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Shimer v. Foley9/16/2003
fer was made and its monetary benefits, and because Shimer's attorney conceded that the evidence was being offered for such truth. But we think Shimer's testimony that Synthes made him an offer, and the terms of that offer, was admissible precisely for the fact that the offer was made and for its terms. Given Shimer's burden in the malpractice action to prove that he lost the financial benefits that he would have received had he accepted the Synthes offer, the words of that offer take on independent legal significance on the issue of whether their acceptance would have produced an agreement binding on the parties.
Yet in addition to proving the probability of a better outcome in his dealings with Synthes, Shimer also needed to introduce in evidence the Synthes proposal to quantify his claim for damages caused by his rejection of the offer. See, e.g., Fishman v. Brooks, 396 Mass. at 647 & n.1 (in the trial within a trial, jury had to determine whether the client would have prevailed in his underlying personal injury claim and whether his damages would have exceeded the amount his attorney recommended he accept in settlement); Atlas Tack Corp. v. Donabed, 47 Mass. App. Ct. 221, 226 (1999) (trial within a trial necessary to determine, first, whether the underlying defendant was negligent, and then whether the client could have obtained a better result in that case than the amount obtained by his attorney in settlement). We acknowledge the judge's dilemma, that the financial promises made by Synthes seemed, in one sense, to be offered not just for the fact that an offer was made but for the truth of Synthes's assertion that it would have paid Shimer those amounts had he accepted the offer. It is a fine distinction, but a critical one.
We think proof of the Synthes offer, even as evidence of damages, was not dependent on the truthfulness, honesty or sincerity of the Synthes vice president who made the proposal, on Synthes's behalf, to pay certain amounts to Shimer. Rather, for purposes of this case, once the offer was extended and it was left to Shimer to accept it, the offer and the financial benefits proposed therein took on independent legal significance. The significance of the words used by Synthes in making the offer was in the fact that they were communicated to Shimer and that he would have accepted; their import, at that point, was unrelated to whether Synthes truly meant to pay the amounts it proposed. "In particular, evidence of lost profits based on a contract is not subject to the hearsay rule because such evidence concerns the existence of the contractual terms rather than an assertion of their 'truth.'" Mueller v. Abdnor, 972 F.2d 931, 937 (8th Cir. 1992) (proposed contracts were not hearsay when offered to show "the making of a contract and the potential loss of benefit"), citing 6 Wigmore, Evidence ยง 1770, at 259-260 n.1 (Chadbourn rev. 1976). See United States Fid. & Guar. Co. v. Davis, 3 Ariz. App. 259, 261 (1996) (testimony recounting conversation about price terms in potential sales agreement was admissible to prove lost profits caused by defendant's wrongful attachment, and not for the truth of the conversation). See generally Jamaica Pond Garage, Inc. v. Woodside Motor Livery, Inc., 236 Mass. 541, 542 (1920) (price stated for rental vehicle, overheard by witness who testified at trial, was not hearsay, but corroborated plaintiff's claim of agreed-upon price).
Consequently, in the narrow circumstances of this trial within a trial framework, we view evidence of the Synthes offer and its terms as operative words admissible to show the financial benefits that Shimer might have obtained but for FHE's negligence. Dismissal of Shimer's complaint, for lack of proof of
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