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Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 

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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

File Name: 19a0332n.06

No. 18-3532

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRUCE B. WHITMAN, Individually and on behalf 

of Joy Whitman and on behalf of Laura Whitman,

Plaintiff-Appellant,

v.

FREDERICK D. TUCKER; ALLIANZ LIFE 

INSURANCE COMPANY OF NORTH AMERICA,

Defendants-Appellees,

ESTHER WHITMAN, Executrix of the Estate and on 

behalf of Roy Whitman,

Defendant.

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ON APPEAL FROM THE 

UNITED STATES DISTRICT 

COURT FOR THE 

SOUTHERN DISTRICT OF 

OHIO

Before: MERRITT and LARSEN, Circuit Judges.

1

LARSEN, Circuit Judge. Bruce, Laura, and Joy Whitman asserted claims against Allianz 

Life Insurance Company of North America and one of its agents, Frederick Tucker, arising out of 

annuity contracts Allianz had executed with the plaintiffs’ deceased father. The district court 

granted judgment on the pleadings to Allianz and Tucker and refused to allow further discovery in 

the matter or another amendment to the complaint. The children appealed, and we AFFIRM.

 

1 The third member of this panel, Judge Damon J. Keith, died on April 28, 2019. This order is 

entered by the quorum of the panel. 28 U.S.C. § 46(d).

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I.

Roy Whitman bought several annuity contracts from Allianz in 2001. Each annuity, 

prepared by Allianz agent Frederick Tucker, named one of Roy’s three children from his first 

marriage (Bruce, Laura, and Joy, the plaintiffs below) as the annuitant. Each contract also 

provided that if Roy were to die before the annuitant, his rights under the annuities would “pass to 

the executor of [his] estate unless ownership has been otherwise assigned.” Roy passed away in 

2016, before any of his children. Roy’s second wife, Esther Whitman, was named executor of 

Roy’s estate. 

In April 2017, each of the three children made a claim for the distribution amount of the 

annuity for which he or she was listed as annuitant. Esther, as executor of Roy’s estate, rejected 

all three claims, contending that the annuity distributions were estate assets. The children then 

sued Esther in state court, and later asserted additional claims for professional negligence and bad 

faith against Allianz and Tucker. According to the children’s allegations, Roy had intended for 

them to receive the annuity distributions after he died, but Tucker had negligently failed to prepare 

annuities to reflect that intent. The children also alleged that Allianz had acted in bad faith by not 

immediately paying them the annuity distributions upon demand. 

Rather than take sides in the dispute between Esther and the children, Allianz removed the 

case to federal court as a statutory interpleader action under 28 U.S.C. § 1335. Allianz deposited 

the distribution amounts with the district court, id. at § 1335(a), so that the court could distribute 

the funds after determining the proper recipient. Esther and the children thereafter settled their 

differences and filed a joint motion requesting that the district court release the interpleaded funds 

to the children, with a small portion to Esther’s attorney. The district court released the 

interpleaded funds as requested and dismissed Esther from the action. 

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Allianz and Tucker moved for judgment on the pleadings under Rule 12(c) of the Federal 

Rules of Civil Procedure as to the children’s claims for negligence (against Tucker and Allianz) 

and bad faith (against Allianz only). The children opposed and asked that the district court first 

allow discovery and then decide the motions as summary judgment motions. The children also 

asked for leave to file a fourth amended complaint. The district court granted Allianz and Tucker’s 

motions and denied the children’s, holding that: (1) the negligent misrepresentation claims were 

barred by the statute of limitations; (2) annuity contracts could not give rise to tort claims of bad 

faith under Ohio law, and the children lacked the privity with Allianz necessary to assert such 

claims anyway; and (3) because of these legal defects, no amendment to the complaint or discovery 

could salvage the children’s claims. The children timely appealed.

II.

We review de novo the grant or denial of a Rule 12(c) motion. Rawe v. Liberty Mut. Fire 

Ins. Co., 462 F.3d 521, 526 (6th Cir. 2006). We accept the complaint’s factual allegations as true 

and “determine whether the plaintiff undoubtedly can prove no set of facts in support of his claim 

that would entitle him to relief.” Ziegler v. IBP Hog Market, Inc., 249 F.3d 509, 512 (6th Cir. 

2001). The standards for evaluating Rule 12(b)(6) motions and Rule 12(c) motions are 

functionally identical. Id. at 511–12. “We review the district court’s interpretation . . . of state 

law de novo.” Id. at 512. 

The district court properly determined that Allianz and Tucker were entitled to judgment 

on the pleadings as to the children’s negligent misrepresentation claims. Under Ohio law, a fouryear statute of limitations applies to professional negligence claims, including the children’s claim 

against Allianz and Tucker. See Ohio Rev. Code § 2305.09; Investors REIT One v. Jacobs, 546 

N.E.2d 206, 209–10 (Ohio 1989). The Ohio Supreme Court “has long recognized” that statutes of 

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limitations begin to run when the tortfeasor’s action occurs, even if “the actual injury is 

subsequent.” LGR Realty, Inc. v. Frank & London Ins. Agency, 98 N.E.3d 241, 245 (Ohio 2018)

(quotation marks omitted). There are two exceptions to this general rule. First, the discovery rule 

provides that “when an injury does not manifest itself immediately, the cause of action does not 

arise until the plaintiff knows or by the exercise of reasonable diligence should have known, that 

he had been injured by the conduct of the defendant.” Id. at 245–46 (quotation marks omitted). 

The second exception is the delayed-damages rule, which applies when “the wrongful conduct 

complained of is not presently harmful,” and so “the cause of action does not accrue until actual 

damage occurs.” Id. at 246.

The children assert that, per the delayed-damages rule, their negligent misrepresentation 

cause of action did not accrue until their father’s death in 2016, when they learned of Tucker’s 

alleged negligence in preparing the annuity contracts. They claim that no actual damage occurred 

until the annuities failed to provide them the distributions. But this argument is squarely foreclosed 

by LGR Realty. Id. at 248. There the Ohio Supreme Court held that the statute of limitations for 

a negligence claim against an insurance provider “began to run when [the insurance company] 

issued the insurance policy” that contained the alleged errors. Id. The court rejected the argument 

that no damages had occurred until the insured discovered the defects. Rather, “[i]f, as [the 

insured] argues, it was injured by the insurance policy containing the [defective provisions], [the 

insured] was damaged the moment it entered into the contract.” Id. For the same reasons, any 

harms arising from the allegedly defective annuity contracts arose “the moment [Roy] entered into 

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the contract” in 2001. Id. So the statute of limitations ran in 2005, over a decade before the 

children filed their claims against Allianz and Tucker.2

The children argue that the delayed-damages rule should apply here because they “were 

not aware of the negligence . . . until their claims for payout were denied.” But, in contrast to the 

discovery rule, the delayed-damages rule is not triggered when plaintiffs become aware of claims; 

it deals with when the damage occurs. Id. at 246. And to the extent the children invoke the 

discovery rule, that exception is likewise unavailing because it does not apply to professional 

negligence claims. Flagstar Bank, F.S.B. v. Airline Union’s Mort. Co., 947 N.E.2d 672, 535 (Ohio 

2011) (“In Investors REIT One, we explicitly rejected the application of the discovery rule 

for . . . causes of action [governed by Ohio Revised Code § 2305.09].”).

The children argue that LGR Realty announced a third exception to the normal accrual 

rules. They say this “unconscionability exception” applies broadly to any situation in which the 

statute of limitations would run out “before [the plaintiff] is even aware of [the claim’s] existence.” 

We do not see any new exception in LGR Realty. Rather, LGR Realty explains that Ohio courts 

 

2 The children argue that the delayed-damages exception should apply under the rule articulated 

in Kunz v. Buckeye Union Insurance Co., 437 N.E.2d 1194, 1197 (Ohio 1982). However, there is 

significant uncertainty over whether Kunz remains valid. A three-justice plurality opinion in LGR 

Realty distinguished Kunz on its facts and explicitly declined to address whether Kunz was still 

good law. 98 N.E.3d at 247. Two concurring justices, on the other hand, argued that LGR Realty 

and Kunz were directly in conflict and “cannot both be law.” Id. at 249–51 (DeWine, J., 

concurring). Ultimately, said the concurring justices, “Kunz has been overruled.” Id. at 251 

(DeWine, J., concurring).

We need not resolve this question. Even if Kunz is still good law, the reasons offered by 

the plurality in LGR Realty for distinguishing Kunz would also distinguish it here. The plurality 

in LGR Realty thought Kunz “not controlling” because the plaintiffs had purchased a new policy 

that contained the defects from inception, while the Kunz plaintiffs had purchased a policy that

initially reflected the parties’ intent, but which later became defective “when that individual policy 

was consolidated into the omnibus policy.” Id. at 522. Applying that analysis here, LGR Realty 

controls because it involves the purchase of new contracts rather than the consolidation of 

preexisting annuity contracts.

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“have judicially created or recognized an exception” to the normal accrual rules “only in the 

narrow circumstances in which application of the general rule ‘would lead to the unconscionable 

result that the injured party’s right to recovery can be barred by the statute of limitations before he 

is even aware of its existence.’” 98 N.E.3d at 247 (quoting Wyler v. Tripi, 267 N.E.2d 419, 422 

(Ohio 1971)). This language does not create a new exception; it explains the purposes of the “two 

primary exceptions” to the general rule, the discovery rule and the delayed-damages rule. Id. at 

245, 247. And no Ohio court has subsequently read LGR Realty to create a third exception to the 

accrual rules.

There is, in any event, an independent reason the claims cannot survive the Rule 12(c) 

motion; the children may not assert these claims under Ohio law. Ohio law grants a cause of action

for professional negligence only to individuals who personally received subpar advice or services 

from a professional. See Beard v. N.Y. Life Ins. & Annuity Corp., No. 12AP-977, 2013 WL 

4678105, at *7 (Ohio Ct. App. Aug. 27, 2013). Roy Whitman may have received subpar service 

from Tucker and Allianz, but the children did not—in fact, they were not involved in the process 

at all. As such, even if the statute of limitations had not run, the children would not themselves be 

entitled to bring these claims. Id.; cf. Shoemaker v. Gindlesberger, 887 N.E.2d 1167, 1168 (Ohio 

2008) (holding that “a beneficiary of a decedent’s will may not maintain a negligence action 

against an attorney for the preparation of a deed that results in increased tax for the estate”).

III.

The district court also correctly determined that the annuity contracts at issue in this case

did not give rise to an action for the tort of bad faith under Ohio common law. Insurers must act 

in good faith in processing claims, and an insurer’s failure to do so gives rise to a tort claim by the 

insured. See Zoppo v. Homestead Ins. Co., 644 N.E.2d 397, 399 (Ohio 1994). But annuity 

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contracts are not insurance contracts, and the mere happenstance that some Ohio statutes apply to 

both3 does not make annuity contracts “insurance” for all purposes. See Trangenstein v. Wheaton 

College Bd. of Trs., 773 N.E.2d 602, 604 (Ohio Ct. App. 2002) (“The ordinary annuity contract 

and the ordinary contract of life insurance are different in essential respects.” (alteration omitted)

(quoting Bronson v. Glander, 77 N.E.2d 471, 472 (Ohio 1948))). The children have pointed to no 

Ohio case—and we have found none—that has extended the bad faith tort to cover disputes over 

annuity distributions. Federal courts, of course, should “be extremely cautious about adopting

‘substantive innovation’ in state law,” Combs v. Int’l Ins. Co., 354 F.3d 568, 578 (6th Cir. 2004),

and the children have given us no reason to believe their position reflects existing Ohio law.

Ohio law “only recognizes an implied covenant of good faith and fair dealing in insurance 

contracts and in limited circumstances where the duty arises from the language of the contract.” 

Pappas v. Ippolito, 895 N.E.2d 610, 622 (Ohio Ct. App. 2008). The children have not pointed to 

any contract language that could create such a duty in these circumstances. And the logic 

underlying the Ohio Supreme Court opinions that created and defined the bad faith tort weighs

heavily against expanding it to include annuities generally. Those cases affirm that:

The imposition of the duty of good faith upon the insurer is justified because of the 

relationship between the insurer and the insured and the fact that in the insurance 

field the insured usually has no voice in the preparation of the insurance policy and 

because of the great disparity between the economic positions of the parties to a 

contract of insurance; and furthermore, at the time an insured party makes a claim 

he may be in dire financial straits and therefore may be especially vulnerable to 

oppressive tactics by an insurer seeking a settlement or a release.

 

3 See Ohio Rev. Code § 3902.01 (establishing “minimum standards for language used in policies 

and certificates of life insurance and annuities”); id. at § 3902.02 (defining “company” or “insurer” 

as “any entity authorized to do the business of life insurance and annuities, sickness and accident 

insurance, credit life insurance, or credit disability insurance; a fraternal benefit society; and a 

health insuring corporation”). 

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Hoskins v. Aetna Life Ins. Co., 452 N.E.2d 1315, 1319 (Ohio 1983) (alterations and quotation 

marks omitted). The considerations that underlie imposing extracontractual duties on an insured 

simply do not extend to annuities. As a general matter, a beneficiary or annuitant claiming 

entitlement to a distribution does not do so under pressing threat of liability or litigation.

Furthermore, Ohio courts have been wary of broadening the tort of bad faith, even within 

the insurance context itself. In Tokles & Son, Inc. v. Midwestern Indemnity Co., 605 N.E.2d 936, 

945 (Ohio 1992), the Ohio Supreme Court rejected an insurance company’s argument that the 

court should establish a mirror image tort for insurance companies to assert against insureds who 

file bad faith or fraudulent claims. And in Gillette v. Estate of Gillette, 837 N.E.2d 1283, 1286–

87 (Ohio Ct. App. 2005), the court held that only the insured may bring a bad faith claim against 

the insurer; third parties asserting liability against the insured cannot. All this counsels against our 

expanding the Ohio bad faith tort to the annuity context.

Finally, the children cannot assert a bad faith claim—even assuming such a claim could 

arise from an annuity contract—because the children were not in privity with Allianz. The 

contracts were between their father and Allianz. And “[i]n the absence of a contractual 

relationship . . . an insurer owes no duty of good faith to [third parties], and such a plaintiff is 

barred from bringing a claim for bad faith against the insurer.” Gillette, 837 N.E.2d at 1287; see 

also Eastham v. Nationwide Mut. Ins. Co., 586 N.E.2d 1131, 1133 (Ohio Ct. App. 1990) 

(“However, the insurer’s duty of good faith and fair dealing derives from and exists solely because 

of its contractual relationship with its insured. . . . ‘[W]e believe that liability for bad faith must 

be strictly tied to the implied-in-law covenant of good faith and fair dealing arising out of the 

underlying contractual relationship.” (emphasis added)). As such, the district court properly 

granted judgment on the pleadings to Allianz.

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IV.

We now review the denial of the children’s other motions. First, the children asked the 

district court to convert the Rule 12(c) motions to summary judgment motions and allow discovery 

before ruling on them. In support of their request, the children attached several documents they 

had received from Allianz which, they claimed, “clearly show evidence as to the negligent 

misrepresentation and bad faith alleged.” The district court denied the request “because additional 

facts are not necessary to rule on [the children’s] claims against Tucker and Allianz.” We review 

the denial of that motion for abuse of discretion. Coomer v. Fifth Third Bank, 811 F.2d 604, at *3 

(6th Cir. 1986) (table). 

The general rule is that when litigants present evidence outside of the pleadings in 

conjunction with a Rule 12(c) motion, and the district court does not specifically exclude these 

materials, the district court must convert the Rule 12(c) motion to a motion for summary judgment. 

Max Arnold & Sons, LLC v. W.L. Hailey & Co., Inc., 452 F.3d 494, 503 (6th Cir. 2006). But there 

was no reversible error here because Allianz and Tucker were entitled to judgment as a matter of 

law regardless of any “evidence as to the negligent misrepresentation and bad faith alleged.” A 

party asserting time-barred or legally insufficient claims cannot prolong litigation and force 

discovery under Rule 12(d) by submitting evidence not relevant to the grounds for dismissal. See

Max Arnold, 452 F.3d at 504 (finding no reversible error from the failure to give notice of 

conversion and opportunity for discovery because “all parties in fact had a sufficient opportunity 

to present pertinent materials” (emphasis added)); Strehlke v. Grosse Point Pub. Sch. Sys., 654 F. 

App’x 713, 718 (6th Cir. 2016) (same). Therefore, the outcome of these motions would be the 

same whether considered under Rule 12(c) or Rule 56. We find no reversible error. 

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The children also requested leave to file a fourth amended complaint in order to more 

explicitly allege that they lacked knowledge of the contract terms until their father’s death, which 

they believed would support their claim that the delayed-damages rule applies here. We review 

the district court’s denial of that request for abuse of discretion, Crosby v. Twitter, Inc., 921 F.3d 

617, 622 (6th Cir. 2019), and discern no basis for reversal. We, like the district court, assumed for 

the limitations period analysis that the children were unaware of the annuity contracts’ terms until 

their father’s death. Even so, the claims are barred for the reasons discussed above. As such, any

amendment would have been futile. Thiokol Corp. v. Dep’t of Treasury, State of Mich., Revenue 

Div., 987 F.2d 376, 382–83 (6th Cir. 1993). There was no abuse of discretion.

* * *

For the foregoing reasons, we AFFIRM the district court in all respects. 

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