     Case: 10-51042     Document: 00511735389         Page: 1     Date Filed: 01/24/2012




            IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                     Fifth Circuit

                                                                            FILED
                                                                         January 24, 2012

                                       No. 10-51042                        Lyle W. Cayce
                                                                                Clerk

BARBARA KOCUREK, Individually, and as Assignee of the Estate of Louis J.
Kocurek, and on Behalf of All Others Similarly Situated,

                                                  Plaintiff-Appellant
v.

CUNA MUTUAL INSURANCE SOCIETY,

                                                  Defendant-Appellee



                   Appeal from the United States District Court
                        for the Western District of Texas
                                    5:08-cv-00581-FB


Before HIGGINBOTHAM, DAVIS, and STEWART, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:*

        Plaintiff Barbara Kocurek appeals the dismissal of her claims against
CUNA Mutual Insurance Company alleging fraud and deceptive practices in the
issuance of life insurance policies covering the life of her deceased husband on
CUNA’s motion to dismiss. Based on our conclusion that the plaintiff has
standing to bring all but one of the classes of claims alleged and that the facts



        *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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                                 No. 10-51042

alleged by plaintiff state a legal claim, we reverse in part, affirm in part and
remand this case to the district court.

                                          I.

      Louis J. Kocurek, as a member of the Firstmark Credit Union, purchased
an accidental death and dismemberment (AD&D) policy naming plaintiff, his
wife, as the primary beneficiary. The policy, CUNA Policy No. T5903024 (2004
Policy), was issued by the defendant CUNA around November 1, 2004 with a
face amount of $200,000. Contingent beneficiaries to this policy were Mr.
Kocurek’s children from a previous marriage.

      After paying the premiums on the 2004 Policy for four months, Mr.
Kocurek received a mailing from CUNA offering him additional AD&D coverage.
Mr. Kocurek purchased additional AD&D coverage by completing and returning
the enrollment form included with the mailing. Around April 1, 2005, CUNA
issued a second AD&D policy, No. T8314104 (the 2005 Policy), in the amount of
$300,000.    The 2005 Policy names Mr. Kocurek’s children as primary
beneficiaries and the plaintiff as contingent beneficiary. Mr. Kocurek paid the
premiums on both policies for over a year and a half until his accidental death
on July 27, 2006.

      Plaintiff attempted to collect the benefits under the 2004 Policy and the
Kocurek children filed a claim under the 2005 Policy. CUNA refused to pay the
benefits on the 2004 Policy because of a “one policy only” provision in both
policies, which CUNA contends voids the 2004 Policy. That provision reads -

      11.03 Other Insurance With Us and Duplicate Coverage: You may
      not be the insured under more than one certificate per participating
      association. Upon discovery of a duplication, we will consider you to
      be covered under the certificate which provides the greatest amount
      of coverage, and will refund any duplicated premium payments
      which may have been made by or on your behalf.


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                                  No. 10-51042

Plaintiff contends that the above clause is misleading to customers, particularly
because the one policy only provision is placed at the end of the policies under
the heading “General Provisions,” despite the presence of other, more
appropriate policy sections. CUNA also solicits and continues to solicit its
current customers with promotional mailings which “offer phantom additional
coverage.” Plaintiff complains that the mailings fail to mention the one policy
only provision and there is no indication that CUNA has or has ever had a
competent system in place to internally discovery and identify duplicate
coverage.

      Plaintiff alleges three causes of action for behalf of herself and six
purported subclasses for false, misleading or deceptive acts or practices, fraud
/misrepresentation, and negligence/gross negligence. CUNA filed a motion to
dismiss arguing (1) that plaintiff does not have standing to bring this suit as
either the beneficiary or purported assignee of the Kocurek estate, (2) that the
plaintiff is not a consumer under the Texas Deceptive Trade Practices Act
(DTPA) (if such claims were alleged), (3) that any DTPA claim did not survive
the death of the consumer, (4) that plaintiff’s misrepresentation claim fails
because neither she nor Mr. Kocurek could have reasonably relied on any
misrepresentation, (5) that plaintiff’s negligence claims fail because plaintiff has
not alleged a legal duty owed to her by CUNA, and (6) that the economic loss
rule bars all of plaintiff’s claims because the claims are contract-based seeking
purely economic losses and are therefore governed by the express terms of the
policies. The district court granted the motion. Plaintiff appeals.

                                        II.

      The district court dismissed Kocurek’s claims either on the basis of lack
of standing or for failure to state a claim. This court reviews a district court’s
dismissal under a Rule 12(b)(6) motion de novo. Gregson v. Zurich American Ins.


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                                  No. 10-51042

Co., 322 F.3d 883, 885 (5th Cir. 2003). Such motions are viewed with disfavor
and are rarely granted. Id. The complaint is construed liberally in favor of the
plaintiff and all well pleaded facts are taken as true. Id. Gregson summarizes
this strict standard of review as follows: "the question therefore is whether in the
light most favorable to the plaintiff and with every doubt resolved on his behalf,
the complaint states any valid claim for relief." Id. (quoting 5 CHARLES A.
WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE
§ 1357, at 601 (1969)). With this guideline in mind and based on our review of
the complaint, we conclude that this case should not have been resolved on a
motion to dismiss, except for any claim under the Texas Deceptive Trade
Practices Act. Our rationale for this decision follows.

      Article III standing requires (1) an injury, (2) a fairly traceable causal link
between the injury and the defendant’s conduct and (3) that can be redressed by
a decision in favor of the plaintiff. Lujan v. Defenders of Wildlife, 504 U.S. 555,
560-61 (1992); In re Cao, 619 F.3d 410, 421 (5th Cir. 2010)(en banc). Kocurek’s
allegations satisfy this test.

      The plaintiff alleged fraudulent conduct on the part of the defendant by
marketing the 2005 Policy as providing additional insurance, but which by its
“one policy only” term terminated her established rights as primary beneficiary
under the previously issued 2004 Policy. The district court concluded that
because the plaintiff had not alleged injuries caused by the issuance of the 2004
Policy, of which she is the beneficiary, but instead claimed harm from the
issuance of the 2005 Policy, she lacked standing because she is not a third party
beneficiary of the 2005 Policy. The defendants mirror this argument on appeal.
We disagree with that limited reading of the complaint.

      Kocurek’s claims are not tied to either policy individually but to the
defendant’s alleged deceptive practice of selling multiple policies to the same


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                                  No. 10-51042

individual based on mailings that offer additional coverage, when the policies are
designed to supercede each other. Because the plaintiff alleged that she lost her
right to benefits under the initial 2004 Policy as a result of this conduct, she was
harmed by the defendant’s conduct, which harm can be redressed by the
damages she is seeking in the suit. The defendant does not dispute that a life
insurance company may owe a duty to the beneficiaries of its policies as well as
the insured with whom it deals directly. Further, at this very preliminary stage
of the litigation, it is premature to conclude that the one policy only provision is
clear and unambiguous. Although evidence outside the pleadings was not
considered in this motion to dismiss, the record indicates a potential ambiguity
in the interpretation of the provision. CUNA’s answer to an interrogatory
indicates a less straightforward reading which belies its contention that the
provision operates simply to have one policy supercede any later policies issued
to the same insured. Accordingly, Kocurek’s individual claims for common law
fraud and negligence should have survived defendant’s motion to dismiss.

      Similarly, the district court erred in dismissing Kocurek’s claims under
Chapter 541 of the Texas Insurance Code. Kocurek adequately alleged that she
was injured by CUNA’s action which she argues were unfair or deceptive under
§ 541.151 et seq. of the Insurance Code. Kocurek alleged that she suffered
damages as a result of CUNA’s circulation of a promotional mailing
misrepresenting the benefits or advantages promised by the policy – an act that
would be deceptive under §§ 541.051 or 541.061. There is no requirement that
Kocurek be a consumer under the policy to bring these claims. Crown Life Ins.
Co. v. Casteel, 22 S.W.3d 378, 383-84 (Tex. 2000).

      Kocurek’s claims under the Texas Deceptive Trade Practices Act were
correctly dismissed. Only a consumer may maintain a cause of action directly
under the DTPA. Tex. Bus. & Com. Code § 17.50. Since Kocurek’s husband, and


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                                   No. 10-51042

not Kocurek, actually purchased the policies, Kocurek does not qualify as a
consumer under the statute. Transport Ins. Co. v. Faircloth, 898 S.W.2d 269,
274 (Tex. 1995) (“A party whose only relationship to an insurance policy is as a
beneficiary seeking proceeds is not a consumer under the DTPA). Kocurek
argues that she is a consumer by virtue of her community property interest in
the policies which were paid for with community funds. However, Kocurek failed
to raise this argument timely in the district court. Accordingly, we decline to
consider it in this appeal.

      Finally, Kocurek argues that she states similar tort and Insurance Code
claims on behalf of her deceased husband’s estate. However, a careful reading
of the complaint reveals that she brings such claims individually and only seeks
recovery of any premium payments owed the estate if her individual claims for
insurance benefits fail.      Kocurek’s claims in this capacity were properly
dismissed. The district court however noted Kocurek’s assertion that she and
the executor of her husband’s estate had executed an assignment of claims
agreement allowing her to pursue her husband’s claims in this case and
indicated its willingness to allow plaintiff leave to amend on this point. We leave
that issue to the discretion of the district court on remand.

                                       III.

      Accordingly, we affirm the dismissal of Kocurek’s claims under the Texas
DTPA and reverse the dismissal of all other claims brought in Kocurek’s
individual capacity. We also affirm the dismissal of all claims brought on behalf
of the estate of Kocurek’s husband except the alternative claim for refund of
insurance premiums. As to all claims, we leave to the district court’s discretion
whether to allow Kocurek to amend or supplement her petition.

AFFIRMED IN PART, REVERSED IN PART, and REMANDED.



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