First Premier Bank v. Kolcraft Enterprises, Inc.

[¶ 1.] Litigants are ordinarily prohibited from disclosing to a jury a prior settlement “to prove liability for or invalidity of the claim or its amount.” This prohibition, embodied in our rules of evidence, avoids prejudice to all parties and promotes settlements. Here, defense counsel broached the fact of an earlier settlement made on plaintiffs behalf. Although the trial court had advised counsel not to offer evidence about this settlement until he ruled on the pending motion in limine, the court took the position that since remarks by attorneys are not evidence, neither side would be precluded from disclosing in their opening statements matters subject to pending motions. Ultimately, the court granted plaintiffs motion in limine, ruling that the prejudicial impact of the settlement evidence outweighed its probative value. Yet the court nonetheless found that any prejudice created by the disclosure of the settlement in defense counsel’s opening statement did not warrant a new trial. Because, in most instances, a prior settlement should not be disclosed to the jury by any means, the court abused its discretion in allowing counsel to reveal it in remarks to the jury. This error, along with error in the jury instructions, impaired the plaintiffs right to a fair trial. We affirm in part, reverse in part, and remand for a new trial.

Background

[¶ 2.] On January 12, 1992, Daniel Boone, age ten months, was severely burned while he was sleeping in a playpen in the children’s bedroom at his parents’ apartment. Defendant Kolcraft Enterprises manufactured the pads for its “Pla-yard” playpens using two types of polyurethane foam. For customers in California, polyurethane treated with a fire retardant was used, as required by law. For all other customers, non-treated foam was used. After this incident, Kolcraft began using treated foam in all the pads it manufactured.

[¶ 3.] Peggy Boone first sued her landlord for her child’s injuries. That matter settled. Plaintiff, First Premier Bank, *436 was later appointed the child’s guardian ad litem to pursue further legal action on the child’s behalf. Its complaint alleged that the playpen was (1) defective and unreasonably dangerous in its design, or (2) defective and unreasonably dangerous because of a failure to warn. Kolcraft moved for summary judgment before trial and a directed verdict at the close of the evidence, arguing that as a matter of law plaintiff could not prove that Kolcraft’s Playard proximately caused Daniel’s injuries. The trial court denied both motions.

[¶ 4.] Before trial, both sides sought to exclude certain evidence by motions in limine. The judge declined to rule on the motions until the parties were ready to offer evidence during trial. In opening statements, with the court’s indulgence, both sides mentioned topics subject to these motions. In other rulings, the court allowed testimony about the smoking habits of Daniel’s parents and their non-functioning smoke detector, and permitted the defense to introduce the mother’s earlier statement that a blanket was the origin of the fire. The court, however, did not allow plaintiff to introduce evidence that Kol-craft began using fire retardant foam in all its playpen pads after the incident here.

[¶ 5.] After a three-week trial, the jury found against plaintiff. The trial court denied plaintiffs motion for a new trial. On appeal, plaintiff advances manifold assignments of error with multiple subparts. Because not all these issues merit discussion, we address the following: (1) Whether plaintiff is entitled to a new trial because defense counsel disclosed to the jury in his opening statement that the injured child’s mother had settled a suit for the same injuries against the family’s landlord several years earlier. (2) Whether the trial court abused its discretion in allowing testimony and argument that careless cigarette smoking could not be ruled out as a source of ignition for the fire. (3) Whether the court erred in instructing the jury that it could infer that missing evidence would not have been favorable to plaintiff. (4) Whether the court erred in not giving definitions of “defective condition” in the disjunctive. (5) Whether the trial court erred when it refused to give the jury a limiting instruction on the use of prior inconsistent statements, thus allowing Kol-craft to use the statement as substantive evidence. (6) Whether the trial court erred in excluding evidence of Kolcraft’s subsequent remedial measures on the ground that this evidence would “unduly delay” the trial. (7) Whether the trial court erred in allowing Kolcraft to raise the issue of a nonfunctioning smoke detector without proper foundation and to argue what was, in effect, a contributory negligence defense. On notice of review, Kol-craft asserts that the trial court erred when it denied its motion for a directed verdict on the question whether Kolcraft’s Playard was the proximate cause of Daniel’s injuries.

I.

Disclosure of Prior Settlement

[¶ 6.] Plaintiff seeks a new trial because Kolcraft violated an order in li-mine excluding evidence of a prior settlement. During Kolcraft’s opening statement, defense counsel advised the jury that plaintiff had settled with the Boone family’s former landlord several years earlier. Our standard of review is set forth in Schuldies v. Millar, 1996 SD 120, ¶ 8, 555 N.W.2d 90, 95 (citation omitted):

Whether a new trial should be granted is left to the sound judicial discretion of the trial court, and this Court will not disturb the trial court’s decision absent a clear showing of abuse of discretion.... We determine that an abuse of discretion occurred only if no judicial mind, in *437 view of the law and the circumstances of the particular case, could reasonably have reached such a conclusion.

The abuse of discretion standard also governs a denial of a motion for mistrial based on a violation of an order in limine. Joseph v. Kerkvliet, 2002 SD 39, ¶ 7 n. 1, 642 N.W.2d 533, 535 n. 1. To justify a new trial for a violation of such an order, the order must have been specific and the violation clear. Harter v. Plains Ins. Co., Inc., 1998 SD 59, ¶ 31, 579 N.W.2d 625, 633. In addition, the violation must have been prejudicial. Id. ¶ 32, 579 N.W.2d 625.

[¶ 7.] Motions in limine are ordinarily heard in advance of trial; they seek a court order requiring parties, attorneys, and witnesses not to disclose “certain facts unless and until permission of the court is first obtained outside the presence and hearing of the jury.” Kjerstad v. Ravellette Publications, Inc., 517 N.W.2d 419, 426 (S.D.1994) (quoting Lapasinskas v. Quick, 17 Mich.App. 733, 170 N.W.2d 318, 319 (1969). Evidentiary rulings made by a trial court during motions in limine are preliminary and may change depending on what actually happens in trial. Luce v. United States, 469 U.S. 38, 41, 105 S.Ct. 460, 463, 83 L.Ed.2d 443 (1984). The purpose of the motion “is to prevent prejudicial evidence from reaching the ears of the jury.” Id. As we noted in Kjerstad, when prejudicial matters are brought before the jury, objections or instructions can never entirely remove the harmful effect. Depending on the nature of the motion, a court may delay ruling because of a lack of sufficient facts on which to base a decision or because it is unable to predict the effect of its ruling on the trial. However, if the court reserves its ruling, it must then decide how it is going to handle possible mention of the subject matter during jury selection and opening statements. Once the subject is broached, “the harm is done.” Kjerstad, 517 N.W.2d at 426 quoting Lapasinskas, 170 N.W.2d at 319).

[¶ 8.] Here, before trial, both parties submitted numerous motions in limine. During a pretrial motions hearing, the judge set forth his policy concerning rulings on the pending forty-five motions:

I want to tell you about my rulings on these motions in limine, and that is that there aren’t going to be any rulings.... [I]n order to rule on them I think [I] have got to hear evidence, so I’m not going to rule on them until the time comes. And so before you would present that evidence, you’re going to approach me and we’ll have a hearing outside of the presence of the jury with the witness on the stand and we’ll take whatever evidence we need.... 1

*438 Kolcraft’s attorney attempted to clarify the instruction:

[C]orrect me if my understanding is not accurate — that if any of these issues covered by the motions in limine before we make any comments in terms of a question or statement or solicit any type of testimony from a witness, counsel is required and has the obligation, whichever side, to first come up”

Citing SDCL 15-14-1, the judge responded, “With the exception of the opening statement, and the opening statement is what you intend to prove.” 2 There, the confusion began.

[¶ 9.] After vigorous disagreement by Kolcraft’s counsel, the judge gave the parties his ruling:

[I]n this kind of case with all of these motions in limine, if I have to rule on the opening statement, that is just intolerable. I’m just not going to blue pencil any opening statement. You lawyers know probably in your heart of hearts what is going to come in and what isn’t. All right. And if you get yourself backed in a corner where you admit stuff that is later going to be a mistrial, that’s too bad. So be it. I’m not afraid to grant a mistrial. I want you to understand that. And so as far as I’m concerned, anything you want to say in the opening statement is fine.

(Emphasis added.) Kolcraft’s counsel pressed the issue:

But again on a lot of these motions in limine, virtually all of them, I think to permit any comment about some of these evidentiary matters that are irrelevant and would be ... extremely prejudicial to even comment about, defeats the purposes of the motions in limine. And I would again object to any references to any of the areas covered by the motions in limine in opening statement.

[¶ 10.] Plaintiffs counsel then entered the debate, “My reading of [SDCL 15-14-1] says that the judge — it basically says you really shouldn’t make reference to particular names or exhibits unless the judge lets you.” He then attempted to clarify the ruling:

[J]ust so I’m clear, the defendants have really filed a motion in limine on about everything. Some of them — well, we don’t think any of them have any merit, to be honest with you, but if I was — I want to make sure that I understand. I can go through in opening statement, I can describe the facts? That’s the function of opening statement, as I understand it, so that the jury can anticipate — you know — the flow of evidence, because the evidence might come in in an irregular fashion. And then when we get on to putting on evidence, before any particular witness starts discussing any of the matters that are in the motions in limine, we’re to come and approach the bench, tell the judge that we anticipate that this witness is going to start talking about.

Kolcraft’s counsel again voiced his opposition:

[T]he whole purpose of our motion in limine is not just to prevent the testimony, because you can always object before the witness gives the answer. The whole purpose and fundamental concept *439 behind a motion in limine is to prevent a comment, the question, or the statement by counsel, because in a lot of issues just talking about it without evidence still plants that in the minds of the jury. And that’s the reason for the motions in limine .... [A]nd to permit comment on motions in limine that are pending is prejudicial and improper, inconsistent with the rule.

[¶ 11.] The judge responded, “I thought [plaintiffs counsel] stated after opening statements are done and before you call any witness that has a motion in limine, we’re going to have a hearing outside of the presence of the jury.” To which plaintiffs counsel replied:

That is my understanding. But, judge, as far as opening statement goes — I mean, I guess, in opening statement— you know — I’m trying to recall the specific motions, some that they have filed — but opening statement is not evidence. The judge instructs the jury that the statements of counsel are not evidence. We all know that if we make promises in opening statement that are not fulfilled in the evidence, that that will turn around and bite us at closing— at the time of closing argument. But here is the concern that I have: as I said, the defendants have filed a motion in limine on about everything. If I was to strictly stay away from everything they have talked about, they will have effectively eviscerated my opening statement. ... And I don’t think that is what opening statement is about. It’s not evidence. We can come here and we ought to be able to talk.... And so I want to — I think the correct approach is let the parties make their opening statements, stay within the boundaries of the statute as far as references to names and exhibits, then when it comes to evidence, before any actual evidence is put on, we approach the bench, we say that this is a topic that is arguably covered by a motion and address it at that point in time. I don’t see any other way to have the procedure occur other than just both parties waving opening statement, which I think would be a great disadvantage and disservice to the jury. And I think that’s the law.

Finally, Kolcraft’s attorney restated his opposition, summed up the judge’s order, and tried to explain the problem as he saw it:

To permit — again, the whole fundamental concept, to permit counsel — and that’s what he wants to do and he’s making it very clear by this argument— is he wants to be able to comment on things to the jury that may not be admissible evidence. And again, the motions in limine, just like questions of counsel, are not evidence. It’s the testimony that is evidence. He wants to be able to introduce things for the jury to hear about that may not be admissible in evidence, and unless the court is willing to rule on the motions in limine prior to opening statement, the only way that it can be done with any record protection and any satisfactory result for either side, is for the attorneys in opening statements to follow the rule, and also with relationship to all of the motions in limine, not comment on those items that are covered by the motions in limine. The alternative is, [plaintiffs counsel] is going to comment on things that are very — for the reasons we’ll urge on our motions in limine — are significant issues that need to be addressed, that we do not believe it’s proper evidence, and to get the jury to hear that, where the evidence has not been ruled on, is improper. It puts me in a horrible position of: do I stay quiet, or do I have to respond in turn just so that the jury hears both sides of these issues relating *440 to evidence that we do not believe will be admissible? And again, it defeats the whole purposes of motions in limine to permit counsel to comment on it.

[¶ 12.] After plaintiffs opening statement, Kolcraft moved for a mistrial because plaintiffs counsel disclosed matters covered in pending motions in limine. 3 In denying Kolcraft’s motion, the trial court reasoned:

What the attorneys say is not evidence. I already instructed.... I will give wide latitude to both sides on final argument, that you know they stated they were going to show this on the opening statements. They didn’t show it, so you can take that into consideration, and I will give any special instruction in that respect that anybody requests that fits within the law....

At the close of Kolcraft’s opening statement, counsel stated:

You’ll hear testimony that the fire occurred on January 12 of '92 and in 1995, Mrs. Boone, on behalf of her child, sued the landlord for those injuries and damages and settled that case with the landlord and two years later after doing that in late 1997, nearly six years after this fire occurred.... 4

[¶ 13.] Plaintiff now contends that the judge’s order “specifically directed counsel not to mention the settlement until a definitive ruling.” We need not tarry for long on this point. True, the court prohibited counsel from offering evidence on matters not yet ruled on. But the court made an exception for opening statements, leaving the field open for the attorneys to comment on whatever they chose. At best, the court’s ruling was equivocal; at worst, it was an open invitation to disclose “anything” to the jury. Therefore, in that the order was inexplicit, we cannot say that the prohibition was clear. In fact, it was Kolcraft’s counsel who argued most vigorously for a prohibition on commenting on matters subject to pending in limine motions. As one of Kolcraft’s attorneys explained at oral argument, they “pleaded” with the judge to make a ruling on the motions. Regardless of the soundness of its reasoning, the court simply did not prohibit Kolcraft’s counsel from mentioning the prior settlement during his opening statement. Nonetheless, having concluded that Kolcraft did not violate an in limine order, we believe it is necessary to examine the court’s decision to defer ruling on all motions in limine, effectively allowing disclosure of the settlement. Before we can reach this more consequential issue, however, we must first address whether plaintiff sufficiently preserved a record for appeal.

[¶ 14.] Kolcraft’s attorney contends that plaintiff should be estopped from proceeding on this issue because plaintiff invited the error. It was plaintiffs counsel who argued that he should be allowed to bring up matters in opening statement that remained to be decided. Yet, plaintiffs counsel, like defense counsel, faced a fait accompli with the court’s ruling that it would not decide in limine motions before the actual time for introduction of evidence. And it was the trial *441 judge who first announced that the attorneys could divulge matters in opening statements that were awaiting the court’s later ruling. Plaintiffs counsel feared making an opening statement “eviscerated” of content if he could not mention any subject covered by all the pending in li-mine motions. We think that with the trial court’s policy, counsel faced a dilemma for which he should not now be punished in having chosen the least of two untenable solutions. The issue was not waived by estoppel.

[¶ 15.] Whether plaintiff properly objected is a more troublesome question. Plaintiff did not expressly frame any “objection.” The record reflects that when Kolcraft’s attorney disclosed the prior settlement to the jury, plaintiffs counsel approached the bench and asked to make a record. Outside the presence of the jury, plaintiffs counsel then protested that the court’s in limine order had been violated and asked that Kolcraft be sanctioned. We have already resolved that there was no violation. Plaintiff did not ask for a mistrial. In denying the request for a sanction, the court again reiterated its position that what counsel broached to the jury was not evidence and would not be precluded.

[¶ 16.] Alert practitioners must remain conscious to the danger of failing to make an adequate record at trial when a motion in limine has been earlier granted or denied. Cf. Joseph v. Kerkvliet, 2002 SD 39, ¶7, 642 N.W.2d 533, 535 (advising that when a motion in limine has been sustained an offer of proof should be made at trial to make sure that appeal rights are preserved). We have adhered consistently to the precept that, in the absence of an objection or an offer of proof during trial to the admission or refusal to admit challenged evidence, an appeal from a ruling on a motion in limine is waived. Id. The rationale for requiring either an objection or an offer of proof is to permit trial judges an opportunity to reconsider in limine rulings with the benefit of having observed unfolding trial events. See Luce, 469 U.S. at 41-42, 105 5.Ct. at 463.

[¶ 17.] A more anomalous problem arises here, however, in a situation where the court neither granted nor denied the motions, but nonetheless permitted counsel unrestricted disclosure of injurious material. 5 We have warned often enough that arguments not raised in circuit court cannot be asserted for the first time on appeal. But here the issue was thoroughly argued below, and even if a proper objection was not made, the court made a deliberate decision to defer its rulings and allow these comments.

[¶ 18.] We think this is one of those rare instances for invoking the plain error doctrine in a civil appeal. Cf Wuest ex rel. Carver v. McKennan Hosp., 2000 SD 151, ¶¶ 35-36, 619 N.W.2d 682, 691. What value does an in limine motion have if, while postponing a decision, the court permits highly prejudicial information to be disclosed to the jury? Although plain error is more often invoked in criminal cases, our rules also allow for its use in civil cases. SDCL 19-9-6 (Rule 103(d)). 6 *442 Granted, this Court has written that the plain error rule applies only to criminal procedure and is inapplicable in civil cases. Mayrose v. Fendrich, 347 N.W.2d 585, 586 (S.D.1984). For authority, however, the Mayrose Court only referred to the criminal counterpart to the civil plain error rule and omitted citing SDCL 19-9-6 (Rule 103(d)). As South Dakota’s Professor Larson argues, “this .position is in conflict with the Court’s own rule, and a refusal to correct even blatant error in a civil case is contrary to the overall sprit of the rules, as expressed in SDCL 19-9-2 (Rule 102), that ‘truth may be ascertained and proceedings justly determined.’ ” John W. Larson, South Dakota Evidence § 103.10[2] (Mi-chie 1991). Mayrose is overruled on this point.

[¶ 19.] Under the plain error rule, those claiming error bear the burden of showing that the error was prejudicial. State v. Nelson, 1998 SD 124, ¶ 8, 587 N.W.2d 439, 443 (citation omitted). Nelson was a criminal case, but the process for examining plain error is the same. “Plain error” requires (1) error, (2) that is plain, (3) affecting substantial rights; and only then may we exercise our discretion to notice the error if (4) it “seriously affect[s] the fairness, integrity, or public reputation of judicial proceedings.” Id. We invoke the plain error rule in criminal cases only in “exceptional circumstances.” Id. Because life and liberty are not at stake in civil tort actions, we will invoke the rule even more cautiously in such cases. Nonetheless, “while the doctrine may be rarely applied even where recognized, to say ‘never’ may well invite ridicule of the entire judicial system due to a ludicrous result in a given case.” Larson, South Dakota Evidence § 103.10[2], We think such a circumstance exists here. A process that allows unrestricted disclosure to a jury of prohibited matters seriously affects the fairness, integrity, and public reputation of judicial proceedings.

[¶ 20.] We turn to the question whether allowing mention of the previous settlement warrants a new trial. In Degen v. Bayman, 86 S.D. 598, 607, 200 N.W.2d 134, 139 (1972), this Court wrote that al though it could “visualize no circumstances where the amount involved in a release or covenant need be disclosed to the jury,” whether the simple disclosure of a settlement should be permitted would be left to the discretion of the court. Degen approved disclosure of a settlement in order to avert collusion between the parties. Not that Degen was wrongly decided in 1972, but it now must be considered in light of the later adoption of the Federal Rules of Evidence in 1978. Today, admission of compromise or settlement evidence is governed by the provisions of SDCL 19-12-10 (Rule 408), which states in part:

Evidence of ... (2) accepting ... a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount.... This section also does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness, [or] negativing a contention of undue delay....

[¶ 21.] This rule is designed to encourage out-of-court resolution of disputes. It forbids admission of a settlement or settlement negotiations “to prove liability for or invalidity of the claim or its amount.” SDCL 19-12-10 (Rule 408); Kjerstad, 517 N.W.2d at 427.

*443 Withholding information or evidence of such a settlement ... from the jury ...

(1) focuses the jury on the crucial questions of liability and full compensation,

(2) prevents the jury from being confused or misled by its knowledge of the settlement ..., and (3) promotes fair verdicts that are consistent with the evidence presented.

Holger v. Irish, 316 Or. 402, 851 P.2d 1122, 1134 (1993) (Unis, J. concurring). In sum, a defendant cannot establish the invalidity of a plaintiffs claim by proof of the plaintiffs settlement with a third person, nor can a plaintiff show a defendant’s liability by proof of a defendant’s settlement with a third person. See Cleere v. United Parcel Service, 669 P.2d 785, 790 (1983) (citations omitted).

[¶ 22.] Compromises may be admissible for “another purpose,” however, such as proving the bias or prejudice of a witness, or negativing a contention of undue delay. SDCL 19-12-10 (Rule 408); see Com Exchange Bank v. Tri-State Livestock Auction Co., Inc. 368 N.W.2d 596 (S.D.1985) (if defendant stands to gain financially from plaintiffs verdict by increasing liability of codefendant, jury may be informed of settlement agreement); Degen, 200 N.W.2d at 139 (settlement cannot be used for collusive advantage); Roso v. Henning, 1997 SD 82, ¶ 13, 566 N.W.2d 136 n3 (S.D.1997) (settlement discussions admitted to show defendant had made an appearance and had not defaulted).

[¶ 23.] As Justice Unis of the Oregon Supreme Court pointed out in interpreting the same rule, “when evidence of a compromise or settlement is offered for ‘another purpose,’ it must ... satisfy all of the other rules of evidence.” Holger, 851 P.2d at 1132 (Unis, J. concurring). This is because SDCL 19-12-10 (Rule 408) states that it “does not require exclusion,” implying that other rules of evidence may. To be admissible, evidence of a settlement offered for “another purpose” must be relevant under SDCL 19-12-1 and 19-12-2 (Rules 401 and 402). Id. And, considering the reason for which it is offered, if the probative value of this evidence is substantially outweighed by the danger of unfair prejudice, or the other factors listed in SDCL 19-12-3 (Rule 403), the trial court may, in its discretion, exclude the evidence. Id.

[¶24.] In explaining its reasons for wanting the prior settlement in evidence, Koleraft’s attorney argued to the trial court that the Degen decision makes such settlements admissible and that the pleading in the earlier complaint against the landlord was an admission against interest and a prior inconsistent statement. These reasons are insupportable. First, as we pointed out, Degen was a pre-federal rules case, and it dealt with the collusive use of a settlement to mislead a jury. Kolcraft does not contend that any collusion was afoot here. Second, whatever merit the remaining contentions have, they disregard the overarching purpose of SDCL 19-12-10 (Rule 408), to make inadmissible such settlements to disprove “liability for or invalidity of the claim or its amount.” That impermissible purpose was precisely how Kolcraft wanted to use the settlement: to show that because there had been a previous claim against another tortfeasor (the landlord), the settlement proved the invalidity of the plaintiffs claim against Kolcraft. Rule 408 plainly forbids this. SDCL 19-12-10 (Rule 408). See also Pounds v. Holy Rosary Medical Center, 127 Or.App. 221, 872 P.2d 437, 439 n. 3 (1994)(admission of pleadings in settled case would swallow the rule excluding evidence of settlement).

[¶ 25.] Kolcraft believes that if it was error to allow disclosure of the settlement, *444 the error was not prejudicial: “the jury never got to the issue of damages because it concluded the product was not defective.” The verdict form, however, only indicates that the plaintiff “did not prove [the] claim[s].” The jury could have considered the settlement as proof that the settling tortfeasor was the culpable party and that Kolcraft’s allegedly defective product was not the proximate cause of the injury. Holger, 851 P.2d at 1134 (new trial ordered when judge informed jury of third party settlement and later told jury to disregard it). Thus, even if the jury never reached the issue of damages, improper disclosure of a prior settlement was prejudicial to proving liability. See Foxworth v. Emanuel Hospital & Health Center, 131 Or.App. 110, 883 P.2d 917, 917-18 (1994).

[¶ 26.] The trial judge’s distinction between disclosure in opening statements and disclosure by formal evidentiary admission ignored the essential purpose of motions in limine. These motions seek to preclude any disclosure, not simply eviden-tiary admission. As we said in Kjerstad, a motion in limine “asks the court to instruct the [party], its counsel and witnesses not to mention certain facts unless and until permission of the court is first obtained outside the presence and hearing of the jury.” Kjerstad, 517 N.W.2d at 426. In Kjerstad, the offending information was conveyed by counsel’s questions. Id. Trial courts have the duty in jury cases to conduct proceedings, “to the extent practicable, so as to prevent inadmissible evidence from being suggested to the jury by any means, such as making statements or offers of proof or asking questions in the hearing of the jury.” Id. (quoting SDCL 19-9-5 (Rule 103(c))) (emphasis added).

See also Brandt v. Wand Partners, 242 F.3d 6, 20 (1stCir.2001) (applying Rule 408 to disclosure by argument of counsel but finding in that instance that rule had not been violated).

[¶ 27.] Under the facts of this case, the circuit court should have precluded any mention of the prior settlement. Its failure to do so was an abuse of discretion. The jury’s duty was to decide whether Kolcraft was liable for Daniel’s injuries and, if so, to find damages. 7 Informing the jury of an earlier settlement seriously prejudiced plaintiffs right to a fair trial. A new trial may be granted for “[irregularity in the proceedings of the court, jury, or adverse party or any order of the court or abuse of discretion by which either party was prevented from having a fair trial.SDCL 15-6-59(a)(l). Plaintiff is entitled to a new trial.

II.

Definitions of Defective Condition

[¶28.] Plaintiff contends that the trial court’s instructions defining defective condition were conflicting and confusing, and thus, they created prejudicial error. The trial court’s Instruction 30 defined defective condition:

A product is in a defective condition and unreasonably dangerous to the user if it is not reasonably fit for the ordinary and reasonably foreseeable purposes for which it was sold or manufactured and expected to be used.

A product is in a defective condition unreasonably dangerous to the user if it could have been designed to prevent a foreseeable harm without significantly *445 hindering its function or increasing its price.

A product can be dangerous without being unreasonably dangerous. Even if a product is defective in some manner, you must find that the defect renders the product “unreasonably” dangerous. A product is not in a defective or unreasonably dangerous condition merely because it is possible to be injured while using it.

South Dakota Pattern Jury Instructions 150-02-1 and 150-02-2 set forth the defective condition definition and risk/utility test. 8

[¶ 29.] We agree that the instruction, as given, without further guidance, was confusing. It should have been framed in the disjunctive. It describes two different definitions of a defective condition, but recites them without informing the jury that the plaintiff need only prove one. In fact, the pattern jury instructions from which the court’s instruction was taken lists these definitions separately. The court, on its own, decided to combine the instructions, leaving out the disjunctive. This was error. Accordingly, on the errors in allowing disclosure of the prior settlement and in failing to instruct on defective conditions in the disjunctive, the case is reversed and remanded for a new trial.

[¶ 80.] Although we need not reach all of plaintiff’s remaining assignments of error, we proceed to decide some of them because they will undoubtedly arise in the next trial.

HI.

Cigarette Smoking Evidence

[¶ 81.] Plaintiff argues that the trial court erred in permitting the jury to hear expert testimony about smoking and cigarette disposal in the home as a possible origin of the fire. Peggy Boone smoked a pack and a half of cigarettes a day. Both Peggy and Ken Boone were smoking in the home on the day of the fire. As Kolcraft points out, “Improper disposal of cigarettes was ... a way of life in the Boone household. Photographs showed extensive smoking, overflowing ashtrays, and the improper disposal of cigarettes on windowsills and on floors.” Terry Flakus, the Fire Inspector for Sioux Falls, ruled out cigarettes altogether as an ignition source because he could not find any cigarette butts in the children’s bedroom after the fire, and the burn characteristics were inconsistent with a -cigarette ignition. Thus, plaintiff asserts that no reliable foundation existed from which Kolcraft’s expert, Robert. Wargin, could state that careless cigarette smoking could have been the cause of the fire.

[¶ 32.] Initially, plaintiff believes that Wargin’s analysis was based on the faulty foundation of cigarette smoking. That cigarette smoking could have been the cause of the fire was the result of his analysis, not, the foundation of his analysis. Wargin studied the burn patterns and other evidence and concluded that the point of origin for the fire was not the Playard, but some item within the playpen. Based on this conclusion, he could not rule out cigarette smoking as a cause of the fire. He found that the fire originated inside the playpen. In examining the Pla-yard, he concluded that the playpen pad and fiberboard bottom showed that the fire was from the top down and not from under the playpen. Major fuel material for the fire consisted of pillows, a quilted comfort *446 er, a blanket, and clothing draped over the playpen. He believed that the urethane foam inside the playpen pad was not responsible for the spread of the fire. Less than thirty percent of both the pad and fiberboard bottom were consumed in the ten-minute fire. Finally, he dedu