* This order and judgment is not binding precedent, e xcept under the

doctrines of law of the case, res judicata, and col lateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3. 

## F I L E D United States Court of Appeals Tenth Circuit 

### MAR 12 2003 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

MATTHEW APPLEGATE, an individual,

Plaintiff-Appellant,

v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a foreign corporation,

Defendant-Appellee. No. 02-7055 (D.C. No. 01-CV-497-S) (E.D. Okla.)

ORDER AND JUDGMENT *

Before KELLY , McKAY , and O’BRIEN , Circuit Judges.

After examining the briefs and appellate record, th is panel has determined unanimously that oral argument would not materiallyassist the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). T he case is therefore ordered submitted without oral argument.-2-

In this diversity case, plaintiff Matthew Applegate appeals from the district court’s grant of summary judgment to defendant Stat e Farm Mutual Automobile Insurance Company (State Farm) on Mr. Applegate’s c omplaint alleging that State Farm mishandled his insurance claim. We exercise j urisdiction under 28 U.S.C. § 1291, and affirm.

I. Background In 1998 sixteen-year-old Matthew Applegate was ridi ng as a passenger in his parent’s car, which was driven by fifteen-ye ar-old Nicole Underwood. The car collided with a vehicle driven by Mitchell Plett, seriously injuring Mr. Applegate’s spine. As a result of the accident , Mr. Applegate is now a quadriplegic. State Farm representative Greg Ellis was assigned the initial insurance claim for Mr. Applegate. The Applegate family had three cars insured with State Farm, with two carrying uninsured/underinsured moto rist (UM) coverage limits of $25,000 per person, and one carrying UM coverage li mits of $10,000 per person. When he discovered possible UM claims, Ellis transf erred those claims to Kris King in State Farm’s separate UM unit. Ellis retai ned the liability portion of Mr. Applegate’s claim, which included claims agains t Underwood and Plett. Nicole Underwood’s parents were also insured by State Farm, so Ellis contacted their agent’s office to determine whetherthey had any policy coverage-3-

applicable to the accident. When told that they ha d several policies, Ellis states that he requested a staff member in the agent’s off ice to set up a claim on the policy in the Underwood household with the highest auto liability limits. According to Ellis, the staff member told him that it appeared that all of the policies in the Underwood household had liability l imits of $25,000 per person. The staff member ultimately reported the liability claim on a policy covering a Plymouth Voyager for $25,000. In October 1998 Ellis advised the Applegate family of the Underwood policy and sent them a certificate of coverage show ing the policy number and liability limit. Meanwhile, Kris King separately o ffered the Applegates $60,000, representing the stacked per-person UM coverage lim its on each of the Applegate’s three policies. Because Matthew Appleg ate was a minor, King retained attorney Jon Starr to obtain court approva l of the proposed settlement. In January 1999 Starr contacted the Applegate famil y’s attorneys, Jim and Nancy Lloyd, and indicated Starr’s authorization to forma lly settle the UM claims. Additionally, Starr advised the Lloyds of his autho rity to settle the liability claims for $85,000, representing $50,000 from a policy on the Plett vehicle, $10,000 from a policy on the Applegate vehicle, and $25,000 from the policy maintained by the Underwoods, for a total settlement offer of $145,000.00.-4-

On January 19, 1999, the Lloyds separately requeste d Starr, King, and Ellis to send certified copies of the declaration sheets for all of the policies in effect at the time of the accident. Ellis responded one w eek later by sending the Lloyds a certificate of coverage verifying the policy limi ts on the Underwood’s liability policy. On Friday, January 29, Ellis discovered another pol icy owned by the Underwoods that had a liability limit of $100,000.0 0 per person. Ellis informed Starr of the discovery that day and informed the Ll oyds on the following Monday. Ellis evaluated the claim under the higher policy a nd ultimately received authority to offer $100,000.00 in place of the $25,000.00 pol icy. Accordingly, Starr formally offered to settle all of Mr. Applegate’s c laims for $220,000.00, and requested the Lloyds to advise Starr when the Apple gates were ready to move forward with the settlement and court authorizationprocess. The Lloyds responded by letter, dated July 13, 1999, indicatin g that the Applegates were ready to proceed. Starr scheduled a court date forJuly 29, 1999, but the Applegates canceled. Soon after, Matthew Applegate turned eighteen, and State Farm paid him $60,000 in UM benefits. The parties never settled the liability claims, and Mr. Applegate sued. Mr. Applegate’s complaint alleged deceit, breach of contract, institutional bad faith, and negligent training and supervision. The allegations derived from-5-

Mr. Applegate’s belief that Ellis had knowledge of the higher Underwood policy from the beginning, and that he withheld this information and attempted to force the Applegates into settling for the smaller amount . State Farm subsequently moved for summary judgment, and the district court granted the motion by order dated March 21, 2002. Mr. Applegate’s appeal raise s two issues in connection with the district court’s order.

II. Standard of Review When reviewing a diversity action, we look to state substantive law, but we follow federal law in determining the propriety of the district court’s grant of summary judgment. Eck v. Parke, Davis & Co., 256 F.3d 1013, 1016 (10th Cir. 2001). “We review the district court’s grant of su mmary judgment de novo, applying the same legal standard used by the district court.” Simms v. Okla. ex rel. Dep’t of Mental Health & Substance Abuse Servs., 165 F.3d 1321, 1326 (10th Cir. 1999). Summary judgment is proper if th e moving party shows “that there is no genuine issue as to any material fact a nd that the moving party is entitled to a judgment as a matter of law.” Fed. R . Civ. P. 56(c). “[T]he substantive law will identify which facts are mater ial. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual di sputes that are irrelevant or unnecessary will not be counted.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,-6-

248 (1986). “[A]n issue of material fact is genuin e only if the nonmovant presents facts such that a reasonable jury could fi nd in favor of the nonmovant.” Simms, 165 F.3d at 1326. In considering whether summary j udgment was appropriate, “we view the evidence and draw reasonable inferences therefrom in the light most favorable to the nonmoving party.” Id.

III. Deceit Claim Granting State Farm’s motion for summary judgment o n Mr. Applegate’s cause of action for deceit, the district court conc luded: [P]laintiff cannot establish this cause of action b ecause there is no evidence of a representative of State Farm deceivin g him. Plaintiff testified he never spoke to anyone at State Farm an d never saw any correspondence from State Farm regarding his case. Further, plaintiff’s father testified he did not notify plai ntiff of the $25,000.00 offer until after the $100,000.00 offer was made. In fact, plaintiff still has not accepted the $100,000.00 offer. An e ssential element of a fraud or deceit claim is reliance on the misrepre sentation by the person claiming injury. There is absolutely no evi dence plaintiff relied on any representation made by State Farm sin ce no representation was made to him and he apparently di d not act on any representation. . . . [P]laintiff has simply faile d to produce evidence showing that defendant State Farm tried to deceive him. Aplt. App. Vol II, doc. 10 at 7-8 (citation omitted ). On appeal, Mr. Applegate argues that these statements demonstrate that “the trial court incorrectly assumed that because the misrepresentation at issue was mad e to [Mr. Applegate’s] attorney and not directly to [Mr. Applegate], the m isrepresentation was not actionable.” Aplt. Br. at 11. In response, State Farm argues that the particular-7-

recipient of the alleged misrepresentation in this case is immaterial because Mr. Applegate has not demonstrated a cause of actio n for deceit in any event. We agree. As the district court correctly noted, to establisha cause of action for deceit under Oklahoma law a plaintiff must prove: (1) the defendant made a material misrepresentation ; (2) that it was false; (3) the defendant made the representation kn owing it was false or in reckless disregard of the truth; (4) that the defendant made it with the intention that it should be acted upon by the plaintiff; (5) that plaintiff acted in reliance upon it; and (6) t hat plaintiff thereby suffered injury. Sturgeon v. Retherford Publ’ns, Inc., 987 P.2d 1218, 1228 (Okla. Ct. App. 1999) (emphasis omitted) (citing Ramsey v. Fowler, 308 P.2d 654, 656 (Okla. 1957)). Most obvious in the present case is Mr. Applegate’s failure to demonstrate that he acted on the alleged misrepresentation of the liabi lity claim and that he has suffered injury as a result. Neither Mr. Applegate nor his representatives accepted the offer on the lower policy limit, which Mr. Applegate claims was purposefully understated. Additionally, Mr. Appleg ate has produced no evidence that he suffered injury as a result of the offer itself. Finally, because Mr. Applegate has also not accepted the $100,000.00 offer, he cannot plausibly claim that he has suffered from not receiving that money. On summary judgment, issues concerning all other elements of the claim b ecome immaterial if the plaintiff does not come forward with sufficient evi dence on any essential element-8-

of the cause of action. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998). Accordingly, because Mr. Applegate failed to make a showing that he suffered injury as a result of his reliance on the alleged misrepresentation, the district court properly granted summary judgment for State Farm on Mr. Applegate’s claim of deceit.

IV. Bad Faith Claim Mr. Applegate also contends the district court erre d by granting State Farm summary judgment on his claim of bad faith. This c ause of action was originally based on allegations that State Farm’s purposeful m ishandling of his claims was “consistent with approved company-wide practices orpolicies which reward and encourage the systematic reduction or avoidance of the payment of claims in an effort to utilize its claim-handling process as a p rofit center for the company.” Aplt. App. Vol. I, doc. 1 at 5. In its motion for summary judgment, State Farm argued that the only policy limits in controversy w ere those issued to the Underwoods. State Farm then correctly advised the court that Oklahoma law does not impose a duty of good faith on insurance compan ies to persons who are not parties to the underlying insurance agreement and therefore does not recognize a bad faith tort action against an insurer by thirdparties.-9-

In his response, Mr. Applegate assured the court th at his bad faith claim was unrelated to any third-party claim based on the Underwood policies. Mr. Applegate stated: Throughout the course of this lawsuit, counsel for Plaintiff has repeatedly advised counsel for State Farm that no c laim is being made for recovery under a third-party bad faith the ory. Although well written and thoroughly researched, State Farm’ s argument concerning third-party bad faith has no applicationto this lawsuit as no claim for third-party bad faith has been made he re. Plaintiff’s bad faith claim relates to State Farm’s handling of his first- party UM claim. Aplt. App. Vol. I, doc. 5 at 7. The district courtspecifically relied on these statements and, consequently, limited its discussio n of the bad faith cause of action to Mr. Applegate’s arguments concerning his UM claims. The court ultimately rejected those arguments, and Mr. Appleg ate has abandoned them in this appeal. Mr. Applegate now contends that the district court ignored two additional arguments concerning the issue of State Farm’s bad faith: (1) “State Farm assumed a duty of good faith to third parties and breached that duty”; and (2) “State Farm adopted a hairsplitting, hyper-tech nical interpretation of the duty of good faith toward an insured pursuing both first and third-party claims.” Aplt. Br. at 14. In each of these arguments, howev er, Mr. Applegate attempted to raise issues concerning State Farm’s mishandling of the Underwood policies, thus-10-

directly contradicting his specific assurances to the district court that his bad faith cause of action concerned only the UM claims. Mr. Applegate should not be surprised that the district court did not consider them. Moreover, we have carefully reviewed the substance of these arguments in light of the entire record in this appeal, and we conclude that they are witho ut merit. Accordingly, the district court properly granted summary judgment for State Farm on Mr. Applegate’s claim of bad faith. The judgment of the United States District Court fo r the Eastern District of Oklahoma is AFFIRMED.

Entered for the Court
Paul J. Kelly, Jr. Circuit Judge