                                                                     F I L E D
                                                               United States Court of Appeals
                                                                       Tenth Circuit
                                   PUBLISH
                                                                      DEC 21 1998
                  UNITED STATES COURT OF APPEALS
                           TENTH CIRCUIT                         PATRICK FISHER
                                                                            Clerk


 DOUGLAS S. MEYER,

       Plaintiff-Counter-Defendant-
       Appellant,

 v.                                            No. 97-8028

 JAY CONLON, individually, and
 NATIONAL FARMERS UNION
 PROPERTY & CASUALTY
 COMPANY, a foreign corporation,

       Defendants-Appellees,

 RAIN AND HAIL INSURANCE
 SERVICE, INC., an Iowa corporation,

       Defendant-Counter-Claimant-
       Appellee.




          APPEAL FROM THE UNITED STATES DISTRICT COURT
                  FOR THE DISTRICT OF WYOMING
                       (D.C. No. 95-CV-170-J)


Thomas D. Birge of Birge & Mayers, P.C., Denver, Colorado, for Plaintiff-
Appellant.

Loyd E. Smith of Murane & Bostwick, L.L.C., Cheyenne, Wyoming, for
Defendants-Appellees.
Before BRORBY , KELLY , and HENRY , Circuit Judges.


PER CURIAM .


      After Rain and Hail refused to pay Douglas S. Meyer’s crop insurance

claim, he sued, under diversity jurisdiction in federal court, Rain and Hail,

National Farmers Union (Rain and Hail’s parent company), and Jay Conlon (a

Rain and Hail agent).   The defendants moved for summary judgment, asserting

that federal statutes preempted Mr. Meyer’s state law claims and, in the

alternative, that they were entitled to summary judgment on the merits. The

district court rejected their preemption argument but granted their summary

judgment motion on the merits. See Meyer v. National Farmers Union Prop. &

Cas. Co., 957 F. Supp. 1492 (D. Wyo. 1997). Mr. Meyer appeals, and we affirm.



                               I.   BACKGROUND

      The Federal Crop Insurance Act (“FCIA”) established the Federal Crop

Insurance Corporation (“FCIC”) to encourage farmers to purchase multiple peril

crop insurance, 1 which protects farmers against loss from natural disasters, such



      1
             Our opinion in State of Kansas ex rel. Todd v. United States , 995
F.2d 1505, 1507-08 (10th Cir. 1993), provides a more detailed discussion of the
history and purpose of the FCIA.

                                         -2-
as hail and disease. To achieve this goal–and in lieu of setting up a government

bureaucracy to process claims–the FCIC makes crop insurance available three

ways: (1) licensed private insurance agents and brokers sell policies issued

directly by the FCIC; (2) the FCIC reinsures private insurers that issue crop

insurance policies, with the FCIC paying the private insurance companies’

operating and administrative costs for the reinsured policies; and (3) county

offices of the Agricultural Stabilization and Conservation Service provide the

insurance directly to farmers. Mr. Meyer acquired his crop insurance through the

second method; Rain and Hail sold him the policy and was reinsured by the FCIC.

      A crop insurance policy sets a per acre crop production guarantee and pays

the farmer for any difference between the guaranteed yield and the actual amount

the farmer harvests. The per acre crop production guarantee is set by (a)

considering the past production of the particular farmer or, (b) if there are no

adequate past production records, using a formula provided by regulation. The

terms of the insurance policy must be fixed by a certain date, which is set by

regulation, and the farmer pays the policy premium after the farmer brings the

crop to market. Paying the premium after the crop is sold creates the unusual

contractual situation in which the farmer has insurance before he has paid his

premium.

      On April 13, 1994, Mr. Meyer, a Wyoming resident, applied to Rain and


                                         -3-
Hail for crop insurance to cover his bean crop. The parties dispute at what

amount per acre Rain and Hail actually guaranteed Mr. Meyer’s bean crop, but no

evidence suggests that it was at more than 999 pounds per acre.

      On June 22, 1994, Mr. Meyer’s crop was damaged by hail. Mr. Meyer

notified Rain and Hail of the hail damage, and, on June 29, an adjuster from Rain

and Hail came to assess Mr. Meyer’s crop. The parties dispute whether the

adjuster told Mr. Meyer that the crop was a total loss, although the adjuster

admits that the crop was damaged. On July 6, three Rain and Hail adjusters went

to Mr. Meyer’s farm and reexamined his crop. The parties dispute whether the

adjusters told Mr. Meyer that the beans were not going to make it and would have

to be torn up, although one of the adjusters admits to offering Mr. Meyer a

payment under the policy to replant 50 to 60 acres.

      On July 11, one of Rain and Hail’s adjusters called to tell Mr. Meyer that

the University of Nebraska Extension Service had found disease in the bean

plants. Mr. Meyer claims to have had a conversation with Mr. Conlon the next

day in which Mr. Meyer said he was going to plow under the crop and wanted

payment under the policy at 999 pounds per acre. According to Mr. Meyer, Mr.

Conlon refused, stating that he would only pay under a lower yield per acre. Mr.

Conlon denies this conversation.

      Mr. Meyer claims he regarded Mr. Conlon’s alleged refusal to honor the


                                         -4-
999 pound figure as meaning that he actually had no insurance coverage and

decided his only recourse was to try to salvage the damaged crop. In September,

Mr. Meyer harvested the beans at a rate of 1,126 pounds per acre. Mr. Meyer

contends that in order to bring the crop in at this level, he had to secure expert

advice, water the beans almost 24 hours a day, weed and cultivate 520 acres by

hand, and replant 100 acres. Mr. Meyer’s expert asserts that Mr. Meyer’s efforts

were extraordinary, and that the bean crop should have been declared a total loss

and adjusted at 999 pounds per acre. According to Mr. Meyer, his extra efforts

cost more than $68,000 in excess of what it would have cost to bring an

undamaged crop to market.

      When Rain and Hail found out that Mr. Meyer was bringing in a crop, it

sought unsuccessfully to collect the premium under an assignment previously

executed by Mr. Meyer. The assignment was in favor of a seed company that had

sold Mr. Meyer seed on credit, and allowed Rain and Hail to collect its premium

out of the proceeds of Mr. Meyer’s crop sold to or by the seed company. On

October 1, the insurance premium came due under the contract, and on November

14, Rain and Hail filed suit against Mr. Meyer in Iowa to collect the premium.

Mr. Meyer’s policy provided that the premium was to be paid in Iowa, and Rain

and Hail’s Iowa attorney filed an affidavit stating that suing out-of-state

defendants in Iowa was the company norm.


                                          -5-
      On November 21, Rain and Hail sent Mr. Meyer a letter demanding he

remit payment of the premium to its Montana office. Mr. Meyer did not pay the

premium.

      On January 25, 1995, an Iowa court entered default judgment against Mr.

Meyer for the premium amount after service attempted by certified mail was

returned as unclaimed. Later, the Iowa court set aside the judgment when it found

that the post office had not delivered the mail to Mr. Meyer. In setting aside the

judgment, the Iowa court noted that although Rain and Hail knew Mr. Meyer had

retained counsel to handle the crop insurance dispute and, in fact, was involved in

ongoing settlement discussions with Mr. Meyer’s lawyer, it had not informed Mr.

Meyer’s attorney of the pending Iowa suit before requesting default judgment.

      On August 2, Mr. Meyer filed this action against National Farmers Union,

Rain and Hail, and Jerry Conlon for: (1) breach of contract; (2) negligent

document preparation; (3) negligent misrepresentation; (4) bad faith/breach of

duty of good faith and fair dealing in insurance contracts; (5) abuse of process;

(6) intentional interference with a contractual relationship; and (7) outrageous

conduct/intentional infliction of emotional distress. The district court granted

summary judgment for the defendants on all of Mr. Meyer’s claims, and he

appealed. However, he did not pursue his intentional interference with a

contractual relationship claim before our Court, and we consider that claim


                                         -6-
abandoned. We will address his other arguments in turn.



                                 II.   ANALYSIS

A.    Standard of Review

      We review a summary judgment ruling de novo, applying the same legal

standard as used by the district court pursuant to Fed. R. Civ. P. 56(c). See Kaul

v. Stephan, 83 F.3d 1208, 1212 (10th Cir. 1996). “Summary judgment is

appropriate if the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is entitled to

judgment as a matter of law.” Id. (quoting Wolf v. Prudential Ins. Co. of Am., 50

F.3d 793, 796 (10th Cir. 1995)). A “material fact is one which might affect the

outcome of the dispute under the applicable law.” Ulissey v. Shvartsman, 61 F.3d

805, 808 (10th Cir. 1995). “An issue of material fact is genuine if a reasonable

jury could return a verdict for the non-movant.” Kaul, 83 F.3d at 1212 (quoting

Wolf, 50 F.3d at 796). We examine the factual record and reasonable inferences

drawn from it in the light most favorable to the non-movant. See id. “If there is

no genuine issue of material fact in dispute, then we next determine if the

substantive law was correctly applied by the district court.” Id. (quoting Wolf, 50

F.3d at 796).


                                         -7-
B.    Preemption

      In State of Kansas ex rel. Todd v. United States, 995 F.2d 1505 (10th Cir.

1993), our Court held that “the FCIC can promulgate regulations preempting state

laws ‘not consistent with the purpose, intent, or authority of the [FCIA].’” Id. at

1509 (quoting 7 C.F.R. § 400.351) (emphasis added). Today, the defendants ask

us to go one step further and hold that no state law causes of action are consistent

with the FCIA and FCIC regulations, that federal law has preempted all state law

causes of action pertaining to FCIC crop insurance contracts. 2 Because we need

not consider Mr. Meyer’s state law causes of action if the FCIA and its

implementing regulations have preempted them, we will resolve the preemption

issue first. Then, because we find federal law does not preempt state law causes

of action consistent with the FCIA and FCIC regulations, we will turn to Mr.

Meyer’s claims.


      2
              Unfortunately, the parties have created some confusion by relying on
complete preemption cases and using the phrase “complete preemption” as a
synonym for ordinary preemption. “Complete preemption” is a term of art for an
exception to the well-pleaded complaint rule.    See Schmeling v. Nordam, 97 F.3d
1336, 1339 (10th Cir. 1996) (distinguishing between “complete preemption” and
ordinary preemption); 14B Charles A. Wright et al., Federal Practice and
Procedure § 3722.1 (1998). Additionally, “complete preemption” analysis and
ordinary preemption analysis are not fungible.    Compare Schmeling , 97 F.3d at
1342-43 (adopting “replacement preemption” analysis in “complete preemption”
case) with Todd , 995 F.2d at 1509-11 (describing ordinary preemption analysis).
As the parties are actually arguing over whether   the FCIA has wholly, rather than
“completely,” preempted state law causes of action against reinsurers, we confine
our analysis to the more relevant ordinary preemption case law.

                                         -8-
      The United States Constitution’s Article VI Supremacy Clause gives

Congress the power to preempt state law. See Todd, 995 F.2d at 1510.

      Preemption occurs when Congress expresses a clear intent to preempt
      in a federal statute; when there is a conflict between federal and state
      law; when compliance with both federal and state law is impossible;
      when there is an implicit barrier in the federal statute to state
      regulation; when Congress has comprehensively occupied an entire
      field and leaves no room for state law; or when state law is an
      obstacle to the objectives and purpose of Congress.

Id. at 1509-10. Additionally, an agency’s preemption regulations, promulgated

pursuant to Congressional authority, have the same preemptive effect as statutes.

Id. at 1509. After a thorough examination of both the FCIA and the FCIC’s

regulations, we hold that none of Todd’s preemption scenarios apply to bar Mr.

Meyer’s claims against the defendants.

      State law applies to FCIA contracts, with two exceptions: (1) when FCIC

contracts provide that state law does not apply and (2) when state law is

inconsistent with FCIC contracts. 7 U.S.C. § 1506(l). Neither exception applies

in this case. The crop insurance contract between Mr. Meyer and Rain and Hail

did not provide that state law did not apply to it. Therefore, by the plain language

of § 1506(l), state law covers the contract unless that law is inconsistent with it.

The defendants do not show us, and we cannot see, how Mr. Meyer’s state law

cause of action on the crop insurance contract is inconsistent with it. Thus, Mr.

Meyer’s suit is allowed under § 1506(l).


                                           -9-
      Additionally, the FCIA contemplates that private insurance companies will

be sued and will have to pay when they are at fault:

      The Board [of Directors of the FCIC] shall provide [reinsured]
      agents and brokers with indemnification, including costs and
      reasonable attorney fees, from the [FCIC] for errors or omissions on
      the part of the [FCIC] or its contractors for which the agent or broker
      is sued or held liable, except to the extent the agent or broker has
      caused the error or omission.

7 U.S.C. § 1507(c) (emphasis added). Of course, if the FCIA created alternative

causes of action, then state law might not be the method by which the agent is

“sued or held liable.” However, the FCIA “[is] barren of language regarding suits

against private companies reinsured by the FCIC.” Williams Farms of

Homestead, Inc. v. Rain and Hail Ins. Servs., Inc., 121 F.3d 630, 634 (11th Cir.

1997). Therefore, were we to accept the defendants’ argument, we would make

§ 1507(c) meaningless because indemnification would never be necessary: No

plaintiff could sue because the FCIA preempts state law causes of action but does

not create federal causes of action to replace them. This is not the intent of

Congress, as the statute’s plain language shows.

      Nor has the FCIC shown an intent to preempt all state law causes of action.

Like the statute, the FCIC’s regulations concerning state and local preemption

specifically contemplate suit for breach of contract, while at the same time

denying states the right to interfere in FCIC contracts:

      State or local governmental entities or non-governmental entities are

                                         -10-
      specifically prohibited from . . . [l]evy[ing] fines [or] judgments . . .
      against companies . . . arising out of actions or inactions on the part
      of . . . individuals and entities authorized or required under the
      [FCIA], the regulations, any contract or agreement authorized by the
      [FCIA] or by regulations, or procedures issued by the [FCIC]
      (nothing herein is intended to preclude any action on the part of any
      authorized State regulatory body or any State court or any other
      authorized entity concerning any actions or inactions on the part of
      the agent, company or employee of any company whose action or
      inaction is not authorized or required under the [FCIA], the
      regulations, any contract or agreement authorized by the [FCIA] or
      by regulations or procedures issued by the [FCIC]) . . . .”

7 C.F.R. § 400.352(b) & (b)(4) (emphasis added). The parenthetical language

permits lawsuits based on agents’ actions not authorized by the FCIA or the

FCIC, negating the defendants argument that the regulations interpret the FCIA as

wholly preemptive. Nor is Mr. Meyer’s suit preempted by the FCIC’s regulations,

as he asserts that the defendants failed to honor the terms of an FCIC

contract—an action not authorized by the FCIA, the regulations, or the contract.

      In Todd, we held that the FCIC reasonably adopted regulations prohibiting

Kansas from interfering by regulation and statute with FCIC contracts. See Todd,

995 F.2d at 1509. We noted that the FCIC had adopted comprehensive

regulations preempting inconsistent state law because: (a) state agencies were

requiring changes in the terms of the crop insurance contracts; (b) states were

forcing the FCIC to pay state taxes on premiums for reinsured contracts, even

though the FCIC is specifically exempt from such taxes under the FCIA; and (c)

states were garnishing, placing liens on, and attaching crop indemnities, despite

                                         -11-
the fact that the FCIA exempted crop indemnities from such state action. See id.

at 1508. In response to this state interference, the FCIC adopted regulations

purporting to preempt state law, and we held that the regulations did, in fact,

preempt state law. See id. at 1512. However, in holding that regulations that

interfere with the purpose of the FCIA and its crop reinsurance contracts are

preempted, we certainly did not bar state law causes of action that allow farmers

to enforce FCIC contracts against reinsurers. In fact, because contract suits

advance the purpose of the FCIA by ensuring that farmers are paid and because,

as we have already concluded, the FCIA and FCIC regulations contemplate such

suits, Todd actually reinforces the proposition that federal law has not preempted

such state law causes of action.

      Congress has not expressed a clear intent to preempt all state law causes of

action against private reinsurers. And, while we have already held that state law

that conflicts with the FCIA and FCIC regulations—or their objectives and

purpose—is preempted, there is no conflict between federal law and Mr. Meyer’s

state common law causes of action to enforce the contract with Rain and Hail.

Nor is compliance with both federal and state contract law impossible, at least as

FCIC contracts are currently written. Additionally, there is no implicit barrier in

the FCIA to state causes of action to enforce contracts. Finally, Congress has not

comprehensively occupied the entire field of crop insurance and left no room for


                                         -12-
state law.

      The FCIA does not wholly preempt state law; rather, it preempts state law

inconsistent with the purpose of the Act. And the FCIC’s regulations simply

clarify that federal law only preempts state suits contrary to the FCIA’s purpose.

Therefore, Mr. Meyer’s state law causes of action, which are not contrary to the

purpose of the FCIA, are not preempted by the FCIA or the FCIC’s regulations.



C.    Breach of Contract

1.    Mr. Meyer’s Failure to Pay His Premium

      We agree with the district court that Mr. Meyer’s failure to pay his

premium is not fatal to his breach of contract claim. The district court held that

Mr. Meyer had a right to setoff the amount of any premium against any damage

payment that might be made because his alleged loss. Meyer, 957 F. Supp. at

1499-1500. According to the district court, the right to setoff occurred before the

premium was due, and therefore, non-payment of the premium did not bar the

action. Id. at 1500.

      The crop insurance policy states, “You cannot bring suit or action against

us unless you have complied with all of the policy provisions.” Aplt’s App. vol.

II, at 433. See also 7 C.F.R. § 401.7 (“No indemnity shall be paid unless the

insured complies with all terms and conditions of the contract.”). Listed under


                                         -13-
“General Provisions” at “a.” is the “Agreement to Insure,” id. at 423, that reads,

“We will provide the insurance described in this policy in return for the

premium.” Id. at 426.

      Listed under “Special Provisions–Dry Beans” at “7.” is the “Annual

Premium” provision that states that “[t]he annual premium is earned and payable

at the time of planting” and that “[a]ny unpaid premium due us may be deducted

from any indemnity payable to you.” Id. at 431. See also 7 C.F.R. § 401.8,

General Crop Insurance Policy Terms and Conditions, 5 a. (“The annual premium

is earned and payable at the time insurance attaches.”). The acreage reports

provide that the premium due date was October 1, 1994. Aplt’s App. vol. I, at

224, 288.

      We agree with Rain and Hail that t he insurer’s right to deduct any unpaid

premium from any indemnity should not be confused with the clear responsibility

of the insured to pay the premium. The policy plainly provides that the premium

is earned and payable at planting, even though it may be billed and due later. See

Aplt’s App. vol. II, at 440 (application); 7 C.F.R. § 401.8, General Crop

Insurance Policy Terms and Conditions, 21 e.(“‘Billing date’--The first date upon

which an insured is billed for insurance coverage and which generally falls at or

near harvest time. Interest accruing on any unpaid premium balance attaches 30

days after the billing date.”). Absent citation to authority, Rain and Hail argues


                                        -14-
that payment of the premium is a condition precedent to suit. We are not

persuaded given that coverage exists prior to payment of the premium, and the

insurer may deduct any unpaid premium from any indemnity. These facts,

together with the general nature of the language relied upon, simply do not

provide clear indication of a condition precedent. See generally 20 John Alan

Appleman, Insurance Law and Practice, § 11416 (1980) (“Nor is a tender of a

premium then due generally a condition precedent to recovery.”).



      2.     Rain and Hail’s Duty to Adjust the Loss

      In challenging the district court’s decision that no loss occurred because

production exceeded the highest possible alternative on the guaranteed yield per

acre, Mr. Meyer argues that Rain and Hail breached the contract by refusing to

adjust the loss prior to harvest. See Aplt’s Br. at 22. He contends that adjusters

from Rain and Hail told him first on June 29 and later on July 6 that his crop was

a total loss, yet did not adjust the loss. According to Mr. Meyer, this breach prior

to harvest entitles him to consequential damages including the $68,000 in extra

costs he incurred by taking his crop to harvest. See Aplt’s Br. at 23.

      The Wyoming amendatory endorsement reads:

      4.     DUTIES AFTER LOSS . . . .

      b.     Our Duties Are:
             ....

                                        -15-
        (2)   Pay or reject the loss within 30 days after we receive the proof
              of loss and any supporting information.

Aplt’s App. vol. II, at 433. Despite this provision, nothing in the policy requires

the insurance company to adjust the loss upon learning of a probable loss, as

opposed to receiving a written proof of loss. See id. at 426, 427 (§ 4(a)(1) &

(6)).

        Moreover, the policy expressly contemplates that it may be necessary to

defer adjustment until after harvest:

        C.    Deferred Adjustment.

              At times it may be necessary for us to defer the
              adjustment of a covered loss until the actual loss can be
              determined. We will not pay for reduction of yield
              resulting from your failure to care for the crop during
              the deferral period.

Id. at 427 (§ 4(d)). This provision is consistent with the balance of the policy

that requires the insured to care for the crop after a probable loss, and to give

written notice if it does not expect to do so or if it wants consent to put the

acreage to another use. See id. at 426 (§ 4(a)(1)(b)) (cited in Aplt’s Br. at 22).

Consent to put the acreage to another use will not be given until it is too late or

impractical to reseed or replant the insured crop. See id.

        The policy contemplates two methods of measuring a loss–actual harvest

and an appraisal. See id. at 430 (§ 4(c)). Where the insured abandons the crop

or puts the acreage to another use without the consent of the insurer, the insurer

                                         -16-
will count the applicable guarantee as appraised production, reducing any loss.

See id. at 430 (§ 4(c)(3)(b)). Where the insured obtains consent to put the

acreage to another use, the appraised potential production will be counted as

production, subject to reappraisal under certain conditions. See id. at 430 (§

4(c)(4)). These provisions make it clear that the insurer is not required to

determine the loss prior to harvest. While the insurer might determine a loss

prior to harvest in some circumstances, the summary judgment evidence in this

case simply does not suggest the lack of a reasonable basis for relying upon the

policy provisions and declining to adjust the loss prior to harvest. See State

Farm Mutual Auto. Ins. Co. v. Shrader, 882 P.2d 813, 825 (Wyo. 1994).



2.    Rejection of Coverage

      Mr. Meyer argues that Rain and Hail rejected or repudiated coverage when

it declined to adjust the loss before harvest at a 999 pound per acre guaranteed

yield. See Aplt’s Br. at 23; Aplt’s Reply Br. at 15. An insurer that stands on its

rights under the contract does not commit anticipatory repudiation. See New

York Life Ins. Co. v. Viglas, 297 U.S. 672, 676-77 (1936); Bill’s Coal Co. v.

Board of Public Utilities, 682 F.2d 883, 886 (10th Cir. 1982); Kimel v. Missouri

State Life Ins. Co., 71 F.2d 921, 923 (10th Cir. 1934). This is particularly true in

this case where Mr. Meyer and Rain and Hail were arguing not about coverage,


                                        -17-
but the amount of coverage based upon yield amounts. Moreover, the facts in

this case simply do not constitute the type of “positive, unequivocal or distinct

renunciation of the agreement” that Wyoming requires for anticipatory

repudiation. See J.B. Serv. Court v. Wharton, 632 P.2d 943, 946 (Wyo. 1981).



3.    Actual Crop in Excess of Claimed Guaranteed Yield

      The district court ruled that Mr. Meyer’s claim for breach of contract must

fail because he “brought in the bean crop at a rate substantially higher than the

[alleged] per acre coverage.” Meyer, 957 F. Supp. at 1500. We agree that Mr.

Meyer’s successful 1,126 pounds per acre harvest prevents his breach of contract

action. The policy defines loss as “[a] condition that occurs when the insured

crop yield falls below the production guarantee.” Aplt’s App. vol. II, at 424.

This language prevents Mr. Meyer from having a loss under the contract, and we

cannot conclude on this record that Rain and Hail breached the contract by failing

to adjust the loss prior to harvest at 999 pounds per acre.



4.    Failure to Agree to Terms

      The district court stated that “both parties knew at the time the acreage

report was submitted that they did not agree on the coverage per acre” and,

therefore, that there was no binding contract. Meyer, 957 F. Supp. at 1500.


                                         -18-
Disputed issues of fact, including the quantity contained in the Assignment,

would preclude summary judgment on this ground. See Frost Constr. Co. v.

Lobo, Inc., 951 P.2d 390, 394 (Wyo. 1998) (“Whether a contract has been formed

is a question of fact.”). However, we affirm the district court’s grant of summary

judgment on the contract claim based upon the absence of anticipatory repudiation

or breach of the contract.



D.    Negligent Preparation of Documents

      The district court found no evidence that Wyoming has recognized or

would recognize a cause of action for negligent preparation of documents.

Therefore, it granted summary judgment to the defendants on this claim. On

appeal, Mr. Meyer states, “The lower court based its decision exclusively on legal

argument. [Mr. Meyer] presented facts which, if believed, would establish a duty

and a breach of that duty. The duty arose not from the case law but from the facts

and the standards in the crop insurance industry.” Aplt’s Br. at 25 (citation

omitted).

      As we are a court of law, we find legal arguments particularly persuasive.

Thus, because Mr. Meyer does not take issue with the district court’s “exclusively

legal argument” that Wyoming does not recognize the cause of action he

advances, we decline to review the district court’s decision and affirm its grant of


                                        -19-
summary judgment on this claim.



E.    Negligent Misrepresentation

      The district court correctly granted summary judgment against Mr. Meyer

on his claim for negligent misrepresentation. The elements of such a claim in

Wyoming are: (1) false information; (2) supplied in the course of one’s business;

(3) for the guidance of others in their business; (4) failure to exercise reasonable

care in obtaining or relating the information; and (5) pecuniary loss resulting from

justifiable reliance on that information. See Verschoor v. Mountain West Farm

Bureau Mutual Ins. Co., 907 P.2d 1293, 1299 (Wyo. 1995).

      Although Mr. Meyer’s expert stated that, according to industry custom, the

Assignment created a binding crop insurance contract at the 999 pound per acre

figure, we doubt that Mr. Meyer’s expert could testify to a legal conclusion that

the Assignment created a binding contract. See Okland Oil Co. v. Conoco Inc.,

144 F.3d 1308, 1328 (10th Cir. 1998); Specht v. Jensen, 853 F.2d 805, 809-10

(10th Cir. 1988) (en banc). Assuming that amount in the Assignment might be

evidence of a disputed contractual term, Mr. Meyer’s position is that the 999

pound per acre figure is not false, as required by the first element of this cause of

action.

      Moreover, the Assignment was prepared not for the guidance of Mr. Meyer


                                         -20-
in his business, but rather for the benefit of Prosser and Rain and Hail. The

Assignment secured Prosser’s credit to Mr. Meyer in the event that loss proceeds

became payable under the policy and allowed Rain and Hail to collect its premium

out of crop proceeds received by Prosser. Aplt’s App. vol. I, at 226. Thus, at

best, Rain and Hail intended to supply the 999 pound per acre figure to Prosser

for guidance in its business, and Mr. Meyer fails to satisfy the third element of

the cause of action. See Verschoor, 907 P.2d at 1300 (“[O]ne who relies upon

information in connection with a commercial transaction may reasonably expect

to hold the maker to a duty of care only in circumstances in which the maker was

manifestly aware of the use to which the information was to be put and intended

to supply it for that purpose.”) (quoting Restatement (Second) Torts § 552 cmt. a

(1977)).

      Finally, Mr. Meyer cannot claim a payable loss under the policy with the

999 pound per acre figure given his actual production, nor can he claim a loss

based upon payment of the crop insurance premium, having failed to pay it. Mr.

Meyer thus fails to satisfy the fifth element of the cause of action.




F.    Insurance Bad Faith/Breach of Duty of Good Faith and Fair Dealing

      The district court determined that Rain and Hail did not breach the duty of


                                         -21-
good faith and fair dealing because it was “fairly debatable” whether Mr. Meyer’s

crop was a total loss and whether the policy contained a 999 or 805 pound per

acre production guarantee. Meyer, 957 F. Supp. at 1502. The district court also

held that Rain and Hail’s Iowa collection efforts were routine. Id. at 1503. Our

analysis is similar.

      The seminal Wyoming case for breach of duty of good faith in insurance

contracts is McCullough v. Golden Rule Ins. Co., 789 P.2d 855 (Wyo. 1990), in

which the Wyoming Supreme Court held that “the appropriate test to determine

bad faith is the objective standard whether the validity of the denied claim was

not fairly debatable.” Id. at 860. In a first-party bad faith claim, the insured must

demonstrate an absence of a reasonable basis for denying a claim and the

insurer’s knowledge or reckless disregard of the lack of a reasonable basis. See

id. The denial of Mr. Meyer’s claim was supported by several “fairly debatable”

grounds, that is, a reasonable insurer would have denied or delayed payment on

such grounds, see id., but we need mention only two. First, as we have held, no

circumstances here required Rain and Hail to adjust the loss prior to harvest.

Second, despite the factual dispute about whether the production guarantee was

999 or 805 pounds per acre, no covered loss occurred when the harvest exceeded

the production guarantee.

      In Hatch v. State Farm Fire & Cas. Co., 842 P.2d 1089 (Wyo. 1992), the


                                         -22-
Wyoming Supreme Court expanded the tort of first-party bad faith to encompass

the investigation, handling and denial of a claim, even if the claim was denied on

a “fairly debatable” ground, where the insurer goes “beyond a reasonable denial

of the claim and engage[s] in unreasonable or unfair behavior to gain an unfair

advantage.” Id. at 1099. See also Shrader, 882 P.2d at 828. The tort “flow[s]

from engaging in oppressive and intimidating claim practices.” Hatch, 842 P.2d

at 1099. In his opposition to summary judgment, Mr. Meyer relied upon (1) the

insurer’s refusal to adjust the loss after the damage and at the level of production

contained in the Assignment, and (2) the insurer’s Iowa collection efforts. Aplt’s

App. vol I, at 189-90. Specifically, he contends that the insurer indicated that the

crop was a total loss, denied coverage at the 999 pound per acre level and

possibly altogether, and forced him into heroic efforts to save the crop. Once the

crop was harvested, the insurer demanded the premium prematurely, attempted to

levy on the crop, and sued him in Iowa.

      On appeal, Mr. Meyer bolsters his argument with the opinion of his expert

that Rain and Hail’s conduct in adjusting the claim was substandard, and not in

conformity with FCIC standards and regulations. See Aplt’s App. vol. I, at 284-

85. Despite the expert’s view that the claim was handled in an intentional and

oppressive manner, the underlying facts simply do not suggest the type of

intentional, oppressive behavior going beyond a reasonable denial of the claim.


                                          -23-
First, to the extent that Rain and Hail’s challenged conduct involved asserting its

position on contract issues including the terms and interpretation of the policy,

such conduct simply did not involve the factual issues attendant to the

investigation, handling and denial of a claim that Hatch bad faith encompasses.

See Davis v. State, 910 P.2d 555, 559 (Wyo. 1996). Second, Rain and Hail is not

responsible for injuries and damage for which the policy provides no

coverage–there must be a causal link between the injuries and damage complained

of and the conduct of Rain and Hail. See Hatch v. State Farm Fire & Cas. Co.,

930 P.2d 382, 394 (Wyo. 1997). Stated another way, a Hatch bad faith claim

cannot substitute for coverage. Third, although Rain and Hail’s handling of this

matter was hardly ideal, and contributed to the acrimony between the parties,

deviation from “best practices” or “industry standards” does not equate with the

type of reckless or intentional oppressive conduct required for this tort. Fourth,

for reasons similar to those we discuss below, Rain and Hail’s availing itself of

the Iowa forum for premium payment without notice to Mr. Meyer’s counsel does

not constitute oppressive conduct on this record. Finally, in light of the above,

we have reviewed the deposition passages of various fact witnesses relied upon by

Mr. Meyer in his briefs and are not persuaded that he has presented evidence from

which a jury could return a verdict for him on a Hatch bad faith claim.




                                        -24-
G.    Abuse of Process

      To show abuse of process in Wyoming, a plaintiff must demonstrate “(1) an

ulterior purpose, and (2) the wilful act in the use of the process which is not

proper in the regular conduct of the legal proceeding.” Bosler v. Shuck, 714 P.2d

1231, 1234 (Wyo. 1986). “‘[T]here is no action for abuse of process when the

process is used for the purpose for which it is intended, [even though] there is an

incidental motive of spite or an ulterior purpose of benefit to the defendant.’”

Toltec Watershed Improvement Dist. v. Johnston, 717 P.2d 808, 811 (Wyo. 1986)

(quoting Restatement (Second) of Torts § 682 (1977)). Bosler cited approvingly

several cases whose facts exemplify the type of wilful act necessary to satisfy the

second element of the tort. See 714 P.2d at 1234-35. Among the cases Bosler

cited is Barquis v. Merchants Collection Ass’n of Oakland, Inc., 496 P.2d 817

(Cal. 1972) (en banc), in which the court reversed dismissal of a suit alleging that

the defendant “knowingly and wilfully instituted actions against consumers in the

wrong county, under inadequate complaints, for the ulterior purposes of impairing

these individuals’ defenses of the actions and with the intent of securing default

judgments by virtue of the inconvenience of the improper forum.” Id. at 823.

According to the California Supreme Court, such filings, if proven, would

constitute abuse of process because “fil[ing] actions in an improper county

pursuant to statutorily inadequate pleadings” amounts to “a wilful act in the use


                                         -25-
of process not proper in the regular course of the proceeding” and because “the

intent to impair individuals’ rights to defend suits and . . . [cause] default

judgments by making it inconvenient for defendants to defend suits on their

merits” is an ulterior purpose. Id. at 824 (internal quotation marks omitted).

      Mr. Meyer alleges that Rain and Hail’s litigation in Iowa was abusive under

Barquis. He states that Iowa courts could not have personal jurisdiction over him

and that, without notifying his attorney, Rain and Hail filed suit in Iowa with the

intent of securing a default judgment against him. Rain and Hail responds that it

“routinely files collection actions in Iowa against out-of-state insureds,” so Mr.

Meyer was not treated differently than others. Aple’s Br. at 41. Additionally,

Rain and Hail asserts that its intent was clearly to notify Mr. Meyer, rather than

obtain default judgment against him, because it attempted, albeit unsuccessfully,

to serve him by mail.

      After examining Mr. Meyer’s proof that Rain and Hail abused process, we

are not convinced that he has presented evidence, beyond mere conclusory

allegations, from which a jury could return a verdict for him on this issue. Mr.

Meyer’s case for abuse of process is planted in his assertion, which we agree

with, that he could have successfully asserted lack of personal jurisdiction in

Iowa courts. See Omnilingua, Inc. v. Great Golf Resorts of World, Inc., 500

N.W.2d 721 (Iowa Ct. App. 1993) (holding that business that was to pay Iowa


                                          -26-
corporation for contract work did not have sufficient minimum contacts as it was

a “passive purchaser” of Iowa products and did not expect to be called into Iowa

court). He feeds this claim with undisputed evidence that Rain and Hail refused

to notify Mr. Meyer’s counsel of the suit and proceeded to default judgment,

despite the fact that Mr. Meyer’s counsel “was actively engaged in discussions

with [Rain and Hail]’s Montana counsel” at the time. Aplt’s App. vol. I, at 38

(Undated Order in Rain and Hail Ins. Serv., Inc. v. Meyer, No. CL 64436 (Iowa

Dist. Ct.)). Rain and Hail furthers Mr. Meyer’s cause by admitting that this is the

normal way it conducts its litigation, which actually suggests a pattern of practice

that, under Barquis, would be further evidence of abuse of process. However,

these hints and allegations of abuse of process are rebutted by Rain and Hail’s

sworn statement that it files all suits in Iowa for legitimate purposes, had no

ulterior motive in suing Mr. Meyer in Iowa, and attempted to serve Mr. Meyer

with process by mail. Thus, although we feel that Rain and Hail’s decision to

seek default judgment without informing Mr. Meyer’s attorney was an unfortunate

legal strategy, without concrete evidence to counter Rain and Hail’s innocent

explanation of Mr. Meyer’s conclusory allegations, Mr. Meyer cannot sustain his

abuse of process claim, and we affirm. See Cosner v. Ridinger, 882 P.2d 1243,

1249 (Wyo. 1994) (holding that a plaintiff’s abuse of process claim alleging that

various proceedings were filed without notice to him for the sake of concealing


                                         -27-
his daughter or denying his visitation rights was “conclusional” and correctly

dismissed).



H.    Outrageous Conduct/Intentional Infliction of Emotional Distress

      The district court properly determined that, even under the facts as alleged

by Mr. Meyer, Rain and Hail’s conduct was not sufficiently outrageous to permit

him to proceed on this claim. Wyoming uses the Restatement (Second) of Torts §

46 (1977) to define the scope of the tort: “One who by extreme and outrageous

conduct intentionally or recklessly causes severe emotional distress to another is

subject to liability for such emotional distress . . . .” Cosner, 882 P.2d at 1248

(quoting Restatement (Second) of Torts § 46(1) (1977)). Outrageous conduct is

conduct that “goes ‘beyond all bounds of decency, and [is] to be regarded as

atrocious, and utterly intolerable in a civilized community.’” Id. (quoting

Restatement (Second) of Torts § 46 cmt. d.). Severe emotional distress is that

which “‘is so severe that no reasonable man could be expected to endure it.’” Id.

(quoting Restatement (Second) of Torts § 46 cmt. j.). To use an apt

colloquialism, a plaintiff attempting to prove this claim has a hard row to hoe.

      Mr. Meyer has introduced no evidence of his emotional state, and Rain and

Hail’s actions simply do not rise to the level required by the Restatement. Mr.

Meyer alleges that Rain and Hail intentionally breached a contract, causing him


                                         -28-
pecuniary loss. The record also reveals that Mr. Conlon stated that Mr. Meyer’s

father owed the company money on a past due debt and that Rain and Hail sued to

collect the premium it contends Mr. Meyer owes it. The emotional impact of

these facts is not so severe that no reasonable man could be expected to endure it.

We affirm the district court’s grant of summary judgment in favor of defendants

on this issue.



                              III.   CONCLUSION

      We affirm the district court’s rulings that (1) the FCIA and the FCIC’s

regulations do not preempt state law causes of action, (2) Mr. Meyer’s failure to

pay his premium did not bar his suit, (3) Rain and Hail did not breach the

insurance contract in denying Mr. Meyer’s claim, (4) there is no cause of action

for negligent preparation of insurance documents in Wyoming, (5) Mr. Meyer

cannot show negligent misrepresentation of the terms of the Assignment, (6) Rain

and Hail did not breach its duties of good faith and fair dealing on this record, (7)

Mr. Meyer has not produced evidence that Rain and Hail abused process, and (8)

Rain and Hail did not intentionally inflict emotional distress on Mr. Meyer.

      AFFIRMED.




                                        -29-
