Zubiate v. American Family Insurance

2022 UT App 144
THE UTAH C OURT OF APPEALS
S HAWNA Z UBIATE,
Appellant,
v.
A MERICAN F AMILY I NSURANCE C OMPANY ,
Appellee.
Opinion
No. 20210090-CA
Filed December 22, 2022
Eighth District Court, Vernal Department
The Honorable Edwin T. Peterson
No. 200800068
Emily Adams and Sara Pfrommer,
Attorneys for Appellant
Evan S. Strassberg, Attorney for Appellee
JUDGE R YAN M. HARRIS authored this Opinion, in which J UDGE
M ICHELE M. C HRISTIANSEN F ORSTER concurred. JUSTICE JILL M.
POHLMAN concurred in part and dissented in part,
with opinion.1
HARRIS, Judge:
¶1 	About a year after purchasing a life insurance policy, a man
(Father) emailed his insurance agent and instructed him to change
the secondary beneficiary on his policy from his mother-in-law
(Mother-in-Law) to his children (the Children). Sometime later,
after Father and his wife both died in an accident, the insurance
1. Justice Jill M. Pohlman began her work on this case as a member
of the Utah Court of Appeals. She became a member of the Utah
Supreme Court thereafter and completed her work on this case
sitting by special assignment as authorized by law. See generally
Utah R. Jud. Admin. 3-108(4).

Zubiate v. American Family Ins. Co.
20210090-CA 	2 	2022 UT App 144
company paid the insurance proceeds to Mother-in-Law. The
Children 	(through 	a 	conservator) 	then 	sued 	the 	insurance
company, but the district court dismissed their entire lawsuit. The
Children now appeal that decision. We affirm the dismissal of two
of their four stated causes of action, but we reverse the dismissal
of the other two, and remand the case to the district court for
further proceedings.
BACKGROUND2
¶2 	In 2014, Father purchased a $1,000,000 life insurance policy
(the 	Policy) 	from 	American 	Family 	Insurance 	Company
(American Family). At the time he purchased the Policy, Father
named his wife as the primary beneficiary and Mother-in-Law as
the secondary beneficiary.
¶3 	The 	following 	year, 	Father 	took 	steps 	to 	change 	the
secondary beneficiary under the Policy. In particular, he emailed
his insurance agent (Agent)—an agent of American Family—and
instructed 	him 	to 	remove 	Mother-in-Law 	as 	the 	secondary
beneficiary and to replace her with the Children, and then to
install his mother, Shawna Zubiate, as a “tertiary beneficiary” in
line behind the Children. However, Agent or American Family
did not make the changes as Father had requested.
¶4 	Four years later, in May 2019, Father and his wife—the
primary beneficiary under the Policy—both died in an accident.
2. “On appeal from a motion to dismiss, we review the facts only
as they are alleged in the complaint. We accept the factual
allegations as true and draw all reasonable inferences from those
facts in a light most favorable to the plaintiff.” Lewis v. U.S. Bank
Trust NA, 2020 UT App 55, ¶ 2 n.1, 463 P.3d 694 (quotation
simplified). Thus, we recite the facts as set forth in the complaint
and assume the truth of those facts for purposes of our analysis.

Zubiate v. American Family Ins. Co.
20210090-CA 	3 	2022 UT App 144
Shortly thereafter, and apparently believing that Mother-in-Law
was still the secondary beneficiary, American Family paid the
insurance proceeds to Mother-in-Law.
¶5 	In June 2020, the Children (through Zubiate, in her capacity
as their conservator) filed this lawsuit against American Family
and Mother-in-Law, generally alleging that the company had
failed 	to 	follow 	Father’s 	instructions 	to 	change 	the 	named
secondary beneficiary, and then had failed to pay the insurance
proceeds to the proper parties. The complaint asserted four
separate causes of action: (1) “Failure to Change Beneficiary
According 	to 	Decedent’s 	Wishes,” 	(2) 	mutual 	mistake 	and
reformation, (3) unilateral mistake, and (4) negligence.
¶6 	Mother-in-Law filed a motion to dismiss the complaint,
asserting that the Children’s various claims were untimely and/or
failed 	to 	state 	a 	claim. 	In 	particular, 	she 	asserted 	that 	the
Children’s first cause of action was not a cognizable claim for
relief, and that the Children had “failed to give any indication of
what that claim might be.” With regard to the other claims,
Mother-in-Law asserted that the Children had failed to state valid
claims for mistake or negligence, but that even if they had, those
claims were time-barred under applicable statutes of limitation.
American Family joined in Mother-in-Law’s motion.
¶7 	In opposition to the motion, the Children asserted that
none of their claims were time-barred, and that they had stated
valid 	claims 	for 	mistake 	and 	negligence. 	In 	addition, 	they
included an introductory section in their memorandum in which
they set forth their main legal theory: that Father had at least
substantially complied with the requirements for changing the
secondary 	beneficiaries 	of 	the 	Policy, 	that 	Father’s 	changes
rendered them third-party beneficiaries under the insurance
contract, and that they could therefore “sue on a contract dispute
as 	intended 	third 	party 	beneficiaries 	of 	the 	life 	insurance
contract.” The Children did not, however, specifically express an

Zubiate v. American Family Ins. Co.
20210090-CA 	4 	2022 UT App 144
intention for the district court to construe their first cause of
action—for 	“Failure 	to 	Change 	Beneficiary 	According 	to
Decedent’s Wishes”—as a claim for breach of contract as third-
party beneficiaries.
¶8 	The 	district 	court 	ultimately 	granted 	the 	motion,
dismissing 	the 	Children’s 	complaint 	against 	both 	American
Family and Mother-in-Law in its entirety, with prejudice and on
the merits. It first concluded that their first cause of action was not
a cognizable claim for relief. Given the way the complaint was
drafted and the way the motion arguments had been postured,
the court found it “unclear as to whether [that claim] sound[ed]
in tort, contract, statute, or another area of law.” Next, the court
concluded that the Children’s mistake claims were barred by the
applicable three-year statute of limitation, determining that the
statute began to run when Father requested the change in
beneficiary, which was five years before the complaint was filed.
And finally, the court concluded that the Children could not sue
American Family for negligence, reasoning that any such claim
“would have to be pursued by” Father.
ISSUES AND STANDARD OF REVIEW
¶9 	The Children now appeal the district court’s dismissal of
their complaint against American Family.3 We review the district
court’s determination for correctness. See Young Res. Ltd. P’ship v.
Promontory Landfill LLC, 2018 UT App 99, ¶ 9, 427 P.3d 457 (“The
grant of a motion to dismiss pursuant to rule 12(b)(6) presents a
question of law that this court reviews for correctness. Similarly,
the determination that a statute of limitations has expired is also
a question of law which we review for correctness, giving no
3. The Children do not appeal the dismissal of their claims against
Mother-in-Law.

Zubiate v. American Family Ins. Co.
20210090-CA 	5 	2022 UT App 144
particular 	deference 	to 	the 	lower 	court’s 	determination.”
(quotation simplified)).
ANALYSIS
¶10 	We begin our analysis with a brief discussion of the
standards governing notice pleading and dismissal of complaints
for failure to state a claim. We then engage in an analysis of the
district court’s dismissal order, and we do so in three parts. First,
we assess whether the district court correctly dismissed the
Children’s mistake claims. Second, we assess whether the court
correctly dismissed the Children’s claim for “Failure to Change
Beneficiary.” And finally, we assess whether the court correctly
dismissed the Children’s negligence claim.
I
¶11 	Utah has adopted the concept of “notice pleading,” see
Mack v. Utah State Dep’t of Com., 2009 UT 47, ¶ 17, 221 P.3d 194,
which is defined as “[a] procedural system requiring that the
pleader give only a short and plain statement of the claim
showing that the pleader is entitled to relief, and not a complete
detailing of all the facts,” Notice Pleading, Black’s Law Dictionary
(11th ed. 2019). This concept is embodied in rule 8 of the Utah
Rules of Civil Procedure, which requires only that a complaint
contain “a short and plain . . . statement of the claim showing that
the party is entitled to relief” and a “demand for judgment for
specified relief.” See Utah R. Civ. P. 8(a). Under this standard, a
complaint is sufficient if it provides “fair notice of the nature and
basis or grounds of the claim and a general indication of the type
of litigation involved.” See Mack, 2009 UT 47, ¶ 17 (quotation
simplified). A plaintiff’s complaint will be deemed adequate
under this standard as long as the defendant knows “what is
being claimed and how to defend” against it. See Youngblood v.
Auto-Owners Ins. Co., 2007 UT 28, ¶ 22, 158 P.3d 1088.

Zubiate v. American Family Ins. Co.
20210090-CA 	6 	2022 UT App 144
¶12 	When considering whether to dismiss a complaint for
failure to state a claim pursuant to rule 12(b)(6) of the Utah Rules
of Civil Procedure, courts must keep this “notice pleading”
standard in mind. See Mack, 2009 UT 47, ¶ 17 (stating that “Rule
12(b)(6) 	reflects 	Utah’s 	adoption 	of 	notice 	pleading”). 	In
particular, our supreme court has instructed that “a complaint
does not fail to state a claim unless it appears to a certainty that
the plaintiff would be entitled to no relief under any state of facts
which could be proved in support of the claim.” Id. (quotation
simplified). And when applying this standard, courts are to
“liberally construe” both the applicable rules of civil procedure as
well as the complaint “to favor finding a pleading sufficient.” See
id. (stating that “courts are to liberally construe both rules 8 and
12 to favor finding a pleading sufficient,” and that “when ruling
on a motion to dismiss for failure to state a claim, the court must
construe the complaint in the light most favorable to the plaintiff
and indulge all reasonable inferences in his [or her] favor”).
¶13 	Complaints are therefore not to be dismissed merely due
to “inartful pleading” or because a plaintiff “could have chosen a
better procedural vehicle to bring [a] claim.” Id. ¶ 21. To the
contrary, dismissal for failure to state a claim is proper only where
it is certain that the plaintiff cannot prevail under any potential
set of facts. See id. ¶ 17; see also Simmons Media Group, LLC v.
Waykar, LLC, 2014 UT App 145, ¶ 15, 335 P.3d 885 (“A motion to
dismiss should be granted only if, assuming the truth of the
allegations in the complaint and drawing all reasonable inferences
therefrom in the light most favorable to the plaintiff, it is clear that
the plaintiff is not entitled to relief.” (quotation simplified)).
¶14 	Thus, under the notice pleading standard, a plaintiff’s
complaint need contain only “a short and plain . . . statement of
the claim showing that the party is entitled to relief” and a
“demand for judgment for specified relief.” See Utah R. Civ. P.
8(a). “When a complaint states a claim in general language but the
factual allegations are so vague and ambiguous that the defendant

Zubiate v. American Family Ins. Co.
20210090-CA 	7 	2022 UT App 144
cannot draft an answer, the proper course of action is to move for
a more definite statement under rule 12(e), not to move for
dismissal.” Canfield v. Layton City, 2005 UT 60, ¶ 14, 122 P.3d 622
(quotation simplified). Indeed, “even if a complaint is vague,
inartfully 	drafted, 	a 	bare-bones 	outline 	or 	not 	a 	model 	of
specificity, the complaint may still be adequate so long as it can
reasonably be read as supporting a claim for relief, giving the
defendant notice of that claim.” Casaday v. Allstate Ins. Co., 2010
UT App 82, ¶ 16, 232 P.3d 1075 (quotation simplified).
¶15 	Other 	courts 	interpreting 	rules 	containing 	language
substantially identical to ours4 have concluded that, while a
plaintiff is required to allege facts supporting the claim, a plaintiff
is not required to specifically describe the legal theories upon
which the claim rests. See, e.g., Aaron v. Mahl, 550 F.3d 659, 666 (7th
Cir. 2008) (“Under the notice pleading standard . . . a complaint
need not contain legal theories.”); Alvarez v. Hill, 518 F.3d 1152,
1157 (9th Cir. 2008) (“Notice pleading requires the plaintiff to set
forth in his complaint claims for relief, not causes of action, statutes
or legal theories.”); McManus v. Fleetwood Enters., Inc., 320 F.3d
545, 551 (5th Cir. 2003) (stating that the federal version of rule 8
does “not require an inordinate amount of detail or precision,”
and that “[t]he plaintiff need not correctly specify the legal theory,
so long as the plaintiff alleges facts upon which relief can be
granted” (quotation simplified)); O’Grady v. Village of Libertyville,
304 F.3d 719, 723 (7th Cir. 2002) (“A plaintiff is not required to set
forth a legal theory to match the facts, so long as some legal theory
can be sustained on the facts pleaded in the complaint.”); see also
Lanier v. President & Fellows of Harvard College, 191 N.E.3d 1063,
1074 (Mass. App. Ct. 2022) (“For a claim to survive a motion to
4. Where applicable federal rules contain substantively identical
language, Utah appellate courts often look to federal case law for
guidance in interpreting our own rules. See, e.g., Arbogast Family
Trust v. River Crossings, LLC, 2010 UT 40, ¶ 16, 238 P.3d 1035.

Zubiate v. American Family Ins. Co.
20210090-CA 	8 	2022 UT App 144
dismiss, the complaint need not recite that specific cause of action
so long as the factual allegations are sufficient to support such a
claim.”); 61A Am. Jur. 2d Pleading § 148 (2022) (“Although the
mere compilation of facts cannot sustain a complaint which fails
to allege the invasion of a right recognized in law . . . the pleader
need not allege the legal theory relied upon.”).
¶16 	We find these federal cases persuasive, and consistent with
existing Utah law. Thus, as long as the plaintiff has set forth facts
that allege “a legal right, the invasion of which by defendant has
caused damage to the plaintiff,” see Dorney v. Dairymen’s League
Coop. Ass’n, 149 F. Supp. 615, 618 (D.N.J. 1957), that pleading is
sufficient, see R3 Composites Corp. v. G&S Sales Corp., 960 F.3d 935,
942 (7th Cir. 2020) (“A complaint need only provide notice of a
plausible claim; there is no rule requiring parties to plead legal
theories or elements of a case.” (quotation simplified)).
II
¶17 	With these principles in mind, we turn to an examination
of the district court’s dismissal of the various causes of action set
forth in the Children’s complaint. We first examine the Children’s
mistake claims, and conclude that the district court erred by
dismissing, at this stage of the proceedings, the Children’s claim
for mutual mistake, but that the court correctly dismissed the
Children’s claim for unilateral mistake.
A
¶18 	The Children’s first mistake claim alleges mutual mistake.
Specifically, the Children allege that Father “informed” Agent
that he wanted to change beneficiaries, and that he did so by
means of an email that was “clear” and “specifically stated” his
intentions. 	According to the 	complaint, 	and 	interpreting 	its
allegations 	liberally, 	Agent 	replied 	by 	“asking 	a 	couple 	of
questions,” but did not indicate that Father’s request was unclear

Zubiate v. American Family Ins. Co.
20210090-CA 	9 	2022 UT App 144
or problematic, and “never said the change would not happen or
that any additional information was needed to make the change.”
Father therefore understood that he had done what was necessary
to effectuate the change in beneficiary, and believed that Agent
“knew this” and shared that understanding.5 This allegedly
shared understanding—that the beneficiaries would be changed
pursuant to Father’s request—did not, however, get incorporated
into the Policy documents and, as a result, American Family paid
the 	insurance 	proceeds to 	Mother-in-Law instead 	of 	to 	the
Children. 	This sort of 	factual 	scenario—an 	alleged 	error 	in
reducing an agreement or understanding to writing—can, in
appropriate cases and if proven, constitute a mutual mistake. See
RHN Corp. v. Veibell, 2004 UT 60, ¶ 37, 96 P.3d 935 (“Mutual
mistake of fact may be defined as error in reducing the concurring
intentions of the parties to writing.” (quotation simplified)). As a
remedy, the Children seek reformation of the Policy, asking that
its terms be “changed to make effective the desires of [Father] and
the intent of his contract.”
¶19 	The district court dismissed the Children’s mutual mistake
claim on timeliness grounds. That was erroneous.
¶20 	Mistake 	claims 	are 	subject 	to 	a 	three-year 	statute 	of
limitation, see Utah Code Ann. § 78B-2-305(3) (LexisNexis 2018),
and the district court correctly noted that the Children’s claim was
5. The dissent reads the Children’s complaint narrowly, and
interprets it as not actually alleging that Agent shared Father’s
understanding that the beneficiaries would be changed. See infra
¶¶ 49–50. In our view, this reading runs afoul of our supreme
court’s mandate that complaints, at the pleading stage, must be
read liberally. The core theory of the Children’s entire complaint
is that they are the true beneficiaries of the Policy. A liberal
reading of the complaint includes at least an implied allegation
that 	Father 	and 	Agent 	shared 	the 	understanding 	that 	the
beneficiaries would be changed at Father’s request.

Zubiate v. American Family Ins. Co.
20210090-CA 	10 	2022 UT App 144
filed more than three years after Father instructed Agent to make
the change. But the applicable statute of limitation contains an
internal discovery rule, which provides that a cause of action for
mistake “does not accrue until the discovery by the aggrieved party
of the facts constituting the . . . mistake.” See id. (emphasis added).
¶21 	Here, the Children allege that they are the aggrieved
parties, and they assert that they could not have reasonably
discovered, and did not actually discover, the existence of the
mistake until they learned that American Family had paid the
insurance proceeds to Mother-in-Law. Indeed, in their complaint,
the Children note that they were “very young” at the time of the
relevant events,6 and assert that Father himself did not learn of
the mistake prior to his death. American Family paid the proceeds
to Mother-in-Law in May 2019, and this lawsuit was filed in June
2020, well within three years of the payout. Under these facts, the
allegations in the complaint are sufficient to survive a motion to
dismiss 	on 	the 	question 	of 	whether 	the 	aggrieved 	parties
discovered the mistake within three years of filing the complaint.
6. Even aside from the application of the statutory discovery rule,
any statute of limitation may have also been tolled due to the
Children’s 	minority. 	See 	Utah 	Code 	Ann. 	§ 	78B-2-108(2)
(LexisNexis Supp. 2022) (“During the time that an individual is
underage . . . the statute of limitations for a cause of action other
than for the recovery of real property may not run.”); see also
Zilleruelo v. Commodity Transporters, Inc., 2022 UT 1, ¶ 39, 506 P.3d
509 (“Indeed, the Tolling Statute . . . has been interpreted to toll
the statute of limitations for a minor during minority, without
regard to whether the minor has a legal guardian.”); Bonneville
Asphalt v. Labor Comm’n, 2004 UT App 137, ¶ 5, 91 P.3d 849 (“The
sweeping scope of this [statutory] language requires that all
statutes 	of 	limitation 	be 	tolled 	during 	minority 	unless 	the
legislature enacts a specific exemption.” (quotation simplified)).

Zubiate v. American Family Ins. Co.
20210090-CA 	11 	2022 UT App 144
¶22 	American Family nevertheless invites us to affirm the
district 	court’s 	dismissal 	of 	the 	mutual 	mistake 	claim 	on
alternative grounds. See Olguin v. Anderton, 2019 UT 73, ¶ 20, 456
P.3d 760 (stating that “[i]t is within our discretion to affirm a
judgment on an alternative ground if it is apparent in the record”
(quotation simplified)). Specifically, American Family points out
that the mistake alleged in the complaint had nothing to do with
the original formation of the insurance contract between Father
and American Family, and contends that any valid claim of
mistake “must relate to the formation of an actual contract.”
¶23 	It is certainly true that, for a mutual mistake claim to
succeed, a plaintiff must show that, “at the time the contract is
made, the parties make a mutual mistake about a material fact,
the existence of which is a basic assumption of the contract.” See
Rocky Ford Irrigation Co. v. Kents Lake Reservoir Co., 2020 UT 47, ¶ 73
n.29, 469 P.3d 1003 (quotation simplified). But mutual mistakes
can occur during the formation of an amendment or modification
to a contract in the same way that they can occur during the
formation of the original contract; that is, claims for mutual
mistake are not limited to mistakes that occurred at the time the
original contract was entered into. After all, an agreement to
amend or modify a contract operates as the creation of a new
contract. See Lewis v. Edwards, 554 S.E.2d 17, 23 (N.C. Ct. App.
2001) (“The effect of a modification to a contract is the production
of a new agreement.”); see also Beacon Terminal Corp. v. Chemprene,
Inc., 429 N.Y.S.2d 715, 717–18 (App. Div. 1980) (stating that “[t]he
modification of a contract results in the establishment of a new
agreement between the parties”); Marnon v. Vaughan Motor Co.,
194 P.2d 992, 1015 (Or. 1948) (“An agreement, when changed by
the mutual consent of the parties, becomes a new agreement,
which takes the place of the old, and consists of the new terms and
as much of the old agreement as the parties have agreed shall
remain unchanged . . . . The new contract supersedes the first to
the 	extent 	that the two 	will 	be 	unable 	to 	stand 	together.”

Zubiate v. American Family Ins. Co.
20210090-CA 	12 	2022 UT App 144
(quotation simplified)). And “[c]hanging a beneficiary on a life
insurance contract effects an amendment to the existing contract
and is itself the making of a new contract.” Rawlings v. John
Hancock Mutual Life Ins. Co., 78 S.W.3d 291, 296 n.1 (Tenn. Ct. App.
2001); see also Moore v. New York Life Ins. Co., 146 S.E.2d 492, 498
(N.C. 1966) (“The exercise by an insured of his right under the
policy to change the beneficiary thereof, effects an amendment of
the former contract and is, itself, the making of a contract . . . .”);
cf. New York Life Ins. Co. v. Baum, 707 F.2d 870, 872 (5th Cir. 1983)
(stating that a party made an “amendment to the insurance
contract” by “changing the name of the beneficiary”); Kirschbaum
v. Wennett, 806 N.E.2d 440, 443 (Mass. App. Ct. 2004) (stating that
a party “amended the document by changing the beneficiary”).
On this basis, we reject American Family’s argument that an
actionable mutual mistake can occur only at the time of formation
of an original contract, and not at the time of formation of an
amended contract.
¶24 	In sum, the Children’s claim for mutual mistake is not
subject to dismissal, at least not at this stage of the proceedings,
on statute of limitation grounds. And we decline American
Family’s invitation to affirm the dismissal of the mutual mistake
claim on the asserted alternative ground. We therefore reverse the
district court’s dismissal of this claim, although we express no
opinion as to its ultimate validity, or as to whether the Children—
as putative third-party beneficiaries not named in the insurance
contract—can properly assert a claim for mutual mistake and
reformation.
B
¶25 	In their other mistake claim, the Children allege that Father
made a unilateral mistake “in that he believed that [a] change had
occurred” to the secondary beneficiary of the Policy and that there
was not “anything additional that he needed to do” to effectuate
that change. As with the mutual mistake claim, the remedy the

Zubiate v. American Family Ins. Co.
20210090-CA 	13 	2022 UT App 144
Children seek on their unilateral mistake claim is reformation: to
change the secondary beneficiaries under the Policy. The district
court dismissed the unilateral mistake claim for the same reason
that it dismissed the claim for mutual mistake—on timeliness
grounds. However, that decision was erroneous for the same
reasons the dismissal of the mutual mistake claim was erroneous;
after all, the same statute of limitation—complete with an internal
discovery rule—applies to both types of mistake claims. See Utah
Code Ann. § 78B-2-305(3).
¶26 	But we elect to affirm, on alternative grounds, the district
court’s dismissal of the Children’s unilateral mistake claim. Under
our law, a unilateral mistake provides a basis for reformation only
“where one party makes a mistake either as the result of the other
party’s fraud or with the knowledge of the other party who then
attempts to take advantage of the mistake.” Red Bridge Cap. LLC v.
Dos Lagos LLC, 2016 UT App 162, ¶ 15, 381 P.3d 1147 (quotation
simplified). The Children, however, make no allegation of fraud
or other intentional behavior, nor do they allege that American
Family attempted to take advantage of any unilateral mistake
Father might have made. And absent “fraud or inequitable
conduct of the other remaining parties,” see Thompson v. Smith, 620
P.2d 520, 523 (Utah 1980), the Children’s only available remedy
would be rescission—and not reformation—of the Policy, see id.
(stating that “reformation is an improper remedy where there has
been no meeting of the minds (and hence no contract)”); Briggs v.
Liddell, 699 P.2d 770, 772 (Utah 1985) (“Reformation is frequently
sought in cases arising under insurance contracts when there is a
dispute over who is the intended beneficiary. The cases uniformly
hold that a unilateral mistake will not support reformation.”). But
the Children do not seek rescission of the entire Policy; in fact,
they would almost certainly prefer that American Family pay the
proceeds to Mother-in-Law—with the hope that some of the
money would eventually reach them indirectly—as opposed to
nobody at all. And rescission of the asserted amended Policy—thus

Zubiate v. American Family Ins. Co.
20210090-CA 	14 	2022 UT App 144
leaving in place the original Policy—is precisely the outcome the
Children sought to avoid by filing their complaint.
¶27 	In other words, even taking the Children’s allegations of
unilateral mistake at face value—as we must at this procedural
stage—the Children are not entitled to the relief they seek
(reformation) on that claim. Accordingly, even though the district
court 	erred 	by 	dismissing 	the 	unilateral 	mistake 	claim 	on
timeliness grounds, we affirm its dismissal of the claim on an
alternative basis, because the claim as pleaded fails on the merits.
III
¶28 	Next, we turn to the claim that the Children captioned
“Failure to Change Beneficiary According to Decedent’s Wishes.”
The district court dismissed this claim, stating that it was “unclear
as to whether it sounds in tort, contract, statute, or another area of
law,” 	and 	determining 	that 	the 	claim 	“does 	not 	provide
[American Family with] fair notice of the nature and basis of the
claim asserted and a general indication of the type of litigation
involved.”7 But dismissal of this claim, at this procedural stage,
was erroneous, because if this claim is construed liberally, in
accordance with notice pleading standards, it states facts that (if
true) could allow recovery on a claim sounding in contract.
¶29 	As 	noted 	above, 	at 	this 	procedural 	stage—when
considering the propriety of a motion to dismiss for failure to state
a claim—we are obligated to interpret the Children’s complaint
liberally. See Mack v. Utah State Dep’t of Com., 2009 UT 47, ¶ 17, 221
P.3d 194 (stating that courts “must construe the complaint in the
light most favorable to the plaintiff and indulge all reasonable
7. The district court dismissed this claim on its merits, and not on
timeliness grounds. And American Family does not ask us to
affirm the dismissal of this claim on any timeliness-related
alternative basis.

Zubiate v. American Family Ins. Co.
20210090-CA 	15 	2022 UT App 144
inferences in his favor”). The governing rule requires a plaintiff to
set forth only “a short and plain . . . statement of the claim
showing that the party is entitled to relief.” See Utah R. Civ. P.
8(a). And “[a] plaintiff is not required to set forth a legal theory to
match the facts, so long as some legal theory can be sustained on
the facts pleaded in the complaint.” See O'Grady v. Village of
Libertyville, 304 F.3d 719, 723 (7th Cir. 2002). In short, “a complaint
does not fail to state a claim unless it appears to a certainty that
the plaintiff would be entitled to no relief under any state of facts
which could be proved in support of the claim.” See Mack, 2009
UT 47, ¶ 17 (quotation simplified).
¶30 	For 	example, 	in 	Alvarez 	v. 	Hill, 	the 	plaintiff 	filed 	a
complaint seeking redress for alleged governmental violations of
his right to exercise his religious beliefs. See 518 F.3d 1152, 1154–
55 (9th Cir. 2008). Although he mentioned the First Amendment
in his complaint, he neglected to mention the Religious Land Use
and Institutionalized Persons Act (RLUIPA), a federal statute that
provides “heightened protection”—beyond that provided by the
First Amendment—for violation of one’s religious rights. See id. at
1156. Because the plaintiff made no mention of the statute in his
complaint, the district court dismissed the complaint without
“tak[ing] account of” RLUIPA. Id. But the appellate court reversed
the dismissal, offering its view that the defendants, by seeking
dismissal, were “exalt[ing] form over substance,” and it rejected
as “entirely meritless” the defendants’ “contention that [the]
complaint’s omission of a citation to RLUIPA precludes [the
plaintiff] from advancing legal arguments based on that statute.”
Id. at 1157–58. The court noted that the plaintiff, in subsequent
filings, had identified RLUIPA as a potential source of relief, and
stated 	that 	the 	plaintiff’s 	complaint 	“contained 	factual
allegations establishing a plausible entitlement to relief under”
that 	statute. 	Id. 	(quotation 	simplified). 	The 	court 	therefore
concluded that, under the circumstances, it was “conclusively
establish[ed] that [the defendants] had fair notice that a statutory

Zubiate v. American Family Ins. Co.
20210090-CA 	16 	2022 UT App 144
religious exercise claim also was being presented to the district
court.” Id. at 1158.
¶31 	In Aaron v. Mahl, the plaintiff filed a complaint to enforce
and collect on a previous judgment. 550 F.3d 659 (7th Cir. 2008).
But the complaint was not artfully drafted, and the “precise legal
theory of recovery was unclear.” Id. at 661. In the complaint, the
plaintiff did not use the word “replevin,” and “appeared to be
asking the court to enforce [a] writ of execution.” Id. at 665–66. At
the outset, “the district court construed [the plaintiff’s] complaint
as requesting that the court enforce the writ of execution and
require [the defendant] to turn over the funds to which [the
plaintiff] was entitled.” Id. at 662. Later, however, after a state
court quashed the writ of execution to which the plaintiff had
referred in his complaint, see id., the defendant moved to dismiss
the complaint on the ground that the “only theory of recovery
espoused in the . . . complaint was [now] frivolous,” and that the
court should not allow a new and unstated theory to “tip-toe in
through the side door.” Id. at 665–66 (quotation simplified). The
court denied that motion, determining that—even though the
complaint did not mention a replevin-based legal theory—the
plaintiff had stated facts sufficient to support relief under that
unstated theory:
[The 	plaintiff’s] 	complaint, 	admittedly 	more
focused on the writ of execution, also named [the
defendant] as a defendant, alleged that he had a
judgment against her, and claimed to be entitled to
the accounts [in question]. [The defendant] wants
the case to be dismissed because [the plaintiff’s]
complaint did not state a claim—he did not use
the word “replevin” or identify any other workable
legal theory. Under the notice pleading standard,
of 	course, 	a 	complaint 	need 	not 	contain 	legal
theories. . . . [The plaintiff’s] complaint gave [the
defendant] notice that he had a judgment against

Zubiate v. American Family Ins. Co.
20210090-CA 	17 	2022 UT App 144
her and he believed that he was legally entitled to
the money in her . . . accounts. Even though the writ
of execution should not have been issued, [the
plaintiff’s] claim was not frivolous from the outset,
and the district court did not err by considering [the
plaintiff’s] claim under another theory.
Id. at 666 (quotation simplified); see also McManus v. Fleetwood
Enters., Inc., 320 F.3d 545, 551 (5th Cir. 2003) (allowing a claim to
proceed even though the plaintiff had pleaded the wrong version
of a statute, noting that “the most natural reading of [his] broadly-
worded complaint would include some version of that claim”).
¶32 	These same principles apply here, and indicate that the
district court should not have dismissed the Children’s first claim
for relief, at least not at this procedural stage. The Children have,
as part of this claim, set forth facts that, if true, would entitle them
to relief on a breach of contract theory. In particular, they have
alleged that Father “made it clear” to Agent, in writing, that “he
did not want [Mother-in-Law] to be the contingent beneficiary” of
the Policy, that he wanted to replace her with the Children, and
that, at a minimum, his request was substantially compliant with
the requirements for changing the beneficiary of the Policy. The
Children therefore contend that, as a result of Father’s request,
they became (or should have become) the secondary beneficiaries
under the Policy, and that they—and not Mother-in-Law—should
have received the insurance proceeds following Father’s death.
These facts are sufficient to give American Family “fair notice”
that the Children claim to be the true secondary beneficiaries of
the Policy and that they seek relief as putative third-party
beneficiaries of that insurance contract. See Mack, 2009 UT 47, ¶ 17
(quotation simplified) (stating that applicable rules require only
that a complaint “provide fair notice of the nature and basis or
grounds of the claim and a general indication of the type of
litigation involved” (quotation simplified)); see also O’Grady, 304
F.3d at 723; McManus, 320 F.3d at 551 (stating that “the plaintiff

Zubiate v. American Family Ins. Co.
20210090-CA 	18 	2022 UT App 144
need not correctly specify the legal theory, so long as the plaintiff
alleges facts upon which relief can be granted”).
¶33 	Moreover, like the plaintiff in Alvarez, see 518 F.3d at 1157–
58, the Children provided at least some additional clarity in filings
subsequent to their complaint—in the Children’s case, in their
memorandum 	opposing 	the 	motion 	to 	dismiss. 	That
memorandum—like 	the 	complaint 	itself—is not 	a 	model 	of
clarity, and it would certainly have been better if the Children had
more specifically asked the court to construe this particular cause
of 	action 	as 	a 	claim 	for 	breach 	of 	contract 	by 	third-party
beneficiaries. But as noted, in the introductory section of that
memorandum, the Children did—at least in a general sense—set
forth exactly this legal theory: they asserted that Father had at
least substantially complied with the requirements for changing
the secondary beneficiaries of the Policy, that Father’s changes
were sufficient to make them third-party beneficiaries under the
Policy, and that they “can sue on a contract dispute as intended
third party beneficiaries of the life insurance contract.”8 And later
in that same memorandum, the Children argued as follows: “It is
8. In our view (unlike the dissent’s, see infra ¶ 56 n.15), the
Children made this same argument—though again far from
artfully—in their opening brief on appeal. In that brief, they set
forth 	the 	same 	general 	theory 	that 	they 	set 	forth 	in 	their
memorandum before the district court: that they were “the
intended third-party beneficiaries of the life insurance policy,”
and that “[i]ntended beneficiaries can sue for a breach of the
defendant’s obligation to them” and may “make a claim under
contract or policy of insurance.” We agree with the dissent that it
certainly would have been better if the Children had more directly
asserted, as they eventually did in their reply brief, that they were
asking for their “failure to change beneficiary” claim to be
recognized as a contract-based third-party-beneficiary claim. But
in our view, the dissent’s framing of the Children’s arguments in
their opening brief on appeal is unduly restrictive.

Zubiate v. American Family Ins. Co.
20210090-CA 	19 	2022 UT App 144
alleged in the complaint that [the Children] should be the
beneficiaries of the contract and that their father, the insured, had
listed them as the beneficiaries of the insurance contract and as
such are intended third-party beneficiaries to that contract.”9
¶34 	It remains to be seen, of course, whether the Children will
be able to support their third-party beneficiary claim for breach of
contract with sufficient proof. After all, to succeed on this claim,
the Children will need to prove that they are in fact third-party
beneficiaries of the Policy; to do so, they must—among other
things—demonstrate that Father at least substantially complied
with all of the requirements for changing the beneficiaries of the
Policy. See Bergen v. Travelers Ins. Co. of Ill., 776 P.2d 659, 663 (Utah
Ct. App. 1989) (stating that “an insured must only substantially
comply with the policy requirements for making a change of
beneficiaries,” and that “a change-of-beneficiary is effective when
it is clear that the insured intends a change, has a right to make a
change, and takes reasonable steps to bring about a change”
(quotation simplified)). The Children’s complaint does not quote
from or attach a copy of the Policy and, in addition, describes only
9. This legal theory should not be unfamiliar to any life insurance
company. Putative third-party beneficiaries of a life insurance
policy—assuming they can prove that status—have long been
held to have the right to sue the insurance company on a claim
sounding in contract. See, e.g., Wentworth v. Equitable Life Assurance
Society, 238 P. 648, 653–54 (Utah 1925) (sustaining a claim by a
putative third-party beneficiary of a life insurance contract); see
also Bergen v. Travelers Ins. Co. of Ill., 776 P.2d 659, 661 (Utah Ct.
App. 1989) (adjudicating a contract-based dispute between two
putative beneficiaries to a life insurance contract). See generally
SME Indus., Inc. v. Thompson, Ventulett, Stainback & Assocs., 2001
UT 54, ¶ 47, 28 P.3d 669 (“Third-party beneficiaries are persons
who are recognized as having enforceable rights created in them
by a contract to which they are not parties and for which they give
no consideration.” (quotation simplified)).

Zubiate v. American Family Ins. Co.
20210090-CA 	20 	2022 UT App 144
in fairly general terms the nature of Father’s communications with
Agent; 	under 	these 	circumstances, 	we 	of 	course 	cannot
meaningfully (and should not in any event) comment on the
relative merit of this claim. But at this procedural stage, it is
enough that the Children have set forth facts that could, if proven,
support a claim for relief. And they have done so with regard to
their first cause of action.
¶35 	Accordingly, the district court erred by dismissing the
Children’s first cause of action at this procedural stage. We
therefore reverse the court’s order dismissing that claim.
IV
¶36 	The Children’s final cause of action alleges negligence on
the part of Agent. Specifically, they contend that Agent—acting
on behalf of American Family—held a “duty as an insurance
agent on behalf of his clients and their interests.” That duty—
according 	to 	the 	complaint—was 	to 	“ensure 	that 	[Father’s]
intentions were seen through.” The district court, after noting that
the complaint does “not allege that [Agent or American Family]
owed [the Children] a duty of care,” concluded that the Children
could not state a valid claim for negligence. We agree with the
district court’s conclusion. The Children’s avenue, if any, for
redress 	against 	American 	Family—whether 	claimed 	directly
against the company or based on a sort of respondeat superior
theory, through Agent—lies in contract and not in tort.
¶37 	At root, the Children’s claims for relief are based on the
notion that Father made them beneficiaries of the Policy. As
discussed above, the Children have stated valid contract-based
claims 	as 	putative 	third-party 	beneficiaries 	and 	for 	mutual
mistake and reformation. The facts they allege in their complaint,
if proven, indicate that American Family may have breached
contractual duties to them as third-party beneficiaries.

Zubiate v. American Family Ins. Co.
20210090-CA 	21 	2022 UT App 144
¶38 	But these duties, as described in the complaint, all arise
from the Children’s claimed status as beneficiaries under the
Policy. That is, what the Children allege is that they have a
contract-based relationship with American Family. And that
relationship is, by definition, a “first-party” relationship, because
the claims are based on breach of contractual terms.10 See, e.g.,
Design Pros. Ins. Co. v. Chicago Ins. Co., 454 F.3d 906, 912 (8th Cir.
2006) (stating that “a beneficiary who seeks to collect the proceeds
of a deceased loved one’s life insurance policy . . . is a first-party
claimant because a contingency or loss has occurred that allows
him or her to make a claim under the policy”); Tolman v. Reassure
Am. Life Ins. Co., 2017 OK CIV APP 15, ¶ 11, 391 P.3d 120 (“The
claim by a life insurance beneficiary against the life insurance
company is generally regarded as a first-party claim and the
relationship between the insured and the insurer is one that rests
in contract”); see also Elizabeth Williams, Cause of Action to Obtain
Punitive Damages Against Insurer for Refusal to Settle or Pay Claim,
56 Causes of Action 2d 465 § 2 (2022) (“First party claims also
include claims made by the beneficiary under a life insurance
policy.”); cf. Harper v. Fidelity & Guar. Life Ins. Co., 2010 WY 89,
¶¶ 31–35, 234 P.3d 1211 (treating a putative beneficiary under a
10. This is true despite the fact that beneficiaries of life insurance
contracts are sometimes referred to as “third-party” beneficiaries.
In the insurance context, “third-party claims” generally refer to
tort claims (for instance, arising out of auto accidents) brought
against insureds by strangers to the insurance contract. See Beck v.
Farmers Ins. Exch., 701 P.2d 795, 798 n.2 (Utah 1985) (“We use the
term ‘first-party’ to refer to an insurance agreement where the
insurer agrees to pay claims submitted to it by the insured for
losses suffered by the insured . . . . In contrast, a ‘third-party’
situation is one where the insurer contracts to defend the insured
against claims made by third parties against the insured and to
pay any resulting liability, up to the specified dollar limit.”). That
is not the sort of claim the Children bring here.

Zubiate v. American Family Ins. Co.
20210090-CA 	22 	2022 UT App 144
life insurance contract as a “first-party” claimant and allowing her
to 	bring a 	bad 	faith claim 	against 	the 	insurer, 	although 	it
dismissed that claim on its merits).
¶39 	In any “first-party” insurance relationship, “the duties and
obligations of the parties are contractual rather than fiduciary”
and, “[w]ithout more, a breach of those implied or express duties
can give rise only to a cause of action in contract, not one in tort.”
Beck v. Farmers Ins. Exch., 701 P.2d 795, 800 (Utah 1985). These
principles are further embodied in what is known as the economic
loss rule, which “places limits on tort claims for purely economic
losses.” Hayes v. Intermountain GeoEnvironmental Services, Inc.,
2021 UT 62, ¶ 16, 498 P.3d 435. When a duty is created by contract,
a plaintiff is generally limited to suing for breach of that duty in
contract, and not in tort. See Reighard v. Yates, 2012 UT 45, ¶ 14,
285 P.3d 1168 (“The economic loss rule prevents recovery of
economic damages under a theory of tort liability when a contract
covers 	the 	subject 	matter 	of 	the 	dispute.”). 	“Under 	such
circumstances, the contract is the exclusive means of obtaining
economic recovery.” Id. ¶ 20. In other words, “when a conflict
arises between parties to a contract regarding the subject matter
of that contract, the contractual relationship controls, and parties
are not permitted to assert actions in tort in an attempt to
circumvent 	the 	bargain 	they 	agreed 	upon.” 	Id. 	(quotation
simplified). 	Thus, 	any 	claim 	that 	the 	Children—as 	putative
beneficiaries of the insurance contract—have against American
Family directly must sound in contract, and not in tort.
¶40 	And 	the 	Children 	may 	not 	circumvent 	these 	legal
principles by attempting to state their tort claim against Agent,
rather than directly against American Family. Under Utah law, a
client of an insurance agent can sue the agent in tort for failure to
procure insurance as requested. See Espenschied Transport Corp. v.
Fleetwood Services, Inc., 2018 UT 32, ¶ 14, 422 P.3d 829 (stating that
“[a]n insurance agent may be obligated to procure insurance by
contract or by duty” and an “agent who fails to procure insurance

Zubiate v. American Family Ins. Co.
20210090-CA 	23 	2022 UT App 144
may be liable for breach of contract or negligence”); see also Harris
v. Albrecht, 2004 UT 13, ¶ 30, 86 P.3d 728 (stating that a “contract
to procure insurance may arise when the agent has definite
directions from the insured to consummate a final contract” and
that a “duty to procure insurance may arise when an agent accepts
an application . . . [or] lulls the other party into believing a contract
has been effected through promises”). But the Children were
not—and do not claim to have been—clients of Agent. Only
Father was.11 And insurance agents typically do not owe tort
11. The district court correctly noted that any tort duty owed by
Agent in this situation would have been owed to Father, and not
to the Children. In dicta, and in the absence of any pending claim
by Father’s estate or any actual motion to amend the complaint on
the part of any party to the lawsuit, the court then mused that any
such claim by Father’s estate would in any event be time-barred.
We are of course aware that Zubiate purports to be not only the
Children’s conservator but also the personal representative of
Father’s estate. But Zubiate filed no documents with the district
court in this case in her capacity as personal representative of
Father’s estate. We recognize that there was some discussion, at
oral argument on the motion to dismiss, of Zubiate’s inchoate
intention to perhaps file some sort of motion or claim on behalf of
Father’s estate in the event the district court dismissed the
Children’s claims. But no such motion or claim was ever filed;
Father’s estate was never a party (or even a putative party) to the
district court lawsuit, and is not a party to this appeal. In view of
these rather unique facts, we (unlike the dissent, see infra ¶ 60)
believe the better reading of the record is to consider the district
court’s comments about the timeliness of an as-yet-unfiled claim
by Father’s estate to be mere musings, offered in dicta, rather than
an actual ruling; in this situation, we think it best—especially in
light of our decision herein to reinstate two of the Children’s
claims, an event that renders decidedly remote the possibility of
Father’s estate ever filing any claim—to offer no opinion on the
(continued…)

Zubiate v. American Family Ins. Co.
20210090-CA 	24 	2022 UT App 144
duties to non-clients—individuals who are not in privity with the
agent and with whom they do not deal. See, e.g., Vestal v. Pontillo,
124 	N.Y.S.3d 	441, 	447 	(App. 	Div. 	2020) 	(stating 	that 	“[a]n
insurance agent ordinarily does not owe a duty of care to a
nonclient,” at least in the absence of evidence of privity); Henry v.
American Church Group of Arizona, LLC, No. 2 CA-CV 2019-0042,
2020 WL 1650642, at *2 (Ariz. Ct. App. Apr. 2, 2020) (stating that
an insurance agent does not owe a duty to “insureds generally,
but rather . . . they owe a duty to their insured clients”); Jones v.
Hyatt Ins. Agency, Inc., 741 A.2d 1099, 1108–09 (Md. 1999) (stating
that “the tort duty owed by an [insurance] agent to the principal
would not extend to third parties”); Brannan Paving GP, LLC v.
Pavement Markings, Inc., 446 S.W.3d 14, 26 (Tex. App. 2013) (“An
insurance agent, however, generally does not owe a duty unless
there is privity.”).
¶41 	In this context, we find persuasive the court’s analysis in
Mims 	v. 	Western-Southern 	Agency, 	Inc., 	a 	case 	involving
circumstances strikingly similar to those presented here. See 226
S.W.3d 833 (Ky. Ct. App. 2007). In Mims, the plaintiff sued an
insurance agent, complaining that he had “negligently failed to
effectuate her late father’s intent to make her the sole contingent
beneficiary of his life insurance policy.” Id. at 834. The court
dismissed the plaintiff’s tort claim against the agent, agreeing
with the agent that the cause of action was a “breach of contract
claim disguised as a negligence claim.” Id. at 836. The court noted
that, in order to succeed on a negligence-based claim, the plaintiff
would “bear the burden of proving that her father intended to
change his contingent beneficiaries” but that the agent acted
negligently in failing to effectuate that request. Id. But, the court
noted, if the plaintiff was “able to meet [that] burden of proof, she
would in effect also be proving that [her father] substantially
validity or timeliness of any potential tort claim that might
someday be filed by Father’s estate against Agent.

Zubiate v. American Family Ins. Co.
20210090-CA 	25 	2022 UT App 144
complied with the provisions of his insurance policy,” and in that
event she would have “a recognized cause of action,” sounding in
contract, against the insurance company. Id. In this situation,
“[t]he threshold inquiry under either a negligence or contract
theory is essentially identical.” Id. The court thus saw no need to
impose or recognize a tort duty on the part of the agent in favor
of the putative beneficiary. Id. at 836–37.
¶42 	As noted above, the economic loss rule prevents recovery
in tort when that same recovery is available in contract. See
Reighard, 2012 UT 45, ¶ 14; see also Grynberg v. Questar Pipeline Co.,
2003 UT 8, ¶ 52, 70 P.3d 1 (stating that “failure to properly perform
a duty assigned by the contract is a breach of that contract and
nothing more”). Therefore, if the Children can prove that Father
substantially complied with the requirements for changing the
beneficiaries under the Policy and that American Family breached
the terms of the Policy by not paying them, then they will succeed
on one or both of their contract-based claims. If they cannot, they
will not be entitled to recovery under any theory. Under these
circumstances, the law does not permit us to recognize a tort duty
owed by Agent to the Children.12
12. The Children rely heavily on Pitts v. Farm Bureau Life Insurance
Co., a case in which the court allowed a putative beneficiary of a
life insurance contract, under certain circumstances, to state a tort
claim against an insurance agent. See 818 N.W.2d 91, 105 (Iowa
2012). That case distinguished Mims on the basis that Iowa’s
“substantial compliance doctrine is not as liberal as Kentucky’s,”
a fact that led the court to conclude that “merely establishing that
the plaintiff was the intended beneficiary of the policy would not
satisfy the substantial compliance doctrine as it exists in Iowa.” Id.
But we find the rationale in Mims to be more persuasive than Pitts
because, as noted, Utah’s “substantial compliance” rules—to
amend 	the 	terms 	of 	a 	life 	insurance 	policy—are 	relatively
(continued…)

Zubiate v. American Family Ins. Co.
20210090-CA 	26 	2022 UT App 144
¶43 	For these reasons, the Children can state no valid tort claim
against American Family, either directly or through Agent. On
this basis, we affirm the district court’s dismissal of the Children’s
fourth cause of action.
CONCLUSION
¶44 	In their complaint, the Children have not set forth facts
that—even construed liberally—could entitle them to relief on
claims for unilateral mistake or negligence. We therefore affirm
the district court’s order dismissing the Children’s third and
fourth causes of action. But the Children have alleged facts that, if
true, could entitle them to relief on claims for breach of contract
(as third-party beneficiaries) and mutual mistake. We therefore
reverse the district court’s order dismissing the Children’s first
and second causes of action, and remand this case for further
proceedings consistent with this opinion.
POHLMAN, Justice (concurring in part and dissenting in part):
¶45 	I concur in part and respectfully dissent in part.
forgiving, as they are in Kentucky. See Bergen, 776 P.2d at 663
(requiring only that an insured take “reasonable steps to bring
about a change” in the policy (quotation simplified)); see also
Wentworth, 238 P. at 654 (citing various exceptions to “strict
compliance” with the terms of a policy when a party does all that
they can to make the change but for some reason that change does
not occur). In other words, if the Children can show that Father—
Agent’s 	client—substantially 	complied 	with 	the 	Policy’s
requirements for changing beneficiaries, then they will have a
valid claim sounding in contract, which means that—under
economic loss principles—they do not also have a remedy in tort.

Zubiate v. American Family Ins. Co.
20210090-CA 	27 	2022 UT App 144
¶46 	Part II.A: Mutual Mistake. I agree with the majority’s
conclusion in Part II.A that the district court erred in concluding
that the Children’s claim for mutual mistake was time-barred. See
supra ¶¶ 18–21. But unlike the majority, I would affirm the
dismissal of the mutual mistake claim for failure to state a claim.
¶47 	As the majority notes, a contract may be reformed if a
plaintiff “show[s] that, ‘at the time the contract is made, the
parties make a mutual mistake about a material fact, the existence
of which is a basic assumption of the contract.’” Supra ¶ 23
(quoting Rocky Ford Irrigation Co. v. Kents Lake Reservoir Co., 2020
UT 47, ¶ 73 n.29, 469 P.3d 1003); see also E & H Land, Ltd. v.
Farmington City, 2014 UT App 237, ¶ 25, 336 P.3d 1077. American
Family argues that the Children cannot make this showing
because, among other things, the alleged mutual mistake was not
made at the time of contracting—that is, when the policy was
created in 2014. The majority rejects this argument, concluding
that the purported change in beneficiaries created a new contract
in 2015 and thus the Children have sufficiently alleged that the
claimed mutual mistake occurred at the time of contracting. Supra
¶ 23. But even if the majority is correct that a change in
beneficiaries creates a new contract, I cannot agree with my
colleagues’ ultimate assessment because it overlooks that the
instrument the Children seek to reform is the 2014 contract.
Indeed, there is no other instrument to reform. Thus, I fail to see
how the Children can succeed on their claim as stated.
¶48 	Further, I believe the Children’s claim for reformation fails
for the additional reason that they have not alleged that the
parties (whether in 2014 or 2015) made a mutual mistake about a
material 	fact. 	Although 	we 	generally 	construe 	complaints
liberally, “[r]eformation of a contract is an equitable remedy
which must be pled with particularity.” Lloyd’s Unlimited v.
Nature’s Way Mktg., Ltd., 753 P.2d 507, 511 (Utah Ct. App. 1988);
see also Briggs v. Liddell, 699 P.2d 770, 772 (Utah 1985) (“[B]ecause
courts are reluctant to change contractual obligations and rights,

Zubiate v. American Family Ins. Co.
20210090-CA 	28 	2022 UT App 144
the party seeking reformation must plead the circumstances
constituting the mistake with particularity.”); Utah R. Civ. P. 9(c)
(“In 	alleging 	fraud 	or 	mistake, 	a 	party 	must 	state 	with
particularity the circumstances constituting fraud or mistake.”). I
do not believe the complaint meets this standard.
¶49 	The Children allege that Father informed Agent that he
would like to change his beneficiary designation, that Father
“thought that he had done enough to make the change,” and that
“[Agent] knew this.” They further allege that Agent “failed to”
change 	the 	beneficiaries 	and 	that 	Father 	and 	Agent 	“were
mutually mistaken as to what the beneficiaries were after this
conversation.” The majority interprets the Children’s allegations
as suggesting that Agent understood “that the beneficiaries
would be changed pursuant to Father’s request.” Supra ¶ 18. Even
if such a belief about a future event could be considered a material
fact, I do not agree that the Children have made such an
allegation.
¶50 	At most, the Children allege Agent understood that Father
wanted to change his beneficiary designation and understood that
Father believed he had taken the necessary steps to make that
change. But the Children do not allege Agent or American Family
understood or agreed that the change had been or even would be
made. See Mabey v. Kay Peterson Constr. Co., 682 P.2d 287, 290 (Utah
1984) (explaining that a finding of this kind of mutual mistake
“must . . . pivot on a common intent by the parties to agree to one
thing”). In fact, in defending their mutual mistake claim in the
district court, the Children identified the mutual mistake as either
(1) Father and Agent’s shared belief that Mother-in-Law “would
use the [insurance] proceeds for the care of the children and
would not misappropriate the funds” or (2) Father’s mistaken
belief that “the beneficiary change had been accomplished” while
Agent “mistakenly believed that the change did not need to
happen.” The Children did not purport to have alleged that Father
and Agent were mutually mistaken that the beneficiaries had

Zubiate v. American Family Ins. Co.
20210090-CA 	29 	2022 UT App 144
been or even would be changed. And without such an allegation,
the Children cannot prove mutual mistake.
¶51 	Part II.B: Unilateral Mistake. I concur in Part II.B of the lead
opinion in its entirety.
¶52 	Part III: Failure to Change Beneficiary According to Decedent’s
Wishes. I disagree with the majority’s conclusion that the district
court erred in dismissing the Children’s claim for “Failure to
Change 	Beneficiary 	According 	to 	Decedent’s 	Wishes.” 	My
disagreement is not with the majority’s well-placed view that “we
are obligated to interpret the Children’s complaint liberally.” See
supra ¶ 29. Rather, I part ways with my colleagues on this issue
because the Children advocated—both in the district court and on
appeal—for a different cause of action from the one the majority
sustains. In other words, it’s not necessarily the absence of a claim
for breach of contract in the complaint that warrants dismissal. I
would affirm the district court’s dismissal because the Children
did not even purport to state a claim for breach of contract until
their reply brief on appeal.
¶53 	Here, the Children elected to bring a claim that they
identified as a “failure to change” claim. In stating that claim, the
Children did not identify a contract, identify themselves as third-
party beneficiaries of that contract, or allege a breach of that
contract. See America West Bank Members, LC v. State, 2014 UT 49,
¶ 17, 342 P.3d 224 (stating that, “at a minimum,” a claim for breach
of contract “must include allegations of when the contract was
entered into by the parties, the essential terms of the contract at
issue, and the nature of the defendant’s breach”). Instead, their
claim recited the email exchange between Father and Agent,
asserted that Father “substantially conformed to the requirements
[of the Policy] to change a beneficiary,” and asserted that the
beneficiaries were not changed.

Zubiate v. American Family Ins. Co.
20210090-CA 	30 	2022 UT App 144
¶54 	Then, when American Family expressly challenged the
validity of such a claim in its motion to dismiss, the Children did
not invite the court to liberally construe their claim as stating a
third-party beneficiary claim for breach of contract. Instead, the
Children argued that “failures to change a beneficiary designation
is a cause of action” recognized by Utah law. (Emphasis added.)
The Children argued that “[c]ase law and equity both allow for a
cause of action for behavior such as this.”
¶55 	Because the Children did not articulate a tort or contract
basis for their “failure to change” claim, the district court took
them 	at 	their 	word 	that 	they 	intended 	to 	assert 	a 	claim
independent of those frameworks. After all, “a core component of
our adversary system [is] the notion that the plaintiff is the master
of the complaint.” Utah Stream Access Coal. v. VR Acquisitions, LLC,
2019 UT 7, ¶ 36, 439 P.3d 593; see also id. ¶ 41 (“We judges are
neutral arbiters—not advocates. To police that distinction we
keep 	ourselves 	out 	of 	the 	business 	of 	second-guessing 	the
pleading 	decisions 	of 	the 	parties.”). 	But 	unable 	to 	discern
“whether [the claim] sounds in tort, contract, statute, or another
area of [the] law,” the district court concluded that the claim, as it
had been alleged and argued, did not provide American Family
“fair notice of the nature and basis of the claim asserted and a
general indication of the type of litigation involved.”13 (Quoting
Gudmundson v. Del Ozone, 2010 UT 33, ¶ 40, 232 P.3d 1059.)
13. It is true that in the Children’s memorandum in opposition to
the motion to dismiss, they argued that they were intended third-
party beneficiaries to the Policy between Father and American
Family. See supra ¶ 33. But that assertion was made in response to
a challenge to the Children’s standing. Had the Children intended
the court to construe their “failure to change” claim as a claim for
breach of contract, it would have been easy enough for them to
reference their earlier standing discussion as support for such a
(continued…)

Zubiate v. American Family Ins. Co.
20210090-CA 	31 	2022 UT App 144
¶56 	The Children then appealed, framing the issue as follows:
“Did the district court err when it concluded that the failure-to-
change-beneficiary claim was not a cognizable claim in Utah?” In
summarizing their argument, the Children did not assert that the
court misconstrued their claim. Instead, the Children argued that
“Utah 	courts—and 	other 	courts 	around 	the 	country—have
recognized” a “failure-to-change-beneficiary claim” and that the
court erred in concluding otherwise. Similarly, in the body of their
opening brief, the Children repeated, “Because caselaw in Utah
allows a policy holder to change a beneficiary and a beneficiary
can sue an insurance company for not making such a change, the
claim of failure to change a beneficiary is a cognizable claim in
Utah.”14 It was only in reply that the Children argued that their
claim could sound in contract.15
construction. But they didn’t. Instead, they continued to defend
their “failure to change” claim as a stand-alone claim.
14. The cases cited by the Children in support of their assertion
have recognized rights of putative beneficiaries to insurance
policies to bring legal action seeking declaratory relief relating to
their rights under such policies, but they neither establish a
“failure to change” claim nor recognize a third-party cause of
action for damages for breach of contract. See Bergen v. Travelers
Ins. Co. of Ill., 776 P.2d 659, 662 (Utah Ct. App. 1989) (declaring the
effectiveness of a purported change of beneficiaries); Wentworth v.
Equitable Life Assurance Society, 238 P. 648, 650 (Utah 1925)
(declaring which beneficiary had superior rights in the policy).
15. The majority construes the Children’s statement in their
opening brief that they were intended third-party beneficiaries of
the Policy as an argument in support of a claim for breach of
contract. See supra note 8. But that assertion was made in support
of 	their 	argument 	that 	the 	district 	court 	had 	“improperly
(continued…)

Zubiate v. American Family Ins. Co.
20210090-CA 	32 	2022 UT App 144
¶57 	I am not confident that the Children could, as purported
third-party beneficiaries, successfully state a claim for breach of
contract. My uncertainty is due, at least in part, to the fact that the
only argument the Children make in support of such a claim is a
limited one appearing for the first time on reply. But regardless of
whether the claim could succeed, the Children simply waited too
long to assert it. Absent exceptional circumstances, we do not
consider issues raised for the first time on appeal as they are not
properly preserved for our review. See Turley v. Childs, 2022 UT
App 85, ¶ 32, 515 P.3d 942 (declining to consider theories that
were “not presented to the district court and are therefore not
preserved for appellate review”). Rather, a party seeking to raise
an issue must first present it to the district court “in such a way
that the court has an opportunity to rule on it.” State v. Johnson,
2017 UT 76, ¶ 18, 416 P.3d 443 (quotation simplified). Further, an
appellant must raise an issue in its opening brief on appeal or we
will consider it waived. See Brown v. Glover, 2000 UT 89, ¶ 23, 16
P.3d 540.
¶58 	The Children did not argue to the district court, or to this
court in their opening brief on appeal, that their complaint should
be construed to state a claim for breach of contract. Rather, they
insisted that Utah law recognizes a stand-alone claim for “failure-
to-change-beneficiary.” As the master of their complaint (and of
their appeal), the Children are entitled to assert the claims they
believe, in their judgment, are most likely to succeed. But having
made that choice, the Children cannot now argue, for the first time
on 	appeal 	(and 	only 	in 	reply), 	that 	their 	complaint 	means
something 	else. 	And 	while 	district 	courts 	must 	construe
complaints liberally, I do not understand that obligation as
dismissed the negligence claim” for lack of standing. I do not
agree that it is unduly restrictive to construe the Children’s
statement as intended to apply to the argument to which it is
attached.

Zubiate v. American Family Ins. Co.
20210090-CA 	33 	2022 UT App 144
requiring them to independently identify claims that the plaintiff
does not purport to bring.16
¶59 	Part IV: Negligence. Finally, I agree with the majority’s
analysis regarding the Children’s negligence claim. I disagree,
however, with its assessment of the district court’s treatment of
the negligence claim asserted on behalf of Father’s estate. See supra
note 11.
¶60 	The majority recognizes that the district court opined that
a tort claim by Father’s estate against American Family would be
time-barred. But it does not address the correctness of that
determination because it considers the court’s statements to be
16. The case law the majority cites, see supra ¶¶ 30–31, does not
compel a different result. For example, in Alvarez v. Hill, 518 F.3d
1152 (9th Cir. 2008), the plaintiff’s “subsequent filings refined the
factual allegations and legal theories supporting his . . . claims,”
by describing “at length” the appropriate legal standards. Id. at
1158. In other words, even if the plaintiff’s complaint did not
articulate the correct legal theory, his subsequent filings clearly
did. Further, unlike the Children here, Alvarez involved a pro se
plaintiff, and under Ninth Circuit authority, the district court was
required to “afford him the benefit of any doubt in ascertaining
what claims he raised in his complaint and argued to the district
court.” Id. (quotation simplified).
Similarly, in McManus v. Fleetwood Enters., Inc., 320 F.3d 545
(5th Cir. 2003), the appellate court construed the plaintiffs’
complaint liberally to include the claim advocated for on appeal
because the claim was considered by the trial court and because
the defendant had not argued to the trial court that the claim had
not been properly pleaded. Id. at 551. Had the district court
construed the Children’s complaint as seeking a claim for breach
of contract or had American Family raised the adequacy of the
Children’s pleading for the first time on appeal, I would view this
issue differently.

Zubiate v. American Family Ins. Co.
20210090-CA 	34 	2022 UT App 144
dicta or musings. Supra note 11. Respectfully, I read the record
differently.
¶61 	The complaint in this case was brought by Shawna Zubiate
as conservator for the Children. But in response to standing
arguments made in American Family’s motion to dismiss, Zubiate
argued that if the district court were to conclude that the Children
do not have standing to assert certain claims, “it would not be
difficult to add Ms. Zubiate as both guardian and personal
representative [of Father’s estate].” Zubiate then asked the court
for “leave to file a motion to amend the complaint should it so
decide.” And when the issue of standing arose again during oral
argument on the motion, Zubiate’s counsel twice advised the
court that Zubiate would be “fine [with] amending the complaint
. . . to just add her other titles,” stating, “[I]t is the same person.
She’s a guardian. She’s the personal representative.”
¶62 	The court took the matter under advisement and, in its
written ruling, explained that any negligence claim arising out of
Agent’s alleged failure to change the beneficiaries “would be
[Father’s] claim” and “would have to be pursued by [Father’s]
representative on behalf of his estate.” The court then stated that
because Zubiate “is the personal representative of [Father’s]
estate,” it would “amend the complaint to indicate the real party
in interest is the estate of [Father]” rather than dismiss the claim
for lack of standing. The court then concluded that the negligence
claim was barred by the applicable statute of limitations and
dismissed the claim on that basis.
¶63 	On appeal, Zubiate challenged the district court’s ruling,
arguing that if Father’s estate is the proper party, the claim is
timely. The parties briefed the issue and neither one asserted that
the court erred in amending the complaint, as Zubiate requested,
to expand her role so as to include a negligence claim on behalf of
Father’s estate.

Zubiate v. American Family Ins. Co.
20210090-CA 	35 	2022 UT App 144
¶64 	Had one of the parties challenged the court’s amendment
of the complaint to expand Zubiate’s role in this litigation, it is
possible that we would have concluded that the complaint was
not 	properly 	amended. 	But 	neither 	party 	challenges 	the
amendment that the court expressly ordered. Thus, based on that
order, I view the complaint to have been amended to assert a
claim for negligence on behalf of Father’s estate, and I accordingly
would have addressed the merits of Zubiate’s challenge to the
dismissal of that claim.