Opinion ID: 1839214
Heading Depth: 1
Heading Rank: 3

Heading: The Order Granting a New Trial

Text: Having concluded that the court properly denied the JNOV, we must consider the propriety of the trial court's grant of a new trial. The trial court stated that a new trial was necessary because the Court failed to give the jury a limiting instruction concerning the money paid to Ms. Catlin by the Defendant. The prior complainant, Ms. Annette Catlin, testified as follows: Q. Did you sue Toyota City? MR. MEELHEIM: I'm going to object to that on the grounds of relevancy, Your Honor. When she sued Toyota City, it clearly doesn't have any bearings in this lawsuit. THE COURT: Ladies and gentlemen, I'm going to go ahead and let this in to show design, scheme or knowledge or intent to defraud, if any, in this action. That's the only purpose of letting this testimony in. MR. MEELHEIM: Judge, I'm going to object to this witness's testimony. THE COURT: Okay. Overruled. Q. You can answer. A. Yes, I sued them. Q. Were you paid any money? A. Yes. MR. MEELHEIM: I'm going to object to that, Your Honor. THE COURT: Overruled. Q. Do you recall how much money you were paid? MR. MEELHEIM: I'm going to object to the amount of money she was paid, Your honor. It's clearly not relevant to this lawsuit. THE COURT: I'm going to overrule. Go ahead. You may answer. Q. How much money did Toyota City pay you after you filed [your] lawsuit? A. $22,500. Q. Do you recall when they paid you this money? MR. MEELHEIM: Object to that, too, Judge, on the basis of relevancy. When she got the money doesn't have anything to do with this. THE COURT: I will sustain. MR. BUSHNELL: That's all, Your Honor. THE COURT: Okay. Mr. Meelheim? At the outset, we note that this case does not concern the broad issue of whether evidence of similar fraudulent acts is admissible. It is well settled that evidence of such similar acts is admissible. See generally C. Gamble, McElroy's Alabama Evidence, § 70.03(1) (3d ed. 1977). In order for evidence of a prior act to be admissible, the prior act must meet the requirements of similarity in nature and proximity in time. We find that the prior act in question here met those requirements, particularly in light of the limiting instruction from the trial court. Toyota City's argument that Ms. Catlin's testimony described events too remote in time to meet the standard of similarity is without merit. Davis v. Davis, 474 So.2d 654 (Ala.1985). The focus of our analysis is on whether the trial court erred in admitting the testimony as to the settlement and amount paid to Ms. Catlin and whether it gave a sufficient limiting instruction regarding that testimony. The trial court did instruct the jury that the only purpose for which the evidence could be considered was to show design, scheme of knowledge or intent to defraud, if any, in this action. The effect of this evidence and of the limiting instruction must be examined in light of the strong policy in our law permitting proof of prior bad acts or schemes to defraud. [Previous] similar acts by different agents, both of whom act for the defendant, are admissible to show fraud, scheme, motive or intent.... Moreover, wide latitude is allowed with regard to testimony in fraud cases since often the perpetrator is the sole possessor of the actual knowledge of the fraud. L.W. Johnson & Assoc., Inc. v. Rivers Construction Co., 532 So.2d 618, 623 (1988), discussing Winn-Dixie Montgomery, Inc. v. Henderson, 395 So.2d 475, 477 (Ala.1981), where the trial court was held to have properly allowed the testimony of a former employee about an earlier misrepresentation under similar circumstances. See also Kabel v. Brady, 519 So.2d 912 (Ala. 1987). The record reveals that the money paid Ms. Catlin was paid as a settlement of her claim. Our law is well settled that evidence of an offer of settlement is generally inadmissible as proof of an admission against the party making the offer: It is the general rule that evidence of an offer to compromise or settle a disputed claim will not be received as an admission of the party making the offer. An offer of agreement to pay, or even payment, in the way of compromise, is not an admission of indebtedness nor of any fact from which indebtedness may be inferred. Griffin v. Hardin, 456 So.2d 1113, 1116 (Ala.Civ.App.1984). See also Super Valu Stores, Inc. v. Peterson, 506 So.2d 317 (Ala.1987), Millsap v. Williamson, 294 Ala. 634, 320 So.2d 649 (Ala.1975), and Indemnity Co. of America v. Pugh, 222 Ala. 251, 132 So. 165 (1931). The policy behind this rule has always been that extra-judicial resolution of disputes by compromise and settlement is to be encouraged, and the admission into evidence of settlement negotiations and agreements would operate to curtail that policy. Our research has discovered no case that specifically addresses this policy issue in the context of facts similar to those in the case at hand. Generally, a question of the admissibility of an offer of settlement arises as a result of negotiations in the same case, not where a settlement is sought to be used against the settling party in a later and different case. However, we are persuaded that the policy considerations raised in this case must be resolved by applying the same analysis. That is, evidence that Toyota City had previously settled a fraud claim against it with Ms. Catlin for the amount of $22,500 could certainly be taken by the jury to be an admission of intentional fraudulent conduct on the part of Toyota City. That evidence was therefore prejudicial to Toyota City in this case, and the adoption by this Court of a rule allowing admission of such evidence in analogous cases would certainly deter similarly accused persons from settlement of claims against them in the future. On the other hand, the admission into evidence of the amount of the settlement payment is not necessary to prove a pattern of fraudulent conduct. That pattern is established by Ms. Catlin's testimony that Toyota City sold her a vehicle that they falsely represented as never having been wrecked. We recognize that evidence of the amount of payment might have some probative value, but the rationale of allowing admission because the evidence might have probative value would apply equally well to those many cases in which our courts have held that an earlier offer of settlement in the same case was not admissible. In each of those cases our courts have held that the policy of denying admission of settlement evidence in order to encourage extrajudicial resolution of cases prevails over arguments for admission based on possible probative value. Accordingly, we agree with the trial court's determination that it erred in admitting the evidence of Ms. Catlin's testimony regarding her settlement. It follows that the trial court did not abuse its discretion in ordering a new trial. Our law requires us to affirm the trial court's determination where that determination is properly grounded in the law. Progressive Specialty Ins. Co. v. Hammonds, 551 So.2d 333 (Ala.1989), and Sims v. Sims, 502 So.2d 722 (Ala.1987). Accordingly, the trial court's order of a new trial is affirmed, and the cause is remanded. 89-404APPLICATION GRANTED; ORIGINAL OPINION WITHDRAWN; OPINION SUBSTITUTED; AFFIRMED. 89-414ORIGINAL OPINION WITHDRAWN; OPINION SUBSTITUTED; AFFIRMED. JONES, SHORES, ADAMS and KENNEDY, JJ., concur. MADDOX, HOUSTON and STEAGALL, JJ., concur in the result.