320 Ga. 208 FINAL COPY
S23G1162 . WHITAKER FARMS, LLC v. FITZGERALD FRUIT FARMS, LLC.
BOGGS, Chief Justice.
Fitzgerald Fruit Farms, LLC, which leased land owned by
Whitaker Farms, LLC, for a peach orchard, sued Whitaker Farms
for damages after being locked out of the leased premises. A jury
awarded Fitzgerald Farms compensatory damages. In the first
appearance of this case before the Court of Appeals, that court
affirmed in part, but reversed the trial court’s ruling that Fitzgerald
Farms could not seek punitive damages. See Whitaker Farms, LLC
v. Fitzgerald Fruit Farms, LLC, 347 Ga. App. 381 (819 SE2d 666)
(2018) (“Whitaker I”). On remand at a trial focused on punitive
damages, a second jury awarded punitive damages to Fitzgerald
Farms. The Court of Appeals again affirmed and held, in relevant
part, that statements made during a settlement negotiation by
Curtis Whitaker, Whitaker Farms’s Chief Operating Officer, to Sean Lennon, Fitzgerald Farms’s owner, were properly admitted under
OCGA § 24-4-408 (“Rule 408”), which governs the admissibility of
settlement offers and statements made in settlement negotiations.
See Whitaker Farms, LLC v. Fitzgerald Fruit Farms, LLC, 368 Ga.
App. 563 (890 SE2d 454) (2023) (“Whitaker II”). We granted
certiorari to review that ruling. We now vacate the Court of
Appeals’s judgment, and as explained further below, determine that
the statements at issue were inadmissible. Furthermore, we remand
the case to the Court of Appeals for a determination as to whether
the admission of the statements was harmful such that a new trial
on punitive damages is required.
1. The relevant facts and procedural background, as set forth
in Whitaker I and II, are as follows. In 2015, Whitaker Farms
purchased a 290-acre peach farm from Carroll Farms. At the time of
the sale, Fitzgerald Farms grew peaches on a 20-acre tract leased
from Carroll Farms. Carroll Farms did not disclose the existence of
the lease to Whitaker Farms prior to the sale. After Whitaker Farms
purchased the farm, it hired Hynes Barnes, one of the owners of
2 Carroll Farms, to manage the property. Neither Barnes nor Carroll
Farms informed Lennon or Fitzgerald Farms that the property had
been sold.
In April 2016, Whitaker learned that Lennon had “pushed up”
some trees on Whitaker Farms’s property, and Whitaker reported
the incident to the local sheriff. A sheriff’s deputy told Whitaker that
the issue was a civil matter, explaining the deputy’s understanding
that Lennon had an ownership interest in the damaged trees. On
August 4, 2016, Fitzgerald Farms’s workers were harvesting
peaches, and as one of the workers left the orchard with a load of
peaches, he saw Barnes driving away from one of the gates and
discovered that the access gates had been locked. When the
employee realized that the workers were locked inside the orchard,
he texted Lennon, who texted Barnes and asked him to unlock the
gate. Barnes responded that Lennon needed to call Whitaker
because Whitaker owned the property now. Lennon called and left a
voicemail for Whitaker, but Whitaker did not return the call. After
getting permission from a superior court judge, the sheriff cut the
3 lock, allowing the workers to depart. The following day, Barnes
relocked the gates, preventing Fitzgerald Farms’s workers from
accessing the property to harvest its peaches.
On August 5, 2016, Fitzgerald Farms sought a temporary
restraining order (“TRO”) against Barnes to gain access to the
orchard so that it could complete the peach harvest. Four days later,
Whitaker executed an application for a criminal arrest warrant for
Lennon, seeking to keep Lennon off the property by having him
arrested. A judge granted the TRO a week after it had been filed,
but by that time, the crop was ruined. Shortly thereafter, Fitzgerald
Farms brought the underlying action for trespass against Whitaker
Farms, seeking compensatory and punitive damages, as well as
attorney fees under OCGA § 13-6-11. Whitaker Farms filed a
counterclaim seeking damages for conversion. A jury found in favor
of Fitzgerald Farms, awarding $150,000 in actual damages for
trespass and lost profits and $400,000 in attorney fees. The jury also
rendered a verdict in favor of Fitzgerald Farms on Whitaker Farms’s
counterclaims.
4 Both parties appealed, and the Court of Appeals affirmed in
part and reversed in part, holding that the trial court erred in not
submitting the issue of punitive damages to the jury. See Whitaker
I, 347 Ga. App. at 389. On remand, the trial court conducted a second
jury trial on the issue of punitive damages. Prior to the first phase
of that punitive-damages trial,1 Whitaker Farms filed a motion in
limine to exclude certain statements Whitaker made to Lennon at a
settlement conference that occurred prior to the first trial. Whitaker
Farms argued that the statements were inadmissible under Rule
408 (b) because the discussion was not relevant to Whitaker’s intent
at the time the gates were locked and were unduly prejudicial.2 The
trial court denied the motion, and at the first phase, Lennon testified
as follows about the discussion with Whitaker at the settlement
1 See OCGA § 51-12-5.1 (d) (providing that in the first phase of a trial on
punitive damages, a factfinder decides whether to award punitive damages, and if the factfinder decides to do so, a second phase of the trial begins on the amount of punitive damages). 2 Whitaker Farms also argued that the trial court should have excluded
the statements under OCGA § 24-4-403, but the trial court declined to do so. The Court of Appeals determined the trial court did not abuse its discretion with respect to this ruling, see Whitaker II, 368 Ga. App. at 567-568, and Whitaker Farms has not challenged that aspect of the Court of Appeals’s opinion. 5 conference:
You know, the conversation started cordial and it turned to — it turned to being told that — you know, we talked about the criminal arrest warrant, that it’s all within [Whitaker’s] right to bring that up again, that I had family to think about. He told me that he thrived off this type of litigation. He had told me that he had been in something like this before and that person went bankrupt, that I needed to consider all of this. . . . And he also made the comment that I had pissed him off, that he was going to make an example out of me. I don’t know if “pissed off” was the exact terminology. I had made him very angry and he was going to make an example out of me for what I had done.
Whitaker, on the other hand, testified that Lennon’s account of the
conversation was “unequivocally not true” and that they had
reached a tentative agreement for Lennon to pay him annually for
the orchard, but the deal never came to fruition. The jury
determined that Fitzgerald Farms was entitled to punitive damages,
and in the second phase, the jury set the amount of punitive
damages at $500,000. Whitaker Farms again appealed, arguing that
the trial court abused its discretion in admitting into evidence the
statements Whitaker made in the settlement conference. The Court
of Appeals, however, affirmed.
6 The Court of Appeals noted that Rule 408 (b) states: “Evidence
of conduct or statements made in compromise negotiations or
mediation shall not be admissible.” However, the Court of Appeals
did not address whether Rule 408 (b) required the exclusion of the
statements at issue here. Instead, the Court of Appeals appeared to
assume that Rule 408 (c) would permit the admission of evidence of
statements and conduct made in compromise negotiations in certain
circumstances. Rule 408 (c) states:
This Code section shall not require the exclusion of any evidence otherwise discoverable merely because it is presented in the course of compromise negotiations or mediation. This Code section shall not require exclusion of evidence offered for another purpose, including, but not limited to, proving bias or prejudice of a witness, negating a contention of undue delay or abuse of process, or proving an effort to obstruct a criminal investigation or prosecution.
The Court of Appeals held that subsection (c) “forbids admission of
evidence only when it is offered to prove liability for or invalidity of
the claim or its amount.” Whitaker II, 368 Ga. App. at 566 (quoting
Zurich American Ins. Co. v. Watts Indus., Inc., 417 F3d 682, 689 (7th
Cir. 2005)). It explained that “the trial court allowed the admission
7 of [Whitaker’s] statements . . . for the limited purpose of proving [his]
intent and state of mind” and were not “used against him to prove
his liability; rather, his demeanor was used as evidence of his state
of mind toward Lennon, which was relevant to the jury’s
consideration of whether to award punitive damages.” Id. at 567.
Accordingly, the Court of Appeals concluded that the trial court did
not abuse its discretion in admitting the statements during the first
phase of the punitive-damages trial in which the jury was
determining whether Fitzgerald Farms was entitled to an award of
punitive damages. See id.
We granted certiorari to address the following questions:
1) Under OCGA § 24-4-408, is “evidence of conduct or statements made in compromise negotiations or mediation” always inadmissible, see OCGA § 24-4-408 (b), or is it admissible under the exception set out in OCGA § 24-4-408 (c) when “offered for another purpose?” See also OCGA § 24- 4-408 (c) (“This Code section shall not require the exclusion of any evidence otherwise discoverable merely because it is presented in the course of compromise negotiations or mediation.”). 2) If the exception set out in OCGA § 24-4-408 (c) applies to conduct or statements made in compromise negotiations or mediation, does that exception make such conduct or statements admissible for the purpose of showing a party’s
8 “state of mind” toward the plaintiff to help establish that punitive damages should be awarded? See OCGA § 24-4-408 (a), (c).
As set forth below, we resolve this case by rejecting the Court
of Appeals’s application of Rule 408 (c), and therefore we answer the
second question and need not address the first question posed.
2. (a) Rule 408 was enacted in 2011 as part of the adoption of
the current Evidence Code and became effective January 1, 2013.
See Ga. L. 2011, pp. 99, 107-108, 214, §§ 2, 101. Rule 408 says, in
full:
(a) Except as provided in Code Section 9-11-68,[3] evidence of: (1) Furnishing, offering, or promising to furnish; or (2) Accepting, offering, or promising to accept a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount shall not be admissible to prove liability for or invalidity of any claim or its amount. (b) Evidence of conduct or statements made in compromise negotiations or mediation shall not be admissible. (c) This Code section shall not require the exclusion
3 OCGA § 9-11-68 sets forth a procedure, under certain circumstances,
for a party to recover attorney fees and litigation expenses when the opposing party rejects a settlement offer in a tort case. 9 of any evidence otherwise discoverable merely because it is presented in the course of compromise negotiations or mediation. This Code section shall not require exclusion of evidence offered for another purpose, including, but not limited to, proving bias or prejudice of a witness, negating a contention of undue delay or abuse of process, or proving an effort to obstruct a criminal investigation or prosecution.
The parties assert, and we agree, that Rule 408 is modeled after the
1975 version of Federal Rule of Evidence 408,4 rather than the 2006
4 Federal Rule of Evidence 408 (1975) provided:
Evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or offering or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. This rule does not require the exclusion of any evidence otherwise discoverable merely because it is presented in the course of compromise negotiations. This rule also does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution. 10 version,5 which was in effect at the time Rule 408 was adopted.6
We also note that Rule 408 (c) is virtually identical to a
provision in both the 1975 and 2006 versions of Federal Rule of
5 Federal Rule of Evidence 408 (2006) provided:
(a) Prohibited Uses.—Evidence of the following is not admissible on behalf of any party, when offered to prove liability for, invalidity of, or amount of a claim that was disputed as to validity or amount, or to impeach through a prior inconsistent statement or a contradiction: (1) furnishing or offering or promising to furnish—or accepting or offering or promising to accept—a valuable consideration in compromising or attempting to compromise the claim; and (2) conduct or statements made in compromise negotiations regarding the claim, except when offered in a criminal case and the negotiations related to a claim by a public office or agency in the exercise of regulatory, investigative, or enforcement authority. (b) Permitted Uses.—This rule does not require exclusion if the evidence is offered for purposes not prohibited by subdivision (a). Examples of permissible purposes include proving a witness’s bias or prejudice; negating a contention of undue delay; and proving an effort to obstruct a criminal investigation or prosecution. 6 After Rule 408 was passed by the Georgia House of Representatives on
February 28, 2011, and by the Georgia Senate on April 14, 2011, see HB 24, Act 52, Ga. L. 2011, p. 99, 107-108 § 2, Federal Rule of Evidence 408 was amended April 26, 2011, with an effective date of December 1, 2011. See Fed. R. Evid. 408 advisory committee notes on 2011 amendments. The federal 2011 amendment was intended to be stylistic only and not to change the result of any ruling on the admissibility of evidence. See id. See also Davis v. State, 299 Ga. 180, 185 n.5 (787 SE2d 221) (2016) (noting effect of 2011 amendment to Federal Rule of Evidence 615). In Sauder v. State, 318 Ga. 791, 799 n.12 (901 SE2d 124) (2024), we stated that Rule 408 (a) is materially identical to Federal Rule of Evidence 408 (a) (1) (2011), but we did not consider how Rules 408 (b) and (c) compared to Federal Rule of Evidence 408. 11 Evidence 408. Because Rule 408 (c) is materially identical to a
provision of former versions of Federal Rule of Evidence 408, we
agree that the Court of Appeals properly looked to federal appellate
courts’ interpretation of the relevant provisions for guidance in
interpreting the rule. See State v. Almanza, 304 Ga. 553, 556 (820
SE2d 1) (2018) (“If a rule in the new Evidence Code is materially
identical to a Federal Rule of Evidence, we look to federal case law.”
(cleaned up)).
(b) For purposes of this appeal, the parties agree that the
statements Whitaker made to Lennon during the settlement
conference are “statements made in compromise negotiations.” As
noted above, under Rule 408 (b) “[e]vidence of conduct or statements
made in compromise negotiations or mediation shall not be
admissible.” However, Rule 408 (c) provides that “[t]his Code section
shall not require the exclusion of any evidence otherwise
discoverable merely because it is presented in the course of
compromise negotiations or mediation.” Subsection (c) further
provides that “[t]his Code section shall not require exclusion of
12 evidence offered for another purpose, including, but not limited to”
a non-exhaustive list of enumerated purposes.
The parties disagree about the proper interpretation of
subsections (b) and (c). Whitaker Farms contends that evidence of
statements made in settlement negotiations is always inadmissible
under the plain language of Rule 408 (b). It reasons that subsection
(c)’s exception does not cover evidence of conduct or statements made
in compromise negotiations, given that subsection (b) renders such
evidence inadmissible. Instead, Whitaker Farms reads subsection
(c)’s exception to address only documents or other evidence
“presented in the course of” such negotiations. Whitaker Farms also
argues that even if evidence of statements made in compromise
negotiations is admissible for “another purpose” under Rule 408 (c),
such evidence cannot be used to show a party’s “state of mind” to
establish punitive damages.
Fitzgerald Farms, on the other hand, asserts that the Court of
Appeals correctly applied the exception in Rule 408 (c) to allow
evidence of Whitaker’s statement in the settlement conference to be
13 admitted “for another purpose.” According to Fitzgerald Farms, the
phrase “another purpose” is a reference to subsection (a), which
forbids introducing evidence of settlement offers or acceptances “to
prove liability for or invalidity of any claim or its amount.” Thus, in
its view, conduct or statements made in compromise negotiations
may be admitted for “another purpose” other than to prove “liability
for or invalidity of any claim or its amount” — the purpose that is
forbidden under subsection (a). It thus contends that Whitaker’s
statements were properly admitted because, as the Court of Appeals
stated, they were used as evidence of Whitaker’s state of mind or
demeanor, not to prove his liability.
We need not resolve the question of whether Rule 408 (b)
provides a categorical exclusion of all evidence of conduct or
statements made in compromise negotiations or whether such
statements may be admitted under the exception set out in Rule 408
(c). As explained below, even assuming that Fitzgerald Farms is
correct that Rule 408 does not require exclusion of statements made
during compromise negotiations if offered for a purpose other than
14 proving “liability for or invalidity of any claim or its amount,” under
Rule 408 (a), the evidence at issue here should have been excluded
because it was offered for the purpose of proving liability for
Whitaker Farms’s liability for punitive damages, which we conclude
constitutes a “claim” for purposes of Rule 408 (a).
(c) We first address the Court of Appeals’s rationale. Assuming,
without deciding, that the Court of Appeals and Fitzgerald Farms
are correct that statements made in compromise negotiations may
be admitted for a purpose other than proving “liability for or
invalidity of any claim or its amount,” see Rule 408 (a), the question
here is whether introducing such statements to prove a party’s
entitlement to punitive damages is an attempt to “prove liability for
or invalidity of any claim or its amount,” and in particular, whether
a claim for punitive damages is a “claim” within the meaning of the
statute. If so, the question then becomes whether the evidence here
was offered for the forbidden purpose of proving liability for punitive
damages or whether it was offered for “another purpose,” see Rule
408 (c), such as the permissible purpose found by the Court of
15 Appeals — “state of mind.” Whitaker II, 368 Ga. App. at 567.
We turn first to the question of whether the word “claim” in
Rule 408 (a) encompasses a request for punitive damages. As noted
above, “if a rule in the new Evidence Code is materially identical to
a Federal Rule of Evidence, we look to federal case law.” Almanza,
304 Ga. at 556. The language of our Rule 408 (a) that is relevant
here — precluding admission of settlement evidence “to prove
liability for or invalidity of any claim or its amount” — is virtually
identical to language in Federal Rule of Evidence 408 (a), and
therefore, we look to federal case law for guidance in determining
whether Fitzgerald Farms’s request for punitive damages
constituted a “claim” under Rule 408, and if so, whether the
admission of Whitaker’s statements in the first phase of the
punitive-damages trial was offered “to prove liability for or
invalidity of any claim or its amount.” However, our review of federal
case law reveals that it does not provide a singular meaning of the
term “claim” in the context of proving “liability for or invalidity” of
the claim. Nor does it definitively answer whether a request for
16 punitive damages is a “claim.” Instead, federal cases have focused
on whether Federal Rule of Evidence 408 requires exclusion of
settlement evidence directly connected to the legal claim at issue in
the current case or whether the rule extends more broadly to
settlement discussions about prior legal claims that are not at issue
in the current case. Compare Lyondell Chem. Co. v. Occidental
Chem. Corp., 608 F3d 284, 296-297 (5th Cir. 2010) (surveying case
law, noting that “courts vary widely in their understanding of the
term [‘claim’]” in the context of evidence offered to prove liability for
or invalidity of a claim, and noting that the majority rule is that “the
dispute being settled need not be the one being tried in the case
where the settlement is being offered in order for Rule 408 to bar its
admission” (cleaned up)), with Wine & Canvas Dev., LLC v. Muylle,
868 F3d 534, 541 (7th Cir. 2017) (stating that “settlement
discussions concerning a specific claim are excluded from evidence
to prove liability on that claim, not on others” (emphasis in
original)), and Vulcan Hart Corp. v. Nat. Labor Relations Bd., 718
F2d 269, 277 (8th Cir. 1983) (holding that settlement evidence is
17 excluded “only if such evidence is offered to prove liability for or
invalidity of the claim under negotiation”). See also 23 Wright &
Miller, Federal Practice & Procedure § 5303 (2d ed. June 2024
update) (noting that the Advisory Committee Notes to the Federal
Rules of Evidence offered no guidance on the scope of the word
“claim”). But the focus of the federal cases on the general question
of whether Federal Rule of Evidence 408 is to be read narrowly or
broadly is not helpful in providing guidance on the specific meaning
of the term “claim.”
(d) Because federal case law does not provide a definitive
answer to the question presented here — whether a request for
punitive damages is a “claim” such that settlement evidence is not
admissible to prove liability for that claim or its amount — we look
to how punitive damages are treated under Georgia law to guide our
analysis.
The term “claim” is often used in legal contexts to refer to “[a]
demand for money, property, or a legal remedy to which one asserts
a right[.]” Black’s Law Dictionary (10th ed. 2014). Our legislature
18 has likewise, in various contexts, defined “claim” as “any request or
demand . . . for money or property.” See OCGA §§ 23-3-120 (1); 49-
4-168 (1). Moreover, the statute authorizing the recovery of punitive
damages requires that an “award of punitive damages must be
specifically prayed for.” OCGA § 51-12-5.1 (d) (1). See also Black’s
Law Dictionary (10th ed. 2014) (defining “prayer for relief,” which is
“[o]ften shortened to prayer,” as a “request for specific relief or
damages”). Additionally, we have long and consistently referred to a
request to recover punitive damages as a “claim” in our case law.
See, e.g., Taylor v. Devereux Foundation, Inc., 316 Ga. 44, 52 (885
SE2d 671) (2023) (one of multiple characterizations of plaintiff’s
demand for punitive damages as a “claim”); Barking Hound Village,
LLC v. Monyak, 299 Ga. 144, 145-146 & n.3 (787 SE2d 191) (2016)
(describing plaintiffs’ claims as including “punitive damages
claims”); Brown & Williamson Tobacco Corp. v. Gault, 280 Ga. 420
(627 SE2d 549) (2006) (discussing plaintiffs’ “punitive damages
claim”); Bragg v. Gavin, 234 Ga. 70, 70 (214 SE2d 532) (1975) (noting
appellant “sought both compensatory and punitive damages” and
19 describing the factual basis for “the claim for punitive damages” as
fraud in inducing plaintiff to purchase Irish Setter dogs); Ga. R. &
Banking Co. v. Eskew, 86 Ga. 641, 641 (12 SE 1061) (1891)
(discussing evidence relevant to a “claim for punitive damages”).
We also note that the statutory language precludes the use of
settlement evidence “to prove liability for . . . any claim or its
amount.” Rule 408 (a) (emphasis supplied). The description of
“claim” as having “an amount” presupposes that a “claim” can be a
request for monetary relief, which has an “amount,” as opposed to
only a general claim of liability for the underlying conduct. See also
OCGA § 9-11-68 (a) (6) (for purposes of offer-of-settlement statute,
offer to settle a tort claim must “[s]tate with particularity the
amount proposed to settle a claim for punitive damages, if any”).
Finally, “liability” may be used in the sense of “[a] financial or
pecuniary obligation in a specified amount[.]” Black’s Law
Dictionary (10th ed. 2014). Given the statutory reference to proving
“liability for . . . any claim or its amount,” Rule 408 (a), the term
“liability” is broad enough to encompass a defendant’s pecuniary
20 obligation. See Lathrop v. Deal, 301 Ga. 408, 442 (801 SE2d 867)
(2017) (in construing state constitutional provision that includes the
term “liability,” noting that it “often refers to a financial or
pecuniary obligation” and citing Black’s Law Dictionary (cleaned
up)).
Fitzgerald Farms’s argument about the meaning of “claim”
relies on federal cases, and it argues that the evidence was properly
admitted here because a punitive damages claim is a derivative
claim, as opposed to the primary claim of trespassing.7
However, the federal cases upon which Fitzgerald Farms relies
address the more general question about whether Federal Rule of
Evidence 408 requires exclusion of settlement evidence when the
7 Fitzgerald Farms also argues that the Court of Appeals’s judgment is
correct for the alternative reason that Whitaker’s behavior was potentially criminal or tortious such that Whitaker Farms could not claim the protection of Rule 408. See, e.g., Chemtall Inc. v. Citi-Chem, Inc., 992 FSupp. 1390, 1410 (S.D. Ga. 1998) (“The Court has no difficulty holding that, where a party’s overriding purpose in advancing a ‘settlement’ communication is not to work a settlement, but instead an outright fraud, such misuse estops him from invoking the evidentiary privilege.”). However, this issue does not fall within the scope of the questions that we posed in granting the petition for certiorari, and we do not address it. See Supreme Court Rule 45.
21 negotiations only related directly to the legal claim being litigated.
For example, Zurich involved a letter written by an insured to its
insurer to settle a coverage dispute under an insurance policy, and
the admission of that letter into evidence in a different jurisdiction
in a case involving a dispute between the insured and its insurer
over the arbitrability of “deductible agreements,” which were
separate from the insurance policy. 417 F3d at 684-687. The Zurich
court held that Federal Rule of Evidence 408 did not require
exclusion of the letter where it was written in connection with
settlement negotiations over a contract action on the primary
liability policies, rather than in connection with the case being tried,
which was a different case involving the question of arbitrability of
separate deductible agreements. See id. at 690.
Additionally, Bradbury v. Phillips Petroleum Co., 815 F2d 1356
(10th Cir. 1987), the primary case Fitzgerald Farms relies upon,
involved settlement evidence involving different legal claims than
the claims being tried. In Bradbury, the plaintiffs sued Phillips
Petroleum and a subsidiary for trespass, assault and battery, and
22 outrageous conduct. See id. at 1359. The Tenth Circuit affirmed the
trial court’s admission of evidence of seven incidents for which
Phillips had paid compensation to other individuals for Phillips’s
misconduct of a similar nature. See id. at 1362-1364. While the
Tenth Circuit noted that “when the issue is doubtful, the better
practice is to exclude evidence of compromises or compromise offers,”
it nevertheless concluded that the trial court did not abuse its
discretion where the evidence was offered for the “other purposes”
alleged by the plaintiffs — to demonstrate Phillips’s “continuous
course of reckless conduct and disregard of personal and property
rights” and to negate Phillips’s defense that its trespass across the
plaintiffs’ land was merely a mistake. Id. at 1363-1364.
Although these cases do not provide an answer to the question
we are considering — whether a request for punitive damages is a
“claim” within the meaning of Rule 408 — Fitzgerald Farms’s
argument is that these cases show that Rule 408 requires exclusion
of settlement evidence only when that evidence relates to the
primary legal claim at issue and that the evidence here was properly
23 admitted because a punitive damages claim is a derivative claim,
not the primary claim. Certainly, an award of punitive damages
cannot be made in the absence of an award of damages on the
underlying tort claim. See OCGA § 51-12-5.1; Southern Gen. Ins. Co.
v. Holt, 262 Ga. 267, 270 (416 SE2d 274) (1992) (“A claim for punitive
damages has efficacy only if there is a valid claim for actual damages
to which it could attach.” (cleaned up)); Nat. Emergency Med. Svcs.,
Inc. v. Smith, 368 Ga. App. 18, 31 (889 SE2d 162) (2023) (“Awards
of punitive damages and attorney fees are derivative of underlying
claims; and where those claims fail, claims for punitive damages and
attorney fees also fail.” (cleaned up)). But the fact that punitive
damages may only be awarded when damages are awarded on the
underlying tort claim does not contradict the statutory analysis set
forth above. And that analysis establishes that a request for punitive
damages is a “claim” for which “liability” must be proven within the
context of Rule 408.
3. Having concluded that settlement evidence may not be
24 offered to prove liability for a claim for punitive damages,8 the next
question is whether the admission of Whitaker’s statements was
used for the purpose of establishing Whitaker Farms’s liability for
punitive damages. Fitzgerald Farms argues that the evidence was
used to show Whitaker’s state of mind — not to prove liability for
punitive damages. We disagree.
Here, the record is clear that the settlement conference
occurred after Fitzgerald Farms sued Whitaker Farms for several
claims, including one for punitive damages, and that the
negotiations between Whitaker and Lennon were undertaken to
settle all the claims raised in the lawsuit. Additionally, it is
undisputed that the statements Whitaker made during the
settlement conference — in which Whitaker allegedly asserted he
could pursue an arrest warrant against Lennon and would “make an
example out of” him — were admitted into evidence during the first
phase of the trial at which the jury was considering whether to
8 Again, we reiterate that we are not addressing whether settlement evidence is categorically excluded under Rule 408 (b). 25 award punitive damages.
In determining that Whitaker’s statements were not used to
prove Whitaker Farms’s liability for punitive damages, the Court of
Appeals stated that Whitaker’s “demeanor was used as evidence of
his state of mind toward Lennon, which was relevant to the jury’s
consideration of whether to award punitive damages.” Whitaker II,
368 Ga. App. at 567. Additionally, it concluded that the trial court
did not abuse its discretion in admitting the evidence where “the
evidence at issue [was] relevant to [Whitaker’s] intent as it related
to the punitive damages standard.” Id. at 568. However, a
defendant’s state of mind is an element of a punitive damages claim.
See OCGA § 51-12-5.1 (b) (to recover punitive damages, plaintiff
must prove that defendant’s actions “showed willful misconduct,
malice, fraud, wantonness, oppression, or that entire want of care
which would raise the presumption of conscious indifference to
consequences”); Taylor, 316 Ga. at 55 (explaining that punitive
damages may be awarded “only if the defendant’s actions showed a
state of mind indicating some extra degree of culpability”). And
26 evidence that is offered to prove an element of a claim is being
offered to prove that claim. Thus, the Court of Appeals erred in its
conclusion that the statements were offered to show Whitaker’s
state of mind but not to prove Whitaker Farms’s liability for punitive
damages.
To support its argument that the evidence here was admitted
for “another purpose,” Fitzgerald Farms relies on two federal cases.
However, these cases are distinguishable. In PRL USA Holdings,
Inc. v. United States Polo Assn., Inc., 520 F3d 109, 112-115 (2nd Cir.
2008), the Second Circuit, applying the 1975 version of Federal Rule
of Evidence 408, held that the rule did not require exclusion of
evidence that arose in settlement discussions over trademark
infringement claims between the same parties that occurred years
earlier where such evidence was relevant, and indeed, nearly
essential to proving estoppel by acquiescence, an affirmative defense
applicable in trademark infringement cases. See id. Similarly, in
Athey v. Farmers Ins. Exchange, 234 F3d 357, 362 (8th Cir. 2000),
the Eighth Circuit held that Federal Rule of Evidence 408 did not
27 require exclusion of testimony about settlement discussions over a
breach of contract case where, under applicable state law, the
testimony at issue was specifically admissible to prove a claim for
bad faith refusal to settle. PRL USA and Athey thus involved
unusual circumstances in which the exclusion of the settlement
evidence would have precluded a party from establishing an
essential element of a defense or where other substantive law
specifically provided for the admission of the settlement evidence.
Neither circumstance is present here. Exclusion of Whitaker’s
statements does not, by itself, preclude Fitzgerald Farms from
establishing its claim for punitive damages. Compare PRL USA, 520
F3d at 112-115. Moreover, Georgia law does not otherwise
specifically admit settlement negotiations as a means of proving
culpability for punitive damages. Compare Athey, 234 F3d at 362.9
Because we conclude that Whitaker’s statements were offered
9 Indeed, liability for punitive damages requires willful misconduct in
the underlying transaction, and actions occurring during litigation do not generally give rise to a punitive damages claim. See Citizens & Southern Nat. Bank v. Bougas, 245 Ga. 412, 413-414 (265 SE2d 562) (1980); Kurtz v. Brown Shoe Co., 281 Ga. App. 706, 706 (637 SE2d 111) (2006). 28 to show his intent and state of mind in his dealings with Lennon,
the statements were necessarily offered to prove Whitaker Farms’s
liability for the punitive damages claim, and thus they were offered
for a purpose forbidden by Rule 408 (a). Accordingly, we conclude
that the Court of Appeals erred in holding that the trial court did
not abuse its discretion in admitting Whitaker’s statements from the
settlement conference.
4. Because the Court of Appeals concluded that the evidence
was admissible, it did not address whether the erroneous admission
of the evidence was harmful such that a new trial on punitive
damages is required. See OCGA § 24-1-103 (a) (“Error shall not be
predicated upon a ruling which admits or excludes evidence unless
a substantial right of the party is affected . . . .”). We remand to the
Court of Appeals for consideration of that issue.
Judgment vacated and case remanded. All the Justices concur, except Peterson, P. J., disqualified.
29 Decided October 31, 2024.
Certiorari to the Court of Appeals of Georgia — 368 Ga. App.
563.
Bondurant Mixson & Elmore, Frank M. Lowrey IV, E. Allen
Page; Schreeder Wheeler & Flint, John A. Christy, Jonathan A.
Akins, for appellant.
The Block Firm, Aaron K. Block, Max P. Marks, for appellee.