Davidson v. Beco Corp.

• Decision Date: 26 December 1986
• Docket Number: No. 16263,16263
• Citation: 112 Idaho 560,733 P.2d 781
• Parties: Howard DAVIDSON, d/b/a D & E Construction, Plaintiff-Respondent, v. BECO CORPORATION, Beco Construction Company, Inc., Doyle Beck and Elizabeth Beck, husband and wife, Defendants-Appellants.
• Court: Idaho Court of Appeals

Page 781

733 P.2d 781

112 Idaho 560

Howard DAVIDSON, d/b/a D & E Construction, Plaintiff-Respondent, v. BECO CORPORATION, Beco Construction Company, Inc., Doyle Beck and Elizabeth Beck, husband and wife, Defendants-Appellants.

No. 16263.

Court of Appeals of Idaho.

Dec. 26, 1986.

Addendum Feb. 19, 1986.

Petition for Review Granted April 30, 1987.

Mark R. Fuller (Fuller & Carr), Idaho Falls, for defendants-appellants.

James D. Holman (Holden, Kidwell, Hahn & Crapo), Idaho Falls, for plaintiff-respondent.

BURNETT, Judge.

May a statement contained in a settlement offer be used to impeach a party who gives contrary testimony at trial? That is the salient issue presented in this case. In addition, we are asked to decide whether personal liability should be imposed for a corporate debt and whether attorney fees should be awarded.

These issues arise from a debt collection suit filed by Howard Davidson against Doyle Beck, Elizabeth Beck, and two corporations controlled by the Becks. Davidson alleged that he had not been fully paid for trucking services. A jury agreed, returning a verdict against all defendants. Judgment was entered accordingly. For reasons explained below, we affirm the judgment against the corporations but reverse it as to the Becks individually.

The facts are these. Davidson provided services for Beco, Inc. (later renamed Beco Construction Company, Inc.), on two construction projects. Davidson submitted bills to Beco but they were not paid. Davidson went to Beco's office. There he met with Doyle Beck, Beco's president and controlling shareholder. Davidson requested payment of $10,712 as billed. When Beck disputed the amount, a compromise was struck at $9,740. Beck gave Davidson a corporate check for $1,000. Arrangements were made for paying the balance.

However, those arrangements became shrouded in controversy.

According to Beck, he and Davidson reached an accord by which Davidson would receive a tractor in lieu of any further cash payment. The tractor would be appraised and if it was worth more than the balance owed, Davidson would pay the excess to the holder of a lien on the tractor. In contrast, Davidson claims there was no such accord. He contends that he rejected the tractor proposal because he did not want to pay the tractor's excess value in order to collect a debt. According to Davidson, Beck agreed for Beco to pay the balance of the debt in cash at the rate of $1,000 per month, together with interest at fourteen percent. The upshot of the controversy is that Beco made no further cash payments and Davidson never took possession of the tractor. Davidson eventually sued Beck and Beco on the original billing. ¹

While the suit was pending, Beco's attorney sent Davidson's attorney a letter. Among other things, the letter acknowledged that Davidson had performed services for Beco. The offer of a tractor in lieu of cash was reiterated. The letter also said that "a similar offer was made [to Davidson] some time ago, but it was refused." This statement, of course, was inconsistent with Beck's assertion that an accord had been reached.

Before trial, Beck and Beco filed a motion in limine, seeking to exclude the letter from evidence. They argued that the letter was inadmissible under I.R.E. 408 because it contained "statements made in compromise negotiations." The district judge ruled that the letter would not be admitted as an exhibit during Davidson's case-in-chief. However, the judge denied the motion insofar as cross-examination was concerned. ² At trial Beck testified about the accord. During cross-examination, Davidson's attorney read into the record several excerpts from the letter. They included the statement that a previous offer had been "refused" and the statement acknowledging existence of a debt. The jury later returned a verdict for Davidson. This appeal followed.

I

Beck and Beco contend that the letter was used improperly at trial. We examine this contention from three perspectives. First, we consider whether the issue has been preserved for appellate review. Next

[112 Idaho 563] we discuss limitations upon the use of statements made in settlement negotiations. Finally, we apply those limitations to the case at hand.

A

In general, an issue concerning the use or admission of evidence must be preserved for appellate review by making a timely objection in the trial court. See Strother, Framing and Preserving Issues on Appeal, IDAHO APPELLATE HANDBOOK (Idaho Law Foundation, 1985). Here, as we have noted, Beck and Beco filed a pretrial motion in limine, seeking to exclude the letter for all purposes. The motion was denied with respect to cross-examination. Beck and Beco did not renew their objection at trial when opposing counsel used the letter. Davidson now claims that any challenge to the letter's use was waived. We disagree.

Despite being a relatively recent phenomenon, the motion in limine has obtained widespread acceptance in state and federal courts. See Annotation, Motions to Exclude Prejudicial Evidence, 63 A.L.R.3d 311 (1975). We have recognized the importance of the motion. See Johnson v. Emerson, 103 Idaho 350, 647 P.2d 806 (Ct.App.1982). It enables a judge to rule on evidence without first exposing it to the jury. It avoids juror bias occasionally generated by objections to evidence during trial. The court's ruling on the motion enables counsel on both sides to make strategic decisions before trial concerning the content and order of evidence to be presented. See E. CLEARY, McCORMICK ON EVIDENCE § 52 (3d ed. 1984) (hereinafter McCORMICK); M. GRAHAM, HANDBOOK OF FEDERAL EVIDENCE § 103.8 (2d ed. 1986) (hereinafter GRAHAM).

We acknowledge that many other courts ascribe a lesser degree of importance to the motion in limine. They hold that even if the motion has been made and denied, the moving party must restate his objection when the evidence is offered at trial. Unless the objection is renewed, any appellate challenge to the judge's ruling is deemed to be waived. See, e.g., Hale v. Firestone Tire & Rubber Co., 756 F.2d 1322 (8th Cir.1985); Collins v. Wayne Corp., 621 F.2d 777 (5th Cir.1980); Douglas v. Lombardino, 236 Kan. 471, 693 P.2d 1138 (1985); Zehner v. Post Oak Oil Co., 640 P.2d 991 (Okl.App.1982). These courts take the position that because the ruling in limine is based on anticipated proof of facts, it is only a preliminary expression of a trial judge's view on the use or admissibility of the evidence. The judge must be reminded of his earlier ruling and must be given an opportunity to reconsider it in light of events during the trial. Collins v. Wayne Corp., supra.

We think it may be prudent in some cases for counsel to invite reconsideration of a judge's ruling in limine; but it does not necessarily follow that failure to do so should bar examination of the issue on appeal. We find more persuasive the reasoning of courts which have held that if a trial judge denies a motion in limine, counsel need not renew his objection at trial. E.g., American Home Assurance v. Sunshine Supermarket, Inc., 753 F.2d 321 (3d Cir.1985); Sheehy v. Southern Pacific Transportation Co., 631 F.2d 649 (9th Cir.1980). As one such court has observed, "All the purposes of an objection have already been fulfilled by the proceedings on the motion in limine. The trial court has been apprised of the possible error in admitting the evidence and has made its ruling, and the record has been perfected for appeal purposes." Harley-Davidson Motor Co., Inc. v. Daniel, 244 Ga. 284, 260 S.E.2d 20 (1979).

Although our Supreme Court has not confronted this precise question, we think it would eschew the necessity of a renewed objection. In Lasselle v. Special Products Co., 106 Idaho 170, 677 P.2d 483 (1984), the Court held that if a trial judge denies a motion to use a proffered special verdict form, the moving party need not later object to the verdict form actually used. "Normally," the Court said, "if a party makes his position known to the court he The same can be said of requiring an evidentiary objection to be repeated after a motion in limine has been denied. Moreover, requiring counsel to repeat the objection would conflict with the policy underlying I.R.C.P. 46. The rule provides that "[f]ormal exceptions to rulings or orders of the court are unnecessary. It is sufficient that a party, at the time the ruling of the court is made or sought, makes known to the court the action which he desires the court to take or his objection to the action of the court and his grounds therefor...." Cf. American Home Assurance v. Sunshine Supermarket, Inc., supra (applying F.R.C.P. 46).

                [112 Idaho 564] need not repeat his objection when the court takes contrary action."  Id. at 173, 677 P.2d at 486.   The Court quoted with approval one commentator's statement that a rule requiring repeated objection exacts a high price in the form of waiver.  The rule "would seem to create a real trap for the unwary or unskilled, and it is certainly doubtful whether the benefit of a double warning to the trial judge is worth such a price."   Comment, Special Verdicts:  Rule 49 of the Federal Rules of Civil Procedure, 74 YALE L.J. 483, 510 n. 89 (1965)
                

Seasoned trial lawyers know that objecting in the presence of a jury may serve only to highlight the evidence in question. As noted by McCORMICK, supra at 133, "Jurors want to know the facts, and they may well look on objections as attempts to hide the facts.... If an objection has little chance of being sustained ... it should usually not be made." In addition, a key purpose of the motion in limine--enabling counsel to make strategic decisions before trial--may be defeated if renewed objections are required. When counsel knows in advance that the court will allow certain damaging evidence to be used at trial, he may choose to introduce the evidence himself in order to ameliorate the adverse impact. See Reyes v. Missouri Pacific Railroad Co., 589 F.2d 791 (5th...