Wireco Worldgroup, Inc. v. Liberty Mut. Fire Ins. Co.
897 F.3d 987
| 8th Cir. | 2018Background
- WireCo purchased successive Liberty Mutual workers’ compensation policies (2009–2012). Each policy provided that premium would be determined by Liberty’s "Manuals of Rules, Classifications, Rates and Rating Plans," and premiums would be estimated then finalized after the policy term.
- Liberty applied state-specific "schedule rating" adjustments (credits/debits) for Missouri and Texas; Missouri credit moved from 4.2% (2009) to smaller credit and then debits (2010–2012); Texas factor was 0% in 2011 and a 40% debit in 2012.
- WireCo sued Liberty for breach of the 2010–2012 renewal policies, alleging Liberty modified schedule rating factors without complying with Missouri and Texas schedule rating plan procedures (notice and documentation), causing $545,561 in excess premiums.
- As an alternative claim, WireCo asserted Liberty’s refusal to refund excess premiums amounted to a recoverable "loss" under Mo. Rev. Stat. § 375.420 (vexatious refusal to pay statute).
- The district court dismissed the § 375.420 claim and granted summary judgment to Liberty on the breach claims, reasoning the state schedule rating plans were not incorporated into the renewal policies; WireCo appealed.
Issues
| Issue | WireCo's Argument | Liberty's Argument | Held |
|---|---|---|---|
| Whether excess-premium withholding is a "loss under a policy" recoverable under Mo. Rev. Stat. § 375.420 | § 375.420's term "loss" is broad and includes insurer refusals to refund excess premiums | "Loss" in insurance context means an indemnifiable event (damage/injury) giving rise to a claim, not premium disputes | Court held § 375.420 does not cover excess-premium refunds; affirmed dismissal of statutory claim |
| Whether Missouri and Texas schedule rating plans were incorporated into renewal policies | Policy language referencing "Rating Plans" incorporates the filed state schedule rating plans, making their procedural requirements contract terms | Either the plans were not incorporated, or, even if incorporated, WireCo cannot show damages from procedural violations | Court expressed doubt about district court's incorporation conclusion but affirmed judgment on other grounds (damages) |
| Whether WireCo could raise new breach theories at summary judgment (failure to obtain documentation; improper reliance on loss experience) | These were grounds supporting pleaded breach claims, not new claims; Rule 8(a) does not force pleading of every ground | The district court reasonably limited the case to grounds actually pleaded in the complaint; new theories introduced too late | Court affirmed district court’s refusal to consider unpleaded theories at summary judgment |
| Whether WireCo proved damages causally linked to alleged breaches | Damages equal the difference between actual premiums paid and what WireCo would have paid had Liberty complied (e.g., using prior years' schedule factors) | There is no evidence WireCo could have obtained lower premiums or that Liberty would have issued renewals using prior rating factors | Court held WireCo failed to present evidence of damages; summary judgment for Liberty affirmed |
Key Cases Cited
- Behlmann v. Century Sur. Co., 794 F.3d 960 (8th Cir. 2015) (applying state statutory construction rules)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must give defendant fair notice of claim and grounds)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment standard; view evidence in light most favorable to nonmovant)
- Keveney v. Mo. Military Acad., 304 S.W.3d 98 (Mo. 2010) (elements of breach of contract action)
- Conley v. Gibson, 355 U.S. 41 (1957) (historical pleading standard referenced for notice pleading)