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Date: 11-08-2013

Case Style: Kathy Carter and Scott Gordon v. Modern Woodmen of America dba Modern Woodmen Fraternal Financial, Barbara A. Betts, John Hurst

Case Number: CJ-2013-4036

Judge: Dana Kuehn

Court: District Court, Tulsa County, Oklahoma

Plaintiff's Attorney: Thomas E. Baker

Defendant's Attorney: Michael D. Goss and Timothy S. Harmon for Barbara A. Betts

Harry A. Parrish for John Hurst and Modern Woodman of America

Description: Kathy Carter and Scott Gordon sued Modern Woodmen of America dba Modern Woodmen Fraternal Financial, Barbara A. Betts, John Hurst on breach of contract, fraud, and bad faith insurance liability theories claiming:

I. Plaintiffs are residents of Tulsa County, State of Oklahoma. Defendant is a foreign insurance company registered and doing business in Tulsa County, State of Oklahoma. Defendant Bells and Hurst sold investments and/or insurance to the Plaintiffs placing jurisdiction and venue properly in this court.

II. Defendants, acting in concert, sold the Plaintiffs as “investments” what were later termed life insurance policies.

III. In each instance, Plaintiffs were told that for a flat payment they would be given an investment which would provide them life insurance with no further premiums. the monies submitted were to draw interest at a rate which was then above market value.

IV. In each instance, after the initial monies had been collected, the Defendant insurance company sent documents which did not match the “investment.” The monies paid were termed premiums and Plaintiffs were billed additional sums of money to keep the life insurance in effect.

V. In each instance, when Plaintiffs received the premium notices, they notified the individual Defendants and were told that it was all a misunderstanding and that their investment money would be refunded with interest,

VI. Plaintiffs are now receiving cancellation notices leaving them with nothing for their investment,

VII. The reasonable expectations of the Plaintiffs were that they would be given the investments promised, the interest on the investments, and the life insurance promised, together with the promised ability to withdraw monies if needed.

VIII. The acts and omissions of the Defendant constitute fraud and misrepresentation, apparent bait and switch tactics, and have damaged the Plaintiffs by:

a. depriving them of their monies invested;

b. depriving them of interest which could have been earned;

c. failing to insure the Plaintiffs;

d. leaving the Plaintiffs either uninsurable or uninsurable at the same rate when the monies were paid.

IX. The acts and omissions of the Defendants have been in violation of their duties and obligations of good faith and fair dealing toward the Plaintiffs entitling Plaintiffs to punitive damages to deter future similar conduct.

WHEREFORE, Plaintiffs pray that their investment monies be refunded with interest, that Defendant pay as damages the money it would cost to insure the Plaintiffs for the same coverage, that Defendants be made to pay actual damages for their bad faith dealing and punitive damages in excess of $75,000.00 so as to deter any further similar bad acts together with all and any other relief to which the court deem them entitled.


Barbara A. Betts appeared and answered as follows:

1. Defendant Betts is presently without sufficient information or knowledge to admit or deny the present residency of Plaintiffs. Defendant Betts denies that she ever sold investments to Plaintiffs. Defendant Betts is without sufficient information to admit or deny that Defendant Flurst sold investments to Plaintiffs and th’&tr d&iles
the same. Defendant Betts admits all other allegations of Paragraph I. of Plaintiffs Petition.

2. The allegations of Paragraph II. of Plaintiffs’ Petition are denied as to this Defendant.

3. The allegations of Paragraph III. of Plaintiffs’ Petition are denied as to this Defendant.

4. The allegations of Paragraph IV. of Plaintiffs’ Petition are denied as to this Defendant as worded. Defendant Betts states the life insurance is what was sold to Plaintiffs by this Defendant.

5. The allegations of Paragraph V. of Plaintiffs’ Petition are denied as to this Defendant.

6. This Defendant is without sufficient information to admit or deny the allegations of Paragraph VT. of Plaintiffs’ Petition and therefore demands strict proof thereof.

7. The allegations of Paragraph VII. of Plaintiffs’ Petition are denied as to this Defendant and Defendant demands strict proof thereof.

8. The allegations of Paragraph VIII. of Plaintiffs’ Petition are denied as to this Defendant.

9. The allegations of Paragraph IX. of Plaintiffs’ Petition are denied as to this Defendant.

AFFIRMATWE DEFENSES

10. This Defendant denies that she or her agents, servants or employees were guilty of any type of negligence.
it. Should this Defendant be found guilty of negligence, which is not admitted but is expressly denied, Defendant Betts states that her negligence was not the proximate cause of Plaintiffs’ alleged injury and damage, if any.

12. Defendant Betts specifically denies that she sold any investments to Plaintiffs, and asserts that at all times Plaintiffs were told and knew they were purchasing either term life insurance or whole life insurance.

13. For further answer and defense, Defendant Betts states that the Plaintiffs fail to state a good and valid cause of action against this Defendant for punitive damages, and further denies that she committed any act or omission which would entitle the Plaintiffs to recover punitive damages.

14. If there are any material allegations which Defendant Betts has not denied, and which adversely affect her rights, Defendant Betts does hereby deny the same.

15. Plaintiffs’ Petition fails, in whole or in part, to state a claim upon which relief can be granted.

16. This Defendant asserts that this action is barred in whole or in part by the applicable Statute of Limitations.

17. Plaintiffs’ Petition fails to state a claim upon which relief can be granted for attorney fees.

18. Plaintiffs’ Petition fails, in whole or in part, to state a claim upon which relief can be granted as to:

a. Any breach of contract claim;

b. Fraud;

c. Misrepresentation; or

d. Bait and switch.

19. As further affirmative defense, this Defendant alleges and asserts that Plaintiffs have failed to properly plead “fraud” and have not stated the circumstances constituting fraud with particularity, as required by 12 0.5. §2009.

20. Plaintiffs’ Petition, to the extent it seeks punitive damages, violates this Defendant’s rights to protection from “excessive fines” as provided in the 8th amendment of the United States Constitution and the Constitution of the State of Oklahoma.

21. Defendant Betts affirmatively states the life insurance was sold to Plaintiffs and was provided to Plaintiffs as long as the premiums were paid.

22. The Plaintiffs’ claims, in whole or in part, are barred by the doctrines of Accord and Satisfaction, Estoppel, Laches, Payment, Release, and Waiver.

23. Any award of punitive damages based upon any standard of proof that is less than “clear and convincing” evidence would violate the Due Process Clause of the Fourteenth Amendment of the United States Constitution, and the Due Process Clause of the Oklahoma Constitution.

24. Any award of punitive damages based upon vague and undefined standards of liability would violate the Due Process Clause of the Fourteenth Amendment of the United States Constitution, and the Due Process Clause of the Oklahoma Constitution.

25. Plaintiffs’ claim for punitive damages are in contravention of Barbara Betts’ rights under each of the following constitutional provisions:

a. The Commerce C]ause of Article I, Section 8 of the United States Constitution;

b. The Contracts Clause of Article I, Section 10 of the United States Constitution;

c. The prohibition against ex post facto laws embodied in Article I, Section 10 of the United States Constitution;

d. The Supremacy Clause of Article VI of the United States Constitution;

e. The Free Speech Clause of the First Amendment of the United States Constitution;

f. The Due Process Clause of the Fifth and Fourteenth Amendments of the United States Constitution and Section 7, Article II of the Oklahoma Constitution;

g. The Takings Clause of the Fifth Amendment of the United States Constitution;

h. The Excessive Fines Clause of the Eighth Amendment of the United States Constitution and Article II, Section 9 of the Oklahoma Constitution;

i. The Right to Trial by Jury contained in the Seventh Amendment of the United States Constitution; and

j. The Equal Protection Clause of the Fourteenth Amendment of the United States Constitution;
as well as the corresponding provisions of the Oklahoma Constitution.

26. The Plaintiffs’ claim for punitive damages is improper for the following reasons:

a. there are no standards provided by Oklahoma law for the imposition of punitive damages, and, therefore, Barbara Betts, has not been put on notice and given the opportunity to anticipate the punitive liability and/or the potential size of the award;

b. the procedures to be followed could permit the award of multiple punitive damages for the same act or omission;

c. the procedures under which punitive damages are awarded and th.e instructions used under Oklahoma law, jointly and separately, are vague and ambiguous and, thus, fail to eliminate the effects of, and to guard against, impermissible jury passion;

d. present Oklahoma law does not provide for sufficiently objective and specific standards to be used by the jury in its deliberations on whether to award punitive damages and, if so, on the amount to be awarded;

e. present Oklahoma law does not provide for a meaningful opportunity for challenging the rational basis for, and the excessiveness of, any award of punitive damages;

f. present Oklahoma procedures may permit the admission. of evidence relative to punitive damages in the same proceeding during which liability is determined;

g. present Oklahoma procedures permit the imposition of joint and several judgments against multiple co-defendants for different acts or degrees of wrong doing or culpability;

h. present Oklahoma procedures fail to permit the reduction of any award for punitive damages based on the culpability of the plaintiff.

27. Barbara Betts, incorporates by reference, and adopts, as if fully set forth herein any and all standards or limitations regarding the determination and enforceability of punitive damages awards set forth in State Farm Mutual Automobile insurance Company v. Campbell, 123 S.Ct. 1513 (2003), and BMW of North America v. Gore, 116 S.Ct. 1589 (1996).

WHEREFORE, PREMISES CONSIDERED, the Defendant, Barbara Betts prays that she be dismissed from this action, that she be awarded her costs and attorney’s fees expended herein, and for any and all other relief as the Court may deem just and proper.

Outcome: Settled and dismissed with prejudice.

Plaintiff's Experts:

Defendant's Experts:

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