Court Opinion

ID: 9471987
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:46:07.023541+00
Date Added: 2024-06-11T17:42:40.854992
License: Public Domain

FAGG, Circuit Judge,
dissenting.
The majority concludes that “the district court was correct in denying Ehrichs any recovery under the theories he pursued below and presses upon us here.” Ante at 1174. Despite its recognition that “Ehrichs did not focus his lawsuit on Kearney’s breach of the stock transfer agreement,” id., the majority reverses the district court on the basis of this theory that was not fairly pled or tried by both parties in the district court or raised on appeal. Because I see no justification for this result, I dissent.
By treating the breach of contract theory as if it were raised in the pleadings the majority in effect amends Ehrichs’ pleadings sua sponte to conform to evidence in the record which is relevant to this theory. See Fed.R.Civ.P. 15(b); Mason v. Hunter, 534 F.2d 822, 825 (8th Cir.1976). Generally, though, this analogy to Rule 15(b) is relied upon to support the judgment of the district court, since “[ajppellate courts seem unwilling to allow amendments that will result in the reversal or substantial alteration of the judgment.” 6 C. Wright & A. Miller, Federal Practice and Procedure § 1494, at 477 (1971). Authority from our own court is consistent with this view:
The issue now urged was clearly not presented to nor determined by the lower court. This is a court of appellate jurisdiction, and we are without authority, on the record before us, to determine this question, even though the parties consent thereto. It is true that, in certain exceptional circumstances, pleadings may be amended or deemed amended even in the appellate court, to conform to the proof for the purpose of sustaining the judgment, but this will not be allowed where such amendment would bring about the reversal of a judgment otherwise correct.
United States v. Winkle Terra Cotta, Inc., 110 F.2d 919, 922 (8th Cir.1940). This reluctance of appellate courts to reverse a judgment on a new theory is understandable since the district court will not have had an opportunity to exercise its own judgment on the issues. Wright & Miller, supra, § 1494, at 477. In my view Winkle is still good law notwithstanding the liberality of modern pleading rules.
Even if we are not directly bound by precedent, considerations of fairness nonetheless dictate that we may not reverse on the basis of an alternate theory unless it appears clearly from the record that the issues involved were tried with the express *1177or implied consent of the parties. See Fed. R. Civ.P. 15(b); Wright & Miller, supra, § 1494, at 478; cf. Dependahl v. Falstaff Brewing Corp., 653 F.2d 1208, 1218 (8th Cir.), cert. denied, 454 U.S. 968, 1084, 102 S. Ct. 512, 641, 70 L.Ed.2d 384, 619 (1981); Armstrong Cork Company v. Lyons, 366 F.2d 206, 208-09 (8th Cir.1966); Standard Title Insurance Co. v. Roberts, 349 F.2d 613, 620-21 (8th Cir.1965). Accordingly, “it cannot be fairly said that there is any implied consent to try an issue where the parties do not squarely recognize it as an issue in the trial.” 3 J. Moore, Moore’s Federal Practice ¶ 15.13[2], at 15-171 — 15-172 (1983); see Dependahl, supra, 653 F.2d at 1218, Armstrong, supra, 366 F.2d at 208-09; Standard Title, supra, 349 F.2d at 620-21; Wright & Miller, supra, § 1493, at 462. In the present case there was no express consent to try the issue of breach of the stock transfer agreement, so the inquiry pivots on whether such consent was implied.
The presence of evidence in the record which supports the majority’s determination that Kearney breached the stock transfer agreement does not in and of itself warrant the conclusion that the issue was tried by consent. Implied consent to try a wholly different theory cannot be inferred merely from the unchallenged introduction of evidence relevant to the new theory when the evidence is also relevant to issues already in the case. See Dependahl, supra, 653 F.2d at 1218; Standard Title, supra, 349 F.2d at 620; see also Moore, supra, ¶15.13[2] at 15-171 — 15-172; Wright & Miller, supra, § 1493, at 462-67. Evidence which supports the breach of contract theory embraced by the majority is also relevant to Ehrichs’ action for an accounting for the surplus of corporate assets. Hence, there is nothing in the record clearly to indicate that the parties recognized that an issue not fairly presented by the pleadings had entered the case by consent at trial.
The unfairness resulting from reliance on a theory not advanced in the district court only compounds the prejudice which flows from the majority’s raising an issue on appeal that was not submitted in the briefs. Kearney is thus not only denied the opportunity to present evidence on the new theory, but is in addition precluded from advancing arguments on appeal pertinent to the rationale of the majority’s decision. Indeed, the outcome on appeal is beyond the realm of possibilities that Kearney might reasonably have foreseen. Without a minimum assurance of predictability on the part of this court, parties will simply be at a loss to decide what arguments and theories they should pursue on appeal. We should not raise and decide issues on our own motion without ensuring that the parties have had a fair opportunity to present evidence and arguments bearing on the resolution of those issues.