Saturday, October 4, 2014

Cross-Examination and Tax Returns

           The decision Young & Rondinello v. Lacy highlights the law regarding cross-examination of a plaintiff's tax return information in a personal injury trial (CA 13-01918, NYLJ 1202672225674, at 1, App. Div., 4th, decided September 26, 2014).

            In Young, the plaintiffs sued the defendant for injuries sustained in an automobile collision.  At trial, the defendant sought to cross-examine one of the plaintiffs regarding her tax return information (hoping to elicit an admission that she committed tax fraud in the past, which could cast doubt on her overall credibility).  The judge disallowed such questioning by defendant, holding that it was a collateral issue (which is an issue taken upon a matter aside from the merits of the case), and ultimately a jury awarded damages of $329,517 to the plaintiffs.  The defendant appealed, arguing for a new trial as, among other things, she should have been allowed to cross-examine the plaintiff regarding her tax return information.

            The Appellate Division, Fourth Department agreed with the defendant, and reversed the trial court's decision, ordering a new trial and allowing the defendant to question the plaintiff regarding the tax return information.  The Appellate Division held that, although questions regarding the plaintiff's tax return information is a collateral issue, the defendant nevertheless had the right to ask the plaintiff about it (though could not attempt to refute the plaintiff's answers by way of extrinsic evidence), stating as follows: "Although it is true, as plaintiff points out, that, because of the collateral evidence rule, defendant's attorney would have been bound by plaintiff's answers concerning her federal tax returns without 'refuting [those] answers by calling other witnesses or by producing extrinsic evidence'...we nevertheless conclude that defendant's attorney should have been allowed to ask the questions (see McNeill v. LaSalle Partners, 52 AD3d 407, 410)."

Salvatore R. Marino, Esq.

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