868 F.3d 637 (8th Cir. 2017), 15-3872, Jo Ann Howard and Associates, P.C. v. Cassity

Docket Nº:15-3872, 15-3878
Citation:868 F.3d 637
Opinion Judge:COLLOTON, Circuit Judge.
Party Name:Jo Ann Howard and Associates, P.C., Special Deputy Receiver of Lincoln Memorial Life Insurance Company, Memorial Service Life Insurance Company, and National Prearranged Services, Inc.; National Organization of Life and Health Insurance Guaranty Associations; Missouri Life and Health Insurance Guaranty Association; Texas Life and Health Insurance G
Attorney:For Jo Ann Howard and Associates, P.C., Special Deputy Receiver of Lincoln Memorial Life Insurance Company, Memorial Service Life Insurance Company, and National Prearranged Services, Inc., National Organization of Life and Health Insurance Guaranty Associations, Missouri Life and Health Insuranc...
Judge Panel:Before COLLOTON, MELLOY, and SHEPHERD, Circuit Judges.
Case Date:August 17, 2017
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 637

868 F.3d 637 (8th Cir. 2017)

Jo Ann Howard and Associates, P.C., Special Deputy Receiver of Lincoln Memorial Life Insurance Company, Memorial Service Life Insurance Company, and National Prearranged Services, Inc.; National Organization of Life and Health Insurance Guaranty Associations; Missouri Life and Health Insurance Guaranty Association; Texas Life and Health Insurance Guaranty Association; Illinois Life and Health Insurance Guaranty Association; Kansas Life and Health Insurance Guaranty Association; Oklahoma Life and Health Insurance Guaranty Association; Kentucky Life and Health Insurance Guaranty Association; Arkansas Life and Health Insurance Guaranty Association, Plaintiffs - Appellees,

v.

J. Douglas Cassity; Randall Sutton; Brent D. Cassity; Tyler J. Cassity; Rhonda L. Cassity; Katherine P. Scannell; Randall J. Singer; Howard A. Wittner; Wittner, Spewark and Maylack, PC; David R. Wulf; Wulf, Bates and Murphy, Inc.; Michael R. Butler; Lennie J. Cappleman; James M. Crawford; Larry Keith Hale; Tony B. Lumpkin, III; Erin P. Engle; Nekol Province; Roxanne J. Schnieders; Kelly Tate; George Wise, III; Marianne Jones; Anne Chrun; National Heritage Enterprises, Inc.; Forever Enterprises, Inc., formerly known as Lincoln Heritage Corporation; Lincoln Memorial Services, Inc.; Forever Network, Inc.; Forever Illinois, Inc.; Hollywood Forever, Inc.; Texas Forever, Inc.; National Prearranged Services Agency, Inc.; Legacy International Imports, Inc.; Wise, Mitchell and Associates, LTD; Brentwood Heritage Properties, LLC; Brennen Bank and Trust Company, Defendants, National City Bank, Defendant - Appellant,

Marshall and Ilsley Trust Company, N.A.; Southwest Bank; U.S. Bank, N.A.; Bank of America, N.A.; American Stock Transfer and Trust Company; Comerica Bank and Trust, N.A.; Brown Smith Wallace, LLC; John Does, 1-25; Rhonda L. Cassity, Inc., Defendants, PNC Bank, N.A., Defendant - Appellant,

BMO Harris Bank, N.A.; Richard Markow; Herbert Morisse, Defendants, American Bankers Association; Missouri Bankers Association, Amici on Behalf of Appellant(s).

Jo Ann Howard and Associates, P.C., Special Deputy Receiver of Lincoln Memorial Life Insurance Company, Memorial Service Life Insurance Company, and National Prearranged Services, Inc.; National Organization of Life and Health Insurance Guaranty Associations; Missouri Life and Health Insurance Guaranty Association; Texas Life and Health Insurance Guaranty Association; Illinois Life and Health Insurance Guaranty Association; Kansas Life and Health Insurance Guaranty Association; Oklahoma Life and Health Insurance Guaranty Association; Kentucky Life and Health Insurance Guaranty Association; Arkansas Life and Health Insurance Guaranty Association, Plaintiffs - Appellants,

v.

J. Douglas Cassity; Randall Sutton; Brent D. Cassity; Tyler J. Cassity; Rhonda L. Cassity; Katherine P. Scannell; Randall J. Singer; Howard A. Wittner; Wittner, Spewark and Maylack, PC; David R. Wulf; Wulf, Bates and Murphy, Inc.; Michael R. Butler; Lennie J. Cappleman; James M. Crawford; Larry Keith Hale; Tony B. Lumpkin, III; Erin P. Engle; Nekol Province; Roxanne J. Schnieders; Kelly Tate; George Wise, III; Marianne Jones; Anne Chrun; National Heritage Enterprises, Inc.; Forever Enterprises, Inc., formerly known as Lincoln Heritage Corporation; Lincoln Memorial Services, Inc.; Forever Network, Inc.; Forever Illinois, Inc.; Hollywood Forever, Inc.; Texas Forever, Inc.; National Prearranged Services Agency, Inc.; Legacy International Imports, Inc.; Wise, Mitchell and Associates, LTD; Brentwood Heritage Properties, LLC; Brennen Bank and Trust Company, Defendants,

National City Bank, Defendant - Appellee,

Marshall and Ilsley Trust Company, N.A.; Southwest Bank; U.S. Bank, N.A.; Bank of America, N.A.; American Stock Transfer and Trust Company; Comerica Bank and Trust, N.A.; Brown Smith Wallace, LLC; John Does, 1-25; Rhonda L. Cassity, Inc., Defendants,

PNC Bank, N.A., Defendant - Appellee,

BMO Harris Bank, N.A.; Richard Markow; Herbert Morisse, Defendants,

American Bankers Association; Missouri Bankers Association, Amici on Behalf of Appellee(s)

Nos. 15-3872, 15-3878

United States Court of Appeals, Eighth Circuit

August 17, 2017

Submitted September 20, 2016.

Appeals from United States District Court for the Eastern District of Missouri - St. Louis.

For Jo Ann Howard and Associates, P.C., Special Deputy Receiver of Lincoln Memorial Life Insurance Company, Memorial Service Life Insurance Company, and National Prearranged Services, Inc., National Organization of Life and Health Insurance Guaranty Associations, National Organization of Life and Health Insurance Guaranty Associations, Missouri Life and Health Insurance Guaranty Association, Texas Life and Health Insurance Guaranty Association, Illinois Life and Health Insurance Guaranty Association, Kansas Life and Health Insurance Guaranty Association, Oklahoma Life and Health Insurance Guaranty Association, Kentucky Life and Health Insurance Guaranty Association, Arkansas Life and Health Insurance Guaranty Association, Plaintiffs - Appellees (15-3872): Farrell A. Carfield, Robert J. Kelly, Clare S. Pennington, Larry Pozner, Daniel M. Reilly, Michael P. Robertson, REILLY & POZNER, Denver, CO; Morry Sean Cole, Maurice B. Graham, GRAY & RITTER, Saint Louis, MO; Sean Connelly, ZONIES LAW, Denver, CO; Eric John Magnuson, ROBINS & KAPLAN, Minneapolis, MN.

For National City Bank, PNC Bank, N.A., Defendants - Appellants (15-3872): Michele (Mike) W. Bartolacci, THOMPSON & COBURN, Saint Louis, MO; James F. Bennett, Caitlin E. O'Connell, DOWD & BENNETT, Saint Louis, MO; Teagan J. Gregory, Mary E. Hickcox-Howard, J. Andrew Keyes, Stephen Raber, Amy Saharia, WILLIAMS & CONNOLLY, Washington, DC.

For American Bankers Association, Missouri Bankers Association, Amicus on Behalf of Appellants (15-3872): Susan Ford Robertson, THE ROBERTSON LAW GROUP, Kansas City, MO.

For Jo Ann Howard and Associates, P.C., Special Deputy Receiver of Lincoln Memorial Life Insurance Company, Memorial Service Life Insurance Company, and National Prearranged Services, Inc., National Organization of Life and Health Insurance Guaranty Associations, Missouri Life and Health Insurance Guaranty Association, Illinois Life and Health Insurance Guaranty Association, Kansas Life and Health Insurance Guaranty Association, Oklahoma Life and Health Insurance Guaranty Association, Kentucky Life and Health Insurance Guaranty Association, Arkansas Life and Health Insurance Guaranty Association, Plaintiffs - Appellants: Farrell A. Carfield, Robert J. Kelly, Clare S. Pennington, Larry Pozner, Daniel M. Reilly, Michael P. Robertson, REILLY & POZNER, Denver, CO; Morry Sean Cole, Maurice B. Graham, GRAY & RITTER, Saint Louis, MO; Sean Connelly, ZONIES LAW, Denver, CO.

For Texas Life and Health Insurance Guaranty Association, Plaintiff - Appellant: Farrell A. Carfield, Robert J. Kelly, Clare S. Pennington, Larry Pozner, Daniel M. Reilly, Michael P. Robertson, REILLY & POZNER, Denver, CO; Morry Sean Cole, Maurice B. Graham, GRAY & RITTER, Saint Louis, MO.

For National City Bank, PNC Bank, N.A., Defendants - Appellees: Michele (Mike) W. Bartolacci, THOMPSON & COBURN, Saint Louis, MO; James F. Bennett, Caitlin E. O'Connell, DOWD & BENNETT, Saint Louis, MO; Teagan J. Gregory, Mary E. Hickcox-Howard, J. Andrew Keyes, Stephen Raber, Amy Saharia, WILLIAMS & CONNOLLY, Washington, DC.

For American Bankers Association, Missouri Bankers Association, Amici on Behalf of Appellee(s): Susan Ford Robertson, THE ROBERTSON LAW GROUP, Kansas City, MO.

Before COLLOTON, MELLOY, and SHEPHERD, Circuit Judges.

OPINION

COLLOTON, Circuit Judge.

PNC Bank appeals a jury verdict in favor of special deputy receiver Jo Ann Howard and Associates, P.C., and a group of state guaranty associations (together, Appellees). The jury found PNC liable for negligence and breach of fiduciary duty in violation of its duties as trustee of various preneed trusts created by National Prearranged Services, Inc. On appeal, PNC makes three arguments: (1) the district court improperly concluded that Appellees' claims arise in tort rather than under the law of trusts; (2) Appellees' claims should have been tried to the court rather than a jury; and (3) the district court improperly disallowed PNC's defenses. Appellees cross-appeal, arguing that the district court erroneously dismissed their tort claims alleging that PNC's predecessor-in-interest aided and abetted fraud and breaches of fiduciary duty. We conclude that Appellees' claims arise under trust law, that the claims are properly tried to the court, and that the measure of damages is limited accordingly. We further hold that the district court properly limited PNC's defenses, and correctly dismissed Appellees' aiding-and-abetting claims. We therefore affirm in part, reverse in part, and remand for further proceedings.

I.

This case arises out of the nationwide fraud scheme of National Prearranged Services, Inc. (NPS), a Missouri-based seller of preneed funeral contracts. The Cassity family owned and operated NPS. NPS operated across the country, but the company's activities in Missouri are the subject of this appeal. The Cassitys also owned two...

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