                                                                        F I L E D
                                                                 United States Court of Appeals
                                                                         Tenth Circuit
                       UNITED STATES COURT OF APPEALS
                                                                         AUG 16 2004
                                TENTH CIRCUIT
                                                                    PATRICK FISHER
                                                                             Clerk


BROOKE KEIRSEY, an individual,

          Plaintiff,

v.

BANNER LIFE INSURANCE
COMPANY, a foreign corporation,
                                                       No. 03-6013
       Defendant-Third-Party-                 (Western District of Oklahoma)
       Plaintiff-Appellant,                     (D.C. No. CIV-01-1574-L)

v.

GENE IMKE and SUZY IMKE, jointly
and severally d/b/a Imke & Associates,

          Third-Party-Defendants-
          Appellees.




                           ORDER AND JUDGMENT *


Before EBEL, ANDERSON, and MURPHY, Circuit Judges.




      *
       This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
I.    INTRODUCTION

      In 2002, Plaintiff-Appellant Banner Life Insurance Co. (“Banner”), filed a

third-party complaint against Gene and Suzy Imke (the “Imkes”). The Imkes are

independent insurance agents/brokers and the claims Banner asserted against them

related to an application for a life insurance policy submitted by one of their

clients, Bryan Keirsey. Banner alleged that negligent and fraudulent acts

committed by the Imkes resulted in its liability to Mr. Keirsey’s surviving spouse

under the terms of a conditional receipt. The parties filed cross-motions for

summary judgment. In their motion for summary judgment, the Imkes argued,

inter alia, that Mr. Keirsey’s policy was in effect on the date of his death

notwithstanding the fact that the policy had not been physically delivered to him.

Relying on Mid-Continent Life Insurance Co. v. Dees, 269 P.2d 322 (Okla. 1954),

the district court granted summary judgment in favor of the Imkes and Banner

appealed. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, this court

affirms the district court’s order.

II.   FACTUAL BACKGROUND

      The Imkes are insurance agents doing business in the state of Oklahoma as

Imke and Associates. In 2001, the Imkes were under contract with Banner to

solicit applications for Banner’s insurance policies. With the assistance of the

Imkes, Mr. Keirsey applied for a life insurance policy with Banner and signed a


                                         -2-
formal application for $250,000 of insurance on June 14, 2001. In the

application, he specifically elected to have the monthly premium payments

automatically deducted from his checking account pursuant to Banner’s pre-

authorized check plan.

      The Imkes advised Mr. Keirsey to include a check for $15.00 with his

application. This amount was more than the $14.44 monthly premium but less

than two months’ premium. The Imkes accepted both the application and the

$15.00 check from Mr. Keirsey and provided him with a Banner conditional

receipt. The purpose of the conditional receipt was to provide temporary

coverage to Mr. Keirsey prior to delivery of the policy by Banner. Coverage

under the conditional receipt terminated “the date the policy is delivered to the

Owner.”

      On July 26, 2001, Banner approved Mr. Keirsey’s application and issued

policy No. 17B330677 to him. The policy was mailed to the Imkes and they

received it on August 1, 2001. Mr. Keirsey died four days later. The policy was

not physically delivered to Mr. Keirsey prior to his death. Mr. Keirsey’s

surviving spouse made a claim under the policy which Banner denied. Banner

initially took the position that Mr. Keirsey had no coverage under the conditional

receipt because the Imkes collected and remitted only one month’s premium.

Banner based its decision on the terms of the conditional receipt which stated,


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CONDITIONS WHICH MUST BE MET BEFORE INSURANCE MAY BECOME
EFFECTIVE PRIOR TO DELIVERY OF THE POLICY:
1.  An amount equal to the modal premium indicated on the application must
    be submitted; . . . pre-authorized check plan (two months’ premium
    required) . . . .

      Mrs. Keirsey filed a complaint against Banner in the United States District

Court for the Western District of Oklahoma, alleging that Banner acted in bad

faith by refusing to pay her claim. Several months later, Banner filed a third-

party complaint against the Imkes alleging six causes of action: (1) breach of

fiduciary duty, (2) breach of contract, (3) negligence, (4) constructive fraud, (5)

indemnification, and (6) setoff/declaratory judgment. In essence, Banner alleged

that the Imkes’ failure to collect the full two months’ premium payment from Mr.

Keirsey resulted in the claims asserted against it by Mrs. Keirsey. Banner

eventually entered into a settlement agreement with Mrs. Keirsey, but continued

to pursue its claims against the Imkes.

      In September and October 2002, the parties filed cross-motions for

summary judgment. In their motion, the Imkes argued, inter alia, that any defects

in the conditional receipt were irrelevant because the policy was in effect on the

date of Mr. Keirsey’s death. In its response to the Imkes’ motion for summary

judgment, Banner argued that the policy was not in effect because two of the

conditions precedent in the application had not been met: (1) the policy was not

physically delivered to Mr. Keirsey during his lifetime, and (2) Mr. Keirsey was


                                          -4-
not “actually in the state of health and insurability represented in . . . [his]

application.” The district court rejected Banner’s argument, concluding that

physical delivery of the policy was unnecessary under Oklahoma law. Dees, 269

P.2d at 323. Accordingly, the district court entered summary judgment in favor of

the Imkes. Banner then brought this appeal.

III.   DISCUSSION

       This court reviews a grant of summary judgment de novo, applying the

same standard employed by the district court. Welding v. Bios Corp., 353 F.3d

1214, 1217 (10th Cir. 2004). A party is entitled to summary judgment “if the

pleadings, depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment as a matter of

law.” Fed. R. Civ. P. 56(c).

       Banner does not dispute that its claims against the Imkes should be

resolved in favor of the Imkes if this court concludes that the policy was in effect

at the time of Mr. Keirsey’s death. Instead, Banner first reasserts the argument it

made before the district court that the policy was not in effect because it was not

physically delivered to Mr. Keirsey during his lifetime. The application

completed by Mr. Keirsey and submitted to Banner provides,

       Except as may be provided in a duly issued Conditional Receipt, no
       insurance shall take effect unless and until the policy has been

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      physically delivered and the first full premium paid during the
      lifetime of the insured(s) and then only if the person(s) to be insured
      is (are) actually in the state of health and insurability represented in
      Parts I and II of this application and any supplements thereto . . . .

Banner argues that this language created a condition precedent to the

effectiveness of the policy; namely, the policy had to be physically delivered to

Mr. Keirsey while he was still alive.

      In Mid-Continent Life Insurance Co. v. Dees, the Oklahoma Supreme Court

rejected the argument that “depositing the policy in a postage prepaid envelope

addressed and mailed to [the] agent is not a delivery to the insured person.” 269

P.2d at 323. The court held, instead, that when

      the first premium has been paid, the application has been approved,
      the policy executed in accord therewith thereby completing the
      insurance contract, and nothing remains to be done but to deliver the
      policy to the insured . . . the mailing of the policy to the agent
      unconditionally while insured was in good health and alive, to be
      given by him to the insured person constitutes delivery in law,
      manual delivery, or further acceptance, being unnecessary.

Id. The district court noted that the parties did not contest that Mr. Keirsey paid

the first months’ premium. 1 It then found that the application was approved, and


      1
        Banner asserted at oral argument that the first premium had not been paid
and, thus, the policy was not in effect regardless of whether it was physically
delivered to Mr. Keirsey. There is no doubt that this argument was not made in
the briefs Banner submitted to this court. In its opening brief, Banner framed the
issues as follows:

      The unmistakable clear evidence in the present case establishes that
      the Banner Application contained two express conditions precedent

                                         -6-
the policy issued and received by the Imkes prior to Mr. Keirsey’s death. Banner

does not challenge these findings on appeal. Instead, it simply asserts that the

language in the application signed by Mr. Keirsey required physical delivery to

Mr. Keirsey before his death. Banner, however, has failed to identify any

material difference between the language in the application signed by Mr. Keirsey

and the language in the application before the Oklahoma Supreme Court in Dees.

Thus, Banner’s argument regarding physical delivery of the policy to the insured

is clearly foreclosed by the holding in Dees.

      In the alternative, Banner argues that the equitable doctrine of constructive

delivery set out in Dees is inapplicable in this case because the policy was not

unconditionally delivered to the Imkes. In support of this argument, Banner relies

on the fact that the policy was mailed to the Imkes together with a document

entitled, “Amendment to Application” and a cover letter titled, “Delivery

Requirements.” 2 The Amendment to Application form states,



      that did not occur prior to Bryan Keirsey’s death. Namely, the Policy
      had not been “physically delivered . . . during [his] lifetime”; and
      (ii) Mr. Keirsey was not “actually in the state of health and
      insurability represented in . . . [his] application.”

Accordingly, the argument regarding the payment of the first premium is waived.
United States v. Abdenbi, 361 F.3d 1282, 1289 (10th Cir. 2004).
      2
       Although the Imkes deny receiving either the Amendment to Application
or cover letter, we will assume for purposes of this appeal that both were
delivered with the policy.

                                         -7-
      The Banner Life Insurance Company is hereby authorized to amend
      the application identified above in the following manner:

      Part I Question #32 shall read: no
      Part I Question #25 shall read: $250,000/OPTerm 10/Standard Plus
      Non Tobacco
      Part I Question #29 shall read: none

Below this text is a line for Mr. Keirsey’s signature. Banner asserts that an

amendment to the application was necessary because Mr. Keirsey left three

questions blank when he completed the application. The testimony of Banner’s

own witness refutes Banner’s assertion that it was necessary for Mr. Keirsey to

complete the questions which he left blank on his application before the policy

became effective. Brian O’Flaherty, the underwriter who approved Mr. Keirsey’s

application, testified that he had already obtained the information requested in the

Amendment to Application and that the failure to complete the questions properly

had no effect on the issuance of the policy.

      Banner also argues that the Amendment to Application constitutes a

counter-offer for coverage at a higher premium than was requested by Mr. Keirsey

in his application. Banner, accordingly, goes on to argue that Mr. Keirsey was

required to sign the Amendment to Application and accept the counter-offer

before the policy became effective. Despite Banner’s assertion that “the record

demonstrates that Banner did not accept Mr. Keirsey’s offer, but rather, made a

counter-offer for a higher premium,” we could find no such evidence in the


                                         -8-
record. Our review of the record reveals that Banner’s assertion is misleading

and disingenuous. The uncontroverted evidence demonstrates that the policy

issued to Mr. Keirsey was the same policy for which he applied.

      Suzy Imke testified that Mr. Keirsey first applied for a life insurance policy

with Massachusetts Mutual Life Insurance Company. When Mr. Keirsey was not

approved at the preferred rate, he asked the Imkes to attempt to secure a better

rate from other companies. Suzy Imke further testified that Mr. Keirsey’s

information was transmitted to Banner and it informally approved him for

insurance at its “Standard Plus” rates. Gene Imke testified that Banner quoted

Mr. Keirsey an annual premium of $165.00 for $250,000 of life insurance at the

Standard Plus rate. Based on that quote, Gene Imke calculated the monthly

premium payment which was paid by Mr. Keirsey and forwarded to Banner with

the application. The policy issued to Mr. Keirsey clearly states that the rating

classification is “Standard Plus” and that the annual premium is $165.00.

      In a vitriolic and thoroughly unprofessional manner, Banner criticizes the

Imkes for relying only on citations to their testimony regarding whether the policy

Mr. Keirsey applied for was the policy which Banner issued. As the party

opposing the Imkes’ motion for summary judgment, however, it is Banner’s

burden “to make a showing sufficient to establish the existence of an element

essential to [its] case.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).


                                         -9-
Banner has utterly failed to do this. In support of its argument that the documents

it allegedly sent to the Imkes together with the policy constituted a counter-offer

for insurance at a higher premium, Banner relies solely on Mr. Keirsey’s failure to

complete Question #27 of the application which states, “If our underwriting

indicates that we cannot give you the lowest rate for the Plan of Insurance, will

you consider a higher rate?” In light of the Imkes’ uncontroverted testimony and

the evidence that Mr. Keirsey remitted a monthly premium payment

commensurate with a Standard Plus policy carrying a $165.00 annual premium,

Mr. Keirsey’s application, even with the incomplete question, does not constitute

any evidence that he applied for the “lowest premium rate,” a rate for which he

knew he did not qualify.

      Having rejected each of Banner’s arguments, we conclude that the policy

was unconditionally delivered to the Imkes on August 1, 2001. Consequently, the

policy was in effect at the time of Mr. Keirsey’s death and the district court

properly dismissed Banner’s claims against the Imkes, all of which were

predicated on the conditional receipt.




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III.   CONCLUSION

       The order of the district court granting summary judgment in favor of the

Imkes is affirmed.

                                      ENTERED FOR THE COURT



                                      Michael R. Murphy
                                      Circuit Judge




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