BJC Health System v. Columbia Casualty ( 2003 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 03-1118
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BJC Health System, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Missouri.
Columbia Casualty Company, *
doing business as CNA HealthPro, *
*
Appellee. *
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Submitted: September 12, 2003
Filed: November 3, 2003
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Before WOLLMAN, HEANEY, and RILEY, Circuit Judges.
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WOLLMAN, Circuit Judge.
This appeal follows the district court’s dismissal of plaintiff-appellant BJC
Health System’s (“BJC”) amended complaint for failure to state a claim upon which
relief could be granted. We reverse and remand.
I.
BJC is the sole shareholder of ATG Assurance Company Limited (“ATG”).
Columbia Casualty Company, doing business as CNA HealthPro (“Columbia”),
provided reinsurance to ATG for policy years 1998 and 1999 at a fixed premium.
ATG and Columbia executed contracts for each year of reinsurance coverage.
BJC’s complaint contends that Columbia was obligated to fix ATG’s
reinsurance premium for policy year 2000 because of a separate premium-guarantee
contract between BJC and Columbia. BJC alleges that Columbia breached the
premium guarantee and that as a result BJC was required to pay ATG’s more costly
policy year 2000 reinsurance premiums.
Columbia moved for dismissal of BJC’s complaint under Fed. R. Civ. P.
12(b)(6), attaching to the motion three documents, which it argued were the only
documents that might give rise to BJC’s claim. Two were the reinsurance agreements
between ATG and Columbia for policy years 1998 and 1999. The third was a
September 21, 1998, reinsurance quotation letter from Columbia. After referring to
the documents, the district court granted the motion and dismissed BJC’s claim,
holding that BJC did not have a contract with Columbia and that BJC lacked standing
to sue as a third-party beneficiary of ATG’s contract with Columbia. We review de
novo the district court’s dismissal of the complaint. Mattes v. ABC Plastics, Inc., 323
F.3d 695, 697-98 (8th Cir. 2003).
II.
BJC argues that the district court erred when it referred to the documents
attached to the motion to dismiss. The documents, BJC maintains, are “matters
outside the pleading,” requiring the motion to dismiss to be treated as a motion for
summary judgment. See Fed. R. Civ. P. 12(b) (“If, on a motion asserting the defense
numbered (6) . . . matters outside the pleading are presented to and not excluded by
the court, the motion shall be treated as one for summary judgment . . . and all parties
shall be given reasonable opportunity to present all material made pertinent to such
a motion by Rule 56.”).
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Columbia responds that because the documents are necessarily embraced by
the complaint, they are not matters outside the pleading, citing our decisions that state
that a plaintiff may not avoid an otherwise proper motion to dismiss by failing to
attach to the complaint documents upon which it relies. See, e.g., Silver v. H&R
Block, Inc., 105 F.3d 394, 397 (8th Cir. 1997) (holding that the statements in question
could have properly been considered as a part of the motion to dismiss because they
were the sole basis for the complaint and their content was not disputed).
Alternatively, Columbia argues that BJC had notice of the conversion into a motion
for summary judgment and should have provided the district court with evidence
supporting its allegations.
BJC replies that it should not have been required to engage in a “battle of the
documents” so early in the litigation, noting that the existence of a contract can be
proved through documentary as well as other types of evidence. Rather, BJC
maintains it should have been given the opportunity to discover additional evidence
supporting its allegations.
Rule 12(b) is not permissive. “[T]he motion shall be treated as one for
summary judgment . . . .” Id. (emphasis added). “Most courts . . . view ‘matters
outside the pleading’ as including any written or oral evidence in support of or in
opposition to the pleading that provides some substantiation for and does not merely
reiterate what is said in the pleadings.” Gibb v. Scott, 958 F.2d 814, 816 (8th Cir.
1992) (quoting Wright & Miller, Federal Practice and Procedure § 1366). This
interpretation of the rule is “appropriate in light of our prior decisions indicating a
12(b)(6) motion will succeed or fail based upon the allegations contained in the face
of the complaint.” Gibb, 958 F.2d at 816. There must be reliance by the district court
on the matters outside the pleading before it can be said that a motion to dismiss has
been converted into one for summary judgment. Casazza v. Kiser, 313 F.3d 414, 418
(8th Cir. 2002).
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We conclude that the three documents Columbia provided to the district court
constitute matters outside the pleading. The documents may or may not be the only
legal agreements relevant to BJC’s alleged contract with Columbia, and their
significance is disputed. Furthermore, the documents were provided “in opposition
to the pleading.” For what purpose would Columbia have provided the documents
to the district court, other than to discredit and contradict BJC’s allegations?
Columbia’s contention that the documents were necessarily embraced by the
complaint is, we believe, insufficient to save the district court’s order. It is true that
the plaintiff must supply any documents upon which its complaint relies, and if the
plaintiff does not provide such documents the defendant is free to do so. Here,
however, BJC alleged the existence of a contract, not a specific document, and the
documents provided by Columbia were neither undisputed nor the sole basis for
BJC’s complaint.
Our determination that the materials are matters outside the pleading does not
complete our inquiry, however, for it remains to decide whether the district court’s
consideration of the documents constituted harmless error. Gibb, 958 F.2d at 816.
Consideration of matters outside the pleading is harmless where “the nonmoving
party had an adequate opportunity to respond to the motion and material facts were
neither disputed nor missing from the record.” Id. at 816; see also Country Club
Estates, L.L.C. v. Town of Loma Linda, 213 F.3d 1001, 1005 (8th Cir. 2000) (holding
that error is harmless if plaintiff could not possibly provide countervailing evidence
or if plaintiff is put on constructive notice that the district court will consider
materials outside the pleading).
Here, BJC was never given notice nor an opportunity to discover or to provide
additional evidence. See Gibb, 958 F.2d at 816-17. Additionally, the September 21,
1998, quotation letter provided by Columbia refers to BJC and not just ATG. The
parties disagree as to the significance of this reference. The two reinsurance contracts
only limit rights “under [these] certificate[s],” which leaves open questions about the
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parties’ rights (or the rights of anyone else) under any other written or oral contracts
or elements thereof. Thus, the district court should have provided BJC an opportunity
to submit evidence in support of its allegations.
Columbia argues that BJC’s complaint was insufficient on its face to state a
claim for breach of contract. Columbia maintains that the allegation that “Columbia
Casualty contracted with BJC for reinsurance of ATG” at a guaranteed premium and
that “Columbia Casualty failed and refused to provide the insurance [sic] for the
guaranteed premium” is insufficient to state a claim under Missouri law. According
to Columbia, this allegation asserts a conclusion of law and thus fails to satisfy
pleading requirements. We disagree.
Under the Federal Rules, it is not necessary to plead every fact with formalistic
particularity. Fed. R. Civ. P. 8(a) (“A pleading which sets forth a claim for relief
. . . shall contain . . . a short and plain statement of the claim showing that the pleader
is entitled to relief . . . .”). Rather, the question for us is whether BJC’s complaint put
Columbia on notice as to the substance of the claim. Swierkiewcz v. Sorema N.A.,
534 U.S. 506, 512 (2002); Parkhill v. Minn. Mut. Life Ins. Co., 286 F.3d 1051, 1057-
58 (8th Cir. 2002). We conclude that it did. The allegations that BJC had a binding
agreement with Columbia, that Columbia breached the agreement, and that BJC
suffered injury as a result of the breach, are sufficient to satisfy the requirements of
Rule 8(a).
The order of dismissal is reversed, and the case is remanded to the district court
for further proceedings consistent with this opinion.
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