*1 TAMMY VonLUTZOW, Appellant, Plaintiff and v. LEPPEK,
LARRY
Respondent.
Defendant
02-046.
No.
Submitted on Briefs June
2002.
August
Decided
For James A. Law Poison. (No Respondent: Appearance). For *2 Opinion the of the Court. JUSTICE COTTER delivered (Tammy) County Lake Tammy VonLutzow claim the ¶1 $17,000 Court, seeking repayment allegedly provided of District over Tammy Larry Leppek (Larry). as loans to The District Court held was $1,000, concluding Larry that she failed to only prove promised repay Tammy appeals. to the rest of the funds. We reverse and remand for a new trial.
ISSUES Tammy presents following appeal: issues on ¶2 408, M.R.Evid., when it
1. Did the District Court violate A, Tammy Larry admitted Defendant’s Exhibit a letter wrote to seeking to settle their financial differences? Tammy denying recovery err in to
2. Did the District Court agreement repay because she failed to show there was $15,000 specific on a date or in a manner? specific AND PROCEDURAL BACKGROUND
FACTUAL evidentiary limit question, Because our decision turns on the ¶3 recounting question. of the facts to those relevant to that our he did acquainted Larry had with since 1990 when been ¶4 building in Whitefish with her carpentry work on the she owned 1999, Tammy began a her husband’s death in March husband. After relationship Larry. Over the course of brief personal Larry helped money changed frequently. hands At times relationship, large bills, often, Tammy relatively transferred Tammy with and more $15,000. $1,200, for Larry, including a check for and another sums Larry money gave she Tammy contends that the bulk of the hand, these Larry, on the other claims that understood to be a loan. Tammy. provided services he provided payment monies were as for Larry $1,200 check she wrote to Tammy asserts that RV, Larry’s 25,1999 payment purchase a down for her August The check was marked her son for a few months. where she lived with the RV line did transfer payment” in the memo and “RV-down transferred the title back Tammy. Tammy subsequently title to duress, seeking repayment she is allegedly under and thus $1,200. the RV. He money down-payment for was a Larry denied that thing.” rent $1,200 part as of her that the was "... testified per month for two him rent of agreed pay $500 claimed belongings in one personal ofher months, as to store some $200 as well testified that building. Larry further he was empty of the houses that the RV was rent, despite the fact willing pay such Tammy was electricity, heat, sewage or water. up hooked not and in Whitefish 1999, Tammy property sold her In December give him the Larry pressured her to $47,000. testified that netted She her title to a 5-acre offering-in return-to transfer to proceeds, sale paperwork no Larry provided Because parcel of land he owned. her sale give Larry the sum of her, declined to protect $15,000. She Rather, testified, agreed she to loan him proceeds. she $15,000 16, 1999. him a check on December wrote $15,000 money Tammy owed Larry claims that the check was him, Larry him, Regarding Tammy’s debts to testified: loan. her, the gave $15,000 me for the that I had loaned She done, staying for out there in the things that I had the rent trailer, gave $15,000 completion me at the all kinds of stuff. She building money I loaned her and rents of the sale of her for the know, money I had loaned storage you; you have what *3 her and stuff. examination, kept ledger he had for the Larry direct testified that
On cross-examination, him. he Tammy On purportedly amounts owed just it kind of in the head.” ledger, admitted there was no but"... was $3,500 testified, Tammy’s late husband owed him example, He for Tammy had heard about carpentry years done before. never for work it this and did not believe was valid. debt recoup portion and some dispute In an effort to settle their Larry Larry, Tammy April wrote a letter to on given she had Tammy
30, 2000, lists the amounts seeking compromise. The letter for the amounts claimed paid Larry and shows deductions balance, nearly repayment of the him. The letter seeks owed $8,000. , reads, part: The letter
Dear you I am tired of pray fair me. I will. you You said would be had no for me. We have game and it over playing longer is no friendship I fear for sometime and relationship qualities of a true possess seem to possibility -for we don’t friendship. get paid. I I need accounting of the dollars have
Attached is 112 really access. I thought hadwe a lifetime commitment but
now signed realize we don’t. I over the you. RV because I trusted always I felt that it was half you mine as told me. I was afraid not sign it over. I you might feared what do if I didn’t. I didn’t want it my security because was for the excess I provided. funds I hate it this, has come to protect my but must interest and not just write it off. I can’t afford me, [sic]. too Please fair be for I have been more than my part fair in actually left out a lot of trips took, checks. The I pretty much paid for. You said they me, you were for but I think enjoyed mileage them as well. The you put my car your taking it good thing. was not a No one anyone that, that cared for would do go. but I’ll let that Larry: Jack’s 3,500 debt was unaware of: $ Your time 5,000 and trouble Rent@500/month Aug, Sept, 1,500 Nov Storage from 12/15-1/15 200 Loans 1,500
400 1.000 Total $13,100 Paybacks Tammy: from
Paid to after I $15,000 closed 12/18/99 payment 1,200 Down of rv ck#3731 8/25/99 Deposit your personal acct:
ck#4061 12/9/99 300 ck#406512-12-99
Larry’s Glasses $21,033 Total Less amount 13,100 $ Money owed to 7.933 *4 your This amount is fair and in 1,000 favor. sent Luke about things a lot of other paid for I have not included. Please let me put sorry [sic] know how we can this too rest. I am it had to end like this. God knows I wish all the best... This letter is evidentiary at the center of the dispute
¶11 before us.
113 evidence, Tammy’s into the letter counsel offered defense When During voir the document. sought voir dire on objected counsel offer a written as the letter was dire, Tammy testified that counsel Accordingly, Tammy’s the debt claim. attempt to settle in an under Rule inadmissible the letter was grounds that objected on the admission of Evidence, which bars Montana Rules 408 of the compromise. or offers to evidence of not an that the letter was by asserting Larry’s responded counsel
¶12 argued, Further, he settlement, accounting. but offer of being against claim accounting prior made 8, which together with Rule read stating: “Rule 408 needs be 8, after an action claim, under Rule is claim is. And a identifies what a year, predates the by the action predates [letter] This has filed. been Finally, counsel asserted suing is him on.” which she document therein, but to the amounts being offered to show impeach Tammy. court found arguments ofthe the district It is unclear which above
¶13 the letter was admitted. persuasive, but
STANDARD OF REVIEW evidentiary rulings is standard of review of a district court’s Our 228, 43, Co., 2000 MT Finstad v. W.R. Grace & ¶ abuse of discretion. 43, 778, (citing Hosp. Busta v. Columbus 240, 8 P.3d 43 301 Mont. ¶ ¶ 128). 122, test for 342, 353, P.2d “The (1996), 276 Mont. Corp. arbitrarily acted without the trial court abuse of discretion whether the bounds of judgment or exceeded employment of conscientious Jarvenpaa v. Glacier Elec. injustice.” resulting in substantial reason 84, 118, 13, P.2d 306, 13, 292 Inc., ¶ 1998 MT Mont. Co-Op., ¶ ¶
DISCUSSION M.R.Evid., when it 408, Court violate Rule Did the District A, Tammy wrote to a letter Defendant’s Exhibit admitted differences? settle their financial seeking to three and resolve must address question, To answer inquiries: preliminary
(1) compromise? Tammy’s letter an offer Was after (2) written the letter have been under Rule must To fall in court? legal claim was filed (3) under Rule inadmissible otherwise be If the letter would exceptions? one of does it fall within 408, M.R.Evid., reads: *5 (1) Evidence of furnishing or offering or promising furnish, or (2) accepting or offering or promising to accept, a valuable consideration in compromising or attempting compromise claim which disputed was validity as to either or amount is not admissible 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 require does not any exclusion of evidence otherwise merely discoverable because it presented in the course of compromise negotiations. This rule also require does not exclusion when the evidence is offered for another purpose, such proving as prejudice bias or witness, of a negativing a contention of delay, undue or proving an effort to obstruct a criminal investigation or prosecution. First, based on our review of the record and the text of
Tammy’s letter
we conclude that the letter constitutes an
offer
compromise.
of
aspects
Several
of the
support
Tammy
conclusion.
begins by asserting,
“You said
would be fair
pray you
with me. I
writes,
will.” She
me,
“Please be fair to
for I have
been more than fair my part
in
and actually left out a lot of checks.”
Tammy concludes the letter with “This amount
is fair
your
and in
favor.” All of these statements indicate that she
presenting Larry
with what she thought was a reasonable and fair settlement of the
disputed debts between them. It only stands to reason that if Tammy
had
seeking
been
present
accounting
full
of the
that
changed hands, rather
offer,
than a settlement
she would not have left
out
checks. Her statement
that
accounting
your
favor,”
“is in
makes it clear
that
was not presenting her
cut
own
and dried
figures,
trying
but was in fact
give Larry
the benefit of the doubt on
every claim he made
attempting
to show that
granting Larry
even
claims,
all those
he
nearly $8,000.
still owed her
Further evidence
that
trying
give Larry
the benefit
of the
purpose
doubt for the
settling
the dispute can be found in the
entry
first
under the list of
“Tammy
monies
Larry.”
The first line
item is: “Jack’s debt I was
$3,500.”
unaware of:
For the sake of
compromise, credited
$3,500 debt,
for this
despite that
she had never before
not,
known about it and
fact,
did
in
believe it was
(Tammy
valid.
later
arguably
introduced
compelling evidence debt.)
suggest
fabricated this
We next turn to
question
of whether an offer of compromise
must occur after a formal claim has been filed in order to be excluded
408,
under Rule
M.R.Evid. Faced with a
question
similar
in Niles v.
Big Sky Eyewear (1989),
455,
236 Mont.
114,
771 P.2d
overruled on
Press,
(1995),
High Country Independent
Inc.
grounds by Sacco v.
other
clarify
209,
411,
Rule 408
896 P.2d
we noted that
“does
271 Mont.
effect.”
litigation
progress
[the Rule]
takes
whether
must be
before
case,
said,
463,
at
In that
Niles,
Tammy wrote the letter of time she July question April 30,2000. in On wrote the letter on lawsuit. 24, 2000, respond, Tammy complaint. to Larry after failed her past, into it is clear that Rule 408 should not reach the remote While admission shielding long prior litigation, prepared of documents to Tammy’s offer of in issued near compromise-like the one Niles-was suggest to the of her to that it was the enough commencement lawsuit predicate resort-litigation. Accordingly, to her under the facts last here, presented that the falls within purview conclude letter M.R.Evid. Finally, we must consider whether this letter meets one of to Rule not exceptions require M.R.Evid. Rule 408 “does exclusion merely evidence presented otherwise discoverable because it is negotiations.” Larry’s asserted, of compromise the course counsel among things, sought Tammy’s April other that he admission of 30th letter, impeach letter not to show the amounts in the to listed but Tammy. scrutiny, If this could claim could withstand the letter possibly be admissible as “evidence otherwise discoverable” that was presented compromise negotiations. in the course of however, review that transcript, Our of the trial reveals Tammy’s his that support argument defendant introduced letter to Tammy sought obligation a loan. Defense proving on that counsel’s cross-examination of focused following exchange The money provided she was not a loan. is instructive: (defense O’Neill):... Q you I’d like down below counsel Now look “ begins “Tammy paragraph
to the that ... (Tammy):
A: Uh-huh.
Q: you Did write that? Yes,
A: I did. Q: saying next you paragraph And then I’d like to look at the
“Paybacks from Tammy.” Is that correct?
A: Yes.
Q: you wrote, you And then “Paid after I closed Did 12/18/99.” you write that?
A: Yes.
Q: you,” You didn’t write you? “loaned did you say? sorry. A: looking What did I’m at something else. Q: you,” you “paid You didn’t write you.” “loaned said Yeah, A: whatever.
Q: you’re loan, So claiming you had but you’re telling him that it’s just you that him paid back?
Defense press counsel continued to his that Tammy’s assertion demonstrates the absence of a loan.
Q: you said, And closed,” you really when “Paid after you”? meant “loaned to $15,000, yes.
A: The
Q: Yeah, document, there is but no loan is there? copy
A: There ais of the cashier’s check. Q: say it, But the cashier’s check doesn’t “loan” does it? A: No. questioning,
Given this line of it is clear Larry sought use Tammy’s letter to show that claim repayment bogus, her of loan while his claim that money outright By she owed him the was valid. offering evidence, Larry this letter into to and sought succeeded in convincing court loan that no was ever intended. He thus accomplished precisely designed what Rule 408 is to avoid: he tendered *7 into offer claim compromise disputed evidence an to a is to that as validity “in prove liability invalidity or amount order to or the for of 408, claim.” Rule M.R.Evid. Accordingly, that
¶24 we conclude the district court abused its A, it Tammy’s April discretion when admitted Exhibit 30th to letter Moreover, Larry. heavily because the District Court relied on this improperly concluding admitted evidence in presented that contradictory testimony credible, and was therefore not we are compelled to in improper conclude that admission resulted injustice, requiring substantial reversal. evidentiary improper ruling dispositive, We find the in this case
¶25 presents appeal. and thus we do not reach the issue second We therefore reverse the District Court’s decision to admit Tammy’s letter order a trial. new NELSON,
JUSTICES LEAPHART and RICE concur.
117 GRAY,dissenting. JUSTICE CHIEF my It is view that opinion. from the Court’s respectfully dissent 408, pursuant to Rule compromise an offer of
Tammy’s letter was not and, further, actually supports the District M.R.Evid., that Niles letter. I affirm. Court’s admission of the would 408, M.R.Evid., does not to and all “offers apply Rule only attempts speaks compromise The to offers or compromise.” Rule that Thus, “a the Court is correct disputed....” claim” which “was while “disputed between herself and Tammy’s letter related debts” disputed two does not trying people a to resolve a debt between letter language requiring 408 exclusion of plain fall the Rule within “claim.” words, “dispute”-as In other compromise disputed offer of of a equivalent of conclude in Rule 408-is not the “claim.” To used otherwise, case, essentially in this is to delete and as the Court does job in It is not nugatory the word “claim” the Rule. a court’s render making interpretations. 1-2-101, in See MCA. I language omit § compromise is not a claim for Tammy’s conclude that an offer to 408, purposes of M.R.Evid. agree “the presents do I the Court that this case
¶29 Nor with question compromise of whether an offer of must occur after a formal under Rule M.R.Evid.” claim has been in order be excluded bring legal is clear that a claim need not be filed in a court to Niles However, be “a play. Rule 408 into Niles also is clear there must merely dispute such a claim,” private compromise a or an offer as “offers private dispute. portion states the relevant ofRule 408 Niles acceptances or of a claim” are not admissible. compromise disputed Nothing in Niles, 463, 771 supports Mont. at P.2d at Mies 236 of a dispute equivalent here that is Court’s determination disputed “claim.” by plaintiff against “a does hold that when claim” exists
¶30 Niles defendants, regarding that offers of claim are within specific purview clearly premised of Rule 408. The decision on the draft parties attorneys case. hired and a facts of that "Whereboth counsel, “[i]t sent defendants’ complaint of the had been Niles, against had a defendants.” certainly clear ... that Niles claim added). cannot simply 119 (emphasis Mont. at 771 P.2d at this case Niles can stretched cover agree with Court that be after months approximately sued three simply because him. led the Court of the facts which Niles her letter None case. present claim” in this conclude “a existed not reach “Rule should Finally, agree I do Court that however, in Niles my view, that the facts past[.]” It is into the remote *8 likely are the outer limit on what can fall within Rule because an actual “claim” existed there. The same is not true here. Most importantly, however, I believe the Court doing trial
courts and legal practitioners grave analysis disservice its of Rule 408. The issue of what constitutes an offer to compromise a claim for purposes of inadmissibility under Rule 408 is infrequently litigated-at least in this Court-and relatively well settled. The opinion Court’s gives guidance no at all as to what “the past” remote might be. The opinion simply law, unsettles the rather than properly applying either the Rule or Niles.
¶33 dissent.