Opinion ID: 1962322
Heading Depth: 1
Heading Rank: 4

Heading: Exclusion of settlement agreement

Text: Prior to the first trial, plaintiffs Dongos settled with the individual defendants, Mr. and Mrs. Banks, for $15,000 and agreed to indemnify them for any further liability that might be imposed on the Bankses in excess of that amount. Because of that settlement agreement, the real interests of the parties at trial were not what they would appear to be from the parties' formal positions in the litigation. The Bankses' complete liability was already fixed by the settlement at $15,000, and consequently, the Bankses had no interest in showing that plaintiffs were themselves negligent and therefore not entitled to a full recovery. Similarly, because the Dongos' recovery from the Bankses was already established, the Dongos had no interest in showing that the Bankses were negligent. Indeed, in view of Holcomb's cross-claim against the Bankses for contribution, the indemnity provision of the settlement agreement made it strongly in the Dongos' interest that the Bankses be found free of fault. The trial justice granted the Bankses' in limine motion to exclude from evidence any information in regard to the settlement agreement. Arguing that the fact that the Dongos and the Bankses had settled might influence their testimony as critical witnesses in ways not apparent to the jury, Holcomb on appeal contends the exclusion was prejudicial error. We do not agree. Under M.R.Evid. 408 a settlement is not admissible to show liability or damages, but it may be admitted on the issue of bias or prejudice of a witness. See Field & Murray, Maine Evidence 82 (1976). In this case Holcomb sought to admit evidence of the settlement only for the purpose of showing possible bias of the Dongos and the Bankses, who appeared as witnesses. The evidence was therefore admissible under Rule 408. However, evidence admissible under Rule 408 is still subject to the requirement of Rule 403 that the trial judge weigh the probative value of the evidence against the possibility that it may be unfairly prejudicial, confusing, or misleading. See Field & Murray, supra. Here, the presiding justice could properly have considered the possibility that the settlement agreement would have been treated as an admission of liability by the Bankses; or the small amount of the settlement might have been seen as an admission by the Dongos that their case was not worth a great deal. There were at any rate some visible, though slight, indications from which the jury might have been able to infer that the Dongos and the Bankses might want to fix liability on Holcomb rather than on each other: the Dongos and the Bankses were families of apparently modest means, while Holcomb was an out-of-state corporation; the Dongos and the Bankses lived on the same street and their children played together; and Mrs. Dongo's reference in her testimony to defendant James Banks by his nickname Jim possibly bespeaks some degree of familiarity. Under the circumstances we cannot say that the presiding justice was required as a matter of law to admit evidence of the settlement agreement.