                                                                      F I L E D
                                                               United States Court of Appeals
                                                                       Tenth Circuit
                     UNITED STATES CO URT O F APPEALS
                                                                    October 19, 2006
                            FO R TH E TENTH CIRCUIT                Elisabeth A. Shumaker
                                                                       Clerk of Court

    CO NN IE RA ND ALL,

          Plaintiff-Counter-
          Defendant-Appellant,

    v.                                                 No. 04-5031
                                                (D.C. No. CV-02-742-K(M ))
    TR AV ELER S C ASU A LTY &                         (N.D. Okla.)
    SURETY COM PANY, formerly
    known as A etna Life and Casualty
    Company,

          Defendant-Counterclaimant-
          Third-Party Plaintiff-Appellee,

    v.

    TH E ESTA TE O F R IC HA RD D.
    RANDALL, SR.,

          Third-Party Defendant.



                             OR D ER AND JUDGM ENT *


Before L UC ER O, A ND ER SO N, and BROR BY, Circuit Judges.




*
      The case is unanimously ordered submitted without oral argument pursuant
to Fed. R. App. P. 34(a)(2) and 10th Cir. R. 34.1(G). 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not binding precedent, except under the doctrines of law of the case, res judicata,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.
      This case is before us following our certification of a dispositive but novel

issue of state law to the Oklahoma Supreme Court. Connie Randall appealed the

district court’s grant of summary judgment in favor of Travelers Casualty &

Surety Company (“Travelers”) on her breach of contract and bad faith claims.

W e VAC ATE the grant of summary judgment on the breach of contract claim,

A FFIR M on the bad faith claim, and REM AND for further proceedings.

      In settlement of claims arising from an automobile accident, Richard D.

Randall, Sr. agreed to a lump sum followed by 300 monthly payments of $1,250,

with any remainder to be paid to his estate. Two days before his death, M r.

Randall executed an assignment conveying his interest in the settlement to his

wife. Travelers refused M rs. Randall’s request for the remaining payments,

asserting that its contractual obligation was to make such payments to M r.

Randall’s estate. M rs. Randall then filed suit in Oklahoma state court claiming

breach of contract and bad faith. Travelers removed the case to federal court and

moved for a declaratory judgment specifying the proper recipient of the payments.

The district granted summary judgment in favor of Travelers, declaring payment

was due to the estate. M rs. Randall now appeals.

                                         I

       Under Oklahoma law, the assignment of a life insurance policy gives the

assignee a right to insurance proceeds even if the insured’s estate is the named

beneficiary. Alkire v. King, 80 P.2d 309 (O kla. 1938). M rs. Randall points to

                                         -2-
language in Alkire suggesting a unity of interests between living persons and their

estates to support her position that the assignment transferred M r. Randall’s entire

interest in the settlement:

        [T]he insured had all rights under the policy as it was issued. . . . No
        third person had any interest in this policy. It was payable to the
        estate of the insured. . . . Under such a policy all rights normally
        held by a beneficiary belonged to the insured. . . . The insured and
        his own estate during his life do not constitute two separate and
        distinct entities: they are a single unit of ownership.

Id. at 310-11 (quoting Chartrand v. Chartrand, 3 N.E.2d 828, 830 (M ass. 1936))

(third omission in original). To determine whether Alkire’s analysis applies to

contracts in general, we certified the question to the Oklahoma Supreme Court.

The question was reformulated by that court as:

        Does the principle articulated in Alkire v. King, 1938 OK 282, 80
        P.2d 309, that the assignment of a life insurance policy conveys to
        the assignee a right to policy proceeds although the insured’s estate
        is the named beneficiary, apply to contracts generally?

Randall v. Travelers Cas. & Sur. Co., ___ P.3d ___, 2006 W L 2673279, at *1

(Okla. Sept. 19, 2006); see also Randall v. Travelers Cas. & Sur. Co., 450 F.3d

1115, 1115 (10th Cir. 2006). 1



1
    W e certified a second question to the Oklahoma Supreme Court:

        M ay an insurer alter the right to assign rights under a settlement
        agreement by funding the contract through the purchase of an annuity
        where the settlement agreement does not anticipate such a purchase
        and where neither the settlement agreement nor the annuity contains
        anti-assignment provisions?
                                                                         (continued...)

                                           -3-
      This question was answered in the affirmative by the Oklahoma Supreme

Court, which noted that “assignments of life insurance policies are nothing more

than ordinary contracts to be determined under general contract principles,”

Randall, 2006 W L 2673279, at *3, and that “there can be no vested right of

inheritance in the estate of a living person.” Id. Accordingly, M r. Randall had

the power to assign his remainder payment. See id. at *4 (“W here, as here, there

is no provision either in the settlement agreement or in the annuity prohibiting

assignment, the contract is subject to assignment.”).

      In light of this conclusive determination of state law, the district court’s

grant of summary judgment on M rs. Randall’s contract claim cannot stand. W e

therefore VAC ATE the entry of summary judgment on the contract claim (and

Travelers’ corresponding claim for a declaratory judgment), and REM AND for

further proceedings. 2




1
 (...continued)
Randall, 2006 W L 2673279, at *1. Even though the court answered this question
“no,” id., we need not consider the issue further because the court’s response to
the first question is dispositive.
2
 The district court expressly did not reach other issues raised in Travelers’
motion for summary judgment, in particular challenges to the legal validity of the
operative assignment, see District Court Order of Feb. 5, 2004, at 3.

                                         -4-
                                           II

       The district court provided two rationales for its grant of summary

judgment against M rs. Randall on her bad faith claim. First, the court held that

Travelers could not be liable for bad faith because it had a valid reason to refuse

payment. Second, the court noted that Oklahoma has not extended bad faith

claims beyond the insurance context to contracts generally.

       Although the first holding is undercut somewhat by our vacatur of the

court’s disposition of the contract claim, we nonetheless hold Travelers had a

legitimate, albeit unsuccessful, basis for refusing to make the remaining payments

under the settlement agreement to M rs. Randall. See Newport v. USA A, 11 P.3d

190, 195 (Okla. 2000) (“The tort of bad faith does not foreclose the insurer’s right

to deny a claim, resist payment, or litigate any claim to w hich the insurer has a

legitimate defense.”) (quotation omitted).

      W hen there is “no conclusive precedential legal authority on an issue,

withholding payment is not unreasonable or in bad faith.” Bailey v. Farmers Ins.

Co., 137 P.3d 1260, 1264 (Okla. Civ. App. 2006) (citing Skinner v. John Deere

Ins. Co., 998 P.2d 1219 (Okla. 2000)). Travelers faced no conclusive authority

contrary to their defense in this case before our certification of the question to the

Oklahoma Supreme Court. Rejection of the bad faith claim by the district court

was proper on this basis, thus we do not reach its alternative rationale.




                                          -5-
      Grant of summary judgment on M rs. Randall’s bad faith claim is

AFFIRM ED, and the judgment of the district court is VACATED in all other

respects. The case is R EM A N D ED for further proceedings consistent with this

order and judgment for application of the newly stated Oklahoma law.


                                                  Entered for the Court


                                                  Carlos F. Lucero
                                                  Circuit Judge




                                        -6-
