Gann v. Fruehauf Corp.

                    United States Court of Appeals,

                            Fifth Circuit.

                             No. 93-7566.

        Bill J. GANN, Plaintiff-Appellee/Cross-Appellant,

                                     v.

    FRUEHAUF CORPORATION, Defendant-Appellant/Cross-Appellee,

                                    and

       Connecticut General Life Insurance Company, et al.,
Defendants/Cross-Appellees.

                             May 30, 1995.

Appeals from the United States District Court for the Southern
District of Mississippi.

Before REYNALDO G. GARZA, DeMOSS and BENAVIDES, Circuit Judges.

     BENAVIDES, Circuit Judge:

     The Appellant/Cross-Appellee Fruehauf Corporation ("Fruehauf")

appeals a jury verdict finding that Fruehauf wrongfully discharged

Appellee/Cross-Appellant     Bill     Gann    ("Gann")    in   violation    of

Washington state law and a Rule 11 monetary sanction imposed on its

counsel.   Gann appeals the district court's entrance of summary

judgment in favor of Fruehauf and Cross-Appellees Connecticut

General Life   Insurance    Company       ("Connecticut   General"),    Karen

Goralski ("Goralski"), Julie Szemborski ("Szemborski"), Carolyn

Robinson   ("Robinson"),      and     Mongoose       Administrators,       Inc.

("Mongoose")   on   his   claims    that     they   violated   the   Employee

Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001,

and the Consolidated Omnibus Budget Reconciliation Act ("COBRA"),

29 U.S.C. § 1162.    We AFFIRM in part and REVERSE in part.


                                      1
                     FACTS AND PROCEDURAL HISTORY

     Gann became an employee of Fruehauf in 1984 in California.

Fruehauf transferred Gann to its state of Washington branch in

April 1986.   Gann hurt himself at work in January 1988, and filed

for worker's compensation benefits in Washington on July 15, 1988.

Fruehauf transferred Gann to its Mississippi branch in August 1988,

and terminated Gann's employment on November 2, 1988.

     In April 1989, Gann filed this action in a federal court in

Mississippi. The defendants included Fruehauf (which maintained an

employee benefit plan in which Gann participated), Connecticut

General (which provided long-term group disability insurance to

Fruehauf in support of the employee benefit plan), Goralski (the

administrator of certain employee benefit plans for Fruehauf),

Szemborski (a benefit analyst for Connecticut General), Robinson (a

benefit   analyst    for    Connecticut   General)    and   Mongoose   (the

administrator of Gann's continuation coverage under the employee

benefit plan established by Fruehauf).

     In his complaint, Gann asserted that all the defendants

improperly denied his claim for disability benefits in violation of

ERISA and COBRA.     Gann also asserted a claim of wrongful discharge

against   Fruehauf     in    violation    of   a     Washington   statute,

Wash.Rev.Code § 51.48.025(1), claiming that Fruehauf discharged him

because he had filed for worker's compensation benefits.

     The district court dismissed Gann's ERISA and COBRA claims on

a summary judgment motion by the defendants, but allowed Gann's

wrongful discharge claim to go to a jury.            The jury rendered a


                                     2
verdict in favor of Gann for $112,500.

                           Fruehauf's Appeal

     Fruehauf raises several arguments on appeal contending that:

(1) the district court erred in applying Washington, instead of

Mississippi, law to the wrongful discharge claim;          (2) the jury

verdict is against the overwhelming weight of the evidence;              (3)

the damages awarded by the jury are not substantiated by the

evidence; (4) a J.N.O.V., New Trial, and/or Remittitur should have

been granted;      and (5) the district court erred in imposing

sanctions on Fruehauf and its counsel.

                                    I

      Fruehauf argues that the district court erred in applying

Washington   law   to   Gann's   wrongful   discharge   claim.      In   his

complaint, Gann argues that Fruehauf wrongfully discharged him

because he pursued his rights for worker's compensation.                 Such

motivations behind a discharge are made actionable by a Washington

statute.   Wash.Rev.Code § 51.48.025(1).      Mississippi law, however,

does not recognize such a cause of action, as all employment

contracts for an indefinite term are terminable at will for any

reason. Green v. Amerada-Hess Corp., 612 F.2d 212, 214 (5th Cir.),

cert. denied, 449 U.S. 952, 101 S.Ct. 356, 66 L.Ed.2d 216 (1980).

     The conflict of law rules of the state in which the district

court is located are to be used in determining the applicable law.

Day & Zimmermann, Inc. v. Challoner, 423 U.S. 3, 4, 96 S.Ct. 167,

167-68, 46 L.Ed.2d 3 (1975).      A district court's determination of

state law is reviewed de novo by an appellate court.             Allison v.


                                    3
ITE Imperial Corp., 928 F.2d 137, 139 (5th Cir.1991).                 Here, the

district court is located in Mississippi.1 Mississippi courts have

held       that     a   "center   of   gravity"   or   "the   most   substantial

relationship" rule applies.            White v. Malone Properties, Inc., 494

So.2d 576, 578 (Miss.1986).

           In interpreting this rule for tort actions, Mississippi

courts have applied the criteria of §§ 6 and 145 of the Restatement

(Second) of Conflict of Laws.             McDaniel v. Ritter, 556 So.2d 303,

310 (Miss.1989).2          Although § 145 lists it as the first factor to

       1
      Fruehauf cites French v. Beatrice Foods Co., 854 F.2d 964
(7th Cir.1988), as authority in support of his arguments.
However, French concerns the application of Illinois conflict of
law rules, and Fruehauf does not demonstrate the connection
between the doctrines of Illinois and Mississippi.
       2
        Section 6 provides:

                  (1) A court, subject to constitutional restrictions,
                  will follow a statutory directive of its own state on
                  choice of law.

                  (2) When there is no such directive, the factors
                  relevant to the choice of the applicable rule of law
                  include

                        (a) the needs of the interstate and international
                        systems,

                        (b) the relevant policies of the forum,

                        (c) the relevant policies of other interested
                        states and the relative interests of those states
                        in the determination of the particular issue,

                        (d) the protection of justified expectations,

                        (e) the basic policies underlying the particular
                        field of law,

                        (f) certainty, predictability and uniformity of
                        result, and


                                           4
be considered, the place of injury is not the sole determinative

factor.   Mitchell v. Craft, 211 So.2d 509, 512-13 (Miss.1968).

Further, the criteria are not strict elements that must always be

present for a state's law to be applied, nor is the formula to be

precisely followed in every instance.     "The principles of Sections

6   and   145   of   the   Restatement    (Second)   defy   mechanical

application—they are less "rules of law' than generally-stated

guideposts."    McDaniel v. Ritter, supra, at 310.          A literal

interpretation of the two sections, however, would have the courts

focus upon the states picked out by the criteria of § 145.    Allison

v. ITE Imperial Corp., supra, at 141.     These states would then be

compared using the criteria of § 6.      Id.



                (g) ease in the determination and application of
                the law to be applied.

     Section 145 provides:

           (1) The rights and liabilities of the parties with
           respect to an issue in tort are determined by the local
           law of the state which, with respect to that issue, has
           the most significant relationship to the occurrence and
           the parties under the principles stated in § 6.

           (2) Contacts to be taken into account in applying the
           principles of § 6 to determine the law applicable to an
           issue include:

                (a) the place where the injury occurred,

                (b) the place where the conduct causing the injury
                occurred,

                (c) the domicile, residence, nationality, place of
                incorporation and place of business of the
                parties,

                (d) the place where the relationship, if any,
                between the parties is centered.

                                  5
     Mississippi   is   the   state   where   the   injury   (termination)

occurred, § 145(2)(a), but we view the conduct causing the injury

to have occurred in Washington,3 § 145(2)(b).         Section 145(2)(c),

the domicile, residence, place of incorporation, and place of

business of the parties, points to Mississippi as Gann's residence

at the time of his termination.           Fruehauf, on the other hand,

conducted business in California, Washington, and Mississippi, and

had its principal headquarters in Michigan.         Finally, § 145(2)(d),

the place where the relationship between the parties is centered,

points to Washington.    Gann worked for Fruehauf in Washington, his

injury occurred in Washington, and the act which he claims prompted

his discharge by Fruehauf, the filing for and receiving of worker's

compensation benefits, occurred in Washington.

     Although the parties had contacts with other states according

to the analysis of § 145, the states with the most interest in this

matter, a major component of the § 6 analysis, are Mississippi and

Washington.   Fruehauf argues that Mississippi has the greater

interest, as the place of the injury is Mississippi, and Gann was

a resident of Mississippi at the time of the discharge.           Further,

Fruehauf argues that Mississippi has a compelling interest in the

correct application of its employment laws to the employment

activities within Mississippi.

     With respect to the facts of this case, we disagree with


     3
      Gann contends that it was his action in pursuing worker's
compensation benefits in Washington, while Fruehauf contends that
Gann's termination was the result of Gann's work performance in
Washington revealed by an internal audit.

                                      6
Fruehauf's assessment.         The relationship of the parties centers

mostly on Washington.         Gann worked for Fruehauf in Washington for

approximately two and a half years, and it is in Washington where

Gann hurt himself and filed for worker's compensation benefits.

Although the termination occurred in Mississippi, the period of

time in which Gann resided in Mississippi was only three months.

We think it significant that the trial court found that the record

supports the finding that the contract of employment was made

between Gann and Fruehauf outside of Mississippi and prior to

Gann's arrival in Mississippi to perform his duties for Fruehauf.

We   think   that    under    the   unique    circumstances   of   this   case

Washington's interest in this matter is paramount to that of

Mississippi.        We note, additionally, that the right given by

Washington,    to    obtain    worker's      compensation   benefits   without

fearing discharge, would be unnecessarily diluted if workers could

be dispatched to other states so that they could be discharged in

contravention of the policies of the state of Washington.4

      4
      In finding the law of Washington to apply to this case, we
reject Fruehauf's reliance on McDaniel v. Ritter, supra, for the
proposition that the application of Washington law in this case
would be offensive to the public policy of Mississippi.
Mississippi courts have held that the laws of other states would
not be applied if the laws are antagonistic to the interests and
policies of Mississippi. In McDaniel, it was held that a foreign
contributory negligence regime would be offensive to the
comparative negligence regime of Mississippi because enforcement
of the foreign state law "would be offensive to the deeply
ingrained or strongly felt public policy of" Mississippi.
McDaniel v. Ritter, supra, at 316-17. However, the issue in this
case is whether a regime that recognizes a wrongful discharge
cause of action "would be offensive to the deeply ingrained or
strongly felt public policy of" Mississippi.

             Where the specific public policy issue involves a

                                       7
                                      II

       Fruehauf next argues that the jury verdict in favor of Gann

on   the   wrongful   discharge   cause    of   action    was   against    the

overwhelming weight of the evidence and should be reversed.

      In reviewing jury verdicts, the appellate court must view all

of the evidence in favor of the prevailing party.           Gibraltar Sav.

v. LDBrinkman Corp., 860 F.2d 1275, 1297 (5th Cir.1988), cert.

denied, 490 U.S. 1091, 109 S.Ct. 2432, 104 L.Ed.2d 988 (1989).

"Weighing the conflicting evidence and the inferences to be drawn

from that evidence, and determining the relative credibility of the

witnesses, are the province of the jury, and its decision must be

accepted if the record contains any competent and substantial

evidence tending fairly to support the verdict." Id. "Substantial

evidence, while something less than the weight of the evidence, is

such relevant    evidence   as    a   reasonable   mind   might   accept    as

adequate to support a conclusion, even if different conclusions

also might be supported by the evidence."          Id.

       In order to establish a prima facie claim under Washington

law for wrongful discharge, Gann must prove (1) that he exercised

his right for worker's compensation or told Fruehauf that he was


      non-resident or a contract made outside of Mississippi,
      Mississippi courts have held that its public policy concerns
      are not implicated. Boardman v. United Services Auto.
      Assn., 470 So.2d 1024, 1039 (Miss.), cert. denied, 474 U.S.
      980, 106 S.Ct. 384, 88 L.Ed.2d 337 (1985). Here, the
      district court found that the contract was made outside of
      Mississippi. The record supports such finding.
      Accordingly, McDaniel does not preclude the application of
      Washington law in Mississippi, and because Washington has
      the greater interest, we hold that the trial court correctly
      applied the law of the state of Washington.

                                      8
going to exercise his right;             (2) that he was discharged;               and (3)

that there was a causal connection between the exercise of his

legal right and the discharge.                   Wilmot v. Kaiser Aluminum &

Chemical Corp., 118 Wash.2d 46, 821 P.2d 18, 28-29 (1991).                              Once

Gann meets this standard, Fruehauf must articulate a legitimate

reason for the discharge.            Id. 821 P.2d at 29.                  Gann must then

prove either that this legitimate reason was a pretext or that

retaliation was a substantial or important factor motivating the

discharge.     Id. at 31.

        The evidence of an improper motive need not be direct.

"Ordinarily the prima facie case must, in the nature of things, be

shown by circumstantial evidence, since the employer is not apt to

announce     retaliation     as    his    motive."          Id.    at     29.     Further,

"[p]roximity in time between the claim and the firing is a typical

beginning     point,   coupled      with       evidence      of    satisfactory         work

performance and supervisory evaluations."                   Id.

       Fruehauf claims that Gann failed to prove a causal connection

between his discharge and his filing for worker's compensation

benefits.     Specifically, Fruehauf claims that Gann has not shown

that   Fruehauf's      stated     reason       for    the    discharge          (that   Gann

performed very poorly) was a pretext or that retaliation was a

substantial factor motivating the discharge.                      We disagree.

       The   proximity     of     Gann's       pursuing     worker's        compensation

benefits and his discharge (three and a half months) together with

evidence     that   Gann's      personnel       file      contained       only    positive

supervisory     evaluations       and     that       he   had     never    received      any


                                           9
criticisms from anyone in Fruehauf concerning his work performance

support the jury verdict.       In addition, there is testimony from

Gann that, after he had arrived in Washington, he had complained to

his superiors many times about the poor performance of certain

individuals,   but   that   nothing    had   been   done.   Finally,   Gann

testified that he was aware of a policy of Fruehauf to discharge

employees who had been injured on the job.              Our review of the

record reveals that the jury could reasonably conclude that Gann's

discharge was made in retaliation and not for the reason advanced

by Fruehauf.

                                      III

      Fruehauf next contends that the damages awarded by the jury

were not substantiated by the evidence, and that the trial court

erred in failing to grant Fruehauf's motions for J.N.O.V., New

Trial, and/or Remittitur.      In his instructions to the jury, the

trial judge provided that:

     If ... you find by a preponderance of the evidence that Bill
     J. Gann is entitled to a verdict, in arriving at the amount of
     the award, you should include the amount of medical leave pay
     and fringe benefits to which Plaintiff Gann was entitled as a
     result of his employment with Defendant, Fruehauf Corporation,
     but for his discharge, and you may consider the following
     factors, if shown by a preponderance of the evidence, in
     determining additional damages, if any, to be awarded to the
     Plaintiff.    Past, present and future emotional distress
     sustained by Plaintiff Gann, if any, as a result of his
     discharge.

After rendering a verdict in favor of Gann, the jury awarded Gann

$112,500 in damages. Fruehauf argues that the damages awarded were

unreasonable and excessive.

     Under the court's instructions, the jury was allowed to award


                                      10
not only medical leave pay and fringe benefits to which Gann was

entitled,     but   could      also    consider     past,       present,      and     future

emotional distress sustained by Gann as a result of his discharge.

Apart from any leave pay and fringe benefit evidence, there was

evidence that Gann suffered emotional distress due to the lost

benefits,     the   termination         itself,    the       losing    of    his    home     in

Mississippi by foreclosure, and additional emotional distress by

having to relocate with his wife and having to be supported by his

mother.       Accordingly, we reject Fruehauf's arguments that the

jury's    decision        is   not    supported         by    the     evidence       and    is

unreasonable and excessive.                We also reject Fruehauf's argument

that he is entitled to a J.N.O.V., New Trial, and/or Remittitur as

without merit.

                                            IV

         Fruehauf    next      argues      that   the    district       court       erred    in

imposing a sanction of $2,385.40 upon Fruehauf's counsel for

submitting     a    second     Motion      for    Partial      Summary       Judgment        in

violation of Rule 11.          The record reveals that the district court

had denied Fruehauf's first Motion for Partial Summary Judgment as

to the retaliatory discharge claim in 1990.                     This claim was based

solely on Fruehauf's argument that Mississippi law applied and

precluded     an    action     for    retaliatory        discharge          based    on     the

Mississippi employment-at-will doctrine.                     In 1993, Fruehauf filed

a second Motion for Partial Summary Judgment seeking a dismissal of

the   claim    on   the    basis      of   Washington        law,     with    Gann's       poor

performance as the legitimate reason for his termination.                                  Such


                                            11
motion was supported by proper affidavit.             Nonetheless, the order

sanctioning Fruehauf for this second motion provides in pertinent

part as follows:

     This same argument was presented to the Court by Fruehauf's
     earlier Motion for Partial Summary Judgment. The Court denied
     that Motion by its Order dated March 9, 1990.      Fruehauf's
     present Motion has been filed unnecessarily for the purposes
     of harassing Plaintiff and needlessly increasing the cost of
     litigation.

It is clear that the trial court sanctioned Fruehauf based upon an

erroneous conclusion that the argument presented in his latter

summary judgment motion was the same as that presented in his first

motion    for   summary      judgment   with     respect   to    the   wrongful

termination     cause   of   action.        Accordingly,   we   find   that   the

district court abused its discretion in sanctioning Fruehauf's

counsel and thereby set aside its sanction.5

  Gann's Appeal With Respect To The Retaliatory Discharge Claim

                                        V

         Gann claims that the district court erred in not providing

reinstatement or a similar remedy and attorney's fees to Gann after

he prevailed in the jury trial.              Gann argues that Washington law

authorizes the district court to award the prevailing plaintiff

"all appropriate relief" including reinstatement with back pay and

attorney's fees.        Further, according to Gann, another Washington

statute, RCW 49.48.030, provides for attorney's fees in regards to

claims for back wages.

     5
      The district court's order of sanction also contained an
argument that was contained in Fruehauf's answer, but which was
not discussed in the motion for summary judgment for which
Fruehauf's counsel was sanctioned.

                                        12
     RCW    51.48.025,   however,   only   states   that   the   court   has

jurisdiction to order such relief, not that it must order such

relief.     Thus, Gann has not stated a claim here, as he has not

indicated how the district court abused its discretion.

      Gann also argues that the district court erred in not

sanctioning Fruehauf for filing a counterclaim against Gann for the

purposes of harassment in violation of Rule 11.        In support of his

arguments, Gann points to the fact that Fruehauf dismissed its

counterclaim for damages shortly before trial.        Gann has failed to

show an abuse of discretion in the trial court's failure to impose

sanctions.

                          Gann's Other Appeals

                               BACKGROUND

     On the same day that Gann was terminated, Fruehauf informed

him that his coverage under the employee benefit plan sponsored by

Fruehauf and administered by Connecticut General would cease on

November 30, 1988, and that he would be eligible under COBRA to

continue his group medical coverage for up to eighteen months if he

paid certain premiums.     On January 30, 1989, Gann elected to have

such coverage, but on March 20, 1989, Mongoose, the administrator

of the continuation coverage, terminated the coverage because of

Gann's alleged nonpayment of premiums.        Gann had also filed with

Fruehauf on November 30, 1988 a claim for certain disability

benefits.    However, when Gann refused to submit to an independent

medical examination, Connecticut General denied the claim.




                                    13
          In his complaint, Gann brought forth seven causes of action.6

The district court entered summary judgment against Gann on all his

claims.      Although Gann asserts that he is appealing the rulings on

all his claims, he only presents arguments on his claims that

Fruehauf, Connecticut General, Goralski, Szemborski, and Robinson

did   not     pay   Gann   disability    benefits   in   violation   of   §

1132(a)(1)(B);7      and Fruehauf, Goralski, and Mongoose terminated

      6
       The claims brought forth by Gann are as follows:

              (1) Goralski did not supply Gann with a requested copy
              of an insurance policy in violation of 29 U.S.C. §§
              1132(a)(1)(A) and 1132(c).

              (2) Fruehauf, Connecticut General, Goralski,
              Szemborski, and Robinson did not pay Gann disability
              benefits in violation of § 1132(a)(1)(B).

              (3) Fruehauf, Connecticut General, Goralski,
              Szemborski, and Robinson breached their duties as
              fiduciaries under the employee benefit plan.

              (4) Fruehauf, Connecticut General, Goralski,
              Szemborski, and Robinson failed to provide Gann an
              individual statement setting forth the information to
              be contained in a registration statement required by 26
              U.S.C. § 6057(a)(2) and 29 U.S.C. § 1132(a)(4).

              (5) Fruehauf, Goralski, and Mongoose terminated Gann's
              continuation coverage in violation of COBRA.

              (6) Connecticut General engaged in unfair and deceptive
              trade practices in the business of insurance in
              violation of Miss.Code Ann. § 83-5-29.

              (7) Fruehauf willfully, intentionally, and in bad faith
              tortiously interfered with the contractual rights of
              Gann.
      7
      § 1132(a)(1)(B) provides: "A civil action may be brought
by a participant or beneficiary to recover benefits due to him
under the terms of his plan, to enforce his rights under the
terms of the plan, or to clarify his rights to future benefits
under the terms of the plan...."


                                    14
Gann's continuation coverage in violation of COBRA. Because he has

not advanced arguments in the body of his brief in support of his

appeal of his other claims, Gann has waived or abandoned these

claims.   Yohey v. Collins, 985 F.2d 222, 224 (5th Cir.1993).

      Appellate courts review summary judgments de novo, applying

the same standard as the district court.       Bodenheimer v. PPG

Industries, Inc., 5 F.3d 955, 956 (5th Cir.1993). Summary judgment

shall be rendered if there is no genuine issue of material fact and

if the moving party is entitled to judgment as a matter of law.

Fed.R.Civ.P. 56(c).   In making its determination, the court must

draw all justifiable inferences in favor of the nonmoving party.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505,

2513-14, 91 L.Ed.2d 202 (1986).

                                  VI

      The district court held that one of the reasons why a refusal

to pay the benefits was justified was because Gann was not under

the care of a licensed physician at the time his claim was pending.

The Certificate of Insurance states that "[n]o Monthly Benefits

will be paid for a period of Total Disability when you are not

under care of a licensed physician."     Gann has not responded to

this argument in this appeal.     Although Gann has been under the

care of a chiropractor, chiropractors are not licensed to practice


          "A denial of ERISA benefits by a plan administrator
     challenged under § 502(a)(1)(B) of ERISA, 29 U.S.C. §
     1132(a)(1)(B), is reviewed by the courts under a de novo
     standard unless the plan gives the administrator
     "discretionary authority to determine eligibility for
     benefits or to construe the terms of the plan.' " Duhon v.
     Texaco, Inc., 15 F.3d 1302, 1305 (5th Cir.1994).

                                  15
medicine,   and    do   not    qualify    according   to   the   words   of   the

certificate.      We thus affirm the trial court's summary judgment on

the disability benefits claim on this basis, and do not need to

reach Gann's other arguments with respect to such claim.

                                         VII

      Gann alleged in his complaint that Fruehauf, Goralski, and

Mongoose wrongfully terminated his continuation of coverage in

violation of COBRA, and appeals the district court's entrance of

summary judgment against Gann.           The district court entered summary

judgment because it found that Gann owed one month's premium for

February 1989.      We agree.

      The due date for premiums was the first day of each month of

coverage.   But 29 U.S.C. § 1162(2)(C) provides that a plan cannot

require the payment of any premium before forty-five days after the

day on which the beneficiary elected to have continuation coverage.

Gann elected to have coverage on January 30, 1989.                       Under §

1162(2)(C), the premiums due February 1 were not required to be

paid until March 17.          The summary judgment evidence presented on

behalf of Fruehauf establishes that the February payment was not

made by Gann by March 17.        Gann's summary judgment evidence on this

point was unable to specifically set out that his February payment

was made on or before March 17.           Because no material issue of fact

was raised by the summary judgment proof, the district court

correctly found that Gann was not entitled to his cause of action




                                         16
alleging a wrongful termination of his continuance of coverage.8

                                      VIII

         Gann argues that the district court erred in not allowing him

to supplement the record.           After the district court issued its

order dismissing Gann's various claims on summary judgment, Gann

moved to supplement the record.                Gann argues that the submitted

evidence would have raised genuine issues of material fact.                   The

lower court, however, disagreed and denied the motion.

     Gann argues that the evidence that he wishes to add as

supplements is not new, but rather corroborates his arguments that

summary judgment is inappropriate.               But Gann does not specify or

describe     the    evidence   or   how    the    district   court   abused   its

discretion.        Under such circumstances, no abuse of discretion is

shown.      Moreover, as Gann describes the evidence as not new

     8
      Gann also argues that a grace period in his continuation
coverage provided that a period of thirty-one days will be
granted as a grace period for the payment of premiums after the
initial premium. The grace period provision states:

             GRACE PERIOD. If, before a Premium Due Date, the
             Policyholder has not given written notice to the
             Insurance Company that the policy is to be cancelled, a
             Grace Period of 31 days will be granted for the payment
             of each premium after the initial premium. The policy
             will stay in effect during that time.

     Thus, according to Gann, because March 17 was the due date
     for the February premium, which was not the initial premium,
     the grace period extends the deadline thirty-one days past
     March 17.

          We disagree. The statutory extension to March 17 is an
     extension for the payment of the premiums and not an
     extension of the due date of the premiums, which remains the
     first day of each month. Thus, the grace period of the
     coverage operates thirty-one days from the due date, the
     first day of each month.

                                          17
evidence, but corroborative of his arguments, no harm is shown.

                              CONCLUSION

     For the foregoing reasons, the judgment of the trial court is

AFFIRMED, except as to the award of sanctions against Fruehauf's

counsel, which is REVERSED.




                                  18