Allianz Life Insurance Company of North America v. Muse et al
Filing
167
ORDER granting 141 Motion in Limine. Signed by Honorable Charles Goodwin on 01/09/2020. (jb)
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
ALLIANZ LIFE INSURANCE
COMPANY OF NORTH AMERICA,
Plaintiff/Counterclaim Defendant,
v.
GENE L. MUSE, M.D.,
Defendant/Counterclaimant;
and
PATIA PEARSON,
Defendant.
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No. CIV-17-1361-G
ORDER
Now before the Court is the First Motion in Limine (Doc. No. 141) filed by
Plaintiff/Counterclaim Defendant Allianz Life Insurance Company of North America
(“Allianz”). Defendant/Counterclaimant Gene L. Muse, MD (“Muse”), has responded
(Doc. No. 149), and the Court heard argument on the Motion on January 7, 2020. The
Court now issues its ruling.
There are three claims currently pending for trial: Allianz’s claims for fraud and
deceit and for conspiracy to commit fraud and deceit, both raised against Muse and
Defendant Patia Pearson; and Muse’s counterclaim for breach of contract, raised against
Allianz. Muse has asserted that as compensatory damages on his breach-of-contract
counterclaim, he will seek (i) “unpaid and underpaid benefit amounts owed under the
policy [from] June 2015 through the present time”1 and (ii) “the present value of the loss
of future policy benefits.” Defs.’ Trial Br. (Doc. No. 137) at 4.
In its First Motion in Limine, Allianz seeks an order prohibiting Muse from
presenting evidence of damages on his counterclaim based upon unpaid benefits for
services performed: (1) from April 22, 2017, through March 30, 2018; (2) from March 31,
2018, through the present date; and (3) beyond the present date. See Pl.’s First Mot. at 1.
The undersigned examines each period in turn and GRANTS the Motion as outlined herein.
A. April 22, 2017, to March 30, 2018
The Court has previously found that “Muse is not entitled to benefits under the
Policy for the home-health services performed by Pearson from April 22, 2017, through
March 30, 2018.” Order on Pl.’s Mot. Partial Summ. J. (Doc. No. 128) at 17. Muse does
not suggest, or support, that benefits are owing for services performed during this time
period by someone other than Pearson. Accordingly, a lack of payment of benefits during
this time is not a “detriment” caused by any breach by Allianz and is not a basis upon which
Muse may seek compensatory damages. Okla. Stat. tit. 23, § 21. Allianz’s Motion is
GRANTED in this respect.
B. March 31, 2018, to Present
Allianz argues that Muse cannot recover damages in the form of unpaid benefits for
this period because Muse has not submitted a proof of loss or claim for payment for services
performed after March 30, 2018. See Pl.’s First Mot. at 2-5 (citing Garrett v. Fairfield Ins.
Both parties use November 1, 2019—the date relied on by Muse’s expert—as the
“present” date in this context, and so the Court does the same for purposes of this Order.
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Co., No. 02-367-P, 2003 WL 23274567, at *8 (E.D. Okla. Oct. 22, 2003) (finding that
insured could not establish a valid claim under insurance contract when insured failed to
submit proof of loss prior to bringing suit as prescribed by the contract)); see also Policy
(Doc. No. 1-1) at 13, 17 (prescribing that Muse must submit proof of loss within 90 days
after the date of loss or as soon as it can reasonably be provided).
Citing Bourke v. Western Business Products, Inc., a decision of the Oklahoma Court
of Civil Appeals, Muse responds that Allianz’s “[b]reach/repudiation” of the Policy
excuses his compliance with the Policy’s requirement that the insured timely submit a proof
of loss. See Def.’s First Resp. at 7 (citing Bourke, 120 P.3d 876, 883 (Okla. Civ. App.
2005) (“[W]here a party to a bilateral contract repudiates the contractual obligation to
perform a required act in the future, the other party to the contract may treat the contract as
then breached and immediately pursue a remedy for breach of the contract.”)). By separate
order, however, the Court has found that Muse’s contract counterclaim premised upon a
theory of anticipatory repudiation fails as a matter of law and, therefore, Muse may not
present evidence in support of that theory at trial. It follows that Muse may not rely upon
the same anticipatory-repudiation argument to excuse his compliance with contract
requirements.2 Stated differently, it is conceivable that Allianz could have caused damage
Though Muse expresses doubt as to his ability to “trust in and do business with Allianz
in any form or fashion” given the current litigation, he does not provide authority for the
proposition that such distrust would allow him to ignore obligations under the Policy but
still be paid per its terms. Def.’s First Resp. at 10-11; cf. Bushey v. Dale, 75 P.2d 193, 196
(Okla. 1937) (“[M]ere expressions . . . of reluctance to perform [the contract], . . . are . . .
insufficient to constitute a breach of contract so as to relieve the opposite party from
tendering performance on his part.”).
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to Muse during this time by breaching the terms of the Policy in some manner, but it was
not by failing to pay a proof of loss that was never presented.
C. The Loss of Future Benefits
Finally, Allianz argues that unpaid-benefit damages that have not yet accrued cannot
be recovered on Muse’s breach-of-contract counterclaim. See Pl.’s First Mot. at 5-12.
First, Allianz argues, “[u]nder Oklahoma law, breach of an insurance policy yields only
those benefits that the insured should have been paid in the past and does not result in the
award of future damages.” Id. at 7-11 (citing Mid-Continent Life Ins. Co. v. Walker, 260
P. 1109 (Okla. 1926); Mid-Continent Life Ins. Co. v. Christian, 23 P.2d 672 (Okla. 1932);
Mass. Bonding & Ins. Co. v. Reeves, 145 P.2d 381 (Okla. 1944); Henderson v. Nat’l Fid.
Life Ins. Co., 257 F.2d 917 (10th Cir. 1958)). Muse makes no attempt to distinguish these
decisions, which do generally support the exclusion of future-damages evidence sought by
Allianz here. See, e.g., Christian, 23 P.2d at 675 (“Under the authorities just cited, plaintiff
would be entitled to recover in his cause of action for all benefits that had accrued under
the [disability] insurance contract at the time of filing his suit. And could amend his
petition to include such installments due up to the date of the amendment. But plaintiff
could not recover for installments that were not due. The court could not determine how
long said installments would continue to become due, because said matter is dependent
upon the conditions of health of plaintiff and the date of his death.”). Instead, Muse argues
that, applying Bourke, Allianz’s repudiation of the Policy excuses Muse from meeting its
conditions in the future—e.g., being certified as Chronically Ill, receiving assistance with
his Activities of Daily Living—in order to recover benefits. See Def.’s First Resp. at 194
20. For the same reasons noted above, the Court finds that Muse may not rely upon
Allianz’s anticipatory repudiation to forgo his obligations under the contract.
Second, Allianz asserts that Muse’s request for the present value of future Policy
benefits is too speculative and contingent upon external events to comprise proper damages
under Oklahoma law. See Pl.’s First Mot. at 11-13; Okla. Stat. tit. 23, § 21 (“No damages
can be recovered for a breach of contract, which are not clearly ascertainable in both their
nature and origin.”). The Court agrees. The Oklahoma Supreme Court has explained that
the “clearly ascertainable” statutory prescription means “without . . . uncertainty” and “that
the damage claimed must be made sure, certain, fixed, established, determined, and
settled.” Baker & Strawn v. Miller & Jones Bros., 235 P. 476, 478 (Okla. 1925). For Muse
to be entitled to payment under the express terms of the Policy, he has to: concurrently
meet several requirements, including certification as Chronically Ill; receive services
covered under the Policy; and submit claims in accordance with the Policy with no
applicable exclusion or limitation on those claims. See Policy at 13-14. Even assuming
these conditions were met prior to April 22, 2017, and even considering Muse’s proposed
medical testimony as to the chronic and worsening nature of his condition, under the facts
of this case it is improperly “contingent” and “speculative” for Muse to be awarded
damages based upon these conditions being met at some point in the future (and for the
remainder of the nearly 20-year life expectancy set forth by Defendants’ expert). Baker &
Strawn, 235 P. at 478.
For all these reasons, Allianz’s First Motion in Limine (Doc. No. 141) is
GRANTED.
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IT IS SO ORDERED this 9th day of January, 2020.
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