Offer to settle -Evidence

05-12

Question A

Carr, a driver, ran into and injured Pedersen, a pedestrian. Pedersen has sued Carr, alleging that Carr, while drunk, struck Pedersen who was in a duly marked crosswalk. Pedersen』s counsel wishes to prove that after the accident Carr went to Pedersen and offered $1,000 to settle Pedersen』s claim.

The trial judge should rule this evidence

(A) admissibleasanadmissionofaparty.

(B) admissible as an admission to show Carr』s liability, provided the court gives a cautionary instruction that the statement should not be considered as bearing on the issue of damages.

(D) inadmissible because even though it is relevant and an admission, the policy of the law is to encourage settlement negotiations.

Choice (D) is correct. This choice correctly characterizes the statement as relevant and an admission, and correctly concludes that the evidence will be inadmissible due to public policy considerations. What』s being proffered is a settlement offer by Carr. But under FRE 408, admissions in conjunction with settlement negotiations are inadmissible to prove negligence, liability, or a claim』s value. That』s the case here.

Question B

On an icy day, a vehicle driven by the defendant struck the plaintiff』s car in the rear, smashing a taillight and denting the plaintiff』s bumper. Before the plaintiff could say anything, the defendant rushed out of his car and told

the plaintiff, 「Look, if you』ll take $500 for

the damage, I』m sure my insurance company will pay for it.」 The plaintiff refused and sued the defendant for damage to his car and minor personal injuries. The plaintiff wishes to testify as to the defendant』s statement at the time of the accident. The defendant objects.

Should the court allow the defendant』s statement to be admitted?

(A) Yes, because it is a statement by an opposing party.

(B) Yes, because it is hearsay within the statement against interest exception.

(D) No, because the statement is hearsay not within any exception.

Choice (A) is correct. The statement by the defendant, who is one of the parties to the action, is admissible as a statement by an opposing party (commonly called an admission). Federal Rule 801(d)(2) provides that a statement offered against a party that is the party』s own statement is not hearsay and therefore cannot be excluded by the rule against hearsay. Assuming that it is relevant and not barred by other rules, the statement is admissible. Here, the defendant』s statement is being offered against him at trial. It is relevant because it can be interpreted as a prior acknowledgment by the defen- dant that he was not totally blameless in the accident, which is undoubtedly inconsistent with his contentions at trial. The statement does not violate Federal Rule 408, which makes offers to compromise a disputed claim inadmissible to prove or disprove the validity or amount of a disputed claim, because it was made by the defendant before the plaintiff made any claim; i.e., there was not yet an actual dispute between the parties. Nor does the statement violate Rule 411, which bars evidence that a person has liability insurance when offered to show fault or ability to pay, because the defendant』s reference to his insurance was an intrinsic part of his admission and could not be readily severed from it. No other rules barring relevant evidence apply, so the statement should be admitted. (B) is incorrect because the statement against interest exception to the hearsay rule [Fed. R. Evid. 804(b)(3)] requires the declarant to be unavailable as a witness, which is not indicated here. More importantly, whenever the statement being offered is by a party, it will almost always be admissible as a statement of a party-opponent even though it does not qualify as a statement against interest, because the former has none of the restrictions that the latter has. (C) is wrong because, as previously noted, the defendant』s statement was made before the existence of a disputed claim between the parties. The public policy rationale for Rule 408, which is to encourage settlement of disputes without litigation, does not come into play until litigation is at least threatened. (D) is incorrect because the statement is an admission by a party, which is treated as nonhearsay under the Federal Rules.

Why? I think the main difference between these two case is the word 「settle」 and 「told」, as the public policy rationale for Rule 408, which is to encourage settlement of disputes, does not come into play until litigation is at least threatened.