Goodwin, Thomas Ryan

English

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Volume 70 Issue 2 Article 13 February 1968 Evidence--Offers of Compromise Versus Admissions Against Interest Thomas Ryan Goodwin West Virginia University College of Law Follow this and additional works at: https://researchrepository.wvu.edu/wvlr  Part of the Evidence Commons Recommended Citation Thomas R. Goodwin, Evidence--Offers of Compromise Versus Admissions Against Interest, 70 W. Va. L. Rev. (1968). Available at: https://researchrepository.wvu.edu/wvlr/vol70/iss2/13 This Case Comment is brought to you for free and open access by the WVU College of Law at The Research Repository @ WVU. It has been accepted for inclusion in West Virginia Law Review by an authorized editor of The Research Repository @ WVU. For more information, please contact ian.harmon@mail.wvu.edu. WEST VIRGINIA LAW REVIEWEvidence--Offers of Compromise Versus AdmissionsAgainst InterestD contracted orally with P to design the mechanical and electricalwork for a building project. P was to be paid on a commission basis.At first, D was satisfied with P's work. Later, however, D becamedissatisfied when he learned that the budget for the building projectwould not permit many of the proposed specifications set forth inP's drawings. D maintained he did not owe P anything, resulting inP's bringing an action for services rendered. It was disclosed at thetrial that D had written P's attorney stating that he felt that P shouldbe compensated for the work he had done in preparing the drawings,but not to the extent of P's billing. Accordingly, the letter furtherinformed P's attorney that D had requested a payment of $1,000.00be made to P. Significantly, the near closing lines of the letterread as follows: "I am sure that if we get together on my next visitto Wheeling, we can settle this problem amicably." The letter wasadmitted into evidence over D's objections. Judgment was enteredfor P on the jury's verdict. D's motion for a new trial, on the groundthat the letter related to an unaccepted offer of compromise andwas for that reason inadmissible, was overruled. D appealed. Held,affirmed. The letter in question was merely an expression of D'sopinion and was in no way connected with an offer for compromise.Consequently, the letter was admissible as an admission againstinterest.' Shaeffer v. Burton, 155 S.E.2d 884 (W. Va. 1967).The line between offers of compromise and admissions againstinterest is a hazy demarcation at best. Nonetheless, it is a line thatmust be defined so that future negotiations leading to private adjust-ments of conflicting claims may be properly conducted. If onebelieved each of his statements volunteered in private negotiationscould be used as admissions of liability in future litigations, suchnegotiations would rarely produce agreement or even occur. Thedecision in Shaffer reflects the position of the West Virginiacourt as to the differentiation between offers of compromise andadmissions against interest.' It should be noted initially that there is a distinct difference betweenadmissions against interest and declarations against interest. The main dif-ference is that so called declarations against interest refer to statements madeby one who is not a party to the proceeding whereas admissions againstinterests are statements made by a party-opponent. Both are exceptions tothe hearsay rule. For a more thorough explanation of the matter see 5WiMoRE, EVrDENCE § 1455 (3d ed. 1940); 58 HARV. L. REv. 1 (1944).[Vol. 701Goodwin: Evidence--Offers of Compromise Versus Admissions Against InterestDisseminated by The Research Repository @ WVU, 1968CASE COMMENTSCourts unanimously hold that offers of compromise are inad-missible in evidence.2 But this uniformity in result is deceptive in thatthe reasons courts give for this conclusion are fundamentally dif-ferent.3 Therefore, it will contribute to the clarification of the ques-tion as to what constitutes compromise offers if one considers thevarious theoretical foundations for their exclusion.The majority of courts predicate the exclusion of offers to com-promise upon a relevancy theory.4 If the statement is such thatits reception into evidence would affect the apparent probabilities ofsome issue of fact in the particular case, and would thereby enhancethe search for the truth of the matter, the statement is relevant.5But, the general rule is that a statement that is an offer neither admitsnor ascertains any liability and is therefore irrelevant.6 In short,the offer is only illustrative of the offeror's desire to avoid litigation.'The minority of courts base their decision of inadmissibility ofoffers on a privilege theory.' Since public policy favors the settle-ment of disputes without invoking the aid of the overburdened courts,the communications that could effectuate such settlements areprivileged.9 As a result, these communications are inadmissible intoevidence. Under this theory, the probative value of the offer isnot important; rather if these negotiations were not protected the24 WIcMoBE, EVIDIENCE § 1062 (3d ed. 1940); Annot., 15 A.L.R.3d13 (1967).3 For a complete discussion of the various reasons courts advance forexcluding offers of compromise from evidence see Bell, Admissions Arisingout of Compromise-Are They Irrelevantp, 31 TEXAS L. REv. 239 (1953).4 E.g., Esser v. Brophey, 212 Minn. 194, 3 N.W.2d 3 (1942). This caseis particularly significant in that it is one of the few decisions that expresslyacknowledges the different theories for excluding offers to compromise fromevidence. Generally, one can ascertain a case s theoretical basis for theexclusion of offers to compromise only by carefully examining its particularlanguage. Wigmore treats the matter of excluding some statements as offers ofcompromise as completely a matter of relevancy. 4 WiGMoRE EVDENCE §1061 (3d ed. 1940). For discussions suggesting offers should be treated asprivileged communications, see McCoanncK, EvIDENCE § 76, at 157 (1954);Bell, Admissions Arising out of Compromise-Are They Irrevelant?, 31 TEXAsL. REv. 239 (1953).5 James, Relevancy, Probability and the Law, 29 CALIF. L. REv. 689(1941).6 Esser v. Brophey, 212 Minn. 194, 3 N.W.2d 3 (1942); Sanhorn v.Neilson, 4 N.H. 501 (1825).7 fBrickell v. Shawn, 175 Va. 373, 9 S.E.2d 330 (1940). But, it may beargued that offers of compromise "are more apt to be made in cases in whichthe party making them is conscious that the cause of his adversary is wellfounded than in the opposite cases." Rideout v. Newton, 17 N.H. 71, 73(1845); cf. McCoRIcx, EVIIENCE, § 76 (1954).8 34 MicH. L. REv. 524 (1936).9 Hiltpold v. Stem, 82 A.2d 123 (Mun. Ct. App. D.C. 1951); Eckhardtv. Harder, 160 Wash. 207, 294 P. 981 (1931).1968]2West Virginia Law Review, Vol. 70, Iss. 2 [1968], Art. 13https://researchrepository.wvu.edu/wvlr/vol70/iss2/13WEST VIRGINIA LAW REVIEWpossibility of private compromise would be slight indeed."0 Thisreasoning crystallizes in the opinion that a person is entitled topursue a course that would result in compromise without the dangerof being prejudiced in the event his efforts should fail." The focusof purpose under the privilege theory then, is directed to the policyof preserving an atmosphere in which private settlements mayflourish.The English courts are the primary exponents of a third theoryfor excluding offers of compromise; this is commonly called thecontract theory. 2 According to this theory, the essential question iswhether or not the offeror stipulated that his statment was to be keptconfidential. In order to signal the offeror's intent to keep the com-munication confidential, the most common practice is to prefacethe communication with the words "without prejudice." The effectof the saving words "without prejudice" is to render the statementinadmissible into evidence. 3It should be noted that the relevancy, privilege and contracttheories are merely reasons for excluding offers of compromise fromevidence; but before the reasons for excluding compromise offersbecome important it is only logical that one must first determinewhat statements will constitute offers of compromise. That is, eventhough a discussion of the theories involved will enhance one'sunderstanding of the general rule of excluding offers of compromise,as a practical matter, the theories operate simply as rationales forThe court's language in Hiltpold v. Stern, supra at 126, aptly explainsthe essence of the riviege theory for excluding offers for compromise:A mere offer of compromise is to be protected because a party toa controversy is permitted in the interest of peace to tender suchterms as to him shall seem proper, and if rejected by the other partyit would be unfair to make use of it as an admission of liability.Compare this statement concerning the "fairness" of excluding offers ofcompromise with the decision reached in Sanborn v. Neilson, 4 N.H. 501(1825).10 Bartels v. Schwake, 153 Minn. 251, 190 N.W. 178 (1922). Discussingoffers of compromise the court said at 252, "The law favors the settlementof disputed claims without litigation, and to encourage such settlements willnot permit either party to use offers of settlement made by the other asevidence of an admission of liability." In Patrick v. Crowe, 15 Colo. 543,554, 25 P. 985, 989 (1891) the court explained that, "If parties can becompelled ... to detail offers made for the purpose of settling matters indispute to avoid litigation, certainly no prudent person would feel safe inoffering any concessions for the purpose of bringing about compromise."1 Eckhardt v. Harder, 160 Wash. 207, 211, 294 P. 981, 983 (1931).124 WiGoRE, EvIDENCE § 1061 (3d ed. 1940); 34 Micn. L. REv. 524,526 (1936).13 Cf. McCoMtmcK, EVIDENCE § 251, at 541 (1954).[Vol. 703Goodwin: Evidence--Offers of Compromise Versus Admissions Against InterestDisseminated by The Research Repository @ WVU, 1968CASE COMMENTSexclusion and do not serve as criteria in the particular case. 4 As aresult, certain tests have been employed to assist the courts in theirinitial differentiation between offers of compromise and admis-sions against interest.The crucial test to distinguish offers of compromise from admis-sions against interest is to determine the intent of the particularindividual making the overture."5 Practically, however, the party'sintentions are operative only to the extent that they are manifest.Therefore, the courts have devised certain objective standards toevaluate the particular individual's intentions. 6 The most commonstandard is to look to the form of the statement. Specifically, if thestatement is in the form of a hypothetical assertion and is conditionalin its terms on effecting a settlement, the statement is an offer ofcompromise. 7 Conversely, if the statement is explicit and absolutein its terms it is an admission against interest.The determination of the party's intent to make an offer of com-promise is not limited to an examination of the statement itself. Theform of the statement is to be considered in light of all the sur-rounding circumstances. First, there must have been an actual disputebetween the parties at the time the particular overture was made. 814 This becomes even more obvious when one considers that in manycases the theories are not mutually exclusive. Often one finds a court employ-ing concurrently the privilege and relevancy theories, for example, withoutacknowledging either as theories, or as separate rationales. E.g., T. M. DealLumber Co. v. Jones, 137 Kan. 480, 21 P.2d 933 (1933).15 People v. Forster, 23 Cal. Rptr. 582, 58 Cal. App. 2d 257, 373 P.2d630 (1962); Hunter v. Totman, 146 Me. 259, 80 A.2d 401, (1951); Colbumv. Groton, 66 N.H. 151, 28 A. 95 (1890); Hendrickson v. Meredith, 161 Va.913, 170 S.E. 602 (1933); Chesapeake and Ohio R.R. Co. v. Stock, 104 Va.97, 51 S.E. 161 (1905).The court in Colburn v. Groton, supra, presents an excellent discussion ofthe law concerning the exclusion of offers of compromise from evidence.16The question of intent and whether or not the statement will beadmissible as an admission against interest is to be determined by the trialcourt as a preliminary question of fact. Hunter v Totnan, 146 Me. 259, 268,80 A.2d 401, 406, (1951); Gagne v. New Haven Rd. Constr. Co., 87 N.H.163, 175 A. 818, 821 (1934). But, if the evidence is disputed as to whethera fact was admitted as true or whether the statement was made with theintention of effectuating a compromise, the question may be submitted to thejury with instructions to disregard it if it is the latter. Colburn v. Groton,66 N.H. 151, 28 A. 95 98 (1890).'7 Brown v. Hysiop, 153 Neb. 669, 677, 45 N.W.2d 743 748 (1951);Keatley v. Hanna Chevrolet Co., 121 W. Va. 669, 675, 6 S.E.2d 1, 4 (1939);Lovett v. West Virginia Central Gas Co., 73 W. Va. 40, 45, 79 S.E. 1007,1009 (1913). See 31 C.J.S. Evidence § 285 (1964)." Wartell v. Novograd, 49 R.I. 191, 141 A. 461 (1928). An offer topay an admitted liability does not come within the general rule excludingoffers of compromise. Firestone Fire and Rubber Co. v. Hillow, 65 A.2d338 (Mun. Ct. App. D.C. 1949) (claim for damage to car advanced by a1968]4West Virginia Law Review, Vol. 70, Iss. 2 [1968], Art. 13https://researchrepository.wvu.edu/wvlr/vol70/iss2/13WEST VIRGINIA LAW REVIEWSimilarly, one is to consider whether or not there was an actual threatof litigation. 9 In this respect, the time of the statement is just as im-portant as its form. Moreover, some courts have asked whether ornot a definite amount of money was offered at the time the statementwas made.2" Certainly an offer of a definite amount in order toeffectuate a settlement of an existing dispute would indicate an inten-tion to compromise. It appears that no one criterion is to be con-sidered controlling; rather, each is to be examined and consideredin light of the entire situation existing between the parties.Once a statement has been characterized generally as an offer ofcompromise and, as such, inadmissible into evidence, it does notnecessarily follow that each segment of the entire statement is likewiseinadmissible. Independent statements of fact, although encompassedin an offer of compromise, are admissible in evidence as admissionsagainst interest.2 The weight of authority takes this position.2 2This, of course, may be just another way of saying independent factsare not offers of compromise. But, failure to realize this gradationcould cause confusion in cases where one finds a court holdinggenerally that a statement is inadmissible because it is an offer tocompromise, while at the same time admitting into evidence partsof the same statement. The public policy favoring the private settle-ment of disputes is out-weighed by the stronger public policy whichrequires that material issues of fact be determined by the greatestamount of relevant nonprejudicial evidence.23The court in Shaeffer made the important distinction between rea-sons or theories for excluding offers of compromise and the generaltests to be used to determine whether a statement is in fact an offer.Although it did not recognize them as such, it acknowledged both thebailor against a parking station; defendant's agent offered to pay in full lesssalvage value); McComas v. Clements, 137 Kan. 681, 21 P.2d 895 (1933)(after car collision, defendant at scene of accident said he would take careof any bills).,9 E.g., Brown v. Hyslop, 153 Neb. 669, 676, 45 N.W.2d 743, 748 (1951).2 0 Id.; cf. Gagne v. New Haven Rd. Constr. Co., 87 N.H. 163, 168, 175A. 818, 821 (1934).21 Hendrickson v. Meredith, 161 Va. 913, 170 S.E. 602 (1923); Keatleyv. Hanna Chevrolet Co., 121 W. Va. 669, 6 S.E.2d 1 (1939); Parkersburgand Marietta Sand Co. v. Smith, 76 W. Va. 246, 85 S.E. 516 (1915).22 See Annot., 15 A.L.R.3d 13 (1967); 29 Am. Jun. 2d Evidence § 630(1967); 31A C.J.S. Evidence § 287 (1964).23 Gagne v. New Haven Rd. Constr. Co., 87 N.H. 163, 168, 175 A. 818,821 (1934).[Vol. 705Goodwin: Evidence--Offers of Compromise Versus Admissions Against InterestDisseminated by The Research Repository @ WVU, 1968CASE COMMENTSprivilege and relevancy theories as the reasons for excluding com-promise offers from evidence.24 Without considering either theprivilege or relevancy theories as controlling, it applied the tests tocharacterize the letter as either an offer or admission.The court applied many of the standard tests to make this dis-tinction: (1) whether or not the statement was in the form of ahypothetical assertion; (2) whether or not the statement was a partof an offer; and (3) whether the statement was made for the purposeof settlement or compromise.The court's consideration of D's purpose for sending the letter toP's attorney was significant. The statement in the letter concerningthe possibility of future settlement if the parties were to "get to-gether" was dismissed by the court as merely an opinion of D. Thusthe court seemed to be drawing a fine line indeed by differentiatingoffers of compromise and opinions. Significantly, this was an un-necessary distinction for the court to make. That is, assuming thestatement concerning an amicable settlement was an offer to com-promise, the admission by D that he owed P some amount wouldstill have been admissible under the general rule that an admissionof liability is admissible into evidence even though it is part of anoffer of compromise.2"The theories of exclusion provide merely rallying points forfuture argument. Presently, however, in West Virginia one wouldbe well advised to give more attention to the particular tests em-ployed by the court. Moreover, it would be prudent to frame anyovertures for compromise in the form of hypothetical assertionswith definite reference to settlement negotiations.Thomas Ryan Goodwin24 The pertinent language is:The rule [for excluding offers] is based upon public policywhich favors the settlement of disputed claims out of court andthe courts treat such offer of compromise by a party as an effort toobtain peace rather than as an admission of liability or of thevalidity of the claim of the other party. Shaeffer v. Burton, 155S.E.2d 884, 891 (W. Va. 1967) (emphasis added).The first part of the sentence contains the public policy concept inherentin the privilege theory; the last half of the sentence explains why such offersare of no probative value and therefore irrelevant.25 E.g., Brown v. Hyslop, 153 Neb. 669, 45 N.W.2d 743 (1951).1968]6West Virginia Law Review, Vol. 70, Iss. 2 [1968], Art. 13https://researchrepository.wvu.edu/wvlr/vol70/iss2/13

Evidence--Offers of Compromise Versus Admissions Against Interest

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Evidence--Offers of Compromise Versus Admissions Against Interest

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