Written by M. Sean High—Staff Attorney
On February 11, 2016, the United States Court of
Appeals for the Fifth Circuit issued an unpublished opinion affirming dismissal
of a complaint for damages resulting from an alleged misrepresentation regarding
an insurance agent’s license to sell crop insurance (Shannon v. Ham, 2016 U.S. App. LEXIS 2404).
According to the court, farmers Billy and Fannie
Shannon (Shannons) filed a complaint alleging that insurance agent Bobby Ham
(Ham) committed fraud by selling the couple crop insurance without a license; the
result of which was a subsequent mishandling of their crop insurance policy and
claims that resulted in over $200,000 in damages.
According to the court, the Shannons did not show “a
causal connection between Ham’s lack of an insurance license and his
mishandling of their policies.” The court asserted that Ham provided the
Shannons with seven years of satisfactory insurance service without issue, and
thus, “it is far more likely that Ham’s lack of licensure played no part in the
Shannons’ injuries and that the claim mishandling that occurred in 2011 and
2012 is attributed to other causes.”
The court stated: “there is no direct relationship
between the lie and the injury because the Shannons have not plausibly alleged
that the lie had anything to do with the eventual claims mishandling.” Ultimately,
the court affirmed the dismissal of the Shannons’ complaint because Ham’s
faulty insurance credentials were not the proximate cause of his mishandling of
the crop insurance policy and claims; the result of which meant the Shannons’ complaint
failed to state a plausible claim for relief as required under 12(b)(6) of the
Federal Rules of Civil Procedure.
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