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 class action against State Farm Mutual 

Automobile Insurance Company (State Farm) alleging breach of contract. 

According to claimants, State Farm breached its uninsured motorist (UM) 

coverage policy by failing to provide claimants the full UM coverage limits 

available to insureds, resident relatives, and guest passengers, even though 

* This order and judgment is not binding precedent, except under the 

doctrines of law of the case, res judicata, and collateral estoppel. It may be 

cited, however, for its persuasive value consistent 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

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claimants paid UM coverage premiums on each policy. State Farm moved to 

dismiss the action on the ground that claimants failed to state plausibly how 

State Farm breached or otherwise acted contrary to the policy language. The 

district court granted State Farm’s motion. Because claimants indeed fail to 

state a plausible breach-of-contract claim, we affirm. 

BACKGROUND 

I. Factual Background 

Claimants are Oklahoma residents and customers of State Farm.1

 State 

Farm sold them UM coverage through multiple auto insurance policies on 

several vehicles. Claimants paid separate premiums on each policy, including a 

separate premium for UM coverage. Each policy offered UM coverage that 

protected three groups of potential vehicle 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 accidents claimants experienced and the UM benefits they 

recovered appear in their prior related state court actions. See Thurston v. State 

Farm Mut. Auto. 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 details are missing from the petition, and so we do 

not include or address them. 

2

 State Farm’s UM coverage promised to “pay compensatory damages for 

bodily injury,” meaning an injury to an “insured . . . caused by an accident that 

involves the operation, maintenance, or use of an uninsured motor vehicle.” 

App. 129 (emphases omitted). Under the policy, “insured” includes (1) “you”; 

(2) “resident relatives”; and (3) “any other person while occupying . . . your 

car,” whom we call guest passengers. Id. (emphases omitted). 

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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 multiple policies with separate 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 required insurers to stack, or 

aggregate, coverage when they charged multiple UM premiums for multiple 

vehicles, either on the same or separate policies.”). But since 2014, UM 

coverage in Oklahoma no longer stacks automatically. See § 3636(B) (“Policies 

issued, renewed or reinstated after November 1, 2014, shall not be subject to 

stacking or aggregation of limits unless expressly provided for by an insurance 

carrier.”).3

 So for people who buy multiple auto insurance policies, the UM 

coverage limits on each policy do not aggregate to create a singular UM 

recovery benefit, unless the insurance company says so explicitly.4 See id. 

3

 Because claimants’ policies renewed after November 1, 2014, the 

amendment prohibiting automatic stacking applied to each of their policies with 

State Farm. See § 3636(B). 

4

 Take this example. Say 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 one with $75,000. With nonstacking coverage, if the insured 

crashes with an uninsured motorist while riding in the first vehicle (carrying 

$25,000 of UM), then the insured will still recover the highest amount available 

among the three policies: $75,000. 

But with stacked coverage, the insured could have combined all three UM 

benefits to recoup the largest possible sum: $150,000. 

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Claimants’ auto policies with State Farm contain an Amendatory 

Endorsement that provides nonstacking 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 same 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 policies combined is the single 

highest applicable limit 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 highest amount available among the 

insured’s policies. Because the coverage is nonstacking, insureds and resident 

relatives derive no extra coverage from additional auto policies that carry lower 

(or the same) UM coverage than those the insured already owns because 

insureds and resident relatives will recover the highest amount anyway. But 

guest passengers only qualify as “insured[s] . . . while occupying” the vehicle 

covered by the UM policy. Id. at 129 (defining the third type of “insured” as 

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“any other person while occupying . . . your car”). So buying another UM 

policy for an additional vehicle carries some benefit because 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 filed 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 district 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”—meaning the full, tripartite coverage for insureds, 

5 Claimants filed their initial class-action petition on March 11, 2022. But 

claimants never served that petition on State Farm, so they filed an amended 

petition later, on September 7, 2022. The amended 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 claims 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 incorporated and holds its principal place 

of business in Illinois; so, the minimal diversity required under CAFA is met. 

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resident relatives, and guest passengers—but “for all other vehicles, it provided 

‘guest passenger’ coverage,” only. App. 97–98 ¶ 6. Yet despite 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 for “refus[ing] to provide UM coverage protecting the 

named insured and their resident relatives” 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 action on several grounds. In part, State 

Farm asserted that claimants failed to state 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 argued that claimants failed to plead a 

valid breach-of-contract claim because their petition “fail[ed] to indicate what 

policy provision State Farm purportedly breached, and [it] fail[ed] to explain 

what State Farm did to allegedly violate such provision.” App. 166. And under 

Oklahoma precedent, State Farm contended, claimants’ theory for recovery 

7

 State Farm additionally submitted that claimants’ claims were barred by 

claim preclusion and issue preclusion, and that the claims offended Oklahoma’s 

rule against claim-splitting due to Thurston’s prior state court action against 

State Farm that arose from the same set of facts. See Thurston I, 478 P.3d at 

417. 

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“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 dismiss. After mining Thurston I for the findings and conclusions 

relevant to claimants’ petition, the court observed that “this case presents the 

same issues as Thurston I, packaged in a slightly different form.” Sharp v. State 

Farm Mut. Auto. 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 determined that issue preclusion barred 

claimants’ action in federal court.9 Id. at *3. 

8

 In Thurston I, Thurston sued State Farm in Oklahoma state court for 

fraud, breach of contract, bad faith, and failure to procure appropriate coverage 

because, he contended, State Farm’s accepting multiple premiums on separate 

UM policies constituted an “express[] provi[sion] for stacking,” under 

§ 3636(B). 478 P.3d at 418. Reviewing an interlocutory summary adjudication 

ruling for State Farm, the Oklahoma Supreme Court analyzed the Amendatory 

Endorsement in Thurston’s policy (the same 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 reasonable-expectations doctrine 

because it found no ambiguity in State Farm’s policy language. Id. Then, 

regarding the premiums, the court held that “[a]cceptance of separate premiums 

alone is not an express provision for stacking.” Id. The court recognized that 

Oklahoma law mandated State Farm to offer 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 “parallel” to Thurston’s, and 

so “the findings of the court in Thurston I apply equally to [both] claims.” 

Sharp, 2023 WL 2816856, at *4. 

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 Claimants then filed a timely notice of appeal asking this court to review 

the district court’s decision to grant State Farm’s motion to dismiss. We have 

jurisdiction under 28 U.S.C. § 1291. 

STANDARD OF REVIEW 

 We review de novo the district court’s decision on a Rule 12(b)(6) 

motion, applying the same standards as the district court. Sagome, Inc. v. 

Cincinnati Ins. Co., 56 F.4th 931, 934 (10th Cir. 2023). To survive a motion to 

dismiss, a plaintiff’s complaint “requires more than labels and conclusions,” 

and the “[f]actual allegations 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. Benefit Life Ins. Co., 63 F.4th 1264, 

1275 (10th Cir. 2023) (brackets omitted) (quoting Ashcroft v. Iqbal, 556 U.S. 

662, 678 (2009)). 

 Further, this court is “entitled to affirm a district court on alternative 

grounds” so long as “those grounds are adequate, apparent in the record, and 

sufficiently illuminated by counsel 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 burden under Rule 12(b)(6) to allege a 

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plausible claim for breach of contract. And so we affirm the district court on 

that alternate ground, without reaching the preclusion 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 provide an added UM benefit for guest passengers, 

only. App. 98 ¶ 6. Claimants perceive this imbalance between the premiums 

charged and coverage extended as a breach of State Farm’s policy. State Farm 

disagrees and resolves that its policy language unambiguously forbids stacking 

and by extension provides the “three-pronged” UM coverage that claimants say 

was promised. Resp. Br. at 23. So according to State Farm, the UM coverage 

was delivered exactly as promised, and thus claimants fail to articulate a valid 

breach-of-contract claim. We agree. 

10 Much of claimants’ briefing to this court focuses on issue preclusion 

and their argument that the district court erred in concluding that the claim 

alleged in this litigation 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 accepting multiple premiums on separate policies constituted 

a breach of contract. Claimants highlight the difference between the state and 

federal actions by distinguishing the recovery sought in each case. Claimants 

explain that had Thurston “prevailed in Thurston I, he would have had access to 

$75,000 in additional stacked coverage,” whereas here, “if Thurston prevails 

. . . he will individually recover several hundred dollars in [premium] 

overcharges collected by State Farm.” Principal Br. at 14. 

Because claimants fail to allege a plausible breach-of-contract claim, we 

decline to address issue preclusion or the attendant arguments. 

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Because this is a diversity 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 the second element, claimants have not sufficiently 

alleged that State Farm in fact breached the policy.

Claimants argue that their claim relies on “the express terms of the 

insurance contract,” which they “extensively quote[]” in the petition. Principal 

Br. at 15. From the policy, claimants note that the UM provision purportedly 

covers “you,” “resident relatives,” and “any other person while occupying . . . 

your car”; for the first two groups, they argue, “State Farm refuses to provide 

for any UM coverage purchased after the coverage on the first insured vehicle.” 

App. 99 ¶ 14. Though claimants acknowledge that “State Farm does provide 

coverage for subsequent vehicles for . . . guest passenger[s],” they maintain 

that they “would not have paid for ‘UM’ coverage if they had 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 byproduct of the policy’s nonstacking 

arrangement. On the stacking point, claimants allege that, “[b]ased on the 

parties’ express contractual relations and their prior course of dealing,” they 

“had a reasonable expectation that paying a separate premium for UM coverage 

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under multiple policies would stack.” App. 98 ¶ 11. But claimants also 

acknowledge that “State Farm disclosed in an ‘Amendatory Endorsement’ that 

the ‘[UM coverage] limits of such policies will not be added together to 

determine the most that may be paid.’” Id. Then, they repeat 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 failed 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 Farm failed and refused to 

advise [them] . . . that they were purchasing two different kinds of coverage,” 

which we understand to mean 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 liberally, we struggle to reconcile them with claimants’ 

later admission that “State Farm disclosed in an ‘Amendatory Endorsement’ 

that the ‘[UM coverage] limits . . . will not be added together.’” App. 98 ¶ 11. 

This statement reveals claimants’ understanding that their UM coverage no 

longer stacked after 2014. And though claimants may feel that they were 

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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 occurs 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 that State Farm failed to 

perform its duty to deliver “the coverage promised,” App. 101 ¶ 25, which 

claimants consistently call “three-pronged 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 Amendatory Endorsement 

eliminated stacking. So in implementing the Amendatory Endorsement, State 

Farm essentially revoked any promise that it would provide UM coverage the 

same as it had before 2014. 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 alleged, 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 coverage 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 charging the same premium). And maybe 

they did. But the crux of that dispute lies with the consideration, not the 

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performance, of the policy. Adequacy of consideration falls outside our 

bailiwick assuming the claimants consented freely to the policy terms. See 

Cassity v. Pitts, 839 P.2d 192, 195 (Okla. 1992) (“Even gross inadequacy of 

consideration, standing alone, is not enough upon which to cancel a contract.” 

(citation omitted)); Meadows v. Neal, 174 P. 753, 754 (Okla. 1918) (“In the 

absence of fraud or overreaching, the adequacy of the 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 coverage would not stack. App. 98 ¶ 11. 

State Farm may have offered claimants a bad deal, but they agreed to it. And a 

bad deal, alone, does not amount 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 amend 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 the first time in a reply brief.” (citation 

omitted)). 

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