                    United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                    ___________

                                    No. 05-3892
                                    ___________

United of Omaha Life Insurance           *
Company,                                 *
                                         *
      Plaintiff - Appellant,             * Appeal from the United States
                                         * District Court for the
      v.                                 * Eastern District of Arkansas.
                                         *
Ross C. Honea,                           *
                                         *
      Defendant - Appellee.              *
                                    ___________

                               Submitted: April 21, 2006
                                  Filed: August 17, 2006
                                   ___________

Before LOKEN, Chief Judge, BOWMAN and BYE, Circuit Judges.
                             ___________

LOKEN, Chief Judge.

       United of Omaha Life Insurance Company issued a $500,000 term life policy
effective August 1, 1996. The insured, John L. Rauch, died on June 26, 1998. The
beneficiary of record, Pioneer Nursing and Rehab Center, Inc. (“Pioneer”), filed a
claim for the policy proceeds that United of Omaha denied. Pioneer sued. United of
Omaha eventually settled the lawsuit for $390,500 and commenced this suit for
indemnification against the broker who procured the policy application, Ross Honea.
The district court1 granted summary judgment in favor of Honea, concluding that
under Arkansas law Honea was an agent of the prospective insured, not United of
Omaha, and therefore had no affirmative duty to disclose that the application was in
substance identical to a prior application United of Omaha had rejected. On appeal,
United of Omaha asserts new breach of contract theories that are not supported by the
sparse factual record. Accordingly, we affirm.

     Honea and United of Omaha entered into a Broker’s Contract providing that
Honea would procure applications for United of Omaha’s insurance products,
“comply with all Company practices and procedures,” and act “in an ethical,
competent and professional manner.” The Contract further provided that Honea
would indemnify United of Omaha against third party claims resulting from “the
Broker’s wrongdoing, or the Broker’s breach of this Contract.”

       In early 1996, Pioneer engaged Linco Construction Company (“Linco”) to build
a nursing home in Melbourne, Arkansas. Rauch was Linco’s president and owner.
When Linco could not obtain a sufficient performance bond, Honea submitted an
application to United of Omaha for a $750,000 “key person” term life insurance
policy, naming Rauch as the insured and Pioneer as the policy owner and beneficiary.
United of Omaha rejected the application. Honea then submitted a second application
for a $750,000 policy, allegedly naming Rauch as the insured, Linco as the policy
owner, and Rauch’s estate as the beneficiary.2 United of Omaha accepted the new
application and sent a printed policy to Honea on July 29, 1996, conditioning its

      1
        The HONORABLE JOHN F. FORSTER, JR., United States Magistrate Judge
for the Eastern District of Arkansas, to whom the case was referred with consent of
the parties pursuant to 28 U.S.C. § 636(c).
      2
      We say allegedly because United of Omaha attached inconsistent application
documents to its complaint and to its response to Honea’s motion for summary
judgment. No deposition testimony in the record on appeal resolves or even
acknowledges the inconsistencies.

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acceptance on Linco agreeing to reduce the face amount of the policy from $750,000
to $500,000. Rauch signed an amendment to this effect on August 28. United of
Omaha issued the policy on September 10, effective August 1.

       The policy provided that the policyholder “may change the ownership of this
policy or pledge it as collateral by assigning it,” so long as United of Omaha recorded
and acknowledged the assignment. On August 2, 1996, after United of Omaha mailed
the policy to Honea but before Rauch accepted the reduced face amount, Rauch in
Honea’s presence signed a United of Omaha form entitled Absolute Assignment. This
document irrevocably assigned Linco’s ownership interest in the policy to Pioneer and
named Pioneer the beneficiary of record. United of Omaha received and recorded the
assignment on September 12. Thereafter, United of Omaha received premium
payments from Pioneer and mailed premium reminder notices to Pioneer. On two
occasions before Rauch’s death, United of Omaha sent policy lapse letters to Pioneer
and reinstated the policy when Pioneer applied for reinstatement and paid the required
premiums.

       In its complaint, United of Omaha sought indemnification on the ground that
Honea violated his duties to United of Omaha “under the law and his broker’s
contract” by submitting an application that negligently failed to disclose or
fraudulently concealed information that Honea knew would make the risk
unacceptable to United of Omaha -- that Pioneer was the intended policy owner and
beneficiary. Honea moved for summary judgment, arguing that Arkansas law does
not recognize the tort of negligent misrepresentation and that United of Omaha could
not prove fraudulent concealment because Honea disclosed the policy assignment to
Pioneer. In response, United of Omaha argued that it was entitled to indemnification
because Honea as United of Omaha’s agent breached his fiduciary duty by submitting
a policy application that he knew to be “directly contrary to United of Omaha’s
interests.”



                                         -3-
       The district court rejected United of Omaha’s contention, concluding that under
Arkansas law as well as the Broker’s Contract, Honea was an agent of the insured, not
the insurer. See Ark. Code Ann. 23-64-102(3) (“A broker shall be deemed to be the
agent of the insured.”). The court then granted summary judgment in favor of Honea
because United of Omaha failed to prove either “wrongdoing” or a breach of the
Broker’s Contract that would obligate Honea to indemnity United of Omaha for
amounts paid on Pioneer’s claim for the policy proceeds.

      On appeal, United of Omaha abandons its contention that Honea breached an
agent’s fiduciary duty by acting contrary to United of Omaha’s interests. Conceding
that Honea acted as agent for the prospective insured, United of Omaha argues that
genuine issues of material fact exist as to whether Honea breached the Broker’s
Contract or was guilty of wrongdoing. United of Omaha asserts that Honea acted
unethically and contrary to the “practices and procedures” referred to in the Broker’s
Contract. He knew that United of Omaha would not issue a term life policy “to serve
as a guarantee of Linco’s performance of the construction contract” because the
company does not issue term life policies when circumstances make it likely that the
policy will be cancelled within five years. With that knowledge, Honea intentionally
submitted the second policy application concealing the true intent of the proposed
transaction, which was then achieved by the assignment to Pioneer.

        We reject this new theory because it is completely unsupported by the summary
judgment record on appeal. United of Omaha submitted no evidence, other than
conclusory assertions in unverified pleadings: (i) why it rejected the first application;
(ii) that Honea was told the reasons for the rejection; (iii) that United of Omaha has
a practice or policy requiring rejection of the second application if Linco had disclosed
its intent to assign the policy to Pioneer and name Pioneer the beneficiary -- actions
which the policy unqualifiedly permitted; (iv) that Honea knew of this policy and
intentionally circumvented it; (v) that Honea violated United of Omaha’s instruction
to deliver the new policy to Linco instead of Pioneer; and (vi) what recognized ethical

                                          -4-
standard for Arkansas insurance brokers Honea breached in a manner that could be
found to be “wrongdoing” within the meaning of the Broker’s Contract. These are not
facts that can be reliably assumed. United of Omaha required a reduction in the face
amount before issuing the policy, was immediately advised of the assignment to
Pioneer and recorded it without protest, and then treated Pioneer as the policy owner
and beneficiary for nearly two years until Rauch died. Even if United of Omaha had
an informal underwriting or business practice not to issue key person term life policies
in these circumstances, any business is free to depart from ordinary practice, for
example, if the customer makes sufficient concessions.

       When theories are properly raised and challenged in the district court, the party
opposing summary judgment may not rest on the allegations in its pleadings; it “must
set forth specific facts showing that there is a genuine issue for trial.” Fed. R. Civ. P.
56(e); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50 (1986); Baucom v.
Holiday Companies, 428 F.3d 764, 768 (8th Cir. 2005). Here, United of Omaha did
not argue these breach-of-contract theories in the district court. We ordinarily do not
consider issues raised for the first time on appeal. Given the mandate of Rule 56(e)
as applied by the Supreme Court, it is particularly appropriate not to consider new
theories that are “entirely without support in the record.” Wever v. Lincoln County,
388 F.3d 601, 608 (8th Cir. 2004). That is the situation here.

      The judgment of the district court is affirmed.
                     ______________________________




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