Petition for Writ of Certiorari — Mutual Life Insurance of New York v. Knowles

0-4 50

No. Supreme Court, U.S.

ti. . =

SEP 17 i938

JOSEPH F. SPANIOL, JR,

In THE CLERK

'

Supreme Court of the United States

OcToBeR TERM, 1986

MUTUAL LIFE INSURANCE COMPANY OF NEW YORK,

Petitioner,

JULIE D. KNOWLES,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

Barrett W. FREEDLANDER,

Nites, Barton & WILMER,

929 North Howard Street,

Baltimore, Maryland 21201,

(301) 539-3240,

Attorneys for Petitioner.

The Daily Record Co., Baltimore, MD 21202 iia

QUESTIONS PRESENTED

As a result of the jury’s answers to two written

interrogatories, the jury returned with a general verdict

for Petitioner. Invoking F.R. Civ. P. 59(e), the trial judge

(federal magistrate) reversed that general verdict favoring

the Petitioner and gave judgment to Kespondent. The

Questions presented are:

1. Whether the Federal magistrate violated the Seventh

Amendment — right to trial by jury in civil cases — by

reversing a jury verdict favoring Petitioner after he

determined (a) that Respondent was surprised by a

particular factual issue and therefore (b) such issue should

not have been submitted to the jury.

2. Whether the Federal Magistrate, in an effort to

correct what he perceived to be error in his jury

instruction, violated the Federal Rules of Civil Procedure

in utilizing Rule 59(e) — Motion to Alter or Amend a

Judgment — to reverse a jury verdict favoring Petitioner.

il

STATEMENT PURSUANT TO SUPREME COURT

RULES 21 AND 28.1

A list of all corporations affiliated with the Petitioner is

found in the Appendix p. 19a infra.

ill

TABLE OF CONTENTS

PAGE

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STATEMENT PurRSUANT TO SUPREME Court RULES

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CONSTITUTIONAL AMENDMENT AND FEDERAL

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LO re

REASONS FOR GRANTING THE WRIT:

It Is Necessary That This Court Affirm That

A Federal Magistrate Does Not Have Dis-

cretionary Authority To Invoke Rule 59(e)

Either To (1) Reverse A Jury Verdict Or (2)

Deprive A Party Of Its Right To A Jury

Trial Guaranteed By The Seventh Amend-

ment Of The U.S. Constitution ....................

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APPENDIX:

Opinion Of The United States Court Of

Appeals For The Fourth Circuit. April 23,

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Memorandum Opinion Of The United States

Magistrate, February 14, 1985 .............0..... 8a

Corporate Affiliations Of Petitioner ............ 19a

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TABLE OF AUTHORITIES

Cases

Aetna Surety Co. v. Yeatts, 122 F.2d 350 (4th

pease iachee kaa one oaaoassakanucianes

Boaz v. Mutual Life Ins. Co. of New York,

146 F.2G S21 (Bt Cir. TGA) oiccccccvcccscecscessesess

Conway v. Chemical Leaman Truck Lines,

Inc., 687 F.2d 108 (5th Cir. 1982) ..........000...

Dimick v. Schiedt, 293 U.S. 474 (1935) o......00...

Dove v. Codesco, 569 F.2d 807 (4th Cir. 1978)

Garrison v. United States, 62 F.2d 41 (4th

Roe nace a ae eae a ee

National Car Rental Systems, Inc. v. Better

Monkey Grip Co., 511 F.2d 724 (5th Cir.

1975) cert. denied, 423 U.S. 894 and 423 U.S.

A UNNE dpanasvetcce taut gaa ceeela heer ees

Slagenhauf v. Holder, 379 U.S. 104 (1964) ........

Slocum v. New York Life Ins. Co., 228 US.

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PAGE

9, 11

9,10

passim

PAGE

Rules

Federal Rules of Civil Procedure:

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IRCA ROY ROR Ne INE ane PP PP MN EAE 6

Treatises

J. Moore W. Taggart & J. Wicker Federal

Practice (2d ed. 1985) (cited as Moore’s

Federal Practice):

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Vol. GR TRG billet tickers 12

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Vie, Be FE 8 ikesiensascdvesieen teeing 10

Rak, Ti EE ictiiencnaccrduseeteriecmnaccuectiere )

Wright & Miller, Federal Practice &

Procedure:

Val. BS OeIs (ITE cities

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Vol. F1 $2006 1978 GB) eck cticcre 10

No.

IN THE

Supreme Court of the United States

OctToBeR TERM, 1986

MUTUAL LIFE INSURANCE COMPANY OF NEW YORK,

Petitioner,

JULIE D. KNOWLES,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

The Petitioner, Mutual Life Insurance Company of New

York, respectfully prays that a writ of certiorari issue to

review the judgment and opinion of the United States

Court of Appeals for the Fourth Circuit, entered in the

above-entitled proceeding on April 23, 1986. Rehearing

was denied July 14, 1986.

2

OPINIONS BELOW

The per curiam Opinion of the United States Court of

Appeals for the Fourth Circuit is reported at 788 F.2d

1038 and reprinted in the appendix p. la, infra. An

Application of the Petitioner for a Rehearing was denied

by Order, dated July 14, 1986.

The Memorandum decision of the United States District

Court for the District of Maryland (Goetz, Federal

magistrate) dated February 14, 1985, is unreported and

reprinted in the appendix (p. 8a infra).

JURISDICTION

The jurisdiction of this Court to review the judgment of

the Fourth Circuit is invoked under 28 U.S.C. § 1254(1).

CONSTITUTIONAL AMENDMENT INVOLVED

AMENDMENT VII

(Trial by Jury in Civil Cases]

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

according to the rules of the common law.

FEDERAL RULES INVOLVED

Rue 50(b)

Motion for Judgment Notwithstanding the Verdict

Whenever a motion for a directed verdict made at the

cluse of all the evidence is denied or for any reason is not

granted, the court is deemed to have submitted the action

to the jury subject to a later determination of the legal

questions raised by the motion. Not later than 10 days

after entry of the judgment, a party who has moved for a

a

3

directed verdict may move to have judgment entered in

accordance with his motion for a directed verdict; or if a

verdict was not returned such party, within 10 days after

the jury has been discharged, may move for judgment in

accordance with his motion for a directed verdict. A

motion for a new trial may be joined with this motion, or a

new triai may be prayed for in the alternative. If a verdict

was returned the court may allow the judgment to stand

or may reopen the judgment and either order a new trial

or direct the entry of judgment as if the requested verdict

had been directed. If no verdict was returned the court

may direct the entry of judgmeni as if the requested

verdict had been directed or may order a new trial.

Rule 59. New Trials; Amendment of Judgments

(a) Grounds. A new trial may be granted to all or any

of the parties and on all or part of the issues (1) in an

action in which there has been a trial by jury for any of

the reasons for which new trials have heretofore been

granted in actions at law in the courts of the United

States... .

* * * * * *

(e) Motion to Alter or Amend a Judgment. A motion to

alter or amend the judgment shall be served not later than

10 days after entry of the judgment.

STATEMENT OF THE CASE

Respondent, the beneficiary of a $200,000 term life

insurance policy, brought this action to recover the

proceeds of the policy. Jurisdiction was based on Title 28

U.S.C. § 1332. The case was referred to a United States

Magistrate for trial pursuant to 28 U.S.C. § 636(c).

This Petition is grounded upon the trial court’s decision

to invoke F.R. Civ. P. 59(e) to reverse a jury verdict and

thereby deprive Petitioner of its right to a jury trial on one

4

of two crucial factual issues submitted to the jury for a

written finding. That one issue was decided in Petitioner's

favor resulting in a general verdict for Petitioner. After

the verdict, the Magistrate determined that he should not

have submitted that issue to the jury. Upon appeal, the

Fourth Circuit determined that a reversal of a jury verdict

under Rule 59(e) was within the discretion of the trial

judge.

SuBSTANTIVE Facts

On May 28, 1980, one Charles Spell, an insurance policy

applicant, gave the Petitioner’s agent an initial premium

check postdated to June 7, 1980. In return, the agent

delivered a policy which contained standard language

acknowledging receipt of the check. Mr. Spell accepted the

policy and the agent delivered it conditioned upon the

agent obtaining a letter from Petitioner's home office

affirming that Mr. Spell could benefit from conversion

rights (i.e. the right to convert the insurance from term to

life keeping his initial insurance age) if he purchased the

policy. This condition did not occur prior to Mr. Spell’s

death on May 31, 1980. Because of Spell’s death and

insufficiency of funds to pay the premium, the initial

premium due was never paid.

PROCEDURAL Facts

On the day following the conclusion of testimony,

Respondent moved that evidence of Spell’s conditional

acceptance of the policy be stricken from the case. She

claimed that she was “surprised” by Petitioner’s evidence

on that issue because it had not been specifically identified

in answers to interrogatories or in the pre-trial order. The

magistrate denied the motion and submitted the issue of

conditional acceptance to the jury.

5

Two written interrogatories were submitted and a

general verdict was requested pursuant to F.R. Civ. P.

49(h). As completed by the jury, the interrogatories were

as follows:

Date

SPECIAL INTERROGATORIES TO THE JURY

1. Based on the evidence in this case did David

Fleming have apparent authority to deliver the

policy in question in this case to Charles Spe!l on

May 29, 1980 in return for a postdated check?

Yes X No ae

If your answer to Question No. 1 is No, your

inquiry has ended and you must find for the

defendant.

If your answer to Question No. 1 is Yes, then

answer Question No. 2.

\

2. Did Charles Spell place a condition upon his

acceptance of the policy that he receive a letter

from the company authorizing him to convert the

policy to whole life?

Yes _X_ No Rat

If your answer to Question No. 2 is Yes, your

inquiry has ended and you must find for the

defendant.

If your answer to Question No. 1 is Yes and

Question No. 2 is No., then you must find for the

plaintiff.

Based upon the answers to the foregoing interrog-

atories, the jury finds in favor of the Defendant

(insert Plaintiff or Defendant)

January 10, 1985 Patricia McSwain

Forelady

Following the jury verdict for Petitioner, Respondent

filed motions requesting a judgment n.o.v. under Rule

50(b), a new trial under Rule 59, and relief from judgment

6

under Rule 60(b). By memorandum opinion dated Feb-

ruary 14, 1985, the Magistrate converted the Rule 60(b)

motion to a Rule 59e) motion as a device to vacate the

answer to written interrogatory #2, leaving the answer to

written interrogatory #1. The Magistrate then entered a

general verdict for Respondent. No mention was made of

either Rule 59(a), on which Respondent apparently relied

in her post-trial motion, or Rule 50(b).

The basis for the reversal of the jury verdict was that

the Magistrate perceived that Respondent was surprised

by the conditional acceptance defense and thus the factual

issue should not have been submitted to the jury.

Petitioner appealed this decision. The Fourth Circuit

ruled that a trial court has discretion under Rule 59(e) to

reverse a jury verdict.

Because the use of Rule 59(e) to reverse a jury verdict

was improper under its own terms and denied Petitioner

its right to a jury verdict on the conditional acceptance

issue in violation of the Seventh Amendment, Petitioner

requests summary reversal and remand for new trial.

REASONS FOR GRANTING THE WRIT

IT IS NECESSARY THAT THIS COURT AFFIRM THAT A FEDERAL

MAGISTRATE DOES NOT HAVE DISCRETIONARY AUTHORITY TO

INVOKE RULE 59%e) EITHER TO (1) REVERSE A JURY VERDICT OR

(2) DEPRIVE A PARTY OF ITS RIGHT TO A JURY TRIAL GUARAN-

TEED BY THE SEVENTH AMENDMENT OF THE U.S. CONSTITUTION

INTRODUCTION

The Magistrate determined that F.R. Civ. P. 59(e)

empowered him to reverse a jury verdict on a critical issue

of fact. Petitioner introduced substantial evidence at trial

to show that the policy of insurance was conditionally

accepted. That issue was submitted to the jury. After due

consideration, the jury decided the issue and rendered a

7

verdict in favor of the Petitioner. On the insistence of

Respondent that the verdict was in error, the Magistrate

vacated both the jury’s finding on this issue and the

verdict favoring Petitioner. He then rendered judgment in

favor of Respondent. This result constituted a violation of

the Seventh Amendment whose guarantee of a trial by

jury demands a new trial under these circumstances.

Slocum v. New York Life Ins. Co., 228 U.S. 364. 380, 397-8

(1913); National Car Rental Systems, Inc. v. Beiter Monkey

Grip Co., 511 F.2d 724, 730 (5th Cir. 1975), cert. denied,

423 U.S. 894 (1975) and 423 U.S. 986 (1975); Garrison uv.

United States, 62 F.2d 41, 42 (4th Cir. 1932). This result

was also contrary to the meaning and purpose of Rule

59(e).

The Magistrate’s decision and the affirmance by the

Fourth Circuit conflict in principle with established

authority dealing with the subject of the right <o jury trial.

To avoid allowing these constitutional and rule in-

fringements to become precedent, this Court should

re-confirm that only Rule 50(b) provides the mechanism

by which a jury verdict can be reversed. Further, this

Court should re-confirm that if a trial judge chooses to

disregard a verdict of the jury for a reason other than that

which satisfies Rule 50(b), then the trial judge must follow

the authority of Rule 59(a) which grants the litigants a

new trial. In the instant case, Magistrate Goetz dis-

regarded a jury verdict reasoning that it was based upon

improperly admitted “surprise evidence.” Petitioner denies

that Respondent was unfairly surprised by the evidence.

In any event, the only remedy for such occurrence is a new

trial under Rule 59(a).

8

Rute 50(b)

First with respect to Rule 5t** which allows a reversal

of a jury verdict, the standard :s.

“[W]hether the evidence is such that, without

weighing the credibility of witnesses or otherwise

considering the weight of the evidence, there can be

but one conclusion as to the verdict that reasonable

men could have reached.”

9 Wright & Miller, Federal Practice and Procedure § 2524

pp. 545-6 (1971). When this standard is met, the

constitutional right to a jury trial is not impinged upon

because the issue is one of law only. When this standard is

ignored, and the verdict of the jury is reversed, the

province of the jury to decide an issue of fact is invaded in

violation of the Constitution. Garrison v. United States,

supra at 42. Neither the trial court nor the Fourth Circuit

found that the Rule 50(b) standard was met in this case.

The standard could not have been met because, undis-

putedly, there was substantial evidence to support the

verdict.

The effect of the lower courts’ disregard of the Rule 50(b)

standard was to declare that a jury verdict could be

reversed under any standard that the trial judge in his

discretion believes ought to apply. This decision is

unprecedented and departs from the common law. As such,

it abrogates the Seventh Amendment’s right to a jury

trial.

Further, in its capacity as the ultimate interpreter of

the Federal Rules of Civil Procedure, Schlagenhauf v.

Holder, 379 U.S. 104, 112 (1964), this Court should declare

that the Federal Rules did establish in Rule 50(b) the only

two alternatives available to the judge who chooses to

vacate a judgment after the jury returns with its verdict.

F.R. Civ. P. 50(b) states: “If a verdict was returned, the

court may allow the judgment to stand or may reopen the

9

judgment and either order a new trial or direct the entry of

judgment, as if the requested verdict had been directed.”

Rule 50(b) (Emphasis supplied). Thus, only rules 50(b) and

59(a) can be invoked after the jury verdict. This principle

is not changed by the submission to the jury — as in this

case — of written interrogatories with instructions to

render a general! verdict under Rule 49:

When jury trial is of right, it is the verdict of the

jury, whether a general verdict or a verdict under

either of the procedures of Rule 49, that is the

definitive finding of fact, and a motion to set aside

such a verdict, or a part of it, must be a motion for

judgment notwithstanding the verdict or a motion

for new trial, or both, under Rules 50 and 59.

9 Wright & Miller, supra, § 2513 at 532-3.

Rute 59(a)

As indicated, because Magistrate Goetz did not rely on

Rule 50(b) the jury verdict in this case could then be

nullified only by reliance on Rule 59(a). If some irregu-

larity led to the jury verdict, as Magistrate Goetz

perceived, then the sole remedy would be to disregard the

jury’s verdict and allow a retrial.

The basis for this principle lies in the common law. The

Seventh Amendment provides that if the common law

establishes grounds for a new trial, that is the only form of

re-examination permitted today when those same grounds

are found to exist. Citing precedent from the common law,

the Fourth Circuit in the frequently-cited case of Aetna

Surety Co. v. Yeatts, 122 F.2d 350, 354 (4th Cir. 1941)

addressed the sole means available at common law to deal

with the precise issue of a claim of surprise after the

verdict has been rendered. '

‘ During the trial and before a verdict is rendered the proper

remedy in the event of surprise is a continuance. 6A Moore’s

Federal Practice {59.08[2], at 59-96; Conway v. Chemical

Leaman Truck Lines, Inc., 687 F.2d 108, 112 (5th Cir. 1982).

Respondent did not request a continuance.

10

The parties may be surprised by a case falsely

made at the trial, which they had no reason to

expect, and therefore could not come prepared to

answer. If unjust verdicts obtained under these and

a thousand like circumstances, were to be con-

clusive for ever, the determination of civil property,

in this method of trial, would be very precarious

and unsatisfactory. It is absolutely necessary to

justice, that there should, upon many occasions, be

opportunities of reconsidering the cause by a new

trial.

Id. at 354 (Emphasis in original). Accord, Conway v.

Chemical Leaman Tank Lines, Inc., 687 F.2d 108 (5th Cir.

1982) (a case very similar procedurally to the instant

case); 11 Wright and Miller, supra, § 2805 at 38 (1973 ed.).

Thus, in reversing the jury verdict the Magistrate

ignored the only remedy available at common law and in

effect re-examined the “surprise” evidence in determining

that it was unsuitable for submission to the jury. Lacking

a common law basis, this ruling thereby deprived

Petitioner of its constitutional right to a jury trial on a

crucial factual issue.

Finally, Petitioner’s position that a new trial is required

under the particular circumstances of this case, is

confirmed by Professor Moore. Included in the “catalog” of

irregularities remedied only by a new trial are the two

“judicial errors” found to exist in this case:

. permitting a party, over timely objection,’ to

present a claim or defense going beyond the issues

as framed at the pre-trial conference or in the

pleadings, where the objecting party is actually

surprised and prejudiced; the improper submission

or withdrawal of a material issue from the jury.

6A Moore’s Federal Practice £59.08[{1], at 59-81.

* In this case, the objection was untimely because it followed

the conclusion of the testimony.

1]

Rute 59(e)

To support his reversal of the jury verdict, the

Magistrate sought out and then applied Rule 59(e). The

authority he utilized for his ruling consisted of two cases

(App. 18a), both non-jury, which permit a judgment to be

vacated under Rule 59(e). The Magistrate equated

vacating a judgment with reversing a jury verdict. In fact,

if Rule 50(b) is not invoked, vacating a jury verdict

consists of setting aside the verdict preliminary to

granting a new trial.

The motion to set aside the verdict and grant a new

trial was a matter of federal procedure governed by

Rule. . .59. . . On such a motion it is the duty of

the judge to set aside the verdict and grant a new

trial, if he is of the opinion that the verdict... .

will result in a miscarriage of justice,. . .

Aetna Casualty and Surety Co. v. Yeatts, supra, 122 F.2d

at 352. (Emphasis supplied). Accord, Slocum v. New York

Life, Ins. Co., supra, 228 U.S. at 380. The restriction

against vacating the judgment without granting a new

trial is found in the Seventh Amendment.

And while the Seventh Amendment does not

preclude the rendition of a judgment n.o.v., where

the motion for directed verdict could have been

properly sustained, it does stand in the way of court

alteration or amendment of a verdict or a judgment

which is based upon a jury verdict.

6A Moore’s Federal Practice 59.04{2] at 59-17 (Emphasis

supplied).

It is the restriction of the Seventh Amendment to

common law precedent that precludes the use of Rule 59(e)

in this case. In Dimick v. Schiedt, 293 U.S. 474, 476

' The Fourth Circuit relied on Dove v. Codesco, 569 F.2d 807

(4th Cir. 1978) which is also a non-jury case permitting a Rule

60(b) motion to be converted to Rule 59(e).

12

(1935), as part of a lengthy discourse on the motion for

new trial, this Court said

In order to ascertain the scope and meaning of the

Seventh Amendment, resort must be had to the

appropriate rules of the common law established at

the time of the adoption of that constitutional

provision in 1791.

We have shown in the previous section that surprise and

erroneous instructions required a new trial at common

law. Rule 59(e) standards, whatever they may be, could

not comply with this prerequisite of common law pedigree

because Rule 59(e) was enacted, not to codify the common

law, but to take care of the situation that arose in Boaz v.

Mutual Life Insurance Co. of New York, 146 F.2d 321 (8th

Cir. 1944) in which the trial judge wished to change his

own ruling prior to verdict and after he had discharged the

jury. Thus, lacking both common law lineage and

legislative intent to change the common law, Rule 59e)

cannot be used either as a vehicle for reversal of a jury

verdict or a grant of a new trial.

The full impact of the ruling of Magistrate Goetz and

the constitutional violation that occurred is highlighted by

Professor Moore’s listing the various situations in which

the Seventh Amendment permits a party to be deprived of

a jury verdict: (1) Issues arising in equity, (2) Use of a

master’s report as evidence, (3) Summary judgment, (4)

Employment of Rule 49 rules, (5) Directed verdict, (6)

Judgment n.o.v. under Rule 50(b) and (7) A new trial

under Rule 59(a). 5 Moore’s Federal Practice ©38.11{3] at

38-74-5. Thus, the limited role of Rule 59(e) is clear: it

“deals only with alteration or amendment of the oriiinal

judgment in a case and does not relate to a judgment upon

motion as provided in Rule 50(b).” 6A Moore’s Federal

Practice 59.01[6] at 59-7. There can be no doubt that the

error in this case is Magistrate Goetz’s equating Rule 59/e)

with Rule 50(b).

13

CONCLUSION

In this case, a Federal Magistrate deprived the Peti-

tioner of a jury trial. He substituted a jury verdict in favor

of the Defendant insurance company (Petitioner) with his

verdict in favor of the Plaintiff (Respondent). In doing so,

he violated the Petitioner’s constitutional right to a jury

trial and also the provisions of the Federal Rules of Civil

Procedure. As stated above, if the Magistrate believed the

jury verdict to have been improper, he should have

granted a new trial.

The Petitioner prays that this Court grant this Petition

for Writ of Certiorari and consider summarily reversing

the judgment of the Fourth Circuit and remanding for a

new trial.

Respectfully submitted,

Barrett W. FREEDLANDER,

Nives, BARTON & WILMER,

929 North Howard Street,

Baltimore, Maryland 21201,

(301) 539-3240,

Attorneys for Petitioner.

14

CERTIFICATE OF SERVICE

I Barretr W. FREEDLANDER, a member of the Bar of this

Court, hereby certify that on the day of September,

1986, three copies of the Petition for a Writ of Certiorari

in the above-entitled case were mailed first class, postage

prepaid to Dale A. Cooter, Esq., Cooter & Gell, 1333 H

Street, N.W. Washington, D.C. 20005, counsel for the

Respondent.

Barrett W. Freedlander

Niles, Barton & Wilmer

929 North Howard Street

Baltimore, Maryland 21201

(301) 539-3240

Attorney for Petitioner.

la

APPENDIX A

United States Court of Appeals

For the Fourth Circuit

No. 85-1275

Julie D. Knowles,

Appellee,

versus

The Mutual Life Insurance Company of New York,

Appellant.

Appeal from the United States District Court for the

District of Maryland, at Baltimore. Clarence E. Goetz,

Magistrate. (JH83-1134)

Argued: October 9, 1985 Decided: April 23, 1986

Before HALL and CHAPMAN, Circuit Judges, and

HAYNSWORTH, Senior Circuit Judge.

Barrett W. Freedlander (Niles, Barton & Wilmer on brief)

for Appellant; Dale A. Cooter, (Linda G. Griffith (Cooter &

Gell on brief) for Appellee.

Per CurRIAM:

This action in the diversity jurisdiction was brought to

collect the proceeds of a life insurance policy. By

agreement, it was tried before a magistrate who submitted

two special interrogatories to the jury. The jury answered

the interrogatories, finding that the defendant’s agent had

apparent authority to accept a postdated check for the first

premium but that the insured had not unconditionally

accepted the insurance policy. Judgment for the defendant

2a

would have followed upon the finding of conditional

delivery, but after the discharge of the jury, the magis-

trate determined that the plaintiff had not been given

notice of the conditional delivery defense and that the

issue had been unfairly tried. He struck the jury’s answer

to that interrogatory and entered judgment for the

plaintiff.

On the defendant’s appeal, we affirm.

I.

On December 17, 1979 Charles Spell filed a written

application for a $200,000 term life insurance policy with

Mutual Life Insurance Company of New York and paid a

premium of $53.39. A policy as applied for was issued but

was not delivered, apparently because of Spell’s uncer-

tainty that he wanted it. MONY’s agent, David Fleming,

obtained a check with which to refund the $53.39 paid by

Spell in December 1979, and, on the evening of May 28,

1980, he called his friend Spell to arrange to deliver the

refund check. He found that Spell was still interested in

taking out the insurance, and the two met at Spell’s house.

It turned out that Spell wanted the term insurance, but he

also wanted the right to convert it to a whole life policy

with premiums based on age 39. For that reason, he

wanted the policy with its December 1979 date. Fleming

told him that he would have such a conversion right, but

Spell insisted that he wanted an official letter from

MONY confirming his conversion right.

The conversation then turned to payment of the first

premium of $373.73. Spell stated that he had only $282 in

his bank account, but it was egreed that he would pay the

initial premium by giving Fleming a check in that

amount, endorsing MONY’s refund check back to MONY,

and paying the difference in cash.

3a

As he was writing the check, Spell said that he would

like to postdate it to June 7, the day after his next

aniicipHrd puylay. Meurding te Meming, hr nasnanded.

“Do us both a favor and date it today.” He explained that

the check could not go through MONY’s channels and be

presented at Spell’s bank until well after June 7. Again

according to Fleming, Spell said that he wished to

maintain a balance in his checking account to avoid a

service charge, to which Fleming responded that he would

pay the service charge if one was imposed on Spell. He

said that Spell then said “O.K.” and went back to writing

the check.

The check was completed, postdated as of June 7, and

placed by Spell upon a pillow between the two men.

Fleming delivered the insurance policy to Spell and then

applied himself to the completion of a form to change the

beneficiary from Spell’s son to his fiancee, the plaintiff.

The check was accepted without comment by Fleming,

though Fleming said he did not look at it and was

unaware until later that it was postdated.

Actually Spell had less than $282 in his bank account

on May 28. He had issued other postdated checks in

anticipation of the June 6 deposit of his monthly salary.

Spell was fatally shot during the night of May 31-June

1.

IT.

The defendant's defense that the insurance policy had

not been accepted by Spell is based upon Spell’s insistence

that he have a letter confirming his conversion rights as

explained to him by Fleming.

4a

At a pre-trial conference, the defendant’s defenses were

said to be that a postdated, or worthless, check is not a

premium payment, and that Spell knew that Fleming had

no actual authority to accept such a check. Several days

later, the magistrate received a letter from counsel for the

defendant supplementing its proposed jury instructions

and amending its request for special interrogatories to put

before the jury its claim of conditional delivery.

At the opening of the second day of trial, after the close

of evidence but before argument to the jury, the plaintiff

objected to the conditional delivery defense, claimed

surprise, and asked that the question not go to the jury.

The magistrate, under the mistaken belief that the

plaintiff's lawyer had received a copy of the letter

requesting submission of the interrogatory under appro-

priate instructions, overruled the objection. At the hearing

on the post-trial motion, the magistrate was correctly

informed that the plaintiff’s lawyer was unaware of the

conditional delivery defense until after the opening of the

trial. The magistrate then struck the jury’s answer to the

second interrogatory and, upon its finding that Fleming

had apparent authority to accept a postdated check,

entered judgment for the plaintiff.

Under these circumstances, we think the magistrate

reasonably determined that the plaintiff was unfairly

surprised by the assertion of the conditional acceptance

defense at trial and that she had no reasonable oppor-

tunity to prepare to meet it. Having made that deter-

mination, it was well within his discretion to alter the

judgment under Fed. R. Civ. P. 59(e).

The plaintiff’s post-trial motion was for relief under

Rule 60(b), but it had been made within ten days after the

entry of judgment and was appropriately treated as a

motion made under Rule 59(e). Dove v. Codesco, 569 F.2d

807, 809 (4th Cir. 1978).

5a

If.

The question of Fleming’s apparent authority to accept

the postdated check in part payment of the first premium

was submitted to the jury under proper instructions, and

we must accept the jury’s finding of apparent authority

since there is an evidentiary basis for it.

Spell and Fleming were friends. Some years before,

Spell had purchased a policy through Fleming when

Fleming was representing another insurance company.

Even if the jury accepted most of Fleming’s version of the

events of the evening of May 28, Fleming did not tell Spell

that he had no authority to accept a postdated check; he

asked that Spell not postdate the check as a “favor” to

both. After the check was written and placed on the pillow

for Fleming to pick up and examine, some time elapsed

before Fleming’s departure. The jury reasonably could

have found that before delivering the insurance policy to

Spell, Fleming would have examined the check and would

have noticed the date, since the dating of the check had

been a matter of active discussion. Finally, the jury might

reasonably have believed that if Spell had known that

Fleming had no authority to accept a postdated check and

could not deliver the policy until the first premium had

been fully paid, he would have made other arrangements

for the payment of that premium and obtained effective

delivery of the policy before his death on the night of May

31-June 1.

IV.

Before trial, MONY’s principal defense seems to have

rested upon the position that there had been no payment

of the first premium during Spell’s lifetime. This is based

on two subsidiary contentions that delivery of a check that

is worthless or postdated is not payment.

6a

It is not now clear that the check was worthless. There

were insufficient funds in Spell’s bank account to cover it

when it was issued and given to Fleming on May 28, but it

could not have been presented before June 7. If Spell had

lived and made a deposit of his salary check on June 6 in

his accustomed manner, there is no indication that the

check would not have been honored when presented on

June 7 or later.

There is no doubt, however, that it was postdated. It was

like a note, a promise to pay on or after June 7. We may

thus accept MONY’s premise that it should not be

regarded as a present payment on May 28, or at any time

during Spell’s lifetime.

The magistrate refused to permit MONY to present that

defense. He held that MONY was estopped to claim

nonpayment by the recital in the policy of payment. He

relied upon an old Maryland case, Consolidated Real

Estate & Fire Insurance Co. v. Cashow, 41 Md. 59 (1874).

In Consolidated, an insurer of a building against loss by

fire had reinsured half the risk. After loss of the building

by fire, the reinsurer refused payment of its proportion of

the loss upon the ground that its premium had not been

paid before the loss. The Maryland Court of Appeais held

that it was estopped to claim nonpayment because its

policy of reinsurance contained a recital that the premium

had been paid.

The case is a history one, but nothing in subsequent

decisions in the Maryland Court of Appeals suggests that

that court would not apply the same rule today. Non-

payment of the premium would not foreclose MONY’s

claim for the amount of the premium, but the recital in

the policy does foreclose MONY’s claim after Spell’s death

that the policy was never effective. Since Fleming’s

delivery of the policy to Spell was admittedly uncon-

7a

ditional, the policy’s recital of “the payment of premiums

as provided” forecloses a claim of invalidity for

nonpayment.

MONY argues that the “as provided” language in the

recital refers to the “plain stipulation” that the premium

be paid during Spell’s lifetime. This, however, is simply

the nonpayment argument that the Consolidated case

prevents.

The defendant contends that Spell had defrauded

Fleming and the defendant and that his fraud should

except this case from the Consolidated rule. The claim of

fraud is premised first upon the contention that Spell

knew Fleming was unauthorized to accept a postdated

check, but that contention is inconsistent with the jury’s

finding. If Spell reasonably believed that Fleming had the

authority to accept a postdated check, his delivery of a

postdated check to Fleming could not have been intended

to defraud him. Spell’s misrepresentation of the balance in

his bank account on May 28 is simply irrelevant. The

postdated check could not have been presented before June

7, and there is nothing to suggest that it would not have

been good on that date if Spell had lived.

V.

Finally, the defendant objects to the award of prejudg-

ment interest.

The policy, itself, provided for the payment of its face

amount together with interest on the unpaid balance for

up to two years. MONY contends that it should not be held

liable for interest for a longer period than its contract

required.

Maryland law, however, gives a trial judge the discre-

tionary right to award prejudgment interest to place the

injured party in a breach of contract case in the same

8a

position she would have occupied had the defendant not

broken its promise. Here, the defendant’s wrongful refusal

to pay deprived the plaintiff of the use of the insurance

proceeds for more than the two years of MONY’s

contractual commitment. It was an appropriate situation

for the magistrate to exercise his discretion as he did. See

I. W. Berman Properties v. Porter Brothers, 276 Md. 1,

19-20, 344 A.2d 65, 75-77 (1975); Brethren Mutual

Insurance Co. v. Filsinger, 54 Md. App. 357, 364-55, 458

A.2d 880, 884-85 (1983). |

VI.

For the foregoing reasons, the judgment is affirmed.

AFFIRMED.

In The United States District Court

for the District of Maryland

Civil Action No. JH-83-1134

Julie D. Knowles

Ds,

The Mutual Life Insurance Company of New York

MEMORANDUM

Plaintiff in the above-captioned case has moved for

Judgment N.O.V. pursuant to Rule 50 of the Federal

Rules of Civil Procedure; for relief from judgment under

Rule 60(b); and for a new trial under Rule 59.

The case has been in the Court since April of 1983. At

dispute is whether a policy of insurance in the amount of

$200,000.00 on the life of Charles J. Spell, Sr. was in effect

9a

at the time of Mr. Spell’s death on May 31, 1980. The

action is brought by the ramed beneficiary, Julie D.

Knowles, against Mutual Life Insurance Company of New

York (MONY), which company denies that the coverage

was ever in force. Not in dispute are the facts that on May

28, 1980, an agent of MONY physically delivered to Mr.

Spell the policy in exchange for a premium payment, part

of which payment was made by a check post-dated to June

7, 1980.

After the filing of the complaint in this case (Paper No.

1), discovery proceeded forthwith, plaintiff having pro-

pounded interrogatories and defendant having answered

by early August of 1983. Plaintiff’s Interrogatories No. 2

and 3 read as follows:

2. State whether it is your position that MONY

Policy No. 1097-22-84 NY, on the life of Charles J.

Spell, Sr., was in full force and effect on the date of

his death, May 31, 1980.

3. If your answer to Interrogatory No. 2 above was

negative:

a. State with specificity all facts providing a basis

for this position.

b. Identify any and all documents in your custody

or control pertaining to the validity of the subject

policy on May 31, 1980.

c. Identify any and all persons who have knowledge

of facts pertaining to the validity of the subject

policy on May 31, 1980.

(Paper No. 7).

The answers to the above-cited interrogatories were as

follows:

Answer to Interrogatory No. 2

It is the position of MONY that the aforesaid

policy was not in full force and effect on May 31,

1983 [sic].

10a

Answer to Interrogatory No. 3

a. 1. Mr. Spell did not have sufficient funds with

which to pay the premium.

2. Mr. Spell dated the initial premium payment

check, June 7, 1980.

3. Mr. Spell did not intend to pay his initial

premium until June 7.

4. Defendant requires that premium checks be

honored in order for insurance to be in effect,

i.e. issued; it simply never was in effect.

b. There is no question that a valid policy was

prepared, so it is not clear, what if any,

documents the Plaintiff is seeking.

c. We incorporate the answer to paragraph 3b and

having indicated a valid policy was prepared, the

names of individuals having such knowledge

would not be relevant even if they can be

ascertained.

(Paper No. 9).

Early in September of 1983, plaintiff moved for

summary judgment (Paper No. 12). Early in October of

1983, defendant answered (Paper No. 17) and filed its own

motion for summary judgment supported by a mem-

orandum of law (Paper No. 18). Plaintiff replied (Paper

No. 21) and defendant replied to the reply with a

memorandum of law (Paper No. 26). A hearing on the

motions was held in December of 1983. Pursuant to the

direction of the Court, plaintiff filed a supplementary

memorandum of law in December of 1983 (Paper No. 29)

and defendant submitted a supplementary memorandum

of law (Paper No. 30) as well as a reply memorandum to

plaintiff's supplemental memorandum (Paper No. 31)

early in January of 1984. On January 13, 1984, the Court

filed a Memorandum and Order in which plaintiff's

motion for summary judgment was denied and defendant’s

enacts niailiialaiiidiiaiiea

lla

motion for summary judgment was granted in part and

denied in part. Three days later, defendant submitted a

motion for reconsideration, again supported by a mem-

orandum of law (Paper No. 33) which was opposed by

plaintiff (Paper No. 34). The Court affirmed its previous

Memorandum and Order by another Memorandum and

Order filed February 3, 1984 (Paper No. 35). The case

subsequently was set for trial in June of 1984. Near the

date of trial, research by the Court into jury instructions

for the case disclosed case law previously uncited by either

party, which case law appeared to be controlling and

which would have the effect of substantially limiting the

issues for trial. Both sides were apprised of the precedent

discovered by the Court, trial was postponed and the

parties were requested to brief the issue raised by the

Court. Plaintiff filed a memorandum of law late in June of

1984 (Paper No. 40) as did defendant (Paper No. 41). This

was followed by a reply memorandum from defendant in

July of 1984 (Paper No. 42), from plaintiff early in August

of 1984 (Paper No. 43) and then a “Final Memorandum”

from defendant in September of 1984 (Paper No. 44). On

September 26, 1984, the Court held a hearing at which

oral arguments were presented and on October 5, 1984,

the Court filed a Memorandum and Order in which the

Court again denied motions for summary judgment and

established that trial would be limited by pretrial order to

the issue of the apparent authority of the MONY agent to

deliver the policy in return for the payment he received,

which issue would be submitted to the jury by way of

special interrogatory as provided in Rule 49 (Paper No.

45). A pretrial conference was held December 18, 1984, at

which time a pretrial order was agreed as amended (Paper

No. 57) and defendant provided to the Court proposed jury

instructions. There was no indication from the parties at

the pretrial conference or in the agreed pretrial order that

the defendant intended to establish at trial that no

insurance contract existed because the decedent had

iii ell

12a

placed a condition upon acceptance of the contract, which

condition was unfulfilled at the time of death. The pretrial

order, in fact, stated:

Defendant proposes to prove or to rely upon as a

defense the fact that Charles Spell indicated his

intent to pay for insurance on or after June 7, 1980

by providing David Fleming with a post-dated,

worthless check.

Charles Spell was on notice that David Fleming

lacked authority, actual or apparent, to deliver the

policy in question in return for a post-dated check.

Despite this knowledge, Charles Spell post-dated

the check constituting part payment.

Legal theory: Neither a post-dated check nor a

worthless check constitute payment of the initial

premium.

(Paper No. 57, p. 3). Subsequent to the pretrial conference,

however, defense counsel caused to be delivered to the

Court a letter dated December 21, 1984, which stated:

Following the deposition of yesterday and discus-

sions with opposing counsel, we supplement our

instructions with the enclosed.

Enclosed was Proposed Instruction No. 15 which reads:

Conditional Delivery

If you find that Charles Spell imposed a condition

upon his acceptance of the insurance policy,

namely, a letter from the Defendant stating that he

could convert this policy to a whole life policy just

as he could have done with his other policy with

New York Life Insurance Company, and such letter

had not been received by Mr. Spell at the time of

his death, then you must find for the Defendant.

Also submitted to the Court by defendant was an amended

request for special interrogatories, the amendment being

the addition of No. 4 which reads:

l3a

Did Charles Spell advise David Fleming that he

would accept the insurance policy upon the condi-

tion that David Fleming obtain for him a letter

from the Defendant relating to the conversion of

this policy to a whole life policy?

The cover letter sent with the enclosures indicates a

carbon copy to Linda G. Griffith, Esquire, plaintiff’s

co-counsel along with Dale Cooter, Esquire. Beneath the

notation of a carbon copy to Ms. Griffith is the notation

“Enclosures.” The Court garnered the impression from

this letter:

1) That some fact had come to light at a deposition

December 20, 1984, following the pretrial conference

which gave rise to the defense posited in the jury

instruction and special interrogatory set forth above.

2) That counsel had discussed the matter between

them.

3) That a copy of defense counsel’s letter to the Court

and the enclosures therein had been sent to plaintiff’s

counsel contemporaneous with its delivery to the Court.

This impression of the Court was reinforced in chambers

before trial on the opening dav of the trial when the Court

made reference to two issues going before the jury and no

objection was heard. At the opening of the second day of

trial, after the close of evidence but before argument to

and instruction of the jury, plaintiff’s counsel objected

strenuously to the late entry of the conditional acceptance

defense, claimed unfair surprise and urged that the

question not go to the jury. Mr. Cooter told the Court that

he had heard mention of conditional acceptance for the

first time in this case in chambers prior to trial on the

previous day and assumed at that time that it had to do in

some way with the post-dated check. Instead, claimed Mr.

Cooter, defense counsel had put forth in his opening

——————oorrrererereeree

l4a

statement the claim that the acceptance of the policy by

Mr. Spell was conditioned upon the receipt of a letter from

the insurance company assuring that the term policy was

convertible to whole life and that, as the letter was never

received by Mr. Spell, the condition was not fulfilled and

there was no acceptance by him of the policy. Mr. Cooter

told the Court that his initial reaction to the argument

was that somehow he had missed a vital point in the

pleadings. He said, however, that a review of the case file

after the first day of trial failed to reveal any prior

mention of the new legal theory being espoused by the

defense. Consequently, he asked the Court to strike all

evidence relative to conditional acceptance and instruct

the jury that the issue was not to be considered by them.

In reply, defense counsel made the following statement:

This is a theory that came to me while I was

preparing for this case subsequent to the answers

to interrogatories — even subsequent to the

pretrial . . . In preparation for the case — at the

last moment, almost ...I uh... that theory

came to me and as you may recall I actually

submitted this instruction after 1 submitted the

other instructions because that’s how late it came

to me. .

I received no new information which would require

supplementation of responses. If you look at Rule

26(e) — and which we did, we studied it and

anticipated this — we felt that it was absolutely

not covered.

The Court then asked defense counsel why he had not

sought amendment of the pretrial order, to which defense

counsel replied:

Well, looked at the pretrial order and thought that

it was covered under the general feeling Mr. Spell’s

intent. . . what was his intent with respect to this

particular insurance.

15a

The Court was of the opinion at that time that it was

rather late in the proceedings for plaintiff to be raising the

objection which it had raised, in light of the Court’s belief

that plaintiff’s counsel, or one of them, had received the

proposed jury instruction and special interrogatory nearly

three weeks before trial and should have been aware of

the issue generated by them. The Court thought it

possible, and even likely, that there had been a failure of

communication between plaintiff’s co-counsel. Moreover,

the Court had intended to and did submit the case to the

jury by way of special interrogatories and the Court

realized that if the jury were to find for the defendant on

_ the first question as to lack of apparent authority or for

plaintiff on both questions, then plaintiff's claim of

surprise would be moot. The Court denied plaintiff's

motion to strike the evidence as to conditional acceptance

and remove the issue from consideration of the jury and

advised plaintiff’s counsel that if, in fact, the jury found

for defendant solely on the issue of conditional acceptance

the Court would entertain a motion for Judgment N.O.V.

The special interrogatories to the jury were:

1. Based on the evidence in this case did David Fleming

have apparent authority to deliver the policy in

question in this case to Charles Spell on May 28,

1980 in return for a postdated check?

2. Did Charles Spell place a condition upon his

acceptance of the policy that he receive a letter from

the company authorizing him to convert the policy to

whole life?

(Paper No. 64). The jury found for plaintiff as to Question

No. 1 and for defendant as to Question No. 2, and,

therefore, found for defendant solely on the issue of

conditional acceptance.

On February 5, 1985, the Court held a hearing on

post-trial motions filed by plaintiff’s counsel. The plead-

ings pursuant to those motions, particularly the incorrect

16a

contention of plaintiff’s counsel that the Court had been in

receipt of the proposed instruction on conditional accept-

ance since the day of the pretrial conference, raised in the

mind of the Court the serious doubt as to whether

plaintiff’s counsel had been in receipt of the letter of

December 21, 1984 and its enclosures. At the hearing on

post-trial motions, defense counsel informed the Court

that its impressions had been wrong — on all counts:

1) The evidence supporting the legal theory advanced

by the defense as to conditional acceptance was not

uncovered at the deposition December 20, 1984.

2) There was no discussion prior to trial between

opposing counsel as to the defense of conditional accept-

ance raised by defendant.

3) Plaintiff's counsel was not sent copies of the

enclosures in the letter of December 21, 1984. It appears,

in fact, that plaintiff's counsel had never seen those

documents and was unaware of their nature until the

February 5 hearing.

The Court finds it unnecessary to determine whether

the misimpression was a creature of design or inad-

vertence. It is sufficient to state that the Court was misled

by defense counsel’s letter as would have been any person

of reason. Had the Court been raced with a pretrial

objection to the eleventh hour interposition of the

conditional acceptance defense, the objection likely would

have been sustained and special interrogatory No. 2 would

not have been before the jury. The basis of that decision

would have been the recognition of this Court of the

importance of the integrity of the discovery process and

the pretrial order. The Federal Rules were not drafted

with caprice or in a vacuum. Rather, they are the

embodiment of the intent of the federal judicial system

that the proceedings therein be open and aboveboard, with

17a

the hope that such openness will produce judicial economy

and substantial justice. Surprise is alien to the process.

Unnecessary surprise is unacceptable. Planned surprise is

an abomination. In this case, experienced trial counsel for

defense, as revealed by his own statement in court,

considered whether this admittedly new legal theory had

to be revealed to plaintiff either through supplementation

of answers to interrogatories or amendment of the pretrial

order. He made the studied decision that he could get by

without either. His decision represents an affront to the

rules of the court and to the dignity of its trial processes. It

is clearly within the discretion of this Court to hold a

litigant estopped by its litigation conduct to have an issue

considered by a trier of fact and this is particularly so

when a party has failed to identify an issue for inclusion

in the pretrial order when under a clear duty to do so.

Matter of Intercontinental Properties Management, 604 F.2d

254 (4th Cir. 1979).

Federal Rule 8(f) provides that all pleadings shall be so

construed as to do substantial justice. Plaintiff has

submitted timely motions under both Rules 59 and 60.

Although plaintiff has not sought specifically the relief

provided by Rule 59(e), it has been recognized that there is

substantial overlap between Rule 59(e) and Rule 60(b),

with one signficant distinction being that Rule 59 motions

must be filed no later than ten days after the entry of

judgment. Judgment was entered in this case January 11,

1985 (Paper No. 66) and plaintiff’s motions were filed

January 16, 1985 (Paper No. 67). Consequently, the Court

is going to read plaintiff’s motion for relief under, Rule

60(b) as a motion for relief under Rule 59(e). Bank of

California v. Arthur Andersen & Co., 709 F.2d 1174 (7th

Cir. 1983). The Court mistakenly thought that plaintiff

was or should have been aware of the conditional

acceptance defense interposed by defendant and that

plaintiff should have but failed to object before trial. This

18a

mistake of fact led the Court to submit the issue of

conditional acceptance to the jury which would not have

been done otherwise. Under the Federal Rules the trial

court is possessed of the authority to alter or vacate

judgment if, in the exercise of its broad discretionary

powers, the Court finds such action to be necessary in

order to accomplish justice. Harman v. Pauley, 678 F.2d

479 (4th Cir. 1982); McCarthy v. Manson, 714 F.2d 234 (2d

Cir. 1983). Pursuant to Rule 59e), this Court will enter an

Order separately altering the judgment to that which

would have been rendered had the issue of conditional

acceptance not been before the jury. Judgment, then, will

be for plaintiff in the amount of $200,000.00 plus the rate

of interest set forth in the contract for the period covered

by the contract and at the legal rate of interest in

Maryland thereafter.

CLARENCE E. Goetz,

United States Magistrate.

Dated February 14, 1985

In The United States District Court

for the District of Maryland

Civil Action No. JH-83-1134

Julie D. Knowles

US.

The Mutual Life Insurance Company of New York

ORDER

In accordance with the foregoing Memorandum, IT IS,

this 14th day of February, 1985, by the United States

District Court for the District of Maryland, ORDERED:

19a

1 That judgment be entered in favor of the plaintiff in

the amount of $200,000.00 plus costs and interest at the

rate provided by the policy for the period provided in the

policy and at the legal rate thereafter.

2. That this altered judgment shall serve in place and

instead of the judgment entered herein on the 11th day of

January, 1985.

3. That the Clerk mail copies of the judgment and this

Memorandum and Order to counsel for the parties.

CLARENCE E. Goetz,

United States Magistrate.

MONY CORPORATE ORGANIZATION CHART

THE MUTUAL INSURANCE COMPANY OF NEW

YORK

MONY LIFE INSURANCE COMPANY OF AMERICA

MONY LEGACY LIFE INSURANCE COMPANY

MONYCO, INC.

MONY LIFE INSURANCE COMPANY OF CANADA

MONY PENSION INSURANCE CORPORATION

MONY SERIES FUNDS, INC.

MONY PREFERRED HEALTH, INC.

MONY GENERAL PPO, INC.

MONY SECURITIES CORP.

MONY ADVISERS, INC.

MONY CREDIT CORPORATION

MONY REINSURANCE CORPORATION

1740 VENTURES, INC.

20a

KELLY & ASSOCIATES, INC.

MONY REALTY MANAGEMENT, INC.

MONY REALTY PARTNERS, INC.

MONY FINANCIAL PLANNING, INC.

UNIFIED MANAGEMENT CORPORATION

MONY AGRICULTURAL FINANCIAL SERVICES, INC.

BELL INVESTMENT ACQUISITION CORPORATION

DUFF FARM MANAGEMENT SERVICE, INC.

MONY-RE GROUP, INC.

MONY-RE MANAGEMENT, INC.

EVALUATION ASSOCIATES, INCORPORATED

EAI RESOURCE INVESTMENTS, INC.

THE KEEP, INC.

EVALUATION ASSOCIATES INVESTMENT MAN-

AGEMENT COMPANY

MONY-ROCKVILLE/GP, INC.

MONY BLOOMFIELD HILLS, INC.