                           In the

United States Court of Appeals
              For the Seventh Circuit

No. 11-3870

Z ENA P HILLIPS,
                                            Plaintiff-Appellant,
                               v.

T HE P RUDENTIAL INSURANCE C OMPANY OF
A MERICA and P RUCO L IFE INSURANCE C OMPANY,

                                          Defendants-Appellees.


             Appeal from the United States District Court
                 for the Southern District of Illinois.
        No. 11-cv-0058-DRH—David R. Herndon, Chief Judge.


        A RGUED A PRIL 9, 2012—D ECIDED M AY 6, 2013




   Before F LAUM and H AMILTON, Circuit Judges, and
F EINERMAN, District Judge.
  F EINERMAN, District Judge. Plaintiff Zena Phillips was
a beneficiary of a life insurance policy taken out by her
fiancé, Michael Strang, and issued by Defendant Pruco



   The Honorable Gary Feinerman, of the Northern District of
Illinois, sitting by designation.
2                                                No. 11-3870

Life Insurance Company, a subsidiary of Defendant
Prudential Life Insurance Company of America (to-
gether, “Prudential”). When Strang died, Prudential
informed Phillips that the default method for paying
the claim was the “Alliance Account settlement option.”
The Alliance Account is what the insurance industry
calls a “retained asset account,” under which the insurer,
instead of paying a lump-sum death benefit, creates
an interest-bearing account for the beneficiary and
sends her a checkbook that can be used to draw down
the funds, in part or in whole, at any time. The funds
are held in Prudential’s general investment account,
which allows Prudential to profit from the spread (if any)
between its investment returns and the interest paid to
the beneficiary, which in Phillips’s case was three percent.
   In this putative class action, Phillips claims that Pruden-
tial’s establishment of the Alliance Account as the
default payment method and enrollment of her in
an Alliance Account breached the insurance policy
in violation of Illinois contract law and unreasonably
delayed the payment of insurance benefits in violation
of section 155 of the Illinois Insurance Code, 215 ILCS
5/155. Phillips also claims that Prudential owed her
a fiduciary duty under Illinois law and breached
that duty by not disclosing information regarding the in-
vestments made with her funds and by keeping for
itself the investment profits. The district court dismissed
all three claims under Federal Rule of Civil Procedure
12(b)(6), 2011 WL 5915148 (S.D. Ill. Nov. 28, 2011), and
Phillips appeals.
No. 11-3870                                              3

  We review de novo the district court’s judgment.
See Munson v. Gaetz, 673 F.3d 630, 632 (7th Cir. 2012).
The complaint’s well-pleaded factual allegations,
though not its legal conclusions, are assumed to be
true. See ibid.; Reger Dev., LLC v. Nat’l City Bank, 592
F.3d 759, 763 (7th Cir. 2010). In conducting our review,
we must consider not only “the complaint itself,” but
also “documents attached to the complaint, documents
that are critical to the complaint and referred to in it,
and information that is subject to proper judicial notice.”
Geinosky v. City of Chicago, 675 F.3d 743, 745 n.1 (7th
Cir. 2012). We also must consider additional facts set
forth in Phillips’s district court brief and appellate
briefs, so long as those facts “are consistent with the
pleadings.” Ibid. To the extent that an exhibit attached
to or referenced by the complaint contradicts the com-
plaint’s allegations, the exhibit takes precedence. See
Forrest v. Universal Sav. Bank, F.A., 507 F.3d 540, 542
(7th Cir. 2007). The facts set forth below are stated as
favorably to Phillips as permitted by the complaint
and other materials that may be considered on review
of a Rule 12(b)(6) dismissal.


I.   Breach of Contract
  As noted above, Phillips claims that Prudential breached
the life insurance policy by making the Alliance
Account the default method of paying her claim and
by enrolling her in an Alliance Account. The parties
agree that Illinois law governs interpretation of the
policy. We have summarized Illinois law pertaining to
the interpretation of insurance policies as follows:
4                                                No. 11-3870

    In Illinois, insurance policies are contracts; the
    general rules governing the interpretation and con-
    struction of contracts govern the interpretation and
    construction of insurance policies. Illinois courts aim
    to ascertain and give effect to the intention of the
    parties, as expressed in the policy language, so long
    as doing so does not contravene public policy. In
    doing so, they read the policy as a whole and
    consider the type of insurance purchased, the risks
    involved, and the overall purpose of the contract. If
    the policy language is unambiguous, courts apply it
    as written. Policy terms that limit an insurer’s liability
    are liberally construed in favor of coverage, but
    only when they are ambiguous, or susceptible to
    more than one reasonable interpretation.
Clarendon Nat’l Ins. Co. v. Medina, 645 F.3d 928, 933 (7th
Cir. 2011) (citations omitted). Although ambiguities are
construed in the insured’s favor, “a court will not
search for ambiguity where there is none.” Valley Forge
Ins. Co. v. Swiderski Elecs., Inc., 860 N.E.2d 307, 314 (Ill.
2006); see also Native Am. Arts, Inc. v. Hartford Cas. Ins.
Co., 435 F.3d 729, 732 (7th Cir. 2006). “[I]n construing a
policy, governing legal authority must . . . be taken into
account as well, for a policy term may be considered
unambiguous where it has acquired an established
legal meaning.” Ace Am. Ins. Co. v. RC2 Corp., 600 F.3d 763,
766 (7th Cir. 2010) (internal quotation marks omitted).
  The Prudential policy authorized the insured (Strang)
and the beneficiary (Phillips) to choose among several
payment options listed in the policy and any other
options that became available in the future:
No. 11-3870                                              5

   [The insured] may choose to have any death benefit
   paid in a single sum or under one of the optional
   modes of settlement described below.
   If the person who is to receive the proceeds of this
   contract wishes to take advantage of one of these
   optional modes, we will be glad to furnish, on
   request, details of the options we describe below or
   any others we may have available at the time the
   proceeds become payable.
The policy listed five payment options as alternatives to
a lump-sum payment: (1) Prudential makes installment
payments over a fixed period of time of up to twenty-five
years; (2) Prudential makes monthly payments over
the course of the beneficiary’s life, with payments
certain for 120 months; (3) Prudential holds the proceeds
and pays interest to the beneficiary on an annual, semi-
annual, quarterly, or monthly basis; (4) Prudential
makes annual, semi-annual, quarterly, or monthly pay-
ments for as long as the proceeds allow; and (5) Prudential
makes payments like those on any annuity that
Prudential regularly issues.
  Strang never elected a payment method. When he
died, Prudential sent Phillips a Claim Form. The form
stated that Prudential’s “preferred method of paying
death benefits” was the Alliance Account and touted
that option as “an easy, no-cost option that gives you
great flexibility,” one that allows the beneficiary to
“access funds immediately to cover current expenses, or
in the future after you have had a chance to consider
all your financial options.” The form explained: “Your
6                                             No. 11-3870

proceeds may remain in this option for as long as you
like while you continuously earn interest. To access
funds, simply write a draft (’check’) for $250 or more
to yourself or any third party. There are no monthly
service charges, per-check charges or check re-order
fees. You will periodically receive a statement showing
your current balance, account activity, interest earned,
and interest rate.” The form added: “This option allows
you to access all of your funds immediately or over time.
You may leave the money in the account, withdraw
the entire amount or write checks against the balance
($250 minimum).”
  The Claim Form gave Phillips the opportunity to select
a payment method other than the Alliance Account,
and clearly stated that if she did not select a payment
method, the benefits would be paid by the Alliance Ac-
count option:
    Unless you elect an alternative settlement option or
    select another payment option, eligible death claim
    benefits will be paid by way of the Alliance Account
    settlement option. If you would like detailed informa-
    tion about settlement options, please refer to the
    enclosed Settlement Options brochure, contact our
    Customer Service Office at (800) 496-1035, or contact
    your Prudential representative.
    If you would like to select an alternative settlement
    option, indicate your settlement option below (as
    described in the Settlement Options brochure).
    ________________________________________________
No. 11-3870                                                7

    If you would like to select another payment option
    allowed in the policy, indicate your payment option
    below.
    ________________________________________________
As can be seen, the form had two lines for Phillips to
elect a payment option other than the Alliance Account.
The first allowed her “to select an alternative settlement
option,” and noted that those options were “described
in the Settlement Options brochure.” The second line
allowed her to choose “another payment option allowed
in the policy.” Phillips left those two lines blank
and returned the form. Prudential accordingly enrolled
her in the Alliance Account option and sent her a check-
book.
  Prudential’s establishment of the Alliance Account as
the default option, and its enrolling Phillips in an Alliance
Account rather than providing her a lump-sum benefit
payment, did not breach the insurance policy. The
policy allowed Phillips to choose any available payment
method—those listed in the Settlement Options brochure,
those listed in the policy, or those, like the Alliance Ac-
count option, that Prudential “may have available at
the time the proceeds become payable”—and by leaving
the two lines blank on the Claim Form, Phillips chose
to enroll in the Alliance Account option. See Garcia
v. Prudential Life Ins. Co. of Am., 2009 WL 5206016, at
*8 (D.N.J. Dec. 29, 2009) (“When Plaintiff executed
the Claim Form without explicitly designating [how]
she wished to receive the benefits she was due under
the Policies, she effectively changed the method by
8                                               No. 11-3870

which she would receive those benefits from one sum
to an Alliance Account.”). Contrary to Phillips’s sug-
gestion, the policy did not make lump-sum payment
the default payment method, such that Prudential was
required to pay Phillips a lump sum unless she told
them otherwise; the policy entitled her to “choose” how
she would be paid, and she did just that.
  The policy did obligate Prudential to “pay the beneficiary
the death benefit described in this contract promptly.”
But the Alliance Account was a valid way of paying
the “death benefit described in this contract”; the
policy’s articulation of that obligation was immediately
followed by the proviso that “[w]e make this promise
subject to all the provisions of this contract,” and the
policy explicitly contemplated that the beneficiary would
be able to choose payment by the methods described in
the policy “or any others we may have available at the
time the proceeds become available.” Thus, the policy
did not guarantee that it would “pay the beneficiary”
via a lump sum to the exclusion of any other option,
and nor did it rule out the particular option that Phillips
chose, the Alliance Account. The policy did guarantee
that Phillips would be able to choose to receive a
lump sum and that, if she did so, the sum would be
paid forthwith. But as discussed above, the Claim Form
did offer her that option (albeit vaguely), and she chose
the Alliance Account instead. As for promptness, there is
no suggestion that the payment—that is, the establish-
ment of the Alliance Account and the delivery of the
checkbook to Phillips—was not carried out “prompt[ly]”;
Phillips nowhere alleges that she had to wait long
No. 11-3870                                               9

to receive the checkbook that gave her access to her
funds or that any checks she drafted were not promptly
paid. Cf. Keife v. Metro. Life Ins. Co., 2013 WL 1007955, at
*7 (D. Nev. Mar. 12, 2013) (holding that the insurer’s
payment of benefits via a retained asset account is “im-
mediate” within the meaning of the policy at issue
in that case).
  Phillips complains that Prudential did not make
her aware of her entitlement to request a lump-sum
payment. It is true that the Claim Form did not explicitly
mention the lump-sum option. And we accept at the
Rule 12(b)(6) stage that the Settlement Options brochure
did not mention it either and that Phillips did not read
the policy itself at the time she filled out the Claim
Form, leaving her unaware of that choice. But nothing
in the policy required Prudential to make explicit
reference to the lump-sum option on the Claim Form or
in the brochure, or to ensure that Phillips was subjec-
tively aware of that option when she made her selec-
tion. The contract merely required Prudential to
allow Phillips to choose lump-sum payment, and it did
offer that choice by permitting her to select “another
payment option allowed in the policy.”
  The principal appellate decision cited by Phillips
to support her contract claim, Mogel v. UNUM Life Ins.
Co., 547 F.3d 23 (1st Cir. 2008), is inapposite. Mogel
was brought under the Employee Retirement Income
Security Act (“ERISA”), 29 U.S.C. § 1001 et seq. The defen-
dant insurer in Mogel issued life insurance policies
that were “employee welfare benefit plans,” id. § 1002(1)
10                                              No. 11-3870

& (3), making the insurer an ERISA fiduciary,
id. § 1002(21)(A). 547 F.3d at 25. When the policies
became due, the insurer set up retained asset accounts
for the plaintiff beneficiaries and sent them check-
books that they could use to withdraw funds. Ibid. The
First Circuit held that so long as the insurer retained
possession of life insurance proceeds, it remained sub-
ject to suit as an ERISA fiduciary, despite having
issued checkbooks to the beneficiaries. Id. at 27. Mogel
certainly stands for the proposition that a retained asset
account is not equivalent to a lump-sum payment. Id. at
26; but cf. Rabin v. MONY Life Ins. Co., 387 F. App’x 36,
39 & n.1 (2d Cir. 2010) (holding that “because MONY’s
use of interest-bearing checking accounts permitted
Rabin to liquidate his proceeds at any time by
writing himself a check for the full account balance, this
disbursement method was not sufficiently different from
payment by check to permit a jury to find a material
breach,” and noting that “the life insurance policy in
Mogel explicitly called for a ‘lump sum’ payment,
whereas the contract here at issue explicitly authorizes
MONY to agree to non-lump-sum payments”). But that
proposition is irrelevant here, where the question is not
whether a retained asset account is the same as a lump-
sum payment, but whether Prudential’s enrollment of
Phillips in the Alliance Account option breached the
insurance policy. For the reasons given above, it did not.
 Finally, Phillips argues that Prudential breached the
policy by failing to explain how the Alliance Account
worked. Phillips primarily relies on Illinois Insurance
Bulletin 2011-03, available at http://insurance.illinois.gov/
No. 11-3870                                                 11

cb/2011/CB2011-03.pdf, which states that a beneficiary
“can only be deemed to have consented to the retained
asset account when there is full disclosure in the notifica-
tion of the terms of the Retained Asset Account at the
time of the claim.” But as Phillips’s counsel acknowl-
edged at oral argument, that bulletin had an effective
date of July 1, 2011, well after the events in this case. And
as for the disclosures that Prudential did give, none
were false or misleading.
 For these reasons, the district court correctly dismissed
Phillips’s breach of contract claim.


II. Vexatious and Unreasonable Delay Under 215 ILCS
    5/155
   Phillips’s statutory vexatious and unreasonable delay
claim under section 155 of the Illinois Insurance Code
fares no better. The statute provides in relevant part:
“In any action . . . wherein there is in issue the liability of
a company . . . for an unreasonable delay in settling a
claim, and it appears to the court that such . . . delay
is vexatious and unreasonable, the court may allow as
part of the taxable costs in the action reasonable attorney
fees, other costs, plus an amount not to exceed any one
of [three designated] amounts.” 215 ILCS 5/155(1).
As described by the Supreme Court of Illinois, section
155 provides an “an extracontractual remedy to policy-
holders whose insurer’s refusal to recognize liability
and pay a claim under a policy is vexatious and unreason-
able.” Cramer v. Ins. Exch. Agency, 675 N.E.2d 897, 900
(Ill. 1996). “If there is a bona fide dispute regarding cover-
12                                              No. 11-3870

age—meaning a dispute that is [r]eal, genuine, and
not feigned—statutory sanctions [under section 5/155]
are inappropriate.” Medical Protective Co. v. Kim, 507
F.3d 1076, 1087 (7th Cir. 2007) (citations and internal
quotation marks omitted, alteration in original).
“Because this statute is penal in nature its provisions
must be strictly construed.” Citizens First Nat’l Bank of
Princeton v. Cincinnati Ins. Co., 200 F.3d 1102, 1110 (7th
Cir. 2000) (internal quotation marks omitted).
  Prudential indisputably did not subject Phillips to
an unreasonable or vexatious delay in paying the claim
on Strang’s life insurance policy. Paying benefits via
an Alliance Account checkbook rather than a check is
not any kind of a delay, and even if it were, Phillips
could hardly complain, as she chose the Alliance
Account option. We suppose that Phillips might have
had a section 155 claim if Prudential had taken an ex-
cessive amount of time to set up her Alliance Account or
to send her a checkbook, or if any checks she wrote
had taken an unreasonable amount of time to clear. But
as noted above, there are no allegations to that effect,
and Phillips therefore has no conceivable claim.


III. Breach of Fiduciary Duty
  Phillips’s fiduciary duty claim fails as well. In Illinois,
“it is well-settled that no fiduciary relationship exists
between an insurer and an insured as a matter of
law.” Greenberger v. GEICO Gen. Ins. Co., 631 F.3d 392,
401 (7th Cir. 2011) (brackets omitted). Phillips counters
that a fiduciary relationship was established when
No. 11-3870                                            13

Prudential became her investment manager for the Alli-
ance Account funds. See Commodity Futures Trading
Comm’n v. Heritage Capital Advisory Servs., Ltd., 823 F.2d
171, 173 (7th Cir. 1987) (brokers owe fiduciary duties to
their clients).
  The premise of Phillips’s argument, that Prudential
became her investment manager, is incorrect. Prudential
did not invest Phillips’s life insurance proceeds for
her benefit. Regardless of how Prudential’s investments
performed, Prudential owed Phillips the same amount:
the death benefit plus whatever interest called for by
the Alliance Account had accrued. This is nothing more
than a debtor-creditor relationship, materially indistin-
guishable from the relationship between a savings
bank and a depositor, see Faber v. Metro. Life Ins. Co.,
648 F.3d 98, 105 (2d Cir. 2011) (a retained asset ac-
count “constitute[s] a straightforward creditor-debtor
relationship”); Rabin, 387 F. App’x at 42-43; Restatement
(Second) of Trusts § 12 cmt. k (“When the insured or
the beneficiary of a life insurance policy exercises an
option under which the insurance company makes de-
ferred payments, the company does not become
trustee unless it is under a duty to segregate and hold
and administer as a separate fund the proceeds of
the policy, and does so. Where, as is almost always, if
not always, the case, the payments are to be made out
of the general assets of the insurance company, it holds
nothing in trust and is not a trustee but is a debtor.”),
which is not a fiduciary relationship, see Thomas v.
UBS AG, 706 F.3d 846, 853 (7th Cir. 2013) (“a bank is not
a fiduciary of its depositors”); Miller v. Am. Nat’l Bank
14                                              No. 11-3870

& Trust Co. of Chi., 4 F.3d 518, 520 (7th Cir. 1993)
(same); Garcia, 2009 WL 5206016, at *11 (same). And
because there was no fiduciary relationship between
Phillips and Prudential, Phillips has no viable fiduciary
duty claim. See Greenberger, 631 F.3d at 401.
                          * * *
  We have considered all of Phillips’s arguments, in-
cluding those not expressly referenced above, and find
them without merit. Our disposition of this appeal is
not intended to suggest any endorsement of the
business practice giving rise to this litigation. Prudential
apparently believes that it can earn larger profits
when beneficiaries of its life insurance policies elect the
Alliance Account option over the lump-sum payment
option. And in an apparent effort to “nudge” beneficiaries
into choosing the more profitable (to it) option, Pruden-
tial makes the Alliance Account the default option and
chooses not to reference the lump-sum option on the
Claim Form or in the Settlement Options brochure.
Whether this practice is disreputable is open to debate—
state insurance regulators are entitled to conclude
that the practice should be limited or restricted—but
for present purposes it suffices to say that the practice
did not breach the life insurance policy, did not effect a
vexatious and unreasonable delay under 215 ILCS 5/155,
and did not breach any fiduciary duty. The district
court’s judgment accordingly is A FFIRMED.



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