## United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 97-2154

___________ Lincoln Benefit Life Company, a * Nebraska Domestic Insurance * Corporation, *

Plaintiff - Appellant, * District Court for the

v. * Robert R. Edwards, *

Defendant - Appellee. * Appeal from the United States

* District of Nebraska.

*

*

___________ Submitted: November 19, 1997 Filed: July 7, 1998

___________ Before BEAM, HEANEY and JOHN R. GIBSON, Circuit Judges.

___________ JOHN R. GIBSON, Circuit Judge. Lincoln Benefit Life filed a declaratory judgment in Nebraska state court against Robert Edwards, alleging he owed Lincoln $452, 558.29. Edwards removed the action to feder al court and filed a counterclaim for breach of contract. Lincoln raised th e statute of limi tations as an affirmative defense to Edwards' counterclaim. The districtThe Honorable Richard G. Kopf, United States District Judge for the District 1 of Nebraska. -2- court concluded that there was an agency relationship between Lincoln and Edwards, 1 and that the statute of limitations did not begin to run until February 1995, whe n Lincoln terminated the contractual relationship. Lincoln appe als, arguing that Edwards' claim is barred by the statute of limitations, and that the district court incorrectl y decided that the statute of limitations period did not commence until the agenc y relationship ended. We affirm.

Lincoln and Edwards entered into a Marketing Director Agreement effectiv e February 1, 1982. In exchange for overwrite commissions, Edwards agreed to recruit, train, and supervis e general agents to sell Lincoln's policies. The agreement provided that Edw ards was an independent contractor and that amounts payable under th e contract "shall be solely for services as an independent contractor."

The ag reement provided that the agent commission statements rendered b y Lincoln concerning "commissions paid and/or payable, advances and indebte dness shall be conclusive" unless Lincoln received notice within thirty days. The agen t commission statements documented all financial activities for a particular agent , inclu ding commissions earned and "chargebacks" (which occurred when Lincol n advanceda commission on a policy and the policy was canceled before the polic y term). The agreement allowed Lincoln to amend the overwriting commission at an y time, but Lincoln agreed that it would pay all marketing directors the same commission. Contem poraneously with the Marketing Director Agreement, Lincoln and Edward s entered into a General Agent Agreement which also set forth Edwards' obligation to-3-

market insurance products for Lincoln in exchange for commissions. Edwards an d Lincoln later entered into a Master General Agent Agreement on March 2 9, 1984. This agreement

also provided that Lincoln would pay all master general agents the sam e overwriting commission and characterized the relati onship of master agent and Lincoln as an "independent contractor." Although not stated in the written agreements, Lincoln told Edwards that i t would not "compete" to recruit future agents in his geographical area, and that it would assign all agents in the Dallas-Fort Worth area to Edwards.
On March 7, 19 86, Edwards signed an agreement to pay Lincoln $433,100.72, plus interest. This obligation came about from an indebtedness created by several of Edwards' subagents. To help Edwards pay this debt, Lincoln agreed to increase hi s commiss ions and to assist Edwards in the recruitment of additional brokers in th e Dallas-Forth Worth area. In January 1994, Edwards requested an accounting of all transactions under the 1982 agreement. Lincoln denied the request, and on February 21, 1995, Lincol n notified Edwards that it wa s terminating its agreements with him. Lincoln filed suit in state court for breach of the March 7, 1986, contract, as modified by a May 1, 1987, addendum revising Edwards' payment obligations.

Edwards removed the c ase to federal court and filed a counterclaim on June 1, 1995, alleging that Lincoln breache d their agreements by: 1) failing to assign agents in the Dallas-Fort Worth

area to him; and 2) paying some agents at a higher commissionNebraska provides for a five-year statute of limitations for breach of a 2 written contract and a four-year statute of limitations for breach of an oral contract. See Neb. Rev. Stat. §§ 25-205, 206 (1995). -4- ra te. Lincoln raised the statute of limitations as an affirmative defense. Lincoln' s position was that Edwards knew of the alleged breaches more than five years before he filed his counterclaim on June 1, 1995. Lincoln contended that Edwa rds knew about the assignme nt of agents as early as 1985 and about the differing commission rates in 1989.

The district court denied Lincoln's summary judgment motion, concluding that the st atute of limitations did not begin to run until Lincoln terminated the agenc y 2 rela tionship on February 21, 1995. Lincoln now appeals, arguing that the statute o f limitations began to run in 198 9, the date of the alleged breach. Lincoln contends that the court erred i n concluding that the statute of limitations period began from the date Lin coln and Edwards ended their agency relationship and in concluding that the tw o parties had an agency relationship.

I. In general, a cau se of action accrues and the statute of limitations begins to run when the aggriev ed party has a right to institute and maintain a suit. See , e.g. , L. J

. Vontz Constr. Co. v. Department of Roads , 440 N.W.2d 664, 666-67 (Neb. 1989)

. Relyi ng on Central States Resources Corp. v. First National Bank , 501 N.W.2d 27 1 (Neb. 1993), the district court concluded, however, that the statute of limitations did not begin to run when the alleged breach of contract occurred, but rather , the statute did-5-

not commence until Lincoln and Edwards terminated t heir agency relationship in 1995. Lincoln contends that the district court relied on dictum from Central States , and that the court erred in applying Central States at all because Edwards was an independent contractor and not an agent of Lincoln. We review the district court's interp retation of Nebraska law de novo, giving no deference to the district court's interpretation of state law. See Salve Regina College v. Russell , 499 U.S. 225, 231 (1991).

A.

In Central States , the Nebraska Supreme Court stated:
[W]h ere there is a general or continuing agency, a statute of limitation s does not commence to run until the agency is terminated, so that unless the death of one of the parties occurs, the termination of a continuin g agen cy cannot be effective so as to set the statute in motion until a n accounting is had or a demand for an accounting made and refused, o r there is an expre ss repudiation of agency communicated to the principal.
501 N.W.2d at 276.

The dist rict court concluded that there was a general or continuing agenc y relationship between Edwards and Lincoln such that the statute of limitations did not begin to run until February 1995, when E dwards demanded an accounting and Lincoln terminated their contractual relationship.-6-

We summarily reject Lincoln's first argument that the district court relie d on dicta from Central States in concluding that a general or continuing agency re lationship tolled the statute of limitations. The Nebraska Supreme Court decided the statute o f limitat ions had not expired in Central States because there was a continuing agenc y relatio nship between two banks. 501 N.W.2d at 276-77. The direction of the cour t that the statute of limitations period did not commence until the agency relationshi p ende d was central to the court's holding that the statute had not yet expired. Th e language was not dictum, and controls here. Cf. McCuen v. American Cas. Co. , 946 F.2d 1401, 1407 (8th Cir. 1991).

B

.
Lincoln's next argument is that Central States does not apply because Edwards was an independent contractor and not an agent of Lincoln. Lincoln points out that the 1982 a nd 1984 agreements specifically provide that Edwards is an independen t contract or

and not an "employee[] or servant[] of [Lincoln]." Lincoln also contend s that an examination of the ten factors used to determine whether an individual is a n agent or an independent contractor, see Delicious Foods Co. v. Millard Warehouse , Inc. , 507 N.W.2d 631, 636 (Neb. 1993), establishes that Edwards was an independent contractor

and not an agent of Lincoln. The ultimate conclusion of whether a n individual is an independent contractor is a question of law, which we review de novo. See id. ; see also Berger Transfer & Storage v. Central S tates, Southeast and Southwest Areas Pension Fund , 85 F.3d 1374, 1377-78 (8th Cir. 1996); Wal-Mart Stores, Inc. v. Crist , 855 F.2d 1326, 1330 n.4 (8th Cir. 1988).-7-

Whether an agency exists depends on the facts under lying the relationship of the par ties, irrespective of the words or terminology used by the parties to characteriz e their relationship. See Waterhout v. Associated Dry Goods, Inc. , 835 F.2d 718, 720 (8th Cir. 1987); Delicious Foods Co. , 507 N.W.2d at 637. Li ncoln argues that because Edward s determined when he wanted to work and who he wanted to work with, h e controlled his own business and was not an agent of Lincoln.

The district court found, however, that Lincoln had sufficient control ove r Edwards to create an agency relationship. The court pointed out that although th e ma rketing agreement gave Edwards the responsibility of developing and supervisin g Li ncoln's business, this responsibility was subject to Lincoln's rules, regulations an d sta ndards. The agreement barred Edwards from entering into insurance sale s agreements with other insurers. The court acknowle dged that although Lincoln did not
control the manner in which Edwards physically conducted himself in performing his duties, Lincoln required Edwards to operate on Lincoln's behalf and held veto power over Edwards' agent se lections. Lincoln considered Edwards as a marketing director, "the frontline of management for the company." The court determined that Lincol n required Edwards to act as its representative, and Edwards had authority to conduc t business transactions on Lincoln's behalf. Lincoln does not argue that these underlying findings are clearly erroneo us, and we are persuaded that the relationship parallels the rel ationship in Grone v. Lincoln Mutual Life Insurance Co. , 430 N.W.2d 507 (Neb

. 1988). In t

hat case, the Nebraska Supreme Court characterized a similar relationship
as that of a principal and agent. Id. at 511. As here, the individual had an exclusive selling agreement with the insur ance company, and there was evidence of the insurer's ability to control the agent's activities. Id. at 509. Cf. Birchem v. Knights of-8-

Columbus , 116 F.3d 310, 313 (8th Cir. 1997); Moore v. Hartford Fire Ins. Co. , 481 N.W.2d 196, 197 (Neb. 1992). We conclude that an agencyrelationship existed between Edwards and Lincoln and tha t the statute of limitations did not begin to run until February 1995, when th e agency re lationship ended. Accordingly, we need not consider Edwards' alternativ e argument that the statute of limitations was tolled because of fraudulent concealment or Lincoln's argument that Edwards claim is actually a claim for an "account stated." We affirm the district court's judgment. BEAM, Circuit Judge, concurring.
I concur in the resu lt reached by the court, and write separately only to address a distinction which the parties failed to discern. Lincol n argues that Edwards could not have been an agent because he was an independent contractor. This, however, is a false dicho tomy. An agent can be either an independent contractor or an employee

. See , Restatement (Second) of Agency § 14N. For example, the attorney-clien t relatio nship is an agent-principal relationship and yet attorneys are also independen t contracto rs. See 41 Am. Jur. 2d Independent Contractors § 2. The ability o f independent contrac tors to be agents is beyond dispute. The parties' confusion seems to stem from the occasional ten dency of courts to use "agent" as a colloquial synonym for"emp loyee" when distinguishing between an employee and an independen t cont ractor. See, e.g. , Delicious Foods Co. v. Millard Warehouse ,Inc. , 507 N.W.2 d 631, 636 (Neb. 1993).
Inthis case, we are not concerned with whether Edwards was Lincoln' s employee or an independent contractor. We are concerned with whether Edwards was-9-

Linc oln's agent, because only agency will toll the statute of limitations. Unde r Nebraskalaw, one is an agent if he or she acts: (1) for the benefit of another and (2) subject to that other’s control. See, e.g. , Andrews v. Schram , 562 N.W.2d 50, 5 4 (Neb. 1997). Edwards meets both prongs of this test. Therefore, the court correctly holds that the resulting agency relationship served to toll the statute of limitations, and I concur. A true copy.
Attest: CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.