           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT United States Court of Appeals
                                                   Fifth Circuit

                                                                            FILED
                                                                         February 13, 2008

                                     No. 07-60137                     Charles R. Fulbruge III
                                   Summary Calendar                           Clerk


PETE REDECOP, doing business as Delta
Z Farms, FRANK REDECOP; ABE REDECOP;
JACOB REDECOP; ISAAC REDECOP; SAILBOAT
PLANTATION, INC., a Mississippi Corporation
partners doing business as Delta Z Farms,

                                                  Plaintiffs-Appellees,
v.

BILL GERBER; GERBER INSURANCE
AGENCY, INC.,

                                                  Defendants-Appellants.



                   Appeal from the United States District Court
                     for the Northern District of Mississippi
                              USDC No. 4:04-CV-62


Before HIGGINBOTHAM, STEWART, and OWEN, Circuit Judges.
PER CURIAM:*
       Defendants-Appellants Bill Gerber and Gerber Insurance Agency, Inc.
(“the Gerbers”) appeal from a jury verdict entered in favor of Plaintiffs-Appellees
Pete Redecop, Frank Redecop, Abe Redecop, Jacob Redecop, Isaac Redecop, and


       *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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Sailboat Plantation, Inc., doing business as Delta Z Farms (“the Redecops”), as
well as the denial of the Gerbers post trial motion for judgment as a matter of
law, or alternatively, motion for new trial. For the following reasons, we
AFFIRM.
I.    Factual and Procedural History
      The Redecops, cotton and soybean farmers doing business as Delta Z
Farms in the Mississippi Delta, owned ten farming units in Washington County.
They were required by their lender to purchase multi-peril crop insurance on
their farming units. The insurance costs were subsidized by the government.
Under the federal multi-peril crop insurance program a farmer may purchase
insurance which guarantees a certain pound per acre yield of a particular crop.
If, as was the case here, the parcel did not have farming history sufficient to
establish an average guaranteed yield, then the guaranteed yield is set by the
government, this is knows as the T-yield. It is possible for the government to
apply a “cup” to the T-yield, meaning the government will limit the drop in the
T-yield to a certain percentage of the previous year’s yield. Bill Gerber was the
owner of Gerber Insurance Agency, Inc. (“Gerber Insurance”),         which sold
multi-peril crop insurance policies to cotton and soybean farmers.
      On February 15, 2002, the Redecops purchased crop insurance through the
Gerbers after a series of discussions about the amount for which the Redecops
would be insured if they purchased insurance from the Gerbers. There is a fact
dispute as to whether Bill Gerber guaranteed the Gerbers coverage at 687
pounds per yield, 69 pounds higher than the pounds per yield set by the
Government. After the Redecops suffered crop losses as a result of inclement
weather conditions, they became aware that they were only insured for 618
pounds per acre.
      Thereafter, the Redecops filed suit, alleging that the Gerbers negligently
misrepresented to them the amount for which they were covered under the


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policy. At the close of evidence, the Gerbers moved for judgment as a matter of
law, which the district court denied. The jury then returned a verdict in favor
of the Redecops in the amount of $295,438.87, finding that the Gerbers had
negligently misrepresented to the Redecops that they were covered for 687
pounds per yield. The Gerbers filed a renewed motion for judgment as a matter
of law, or in the alternative for remittur or new trial. The district court denied
the Gerber’s renewed motion, stating that the Redecops had presented sufficient
evidence for the jury to find that the Gerbers had negligently misrepresented
their coverage amount and that the case came down to a credibility
determination. The Gerbers timely appealed.
II.   Discussion
      On appeal, the Gerbers urge two points of error. First, they argue that the
district court erred in finding that the Redecops succeeded in proving negligent
misrepresentation as a matter of law. Second, they contend that there was
insufficient evidence to support the finding of damages in the court below. We
address each argument in turn.
      We review the district court’s ruling on a motion for judgment as a matter
of law (“JMOL”) de novo. Lewis v. Bank of Am., 343 F.3d 540 (5th Cir. 2003).
We must affirm unless “there is no legally sufficient evidentiary basis for a
reasonable jury[s]” verdict. Fed. R. Civ. P. 50(a). In reviewing the trial record,
we draw all reasonable inferences and resolve all credibility determinations in
favor of the non-moving party. Dresser-Rand Co. v. Virtual Automation Inc., 361
F.3d 831, 838 (5th Cir.2004).
      A.    Negligent Misrepresentation
      Under Mississippi Law, in order to recover under a negligent
misrepresentation claim, a party must prove by a preponderance of the evidence
that: (1) there was a misrepresentation (or omission) concerning a past or
present fact; (2) the misrepresentation was material; (3) the misrepresentation

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was the product of negligence, i.e., the person failed to exercise reasonable care;
(4) they reasonably relied on the misrepresentation; and (5) they suffered
damages as a direct and proximate result of the reliance. Spragins v. Sunburst
Bank, 605 So.2d 777, 780 (Miss. 1992). The Gerber’s contend that the Redecop’s
did   not   prove   negligent   misrepresentation    because    (1)   the   alleged
misrepresentation did not involve a past or present fact, and (2) the Redecops did
not reasonably rely on it.
      The first element of negligent misrepresentation, misrepresentation of a
fact, must concern a past or present fact, rather than a promise of future
conduct. Spragins, 605 So.2d at 780 (citation omitted); see also Bank of Shaw
v. Posey, 573 So.2d 1355, 1360-61 (Miss. 1990) (holding no negligent
misrepresentation where bank allegedly promised to loan money to plaintiffs
because the alleged misrepresentation did not relate to past or presently
existing); Berkline Corp. v. Bank of Miss., 453 So.2d 699, 702 (Miss.
1984)(holding plaintiffs had established the first element of negligent
misrepresentation where plaintiffs alleged that a bank misrepresented that a
company was credit worthy).
      Turning to the facts of this case, the evidence at trial consisted primarily
of testimony from Bill Gerber and Pete Redecop, both of whom were involved in
the discussions surrounding the policy at issue in this case. The Gerbers argue
that the first element was not met as a matter of law because the
misrepresentation alleged by the Redecops did not concern a past or present fact
as required under Mississippi law. In support of this contention, they point to
testimony by Bill Gerber in which he states that he told the Redecops that the
Government might apply a ten-percent cup. Bill Gerber also testified that he
never guaranteed the Redecops that the Government would do so. The Gerbers
argue, however, that even if Bill Gerber had represented to the Redecops that
the Government would apply a ten-percent cup, because such an act would

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constitute a future act and/or opinion, the plaintiffs have failed to meet the first
element of negligent misrepresentation.
      Conversely, the Redecops argue that the alleged misrepresentation was
not whether the Government would apply a ten-percent cup. Rather, they
contend that the misrepresentation was about the amount of crop insurance they
purchased and how much insurance was available to them in the event of crop
loss. Pete Redecop testified that Bill Gerber informed him and his brothers that
they were covered at an amount equal to ten percent lower than the coverage
they had the previous year, or 687 pounds per yield. Pete Redecop also testified
that when he finally received and reviewed the policy, he called the Gerbers to
inform them that the policy indicated that they were insured for only 400 pounds
per yield. He was told that the amount would be adjusted. Subsequently, after
the crops were lost to rain and wind damage, Pete Redecop testified that the
Gerbers again assured him on at least two occasions that the amount of
insurance coverage would be adjusted.
      Based on the evidence presented at trial, we cannot conclude that the
district court erred in determining that as a matter of law, the Redecops made
out the first element of negligent misrepresentation. There was competing
testimony submitted from Bill Gerber and Pete Redecop. The jury believed Pete
Redecops’ statement that Bill Gerber guaranteed the Redecops that they were
covered at an amount equal to ten percent lower than the coverage they had the
previous year, or 687 pounds per yield.          Thus, weighing the credibility
determination in favor of the non-moving party, we conclude that there was
sufficient evidence to support the jury’s determination.
      Second, the Gerbers argue that the Redecops did not reasonably rely on
the alleged misrepresentation. In support of this proposition, the Gerbers cite
to Mills v. Sam’s Club, Inc., 2006 WL 3375254 (S.D. Miss. 2006)(citing
Thompson v. Chick-Fil-A, Inc., 923 So.2d 1049 (Miss.Ct.App. 2006)), which held

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that in order to show reliance, a plaintiff must show that she “had been induced
by the conduct of another to do something different from what would otherwise
have been done.” Id.
       The Gerbers have not presented any record evidence to support their
claim that this standard has not been met. Here, the Redecops do not dispute
the fact that crop insurance was required, rather they argue that they relied on
Bill Gerber’s representation that they were insured for 687 pounds per yield in
deciding to purchase coverage from the Gerbers. Pete Redecop testified that he
was offered insurance coverage at the same levels from another insurance agent,
but he and his brothers decided to purchase insurance from Gerber Insurance
based on the representation made to them by Bill Gerber. The Gerbers offered
no evidence, other than Bill Gerber’s testimony, to rebut Pete Redecops
testimony.
      Resolving all credibility determinations in favor of the Redecops, we hold
that a reasonable jury could conclude that the Redecops reasonably relied on Bill
Gerber’s representations in deciding to purchase insurance from the Gerbers,
rather than another company. Accordingly, the district court did not err in
denying the Gerbers’ motion for judgment as a matter of law on the issue of
reliance.
      B.     Damages
      The Gerbers contend that there was insufficient evidence to prove that the
Redecops suffered damages. First, the Gerbers argue that because insurance
was unavailable at the level at which the Redecops thought they were insured,
they cannot recover damages based on what “unattainable insurance would have
paid.” However, in light of Pete Redecop’s testimony that he turned down
insurance from another company offering at 687 pounds per yield, for the same
reasons that the Gerber’s reliance argument fails, so must their damages
argument.


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       Second, the Gerbers argue that they were wrongfully held liable for Ace
Property & Casualty Insurance Company’s (“Ace Insurance”) failure to pay. The
Gerbers argue that Ace Insurance failed to pay a portion of the Redecops’ claims
due to the Redecops’ comparative negligence. However, as noted by the district
court, the Gerbers presented essentially no evidence at trial to substantiate this
claim. Thus, there is insufficient evidence in the record before us to support the
Gerbers’ contention that the Redecops’ pay out from Ace Insurance was lower
through some fault of the Redecops. Accordingly, this argument fails.
       Finally, the Gerbers contend that the district court allowed an incorrect
measure of damages. In particular, they argue that the district court awarded
the Redecops benefit of the bargain damages, rather than limiting the Redecops
recovery to their actual losses. Because the Mississippi Supreme Court has yet
to address this issue, this court is required to follow the rule we believe the
Mississippi Supreme Court would adopt. Am. Indem. Lloyds v. Travelers Prop.
& Cas. Ins. Co., 335 F.3d 429, 435 (5th Cir.2003). “[I]n making [our] Erie guess,
we consider, among other sources, treatises . . . decisions from other jurisdictions
. . . and the majority rule.” Id. (internal quotation marks omitted).
       We find the Restatement (Second) of Torts § 552B (2007) to be most
instructive on this issue.1 Section 552B provides that:
              (1) The damages recoverable for a negligent
              misrepresentation are those necessary to compensate
              the plaintiff for the pecuniary loss to him of which the
              misrepresentation is a legal cause, including
                    (a) the difference between the value of what he
                    has received in the transaction and its purchase
                    price or other value given for it; and



       1
        Moreover, the Mississippi Supreme Court has previously relied on the Restatement
(Second) of Torts in a case involving misrepresentation. See Guastella v. Wardell, 198 So. 2d
227, 230 (Miss. 1967), citing Restatement (Second) of Torts § 551 (1965).


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                   (b) pecuniary loss suffered otherwise as a
                   consequence of the plaintiff’s reliance upon the
                   misrepresentation.
             (2) the damages recoverable for a negligent
             misrepresentation do not include the benefit of the
             plaintiff’s contract with the defendant.
Based on Section 552B, we agree that a plaintiff is not entitled to the benefit of
the bargain measure of damages. Instead, when recovering on a claim for
negligent misrepresentation, a plaintiff may only recover his pecuniary or
economic losses.
       Accordingly, the question here is whether the district court limited the
Redecops’ damages to their pecuniary losses. Damages were calculated by
subtracting the actual production in terms of pounds from the guaranteed
pounds under the policy in order to determine the crop loss in terms of pounds.
The amount of crop loss was then multiplied by the guaranteed price. Finally,
the amount paid out by Ace on the policy was subtracted from that amount,
resulting in $295,438.87.    These damages constitute the Redecops’ actual
economic loss due to the Gerbers’ negligent misrepresentation. Therefore, the
Gerbers have failed to show that the jury’s determination of damages was
improper.
III.   Conclusion
       For the reasons stated above, we AFFIRM.




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