Opinion ID: 1613380
Heading Depth: 1
Heading Rank: 2

Heading: Pattern-or-Practice Testimony

Text: Morris argues that the trial court improperly admitted testimony from five particular witnesses, each of whom spoke about various aspects of Morris's past behavior. We review the admissibility of pattern-or-practice evidence on a fraud claim by an abuse-of-discretion standard. [R]ulings on the admissibility of evidence are within the sound discretion of the trial judge and will not be disturbed on appeal absent an abuse of that discretion. Bama's Best Party Sales, Inc. v. Tupperware, U.S., Inc., 723 So.2d 29, 32 (Ala. 1998) (citing Preferred Risk Mut. Ins. Co. v. Ryan, 589 So.2d 165 (Ala.1991)). Any analysis of pattern-or-practice evidence must begin with this controlling rule of evidence: Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show action in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.... Ala.R.Evid. 404(b). The basic intent of Rule 404(b) is to exclude collateral character evidence, which ordinarily is likely to prejudice the jury and confuse the issues. However, this Court has long held that evidence of past unrelated acts, so-called pattern-or-practice evidence, may be admissible in certain circumstances when fraud is alleged. See Great American Ins. Co. v. Dover, 221 Ala. 612, 130 So. 335 (1930); Nelms v. Steiner Bros., 113 Ala. 562, 22 So. 435 (1897). In order for the pattern-or-practice evidence to be relevant and admissible, the collateral acts of fraud must be substantially of the same character [and] contemporaneous in point of time, or nearly so. Life Ins. Co. of Georgia v. Smith, 719 So.2d 797, 808 (Ala.1998) (citing Great American Ins. Co. v. Dover, 221 Ala. at 614, 130 So. at 336). Given the potential for prejudice and the general policy of preclusion, we have required high levels of similarity between the past acts and the present behavior. See Massachusetts Mut. Life Ins. Co. v. Collins, 575 So.2d 1005 (Ala.1990), cert. denied, 499 U.S. 918, 111 S.Ct. 1306, 113 L.Ed.2d 240 (1991). The acts must be both similar in nature and of substantially the same character. See Bama's Best Party Sales, Inc., 723 So.2d at 33. It is important to note that external factors have affected the standard for admitting pattern-or-practice testimony during the past two decades. Even though Alabama has long recognized an exception for fraud claims, that exception, which had been narrow, expanded in the late 1980s as a consequence of the Legislature's first attempt at placing a cap on punitive damages. Section 6-11-21 was enacted as part of a `package of bills' collectively called `the Alabama Tort Reform Act.' L. Nelson, Tort Reform in Alabama: Are Damages Restrictions Unconstitutional? 40 Ala.L.Rev. 533, 533 (1989); Act No. 87-185, § 2, 1987 Ala. Acts 251. The section provides: `An award of punitive damages shall not exceed $250,000.00, unless it is based upon one or more of the following: `(1) A pattern or practice of intentional wrongful conduct, even though the damage or injury was inflicted only on the plaintiff....' Henderson v. Alabama Power Co., 627 So.2d 878, 880 (Ala.1993). Because the admission of pattern-or-practice evidence was critical to an order upholding an award of punitive damages in excess of the statutory cap, courts tended to allow a broader range of such evidence. However, with the repeal of the old statutory cap on punitive damages and the substitution of a new series of restrictions, see § 6-11-21, Ala.Code 1975, we no longer have a basis for a broad reading of the pattern-or-practice exception by which evidence of other intentional wrongful conduct is made admissible. Morris objected, both by two motions in limine and at trial, to the testimony of five witnesses; those witnesses were allowed to testify about various bad experiences they claimed to have had with Morris Pest Control. The Lasters' theory to which they claimed these witnesses' testimony was relevant was the theory that Morris falsified termite letters so as to facilitate the financing or sale of homes. The Lasters argue that the real-estate transfer-and-financing market was the bread and butter of Morris's business and that Morris would not jeopardize its relationships with people involved in the industry by truthfully reporting a termite infestation or other problem in a home he inspected. It is this theory that must provide the basis for an evaluation of pattern-or-practice testimony. The trial court essentially framed the query as whether the proffered testimony would speak to the honesty of the business. Such a liberal interpretation of the pattern-or-practice evidentiary standard permits the admission of far too much extraneous and potentially highly prejudicial testimony, and such an interpretation would defeat the fundamental purpose of Ala. R. Evid. 404(b) by allowing an unbridled exception. The Lasters first called Ray Edgeworth as a witness, for the purpose of establishing that Morris had a pattern or practice of failing to give truthful reports of termite infestation. Edgeworth testified that in order to refinance his home, he had needed to obtain termite treatment and to obtain a termite bond. According the Edgeworth's testimony, Morris sent Edgeworth a bill for termite treatment and for a bond, but apparently never performed the treatment and never furnished the bond. Approximately a year and a half later, Edgeworth testified, he discovered swarms of active termites in his son's bedroom; he said that upon being confronted about the problem, Morris simply refunded the money Edgeworth had paid for the treatment. The Lasters then called a second witness, Reid Morgan, to testify to an alleged pattern or practice. Morgan testified that before he bought a home he obtained the services of Morris Pest Control and Morris issued a termite letter, representing that Morris had conducted an inspection and had detected no problems with the home. A month later, another termite inspection company found active infestations in several areas of Morgan's home. Again, we note that Morris's conduct alleged by Morgan is similar to conduct by Morris the Lasters allege as the basis of their fraud claim. The Lasters next called as a witness Perry Broome. He testified that before the closing on the purchase of Broome's home, Morris provided a termite letter. Soon afterwards, Broome testified, Broome found evidence of active termites; termite damage eventually forced him to replace a bathroom floor. He further stated that Morris said he would have to cut a hole in the floor to treat certain areas, even though previously Morris had apparently said he had visually inspected these areas. We see significant similarities between the facts alleged by the Lasters and the facts testified to by Broome. The question whether the testimony of Edgeworth, Morgan, and Broome showed that Morris had carried on a pattern or practice of making inaccurate inspections and keeping incorrect records was a question proper for the jury to consider. The Lasters next called Jim Franklin to testify as to his experience with Morris Pest Control. Franklin testified that he had hired Morris to pretreat a home Franklin was building; that although Franklin had not suffered any infestation, Morris apparently used too little of the required chemicals; that Morris also agreed to return to perform follow-up visits every year; and that Franklin believed Morris did not make those follow-up visits. Here, Franklin's testimony, supposedly offered to prove a pattern or practice by Morris, devolves into a more general assault upon Morris's business and professional practices. The plaintiff and the defense attorneys had stipulated to Morris's standing objection to the introduction of this evidence, an objection based upon a lack of similarity. If Franklin's testimony is true, then Morris may be poor at pest control, but the conduct Franklin testified to does not parallel the alleged conduct made the basis of the Lasters' action or the conduct described by the other pattern-or-practice witnesses. The final witness called by the Lasters was Jerry Maynor, a former employee of Morris Pest Control. Morris objected to Maynor's testimony, on two grounds. First, Morris argued Maynor's testimony was not within the narrow exception for pattern-or-practice evidence. Second, Morris argued that Maynor was a surprise witness. We find the first argument convincing. The Lasters wanted Maynor to testify as to Morris's alleged pattern or practice of falsifying termite letters so as to appease real-estate agents. The trial court did not allow the Lasters to call Maynor as a direct witness, because they claimed to have found Maynor only one day earlier. The trial court properly recognized the difficult position in which Maynor's testimony would place defense counsel. However, the trial court allowed the Lasters to call Kenneth Morris, the owner of Morris Pest Control, and ask him a series of questions about his past professional relationship with Maynor. The Lasters asked Morris general questions about fraudulent practices and specifically inquired of him about a particular client Morris might have had eight years earlier. Morris denied ever falsifying any termite letters himself and denied instructing Maynor to falsify any letters. The questioning of Morris was brief and perfunctory. The Lasters then called Maynor to the stand, ostensibly as a rebuttal witness. His testimony briefly rebutted Morris's assertions that Morris had good business practices and then it proceeded to meander through a litany of allegations regarding frauds that Maynor claims to have seen while he was employed by Morris. The substance of Maynor's testimony spoke to an alleged pattern or practice of fraud and was only thinly veiled as rebuttal testimony. Much of his testimony would not have been admissible under pattern-or-practice standards that adhered to the requirement that the pattern-or-practice evidence indicate conduct that had a substantial similarity to the conduct now alleged. Maynor spoke at length regarding allegations that Morris had used improper pest-control chemicals and an allegation that Morris had by deceit induced an elderly couple to purchase an unnecessary termite bond from Morris. Morris objected to Maynor's testimony both because of the Lasters' failure to disclose Maynor as a potential witness and because, he claimed, the conduct it indicated lacked the similarity required of pattern-or-practice testimony. By its nature and its substance, Maynor's testimony as to conduct lacking the requisite similarity was prejudicial, and the admission of that testimony was beyond the discretion afforded the trial court to admit evidence of other ... acts as an exception to Ala. R.Evid. 404(b).