Plaintiff appeals from a judgment based on a jury verdict upholding a release agreement. In the first stage of a bifurcated trial, the jury concluded that plaintiff was bound by a release agreement that he had entered into with defendant’s insurer and thus was precluded from recovering damages. On appeal, plaintiff claims that the trial judge erred in granting defendant’s two motions in limine, the first to exclude evidence of the extent of plaintiffs personal injuries and the second to exclude evidence of the insurance adjuster’s conduct with respect to another claimant involved in the same accident. We reverse and remand.
On appeal from a jury verdict, we view the evidence in the light most favorable to the prevailing party, in this case defendant.
Holmes v. Morgan,
Defendant was insured by State Farm. Vanderwood, a State Farm claims adjuster, investigated the accident and determined that liability for the accident was not at issue; defendant was at fault. Vanderwood then attempted to settle the insurance claims in the case by contacting plaintiff and his girlfriend by telephone and having another adjuster meet with plaintiff at the State Farm office. On March 15, 1994, nine days after the accident, Vanderwood met with plaintiff and settled the claim for the property damage to his car for $1,046 and suggested settling the personal injury claim for $500. Plaintiff had seen a doctor about his accident injuries five days earlier. At that time, thе doctor was not sure of plaintiffs medical condition. He gave plaintiff some pain medication and asked to see him again the following week. Plaintiff had not had a follow-up visit with the doctor at the time of settlement. When plaintiff told Vanderwood that he was still sore, but that the soreness went away with Tylenol *403 or aspirin, Vanderwood offеred plaintiff $800 for his personal injuries. Plaintiff accepted the settlement, signing a complete release. According to plaintiff and Moore, at the time of the settlement, plaintiff felt fine and, according to plaintiff, he “wanted to get it over with.”
At trial, plaintiff testified that, during the settlement meeting, Vanderwood stated that he had a doctоr’s report indicating that plaintiff was “okay.” Plaintiff testified that he signed the release only because he relied on Vander-wood’s representation. Vanderwood denied making such representations. It is uncontested that Vanderwood did not have, and had not seen, a doctor’s report on plaintiff. Immediately after obtaining plaintiffs rеlease, Vanderwood telephoned Moore and then met with her at her home a few days later to settle her son’s claim. She also signed a release. In an offer of proof at trial, Moore testified that Vanderwood told her that he had a doctor’s report that indicated that her son and plaintiff were okay. Vanderwood denied making that statement to Moore.
Plaintiff testified in an offer of proof that after he signed the release his neck condition grew worse. He underwent neck fusion surgery for two severed disks, incurring $30,000 to $35,000 in medical expenses and missing three- and-one-half months of work. He then filed this lawsuit seeking damages for his injuries caused by defendant’s negligence. Defendant relied on the release as an affirmative defense. Plaintiffs reply alleged that the release was invalid because it had been obtained by misrepresentation and in violation of the Unfair Claim Settlement Practices Act. ORS 746.230(1)©.
The parties agreed to bifurcate the trial, with the first stage determining the validity of the release and the second stage, if necessary, determining damages. Before the first stage of trial, the corut granted defendant’s two motions in limine, the first to exclude evidence of the extent of plaintiffs injuries and the second to exclude evidence of Vander-wood’s dealings with Moore. Following trial, the jury found that the release was valid and renderеd a verdict for defendant.
*404 Plaintiff first assigns error to the trial court’s grant of defendant’s motion in limine to exclude evidence of the extent of his injuries discovered after the release was signed. Defendant argued that, because the trial was bifurcated, evidence of the extent of plaintiffs injuries should not be allowed until the second stage of the trial on damages. The trial court accepted defendant’s argument and excluded the evidence. Although it is not entirely clear from the record, it appears that the trial court determined that the evidence was irrelevant to the first stage of the trial.
We review rulings on relevance for errors of law.
Lakin v. Senco Products, Inc.,
Plaintiff claims that the release he signed was voidable as an illegal contract 1 because it violated the Unfair Claim Settlement Practices Act, which provides:
“No insurer or other person shall commit or perform any of the following unfair claim settlement practices:
"* * * *
“(f) Not attempting, in good faith, to promptly and equitably settle claims in which liability has become reasonably clear[.]” ORS 746.230(l)(f).
Plaintiff claims that the full extent of his injuries is relevant to whether Vanderwood attempted to “equitably settle” his claim. 2 Plaintiff argues that the disparity between the amount of the settlement and the actual medical costs *405 incurred by him tends to show that the settlement was not equitable. We disagree.
The equity of a settlement is judged as of the time it is made.
In Raymond v. Feldmann,
Plaintiff contends in his second assignment of error that the trial court erred in excluding evidence of Vanderwood’s dealings with Moore. Plaintiff made an offer of proof that Moore would testify that Vanderwood untruthfully told her that hе had a doctor’s report indicating that her son was okay in order to induce her to sign a release. The trial court excluded the evidence under OEC 404(3), which provides:
“Evidence of other crimes, wrongs or acts is not admissible to prove the character of a person in order to show that the person acted 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.”
In
State v. Johnson,
“(1) The evidence must be independently rеlevant for a non-character purpose; (2) the proponent of the evidence must offer sufficient proof that the uncharged misconduct was *406 committed and that defendant committed it; and (3) the probative value of the uncharged misconduct evidence must not be substantially outweighed by the dangers or considerations set forth in OEC 403.” (Footnotes omitted.)
The trial court here ruled under the first part of this test, stating that plaintiffs evidence did not meet any of the statutory exceptions. We review this issue as a question of law.
State v. Westby,
The Supreme Court has held that OEC 404(3) is an inclusionary rule, not an exclusionary one.
State v. Johns,
Here, plaintiff is attempting to prove that the release he signed violates the Unfair Claim Settlement Practices Act. One element of the statute is that the insurer must attempt to settlе “in good faith.” ORS 746.230(l)(f). Plaintiff claims that Vanderwood told him that he had a doctor’s report indicating that plaintiff was okay. Because it is uncontested that Vanderwood did not have such a report, evidence that Vanderwood made the claimed statement would show that he did not act in good faith.
Moore’s testimony that Vanderwood also told her that he had a doctor’s report indicating that plaintiff and her son were okay tends to show that Vanderwood did, in fact, make virtually the same false statement to plaintiff. This is not mere propensity evidence, such as testimony that Van-derwood had made various unrelated misrepresentations to Moore in attempting to settle hеr claim. Rather, this is evidence of a specific subterfuge that Vanderwood had allegedly used successfully a few days earlier in settling plaintiffs claim. Evidence that a person used exactly the same lie to achieve the same goal on a different occasion makes it more likely that the person did, in fact, make the same statement at the time in question. Because of the similarity between *407 Vanderwood’s purported statement to Moore and the statement that plaintiff claims Vanderwood made to him, the evidence is relevant to the validity of the signed release. The trial court erred in excluding it on relevancy grounds.
Defendant argues that, even if the trial court erred in excluding Moore’s testimony, the error was not substantial under OEC 103(1) and does not support reversal. Prejudicial error occurs if the excluded evidence has some likelihood of affecting the jury’s result.
Cunningham v. Montgomery,
Although the trial court did not reach the second step of the Johnson test, there are questions of law that may arise on remand, so it is necessary to address them now. Not only must the offered evidence be relevant for some purpose other than to prove propensity, the proponеnt of the evidence must also offer sufficient proof that the “other” act was committed and that the person against whom it is offered committed it. 3
The issue is how to determine whether “sufficient proof’ has been offered. Defendant argues that this is a preliminary question of fact for the trial judge to decide using a preponderance of the evidence standard under OEC 104(1),
4
*408
citing
State v. Kim,
In Kim, we were faced with the question of the appropriate standard of proof for showing the connection between the defendant and the uncharged bad act. Notwithstanding the incongruous сitation to OEC 104(2) that followed our statement that “[tjhere is a preliminary question of fact for the trial court to resolve before evidence of a crime other than the one charged may be admitted,” our analysis centered on OEC 104(1), 6 and we concluded that the preponderance of the evidence standard of OEC 104(1) was aрpropriate. Id. Kirkpatrick relies on Kim for this conclusion:
“Evidence of an alleged prior bad act by the defendant offered under Rule 404(3) is not admissible without a preliminary showing that the defendant committed such an act. The issue is for the court under Rule 104(1), and the applicable standard of proof is by a preponderance of evidence. State v. Kim,111 Or App 1 , 5,824 P2d 1161 , 1163, rev denied314 Or 176 ,836 P2d 1345 (1992). To admit evidence of alleged prior misconduct by the defendant without such a showing could be highly prejudicial.” Laird C. Kirkpatrick, Oregon Evidence 141 (3d edition 1996).
*409
Although federal courts apply the lesser conditional relevance standard of “evidence sufficient to support a jury finding,” following
Huddleston v. United States,
There are important reasons for requiring the proponent of other act evidence to meet the higher OEC 104(1) standard of preponderance of the evidence before it is sent to the jury. In the criminal context, the Supreme Court, in
State v. Pinnell,
“Unrelated misconduct evidence has been described as ‘the most prejudicial evidence imaginable against an accusеd.’ People v. Smallwood, 42 Cal 3d 415, 228 Cal Rptr 913, 922,722 P2d 197 , 205 (1986). Justice Cardozo stated that uncharged misconduct evidence can be a ‘peril to the innocent.’ People v. Zackowitz,254 NY 192 ,172 NE 466 , 468 (1930).” id. at 106 n 14.
Given the extreme dangers of such other act evidence, it is important to ensure that the act did, in fact, occur and that the accused party committed the act before the jury is allowed to consider it. The Pinnell court borrоwed a phrase from another court to illustrate the problem of letting the jury hear such evidence: “A drop of ink cannot be removed from a glass of milk.” Id. at 106 (quoting Government of Virgin Islands v. Toto, 529 F2d 278, 283 (3d Cir 1976)).
Another reason to require a showing by a preponderance of the evidence that the other act occurred is that the *410 other act and the charged act arе mutually reinforcing. The evidence of the other act is intended to help prove that the party against whom it is offered committed the charged act but, by the same reasoning, the charged act reinforces the likelihood that the party was involved in the other act, thus increasing the likelihood that the jury will believe that both acts occurred. The requirement that the proponent of other act evidence prove its connection to the party against whom it is being offered by a preponderance standard, before the jury is allowed to hear it, is some insurance against exposing the jury to mutually reinforcing falsehoods.
Given the precedent of Kim and the dangers of exposing the jury to highly рrejudicial other act evidence, we hold that the proponent of other act evidence must prove by a preponderance of the evidénce under OEC 104(1) that the other act occurred and that the person against whom it is offered committed it.
Reversed and remanded.
Notes
Illegal contracts may be rescinded by the party not at fault.
State v. Pettit,
Vanderwood admitted that liability was not at issue in this case.
The third party who committed the “other” act in this case was defendant’s agent, and, accordingly, the analysis is the same as it is for the uncharged misconduct evidence referred to in
State v. Johnson,
OEC 104(1) provides:
“Preliminary questions concerning the qualification of a person to be a witness, the existence of a privilege or the admissibility of evidence shall be determined by the court, subject to the provisions of subsection (2) of this section. In making its determination the court is not bound by the rules of evidence except those with respect to privileges.”
The Supreme Court has held that the judge is to use the preponderance standard in deciding preliminary questions of fact under OEC 104(1).
State v. Carlson,
OEC 104(2) provides:
“When the relevancy of evidence depends upon the fulfillment of a condition of fact, the court shall admit it upon, or subject to, the introduction of evidence sufficient to support a finding of the fulfillment of the condition.”
Both of the Supreme Court cases that we cited,
State v. Pinnell,