### IN THE UNI TED STAT ES COURT OFAPPEALS FOR THE FIF TH CIRCU IT

No. 10-60877 Summary Calendar

KLLM TRANSPORT SERVICES, LIMITED LIABILITY COMPANY,
Plaintiff
v. MARSH USA, INCORPORATED, ET AL,
Defendants KLLM TRANSPORT SERVICES, LIMITED LIABILITY COMPANY, Plaintiff–Appellant
v. INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA; C.V. STARR & COMPANY, Defendants–Appellees

Appeal from the United States District Court for the Southern District of Mississippi USDC Nos. 3:09-CV-93; 3:09-CV-94

Before REAVLEY, SMITH, and PRADO, Circuit Judges. PER CURIAM: * U n i te d S ta te s C o u rt o f A p p ea l s F i ft h C i rc u i t 

### F I L E D Novembe r 18, 20 11 Lyle W . Cayce Clerk

Pursua nt to 5 T H C IR

. R. 47.5 , the cour t hasd ete rm inedt hat this op inion s houldnot * be publ ish ed and is not pr ece dent excep t unde r the lim ite d cir cum st ance s se t forth in 5 T H C IR

. R. 47.5 .4. Case: 10-60877 Document: 00511670636 Page: 1 Date Filed: 11/18/2011No. 10-60877

Plaint i f f –Appellant KLLM Transport Services, LLC (“KLLM”), brought suit ag a inst Defendants–Appellees C.V. Starr & Company and the Insurance Company of th e S tate of Pennsylvania (collectively, “Insurer Defendants”), alleging a breach of an insurance policy (the “Policy”) that it had purchased from the Insurer Defendants. The district court dismissed KLLM’s complaint for failure to state a claim after d e t e r mining that the contract’s terms were

un a mb i guous and that the Insurer Defendants had not breached any of its terms. We affirm. I. BACKGROUND KLLM, a comm e r c ial trucking company, acquired the Policy from the Insurer Defendants fo r a three-year period beginning January 1, 2000 and ending January 1, 2003 (the “Policy Period”). The Policy provided commercial umbrella coverage beyond the insurance KLLM had otherwise purchased. On December 31, 1999, the Insurer Defendants sent a “binder” to KLLM’s insurance broker. This binder stated the Policy Period, the premium rate, and that “[t]his Binder may be canceled at any time by the Insured or the undersigned giving the other notice in writing.” In March 2000, KLLM received the Policy. It contained an endorsement t i t led “Mississippi Amendatory Endorsement” (the “Cancellation Provision” ) which stated that: This policy may be cancelled by the Insured by mailing to the Insurer written notice stating when such canc e ll a t ion shall be effective. This po li c y may be cancelled or nonrenewed by the Insurer by mailing or delivering a notice of cancellation or nonrenewal to the named Insured at least thirty (30) days prior to the effective date of cancellation or nonrenewal. After twenty-two months, on October 30, 2001, the Insurer Defendants notified KLLM that, pursuant to the Policy’s cancellation provision, they were cancelling

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the policy effective January 1, 20 0 2

. Thus, the Insurer Defendants provided KLLM with sixty days notice of cancellation. KLLM alleged th at th is cancellation amounted to: breach of contract, tortious breach of contract, and breach of the duty of good faith and fair dealing. In addition, KLLM all e g e d that the Insurer Defendants made oral representations amounting to a promise for a guaranteed three-year, level-rate agr e e m e nt. KLLM alleged that it relied on these representations to its detriment and were injured when the Insurer Defendants cancelled the Policy before the end of the Policy Period. Accordingly, KLLM alleged a claim of fraud and intentional misrepresentation. T he district court dismissed KLLM’s claims with prejudice af t e r 1 determining that: (1) the [Policy] was subject to a cancellation provision

. . . ; ( 2 ) the Cancellation Provision could be exercised by either Plaintiff or the Insurer Defendants at anytime for any reason a n d , w as not restrictive in scope; (3) the Policy was unambi gu o u s a nd did not contain a three year “guaranteed” level prem i u m as alleged in the Complaint; a n d ( 4) any alleged promise that the Policy was “guaranteed” for a three year period c o uld not be relied on by the Plaintiff, since this alleg ed promise contradicted the Cancellation Provision. KLLM now appeals these determinations by the district court.

KLLM ass ert s that due to the com ple x pr oce dur al his tory of thes e cons olid ated cas es , 1 wh ich we re both tra nsf err ed to a mul ti- dis tri ct liti gation in New Jers ey for se veral years and then ret urned to the Sout he r n D ist ric t of Mis sis sip pi, the Insur er De fen dant s’ mo tio n to dis mi ss wa s no longer pend ing wh en the dis tri ct cour t call ed for a hearing to dis pos e of it. Regardles s, the dis tri ct cour t gave couns el nine days advanc e noti ce prior to t h e h e a r i n g to pr epa re, wh ich w e det erm ine w as s uff icie nt noti ce for a sua sp onte dis mi ss al wi th pr ejudi ce. See Carrollv . Fort Jam es Corp

. , 470 F.3d117 1, 1177 ( 5th Cir. 2006) (“ [A] dis tri ct co urtm ay dis mi ss a com plai nt on its ow n for fai lure to st ate a clai m, ” “as long as the pr oce dur e em plo yed is f air, ”andsuch f

airne ssrequir es“bothnotic e of th e court’s intent ion and an op portunit y to res pond .”) (int erna l quota tio n m ark s and cit atio ns om itt ed)

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II. STANDARD OF REVIEW AND APPLICABLE LAW We review de novo a district court’s decision to dismiss a claim pursuant to Rule 12(b)(6). Herrman Holdings Ltd. v. Lucent Tec h

. , I n c . , 302 F.3d 552, 557 (5th Cir. 2002). In doing so, we liberally construe the complaint and draw all reasonable inference s i n the light most favorable to the plaintiff. Woodard v. Andrus , 419 F.3d 348, 351 (5th Cir. 200 5). When reviewing a motion to dismiss under R u l e 1 2(b)(6) we generally limit our inquiry to th e content of the pleadings, but where, as here, the complaint incorporates a contract by reference, we may consider it as well. See United States ex rel. Willard v. Humana Health Plan of Tex. Inc. , 336 F.3d 375, 379 (5th Cir. 2003). The district court exercised diversity jurisdi c tion under 28 U.S.C. § 1332(a). Accordingly, we apply the substantive law of the forum state, Mississippi. Wiley v. State Farm Fire & Cas. Co. , 585 F.3 d 2 0 6 , 210 (5th Cir. 2009). Under Mississippi law, courts enf o rce insurance policies according to t h e i r p r ovisions. Noxubee Cnty. Sch. Dist. v. United Nat’l Ins. Co. , 883 So. 2d 1159, 1166 (Miss. 2004). We have recogniz e d th at under Mississippi law, contract interpretation consists of

a three-tiered approach

. . . that begins with the text and applies the familiar four corners test, which focuses exclusively on an objective reading of the words employed in the contract to th e exclusion of parol or extrinsic evidence

. Only if the contract is unclear or ambiguous is a court authorized to resort to canons of interpretation and parol evidence. Wiley , 585 F.3d at 211 (internal quotation marks and citations omitted). Under Mississippi law, f r au d an d inte ntio n al mi s re p re s e nt atio n are shown by satisfying nine elements: (1) a represe n t a t i on (2) that is false (3) and material (4) that the speaker knew w a s false or was ignorant of the truth (5) combined with the speaker's intent that the listener act on the representation

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in a manner reasonably contemp l ated (6) combined with the listener’s ignorance of the statement’s falsity (7) and the listener’s
r e l i a n c e on the statement as true (8) with a right to rely on th e statement, and (9) the listener’s proximate injury as a consequence. Moore v. Bailey , 46 So. 3d 375, 384 (Miss. App. 2010). III. DISCUSSION A. Breach of Contract KLLM argues that the Policy Period established a fixed-premium contract with a similarly fixed three-year term, and that the fixed term is inconsi s tent with the Cancellation Provision. Therefore, it argues, the Policy is ambiguous, possibly illusory, and should be construed against the Insurer Defendants who drafted the Policy. On this interpretation of the Policy, the Insurer Defendants’ cancellation constituted a breach. KLLM, however, cites no authority to support this argument. In response, the Insurer Defendants argue that the Cancellation Provision and the Policy Period are consistent: the contract establishes a fixedrate pr e m i u m for a three-year period, or until either party cancels the Policy. Moreover, they argue, policy periods and cancellation provisions are frequently
p a rt o f insurance contracts, and so long as the cancellation provision complie s with state law and public policy, it should be enforced. In support of th e i r interpreta t i o n of the Policy, the Insurer Defendants point to a Mississippi statute which states: “A cancellation

. . . of liability insurance coverage . . . is not effective

. . . unless notice is mailed or delivered to the insured

. . . not less than thirty (30) days prior to the effective date of such cancellation.” Miss. Code Ann. § 83-5-28 (West 2006). We agree with the Insurer Defendants that there is nothing in the Policy indicating a guaranteed three-year term. And, “r e a d [i ng] the contract as a whole, so as to give effect to all of its clauses,” Facilities, Inc. v. Rogers-Usry Chevrolet, Inc. , 908 So. 2d 107, 111 (Miss. 2005), the Policy Period together with the Cancellation Provision unambiguously means that the premium rate is set

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for the duration of the Policy Period, unless the Policy is cancelled by either party prior to the end of the Policy Period. This unambigu o u s m e a n i n g is confirmed by the Mississippi Code’s acknowledgment of cancellation provisions in i n s u rance contracts. The Insurer Defendants gave KLLM sixty days notice—more than the thirty days required by the Policy—prior to cancelling the Policy. Accordingly, the Insurer Defendants did not breach the contract and did not breach their duty of good faith and fair dealing. See Baldwin v. Laurel Ford Lincoln-Mercury, Inc. , 32 F. Supp. 2d 894, 898 (S.D. Miss. 1998) (“A party which acts in accordance with the express terms of a contract generally cannot be found to have violated the covenant of good faith and fair dealing.”). B. Fraud and Intentional Misrepresentation KL LM m a i ntains that it still pleaded a viable claim of fraud and intentional misrepresentation even if the Insurer Defendants did not breach the Policy. KLLM alleged that “[w]hen KLLM purchase d th e P o licy from Insurer Defendants, they promised and represented to KLLM that the pre m i u m rate would remain unchanged for three years.” In response, the Insurer Defendants argue that as a m a t t e r of law, KLLM could not have reasonably relied on that oral promise because it is contrary to the Policy’s unambiguous language. See Leonard v. Nationwide Mut. Ins. Co. , 499 F.3d 419, 440 ( 5 th C ir. 2007) (“[I]nsured’s reliance on [insurance age n t’s] statements was objectively unreasonable in light of the policy language clearly [to the contra ry . ] ” )

. The Insurer Defendants also urge us to af firm on an alternative ground not discussed by the district court: KLLM failed to plead fraud with the particularity required by Federal Rule of Civil Procedure 9(b). See Sullivan v. Leor Energy, LLC, 600 F.3d 542, 550–51 (5th Cir. 2010) (“State law frau d claims are subject to the heightened pleading requirements of Rule 9(b).”). We may affirm the district court’s dismissal o rder on different grounds than th o s e m entioned by the district court. Gulf Guar. Life Ins. Co. v. Conn.

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G e n . L ife Ins. Co. , 304 F.3d 476, 486 (5th Cir. 2002). We do so here, because KLLM did not sufficiently plead fraud. “To plead fraud adequately, the plaintiff must specify the sta t e m ents contended to be fraudulent, identify the speaker,

s t a te when and where the statements were made, and explain w h y th e statements were fraudulent.” Sullivan , 600 F.3d at 551 (citation and inte r n al quotation marks omitted). While it is true that KLLM alleged th at “th ey [the Insurer Defendants] promised and represented to KLLM that the premium rate would remain unchanged for three years,” by not specifying “who at the company made the statements,” they i n a d e quately pleaded fraud under Rule 9(b). See Sullivan , 600 F.3d at 551. Accordingly , th e di s trict court did not err by dismissing KLLM’s fraud claim. IV. CONCLUSION For the foregoing reasons, the district court’s order is AFFIRMED.

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