SER Katie Franklin v. Hon. R. Craig Tatterson, Judge , 821 S.E.2d 330 ( 2018 )

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
September 2018 Term FILED
_______________
November 13, 2018
released at 3:00 p.m.
No. 18-0218 EDYTHE NASH GAISER, CLERK
_______________ SUPREME COURT OF APPEALS
OF WEST VIRGINIA
STATE OF WEST VIRGINIA ex rel. KATIE FRANKLIN,
Petitioner
v.
HONORABLE R. CRAIG TATTERSON,
Judge of the Circuit Court of Jackson County; and
CATHY BROWN,
Respondents
____________________________________________________________
ORIGINAL PROCEEDING IN PROHIBITION
WRIT GRANTED
____________________________________________________________
Submitted: October 24, 2018
Filed: November 13, 2018
Patrick Morrisey John W. Alderman, III, Esq.
Attorney General Law Offices of John W. Alderman
Lindsay S. See Charleston, West Virginia
Solicitor General Counsel for Respondent Cathy Brown
Charleston, West Virginia
Katie Franklin, Esq.
Jackson County Prosecuting Attorney
Ripley, West Virginia
Counsel for Petitioner
JUSTICE WALKER delivered the Opinion of the Court.
SYLLABUS BY THE COURT
1. “Prohibition lies only to restrain inferior courts from proceeding in
causes over which they have no jurisdiction, or, in which, having jurisdiction, they are
exceeding their legitimate powers and may not be used as a substitute for [a petition for
appeal] or certiorari.” Syllabus Point 1, Crawford v. Taylor, 138 W. Va. 207, 75 S.E.2d
370 (1953).
2. “In determining whether to entertain and issue the writ of prohibition
for cases not involving an absence of jurisdiction but only where it is claimed that the lower
tribunal exceeded its legitimate powers, this Court will examine five factors: (1) whether
the party seeking the writ has no other adequate means, such as direct appeal, to obtain the
desired relief; (2) whether the petitioner will be damaged or prejudiced in a way that is not
correctable on appeal; (3) whether the lower tribunal’s order is clearly erroneous as a matter
of law; (4) whether the lower tribunal’s order is an oft repeated error or manifests persistent
disregard for either procedural or substantive law; and (5) whether the lower tribunal’s
order raises new and important problems or issues of law of first impression. These factors
are general guidelines that serve as a useful starting point for determining whether a
discretionary writ of prohibition should issue. Although all five factors need not be
satisfied, it is clear that the third factor, the existence of clear error as a matter of law,
should be given substantial weight.” Syllabus Point 4, State ex rel. Hoover v. Berger, 199
W. Va. 12, 483 S.E.2d 12 (1996).
i
3. “The decision of whether to admit evidence of compromise offers for
a purpose other than to ‘prove liability for or invalidity of the claim or its amount,’ W. Va.
R. Evid. 408, is within the sound discretion of the circuit court.” Syl Pt. 7, State ex rel.
Shelton v. Burnside, 212 W. Va. 514, 575 S.E.2d 124 (2002).
4. Evidence of all statements made during compromise negotiations are
inadmissible under Rule 408 of the West Virginia Rules of Evidence unless offered to
prove an exception under the rule. Because this Court’s prior holding in Syllabus Point 3
of Shaeffer v. Burton, 151 W.Va. 761, 155 S.E.2d 884 (1967) has been superseded by Rule
408 of the West Virginia Rules of Evidence, it is overruled.
5. “While testimony offered to show an unaccepted offer of compromise
is incompetent and inadmissible, where it appears that such statements were made without
any attempt to effect any compromise between the parties, such testimony is admissible
under the well-established rule that the declaration of parties to the record against interest
may be shown in evidence.” Syllabus Point 2, Averill v. Hart & O’Farrell, 101 W.Va.
411, 132 S.E. 870 (1926).
ii
WALKER, JUSTICE:
Petitioner Katie Franklin, Prosecuting Attorney of Jackson County, invokes
this Court’s original jurisdiction seeking a writ to prohibit the Circuit Court of Jackson
County from enforcing its order suppressing all evidence of text messages between
Respondent Cathy Brown, the defendant in the underlying criminal case, and an accountant
for the company from which she allegedly embezzled $306,000. Because it is evident that
the text messages were not exchanged in the context of civil settlement negotiations, we
grant the writ of prohibition and find that the circuit court committed a clear error of law
in prohibiting their admission at trial.
I. FACTUAL AND PROCEDURAL BACKGROUND
Ms. Brown has been charged with one count of embezzlement of
approximately $306,000 from Hartley Oil Company, Inc. (Hartley Oil). On October 13,
2015, Hartley Oil’s accountant, Krista Bratton, discovered an alleged multi-year
embezzlement scheme by Ms. Brown, another employee of the company. After an inquiry
by the accountant, Ms. Brown claimed to be sick and went home. Over the next seven
days, Ms. Brown and the accountant exchanged several text messages. Throughout the
texts Ms. Brown expressed regret for her actions and a willingness to make amends, and
asked whether Hartley Oil’s owners, Rodd and Georgie Hartley, would seek criminal
prosecution.
1
The circuit court characterized the text messages as follows.1 On October
15, 2015, Ms. Brown sent a text to the accountant asking a question about payroll. After
receiving the accountant’s response, Ms. Brown asked “[h]ows everything else[?]” The
following texts ensued:
[Ms. Brown]: I don’t think he bills in U.S. Dollars
Has she got back with you
[Accountant]: She is researching the amount
[Ms. Brown]: I will be back to work on Monday I have
a lot of personal things wrong with me
I am ready to have a nervous breakdown
my Meds aren’t helping anymore
Is that ok
[Accountant]: It is but I’d like to talk about what’s going
on.
[Ms. Brown]: With me
[Accountant]: Yes mam, you’ve got me worried
[Ms. Brown]: Worried about what
[Accountant]: You told me that you’ve done something
and that I could guess what. I would really prefer not to guess
what it is.
1
As noted in the circuit court’s order, the text messages contain misspellings and
grammatical errors. The name of Ms. Brown’s minor daughter has been redacted in
accordance with Rule 40(e) of the West Virginia Rules of Appellate Procedure.
2
When Ms. Brown asked to talk on Monday, the accountant asked if Ms.
Brown could call her “tomorrow,” which “would give [her] a night to sleep on it.” Ms.
Brown insisted that she wanted to come in and talk with “everyone next week,” and “after
hours if possible.” The accountant responded that she would talk to the owners of the
company. These texts followed:
[Ms. Brown]: What did she say am I’m going to jail or
are they going to work with me fir paying it back I am worried
[about my daughter,] not myself
[Ms. Brown]: At this point are you just saying I quit
[Accountant]: I think we need to determine how much
before the decision is made. I’m still talking to Rodd and
Georgie [Hartley Oil’s owners].
***
[Ms. Brown]: I am so sorry for everything I thought it
was best to just go ahead and say something
[Accountant]: I appreciate it. I’m trying to communicate
that with Rodd too that you telling us should count for
something
[Ms. Brown]: lol ease do everything you can to help me
I know what I did was wrong and I wish I could take it back I
am willing to pay every penny back to them I will do anything
I just don’t want to ruin [my daughter’s] life over something
that I did I think I can tell you the amount once I look at it but
I would really like to come in and talk. I know everyone hates
me at this point that’s why I would just like to say I quit so [my
daughter] Don’t find out she’s just a child and do t need to be
hurt. I know I am the one that hurt her I would work anywhere
for free just to get then their money back I was struggling
between bills. Famous for [my daughter] trying to keep her
happy. I know that is no excuse for what I did. Please don’t
hate me. Please do everything you can to help me I really
cinfide in you. I am telling everyone that I quit for personal
3
reasons right now I just don’t want to go to jail but that not my
choice it’s up to rodd
[Accountant]: I will call you here in a minute.
[Ms. Brown]: Does everyone hate me. I am so sorry2
The State asserts that, after this particular exchange, Ms. Brown and the
accountant spoke by telephone and Ms. Brown admitted to stealing approximately $20,000
during the 2015 calendar year. The following day, on October 16, 2015, Ms. Brown sent
a text to the accountant that stated, “Krista I’m scared to death.” Ms. Brown later asked
about what was being said about her around the company and what the other employees
knew of the situation. The accountant then assured Ms. Brown that the situation was being
kept quiet and Ms. Brown’s response stated “[t]hank you for being so good to me.” The
accountant promised Ms. Brown that she was “trying to keep everything fair.” Then, Ms.
Brown and the accountant had the following exchange:
[Ms. Brown]: I’m so scared
I hate myself
[Accountant]: Cathy, what has happened can’t be
changed, only going forward. No matter what happens
[Ms. Brown]: I texted Georgie last night but she didn’t
respond.
I know she is really mad
[Accountant]: I can imagine she is
2
(emphasis by the State) (typographical errors in original).
4
***
[Ms. Brown]: Are you keeping my Checks
[Accountant]: The payroll ones? I don’t think I can. We
will work that out this afternoon.
And I’ll need you to sign a termination slip.
[Ms. Brown]: Ok
Did you say anything to him
[Accountant]: I’m trying to go through and find
everything
Ms. Brown later sent spreadsheets to the accountant which contained
highlighted, circled and crossed-through items. The text exchange continues as follows:
[Ms. Brown]: Ok all the I highlighted ones
I have a question if can I cash out my 401k and give it to the
Hartleys
Can I meet you and sign the paper and get my check
Ms. Brown and the accountant then discussed a time for Ms. Brown to come
to the office for a meeting. That same day, Ms. Brown sent the accountant a text that she
“[j]ust pulled in” the office. Ms. Brown then signed a Hartley Oil Company, Inc. -
Employee Action Form that included the handwritten statement “Admitted to embezzling”
by the accountant in the Incident Information section of the form.
5
The following day, October 17, 2015, Ms. Brown sent a text including a
picture of her daughter to the accountant and thanked her for “being a friend.” The
accountant indicated that she saw the picture on Facebook and complimented Ms. Brown’s
daughter. In response, Ms. Brown sent the following text message:
[Ms. Brown]: Thank you. I am Already working on
getting money together I’m selling my Durango and hoping I
can get the 401 money out and I have my vacation checks.
Ms. Brown again thanked the accountant for helping her.
On October 18, 2015, Ms. Brown sent a text to the accountant asking to meet
in person. Ms. Brown indicated, “[a]nd again I am so sorry.” When the accountant
responded, “I know Cathy,” Ms. Brown responded, “I feel like you are the only friend I
have right now.” Ms. Brown continued to apologize in the texts.
On October 19, 2015, Ms. Brown sent a text to the accountant that she was
selling her Durango, cashing in her 401(k) account and borrowing money on her house. In
her text, Ms. Brown stated, “I would like to start paying some back as soon as I can if they
will let me.” Ms. Brown later sent her a text that stated, “[i]f you have any questions on
anything I would gladly answer them for you.”
On October 20, 2015, Ms. Brown again sent a text to the accountant asking
about setting up a meeting with Hartley Oil’s owners. When the accountant indicated
neither were available, Ms. Brown sent a text stating, “[o]mg their not there I pray there
6
not somewhere pressing charges in me.” Later that day, there were texts between Ms.
Brown and the accountant arranging for Ms. Brown to call her.
Ms. Brown continued texting with the accountant on October 22, 25 and 26
and November 11, 12, 19 and 20. In those texts, they discussed Ms. Brown providing more
information to the accountant, including discussions about meeting at the Ripley Park and
Ride so that Ms. Brown could provide documents.
Prior to the trial on the embezzlement charge, the State filed a notice of intent
to introduce the string of text messages from October 15, 2015 to November 20, 2015.
After briefing by the parties, the circuit court entered an order on August 3, 2017, which
denied admission of the text messages. The court found that Rule 408 of the West Virginia
Rules of Evidence precluded their admission at trial. Rule 408 provides that:
Compromise offers and negotiations.
(a) Prohibited Uses. Evidence of the following is
not admissible—on behalf of any party—either to prove or
disprove the validity or amount of a disputed claim, the liability
of a party in a disputed claim, or to impeach by a prior
inconsistent statement or a contradiction:
(1) furnishing, promising, or offering—or accepting,
promising to accept, or offering to accept—a valuable
consideration in compromising or attempting to compromise
the claim; and
(2) conduct or a statement made during compromise
negotiations about the claim.
(b) Exceptions. This rule does not require the
7
exclusion of any evidence otherwise discoverable merely
because it is presented in the course of compromise
negotiations. This rule also does not require exclusion when
the evidence is offered for another purpose, such as proving
bias or prejudice of a witness, negating a contention of undue
delay, or proving an effort to obstruct a criminal investigation
or prosecution.
In so ruling, the circuit court found that Rule 408 is not limited to civil
proceedings, but also applies to criminal proceedings by virtue of West Virginia Rule of
Evidence Rule 101(a), which instructs that “these rules apply to proceedings in the courts
of this State. . . .”3 The circuit court also relied upon United States v. Davis,4 which the
court found to be factually analogous to the text messages in the case at hand, and
determined that they were made in an “attempt to compromise and settle the matters that
gave rise to the Indictment.”5 In prohibiting the admission of the text messages, the circuit
court stated:
Defendant expressed that she “just [doesn’t] want to go to jail,”
is concerned about Hartley Oil executives’ planned courses of
action regarding the allegations against her, and offers her
401K and other monies so that no charges will be brought
against her.
On March 14, 2018, the State filed a petition for a writ of prohibition to
prohibit the circuit court from enforcing its order suppressing all evidence of text messages
3
(emphasis added).
4
596 F.3d 852 (D.C. Cir. 2010).
5
(emphasis added).
8
between Ms. Brown and Hartley Oil’s accountant. After Ms. Brown filed a response, this
Court issued a rule to show cause by corrected order entered May 9, 2018.
II. STANDARD OF REVIEW
The general standard for issuance of a writ of prohibition is set forth in West
Virginia Code § 53-1-1 (2016), which states that “[t]he writ of prohibition shall lie as a
matter of right in all cases of usurpation and abuse of power, when the inferior court has
not [sic] jurisdiction of the subject matter in controversy, or, having such jurisdiction,
exceeds its legitimate powers.” This Court has held that “[p]rohibition lies only to restrain
inferior courts from proceeding in causes over which they have no jurisdiction, or, in
which, having jurisdiction, they are exceeding their legitimate powers and may not be used
as a substitute for [a petition for appeal] or certiorari.”6 With respect to the standard, this
Court has established five factors to be considered:
In determining whether to entertain and issue the writ of
prohibition for cases not involving an absence of jurisdiction
but only where it is claimed that the lower tribunal exceeded
its legitimate powers, this Court will examine five factors: (1)
whether the party seeking the writ has no other adequate
means, such as direct appeal, to obtain the desired relief; (2)
whether the petitioner will be damaged or prejudiced in a way
that is not correctable on appeal; (3) whether the lower
tribunal’s order is clearly erroneous as a matter of law; (4)
whether the lower tribunal’s order is an oft repeated error or
manifests persistent disregard for either procedural or
substantive law; and (5) whether the lower tribunal’s order
raises new and important problems or issues of law of first
impression. These factors are general guidelines that serve as a
6
Syl. Pt. 1, Crawford v. Taylor, 138 W. Va. 207, 75 S.E.2d 370 (1953).
9
useful starting point for determining whether a discretionary
writ of prohibition should issue. Although all five factors need
not be satisfied, it is clear that the third factor, the existence of
clear error as a matter of law, should be given substantial
weight.7
“The decision of whether to admit evidence of compromise offers for a
purpose other than to ‘prove liability for or invalidity of the claim or its amount,’ W. Va.
R. Evid. 408, is within the sound discretion of the circuit court.”8 Thus, our general rule
provides that “[p]rohibition is ordinarily inappropriate in matters involving a trial court’s
pretrial ruling on . . . the admissibility of evidence.”9 However, in circumstances like the
present case, when the State has no other adequate means to obtain the desired relief and
this issue is not one that would be correctable on appeal, this Court has entertained a
petition for a writ of prohibition.10 With these standards in mind, we consider the parties’
arguments.
7
Syl. Pt. 4, State ex rel. Hoover v. Berger, 199 W. Va. 12, 483 S.E.2d 12 (1996).
8
Syl. Pt. 7, State ex rel. Shelton v. Burnside, 212 W. Va. 514, 575 S.E.2d 124 (2002).
9
Policarpio v. Kaufman, 183 W. Va. 258, 261, 395 S.E.2d 502, 505 (1990).
10
See State ex rel. Plants v. Webster, 232 W. Va. 700, 708, 753 S.E.2d 753, 761
(2012).
10
III. DISCUSSION
The State argues that although Rule 408 may be applicable in criminal
proceedings, the text messages here were not statements made for civil settlement
purposes. Rather, they were intended to affect a criminal proceeding and thus, Rule 410
of the West Virginia Rules of Evidence applies. Rule 410 addresses the admissibility of
criminal plea negotiations in civil and criminal trials. Pursuant to Rule 410(a)(4), criminal
plea negotiations are not admissible at trial if “an attorney for the prosecuting authority” is
a party to the negotiations, which was not the case here. Therefore, the State argues that
this Court should prohibit the circuit court from enforcing its order suppressing all evidence
of text messages between Ms. Brown and an accountant for the employer from which she
allegedly embezzled $306,000.
The State notes that the texts referenced solely Ms. Brown’s fear of going to
jail and the potentiality for criminal charges. Throughout the text messages, the State
asserts that there is no statement that references a civil negotiation or even a concern for
any form of civil remedy; to the contrary, Ms. Brown made it clear in the texts that she
would sell her personal property and assets to do whatever she needed to do in order to
avoid criminal charges. The State argues that the nature of Ms. Brown’s text messages
distinguishes her situation from Davis, where the D.C. Circuit found that the defendant was
11
engaged in civil settlement negotiations and did not have any awareness of a potential
criminal proceeding.11
The State contends that a Fourth Circuit case, United States v. Peed,12 is more
analogous to the present circumstances than Davis. In Peed, the Fourth Circuit found that
the district court did not abuse its discretion in admitting a secretly recorded conversation
during which a criminal defendant attempted to pay a victim in exchange for dropping the
charges. The Fourth Circuit agreed with the district court’s characterization of the
defendant’s statements as an attempt to avoid criminal prosecution, not as an effort to
resolve a civil claim, which is the purpose behind Rule 408.13
Alternatively, the State claims that even if the text message exchanges were
civil settlement negotiations, the texts would still be admissible under this Court’s decision
in Shaeffer v. Burton.14 In Syllabus Points 2 and 3 of Shaeffer, this Court held:
2. ‘While testimony offered to show an unaccepted
offer of compromise is incompetent and inadmissible, where it
appears that such statements were made without any attempt to
effect any compromise between the parties, such testimony is
admissible under the well-established rule that the declaration
of parties to the record against interest may be shown in
11
596 F.3d at 861.
12
714 F.2d 7 (4th Cir. 1983).
13
Id. at 9-10.
14
151 W.Va. 761, 155 S.E.2d 884 (1967).
12
evidence.’ Point 2, syllabus, Averill v. Hart & O’Farrell, 101
W.Va. 411, [132 S.E. 870 (1926)].
3. The determining factor as to whether a statement
is in the nature of a settlement proposal or offer, so as to
exclude it from evidence, is whether the form of the statement
is explicit or absolute, and if its purpose is to declare a fact
really to exist rather than to concede a fact hypothetically in
order to effect a settlement, the statement is admissible.15
The State argues that while this Court decided Shaeffer before the adoption
of the West Virginia Rules of Evidence, the Court favorably cited the Shaeffer decision in
SER Richmond American Homes of W.Va., Inc. v. Sanders.16 Applying the holdings of
Shaeffer to this case, the State argues that not only did Ms. Brown make various admissions
of actual guilt—not simply hypothetical guilt—but she also provided copies of
spreadsheets where she highlighted accounting entries relating to money she specifically
admits to embezzling. Therefore, the State argues that Ms. Brown’s text messages, along
with the spreadsheets, constitute direct, express, and unconditional admissions of stated
facts and show an intention to admit liability for at least part of the crime charged.
To the contrary, Ms. Brown argues that the circuit court properly relied on
Davis. First, Ms. Brown argues that the text message exchanges occurred in the context of
and contemporaneously with settlement negotiations to resolve Hartley Oil’s claim against
15
Id. at 761, 155 S.E.2d at 886.
16
226 W.Va. 103, 117, 697 S.E.2d 139, 153 (2010).
13
her and, therefore, Rule 408 applies. The first set of text messages indicated that Ms.
Brown allegedly asked Hartley Oil’s accountant if “they are going to work with me fir
paying it back.” Ms. Brown asserts that the accountant proceeded to indicate that the
amount needed to be determined and she was still talking to the company’s owners. The
next set of text messages indicated that Ms. Brown was willing to pay Hartley Oil, would
do everything in order to resolve the matter, and wanted to calculate the amount owed in
order to compensate the company. Ms. Brown asserts that she and the accountant sought
to establish the amount of the disputed claim. She contends that she expressed her desire
to make financial amends rather than confessing to a crime.
Ms. Brown claims that, at that time, Hartley Oil retained counsel to evaluate
its civil claim and the potential for reaching a settlement. While Hartley Oil ultimately
filed a civil action against Ms. Brown to recover monetary damages for the alleged
embezzlement, Ms. Brown’s attorney engaged in negotiations with a lawyer for Hartley
Oil prior to the filing of that action. On November 17, 2015, Ms. Brown sent $17,135 to
Hartley Oil. Ms. Brown asserts that there were also e-mails titled “settlement negotiations”
between her and Hartley Oil’s attorneys in an attempt to reach a settlement. Ms. Brown
contends that when she and Hartley Oil failed to reach a settlement in 2016, the company
filed its action. Therefore, Ms. Brown argues that the circuit court properly found that the
text messages were inadmissible because they constituted settlement negotiations under
Rule 408.
14
The threshold question this Court must consider is whether Rule 408 applies
to the text messages between Ms. Brown and the accountant at Hartley Oil. To establish
that Rule 408(a) applies to a particular document or information, a party must make a
substantial showing that it was, in fact, part of civil settlement negotiations. In Miller v.
Allman,17 we recently discussed the intended application of Rule 408:
This rule “addresses the admissibility of evidence originating
in offers to compromise or settle civil suits.” 1 Palmer, et al.,
Handbook on Evidence § 408.02, at 479. There are two
provisions set out under Rule 408(a) that prohibit evidence
concerning settlements. “Rule 408(a)(1) covers offers or
acceptance of offers to compromise, [and] Rule 408(a)(2)
covers any statement made during compromise negotiations.”
United States v. Dish Network, L.L.C., No. 09-3073, 2015 WL
9164665, at *3 (C.D. Ill. signed December 15, 2015). It has
been noted that “Rule 408 statements made in settlement
negotiations are only excludable under the circumstances
protected by the rule.” 1 Palmer, et al., Handbook on Evidence
§ 408.02, at 479. The exceptions to the prohibitions of Rule
408(a) are found in Rule 408(b). . . . It has been recognized that
“[t]his is an illustrative, not an exhaustive, list of the many
exceptions to the Rule 408 prohibition.” United States v. J.R.
LaPointe & Sons, Inc., 950 F. Supp. 21, 23 (D. Me. 1996).[18]
In making a determination of whether Rule 408 applies, a court must look at
the totality of the circumstances.19 “In determining whether prelitigation discussions
between parties constitute settlement negotiations requires a trial court to look at the totality
17
240 W. Va. 438, 813 S.E.2d 91 (2018) (Walker, J. dissenting on other grounds).
18
240 W. Va. at __, 813 S.E.2d at 104. (emphasis added).
19
1 Palmer, et al., Handbook on Evidence § 408.03[1] at 482 (citing Raybestos
Products Co. v. Younger, 54 F.3d 1234, 1241 (7th Cir. 1995).
15
of the circumstances, carefully reviewing the substance of the communications and the
timing of its occurrence.”20
While litigation need not have actually commenced in order for Rule 408 to
apply, under Rule 408(a) there must be a prior dispute before excluding evidence of an
offer to compromise. “Courts generally recognize a preexisting dispute when an offer is
made after some legal action had been taken or threatened, i.e., a threat to bring suit on a
claim, delivery of a claim to an attorney for legal action, or the actual filing of a suit.”21
Rule 408, however, does not apply to settlement offers made before the plaintiff has
asserted a claim or threatened to assert a claim against the defendant.
While the State argues that even if the text message exchanges were civil
settlement negotiations, the texts would still be admissible under this Court’s decision in
Shaeffer v. Burton, it is clear that our prior holding in Syllabus Point three of Shaeffer has
been superseded by Rule 408. In Shaeffer, this Court held that if the purpose of a statement
was to declare the existence of a fact, rather than to concede a fact hypothetically in order
20
Id.
21
1 Palmer, et al., Handbook on Evidence § 408.03[1] at 483-84 (citing NMB Air
Operations Corp. v. McEvoy, 1999 U.S. App. LEXIS 22991 (9th Cir. Sept. 16, 1999) (“in
order for a compromise to be inadmissible at trial under Rule 408, the underlying claim
must be disputed as to either validity or amount”); Lightfoot v. Union Carbide Corp., 110
F.3d 898 (2d Cir. 1997); S.A. Healy Co. v. Milwaukee Metropolitan Sewerage Dist., 50
F.3d 476 (7th Cir. 1995).
16
to effect settlement, the statement was admissible.22 Thus, before the adoption of Rule 408,
“[a]n admission of fact was independent of the compromise and, therefore, admissible
unless the admission was stated hypothetically, expressly stated to be without prejudice, or
so interwoven with the compromise offer as to be inseparable from it.”23 Recognizing that
the common law rule in Shaeffer was difficult to apply, thus making it susceptible to
contradictory and inequitable results, the Handbook on West Virginia Evidence explains
that Rule 408 supersedes Shaeffer:
Rule 408(a) avoids the problems caused by Shaeffer, by
implicitly placing the words without prejudice after every
statement made during compromise negotiations, thus
rendering such statements inadmissible. This expansion of the
rule is consistent with the privilege theory that excludes offers
of compromise under the notion of encouraging settlements at
the risk of losing valuable evidence. Now, contrary to common
law, evidence of all statements made during compromise
negotiations are inadmissible unless offered to prove an
exception under Rule 408(b).[24]
Agreeing with this interpretation of Rule 408(a), the Fourth Circuit has also
determined that the rule is broader than the common law exclusionary rule in many
jurisdictions, and excludes from evidence all statements made in the course of settlement
22
See Shaeffer at Syl. Pt. 3.
23
1 Palmer, et al., Handbook on Evidence § 40.8.03[4] at 489-90 (citing Shaeffer,
151 W. Va. 761, 155 S.E.2d 884).
24
Id. (emphasis added).
17
negotiations.[25] Accordingly, we hold that contrary to our prior common law, evidence of
all statements made during compromise negotiations are inadmissible under Rule 408 of
the West Virginia Rules of Evidence unless offered to prove an exception under the rule.
Because this Court’s holding in Syllabus Point 3 of Shaeffer has been superseded by Rule
408 of the West Virginia Rules of Evidence, it is overruled.26 Thus, Shaeffer lends no
guidance to our determination of this matter.
While Rule 408(a) may in fact be applicable to criminal proceedings, the
issue of whether Rule 408(a) actually applies to criminal prosecutions has not yet been
resolved by this Court.27 Regardless, it is unnecessary for the Court to decide that issue in
this particular case because it is evident that the text messages were not part of a civil
settlement negotiation under Rule 408.
25
Id. (citing Fiberglass Insulators, Inc. v. Dupuy, 856 F.2d 652 (4th Cir. 1988))
(internal footnotes and citations omitted).
26
As this Court reiterated in Syllabus Point 1 of Reed v. Wimmer, 195 W.Va. 199,
465 S.E.2d 199 (1995):
“The West Virginia Rules of Evidence remain the
paramount authority in determining the admissibility of
evidence in circuit courts. These rules constitute more than a
mere refinement of common law evidentiary rules, they are a
comprehensive reformulation of them.” Syllabus Point 7, State
v. Derr, 192 W.Va. 165, 451 S.E.2d 731 (1994).
27
See 1 Palmer, et al., Handbook on Evidence § 408.03[3] at 488.
18
The text messages undoubtedly convey that these discussions were not an
attempt to compromise or settle a civil dispute. Rather, Ms. Brown was clearly worried
about whether the owners were going to press charges against her and she wanted to pay
back what she owed them in an effort to avoid criminal prosecution. This conclusion is
supported by the circuit court’s analysis, which included this observation:
Defendant expressed that she “just [doesn’t] want to go to jail,”
is concerned about Hartley Oil executives’ planned courses of
action regarding the allegations against her, and offers her
401K and other monies so that no charges will be brought
against her.
And the case relied upon by the circuit court, Davis,28 offers little guidance
in analyzing the facts before us in this case. In Davis, the court addressed the application
of Federal Rule of Evidence 408 in a criminal proceeding where the state had sought to
introduce testimony of a telephone conversation in which the defendant, who was accused
of stealing money from a national fraternity while serving as its treasurer, offered to pay
back some of the money he stole from the fraternity to “make [the accusations] go away.”
The conversation was as follows:
[The defendant asked – he said, ‘Can we just split this
$29,000 and make this situation go away? . . . . I told him that
[the] amount was in excess of a hundred thousand dollars. [The
defendant’s] statement to me at that point was, ‘I can’t afford
to pay that amount,’ and then I told him – I said, ‘Terry, if you
want to do some – negotiate some kind of settlement, you need
to talk to our legal counsel or our international president.’”[29]
28
596 F.3d 852.
29
Id. at 854 (emphasis added).
19
In finding that the statements were not admissible, the Davis court reasoned:
There can be no doubt that Davis offered to compromise
a disputed claim. His offer was to split the $29,000 in checks
to cash he thought the fraternity had discovered. The claim
“was disputed as to validity or amount,” FED.R.EVID. 408(a):
Davis did not confess to taking the fraternity’s money; he said
that he had deposited the cash checks into the fraternity’s
payroll account; and Hammock rejected Davis’s explanation.
See Affiliated Mfrs., Inc. v. Alum. Co. of Am., 56 F.3d 521, 527–
28 (3d Cir.1995). It is also clear that the government intended
to introduce Davis’s settlement offer in order to prove Davis’s
guilt, or in the words of Rule 408(a), his “liability.”[30]
In Davis, the court found that the defendant was engaged in civil settlement
negotiations and did not have any awareness of a potential criminal proceeding. In
contrast, the State correctly contends that in this case there is no statement that references
a civil negotiation or even a concern for any form of civil remedy. To the contrary, Ms.
Brown’s texts make it clear that she would sell her personal property and assets to do
whatever she needed to do in order to avoid criminal charges.
Further, we are not inclined to follow the reasoning applied by the court in
Davis. When we examine the facts in that case, it is apparent that the defendant was, as
here, not conversing with a person who had authority to enter into compromise/settlement
negotiations, an implicit requirement of Rule 408. Thus, while the defendant in Davis may
30
Davis, 596 F.3d at 858-59 (emphasis added).
20
have made an offer to compromise, as evidenced by the new treasurer’s comments, the
offer was not made to a person with any authority to settle the claim.
Additionally, the claim in Davis “was disputed as to validity or amount”
under Federal Rule of Evidence 408(a). The court found that Davis did not confess to
taking the fraternity’s money; he said that he had deposited the cash checks into the
fraternity’s payroll account; and Hammock rejected Davis’s explanation. Here, Ms. Brown
admitted her wrongdoings in her text messages and offered to pay back the full amount she
owed:
[Ms. Brown]: lol ease do everything you can to help me I
know what I did was wrong and I wish I could take it back I am
willing to pay every penny back to them I will do anything I
just don’t want to ruin [my daughter’s] life over something that
I did I think I can tell you the amount once I look at it but I
would really like to come in and talk. I know everyone hates
me at this point that’s why I would just like to say I quit so [my
daughter] Don’t find out she’s just a child and do t need to be
hurt. I know I am the one that hurt her I would work anywhere
for free just to get then their money back I was struggling
between bills. Famous for [my daughter] trying to keep her
happy. I know that is no excuse for what I did. Please don’t
hate me. Please do everything you can to help me I really
confide in you. I am telling everyone that I quit for personal
reasons right now I just don’t want to go to jail but that not my
choice it’s up to rodd[31]
Because a dispute as to the amount and validity of the claim is a foundational
requirement for Rule 408’s application, payment of the full amount demanded or
31
(emphasis by the State).
21
acknowledgement of the debt has been held not to constitute a compromise offer and is not
protected under Rule 408. In Carmichael v. Government of the Virgin Islands,32 a court
determined that when a defendant was initially confronted by her employer regarding some
missing funds and the defendant readily admitted to taking the money to pay her creditors
and agreed to repay the full amount demanded, her conduct had not come within Rule 408
due to lack of valuable consideration. Specifically, the court found:
[The defendant’s] attempt to bring her restitution payment
within the rule must also fail for lack of consideration because,
having taken CAC’s funds for her own use, any agreement to
repay those funds, which she already had a duty to do, cannot
constitute valuable consideration under Rule 408. Therefore,
the trial court did not abuse its discretion in admitting evidence
of those payments.33
This case is also analogous to Peed,34 where a secretly-recorded telephone
conversation between a defendant and an owner of a valuable doll collection was held
admissible at trial despite the defendant’s contention that the statement, in which the
defendant offered to return the dolls in return for dropping the criminal charges, constituted
an offer to compromise a civil claim. During the telephone conversation, the defendant
stated, “You’re the one that pressed the charges, will you drop the charges? . . . If you want
32
No. CRIM.A.2002/164, 2004 WL 3222756 (D.Vi. Nov. 29, 2004).
33
Id. at *8.
34
714 F.2d 7.
22
the dolls back and but [sic] I want your word that everything will be dropped.”35
The Fourth Circuit, refusing to characterize the defendant’s statement as an
offer to compromise a civil claim, stated:
There was no civil suit pending at the time this
conversation took place. [The defendant’s] jargon (“drop the
charges”) implies concern over criminal prosecution. These
were not negotiations aimed at settling a civil claim,
negotiations that the policy behind Rule 408 seeks to
encourage. Nor were [the defendant’s] statements followed up
by any attempt on [the defendant’s] part to obtain money or
resources for achieving a settlement with [the complainant].[36]
Thus, the court determined that the defendant’s statements were an attempt to avoid
criminal prosecution under Rule 408(b), and, accordingly, the evidence was held
admissible.37
While Ms. Brown did eventually follow up with an attempt to obtain money
or resources for achieving an eventual civil settlement with Hartley Oil, the fact remains
that, like Peed, the tenor of Ms. Brown’s text messages with the company’s accountant
35
Id. at 9.
36
Id.
37
Id.
23
evidences that these early discussions were not part of a civil settlement negotiation, but
rather simply conveyed her concerns about criminal prosecution.38
And, as we stated above, Rule 408 does not apply to settlement offers made
before the plaintiff has asserted a claim or has threatened to assert a claim against the
defendant.39 Here, the first evidence in the record allegedly demonstrating the existence
of, or a threat by, Hartley Oil to bring a civil claim, is a November 5, 2015 email from John
Alderman, Ms. Brown’s counsel, to Ancil Ramey, Hartley Oil’s counsel, wherein he
conveys that Ms. Brown was planning to pay back the debt owed. However, even assuming
that civil settlement negotiations had begun at some point during the course of these text
conversations, looking at the totality of the circumstances, when we examine the nature of
the comments made by Ms. Brown and the employee with whom her text messages were
38
This case is also factually analogous to a Tennessee appellate court case, State v.
Ward, No. 2008-02389-CCA-R3-CD, 2010 WL 3516206 (Tenn. Crim. App. Sept. 8,
2010). In Ward, a defendant was convicted of stealing aluminum pipes from a nursery and
the trial court denied his motion to exclude a statement he made to the manager of the
nursery under Rule 408. Following the theft, the defendant asked the manager “Can I pay
you for these pipes that’s been cut up and forget about it?” The appellate court held that
the statement was admissible under the exception to Rule 408 for proving an effort to
obstruct a criminal investigation or prosecution. Id. at *8. While we do not go so far as to
find that Ms. Brown’s offer was an effort to obstruct a criminal investigation, like Peed,
we conclude that her statements do not “rise to the dignity of an offer to compromise a civil
claim for purposes of [Rule] 408.” Peed, 714 F.2d at 9.
39
“Courts generally recognize a preexisting dispute when an offer is made after
some legal action had been taken or threatened, i.e., a threat to bring suit on a claim,
delivery of a claim to an attorney for legal action, or the actual filing of a suit.” 1 Palmer,
et al., Handbook on Evidence § 408.03[1] at 483-84.
24
exchanged, it is evident that these text messages were not aimed at settling a civil claim,
the negotiations that the policy behind Rule 408 seeks to encourage. Accordingly, we find
that the circuit court committed a clear error of law in prohibiting their admission at trial.
As this Court has made clear:
While testimony offered to show an unaccepted offer of
compromise is incompetent and inadmissible, where it appears
that such statements were made without any attempt to effect
any compromise between the parties, such testimony is
admissible under the well-established rule that the declaration
of parties to the record against interest may be shown in
evidence.[40]
Although prohibition is ordinarily inappropriate in matters involving a trial court’s pretrial
ruling on the admissibility of evidence, when the State has no other adequate means to
obtain the desired relief and the issue is not one that would be correctable on appeal, this
Court has entertained a petition for a writ of prohibition.41 Because the circuit court’s
ruling would effectively prohibit all of the evidence surrounding these statements,
including testimony from the accountant regarding her discussions with Ms. Brown, it
would impede the State’s ability to secure a valid criminal conviction in this case.
Accordingly, we grant the State’s request for extraordinary relief.
40
Syl. Pt. 2, Averill v. Hart & O’Farrell, 101 W.Va. 411, 132 S.E. 870 (1926).
41
See State ex rel. Plants v. Webster, 232 W. Va. at 708, 753 S.E.2d at 761.
25
IV. CONCLUSION
For these reasons, we grant the requested writ and prohibit the circuit court
from enforcing its August 3, 2017 order denying admission of these text messages.
Writ granted.
26