Court Opinion

ID: 71409
Source: CourtListenerOpinion
Date Created: 2010-04-26 07:18:11+00
Date Added: 2024-06-11T09:39:20.267889
License: Public Domain

United States Court of Appeals,
                         Eleventh Circuit.

                      Nos. 94-6648, 94-6723.

  GENERAL AMERICAN LIFE INSURANCE COMPANY, Plaintiff-Appellant-
Cross-Appellee,

                                v.

         AmSOUTH BANK, Defendant-Appellee-Cross-Appellant.

  GENERAL AMERICAN LIFE INSURANCE COMPANY, Plaintiff-Appellee,

                                v.

                AmSOUTH BANK, Defendant-Appellant,

                  Edward Clayton Land, Defendant.

                           Dec. 4, 1996.

Appeals from the United States District Court for the Southern
District of Alabama. (No. CA92-0900-P-5), Virgil Pittman, Judge.

Before CARNES, Circuit Judge, and FAY and GIBSON *, Senior Circuit
Judges.

     JOHN R. GIBSON, Senior Circuit Judge:

     General American Life Insurance Company appeals from a jury

verdict finding that it was estopped from asserting its claim that

AmSouth Bank improperly paid checks payable to General American.

General American's agent indorsed the checks without authority and

deposited them in his account at AmSouth.    General American argues

that as a matter of law, AmSouth did not establish the elements of

estoppel.   AmSouth cross-appeals from a summary judgment order

holding it liable for checks payable to General American that the

agent restrictively indorsed and deposited in his account. General

American also argues that the district court erred in amending the

     *
      The Honorable JOHN R. GIBSON, Senior U.S. Circuit Judge for
the Eighth Circuit, sitting by designation.
summary judgment order to reduce General American's damages.          We

affirm the summary judgment insofar as it holds AmSouth liable to

General   American,   but   reverse   its   determination   of   General

American's damages.   We reverse the judgment on the jury's verdict

in favor of AmSouth.        Finally, we remand for a new trial to

determine General American's damages.

     In 1982 General American, by written contract, appointed Land

& Associates, Inc. a general agent for the purpose of procuring

applications for its life and health insurance and annuities, which

Land & Associates was licensed to sell.        Edward C. Land was the

owner and proprietor of Land & Associates.

     Land opened a checking account at the Springdale branch of

AmSouth in Mobile, Alabama under the corporate name of Land &

Associates.   Though this account was a business account, Land

opened the account and the signature card for the account bore his

personal social security number.      Land used the account to pay his

agency's expenses, but he also paid personal expenses out of it,

such as his child's tuition, his membership in a Mardi Gras

society, his power and light bills, and his Visa card bills.        When

Land opened the account, he provided to AmSouth business cards and

stationery from General American showing that Land & Associates was

a general agent of General American.        Land had no authority to

indorse checks and knew this, and also knew that according to the

laws of insurance, he could not commingle his money with his

clients' money.

     Land sold General American insurance and pension investment

services to customers. According to General American's procedures,
customers      were   supposed   to   write       checks   payable   to   General

American.      General American required Land to send these checks

directly to it, and did not authorize Land to indorse these checks

under any circumstances.

     Land, however, would occasionally indorse and deposit customer

checks when they were not for the exact amount owed to General

American, and then write a Land & Associates check to General

American    for    the   correct    amount.         Land   would   make   up    the

difference, although only when the customer's check and his check

were for a small amount, typically under $600.                  General American

cashed   and    processed   these     Land    &    Associates    checks   without

objection.

     Land also sent Land & Associates checks to General American

for customer accounts when customers would inadvertently write

checks payable to Land & Associates rather than General American.

These Land & Associates checks were also always for small amounts,

and General American cashed and processed them without objection.

It was impossible for General American to know from processing the

Land & Associates checks why Land had written these checks payable

to a customer's account.

     In March 1987, Land began to misappropriate money.                        Land

purchased a rubber stamp in Mobile which printed "GALIC Qualified

Plans Acct:       0551-0900 For Deposit Only."         With his rubber stamp,

Land indorsed eleven customer checks payable to General American

totalling $101,854.39 and deposited them into his Land & Associates

account at AmSouth.

     Land lost his first rubber stamp after indorsing eleven
checks. Land purchased another rubber stamp which printed "General

American Life Insurance Co. Qualified Plans Acct 0551-0900."           Land

used this stamp to indorse twenty-six more customer checks payable

to General American totalling $554,462.69 and deposited these

checks into his Land & Associates account at AmSouth.

     To conceal his misappropriations from General American and his

customers, Land changed the addresses for his General American

customers to a post office box that he controlled.             Land would

intercept the statements General American sent to the customers,

which showed that less than all of their money was reaching General

American.     He would then falsify new statements and send those to

the customers.

     Land paid back some of the money to his customers before he

was caught.    Without raising suspicion Land purchased from AmSouth

teller's checks drawn on AmSouth's account at Chemical Bank of New

York City.     In the space marked for the remitter or purchaser of

the checks Land put the initials of a customer from whom he had

stolen money. Land made the checks payable to General American and

sent them to General American as if they had come from a customer.

     Finally, Land's business practices raised suspicions, and in

October 1990, just as his agency was about to be investigated, Land

confessed to General American that he was taking money.

     The employees of AmSouth's Springdale branch never inquired

about   Land's   authority   to   indorse   checks   payable   to   General

American and deposit them into his Land & Associates account.

AmSouth's employees never asked Land for corporate resolutions from

General American authorizing him to indorse and deposit General
American checks into his Land & Associates account.                   Nor did they

ask General American if Land had the authority to indorse its

checks.    They never inquired about Land's authority because they

knew Land & Associates to be General American's general agent, and

because Land had been a frequent and trusted customer at the

Springdale branch from 1983 to 1990.

     General   American        sued    AmSouth    for    conversion         of   the

thirty-seven checks Land indorsed with his rubber stamps.                        The

district   court    granted    summary     judgment     in    favor    of   General

American on the eleven checks that Land restrictively indorsed "For

Deposit Only" with his first rubber stamp.                   The district court

ruled that AmSouth was liable for the checks as a matter of law

because the checks were indorsed in the name of General American

and "For Deposit Only," and AmSouth did not deposit the checks into

a General American account.            Based on these eleven checks the

district court entered judgment in favor of General American for

$114,733.79.       After General American and AmSouth filed their

notices of appeal, the district court reduced the judgment for

General American to $73,825.24.

     With respect to the other twenty-six checks payable to General

American and deposited into the Land & Associates account, the

district   court    directed    a     verdict   for   General    American,       but

submitted to the jury the issue of whether General American was

estopped from denying the validity of the indorsements on these

checks. The jury returned a verdict for AmSouth. General American

appeals from the jury's verdict and the district court's reduction

of the judgment in its favor on the eleven checks, while AmSouth
appeals from the district court's grant of summary judgment in

favor of General American on the eleven checks.

                                           I.

      General American argues that the jury's verdict in favor of

AmSouth on the twenty-six checks must be reversed because Land did

not   have    the    authority      to   indorse       checks   payable   to   General

American and because AmSouth did not present sufficient evidence to

support its estoppel defense.

        Alabama law governs this diversity case.                  Our review of the

district court's determination and application of Alabama law is de

novo, without deference to the district court.                        Salve Regina

College v. Russell, 499 U.S. 225, 111 S.Ct. 1217, 113 L.Ed.2d 190

(1991).

        Under Alabama law, a depositary bank is liable to the payee

of a check for conversion when the bank allows a party who has

indorsed the check without authority to deposit the check into his

account. Al Sarena Mines, Inc. v. Southtrust Bank, 548 So.2d 1356,

1358 (Ala.1989).           The depositary bank may avoid liability for the

check    if   it     has    a    valid defense against the payee.                    Id.

Consequently, AmSouth can avoid liability to General American for

the checks Land indorsed and deposited in his account at AmSouth

if:     (1) Land's indorsements were authorized;                 or (2) AmSouth has

a valid defense against General American.

                                           A.

         AmSouth argues that under Alabama law a general insurance

agent has full power to bind the insurer and stands in the shoes of

the   insurer       for    all   purposes,      and,    therefore,   Land      had   the
authority to indorse General American checks.                 AmSouth cites

Washington National Insurance Co. v. Strickland, 491 So.2d 872

(Ala.1985), and cases following Washington National to support its

argument.

         We reject AmSouth's interpretation of the law of Alabama.

General American's appointment of Land & Associates as its general

agent did not automatically give Land the apparent authority to

indorse checks payable to General American and deposit them in the

Land & Associates account.        While it is true that a general agent

who lacks the actual authority to bind his principal may have the

apparent authority to do so, see Protective Life Ins. Co. v.

Atkins,    389    So.2d   117,   118-19   (Ala.1980),   a   general   agent's

apparent authority is limited by the usual scope and character of

the business entrusted to his care, see Washington Nat'l, 491 So.2d

at 874;     Sanders v. Brown, 145 Ala. 665, 39 So. 732, 734 (1905).

What is within the usual scope and character of the business

customarily entrusted to a particular type of general agent is a

question of fact.      Protective Life, 389 So.2d at 119.      AmSouth bore

the burden of proof on this issue, and thus had to prove apparent

authority.       See Ala.Code § 7-3-307(1)(a) (1993).1

     AmSouth failed to present evidence that General American gave

Land authority or that insurers customarily allow their general

     1
      Section 7-3-307(1)(b) provides for a presumption that all
signatures on a check are authorized. Ala.Code § 7-3-307(1)(b)
(1993). This presumption, however, is rebutted as soon as some
evidence is introduced that could support a finding that a
signature is unauthorized. Ala.Code § 7-3-307 official comment 1
(1993). General American rebutted this presumption of authority
when it presented testimony that Land was not authorized to
indorse checks payable to General American.
agents to indorse checks payable to the insurer. The only evidence

on this issue, presented by General American, was that no insurer

allows its general agents to indorse checks made payable to the

insurer.    We must reject AmSouth's argument that Land had the

apparent authority to indorse General American checks because

AmSouth did not provide any evidence at trial to support its

argument.    See Sanders, 39 So. at 734 (rejecting an apparent

authority argument because of an absence of proof to support it).

       Malmberg v. American Honda Motor Co., 644 So.2d 888, 891

(Ala.1994), makes clear that the doctrine of apparent authority is

based on the actions of the principal, not those of the agent.

Apparent authority is based on the principal holding the agent out

to the third party as having the authority upon which he acts, not

upon what one thinks an agent's authority might be, or what the

agent holds out his authority to be.    Id. at 891.     In Malmberg, the

evidence of Honda logos on a dealer's signs, literature, products,

brochures and plaques, was not sufficient in itself to create an

inference   of   agency.   Apparent   authority   was   found   only   in

substantially greater and more detailed evidence of the method in

which Honda dealers dealt with warranties, so as to support a

customer's reliance on the dealer's statements about the warranty.

Id.   Malmberg recognizes the close relationship between apparent

authority and estoppel, an issue with which we will deal.

      Time and again AmSouth returns to its assertion that its

employees knew that Land & Associates was the general agent for

General American, and that this supported the existence of both

apparent authority and estoppel.      The stationery and the business
card, with General American's name and Land & Associates' identity

as general agent, are the high water mark of this evidence.            We

think this evidence is not unlike the logos, signs, and literature

in Malmberg, and is inadequate to support AmSouth's argument.

     The Alabama cases that AmSouth cites to support its argument

do not contradict our analysis.    Washington National and the cases

following it simply hold that a jury may find, when presented with

sufficient evidence, that issuing insurance policies is within a

general insurance agent's apparent authority.       See, e.g., American

States Ins. Co. v. C.F. Halstead Developers, Inc., 588 So.2d 870,

872-73 (Ala.1991); Morris v. Cotton States Life & Health Ins. Co.,

501 So.2d 1192, 1194 (Ala.1986).         See also Protective Life, 389

So.2d at 119.     None of these cases can be read to support the

proposition that a general insurance agent stands in the shoes of

an insurance company for all purposes, including the indorsement of

checks, as AmSouth argues.      AmSouth simply reads these cases too

broadly.

                                   B.

      General American argues that the district court should have

entered judgment as a matter of law for General American because

AmSouth failed to present sufficient evidence to support its

estoppel defense.   General American also argues that the district

court's    instruction   on   estoppel    was   incorrect   because   the

instruction did not include an intent element for estoppel.

     We review de novo the district court's decision on whether to

grant a party judgment as a matter of law.        Oxford Furniture Cos.

v. Drexel Heritage Furnishings, Inc., 984 F.2d 1118, 1122 (11th
Cir.1993).       We review all of the evidence, and all reasonable

inferences    which   flow   from   the   evidence,   in    the     light   most

favorable to the party opposing the motion for judgment as a matter

of law.    Id.    A party is entitled to judgment as a matter of law

only if the evidence and inferences derived from the evidence are

so strong that reasonable persons in the exercise of impartial

judgment could not arrive at a contrary verdict.           Id.    If, however,

the    evidence    allows    reasonable   persons     to    reach    different

conclusions, judgment as a matter of law is inappropriate.                  Id.

        Estoppel is an equitable doctrine that does not create a

right or impose an obligation, but prevents an otherwise unjust

result.    Williams v. FNBC Acceptance Corp., 419 So.2d 1363, 1367

(Ala.1982).       The purpose of estoppel is to promote equity and

justice in an individual case by preventing a party from asserting

rights under a general rule of law when his own conduct renders

that   assertion    contrary   to   equity   and   good    conscience.        Id.

AmSouth, as the party invoking estoppel, has the burden of proving

this defense.      Mobile Towing & Wrecking Co. v. First Nat'l Bank,

201 Ala. 419, 78 So. 797, 800 (1918).

       AmSouth argues that the Alabama Supreme Court has articulated

conflicting definitions of equitable estoppel, but recognizes that

the district court properly instructed the jury as follows:

            Here is the definition of estoppel: "An estoppel has
       three important elements. The actor, who usually must have
       knowledge of the true facts, communicates something in a
       misleading way, either by words, conduct or silence." And the
       person—and the other person in this case would be the
       bank—"relies upon that communication. And the other"—that is
       the bank—"would be harmed materially if the" plaintiff in this
       case would be "permitted to assert any claim inconsistent with
       his earlier conduct."
     The district court also instructed the jury that with respect

to the affirmative defense of estoppel, if the proof failed to

establish any essential elements, the jury must find for General

American.

     We are aware that Mazer v. Jackson Insurance Agency, 340 So.2d

770, 773 (Ala.1976), contains definitions of estoppel from two

texts, and General Electric Credit Corp. v. Strickland Division of

Rebel Lumber Co., 437 So.2d 1240, 1243 (Ala.1983), appears to state

the definition in a somewhat different fashion.           Nevertheless,

General Electric, citing Mazer, sets out the elements of estoppel

articulated in United States Fidelity & Guaranty Co. v. McKinnon,

356 So.2d 600, 606 (Ala.1978), which the district court quoted and

specifically referred to in its jury instruction.        AmSouth argues

that the definition of estoppel depends on the facts, and indeed

cites a number of Alabama Supreme Court cases that arguably would

support this conclusion, and also relate to the question of whether

intent is required in estoppel.     Many of these issues we need not

resolve, as AmSouth specifically states that McKinnon, as well as

other decisions that were the basis for a portion of the district

court's   instructions,   are   statements   of   the   Alabama   law   on

estoppel, and with the exception of intent, General American

agrees.

     One portion of the first element of estoppel, which the cases

say is usually present, see General Elec., 437 So.2d at 1243;

McKinnon, 356 So.2d at 606;      Mazer, 340 So.2d at 773, is that a

party cannot be estopped unless it has knowledge of the true facts

and communicates something misleading to another who relies upon
the communication. As the party invoking estoppel, AmSouth has the

burden of proving that General American knew or should have known

that Land was indorsing checks payable to General American.     See

Tarrant Am. Sav. Bank v. Smokeless Fuel Co., 233 Ala. 507, 172 So.

603, 607-08 (1937).   AmSouth's estoppel defense begins to founder

because it has not demonstrated that General American had knowledge

of Land's indorsement and deposit of checks payable to General

American, because General American made no communication of any

kind to AmSouth, and because it follows that in absence of the

communication there could be no reliance by AmSouth.

     AmSouth presented no direct evidence that General American

knew Land was indorsing its checks.     All of General American's

employees testified that General American did not allow any general

agent to indorse checks payable to General American under any

circumstances.   All of these witnesses denied knowing about Land's

indorsement of General American checks and denied knowing of anyone

at General American who was aware of Land's indorsement of General

American checks.   AmSouth's employees uniformly stated that they

never told General American that Land was indorsing checks payable

to it and never asked General American if Land could do so.   Thus,

the testimony of General American's employees was corroborated by

the testimony of AmSouth's employees.

     To escape this shortfall in its evidence, AmSouth relies on

testimony from Land that shows, it argues, that General American

knew or should have known that Land was indorsing its checks.   We

reject AmSouth's argument that a reasonable jury could conclude

that General American knew or should have known Land was indorsing
its checks because General American accepted Land & Associates

checks   which    paid   money    into    customer     accounts.     Land's

uncontradicted testimony is that it was impossible for someone

other than himself, such as General American, to know why he had

sent a Land & Associates check payable to a customer's account.

Further, this is especially so when there was an explanation for

the Land & Associates checks which did not involve his indorsement

of General American checks, that is, that a customer gave Land a

check payable to Land & Associates.        Indeed, Land's testimony was

that he was attempting to conceal, from not only General American

but also AmSouth, the nature of his transactions.           We conclude no

reasonable jury could infer that General American knew or should

have known that Land was indorsing its checks because it received

and   processed   Land   &   Associates   checks   that   paid   money   into

customer accounts.

      AmSouth also argues that General American knew or should have

known Land was indorsing checks because General American received

Chemical Bank teller's checks from Land.             The record shows that

there was nothing on these checks to indicate to General American

that Land purchased them or did anything but collect them from

customers and send them to General American.            Land testified and

the checks show that Land always put a customer's initials in the

space on the checks marked for the remitter of the check.                Land

also testified that he sent these checks to General American with

the paperwork which normally accompanied a customer's check.               We

conclude that no reasonable jury could infer that General American

knew or should have known Land was indorsing checks payable to
General American from General American's processing of the Chemical

Bank teller's checks.

     AmSouth's defense of estoppel fails because AmSouth has failed

to provide sufficient evidence to prove the essential elements of

its defense.   The record is clear that General American, having no

knowledge of Land's practice, made no communication to AmSouth, and

with no communication, it follows that there was nothing for

AmSouth to rely upon. Thus, AmSouth has simply not established the

essential elements of estoppel.            It also follows that whether or

not intent was necessary on the part of General American, the

failure to demonstrate knowledge and communication make it evident

that there could be no intention that such be acted upon.                 AmSouth

has also failed to show that Land had authority to indorse checks

payable to General American. Indeed, there is only evidence to the

contrary.    Therefore, AmSouth is liable as a matter of law to

General American for converting the twenty-six checks Land indorsed

and deposited in his account at AmSouth.            See Al Sarena Mines, 548

So.2d at 1358.      We reverse the jury's verdict in favor of AmSouth.

     Having concluded that there was no submissible issue as to

estoppel, it is unnecessary that we reach the highly contested

issue as to whether the instruction given by the district court on

estoppel was erroneous for failure to submit the issue of intent.

                                      II.

     AmSouth     cross-appeals      from    the   district    court's     summary

judgment order holding AmSouth liable to General American for the

eleven restrictively indorsed checks.               AmSouth argues that the

district    court   should   have    allowed      AmSouth    to   raise   certain
affirmative defenses against General American's claim that AmSouth

converted the eleven checks.      AmSouth asserts that its defenses

raise genuine issues of material fact, and, therefore, summary

judgment was inappropriate as to these eleven checks.

     We review de novo the district court's grant of summary

judgment.    Hairston v. Gainesville Sun Publishing Co., 9 F.3d 913,

918 (11th Cir.1993).    Summary judgment is appropriate if there is

no genuine issue as to any material fact and the party asking for

summary judgment is entitled to judgment as a matter of law.     Id.

Summary judgment must be granted when a party fails to present

evidence establishing an element essential to his case and on which

he has the burden of proof.   Id. (quoting Celotex Corp. v. Catrett,

477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265

(1986)).

         Under Alabama law, a depositary bank is liable to the payee

of a restrictively indorsed check for conversion of that check when

the bank does not pay the check according to its restrictive

indorsement.    AmSouth Bank v. Reliable Janitorial Serv., Inc., 548

So.2d 1365, 1367-68 (Ala.1989).    The depositary bank, however, may

avoid liability for the check if it has a valid defense against the

payee.    See id. at 1368-69 (permitting a depositary bank to raise

the defense of account stated).

     We conclude that the district court properly granted General

American summary judgment because none of AmSouth's defenses raise

a genuine issue of material fact or preclude granting General

American judgment as a matter of law.     The defenses that AmSouth

argues raise a genuine issue of material fact and preclude summary
judgment with respect to the eleven checks are:           (1) that Land had

the   apparent    authority    to   indorse   checks    payable    to   General

American because he was General American's general agent;                   (2)

equitable estoppel;        and (3) ratification.2

      As we explained above, AmSouth has failed to present any

evidence to support its apparent authority argument on which it has

the burden of proof.        See Celotex Corp., 477 U.S. at 322-25, 106

S.Ct. at 2552-54.          Also, there is no basis in Alabama law for

AmSouth's argument that Land had the authority to indorse checks

payable   to     General    American   simply   because    he     was   General

American's general agent.           Thus, AmSouth's apparent authority

defense did not prevent the district court's grant of summary

judgment to General American on the eleven checks.

      AmSouth's equitable estoppel defense fails because AmSouth

presented no evidence to support the essential elements of this

defense on which it had the burden of proof.           As to whether General

American knew or should have known that Land was indorsing its

checks, the only evidence was to the contrary.                  There was no

communication by General American and no reliance by AmSouth.               The

evidence AmSouth relies on to raise a genuine issue as to General

American's knowledge is the same evidence it presented at the trial

concerning the twenty-six checks.        That evidence was not enough to

      2
      AmSouth in its brief to this court mentions other defenses
such as "contributory negligence," "consent," and "respondeat
superior." AmSouth completely fails to discuss or explain what
genuine issues of material fact these defenses raise, and thus we
do not consider them. Cf. Blue Cross & Blue Shield v. Weitz, 913
F.2d 1544, 1550 (11th Cir.1990) ("Presenting such arguments in
opposition to a motion for summary judgment is the responsibility
of the non-moving party, not the court....").
preclude judgment as a matter of law with respect to the twenty-six

checks, and it also fails with respect to the eleven restrictively

indorsed checks.

     AmSouth's ratification defense, on which it had the burden of

proof, did not preclude summary judgment because AmSouth did not

present    any   evidence      that    General     American          ratified   Land's

unauthorized indorsements.            Id.

         The payee of a check can expressly ratify an unauthorized

indorsement by approving the indorsement, see Citibanc v. Tricor

Energies, Inc., 493 So.2d 1344, 1347 (Ala.1986);                     Fulka v. Florida

Commercial Banks, Inc.,                      371        So.2d         521,      523-24

(Fla.Dist.Ct.App.1979), or by holding the unauthorized indorser

solely responsible for the check and forgoing any action against

the depositary bank which accepted the check, see Eutsler v. First

Nat'l Bank, 639 P.2d 1245, 1247-48 (Okla.1982); Federal Pac. Elec.

Co. v. First Pa. Bank, 266 Pa.Super. 471, 405 A.2d 530, 534 (1979);

Thermo Contracting Corp. v. Bank of New Jersey,                      69 N.J. 352, 354

A.2d 291, 296-97 (1976).        The payee of a check impliedly ratifies

an unauthorized indorsement when he discovers the unauthorized

indorsement      and   then    unreasonably        delays       in     notifying   the

depositary bank that he intends to hold the bank liable for the

check.    See Cook v. Great Western Bank & Trust, 141 Ariz. 80, 685

P.2d 145, 148-50 (Ct.App.1984).

     AmSouth argues it established a genuine issue of material fact

as to its ratification defense by proof: (1) that General American

waited     several     years   after        discovery     of    the      unauthorized

indorsements to file suit against AmSouth;                  and (2) that General
American has held Land responsible for its loss resulting from

Land's unauthorized indorsements.          The record shows that General

American    notified     AmSouth   shortly     after    it   confirmed     Land's

misappropriations.        Additionally,       General    American's      delay    in

filing suit against AmSouth is irrelevant for ratification, because

notification does not equal or require filing suit.                   As General

American did notify AmSouth promptly and its delay in filing suit

is irrelevant, this evidence raises no genuine issue of material

fact.

          General    American   can    hold    Land     responsible      for     his

unauthorized        indorsements   without      expressly      ratifying         his

indorsements.       It is only when the payee looks to the indorser for

payment on the check and forgoes any action against the depositary

bank that the payee expressly ratifies the indorsement.                          See

Eutsler, 639 P.2d at 1247-48;         Federal Pac. Elec., 405 A.2d at 534.

AmSouth    has   not   presented   any   evidence       showing   that    General

American agreed to pursue only Land and, thereby, excused AmSouth

from any liability on the checks. That General American has forced

Land to pay back some of his illegal gains, by itself, does not

raise a genuine issue of material fact as to AmSouth's ratification

defense.    Thus, AmSouth's ratification defense did not prevent the

district court's entry of summary judgment as AmSouth had the

burden of proof on this defense and failed to present any relevant

evidence to support this defense.          See Celotex Corp., 477 U.S. at

322-25, 106 S.Ct. at 2552-54.

        The district court properly entered summary judgment against

AmSouth on the eleven restrictively indorsed checks as AmSouth was
liable in conversion for those checks as a matter of law.

                                 III.

      General American argues that the district court improperly

amended its June 13, 1994 judgment in favor of General American,

because it did not have jurisdiction to amend the judgment after

General American and AmSouth had filed their notices of appeal.

General American also argues that the June 13, 1994 judgment should

be reinstated because the information the district court used to

amend its judgment was inaccurate.

      Under Federal Rule of Civil Procedure 60(a), the district

court may freely amend its judgment to correct errors arising from

an oversight or omission before an appeal from that judgment is

docketed in the appellate court.        The district court amended its

judgment on July 14, 1994 to correct an oversight in that judgment.

This court docketed the appeal from that judgment on July 21, 1994.

Thus, under Rule 60(a) the district court had the power to amend

its judgment on July 14, 1994.

      General American also argues that the district court relied

on inaccurate information in amending its judgment.       In its July

14, 1994 amended judgment the district court reduced the damages it

awarded to General American for AmSouth's conversion of the eleven

restrictively indorsed checks because it failed to take into

account two of AmSouth's offsets which should have been credited

against General American's recovery.       While we express no opinion

on the accuracy of the information concerning the offsets, we note

that the district court or a jury will have to fully revisit the

issue of the amount of AmSouth's offsets in calculating General
American's damages from AmSouth's conversion of the twenty-six

checks indorsed without restriction. In order to obtain consistent

results, we believe the best course is to reverse the district

court's determination of General American's damages from the eleven

checks so that General American's damages and AmSouth's offsets for

all thirty-seven checks can be determined in one proceeding.

                                       IV.

     In conclusion, we hold that AmSouth is liable as a matter of

law to General American for converting all thirty-seven of the

checks in this case.    We, therefore, REVERSE the jury's verdict in

favor of AmSouth and AFFIRM the summary judgment in favor of

General   American.      We     also     REVERSE    the      district   court's

determination   of    General    American's        damages     resulting   from

AmSouth's conversion of the eleven restrictively indorsed checks.

Finally, we REMAND for a new trial to determine General American's

damages resulting from AmSouth's conversion of the thirty-seven

checks.