United States District Court, S.D. Mississippi, Northern Division
CARLTON W. REEVES, District Judge.
Before the Court are the parties' cross-motions for summary judgment. Docket Nos. 53, 68. The motions are fully briefed and ready for adjudication.
I. Factual and Procedural History
Greenwich Insurance Company sells several lines of insurance in Mississippi. One of them is Multiple Peril Crop Insurance (MPCI).
The Mississippi Windstorm Underwriting Association (MWUA) aggregates funds from its members - property insurers in Mississippi, including Greenwich - and buys reinsurance. When its members incur losses and reinsurance proceeds fail to cover the shortfall, it assesses its members to make up the difference.
MWUA's assessment is based on the amount of certain property insurance written by each member. The Court emphasizes "certain" because federal law prohibits associations from assessing MPCI premiums, either directly or indirectly. 7 C.F.R. § 400.352. When insurance companies report their property insurance to MWUA, then, they know to report their MPCI business on a special line, apart from other, "assessable" lines of business.
In 2004, Greenwich reported its 2003 business to MWUA. It said that the assessable portion of its business was $3, 049, 013.
That number was unchallenged for many years and perhaps would have remained uncontested were it not for Hurricane Katrina. The storm which made landfall in 2005 resulted in years of disruption and litigation in the insurance industry and beyond. The relevance to this suit is that in 2012, the Mississippi Supreme Court ruled that MWUA had to adjust its 2004 assessment, which was based upon 2003 data. Mississippi Windstorm Underwriting Ass'n v. Union Nat. Fire Ins. Co., 86 So.3d 216 (Miss. 2012).
As a result, in August, October, and December 2012, MWUA told its members that a "true-up" would be conducted. It set a deadline of January 1, 2013, for its members to revise their 2003 data. MWUA specifically noted that no extensions would be permitted.
Greenwich timely responded. Its Assistant Vice President signed the response form indicating that Greenwich would not be amending its data.
In February 2013, MWUA sent its members, including Greenwich, a letter stating the percentage of the assessment each member would be responsible for paying. The letter contained an April 1, 2013 deadline for members to object to the data or calculations.
Greenwich again did not object. Instead, in March 2013, its Assistant Vice President signed and returned a form confirming its data. She specifically certified that the information was final, subject to recalculation only by MWUA's own audit or calculation errors, or errors noted by the member during a limited review period.
In December 2013, Greenwich received the bill showing the amount of the assessment. It was for approximately $4.1 million. Aggrieved, Greenwich commenced an investigation and learned - apparently for the first time - that it had incorrectly reported its 2003 data. Although it had reported $3, 049, 013 in assessable business, it should have reported $285, 681. Greenwich also attempted to revise its reporting of MPCI from $0 to approximately $4.7 million.
Greenwich paid the $4.1 million under protest in January 2014 and requested an opportunity to amend its 2003 data. The ...