                 United States Court of Appeals
                            For the Eighth Circuit
                      ______________________________

                                No. 16-2093
                      ______________________________

                               Olga Despotis Trust

                                         Plaintiff- Appellant

                                         v.

                        The Cincinnati Insurance Company

                                       Defendant - Appellee
                                  ____________

                     Appeal from United States District Court
                  for the Eastern District of Missouri - St. Louis
                                  ____________

                            Submitted: March 7, 2017
                             Filed: August 16, 2017
                                 ____________

Before RILEY,1 Chief Judge, GRUENDER, Circuit Judge, and GRITZNER,2 District
Judge.
                               ____________

GRITZNER, District Judge.


      1
       The Honorable William Jay Riley stepped down as Chief Judge of the United
States Court of Appeals for the Eighth Circuit at the close of business on March 10,
2017. He has been succeeded by the Honorable Lavenski R. Smith.
      2
      The Honorable James E. Gritzner, United States District Judge for the
Southern District of Iowa, sitting by designation.
      Olga Despotis Trust (the Trust) appeals the district court’s3 grant of summary
judgment in favor of Cincinnati Insurance Company (CIC) on the Trust’s claims for
breach of contract, vexatious refusal, and declaratory judgment. We affirm.

I.     BACKGROUND
       On December 31, 2010, a tornado destroyed a building leased as a medical
imaging facility located in Sunset Hills, Missouri, which was owned by the Trust and
insured by CIC. On February 15, 2011, the trustee, Dr. George Despotis (Dr.
Despotis), executed a proof of loss form to CIC, claiming a loss in excess of the
policy’s limits and alleging the actual cash value (ACV) of the building at the time
of loss was $1,400,000. CIC, on the other hand, determined that at the time of the
loss, the ACV of the building was $800,000. Within fifteen days of the Trust’s
submission of its proof of loss, CIC presented the Trust with a check for $813,931,
which included the undisputed $800,000 ACV amount. The Trust insisted that
additional funds were due, and it disputed CIC’s loss value determinations.

       Because the loss value was in dispute, on April 19, 2011, CIC sent the Trust’s
attorney a letter invoking the policy’s appraisal provision, which allowed either party
to request an appraisal in the event of a dispute regarding the amount of covered
damages. The Trust responded to CIC’s request, stating it deemed appraisal
“unproductive” and proposing a settlement. J.A. at 166. CIC declined the settlement
offer and again requested the Trust’s cooperation with the appraisal. In reply, the
Trust asked CIC for various assurances regarding the appraisal process, noting that
appraisal would leave unresolved issues, and advising CIC it would be filing legal
action within days. Addressing the Trust’s request for assurances regarding the
appraisal process, CIC advised that appraisal would be binding on both the insured
and the insurer under the terms and conditions of the appraisal provision. CIC also


      3
       The Honorable Ronnie L. White, United States District Judge for the Eastern
District of Missouri.
                                          -2-
informed the Trust that the purpose of the appraisal process was to resolve all
disputes between the insured and the insurer regarding covered damages. One week
later, the Trust filed a lawsuit in Missouri state court seeking damages for breach of
contract and a declaratory judgment that the appraisal provision of the policy was
unenforceable. CIC removed the case, but eighteen months later, the case was
voluntarily dismissed without prejudice. The Trust then filed the present lawsuit in
the Eastern District of Missouri, alleging the same breach of contract (count one) and
declaratory judgment (count three) claims, and an additional claim for vexatious
refusal (count two).

       CIC filed a motion for summary judgment on count three, asking the court to
order appraisal. The court granted CIC’s motion, ordered the parties to participate
in appraisal, and stayed the case. Olga Despotis Tr. v. Cincinnati Ins. Co., No. 4:12-
CV-2369 RLW, 2014 WL 5320260, at *2 (E.D. Mo. Oct. 17, 2014). On August 4,
2015, the appraisal panel issued its decision, declaring an ACV loss of $1,056,000;
the panel also determined the total replacement cost to be $1,500,000, and lost rent
to be $94,000. As a result of the appraisal, CIC paid the Trust the remaining ACV
($256,000) and an additional $22,658.28 for lost rental income.

       The Trust insisted it was entitled to the building’s replacement cost, rather than
simply the ACV of the loss, and moved to amend its complaint to add allegations in
its breach of contract claim that CIC failed to pay replacement cost and/or interfered
with the Trust’s ability to pursue the replacement cost provision of the policy. The
policy’s replacement cost provision stated replacement costs would be paid only if
“the repairs or replacement have been completed or at least underway within 2 years
following the date of the ‘loss.’” J.A. at 175. The district court denied the motion to
amend, concluding “the amended complaint would require additional discovery that
would necessarily delay resolution of this already extremely protracted litigation” and
that this “unexcused delay would unduly prejudice Defendant because of the



                                           -3-
advanced nature of this case.” Olga Despotis Tr. v. Cincinnati Ins. Co., No. 4:12-CV-
2369 RLW, 2015 WL 8481863, at *1 (E.D. Mo. Dec. 8, 2015).

      The parties filed cross-motions for summary judgment on the remaining counts
one and two, and the district court granted summary judgment in CIC’s favor.
Regarding the Trust’s claim that CIC breached the contract by making a loss payment
based on a flawed calculation of the ACV, the district court reasoned, “The Trust
cannot maintain a claim for breach of contract based upon a payment that occurred
in March 2011, prior to when the parties fully engaged in the appraisal process
provided for in the Policy,” which was not completed until August 2015. Olga
Despotis Tr. v. Cincinnati Ins. Co., No. 4:12-CV-2369 RLW, 2016 WL 831933, at
*3 (E.D. Mo. Feb. 29, 2016). The district court also reasoned CIC could not have
breached the contract by not paying the replacement cost because the Trust failed to
replace the damaged property within two years of the date of loss, as the provision
required. Id. The court further found a vexatious refusal claim could not be
maintained based on conduct that occurred prior to the completion of the appraisal
process, reasoning that such a holding would subvert the appraisal process. Id. at *5.

      The Trust appeals the grant of summary judgment, arguing genuine issues of
material fact preclude summary judgment as to whether CIC waived its right to
invoke the appraisal provision and whether CIC breached the policy by refusing to
pay the Trust the replacement cost.

II.    DISCUSSION
       We review the district court’s grant of summary judgment and its interpretation
of the insurance policy de novo. Gohagan v. Cincinnati Ins. Co., 809 F.3d 1012,
1015 (8th Cir. 2016). “Summary judgment is appropriate only when, viewing the
facts in the light most favorable to the nonmoving party, there is no genuine issue of
material fact, and the moving party is entitled to judgment as a matter of law.” Id.
(internal citations and quotation marks omitted). “When, as here, federal jurisdiction

                                         -4-
is based on diversity of citizenship, ‘[s]tate law governs the interpretation of
insurance policies.’” Burger v. Allied Prop. & Cas. Ins. Co., 822 F.3d 445, 447 (8th
Cir. 2016) (alteration in original) (quoting Secura Ins. v. Horizon Plumbing, Inc., 670
F.3d 857, 861 (8th Cir. 2012)). It is undisputed that Missouri law applies to the
claims in this case. Thus, “we are bound by the Supreme Court of Missouri’s
decisions.” W. Heritage Ins. Co. v. Asphalt Wizards, 795 F.3d 832, 837 (8th Cir.
2015).

       A.     Enforcement of the Appraisal Provision
       The Trust argues the district court erred by concluding CIC had not waived its
right to invoke the appraisal provision and then by enforcing the provision. The Trust
argues waiver occurred because CIC did not identify an appraiser within twenty days
of the written demand for appraisal as required by the provision. The Trust asserts
the district court failed to view the evidence in the light most favorable to the Trust
and failed to allow an inference that the Trust was not reluctant to engage in the
appraisal process but was merely seeking confirmation that CIC would be bound by
the outcome of the appraisal. Citing “entrenched principles of insurance law,”
Appellant’s Br. 34, the Trust further argues that by recognizing the existence of an
arbitrable dispute, CIC impliedly waived its right to arbitrate, which the Trust
equates with CIC’s appraisal right. The Trust’s final assertion is that CIC only
invoked the appraisal provision for the disputed actual cash value whereas the district
court erred by sending the entire case, including replacement cost, for appraisal.

            1.    Appraisal Provision
      The policy’s Appraisal Provision4 states as follows:

      4
        The Trust notes that in its letter of April 19, 2011, CIC did not cite the
Missouri changes endorsement to the policy’s appraisal provision. A comparison of
the provisions shows that the only relevant difference is that the Missouri provision
sets time limits for the steps of the appraisal process. It is clear from the record that
the parties did not engage an appraiser, which, as CIC contended and the district court
                                           -5-
             If we and you disagree on the value of the property or the amount
      of loss, either may make written demand for an appraisal of the loss. In
      this event, each party will select a competent and impartial appraiser and
      notify the other of the appraiser selected within 20 days of the written
      demand for appraisal. The two appraisers will select an umpire. If they
      cannot agree upon an umpire within 15 days, we or you may request that
      selection be made by a judge of a court having jurisdiction. The
      appraisers will state separately the value of the property and amount of
      loss. If they fail to agree, they will submit their differences to the
      umpire. The umpire shall make an award within 30 days after the
      umpire receives the appraisers’ submissions of their differences. A
      decision agreed to by any two will be binding. Each party will
                    a.     Pay its chosen appraiser; and
                    b      Bear the other expenses of the appraisal and umpire
                           equally.
      If there is an appraisal, we will still retain our right to deny the claim.

J.A. at 176.

             2.      Enforceability
       As an initial matter, the Trust alleged the appraisal provision was vague
because it did not address what would happen if the neutral appraiser did not agree
with one of the party’s appraisers, and that it was unenforceable because it allowed
CIC to retain the right to deny the claim even after appraisal. The Trust also contends
the appraisal provision was unconscionable because it required the Trust to pay part
of the appraisal cost.

      The possibility both parties could disagree with the umpire’s decision did not
render the appraisal provision ambiguous. “Ambiguity does not arise merely because
the parties disagree over the meaning of a provision, and courts may not create
ambiguity by distorting contractual language that may otherwise be reasonably


agreed, CIC was not required to identify due to the Trust’s failure to engage in
appraisal.
                                          -6-
interpreted.” Woods of Somerset, LLC v. Developers Sur. & Indem. Co., 422 S.W.3d
330, 335 (Mo. Ct. App. 2013); see also Home Builders Ass’n of Greater St. Louis,
Inc. v. City of Wildwood, 107 S.W.3d 235, 239 (Mo. 2003) (“Where a provision’s
language is clear, courts must give effect to its plain meaning and refrain from
applying rules of construction unless there is some ambiguity.”). Invoking a
hypothetical situation—such as both parties disagreeing with the umpire’s decision,
which did not even occur in this case—does not create an ambiguity where none
exists. See Haggard Hauling & Rigging Co. v. Stonewall Ins. Co., 852 S.W.2d 396,
401 (Mo. Ct. App. 1993) (“The rule requiring that an insurance policy be construed
favorably to an insured in cases of ambiguity does not permit a strained interpretation
of the language of the policy in order to create an ambiguity where none exists.”).

      Nor was the provision unenforceable because CIC retained the right to deny the
claim based on a defense or exclusion. Under Missouri law, “[a] provision in an
insurance policy for the amount of the loss to be ascertained by appraisers in case of
disagreement in relation thereto is binding and enforceable, and must be complied
with before a right of action accrues to the insured.” Lance v. Royal Ins. Co., 259
S.W. 535, 535 (Mo. Ct. App. 1924). “[W]here the parties’ disagreement is over the
amount of loss, appraisal is appropriate.” Certain Underwriters at Lloyd’s, London
Subscribing to Certificate No. IPSI 12559 v. SSDD, LLC, No. 4:13-CV-193 CAS,
2013 WL 2403843, at *8 (E.D. Mo. May 31, 2013) (citing Lance, 259 S.W. at 535).
Defenses and exclusions, on the other hand, are coverage issues, which cannot be
resolved through the appraisal process. See Am. Family Mut., Ins. Co. v. Dixon, 450
S.W.3d 831, 836 (Mo. Ct. App. 2014) (“[A]ppraisal provisions in an insurance policy
apply only if the dispute between the parties relates to the amount of the loss and not
coverage.” (citing Hawkinson Tread Tire Serv. Co. v. Ind. Lumbermens Mut. Ins.
Co., 245 S.W.2d 24, 24, 28 (Mo. 1951))). Thus, the invocation of the appraisal
provision would not abridge either party’s right to challenge a coverage issue,
including CIC’s right to deny the claim. Nor did the appraisal provision, which
divided the cost of appraisal equally, abridge the insured’s potential rights under

                                          -7-
Missouri’s vexatious refusal statute, Mo. Rev. Stat. § 375.420. As the Missouri
Supreme Court has reasoned, “[t]he existence of a litigable issue, either factual or
legal, does not preclude a vexatious penalty where there is evidence the insurer’s
attitude was vexatious and recalcitrant.” DeWitt v. Am. Family Mut. Ins. Co., 667
S.W.2d 700, 710 (Mo. 1984).

       The district court properly afforded the appraisal provision its plain meaning
in determining it was unambiguous, enforceable, and did not abridge the Trust’s
rights under Missouri’s vexatious refusal statute.

               3.     Waiver
       The Trust argues the district court erred in not finding CIC waived its right to
invoke the appraisal provision. According to the Trust, CIC failed to comply with the
provision’s requirement to select an appraiser within the requisite time. The Trust
further argues CIC did not attempt to enforce the appraisal provision until its prayer
for relief in its motion for summary judgment on the declaratory judgment count, in
which CIC asked the district court to stay the case and to order the parties to engage
in the appraisal process. We disagree.

        After receiving the Trust’s proof of loss statement and paying the Trust the
undisputed ACV of $800,000, CIC unequivocally initiated the appraisal provision in
its letter of April 19, 2011: “This letter is to serve as [CIC]’s written demand for
appraisal of the disputed portions of this loss.” J.A. at 164-65. In its response on
April 20, the Trust acknowledged CIC’s demand for appraisal and in the very next
sentence established its position that “using the appraisal process to determine the
disputed portions of the loss under the Policy is completely unproductive,” asserting
CIC was in breach of the policy and that its breach would not be resolved through the
appraisal process. J.A. at 166. The letter went on to advise CIC that “in lieu of
pursuing the remedies available to the Insured at law, in equity, and/or under the
Policy, the Insured is willing to consider a settlement and resolution of all matters

                                          -8-
related to the Policy and the Claim.” J.A. at 168. The Trust proceeded to suggest
sums for which it would be willing to settle the claim. Id. CIC’s response on May
2, definitively rejected the Trust’s settlement demand and made its “second request
for appraisal.” J.A. at 171-72. The Trust’s reply on May 4 did not retract the Trust’s
position rejecting the efficacy of appraisal but instead sought assurances that CIC
“agree[d] to be bound by the outcome of the appraisal process,” restated its
contention that there were unresolved matters with respect to the Trust’s claim under
the policy, and informed CIC that the Trust “will be filing legal action seeking
resolution of those unresolved matters within the next few days.” J.A. at 173. In its
final pre-litigation communication to the Trust on May 11, CIC responded that the
terms and conditions of the appraisal process were binding on both the insured and
the insurer and invited the Trust to clarify the unresolved matters to which it referred.
The Trust answered by filing the lawsuit seven days later. As such, the Trust’s
written communication coupled with its conduct—most notably filing a lawsuit
against CIC—demonstrated its decision not to participate in the execution of a valid
policy provision.

       In support of its waiver argument, the Trust asserts that arbitration clauses are
inserted in policies for the protection of the insurers who profit off delays caused by
resolution conflicts. See Appellant Br. 34-35. Relying on the dissent in Riley v.
State Farm Mutual Automobile Insurance Co., 420 F.2d 1372 (6th Cir. 1970), the
Trust asserts “[w]here insurers recognize the existence of arbitrable disputes, they
have the duty to go forward with, or expedite, arbitration. Where they fail to do so,
they waive their right to arbitrate,” and “[h]aving impliedly waived by its actions the
right to arbitrate the dispute, [the insurer] could not revive it by subsequent acts.” Id.
at 1378, 1379 (Celebrezze, J., dissenting).

      Riley is distinguishable from the present case. First, the above-quoted
language from Riley, upon which the Trust relies, is from the dissent in that case. Id.
The Riley majority held the insurer had not waived the arbitration provision and the

                                           -9-
delay at issue in the case had been caused by the insured. Id. at 1377. To the extent
Riley applies at all, it does not support the Trust’s position. Second, Riley applied
Michigan law to determine the enforceability of an arbitration provision, not an
appraisal provision. Id. at 1376 n.3. Missouri law, which governs this dispute, has
long recognized the distinction between arbitration clauses and appraisal provisions.
See Dworkin v. Caledonian Ins. Co., 226 S.W. 846, 848 (Mo. 1920) (distinguishing
arbitration clauses, which send the entire controversy to a different tribunal and often
divest the court of jurisdiction, from appraisal provisions, which simply have
appraisers set the amount of loss).

       The Trust’s attempt to recast its response to CIC’s letter invoking the appraisal
provision as simply seeking assurances from CIC rings hollow. The Trust took a
definitive position against appraisal, referring to it as completely unproductive, and
advised CIC it would be filing a breach of contract action within days. We decline
the Trust’s invitation to view CIC’s failure to identify an appraiser within the
requisite time in a vacuum. Rather, CIC’s response was a reflection of the Trust’s
declaration of its position regarding appraisal, and its stated intention to file a lawsuit,
which the Trust carried out.

       We similarly reject the Trust’s assertion that CIC waited several years into the
second lawsuit before seeking to proceed with appraisal and therefore waived
enforcement of the appraisal provision. The Trust, not CIC, filed the lawsuit after
declining to engage in the appraisal process. Moreover, on February 22, 2013, two
months after the Trust filed the second lawsuit, CIC filed its answer and raised as its
third affirmative defense that the Trust breached the policy’s appraisal provision by
refusing to participate in appraisal. In its prayer for relief, CIC asked the court to
declare the provision unambiguous and binding as to the amount of covered damages.

      The district court properly concluded CIC did not waive the appraisal
provision.

                                            -10-
             4.     Amount of Loss
      The Trust argues the district court erred in submitting the valuation of
replacement cost as well as actual cash value for appraisal because CIC never invoked
appraisal for replacement cost.

       The language of the appraisal provision directs that the parties’ selected
appraisers are to “state separately the value of the property and amount of loss.” J.A.
at 176 (emphasis added). The district court ordered, “The parties shall participate in
the appraisal provision as outlined in the Policy.” Olga Despotis Tr., 2014 WL
5320260, at *8 (emphasis added). Furthermore, when CIC invoked the appraisal
provision in its April 19 letter, CIC detailed the parties’ valuation differences. In its
May 11 letter, CIC reiterated that “the purpose of the appraisal process is to resolve
all disputes regarding covered damages . . . .” J.A. at 174. The Trust’s contention
that there was no basis for the district court to order appraisal of all covered damages,
including replacement cost, is unfounded.5

      B.     Dismissal of Breach of Contract Claim
      The Trust’s second point of error argues that the district court erred by granting
summary judgment in favor of CIC on the Trust’s breach of contract claim.
Specifically, the Trust argues the district court entered judgment without addressing
the theories pled in its complaint, including that CIC anticipatorily breached the
appraisal and rebuilding provisions of the contract.

      5
        The Trust also argues that the district court erred in ordering appraisal because
CIC never requested that affirmative relief. We disagree. By requesting a declaration
that the appraisal provision was unenforceable (count three), the Trust brought the
provision into play, which allowed CIC to defend against such a declaration. In
addition, as previously discussed, CIC’s answer to the complaint denied the Trust’s
allegation that the provision was invalid and unenforceable and raised various
affirmative defenses, including that the Trust breached the appraisal provision, and
in its prayer for relief, CIC asked the court to find the appraisal provision
unambiguous and binding as to the amount of covered damages.
                                          -11-
            1.    Loss Provision
      The policy’s loss provision states as follows:

      (a) We will pay the cost to repair or replace, after application of the
      deductible and without deduction for depreciation, but not more than the
      least of the following amounts:
             1) The Limit of Insurance under this policy that applies to
             the lost or damaged property;
             2) The cost to replace, on the same “premises”, the lost or
             damaged property with other property:
                    a) Of comparable material and quality; and
                    b) Used for the same purpose; or
             3) The amount that you actually spend that is necessary to
             repair or replace the lost or damaged property.
             If a building is rebuilt at a new premises, the cost is limited
             to the cost which would have been incurred had the
             building been built at the original “premises”.
      (b) You may make a claim for “loss” covered by this insurance on an
      “actual cash value” basis instead of on a replacement cost basis. In the
      event you elect to have “loss” settled on an “actual cash value” basis,
      you may still make a claim on a replacement cost basis if you notify us
      of your intent to do so within 180 days after the “loss”.
      (c) We will not pay on a replacement cost basis for any “loss”:
             1) Until the lost or damaged property is actually repaired or
             replaced with other property of generally the same
             construction and used for the same purpose as the lost or
             damaged property; and
             2) Unless the repairs or replacement have been completed
             or at least underway within 2 years following the date of
             “loss”.

J.A. at 175.

       The appraisal ordered by the district court determined the ACV of the property
to be $1,056,000, which was $256,000 more than CIC’s initial estimate and payment.


                                        -12-
After paying the Trust the additional $256,000, CIC moved for summary judgment
on the remaining breach of contract and vexatious refusal claims. In its order
granting summary judgment in CIC’s favor, the district court noted that the Trust
insisted its breach of contract claim was based on the theory that CIC breached the
policy by not paying the correct ACV in March 2011 and that the Trust specifically
denied that its breach of contract claim was based on an anticipatory breach theory.
The district court found there was no breach of contract as a matter of law since there
was no wrongful refusal to pay. The court detailed that CIC paid the undisputed
portion of loss shortly after the proof of loss was submitted and that the Trust was
required to the engage in the appraisal process with respect to the disputed loss
amounts. The court concluded the Trust’s cause of action for breach of contract could
not accrue until completion of the appraisal process, and thus the Trust could not base
a breach of contract claim on CIC’s payment in 2011. Regarding the Trust’s failure
to initiate the rebuilding process within two years of the loss, the court was
unpersuaded by the Trust’s argument that CIC’s undervaluation of the ACV
prevented the Trust from rebuilding or that the additional $256,000 ACV would have
caused the Trust to start the rebuilding process. The court concluded the Trust’s
failure to start the rebuilding process within two years as required by the replacement
cost provision was fatal to its breach of contract claim.

       As with the appraisal provision, the policy’s replacement cost provision was
clear and unambiguous, and therefore the district court was required to enforce the
provision as written. See Floyd-Tunnell v. Shelter Mut. Ins. Co., 439 S.W.3d 215,
217 (Mo. 2014). Courts applying Missouri law have found when a policy requires
repair or replacement of the damaged property as a condition precedent to receiving
payment for the repair or replacement costs, the insurer has no obligation to pay that
amount unless or until repair or replacement occurs. See Porter v. Shelter Mut. Ins.
Co., 242 S.W.3d 385, 394 (Mo. Ct. App. 2007); Kastendieck v. Millers Mut. Ins. Co.
of Alton, Ill., 946 S.W.2d 35, 40 (Mo. Ct. App. 1997); see also Federated Mut. Ins.
Co. v. Moody Station & Grocery, 821 F.3d 973, 977-78 (8th Cir. 2016). It is

                                         -13-
undisputed that the replacement process was neither complete nor underway within
two years of the date of loss as required under the policy.

       The district court also found the Trust failed to produce any evidence to
support its contention that CIC breached the contract in the administration of the
Trust’s claim other than the Trust’s assertions of general dissatisfaction in the manner
with which CIC handled its claim. The court also discussed Dr. Despotis deposition
testimony that he attended several meetings with CIC and submitted bids for
rebuilding but was repeatedly put off by CIC. The district court noted that the Trust
had not produced any dates for the supposed meetings with CIC about replacing the
building nor any documentation regarding replacement bids. The district court
concluded because the Trust failed to repair or replace the building within two years
of the loss, as required under the replacement cost provision of the policy, CIC was
under no obligation to pay the Trust the replacement cost. Therefore, CIC could not
have breached the policy by failing to do so.

       Relying on Bailey v. Farmers Union Co-operative Insurance Co., 498 N.W.2d
591, 594 (Neb. 1992), the Trust argues it should not be barred from recovery for
failing to rebuild within the time constraints of the policy because it was unable to
initiate the building process due to CIC’s refusal to give assurances that replacement
costs would be covered. In Bailey, the home of the insured—a disabled single
mother—collapsed during renovations, resulting in a total loss. Id. at 598. The
insurer sought to avoid the claim under various defenses. Id. at 594-96. The record
contained correspondence from the insurer to the insured misrepresenting the policy’s
coverage, offering last chance-type settlement demands, and threatening litigation.
Id. at 595-96. The record also contained the insurer’s field agent’s notes, which
proposed ways the insurer could deny the claim. Id. Although the insurer did provide
an ACV calculation of $11,900 to the insured, it was presented as a “final settlement,”
and not as the undisputed ACV amount to be used as seed money. Id. at 596. The
insured rejected that offer and presented the insurer with her own ACV ($16,700) and

                                          -14-
replacement cost ($50,449) calculations. Id. The insurer responded that its ACV
calculation was the total value of the claim and the replacement cost would not be
covered, directly misrepresenting the policy provision. Id. The insured sued the
insurer for breach of contract and in tort for mental anguish. Id. at 597. Following
a bench trial, the court concluded, inter alia, that the insured’s failures to rebuild and
to claim replacement costs within the requisite time frame was excused, reasoning the
insurer’s relentless conduct, which the court described as almost criminal, prevented
the insured from complying with the policy provision. Id. The decision was affirmed
on appeal. Id. at 605.

       The present case is distinguishable from Bailey. In Bailey, the insurer never
provided the insured with the undisputed ACV. Rather, the insured was sent a
“settlement offer” with a check for the insured’s calculated ACV and a notice that if
the insured “did not accept the settlement offer, [the insurer] ‘would have no
alternative’ but to withdraw the offer and prepare to defend itself in court.” Id. at
595-96. Here, CIC paid the undisputed ACV of $800,000 within fifteen days of the
Trust submitting its proof of loss, which the Trust accepted, and the undisputed ACV
was not, as in Bailey, presented as a settlement offer. CIC clearly acknowledged that
a dispute remained about whether CIC owed the Trust additional payments by
invoking the appraisal provision. Further distinguishable is that the record in Bailey
contained ample evidence of the insurer’s delays and attempts to avoid the claim
altogether. Id. at 597. Here, the Trust, not CIC, refused to comply with policy
provisions, presented the insurer with settlement offers, and threatened litigation.
Record evidence in Bailey included the field agent’s notes, suggesting ways the
insurer could avoid the claim, as well as letters from the insurer to the insured
advising her to accept the settlement offer or face litigation and that the insurer did
not have to pay the replacement cost. Id. at 595-96. Here, the only evidence
supporting the Trust’s allegation that CIC frustrated its attempts to rebuild is Dr.
Despotis’ deposition testimony, in which Dr. Despotis stated that CIC dodged Dr.
Despotis’ requests for confirmation that CIC would pay the rebuilding cost. The

                                           -15-
Trust argues that by disregarding this testimony, the district court improperly made
a credibility determination. While the Trust is correct that credibility determinations
“are jury functions, not those of a judge . . . ruling on a motion for summary
judgment,” Johnson v. Securitas Sec. Servs. USA, Inc., 769 F.3d 605, 614–15 (8th
Cir. 2014) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)), the
district court did not make a credibility determination in this instance. Dr. Despotis’
testimony merely recounted his version of the dispute at the core of CIC’s invocation
of the appraisal provision—the value of the loss—a process the Trust rejected as
“unproductive.” The district court did not improperly weigh evidence in concluding
the Trust’s failure to take any steps toward rebuilding was fatal to its breach of
contract claim.

      2.     Anticipatory Breach
      On appeal, the Trust argues that the district court erred in dismissing its breach
of contract claim by failing to consider its viable cause of action for anticipatory
breach of the policy. Before the district court, however, in its reply to its own motion
for summary judgment, the Trust categorically denied that either its breach of contract
or vexatious refusal claim was based on a theory of anticipatory breach:

      D. Plaintiff Does Not Claim Anticipatory Repudiation.
      Cincinnati misconstrues the Trust’s claim to this Court as one for
      “anticipatory repudiation”. . . . The Trust pled breach of contract (Count
      I) for failure to provide replacement cost (Count I) . . . . The Trust pled
      vexatious refusal to pay (Count II) . . . . Directly as a result of these
      breaches, the Trust simply could not “rebuild” the Property. In fact,
      Cincinnati’s actions were a manifestation of its intent (in 2011 and
      currently) to avoid its contractual obligations under the Policy by
      delaying payment of a properly calculated ACV so as to prevent the
      Trust from rebuilding. In so doing, it was unreasonable and vexatious
      in its conduct. These are not claims for anticipatory repudiation.

Appellee’s Add. 7.


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       When a party did not make an argument in the district court, it “may not raise
an issue for the first time on appeal as a basis for reversal.” Westfield Ins. Co. v.
Robinson Outdoors, Inc., 700 F.3d 1172, 1176 (8th Cir. 2012). Nonetheless, even if
the Trust preserved such a claim, it fails. “Missouri has recognized the doctrine of
anticipatory breach by repudiation. But such a repudiation is shown only by the
disclosure of a positive intention not to perform the contract, by express statements
or otherwise.” Ewing v. Miller, 335 S.W.2d 154, 158 (Mo. 1960) (citation omitted).
The Trust has presented no evidence that CIC demonstrated the requisite positive
intention not to perform the contract. The evidence shows CIC paid the undisputed
ACV within fifteen days of the Trust’s submission of the loss and initiated the
contract’s appraisal provision. The Trust, on the other hand, demonstrated a manifest
intent not to perform, which is evinced in its communications with CIC in April and
May 2011. To the extent the Trust asserted a claim for breach of contract based on
an anticipatory breach theory, the claim fails. The district court committed no error
in finding the Trust’s breach of contract claim failed as a matter of law.

      C.      Dismissal of Vexatious Refusal Claim
      On appeal, the Trust argues the district court erred in granting CIC summary
judgment on “All Remaining Counts of Plaintiff’s Complaint,” Appellant’s Br. 40,
and does not separately address the dismissal of the vexatious refusal claim. The
Trust’s only reference to that claim is in the conclusion of its initial brief, stating
“CIC breached the insurance policy and that its conduct was vexatious,” and
requesting a “statutory penalty and attorneys’ fees it has spent in trying to obtain the
benefits of its insurance policy.” Appellant’s Br. 58.

      To establish a claim under Missouri’s vexatious refusal statute, Mo. Rev. Stat.
§ 375.296, the Trust had to prove “(1) [it] had an insurance policy with [CIC]; (2)
[CIC] refused to pay; and, (3) [CIC’s] refusal was without reasonable cause or
excuse.” See Mo. Bank & Tr. Co. of Kansas City v. OneBeacon Ins. Co., 688 F.3d
943, 948–49 (8th Cir. 2012) (first alteration in original) (quoting Dhyne v. State Farm

                                          -17-
Fire & Cas. Co., 188 S.W.3d 454, 457 (Mo. 2006)). The district court granted CIC’s
motion for summary judgment on the vexatious refusal claim, reasoning the Trust
failed to state a claim for breach of contract and CIC was justified in its actions, and
that there could be no vexatious refusal to pay the ACV amount determined through
the appraisal process, until the completion of that process.

        “The law is well-settled that for an insured to obtain a penalty for an insurance
company’s vexatious refusal to pay a claim, the insured must show that the insurance
company’s refusal to pay the loss was willful and without reasonable cause or excuse
. . . .” Watters v. Travel Guard Int’l, 136 S.W.3d 100, 108 (Mo. Ct. App. 2004).
There is no evidence in the record to support the contention that any refusal to pay
was without reasonable cause or excuse. CIC timely paid the undisputed ACV and
invoked the appraisal process. While the umpire determined the ACV to be
$1,056,000, which was $256,000 more than the $800,000 CIC paid the Trust, CIC
promptly paid that difference. This conduct belies the Trust’s assertion that CIC
acted unreasonably. Furthermore, in its submission of its proof of loss, the Trust
calculated an ACV of $1,400,000. Faced with a $600,000 calculation difference, it
was not unreasonable for CIC to pay the Trust the undisputed amount and invoke
appraisal. We also note that CIC’s initial ACV calculation was closer to the
appraisers’ (eventual) calculation than was the Trust’s. The district court properly
granted CIC summary judgment on the Trust’s vexatious refusal claim.

III.  CONCLUSION
      For the foregoing reasons, we affirm the grant of summary judgment in favor
of CIC.
                      ______________________________




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