Sex Crime Convictions Admissible in Civil Fraud Case

Committing a sex crime can prove a propensity to lie, according to one federal appellate court. In an insurance fraud case where credibility was a primary issue, the court concluded Federal Rule of Evidence 609 allowed evidence of an unrelated sexual felony despite Federal Rule of Evidence 403’s safeguards against undue prejudice. ABA Litigation Section leaders recognize the holding opens the door for evidence of other felony convictions, thus requiring more preparation for witnesses who may have to testify on these issues.

Insured’s Sexual Offense Becomes Admissible

In American Modern Home Insurance Company v. Thomas, an insurance company sought a declaratory judgment in the U.S. District Court for the Eastern District of Missouri that its insureds intentionally caused fire damage to their home. At the jury trial, the district court excluded evidence of one of the insured’s felony sex convictions, including the underlying facts.

While the district court recognized “a court must admit evidence of a past felony conviction not involving a dishonest act or false statement subject to Rule 403’s balancing factors” pursuant to Rule 609(a)(1)(A) of the Federal Rules of Evidence, it held the “danger of unfair prejudice, undue delay, and confusing the issues substantially outweighed the probative value” of the convictions. After the jury found for the insureds, the insurer appealed, among other things, the district court’s exclusion of the statutory rape and statutory sodomy convictions.

The U.S. Court of Appeals for the Eighth Circuit reversed, calling evidence of the insured’s credibility paramount as “the parties presented ‘diametrically opposed’ stories,” and remanded the case for further proceedings. According to the appellate court, the danger of unfair prejudice could not overcome the highly probative nature of this credibility evidence.

Sex Crime Convictions Do Not Have a “Category of Their Own”

“Aside from the procedures set forth in Federal Rule of Evidence 412, there is no rule that says a prior conviction for a sex crime should be treated any differently than any other conviction,” offers Adam C. Reeves, Lexington, KY, social media subcommittee chair of the Litigation Section's Appellate Practice Committee. “Granting the argument that a jury cannot handle hearing that a defendant’s previous conviction was for a sex crime, or that there are no curative procedures that could address it,” he continues, “could create a rule treating sex crimes differently than all others.”

Indeed, the insurer suggested the district court include the names, dates, and dispositions of the felonies. The appellate court also suggested the district court could remove the name of the crime committed.

“This is not to say that a specific case might justify the exclusion of a defendant’s prior sex crime conviction, and the trial court’s reasoning shows why the court felt like this was exactly that case,” explains Reeves. “But generally speaking, in the context of Federal Rule of Evidence 609, sex crimes should not be given a category of their own,” he opines.

Possible “Chilling” Effect

Some Section leaders worry that this opinion opens the door to allowing scandalous felony conviction evidence at trial despite the fact that the evidence has no bearing on the issues at hand. “You’re potentially chilling the desire of people to come out and affecting their ability to get the redress they seek,” asserts Alexander C. Wharton, Memphis, TN, cochair of the Section’s Minority Trial Lawyers Committee.

“Credibility is always at stake,” he explains. “They talk about juries being able to handle these issues but how far out there are you willing to let the parties deviate from the main questions that the jury has to answer?” Wharton asks.

Effect on Witness Interest in Testifying

The appellate court’s opinion further highlights the importance of preparing witnesses to testify regarding their felony convictions. “At the beginning of the case, you now have to do a background check on your client because if you have a felony conviction, especially a felony of a sexual nature, there’s a good chance it will come up,” observes Wharton. “This holding opens up Pandora’s box so that if there is any conviction of any sort, even if has nothing to do with the case, the witness will have to get into it.”

Section leaders agree that this holding provides an important lesson for litigators. “As always, I try to inform clients in advance of the potential risks associated with prior convictions of any stripe,” notes Reeves. “This case certainly counsels lawyers to prepare for such evidence and to engage in thorough motion practice to hopefully avoid it long before trial.”