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Graber v. City Of Ankeny9/7/2000
since the offer may be motivated by a desire for peace rather than from any concession of weakness of position . . . (2) . . . promotion of the public policy favoring the compromise and settlement of disputes. . . . While the rule is ordinarily phrased in terms of offers of compromise, it is apparent that a similar attitude must be taken with respect to completed compromises when offered against a party thereto. This latter situation will not, of course, ordinarily occur except when a party to the present litigation has compromised with a third person. Fed. R. Evid. 408 advisory committee's note; accord Miller v. Component Homes, Inc., 356 N.W.2d 213, 216 (Iowa 1984) (noting, as reasons for excluding evidence of compromise, that offer of compromise implies merely a desire for peace, not a concession of wrong doing, and public policy favoring settlement of disputes).
The committee comments to the Iowa rule state that the Iowa rule is in accord with the federal rule. See Iowa R. Evid. 408 committee comment—1983.
In McHann v. Firestone Tire & Rubber Co., the Fifth Circuit Court of Appeals reversed a trial court ruling allowing into evidence the fact that the plaintiff had settled with a third party. 713 F.2d 161, 165-66 (5th Cir. 1983). The court gave the following explanation of the reasons underlying the rule:
Our concern is that the Covenant Not to Sue would have led the jury to deny [the plaintiff's] claim against Firestone based on the perception that [the third party] would not have paid the substantial sum of $27,500 if it . . . were not the party at fault. Excluding evidence of the Covenant will eliminate this possible source of prejudice to [the plaintiff], and will carry out the policy of Rule 408 to encourage out-of-court settlements. . . . he incentive for parties to settle cases involving many [parties] would be undermined if their settlement with one . . . could come back to haunt them in later suits. Id. at 166-67 (citations omitted).
These reasons are equally valid under Iowa Rule of Evidence 408. See Lewis, 278 N.W.2d at 14 ("It is generally held that offers to compromise disputed claims are inadmissible because they are irrelevant and because policy considerations require their exclusion.").
C. Application of law to present case.
In the case before us, the City asserts that the evidence of settlement was relevant to Allen's credibility. Allen testified at trial that the light turned red too fast given the speed of the cars on Oralabor. This testimony supported the plaintiff's claim that the City was negligent, as well as the plaintiff's claim that Allen had a legal excuse for being in the intersection on a red light. Thus, claims the City, evidence that Allen had settled with the plaintiff was relevant to Allen's bias or prejudice. In addition, the City contends the evidence was necessary to prove Allen's identity as a released party for purposes of receiving a comparative fault instruction under Iowa Code chapter 668.
1. Relevancy to bias or prejudice of Allen.
In reviewing our cases dealing with the admission of evidence of settlement, it is apparent that we have strictly adhered to the principle that it is erroneous and highly prejudicial to allow such evidence into the record solely for the purpose of establishing liability, and we have been reluctant to make an exception for impeachment purposes. In Stewart v. Madison, 278 N.W.2d 284 (Iowa 1979), the plaintiff was a passenger in a car driven by Madison and was injured in a collision between Madison's car and a train. 278 N.W.2d at 285. The plaintiff sued Madison and the railroad, but settled with Madison before trial. Id. at 293. At
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