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Leonards to recovery for their flood-induced damages. See In re Katrina Canal
F. Weather-Conditions Exclusion
[27] Link to KeyCite Notes Neither party briefed or argued the applicability of the
weather-conditions exclusionFN16 in the district court, nor has Nationwide
alleged that the exclusion bars recovery. The district court raised the issue sua
sponte in its Memorandum Opinion, finding the provision ambiguous and
following if another excluded peril contributes to the loss:
(...)
c. Weather conditions, if contributing in any way with an exclusion listed in
paragraph 1. of this Section.
G. Negligent Misrepresentation Claim
that Paul Leonard drew from the conversations were inconsistent with the policy
exclusion for water damage. Leonard, 438 F.Supp.2d at 692.
1. Background Principles
[28] Link to KeyCite Notes[29] Link to KeyCite Notes[30] Link to KeyCite
Notes[31] Link to KeyCite Notes Under Mississippi law, a party's reliance on
F.3d at 464 (quoting Godfrey, Bassett & Kuykendall Architects, Ltd. v. Huntington
Lumber & Supply Co., Inc., 584 So.2d 1254, 1257 (Miss.1991)). An agent's oral
representations can modify the policy only if it is ambiguous; when the
contractual language is plain, there can be no modification. Am. States Ins. Co.
v. Natchez Steam Laundry, 131 F.3d 551, 555 (5th Cir.1998).
orally modify contracts, only apparent authority is pertinent here.
[34] Link to KeyCite Notes[35] Link to KeyCite Notes Somewhat tautologically,
the Mississippi Supreme Court has explained that “[a]pparent authority exists
when a reasonably prudent person, having knowledge of the nature and usages
of the business involved, would be justified in supposing, based on the character
(citing Andrew Jackson Life Ins. Co. v. Williams, 566 So.2d 1172, 1181
(Miss.1990)). The insured is bound by policy language that would put a
reasonable person on notice of limitations to the agent's authority. See Union
Nat'l, 286 F.Supp.2d at 788.
2. Fletcher's Conversations with Paul Leonard
Leonards are proceeding under a tort or a contract theory. They contend in their
opening brief that the district court failed to adjudicate their contractual “oral
modification” claim. The Leonards pled, however, only “equitable fraud” FN17
(Count Eight) and fraud claims sounding in tort (Counts Nine and Ten). The
complaint contains no contract claims at all.
statements, when coupled with their equitable estoppel claim (Count Two),
amount to “what may more broadly be termed a claim based on ‘oral
modification’ of an insurance contract.” They argue this without ever intoning the
word “oral” or “modification” in their pleadings. Even were we to credit this
explanation, the Leonards' further allegation that the district court failed to
in the first place. Nonetheless, whether they proceed under a misrepresentation
theory or a contract-modification theory, the Leonards lose on both scores. The
district court should never have considered the argument because Fletcher's
statements are irrelevant to interpreting this policy as a matter of Mississippi
insurance law.
HOW YOUR POLICY MAY BE CHANGED
(...)
(c) A waiver or change of a part of this policy must be in writing by use to be
valid. Our request for an appraisal or examination does not waive our rights.
Paul Leonard admits to having read the policy. Even had he not, knowledge of
923 F.2d 1158, 1163 (5th Cir.1991), the policy contained no express statement
that the insurer disclaimed any representations made by an agent that were
contrary to the written policy. Moreover, both Nichols and Scott v. Transport
Indemnity Co., 513 So.2d 889 (Miss.1987), involve fraudulent inducement to sign
new policies, not oral modifications of existing policies. Nichols, 923 So.2d at
and discover that the agents' offers wrongfully contravened unrevealed policy
conditions.” (emphasis in original) (internal quotation marks omitted). And in
American Income Life Insurance Co. v. Hollins, 830 So.2d 1230, 1238
(Miss.2002), the insured “was not given notice of the exclusion at the time of
relying on the agent's misrepresentation.” None of these cases supports the
of apparent authority-detrimental change in position-their misrepresentation claim
is stale. The most recent statements the Leonards cite were uttered six years
ago in 1999. The statute of limitations for negligent misrepresentation in
Mississippi is three years. See Miss.Code Ann. § 15-1-49. Because the policy
terms are unambiguous, the Leonards' claim accrued at the time the
4. Oral Modification Theory
[39] Link to KeyCite Notes[40] Link to KeyCite Notes[41] Link to KeyCite Notes
There are at least two reasons why the Leonards' contract-based claim fails as
well. First, the policy's integration clause pretermits the claim as a matter of
law.FN19 See Stephens v. Equitable Life Assurance Soc'y, 850 So.2d 78, 83
modifications be in writing”).FN20 Instead, they argue that their pleading of
equitable estoppel obviates entirely the need to resort to the integration clause.
That claim ignores the rule that doctrines like equitable estoppel that allow
insureds to procure rights at variance with a written insurance policy cannot be
used to extend coverage not otherwise provided by the policy. See Kubow v.
FN19. Although the parol evidence rule is not a bar to evidence of a subsequent
contract modification, see Dixie S. Indus. Coating, Inc. v. Miss. Power Co., 872
So.2d 769, 772 (Miss.Ct.App.2004), the rule is activated only upon the discovery
of ambiguity in a contract and is thus inapplicable here. Smith v. Smith, 872
So.2d 74, 78 (Miss.Ct.App.2004) (“Parol evidence of the intention of the parties
dealing [between the parties] which repeatedly disregards such stipulation” may
amount to waiver. Id. (citation omitted). That situation is not present here.
[42] Link to KeyCite Notes Second, Mississippi law requires that oral
modification correspond to general rules of contract formation, like the meeting-
of-the-minds requirement. See, e.g., Rotenberry v. Hooker, 864 So.2d 266, 270
The Leonards' additional claim that equitable estoppel does not require mutual
assent is irrelevant because estoppel cannot operate to create hurricane
coverage that does not exist under the policy.
Whether the Leonards proceed under a contract or tort claim, their allegation that
Fletcher's comments entitle them to additional coverage is incorrect as a matter
court admitted statements Fletcher made to five Nationwide policyholders as
“habit” evidence under Federal Rule of Evidence 406 because “there was
enough evidence ... as a matter of habit and routine, [that Fletcher] expressed his
opinion, when he was asked, that customers should not purchase flood
insurance unless they lived in a flood prone area ....” Leonard, 438 F.Supp.2d at
specific set of stimuli that is reflexive, repeated, and invariable in nature.”).
Fletcher has about fifteen hundred customers. Comments he purportedly made
to five of them over the course of a decade about the need for additional flood
coverage do not remotely qualify or quantify as a habit within the meaning the
Rule 406. The record demonstrates that Fletcher sold nearly two hundred NFIP
III. CONCLUSION
Subject to the foregoing explanation of the trial court's errors, we
AFFIRM.
1. Background Principles
[28] Link to KeyCite Notes[29] Link to KeyCite Notes[30] Link to KeyCite
Notes[31] Link to KeyCite Notes Under Mississippi law, a party's reliance on
F.3d at 464 (quoting Godfrey, Bassett & Kuykendall Architects, Ltd. v. Huntington
Lumber & Supply Co., Inc., 584 So.2d 1254, 1257 (Miss.1991)). An agent's oral
representations can modify the policy only if it is ambiguous; when the
contractual language is plain, there can be no modification. Am. States Ins. Co.
v. Natchez Steam Laundry, 131 F.3d 551, 555 (5th Cir.1998).
orally modify contracts, only apparent authority is pertinent here.
[34] Link to KeyCite Notes[35] Link to KeyCite Notes Somewhat tautologically,
the Mississippi Supreme Court has explained that “[a]pparent authority exists
when a reasonably prudent person, having knowledge of the nature and usages
of the business involved, would be justified in supposing, based on the character
(citing Andrew Jackson Life Ins. Co. v. Williams, 566 So.2d 1172, 1181
(Miss.1990)). The insured is bound by policy language that would put a
reasonable person on notice of limitations to the agent's authority. See Union
Nat'l, 286 F.Supp.2d at 788.
2. Fletcher's Conversations with Paul Leonard
Leonards are proceeding under a tort or a contract theory. They contend in their
opening brief that the district court failed to adjudicate their contractual “oral
modification” claim. The Leonards pled, however, only “equitable fraud” FN17
(Count Eight) and fraud claims sounding in tort (Counts Nine and Ten). The
complaint contains no contract claims at all.
statements, when coupled with their equitable estoppel claim (Count Two),
amount to “what may more broadly be termed a claim based on ‘oral
modification’ of an insurance contract.” They argue this without ever intoning the
word “oral” or “modification” in their pleadings. Even were we to credit this
explanation, the Leonards' further allegation that the district court failed to
in the first place. Nonetheless, whether they proceed under a misrepresentation
theory or a contract-modification theory, the Leonards lose on both scores. The
district court should never have considered the argument because Fletcher's
statements are irrelevant to interpreting this policy as a matter of Mississippi
insurance law.
HOW YOUR POLICY MAY BE CHANGED
(...)
(c) A waiver or change of a part of this policy must be in writing by use to be
valid. Our request for an appraisal or examination does not waive our rights.
Paul Leonard admits to having read the policy. Even had he not, knowledge of
923 F.2d 1158, 1163 (5th Cir.1991), the policy contained no express statement
that the insurer disclaimed any representations made by an agent that were
contrary to the written policy. Moreover, both Nichols and Scott v. Transport
Indemnity Co., 513 So.2d 889 (Miss.1987), involve fraudulent inducement to sign
new policies, not oral modifications of existing policies. Nichols, 923 So.2d at
and discover that the agents' offers wrongfully contravened unrevealed policy
conditions.” (emphasis in original) (internal quotation marks omitted). And in
American Income Life Insurance Co. v. Hollins, 830 So.2d 1230, 1238
(Miss.2002), the insured “was not given notice of the exclusion at the time of
relying on the agent's misrepresentation.” None of these cases supports the
of apparent authority-detrimental change in position-their misrepresentation claim
is stale. The most recent statements the Leonards cite were uttered six years
ago in 1999. The statute of limitations for negligent misrepresentation in
Mississippi is three years. See Miss.Code Ann. § 15-1-49. Because the policy
terms are unambiguous, the Leonards' claim accrued at the time the
4. Oral Modification Theory
[39] Link to KeyCite Notes[40] Link to KeyCite Notes[41] Link to KeyCite Notes
There are at least two reasons why the Leonards' contract-based claim fails as
well. First, the policy's integration clause pretermits the claim as a matter of
law.FN19 See Stephens v. Equitable Life Assurance Soc'y, 850 So.2d 78, 83
modifications be in writing”).FN20 Instead, they argue that their pleading of
equitable estoppel obviates entirely the need to resort to the integration clause.
That claim ignores the rule that doctrines like equitable estoppel that allow
insureds to procure rights at variance with a written insurance policy cannot be
used to extend coverage not otherwise provided by the policy. See Kubow v.
FN19. Although the parol evidence rule is not a bar to evidence of a subsequent
contract modification, see Dixie S. Indus. Coating, Inc. v. Miss. Power Co., 872
So.2d 769, 772 (Miss.Ct.App.2004), the rule is activated only upon the discovery
of ambiguity in a contract and is thus inapplicable here. Smith v. Smith, 872
So.2d 74, 78 (Miss.Ct.App.2004) (“Parol evidence of the intention of the parties
dealing [between the parties] which repeatedly disregards such stipulation” may
amount to waiver. Id. (citation omitted). That situation is not present here.
[42] Link to KeyCite Notes Second, Mississippi law requires that oral
modification correspond to general rules of contract formation, like the meeting-
of-the-minds requirement. See, e.g., Rotenberry v. Hooker, 864 So.2d 266, 270
The Leonards' additional claim that equitable estoppel does not require mutual
assent is irrelevant because estoppel cannot operate to create hurricane
coverage that does not exist under the policy.
Whether the Leonards proceed under a contract or tort claim, their allegation that
Fletcher's comments entitle them to additional coverage is incorrect as a matter
court admitted statements Fletcher made to five Nationwide policyholders as
“habit” evidence under Federal Rule of Evidence 406 because “there was
enough evidence ... as a matter of habit and routine, [that Fletcher] expressed his
opinion, when he was asked, that customers should not purchase flood
insurance unless they lived in a flood prone area ....” Leonard, 438 F.Supp.2d at
specific set of stimuli that is reflexive, repeated, and invariable in nature.”).
Fletcher has about fifteen hundred customers. Comments he purportedly made
to five of them over the course of a decade about the need for additional flood
coverage do not remotely qualify or quantify as a habit within the meaning the
Rule 406. The record demonstrates that Fletcher sold nearly two hundred NFIP
III. CONCLUSION
Subject to the foregoing explanation of the trial court's errors, we
AFFIRM.
