Opposition Brief — Lear v. Equitable Life Assurance Society of the United States

ESE, ae. as

IN THE

Supreme Court of the United States

OcTOBER TERM, 1986

Exsic M. LEAR,

Petitioner,

VS.

THE EQUITABLE LIFE ASSURANCE SOCIETY

Or THE UNITED STATES.

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals For the Eighth Circuit

BRIEF FOR THE EQUITABLE LIFE ASSURANCE

SOCIETY OF THE UNITED STATES

IN OPPOSITION TO PETITION

AUSTIN PARHAM

WASINGER, PARHAM & MORTHLAND

2801 St. Mary’s Avenue

Hannibal, Missouri 63401

(314) 221-3225

Attorney for Respondent

The Equitable Life Assurance

Society of the United States

~ St. Louis Law Printing Co.,Inc., 411 No. Tenth Street 63101 314-231-4477

a

i

is

QUESTIONS PRESENTED

Did the Court of Appeals violate the prohibition of the

United States Constitution against re-examining evidence

because of the following allegations presented in the petition:

I. BECAUSE IT IGNORES MATERIAL AND

SUBSTANTIAL EVIDENCE THAT ALL

OF PLAINTiFF’S CHECKS WERE FIRST

CONSIDERATIONS FOR SEPARATE

SINGLE PREMIUM ANNUITY CON-

TRACTS ACTUALLY AUTHORIZED TO

BE COLLECTED IN AGENT’S OWN

NAME;

II. BECAUSE IT IGNORES THE CON-

TROLLING SUBSTANTANTIVE LAW OF

MISSOURI REGARDING THE EFFECT

OF COURSE OF CONDUCT IN

ESTABLISHING IMPLIED OR ACTUAL

AUTHORITY OF AN AGENT AND

DISREGARDS THIS EVIDENCE SUP-

PORTING PLAINTIFF’S ACTUAL

AUTHORITY THEORY OF RECOVERY;

Ill. BECAUSE IT IGNORES SUBSTANTIVE

EVIDENCE SUPPORTING THE

REASONABLENESS OF PLAINTIFF’S

BELIEF, SUBSTITUTES ITS JUDGMENT

FOR THAT OF THE JURY, APPLIES AN

IMPROPER STANDARD OF REVIEW

AND IGNORES THE CONTROLLING

SUBSTANTIVE LAW OF MISSOURI

REGARDING THE EFFECT AND SUFFI-

CIENCY OF COURSE OF CONDUCT

EVIDENCE IN DETERMINING THE

REASONABLENESS OF BELIEF IN AP-

PARENT AUTHORITY;

and,

did the Court of Appeals err by failing to consider that the

District Court might have refused to instruct on the affirmative

defense of the statute of limitations as a sanction for a failure to

submit such an affirmative defense instruction in compliance

with the District Court’s pretrial order?

iii

INDEX

Page

Questions Presented .............2cccscccseceecees i

cid av es deb aswesamsen reas iv

RUE cect rence esse nessedaceceescons 2

ES ES SS eee r

Constitutional Provision Involved.................+- 2

ss cake bce ssdaseecvecn eens 3

EES Py ree eee eee ee eee 8

red dbe ced 6 the bese bea e 14

Ee eee hee ee ee eer A-l

TT

iV

TABLE OF AUTHORITIES

Pages |

Cases:

Alexander v. Perkin Elmer Corp., 729 F.2d 576 (8th |

Se G8 Serco a eect abe week cniad ke oken 13 |

Burr v. National Life & Acc. Ins. Co., 667 S.W.2d 5 |

DNS 6 uae evay vaca ea eet beau 13

Ex Parte Peterson, 253 U.S. 300, 40 S.Ct. 543, 64 L.Ed.

Re hig sete erry Pes eo Y |

Futrell v. State, 667 S.W.2d 404 (Mo. banc 1984) ...... 10

Galloway v. United States, 319 U.S. 372, 63 S.Ct. 1077,

ee es gas 5s d6 ob sib od owed cesar os 8

Harding v. Modern Income Life Ins. Co., 593 S.W.2d

GI IN iis esa kaw bas ou hiss oc 13

Houston v. Groth Enterprises, Inc., 670 S.W.2d 178

5S ooo dw a does kad wees 9

Jefferson Gravois Bank v. Cunningham, 674 S.W.2d

II BI ee et 9,13

Kueneke v. Jeggle, 658 S.W.2d 516 (Mo.App. 1983).... 13

Layne & Bowler Corp. v. Western Well Works, 261

U.S.387, 43 S.Ct. 422, 67 L.Ed. 712 (1923) ....... 12

NLRB v. Pittsburgh S.S. Co., 340 U.S. 498, 71 S.Ct.

ts We a TONNES sk écccneddvnsssdredacs 1]

Rice v. Sioux City Memorial Park Cemetary, Inc.,

349 U.S. 70, 75 S.Ct. 614, 99 L.Ed. 897 (1955) .... 11

Rogers v. Lodge, 458 U.S. 613, 102 S.Ct. 3272, 73

Demy MEIER io vw bb bso Wieck ook down, Ae 10

rere

Smith v. Honeywell, Inc., 735 F.2d 1067 (8th Cir.), cert.

denied, 105 S.Ct. 576 (1984) .....-.0- +e eee eres 8

Woods v. Holy Cross Hospital, 591 F.2d 1167 (Sth

oe. POPP Pere rey rr ca Ct yet 9

Ybarra v. Burlington Northern, Inc., 689 F.2d 147

(Sth Cir. 1982) ....... ccc cee een eee eee e eee ences 8

Constitution:

U.S. Const. Amend. VII,

U.S.C.A. Const. Amend. 7 ........-.++-- 2,8,9,10,11,15

Statutes: |

Section 516.120(5) RSMo. .......--- eee ee eee eeeees 4,10

28 U.S.C. section 1254(1) ......- 6. e ee ee ee ee eens 2

28 U.S.C. section 2101(C) .. 1.0... cece e ence eee eeeees 2

Rules:

Oi Pile DD y gs alec kan de A deine eee een eee 2

em | dl eee errrrrrerrre rire rT rae rose 9,14

Oi% Det O 5 . occcciwsns 6 pide sce ett eae 14

No. 86-915

IN THE

Supreme Court of the United States

OcTOBER TERM, 1986

Evsict M. LEAR,

Petitioner,

Vs.

THe Eouitas_e Lire ASSURANCE SOCIETY

Or THE UNITED STATES.

Respondent.

On Petition for a Writ of Certiorari to the eet

United States Court of Appeals For the Eighth Circuit

BRIEF FOR THE EQUITABLE LIFE ASSURANCE

SOCIETY OF THE UNITED STATES

IN OPPOSITION TO PETITION

The respondent, The Equitable Life Assurance Society of the

United States, submits its brief in opposition and respectfully

prays this Court to deny the petition of Elsie M. Lear for a Writ

of Certiorari to the United States Court of Appeals For the

Eighth Circuit for review of its judgment and opinion reversing

a judgment in favor of said petitioner and remanding the case to

the United States District Court, Eastern District of Missouri

for retrial on limited issues.

_

OPINIONS BELOW

The opinion of the United States Court of Appeals for the

Eighth Circuit in Appellate No. 85-1453EM is reported at 798

F.2d 1128 and is reproduced as Appendix A in the petition for a

writ of certiorari by Elsie M. Lear (Pet. App. 1 thru 16). The

judgment of the United States District Court, Eastern District

of Missouri in Case No. N83-00039C entered upon a jury ver-

dict is not reported, but is reproduced as Appendix C in said

petition (Pet. App. 18).

STATEMENT OF JURISDICTION

The petition for writ of certiorari by Elsie M. Lear (the plain-

tiff in the District Court and the appellee in the Court of Ap-

peals) was mailed for filing with the Clerk of the United States

Supreme Court on December 2, 1986, following the denial by

the United States Court of Appeals For the Eighth Circuit of

her motion for rehearing in the Court of Appeals on September

4, 1986 (Pet. Appendix B, App. 17) after entry of the Court of

Appeals’ judgment and opinion filed on August 8, 1986 (Pet.

App. 1). The United States Supreme Court has jurisdiction to

review a final judgment under 28 U.S.C. section 1254(1) invok-

ed by the petitioner if the petition is filed within ninety (90) days

of the denial of the motion for rehearing under 28 U.S.C. sec-

tion 2101(c) and Supreme Court Rule 20.

CONSTITUTIONAL PROVISION INVOLVED

United States Constitution, Amendment VII:

In Suits at common law, where the value in controversy

shall exceed twenty dollars, the right of trial by jury shall

be preserved, and no fact tried by a jury, shall be otherwise

reexamined in any Court of the United States, than accor-

ding to the rules of the common law. U.S.C.A. Const.

Amend. 7

a e

STATEMENT OF THE CASE

Petitioner’s STATEMENT OF CASE is replete with

misassertions of fact and argument with no reference to the

record of this case and not supported by the record. A fair and

succinct summary of the facts as presented to the United States

Court of Appeals For the Eighth Circuit is set forth as the

BACKGROUND in the Court of Appeals’ opinion. (Pet. App.

2 thru 4).

Respondent’s liability in this diversity case is premised solely

on a theory of respondeat superior for the fraud of its agent in

obtaining funds from the peitioner which the respondent never

received. Said insurance agent received several checks from the

petitioner and/or Mr. Lear made payable to the order of Denzil

D. David (the agent) from on or about January 10, 1973

through September 6, 1975 in the amounts of $25,000.00,

$21,000.00, $9,000.00, $25,000.00, $15,000.00, $15,000.00,

$5,000.00, $6,500.00, and $3,500.00. (Pitf’s Exh. 7,8A, 8B, 9,

10, 11, 12, 13A and 13B, Tr.Vol.II [Elsie Lear], pp. 21, 22, 31,

40, 42, 46, 48 and 51). In exchange for these checks, Denzil

Daniel David gave the Lears documents entitled ‘‘Personal

Notes’’ stating they obligated Mr. David to pay the Petitioner.

(see footnote 3 of the Court of Appeals’ opinion reproduced at

Pet. App. 2 thru 3). None of these documents bear the respon-

dent’s name nor indicate that Denzil D. David signed them

other than in his individual capacity. (Tr. Vol. II [Elsie Lear]

pp. 68, 75, 77, 81, 85, 88 and 90).

Prior to commencing her action against the respondent, the

petitioner pursued her claim against Mr. David and his wife,

Letha R. David, on these ‘‘Personal Notes’’ (Tr. Vol. II [Elsie

Lear] p. 102) to final judgment in Mr. David’s bankruptcy case.

(Pitf’s Exh. 49, Tr. Vol. II [Elsie Lear] p. 122). She did not

commence her action against the respondent until suit was filed

in State Court on March 15, 1983. Thereafter, the respondent

sought and obtained removal to the United States District

Court, Eastern District of Missouri based solely on diversity

_— Pr

jurisdiction. The applicable statute of limitations is section

516.120(5) RSMo which requires a fraud action to be brought

within five years of the discovery of the fraud or when it should

have been discovered (unless diligence to discover the fraud is

excused).

The jury was instructed by the District Court which read the

following verdict director tendered by the petitiouer:

Now, in this case your verdict must be for the Plaintiff

Elsie Lear if you believe the following:

FIRST, Denzil Daniel David was acting within the scope

and course of his agency for Defendant Equitable Life

Assurance Society of the United States when he made the

representations submitted in this instruction, and

SECONID, Denzil Daniel David represented to Plaintiff

Elsie Lear that the funds he received from her would be

received on behalf of and invested with the Defendant

Equitable Life Assurance Society of the United States in a

retirement plan or annuity for Plaintiff Elsie Lear, inten-

ding that Plaintiff rely upon such representation in giving

her funds to Denzil Daniel David, and

THIRD, the representations were false, and

FOURTH, Denzil Daniel David knew the representa-

tions were false and,

FIFTH, the representations were material to the decision

of Plaintiff Elsie Lear in giving her funds to Denzil Daniel

David in the manner specified in the representations set

forth in the previous paragraph second, and

SIXTH, Plaintiff Elsie Lear relied on the representa-

tions in giving her funds to Denzil Daniel David and in so

relying Plaintiff was using ordinary care, and

SEVENTH, as a direct result of such representation, the

Plaintiff Elsie Lear was damaged. (Instruction No. 5)

pa yon

The jury was further instructed as to the substantive law that:

If you believe the acts of Denzil Daniel David were

within the scope and course of agency as just defined [i.e.,

in Instruction No. 6], your verdict must be for Defendant

The Equitable Life Assurance Society of the United States

unless you believe the acts of Denzil D. David were done to

further the business of the Equitable Life Assurance Socie-

ty of the United States. (Instruction No. 6a).

The agent’s employment contracts with the respondent were

in evidence at the trial of this case. (Pitf’s Exh. 1). Petitioner

also testified as to the transactions between her and the respon-

dent’s agent. On cross-examination she specifically testified

that she received no communications from anyone on behalf of

the respondent other than her discussions with Mr. David, nor

did she receive any materials from the respondent directly and

that she did not know of any Equitable representative who had

any knowledge that Denzil Daniel David was executing these

personal notes to the Lears. (Tr. Vol. II [Elsie Lear] pp. 99 thru

101).

Denzil Daniel David’s employment contracts contained the

following provision:

XVI. Independent Contractor. Nothing contained herein

shall be construed to create the relationship of employer

and employee between The Equitable and the agent. The

agent shall be free to exercise independent judgment as to

the persons from whom applications for policies and an-

nuity contracts will be solicitated and the time and place of

solicitation. The Agent shall abide by the rules and regula-

tions of the Equitable in accordance with Paragraph VII

hereof but such rules and regulations shall not be con-

strued so as to interfere with the freedom of action of the

Agent as described in this Paragraph. (Plft’s Exh. 1)

Based on the agent’s employment contracts in evidence the

Court of Appeals held as a matter of law that Denzil Daniel

—

David had no express or actual authority for the payment of

monies to Mr. David, except for the first premium check dated

January 10, 1973 for $25,000.00. (see Opinion at Pet. App. 6).

The Court of Appeals expressly considered the law and the

evidence of ‘‘prior courses of dealings and similar transactions’’

as creating apparent authority for the agent to collect all

premium checks. (see Opinion at Pet. App. 7). The Court of

Appeals concluded:

We appreciate the fact that the Lears were elderly and in

somewhat poor health at the time of these transactions.

However, the totality of the evidence, especially the per-

sonal notes, leads us to hold that an ordinarily reasonable

and prudent person could not reasonably have believed

that David had the apparent authority to collect the later

premium checks.

Again, while we are mindful that it is for the jury and

not us to evaluate and weigh the evidence, an examination

of the record as a whole simply does not disclose the

evidence of substance which is needed to support this jury

verdict.

(see Opinion at Pet. App. 8).

The record discloses no mention of any sanctions considered

or imposed by the District Court upon the respondent for any

failure to comply with the pretrial orders regarding submitting

jury instructions. The record before the Court of Appeals was

that the respondent (which did plead the affirmative defense of

the statute of limitations) did not request a specific written in-

struction on this defense, but did object that this issue should be

placed in the verdict director. (see Opinion at Pet. App. 9).

The Court of Appeals observed that the facts were unclear as

to when Lear first discovered the fraud, and that there was

evidence in support of the defense and that the District Court

prejudicially erred in not submitting an instruction on this issue

to the jury.

core

The Court of Appeals held that the respondent could not be

liable for more than damages flowing from the first representa-

tion, and therefore remanded the case for a determination of

any actual and punitive damages from this representation plus

for a fact determination whether the statute of limitations was

satisfied.

Given this disposition of the petitioner’s appeal, the Court of

Appeals noted further discussion of whether the evidence was

sufficient to prove damages was unnecessary. (footnote 9, Opi-

nion, Pet. App. 8). Mrs. Lear had testified at the trial as to her

damages that she did receive some payments of monies from

Denzil D. David on various of Plaintiff’s exhibits [the ‘‘Per-

sonal Notes’’], but did not have records or any way of knowing

how much or if all of such payments had been received. (Tr.

Vol. II [Elsie Lear] pp. 71, 77, 78, 79, 82, 83, 85, 86, 88, 89, 91,

92, and 41).

This case is pending retrial on the issues of the statute of

limitations and of damages pursuant to the mandate of the

United States Court of Appeals For the Eighth Circuit, follow-

ing its denial of the petitioner’s petition for rehearing. (Resp.

Brf., App. 1, et seq.)

a

ARGUMENT

The petition for writ of certiorari to the United States Court

of Appeals For the Eighth presents no special and important

question justifying further review of the evidence in this case by

the Supreme Court of the United States, and raises for the first

time an assertion by the petitioner that her Seventh Amendment

right to not have a court reexamine any fact tried by a jury,

otherwise than according to the rules of the common law was

violated. (see PETITION FOR REHEARING AND

MEMORANDUM IN SUPPORT THEREOF BY AP-

PELLEE, ELSIE M. LEAR, (Resp. Brf., App. 1, et seq.)

Among the many reasons why the petition for a writ of cer-

tiorari to the United States Court of Appeals For the Eighth

Circuit should be denied, the following are compelling:

1. It is within the review jurisdiction of the Court of Ap-

peals to determine as a matter of law whether the evidence

is sufficient to support a jury verdict without violating the

Seventh Amendment to the United States Constitution;

Petitioner argues the same abstract principle of law set forth

in Smith v. Honeywell, Inc., 735 F.2d 1067, 1069 (8th Cir.),

cert. denied, 105 S.Ct. 576 (1984) followed by the Court of Ap-

peals in its opinion (Pet. App. 5 and 8) that it could reverse a

jury verdict when no evidence of substance supports it. This

standard of review is consistantly applied in the Court of Ap-

peals For the Eighth Circuit. e.g. Ybarra v. Burlington Nor-

thern Inc., 689 F.2d 147, 150 (8th Cir. 1982).

The Seventh Amendment ‘‘was designed to preserve the basic

institution of jury trial in only its most fundamental elements,

not the great mass of procedural forms and details.’’ Galloway

v. United States, 319 U.S. 372, 392, 63 S.Ct. 1077, 1088, 87

L.Ed. 1458 (1943). It is held that at the core of these fundamen-

tal elements is the right to have a ‘‘jury ultimately determine the

issues of fact if they cannot be ... determined as a matter of law.

{

ates

‘‘Woods v. Holy Cross Hospital, 591 F.2d 1164, 1178 (Sth Cir.

1979). See also Ex Parte Peterson, 253 U.S. 300, 310, 40 S.Ct.

543, 546, 64 L.Ed. 919 (1920).

It clearly appears that the Court of Appeals could determine

that the issues of fact it reversed were erroneous as a matter of

law under the standard of review it followed without violating

the petitioner’s Seventh Amendment rights, and in so holding

has not departed from the usual and accepted course of judicial

proceedings requiring further review by the United States

Supreme Court.

2. No federal law questions are involved in this purely

diversity jurisdiction case;

Petitioner has merely reargued to this Court'that substantive

evidence supported the jury verdict, and that the Court of Ap-

peals ignored controlling substantive law of Missouri regarding

the effect of course of conduct evidence. Contrary to this asser-

tion by the petitioner, the Court of Appeals specifically con-

sidered this law, citing Jefferson-Gravois Bank v. Cunningham,

674 S.W.2d 561 (Mo.App. 1984) at 563-64, and Houston v.

Groth Enterprises, Inc., 670 S.W.2d 178 (Mo.App. 1984) at

180. (Opinion, Pet. App. 6 thru 7). Thus, the petition presents

no reason for certiorari to be allowed of the character indicated

in Supreme Court Rule 17.

3. Petitioner has waived any constitutional rights violation

by not asserting her rights under the Seventh Amendment

in her petition for renearing in the Court of Appeals;

Petitioner’s petition is premised upon a constitutional error

by the Court of Appeals, and not by any constitution question

presented in her case against the respondent. Her vehicle for br-

inging the Seventh Amendment issue to the attention of the

Court of Appeals was a petition for rehearing under F.R.A.P.

40. However, in her petition for rehearing she argued that

substantive evidence supported the existence of apparent

isin” Oa

authority, but no where asserted any violation of the Seventi:

Amendment of the United States Constitution. (Rsp. Brf., App.

7 thru 13)

Since the petitioner’s constitutional contentions were not

presented to the Court of Appeals, they are waived and are not

properly presented to this Court. Rogers v. Lodge, 458 U.S.

613, 629, n.2, 102 S.Ct. 3272, 3281, n.2, 73 L.Ed.2d 1012

(1982).

4. Further review of this case is premature as all other

issues may become moot upon a jury determination on the

statute of limitations issues ana the damages issues;

Multiple and complex issues were and still are presented by

the facts of this case. However, the judgment and mandate of

the Court of Appeals has reduced these on remand for retrial to

all of the damages issues and the statute of limitations issues, in-

cluding whether the petitioner suffered any damages from the

first representations, when she discovered the agent’s fraud and

which rule of discovery (due diligence to discover vs. such

diligence being excused because of a fiduciary relationship) ap-

plies under section 516.120(5) RSMo. Until the retrial of these

issues is completed, this case is not appropriately ripe for fur-

ther review and the questions presented by the petition for cer-

tiorari may become moot.

5. Federal Courts do not create state law and the Court of

Appeals’ opinion is not binding upon state courts or non-

parties so that this case is of limited precedential value.

In the case of Futrell v. State, 667 S.W.2d 404 (Mo. banc

1984) the Missouri Supreme Court reaffirmed that ‘‘While un-

questionably meriting respect, rulings of the Eighth Circuit

Court of Appeals are not generally binding on Missouri state

court, [citations deleted], and the trial court’s evaluation would

be independent of [the Eighth Circuit case]. Id. at 407.

Likewise, the opinion of the Eighth Circuit Court of Appeals in

ee. ee

this case has no res judicata effects upon any non-parties to this

case. Thus, the problem, if any, in this case is peculiar to these

parties and the Seventh Amendment issue presented by the peti-

tioner is merely ‘‘academic and episodic”’ so that certiorari is in-

appropriate in The United States Supreme Court. Rice v. Sioux

City Memorial Park Cemetery, Inc., 349 U.S. 70, 75 S.Ct. 614,

99 L.Ed 897 (1955).

6. Senior Circuit Judge J. Smith Henley penned the opi-

nion (joined by Circuit Judges Theodore McMillian and

John R. Gibson,) and in the opinion was expressly mind-

ful of the applicable standard for reversimg a jury verdict

which was followed;

The panel of judges in this case for the Cours of Appeals, and

the Eighth Circuit generally, does not frequently reverse jury

verdicts. However, if appellate review is to be meaningful such

action must be available and taken when the lack of sufficient

evidence requires it under the appropriate standard of review.

The petition does not take issue with the standard of review ap-

plied by this panel of judges, but simply disagrees with its deter-

mination using this standard. Unless the United States Supreme

Court chooses to function as an ordinary appellate court in this

case, there is no reason presented to simply review the evidence

as sought by the petitioner. NLRB v. Pittsburgh S.S. Co., 340

U.S. 498, 71 S.Ct. 453, 95 L.Ed. 479 (1951).

7. This case involves no unsettled principles of law or con-

flicts between any courts regarding the right of the Court

of appeals to reverse an erroneous jury case, and its out-

come is only of importance to the parties so that ordinary

appellate review rather than certiorari in the United States

Supreme Court is appropriate;

As stated above this case is of limited precedential value and

deals primarily with the application of proper standards of

review of a jury verdict to the peculiar facts of this case. Thus,

the outcome of this case is important to these parties, but is of

little importance to the public in general. As this Court has

stated in the past, it is important for this Court to consistently

deny the writ of certiorari except in cases involving matters of

importance to the public as distinguished from the parties.

Layne & Bowler Corp. v. Western Well Works, Inc., 261 U.S.

387, 392-393, 43 S.Ct. 422, 423-424, 67 L.Ed 712 (1923).

8. The judgment of the Court of Appeals is fair and

equitable to the petitioner, and if any error was made it

was in holding the respondent liable for any damages caus-

ed by the agent’s representations as the fraud of the agent

was solely for his own benefit;

The petitioner is entitled to a new trial under the mandate of

the Court of Appeals with a new opportunity to prove her

damages. The Court of Appeals did not resolve whether she

had presented sufficient evidence of actual damages to make a

submissible case for fraud, although her own testimony revealed

no basis for determining if and how much money the agent had

not paid her as called for in his ‘‘Personal Notes’’ and she was

the party in a position to know that fact since the respondent

did not receive the money or pay her any money in these tran-

sactions between the petitioner and the respondent’s agent.

Further, the evidence and basis of the petitioner’s claim

against the respondent was that the agent committed the fraud

for his own benefit and not the respondent’s. The Court of Ap-

peals apparently rejected the respondents arguments as to the

effect of the evidence, however its discussion focused on the

issues of ‘‘scope and authority’’ of respondent’s agent without

making any express holding or discussion of the sufficiency of

the evidence to support a jury verdict against the respondent

under Instruction No. 6a. This instruction was in addition to the

fact that the petitioner submitted her case by paragraphs SE-

COND and THIRD of Instruction No. 5 on a theory requiring

the jury to find that the agent’s representations that her funds

“‘would be received on behalf of and invested with’’ the respon-

dent were false, although the respondent’s vicarious liability is

dependent upon the agent having received her funds within the

course and scope of his authority for the benefit of the respon-

dent.

9. Petitioner has skewed the facts, argued law not suppor-

ting her positions, and has failed to present with accuracy,

brevity and clearness that which is essential to a ready and

adequate understanding the points, if any, requiring con-

sideration;

Petitioner presents as a question for the extraordinary grant

of a writ of certiorari whether the Court of Appeals abused its

discretion in not considering that the District Court did not in-

struct on the statute of limitations as a sanction for her bold

assertion that the respondent disobeyed the pretrial order. This

point calls for pure speculation as she even admits in her peti-

tion that respondent’s objection to the verdict director as not re-

quiring a finding on this pleaded affirmative defense ‘‘was over-

ruled by the District Court without further comment’’. (Pet. p.

22). Case law in Missouri provides in circumstances such as in

this case where the fraud occurs more than five years prior to

commencement of the action it is the plaintiff who then has the

burden of proof on the issues of the statute of limitations which

she must plead and prove, unless waived by the defendant’s

failure to plead this defense. Kueneke v. Jeggle, 658 S.W.2d

516 (Mo.App. 1983), Burr v. National Life and Accident In-

surance Co., 667 S.W.2d 5 (Mo.App. 1984), Harding v.

Modern Income Life Insurance, 593 S.W.2d 568 (Mo.App.

1979), Alexander v. Perkin Elmer Corp., 729 F.2d 576 (8th Cir.

1984).

Petitioner likewise asserts as fact in her STATEMENT OF

CASE that she actually discovered the fraud in 1980 (Pet. p. 5)

whereas this remains an open fact issue.

Further, cases cited by the petitioner in her petition do not

support her arguments. e.g. the case of Jefferson-Gravois Bank

v. Cunningham, 674 S.W.2d 561 (Mo. App. 1984) is not

my

substantive law of Missouri ‘‘that actual authority of an agent

may be predicated upon a course of conduct...’’ (Pet. 11).

Rather, this case is correctly cited by the Court of Appeals as

authority that apparent authority may be shown by prior

courses of dealings. (Opinion, Pet. App. 7.). This erroneous

legal argument and premise is repeated in the questions

presented by the petitioner as the reason The Supreme Court of

the United States should grant certiorari.

Such errors in the petition for a writ of certiorari exemplify

the failure of the petitioner to be accurate, brief, and clear and

alone are sufficient reasons for denying her petition under

Supreme Court Rule 21.5.

CONCLUSION

Petitioner presents no question for review by writ of certiorari

to the United States Circuit Court For the Eighth Circuit that

justifies the exercise of the discretionary power of the Supreme

Court of the United States to grant her petition.

Supreme Court Rule 17 provides that such review will be

granted only when there are special and important reasons

therefor, and provides examples indicating the character of

reasons that will be considered. No such reason is asserted by

the petitioner in this case. Rather, the petitioner merely seeks a

redetermination of the sufficiency of the evidence and in-

ferences which the Court of Appeals in the usual course of ap-

pellate review has determined against her.

The standard of review for reversing the judgment of the trial

court upon the jury verdict in this case is undeniably consistent

with the petitioner’s right not to have a court of the United

States reexamine facts determined by the jury otherwise than

allowed by the common law. Further, under the judgment and

mandate of the Court of Appeals the petitioner may still have a

jury determination of her recoverable damages making such

review premature and potentially moot.

—

The judgment and opinion of the Court of Appeals is the law

of this case for the mandated retrial, but as a precedent does not

effect the substantive law of Missouri nor the appropriate stan-

dards for review of jury verdicts under the Seventh Amendment

of the United States Constitution or general principles of law.

Finally, the petitioner relies on a constitutional right first

asserted in her petition for writ of certiorari, relies on case law

unsupportive of her assertions, is argumentative and misstates

facts in her STATEMENT OF CASE, and fails to adequately

present what is essential to a ready understanding of the ques-

tions presented with accuracy, brevity and clearness.

Therefore, this Court should be consistent and not grant the

writ of certiorari to the United States Court of Appeals For the

Eighth Circuit sought by the petitioner.

Respectfully submitted,

WASINGER, PARHAM &

MORTHLAND

Austin Parham

2801 St. Mary’s Avenue

Hannibal, Missouri 63401

(314) 221-3225

Attorney for Respondent

APPENDIX

APPENDIX

IN THE UNITED STATES COURT OF APPEALS

EIGHTH CIRCUIT

No. 85-1453EM

Elsie M. Lear,

Appellee,

VS.

The Equitable Life Assurance Society

of the United States,

Appellant.

PETITION FOR REHEARING

AND MEMORANDUM IN SUPPORT THEREOF

Comes now the Appellee and requests this Court pursuant to

Rule 40 of the Federal Rules of Appellate Procedure and Rule

15 of this Circuit’s local rules to rehear and reconsider its judg-

ment entered August 8, 1986, and in support thereof states that

said judgment has overlooked material facts or misconstrued

the law as relates thereto in the following respects, to-wit:

1. All checks paid by Lear to David and forming the basis for

this action were, in each instance, first (and only) premium

checks for single premium annuities and were, therefore, within

the express authority of said agent.

The jury found all elements of the verdict director, including

that Agent David was acting within the scope and course of his

agency under either the actual or apparent authority submis-

sions and reasonable reliance by Lear on David’s misrepresenta-

tions. Thus, the question is whether there was evidence of

substance viewed in a light most favorable to the verdict and

giving Lear the benefit of all reasonable inferences to support

the jury’s determination of actual authority with respect to a//

checks forming the basis of this suit. Smith v. Honeywell, Inc.,

a * en

735 F.2d 1067, 1069 (8th Cir.) Cert. Denied 105 S.Ct. 576

(1984); Northern v. McGraw Edison, 542 F.2d 1336 (Sth Cir.

1976). There was such evidence of substance in the form of

Lear’s unrefuted testimony that a// checks were first (and only)

payments for single premium annuities (See Vol. I] within Vol. I

(filed 4/15/85) - partial transcript P. 15, L. 25; P. 16, L. 1-3; P.

17, L. 6-9; P. 20, L. 5-16; P. 23, L. 4-12; P. 32, L. 7-10; P. 38,

L. 3-9, 17-19; P. 40, L. 20-24; P. 42, L. 5-10, 22-25; P. 46, L.

2-6, 12-17; P. 52, L. 17-19; P. 127, L. 12-19; P. 129, L. 5-13),

the reason this type annuity was necessary (Vol. II within Vol. I

(filed 4/15/85), P. 20, L. 5-16), the Defendant’s document con-

firming Lear’s recollection of cancellation of a monthly pay-

ment annuity (D’s Exh. F-1 and PI’s Exh. 29), the Defendant's

contract with David allowing collection of first premiums (PI's

Exh. 1) and David's stipulation that he defrauded Lear by false-

ly representing her funds would be forwarded to Defendant to

purchase single premium annuities (PI's Exh. 49). Consequent-

ly, each and every check which is the subject of this suit was ex-

pressly authorized by Defendant to be collected by David by the

express provisions of their employment contract. (PI's Exh. #1)

Therefore, analysis of these checks focusing upon whether the

same are first or subsequent checks fails to properly consider

that David was actually authorized to accept all first premium

annuity payments in his own name and that all Lear’s checks

were first (and only) premium payments for single premium an-

nuities. It is of no consequence that the purchases after the first

were through the same agent and with the same company. They

were still first premiums expressly authorized by David’s con-

tract to be collected and by practice and custom impliedly

authorized to be collected in his own name. Further, analysis

focusing on the effect of the notes and David’s payments is in-

appropriate because the jury passed on whether these were

“*notes’’ and found they weren't solely agent's responsibility as

would be true with notes. (See D’s closing argument - Vol. III,

P. 41, L. 18-20) Rather, the jury was entitled to consider oral

evidence in variance with the terms of the ‘‘notes’’ in support of

the plea of fraud to explain the transaction, did consider the

a Soo

same and found Lear’s evidence persuasive. Thus, any argu-

ment regarding notice to Lear by the ‘‘notes’’ or checks drawn

on David’s personal account is simply not in point since these

acts constitute part of the effort to prevent detection of the

fraud, do not bear at all on whether David was actually

authorized to receive Lear’s funds for remittance to Defendant,

and was determined by the jury in favor of Lear in passing upon

the reasonableness of her reliance on David’s representations.

Bowers v. S.H.S. Motor Sales, 481 SW2d 584 (Mo. App. 1972)

Moreover, reasonableness of reliance is not even an issue where,

as here, there is a fiduciary relationship or the fraudfeasor has

superior knowledge of the facts, Tietjens v. General Motors

Corp., 418 SW2d 75 (Mo. Supp. 1967); Vinyard v. Herman, 578

SW2d 938 (Mo. App. 1979), or where, as here, the fraudfeasor

makes a positive representation inducing Plaintiff not to make

inquiry into the true facts, Bowers v. S.H.S. Motors Sales,

Supra, and is never an element of the definition of actual

authority. (Instruction #6) It is important to recognize that

while the fraud continued from one check to the next in terms of

preventing detection, each check given was a new fraud com-

pleted when David received Lear’s respective checks, each of

which was expressly authorized by Defendant to be collected by

David from Lear in his own name. Moreover, even if these

checks were not payments for single premium annuities, the

same result obtains since Lear is not bound by secret limitations

on David’s authority. Wynn v. McMahon Ford, 414 SW2d 330

(Mo. App. 1967). ,

Finally, the concept of implied authority recognizes that the

actual or express authority of an agent can be enlarged upon by

a course of dealing accepted or acquiesed in by the principal.

Jefferson-Gravois Bank v. Cunningham, 674 SW2d 561'(Mo.

Ct. App. 1984). This principle is recognized in paragraph 2 of

the actual authority definition given by the Court. (Instruction

No. 6) In this connection, not only did Lear pay directly to

David pursuant to his promise that the funds would be remitted

to Defendant but, also, the evidence established that this prac-

ant AE tie

tice was permitted by Defendant’s contract with David (PI’s

Exh. 1) and he had a habit of collecting all premium checks, not

just the first, in his own name (PI’s Exhs. 27a - 27gg) despite ex-

press provisions in his employment contract to the contrary.

(Tr. Vol. I (filed 4/15/85), P. 18, L. 17-25; P. 19, L.1) (See also

Tr. Vol. I, P. 41, L. 6-10) Moreover, Defendant permitted this

to continue for a period of several years, before, during and

after the fraud perpetrated upon Lear. (Tr. Vol. II, P. 47, L.

15-17, L. 20-22, 25; P. 48, L. 1-5, 8-12) Furthermore, it is a

common practice in the industry for premium checks to be

made payable to the agent and not the company. (Tr. Vol. Il, P.

41, L. 15-19; P. 43, L. 23-25; P. 44, L. 3) This fact has even

been recognized by the Missouri Supreme Court in G/ynn v.

M.F.A. Mutual Ins. Co., 254 SW2d 623 (Mo. Sup. En Banc

1953) where the Court said ‘‘It was his duty to make collections

...’. Thus, the actual authority of David as expressed in the

contract, as implied by prior dealings between him and Defen-

dant and as implied by custom in the industry generally, clearly

indicates that the receipt by David in his own name of ai/ of the

checks which are the subject of this suit was an act within his ac-

tual authority whether express or implied. Certainly the jury

had ample evidence before it to find that the receipt of Lear’s

funds by David was within his actual authority whether express

or implied. This holding renders unnecessary a consideration of

apparent authority and avoids the judicial and societal problems

arising from this Court’s present holding that an agent, as a

matter of law, is not apparently authorized to transact the exact

business he is expressly authorized to conduct. Stated alter-

natively, an exceedingly dangerous precedent that a Plaintiff is

not, as a matter of law,. reasonable in relying upon appearances

of authority to act as expressly authorized by said agent’s con-

tract, accepted as common practice in the industry, permitted

and acquiesed in by said agent’s principal and generally ac-

cepted by the bulk of society... not to mention this jury, is

avoided.

ae <

2. The evidence was unrefuted and Defendant admits that as

a part of David’s duties he was in a fiduciary relationship with

Lear which established this fact as a matter of law.

The evidence at trial was unrefuted that David, as a part of

the duties of his employment with Defendant, was in a fiduciary

relationship with Lear. An agent of Defendant, Robert O.

Parker testified that it is a duty of an insurance agent to invite

and obtain the trust and confidence of prospective clients if any

insurance is to be sold. Tr. Vol. I (filed 4/15/85), P. 6, L. 24,

25; P. 7, L. 6-9, 18-20, 25; P. 8, L. 1-3. Lear testified that she

was invited by David to repose her trust and confidence in him

and did repose such trust and confidence in him with respect to

each of the checks intended as payment for single premium an-

nuities. See Vol. Il within Vol. I - partial transcript (filed

4/15/85) P. 14, L. 19-21; P. 15, L. 18-20; P. 17, L. 17-25; P. 18,

L. 1-3, 12-14; P. 21, L. 8-11, 15, 16, 20-22; P. 22, L. 14-25; P.

3. Lh. 13-ae-.. 27, L. 3% BP. 38, LP: FP. a, E012,

20-22; P. 35, L. 21, 22; P. 36, L. 22-25; P. 38, L. 10-13, 17-21;

P. 40, L. 20-25; P. 41, L. 1-6; P. 42, L. 24, 25; P. 43, L. 1-6; P.

44, L. 20-22; P. 46, L. 14-20; P. 47, L. 9-13; P. 50, L. 9-15; P.

$2. L. 10-13: P. 74, L. 20-22: P. 127, L. 2-25;-P. 128, L. 1, 2,

6-9. Indeed, there can be no question but that when we deliver

our funds to an insurance agent for remittance to the insurance

carrier we are reposing trust and confidence in said agent that

said funds will be so remitted. The definition of a fiduciary

clearly demonstrates this fact when said term is defined as ‘‘a

person holding the character of a trustee ...; one is said to

receive money ... in a fiduciary capacity when ... the money ...

he handles is not his own ...’’ Black’s Law Dictionary, (4th Ed.

Rev. 1968).

Finally, Defendant alleges in point ‘‘C’’ of its brief on appeal!

that David was also the agent of Lear. (See Point ‘‘C’’ of Ap-

pellant’s Brief on Appeal). Said allegation on appeal constitutes

a judicial admission by Defendant that David stood in a

fiduciary relationship with Lear. While Lear does not concede

a» Mas

that David was her agent, there can be no question but that

David was acting in a fiduciary capacity with respect to the

remittance of Lear’s funds to Defendant.

Since there was absolutely no factual dispute regarding this

fiduciary relationship, this issue is established as a matter of law

without the need to instruct the jury on the same since matters

about which there can be no dispute need not be submitted to

the jury. Bowers v. S.H.S. Motor Saies, Supra; Vinyard v. Her-

man, Supra; Shechter v. Brewer, 344 SW2d 784 (Mo. App.

1961).

3. Substantial evidence supports the jury’s determination of

the existence of apparent authority by David to receive Lear’s

funds for remittance to Defendant.

It has been variously stated that a jury verdict will only be

overturned when, viewing the evidence in a light most favorable

to the verdict and giving the prevailing party the benefit of all

reasonable inferences and resolving all conflicts in said party’s

favor, no evidence of substance supports it. Smith v.

Honevwell, Inc., Supra; Northern v. McGraw-Edison, Supra.

As Lear has already submitted sufficient evidence and

arguments to support a determination of the existence of actual

authority on the part of David to receive all her funds and remit

each said collection to Defendant for the purchase of single

premium annuities as was expressly conferred in said agent’s

contract with Defendant, those arguments will not be here

repeated. However, it bears repeating that each check given by

Lear to David and upon which this suit is based was for the pur-

chase of a single (and only) premium annuity as was specifically

authorized by Defendant’s contract with David. Consequently,

analysis of the reasonableness of Lear’s reliance on appearances

that David had the authority to receive her checks and remit the

same to Defendant for the purchase of single premium annuities

must focus upon the appearance to do just that. Moreover, by

virtue of the fiduciary relation, Lear’s reliance on appearances

to create the apparent authority of Agent David to remit her

ars, ee

funds from each of her checks for the purchase of single

premium annuities is to be viewed not only in a light most

favorable to the jury’s verdict and giving Lear the benefit of all

reasonable inferences, but, also, without any need or necessity

on Lear’s part to inquire behind the appearances creating such

authority. Tietjens v. General Motors Corp., Supra; Bowers v.

S.H.S. Motor Sales, Supra; Shechter v. Brewer, Supra;

Remember, in this context, that the only authority which Lear

need reasonably have believed (based upon appearances) David

had, is the same authority which the contract expressly confer-

red, prior dealings between said agent and Defendant impliedly

authorized and custom and practice in the industry readily

recognizes. Analysis focusing upon the ‘‘personal notes’’ is in-

appropriate since the jury was permitted, under an exception to

the parole evidence rule, to hear Lear’s testimony in variance

with the express language with these documents and the jury

was entitled to believe and, indeed, did believe that these were

not ‘‘notes’’ at all but were, as testified by Lear, receipts for

funds delivered and an indication of the amounts she was to

receive with respect to each investment. (See D’s closing argu-

ment - Vol. III, P. 41, L. 18-20) The jury was certainly entitled

to believe that these documents and the payments David made

to Lear were a part of the effort of David to conceal his fraud

and were, certainly, not a part of the transaction which was

completed upon delivery of the respective checks to David. To

hold to the contrary disregards well established precedent in the

State of Missouri regarding what a jury may believe with respect

to the reasonableness of a Plaintiff’s reliance on apparent

authority. Specifically, Bowers v. S.H.S. Motor Sales, Supra,

held that even though the contract between the agent and plain-

tiff indicated that the car being purchased was used, said plain-

tiff was entitled to rely upon the agent’s representation that said

vehicle was new. Further, Wynn v. McMahon Ford, Supra,

held that a ‘‘car order form’’ was not, as the document stated,

an offer to purchase by plaintiff but was, rather, a receipt for

down payment. Further, Baker v. St. Paul Fire and Marine Ins.

ey eee

Co., 427 SW2d 281 (Mo. App. 1968), held that a plaintiff may

rely upon the appearance of authority and all representations of

the agent within the scope of said apparent authority even

though in direct contradiction of express limitations on said

agent’s authority. Finally, Tietjens v. GMC, Supra, held that

an application form which specifically and prominently

displayed the limits of the agent’s authority was not controlling.

Rather, the plaintiff was entitled to rely upon the appearance of

authority and the jury entitled to believe that said reliance was

reasonable. Indeed, even if these checks were not payments for

single premium annuities, Lear’s reliance on the appearance of

authority in David to collect the same for remittance would still

be reasonable since secret limitations on David’s authority are

not binding on her. Wynn v. McMahon Ford, Supra.

The facts which support the reasonableness of Lear’s reliance

on the appearance of authority in David to receive her funds

and remit the same to Defendant for the purchase of a single

premium annuity are many and various. Specifically, the fact

David was provided with a business card, pamphiets and

brochures, office space, secretarial services, a tel2phone listing

and other indicia of his employment by Defendant; the employ-

ment contract between Defendant and Davic specifically

authorizing the receipt by him of funds for remittance to Defen-

dant; the course of conduct between Defendant and David in-

dicating that Defendant had authorized him to collect said

funds in his own name and remit them through his personal

checking account to the Defendant; Defendant permitting this

collection and remittance with respect to not only the first

premiums but also subsequent premiums; the well established

custom in the insurance industry for agents to collect premiums

in their own name for remittance to their principal; the fact the

first attempt by Lear to purchase an annuity with Defendant

was accomplished by signing a check payable to David but in-

tended for remittance to Defendant; and the powers associated

with the position David held all indicate his apparent authority.

Shechter v. Brewer, Supra; Tietjens v. General Motors Corp.,

my pe

. Supra. While apparent authority cannot be based solely on the

declarations of an agent, the statements of David can be utilized

to help explain the reasonableness of Lear’s reliance on his ap-

parent authority. Therefore, the first annuity which was

withdrawn or cancelled was applied for without the Lears sign-

ing any application and establishes a course of conduct from

prior dealings upon which Lear reasonably may rely in believing

that David had the authority to fill out documents on her behalf

in applying for annuities. Since Defendant’s own exhibits and

records show that this application was received by Defendant

(See D’s Exh. F-1, P’s Exh. 29), it cannot be questioned that ap-

plication could be made in this fashion. Therefore, David was

apparently authorized to represent to clients that he could fill

out their applications for annuities for them. The Court should

also bear in mind that it was David’s positive misrepresentations

and attempt to conceal this fraud which kept Lear off-guard

and prevented inquiry. Further, the position which an agent en-

joys gives rise to certain powers and authority even if said

authority is expressly withheld by the principal. Wynn v.

McMahon Ford, Supra. Consequently, since David was ex-

pressly authorized to collect first premiums (which all checks of

Lear were), David’s apparent authority to collect the same for

remittance to Defendant should not be questioned in the face of

a jury verdict that said agent had said authority.

Finally, the precedent established by the Court’s present

holding is exceedingly dangerous to society since Lear’s offer of

proof amply demonstrated that twenty-three (23) other elderly

individuals were deirauded by David in essentially the same

fashion. (See Pl’s offer of proof - Tr. Vol. I (filed 5/13/85) P.

67, L. 1 through P. 83, L. 5; Tr. Vol. II (filed 5/13/85) P. 2, L.

10 through P. 6, L. 4) Consequently, it cannot be questioned

that the bulk of society considers themselves reasonable in giv-

ing their agents premium checks made payable to the agent with

the trust that the same will be forwarded to the insurance car-

rier. In this connection, what was said in Darks v. Grecer Co.,

146 Mo. App. 246 (1910), is equally applicable here. Specifical-

| |

— A-10 —

ly, the Court stated that the liability of the principal for his

agent’s tort is not based upon a presumed authority in the agent

to do the acts but upon public policy for the reason that it is

more reasonable when one of two innocent persons must suffer

from the wrongful act of a third person that the principal who

has placed the agent in the position of trust and confidence

should suffer than a stranger. While this principle has been

variously stated to involve imputing knowledge by the agent of

his own fraud to the principal as in Globe Indemnity Co. v. First

National Bank, St. Louis, 133 SW2d 1066 (1939), the controll-

ing principal underlying all of these cases is that stated in

Southern Pac. Trans. Co. v. Continental Shippers, 485 F. Sup.

1313 D.C. (Mo. 1980), that as between a principal and a third

party, the principal must bear the risk when his agent fails to

properly perform his duties.

In conclusion, it is apparent that this Court is not viewing the

evidence in a light most favorable to the verdict, giving Lear the

benefit of all reasonable inferences nor resolving conflicts in the

evidence in favor of Lear when the Court reviewed the ‘‘totality

of the evidence’’ and focuses on the ‘‘personal notes’’ despite

the jury’s determination to the contrary. This analysis

disregards the fact that the jury was certainly entitled to believe

that these were not ‘‘personal notes’’ at all and, further,

disregards the fact that these ‘‘notes’’ have nothing to do with

the apparent authority of this agent to receive Lear’s funds and

forward the same to Defendant for the purchase of single

premium annuities. The jury was entitled to believe that these

“*notes’’ and the payments made by David were simply a

method to prevent detection of his fraud. Analysis should focus

upon the fact that once a defrauded party gives his money to an

agent under the circumstances of this case, subsequent transac-

tions are made easier, not more difficult, particularly in light of

the fact that payments were being received as had been

represented. Lear is not arguing that the statements of David

create his apparent authority. Rather, the initial annuity ap-

plication which was withdrawn clearly evidences a course of

— A-ll —

dealing upon which Lear was entitled to rely. Thus, the

fiduciary nature of the relationship between David and Plain-

tiff, the superior knowledge by David of the facts, the affir-

mative misrepresentation calculated to and having the effect of

inducing Lear’s reliance, the efforts on the part of David to pre-

vent discovery of his fraud, the normal authority of the position

David enjoyed as an agent of Defendant, the indicia of apparent

authority manifested in the form of office space, pamphlets and

brochures, business cards, phone listings and secretarial ser-

vices, the well-accepted standard in the industry and by society

in general of having agents collect premiums and the prior

course of dealings in the form of the first withdrawn annuity ap-

plication all constitute substantial evidence in support of the

jury’s determination of apparent authority. It appears this

Court has overlooked the fact that all checks were given for the

purchase of single premium annuities and were, thus, actually

authorized. Further, the jury found Lear’s reliance on David’s

representation that he would send her funds to Defendant was

reasonable and this Court has acknowledged that David had the

actual authority to make said representation with respect to, at

leasi, the first check collected. Consequently, how then can it

be unreasonable as a matter of law for her to rely on the ap-

parent authority of the same agent to perform that same duty

with respect to subsequent checks given in payment for single

premium annuities. To do so reduces to the proposition that

David was not apparently authorized to do what he was actually

authorized to do.

4. Defendant is not entitled to an instruction on the affir-

mative defense of the statute of limitations because it did not

tender one in obedience to the Pretrial Order and because the

evidence clearly established that Lear neither knew nor should

have known she was being defrauded until after March 15,

1978, within five (5) years of the filing of this action.

In this case, the trial Court’s pretrial order pursuant to Rule

13, Form A (Rules, U.S. Dist. Ct., E. D. Mo. as amended), pro-

— A-12 —

vided that, ‘‘the attorneys shall, not less than ten days prior to

the date set for trial ...(4) submit to the Court and to opposing

counsel their written requests for instructions, reserving the

right to submit requests for additional or modified instructions

not more than three days thereafter in light of the instructions

not more than three days thereafter in light of the opposing par-

ty’s requests for instructions,’’ and that ‘‘...except for gocs

cause shown, no party shall be permitted ... to submit requests

for any further or additional instructions for consideration by

the Court.’’ Defendant submitted no request for an instruction

on the affirmative defense of the statute of limitations in com-

pliance with this pretrial order. (See Defendant’s compliance

with pretrial order) Consequently, the Court was free to apply

sanctions ‘‘including, but not limited to, dismissal of the action, ©

entry of a default judgment, or restrictions on the admissibility

of certain evidence, as described in the order’’. Rule 13, Supra.

The Court chose to consider the affirmative defense of the

statute of limitations to be waived by the Defendant’s failure to

tender an instruction on this defense in compliance with the

pretrial order and, therefore, refused to instruct on this issue.

That is an appropriate sanction under Rule 13 since it deals ex-

plicitly with the Defendant’s failure to tender an instruction on

said issue and clearly eliminates this point on appeal even

though Defendant might otherwise have preserved this point for

appeal by objecting to Plaintiff’s verdict director.

Alternatively, the trial Court held, as a matter of law, that

there was no need to instruct the jury on this defense because

the uncontradicted evidence established a fiduciary relation bet-

ween David and Lear thus eliminating the need to instruct the

jury on that question and making the point at which Lear ac-

tually knew she had been defrauded the only relevant point in

time for the period of limitations. Burr v. National Life & Acci-

dent Ins. Co., 667 SW2d 5 (Mo. App. 1984) In this connection,

the Defendant’s own evidence established regular monthly

payments to and after March 15, 1978. (See D’s Exh. K-6)

Moreover, Lear’s evidence established that she did not actually

ee eee

a Ald —

know she had been defrauded until after December, 1980, when

her husband died. (Tr. Vol. II within Vol. I (filed 4/15/85) P.

57, L. 2-5) The reference by Lear to 1974 is by no means clear

regarding exactly what is being discussed. Taken in context, this

reference was to an irregularity in the receipt of monthly

payments as contemplated. (Tr. Vol. II within Vol. I (filed

4/15/85) P. 101, L. 14-22) However, the Defendant’s own

evidence refutes that recollection. (D’s Exh. K-6) Consequent-

ly, the clear, convincing and uncontradicted evidence regarding

the date when Lear actually knew she had been defrauded pin-

points said date within five years of the filing of this suit.

Even utilizing the ‘‘should have known’’ standard with

respect to knowledge of this fraud yields the same result.

Specifically, the Defendant’s own evidence (K-6) clearly

establishes regular payments to and within five years of the fil-

ing of this suit. Matters about which there can be no dispute

need not be submitted to the jury. Baker v. St. Paul Fire &

Marine Ins. Co., Supra.

WHEREFORE, Appellee prays for an order by this Court

rehearing and correcting its judgment entered on August 8,

1986, and affirming the trial court’s judgment on the jury’s ver-

dict in favor of Plaintiff.

Respectfully submitted,

STEVEN E. RAYMOND #26593

P. O. Box 177

Shelbyville, Missouri 63469

Phone (314) 633-2131

Attorney for Appellee