## Facts

- Southern Stone Company, Inc. sold limestone rock to S & M Materials Company (S&M) on account.
- S&M failed to pay and later ceased operations, leaving an unpaid balance.
- Southern Stone sued S&M’s officers, directors, and shareholders, including Thomas Moore, seeking to impose personal liability for the corporate debt.
- Before S&M closed, Moore formed a new corporation (TM, Inc.), which Southern Stone treated as supporting its pursuit of individual liability.
- About a year after S&M’s dissolution, Southern Stone sent Moore a detailed letter recounting Moore’s alleged statements and conduct and asserting, in substance, that Moore had personally committed to payment of S&M’s obligation.
- The letter invited Moore to respond if any part was inaccurate; Moore did not reply.
- At trial, over objection, the district court admitted the letter as an adoptive admission by Moore based on his silence.
- Moore testified that he did not respond because he was no longer involved with S&M and felt no need to answer the letter’s assertions about past dealings.
- The jury found Moore personally liable, and Moore appealed, challenging the evidentiary ruling admitting the letter.

## Issues

1. Whether Moore’s nonresponse to Southern Stone’s post-dissolution letter could be treated as an adoptive admission under Federal Rule of Evidence 801(d)(2)(B).
2. Whether admitting the letter as substantive evidence of Moore’s personal liability was reversible error given the letter’s importance to the verdict.

## Decision

- The Fifth Circuit held the letter was improperly admitted as an adoptive admission by silence.
- The court reversed the judgment against Moore and remanded for further proceedings.
- The court concluded the error was not harmless because the letter was central to the theory and proof of Moore’s personal liability.

## Legal Principles

- Under Fed. R. Evid. 801(d)(2)(B), silence may constitute adoption of a statement only when the surrounding circumstances make it reasonable to treat the failure to deny as assent.
- A proponent must establish foundational facts showing the party heard or received the statement, understood it, and would naturally be expected to deny it if untrue.
- Silence in response to a unilateral letter is generally ambiguous and typically insufficient, without additional contextual proof, to support an inference of adoption.
- A sender cannot ordinarily create favorable evidence by sending a self-serving letter inviting correction and then using nonresponse as substantive proof of agreement.
- When improperly admitted adoptive-admission evidence supplies a critical link in proving liability, admission of that evidence can require reversal.

## Conclusion

The Fifth Circuit rejected treating a recipient’s failure to answer a post-dissolution demand letter as an adoptive admission absent a strong foundation that the circumstances called for a denial, and it reversed because the improperly admitted letter materially affected the verdict imposing personal liability.


Southern Stone Co. v. Singer, 665 F.2d 698 (5th Cir. 1982)