The Estate of Charles D. Smith, by Patsy G. Smith, Personal Representative v. Primerica Life Insurance Company

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 21-3196
___________________________
The Estate of Charles D. Smith, by Patsy G. Smith, Personal Representative
Plaintiff - Appellee
v.
Primerica Life Insurance Company
Defendant
Kansas City Chrome Shop, Inc.; The Estate of Dora Mae Wall, Substituted for
Dora Clark-Wall
Third Party Defendants - Appellants
____________
Appeal from United States District Court
for the Western District of Missouri - Kansas City
____________
Submitted: September 22, 2022
Filed: November 23, 2022
____________
Before GRUENDER, SHEPHERD, and ERICKSON, Circuit Judges.
____________
GRUENDER, Circuit Judge.
This case concerns a $225,000 life insurance policy issued on the life of
Charles Smith. When Smith died in 2018, his estate (“Smith’s Estate” or the

-- 1 of 13 --

-2-
“Estate”) made a claim for the policy proceeds. His former employer, Kansas City
Chrome Shop (“KCCS”), together with KCCS’s president, Dora Clark-Wall, made
a competing claim. After the district court1 granted partial summary judgment in
favor of Smith’s Estate, Clark-Wall brought equitable claims in her personal
capacity.2 Following a bench trial, the district court found that Clark-Wall was
entitled to an equitable portion of the proceeds totaling $55,253.28 and that Smith’s
Estate was entitled to the remaining $169,746.72. KCCS and Clark-Wall appeal,
and we affirm.
I.
In 1989, Primerica issued a twenty-year $100,000 life insurance policy on
Charles Smith’s life. KCCS, a Kansas corporation for whom Smith worked, was the
owner and named beneficiary of the policy. According to Smith’s family, Smith
stopped working for KCCS around 1994. In 2010, without Smith’s assent, the policy
was renewed for another twenty-year term and its benefit was increased to $225,000.
All premiums under the policy were paid by Clark-Wall. The policy provided that
“[p]roceeds will be paid to [Smith’s] estate if there is no living beneficiary or owner”
at the time of Smith’s death.
Following Smith’s death in 2018, his Estate asked Primerica for the policy
proceeds. KCCS and Clark-Wall made competing claims. When Primerica declined
to pay the proceeds to any claimant, Smith’s Estate sued Primerica for breach of
contract in Missouri state court.
In April 2019, after removing the Estate’s suit on diversity grounds, Primerica
brought an interpleader action against the Estate and against KCCS and Clark-Wall.
1 The Honorable Brian C. Wimes, United States District Judge for the Western
District of Missouri.
2 Clark-Wall died in November 2020, and her estate has been substituted as a
party. For convenience, we refer simply to Clark-Wall.

-- 2 of 13 --

-3-
See 28 U.S.C. § 1335; Fed. R. Civ. P. 22. KCCS and Clark-Wall then filed a breach-
of-contract claim against the Estate, alleging that Smith and Clark-Wall had
previously agreed that the policy was to be “an assurance and collateral” held by
KCCS for a series of unpaid loans made to Smith and that the Estate breached that
agreement when it submitted a claim for the proceeds to Primerica. Later, Primerica
deposited the proceeds into an interest-bearing account held by the district court and
was dismissed as a party.
Meanwhile, separate proceedings took place in Missouri state court. In July
2019, KCCS and Clark-Wall each filed probate claims against Smith’s Estate,
alleging that they made personal loans to Smith that remained outstanding when he
died. In July 2020, after a bench trial, the court entered judgment in favor of Smith’s
Estate on both claims. As to KCCS’s claim, applying Kansas law, the court found
that KCCS was dissolved as a corporation in 1994 and therefore lacked standing to
pursue any probate claim against Smith’s Estate. As to Clark-Wall’s claim, the court
found that Clark-Wall “failed to establish by competent evidence she is entitled to
receive payment . . . for any personal loans.” KCCS and Clark-Wall appealed, and
the Missouri Court of Appeals later affirmed. Kan. City Chrome Shop, Inc. v. Smith,
649 S.W.3d 19, 20 (Mo. Ct. App. 2022); Clark v. Smith, 644 S.W.3d 835, 837 (Mo.
Ct. App. 2022).
In August 2020, the federal district court granted partial summary judgment
to Smith’s Estate. The court found that, in light of the state court’s determination
that KCCS was dissolved as a corporation in 1994, KCCS was collaterally estopped
from asserting that it was a “living beneficiary” under the policy at the time of
Smith’s death. Having thus dismissed KCCS from the case, the court then allowed
Clark-Wall to proceed in her personal capacity with claims for breach of contract,
novation, unjust enrichment, and recoupment, as well as affirmative defenses of
equitable estoppel and waiver.
Following a bench trial, the district court denied Clark-Wall’s breach-of-
contract, novation, and recoupment claims but granted her unjust-enrichment claim.

-- 3 of 13 --

-4-
It did not address her affirmative defenses. Accordingly, the court ordered that
Clark-Wall was entitled to an equitable award of $55,253.28 to be paid from the
proceeds, representing the total amount of her premium payments. The remaining
proceeds went to Smith’s Estate. Clark-Wall moved to alter or amend the judgment
under Federal Rule of Civil Procedure 59(e), requesting that the court specify the
amount of interest to be added to her equitable award. The court denied that motion
and explained that the only interest to which she was entitled was “any interest
accrued on this amount from the date Primerica deposited the funds into the Court
registry.”
On appeal, KCCS and Clark-Wall challenge the district court’s application of
collateral estoppel, its denial of Clark-Wall’s claims for breach of contract and
novation, and its failure to address her affirmative defenses. Clark-Wall also
challenges the district court’s decision not to include prejudgment interest with her
equitable award and its denial of her Rule 59(e) motion.
II.
We begin with KCCS and Clark-Wall’s argument that the district court erred
in finding that KCCS was collaterally estopped from asserting that it was a “living
beneficiary” under the policy at the time of Smith’s death. “We review a district
court’s collateral-estoppel determination de novo.” Riis v. Shaver, 4 F.4th 701, 703
(8th Cir. 2021).
Collateral estoppel, sometimes called issue preclusion, generally bars the
relitigation of factual or legal issues that were decided—correctly or not—in a prior
action. Ginters v. Frazier, 614 F.3d 822, 825-26 (8th Cir. 2010); Fischer v.
Scarborough, 171 F.3d 638, 641 (8th Cir. 1999). Its purpose is to “protect[] against
the expense and vexation attending multiple lawsuits, conserv[e] judicial resources,
and . . . minimiz[e] the possibility of inconsistent decisions.” B & B Hardware, Inc.
v. Hargis Indus., Inc., 575 U.S. 138, 147 (2015) (internal quotation marks omitted).

-- 4 of 13 --

-5-
Here, to determine whether collateral estoppel applies, we look to the law of
Missouri, the state that issued the potentially preclusive judgment. See Riis, 4 F.4th
at 703. Under Missouri law, four conditions must be met for collateral estoppel to
apply: (1) the issue for which collateral estoppel is asserted in the present action is
identical to one that was determined in the prior action, (2) the prior action resulted
in a judgment on the merits, (3) the party against whom collateral estoppel is asserted
was a party or in privity with a party to the prior action, and (4) the party against
whom collateral estoppel is asserted had a full and fair opportunity in the prior action
to litigate the issue for which collateral estoppel is asserted. In re Caranchini, 956
S.W.2d 910, 912-13 (Mo. 1997).
KCCS and Clark-Wall assert that the first condition is not met because the
issues involved in the state and federal actions were different. They argue that the
state court considered only whether KCCS had standing to pursue a probate claim
for reimbursement of personal loans against Smith’s Estate, whereas the federal
court considered the distinct question of whether KCCS could collect the policy
proceeds. They do not dispute that the other collateral-estoppel conditions are
satisfied.3
We conclude that the district court properly applied collateral estoppel
because the issue presented in the federal action was already determined in the prior
state action: whether KCCS was a valid, existing corporation at the time of Smith’s
death.
3 KCCS and Clark-Wall argued in their briefs that the fourth collateral-
estoppel condition was not met because the state judgment was pending appeal and
thus not “final.” After briefs were filed, however, the Missouri Court of Appeals
affirmed the state judgment. Kan. City Chrome Shop, 649 S.W.3d at 29.
Accordingly, at oral argument, counsel for KCCS and Clark-Wall conceded the state
judgment’s finality. See Noble v. Shawnee Gun Shop, Inc., 316 S.W.3d 364, 369
(Mo. App. Ct. 2010).

-- 5 of 13 --

-6-
In the state action, the court had to resolve, as a threshold matter, whether
KCCS had standing to sue. See CACH, LLC v. Askew, 358 S.W.3d 58, 61 (Mo.
2012). Because dissolved corporations generally lack authority to sue, Gunter v.
Bono, 914 S.W.2d 437, 440 (Mo. Ct. App. 1996), the standing question led the court
to consider KCCS’s corporate status. Applying Kansas law, the court found that
KCCS forfeited its articles of incorporation in 1991 and had until 1994 to settle its
affairs, at which point it dissolved. See 7 Kan. Stat. Ann. § 17-6807.
In the federal action, the district court had to determine whether KCCS was a
“living beneficiary” at the time of Smith’s death in 2018 such that it was entitled to
the Primerica policy proceeds. Whether a corporation is a “living beneficiary” under
a life insurance policy depends on that corporation’s corporate status—if the
corporation is dissolved, it is not “living.” See Chicago Title & Tr. Co. v. 4136
Wilcox Bldg. Corp., 302 U.S. 120, 124-25 (1937) (“[A] private corporation in this
country can exist only under the express law of the state or sovereignty by which it
was created. Its dissolution puts an end to its existence, the result of which may be
likened to the death of a natural person.”); Manard v. Snyder Bros. Co., 964 S.W.2d
487, 488 n.3 (Mo. Ct. App. 1998) (observing that a forfeited corporation “cease[s]
to exist as a legal entity”). The federal action therefore presented the same issue of
KCCS’s corporate status that the state court already adjudicated. Accordingly, the
district court properly held that the state court’s determination that KCCS had
dissolved in 1994 barred KCCS from asserting that it was a “living beneficiary” in
2018.4
4 KCCS and Clark-Wall argue that the state judgment was not preclusive as to
whether KCCS was “living” at the time of Smith’s death because the state court’s
conclusion that KCCS was dissolved rested on an error of law. They maintain that
the court erred because KCCS was reinstated in 2020 under Kansas law,
demonstrating that KCCS “has never been dissolved as a corporation.” See 7 Kan.
Stat. Ann. § 17-7002(e) (providing that a corporation may be “reinstated with the
same force and effect as if its articles of incorporation or authority to engage in
business had not been forfeited”). But the state court considered this argument and
nonetheless determined that KCCS was dissolved. See Kan. City Chrome Shop, 649

-- 6 of 13 --

-7-
Contrary to KCCS and Clark-Wall’s argument, the state court did not need to
decide specifically whether KCCS was entitled to the policy proceeds for its
corporate-status determination to have preclusive effect in the federal action. Even
when two suits raise different legal issues or causes of action, a fact properly
determined in one will be given effect in the other. Spath v. Norris, 281 S.W.3d 346,
352 (Mo. Ct. App. 2009). Because the state court “necessarily and unambiguously
resolve[d] the same question presented in the [federal] proceeding,” see U-Haul Co.
v. Carter, 567 S.W.3d 680, 685 (Mo. Ct. App. 2019) (internal quotation marks
omitted), the district court did not err in finding that KCCS was collaterally estopped
from asserting that it was a “living beneficiary” entitled to the policy proceeds.
III.
We next address whether the district court erred in denying Clark-Wall’s
claims for breach of contract and novation. After a bench trial, we review legal
conclusions de novo and factual findings for clear error. Kaplan v. Mayo Clinic,
847 F.3d 988, 991 (8th Cir. 2017).
A.
We begin with the breach-of-contract claim. Under Missouri law, a breach-
of-contract action requires the claimant to demonstrate “(1) the existence and terms
of a contract; (2) that plaintiff performed or tendered performance pursuant to the
contract; (3) breach of the contract by the defendant; and (4) damages suffered by
the plaintiff.” Keveney v. Mo. Mil. Acad., 304 S.W.3d 98, 104 (Mo. 2010). Although
the construction of a contract’s terms is a question of law, Rowan v. Coves N. Homes
Ass’n, 426 S.W.3d 725, 727 (Mo. Ct. App. 2014), whether a contract exists is a
question of fact, Laws v. Progressive Direct Ins., 615 S.W.3d 861, 867 (Mo. Ct.
App. 2020).
S.W.3d at 22. And even if the state court’s determination was legally erroneous, it
would still have preclusive effect in the federal action. See Ginters, 614 F.3d at 826.

-- 7 of 13 --

-8-
Clark-Wall alleges that Smith accepted several personal loans from her and
agreed that, if she purchased the Primerica policy and paid the premiums, the
proceeds would serve as collateral in the event that he could not repay her. When
Smith’s Estate submitted a claim for the proceeds to Primerica, Clark-Wall argues,
it breached this agreement.
The only evidence of any such agreement is Clark-Wall’s testimony that
Smith was considered KCCS’s “key man,” that he “asked me to buy an insurance
policy so that if something would happen to him, I could regain part of the money”
for the loans, and that he encouraged her to continue making premium payments.
The policy itself does not refer to any obligation by Smith concerning loan
repayment. Nor does it say that a claim for the proceeds by Smith’s Estate would
be a breach of its terms. Indeed, it expressly provided that Smith’s Estate would be
entitled to the proceeds if there was no living beneficiary.
The district court found that neither Clark-Wall’s testimony nor any other
evidence demonstrated the existence of any agreement that Smith’s Estate might
have breached when it asked Primerica for the policy proceeds. After reviewing the
record, we find no clear error in that determination. See Viacom Outdoor, Inc. v.
Tauoil, 254 S.W.3d 234, 239 (Mo. Ct. App. 2008) (affirming dismissal of breach-
of-contract claim where “[t]he record reveal[ed] not even a modicum of evidence
showing a meeting of the minds”). Accordingly, the district court did not err in
denying Clark-Wall’s breach-of-contract claim.
B.
Clark-Wall’s related novation claim fares no better. Novation is “the
substitution of a new contract or obligation for an old one which is thereby
extinguished.” State ex rel. Premier Mktg., Inc. v. Kramer, 2 S.W.3d 118, 122 (Mo.
Ct. App. 1999). It consists of “(1) a previous valid obligation; (2) agreement of all
parties to a new contract; (3) extinguishment of an old contract; and (4) validity of a
new contract.” Id. Novation is sometimes asserted as a theory underlying a breach-

-- 8 of 13 --

-9-
of-contract claim or as an affirmative defense to such a claim. See, e.g., Am. Nat.
Ins. v. Noble Commc’ns Co., 936 S.W.2d 124, 131 (Mo. Ct. App. 1996); Wilson v.
Midstate Indus., 777 S.W.2d 310, 312 (Mo. Ct. App. 1989); McHenry v. Claspill,
545 S.W.2d 690, 692 (Mo. Ct. App. 1976).
Clark-Wall alleges that the 2010 policy renewal was a novation of a prior
agreement between Smith and her that the policy proceeds would serve as collateral
for Smith’s outstanding debts. She says that when it became clear that Smith could
not repay his debts, Smith and she agreed to renew the policy so that she could be
compensated. We construe Clark-Wall’s novation argument as a breach-of-contract
claim with respect to the 2010 policy renewal.
As explained above, there is no clear error in the district court’s determination
that no agreement existed between Smith and Clark-Wall concerning the use of the
policy proceeds to repay loans. Without establishing that Smith owed her a previous
obligation—let alone that he agreed to substitute that obligation by renewing the
policy in 2010—Clark-Wall could not show that the policy renewal was a novation.
See Premier Mktg., 2 S.W.3d at 122. Therefore, the district court did not err in
rejecting Clark-Wall’s novation claim.
IV.
We turn now to Clark-Wall’s argument that the district court erred by not
addressing her affirmative defenses of equitable estoppel and waiver at the bench
trial. We review the district court’s implicit denial of these defenses for an abuse of
discretion. See Riegelsberger v. Air Evac EMS, Inc., 970 F.3d 1061, 1063 (8th Cir.
2020).
The defense of equitable estoppel has three elements: (1) “an admission,
statement, or act by the person to be estopped that is inconsistent with a later claim”;
(2) an action by the person asserting estoppel that is taken in reliance on such
“admission, statement or act”; and (3) an injury that would result if the person to be

-- 9 of 13 --

-10-
estopped “is permitted to contradict or repudiate his admission, statement or act.”
Shores v. Express Lending Servs., Inc., 998 S.W.2d 122, 127 (Mo. Ct. App. 1999).
It is an “unfavored theory in the law.” Channawood Holdings, LLC v. 1209 Wash.,
LLC, 333 S.W.3d 480, 488 (Mo. Ct. App. 2010). The related equitable defense of
waiver may be pleaded against a party who attempts to assert a right after engaging
in conduct that is “so manifestly consistent with and indicative of an intention to
renounce” such right. Id. at 485.
Clark-Wall asserts that Smith’s Estate is equitably estopped from recovering
the policy proceeds because Smith never cancelled the policy, paid the premiums
himself, or instructed her to stop paying them. Such inaction, she argues,
demonstrated that Smith intended for her, not his Estate, to receive the proceeds and
induced her to continue making payments on the belief that the proceeds would be
hers. Alternatively, Clark-Wall argues that Smith’s inaction constituted a waiver of
his Estate’s right to recover the proceeds.
Neither equitable estoppel nor waiver is plausible. The district court did not
find that Smith even knew about the policy or Clark-Wall’s continued premium
payments. Indeed, it expressly found that Clark-Wall renewed the policy without
Smith’s assent. We find no clear error. Obviously, if Smith did not know that Clark-
Wall was making payments or that the policy even existed, his supposed inaction
would be neither inconsistent with, nor a waiver of, his Estate’s claim to the
proceeds. See Ryan v. Ford, 16 S.W.3d 644, 651 (Mo. Ct. App. 2000) (“[T]o invoke
[equitable estoppel] . . . a party must show by clear evidence that there was: a
representation made by the party estopped . . . [which] may be manifested by
affirmative conduct, either acts or words, or by silence amounting to concealment of
material facts. These facts must be known to the party estopped, and unknown to
the other party.” (citations and internal quotation marks omitted)); cf. Channawood
Holdings, 333 S.W.2d at 486 (holding that waiver did not occur where a party “pa[id]
no heed to or overlook[ed] a deadline mandating action”). Accordingly, the district
court did not abuse its discretion in implicitly denying Clark-Wall’s equitable-
estoppel and waiver defenses.

-- 10 of 13 --

-11-
V.
Finally, we consider Clark-Wall’s argument that the district court should have
ordered prejudgment interest on her unjust-enrichment award. We review a district
court’s ruling on prejudgment interest for an abuse of discretion.5 Vogt v. State Farm
Life Ins., 19 F.4th 1071, 1073 (8th Cir. 2021).
Prejudgment interest may be awarded as “compensation for the use or loss of
the use of money to the person entitled to it.” Lambley v. Diehl, 603 S.W.3d 346,
364 (Mo. Ct. App. 2020). In interpleader actions, “prejudgment interest need not be
automatically allowed,” Ins. Co. of N.A. v. Skyway Aviation, Inc., 828 S.W.2d 888,
892 (Mo. Ct. App. 1992), and will be awarded only if the “principles of fairness and
justice” so require, Catron v. Columbia Mut. Ins., 723 S.W.2d 5, 7 (Mo. 1987); see
also Bauer v. Uniroyal Tire Co., 630 F.2d 1287, 1290 (8th Cir. 1980) (“Even if
[state] law allows an award of prejudgment interest, a court will make an award in
an interpleader action only if it is equitable to do so.”).
Although the district court equitably awarded $55,253.28 to Clark-Wall,
Clark-Wall says this amount is inadequate because it compensates her merely for the
premiums’ “face value” and not their “time value.” By the same token, Clark-Wall
argues that it would be “inequitable and unjust” for Smith’s Estate to retain the
policy proceeds “without paying offset for interest.” The district court disagreed,
finding that an award of $55,253.28 without prejudgment interest was adequate
compensation.
5 Although Clark-Wall frames them as separate issues on appeal, we consider
together the district court’s initial decision not to order prejudgment interest with her
unjust-enrichment award and its later denial of her Rule 59(e) motion asking to alter
or amend the award to include prejudgment interest. See Cont’l Indem. Co. v. IPFS
of N.Y., LLC, 7 F.4th 713, 717 (8th Cir. 2021) (reviewing for an abuse of discretion
a court’s ruling on a Rule 59(e) motion requesting prejudgment interest).

-- 11 of 13 --

-12-
We are unpersuaded that the district court abused its discretion by not
including prejudgment interest with Clark-Wall’s equitable award. At the bench
trial, Smith’s widow and daughter both testified that Smith stopped working for
KCCS sometime around 1994—by which point the corporation was dissolved—and
that, by 1999, Smith no longer owed any debts to KCCS or Clark-Wall. Clark-Wall
nonetheless continued to make monthly premium payments on the Primerica policy
for the next nineteen years, even renewing it without Smith’s assent. Nothing in the
record suggests that Clark-Wall ever attempted to cancel the policy, turn it over to
Smith, or inform Primerica that Smith stopped working for KCCS or that KCCS was
dissolved.
Given these circumstances, it seems that Clark-Wall’s continued payments
and renewal of the policy were essentially a gamble on Smith’s life—a benefit she
hoped to reap if he died before she did. The law does not view such conduct
favorably. See Lakin v. Postal Life & Cas. Ins., 316 S.W.2d 542, 549 (Mo. 1958)
(“A person cannot take out a valid and enforceable policy of insurance for his own
benefit on the life of a person in which he has no insurable interest; such a policy or
contract of insurance is void and unenforceable on the grounds of public policy, it
being merely a wagering contract.”). We therefore fail to see how the principles of
fairness and justice demand that Clark-Wall be awarded accumulated interest on her
payments. See Purcell v. Cape Girardeau Cnty. Comm’n, 322 S.W.3d 522, 524
(Mo. 2010) (observing that litigants with “unclean hands” generally may not obtain
equitable relief). Accordingly, we find no abuse of discretion in the district court’s
equitable award to Clark-Wall.6
6 Clark-Wall further urges that the district court should have used her
equitable-recoupment claim as another means of awarding prejudgment interest.
Equitable recoupment permits a defendant to “claim damages from a plaintiff, either
because [the plaintiff] has not complied with some cross obligation of the contract
upon which he sues, or because [the plaintiff] has violated some duty which the law
imposed upon him in the making or performance of that contract.” Russell v. Empire
Storage & Ice Co., 59 S.W.2d 1061, 1067 (Mo. 1933). The district court did not
abuse its discretion in rejecting this claim on the basis that the claim addressed the
same concerns as Clark-Wall’s unjust-enrichment claim. See Coohey v. United

-- 12 of 13 --

-13-
VI.
For the foregoing reasons, we affirm.
______________________________
States, 172 F.3d 1060, 1064 (8th Cir. 1999) (observing that equitable recoupment
“finds its roots in the equitable concerns of unjust enrichment”).

-- 13 of 13 --