Court Opinion

ID: 9721838
Source: CourtListenerOpinion
Date Created: 2023-08-26 09:10:45.441424+00
Date Added: 2024-06-11T18:24:28.880757
License: Public Domain

STATON, Judge,
dissenting.
I dissent. It was the State who placed in issue the question whether the loan receipt agreement constituted full satisfaction for Ingram and Kirk’s injuries. It was the State who introduced into evidence the monetary sum ($3,500) which Ingram and Kirk had received pursuant to the loan receipt agreement. Consequently, I would hold that the State cannot now complain of the admission of the loan receipt agreement, which Ingram and Kirk offered in rebuttal to the testimony regarding the payment they received under the agreement. Although the trial court erred when it failed to delete objectionable portions of the agreement, that evidence was merely cumulative in nature. Hence, the trial court’s failure — which forms the only basis for the reversal granted by the Majority of this Court — constituted harmless error.
As the Majority has noted, we enjoy here the wisdom of hindsight; at the time the trial court acted on the question before us, the law of loan receipt agreements remained largely unsettled. It was only recently that the question of the admissibility of loan receipt agreements was addressed by our Supreme Court. In Health and Hospital Corp. of Marion County et al. v. Gaither (1979), Ind., 397 N.E.2d 589, the Court held that the details of a loan receipt agreement are admissible only when the co-defendant who has executed the loan receipt agreement remains a party to the litigation.1 Otherwise, the existence and details of the agreement are not admissible. As the Court explained in Gaither:
“The only purpose behind putting the agreement in evidence would be to inform the jury that plaintiff had already received satisfaction for his injury. This would be unjust. That information would have an effect upon the jury similar to informing a jury of a defendant’s liability insurance coverage, which is not permissible in this state. Pickett v. Kolb (1968), 250 Ind. 449, 237 N.E.2d 105; Martin v. Lilly (1919), 188 Ind. 139, 121 N.E. 443. . . .”
The unjust “effect” upon which the Court based its ruling that evidence of a loan receipt agreement is inadmissible is the inherent potentiality that a jury would adjust its assessment of damages once it was informed of the plaintiff’s acquisition of loan receipt monies; in short, the plaintiff would be penalized for entering into the loan receipt agreement. This result would clearly emasculate our Supreme Court’s approval of the use of loan receipt agreements. See American Transport Co. v. Central Indiana Ry. Co. (1970), 255 Ind. 319, 264 N.E.2d 64. Consequently, evidence of the existence and details of a loan receipt agreement, as is the case with a defendant’s liability insurance, are considered prejudicial, irrelevant, and inadmissible.
Here, the State called plaintiffs Ingram and Kirk to the witness stand and elicited *813from them the monetary details of the loan receipt agreement which they had executed with defendant Greenwood Realty Corporation. These irrelevant and highly prejudicial details, were revealed to the jury in the following individual colloquies:
1) WITNESS INGRAM
“Q. Mr. Ingram, do you recall on the date of November 4, ’75, which would have been the day before we started the trial here, do you recall entering into an agreement with yourself and Mr. Kirk and Greenwood Realty Company and Greenwood Shopping Center?
“A. Relating to what, sir?
“Q. Relating, sir, to a payment to you of $3,500 from the Greenwood Realty Corporation and the Greenwood Shopping Center, Inc.?
“A. Yes, I do.
* * * * * *
“Q. Now, Mr. Ingram, do you know, from your discussions with your attorney concerning this agreement, that you were to receive $3,500, you and Mr. Kirk together would receive $3,500 upon the execution of this agreement?
“A. Yes, I did.
“Q. And is it not true, Mr. Ingram, that under the terms of that agreement that, if this jury came back with a verdict of less than $6,000, you would not have to repay any of that $3,500?
“A. Yes.”
2) WITNESS KIRK
“Q. Mr. Kirk, did you also on or about November 4, 1975, execute an agreement together with Mr. Ingram and the Greenwood Realty Company and the Greenwood Shopping Center, Inc., providing for a payment of $3,500 to you?
“A. I really can’t—
“Q. Would it refresh your recollection if I showed you the document?
A. Probably would.
(Mr. Byal exhibited a document to Mr. Kirk.)
“A. I signed that document there.
“Q. That’s the document that I just described to you that we have been talking about.
“A. I signed that, yes.
* . * * * * *
“Q. Do you understand that under the terms of that agreement that, if the jury returns to you a verdict of under $6,000, that you may keep the $3,500 paid to you under this agreement?
“A. I think maybe that’s the way it was. I don’t know if I fully understood it or not.”
Following the State’s introduction of this evidence regarding the existence and monetary details of the loan receipt agreement, plaintiffs’ attorney recalled witness Ingram to the stand for rebuttal purposes. To attempt to explain the nature of the loan receipt agreement which Ingram and Kirk had executed with Greenwood, plaintiffs’ attorney sought to introduce the loan receipt agreement into evidence. Over the State’s objection, the court admitted the agreement into evidence. Judge Garrard holds that the trial court erred in admitting the agreement.
I disagree with Judge Garrard. It is well settled that otherwise inadmissible evidence may, in the discretion of the trial court, be admitted to explain or rebut prejudicial evidence which has been introduced by the opposing party. Jackson v. Beard (1970), 146 Ind.App. 382, 255 N.E.2d 837, 846; Bandy v. Myers (1967), 141 Ind.App. 220, 227 N.E.2d 183, 186; Lyon v. Aetna Life Ins. Co. (1942), 112 Ind.App. 573, 44 N.E.2d 186, 191. As the Court explained in Jackson v. Beard:
“ ‘Accordingly, where evidence on a certain issue is introduced by one party, and it appears likely that the other party will be prejudiced unless he is permitted to introduce contradictory or explanatory *814evidence, such evidence should be admitted. The admission of contradictory or explanatory rebuttal evidence that is otherwise inadmissible depends on the court’s judgment of the prejudice that will result if such evidence is not permitted, . .
146 Ind.App. at 396, 255 N.E.2d at 846, quoting 12 I.L.E. Evidence § 54 p. 486 (1959). The rule enunciated in Jackson has been applied where one party has interjected only a portion of a document (Lyon v. Aetna Life Ins. Co., supra), a part of a transaction (Becker v. Gibson (1880), 70 Ind. 239), or a part of a conversation (Bandy v. Myers, supra.).
As the Supreme Court recognized in Gaither, the State’s interjection of the monetary details of the loan receipt agreement executed by plaintiffs Ingram and Kirk and defendant Greenwood (who was dismissed from the litigation) could only serve to prejudice the jury against to plaintiff’s claim of damages vis-a-vis the State. To minimize that prejudice, the only avenue available to Ingram and Kirk was to offer the loan receipt agreement into evidence. The trial court’s admission of the agreement provided the jury with a complete understanding of the financial relationship between the plaintiffs and the dismissed defendant Greenwood.
I note that Judge Hoffman, in his concurring opinion, agrees that it was not error for the trial court to admit the agreement for the purpose of explaining the financial relationship between Ingram and Kirk and defendant Greenwood. Consequently, the only basis2 for reversing the trial court in which a Majority of this Court concurs is the failure of the trial court to delete objectionable portions of the loan receipt agreement.
The only error committed by the trial court — subsequent to the State’s prejudicial interjection of the monetary details of the agreement — was its failure to remove the objectionable portions prior to its admission. That language regarding the State’s culpability and the extent of the plaintiff’s injuries should not have been admitted into evidence. The admission of that evidence, however, was clearly harmless error.
It is a well-settled rule of appellate review that an erroneous admission of evidence will not warrant reversal unless it is shown that the complaining party was prejudiced by the objectionable evidence. Marsh v. Lesh (1975), 164 Ind.App. 67, 326 N.E.2d 626, 628. Consequently, when the evidence erroneously admitted is merely cumulative in nature, reversal is not warranted. Hendrickson & Sons Motor Co. v. OSHA (1975), 165 Ind.App. 185, 331 N.E.2d 743, 752; Haskett v. Haskett (1975), 164 Ind.App. 105, 327 N.E.2d 612.
Here, the jury was provided with extensive evidence concerning both the State’s alleged culpability and the extent of the injuries sustained by Ingram and Kirk. That evidence which renders the error harmless is hereafter summarized.
Ingram and Kirk had alleged in their complaint that the State had negligently *815maintained a drainage ditch which adjoined a state roadway in St. Joseph County. As a result of that improper maintenance, they alleged, the ditch was filled with water which overflowed and obscured the boundaries of a shopping center entryway. Ingram and Kirk had further alleged that the State’s improper maintenance, as well as its negligent failure to erect warning signs or guardrails, was the proximate cause of the injuries they sustained when their automobile plunged off the entryway and into the ditch.
In support of these claims presented to the jury, the expert testimony of John McNamara, St. Joseph County Surveyor and Drainage Engineer, was admitted into evidence. McNamara testified at length regarding the engineering and design of the roadway, ditches, and surrounding areas. He testified that the State had knowledge of the recurring problem and that it had conducted an investigation into the causes of the problem. That investigation, McNamara stated, led to the conclusion that a drainpipe which the State had installed in 1950 was “covered up and clogged.” McNamara further testified that if the State had unclogged the drainage pipe the accumulation of water at the scene would have been significantly diminished, but the State failed to clear the blocked pipe.
Plaintiffs' Ingram and Kirk, as well as Police Officer Ernest Nybo, who investigated the accident, testified that the pavement surface at the scene of the crime was covered with water. Police Officer Donald Niez-godski, who also investigated the accident, testified that immediately following the investigation, he had Officer Nybo contact the State to “have them put some barricades over there so we wouldn’t have another accident.”
The evidence regarding Ingram and Kirk’s injuries was extensive. Dr. Z. W. Sobol, an orthopedic surgeon, testified that Ingram sustained a sprain of the lumbo-sacral spine which necessitated that Ingram undergo five days of hospitalization in pelvic traction. He also testified that Ingram would endure chronic muscle spasms for perhaps two years as a result of his sprain and that Ingram, a construction worker, would be unable to lift weights above thirty pounds for the remainder of his life. In other words, Sobol testified, Ingram had sustained a seven and one-half per cent permanent impairment of his physical person. Sobol testified that Kirk also suffered an acute sprain of the lumbosacral and cervical areas of the spine, which would manifest itself for some time if Kirk engaged in strenuous activity. Both men required hospitalization and incurred medical expenses.
Based on this evidence, the objectionable portions of the loan receipt agreement can only be regarded as cumulative in nature. Consequently, the erroneous admission of them was clearly harmless error. Furthermore, I note that the jury was fully apprised of the inspiration behind the statements contained in the loan receipt agreement. The jury understood that plaintiffs Ingram and Kirk and Greenwood were the source of the objectionable statements. The State had fully informed the jury that the financial interests of both Ingram and Kirk, as well as Greenwood, were served by the agreement; the jury was fully aware that those parties would all benefit if liability was imposed upon the State and damages were ascertained in excess of $6,000. This evidence covers approximately three hundred and fifty pages of the transcript.
When the objectionable portions of the loan receipt agreement are placed in this harmless light, the need for a reversal and costly new trial appear pointless and unnecessary; therefore, I dissent.

. In that instance, the admission of the agreement serves to inform the jury of the conflict of interest which surrounds the co-defendant to the agreement. At trial, the co-defendant to the agreement would, under the terms of most loan receipt agreements, be interested in maximizing the liability of the non-participating co-defendant; the admission of' the agreement thereby insures that the non-participating defendant enjoys his right to a fair trial. Id. See also, Burkett v. Crulo Trucking Company (1976), Ind.App., 355 N.E.2d 253.
I note that in the instant case, Ernest F. Greenwood of the Greenwood Realty Corporation did testify at trial, notwithstanding the fact that the corporation was dismissed as a defendant once it had entered into the loan receipt agreement with Ingram and Kirk. If Gaither is construed to authorize the admission of a loan receipt agreement for impeachment purposes, then the State’s interjection of the monetary details of the agreement was not prejudicial in nature. Of course, if Gaither is to be so interpreted, Ingram and Kirk were still entitled to introduce the remainder of the loan receipt agreement in rebuttal. Therefore, my analysis of the events which occurred at trial would remain unchanged regardless of the interpretation which might be placed on the language contained in Gaither.

. I emphasize that the overly broad statement of the reason the trial court is here reversed has no support from either Judge Hoffman or myself. The particular language to which I refer is the following statement from the Majority Opinion:
“We are persuaded, however, that it was error to handle the loan receipt in this fashion and that there was such likelihood that the error infected the proceedings that a new trial should be granted.”
The reason this statement finds no support from Judge Hoffman or myself is that (1) the State is the appellant here, and (2) the State interjected the prejudicial monetary details of the agreement, notwithstanding the fact that defendant Greenwood was dismissed from the suit: Compare, Health and Hospital Corp. of Marion County v. Gaither, supra. Consequently, to permit the State to obtain a reversal of the adverse judgment would be to allow it to benefit from its own prejudicial interjection of the agreement’s monetary aspects. Ingram and Kirk were entitled to offer the agreement into evidence to explain the relationship between themselves and Greenwood. Hence, I emphasize that the reversal granted here rests only on the trial court’s failure to delete objectionable portions of the agreement. As explained in the text, I do not agree that the failure of the court to remove the objectionable portions can be characterized as reversible error.