United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 98-2132

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S & W Agency, doing business as

Farm and City Insurance Services,

Inc.; Gaylord Wooge,

Appellees,

v.

Foremost Insurance Company;

Foremost County Mutual Insurance;

American Federation Insurance

Company; Foremost Signature

Insurance Company; George H.

Shattuck,

Appellants.

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National Association of

Independent Insurers,

Amicus on Behalf

of Appellant.

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Appeal from the United States

District Court for the

Northern District of Iowa.

[UNPUBLISHED]

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Submitted: April 21, 1999

 Filed: May 14, 1999

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1

 The Honorable Richard G. Kopf, United States District Judge for the

District of Nebraska, sitting by designation.

2

Before BEAM and HANSEN, Circuit Judges, and KOPF,1 District Judge. 

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PER CURIAM.

Gaylord Wooge owns and operates Farm and City Insurance Services, an

independent insurance agency located in Forest City, Iowa. Mr. Wooge conceived of

a unique insurance endorsement that was particularly well-suited for recreational

vehicle (RV) owners. Foremost Insurance Company (Foremost) provided the

necessary underwriting for Wooge's product. Over the years, Mr. Wooge's

endorsement became known in the industry as the "Wooge endorsement," and it was

very successful. The relationship between Mr. Wooge and Foremost was also unique

in that Mr. Wooge conceived of and secured various agreements with RV

manufacturers and RV manufacturers' associations that were necessary to make the

Wooge endorsement viable and profitable. These efforts cost Mr. Wooge a

considerable amount of time and money, and also earned him substantial commissions

from Foremost.

After several years of a peaceful working relationship between Mr. Wooge and

Foremost, Foremost began secret plans to directly market a competing endorsement and

to eliminate or severely reduce Mr. Wooge's earned and future commissions. During

this time, whenever Mr. Wooge became suspicious, Foremost provided him with

various reassurances. In June 1992, Foremost was finally in a position to capture Mr.

Wooge's RV business and it terminated his agency. Upon terminating Mr. Wooge,

Foremost attempted to thwart his efforts to transfer his book of business to another

insurance underwriter, thus compounding the harm suffered by Mr. Wooge.
2

 The Honorable John A. Jarvey, Chief United States Magistrate Judge for the

Northern District of Iowa, to whom the case was assigned with the consent of the

parties. See 28 U.S.C. § 636(c).

3

Mr. Wooge then commenced the present diversity action alleging the following

claims: (1) breach of contract; (2) tortious interference with a contract; (3) fraudulent

misrepresentation; (4) fraudulent nondisclosure by a fiduciary; and (5) misappropriation

of trade secrets. A jury returned a verdict in favor of Mr. Wooge on all claims, and

awarded him $688,000 in compensatory damages and $8 million in punitive damages.

On Foremost's posttrial motions, the district court2 upheld the jury's verdict as to

liability and the amount of compensatory damages. The district court granted a new

trial limited to the question of punitive damages. The parties waived their right to a

jury trial on the punitive damages issue. After hearing evidence in the second trial, the

district court concluded that Mr. Wooge had presented compelling evidence of

fraudulent conduct on the part of Foremost, and it awarded Mr. Wooge $4 million in

punitive damages.

Having carefully reviewed the record and having considered the 31 separate

issues Foremost argues on appeal, see Financial Holding Corp. v. Garnac Grain Co.,

Inc., 965 F.2d 591, 596 (8th Cir. 1992), we agree with the district court's

determinations as to liability and compensatory damages. We further agree with the

district court's conclusion that the evidence of Foremost's fraudulent conduct warrants

a substantial award of punitive damages in the amount of $4 million. We are not

persuaded by Amicus's arguments that by affirming the district court's judgment in this

case, we are upsetting settled legal expectations that exist between insurers and

independent insurance agents. The relationship between Mr. Wooge and Foremost was

atypical to say the least. Moreover, Foremost's conduct, we hope, was also

atypical—nobody has a settled expectation to engage in, or to be engaged by,

fraudulent conduct.
4

In sum, we believe that the district court thoroughly and correctly addressed the

controlling issues involved in this case. Accordingly, we affirm the judgment of the

district court. See 8th Cir. Rule 47B.

A true copy.

Attest:

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