EvidenceProf Blog

Editor: Colin Miller
Univ. of South Carolina School of Law

Tuesday, December 25, 2007

The Anti-Dentite?: 6th Circuit Finds Rebutting Claim of Failure to Mitigate Not a Permitted Use Under Rule 408 in Christmas Case

In 1999, Dr. Samuel David Stockman sold his dental practice of other 40 years to Dr. Louis Leonor and the Oakcrest Dental Center.  Pursuant to a side agreement to the sale, Dr. Leonor hired Dr. Stockman to work as a dentist at Oakcrest with no retirement or termination date set for Dr. Stockman.  In 2001, however, whether because of decreased production, as Dr. Leonor claimed, or age discrimination, as Dr. Stockman claimed, Dr. Leonor fired Dr. Stockman and replaced him with a 33 year-old dentist.

Dr. Stockman thereafter sued Dr. Leonor and Oakcrest, contending that his firing violated the Age Discrimination and Employment Act and the Michigan-Elliott Larsen Civil Rights Act.  As part of his complaint, Dr. Stockman alleged that based upon his age, he was afforded fewer operations, not given a dedicated and competent dental assistant, and given few new patients who required expensive treatments.  Dr. Stockman also alleged that on three occasions, culminating in a Christmas party in 1999, Dr. Leonor asked him whether he realized that he was the oldest dentist at Oakcrest.

After Dr. Stockman brought the lawsuit, an attorney representing Dr. Leonor and Oakcrest sent a letter to Dr. Stockman offering to reinstate him to his prior position in exchange for settlement of the entire action.  Two days later, Dr. Stockman's lawyer responded with a letter "accepting" the reinstatement, but noting that the acceptance did not resolve all of the claims in the case.  Believing that this letter constituted a rejection and counteroffer, the defendants withdrew their offer of reinstatement, and the case proceeded to trial.

At trial in the District Court for the Eastern District of Michigan, the defendants moved to have the letters excluded pursuant to Federal Rule of Evidence 408.  Federal Rule of Evidence 408 states that evidence of compromises, offers to compromise, and related statements are inadmissible to prove liability for, invalidity of, or amount of a claim that was disputed as to liability or amount, or to impeach through a prior inconsistent statement or contradiction.  Rule 408, however, goes on to state that evidence is admissible if offered for purposes not prohibited by 408(a).  The Rule then lists as three illustrative examples:  proving bias, negating a contention of undue delay, and proving an effort to obstruct a criminal investigation or prosecution.

These examples, however, are merely illustrative and not exhaustive.  Accordingly, the court found that the letters were admissible by Dr. Stockman because they were not offered for a precluded purpose but were instead offered to help Dr. Stockman rebut the defendants' claim that he failed to mitigate his damages.  After trial, the court awarded Dr. Stockman $479,491.63.

On appeal, the Sixth Circuit Court of Appeals reversed. See Stockman v. Oakcrest Dental Center, P.C., 480 F.3d 791 (6th Cir. 2007).  The Sixth Circuit noted that some courts, including the 1st, 5th, and 7th Circuits, have found that proving or rebutting a claim that a plaintiff failed to mitigate his damages is a permissible purpose not precluded by Rule 408.  See, e.g., Urico v. Parnell Oil Co., 708 F.2d 852, 854-55 (1st Cir. 1983).  The Sixth Circuit, however, found that these courts ruled incorrectly, and I found no analysis in these cases explaining why Rule 408 did not apply.

Instead, the Sixth Citrcuit agreed with the 2nd Circuit in Pierce v. F.R. Tripler & Co., 955 F.2d 820, 826-27 (2nd Cir. 1992), and found that using evidence of settlement negotiations to prove or rebut a claim that a plaintiff failed to mitigate his damages was using the evidence to prove the amount of a claim that was disputed as to liability or amount.  This reasoning makes sense to me. 

Dr. Stockman was claiming that he was wrongfully fired and thus sought to recover a certain amount of money from Oakcrest and Dr. Leonor.  Oakcrest and Dr. Leonor then claimed that Dr. Stockman should recover less money than he sought because he failed to mitigate his damages by finding alternate employment.  Dr. Stockman then sought to prove that he was entitled to the full extent of his damages because he sought to mitigate through his "acceptance" letter to the defendants.  Thus, I don't see any other way to characterize Dr. Stockman's attempted use of the letters other than to prove the amount of his claim against the defendants.  I thus think that the 6th Circuit's decision was proper and that the majority of courts have ruled improperly on the issue.



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