Court Opinion

ID: 4176712
Source: CourtListenerOpinion
Date Created: 2017-06-12 15:04:14.453738+00
Date Added: 2024-06-11T07:47:12.747766
License: Public Domain

United States Court of Appeals
                             For the Eighth Circuit
                          _________________________

                                 No. 16-2417
                          _________________________

   John W. Cromeans, Individually and in behalf of all others similarly situated;
              Elkton Bank and Trust Company; Robert Benisch

                                       Plaintiffs - Appellants

                                          v.

              Morgan Keegan & Company; Armstrong Teasdale, LLP

                                       Defendants - Appellees

                                 _______________

                      Appeal from United States District Court
                for the Western District of Missouri - Jefferson City
                                _______________

                             Submitted: March 7, 2017
                               Filed: June 12, 2017
                                _______________

Before RILEY, Chief Judge,1 GRUENDER, Circuit Judge, and GRITZNER, District
Judge.2
                              _______________

      1
       The Honorable William Jay Riley stepped down as Chief Judge of the United
States Court of Appeals for the Eighth Circuit at the close of business on March 10,
2017. He has been succeeded by the Honorable Lavenski R. Smith.
      2
        The Honorable James E. Gritzner, United States District Judge for the Southern
District of Iowa, sitting by designation.
GRITZNER, District Judge.

       Plaintiffs John W. Cromeans, Robert Benisch, and Elkton Bank and Trust
Company (collectively, “Plaintiffs”), class representatives, appeal the district court’s3
denial of their motion to enforce the settlement agreement in a securities class action,
as well as the district court’s denial of a subsequent motion to alter or amend.
Defendants Morgan Keegan and Company (“Morgan Keegan”) and Armstrong
Teasdale LLP (collectively, “Defendants”) move to dismiss Plaintiffs’ appeal. For the
reasons stated below, we affirm the district court and deny Defendants’ motion to
dismiss.

I.    BACKGROUND
      This appeal arises out of litigation involving Defendants’ alleged violations of
the Missouri Securities Act relating to a failed bond issue (the Bonds) by the City of
Moberly, Missouri. Morgan Keegan served as underwriter of the Bonds, and the
bonds were sold on the secondary market by Morgan Keegan and by other
broker-dealers.

       Plaintiffs, proceeding as a class action, defined the class as all persons
nationwide who purchased the Bonds between the date of the first offering and the
date Morgan Keegan reduced the price of the bonds. Defendants resisted class
certification, arguing that other than those who originally purchased from Morgan
Keegan, it would be impossible to identify bondholders who had purchased the Bonds
in the secondary market from other broker-dealers or from those who purchased the
bonds on the secondary market and later sold them. The district court certified the
class in September 2014. By the end of the opt-out period, class members whose
aggregate Bond holdings represented most of the par value of the Bonds had retained
separate counsel and opted out. The remaining members of the class had purchased

      3
      The Honorable Nanette K. Laughrey, United States District Judge for the
Western District of Missouri.

                                          -2-
or held Bonds with a total par value of $8,455,000. On January 14, 2015, the case
settled after the jury had been impaneled for trial but prior to opening statements.

       That day, the parties announced their settlement agreement on the record before
the district court. That discussion proceeded as follows, in relevant part:

             MR. HATFIELD [Attorney for Defendant Morgan Keegan]: Your
      Honor, the only thing I would add is, just to make sure we get it all on
      the table, defendants do intend to propose that for some people, that if
      they don’t make a claim or - well, let me back up.

             So there are people that have - own the bonds today, easily,
      identifiable. Some of them are still Morgan Keegan clients. Those
      people are really easy to deal with and to handle.

             THE COURT: Right.

              MR. HATFIELD: There are some of these other people that I may
      have erroneously named yesterday who bought from others who are a
      little hard to find that we talked about yesterday.

             We do anticipate proposing a process for those people in which,
      if they do not submit claims, Morgan Keegan could receive some of the
      pot back, but that would be for a defined set of the class.

             THE COURT: What is predicted as to the size?

             MR. SUTER [Attorney for Defendant Morgan Keegan]: Your
      Honor, one of the conditions that wasn’t mentioned is that the bonds be
      tendered back and Morgan Keegan will become the owner of the bonds.
      So in exchange for the pro rata amount of settlement funds that are
      available after attorneys’ fees, those folks who actually submit the claims
      and who give us their bonds will, in exchange, get their pro rata share of
      the settlement proceeds.

                                         -3-
             To the extent that we don’t know who those folks are - - and it’s
      about a third of the class, we don’t know who they are, which is why
      we’ve made these arguments all along - - if those folks don’t make a
      claim, we get that money back because we’re not getting their bonds in
      return.

             Separately - - separate and apart from that, there are nine of the
      known Morgan Keegan clients who have bought and sold their bonds.
      They have a defined amount of money that they lost, and we’ve
      calculated that, and we’ve shared that with the plaintiffs. Those folks
      would also be settling class members who would get their proportionate
      share out of what’s left after attorneys’ fees. So it would be all-inclusive
      of all of the folks that are Morgan Keegan clients, and it would be
      all-inclusive of the folks who we do not know who make claims and give
      us their bonds in exchange for the pro rata share of what Your Honor
      may approve.

             THE COURT: Now, I know there’s been a discussion about being
      able to identify that group, and I guess - -

             MR. FRANCIS [Attorney for Plaintiffs]: When there’s money on
      the table, they’ll come out. . . . .

Appellants’ App. 84-86. Later, when discussing the claims process for bondholders,
an attorney for Defendants stated that the dollar amount of the settlement was to be
“[a]ll-inclusive of the unknown folks.” Appellants’ App. 88.

      Eight weeks later, on March 11, 2015, the parties filed a Stipulation of
Settlement (the Stipulation) memorializing their agreement. The Stipulation released
Defendants from all claims relating to the Bonds and included an appellate waiver
binding on Plaintiffs and Defendants, which covered both appeals of the district
court’s judgment as well as post-judgment proceedings. The Stipulation also included
a merger clause and provided that the agreement was to be governed by Missouri law.

                                          -4-
       In the Stipulation, Defendants agreed to pay up to $8,250,000 (the “Gross
Settlement Amount”) to settle the litigation. The ultimate payout was to depend on
a subsequent tender process. The parties agreed that Defendants would pay a fixed
$3,064,863 in attorneys’ fees, costs, and class representative enhancements. In
addition, Defendants would pay an amount up to $5,185,317 (the “Net Settlement
Fund”) pursuant to the two-step formula described below.

      The Stipulation divided the class into six Groups based on which Bonds a class
member purchased and how the Bonds were purchased. Holders of Series B Bonds
had received payments not shared by holders of other Bonds, so Series B bondholders
were treated differently. The Stipulation set forth the Groups as follows:

      •     Class Members who hold Series B Bonds with a total par value of
            $2,495,000 (Group 1).

      •     Class Members who hold all other bonds with a total par value of
            $5,960,000 (Group 2).

      •     Nine known Morgan Keegan Purchasers who sold their Moberly
            Bonds and incurred realized losses. The amount of realized losses
            by known Morgan Keegan Purchasers who sold their Moberly
            Bonds is believed to be $121,984 (Group 3).

      •     Any other Class Members who sold their Moberly Bonds but did
            not suffer any losses (Group 4).

      •     Class Members who are unknown Non-Morgan Keegan
            Purchasers who sold Series B Bonds for a loss at other Broker-
            Dealers (Group 5).

      •     Class Members who are unknown Non-Morgan Keegan
            Purchasers who sold Bonds other than Series B for a loss at other
            Broker-Dealers (Group 6).

                                        -5-
Appellants’ App. 36. The Stipulation also states, “No allocation of potential net
Settlement percentage recovery has been made by Plaintiffs to (i) Group 4 because
Class Members in that group sustained no losses, or (ii) Group 5 or Group 6 because
it is presently unknown if those Non-Morgan Keegan Purchasers suffered any losses
at other Broker-Dealers.” Id.

      The Stipulation then set forth a two-step process for calculating the ultimate
amount of the payment to be made to the class. The Stipulation included a table
(Table 1) that set forth the background facts for application of the two-step process.

                                      Table 1

Cromeans v. Morgan Keegan & Co, Inc., No. 2:12-CV-04269-NKL, slip op. at 3
(W.D. Mo. Jan. 11, 2016); Appellants’ App. 37. Table 1 represents that the par value
of the “Bonds Currently Held” by Groups 1 and 2 together was $8,455,000. Below
Table 1, the Stipulation set forth the two-step calculation process:

             Step 1: The dollar amount of any payment from the Net
      Settlement Fund that any Class Member in Group 1 or in Group 2 may
      receive will depend upon the actual number of Bonds (at par value) that
      are tendered to Morgan Keegan to “buy back” in connection with this

                                         -6-
      Settlement, which will in turn affect the amount of the Gross Settlement
      Amount that Morgan Keegan and Armstrong Teasdale will be obligated
      to fund. This is so because if Bonds currently held by Class Members
      are not tendered to Morgan Keegan, then Morgan Keegan and Armstrong
      Teasdale are not obligated to fund the proportionate amount of Gross
      Settlement Amount represented by Bonds that are not tendered.

            Step 2: The dollar amount of any payment from the Net
      Settlement Fund that any Class Member in Group 1 or in Group 2 may
      receive will further depend upon whether or not any Class Members in
      Group 5 or in Group 6 submit timely and proper Claim Forms. This is
      so because:

             (i) if any valid claims are submitted by Group 5 Class Members,
             this may increase the current total known losses on Series B
             Bonds, and hence may reduce accordingly the amount to which
             individual Series B Class Members may entitled from the Net
             Settlement Fund allocated to Series B Members as set forth in
             Column 8 for Group 1 (i.e., 9.88%) in the chart above; and/or

             (ii) if any valid claims are submitted by Group 6 Class Members,
             this may increase the current total known losses on Bonds other
             than Series B Bonds, and hence may reduce accordingly the
             amount to which individual Class Members other than Series B
             Class Members may entitled from the Net Settlement Fund as set
             forth in the Column 8 for Group 2 (i.e., 88.09%) in the chart
             above.

Appellants’ App. 37-38.

       On October 2, 2015, the district court granted Plaintiffs’ motion for final
approval of the Stipulation and dismissed Plaintiffs’ claims with prejudice. Once the
time for bondholders to tender their Bonds had expired, Morgan Keegan had received
Bonds representing $6,970,000 of the outstanding $8,455,000 par value. This
represented approximately 82.44% of the par value of the outstanding Bonds.

                                         -7-
Defendants multiplied the Net Settlement Fund value ($5,185,317) by the percentage
of par value Bonds tendered by bondholders in Groups 1 and 2 (82.44%) to reach a
value of $4,274,590 owed pursuant to Step 1 of the Stipulation. To this, Defendants
added $121,948 owed to Group 3. This resulted in a sum of $4,396,538 that
Defendants claimed they were obligated to fund pursuant to Step 1.

      Then, applying Step 2, Defendants reallocated a portion of the funds owed to
Groups 1 and 2 to Groups 5 and 6 based on the volume of claims submitted by class
members in the latter Groups. Class members in Groups 5 and 6 submitted claims
corresponding to Bonds with a total par value of $880,000. Defendants then offset
these claims against the claims of bondholders in Groups 1 and 2 and did not
recalculate the total amount owed to the class. Adding the value of $4,396,538 to the
fixed $3,064,683 allocated for fees, costs, and class representatives, Defendants
calculated their total liability under the Stipulation to be $7,461,221.

       After Defendants paid the $7,461,221, Plaintiffs filed a Motion to Enforce
Stipulation of Settlement (“Motion to Enforce”). Plaintiffs argued that the claims
made by class members in Groups 5 and 6 reduced the number of “Bonds currently
held” under Step 1 because the Bonds sold by class members in Groups 5 and 6 were
not held by class members in Groups 1 and 2 at the time of the Stipulation. Plaintiffs
claimed that Defendants’ refusal to exclude the par value of the Bonds subject to
claims by Groups 5 and 6 resulted in a shortfall of $380,954. The district court denied
the Motion to Enforce and held that Defendants’ payment calculations complied with
the Stipulation. The district court held that the Stipulation did not increase
Defendants’ payment obligations based on claims made by Groups 5 or 6 but merely
allocated the funds owed among class members.

       Plaintiffs then moved to alter or amend the district court’s order, which the
district court also denied. Plaintiffs argued that the district court improperly placed
the burden of proof upon them, but the district court found that its prior order

                                         -8-
construed the Stipulation as a matter of law and thus did not take into account burdens
of proof. The district court also rejected Plaintiffs’ argument that its construction of
the Stipulation was unreasonable simply because under certain circumstances
application of the calculation process could have resulted in the class receiving
nothing, noting that most of the outstanding Bonds actually were tendered. Plaintiffs
appeal these rulings.

       On May 20, 2016, after Plaintiffs filed their Notice of Appeal, Plaintiffs moved
for an order requiring the settlement administrator to distribute to the class the
proceeds from the settlement that had been paid by Defendants. The amount to be
distributed did not include the disputed $380,954 that is the subject of this appeal. On
July 18, 2016, the district court ordered the settlement administrator to distribute the
funds to the class. Per the Stipulation, the back of each check was to contain a release
of claims against the Defendants “for all claims alleged or which could have been
alleged in District Court for the Western District of Missouri case, 2:12-cv-04269-
NKL . . . including all claims relating to the Moberly Bonds.” Appellants’ App. 28.
After Plaintiffs filed their opening brief in this appeal, Defendants filed a Motion to
Dismiss the Appeal (“Motion to Dismiss”) based on this distribution, arguing that the
instant case is now moot.

II.    DISCUSSION
       A.     Motion to Dismiss
       Defendants contend that the distribution of settlement checks to the class moots
Plaintiffs’ appeal and finally resolves this case. Defendants argue that the releases
and waivers contained in the Stipulation and in the settlement checks prevent
Plaintiffs from pursuing any further appeals, and that receipt of settlement
extinguishes Plaintiffs’ claims. Defendants thus argue that Plaintiffs lack Article III
standing and that application of the prudential mootness doctrine would also be
appropriate.

                                          -9-
       The fundamental requirement that federal jurisdiction requires “cases or
controversies” means that federal courts cannot entertain claims that are moot. Life
Inv’rs Co. of Am. v. Fed. City Region, Inc., 687 F.3d 1117, 1121 (8th Cir. 2012).
“‘When, during the course of litigation, the issues presented in a case lose their life
because of the passage of time or change in circumstances . . . and a federal court can
no longer grant effective relief, the case is considered moot’ and cannot be heard by
a court.” Id. (alteration in original) (quoting Ali v. Cangemi, 419 F.3d 722, 723 (8th
Cir. 2005) (en banc)). “If an issue is moot in the Article III sense, we have no
discretion and must dismiss the action for lack of jurisdiction.” Ali, 419 F.3d at 724.

       This appeal continues to present a live controversy, notwithstanding the various
waivers and releases in the Stipulation and settlement checks and even the distribution
of funds to the class. Plaintiffs are not pursuing their original claims relating to the
Bonds. Rather, the dispute before this court concerns whether Defendants fully
discharged their obligations under the Stipulation. The Stipulation explicitly granted
that the district court would have continuing jurisdiction for the purposes of
“enforcing this Agreement” and “addressing settlement administration matters.”
Appellants’ App. 33. Settlement agreements are contracts that confer standalone
rights and duties upon each party. See Vidacak v. Okla. Farmers Union Mut. Ins., 274
S.W.3d 487, 490 (Mo. Ct. App. 2008) (“Release agreements, like that signed by
Respondent and his wife in this case, are contracts.”); Anderson v. Bd. of Curators of
the Univ. of Mo., 103 S.W.3d 394, 399 (Mo. Ct. App. 2003) (“Principles applicable
to contractual agreements govern our interpretation of the professors’ releases or
settlement agreements, and our primary goal is to enforce the parties’ intended
agreement.” (internal citations omitted)).4 Like the releases in the Stipulation, the
releases printed on the settlement checks distributed to the class relate to the
underlying securities claims, not disputes over whether Defendants complied with the
terms of the Stipulation.

      4
         There is no dispute that Missouri law governs the interpretation of the
Stipulation based on its choice of law provision. See Downing v. Riceland Foods,
Inc., 810 F.3d 580, 587 (8th Cir. 2016).

                                         -10-
       This court also declines to dismiss Plaintiffs’ appeal as prudentially moot.
Prudential mootness is a discretionary doctrine that allows courts to dismiss a case
where the court is unable to provide an effective remedy. See Ali, 419 F.3d at 724.
This appeal concerns whether Defendants owe the class an additional $380,954 over
and above the funds already distributed. The district court has the ability to provide
that remedy. Defendants imply that interpreting the Stipulation in accordance with
Plaintiffs’ position on appeal could result in a liability calculation according to which
Defendants would be entitled to claw back funds from the class, but Defendants have
identified no evidence that would lead to such a scenario, nor have Defendants
appealed the district court’s order compelling the settlement administrator to pay the
class members.

      B.     Construction of the Stipulation
      On appeal, Plaintiffs argue that the district court erred in construing the
Stipulation by failing to interpret the phrase “Bonds currently held” according to its
ordinary meaning. Plaintiffs also argue that the district court failed to consider the
Stipulation as a whole and misapplied the burden of proof, and that the resulting
construction was patently unreasonable.

       This court reviews a district court’s construction of a settlement agreement de
novo. United States v. Bailey, 775 F.3d 980, 981 (8th Cir. 2014); Transcon. Ins. Co.
v. Rainwater Const. Co., 509 F.3d 454, 456 (8th Cir. 2007). “Interpretation of a
release or a settlement agreement is governed by the same principles applicable to any
other contractual agreement, and the primary rule of construction is that the intention
of the parties shall govern.” Andes v. Albano, 853 S.W.2d 936, 941 (Mo. 1993).
Missouri courts determine the intent of the parties “based on the contract language
alone unless its terms are ambiguous.” Health Care Found. of Greater Kan. City, 507
S.W.3d 646, 661 (Mo. Ct. App. 2017); see also Andes, 853 S.W.2d at 941
(“[L]anguage that is plain and unambiguous on its face will be given full effect within
the context of the agreement as a whole unless the release is based on fraud, accident,
misrepresentation, mistake, or unfair dealings.”). “Under Missouri law, determining

                                          -11-
the meaning of an unambiguous provision is a question of law for the court,
determined by giving language its plain and ordinary meaning without resort to
extrinsic evidence.” Shaw Hofstra & Assocs. v. Ladco Dev., Inc., 673 F.3d 819, 825
(8th Cir. 2012) (quoting Weitz Co. v. MH Washington, 631 F.3d 510, 524 (8th Cir.
2011)). “A contract is ambiguous when the terms are susceptible of more than one
reasonable meaning.” Id. (quoting Weitz, 631 F.3d at 524).

        Plaintiffs argue that the district court misconstrued the term “Bonds currently
held.” The provision of the Stipulation setting forth “Step 1” states, “[I]f Bonds
currently held by Class Members are not tendered . . . then [Defendants] are not
obligated to fund the proportionate amount of Gross Settlement Amount represented
by Bonds that are not tendered.” Appellants’ App. 37. This provision requires the
calculation of a percentage of the Net Settlement Fund to be paid by Defendants based
on the par value of the Bonds that were eventually tendered. The parties agree that the
par value of the Bonds actually tendered was $6,970,000. The parties disagree,
however, about how the Stipulation defines the appropriate point of comparison,
though both agree that the Stipulation compels a comparison between the Bonds
tendered and the “Bonds currently held.” Defendants defined the “Bonds currently
held” as a constant value of $8,455,000 in par value based on, among other references,
Table 1. Plaintiffs argue that the Bonds tendered should only be compared against the
par value of Bonds actually held by members of the class (those in Groups 1 and 2)
at the time the Stipulation was executed. Because class members in Groups 5 and 6
made claims for losses relating to Bonds totaling $880,000 of par value, the amount
of “Bonds currently held” should be reduced accordingly by $880,000. Plaintiffs
argue this view best represents the ordinary meaning of the phrase “Bonds currently
held.” Claims from class members in Groups 5 and 6, who had sold their Bonds,
reflect the fact that some number of Bonds were not held by class members at the time
of settlement.

      The Stipulation, however, unambiguously defines the par value of “Bonds
currently held” as a fixed amount: $8,455,000. Table 1 represents that $8,455,000 is

                                         -12-
the par value of “Bonds Currently Held,” and as the district court noted, there is no
indication in the Table that this number is subject to change. The Stipulation contains
other references to the class members “hold[ing],” in the present tense, Bonds totaling
$8,455,000 in par value. E.g., Appellants’ App. 36 (Group 1 holds Bonds with par
value of $2,495,000, and Group 2 holds Bonds with par value of $5,960,000). By
contrast, the use of the phrase “Bonds currently held” in the description of Step 1,
which Plaintiffs highlight, contains no similar definitional referent. Rather, as the
district court noted, the description of Step 1 states that Defendants have no obligation
to pay the class with respect to Bonds that are not tendered.

       Plaintiffs argue that a view of the Stipulation as a whole shows that the
$8,455,000 figure simply represents the par value of the Bonds originally purchased
by class members, not those currently held. According to Plaintiffs, the definitions
of Groups 5 and 6 – class members who had sold their Bonds for a loss – shows that
it was understood that the value of “Bonds currently held” would be less than
$8,455,000. Plaintiffs also point to the definition of Step 2, which provides that the
amounts that Groups 1 and 2 will receive is conditional on claims submitted by
Groups 5 and 6; this, in Plaintiffs’ view, also reflects an understanding that class
members in Groups 1 and 2 did not currently hold Bonds with a combined par value
of $8,455,000 at the time the Stipulation was signed. Nevertheless, as stated above,
the Stipulation explicitly represents that $8,455,000 was the value of “Bonds currently
held.” The district court correctly observed that the definition and inclusion of Groups
5 and 6, and the effect that claims from those Groups have on the Step 2 calculation,
each relate not to the total amount owed by Defendants but to the relative amounts
owed toward each Group.

       Ultimately, the language of the Stipulation clearly states that the value of
“Bonds currently held” was a fixed amount, or $8,455,000. Plaintiffs’ argument that
the Stipulation did not mean to do this relies on assumptions that the parties did not
mean to say what the Stipulation says, but instead meant to state that the value of
“Bonds currently held” depended on the outcome of the claims process. Under

                                          -13-
Missouri law, an “[a]mbiguity arises only where the terms are reasonably open to
more than one meaning, or the meaning of the language used is uncertain.” Health
Care Found., 507 S.W.3d at 661 (quoting Woods of Somerset, LLC v. Developers
Sur. & Indem. Co., 422 S.W.3d 330, 335 (Mo. Ct. App. 2013)). “Ambiguity does not
arise merely because the parties disagree over the meaning of a provision, and courts
may not create ambiguity by distorting contractual language that may otherwise be
reasonably interpreted.” Id. (quoting Woods of Somerset, 422 S.W.3d at 335).
Where, as here, the contract is subject to only one reasonable interpretation, “the
parties’ intent may be gathered from the terms of the contract alone, and no extrinsic
evidence may be introduced to contradict the terms of the contract or to create an
ambiguity.” State ex rel. Greitens v. Am. Tobacco Co., 509 S.W.3d 726, 741 (Mo.
2017). The district court did not err in interpreting the Stipulation according to its
unambiguous meaning and in holding that Defendants complied with the Stipulation’s
payment obligations.

       Plaintiffs also argue that the district court erred in not considering statements
made on the record before the district court regarding the parties’ settlement prior to
the drafting of the Stipulation. Plaintiffs argue that the statements before the district
court are not parol evidence because the transcript of the colloquy before the district
court was incorporated into the Stipulation.

        Under Missouri law, “[t]o incorporate terms from another document, the
contract must ‘make [] clear reference to the document and describe[] it in such terms
that its identity may be ascertained beyond a doubt.’” State ex rel. Hewitt v. Kerr, 461
S.W.3d 798, 810-11 (Mo. 2015) (second and third alterations in original) (quoting
Intertel, Inc. v. Sedgwick Claims Mgmt. Servs., Inc., 204 S.W.3d 183, 196 (Mo. App.
2006)). “The intent to incorporate must be clear.” Id. at 810. However, the existence
of a merger clause strongly indicates that a writing is a complete and final agreement.
Johnson ex rel. Johnson v. JF Enters., LLC, 400 S.W.3d 763, 766 (Mo. 2013).

                                          -14-
       The Stipulation states that the parties previously put the settlement on the record
in chambers. This reference to the discussion in chambers, included in the section of
the Stipulation that recites the history of the litigation, does not convey any clear
intent to incorporate the representations made before the district court as contractual
terms. The Stipulation also contains a merger clause. Thus, to the extent the
transcript constitutes a document that the Stipulation could incorporate, the district
court did not err in refusing to look outside the four corners of the Stipulation.
Moreover, it is clear from the transcript that even when discussing settlement before
the district court, prior to drafting the Stipulation, Defendants had only agreed to pay
class members based on Bonds actually tendered, and no statement by either party
spells out Plaintiffs’ preferred calculation method.5

       C.     Unreasonable Results
       Plaintiffs also argue that the district court’s interpretation of the Stipulation
leads to unreasonable results. Under Missouri law, “courts ‘reject an interpretation
that involves unreasonable results when a probable or reasonable construction can be
adopted.’” Stonebrook Estates, LLC v. Greene Cty., 275 S.W.3d 353, 355 (Mo. Ct.
App. 2008) (quoting Blackburn v. Habitat Dev. Co., 57 S.W.3d 378, 386 (Mo. Ct.
App. 2001)). Plaintiffs argue that the district court’s interpretation was unreasonable
because it made Plaintiffs’ recovery dependent to some extent on the actions of
individuals who had no legal relationship with Defendants: individuals who purchased
Bonds from class members after the class period and thus would have had the ability
to tender or not tender those Bonds. Had all class members sold their Bonds after the
class period, and had no subsequent purchasers tendered their Bonds, the class

      5
        Plaintiffs also argue that Defendants should be estopped from interpreting the
Stipulation as they have done based on statements made before the district court.
Plaintiffs, however, did not present an estoppel argument to the district court, either
in the Motion to Enforce or the subsequent Motion to Alter or Amend. Arguments not
raised before the district court are waived on appeal. See St. Paul Fire & Marine Ins.
Co. v. Compaq Comput. Corp., 539 F.3d 809, 824 (8th Cir. 2008).

                                          -15-
members would have received nothing under the district court’s interpretation of the
Stipulation. Plaintiffs’ hypothetical scenario is far removed from the facts of this case.
Plaintiffs stated in the Stipulation that they expected to receive compensation for 86%
of their losses. Instead, Plaintiffs received compensation for 80% of their losses. The
district court did not err in refusing to abrogate the parties’ bargain because the
Plaintiffs recovered slightly less than expected following a conditional tender process
that the parties knew to be contingent, based only on the theoretical possibility of a
wildly different outcome.

       D.    Burdens of Proof
       Finally, Plaintiffs argue that the district court erred by placing the burden of
proof on them. Plaintiffs argue that because Defendants seek to assert a special
meaning of otherwise unambiguous language, Defendants should have had the burden
of proof before the district court. The district court stated in its order denying
Plaintiffs’ Motion to Enforce that “[a] party requesting specific performance of
settlement agreement has the burden of proving the claim ‘by clear, convincing, and
satisfactory evidence.’” Appellees’ App. 1256 (quoting Precision Inv., LLC v.
Cornerstone Propane, LP, 220 S.W.3d 301, 303 (Mo. 2007)). The district court also
held the meaning of the Stipulation to be unambiguous as a matter of law.

       The district court did not err. A party seeking specific performance bears the
burden of proof on disputed issues of fact. See Precision Inv., 220 S.W.3d at 303.
Here, the court construed the Stipulation as a matter of law. In doing so, the district
court did not place a burden of proof on any party. As discussed above, the
Stipulation is unambiguous; thus, Defendants by definition cannot be seeking to assert
a special meaning of any language in the Stipulation. See McFarland v. O’Gorman,
814 S.W.2d 692, 694 (Mo. Ct. App. 1991) (“If a written contract is unambiguous, one
of the parties should not be permitted to avoid his obligations under it on the grounds
that the obligations under the contract are not those that were intended, unless the
evidence is clear and convincing.”).

                                          -16-
III.   CONCLUSION
       We conclude that the district court correctly held that Defendants’ payment to
the class complied with the unambiguous language of the Stipulation. The judgment
of the district court is affirmed.
                          ______________________________

                                        -17-