Contract Liability and Admission of Evidence: Improper Application of Rule of Evidence 403

We were engaged to represent the installer of a fire alarm system on an appeal to the Maine Supreme Judicial Court sitting as the Law Court following a $2,700,000 jury verdict in the trial court. During discovery, a contract was produced that inadvertently omitted the reverse side of one of the pages. That page included limitations on the installer’s liability. The mistake was ultimately uncovered and the page was produced prior to the close of discovery and prior to the completion of the installer’s employees’ depositions. On summary judgment, the trial court found that there was no discovery violation that required the court to strike the subject page, but omitted the page from the summary judgment record on the grounds that it might not be admissible at trial. At trial, the court excluded the page based on the balancing test found in Rule 403, finding that the late disclosure prejudiced the plaintiff camp and that the prejudice outweighed the probative value of the limitation on liability. On appeal, the Law Court found that the court did not abuse its discretion in refusing to strike the page as a discovery violation, but that it erred by excluding the document pursuant to Rule 403. In so holding, the Law Court noted the distinction between the prejudice required to strike evidence as a discovery violation and the prejudice required to exclude evidence pursuant to Rule 403. For a discovery violation, the prejudice looks to the opposing party’s capacity to respond to the evidence. For Rule 403, the prejudice is based on the specific nature of the evidence itself. As such, prejudice caused by unfair surprise during discovery is not, standing alone, grounds for finding prejudice under Rule 403. As a result, the Law Court vacated the $2,700,000 verdict and remanded the case to the trial court. Camp Takajo, Inc. v. SimplexGrinnell, L.P., 2008 ME 153

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