Opinion ID: 2315135
Heading Depth: 1
Heading Rank: 2

Heading: the landlord's offers to buy out the tenant

Text: At trial, Garcia's counsel tried to introduce evidence that, after receiving GHA's offer to purchase his building, Llerena offered Sharma $25,000, then $50,000, and finally $100,000 to give up the leasehold. Garcia proffered evidence of these offers as proof of his damages, i.e., as proof of Llerena's own valuation of the leasehold interest Garcia would have received had Llerena permitted him to exercise his rights under the option contract. [4] The trial court refused to admit evidence of the offers, [5] however, on the ground that under applicable rules of evidence they were excludable as offers of settlement and compromise of existing conflict between a tenant and a landlord. See Pyne v. Jamaica Nutrition Holdings Ltd., 497 A.2d 118, 126-27 (D.C.1985) (offer to compromise or agreement to settle claim inadmissible on issue of liability); see also Beckman v. Farmer, 579 A.2d 618, 647-49 (D.C.1990) (letter offering settlement but disclaiming liability inadmissible for any purpose). There are two reasons why offers of settlement and compromise traditionally have not been admissible to prove liability or damages. [6] First, such offers are of questionable relevance, since they readily may be construed as a desire for peace rather than an admission of weakness of position. E. CLEARY, MCCORMICK ON EVIDENCE § 274 at 811 (3d ed. 1984); see Pyne, 497 A.2d at 127; Harrison v. District of Columbia, 95 A.2d 332, 334 (D.C.1953). Second, the rule furthers the policy of promoting the settling of disputes, which would be discouraged if settlement offers were admissible in evidence. See Pyne, 497 A.2d at 127; E. CLEARY, MCCORMICK ON EVIDENCE § 274 at 811. To invoke this rule of inadmissibility, there must have been an actual dispute over the validity or amount of the claim when the offer was made. See id. That requirement is met here, since Llerena and Sharma disputed the validity of Llerena's allegations that the tenant was in default under two provisions of the lease. Garcia relies on this court's decision in Auxier v. Kraisel, 466 A.2d 416 (D.C.1983), to take Llerena's offers to the Sharmas outside the traditional rule. In that case, a real estate broker contracted to sell a rowhouse on behalf of the owner to an investment company. The owner eventually refused to go through with the sale because his broker had agreed to an inadequate price. The contract purchaser sued for specific performance, and the owner settled for $12,500. The owner then sued his broker for breach of fiduciary duty and sought to introduce as evidence of damages his $12,500 settlement with the contract purchaser. The trial court admitted the evidence, and we sustained the ruling: Because the settlement evidence at issue here was introduced to show the amount of damages incurred by reason of underlying litigation with a third party, and not as an admission by appellant of liability or of the amount of damages in the instant litigation, the traditional rule of inadmissibility was inapplicable. Id. at 419-20. In the present case, in contrast, Garcia sought to introduce Llerena's offers to Sharma as a way of proving the value of the leasehold. His theory was to postulate that, as optionee, he stood in Sharma's shoes and thus could use Llerena's offers to Sharma as an admission by [Llerena]... of the amount of damages in the instant litigation. Id. at 420. For that reason, the traditional rule of inadmissibility is applicable here, rather than the Auxier exception, and the court did not err in excluding the proffered evidence.