IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF IOWA

CENTRAL DIVISION





TOP OF IOWA COOPERATIVE, an Iowa cooperative,
Plaintiff,

No. C 96-3146-MWB

vs.



PRELIMINARY AND

FINAL INSTRUCTIONS

TO THE JURY

VIRGIL E. SCHEWE,
Defendant.

____________________



TABLE OF CONTENTS

PRELIMINARY INSTRUCTIONS

NO. 1 - PRELIMINARY INSTRUCTIONS

NO. 2 - STATEMENT OF THE CASE

NO. 3 - BURDENS OF PROOF

NO. 4 - ELEMENTS OF THE CLAIMS AND DEFENSES

NO. 5 - DUTY OF JURORS

NO. 6 - ORDER OF TRIAL

NO. 7 - DEFINITION OF EVIDENCE

NO. 8 - CREDIBILITY OF WITNESSES

NO. 9 - STIPULATED FACTS

NO. 10 - DEPOSITIONS

NO. 11 - INTERROGATORIES

NO. 12 - OBJECTIONS

NO. 13 - BENCH CONFERENCES

NO. 14 - NOTE-TAKING

NO. 15 - CONDUCT OF JURORS DURING TRIAL

FINAL INSTRUCTIONS

NO. 1 - INTRODUCTION

NO. 2 - IMPEACHMENT OF WITNESSES

NO. 3 - LEGALITY OF THE CONTRACTS

NO. 4 - TOP OF IOWA'S CLAIM OF BREACH OF CONTRACT

NO. 5 - MR. SCHEWE'S COUNTERCLAIM OF BREACH OF

CONTRACT

NO. 6 - MR. SCHEWE'S COUNTERCLAIM OF BREACH OF

FIDUCIARY DUTY

NO. 7 - AFFIRMATIVE DEFENSE OF EQUITABLE ESTOPPEL

NO. 8 - FAILURE OF PROOF

NO. 9 - DAMAGES--IN GENERAL

NO. 10 - DAMAGES--SPECIFIC

NO. 11 - DELIBERATIONS



VERDICT FORM

PRELIMINARY INSTRUCTION NO. 1 - PRELIMINARY INSTRUCTIONS



Members of the jury, before the lawyers make their opening statements, I give you these preliminary instructions to help you better understand the trial and your role in it. Consider these instructions, together with any oral instructions given to you during the trial and the written final instructions given at the end of the trial, and apply them as a whole to the facts of the case. In considering these instructions, the order in which they are given is not important.



PRELIMINARY INSTRUCTION NO. 2 - STATEMENT OF THE CASE



The following brief summary of the case is not to be considered evidence or proof of any facts or events in the case. It simply informs you of the factual disputes between the parties.

This is a civil case brought by plaintiff Top of Iowa Cooperative, a farmer-owned cooperative, against defendant Virgil E. Schewe, a family farmer. The dispute between the parties concerns certain contracts, called "hedge-to-arrive contracts" or "HTAs," for the sale and purchase of grain. Top of Iowa claims that Mr. Schewe "repudiated," or breached, his HTAs by failing to deliver grain under the terms of the contracts. Mr. Schewe denies that claim. He also asserts, as an affirmative defense, that Top of Iowa should be barred, or "estopped," from recovering on the HTAs by Top of Iowa's own improper actions.

Mr. Schewe has also brought his own claims, called "counterclaims," in this lawsuit. First, Mr. Schewe asserts his own breach-of-contract claim against Top of Iowa, in which he claims that Top of Iowa breached the HTAs in three ways: (1) by refusing to accept delivery of his grain; (2) by trying to change the terms of the contracts; and (3) by forcing him to "roll" his contracts to a later delivery date and then improperly demanding payment for Top of Iowa's expenses in handling the contracts. Second, Mr. Schewe asserts a counterclaim of breach of fiduciary duty, in which he contends that Top of Iowa failed to disclose adequately the riskiness of the HTAs, which Top of Iowa had a fiduciary duty to do under the circumstances. Top of Iowa denies Mr. Schewe's counterclaims, and also contends, as an affirmative defense, that Mr. Schewe should be barred, or "estopped," from recovering on his counterclaims by his own improper conduct.

You will be asked to resolve these disputes between the parties.

PRELIMINARY INSTRUCTION NO. 3 - BURDENS OF PROOF



In these instructions, you are told that your verdict depends on whether you find certain facts have been proved. The burden of proving a fact is upon the party whose claim, counterclaim, or affirmative defense depends upon that fact. In this case, claims of "breach of contract" and "breach of fiduciary duty" must be proved "by the greater weight of the evidence." To prove something "by the greater weight of the evidence" is to prove that it is more likely true than not true. The "greater weight of the evidence" is determined by considering all of the evidence and deciding which evidence is more believable. If, on any issue in the case, the evidence is equally balanced, you cannot find that issue has been proved.

The parties' affirmative defenses of "equitable estoppel," however, must be proved according to a higher standard. Such a defense must be proved "by clear, convincing, and satisfactory evidence." Evidence is "clear, convincing, and satisfactory" if there is no serious or substantial uncertainty about the conclusion to be drawn from it.

Neither the "greater weight of the evidence" nor "clear, convincing, and satisfactory evidence" is necessarily determined by the greater number of witnesses or exhibits a party has presented. The testimony of a single witness that produces in your mind a belief in the likelihood of truth is sufficient for proof of any fact and would justify a verdict in accordance with such testimony. This is so, even though a number of witnesses may have testified to the contrary, if after consideration of all of the evidence in the case, you hold a greater belief in the accuracy and reliability of that one witness.

You may have heard of the term "proof beyond a reasonable doubt." That is a stricter standard, which applies in criminal cases. It does not apply in civil cases such as this. You should, therefore, put it out of your minds.

PRELIMINARY INSTRUCTION NO. 4 - ELEMENTS OF THE CLAIMS

AND DEFENSES





To help you follow the evidence, here is a brief summary of the nature and elements of the parties' claims, counterclaims, and affirmative defenses.



Breach Of Contract

Each party claims that the other breached the HTAs at issue in this case. To win a claim or counterclaim of breach of contract, a party must prove the following five elements by the greater weight of the evidence:

One, the existence of a contract;

Two, the terms of the contract;

Three, the party asserting the claim or counterclaim has done what the contract requires or has been excused from doing what the contract requires;

Four, the opposing party breached the contract; and

Five, the amount of any damage to the party asserting the claim or counterclaim caused by the other party's breach of the contract.

Remember that, as to element four, Top of Iowa contends that Mr. Schewe breached the HTAs by failing to deliver grain under the terms of the contract. On the other hand, Mr. Schewe contends that Top of Iowa breached the HTAs (1) by refusing to accept delivery of his grain; (2) by trying to change the terms of the contracts; and (3) by forcing him to "roll" his contracts to a later delivery date and then improperly demanding payment for Top of Iowa's expenses in handling the contracts.

If a party asserting a claim or counterclaim of breach of contract has failed to prove all of the above elements by the greater weight of the evidence, then your verdict must be for the opposing party on that claim or counterclaim.



Breach Of Fiduciary Duty

In addition to his counterclaim of breach of contract, Mr. Schewe asserts a counterclaim of breach of fiduciary duty, in which he contends that Top of Iowa failed to disclose adequately the riskiness of the HTAs, which Top of Iowa had a fiduciary duty to do under the circumstances. To win his claim of breach of fiduciary duty against Top of Iowa, Mr. Schewe must prove the following four elements by the greater weight of the evidence:

One, Top of Iowa owed a fiduciary duty to Mr. Schewe;

Two, Top of Iowa breached the fiduciary duty it owed to Mr. Schewe;

Three, the breach of fiduciary duty was a proximate cause of damage to Mr. Schewe; and

Four, the amount of damages, if any.

If Mr. Schewe has failed to prove all of the above elements by the greater weight of the evidence, then your verdict must be for Top of Iowa on Mr. Schewe's counterclaim of breach of fiduciary duty.



Affirmative Defense Of Equitable Estoppel

Top of Iowa and Mr. Schewe both contend, as affirmative defenses to the claim or counterclaims against them, that the opposing party should be barred, or "estopped," from recovering on any claim or counterclaim by the claimant's own improper conduct. You will consider this affirmative defense if you find that the claimant has otherwise proved the elements of the claimant's claim or counterclaim by the greater weight of the evidence. To succeed on this defense, and thereby to bar the claimant's recovery, the defending party must prove the following four elements of "equitable estoppel" by "clear, convincing, and satisfactory evidence":

One, the claimant made a false representation or concealment of material facts;

Two, the defending party lacked knowledge of the true facts;

Three, the claimant intended that the defending party act on the representations; and

Four, the defending party relied on the representations to the defending party's prejudice or injury.

If the defending party has proved all of these elements by clear, convincing, and satisfactory evidence, then the claimant is barred, or "estopped," from recovering on its claim or counterclaim. However, if the defending party fails to prove all of these elements by clear, convincing, and satisfactory evidence, and the claimant has proved all of the elements of its claim or counterclaim by the greater weight of the evidence, then the claimant is entitled to damages in some amount.



This is only a preliminary outline of the elements of the parties' claims, counterclaims, and affirmative defenses. At the end of the trial, I will give you final written instructions, which will explain these claims, counterclaims, and affirmative defenses in greater detail. Because they are more detailed, those final instructions govern on the elements of the parties' claims, counterclaims, and defenses.

PRELIMINARY INSTRUCTION NO. 5 - DUTY OF JURORS



It will be your duty to decide from the evidence what the facts are. You, and you alone, are the judges of the facts. You will hear the evidence, decide what the facts are and then apply those facts to the law, which I will give you in these preliminary instructions, any instructions given during the trial, and in the final instructions at the conclusion of the case. You will then deliberate and reach your verdict. You are the sole judges of the facts; but you must follow the law as stated in my instructions, whether you agree with it or not.

You have been chosen and sworn as jurors in this case to try the issues of fact presented by the parties. Do not allow sympathy or prejudice to influence you. The law demands of you a just verdict, unaffected by anything except the evidence, your common sense, and the law as I will give it to you.

This case should be considered and decided by you as an action between persons of equal standing in the community, of equal worth, and holding the same or similar stations in life. In this case, plaintiff Top of Iowa is a corporation. The mere fact that a party is a corporation does not mean that it is entitled to any greater or lesser consideration by you. All persons, including individuals and corporations, stand equal before the law, and are entitled to the same fair consideration by you.

When a corporation such as Top of Iowa is involved, of course, it may act only through natural persons as its agents or employees; and, in general, any agent or employee of the corporation may bind the corporation by the acts and declarations made while acting within the scope of the authority delegated to the employee by the corporation or within the scope of the employee's or agent's duties as an employee or agent of the corporation.

You should not take anything I may say or do during the trial as indicating what I think of the evidence or what I think your verdict should be.

PRELIMINARY INSTRUCTION NO. 6 - ORDER OF TRIAL



The trial will proceed in the following order:

After I conclude these preliminary instructions, the plaintiff's lawyer may make an opening statement. Next, the defendant's lawyer may make an opening statement. An opening statement is not evidence, but is simply a summary of what the lawyers expect the evidence to be.

The plaintiff will then present evidence and witnesses and the defendant may cross-examine. Following the plaintiff's case, the defendant may present evidence and witnesses and the plaintiff may cross-examine. Following the defendant's case, the plaintiff may take a further opportunity to present additional evidence.

After the evidence is concluded, I will give you the final instructions on the law that you are to apply in reaching your verdict. The lawyers will then make their closing arguments to summarize and interpret the evidence for you. As with opening statements, closing arguments are not evidence. I will then give you some final instructions on deliberations, and you will retire to deliberate on your verdict.

PRELIMINARY INSTRUCTION NO. 7 - DEFINITION OF EVIDENCE



You shall base your verdict only upon the evidence, these instructions, and other instructions that I may give you during the trial.

Evidence is:

1. Testimony in person, including testimony using teleconferencing technology, or testimony previously given, which includes depositions or videotaped depositions.

2. Exhibits admitted into evidence by the court.

3. Stipulations, which are agreements between the parties.

4. Any other matter admitted into evidence.

Evidence may be direct or circumstantial. You should not be concerned with these terms since the law makes no distinction between the weight to be given to direct and circumstantial evidence. The weight to be given any evidence is for you to decide.

The following are not evidence:

1. Statements, arguments, questions, and comments by the lawyers.

2. Objections and rulings on objections.

3. Testimony I tell you to disregard.

4. Anything you saw or heard about this case outside the courtroom.

You should not take anything I may say or do during the trial as indicating what I think of the evidence.

PRELIMINARY INSTRUCTION NO. 8 - CREDIBILITY OF WITNESSES



In deciding what the facts are, you may have to decide what testimony you believe and what testimony you do not believe. You may believe all of what a witness says, or only part of it, or none of it.

In deciding what testimony to believe, consider the witnesses' intelligence, their opportunity to have seen or heard the things they testify about, their memories, the motives they may have for testifying a certain way, their manner while testifying, whether they said something different at an earlier time, the general reasonableness of their testimony, and the extent to which their testimony is consistent with other evidence that you believe.

In deciding whether or not to believe a witness, keep in mind that people sometimes hear or see things differently and sometimes forget things. You need to consider therefore whether a contradiction is an innocent misrecollection or lapse of memory or an intentional falsehood, and that may depend on whether it has to do with an important fact or only a small detail.

You may hear testimony from persons described as experts. Persons who have become experts in a field because of their education and experience may give their opinions on matters in that field and the reasons for their opinions. Consider expert testimony just like any other testimony. You may accept it or reject it. You may give it as much weight as you think it deserves, considering the witness's education and experience, the reasons given for the opinion, and all the other evidence in the case.

Also, an expert witness may be asked to assume certain facts are true and to give an opinion based on that assumption. This is called a hypothetical question. If any facts assumed in the question are not proved by the evidence, you should decide if that omission affects the value of the expert's opinion.

PRELIMINARY INSTRUCTION NO. 9 - STIPULATED FACTS



The plaintiff and the defendant have agreed, or "stipulated," to certain facts and have reduced these facts to a written agreement or stipulation. Any counsel may, throughout the trial, read to you all or a portion of the stipulated facts. You should treat these stipulated facts as having been proved.

PRELIMINARY INSTRUCTION NO. 10 - DEPOSITIONS



Certain testimony from a deposition may be read into evidence or played from a videotape. A deposition is testimony taken under oath before the trial and preserved in writing or on videotape. Consider that testimony as if it had been given in court.

PRELIMINARY INSTRUCTION NO. 11 - INTERROGATORIES



During this trial, you may hear the word "interrogatory." An interrogatory is a written question asked by one party of another, who must answer it under oath in writing. Consider interrogatories and the answers to them as if the questions had been asked and answered here in court.

PRELIMINARY INSTRUCTION NO. 12 - OBJECTIONS



From time to time during the trial I may be called upon to make rulings of law on objections or motions made by the lawyers. It is the duty of the lawyer for each party to object when another party offers testimony or other evidence that the lawyer believes is not properly admissible. You should not show prejudice against a lawyer or the party the lawyer represents because the lawyer has made objections. You should not infer or conclude from any ruling or other comment I may make that I have any opinions on the merits of the case favoring one side or the other. Also, if I sustain an objection to a question that goes unanswered by the witness, you should not draw any inferences or conclusions from the question itself.

PRELIMINARY INSTRUCTION NO. 13 - BENCH CONFERENCES



During the trial it may be necessary for me to talk with the lawyers out of your hearing, either by having a bench conference here while you are present in the courtroom, or by calling a recess. Please understand that while you are waiting, we are working. The purpose of these conferences is to decide how certain evidence is to be treated under the rules of evidence, and to avoid confusion and error. We will, of course, do what we can to keep the number and length of these conferences to a minimum.

PRELIMINARY INSTRUCTION NO. 14 - NOTE-TAKING



If you want to take notes during the trial, you may. However, it is difficult to take detailed notes and pay attention to what the witnesses are saying. If you do take notes, be sure that your note-taking does not interfere with listening to and considering all of the evidence. Also, if you take notes, do not discuss them with anyone before you begin your deliberations. Do not take your notes with you at the end of the day. Be sure to leave them on your chair in the courtroom. The court attendant will safeguard the notes. No one will read them. The notes will remain confidential throughout the trial and will be destroyed at the conclusion of the trial.

If you choose not to take notes, remember it is your own individual responsibility to listen carefully to the evidence. You cannot give this responsibility to someone who is taking notes. We depend on the judgment of all members of the jury; you must all remember and consider the evidence in this case.

Whether or not you take notes, you should rely on your own memory regarding what was said. Your notes are not evidence. A juror's notes are not more reliable than the memory of another juror who chooses to consider the evidence carefully without taking notes. You should not be overly influenced by the notes.

You will notice that we do have an official court reporter making a record of the trial. However, we will not have typewritten transcripts of this record available for your use in reaching your verdict.



PRELIMINARY INSTRUCTION NO. 15 - CONDUCT OF JURORS

DURING TRIAL





You will not be required to remain together while court is in recess. However, to ensure fairness, you, as jurors, must obey the following rules:

First, do not talk among yourselves about this case, or about anyone involved with it, until the end of the case when you go to the jury room to decide on your verdict.

Second, do not talk with anyone else about this case, or about anyone involved with it, until the trial has ended and you have been discharged as jurors.

Third, when you are outside the courtroom, do not let anyone tell you anything about the case, or about anyone involved with it until the trial has ended and your verdict has been accepted by me. If someone should try to talk to you about the case during the trial, please report it to me.

Fourth, during the trial you should not talk with or speak to any of the parties, lawyers or witnesses involved in this case--you should not even pass the time of day with any of them. It is important not only that you do justice in this case, but that you also give the appearance of doing justice. If a person from one side of the case sees you talking to a person from the other side--even if it is simply to pass the time of day--an unwarranted and unnecessary suspicion about your fairness might be aroused. If any lawyer, party, or witness does not speak to you when you pass in the hall, ride the elevator, or the like, remember it is because they are not supposed to talk or visit with you either.

Fifth, do not read any news stories or articles about the case, or about anyone involved with it, or listen to any radio or television reports about the case or about anyone involved with it.

Sixth, do not do any research or make any investigation about the case on your own.

Seventh, do not make up your mind during the trial about what the verdict should be. Keep an open mind until after you have gone to the jury room to decide the case and you and your fellow jurors have discussed the evidence.

DATED this 2nd day of April, 2001.



FINAL INSTRUCTION NO. 1 - INTRODUCTION



Members of the jury, the instructions I gave you at the beginning of the trial and any oral or written instructions I gave you during the trial remain in effect. I now give you some additional instructions.

You must, of course, continue to follow the instructions I gave you earlier, as well as those I give you now. You must not single out some instructions and ignore others, because all are important. The instructions I am about to give you now, as well as the preliminary instructions given to you at the beginning of the trial, are in writing and will be available to you in the jury room. All instructions, whenever given and whether in writing or not, must be followed. This is true even though some of the instructions I gave you at the beginning of the trial are not repeated here.

In considering these instructions, the order in which they are given is not important.

Neither in these instructions nor in any ruling, action, or remark that I have made during the course of this trial have I intended to give any opinion or suggestion as to what your verdict should be.

FINAL INSTRUCTION NO. 2 - IMPEACHMENT OF WITNESSES





In Preliminary Instruction No. 8, I instructed you on the credibility of witnesses. I now give you this further instruction on how the credibility of a witness can be "impeached."

A witness may be discredited or "impeached" by contradictory evidence, or by evidence that at some time the witness has said or done something, or has failed to say or do something, that is inconsistent with the witness's present testimony. If you believe any witness has been impeached and thus discredited, it is your exclusive province to give the testimony of that witness such credibility, if any, as you may think it deserves.

FINAL INSTRUCTION NO. 3 - LEGALITY OF THE CONTRACTS





You have heard evidence in this case that may suggest that the HTA contracts in question are or were somehow illegal, or that one of the parties questioned their legality. However, after this suit was filed, I determined that the HTA contracts in question here are legal. Therefore, the only remaining questions for you to decide are whether or not any party breached the contracts or breached a fiduciary duty concerning the contracts.

FINAL INSTRUCTION NO. 4 - TOP OF IOWA'S CLAIM

OF BREACH OF CONTRACT





Top of Iowa claims that Mr. Schewe "repudiated," or breached, his HTAs by failing to deliver grain under the terms of the contracts. Mr. Schewe denies that claim. He also asserts, as an affirmative defense, that Top of Iowa should be barred, or "estopped," from recovering on the HTAs by Top of Iowa's own improper actions.

To win its claim of breach of contract, Top of Iowa must prove the following five elements by the greater weight of the evidence:

One, the existence of a contract.

"Contract" means the total legal obligation that results from the parties' agreement. "Agreement" means the bargain of the parties in fact as found in their language or by implication from other circumstances, including course of dealing or course of performance, as defined below. The existence of a contract requires a meeting of the minds on the material terms. This means the parties must agree upon the same things in the same sense. You are to determine if a contract existed from the words and acts of the parties, together with all reasonable inferences you may draw from the surrounding circumstances.



Two, the terms of the contract.

A writing signed by the parties need not contain all the material terms of the contract and such material terms as are stated need not be precisely stated. All that is required is that the writing afford a basis for believing that oral evidence of an agreement rests on a real transaction. The only term that must appear in the writing is the quantity of goods involved in the agreement. Terms in a writing that is intended by the parties as a final expression of their agreement with respect to such terms as are included in it may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement, but may be explained or supplemented. "Supplement" means "to add to."

Terms of the writing may be supplemented by a course of dealing. A "course of dealing" is a sequence of previous conduct between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct. A course of dealing can give particular meaning to and can supplement or qualify terms of an agreement.

Terms of the writing may also be supplemented by a course of performance. A "course of performance" can exist where a contract involves repeated occasions for performance by either party with knowledge of the nature of the performance and an opportunity for objection to it by the other. A course of performance accepted or acquiesced in without objection can be used to determine the meaning of the agreement.

Whenever it is reasonable to do so, the written terms of the agreement and any course of performance or course of dealing must be construed as consistent with each other. However, when it is unreasonable to do so, the written terms shall control over course of performance or course of dealing.

Terms of the writing may also be supplemented by evidence of consistent additional terms.



Three, Top of Iowa has done what the contract requires or has been excused from doing what the contract requires.

A party's performance is excused by the other party's prior breach of the contract, such as by renouncing or repudiating the contract, as "renunciation" and "repudiation" are defined in the explanation to element four.



Four, Mr. Schewe breached the contract.

A breach of the contract occurs when a party fails to perform a term of the contract. A breach also occurs when a party "renounces" or "repudiates" a contract. A "renunciation" occurs when a party clearly rejects the contract by giving notice to the other party that the party will not perform. A "repudiation" occurs when a party makes a statement that, fairly read, amounts to a statement of intention not to perform the contract except on conditions that go beyond those provided in the contract. Top of Iowa contends that Mr. Schewe breached or repudiated the HTAs by failing to deliver grain under the terms of the contracts.



Five, the amount of any damage to Top of Iowa caused by Mr. Schewe's breach of the contract.

If Top of Iowa has failed to prove all of the above elements by the greater weight of the evidence as to Mr. Schewe, then your verdict must be for Mr. Schewe on Top of Iowa's claim of breach of contract. However, if Top of Iowa has proved all of these elements by the greater weight of the evidence, then Top of Iowa is entitled to damages in some amount from Mr. Schewe for breach of contract, unless Mr. Schewe proves his affirmative defense of "equitable estoppel" by clear, convincing, and satisfactory evidence, as that defense is explained to you in Final Jury Instruction No. 7. Remember that the respective burdens of proof on Top of Iowa's claim and Mr. Schewe's affirmative defense were explained to you in Preliminary Jury Instruction No. 3.

FINAL INSTRUCTION NO. 5 - MR. SCHEWE'S COUNTERCLAIM

OF BREACH OF CONTRACT





Mr. Schewe's first counterclaim is that Top of Iowa breached the HTAs. Top of Iowa denies Mr. Schewe's counterclaim of breach of contract, and also contends, as an affirmative defense, that Mr. Schewe should be barred, or "estopped," from recovering on his counterclaim by his own improper conduct.

To win his counterclaim of breach of contract, Mr. Schewe must prove the following five elements by the greater weight of the evidence:

One, the existence of a contract.

This element was explained to you in Final Jury Instruction No. 4.



Two, the terms of the contract.

This element was also explained to you in Final Jury Instruction No. 4.



Three, Mr. Schewe has done what the contract requires or has been excused from doing what the contract requires.

This element was also explained to you in Final Jury Instruction No. 4.



Four, Top of Iowa breached the contract.

This element was also explained to you in Final Jury Instruction No. 4. Mr. Schewe contends that Top of Iowa breached the HTAs in the following ways: (1) by refusing to accept delivery of his grain in the Fall of 1995 and/or in the Spring of 1996; (2) by trying to change the terms of the contracts; and (3) by forcing him to "roll" his contracts to a later delivery date and then improperly demanding payment for Top of Iowa's expenses in handling the contracts. It is not necessary for Mr. Schewe to prove that Top of Iowa breached the HTAs in all three of these ways in order for him to win his counterclaim of breach of contract; rather, it is enough if he proves, by the greater weight of the evidence, that Top of Iowa breached the HTAs in any one or more of these ways, although you must unanimously agree on the way or ways in which Top of Iowa breached the HTAs.



Five, the amount of any damage to Mr. Schewe caused by Top of Iowa's breach of the contract.

If Mr. Schewe has failed to prove all of the above elements by the greater weight of the evidence as to Top of Iowa, then your verdict must be for Top of Iowa on Mr. Schewe's counterclaim of breach of contract. However, if Mr. Schewe has proved all of these elements by the greater weight of the evidence, then Mr. Schewe is entitled to damages in some amount from Top of Iowa for breach of contract, unless Top of Iowa proves its affirmative defense of "equitable estoppel" by clear, convincing, and satisfactory evidence, as that defense is explained to you in Final Jury Instruction No. 7. Remember that the respective burdens of proof on Mr. Schewe's counterclaim and Top of Iowa's affirmative defense were explained to you in Preliminary Jury Instruction No. 3.

FINAL INSTRUCTION NO. 6 - MR. SCHEWE'S COUNTERCLAIM

OF BREACH OF FIDUCIARY DUTY





Mr. Schewe's second counterclaim is for breach of fiduciary duty. Top of Iowa also denies this counterclaim, and again contends, as an affirmative defense, that Mr. Schewe should be barred, or "estopped," from recovering on this counterclaim by his own improper conduct.

To win his claim of breach of fiduciary duty against Top of Iowa, Mr. Schewe must prove the following four elements by the greater weight of the evidence:

One, Top of Iowa owed a fiduciary duty to Mr. Schewe.

A "fiduciary relationship" is a relationship of trust and confidence on a subject between two persons. One of the persons is under a duty to act for or give advice to the other on that subject. Confidence is placed on one side, and domination and influence result on the other. Circumstances that may indicate the existence of a fiduciary relationship include the acting of one person for another, the having and exercising of influence over one person by another, the placing of confidence by one person in another, the dominance of one person by another, the inequality of the parties, and the dependence of one person upon another. None of these circumstances is more important than another. A fiduciary relationship can therefore exist when the evidence indicates that (1) one of the parties enjoyed superior or excessive influence over the other; (2) the parties had a confidential relationship and one of the parties had greater access to facts and legal resources; or (3) there was a disparity of business experience and an invitation to the party with lesser experience to place confidence in the advice of the other party. It is for you to determine from the evidence whether a fiduciary relationship existed between the parties.

If a fiduciary relationship exists, a fiduciary has a duty to disclose all material facts in dealing with the other party to permit the other party to make an intelligent, knowing decision in such dealings. A fact is material if a reasonable person would consider it to be important in making a decision.



Two, Top of Iowa breached the fiduciary duty it owed to Mr. Schewe.

Mr. Schewe contends that Top of Iowa breached its fiduciary duty to him when Top of Iowa failed to disclose adequately the riskiness of the HTAs. It is a breach of fiduciary duty for a fiduciary to fail to perform the duty to disclose all material facts in dealing with the other party to permit the other party to make an intelligent, knowing decision in such dealings.



Three, the breach of fiduciary duty was a proximate cause of damage to Mr. Schewe.

The conduct of a party is a proximate cause of damage when it is a substantial factor in producing damage and when the damage would not have happened except for the conduct. "Substantial" means the party's conduct has such an effect in producing damage as to lead a reasonable person to regard it as a cause.



Four, the amount of damages, if any.



If Mr. Schewe has failed to prove all of the above elements by the greater weight of the evidence as to Top of Iowa, then your verdict must be for Top of Iowa on Mr. Schewe's counterclaim of breach of fiduciary duty. However, if Mr. Schewe has proved all of these elements by the greater weight of the evidence, then Mr. Schewe is entitled to damages in some amount from Top of Iowa for breach of fiduciary duty, unless Top of Iowa proves its affirmative defense of "equitable estoppel" by clear, convincing, and satisfactory evidence, as that defense is explained to you in Final Jury Instruction No. 7. Remember that the respective burdens of proof on Mr. Schewe's counterclaim and Top of Iowa's affirmative defense were explained to you in Preliminary Jury Instruction No. 3.

FINAL INSTRUCTION NO. 7 - AFFIRMATIVE DEFENSE

OF EQUITABLE ESTOPPEL





Top of Iowa and Mr. Schewe both contend, as affirmative defenses to the claim or counterclaims against them, that the opposing party should be barred, or "estopped," from recovering on any claim or counterclaim by the claimant's own improper conduct. You will consider this affirmative defense if you find that the claimant has otherwise proved the elements of the claimant's claim or counterclaim by the greater weight of the evidence. To succeed on this defense, and thereby to bar the claimant's recovery, the defending party must prove the following four elements of "equitable estoppel" by "clear, convincing, and satisfactory evidence":

One, the claimant made a false representation or concealment of material facts.

A "representation" is any word or conduct asserting the existence of a fact. A representation of fact includes an opinion expressed for the deliberate purpose of deceiving another. A representation of fact includes a promise to perform a future act. A representation also includes an opinion. An opinion is a statement of a person's belief that a fact exists or that person's judgment as to quality, value, authenticity, or a similar matter.

A representation of fact implies that the maker has definite knowledge or information supporting his or her statement; a representation of opinion does not. You must consider all of the surrounding circumstances, including the exact words used, in deciding whether a representation is one of fact or opinion.

A fact is "material" if: (1) a reasonable person would consider it as important in making a decision; (2) the party knows or has reason to know that the other party considers, or is likely to consider, the fact as important in making a decision; or (3) the fact influences a person to enter into a transaction that would not have occurred otherwise.

"Concealment" may be shown by actions to prevent another from learning about material information, or it may be shown by silence or inaction in response to a request for the material information.



Two, the defending party lacked knowledge of the true facts.

Three, the claimant intended that the defending party act on the representations.

The necessary intention can be inferred from actions that show one of the parties wanted to deceive the other as to representations or concealments or believed that in all likelihood the other party would be deceived; the concealment or promise would deceive a person as to a party's intention to perform obligations under the HTAs; or one of the parties concealed or made unfulfilled promises as to that party's intention to perform the party's obligations under the HTAs without regard for their importance to the other party.



Four, the defending party relied on the representations to the defending party's prejudice or injury.

A party must rely on the representation and the reliance must be justified. It is not necessary that the representation be the only reason for the party's action. It is enough if the representation was a substantial factor in bringing about the action. Whether reliance is justified depends on what the party can reasonably be expected to do in light of its own information and intelligence. Reliance is not justified if the representation is of an unimportant fact or is obviously false.

A party was justified in relying on the other party's representations of opinion only if one or more of the following situations existed: (1) a party had or claimed to have special knowledge of the matter that the other party did not have; (2) a party had a fiduciary or other similar relation of trust and confidence with the other party; (3) the other party had successfully tried to gain the party's confidence; (4) the other party knew of some special reason to expect that the party would rely on the opinion.

A person is presumed to be able to form his or her own opinion about the wisdom of entering into a routine transaction. A person entering into an ordinary transaction is not justified in relying upon the other party's "puffing," "sales talk," or other general opinion of the value of the transaction. However, a person may be justified in relying upon a statement that the transaction is satisfactory for the person's announced purpose.



If you find that the defending party has proved all of these elements by clear, convincing, and satisfactory evidence, then the claimant is barred, or "estopped," from recovering on its claim or counterclaim and you must therefore find for the defending party on that claim or counterclaim. However, if the defending party fails to prove all of these elements by clear, convincing, and satisfactory evidence, and the claimant has proved all of the elements of its claim or counterclaim by the greater weight of the evidence, then the claimant is entitled to damages in some amount. Remember that the respective burdens of proof by the "greater weight of the evidence" on claims and counterclaims and by "clear, convincing, and satisfactory evidence" on the affirmative defenses were explained to you in Preliminary Jury Instruction No. 3.

FINAL INSTRUCTION NO. 8 - FAILURE OF PROOF



If you find, after considering all of the evidence presented, that neither party has proved its claim or counterclaims, you may so indicate on the verdict form.

FINAL INSTRUCTION NO. 9 - DAMAGES--IN GENERAL



If you find in favor of one of the parties on that party's claim or counterclaim, you must award that party such sum as you find will fairly and justly compensate that party for any damages you find that party sustained as a direct result of the other party's wrongful conduct. However, I must explain to you now some matters applicable to all of your determinations of damages.

In arriving at the amount of damages on a claim or counterclaim, you cannot establish a figure by taking down the estimate of each juror as to damages and agreeing in advance that the average of those estimates shall be your award of damages for that claim or counterclaim.

Remember, throughout your deliberations, you must not engage in any speculation, guess, or conjecture. Although the precise amount of a party's damages may be difficult to determine, that should not affect the party's recovery. On the other hand, a party is not to be awarded purely speculative damages. Damages may be awarded only when there is some reasonable basis in the evidence in the case for determining that the party has in fact suffered a loss, even though the amount of such loss is difficult to determine.

You must not award damages under any of these Instructions by way of punishment or through sympathy. Your judgment must not be exercised arbitrarily, or out of sympathy or prejudice, for or against any of the parties. The amount you assess for any item of damage must not exceed the amount caused by the wrongful conduct of a party as proved by the evidence.

The fact that I am instructing you on the proper measure of damages should not be considered as an indication that I have any view as to which party is entitled to your verdict in this case. Instructions as to the measure of damages are given only for your guidance, in the event that you should find that a party is entitled to damages in accord with the other instructions.

FINAL INSTRUCTION NO. 10 - DAMAGES--SPECIFIC



I will now explain the measure of damages on the parties' claims and counterclaims.

Breach of contract. The measure of damages for breach of contract is an amount that will reimburse the party making the claim or counterclaim for the loss caused by his or its reliance on the contract and that will place him or it in as good a position as if the other party had not breached the contract. The damages you award for breach of contract must be foreseeable or have been reasonably foreseen at the time the parties entered into the contract. This measure of damages applies to Top of Iowa's claim of breach of contract, as explained in Final Jury Instruction No. 4, as well as to Virgil Schewe's counterclaim of breach of contract, as explained in Final Jury Instruction No. 5. I will now explain how this measure of damages applies to each of these claims.

Top of Iowa's claim. If you find that Mr. Schewe breached his contracts to deliver grain to Top of Iowa, in accordance with the five elements set forth in Final Jury Instruction No. 4, then the specific measure of Top of Iowa's damages is the difference between the market price of the grain at the time Top of Iowa learned of the breach and the contract price of the grain. Market price is determined at the place where the grain was to be delivered.

Mr. Schewe's counterclaim. If you find that Top of Iowa breached its contracts with Mr. Schewe in accordance with the five elements set forth in Final Jury Instruction No. 5, then the specific measure of Mr. Schewe's damages is the profit Mr. Schewe would have made from full performance of the contract by Top of Iowa.

Nominal damages. If you find that a breach of contract caused no loss, then you must award the party who has otherwise established a breach of contract "nominal damages" of $1.00. "Nominal damages" are allowed, not as an equivalent for the wrong, but in recognition of a technical injury, and by way of declaring or vindicating a legal right. Nominal damages are not the same as damages that are small in amount or too difficult to determine.

Remember that damages for breach of contract, like other elements of that claim or counterclaim, must be proved by the greater weight of the evidence.

Breach of fiduciary duty. The measure of damages for breach of fiduciary duty is an amount that will reimburse Mr. Schewe for the loss caused by Top of Iowa's failure to fulfill its fiduciary duty. Therefore, if you find that Top of Iowa breached its fiduciary duty to Mr. Schewe in accordance with the four elements set forth in Final Jury Instruction No. 6, then the measure of damages for breach of fiduciary duty is the benefit of the bargain represented by the HTAs to Mr. Schewe had he been properly advised by Top of Iowa about the riskiness of the HTAs. The "benefit of the bargain" is the sum necessary to place Mr. Schewe in the same financial position he would have enjoyed if he had been properly advised by Top of Iowa about the riskiness of the HTAs. Mr. Schewe may also recover other monetary losses he suffered as a consequence of his reliance upon Top of Iowa's insufficient advice about the riskiness of the HTAs.

Nominal damages. If you find that a breach of fiduciary duty caused no loss, then, if Mr. Schewe has otherwise established a breach of fiduciary duty, you must award Mr. Schewe "nominal damages" of $1.00. "Nominal damages" are allowed, not as an equivalent for the wrong, but in recognition of a technical injury, and by way of declaring or vindicating a legal right. Nominal damages are not the same as damages that are small in amount or too difficult to determine.

Remember that damages for breach of fiduciary duty, like other elements of that counterclaim, must be proved by the greater weight of the evidence.

FINAL INSTRUCTION NO. 11 - DELIBERATIONS



In conducting your deliberations and returning your verdict, there are certain rules you must follow.

First, when you go to the jury room, you must select one of your members as your foreperson. That person will preside over your discussions and speak for you here in court.

Second, it is your duty, as jurors, to discuss this case with one another in the jury room. You should try to reach agreement if you can do so without violence to individual judgment. Each of you must make your own conscientious decision, but only after you have considered all the evidence, discussed it fully with your fellow jurors, and listened to the views of your fellow jurors. Do not be afraid to change your opinions if the discussion persuades you that you should, but do not come to a decision simply because other jurors think it is right, or simply to reach a verdict. Remember at all times that you are not partisans. You are judges--judges of the facts. Your sole interest is to seek the truth from the evidence in the case.

Third, if you need to communicate with me during your deliberations, you may send a note to me through the Court Security Officer, signed by one or more jurors. I will respond as soon as possible either in writing or orally in open court. Remember that you should not tell anyone--including me--how your votes stand numerically.

Fourth, your verdict must be based solely on the evidence and on the law which I have given to you in my instructions. Nothing I have said or done is intended to suggest what your verdict should be--that is entirely for you to decide.

Finally, I am giving you the verdict form. A verdict form is simply the written notice of the decision that you reach in this case. You will take this form to the jury room, and complete it when you have reached a verdict. Your verdict must be unanimous and you must all sign the verdict form. When you have reached a verdict, the foreperson will advise the Court Security Officer that you are ready to return to the courtroom.

DATED this 4th day of April, 2001.

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF IOWA

CENTRAL DIVISION





TOP OF IOWA COOPERATIVE, an Iowa cooperative,
Plaintiff,

No. C 96-3146-MWB

vs.



VERDICT FORM

VIRGIL E. SCHEWE,
Defendant.

____________________



We, the jury, unanimously find as follows:



TOP OF IOWA'S CLAIM OF BREACH OF CONTRACT
1 Has Top of Iowa proved all of the elements of its claim of breach of contract, as explained in Final Jury Instruction No. 4, by the greater weight of the evidence? (If your answer is "yes," go on to line 2, but if your answer is "no," go on to line 3 and enter your verdict in favor of Mr. Schewe.)





_____ Yes






_____ No
2 Has Mr. Schewe proved his affirmative defense of equitable estoppel, as explained in Final Jury Instruction No. 7, by clear, convincing, and satisfactory evidence? (If your answer is "no," enter your verdict on line 3 in favor of Top of Iowa, but if your answer is "yes," enter your verdict on line 3 in favor of Mr. Schewe.)

_____

No



_____

Yes

3 In whose favor do you find? _____ Top of Iowa _____ Mr. Schewe
4 If you found in favor of Top of Iowa, what damages do you award to Top of Iowa on this claim, as damages for Mr. Schewe's breach of contract are explained in Final Jury Instruction No. 10?



____
The difference between the market price and the contract price, in the amount of $_______________.
____ Nominal damages in the amount of $1.00.










MR. SCHEWE'S FIRST COUNTERCLAIM OF BREACH OF CONTRACT
1 Has Mr. Schewe proved all of the elements of his counterclaim of breach of contract, as explained in Final Jury Instruction No. 5, by the greater weight of the evidence? (If your answer is "yes," go on to line 2, but if your answer is "no," go on to line 3 and enter your verdict in favor of Top of Iowa.)





_____ Yes






_____ No
2 Has Top of Iowa proved its affirmative defense of equitable estoppel, as explained in Final Jury Instruction No. 7, by clear, convincing, and satisfactory evidence? (If your answer is "no," enter your verdict on line 3 in favor of Mr. Schewe, but if your answer is "yes," enter your verdict on line 3 in favor of Top of Iowa.)

_____

No



_____

Yes

3 In whose favor do you find? _____ Mr. Schewe _____ Top of Iowa
4 If you found in favor of Mr. Schewe, what damages do you award to Mr. Schewe on this counterclaim, as damages for Top of Iowa's breach of contract are explained in Final Jury Instruction No. 10?





____
The profit Mr. Schewe would have made from full performance of the contract, in the amount of $_______________.
____ Nominal damages in the amount of $1.00.








MR. SCHEWE'S SECOND COUNTERCLAIM OF BREACH OF FIDUCIARY DUTY
1 Has Mr. Schewe proved all of the elements of his counterclaim of breach of fiduciary duty, as explained in Final Jury Instruction No. 6, by the greater weight of the evidence? (If your answer is "yes," go on to line 2, but if your answer is "no," go on to line 3 and enter your verdict in favor of Top of Iowa.)





_____ Yes






_____ No
2 Has Top of Iowa proved its affirmative defense of equitable estoppel, as explained in Final Jury Instruction No. 7, by clear, convincing, and satisfactory evidence? (If your answer is "no," enter your verdict on line 3 in favor of Mr. Schewe, but if your answer is "yes," enter your verdict on line 3 in favor of Top of Iowa.)

_____

No



_____

Yes

3 In whose favor do you find? _____ Mr. Schewe _____ Top of Iowa
4 If you found in favor of Mr. Schewe, what damages do you award to Mr. Schewe on this counterclaim, as damages for Top of Iowa's breach of fiduciary duty are explained in Final Jury Instruction No. 10?



____
"Benefit of the bargain" damages and other monetary losses, in the amount of $_______________.
____ Nominal damages in the amount of $1.00.








Date: ________________ Time: ________________





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