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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_2456%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1987
- **Citation:** 479 U.S. 1066

## Text

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

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_2456%3A2. Public record. Not legal advice.