Fullenkamp v. Newcomer, 2-1085A319
| Decision Date | 28 May 1987 |
| Docket Number | No. 2-1085A319,2-1085A319 |
| Citation | 508 N.E.2d 37 |
| Parties | Christian FULLENKAMP and Hemmelgarn & Sons, Inc., v. James A. NEWCOMER and Dorothy J. Newcomer, Appellees (Plaintiffs Below), and Delbert Mauller and Warren Groscost, Appellees (Defendants Below). |
| Court | Indiana Appellate Court |
David L. Kiley, Sr., H. Joseph Certain, Kiley, Osborn, Brown, Kiley, Harker and Rogers, Marion, for appellants.
Malcom M. Metzler, Robert C. Beasley, White, Beasley, Gilkison, Retherford and Buckles, Muncie, for appellees James A. Newcomer and Dorothy J. Newcomer.
John M. Feick, Cross, Marshall, Schuck, De Weese & Cross, Muncie, for appellees Mauller and Groscost.
Christian Fullenkamp and Hemmelgarn & Sons, Inc. appeal an adverse judgment in favor of James E. and Dorothy J. Newcomer. We reverse.
On October 31, 1980, Fullenkamp, James E. Newcomer, and Delbert Mauller were involved in a multiple-vehicle accident on a two-lane highway in Delaware County, Indiana. Just prior to the accident Newcomer passed Fullenkamp, who was driving an egg truck. After returning to the right-hand lane, Newcomer observed Mauller pull a farm tractor with an attached plow onto the highway. Newcomer braked and came to a stop to avoid hitting the trailing plow. Fullenkamp collided with Newcomer's smaller truck. Newcomer and his wife filed a personal injury suit against Fullenkamp, Fullenkamp's employer, Hemmelgarn, Mauller and Mauller's employer, Warren Groscost.
Prior to trial Mauller and Groscost executed a loan receipt agreement with the Newcomers. By its terms, Mauller and Groscost agreed to loan the Newcomers $20,000 and to participate actively in the trial. In return, the Newcomers agreed diligently to pursue the action against Fullenkamp and Hemmelgarn and to repay the $20,000 loan only if the Newcomers recovered a judgment or obtained a settlement in excess of $40,000 against Fullenkamp and Hemmelgarn or all defendants jointly. The Newcomers also agreed not to execute upon any judgment they obtained against Mauller and Groscost, thus effectively limiting Mauller and Groscost's liability to $20,000.
Prior to trial the court granted the Newcomers' motion in limine prohibiting the admission of the loan receipt agreement into evidence or any mention of its existence. During cross-examination, Fullenkamp and Hemmelgarn unsuccessfully attempted to question James Newcomer, Mauller and Groscost regarding the loan receipt agreement and requested permission to admit the agreement as edited by the court for impeachment purposes. 1 Fullenkamp and Hemmelgarn also tendered to the court a final instruction on the loan receipt agreement which was refused. 2 The jury returned a verdict against all defendants and for James and Dorothy Newcomer in the amount of $75,000 and $40,000 respectively. Fullenkamp and Hemmelgarn appeal the adverse judgment.
Although other issues were raised on appeal, because we reverse, we address only the issue whether the trial court erred in refusing to admit evidence of the loan receipt agreement for impeachment purposes.
Loan receipt agreements are devices through which a defendant who is potentially liable to a claimant advances funds in the form of a non-interest loan in return for a promise not to pursue the claim or not to enforce any judgment rendered against the lender/defendant. In exchange for limiting the liability of the agreeing defendant, the plaintiff immediately receives a guaranteed sum rather than awaiting the uncertain outcome of protracted litigation. Our courts have long approved the use of loan receipt agreements as a means of settling litigation prior to trial. See American Transport Co. v. Central Indiana Rwy. Co. (1970), 255 Ind. 319, 264 N.E.2d 64; Northern Indiana Public Service Commission v. Otis (1969), 145 Ind.App. 159, 250 N.E.2d 378; Klukas v. Yount (1951), 121 Ind.App. 160, 98 N.E.2d 227.
Approving the use of loan receipt agreements as a settlement tool, however, does not address the issue of their admissibility at trial. In fact, our appellate courts have held loan receipt agreements are not admissible as substantive evidence. See e.g. Health & Hospital Corp. v. Gaither (1979), 272 Ind. 251, 397 N.E.2d 589; State v. Thompson (1979), 179 Ind.App. 227, 385 N.E.2d 198. However, their preclusion as substantive evidence does not forestall admissibility as impeaching evidence under the proper circumstances.
Our courts have acknowledged the admissibility of loan receipt agreements in certain situations. For example, in Gray v. Davis (1982), Ind.App., 434 N.E.2d 146, the administrator of a decedent's estate sued the drivers of two vehicles (and their respective employers) who were involved in a collision with the decedent's vehicle. Prior to trial, a loan receipt agreement was executed between the administrator, the drivers, and one driver's employer. The loan receipt agreement was admitted into evidence during the course of one driver's testimony over the administrator's objection the agreement was inadmissible because the driver testifying would not receive any repayment, whatever the trial's outcome. This court held the agreement was admissible for impeachment purposes because the agreement facilitated the driver's dismissal from the action.
In State v. Thompson, the plaintiff, Thompson, sued the truck driver, the truck owner, and the State of Indiana for injuries he sustained in a collision between his vehicle and a truck. Thompson entered a loan receipt agreement with the truck driver and the truck owner. Thompson agreed to prosecute his claim against the State and to dismiss with prejudice his claim against the agreeing defendants. Thompson further agreed to repay the amount loaned, $225,000, without interest, only to the extent he successfully collected on his claim against the State. Although this court affirmed the trial court's exclusion of the loan receipt agreement from evidence, it did so because neither the truck driver nor the owner testified, and accordingly, the agreement was not offered to impeach the testimony of the agreeing defendants. In...
To continue reading
Request your trial
-
Collings v. City First Mortg. Servs., LLC
...P.2d 706 (1986); Illinois—Reese v. Chicago, Burlington & Quincy R.R. Co., 55 Ill.2d 356, 303 N.E.2d 382 (1973); Indiana—Fullenkamp v. Newcomer, 508 N.E.2d 37 (Ind.Ct.App.1987); Kansas—Ratterree v. Bartlett, 238 Kan. 11, 707 P.2d 1063 (1985); Louisiana—Daniel v. Penrod Drilling Co., 393 F.Su......
-
Collings v. City First Mortg. Servs., LLC
...P.2d 706 (1986); Illinois—Reese v. Chicago, Burlington & Quincy R.R. Co., 55 Ill.2d 356, 303 N.E.2d 382 (1973); Indiana—Fullenkamp v. Newcomer, 508 N.E.2d 37 (Ind.Ct.App.1987); Kansas— Ratterree v. Bartlett, 238 Kan. 11, 707 P.2d 1063 (1985); Louisiana—Daniel v. Penrod Drilling Co., 393 F.S......
-
Dixon v. Commissioner
...between the settling defendants and nonsettling defendants. See Dosdourian v. Cartsen, 624 So. 2d 241 (Fla. 1993); Fullenkamp v. Newcomer, 508 N.E.2d 37 (Ind. Ct. App. 1987); General Motors Corp. v. Lahocki, 410 A.2d 1039 (Md. 1980); Lum v. Stinnett, 488 P.2d 347 (Nev. 1971); Cox v. Kelsey-......
-
Collings v. City First Mortg. Servs., LLC
...706 (1986); Illinois — Reese v. Chicago, Burlington & Quincv R.R. Co., 55 III. 2d 356, 303 N.E.2d 382 (1973); Indiana — Fullenkamp v. Newcomer, 508 N.E.2d 37 (Ind. Ct. App. 1987); Kansas — Ratterree v. Bartlett, 238 Kan. 11.707 P.2d 1063 (1985); Louisiana — Daniel v. Penrod Drilling Co., 39......