IN THE SUPREME COURT OF MISSISSIPPI
NO. 2005-CA-00039-SCT
STACEY CARTER, DONNELL BAYLOUS, BESSIE Y.
BAYLOUS, JERRY HARMON, TINA HARMON,
WALTER HENDERSON, YUMEKA HENDERSON,
WANNIS D. SIDDELL AND DELORES SIDDELL
v.
CITIGROUP INC., CITIFINANCIAL MORTGAGE
COMPANY, INC., ASSOCIATES FINANCIAL LIFE
INSURANCE COMPANY AND AMERICAN HEALTH
AND LIFE INSURANCE COMPANY
DATE OF JUDGMENT: 12/20/2004
TRIAL JUDGE: HON. BOBBY BURT DELAUGHTER
COURT FROM WHICH APPEALED: HINDS COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANTS: J. BRAD PIGOTT
J. DOUGLAS MINOR
ATTORNEYS FOR APPELLEES: RICHARD CARLTON KELLER
KERMIT LAGUIN KENDRICK
NATURE OF THE CASE: CIVIL - OTHER
DISPOSITION: AFFIRMED - 07/20/2006
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
BEFORE COBB, P.J., EASLEY AND DICKINSON, JJ.
EASLEY, JUSTICE, FOR THE COURT:
STATEMENT OF THE CASE
¶1. This case involves the sale of credit life insurance with mortgage loans. The Plaintiffs
in this action all obtained mortgage loans from Southern Mortgage Company (Southern
Mortgage). The Plaintiffs alleged that Southern Mortgage breached its fiduciary duties by
inducing them to buy overpriced credit life insurance with their loans. Southern Mortgage is
not a party in this action. However, the Plaintiffs claimed that the Defendants induced
Southern Mortgage to breach its fiduciary duties to the Plaintiffs.
¶2. Fifteen plaintiffs filed suit against nine defendants in the Circuit Court of the Second
Judicial District of Hinds County, Mississippi, on August 7, 2002. In the course of the
litigation, the claims of seven plaintiffs were dismissed because these plaintiffs previously
agreed to arbitration against the defendants. The eight plaintiffs that remained were Donnell
Baylous, Bessie Y. Baylous, Jerry Harmon, Tina Harmon, Walter Henderson, Yumeka
Henderson, Wannis D. Siddell, and Delores Siddell (collectively known as the “Plaintiffs”).
¶3. These eight Plaintiffs later voluntarily dismissed all their claims against four of the
original nine Defendants. The remaining five defendants were CitiFinancial Mortgage
Company, Inc. (CitiFinancial Mortgage); Associates Financial Life Insurance Company
(Associates Life); American Health and Life Insurance Company (American Health and Life)
(collectively known as the Defendants)1. Artie Armstrong and Douglas Carson were
defendants employed by Southern Mortgage d/b/a/ Heritage Mortgage Company.
¶4. In their First Amended Complaint, the Plaintiffs alleged conspiracy to breach the
broker’s fiduciary duty; conspiracy to violate agent commission statutes; conspiracy to violate
agent licensing statutes; negligent misrepresentation; breach of contractual duties of good faith
1
The Defendants’ brief indicates that CitiFinancial Mortgage; Associates Life; and
American Health and Life are represented on appeal.
2
and fair dealing; and negligent supervision. The Plaintiffs later voluntarily dismissed their
claim for breach of contractual duties of good faith and fair dealing.
¶5. Once discovery was complete, the Defendants filed a motion for summary judgment
against the Plaintiffs. On December 16, 2004, the trial court heard oral arguments on the
motion and ruled in the Defendants’ favor. The trial court held:
[T]he Court finds that there has been a failure on behalf of the plaintiff to bring
forth sufficient evidence that the relationship was anything other than that of an
arm’s length transaction between mortgager and mortgagee. Therefore, the
applicable statute of limitations bars all claims.
The trial court granted summary judgment and dismissed all of the Plaintiffs’ claims against
the Defendants. On January 6, 2005, the circuit court signed a Rule 54(b) Certificate of Final
Judgment M.R.C.P. 54(b). The final judgment found that the motion of Defendants Citigroup;
CitiFinancial Credit; CitiFinancial Mortgage; Associates First Capital Corporation; Associates
Corporation of North America; Associates Life; and American Health and Life, for summary
judgment was well taken and granted. The final judgment also ordered that based upon the grant
of summary judgment the Plaintiffs’ claims against Armstrong and Carson were also
dismissed. Following this ruling, the Plaintiffs filed an appeal to this Court.
¶6. Finding that the claims are barred by the applicable three- year statute of limitations
found in Miss. Code Ann. § 15-1-49 (Rev. 2003), we affirm the trial court’s grant of summary
judgment.
3
FACTS
¶7. The Plaintiffs claimed that the Defendants conspired to induce Southern Mortgage to
breach its fiduciary duties to them. Southern Mortgage ran a commercial stating that “we’re
on your side.” Part of the agreement between Southern Mortgage and Associate Life stated
that “Agent will be an independent contractor, and this Agreement will not be construed to
create the relationship of employer and employee between Company and Agent.” Each of the
loan transactions were independent of one another and occurred between 1997 and 1998. The
facts concerning the separate transactions and individuals involved are as follows:
1. The Harmons
¶8. Jerry and Tina Harmon obtained a mortgage loan from Southern Mortgage. They closed
on a mortgage loan on October 8, 1998, in Tupelo, Mississippi. The Harmons filed suit on
August 7, 2002, almost four years after receiving their mortgage loan.
¶9. Jerry stated that in regard to obtaining a loan he was not going in to get financial or
business advice. Nevertheless, “[w]ith Southern Mortgage or a mortgage company, you got to
have some advice” about rates and whether bills should be consolidated. Jerry did not know
the best way to get the loan money, but he stated that he relied on the Southern Mortgage
employee “to tell you what’s the best. I didn’t know.” Jerry thought that the mortgage
company would know whether he needed to consolidate all his bills. Jerry heard about
Southern Mortgage through a television commercial. The commercial advertised about
consolidating loans, getting a cheaper interest rate, getting lower payments, and having extra
money.
4
¶10. The loan document that Jerry signed stated that he was purchasing credit insurance
which was not required to obtain the loan. There was also a fifteen-day cancellation clause for
the credit insurance. The loan document contained a “Credit Insurance Authorization” section
which stated:
I understand that credit insurance is not required to obtain this loan. Insurance
provided by Lender may be from an affiliated company which expects to profit
from the insurance.
***
CANCELLATION OPTION: If I desire to do so I may, without penalty or
obligation, within 15 days from the Date shown above, cancel all, but not part of,
the optional credit insurance coverages by returning all credit insurance
certificates received in connection with this loan to the Lender at the address
set forth above. Upon cancellation, the unearned credit insurance premium will
be credited to my account. Even though a credit is made to my account because
the credit insurance is cancelled, I will still be obligated to continue making
payments on my loan as scheduled.
Jerry signed this document on October 8, 1998.
¶11. Jerry received a GED and attended community college for a few years. According to
his testimony, Jerry can read, write, and handle his own business affairs. He owns his own
construction business. In the course of his business, he dealt with contracts. Jerry admitted
that when a contract is signed one should be bound by the terms of the contact.
¶12. He saw a Southern Mortgage television commercial about obtaining a loan. Jerry went
to Southern Mortgage to obtain a loan. He did not compare the rates of other mortgage
companies or lenders. Jerry did not seek alternate financing or “shop around” between the time
of his meeting at Southern Mortgage and the loan closing date. He understood what credit life
insurance is and does. While he could not remember the name of the Southern Mortgage
5
employee, Jerry admitted that the employee explained the cost of the credit life insurance. The
man that Jerry spoke to never stated that he worked for Associates or Citifinancial.
¶13. At the closing, Jerry signed numerous documents at a lawyer’s office with no Southern
Mortgage employees present. Jerry did not read the closing documents. However, Jerry
admitted that he was not prevented from reading the documents at the closing. When he
returned home, Jerry did not read the documents either. Jerry admitted that he signed the
“Credit Insurance Authorization” form which stated on its face that the premium was
$3,441.99, that this insurance was not required to obtain a loan, that the insurance may be from
an affiliated lender which expects to profit from the insurance, and had a fifteen-day
cancellation provision. Jerry also signed a “Truth in Lending Disclosure Statement” that stated
on its face that the interest rate was 13.639% and the 179 payments were in the amount of
$541.26.
¶14. Tina Harmon never spoke with anyone from Southern Mortgage. She attended the loan
closing with her husband Jerry. Tina did not disagree with any of the statements made by her
husband, Jerry. Tina’s main concern was that a large commission was charged to them. She
was not aware of any lies by the companies. Tina is a high school graduate and capable of
handling her own financial affairs. She can read and write. Tina never read any of the loan
documents. The credit life insurance was taken out on Jerry only. Tina did not have any credit
life insurance in her name. Tina agreed that the credit life insurance was beneficial in the event
her husband died because the loan would be paid. After the closing, Tina did not read the loan
6
documents. Tina admitted that she and her husband are bound by the terms contained in the
documents that they signed.
2. The Baylouses
¶15. Donnell and Bessie Baylous obtained a mortgage loan from Heritage Mortgage d/b/a
Southern Mortgage. They closed on a mortgage loan on July 29, 1998, in Jackson, Mississippi.
A disclosure statement signed by Donnell and Bessie stated “Credit Life Insurance and Credit
Disability Insurance are not required to obtain credit, and will not be provided unless you sign
and agree to pay the additional cost.” The Baylouses filed suit on August 7, 2002, more than
four years after receiving their mortgage loan.
¶16. In an interrogatory answer, the Baylouses stated that they met with Carson. They relied
on a commercial in which Carson and Armstrong, as Heritage Mortgage, stated in effect that
they “served as experts in debt consolidation and lowering monthly bills, and would provide
expertise and advise to their clients, and be on the side of their clients, in entering such
mortgage arrangements.” At his deposition, when Donnell was asked if he was paying the
representative, he stated “[w]hat I’m saying is, he’s a broker, right? Doug - - I’m sure he got paid
for doing this.” Also, Bessie stated that Carson told them that he had reviewed the loan
documents, but he did not read through the documents with them. She also stated, “[t]hat’s why
he got so much out of that. When we made the loan, he got so much money out of it to read
them himself. That’s what he said.”
¶17. Donnell received a GED. He can read and write. He saw a television commercial for
Southern Mortgage. Donnell stated that he did not know that he purchased credit life insurance,
7
but that his wife, Bessie, was aware of it. However, he agreed that credit life insurance is not
a bad idea.
¶18. No one forced Donnell to stay at the closing or take out a loan. Donnell admitted that
he and his wife did not read all of the loan closing documents. However, they were not
prevented from reading the documents. They were given a copy of the documents. The
documents disclosed the interest rate, finance charge, amount of money financed and the total
payments due, $745.51 per month. The documents also stated the purchase price for the credit
life insurance which was initialed by Donnell. Donnell agreed that had he read the documents
he would have seen the amount financed, the finance charge, the total payments, and that the
credit life insurance was not required. The loan documents also had a notice of a right to
cancel. Another loan document also stated that credit life insurance was not required to obtain
a loan. The document stated in part, “I understand that credit life insurance is not required.”
¶19. Donnell stated that he never had any conversations with CitiFinancial Credit Company
and did not know how CitifFinancial Mortgage, Associates First Capital Corporation,
Associates Corporation of North America, Associates Financial Life Insurance Company had
harmed him.
¶20. Bessie has a ninth grade education. She stated that she had no testimony different from
her husband about how they heard about obtaining a loan. She agreed with her husband’s
deposition about all of the loan closing information, except that there were three people present
at the closing, not four as Donnell claimed. Bessie admitted that she did not read the
documents. However, she did sign documents that stated that they had three days to cancel the
8
loan and that they wanted credit life insurance. She agreed that she was not forced to sign the
documents.
3. The Hendersons
¶21. Walter and Yumeka Henderson obtained a mortgage loan from Heritage Mortgage d/b/a/
Southern Mortgage. They closed on a mortgage loan on July 28, 1998, in Jackson, Mississippi.
A disclosure statement signed by Yumeka and Walter stated “Credit Life Insurance and Credit
Disability Insurance are not required to obtain credit, and will not be provided unless you sign
and agree to pay the additional cost.” The Hendersons filed suit on August 7, 2002, more than
four years after receiving their mortgage loan.
¶22. Yumeka graduated from high school. She was enrolled in college at the time of the
deposition. She can read and write. Yumeka saw a commercial on television for a loan and
spoke to a friend that also received a loan. In an interrogatory response which Yumeka signed,
she stated the “mortgage broker representative” that she dealt with “represented that they were
professional experts in looking out for my interests in such mortgage transactions, they would
in effect be ‘on my side’ in getting me the best deal for my family and to improve my financial
situation as much as possible.”2 Yumeka also stated in an interrogatory answer:
At the time we dealt with Heritage Mortgage [Armstrong] was represented to be
in the business or occupation of providing expertise and services in mortgage-
related financial services and advice to borrowers involving how to consolidate
2
The Baylouses’ interrogatory answer had the same response.
9
and combine multiple loans, lower monthly payments, and otherwise simplify and
improve the personal financial conditions of the individual customers.3
She also stated that she understood Armstrong and his business to “represent interests of their
customers in getting the best financial arrangement possible.” Had she read the documents, she
would have understood the credit life insurance and known the purchase cost. Yumeka thought
credit life insurance was a good idea and provided “security.”
¶23. Yumeka admitted that she and her husband, Walter, did not read the loan documents.
Yumeka and her husband purchased insurance with the loan. The language of the contract stated
that the lender can transfer the note. The documents also disclosed the interest rate and
contained a notice of right to cancel within three days of obtaining the loan. The documents
also disclosed that the credit life insurance was not required. Yumeka admitted that had she
read the document, which she signed, she would have understood it. Yumeka signed these
documents.
¶24. Walter has an eleventh grade education. He can read and write. He learned about the
loan from a television commercial. On his second visit to the loan company, they discussed
credit life insurance. Walter stated that his wife, Yumeka, makes all their business decisions.
He agreed with everything that Yumeka stated in regard to Exhibit 1. He signed the truth in
lending disclosure statement. Walter also agreed that he was not forced to sign any documents
and was not prevented from reading the documents.
4. The Siddells
3
The Baylouses’ interrogatory answer had the same response.
10
¶25. Wannis and Delores Siddell obtained a mortgage loan from Southern Mortgage. Wannis
felt mistreated and felt like Southern Mortgage did not do what it promised him. When
questioned about whether he read the loan closing documents before signing them, Wannis
stated that he did not read them. He stated that the lady involved with the closing told him “sign
here.” Wannis did not ask any questions about the documents because “she was talking so fast
until I just thought she was straight.” The loan closing representative did not slow down when
Wannis requested her to do so. Instead, the lady said “[e]verything was going to be all right.”
According to Wannis, the lady “was a fast talker.” In regard to the purchase of the credit life
insurance, Wannis stated at one point that the insurance “sounded pretty good.” Later, Wannis
stated that he did not want to purchase credit life insurance. However, the representative told
him that she thought the insurance would be “best.” Wannis also stated that the representative
told him that the insurance would be “good.” However, he stated that “she didn’t tell me what
it was going to cost me until after everything was signed.”
¶26. They closed on a mortgage loan on October 27, 1997, in Tupelo, Mississippi. A
disclosure statement signed by Wannis and Delores stated “Credit Life Insurance and Credit
Disability Insurance are not required to obtain credit, and will not be provided unless you sign
and agree to pay the additional cost.” CitiFinancial and Associates Life never made promises
to Wannis. Delores never spoke to CitiFinancial, Associates Life, or American Health and Life.
The Siddells filed suit on August 7, 2002, almost five years after receiving their mortgage loan.
¶27. Wannis has a GED. He can read and write and is capable of handling his own affairs.
Wannis stated that it is a good idea to read documents before you sign them in order to
11
understand what you are signing. At the closing, the Southern Mortgage employee told Wannis
that the credit life insurance would cost about $8,000.00. Wannis understood credit life
insurance and thought it was a good idea to have it. The insurance sounded pretty good because
it would cover the house if anything happened to him.
¶28. Wannis admitted that he was not forced to sign any documents, nor was he prevented him
from reading the loan documents. He was also given a copy of the loan documents. The credit
life insurance provision stated that the insurance was not required. The loan documents also had
a three-day cancellation provision. The loan documents stated that the loan interest rate was
over 13%, the payment was $682.03, and the credit life insurance was $8,340.00. Wannis and
Delores initialed and signed these documents.
¶29. Wannis was unsure who he was suing. He stated that he borrowed money from Southern
Mortgage and not the Defendants. Wannis realized that Southern Mortgage did not do what they
had promised to do in 1997.
¶30. Delores Siddell has an eleventh grade education. She can read and write and is capable
of handling her own affairs. Delores understood the concept of credit life insurance and
thought that it is a good idea. She also thought that it is a good idea to read documents before
you sign them.
¶31. Delores admitted that she was not forced to go to Southern Mortgage for a loan, to
close, or to sign any documents. She knew in 1997 that credit life insurance was purchased with
the loan. The credit life insurance provision stated that the insurance was not required. The loan
documents also had a three-day cancellation provision. The loan documents also stated that the
12
interest rate, finance charges, and the payment amount. Wannis and Delores initialed and signed
these documents. The loan documents stated that the loan may be sold without prior notice to
the borrower.
¶32. At the closing Delores asked no questions but she was not prevented from asking any
questions either. She stated that she never had any conversations with CitifFinancial Mortgage,
Associates First Capital Corporation, Associates Corporation of North America, Associates
Financial Life Insurance Company, and American Health & Life Insurance Company. None of
these Defendants made any promises to pay off her bills, only Southern Mortgage made that
promise. She realized that Southern Mortgage did not do what it had promised to do in 1997.
ANALYSIS
¶33. The Plaintiffs raise four issues on appeal concerning whether the trial court erred in
granting summary judgment. The Plaintiffs assert that they established a genuine issue of
material fact (1) as to their claim that Southern Mortgage owed a fiduciary duty; (2) in support
of the Plaintiffs’ fiduciary-related claims; (3) in support of the Plaintiffs’ claim that the
Defendants conspired for Southern Mortgage to breach fiduciary duties owed to the Plaintiffs
by failing to disclose material facts; and (4) that these material non-disclosures tolled the
statute of limitations.
¶34. The Plaintiffs argue that the Defendants had a fiduciary relationship with them. This
relationship allegedly stemmed from CitiFinancial Mortgage and American Health and Life’s
payment of commissions to Southern Mortgage, as the alleged “mortgage brokers,” for the sale
of its credit life insurance. The Plaintiffs argue that Southern Mortgage held itself and its
13
representative out as agents and fiduciaries by its slogan “we’re on your side.” The Plaintiffs
stated in their depositions and answers to interrogatories that they relied upon Southern
Mortgage as their alleged “brokers” to look out for their best interest or, in the very least, as
representatives looking out for their best interests. In addition, the Plaintiffs argue that prior
to 2002, no one at Southern Mortgage disclosed the payment of alleged illegally high
commission proceeds, or that in order to receive the commissions, Southern Mortgage
allegedly had to choose a lender with higher interest rates and could not find alternate credit life
insurance from another company.
¶35. The trial court found that the Plaintiffs failed to demonstrate sufficient evidence that the
relationship was anything other than that of an arm’s length transaction between mortgager and
mortgagee. The trial court then barred all claims pursuant to the applicable statute of
limitations.
¶36. “This Court uses a de novo standard of review when passing on questions of law including
statute of limitations issues.” Stephens v. Equitable Life Assurance Society, 850 So. 2d 78,
82 (Miss. 2003). In Andrus v. Ellis, 887 So. 2d 175, 179 (Miss. 2004), this Court held:
It is undisputed that the three-year statute of limitations set forth in Miss.
Code Ann. § 15-1- 49 (Rev. 2003) is controlling in the instant case. See
Stephens v. Equitable Life Assurance Soc'y of the United States, 850 So. 2d
78 (Miss. 2003); Am. Bankers Ins. Co. of Florida v. Wells, 819 So. 2d 1196
(Miss. 2001). Section 15-1-49 provides in part:
(1) All actions for which no other period of limitation is
prescribed shall be commenced within three (3) years next after
the cause of such action accrued, and not after.
14
This Court employs de novo review when considering issues of law such as
statutes of limitations. Stephens, 850 So. 2d at 82.
¶37. Here, the Plaintiffs alleged breach of fiduciary duty, conspiracy, negligent
misrepresentation, and negligent supervision. Much of the Plaintiffs’ allegations rely upon
their dealings with Southern Mortgage, who is not a party to the law suit or this appeal. The
parties argued all these issues at the summary judgment hearing before the trial court.
¶38. After listening to all the Plaintiffs’ arguments, the trial court ruled that the Plaintiffs’
relationship was no more than an arm’s length transaction between mortgagor and mortgagee.
The trial court also ruled that the claims were barred by the applicable statute of limitations. An
analysis based upon the statute of limitations must be addressed prior to any examination of the
Plaintiffs’ issues.
¶39. This Court has held that there is a three-year statute of limitations for claims of breach
of a fiduciary duty, misrepresentation, and conspiracy. See Am. Bankers Ins. Co. v. Wells, 819
So. 2d 1196, 1200 (Miss. 2001). This Court has also applied a three-year statute of limitations
for fraudulent concealment, negligent hiring, and concealment. Stephens, 850 So. 2d at 82.
See also Miss. Code Ann. § 15-1-49; Sanderson Farms Inc. v. Ballard, 917 So. 2d 783, 789
(Miss. 2005) (fraudulent inducement and fraudulent concealment claims have a three-year
statute of limitations and fraud claims accrue at the time of the completion of a sale induced
by false representations or consummation of the alleged fraud);
¶40. In Andrus, this Court addressed a claim against a lender for fraudulent and negligent
misrepresentation and fraudulent inducement in the purchase of credit life, disability, and
15
property insurance. Andrus, 887 So. 2d at 179. The Plaintiffs in Andrus alleged that they were
either unaware that they purchased insurance, unaware that the insurance was not necessary, and
the lender did not disclose the commission earned. Id. This Court found that the plaintiffs in
Andrus were on notice of the terms of the contract and the credit insurance and all claims
accrued at the time the loan agreements were executed. Id. at 180. In so far as the fraudulent
concealment claim, the Court held that the Andrus plaintiffs had the documents in their
possession and no one questioned any discrepancy between the document and their
understanding of the document terms until filing suit. Id. at 181. As to the commission, this
Court in Andrus held:
As to the alleged failure to disclose commissions, the Court finds this argument
without merit. In the course of a private transaction where the seller
encourages a buye r to purchase additional products, one would assume that
the seller is motivated by some sort of incentive such as, in this instance,
a commission. There is no testimony that the Defendants concealed or denied
that they were receiving commissions nor is there any testimony regarding
whether the Plaintiffs specifically inquired as to such. Likewise, there is no
allegation in fact or duty under law to support the argument that the Defendants
were obligated to do so. We presume that parties enter into private transactions
for their own personal benefit.
Andrus, 887 So. 2d at 181-82 (emphasis added).
¶41. All of the Plaintiffs obtained copies of their loan documents. The insurance disclosure
form stated that the credit life insurance was not required to obtain the loan. Further, the
disclosure form stated the purchase price of the credit life insurance. This Court has held that
“whether an insured reads the entire insurance policy, the ‘knowledge of its contents would be
imputed to them as a matter of law.’” Stephens, 850 So. 2d at 82 (quoting Cherry v. Anthony,
16
501 So. 2d 416, 419 (Miss. 1987)). “In Mississippi, a person is charged with knowing the
contents of any document that he executes.” Russell v. Performance Toyota, Inc., 826 So. 2d
719, 725 (Miss. 2002). In Stephens, this Court held:
[A] written contract cannot be varied by prior oral agreements. Moreover, as an
evidentiary matter, parol evidence to vary the terms of a written contract is
inadmissible. Finally, 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, 850 So. 2d at 83 (quoting Godfrey, Bassett & Kuykendall Architects, Ltd. v.
Huntington Lumber & Supply Co., 584 So. 2d 1254, 1257 (Miss. 1991)). We find that the
Plaintiffs’ claims were governed by three-year statute of limitations and the claims accrued at
the time the loan documents were executed. See Andrus, 887 So. 2d at 180; Stephens, 850 So.
2d at 82. As in Andrus and Stephens, the Plaintiffs here were on notice.
¶42. All of the claims in the case today were filed almost four or more years after the loan
agreements were executed. The most recent loan closing occurred on October 8, 1998, by the
Baylouses. The complaint was filed on August 7, 2002, approximately three years and ten
months after the closing. Any claims against the Defendants accrued at the time of the
execution of the loan documents. Sanderson Farms, 917 So. 2d at 789; Andrus, 887 So. 2d
at 180; Stephens, 850 So. 2d at 82. Therefore, all suits were filed after the running of the
three-year statute of limitations.
¶43. The Plaintiffs argue that the Southern Mortgage employees were their alleged “brokers”
or at a minimum the employees should have been looking out for their best interest. Even
17
assuming arguendo that the Southern Mortgage employees were “brokers,” the Plaintiffs filed
suit more that three years from the date of closing the loans. After closing on their house
loans, the Plaintiffs had no further contact with these representatives. Only one Plaintiff
contacted a Defendant to inquire about his credit life insurance. Of the Plaintiffs questioned,
none asked any questions about the credit life insurance and some stated that they would never
ask about any commission because it was not their business. Furthermore, many Plaintiffs
stated that credit life insurance was actually a good idea. The loan documents stated the
purchase price of the credit life insurance, stated that the credit life insurance was not required,
and had a three-day cancellation provision. None of the Plaintiffs read the loan documents.
¶44. In Stephens, this Court applied a two-prong test for fraudulent concealment claims.
Miss. Code Ann. § 15-1-67 (Rev. 2003) states:
If a person liable to any personal action shall fraudulently conceal the
cause of action from the knowledge of the person entitled thereto, the cause of
action shall be deemed to have first accrued at, and not before, the time at which
such fraud shall be, or with reasonable diligence might have been, first known or
discovered.
In Robinson v. Cobb, 763 So. 2d 883, 887 (Miss. 2000), this Court held that “[f]raudulent
concealment of a cause of action tolls its statute of limitations.” This Court in Stephens held
“the plaintiffs have a two-fold obligation to demonstrate that (1) some affirmative act or
conduct was done and prevented discovery of a claim, and (2) due diligence was performed on
their part to discover it.” Stephens, 850 So. 2d at 84. See also Andrus, 887 So. 2d at 181. In
Sanderson, this Court held, in regard to fraudulent concealment claims, that “there must be
18
shown some act or conduct of an affirmative nature designed to prevent and which does prevent
discovery of the claim.” Sanderson, 917 So. 2d at 790 (citing Reich v. Jesco, Inc., 526 So. 2d
550, 552 (Miss. 1988)); Andrus, 887 So. 2d at 181; Stephens, 850 So. 2d at 83-84. “Merely
alleging that the other side has complete control of [information] simply will not suffice.” Id.
¶45. The Plaintiffs did not state that Southern Mortgage made misrepresentations to them
after they closed their loans. Most of the testimony indicated that none of the Plaintiffs had
conversations with any of the Defendants; therefore, no misrepresentations or subsequent acts
of concealment were made by the Defendants.4 Also, nothing in the deposition testimony
indicates that the Defendants prevented the discovery of any alleged claims. Therefore, we find
that the first prong of the two-part test set forth in Stephens, that being, some affirmative act
or conduct was done and prevented discovery of a claim, was not met. The Defendants did not
take any subsequent affirmative actions which were designed to prevent or did prevent discovery
of the claims.
¶46. As for due diligence, the Plaintiffs stated that they were not aware of the commission
rates or that the Southern Mortgage representatives had to sell the Defendants credit life
insurance and could not “shop around” for lower insurance. The Plaintiffs claim that Southern
Mortgage representatives did not disclose this information to them until 2002. None of the
Plaintiffs stated that they made any inquiries about credit life insurance or paid commissions
4
At one point, Wannis had a conversation with CitiFinacial Mortgage concerning a
reduction in payments and the fact that he thought his balance was too high. However, his loan
documents contained the financed amount. He did not indicate that CitiFinancial Mortgage
made a misrepresentation to him about this question.
19
after closing the loans. The Plaintiffs all received copies of the loan documents from Southern
Mortgage. Most of the Plaintiffs stated that they did not read the loan documents. All of the
Plaintiffs stated that they were not prevented from reading the loan documents. The loan
documents stated the terms of the insurance. The loan documents stated that credit life
insurance was not required to obtain the loan; the interest rate; a company other than the lender
could be the insurer who expected to make a profit from the sale of insurance; the premium
payment amount; and the total loan finance amount. None of the Plaintiffs stated that they were
precluded from asking any questions. Those Plaintiffs actually questioned about inquiries
concerning insurance commissions did not ask about the payment of any insurance
commission. None of the Plaintiffs objected to the credit life insurance, commissions, or loan
terms in general until the filing of the complaint. The record demonstrates a total lack of due
diligence by the Plaintiffs. Accordingly, the issue of the statute of limitations is dispositive of
the case, and this Court need not address any other issues raised by the parties.
CONCLUSION
¶47. We find that the dispositive issue concerns filing the actions within the statute of
limitations. We find that the Plaintiffs’ claims are barred pursuant to Miss. Code Ann. § 15-1-
49. Since, there is no proof of fraudulent concealment, the running of the statute of limitations
on their causes of action was not tolled. We find that the trial court correctly granted the
summary judgment in favor of the Defendants, on the grounds that the claims were barred by
the statute of limitations. Accordingly, we affirm the judgment of the Circuit Court of the
Second Judicial District of Hinds County.
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¶48. AFFIRMED.
SMITH, C.J., WALLER AND COBB, P.JJ., CARLSON AND DICKINSON, JJ.,
CONCUR. GRAVES, J., DISSENTS WITHOUT SEPARATE WRITTEN OPINION. DIAZ
AND RANDOLPH, JJ., NOT PARTICIPATING.
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