Opinion ID: 2604741
Heading Depth: 2
Heading Rank: 5

Heading: relationship between meg and alpac

Text: Before trial began, MEG argued that the jury should be fully informed about the relationship between the Alaska Pacific Assurance Company (ALPAC) and MEG. ALPAC posted a performance bond of $100,000.00 to assure NTC of MEG's performance of the logging agreement, but MEG was required to indemnify ALPAC for this amount if the logging agreement was breached. ALPAC was named as a defendant only because in attempting to recover on a performance bond, the obligee (in this case NTC) has the option of suing the surety along with the principal. Fountain Sand & Gravel Co. v. Chilton Construction Co., 40 Colo. App. 363, 578 P.2d 664, 665 (1978); Thompson v. Maloney, 267 So.2d 378 (Fla.App. 1972). The jury knew about the performance bond because it was admitted into evidence as part of the agreement between MEG and NTC, but the court ruled that the indemnity agreement, and any testimony concerning it, was irrelevant and therefore inadmissible. Evidence as to insurance is traditionally excluded from liability trials in Alaska. Poulin v. Zartman, 548 P.2d 1299 (Alaska 1976). NTC argued, and the court apparently agreed, that the existence of an indemnity agreement had no bearing on the contested issues of MEG's liability or the proper amount of damages. Evidence which is not relevant is not admissible. Alaska R. Evid. 402. Relevant evidence is defined as evidence which has any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence. Alaska R.Evid. 401. The indemnity agreement did not prove or disprove any facts relating to NTC's breach of contract claim or MEG's impossibility defense and the court properly excluded it as irrelevant. MEG does not directly challenge the finding of irrelevance, but instead asserts that the jury was prejudiced because ALPAC was a named party in the suit and present through counsel throughout the trial, which effectively put the jury on notice that MEG was insured. [8] In Bertram v. Harris, 423 P.2d 909 (Alaska 1967), we found that voir dire questions to jury members concerning their stockholdings in insurance companies may have conveyed to the jury the impression that an insurance company would be required to pay any judgment recovered against the appellee. Id. at 918-19. Although this impression may have prejudiced the jury, we held in Bertram that any mistaken assumptions on this score were cured by an instruction that the jury was not to be concerned with insurance. Id. [9] Similar instructions were given to the jurors in this case. Before trial began, the jury was told that ALPAC was essentially a nominal party to the suit. After the trial ended, the jury was given Instruction No. 35, which stated that [t]he fact that there is an insurance company as a party to this lawsuit, and the fact that there is a performance bond should not influence your decision upon any issue in this case. It would be improper for you to give it any consideration. MEG did not object to this instruction. We hold that Instruction No. 35 cured whatever prejudice may have been caused by the admission of the performance bond into evidence and the presence of ALPAC as a defendant.