Opinion ID: 1599552
Heading Depth: 2
Heading Rank: 1

Heading: whether the trial court erred in granting the bank's motion for summary judgment.

Text: ¶ 9. In reviewing a trial court's decision to grant summary judgment, this Court uses a de novo standard of review. Franklin County Mem'l Hosp. v. Miss. Farm Bureau Mut. Ins. Co., 975 So.2d 872, 874 (Miss.2008) (citing Callicutt v. Prof'l Servs. of Potts Camp, Inc., 974 So.2d 216, 219 (Miss.2007)). The evidence must be viewed in the light most favorable to the non-moving party and if, in this view, the moving party is entitled to a judgment as a matter of law, then summary judgment should be granted in his favor. Otherwise, the motion should be denied. Palmer v. Anderson Infirmary Benevolent Ass'n, 656 So.2d 790, 794 (Miss.1995) (citing Brown v. Credit Center, Inc., 444 So.2d 358, 362 (Miss.1983)). ¶ 10. Mississippi Rule of Civil Procedure 56(c) states in pertinent part: The judgment sought shall be rendered forthwith 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 a judgment as a matter of law. A fact is material if it tends to resolve any of the issues properly raised by the parties. Simpson v. Boyd, 880 So.2d 1047, 1050 (Miss.2004) (quoting Palmer, 656 So.2d at 794). Even where the trial court finds that there is nothing before it that indicates a genuine dispute of material fact and finds that the movant is otherwise entitled to summary judgment, the trial court may nevertheless be justified in denying summary judgment when, in its view, a full exposition of the facts may result in a triable issue or is warranted in the interest of justice. Great Southern Nat'l Bank v. Minter, 590 So.2d 129, 135 (Miss.1991) (quoting Brown v. McQuinn, 501 So.2d 1093, 1095 (Miss.1986)). ¶ 11. Holland contends he informed Jeffreys that, in the event cotton prices dropped below eighty cents a pound, he would need an additional $200,000 (for a total of a $700,000) line of credit, for the purpose of covering margin calls in commodities trading. He further claims that Jeffreys orally promised to extend the line of credit an additional $200,000 to cover margin calls. Holland maintains that when cotton prices did drop, his business suffered losses due to the Bank's negligent and fraudulent misrepresentations regarding his line of credit. On the other hand, the Bank maintains that Holland asked for an extended line of credit in the amount of $100,000 for the purpose of covering margin calls, which the Bank denied due to Holland not being able to produce more collateral. The Bank further contends that Jeffreys did not have the authority to either grant or deny a $200,000 extended line of credit and that such action had to be presented to the Bank board for consideration. Additionally, the Bank contends that Holland knew or should reasonably have known that Jeffreys lacked this authority. Furthermore, the Bank contends that Holland cannot recover based on future promises for an extended line of credit, nor can any oral agreement alter the four corners of the written contract under the parol evidence rule. [3] ¶ 12. The trial court ruled that Holland's claim of negligent misrepresentation failed because a promise to lend money is not a past or present existing fact but a promise of future conduct and as such is not such a representation as will support recovery under a theory of negligent misrepresentation. Bank of Shaw v. Posey, 573 So.2d 1355, 1360 (Miss. 1990); see also Moran v. Fairley, 919 So.2d 969 (Miss.Ct.App.2005). Although the trial court did not specifically address the claim of fraudulent misrepresentation, the rule is the same. In cases of fraud, relief cannot be based on future promises, except in some cases when a contractual promise is made with the present undisclosed intention of not performing it. Bank of Shaw, 573 So.2d at 1360. Holland cites Kidd v. Kidd, 210 Miss. 465, 49 So.2d 824, 827 (1951), for the same premise in support of his argument that Jeffreys promised him the extended line of credit with the undisclosed intent not to perform. ¶ 13. In order to recover under a theory of fraudulent misrepresentation, a plaintiff must prove, by clear and convincing evidence, the following elements: (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of the truth; (5) his intent that it should be acted on by the hearer and in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) his reliance on its truth; (8) his right to rely thereon; and (9) his consequent and proximate injury. Bank of Shaw v. Posey, 573 So.2d 1355, 1362 (Miss.1990) (citing Ezell v. Robbins, 533 So.2d 457 (Miss.1988); Martin v. Winfield, 455 So.2d 762, 764 (Miss.1984); Franklin v. Lovitt Equip. Co., Inc., 420 So.2d 1370, 1373 (Miss.1982)). Even if the facts as espoused by Holland were accepted as true, the record reveals that Holland is unable to make a clear and convincing showing that Jeffreys was aware that there would be no extended line of credit, yet promised Holland the $200,000. As to the alleged misrepresentation, Holland's contention that Jeffreys promised him the $200,000 is flatly denied by Jeffreys and the Bank. Holland admits that there was never an actual agreement to extend the line of credit by $200,000. He states that he told Jeffreys he might need the money at a future date based on the cotton market. Furthermore, Holland would have to prove that he had a right to rely on such a falsehood. However, Holland should have reasonably known that Jeffreys lacked authority to lend that amount of money and that any loan proposals would have to be brought before the Bank's board. ¶ 14. Absent a showing of fraud, the trial court was eminently correct in finding that the written loan agreement could not be altered by prior oral agreements. See Godfrey, Bassett, & Kuykendall Architects, Ltd. v. Huntington Lumber & Supply Co., 584 So.2d 1254, 1257 (Miss.1991); see also Franklin v. Lovitt Equipment Co., 420 So.2d 1370, 1372 (Miss.1982). Furthermore, this Court has held: [A] person is under an obligation to read a contract before signing it, and will not as a general rule be heard to complain of an oral misrepresentation the error of which would have been disclosed by reading the contract. Stephens v. Equitable Life Assurance Soc'y of the United States, 850 So.2d 78, 82 (Miss.2003) (quoting Godfrey, 584 So.2d at 1257) (citations omitted). The loan agreement provided for a $500,000 line of credit, and the trial court did not err in finding that any prior oral agreement that attempts to alter this written agreement is inadmissible. ¶ 15. In the alternative, Holland argues that, if not fraudulent, then Jeffreys's misrepresentation was negligent. This Court has distinguished fraudulent representation and negligent representation: The basis for damages resulting from negligent misrepresentation is the lack of care; the basis for damages resulting from fraud is the want of honesty. See Restatement of the Law of Torts ( Second) sections 549 and 552 (1977). The lack of care in negligent misrepresentation and the want of honesty in fraudulent misrepresentation in business transactions give rise to distinct causes of action, the one in tort, the other in fraud. Bank of Shaw, 573 So.2d at 1360 (quoting First Money, Inc. v. Frisby, 369 So.2d 746, 750 (Miss.1979)). In order to establish negligent misrepresentation, the following elements must be proven: (1) a misrepresentation or omission of a fact; (2) that the representation or omission is material or significant; (3) that the person/entity charged with the negligence failed to exercise that degree of diligence and expertise the public is entitled to expect of such persons/entities; (4) that the plaintiff reasonably relied upon the misrepresentation or omission; and (5) that the plaintiff suffered damages as a direct and proximate result of such reasonable reliance. Horace Mann Life Ins. Co. v. Nunaley, 960 So.2d 455, 461 (Miss.2007) (citing Skrmetta v. Bayview Yacht Club, Inc., 806 So.2d 1120, 1124 (Miss.2002)). Hazlehurst Lumber Co. v. Miss. Forestry Comm'n, 983 So.2d 309, 313 (Miss.2008). The aforementioned elements must be proven by a preponderance of the evidence. Bank of Shaw, 573 So.2d at 1360. As was the case with the fraudulent-misrepresentation allegation, Holland was unable to show that he reasonably could have relied on any assertions by Jeffreys that an additional $200,000 line of credit would be forthcoming, given that Jeffreys lacked actual and apparent authority to approve a loan agreement of such financial magnitude. ¶ 16. On the issue of damages, the trial court held that Holland failed to produce documentation in support of his claim that the Bank's refusal to grant his loan resulted in losses to his cotton and farming business. Holland argues that the testimony of his accountant would establish that the Bank's alleged misappropriation of the $237,000 in proceeds from the Lafayette County land sale caused him to suffer severe monetary damages. Holland further argues that causal connection is a question of fact to be determined by a jury. See e.g., Glover v. Jackson State Univ., 968 So.2d 1267, 1277 (Miss.2007). Causation and damages are but two elements of Holland's claims. As discussed previously, Holland has failed to establish reasonable reliance on any assertions by Bank employee William Jeffreys. Therefore, the trial court did not err in finding as a matter of law that Holland was not entitled to recovery of monetary damages. ¶ 17. As to the claim of breach of fiduciary duty, Holland fails to show that there was an escrow agreement that would impose a fiduciary duty on the Bank or its agent. This Court has stated the following regarding fiduciary relationships: Although every contractual agreement does not give rise to a fiduciary relationship, in Mississippi such a relationship may exist under the following circumstances: (1) the activities of the parties go beyond their operating on their own behalf, and the activities [are] for the benefit of both; (2) where the parties have a common interest and profit from the activities of the other; (3) where the parties repose trust in one another; and (4) where one party has dominion or control over the other. Robley v. Blue Cross/Blue Shield, 935 So.2d 990, 995 (Miss.2006) (citing Univ. Nursing Assocs., PLLC v. Phillips, 842 So.2d 1270, 1274 (Miss.2003); Carter Equip. Co. v. John Deere Indus. Equip. Co., 681 F.2d 386, 391 (5th Cir.1982)). The Bank argues that this escrow agreement was merely a proposed agreement that the Bank rejected on the basis that Holland could not produce more collateral. This Court is unable to find from the record before us any of the requisite elements for a fiduciary relationship where Holland has failed to produce evidence that the agreement existed. It is undisputed that Holland sold property that was the Bank's collateral, and that the Bank offset Holland's debt owed to them with the sales proceeds. Under the holding in Wise v. Valley Bank, 861 So.2d 1029 (Miss.2003), unless there was an agreement to the contrary, the relationship between Holland and the Bank was one of debtor/creditor. As to the duty owed by banks, this Court held in Wise: The relationship between a bank and a depositor, without an agreement to the contrary, is simply one of debtor and creditor, and a deposit is not, ordinarily, a trust fund. Deposit Guar. Bank & Trust Co. v. Merchants' Bank & Trust Co., 171 Miss. 553, 158 So. 136, 137 (1934) (citing Moreland v. People's Bank of Waynesboro, 114 Miss. 203, 74 So. 828 (1917)). Furthermore, we have found that the relationship between a bank and its depositor is generally not a fiduciary one. Merchants & Planters Bank of Raymond v. Williamson, 691 So.2d 398, 403 (Miss.1997). Wise, 861 So.2d at 1033. Logically, [t]he existence of a fiduciary duty must be established before a breach of that duty can arise. Merchants & Planters Bank v. Williamson, 691 So.2d 398, 403 (Miss.1997) (citing Lowery v. Guar. Bank and Trust Co., 592 So.2d 79, 83 (Miss.1991)). ¶ 18. Assuming arguendo that Holland could establish a prime facie case of fraudulent or negligent misrepresentation or breach of fiduciary duty, those claims would be deemed waived based on Holland's signing the renewal notes and participating in the workout agreement with the Bank, as discussed infra in Holland's second assignment of error. ¶ 19. For the reasons discussed, we find these combined assignments of error to be without merit.