                                                       United States Court of Appeals
                                                                Fifth Circuit
                                                             F I L E D
                   UNITED STATES COURT OF APPEALS
                        For the Fifth Circuit                March 21, 2002

                                                         Charles R. Fulbruge III
                                                                 Clerk
                            No. 01-60713
                          Summary Calendar


                        C.I.O.S. FOUNDATION,

                                               Plaintiff-Appellant,


                                VERSUS


               MISSISSIPPI INSURANCE SERVICES, INC.;
                       ALBERT J. KOSSMAN, JR.,

                                               Defendants-Appellees.




           Appeal from the United States District Court
  For the Northern District of Mississippi, Greenville Division
                           (4:00-CV-1-D-A)




Before DeMOSS, PARKER, and DENNIS, Circuit Judges.

PER CURIAM:*

      This diversity case involves a failed loan from the Christ is

Our Salvation Foundation (C.I.O.S.) to Naguchi Trading Company,

Inc. (NTC).    C.I.O.S. lent $650,000 to NTC in part because another



  *
   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opinion should not be published and is not precedent except under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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company, Berkston Insurance (Berkston), agreed to guaranty the loan

on NTC’s behalf.      Al Kossman, an insurance agent with Mississippi

Insurance Services, Inc. (MIS), helped NTC obtain the loan from

C.I.O.S. and the guaranty from Berkston.         But when NTC defaulted on

the loan, Berkston failed to make good on its guaranty.            C.I.O.S.

sued Kossman and MIS for its damages associated with the failed

loan,   arguing   that   Kossman   violated     his   responsibilities     to

C.I.O.S. and that he misrepresented Berkston’s financial viability.

The district court granted Kossman and MIS’s motions for summary

judgment   on   the   ground   that   C.I.O.S.     had   no   formal   agency

relationship with Kossman or MIS.          On appeal, C.I.O.S. argues that

it is entitled to recovery under the alternative theories of

gratuitous agency and equitable estoppel.          We affirm.



                                      I.

     George W. Hood, Jr. formed NTC to distribute the seafood

processed by another one of his companies, Procesadora Del Mar

(PDM). Both NTC and PDM had been in business for approximately two

years before C.I.O.S. lent money to NTC.          In late 1996, Hood began

to seek outside funding for his seafood businesses. At around this

time he met Al Kossman.         Hood had several conversations with

Kossman, and on one of those occasions Hood discussed his need for

capital.   Kossman suggested that Hood contact David Stokes, a man

that Kossman believed “front[ed] for a trust” that made business



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loans.

     Hood took Kossman’s suggestion and met with Stokes to discuss

a possible loan for NTC. Stokes informed Hood that he occasionally

procured loans from C.I.O.S., a charitable religious foundation.

At this stage in the negotiations, however, Stokes told Hood that

C.I.O.S. was not interested in extending him a loan because his

companies were heavily leveraged. Hood then asked Kossman to serve

as his agent for the purposes of securing insurance and putting

together a project prospectus that would make NTC a more attractive

loan applicant. Kossman agreed to work on Hood’s behalf and turned

to Berkston Insurance in an attempt to procure a guaranty bond.

Meanwhile, Hood drafted a “proforma” containing estimates of NTC’s

projected performance.

     Once Stokes reviewed NTC’s proforma and learned that Kossman

was working to secure a guaranty bond, he became more receptive to

the idea of C.I.O.S. lending money to NTC. Stokes referred Kossman

and Hood to Kent Reynolds, the financial controller for C.I.O.S.

During their negotiations, Reynolds requested that Kossman research

the viability of Berkston Insurance; Kossman told Reynolds that he

would get something in writing.            On December 31, 1996, Kossman

faxed Reynolds the Best Rating Guide’s insurance ratings for

Berkston’s reinsurers, but not the ratings for Berkston itself.

After receiving these documents, C.I.O.S. decided to loan NTC

$650,000; the loan was scheduled to close on January 8, 1997.

There    is   no   evidence   that   Reynolds   requested   any   additional

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information from Kossman before closing.

     On January 7, 1997, the day before closing, Hood’s attorney

provided Reynolds with various documents, including additional

copies of the Best Rating Guide’s rating for Berkston’s reinsurers.

At the closing, Hood provided additional information obtained by

Kossman relating to NTC’s ability to obtain insurance.           Based on

this information and Berkston’s guaranty bond, C.I.O.S. closed the

loan for NTC.    Two days after Reynolds signed the loan, but before

C.I.O.S. transferred the money to NTC, Hood’s attorney faxed to

Reynolds instructions for wiring the loan proceeds and Berkston’s

financial   statement.     Reynolds   did   not   review   the   financial

statements before he wired the money to NTC.

     NTC defaulted on the loan after making only one payment.           In

April 1997, C.I.O.S. extended the term of the loan and Berkston

reaffirmed its guaranty.    NTC, however, continued to miss payments

and, when it defaulted on this extended loan, Berkston refused to

honor its guaranty.      C.I.O.S. sued NTC, Berkston, and Hood, and

obtained default judgments against all three.        While C.I.O.S. was

suing Berkston to collect on the guaranty, it learned that Berkston

was not a financially viable company and that it was under FBI

investigation.    As a result of this information, C.I.O.S. made no

attempt to collect on the its default judgment against Berkston.

Instead, C.I.O.S. sued Kossman and his firm, MIS, alleging that

Kossman knew or should have known that Berkston was not financially

viable.

                                  4
       Kossman and MIS filed motoins for summary judgment arguing

that there is no evidence (1) that Kossman knew Berkston to be

insolvent,   (2)   that   Kossman   breached    a   duty     to   C.I.O.S.   to

determine Berkston’s solvency, or (3) that C.I.O.S. suffered any

damages as a result of Kossman’s actions.              The district court

granted the motions for summary judgment on the grounds that there

is no proof that Kossman knew that Berkston was insolvent or that

Kossman was an agent for C.I.O.S.          C.I.O.S. appeals arguing that

the district court erroneously failed to address whether it can

recover    under   Mississippi’s    gratuitous      agency    and   equitable

estoppel doctrines.



                                    II.

       “We review a district court’s ruling on motion for summary

judgment de novo, applying the same standards as those that govern

the district court’s determination.”        McKee v. Brimmer, 39 F.3d 94

(5th Cir. 1994).     Summary judgment must be granted if the court

determines that there is no genuine issue as to any material fact

and that the moving party is entitled to judgment as a matter of

law.     Fed. R. Civ. P. 56(c).          To ascertain whether there are

genuine issues of material fact in this Mississippi-based diversity

action, we look to the substantive law of Mississippi.              Lavespere

v. Niagara Mach. & Tool Works, Inc., 910 F.2d 167, 177-78 (5th Cir.

1990).    We must view the evidence in the light most favorable to



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C.I.O.S., the nonmoving party. Barhonovich v. Amer. Nat. Ins. Co.,

947 F.2d 775 (5th Cir.1991).



                                    III.

     C.I.O.S. argues that Kossman breached his duty to C.I.O.S.

under the doctrine of gratuitous agency when he failed to provide

C.I.O.S. with Berkston’s Best Rating Guide’s insurance ratings. In

Mississippi, a person becomes a gratuitous agent when he “makes a

promise or engages in other conduct which (1) ‘he should realize

will cause another reasonably to rely upon the performance of

definite acts of service by him as the other’s agent,’ and (2)

‘which causes the other to refrain from having such acts done by

other available means.’” Lee Hawkins Realty, Inc. v. Moss, 724

So.2d 1116, 1119 (Miss. Ct. App. 1998) (quoting the Restatement

(Second)   of   Agency   §   348   (1957)).   Even   if   Kossman   became

C.I.O.S.’s gratuitous agent, he can only be liable if he breached

his limited duty of providing C.I.O.S. with Berkston’s Best rating

and his negligence caused C.I.O.S. to make the loan.          See id. at

1120.

     C.I.O.S. has not presented competent summary judgment evidence

that Kossman was its gratuitous agent because there is no evidence

that Kossman promised to provide C.I.O.S. with Berkston’s Best

rating or that he should have realized that Reynolds was relying on

him to provide that service. At all times during the negotiations,



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Kossman was acting as Hood’s formal agent.          To the extent that he

provided information to C.I.O.S., it was in furtherance of Hood’s

interest in obtaining the loan.           After Kossman provided Reynolds

with the Best ratings for Berkston’s reinsurers, Reynolds never

asked for any additional financial information on Berkston.

     Furthermore, C.I.O.S. has presented no evidence that Kossman’s

failure to provide it with Berkston’s Best rating caused it to sign

the loan.     First, C.I.O.S. has not indicated whether Berkston’s

Best ratings would have exposed its insolvency.              Second, the

undisputed evidence shows that Reynolds signed the loan on behalf

of C.I.O.S. without seeing Berkston’s Best rating or its financial

statements.    As stated above, after Kossman provided him with the

Best ratings for Berkston’s reinsurers, Reynolds never asked for

any additional financial information on Berkston.         Although Hood’s

lawyer provided    Reynolds   with    Berkston’s    financial   statements

before he transferred any money to NTC, Reynolds admits that he did

not review the financial documents until after he wired the money

to NTC.



                                     IV.

     C.I.O.S. also argues that it is entitled to recover under the

doctrine of equitable estoppel.            To make a claim for equitable

estoppel under Mississippi law, C.I.O.S. must show that (1) Kossman

misrepresented or concealed material facts, (2) with knowledge or



                                      7
imputed knowledge of such facts, and (3) with the intent that

C.I.O.S. rely upon his misrepresentation or concealment of facts.

Turner v. Terry, 799 So.2d 25, 37 (Miss. 2001).   C.I.O.S. must also

show that (4) it was ignorant of the misrepresented or concealed

facts and (5) that it actually relied upon the misrepresentation to

its detriment.    Id.   “The doctrine of equitable estoppel is not

favored and should only be applied when equity clearly requires

it.”    Id. at 37-38.

       C.I.O.S. has not submitted competent summary judgment evidence

to state a claim for equitable estoppel.   There is no evidence that

Kossman knew about Berkston’s financial problems and there is no

basis for imputing knowledge of Berkston’s insolvency to Kossman.

There is also no evidence that Kossman concealed anything from

C.I.O.S.    Kossman submits that he had no idea that Berkston was

insolvent and that he provided C.I.O.S. with all of the financial

information on Berkston that he had.     Hood’s deposition testimony

corroborates Kossman’s version of the facts.       Hood stated that

Kossman seemed genuinely surprised when he learned that Berkston

was insolvent and that he told Hood that Berkston had “duped” him.

C.I.O.S. points to no contravening evidence in the record.    In its

response to the appellants’ motions for summary judgment, C.I.O.S.

states only that it “feels that Kossman should have known of

Berkston’s financial problems, because he was representing himself

to be a reputable insurance agent.” (ROA at 198) (emphasis added).

Furthermore, C.I.O.S.’s original brief does not even allege that

                                  8
Kossman knew or should have known of Berkston’s poor financial

situation.   C.I.O.S. builds its equitable estoppel argument around

superseded   cases     that   did   not       require   the    defendant   to   have

knowledge of the facts that he misrepresents.                  (Appellant’s Br. at

10.) (citing Covington v. Page, 456 So.2d 739, 741 (Miss. 1984),

PMZ Oil Co. v. Lucroy, 449 So.2d 201, 206 (Miss. 1984), and

Resolute Ins. Co. v. State, 290 So.2d 599, 602 (Miss. 1974)).                     As

stated above, the Mississippi Supreme Court has since made the

defendant’s knowledge of the misrepresentation or concealment an

element of equitable estoppel.            See Turner, 799 So.2d at 37.

     In its reply brief, C.I.O.S. asks us to infer that Kossman

knew about Berkston’s financial situation because he allegedly had

access to Berkston’s Best rating.              This argument is waived because

C.I.O.S.   did   not   raise   it   in        its   original    brief.     Webb   v.

Investacorp, Inc., 89 F.3d 252, 257 n.2 (5th Cir. 1996) (“An

appellant abandons all issues not raised and argued in its initial

brief on appeal.”) (quoting Cinel v. Connick, 15 F.3d 1338, 1345

(5th Cir. 1994)).       But even assuming that Kossman had access to

Berkston’s Best rating, there still is no evidence that he knew or

should have known that Berkston was insolvent.                  C.I.O.S. provides

no evidence that Kossman actually read the Best rating, and even

assuming that he did, there is no indication in the record that the

Best rating exposed Berkston’s insolvency.                     We therefore find

insufficient summary judgment evidence to support C.I.O.S.’s claim

for equitable estoppel.

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                                V.

    Viewing the evidence in the light most favorable to C.I.O.S.,

we find no material issues of fact regarding C.I.O.S.’s right to

recover under the doctrines of gratuitous agency or equitable

estoppel.   We therefore AFFIRM the district court’s ruling.




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