                                                             FILED
                                                 United States Court of Appeals
                    UNITED STATES COURT OF APPEALS       Tenth Circuit

                           FOR THE TENTH CIRCUIT                      February 18, 2015

                                                                     Elisabeth A. Shumaker
                                                                         Clerk of Court
FIDELITY & GUARANTY LIFE
INSURANCE COMPANY,

             Plaintiff - Appellee,

v.                                                        No. 14-6147
                                                   (D.C. No. 5:13-CV-01040-R)
PATRICIA LITCHFIELD; LONNIE                               (W.D. Okla.)
WILLIAM LITCHFIELD,

             Defendants - Appellants.


                            ORDER AND JUDGMENT*


Before KELLY, BALDOCK, and MORITZ, Circuit Judges.


      Fidelity & Guaranty Life Insurance Co. filed a complaint seeking a declaratory

judgment that it was not obligated to pay death benefits under a term life insurance

policy because that policy had been converted to a universal life insurance policy and

death benefits were paid under that policy. The district court granted summary

judgment to Fidelity & Guaranty. Patricia Litchfield, the widow of the insured, Lee

*
      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 This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral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.
Litchfield, and Lonnie William Litchfield, the owner and beneficiary of the policies

and the brother of Lee, appeal from the grant of summary judgment. Exercising

jurisdiction under 28 U.S.C. § 1291, we affirm.

      In 1998, Fidelity & Guaranty issued a $1,000,000 term life insurance policy to

Lonnie insuring Lee’s life. The policy provided, in part, that it would terminate if it

was exchanged for a new policy on the insured’s life.

      In 2011, Lonnie and Lee completed a policy change application to convert the

term life insurance policy to a universal life insurance policy. Fidelity & Guaranty

approved the change application and issued a universal life insurance policy to

Lonnie, insuring Lee’s life for $1,000,000. Fidelity & Guaranty sent Lonnie a letter

telling him that the term life insurance policy had been terminated and that all

benefits previously provided were null and void.

      Despite the conversion and termination of the term life insurance policy,

Fidelity & Guaranty’s offshore processor did not make an entry in its computer

system to reflect the termination. So premium notices for the term life insurance

policy were automatically generated and continued to be sent. Premium notices were

also sent for the universal life insurance policy. Lonnie paid the premiums for both

policies, and Fidelity & Guaranty kept the payments. During the time Lonnie was

making both sets of payments, a Fidelity & Guaranty customer service representative,

who consulted Fidelity & Guaranty’s computer system, informed Lonnie that the

term life insurance policy was in effect.


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      Lee died in July 2013, eighteen months after the conversion of the term life

insurance policy to the universal life insurance policy. Lonnie contacted Fidelity &

Guaranty and made a claim for death benefits under both policies. In reviewing the

claim, Fidelity & Guaranty realized that although the term life insurance policy had

terminated, its system indicated that it was still in effect, and it had mistakenly sent

payment notices and accepted payments on the term life insurance policy. Fidelity &

Guaranty refunded, with interest, the premiums paid on the term life insurance policy

for the prior eighteen months. It also paid Lonnie the $1,000,000 death benefit, with

interest, under the universal life insurance policy.

      Lonnie and Patricia demanded in writing that Fidelity & Guaranty pay the

death benefit under the term life insurance policy. Fidelity & Guaranty filed this suit

seeking a declaration that it has no obligation to pay a death benefit under the term

life insurance policy. Fidelity & Guaranty moved for summary judgment. Patricia

and Lonnie argued that Fidelity & Guaranty should be estopped from denying

coverage under the term life insurance policy and that Fidelity & Guaranty waived an

argument that it terminated the term life insurance policy. Also, they asserted

counterclaims for breach of contract and bad faith by Fidelity & Guaranty.

      The district court granted summary judgment, determining that Fidelity &

Guaranty converted the term life insurance policy to a universal life insurance policy

at Lonnie’s request, only the universal life insurance policy was in effect at the time

of Lee’s death, equitable estoppel does not apply because Fidelity & Guaranty’s


                                           -3-
off-shore processors made an administrative mistake, and that unintentional mistake

could not result in a waiver.1 Consequently, the court declared that Fidelity &

Guaranty did not owe Lonnie and Patricia an additional $1,000,000 under the term

life insurance policy. In addition, the court rejected their counterclaims for breach of

contract for failing to pay the death benefit under the term life insurance policy and

for bad faith deprivation of benefits under that policy.

      Patricia and Lonnie argue that the district court erred in granting summary

judgment in favor of Fidelity & Guaranty because (1) Fidelity & Guaranty’s mistake

did not relieve it from its duty to pay the term life insurance policy death benefit or

from the applicability of waiver and estoppel; and (2) the reasonable-expectations

doctrine along with the parties’ intent support modification and reinstatement of the

term life insurance policy. “We review [the] grant of summary judgment de novo,

applying the same standard as the district court.” Oldenkamp v. United Am. Ins. Co.,

619 F.3d 1243, 1246 (10th Cir. 2010) (internal quotation marks omitted). Under

Federal Rule of Civil Procedure 56(a), the court properly “grant[ed] summary

judgment if [Fidelity & Guaranty] show[ed] that there is no genuine dispute as to any

material fact and [it] is entitled to judgment as a matter of law.” We consider the

record and its inferences in the light most favorable to Patricia and Lonnie. See

Oldenkamp, 619 F.3d at 1246.


1
     The district court also denied Patricia’s and Lonnie’s motion for partial
summary judgment.


                                          -4-
      After considering the parties’ briefs, appellants’ appendix, and the relevant

law, in accordance with the above summary-judgment standard of review, we agree

with the district court’s disposition of the case and conclude that there are no genuine

issues of material fact and that Fidelity & Guaranty is entitled to judgment as a

matter of law. Accordingly, we affirm the court for substantially the same reasons

set forth in the court’s order of June 19, 2014. See Aplt. App., Vol. II, at 771-81.

      The judgment of the district court is affirmed.


                                                Entered for the Court


                                                Bobby R. Baldock
                                                Circuit Judge




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