On appeal from Superior Court of New Jersey, Law Division, Camden County.
Michels and Skillman. The opinion of the court was delivered by Skillman, J.A.D.
This is an appeal from a jury verdict of no cause in an automobile negligence case. We conclude that the trial judge committed prejudicial error with respect to three evidence rulings during trial. Therefore, we reverse and remand for a new trial.
Defendant Sandra Wyatt was operating an automobile in which her children, Nicole Wyatt and Dylan Henson, and Barbara Cremean were passengers. The automobile went through a red light and collided with a truck being driven by codefendant Charles DeYoung. This suit was brought on behalf of the three passengers against Wyatt and DeYoung.*fn1
The only eyewitness testimony concerning the accident was by Cremean and Sandra Wyatt. Cremean said that she and Wyatt were talking. She first noticed that the light was red as they began to enter the intersection. She then said to Wyatt, "what are you doing?" Wyatt applied the brakes and her car fishtailed into DeYoung's truck.
On the other hand, Wyatt testified that she observed the light turn red when she was a substantial distance from the intersection
and applied the brakes when she was still 60 to 70 feet away. However, the brakes failed to respond and she was unable to stop her car or to avoid DeYoung's truck. The verdict seems to indicate that the jury accepted Wyatt's version of the accident.
Over plaintiff's objection, the trial judge permitted Wyatt to testify that her automobile, including the brakes, was serviced by Firestone the day before the accident, that the total estimate of body damage to the automobile from the accident was $843, and that Firestone paid that full amount to Wyatt and her husband after the accident in exchange for a release from liability. However, the trial judge, in an inconsistent ruling, subsequently sustained an objection to the admission into evidence of the property damage estimate and release. And in his instructions to the jury the trial judge said:
One other thing. There has been some testimony with respect to Mrs. Henson receiving a certain amount of money from Firestone who is not a party to this suit. The fact that she received payment from Firestone is not evidence per se that the brakes failed. So that you may not consider that as evidence with respect to the issue of whether her brakes failed. You may, of course, obviously consider Mrs. Henson's testimony that her brakes failed and she complained to Firestone and she said it was supposed to have been repaired the day before the accident. That is a question of credibility which you have to of course assess.
Thus, while the trial judge instructed the jury that the testimony concerning Firestone's payment to Wyatt and her husband was not "evidence per se," this testimony was not stricken from the record and the jury may very well have understood that it could be considered in assessing the credibility of Wyatt's testimony concerning the alleged brake failure.
Plaintiffs argue that evidence of the settlement with Firestone was inadmissible on three separate grounds: (1) it was hearsay and therefore inadmissible under Evidence Rule 63; (2) it was evidence of a settlement of litigation and therefore inadmissible under Evidence Rule 52 or (3) any marginal relevancy
of the evidence was substantially outweighed by the risk of undue prejudice and therefore it was inadmissible under Evidence Rule 4(b). We conclude that this evidence was not hearsay and that it was not inadmissible under Rule 52. However, we also conclude that this evidence had little or no probative value and that there is a substantial danger it was assigned undue weight by the jury. Therefore, the trial judge abused his discretion in not excluding it pursuant to Rule 4. Furthermore, we are convinced that the prejudice to plaintiffs from the admission of this evidence was not cured by the trial judge's subsequent ambiguous instructions to the jury.
Hearsay is defined by Rule 63 as "a statement offered to prove the truth of the matter stated which is made other than by a witness while testifying at the hearing." A "statement," as that word is used in Rule 63, is ". . . not only an oral or written expression but also nonverbal conduct of a person intended by him as the substitute for words in expressing the matter stated." Evid.R. 62(1). Clearly, Firestone's payment to Wyatt was not "an oral or written expression." It was instead "nonverbal conduct." However, this conduct was not "intended by [Firestone] as the substitute for words." It was not like a person shaking his head up and down instead of saying "yes," see State v. Simmons, 52 N.J. 538, 541 (1968), cert. den. 395 U.S. 924, 89 S. Ct. 1779, 23 L. Ed. 2d 241 (1969), or pointing to the person being identified in a lineup instead of saying, "that's the man," U.S. v. Caro, 569 F.2d 411, 416 n. 9 (5th Cir.1978). Firestone's payment of money to Wyatt was not intended as a communication but rather was action designed to resolve any claim she might have. Therefore, that action was not a "statement" within the meaning of Rule 62(1) and hence not excludable from evidence as hearsay pursuant to Rule 63.
Evidence Rule 52 provides in relevant part:
Evidence that a person has, in compromise or from humanitarian motives, furnished or offered or promised to furnish money, or any other thing, act or service to another who has sustained or claimed to have sustained loss or
damage, is inadmissible to prove his liability for the loss or damage or any part of it.
There are two basic rationales for the exclusion of evidence of settlement discussions and settlements. One, advocated by Professor Wigmore, ". . . is that offers of compromise are excluded because not factually relevant; that they do not imply a belief (and, consequently, an admission by implication) on the part of the offeror that the adversary's claim is well founded, but rather that the further prosecution of the claim is preferably avoided by a purchase of the offeror's peace." Winfield Mutual Housing Corp. v. Middlesex Concrete Products & Excavating Corp., 39 N.J. Super. 92, 100 (App.Div.1956); see 4 Wigmore, Evidence (Chadbourn rev. 1972), § 1061. The other, advocated by Professor McCormick, is "the social desirability of promoting settlements of controversies over disputed claims." Winfield Mutual Housing, supra, at 100; see McCormick, Evidence (3 ed. 1984), § 274; see also Rynar v. Lincoln Transit Co., Inc., 129 N.J.L. 525, 529 (E. & A. 1943).
Evidence Rule 52 is taken from the Uniform Rules of Evidence, which adopt the McCormick view, that is, that evidence of settlements is excluded in order to promote settlements. Winfield Mutual Housing, supra, 39 N.J. Super. at 101. Consequently, Rule 52 did not bar evidence of the settlement between Firestone and Wyatt. The admission of this evidence could not undermine the policy of encouraging settlements, because it was not offered against one of the parties to the settlement. Rather, it was Wyatt herself one of the parties to the settlement, who offered the evidence to show that Firestone was legally responsible for the accident and hence that Wyatt was not. Stated another way, since Firestone was not a party to the lawsuit and hence could not be held liable, evidence of the settlement was not offered "to prove [Firestone's] liability for the loss" within the intent of Rule 52. See McCormick, supra, at 813 n. 23 ("A settlement which is offered as proof of the liability of a third party, arising out of
the transaction in suit, is not within the privilege since the evidence will not harm the parties to the compromise.")
Nonetheless, this evidence should have been excluded because it had little or no probative value with respect to Firestone's responsibility for the accident and yet had an inherent capacity to unduly influence the jury. Rule 4(b) provides that "[t]he judge may in his discretion exclude evidence if he finds that its probative value is substantially outweighed by the risk that its admission will . . . create substantial danger of undue prejudice or of confusing the issues or of misleading the jury." Firestone settled with Wyatt and her husband by paying them $843 for the property damage to their car. The record does not indicate the reason Firestone made this payment, although the release does contain the standard recitation that the payment by Firestone "is not to be taken as an admission of liability." However, it is as logical to infer that Firestone simply desired to avoid litigation by the payment of a small sum of money as that it acknowledged any responsibility for the accident. See Wigmore, supra, § 1061 at 36 ("the offer implies merely a desire for peace, not a concession of wrong done"). Although lack of relevancy is not the basis for the exclusion of evidence of a settlement under Rule 52, we conclude that the simple fact that Firestone paid a small sum of money to Wyatt had so limited probative value with respect to the condition of Wyatt's brakes at the time of the accident that it should have been excluded under Rule 4.
This conclusion is squarely supported by the one decision which we have located dealing with the issue. In Esser v. Brophey, 212 Minn. 194, 3 N.W. 2d 3 (Sup.Ct.1942), a defendant in an automobile case sought to introduce evidence that the driver of another car involved in the accident had paid for the damages to his car, thereby supporting an inference that the other driver and not defendant was responsible for the ...