Opinion ID: 798500
Heading Depth: 2
Heading Rank: 3

Heading: Negligent Misrepresentation by Insurer in Mississippi

Text: Although the state law claim is preempted, Grissom's negligent misrepresentation by an insurer claim also does not find a basis in Mississippi law. In Mississippi, a plaintiff must meet five factors to succeed in a claim of negligent misrepresentation: (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. Mladineo v. Schmidt, 52 So.3d 1154, 1164-65 (Miss.2010) (quotation marks and citation omitted). Liberty Mutual argues that Mississippi law does not recognize a claim for negligent misrepresentation against an insurer because an insurer has no fiduciary duty to insureds and no affirmative duty to advise buyers about their individual insurance needs (factor 3). Id. at 1163. Grissom counters that insurers have a duty to use reasonably prudent diligence and care in business transactions and thus misrepresentation may be alleged for failure to disclose information. There is no Mississippi law directly on point, but Mississippi courts have spoken to the relationship between insurers and insureds and have also discussed the duties owed to the insured. The Mississippi Court of Appeals explained the Mississippi legal principle that the purchase of insurance is an arms-length transaction and no fiduciary duty arises between an insurance company or its agents and the purchaser of the insurance. Taylor v. S. Farm Bureau Cas. Co., 954 So.2d 1045, 1049 (Miss.Ct.App.2007). The court stated: In Mississippi, a claim of fraud by omission arises only where the defendant had a duty to disclose material facts purportedly omitted. This duty generally arises only where there is a fiduciary relationship between the parties .... Under Mississippi law, there is no fiduciary relationship or duty between an insurance company and its insured in a first party insurance contract. Id. (quoting Langston v. Bigelow, 820 So.2d 752, 756 (Miss.Ct.App.2002)). Further, we do not find that insurance agents in Mississippi have an affirmative duty to advise buyers regarding their coverage needs .... [I]mposing liability on agents for failing to advise insureds regarding the sufficiency of their coverage would remove any burden from the insured to take care of his or her own financial needs. Mladineo, 52 So.3d at 1163. Liberty Mutual is not required to provide advice to insurance customers. Because Liberty Mutual was not offering insurance advice, was not a fiduciary of Grissom, and did not offer any statement to Grissom to imply the lack of alternative insurance options, Mississippi law would not recognize negligent misrepresentation as a cause of action against Liberty Mutual and the submission of negligent misrepresentation to the jury was error.