California Court of Appeals Holds Evidence of Pretrial Settlement Between Plaintiff and One of Two Defendants Should Have Been Admitted at Trial

file5001259340889In a personal injury lawsuit before the California Court of Appeal, the court addressed the trial court’s exclusion of evidence concerning a pretrial settlement between the plaintiffs and the taxicab company.

In this case, a taxi passenger, Christine Diamond, was injured during a vehicle collision with another car. Mrs. Diamond and her husband (the Diamonds) brought a negligence action against the drivers and owners of both vehicles. Claims against the taxi driver and the owner of the cab, as well as the Yellow Cab Taxi Company, (Yellow Cab) were settled, and pursuant to a provision in that settlement, Yellow Cab agreed to participate as a defendant in the Diamonds’ jury trial. Yellow Cab moved for a determination that the settlement with the Diamonds had been made in good faith. The Reshkos did not oppose this good faith finding, but they added there must be a recognition at trial that there had been a settlement. The court made the good faith determination but did not decide whether the evidence of the settlement was admissible at trial.

The jury found that both drivers had been negligent and that the driver of the other car, Serge Reshko, and his mother (the Reshkos) had been 60 percent responsible. The Reshkos were held liable to the Diamonds for $406,698.00, plus fees and costs.

The Reshkos appealed the trial court judgment on the grounds that the court committed a structural error by excluding evidence of the pretrial settlement between the Diamonds and Yellow Cab.

In this case, the taxicab driver was making a U-turn from an outside lane, and he was broadsided by Mr. Reshko, who had been traveling above the speed limit to try and “make the light,” according to a statement to the interviewing officer. The officer cited the taxicab driver for making an improper U-turn from an outside lane, and he also cited Mr. Reshko for speeding.

The Diamonds brought a negligence action against Yellow Cab and the Reshkos, and before trial, the Diamonds settled with Yellow Cab.   During pretrial motions, the trial court reserved ruling on a motion by the Reshkos for an order that the jury be informed about the settlement between the Diamonds and Yellow Cab.

During trial, evidence regarding liability included testimony from the cab driver and the defendant, Mr. Reshko. Additionally, a witness who had been in his vehicle at the intersection when the accident occurred testified that he saw Mr. Reshko run a red light and that he was driving above the speed limit. He also testified that the cab driver was moving slowly but making “a really stupid move” by attempting a U-turn.

Trial evidence also included medical testimony concerning Christine’s physical and emotional injuries, including post-traumatic stress disorder. Both parties presented expert economists to evaluate the Diamonds’ alleged economic losses from the accident.

The jury found that both the cab driver and Mr. Reshko were negligent and substantial factors in causing harm to Mrs. Diamond. They awarded $258,778.00 in economic damages and $137,000.00 in future economic damages. For noneconomic damages, they awarded $150,000.00 for past damages, $150,000.00 for future damages, and $50,000.00 for loss of consortium.

On appeal, the court stated the standard of review is abuse of discretion, a deferential standard. At issue is whether it was an abuse of discretion to exclude evidence of the pretrial settlement agreement between the Diamonds and Yellow Cab. The Diamonds and Yellow Cab contended that it was not, and Yellow Cab stated that admitting the evidence would have unfairly prejudiced the Diamonds because the message to the jury would be that Yellow Cab was responsible for the accident.

The Reshkos argue that by excluding the evidence of the pretrial agreement, they were denied a fundamental right to a fair trial. They contend that without knowledge that Yellow Cab “switched sides” before trial, the jury could not properly assess witness credibility or perceive trial tactics.

While evidence of a settlement cannot be used to prove liability, it is admissible to prove witness bias and to prevent collusion. Here, while the trial court did refuse to inform the jury of the settlement agreement at least three times, the appellate court stated that the record does not state why they made these rulings.

The court stated that the ruling not to inform the jury of the settlement transgressed the confines of applicable legal principles. First, the trial court was not limited in its authority to admit evidence at trial. Second, in this case the good faith determination of a settlement agreement contained a term requiring continuing participation by a settling defendant, Yellow Cab. This participation is premised on a presumption that the jury will be made aware of the settlement. Finally, the basis of the ruling centered on a misperception concerning the relevance of the agreement when a settling defendant is participating fully at trial. Not only is the evidence relevant to explain a bias brought to the attention of the jury, but also it is relevant because presenting the evidence prevents collusion and helps the jury determine liability and damages. The jury gains knowledge of credibility and trial tactics, and ultimately, the court held, substantive trial evidence.

In conclusion, the court held it was an abuse of discretion for the trial court to exclude evidence of the settlement agreement between the Diamonds and Yellow Cab. However, it was not a structural error requiring reversal, as was contended by the Reshkos. A structural error requires a showing of miscarriage of justice, a high standard of prejudice that has not been met here.

This case demonstrates the importance of presenting competent and complete evidence during a personal injury lawsuit. Car accident victims can rely on the expertise of the attorneys at the Sharifi Firm to fully represent their interests and protect their rights. Contact us for a free consultation at 866-422-7222.

More Blog Posts:

California Appeals Court Remands for New Trial in Car Accident Case Involving Issues of Credibility, Southern California Injury Lawyer Blog, August 17, 2015

California Court of Appeals Upholds Decision to Grant New Trial on Damages in Bus Accident Case, Southern California Injury Lawyer Blog, June 26, 2015

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