Submitted: November 15, 2017
from United States District Court for the Western District of
Missouri - St. Joseph
COLLOTON and GRUENDER, Circuit Judges, and HOLMES,  District
COLLOTON, CIRCUIT JUDGE.
WorldGroup, Inc. brought a five-count action against its
workers' compensation insurance carriers, Liberty Mutual
Fire Insurance Company and The First Liberty Insurance
Corporation (collectively, "Liberty"). The lawsuit
sought damages for excess premiums that WireCo allegedly paid
on three of Liberty's insurance policies.
district court,  at the pleading stage, dismissed a claim
for vexatious refusal to pay under Mo. Rev. Stat. §
375.420. The district court then granted summary judgment for
Liberty on WireCo's remaining breach of contract claims.
WireCo appeals the dismissal of all counts. Although our
reasoning differs from that of the district court in some
respects, we ultimately affirm the judgment.
is a wire and cable company that operates in many States,
including Texas and Missouri. In 2009, WireCo purchased a
workers' compensation insurance policy from Liberty. The
2009 policy was in effect from June 30, 2009, to June 30,
2010. WireCo purchased renewal policies from Liberty in 2010,
2011, and 2012, respectively. Each policy contained an
"Information Page," endorsements, and terms and
policies specified that Liberty would calculate the premium
for each policy twice. Before the policy went into effect,
Liberty would calculate an estimated premium, and WireCo
agreed to pay this amount before the policy expired. After
the policy expired, Liberty would calculate an actual premium
in light of developments during the term. If the actual
premium differed from the estimate, then the policy provided
that WireCo would make an additional payment or receive a
refund, as the case may be.
policy had two sections that explained how premiums would be
calculated. Both sections identified "rating plans"
as an element in the calculation. Item 4 of each policy's
Information Page read: "Premium: The premium for this
policy will be determined by our Manuals of Rules,
Classifications, Rates and Rating Plans."
(Emphasis added). Part Five of each policy's
"General Section" read: "All premium for this
policy will be determined by our manuals of rules, rates,
rating plans and classifications." (Emphasis
added). According to WireCo, the references to "rating
plans" meant the "schedule rating plans" that
Liberty had filed with each State. One point of dispute is
whether two particular schedule rating plans from Missouri
and Texas were incorporated by reference into the renewal
rating is a method of adjusting the premium on workers'
compensation insurance to account for risk characteristics
that affect the probability or severity of future losses.
When an insurance policy covers the insured company's
operations in multiple States, the carrier must calculate a
schedule rating factor for each State in accordance with the
schedule rating plan it filed with the State. A schedule
rating factor can take the form of a credit, which lowers the
premium on the policy, or a debit, which increases the
premium on the policy.
complaint, WireCo alleged that Liberty breached the 2010,
2011, and 2012 renewal policies because it modified the
Missouri and Texas schedule rating factors without complying
with the procedures laid out in the Missouri and Texas
schedule rating plans. In relevant part, the Missouri
Schedule Rating Plan stated:
2. No Schedule debit or credit can take effect until the
evidence supporting the modification is in our files.
. . . .
5. The customer will be informed in writing within ninety
(90) days of the policy inception or renewal date, of the
basis for any schedule debit or credit applied. If the policy
is subject to any changes in its schedule debits ...