Opinion ID: 1290821
Heading Depth: 2
Heading Rank: 4

Heading: Exclusion of Evidence Regarding the New Board's Authority

Text: Finally, Scenic argues the district court abused its discretion in excluding: (1) on relevancy grounds, evidence of conduct predating the 1999 mortgage; (2) for lack of foundation, documents describing persons as Tabernacle trustees under the theory Scenic had not shown Tabernacle elected those persons in accordance with its canons, bylaws, and procedures; and (3) as inadmissible settlement discussions, evidence that Tabernacle representatives discussed the delinquent loan with Scenic and agreed to execute a deed, in lieu of foreclosure, to cure the default. We review for abuse of discretion the district court's evidentiary rulings, according such decisions substantial deference. Marmo v. Tyson Fresh Meats, Inc., 457 F.3d 748, 757 (8th Cir.2006). On multiple occasions during the trial, Scenic attempted to prove Tabernacle authorized the note and mortgage by showing a prior course of dealing among Superior, Tabernacle, and representatives of Tabernacle. Scenic contends the district court abused its discretion by concluding such evidence was irrelevant to the New Board's authority to bind Tabernacle. We disagree. Scenic's argument ignores the well-settled principles under Arkansas law regarding congregational church governance and under Tabernacle's own church canons that (1) congregational church affairs are determined by a majority vote of the church's members, (2) Tabernacle's executive power is vested in a board of trustees consisting of three members elected at Tabernacle's annual meeting of the general assembly, and (3) the board of trustees may not mortgage real or personal property without the prior approval of a two-thirds majority vote of Tabernacle members present and voting at a meeting of the church for which notice of the proposed action was given. See Elston, 186 S.W.2d at 663 (In congregational groups the affairs are determined by the vote of the majority of the members.); see, e.g., McCree, 101 S.W.3d at 278. A prior course of dealing is not relevant to matters of the New Board's authority to bind Tabernacle. Scenic presented no evidence (or proffered any, for that matter) demonstrating the individuals who signed the 2001 note and mortgage were properly elected by Tabernacle's congregation or that Tabernacle approved the mortgage of its property by a two-thirds vote of its members at a duly-called congregational meeting. Because evidence predating the disputed transaction was not relevant to establishing the New Board's authority to bind Tabernacle, the district court did not abuse its discretion in excluding the evidence. Similarly, Scenic argues the district court abused its discretion by essentially requiring Scenic to prove the merits of its case  i.e., authorization  as a foundational predicate for the admission of certain evidence. However, to the extent Scenic sought to introduce evidence for the purpose of demonstrating the individuals who executed the multipurpose note and mortgage were trustees and thus were authorized to conduct business on behalf of Tabernacle, Scenic first had to demonstrate the individuals were authorized  that is, elected to the church's board of trustees at Tabernacle's annual meeting of the general assembly. There is no dispute Scenic failed to establish this foundational predicate. Given the unique legal principles applicable to this dispute concerning congregational church governance, the authority of trustees to encumber church property, and the origin or creation of such authority, the district court's decision to exclude Scenic's proffered evidence on the ground it lacked foundation was not an abuse of discretion. Scenic's last claim of error concerns the district court's exclusion of evidence of conduct during settlement negotiations between Scenic and Tabernacle representatives. Scenic sought to introduce testimony that Tabernacle representatives offered to execute a warranty deed in lieu of foreclosure to cure the default, for the purpose of proving Tabernacle authorized the multipurpose note and mortgage and to rebut Tabernacle's claim otherwise. Contrary to Scenic's assertions, this type of evidence falls squarely within the parameters of Federal Rule of Evidence 408(a), which excludes the use of evidence of compromise and offers to compromise to prove liability for a disputed claim and also denies the admissibility of statements made in settlement negotiations. Thus, the district court did not abuse its discretion in excluding this evidence.