## Facts

- Sixteen-month-old Jason T. Bell suffered severe burns in a residential fire at his grandfather Joseph Moore’s home; Moore was insured under a homeowner’s policy issued by Farmers-affiliated entities.
- Bell, through his mother and guardian, retained counsel to pursue claims arising from the fire.
- During pre-suit or settlement communications, Bell’s counsel repeatedly asked the insurer’s claims personnel and the insurer’s outside counsel for the policy limits.
- Farmers allegedly knew the policy limit was $300,000, but opposing counsel allegedly stated he did not know the limits and later allegedly represented the limit was $100,000.
- Bell settled the claim for $100,000 and signed a release.
- Bell later learned the policy limit was allegedly $300,000 and sued the insurers, their law firm, and the handling attorney, asserting fraudulent misrepresentation and related theories based on the policy-limits statements.

## Issues

1. Whether a party represented by counsel is categorically barred from justifiably relying on factual representations made by opposing counsel during settlement negotiations.
2. Whether defendants were entitled to summary judgment on the element of justifiable reliance in a fraudulent misrepresentation claim arising from alleged misstatements of policy limits.

## Decision

- The Indiana Supreme Court rejected a per se rule that reliance on opposing counsel’s settlement representations is always unjustified.
- The court held that whether, and to what extent, reliance is justified depends on the circumstances and may present a question for the factfinder.
- The court concluded the summary-judgment record did not negate justifiable reliance as a matter of law and did not eliminate genuine issues of material fact.
- The trial court’s denial of summary judgment was affirmed, and the case was remanded for further proceedings.

## Legal Principles

- Fraudulent misrepresentation requires, among other elements, a material misrepresentation of past or existing fact, made with knowledge (or reckless ignorance) of falsity, intended to induce reliance, actual reliance, justifiable reliance, and resulting injury.
- Justifiable reliance is ordinarily fact-dependent and turns on the totality of the circumstances rather than categorical assumptions about adversarial negotiations.
- The presence of counsel in settlement negotiations is relevant to the reliance analysis but is not dispositive and does not immunize intentional misstatements of material fact.
- Where the challenged information is primarily within the opposing side’s control (such as policy limits) and the claimant made efforts to obtain it, reliance may be found reasonable depending on the surrounding facts, making summary judgment inappropriate.

## Conclusion

The Indiana Supreme Court held that representation by counsel does not automatically defeat justifiable reliance on opposing counsel’s factual statements in settlement discussions; instead, reliance generally turns on case-specific facts, and alleged misstatements about policy limits can present triable issues precluding summary judgment.


Fire Ins. Exch. v. Bell, 643 N.E.2d 310 (Ind. 1994)