UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

_________________________________ SHANNON SHARP; ERIC M. THURSTON, Plaintiffs - Appellants,

v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant - Appellee. No. 23-6067 (D.C. No. 5:22-CV-00854-R) (W.D. Okla.)

________________ _________________ ORDER AND JUDGMENT *

________________ _________________ Before HARTZ , PHILLIPS , and CARSON , Circuit Judges.

________________ _________________ Shannon Sharp and Eric M. Thurston (claimants) appeal the district court’s dismissal of their putative cl ass action against State Farm Mutual Automobile Insurance Company (State Farm) alleging breach of contract. According to claimants, State Farm br eached its uninsure d motorist (UM) coverage policy by failing to provide claimants the full UM coverage limits available to insureds, resident relativ es, and guest passengers, even though

* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicat a, and collateral estoppel. It may be cited, however, for its persuasive value co nsistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. FILED United States Court of Appeals Tenth Circuit 

### February 16, 2024 Christopher M. Wolpert Clerk of Court Appellate Case: 23-6067 Document: 010111001698 Date Filed: 02/16/2024 Page: 12 claimants paid UM coverage premiums on each policy. State Farm moved to dismiss the action on the ground that cl aimants failed to state plausibly how State Farm breached or otherwise acted contrary to the pol icy language. The district court granted State Farm’s mo tion. Because claimants indeed fail to state a plausible breach-of-c ontract claim, we affirm.
BACKGROUND
I. Factual Background Claimants are Oklahoma resident s and customers of State Farm. 1 State Farm sold them UM coverage throug h multiple auto insu rance policies on several vehicles. Claimants paid separate premiums on each policy, including a separate premium for UM coverage. Ea ch policy offered UM coverage that protected three groups of potential vehi cle passengers: named insureds, resident relatives, and guest passengers. 2

1 We cabin our discussion to the facts contained in the amended class-action petition as presented to the district court. More detailed facts surrounding the auto accident s claimants experienced an d the UM benefits they recovered appear in their prio r related state court actions. See Thurston v. State Farm Mut. Au to. Ins. Co. ( Thurston I ), 478 P.3d 415 (Okla. 2020); Am. Petition, Sharp v. Fennell , No. CJ-2018-2720 (Okla. D. Ct. Okla. Cnty. filed Feb. 18, 2020). But those de tails are missing from th e petition, and so we do not include or address them.

2 State Farm’s UM coverage promised to “pay compensa tory damages for bodily injury,” me aning an injury to an “insured . . . cau sed by an accident that involves the operation, maintenance, or use of an uninsu red motor vehicle.” App. 129 (emphases omitted). Under the po licy, “insured” includes (1) “you”; (2) “resident relatives”; and (3) “any other person while oc cupying . . . your car,” whom we call guest passengers. Id. (emphases omitted). Appellate Case: 23-6067 Document: 010111001698 Date Filed: 02/16/2024 Page: 23 By law, State Farm is required to offer this tripartite UM coverage for every policy it issues. See Okla. Stat. tit. 36, § 3636 (A), (H). Before 2014, UM coverages provided under mu ltiple policies with sepa rate premiums would add together, or “stack.” Thurston v. State Farm Mut. Auto . Ins. Co. ( Thurston I ), 478 P.3d 415, 419 (Okla. 2020 ) (“[W]e previously requir ed insurers to stack, or aggregate, coverage when they charged multiple UM premiums for multiple vehicles, either on the same or sepa rate policies.”). But since 2014, UM coverage in Oklahoma no l onger stacks automatically. See § 3636(B) (“Policies issued, renewed or reinstat ed after November 1, 2014, shall not be subject to stacking or aggregation of limits unless expressly provid ed for by an insurance carrier.”). 3 So for people who buy multiple auto insura nce policies, the UM coverage limits on each policy do not aggregate to create a singular UM recovery benefit, unless the insu rance company says so explicitly. 4 See id.

3 Because claimants’ policies rene wed after November 1, 2014, the amendment prohibiting automatic stacking ap plied to each of their policies with State Farm. See § 3636(B).

4 Take this example. Sa y an insured owns three auto policies with State Farm covering three vehicles—one with a UM coverage limit of $25,000; one with $50,000; and on e with $75,000. With nonstack ing coverage, if the insured crashes with an uninsured motorist whil e riding in the first vehicle (carrying $25,000 of UM), then the insured will still recover the highest amount available among the three po licies: $75,000. But with stacked coverage , the insured could have combined all three UM benefits to recoup the larg est possible su m: $150,000. Appellate Case: 23-6067 Document: 010111001698 Date Filed: 02/16/2024 Page: 34 Claimants’ auto policies with St ate Farm contain an Amendatory Endorsement that provides nonstac king coverage. The Amendatory Endorsement reads:
UNINSURED MOTOR VEHICLE COVERAGE . . . If Other Uninsured Motor Vehicle Coverage Applies
1. If Uninsured Motor Vehicle Coverage provided by this policy and one or more other vehicle policies issued to you or any resident relative by the State Farm Companies apply to the sa me bodily injury, then:

a. the Uninsured Motor Vehicle Coverage limits of such policies will not be added together to determine the most that may be paid; and b. the maximum amount that may be paid from all such policie s combined is the single highest applicable lim it provided by any one of the policies. We may choose one or more policies from which to make payment. App. 106 (emphases added). In plainer English, this Amendatory Endorsement lets an insured recover UM benefits once per accident in the highes t amount available among the insured’s policies. Because the coverage is nonstacking, insureds and resident relatives derive no extra coverage from additional auto policie s that carry lower (or the same) UM coverage than thos e the insured already owns because insureds and resident relatives will recover the highest amount anyway. But guest passengers only qualify as “insur ed[s] . . . while occ upying” the vehicle covered by the UM policy. Id. at 129 (defining the third type of “insured” as Appellate Case: 23-6067 Document: 010111001698 Date Filed: 02/16/2024 Page: 45 “any other person while occupying . . . your car”). So buying another UM policy for an additional vehicle carries some benefit beca use the new policy will protect guest passengers riding in that vehicle who would not otherwise have been covered by the insured’s existing policies on other vehicles.
II. Procedural History Based on State Farm’s accepting full UM coverage premiums for nonstacking UM coverage, claimants file d a putative class-action petition in Oklahoma state district court against State Farm for breach of contract. 5 State Farm removed the case to federal distri ct court under the Class Action Fairness Act (CAFA), 28 U.S.C. § 1332(d), based on diversity, asserted class size, and aggregated amount in controversy. 6 Soon after, State Farm moved to dismiss claimants’ breach-of -contract claim. In claimants’ petition, they alleged that “for the first vehicle, State Farm provided UM coverage”—me aning the full, tr ipartite coverage for insureds,

5 Claimants filed their initial class-ac tion petition on March 11, 2022. But claimants never served that petition on State Farm, so they filed an amended petition later, on Se ptember 7, 2022. The ame nded petition is the one we discuss throughout this order.

6 “CAFA permits a class action to be brought in or removed to federal court if the proposed classes include at least 100 persons with claims, the aggregate amount in controversy on all cl aims exceeds $5 million, [and] at least one proposed plaintiff and one defendant have diverse citizenship . . . .” Speed v. JMA Energy Co., LLC , 872 F.3d 1122, 1126 (10th Cir. 2017). Claimants are Oklahoma residents and State Farm is in corporated and holds its principal place of business in Illinois; so , the minimal diversity requir ed under CAFA is met. Appellate Case: 23-6067 Document: 010111001698 Date Filed: 02/16/2024 Page: 56 resident relatives, and guest passengers—but “for all other vehicles, it provided ‘guest passenger’ coverage,” only. App. 97–98 ¶ 6. Yet despit e this “different, lesser coverage,” State Farm “charge[d] and accept[ed] full premiums” on each policy. Id. at 98 ¶¶ 6, 9. On this basis, claimants raised a breach-of-contract claim against State Farm fo r “refus[ing] to provide UM coverage protecting the named insured and their resident relative s” on all covered vehicles and sought “recovery of premiums charged by State Farm for vehicles other than the first insured vehicle.” Id. at 99 ¶ 16, 101 ¶ 24. State Farm moved to dismiss the actio n on several grounds. In part, State Farm asserted that claimants failed to st ate a claim for relief under federal civil pleading standards and Oklahoma state law. 7 Under Federal Rules of Civil Procedure 8 and 12(b)(6), State Farm ar gued that claimant s failed to plead a valid breach-o f-contract claim because their petiti on “fail[ed] to indicate what policy provision State Farm purportedly breached, and [it] fail[ed] to explain what State Farm did to allegedly violat e such provision.” App. 166. And under Oklahoma precedent, State Farm contende d, claimants’ theory for recovery

7 State Farm additionally submitted that claimants’ claims were barred by claim preclusion and issue preclusion, an d that the claims offended Oklahoma’s rule against claim-splitting due to Thurst on’s prior state court action against State Farm that arose from the same set of facts. See Thurston I , 478 P.3d at 417. Appellate Case: 23-6067 Document: 010111001698 Date Filed: 02/16/2024 Page: 67 “was rejected by the Oklahoma Supreme Court” in the related state action, Thurston I

. 8 App. 160. Largely in light of Thurston I , the district court granted State Farm’s motion to dismi ss. After mining Thurston I for the findings and conclusions relevant to claimants’ petition, the cour t observed that “thi s case presents the same issues as Thurston I , packaged in a slight ly different form.” Sharp v. State
Farm Mut. Au to. Ins. Co. , No. Civ-22-854 , 2023 WL 2816856 , at *4 (W.D. Okla. Apr. 6, 2023). Given the sufficient “crossover” with the previous state court action, the district court dete rmined that issue preclusion barred claimants’ action in federal court. 9 Id. at *3.

8 In Thurston I , Thurston sued State Farm in Oklahoma st ate court for fraud, breach of contract, bad faith, and failure to pr ocure appropriate coverage because, he contended, State Farm’s accepting multiple premiums on separate UM policies constituted an “express[] provi[sion] for st acking,” under § 3636(B). 478 P.3d at 418 . Reviewing an interlocutory summary adjudication ruling for State Farm, the Oklahoma Supreme Court an alyzed the Amendatory Endorsement in Thurston’s policy (the sa me one before us) and concluded that the language unambiguously prohibited stacking. Id. at 421. At the outset, the court rejected Thurston’s argument under the reasonab le-expectations doctrine because it found no ambiguity in State Farm’s po licy language. Id. Then, regarding the premiums, the court held th at “[a]cceptance of separate premiums alone is not an express provision for stacking.” Id. The court recognized that Oklahoma law mandated State Farm to offe r full UM coverage under each auto policy it issued to Thurston. Id. (citing § 3636(A)).

9 Though Sharp was not a party in Thurston I , the court reasoned that “the legal rationale” behind Sharp’s allegations were “paralle l” to Thurston’s, and so “the findings of the court in Thurston I apply equally to [both] claims.” Sharp , 2023 WL 28168 56, at *4. Appellate Case: 23-6067 Document: 010111001698 Date Filed: 02/16/2024 Page: 78 Claimants then filed a timely notice of appeal asking this court to review the district court’s decision to grant Stat e Farm’s motion to dismiss. We have jurisdiction under 28 U.S.C. § 1291.
STANDARD OF REVIEW We review de novo the district cour t’s decision on a Rule 12(b)(6) motion, applying the same stan dards as the district court. Sagome, Inc. v.
Cincinnati Ins. Co. , 56 F.4th 931, 934 (10th Cir. 2023). To su rvive a mo tion to dismiss, a plaintiff’s complaint “requires more than labels and conclusions,” and the “[f]actual allegati ons must be enough to raise a right to relief.” Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555 (2007). So though “we accept the well-pleaded facts alleged as true,” we also “need not accept ‘threadbare recitals of the elements of a cause of action that are supported by mere conclusory statements.’” Clinton v. Sec. Be nefit Life Ins. Co. , 63 F.4th 1264, 1275 (10th Cir. 2023) (bra ckets omitted) (quoting Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009)). Further, this court is “entitled to a ffirm a district court on alternative grounds” so long as “those grounds are adequate , apparent in the record, and sufficiently illum inated by coun sel on appeal.” Walton v. Powell , 821 F.3d 1204, 1212 (10th Cir. 2016).
DISCUSSION Claimants implore that “[t]his case is simple.” Principal Br. at 4. We agree. Claimants have not met their bu rden under Rule 12 (b)(6) to allege a Appellate Case: 23-6067 Document: 010111001698 Date Filed: 02/16/2024 Page: 89 plausible claim for breach of contract. A nd so we affirm the district court on that alternate ground, w ithout reaching the preclusio n issues or arguments. 10
See Walton , 821 F.3d at 1212. State Farm and claimants agree that State Farm’s UM coverage is nonstacking. Their disagreement springs from State Farm’s accepting premiums for what claimants call “different, less valuable” coverage: the coverage on additional policies that pr ovide an added UM benefit for guest passengers, only. App. 98 ¶ 6. Claimants perceive this imbalance between the premiums charged and covera ge extended as a breach of St ate Farm’s policy. State Farm disagrees and resolves that its polic y language unambiguousl y forbids stacking and by extension provides the “three-prong ed” UM coverage that claimants say was promised. Resp. Br. at 23. So according to Stat e Farm, the UM coverage was delivered exactly as promised, and th us claimants fail to articulate a valid breach-of-contract claim. We agree.

10 Much of claimants’ briefing to th is court focuses on issue preclusion and their argument that th e district court erred in concluding that the claim alleged in this litigat ion is barred by Thurston I . In Thurston I , Thurston claimed that State Farm’s accepting the premiums created an express provision for stacking. Thurston I , 478 P.3d at 418. Before this court, claimants allege that State Farm’s accepti ng multiple premiums on se parate policies constituted a breach of contract. Claimants highlight the difference betw een the state and federal actions by distingu ishing the recovery sough t in each case. Claimants explain that had Thurston “prevailed in Thurston I , he would have had access to $75,000 in additiona l stacked coverage,” whereas here, “if Thurston prevails . . . he will individually recover se veral hundred dollars in [premium] overcharges collected by State Farm.” Principal Br. at 14. Because claimants fail to allege a pl ausible breach-of-cont ract claim, we decline to address issue preclusio n or the attendant arguments. Appellate Case: 23-6067 Document: 010111001698 Date Filed: 02/16/2024 Page: 910 Because this is a divers ity action, Oklahoma’s contract law applies. Automax Hyundai S., L.L.C. v. Zurich Am. Ins. Co. , 720 F.3d 798, 804 (10th Cir. 2013). In Oklahoma, a breach-of-contract claim requires a claimant to show “(1) formation of a contract; (2) breach of the contract; and (3) damages as a result of that breach.” Morgan v. State Farm Auto. Ins. Co. , 488 P.3d 743, 748–49 (Okla. 2021). Under th e second element, claima nts have not sufficiently alleged that State Farm in fact breached the policy. Claimants argue that their claim re lies on “the express terms of the insurance contract,” which they “extensively quote[]” in the petition. Principal Br. at 15. From the policy, claimants no te that the UM provision purportedly covers “you,” “resident relatives,” a nd “any other person while occupying . . . your car”; for the first two groups, they argue, “State Farm re fuses to provide for any UM coverage purchased after the coverage on the first insured vehicle.” App. 99 ¶ 14. Though clai mants acknowledge that “S tate Farm does provide coverage for subsequent vehicles for . . . guest passenger[s],” they maintain that they “would not have paid for ‘UM’ coverage if they ha d known they were actually purchasing only [guest passenger] UM.” Id. ¶¶ 14–15. The narrower coverage that State Farm provides on “subsequent vehicles,” to which claimants object, is a byproduc t of the policy’s nonstacking arrangement. On th e stacking point, claimants a llege that, “[b]ased on the parties’ express contractual relations an d their prior course of dealing,” they “had a reasonable expecta tion that paying a separate premium for UM coverage Appellate Case: 23-6067 Document: 010111001698 Date Filed: 02/16/2024 Page: 1011 under multiple policies wo uld stack.” App. 98 ¶ 11. But claimants also acknowledge that “State Farm disclosed in an ‘Amendatory Endorsement’ that the ‘[UM coverage] limits of such po licies will not be added together to determine the most th at may be paid.’” Id. Then, they rep eat the policy’s guarantee that “the amount paid will be the ‘single highest applicable limit provided by any one of the policies.’” Id. These quotations represent the extent of claimants’ effort to identify a provision of the policy that State Farm breached. But fatal to their claim, not once do claimants show that State Farm violated any of the above-quoted terms or that State Farm ever fa iled to deliver claimants UM coverage in the “highest applicable limit provided,” as the policy promises. See id. The most claimants do is assert that (1) “State Fa rm failed and refused to advise [them] . . . that they were purc hasing two different kinds of coverage,” which we understand to me an the pre-2014 stacking coverage and the post-2014 nonstacking coverage; and that (2) “[b]y continuing to tender separate premiums for UM coverage to State Farm, [claimants] were requesting UM coverage, and State Farm was promising to deliver same.” Id. ¶¶ 6, 10. Even construing these claims liberal ly, we struggle to reconc ile them with claimants’ later admission that “State Farm disclo sed in an ‘Amendat ory Endorsement’ that the ‘[UM coverage] limits . . . will not be added together.’” App. 98 ¶ 11. This statement reveals claimants’ unde rstanding that their UM coverage no longer stacked after 2014. And though claimants may feel that they were Appellate Case: 23-6067 Document: 010111001698 Date Filed: 02/16/2024 Page: 1112 overcharged for the UM premiums paid after this policy change, that grievance doesn’t fit within the elements of a breach-of-contract claim. Oklahoma law directs that “a breach occu rs when a party fails to perform a duty arising under or imposed by agreement.” Fretwell v. Protection Alarm
Co. , 764 P.2d 149, 151 (Okla. 1988). Claimants argue th at State Farm failed to perform its duty to deliver “the cove rage promised,” App. 101 ¶ 25, which claimants consistently call “three-pronge d UM coverage,” Principal Br. at 14. But practically, the “three- pronged UM coverage” claimants seek requires stacking. And as discussed above, all agree that the Amen datory Endorsement eliminated stacking. So in implementing the Amenda tory Endorsement, State Farm essentially revoked any promise th at it would provide UM coverage the same as it had before 20 14. Claimants cannot fault State Farm for failing to deliver something it never promised , especially when the Amendatory Endorsement advised them of the policy change and claimants continued to pay the premiums anyway. Based on the petition as allege d, we cannot ascertain a plausible breach-of-contract claim. Again, we suspect that claimants’ true quarrel lies with their feeling that they overpaid for guest passenger cove rage on their later-purchased UM policies. See Principal Br. at 15 (arguing that “[w]hat State Farm provided was only the third prong of UM coverage . . . known as ‘guest passenger coverage’” which was “less valuable,” despite ch arging the same pr emium). And maybe they did. But the crux of that disput e lies with the cons ideration, not the Appellate Case: 23-6067 Document: 010111001698 Date Filed: 02/16/2024 Page: 1213 performance, of the policy. Adequacy of consideration falls outside our bailiwick assuming the cl aimants consented freely to the policy terms. See Cassity v. Pitts , 839 P.2d 192, 195 (Okla. 1992) (“Even gross inadequacy of consideration, standing al one, is not enough upon which to cancel a contract.” (citation omitted)); Meadows v. Neal , 174 P. 753, 754 (Okl a. 1918) (“In the absence of fraud or overr eaching, the adequacy of th e consideration is solely the business of the parties.” (citation omitted)). Seeing no allegation to the contrary, we assume consideration is adequate. At bottom, claimants agreed to pay the separate premiums despite State Farm’s “disclos[ure]” that the UM co verage would not stack. App. 98 ¶ 11. State Farm may have offere d claimants a bad deal, but they agreed to it. And a bad deal, alone, does not amoun t to a breach of contract. 11
CONCLUSION For these reasons, we affirm. Entered for the Court
Gregory A. Phillips Circuit Judge

11 Claimants argue for the first time in their reply brief that the district court erred in declining to give them leave to amen d their petition. We do not address this argument. See Butler v. Daimler Trucks N. Am., LLC , 74 F.4th 1131, 1146 (10th Cir. 2023) (“ The general rule in this circuit is that a party waives issues and arguments raised for th e first time in a re ply brief.” (citation omitted)). Appellate Case: 23-6067 Document: 010111001698 Date Filed: 02/16/2024 Page: 13