The court granted the insurer’s and the mortgagee’s motions to dismiss the homeowner’s claims for breach of contract, bad faith and breach of fiduciary duty. Morris v. Standard Guar. Ins. Co., et al., 2026 U.S. Dist. LEXIS 12354 (N.D. Okla. Jan. 23, 2026).

PHH Mortgage Corporation was Plaintiff Sidney Morris’ mortgagee. The mortgage required plaintiff to obtain insurance on the property or the lender could do so on his behalf. PHH purchased a homeowner’s policy from Standard Guaranty on plaintiff’s behalf. Plaintiff asserted he was a third-party beneficiary to the policy and paid monthly premiums.

Plaintiff alleged that his property suffered storm damage and he submitted a claim to Standard Guaranty. According to plaintiff, he was treated as the insured throughout Standard Guaranty’s handling of the claim, thereby demonstrating that he was a beneficiary of the policy. Plaintiff further alleged that throughout the handling of the claim, he relied on PHH to advocate on behalf of their common interest in the property and that PHH had a duty to ensure that Standard Guaranty would handle the claim reasonably.

Plaintiff alleged that Standard Guaranty failed to properly investigate the claim, evaluate the investigation for the claim, used a virtual claim handling process, and used third parties to undervalue or delay the claim.

Plaintiff further alleged that PHH breached the contract with him by failing to act in any way regarding the claim. Both Standard Guaranty and PHH moved to dismiss plaintiff’s complaint.

Under Oklahoma law, to determine whether a party was a third-party beneficiary under a contract, a court had to consider the contracting parties’ primary intent as reflected in the policy. In reviewing the policy, the court noted the loss payment provision provided, “We will adjust all losses with the named insured” and “Loss will be made payable to the named insured and the borrower . . .” The Declarations listed PHH as the named insured and plaintiff as “borrower” for the “described location.” The Declarations provided coverage to the residential property listed as the “described location.”

Considering these provisions, the court did not find any direct or express intent by the contracting parties to confer a direct benefit to plaintiff under the policy. While the loss payment provision contemplated a situation in which the borrower, plaintiff, may be paid, it conditioned payment at Standard Guaranty’s “option.” Standard Guaranty’s option could not be said to provide a “direct” or “express” benefit to plaintiff. Accordingly, there was no direct benefit to plaintiff either in loss payment or personal coverage under the policy. Plaintiff did not qualify as a third-party beneficiary under Oklahoma law. The breach of contract and bad faith claims against Standard Guaranty were dismissed.

Nor was plaintiff’s claims against PHH for breach of contract or breach of fiduciary duty viable. Plaintiff’s breach of contract claim was based upon his alleged status as a third-party beneficiary under the policy. However, plaintiff was not a party to the contract and PHH could not breach any of the policy provisions as to plaintiff. Further, plaintiff did not allege facts or circumstances establishing a fiduciary relationship with PHH. A contract between Standard Guaranty and PHH could not impose a fiduciary duty by PHH to plaintiff. The claim for breach of fiduciary duty was also dismissed.