Rennenger v. Manley Toy Direct LLC

161 F. Supp. 3d 719, 2015 U.S. Dist. LEXIS 179608, 2015 WL 11117090
CourtDistrict Court, S.D. Iowa
DecidedApril 23, 2015
DocketNo. 4:10-cv-00400-JEG
StatusPublished

This text of 161 F. Supp. 3d 719 (Rennenger v. Manley Toy Direct LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rennenger v. Manley Toy Direct LLC, 161 F. Supp. 3d 719, 2015 U.S. Dist. LEXIS 179608, 2015 WL 11117090 (S.D. Iowa 2015).

Opinion

ORDER

JAMES E. GRITZNER, Senior Judge UNITED STATES DISTRICT COURT

This matter now comes before the Court on the Second Motion in Limine by Defendants Toy Quest, LTD., and Aquawood, which Plaintiff resists. The matter came on for hearing on April 17, 2015.1 Attorney David Luginbill appeared for Toy Quest and Aquawood. Attorney Brian O’Neill appeared for Plaintiff. These Defendants move in limine to preclude evidence concerning settlement negotiations, corporate disclosure statements from other lawsuits, and the sale of a building in Indianola by an entity identified as The Toy Warehouse, L.L.C.

SETTLEMENT DISCUSSIONS

On the record currently available to the Court, the claimed settlement discussions at issue arise in the context of a unanticipated telephone direct contact by Brian Dubinsky, President of Aquawood, with Plaintiff Danielle Rennenger on April 13, 2015.2 While the specific content of the [721]*721telephone discussion remains somewhat elusive, there does not appear to be a dispute that the phone call occurred.

Mr. Dubinsky reportedly identified himself as the President of Aquawood and suggested his company would be responsible for any verdict in the pending ease. The Court is informed Ms. Rennenger would testify as follows:

Mr. Dubinsky then told her his name and said he represented Aquawood and that it was his company. He tried to convince her that he did not do anything wrong. Mr. Dubinsky told Mr. (sic.) Rennenger that her attorneys were going to paint him out to be a bad guy and that he was not a bad guy, but that is (sic) company is going to have to pay for it and he has never stepped foot in Iowa. At the very end of the conversation, he then said he could give her a gift, some money, or a car.

Pl.’s Resist. 2, ECF No. 297. Toy Quest and Aquawood argue the content of the telephone call constitutes settlement discussions and is therefore inadmissible under Federal Rule of Evidence 408.

Rule 408 states as follows:

(a) Prohibited Uses. Evidence of the following is not admissible — on behalf of any party — -either to prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction:
(1) furnishing, promising, or offering — or accepting, promising to accept, or offering to accept — a valuable consideration in compromising or attempting to compromise the claim; and
(2) conduct or a statement made during compromise negotiations about the claim — except when offered in a criminal case and when the negotiations related to a claim by a public office in the exercise of its regulatory, investigative, or enforcement authority.
(b) Exceptions. The court may admit this evidence for another purpose, such as proving a witness’s bias or prejudice, negating a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.

Because the specific scenario now before the Court fortunately rarely occurs, the Court must assess more generally the application of Rule 408, with due regard for whether there was a clear effort “to compromise a claim” under subsection (a)(2), and whether the evidence is probative on “another purpose” under subsection (b).

A. Offer of Settlement/Compromise Negotiations

Raybestos Products Co. v. Younger, 54 F.3d 1234, 1240 (7th Cir.1995), is instructive as to the factors a court should look at in determining whether evidence constitutes an offer of settlement and/or compromise negotiations. In Raybestos, the defendants sought to preclude a letter the defendants sent to the plaintiff asserting the letter was inadmissible evidence of statements made in compromise negotiations. In reviewing and affirming the district court’s admission of the letter, the Seventh Circuit reasoned,

To determine whether Younger sent his letter as an attempt to compromise a claim, or rather to intimidate the plaintiff, this court must look at the totality of the circumstances, carefully reviewing the contents of the letter and the timing of its delivery. Upon review of the record and the atmosphere in which this letter was sent, we conclude that Younger volunteered this letter and that no settlement arrangements or discussion had been initiated by Raybestos against [722]*722whom Younger was then making various defamation claims.

Id.

Although the Court is advised that separate settlement discussions had been arranged between the parties and the attorneys, the currently available record does not lend itself to an easy conclusion that Dubinsky was involved in compromising a claim. Given the surprise con-tact from the President of a defendant company to an individual plaintiff, in which an general offer of some accommodation was made in encouraging the Plaintiff to change her position, the contact appears more an intentional or inartful effort to influence the Plaintiff. While trial evidence could require a different response, the Court does not on the current record conclude Dubinsky’s contact was in the nature of settlement negotiations as that concept can reasonably be characterized under the rule.

B. Settlement Negotiations Admissible for Other Purposes

On the issue of whether settlement negotiations are admissible for other purposes, Dahlgren v. First Nat. Bank of Holdrege, 533 F.3d 681, 699 (8th Cir.2008), is instructive. At trial in Dahlgren, over the objection of the defendant bank (the Bank), the plaintiff offered testimonial evidence that two banks had similarly sued the Bank and that the Bank had settled those claims; the district court allowed the testimony that the Bank had settled those claims, but not the amount of the settlement. In affirming, the Eighth Circuit reasoned Rule 408 “only applies to evidence of compromise offered to prove liability for or the amount of the claim that was compromised, whereas here evidence that the Bank settled claims by its successor lenders was offered to refute the Bank’s claim that it was not liable for plaintiffs’ tort claims....” Id. (emphasis added).

The Eighth Circuit went on to state,

As Judge Learned Hand explained years ago, the admission of evidence that a defendant settled a claim "with a third party arising out of the same set of operative facts carries the inherent risk that “such a concession of liability is almost sure to be taken as an admission of fault.” Paster v. Pennsylvania R.R., 43 F.2d 908, 911 (2d Cir.1930). For this reason, even the circuits that construe Rule 408 narrowly view evidence of third party settlements skeptically. As the Tenth Circuit explained in Towerridge, Inc, v. T.A.O., Inc., 111 F.3d 758

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161 F. Supp. 3d 719, 2015 U.S. Dist. LEXIS 179608, 2015 WL 11117090, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rennenger-v-manley-toy-direct-llc-iasd-2015.