FILED

United States Court of Appeals

Tenth Circuit

February 2, 2012

Elisabeth A. Shumaker

Clerk of Court

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

MELISSA LEIGH TOPPINS,

Plaintiff-Appellant,

v.

MINNESOTA LIFE INSURANCE

COMPANY,

Defendant-Appellee.

No. 11-5062

(D.C. No. 4:10-CV-00426-GKF-FHM)

(N.D. Okla.)

ORDER AND JUDGMENT*

Before KELLY, MURPHY, and HOLMES, Circuit Judges.

Melissa Leigh Toppins appeals the district court’s summary judgment in

favor of Minnesota Life Insurance Co. (“Minnesota Life”) on her claims that

Minnesota Life breached the duty of good faith and fair dealing by not paying her

the proceeds of a life insurance policy for 47 days after its receipt of her claim. 

We exercise jurisdiction under 28 U.S.C. § 1291 and affirm.

* After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist the determination of

this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is

therefore ordered submitted without oral argument. 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not binding precedent, except under the doctrines of law of the case, res judicata,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. 
Background

Ms. Toppins’s husband Timothy Toppins took out a million-dollar life

insurance policy with Minnesota Life. The policy was issued on August 26, 2008. 

Mr. Toppins was killed when the private aircraft in which he was a passenger

crashed on February 28, 2010. Ms. Toppins submitted the necessary claim form

and death certificate, which Minnesota Life received on March 17, 2010. Also on

March 17, 2010, because Mr. Toppins had died within two years of the policy

issue date, Minnesota Life began a routine investigation by referring its

investigation to a third-party vendor who, in turn, requested Joe Jolly to interview

Ms. Toppins. Mr. Jolly then interviewed Ms. Toppins by telephone on March 23,

2010. 

Legal counsel for Ms. Toppins became involved on March 29, 2010, and

directed Mr. Jolly to contact him, not Ms. Toppins. On March 31, 2010, Mr. Jolly

sent to counsel his report and a medical information release form, asking that

Ms. Toppins sign them. Rather than have his client sign the documents, counsel

demanded immediate payment and disputed Minnesota Life’s right to conduct an

investigation. Counsel filed the underlying lawsuit in Oklahoma state court on

April 22, 2010.

On April 27, 2010, Ms. Toppins’s counsel informed Minnesota Life that his

client did not have any changes to Mr. Jolly’s proposed written report. Based on

that representation and without requiring Ms. Toppins to sign the statement or

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provide medical authorizations, on April 29, 2010, Minnesota Life determined

that it would pay the policy, and contacted its reinsurer to confirm the decision. 

On April 28 and 29, 2010, Minnesota Life informed Ms. Toppins’s attorney that it

was awaiting confirmation from its reinsurer. On Friday, April 30, 2010, the

reinsurer confirmed the payment decision and on the following Monday, May 3,

2010, Minnesota Life sent a check in the amount of $1,007,043.76 to

Ms. Toppins, which represented the one-million dollar policy amount plus

statutory interest. 

Minnesota Life removed the lawsuit to federal court based on diversity

jurisdiction. See 28 U.S.C. § 1332(a). Eventually, the district court granted

Minnesota Life’s motion for summary judgment, concluding that Minnesota Life

did not act unreasonably or in bad faith. Ms. Toppins appeals, asserting that

summary judgment was improper on her claim that Minnesota Life breached the

duty of good faith and fair dealing.1

Standards of Review

“We review the district court’s grant of summary judgment de novo,

applying the same standards that the district court should have applied.” 

Cohen-Esrey Real Estate Servs., Inc. v. Twin City Fire Ins. Co., 636 F.3d 1300,

1 Ms. Toppins has waived all other claims by not arguing them in her

appellate briefs. Issues not argued to the appellate court are deemed waived. 

Ruiz v. McDonnell, 299 F.3d 1173, 1182 n.4 (10th Cir. 2002). 

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1302 (10th Cir. 2011) (internal quotation marks omitted). Summary judgment is

appropriate if “the movant shows that there is no genuine dispute as to any

material fact and the movant is entitled to judgment as a matter of law.” Fed. R.

Civ. P. 56(a). “We examine the record and all reasonable inferences that might

be drawn from it in the light most favorable to the non-moving party.” 

Cohen-Esrey Real Estate Servs., Inc., 636 F.3d at 1302 (internal quotation marks

omitted). In this diversity case, we must “apply Oklahoma law with the objective

that the result obtained in the federal court should be the result that would be

reached in an Oklahoma court.” Blanke v. Alexander, 152 F.3d 1224, 1228

(10th Cir. 1998) (internal quotation marks omitted). 

Analysis

Ms. Toppins challenges the district court’s conclusion that Minnesota Life

did not act unreasonably or in bad faith. She argues that Minnesota Life breached

its duty of good faith and fair dealing as follows: (1) it delayed payment while

waiting for the reinsurer’s confirmation of its decision to pay, (2) it delayed

payment while it waited for Ms. Toppins to sign her statement and complete the

medical records authorizations, (3) it engaged in a standard practice of conducting

underwriting review after an insured’s death, and (4) it did not pay on the policy

within 30 days of receipt of the claim. Ms. Toppins further argues that under

Oklahoma law, the question of whether an insurance company has violated the

duty of good faith and fair dealing is a jury question, disputed material facts

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precluded summary judgment, the fact that Mr. Jolly destroyed his interview

notes gives rise to a negative inference, and she was entitled to damages.

In Oklahoma, tort liability for breach of the implied covenant of good faith

and fair dealing requires “a clear showing that the insurer unreasonably, and in

bad faith, withholds payment of the claim of its insured.” Christian v. Am. Home

Assurance Co., 577 P.2d 899, 905 (Okla. 1977). The essence of the tort is failing

to promptly pay a claim “unless the insurer has a reasonable belief that the claim

is legally or factually insufficient.” Buzzard v. Farmers Ins. Co., 824 P.2d 1105,

1109 (Okla. 1991). “[T]o determine the validity of the claim, the insurer must

conduct an investigation reasonably appropriate under the circumstances. The

knowledge and belief of the insurer during the time period the claim is being

reviewed is the focus of a bad-faith claim.” Newport v. USAA, 11 P.3d 190, 198

(Okla. 2000) (internal quotation marks omitted). To make out a prima facie case

against an insurance company for a bad faith delay in payment, a plaintiff must

establish: 

(1) claimant was entitled to coverage under the insurance policy at

issue; (2) the insurer had no reasonable basis for delaying payment;

(3) the insurer did not deal fairly and in good faith with the claimant;

and (4) the insurer’s violation of its duty of good faith and fair

dealing was the direct cause of the claimant’s injury. The absence of

any one of these elements defeats a bad faith claim.

Beers v. Hillory, 241 P.3d 285, 292 (Okla. Civ. App. 2010) (internal quotation

marks omitted). Ms. Toppins has the burden of proof. McCorkle v. Great

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Atlantic Ins. Co., 637 P.2d 583, 587 (Okla. 1981). 

Ms. Toppins claims that Minnesota Life unreasonably withheld payment in

bad faith by seeking its reinsurer’s confirmation of its decision to pay. She

contends that she was not a party to any contract between Minnesota Life and its

reinsurer and the delay of four business days was unreasonable. We disagree with

both of Ms. Toppins’s contentions, particularly because she has cited no authority

for her proposition that an insurer is not entitled to take a few days to confer with

its reinsurer. It was not unreasonable for Minnesota Life to obtain confirmation

from its reinsurer, nor was the four-day delay unreasonable. 

Next, Ms. Toppins objects to Minnesota Life’s decision to delay payment

pending her signature on the statement she gave to investigator Jolly and

completion of the medical records authorizations. She asserts that the policy did

not allow for an investigation, so she was not required to sign these documents. 

But because Mr. Toppins died within two years of the policy issue date, the

policy’s provision concerning incontestability applied. That provision provided

for the policy to become incontestable, except for nonpayment of premiums, after

it “has been in force during the insured’s lifetime for two years from the policy

date.” Aplt. App. 130; see also Okla. Stat. tit. 36, § 4004 (“There shall be a

provision that the policy . . . shall be incontestable, except for nonpayment of

premiums, after it has been in force during the lifetime of the insured for a period

of two (2) years from its date of issue.”). “It was not bad faith for [Minnesota

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Life] to investigate a claim when the insured died within the two year

incontestable period.” Marshall v. Universal Life Ins. Co., 831 P.2d 651, 653

(Okla. Ct. App. 1991). 

Ms. Toppins next asserts that Minnesota Life breached its duty of good

faith and fair dealing by engaging in a standard practice of conducting

underwriting review after an insured’s death. We must reject this claim. “The

tort of bad faith breach of an insurance contract must be based upon an insurer’s

wrongful denial of a claim; it cannot be based upon the conduct of the insurer in

selling and issuing the policy.” Hays v. Jackson Nat’l Life Ins. Co., 105 F.3d

583, 590 (10th Cir. 1997) (citing Claborn v. Washington Nat’l Ins. Co., 910 P.2d

1046, 1051 (Okla. 1996)). Therefore, any evidence that Minnesota Life engaged

in post-death underwriting was irrelevant to the issue of whether Minnesota Life

acted tortiously in paying Ms. Toppins’s claim. See id. 

Ms. Toppins complains that Minnesota Life did not pay on the policy

within 30 days of receipt of the claim, thus demonstrating its bad faith. She relies

on Okla. Stat. tit. 36, § 4030.1(B), which provides: “An insurer shall pay the

proceeds of any benefits under a policy of life insurance not more than thirty (30)

days after the insurer has received proof of death of the insured. If the proceeds

are not paid within this period, the insurer shall pay interest on the

proceeds . . . .” Although Ms. Toppins does not assert that an insurance

company’s failure to pay within 30 days is automatically bad faith, she says that

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the statute, coupled with evidence that Minnesota Life’s employees were unaware

of it, does show bad faith. We disagree; under the circumstances of this case, we

conclude that the payment of the full amount of the life insurance policy, plus

interest, 47 days after receipt of proof of death did not constitute bad faith. Cf.

Hall v. Globe Life and Accident Ins. Co., 998 P.2d 603, 604, 605 (Okla. 1999)

(judgment was entered in claimant’s favor three years after insured’s death;

applying section 4030.1 to “the issue of late payment of insurance proceeds”). 

Ms. Toppins contends that disputed material facts precluded entry of

summary judgment. She relies on the following allegedly disputed facts: 

(1) whether investigator Jolly’s written report reflected everything they discussed

during the telephone interview, and (2) whether Mr. Jolly’s questions had “started

to get badgering.” Aplt. Opening Br. at 30. Aside from the fact that Ms. Toppins

had ample opportunity to correct Mr. Jolly’s report, she has failed to demonstrate

why any omissions were material. Similarly, her complaint that she may have felt

badgered does not preclude summary judgment on her bad-faith claim because it

is irrelevant to the delay in payment. See Sorbo v. United Parcel Serv., 432 F.3d

1169, 1176 (10th Cir. 2005) (holding disputed fact must be material to avert

summary judgment). In addition, her assertion that Mr. Jolly’s destruction of his

interview notes entitles her to an adverse inference is unavailing. She has not

shown that she sought sanctions under Fed. R. Civ. P. 37; accordingly, she is

limited to “seek[ing] sanctions under a spoliation of evidence theory [which

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requires] proo[f] of bad faith” where “the aggrieved party seeks an adverse

inference.” Turner v. Pub. Serv. Co., 563 F.3d 1136, 1149 (10th Cir. 2009)

(citations omitted). Ms. Toppins had not made a showing that Mr. Jolly, or

anyone else, destroyed the notes in bad faith.

Conclusion

We conclude that no reasonable jury could find in favor of Ms. Toppins on

her claim that Minnesota Life violated the duty of good faith and fair dealing. 

Consequently, she was not entitled to compensatory or punitive damages. The

district court’s judgment in favor of Minnesota Life is therefore AFFIRMED.

Entered for the Court

Paul J. Kelly, Jr.

Circuit Judge

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