Summary of a Recent
Judicial Development in
Crop Insurance

Merrill Doctrine Inapplicable to
Private Insurer

Harrison M. Pittman
Research Assistant Professor of Law

In Rain & Hail Insurance Services, Inc. v. Vickery, No. A05A0335, 2005 WL 1653761 (Ga. Ct. App. July 14, 2005), the Georgia Court of Appeals held that the so-called Merrill doctrine, which established by the United States Supreme Court in Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380 (1947), did not apply in an action between an insured and a private crop insurance company. Plaintiff Jeff Vickery brought an action against defendant Rain & Hail Insurances Services, Inc., after the defendant denied a loss claim filed by the plaintiff on behalf of Vickery Farms, Inc. See id. at *4. The plaintiff argued that the claim was improperly denied because he relied on information provided to him by the crop insurance agent who sold him the policy. See id. The defendant argued that the plaintiff could not rely upon the agent's representations in light of Merrill, which held that "an insured could not rely upon an agent's representations of the policy provisions because the . . . [Federal Crop Insurance Corporation], a government agency, could not be estopped by the erroneous representations of its agent." Id. The court noted that in Dailey v. American Growers Ins., 103 S.W.3d 69 (Ky. 2003) it was held that Merrill did not apply to private insurers because "‘claims against private insurers represent no direct threat to the public coffers.'" Id. (citation omitted). In the present case the court held that the plaintiff's action "does not represent a direct claim on the public treasury and therefore Merrill does not bar the application of equitable estoppel against Rain & Hail in this case." Id.

The case was decided on July 14, 2005; this summary was posted July 29, 2005.