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Strickland v. Broome

United States District Court, S.D. Mississippi, Eastern Division

October 19, 2017

ELIZABETH L. STRICKLAND, et al., PLAINTIFFS
v.
AMY ALYECE BROOME, et al. DEFENDANTS

          MEMORANDUM OPINION AND ORDER

          KEITH STARRETT, UNITED STATES DISTRICT JUDGE.

         For the reasons below, the Court grants Defendant USAA's Motion to Dismiss [37]. Plaintiffs' claims of breach of fiduciary duty and constructive trust against USAA are dismissed with prejudice.

         I. Background

         This case involves a dispute over life insurance proceeds. In October 2002, Steve Broome and Plaintiff Elizabeth Strickland got divorced. The Final Judgment of Divorce incorporated the terms of a property settlement. Exhibit A to Amended Complaint at 2, Strickland v. Broome, No. 2:16-CV-124-KS-MTP (S.D.Miss. June 21, 2017), ECF No. 31-1. The property settlement provided: “Each party shall maintain the same amount of life insurance and keep the beneficiary the same.” Id. at 9. Plaintiff alleges that, at the time of the divorce, Steve Broome had a life insurance policy in the amount of $400, 000 with Plaintiff Strickland as the named beneficiary, and Strickland had a life insurance policy in the amount of $400, 000 with Plaintiff Elizabeth Lance Broome Revocable Trust as the named beneficiary.

         According to Plaintiffs, the divorce court held a contempt hearing in February 2004 to address Broome's failure to maintain the life insurance, among other things. But in July 2004, Broome requested that the primary beneficiary on his life insurance policy issued by Defendant USAA be changed from Defendant Amy Alyece Broome to the Plaintiff Trust, and USAA complied. Exhibit C to Amended Complaint at 25, 34-38, Strickland v. Broome, No. 2:16-CV-124-KS-MTP (S.D.Miss. June 21, 2017), ECF No. 31-3.

         Steve Broome died in August 2013. In September 2013, USAA paid the life insurance policy proceeds to Amy Broome, less an amount Steve Broome had assigned to a creditor.

         At some point between July 2004 and June 2009, the primary beneficiary on the policy had apparently changed. According to USAA records, Amy Broome was the primary beneficiary as of June 25, 2009, and at the time of Steve Broome's death. Id. at 55. The record contains no evidence as to how the change of beneficiary occurred, and Plaintiffs allege both that Steve Broome never changed the beneficiary, and that he was induced to do so by Amy Broome. Amended Complaint at 4-6, Strickland v. Broome, No. 2:16-CV-124-KS-MTP (S.D.Miss. June 21, 2017), ECF No. 31.

         Plaintiffs filed their Complaint in this Court on August 15, 2016, asserting claims against Amy Broome. On June 21, 2017, they filed an Amended Complaint, also asserting claims against USAA. USAA filed a Motion to Dismiss [37], which the Court now addresses.

         II. Standard of Review

         To survive a motion to dismiss under Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Great Lakes Dredge & Dock Co. LLC v. La. State, 624 F.3d 201, 210 (5th Cir. 2010) (punctuation omitted). “To be plausible, the complaint's factual allegations must be enough to raise a right to relief above the speculative level.” Id. (punctuation omitted). The Court must “accept all well-pleaded facts as true and construe the complaint in the light most favorable to the plaintiff.” Id. But the Court will not accept as true “conclusory allegations, unwarranted factual inferences, or legal conclusions.” Id. Likewise, “a formulaic recitation of the elements of a cause of action will not do.” PSKS, Inc. v. Leegin Creative Leather Prods., Inc., 615 F.3d 412, 417 (5th Cir. 2010) (punctuation omitted). “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009).

         III. Discussion

         A. Breach of Fiduciary Duty

         Defendant argues that Plaintiffs' breach of fiduciary duty claim must be dismissed because it owes no fiduciary duty to Plaintiffs. In response, Plaintiffs argue that insurers may, in fact, owe fiduciary duties to their insureds.

         To state a claim for breach of fiduciary duty, a plaintiff must show the existence of a fiduciary duty, and that the defendant breached such duty. Lowery v. Guaranty Bank & Trust Co., 592 So.2d 79, 83 (Miss. 1991). “[U]nder Mississippi law, there is no fiduciary relationship or duty between an insurance company and its insured in a first- party insurance contract.” Booker v. Am. Gen. Life & Accident Ins. Co., 257 F.Supp.2d 850, 856 (S.D.Miss. ...


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