Professional Documents
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Tenth Circuit
Byron White United States Courthouse
1823 Stout Street
Denver, Colorado 80294
(303) 844-3157
Patrick J.
Clerk
Fisher, Jr.
Elisabeth A. Shumaker
Chief Deputy Clerk
Beth Morris
Deputy Clerk
encl
PUBLISH
FILED 6/11/96
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
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RODGER M. ARST,
Plaintiff-Appellant,
vs.
STIFEL, NICOLAUS & COMPANY, INC.,
and ODIS E. SHOAF, JR.,
Defendants-Appellees.
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No. 95-3005
____________________
Appeal from the United States District Court
for the District of Kansas
(D.C. No. 93-1299-PFK)
____________________
Joe Rebein of Shook, Hardy & Bacon, P.C., Kansas City, Missouri,
(Barbara A. Harmon and Brett D. Leopold of Shook, Hardy & Bacon,
P.C. of Overland Park, Kansas, and Kurt A. Harper of Sherwood &
Harper, Wichita, Kansas with him on the brief) for PlaintiffAppellant.
Reggie C. Giffin of Morrison & Hecker, Kansas City, Missouri
(John C. Nettels, Jr. of Morrison & Hecker, Wichita, Kansas, and
James A. Walker of Triplett, Woolf & Garretson, L.L.P., Wichita,
Kansas, with him on the brief) for Defendants-Appellees.
____________________
Before BRORBY and McWILLIAMS, Circuit Judges, and KERN, District
Judge. *
____________________
KERN, District Judge.
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We
I.
Facts.
shareholders because Stifel Co. wanted to remain a neutral gobetween and was concerned that Shoafs purchases could be
construed as recommendations.
same amount as other buyers of the PCA shares minus his regular
commission.
Appellant Arst purchased 37,500 shares of PCA stock for
$2.00 in the 1980s, before Stifel Co. was engaged as an
accommodating broker.
selling his PCA shares.
inquire about the price of the stock and the market for the
shares.
Shoaf did
not mention rumors circulating about PCAs plans to go public-rumors that Shoaf apparently had mentioned to other people.
There is no evidence that Shoaf was privy to inside information.
On August 18, 1996, Arst authorized Shoaf to sell all of his
37,500 PCA shares at $4.625 per share--the going price.
Shoaf
sell the shares, Shoaf did not know whether he or his family
would purchase any of the shares.
At the conclusion of
At the time of
the closing, Arst did not inquire who had bought his shares.
In November 1992, PCA announced its plans to go public.
In
December, PCA stock split four for three, and in March 1993, PCA
made a public offering at $15.25 per share.
sent Shoaf and Stifel Co. a written request for the names of the
purchasers of his stock.
names.
Defendants
II.
Discussion
We review the district court's grant of summary judgment de
Tel. Co., 22 F.3d 1527, 1529 (10th Cir.), cert. denied, 115 S.Ct.
655 (1994).
matter of law."
Fed.R.Civ.P.
Arst brought
a claim under SEC Rule 10b-10(a)(7)(i), 17 C.F.R. 240.10b10(a)(7)(i), for Defendants failure to disclose the names of the
buyers of his stock.
of such customer . . . .
Defendants complied with their initial obligations under the Rule
by informing Arst at the completion of the transaction that the
names of the buyers of his shares would be furnished upon written
request; however, when Arst subsequently made such a written
request eight months later, Defendants refused to furnish the
names until compelled by court order.
Rule 10b-10(a)(7)(i), which was promulgated by the SEC
pursuant to 10(b) of the Securities Exchange Act of 1934, 15
U.S.C. 78(j), does not expressly provide for a private cause of
action for a violation of its terms.
(10th Cir. 1994) (interpreting the Federal Oil and Gas Royalty
Management Act) (quoting Pullman v. Chorney, 712 F.2d 447, 449
(10th Cir. 1983)) (citing Transamerica Mortgage Advisors, Inc.
(TAMA) v. Lewis, 444 U.S. 11 (1979)).
Id.
Ernst v.
Dufty, 627 F.2d 221, 223 (10th Cir. 1980); Vincent v. Moench, 473
F.2d 430, 435 (10th Cir. 1973). 2
Since Defendants
Therefore,
any
(10th Cir. 1990) (citing Denison State Bank v. Madeira , 640 P.2d
1235, 1241 (Kan. 1982)), cert. denied, 500 U.S. 905 (1991).
We
1.
Arst.
Shoaf, on
Therefore,
the fiduciary duty Shoaf owed Arst was to carry out the ordered
sale with due care and loyalty and not to make unauthorized
sales.
Foreman, 322 P.2d 740, 745 (Kan. 1958) ([I]n all transactions
concerning and affecting the subject matter of his agency, it is
the duty of the agent to act with the utmost good faith and
loyalty for the furtherance and advancement of the interests of
his principal) (citations omitted).
Arst's claim of self-dealing implicates Shoafs duty of
loyalty as a fiduciary.
Restatement
See
also Reuschlein & Gregory, The Law of Agency & Partnership (2nd
ed. 1990) 67 at 126 (An agent must disclose to his principal
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conflict of interests.
The Restatement anticipates this type of argument and
explains that even under these circumstances the agent has a duty
to disclose purchases on his own account.
[I]n the absence of a known custom or an agreement, an agent
employed to sell at the market price cannot, without
disclosure to the principal, properly buy the goods on his
own account, even though he pays a higher price for them
than the principal could obtain elsewhere. . . . Likewise,
ordinarily, an agent appointed to buy or to sell at a fixed
price violates his duty to the principal if, without the
principals acquiescence, he buys from or sells the
specified article to himself at the specified price, even
though it is impossible to obtain more or as much.
Restatement (Second) of Agency 389 cmt. c (1958).
We hold that
12
The district
district court.
In Rajala v. Allied Corp. , 919 F.2d 610 (10th Cir. 1990), we
analyzed the requirements under Kansas law of an implied
fiduciary relationship.
1974)).
Arst has not met this burden of proof.
That
See also Hotmar v. Lowell H. Listrom & Co. , 808 F.2d 1384,
5
Shoaf and Stifel Co. were acting as agents for both buyers and
sellers of PCA stock.
As
Shoaf, with whom he could have discussed his decision to sell the
PCA stock.
Therefore, his
Arst
(...continued)
argument that Defendants had made misrepresentations in violation
of Rule 10b-5; plaintiff argued only that defendants failed to
disclose information in violation of that rule. Therefore, we
conclude that Plaintiff has waived the former issue. See
Abercrombie v. City of Catoosa, Okla. , 896 F.2d 1228, 1231 (10th
Cir. 1990); Jordan v. Bowen, 808 F.2d 733, 736 (10th Cir.), cert.
denied, 484 U.S. 925 (1987); Bledsoe v. Garcia, 742 F.2d 1237,
1244 (10th Cir. 1984).
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IV.
Conclusion.
In sum, we hold as follows: (1) Plaintiff does not have a
We
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