Brock v. Prudential Insurance Company of America, Inc.
OPINION AND ORDER by Judge John E Dowdell ; dismissing/terminating case (terminates case) ; granting 11 Motion for Summary Judgment; denying 13 Motion for Summary Judgment; finding as moot 23 Motion for Miscellaneous Relief (Re: 2 Complaint ) (SAS, Chambers)
IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OKLAHOMA
PAUL R. BROCK,
PRUDENTIAL INSURANCE COMPANY OF
Case No. 14-CV-16-JED-TLW
OPINION AND ORDER
Before the Court are defendant Prudential Insurance Company of America, Inc.’s Motion
for Summary Judgment and Brief in Support (Doc. 11), and plaintiff Paul R. Brock’s Motion for
Summary Judgment and Brief in Support Thereof (Doc. 13). 1 Both motions are opposed. For
the reasons set forth below, the Court concludes that defendant’s Motion should be granted and
plaintiff’s Motion should be denied.
The following facts are undisputed. Plaintiff Paul Brock is the brother of Carl Brock,
who was a United States Army Sergeant at the time of his death on December 17, 2012. (Doc.
11 at 3, ¶¶ 1, 3). Sergeant Brock was enrolled in the Service Member’s Group Life Insurance
program (“SGLI”). (Id., ¶ 2).
On November 10, 2011, plaintiff was designated the beneficiary of Sergeant Brock’s
SGLI life insurance policy, which was issued by defendant Prudential Insurance Company of
Plaintiff’s Motion for Summary Judgment concedes that it is “substantially the same” as his
Response to defendant’s Motion for Summary Judgment, and was merely “brought to formally
place the issue of Plaintiff’s entitlement to judgment before the Court.” (Doc. 13 at 1). Thus, by
addressing the arguments in plaintiff’s Response to Prudential’s Motion for Summary Judgment,
the Court is also addressing the merits of plaintiff’s summary judgment motion.
America, Inc. (“Prudential”) and had a total death benefit in the amount of $400,000. (Id., ¶ 3).
The insurance contract makes clear that Prudential shall pay the amount of insurance purchased
by Sergeant Brock to Sergeant Brock’s beneficiary upon Prudential’s receipt of proof in writing.
The terms of the contract further state that any change in Sergeant Brock’s beneficiary is
effective “only by filing written notice thereof, over his signature, prior to his death with his
uniformed service or with the Office as required by the further provisions of this Section.” (Doc.
12 at 4, ¶ 1). On June 13, 2012, a change of designated beneficiary naming Irene Eridiano Brock
as the principal beneficiary was electronically was submitted to SGLI. On January 2, 2013, an
Army representative advised defendant that the beneficiary change was never certified by
Sergeant Brock’s digital or physical signature, per the requirements. (Doc. 11 at 3, ¶ 4; Doc. 12
at 5, ¶ 3).
Plaintiff made a claim for death benefits under the SGLI policy on January 15, 2013.
(Id., ¶ 5).
On February 25, 2013, the Army Criminal Investigation Department (“CID”)
informed Prudential that it had initiated an investigation regarding Irene Eridiano Brock’s
involvement in Sergeant Brock’s death and change in Sergeant Brock’s beneficiary designation.
(Id., ¶ 6). CID informed Prudential that it could be a “long” investigation. (Id., ¶ 6).
February 27, 2013, Prudential referred plaintiff’s claim to have the funds interpled. (Doc. 11,
Exh. 7). On March 28, 2013, Prudential determined that the claim was not ripe for interpleader
based on the pending CID investigation and the fact that Irene Eridiano Brock could still submit
a claim under the policy. (Doc. 11, Exh. 8). 2
Plaintiff has failed to meaningful object to this fact, which the Court finds is supported by the
record. See Fed. R. Civ. P. 56(e)(2) (“If a party . . . fails to properly address another party’s
assertion of fact as required by Rule 56(c), the court may . . . consider the fact undisputed for
purposes of the motion.”); LCvR 56.1(c) (“All material facts set forth in the statement of the
Prudential maintained communication with plaintiff’s counsel regarding the status of
plaintiff’s claim given the existence of an “unclear beneficiary” designation and the pending CID
(Id., ¶ 9).
Correspondence dated June 12, 2013 states that Prudential was
“await[ing] the result of [the CID] investigation in order to proceed with [plaintiff’s] claim.”
(Doc. 11, Exh. 9, at 3). The CID investigation was completed on or about October 9, 2013.
Defendant did not receive a copy of the CID report until January 9, 2014. (Id., ¶ 10). 3
Plaintiff initiated this lawsuit on January 13, 2014, seeking “full payment of $400,000 in
life insurance benefits” under the SGLI life insurance policy as a third-party beneficiary of the
contract, in addition to interest, costs, and attorney’s fees. (Doc. 2 at 2, ¶¶ 7-8). The parties
commenced settlement negotiations and could not agree on the interest rate applicable to the
proceeds of the SGLI policy. Prudential claimed it was only required to pay the usual amount of
interest paid on death proceeds, citing the terms of the policy, which provide that interest is set
“at a rate to be determined by the Insurance Company.” Plaintiff claimed that Prudential should
pay either the prejudgment interest rate, or the amount defendant earned on the proceeds during
the time they were held. Plaintiff claimed interest at a rate of 2.15 percent as of February 6,
2014. (Doc. 11 at 5, ¶¶ 13-15).
On February 11, 2014, Prudential paid plaintiff $400,000 representing the total proceeds
of the policy, plus interest in the amount of $2,333.62, calculated with the interest rate normally
paid by Prudential for death proceeds. The check was negotiated by plaintiff and his law firm on
material facts of the movant may be deemed admitted for the purpose of summary judgment
unless specifically controverted by the statement of material facts of the opposing party.”).
Plaintiff has also failed to meaningfully object to this fact. The October 9, 2013
correspondence includes a request for the CID report, and therefore plaintiff’s contention that
“Prudential did not request the results of the investigation until January 9, 2014” is without
merit. (See Doc. 12 at 4, ¶ 10). The exhibit further demonstrates that defendant requested the
CID report again on January 8, 2014. (Exh. 10, at 3).
February 13, 2014. (Id., ¶¶ 16-17). Plaintiff now argues that an interest rate of 15 percent is
proper pursuant to Okla Stat. tit. 36, § 3629(b). (Id., ¶ 18).
Summary judgment is appropriate only “if the movant shows that 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); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 250 (1986). “A fact is ‘material’ only if it might affect the outcome
of the suit under governing law.” Anderson, 477 U.S. at 248. There is no genuine issue of
material fact “unless there is sufficient evidence favoring the nonmoving party for a jury to
return a verdict for that party.” Id. at 249. The district court thus must determine “whether the
evidence presents a sufficient disagreement [about that material fact] to require submission to a
jury or whether it is so one-sided that one party must prevail as a matter of law.” Id. at 251-52.
The non-movant’s evidence should be taken as true, and all justifiable and reasonable inferences
are to be drawn in the non-movant’s favor. Id. at 255.
“Credibility determinations, the weighing of evidence, and the drawing of legitimate
inferences from the facts are jury functions, not those of a judge . . . ruling on a motion for
summary judgment. . . .” Id. “[A]t the summary judgment stage the judge’s function is not
himself to weigh the evidence and determine the truth of the matter but to determine whether
there is a genuine issue for trial.” Id. at 249.
Prudential argues that it is entitled to summary judgment because there is no genuine
dispute of material fact regarding Prudential’s performance of its obligations under the contract.
Specifically, Prudential argues that: (1) its payment of the life insurance policy proceeds to
plaintiff bars plaintiff’s breach of contract suit, and (2) it has satisfied its obligation to pay
interest to plaintiff. Plaintiff’s argument in response, which is also the main argument in its own
Motion for Summary Judgment, is that there exists a genuine dispute regarding whether
Prudential’s delay in paying plaintiff the proceeds constitutes a breach of the contract. (Doc. 12
A. Breach of Contract
Under Oklahoma law, plaintiff must prove the following in order to recover on his breach
of contract claim: (1) formation of a contract, 2) 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). Prudential asserts that its payment of the entire sum of the SGLI policy proceeds
to plaintiff on February 11, 2014 supports a judgment in its favor. (Doc. 11 at 6). In response,
plaintiff contends that he is entitled to judgment because Prudential’s delay constitutes breach of
the contract. Plaintiff also argues that Prudential’s defense of payment argument lacks merit
because the payment was made after the lawsuit was filed. (Doc. 12 at 7-9).
Based on the undisputed facts, the Court concludes that there is no material dispute
regarding plaintiff’s breach of contract claim. Plaintiff has failed to show that Prudential denied
his claim for benefits at any time. Instead, the evidence demonstrates that plaintiff was informed
that Prudential was awaiting the results of the pending CID investigation in order to process his
claim. (Doc. 11, Exh. 9, at 3). Prudential paid plaintiff the proceeds and accrued interest just
over a month after receiving the CID investigation report. (Doc. 11 at 5, ¶ 16). Plaintiff has
cited no law demonstrating that an insurer’s delay in payment of life insurance proceeds
constitutes breach of a contract. Nor has the Court uncovered any law to this effect.
The case cited by Prudential, Butterfly-Biles v. State Farm Life Ins. Co., 2010 WL
346839 (N.D. Okla. Jan. 21, 2010), supports the Court’s conclusion. In that case, a life insurance
beneficiary alleged that State Farm breached its insurance construct by refusing to timely pay her
benefits. Prior to initiation of the lawsuit, State Farm had informed plaintiff that it was awaiting
the results of an investigation regarding the cause of the insured’s death, in which she was a
suspect. Id. at *2). In its answer to plaintiff’s complaint, State Farm “admitted that it was ready,
willing, and able to make payment under the policy to the appropriate beneficiary or
beneficiaries,” and later interpleaded beneficiaries and deposited the funds with the court. Id. at
*5. Based on these facts, the district court determined that “State Farm has not refused to make
payment under the policy. Because it has not refused to pay benefits, State Farm cannot be liable
for breach of contract.” Id. The court thus granted State Farm’s motion for summary judgment
on the plaintiff’s breach of contract claim. Id. at *7.
Plaintiff has failed to assert a meaningful distinction between this case and Butterfly-Biles
that would counsel a different result here. 4 Drawing all inferences in plaintiff’s favor, the Court
cannot conclude that there is sufficient evidence such that a reasonable jury would find in favor
of plaintiff on its breach of contract claim. Prudential is therefore entitled to summary judgment.
B. Applicable Interest Rate
While the Court acknowledges that Colorado law governed the breach of contract claim in
Butterfly-Biles, the Court agrees with Prudential that there is no significant difference between
Oklahoma and Colorado law on the relevant principles of contract law. Moreover, it appears
that, like in Butterfly-Biles, any argument regarding delay of payment is more relevant to a bad
faith claim than a breach of contract claim. See Toppins v. Minnesota Life Ins. Co., 460 F. App’x
768, 771 (10th Cir. 2012) (unpublished) (under Oklahoma law, liability for breach of the implied
covenant of good faith and fair dealing requires “a clear showing that the insurer unreasonably,
and in bad faith, withholds payment of the claim of its insured.” (quoting Christian v. Am. Home
Assurance Co., 577 P.2d 899, 905 (Okla. 1977)). However, plaintiff has not asserted any claim
beyond the breach of contract claim.
Because the Court finds that judgment in favor of Prudential is proper, plaintiff’s
argument that it is entitled to interest under Okla. Stat. tit. 36, § 3629(B) is moot. To be clear,
Okla. Stat. tit. 36, § 3629(B) allows an award of costs and attorney fees to the “prevailing party”
upon the entry of judgment. If the insured is the prevailing party, interest is set at a rate of 15
Thus, Court’s determination that summary judgment in Prudential’s favor is
appropriate makes clear that plaintiff is not the prevailing party and therefore § 3629(B) is
inapplicable. 5 Accordingly, Prudential’s interest payment to plaintiff at a rate consistent with the
rate it normally pays for death proceeds was proper.
For the reasons stated above, defendant Prudential Insurance Company of America, Inc.’s
Motion for Summary Judgment and Brief in Support (Doc. 11) is granted, and plaintiff Paul R.
Brock’s Motion for Summary Judgment and Brief in Support Thereof (Doc. 13) is denied.
SO ORDERED this 27th day of March, 2017.
The Court rejects plaintiff’s argument that Prudential’s payment of proceeds after the initiation
of this lawsuit makes plaintiff a “prevailing party” for purposes of § 3629(B), because at no point
during these proceedings has a judgment been entered in plaintiff’s favor. The Tenth Circuit
recently emphasized the importance of a judgment in triggering § 3629(B): “We have recognized
that the ‘judgment’ requirement of § 3629(B) ‘applies equally to judgments entered pursuant to a
confession of judgment, a stipulation, a summary judgment, or any other final determination of
rights.’ Nevertheless, there still must be a judgment. And absent a judgment, [the insured]
cannot be the prevailing party.” Hayes Family Trust v. State Farm Fire & Cas. Co., 845 F.3d
997, 1009-10 (10th Cir. 2017) (quoting Yousuf v. Cohlmia, 741 F.3d 31, 46 (10th Cir. 2014)).
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