## Facts

- Agnes Syester, an elderly widow living alone, began taking lessons at an Arthur Murray dance studio in Des Moines after receiving a gift certificate.
- Studio owners and employees sold Syester increasingly large blocks of instruction, ultimately totaling thousands of hours and nearly $30,000 in payments.
- Syester alleged the studio used sustained flattery and high-pressure tactics, repeatedly assuring her she had exceptional talent and could become a professional dancer, despite limited progress.
- Syester was awarded numerous medals and other indicia of advancement, which the jury could view as part of a strategy to induce further purchases.
- After a favored instructor was terminated, Syester sued for a refund of unused lessons.
- The studio rehired the instructor, who resumed a close relationship with Syester and persuaded her to dismiss the suit.
- Syester executed written releases in connection with promises of partial repayment (including a promised $6,090 refund for the latest lessons and a later promised $4,000 payment that was not made).
- Syester later brought this action alleging fraud in both the sale of lessons and the procurement of the releases, seeking actual and punitive damages.
- A jury awarded $14,300 in actual damages and $40,000 in punitive damages; judgment was entered on the verdict.

## Issues

1. Whether the evidence was sufficient to submit to the jury and support findings that defendants made actionable fraudulent misrepresentations in selling extensive dance instruction to Syester.
2. Whether the releases barred Syester’s claims or were unenforceable because they were procured by fraud or overreaching.
3. Whether punitive damages were permissible on the record and whether the $40,000 punitive award was excessive or the product of passion or prejudice.

## Decision

- The Iowa Supreme Court affirmed the judgment for Syester.
- The court held the record contained sufficient admissible evidence for the jury to find a calculated course of intentional misrepresentation in the sales program and in obtaining the releases.
- The court held the releases were not binding because the jury could find they were procured by fraud and overreaching.
- The court upheld both the compensatory and punitive awards, concluding the punitive amount was supported by the evidence and not indicative of passion or prejudice.
- The court emphasized that credibility, intent, and whether statements amounted to mere sales talk or fraud were for the jury under proper instructions.

## Legal Principles

- Fraud claims present jury questions when evidence supports findings of material misrepresentation, falsity, intent to deceive, reliance, and resulting damage, including where misrepresentations occur as part of a sustained course of conduct.
- Statements characterized as “puffing” may be actionable when, viewed in context, they function as intentional misrepresentations used to induce substantial purchases.
- A release or settlement agreement is not enforceable against a party who proves it was procured by fraud or overreaching; a jury may invalidate a release when the negotiations are part of the deceptive scheme.
- Punitive damages may be awarded and upheld in fraud cases when the defendant’s conduct is willful and egregious, serving punishment and deterrence, and an award will not be disturbed absent signs of passion, prejudice, or lack of evidentiary support.
- Appellate review focuses on whether the evidence and instructions were sufficient to support the verdict, not on reweighing witness credibility or choosing between competing inferences.

## Conclusion

The court affirmed a jury verdict finding that a dance studio’s sustained, intentional misrepresentations induced an elderly customer to purchase excessive instruction, that subsequent releases were ineffective because they were obtained through the same fraudulent conduct, and that substantial punitive damages were warranted to punish and deter the misconduct.


Syester v. Banta, 133 N.W.2d 666 (Iowa 1965)