United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 96-2572

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Alfred W. Harre, *

*

Plaintiff/Appellee, *

*

Bernice E. Harre, *

*

Plaintiff, *

*

David Bening, *

*

Plaintiff/Appellee, *

* Appeal from the United States

v. * District Court for the 

* Eastern District of Missouri.

Arthur G. Muegler, *

* (PUBLISHED)

Defendant/Appellant. *

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 Submitted: April 17, 1997

 Filed: May 23, 2997

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Before BOWMAN, HANSEN, and MURPHY, Circuit Judges.

___________

PER CURIAM.

In 1990, Alfred and Bernice Harre and David Bening sued Arthur

Muegler, alleging claims of fraudulent and negligent misrepresentation.

During a long discovery period, Muegler failed to provide requested

documents, to respond to interrogatories, or to answer deposition

questions, asserting his fifth amendment privilege. As a sanction for his

noncompliance with discovery
The Honorable Charles A. Shaw, United States District Judge

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for the Eastern District of Missouri.

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requests and orders, the district court barred him from presenting

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undisclosed evidence or testifying at trial. He nevertheless prevailed

with the jury, but the judgment was overturned because of erroneous jury

instructions. See Bening v. Muegler, 67 F.3d 691 (8th Cir. 1995). In the

second trial, a jury awarded Bening and Alfred Harre $260,000 each for

compensatory and punitive damages. Muegler appeals from the adverse

judgment, contesting the sanctions imposed by the court, its evidentiary

rulings, the jury instructions, and the sufficiency of the evidence. We

affirm. 

The evidence presented at trial is recited here in the light most

favorable to the verdict. Newhouse v. McCormick & Co., Inc., 110 F.3d 635,

637 (8th Cir. 1997). Alfred Harre and Bening are Illinois farmers who

invested in Concepts Communications and a related limited partnership in

1988 and 1989. James Grice, who was Concepts' president, and Muegler, who

was Concepts’ attorney throughout most of this period, had organized and

conducted several promotional meetings that Harre and Bening attended.

Muegler introduced Grice to the potential investors as a computer and

communications expert, and Grice introduced Muegler as the former counsel

of Emerson Electric Company. Muegler represented that the companies were

involved in the telecommunications business and that money invested in them

would be used to purchase telephone equipment and run the businesses.

Harre and Bening each invested over $80,000, three fourths of it in a

limited partnership which Muegler stated had a contract to provide beeper

and pager service to the state of Illinois. There was no such contract,

however, and the limited partnership never operated as a business. The

funds invested by Harre and Bening were not used to purchase telephone

equipment, and there was evidence that the $120,000 supposedly invested in

the partnership was used instead to purchase a
Grice had been convicted in 1980 and 1981 of several counts

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of theft in Texas but was later paroled.

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certificate of deposit to secure a $120,000 loan for Concepts. An amount

almost equal to that loan amount was spent by Concepts to open a gay bar

in St. Louis.

In December 1989, police raided Concepts’ offices and arrested Grice,

who as a convicted felon was prohibited from selling securities. There

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was evidence that Muegler knew Grice was a convicted felon, and it was

revealed after the raid that Concepts did not own its telephone equipment

but was leasing it. The lessor took control, and Concepts was left without

any assets. The Harres and Bening then sued Muegler, alleging that they

had lost the total value of their investments because of Muegler’s improper

conduct. 

During discovery, Muegler failed to produce requested pre-trial

documentary evidence, to answer interrogatories, or to identify his

witnesses. He ignored orders of the district court to compel, and asserted

the fifth amendment at his deposition. Plaintiffs were therefore unable

to discover his evidence. As a sanction for noncompliance, the court

prevented him from presenting any evidence he had not turned over during

discovery and from testifying. Shortly before trial, Muegler indicated

that documentary evidence would be made available for review and that he

would waive his fifth amendment privilege. The district court found that

Muegler’s offer of discovery had occurred too late in the course of trial

preparation and that permitting undiscovered evidence at trial would

prejudice the plaintiffs. On appeal, Muegler argues that the district

court should not have imposed those sanctions.

A careful review of the record reveals an almost complete failure to

give discovery on the part of Muegler. Muegler
Both Grice and Muegler were indicted in Illinois on charges

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of the unlawful sale of securities and theft, and Grice was

indicted on the additional offense of deceptive practice. In 1993,

Grice was convicted of seven counts of the unlawful sale of

securities, two counts of theft, and one count of the offense of

deceptive practice, but the charges against Muegler were dismissed

after the original verdict in this case. The Illinois criminal

charges were reinstated after the judgment in his favor was

reversed.

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disregarded court orders to answer interrogatories or produce documents,

and he refused to answer any questions in his deposition other than to give

his name. He claimed that he did not have necessary information to comply

with discovery requests because documents and files had been seized in the

police raid and were in the possession of Illinois prosecutors who were

pursuing criminal charges against Grice and him. The docket sheet from

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the Illinois criminal case indicates, however, that the state had complied

with Muegler's discovery request for those documents almost two years

before he admitted they were available and before he supplemented his

answers to interrogatories. Only after the district court imposed

sanctions and trial was soon to begin did Muegler indicate a willingness

to produce the documents, identify his witnesses, and waive his fifth

amendment privilege. 

Although Muegler now claims the district court should be reversed,

he still has not specified what particular evidence was excluded, its

substance, or how he was prejudiced by its exclusion. See Strong v.

Mercantile Trust Co., N.A., 816 F.2d 429, 432 (8th Cir. 1987) (offer of

proof is necessary for appellate court to determine whether exclusion of

evidence was prejudicial). Under the unusual circumstances presented, the

imposition of sanctions preventing Muegler from introducing undisclosed

evidence was not an abuse of discretion and did not result in a

constitutional violation. See Boardman v. National Med. Enters., 106 F.3d

840,
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844 (8th Cir. 1997); see also SEC v. Graystone Nash, Inc., 25 F.3d 187,

191-92 (3d Cir. 1994).

Muegler makes a number of other claims of error which he asserts

individually and cumulatively resulted in constitutional violations and had

an adverse effect on the jury. He argues that the district court abused

its discretion in several evidentiary rulings and violated the Constitution

by admitting irrelevant, incompetent, and unduly prejudicial evidence while

excluding other relevant evidence. He also argues there was not enough

evidence to support the giving of several jury instructions, that they

misstated the law and contained errors permitting the jury to return a

verdict outside the law, and that the punitive damages instructions were

unconstitutional. Finally, he contends that the plaintiffs did not state

a claim of negligent misrepresentation in their complaint, establish their

claims as a matter of law, or prove damages. Harre and Bening respond that

there was overwhelming evidence to prove their claims and damages, the

district court did not abuse its discretion in its evidentiary rulings, and

the jury instructions properly stated the law.

After thoroughly examining the record and considering Muegler's

arguments, we conclude that the claims of error are without merit. There

was substantial admissible evidence to support the giving of all the jury

instructions and the resulting verdict, and the district court did not

abuse its discretion in its evidentiary rulings. The jury instructions

taken as a whole adequately and fairly stated the law, and Muegler has not

shown he was prejudiced by any error or that his constitutional rights were

violated.

For these reasons, the judgment of the district court is affirmed.
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A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.