court noted, if an insurer
became the trustee of a beneficiary once policy benefits were due, it would effectively
abrogate Mississippi’s general rule that “ordinary insurance policy transactions” do not
create fiduciary relationships. Robley v. Blue Cross/Blue Shield of Mississippi, 935 So.
2d 990, 995-96 (Miss. 2006).1
Finally, Plaintiffs argue that the Court “overlooked” their claims of conversion
and breach of contract. But the Court did not address any claims of conversion or
breach of contract because USAA’s motion did not seek dismissal of any such claims.
Therefore, there is no decision for the Court to reconsider with respect to any purported
claims of conversion or breach of contract.
To the extent Plaintiffs seek leave to amend to add claims of conversion and
breach of contract, the Court declines to address this issue in ruling on the present
motion. Plaintiffs are free to file a separate motion seeking leave to amend.
III. CONCLUSION
For these reasons, denies in part and declines to address in part Plaintiffs’
1
Plaintiffs argue that cases addressing the lack of a fiduciary relationship
between an insurer and insured are distinguishable because Elizabeth Strickland
was a third-party beneficiary of the policy, rather than the insured. But, again,
Plaintiffs have not cited any Mississippi cases providing that an insurer owes a
fiduciary duty to a policy’s beneficiary. It seems implausible that the Mississippi
Supreme Court would find that an insurer has a fiduciary relationship with a thirdparty beneficiary, while it has explicitly rejected such a general rule with regard to
the insurer’s own policyholders.
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Motion for Reconsideration [50].
SO ORDERED AND ADJUDGED this 14th day of March, 2018.
/s/ Keith Starrett
KEITH STARRETT
UNITED STATES DISTRICT JUDGE
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