author: LAVORATO, Justice. CADY, Justice

text:
    Shari G. McCLURE, Appellee, v. WALGREEN CO., Appellant, Theresa D. Petersen, Defendant.
    No. 98-1821.
    Supreme Court of Iowa.
    July 6, 2000.
    Rehearing Denied Aug. 10, 2000.

      Kevin M. Reynolds and Richard J. Kirschman of Whitfield <& Eddy, P.L.C., Des Moines, for appellant.
    Michael H. Figenshaw of Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des Moines, and Martin E. Spellman and Mark E. Spellman of Spellman, Spellman, Spell-man, Spellman, Kealhofer & Spellman, Perry, for appellee.

         McGiverin, C J., and Snell and Ternus, JJ., not participating.

   LAVORATO, Justice.

Walgreen Co. appeals from a jury verdict and judgment for punitive damages because of injuries Shari McClure suffered resulting from a prescription misfill error at a Walgreen pharmacy. Shari cross-appeals from the district court’s denial of her motion for new trial, or in the alternative, additur, regarding the amount of punitive damages. Walgreen contends there was not sufficient evidence to submit the issue of punitive damages to the jury. Walgreen also challenges an instruction the district court gave on punitive damages and several evidentiary rulings, one of which requires reversal and remand for new trial on punitive damages only. We affirm on all other issues Walgreen raises. The reversal renders moot Shari’s cross-appeal, and we therefore do not address it.

I. Background Facts and Proceedings.

In 1995, doctors diagnosed Shari McClure with pancreatic cancer. She underwent a surgical procedure in which doctors removed a substantial portion of her stomach, small intestine, and pancreas.

In 1997, Shari’s cancer recurred. She underwent a second surgical procedure. Later, her doctors placed her on a fluo-rouracil chemotherapy and radiation regimen.

On July 27, 1997, Shari was hospitalized because of nausea and dehydration resulting from her chemotherapy and radiation treatments. Her condition quickly improved, and on July 31, 1997, Shari was released from the hospital.

After her release from the hospital, one of Shari’s daughters, Deb McClure, went to the Walgreen Pharmacy on Ingersoll Avenue in Des Moines to pick up three prescriptions for her mother: Diflucan, Kytril, and Pepcid. Diflucan is used to treat yeast infection caused by chemotherapy and radiation treatments. Kytril is an antinausea medication. Pepcid controls the production of stomach acid. Dr. Thomas Buroker, Shari’s oncologist, prescribed Pepcid to protect her stomach from stomach acid and thereby decrease her nausea and increase her appetite.

When Deb brought the prescriptions in, the Walgreen pharmacy staff prepared a pill vial labeled “Pepcid, 20mg tablets ... 1 tablet by mouth twice daily.” Rather than filling the pill vial with Shari’s prescription for Pepcid, however, the Walgreen pharmacy staff erroneously gave Shari sixty 20mg tablets of Paroxetine Hydrochloride. Paxil, the brand name for this drug, is a selective serotonin reuptake inhibitor. The drug is used to treat obsessive-compulsive disorders, panic disorders, and depression. Even when taken in commonly recommended starting dosages of 10 milligrams per day, the drug can cause dizziness, confusion, achalasia (inability to sit still), nausea, and other mental status changes.

Shari took the 20mg tablets of Paxil approximately twice daily (as had been prescribed for the Pepcid) from July 31, 1997, to August 28, 1997. (The remaining pills in the bottle indicated she missed taking the drug twice daily on several occasions.) During this time, Shari exhibited increased irritability, weakness, confusion, and inattention to hygiene. On August 18, 1997, Dr. Buroker, unaware of the medication dispensing error, prescribed Zoloft, an antidepressant, to control Shari’s behavior. On August 22, the doctor suspended use of Zoloft because Shari was exhibiting very low blood pressure.

On August 23, 1997, Shari had gotten up to go to the bathroom, became dizzy, and fell. As a result of the fall, she suffered fractures in her right leg and left foot. Medical testimony attributed the fall to the changes in her mental status and equilibrium brought on by her ingestion of Paxil.

Because of her injuries, Shari was admitted to Wesley Acres Retirement Home on August 26, 1997. One of Shari’s daughters brought Shari’s medications (including the Paxil) to the retirement home. The nurses at the retirement home continued to administer the Paxil pills to Shari until one of the nurses finally discovered the error on August 28, 1997. The retirement home immediately notified Shari’s internist, Dr. John Yost, of the error. Dr. Yost ordered that Shari stop taking the Paxil medication immediately.

The retirement home also notified Shari’s family of the error. Shari’s daughter-in-law, Lynette McClure, notified Walgreen of the error. Walgreen’s response was that an incident report had to be filed. At no time, however, did Walgreen discuss the side effects of Paxil with the family or warn of potential withdrawal problems associated with the abrupt discontinued use of the drug.

On September 9, 1997 — the day Shari was to be released from the retirement home — she fell again because of dizziness. This time she suffered injuries to her head, back, and pelvis. Medical testimony attributed this fall to symptoms of a withdrawal syndrome associated with the abrupt discontinuance of Paxil.

On October 2, 1997, Shari sued Walgreen for compensatory damages and later added as a defendant, Theresa D. Petersen, the pharmacist on duty at the time the error was made. Shari alleged the two defendants were negligent and their negligence caused her fall and injuries. Later, Shari added a count for punitive damages against both defendants.

A jury returned a verdict' for compensatory damages against both defendants in the amount of $100,000. The jury also returned a verdict of $150,000 against Walgreen alone for punitive damages. Walgreen paid the compensatory damage award and has appealed only from the punitive damage award. Shari has cross-appealed.

On appeal, Walgreen contends there was insufficient evidence to submit punitive damages. Walgreen also challenges a punitive-damage instruction submitted to the jury and two evidentiary rulings. One of these evidentiary rulings concerns the admission of certain incident reports. The other concerns licensee disciplinary proceedings in connection with the incident.

In her cross-appeal, Shari contends the district court abused its discretion in denying her motion for new trial or in the alternative, her additur, regarding the amount of punitive damages.

II. Issues.

A. Punitive damages.

1. Sufficiency of the evidence. Walgreen contends here as it did in its motion for directed verdict that the evidence was insufficient to establish a willful and wanton disregard for the rights and safety of another. At best, Walgreen contends, the evidence supports nothing more than a simple mistake. Therefore, Walgreen concludes, the district court erred in submitting the punitive-damages issue to the jury. Not surprisingly, Shari argues there is overwhelming evidence supporting the submission of this issue to the jury.

We review a ruling denying a motion for directed verdict for correction of errors at law. Iowa R.App. P. 4; see James ex rel. James v. Burlington Northern, Inc., 587 N.W.2d 462, 464 (Iowa 1998). When reviewing such rulings, we view the evidence in the same light as the district court to determine whether the evidence generated a jury question on the issue. Heick v. Bacon, 561 N.W.2d 45, 47 (Iowa 1997).

A directed verdict is not appropriate if the party against whom the motion is made has presented substantial evidence on each element of the claim. Id. Under this standard, the district court must submit the issue to the jury if reasonable minds could disagree on it in light of the evidence presented. Id. Even if certain facts are not in dispute, a jury question exists if reasonable minds might draw different inferences from those facts. Iowa R.App. P. 14(0(17).

When ruling on a motion for directed verdict, the district court must view the evidence in the light most favorable to the party against whom the motion is made. Iowa R.App. P. 14(f)(2). A party moving for a directed verdict is considered to have admitted the truth of all evidence offered by the other party as well as every favorable inference that may fairly and reasonably be deduced from it. Heick, 561 N.W.2d at 47.

Iowa Code section 668A.1 (1997) sets the standard for awarding punitive damages:

a. Whether, by a preponderance of clear, convincing, and satisfactory evidence, the conduct of the defendant from which the claim arose constituted willful and wanton disregard for the rights or safety of another.

We have defined “willful and wanton” in the context of this statute to mean that

“[t]he actor has intentionally done an act of unreasonable character in disregard of a known or obvious risk that was so great as to make it highly probable that harm would follow, and which thus is usually accompanied by a conscious indifference to the consequences.”

Fell v. Kewanee Farm Equip. Co., 457 N.W.2d 911, 919 (Iowa 1990) (quoting W. Page Keeton et al., Prosser & Keeton on the Law of Torts § 34, at 213 (5th ed.1984)).

Punitive damages serve “as a form of punishment and to deter others from conduct which is sufficiently egregious to call for the remedy.” Coster v. Crookham, 468 N.W.2d 802, 810 (Iowa 1991). Mere negligent conduct is not sufficient to support a claim for punitive damages. Beeman v. Manville Corp. Asbestos Disease Compensation Fund, 496 N.W.2d 247, 256 (Iowa 1993). Such damages are appropriate only when actual or legal malice is shown. Schultz v. Security Nat’l Bank, 588 N.W.2d 886, 888 (Iowa 1998).

Actual malice is characterized by such factors as personal spite, hatred, or ill will. Id. Legal malice is shown by wrongful conduct committed or continued with a willful or reckless disregard for another’s rights. Id.

We agree with Shari that the evidence in this case was not limited to “one innocent misfill.” Petersen was the sole pharmacist on duty when Shari’s prescription was misfilled during the busy noon hour on July 31, 1997. She admitted the need for extra technicians to help staff during the noon rush hour at the pharmacy-

Additionally, there were thirty-four incident reports in evidence. These reports indicated dispensing errors nearly identical to the dispensing error in this case: The incorrect medication begins with the same alphabetic character as the correct medication prescribed. The errors all occurred within a three-year period before the incident in question. Viewing this evidence in the light most favorable to Shari, we conclude the jury could reasonably infer that Walgreen had a serious problem in this regard, knew it had the problem, but did not take adequate steps to correct it.

What made Walgreen’s conduct particularly egregious, however, was its failure to warn Shari or her doctors of the serious adverse side effects associated with Paxil and the abrupt discontinuance of the drug. Walgreen learned of the error twelve days before Shari’s second fall. However, contrary to pharmacy standards and its own policy manual, Walgreen neglected to warn Shari or her family of such adverse side effects. See Burke v. Bean, 363 S.W.2d 366, 368 (Tex.Civ.App.1962) (holding that failure to warn plaintiff of error in filling her prescription was sufficient evidence of conscious indifference to plaintiffs rights to support an award for punitive damages). Viewing the evidence in the light most favorable to Shari, we think the jury could reasonably have found that such a warning would have prevented the injury.

In the context of a products liability case, we considered analogous conduct to support an award of punitive damages:

Viewing the evidence in the light most favorable to Lovick, we agree with the trial court that punitive damages were properly submitted to the jury. There was evidence Wil-Rich failed to institute a warning campaign for numerous years despite knowledge of numerous similar incidents involving its cultivator and knowledge of the efforts of Deere & Company to warn their users of the danger. There was also some inference from the evidence that Wil-Rich acted indifferently to any need to warn of the potential for danger....
We think evidence of conduct both before and after the failure to warn can be relevant. Although the earlier conduct of Wil-Rich would not alone support punitive damages, it may be appropriately considered by the jury in determining whether its conduct in failing to institute a warning program constituted willful and wanton disregard.

Lovick v. Wil-Rich, 588 N.W.2d 688, 700-01 (Iowa 1999) (emphasis added).

Likewise, here, the jury could reasonably infer that Walgreen acted indifferently to any need to warn Shari or her family of the side effects of Paxil once it learned of its mistake, knowing full well that such inaction could result in injury to her.

Viewing all of this evidence in the light most favorable to Shari, we are convinced there was sufficient evidence to submit the punitive-damage issue to the jury. The district court did not err in doing so.

2. Jury instruction. Walgreen objected to the district court’s refusal to give its requested instruction on punitive damages. Instead of the requested instruction, the district court gave Iowa Uniform Civil Jury Instruction No.- 210.1 (1988).

Walgreen contends the uniform jury instruction does not comport with the constitutional requirements for jury instructions on punitive damages set out in Pacific Mutual Life Insurance Co. v. Haslip, 499 U.S. 1, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991). In Haslip, the Court reviewed the constitutionality of a jury instruction on punitive damages in a fraud case and found that it did not violate the Due Process Clause of the Fourteenth Amendment. Id. at 19-20, 111 S.Ct. at 1044, 113 L.Ed.2d at 20-21. In so concluding, the Court said:

By these instructions ... the trial court expressly described for the jury the purpose of punitive damages, namely, “not to compensate the plaintiff for any injury” but “to punish the defendant” and “for the added purpose of protecting the public by [deterring] the defendant and others from doing such wrong in the future.” ...
To be sure, the instructions gave the jury significant discretion in its determination of punitive damages. But that discretion was not unlimited. It was confined to deterrence and retribution, the state policy concerns sought to be advanced. Amd if punitive damages were to be awarded, the jury “must take into consideration the character and the degree of the wrong as shown by the evidence and necessity of preventing similar wrong.” ... The instruction thus enlightened the jury as to the punitive damages’ nature and purpose, identified the damages as punishment for civil wrongdoing of the kind involved, and explained that their imposition was not compulsory.

Id. at 19, 111 S.Ct. at 1044, 113 L.Ed.2d at 20-21.

For reasons that follow, we think the instruction the district court gave here sufficiently conveyed to the jury what it needed to know and did not violate the Haslip holding. First, the instruction explained that punitive damages are available only if “the plaintiff has proven by a preponderance of clear, convincing and satisfactory evidence the defendant’s conduct constituted a willful and wanton disregard for the rights or safety of another and caused actual damage to the plaintiff.”

Second, the instruction did not convey to the jury that it must award punitive damages, but rather informed the jury that such damages were simply within its discretion.

Third, the instruction stated that “punitive damages are not intended to compensate for injury but are allowed to punish and discourage the defendant and others from like conduct in the future.” (Emphasis added.)

Fourth, the instruction informed the jury that there is no exact formula for calculating the amount of punitive damages, but explained that the jury could consider “the amount of punitive damages which [would] punish and discourage like conduct by the defendant in view of ... its financial condition.”

Fifth, the instruction told the jury that in fixing punitive damages, it could consider the “nature of defendant’s conduct” and “plaintiffs actual damages.” Haslip recognized the “plaintiffs actual damages” as an important constitutional factor with respect to punitive damages. See BMW of North America, Inc. v. Gore, 517 U.S. 559, 580-81, 116 S.Ct. 1589, 1601-02, 134 L.Ed.2d 809, 829-30 (1996) (citing Haslip, 499 U.S. at 23-24, 111 S.Ct. at 1046, 113 L.Ed.2d at 23).

In addition, separate instructions defined “willful and wanton conduct” and “preponderance of clear, convincing, and satisfactory evidence.” While these definitions were not included in the punitive-damage instruction itself, the definitions are nevertheless read in conjunction with the instruction to determine the sufficiency of the instruction on the issue. See Leaf v. Goodyear Tire & Rubber Co., 590 N.W.2d 525, 536 (Iowa 1999) (“Jury instructions are to be read and considered as a whole, not ‘piecemeal or in artificial isolation.’ ”).

Clearly, the uniform civil jury instruction here “enlightened the jury as to the punitive damages’ nature and purpose, identified the damages as punishment for civil wrongdoing of the kind involved, and explained that their imposition was not compulsory.” Haslip, 499 U.S. at 19, 111 S.Ct. at 1044, 113 L.Ed.2d at 21; see also State v. Morrison, 368 N.W.2d 173, 175 (Iowa 1985) (holding that district court is not required to word jury instructions in any particular way so long as it correctly states the law). Walgreen has demonstrated no violation of the Haslip holding and therefore has demonstrated no constitutional or legal error. State ex rel. Miller v. DeCoster, 596 N.W.2d 898, 904 (Iowa 1999) (holding that we review constitutional challenges de novo); Olson v. Nieman’s, Ltd., 579 N.W.2d 299, 316 (1998) (holding that we ordinarily review jury instruction challenges for correction of errors at law).

3. Admission of financial information. Shari introduced evidence of Walgreen’s worldwide financial condition. Walgreen contends that the “Federal Constitution does not permit a jury in one jurisdiction to consider extraterritorial conduct of a corporate defendant when fashioning a punitive damage award.” Walgreen attempts to extend this rule by arguing that the jury should have been allowed to consider Walgreen’s financial worth only with respect to earnings, sales, revenue, and operations occurring within the State of Iowa. Walgreen contends the district court’s refusal to give an instruction along these lines was unconstitutional.

In Iowa, “[e]vidence of a defendant’s financial worth is one relevant factor for the jury to consider when setting a punitive damage award.” Lara v. Thomas, 512 N.W.2d 777, 783 (Iowa 1994). Federal courts have recognized that, as a general matter, allowing this evidence on the question of punitive damages does not violate due process. See, e.g., Continental Trend Resources, Inc. v. OXY USA, Inc., 44 F.3d 1465, 1475 (10th Cir.1995); Robertson Oil Co. v. Phillips Petroleum Co., 14 F.3d 373, 380-81 (8th Cir.1993). Walgreen argues, however, that in awarding punitive damages for conduct occurring in Iowa, the jury may only consider the financial worth deriving from its business in Iowa.

In support of its argument, Walgreen relies on Gore. In that case, the Supreme Court held state sovereignty and comity mandated that, in fixing punitive damages, only the wrongful conduct that occurred within the state where the damages occurred could be considered in determining the amount of punitive damages. Gore, 517 U.S. at 572-73, 116 S.Ct. at 1597-98, 134 L.Ed.2d at 824-25. In other words, a jury may only award punitive damages to punish conduct occurring within the jurisdiction of a particular state and may not award such damages to punish or deter conduct that is lawful in other jurisdictions and which had no impact on the state or its citizens. Id.

Contrary to Walgreen’s argument, however, Gore does not stand for the proposition that a jury may not consider nationwide or worldwide'financial resources in awarding punitive damages for conduct that occurred solely within the borders of a particular state. Walgreen does not cite any other authority for its argument. Nor does it otherwise explain how permitting the jury to consider this type of evidence is unconstitutional. We conclude there was no constitutional violation in admitting the evidence.

B. Evidentiary rulings.

1. Incident reports. The district court permitted Shari to introduce, as a single exhibit, evidence of thirty-four incident reports involving claimed “error” with prescriptions filled by the Walgreen pharmacy on Ingersoll within a three-year period preceding the prescription error in dispute in this case. Walgreen contends the district court abused its discretion when it admitted the exhibit for two reasons. First, all but four of the thirty-four incident reports involved pharmacists other than the defendant, Theresa Petersen. Second, each incident occurred under circumstances significantly different from those involved in this case.

Our review for admission of this type of evidence is for abuse of discretion. Lovick, 588 N.W.2d at 692.

Evidence of prior accidents may be admitted to show the existence of a dangerous condition. Id. at 692. Walgreen properly asserts, however, that a foundational showing must indicate the prior incidents occurred under substantially the same circumstances. Id. Nevertheless, we think Walgreen’s arguments lack merit.

Shari was clearly trying to establish a pattern of conduct that showed that Walgreen knew of problems in getting prescriptions properly filled at the pharmacy on Ingersoll, yet did nothing to solve the problem. The challenged evidence was obviously relevant to the punitive-damage issue of willful and wanton conduct on the part of Walgreen. See Cook v. State, 431 N.W.2d 800, 803 (Iowa 1988) (“The probative value of previous accidents rests in the likelihood that the same conditions caused the accident under litigation.”); see also Harco Drugs, Inc. v. Holloway, 669 So.2d 878, 881 (Ala.1995) (holding that 233 incident reports prepared by defendant’s employees showing errors in filling prescriptions were relevant to show defendant-pharmacist’s knowledge of problems within its pharmacies and therefore admissible on plaintiffs wantonness claim for punitive damages).

It is true that Petersen was not named in all of the incident reports. This fact, however, does not render the prior incident reports inadmissible. Shari had dropped her punitive-damage claim against Petersen. Shari’s claims concerned only the Walgreen pharmacy on Ingersoll itself, and not the willful and wanton conduct of any one particular employee.

Shari clearly established proper foundation for admitting the incident reports. All the reports dealt with misfilling incidents that occurred at the Walgreen pharmacy on Ingersoll. See Oberreuter v. Orion Indus., Inc., 398 N.W.2d 206, 211 (Iowa App.1986) (noting that “Iowa cases in which evidence of similar accidents was admissible involved accidents at the same location as plaintiffs’ injury”). Moreover, most of the incidents occurred within a short, three-year period preceding the incident in question. See Harco, 669 So.2d at 881 (holding as relevant incident reports prepared by defendant’s employees within three years of the error in filling plaintiffs prescriptions); see also Lovick, 588 N.W.2d at 697 n. 5 (noting that in negligence cases, evidence of prior incidents must not be too remote in time). Finally, many of the incident reports concerned dispensing errors whereby the name of incorrectly dispensed medication started with the same alphabetic character as the medication that was actually prescribed— the same type of incident that occurred here.

We conclude the district court did not abuse its discretion in admitting the incident reports.

2. Matters pertaining to the licensee disciplinary proceedings. Following the prescription error, the Iowa Board of Pharmacy Examiners initiated an investigation into the incident. See Iowa Code § 272C.3(a), (c), (d). On October 14, 1997, the board filed charges against Walgreen, alleging a variety of statutory violations in connection with the prescription error. See Iowa Code § 272C.3(e). On January 28, 1998, Walgreen submitted a written proposed stipulation and consent order. The proposed stipulation and consent order indicated it was offered to resolve the disputed claims and did not constitute any admission of wrongdoing. On February 3, 1998, the board formally accepted the stipulation and consent order in writing.

During trial, the district court admitted into evidence the formal statement of charges as well as the stipulation and consent order. Walgreen contends here; as it did in the district court, that the statement of charges as well as the stipulation and consent order were not admissible. These documents were not admissible, Walgreen says, because (1) they were not relevant, and (2) any probative value was substantially outweighed by the danger of unfair prejudice and confusion of issues.

Evidence is relevant when it has “any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” Iowa R. Evid. 401. “The test is ‘whether a reasonable [person] might believe the probability of the truth of the consequential fact to be different if [the person] knew of the proffered evidence.’ ” State v. Plaster, 424 N.W.2d 226, 229 (Iowa 1988) (quoting 1 Jack B. Weinstein & Margaret A. Berger, Weinstein’s Evidence ¶ 401[07], at 401-48).

Not every ruling admitting irrelevant evidence requires reversal. See Shawhan v. Polk County, 420 N.W.2d 808, 810 (Iowa 1988). We reverse only if the erroneous ruling affects the substantial rights of the complaining party. Iowa R. Evid. 103(a) (providing that “error may not be predicated upon a ruling which admits or excludes evidence unless a substantial right of the party is affected”); Shawhan, 420 N.W.2d at 810. Although a presumption of prejudice arises when the district, court has received irrelevant evidence ovér a proper objection, the presumption is not sufficient to require reversal if the record shows a lack of prejudice. See Shawhan, 420 N.W.2d at 810.

Even relevant evidence, however, is not admissible “if its probative value is substantially outweighed by the danger of unfair prejudice.” Iowa R. Evid. 403. “Relevancy” is the tendency to make a consequential fact more or less probable; “probative value” gauges the strength and force of that tendency. Plaster, 424 N.W.2d at 231. “Unfair prejudice” is the “ ‘undue tendency to suggest decisions on an improper basis, commonly though not necessarily, an emotional one.’ ” Id. (quoting Fed.R.Evid. 403 advisory committee’s note).

We reverse a ruling that the district court makes in the balancing process under rule 403 only if the district court has abused its discretion. Id. at 232. And the complaining party has the burden to establish that the district court abused its discretion in its ruling. Id.

With these principles in mind, we turn to the statement of charges and the stipulation and consent order. The statement of charges is in nine counts. Six of those counts “charged” Walgreen “under Iowa Code § 155A.15(2)(c) [and various administrative rules] with engaging in a practice harmful to the public by failing to prevent a medication dispensing error” on a particular date. One of those incidents concerned the one involved here.

One count “charged” Walgreen “under Iowa Code § 155A.15(2)(c) [and various administrative rules] with engaging in a practice harmful to the public by failing to prevent repeated unauthorized dispensing of a generic drug to a patient between 1990 and 1992.”

One count “charged” Walgreen “under Iowa Code § 155A.15(2)(c) [and various administrative rules] with inadequate and/or deficient space and staffing for the prescription department, as observed during a routine pharmacy inspection conducted on April 24,1995.”

A final count “charged” Walgreen “under Iowa Code § 155A.15(2)(c) [and various administrative rules] with failure to ensure that all pharmacists at Walgreen Pharmacy # 1908 [Ingersoll] effectively utilized patient information; conducted prospective drug use review; and provided oral patient counseling; which resulted in or contributed to the medication dispensing errors contained in” the six counts involving medication dispensing error.

Iowa Code section 155A.15(2)(c) provides that the board of pharmacy examiners may impose a fine, issue a reprimand, or revoke, restrict, or cancel, or suspend a license, and may place a licensee on probation if the board finds that the licensee has

[v]iolated any provision of this chapter or any rule adopted under this chapter or that any owner or employee of the pharmacy has violated any provisions of this chapter or any rule adopted under this chapter.

In the stipulation and consent order, Walgreen and the board stipulated that the charges “shall be resolved without proceeding to hearing, as the parties have agreed to the following Stipulation and Consent Order.... [That] [t]his Stipulation and Consent Order is entered into in order to resolve a disputed claim and constitutes no admission on the -part of [Walgreen].” (Emphasis added.)

In addition the parties agreed that (1) Walgreen’s license be placed on probation for three years; (2) Walgreen pay a civil penalty of $2500; (3) Walgreen submit a plan documenting, resolving, and preventing medication dispensing errors; (4) Walgreen address the issues of adequate space and staffing; and (5) Walgreen submit to random unannounced visits or inspections by the board or its agents to verify compliance with the stipulation and order.

The statement of charges was irrelevant because it was merely assertions of wrongdoing. None of the matters in the statement of charges was either proved or disproved.

And nothing in the stipulation and consent order amounted to an admission of wrongdoing. The stipulation and consent order specifically states it was entered into to resolve a disputed claim and constitutes no admission on the part of Walgreen. The stipulation and consent order was therefore “motivated by a desire for peace rather than from a concession of the merits of the claim,” and for that reason the document was irrelevant. 29 Am.Jur.2d Evidence § 508, at 588-89 (1994) (explaining that one of the underlying principles excluding settlements and offers of settlement is that “the evidence is irrelevant as being motivated by a desire for peace rather than from a concession of the merits of the claim” (emphasis added)); see Miller v. Component Homes, Inc., 356 N.W.2d 213, 215-16 (Iowa 1984); see also Petruzzi’s IGA Supermarkets, Inc. v. Darling-Delaware Co., 998 F.2d 1224, 1246-47 (3d Cir.1993) (holding that evidence of five prior antitrust actions brought against the defendants was irrelevant on issue of defendants’ motive to conspire and noting that “[s]imply because the defendants were named in past antitrust cases involving similar allegations does not make it more probable that the defendants had a motive to carry out their conspiracy”); Kramas v. Security Gas & Oil, Inc., 672 F.2d 766, 767 (9th Cir.1982) (affirming exclusion of SEC consent decree in prior enforcement proceedings under Federal Rule of Evidence 403 in which “consent decree involved no finding of culpability and no judgment of wrongdoing and contained a recitation that it did not constitute evidence of wrongdoing in the enforcement proceeding”); Beck v. Cantor, Fitzgerald & Co., 621 F.Supp. 1547, 1565, 1566 (N.D.Ill.1985) (holding that all evidence of SEC investigation, SEC opinion, and defendant’s acquiescence in SEC opinion was inadmissible as irrelevant and immaterial), overruled on other grounds by Pinter v. Dahl, 486 U.S. 622, 644, 108 S.Ct. 2063, 2076-77, 100 L.Ed.2d 658, 688 (1988).

The consequential fact in the litigation here was whether Walgreen’s conduct was willful and wanton. The likelihood that Walgreen’s conduct was willful and wanton was not enhanced by a statement of charges that proved nothing and a stipulation and consent order that admitted nothing.

Because the statement of charges and the stipulation and consent order were irrelevant and therefore inadmissible, we do not reach the balancing question under rule 403. However, we must still decide whether this evidence affected Walgreen’s substantial rights. On this point, we note that there is nothing in the record to overcome the presumption that this inadmissible evidence affected Walgreen’s substantial rights.

The tone of the charges conveys an atmosphere of criminality. That is not surprising since the matters charged carry a criminal penalty. See Iowa Code § 155A.22 (providing that any person who violates any of the provisions of “this chapter” commits a simple misdemeanor). They may also subject an offending party to a civil penalty of not to exceed $25,000. See Iowa Code § 155A.18. Given the nature, language, and tone of the statement of charges and the stipulation and consent order, the jury was likely to consider them as evidence of willful and wanton misconduct on the part of Walgreen. Obviously, this was the very reason for which the documents were introduced. However, as we have concluded, the documents were irrelevant on that issue. The district court accordingly erred in admitting the two documents.

The conclusion we reach on this issue requires a reversal of the judgment on punitive damages and a remand for a new trial on the punitive-damages issue only. Because the reversal renders moot Shari’s cross-appeal, we do not address it.

III. Disposition.

In sum, we conclude there was sufficient evidence to submit the punitive-damages issue to the jury. The district court therefore committed no error in submitting the issue. We affirm on this issue.

The instruction defining punitive damages was correct, and for that reason the district court did not err in refusing to give Walgreen’s proposed jury instruction on punitive damages. We likewise affirm on this issue.

Evidence of Walgreen’s worldwide financial condition and of the prior incidents was admissible, and for that -reason the district court did not abuse its discretion in admitting both items of evidence. We also affirm on this issue.

The statement of charges and the stipulation and consent order were irrelevant and affected Walgreen’s substantial rights. For this reason, we reverse and remand for a new trial on the issue of punitive damages only.

Although we have not addressed all of the issues raised and arguments made, we have carefully considered them. Those we have not addressed lack merit, were not preserved, or are moot.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

All justices concur except CADY, J., who dissents, and NEUMAN and TERNUS, JJ., who take no part.

CADY, Justice

(dissenting).

I respectfully dissent.

I would conclude there was insufficient evidence to support the submission of punitive damages to the jury as a matter of law.

The legal standard for an award of punitive damages is clear, convincing, and satisfactory evidence of conduct constituting willful and wanton disregard for the rights or safety of another. Iowa Code section 668A.1 (1997). The majority concludes this standard was met through evidence concerning the error in filling the prescription, the prior reports of dispensing errors, and the failure to warn Shari or her doctors of the side effects of the drug, including the side effects of discontinuing the drug. I would conclude the evidence fell far short of our legal standard. It supports a finding of negligence, but not punitive damages.

Although there was evidence of thirty-four prior incident reports, there was no further evidence introduced at trial to evaluate the incident reports in the context of willful and wanton disregard for the safety of another. Tort standards do not require perfection, and thirty-four incident reports over a three-year period may be entirely acceptable within the industry. Shari presented no evidence to interpret the meaning of the number of prior incident reports.

The main reason offered by the majority for submitting punitive damages, however, is the evidence that Walgreen failed to warn Shari of the dangers of the misfilled prescription after they learned a mistake had occurred. I agree the failure of a pharmacist to warn of the dangers of a misfilled prescription after acquiring knowledge of the mistake constitutes, by itself, egregious conduct. However, it is undisputed in this case that Shari was under the care of a physician at the time Walgreen learned of the mistake, and Walgreen knew the physician had undertaken a course of treatment for Shari in response to the mistake. This removes the conduct from the realm of punitive damages.

A health care practitioner has a duty to provide care that a reasonable health care practitioner would provide in the same circumstances. See Wambold v. Brock, 236 Iowa 758, 764, 19 N.W.2d 582, 585 (1945). Inherent in this basic principle, however, is that it would be reasonable for a health care practitioner to rely upon another health care practitioner to also conform to this standard. In other words, the duty of a pharmacist to a customer does not change the nature of the relationship between the customer and the treating physician. Thus, it was reasonable for Walgreen to assume the physician would pursue a reasonable course of treatment in response to its mistake and the failure to warn under these circumstances falls far short of the standard of willful and wanton disregard for Shari’s safety. Walgreen knew Shari’s safety was in the hands of a medical doctor. Its conduct in failing to warn Shari or the doctor, under these circumstances, does not show a lack of care with disregard for the consequences. See Beeman v. Manville Corp., 496 N.W.2d 247, 255 (Iowa 1993). Furthermore, Walgreen did not try to cover up its mistake. See Tratchel v. Essex Group, Inc., 452 N.W.2d 171, 176 (Iowa 1990) (concealment supports punitive damages). This case is clearly distinguishable from the Burke case used by the majority to support its position.

A jury should not be permitted to consider punitive damages based on negligent conduct alone. This is true even if the conduct consists of multiple instances of negligence.


source: Caselaw Access Project

author: McGIVERIN, Chief Justice.

license: Public Domain

text:
    Marc DETTMANN, as Executor of the Estate of Laurie Jean Dettmann, Deceased, Appellee, v. Michael Scott KRUCKENBERG and Keith Kruckenberg, Appellants, Aaron Jones, Appellee, and Jennifer Orth, David Wayne Anderson, and Ike Auen Distributing Company, Appellees.
    No. 98-1461.
    Supreme Court of Iowa.
    July 6, 2000.

      William G. Enke, Fort Dodge, for appellants Kruckenberg.
    Gary W. Armstrong of Mack, Hansen, Gadd, Armstrong & Brown, P.C., Storm Lake, and Michael R. Bovee of Montgomery, Barry and Bovee, Spencer, for appel-lee Dettmann.
    Mark Brownlee of Kersten Brownlee Hendricks, L.L.P., Fort Dodge, for appel-lee Jones.
    John C. Gray and Jeff W. Wright of Heidman, Redmond, Fredregill, Patterson, Plaza & Dykstra, L.L.P., Sioux City, for appellee Orth.

      Francis Fitzgibbons and Harold W. White of Fitzgibbons Law Firm, Esther-ville, for appellees Anderson and Auen Distributing.
   McGIVERIN, Chief Justice.

Plaintiff, Marc Dettmann, brought this wrongful death action as executor of the estate of his wife, Laurie Dettmann. Laurie Dettmann died when the vehicle she was driving was struck by a vehicle being driven by an intoxicated driver, defendant Michael Kruckenberg, age nineteen. Earlier on the day of the accident, Krucken-berg and his teenage friend, defendant Aaron Jones, stole beer from a beer truck that was parked at a convenience store and consumed the beer. Plaintiffs wrongful death action named as defendants, Michael Kruckenberg and his father Keith Kruck-enberg, who owned the car, Aaron Jones, David Anderson, the beer truck driver, Ike Auen Distributing Company, the beer distributor, and Jennifer Orth, a teenage friend of Michael Kruckenberg who allegedly provided Kruckenberg with alcohol on the day of the accident. In a jury trial, the district court sustained a motion for directed verdict by defendants Anderson and the beer distributor. After a jury returned a verdict in favor of plaintiff against the Kruckenbergs, the district court entered judgment in favor of plaintiff for compensatory damages in the amount of $640,462. Kruckenbergs appeal and plaintiff and defendant Jones cross-appeal, raising various issues.

Upon our review, we find no reversible error in the district court proceedings and affirm the judgment of the district court.

I. Background facts and proceedings.

Around 1:00 p.m. on August 16, 1995, teenage friends Michael Kruckenberg and Aaron Jones stopped at a convenience store to buy gas for Kruckenberg’s vehicle, which was owned by Michael’s father, Keith Kruckenberg. As they were putting gas in the vehicle, a Bud Light beer truck and trailer, being driven by David Anderson and owned by Ike Auen Distributing Company, pulled into the store’s parking lot. Anderson exited the truck and entered the store to check on the product needs .of the store operator. While Anderson was inside the store, Jones walked to the truck, opened one of the unlocked closed doors, removed an eighteen pack of Bud Light beer, and put it in Kruckenberg’s car. Kruckenberg also removed an eighteen pack of beer from the truck. Anderson was gone from his truck for approximately five minutes and was unaware of the theft until approximately twenty minutes later. Anderson did not see Michael or Aaron at any time during his stop at the convenience store.

Kruckenberg and Jones then drove to the home of their teenage friend Jennifer Orth. They also had other beer in the car with them that they had obtained from another source. While at that location, Michael Kruckenberg drank eight to twelve cans of the beer stolen from the beer truck and two glasses of sloe gin and Pepsi that Orth provided him. Other youths were at the party at Orth’s home. At approximately 4:30 p.m., after the party broke up, Kruckenberg and Jones began riding around the Lytton/Roekwell City area in Kruckenberg’s car. At approximately 5:25 p.m., Kruckenberg’s car ran a stop sign in rural Calhoun County, Iowa, and collided with Laurie Dettmann’s car, killing her. A blood test given to Kruckenberg one hour and twenty minutes after the accident revealed a blood-alcohol concentration of .098. Michael was subsequently charged with and convicted of vehicular homicide, a felony carrying a sentence of more than one year in prison. See Iowa Code § 707.6A (1995). Our court of appeals affirmed that conviction on December 29,1997.

On July 15, 1997, plaintiff Marc Dett-mann, Laurie’s husband and the executor of her estate, filed a wrongful death action against Michael Kruckenberg and his father Keith, owner of the vehicle, Aaron Jones, Jennifer Orth, David Anderson, the driver of the beer truck, and Ike Auen Distributing, the beer truck owner. In the petition, plaintiff alleged that Michael negligently operated the vehicle that collided with Laurie’s vehicle and that defendants Jones and Orth had supplied alcohol to Michael. Additionally, plaintiff alleged that David Anderson, the beer truck driver, and his employer, the beer distributor, were negligent in failing to lock the beer truck, thereby allowing the theft of beer from the truck to occur.

In an answer filed July 24,1997, Michael and Keith Kruckenberg admitted that Michael was the driver of the vehicle that collided with Laurie Dettmann’s vehicle. However, in early 1998, Michael and Keith filed a motion to amend their answer to deny that Michael was driving the vehicle and that it was being driven with Keith’s consent. Michael and Keith also sought permission to file a cross-claim against Aaron Jones, alleging that Aaron, not Michael, was driving the Kruckenberg vehicle at the time of the accident and without the knowledge and consent of Keith Krucken-berg. The court sustained the Krucken-bergs’ motion and allowed them to amend their answer to deny that Michael was driving the vehicle, but overruled defendant Kruekenbergs’ motion to file a cross-claim against Aaron Jones.

Approximately one week before the civil case trial was scheduled to begin, the Kruekenbergs filed supplemental answers to interrogatories propounded by plaintiff Dettmann, which revealed that an individual, Leta Jensen, may testify at trial that Aaron Jones admitted to her, earlier in the year, that he, and not Michael, was driving the Kruckenberg vehicle at the time of the accident.

Defendant Aaron Jones then filed a pretrial motion under Iowa rule of evidence 104(a), asking the court to exclude at trial any evidence offered by the Kruekenbergs that Aaron, and not Michael, was driving the Kruckenberg vehicle at the time of the accident. Specifically, Jones argued that Kruckenberg’s criminal case conviction of vehicular homicide that arose from the accident, see Iowa Code § 707.6A(1), precluded Michael from litigating the identity of the driver in plaintiff Dettmann’s wrongful death action. The trial court sustained Jones’s motion, finding that the elements of issue preclusion had been satisfied as to the identity of the person driving the Kruckenberg vehicle that collided with the Dettmann vehicle. In light of this ruling, the court denied plaintiff Dett-mann’s motion to amend plaintiffs petition as being moot.

The matter then proceeded to trial.

At the close of all evidence, defendants Anderson and Ike Auen Distributing Company, the beer distributor [hereinafter collectively referred to as Anderson], moved for a directed verdict. The court sustained the motion, based on its conclusions that there was no special relationship between Anderson and Laurie Dettmann such that Anderson owed Laurie a legal duty. The court also concluded that even if Anderson was negligent in failing to lock the beer truck doors, a series of intervening acts, including (1) theft of the beer, (2) possession and consumption of the beer by the minors, and (3) driving in a reckless or intoxicated condition, were sufficient to sever all proximate cause and liability of defendant Anderson to plaintiff.

The jury returned a verdict in favor of plaintiff Dettmann, finding that defendants Michael Kruckenberg, Aaron Jones and Jennifer Orth were each at fault, but that Michael’s negligence alone was the proximate cause of plaintiffs compensatory damages. The jury also found that Michael’s conduct was willful and wanton, but awarded no punitive damages. The court entered judgment in favor of plaintiff and against the Kruckenbergs in the amount of $640,462, representing the compensatory damage amount awarded by the jury.

Defendants Kruckenberg appeal, arguing that the district court erred in finding that the Kruckenbergs were precluded from litigating whether Michael was the driver at the time of the accident and in refusing to allow their expert to testify regarding speed of the Kruckenberg vehicle at the time of the collision.

Plaintiff Dettmann cross-appeals, contending that the district court erred in sustaining defendant Anderson’s motion for directed verdict. Defendant Aaron Jones also cross-appeals. However, based on our ultimate decision in this case, we need only address the merits of the issues raised on appeal by defendants Michael and Keith Kruckenberg and by plaintiff Dettmann.

II. Kruckenbergs’ appeal.

The defendants Kruckenberg raise two issues on appeal. First, they assert that the district court erred in ruling that they were precluded from offering evidence that Aaron Jones, and not Michael, was driving the Kruckenberg vehicle at the time of the accident. Second, the Kruck-enbergs contend that the court erred in refusing to allow their expert to testify regarding the speed of the Kruckenberg vehicle at the time of the collision.

A. Preclusive effect of the criminal case conviction.

Approximately one week prior to the scheduled civil trial date, Kruckenbergs filed a supplemental answer to interrogatories propounded by plaintiff, indicating that the Kruckenbergs might call as a witness at trial an individual named Leta Jensen who may testify Aaron Jones admitted to her in early 1998, that he was driving the Kruckenberg car at the time of the accident.

In response, defendant Jones filed a motion under Iowa rule of evidence 104(a) asking the court to exclude any evidence offered by the Kruckenbergs showing that he, not Michael, was driving the Krucken-berg vehicle at the time of the accident. Jones argued that Michael’s criminal conviction of vehicular homicide resulting from the accident and death of Laurie Dettmann precluded Michael and Keith Kruckenberg from relitigating in the civil case the identity of the person driving the Kruckenberg vehicle at the time of the accident.

Plaintiff Dettmann also filed a motion, seeking leave to amend his petition, requesting permission to plead, in the alternative, that either Michael Kruckenberg or defendant Aaron Jones was the driver. Plaintiff characterized the motion as contingent upon the court overruling defendant Jone’s motion.

The Kruckenbergs resisted Jone’s motion, arguing (1) that there was no mutuality of parties between those involved in the criminal case (Michael) and the civil case (Michael and his father, Keith), (2) that there was no privity between Michael and Keith, (3) that Keith did not have a full and fair opportunity to litigate the relevant issues in the criminal proceeding, (4) that holding Keith bound by the judgment reached in the criminal case violates his right to due process, and (5) that Michael did not have an opportunity to litigate the issue of the driver’s identity in the criminal case because he chose to preserve his United States Constitution Fifth Amendment right not to testify. The Krucken-bergs did not offer Jensen’s alleged testimony at the hearing concerning the rule 104 motion nor at trial.

The district court concluded that issue preclusion principles applied such that Michael’s criminal conviction for vehicular homicide precluded the Kruckenbergs from relitigating in the civil case the issue of who was driving the Kruckenberg vehicle at the time of the accident.

1. Issue preclusion principles.

“The doctrine of issue preclusion prevents a party to a prior action in which a judgment has been rendered from relit-igating in a subsequent action issues raised and resolved in the previous action.” Brown v. Kassouf, 558 N.W.2d 161, 163 (Iowa 1997) (quoting Hunter v. City of Des Moines, 300 N.W.2d 121, 123 (Iowa 1981)). We have said that issue preclusion applies if the following four requirements are met: “(1) the issue determined in the prior action is identical to the present issue; (2) the issue was raised and litigated in the prior action; (3) the issue was material and relevant to the disposition in the prior action; and (4) the determination made of the issue in the prior action was necessary and essential to that resulting judgment.” American Family Mut Ins. Co. v. Allied Mut. Ins. Co., 562 N.W.2d 159, 163-64 (Iowa 1997).

In addition to these four requirements, “either (1) the parties in both actions must be the same (mutuality of parties), or (2) there must be privity between the party against whom issue preclusion is invoked and the party against whom the issue was decided in the first litigation.” Brown, 558 N.W.2d at 163. A “privy” means “one who, after rendition of the judgment, has acquired an interest in the subject matter affected by the judgment through or under one of the parties, as by inheritance, succession, or purchase.” Id. (quoting Goolsby v. Derby, 189 N.W.2d 909, 914 (Iowa 1971)).

Issue preclusion may be used offensively as a sword by a new plaintiff against a defendant who was a party to the former litigation. See Harris v. Jones, 471 N.W.2d 818, 820 (Iowa 1991). Defensive use of issue preclusion occurs when a stranger to the-judgment in the former action, ordinarily the defendant in the second action, relies upon the prior judgment as conclusively establishing in that party’s favor, an issue which the party must prove as an element of the defense. Brown, 558 N.W.2d at 164. Neither mutuality of parties nor privity is required where issue preclusion is applied defensively if the party against whom issue preclusion is invoked was

so connected in interest with one of the parties in the former action as to have had a full and fair opportunity to litigate the relevant claim or issue and be properly bound by its resolution.

Id. at 163-64 (quoting Opheim v. American Interinsurance Exch., 430 N.W.2d 118, 120 (Iowa 1988)).

2. Relevant authorities concerning whether a criminal conviction may be preclusive as to issues presented in a civil case.

We must first decide whether issue preclusion principles may apply such that a criminal case conviction is preclusive as to issues raised in a subsequent civil suit brought against the criminal defendant. If so, the next question is whether Michael’s criminal conviction for vehicular homicide is preclusive in the present civil case on the issue of who was driving the Krucken-berg vehicle at the time of the accident.

The rule is well established in Iowa that a validly entered and accepted guilty plea precludes a criminal defendant from relitigating essential elements of the criminal offense in a later civil case arising out of the same transaction or incident. See Teggatz v. Ringleb, 610 N.W.2d 527, 529 (Iowa 2000); accord AID Ins. Co. (Mut.) v. Chrest, 336 N.W.2d 437, 439 (Iowa 1983); Ideal Mut. Ins. Co. v. Winker, 319 N.W.2d 289, 296 (Iowa 1982). The question remains, however, whether a criminal case conviction is preclusive as to issues raised in a subsequent civil action brought against the criminal defendant. This is the narrow issue we must decide in this case.

We first point out that evidence of Michael’s criminal case conviction would probably have been admissible at the civil trial over a hearsay objection as an exception to the hearsay rule. See Iowa R. Evid. 803(22); 47 Am.Jur.2d Judgments § 732, at 210 (1995) (“A judgment in a criminal action has always been available as evidence in a civil action as proof of its existence or rendition.”). We also point out that Iowa Code section 321.489, which states “[n]o record of the conviction of any person for any violation of this chapter [321] shall be admissible as evidence in any court in any civil action,” does not exclude Michael’s criminal case conviction here under Iowa Code section 707.6A. This is because Michael was convicted under Iowa Code chapter 707, not chapter 321.

We have apparently never previously examined the preclusive effect of a criminal conviction on issues raised in a later civil suit against the criminal defendant. We therefore turn to other authorities that have addressed the issue for assistance in this matter.

Section 85 of the Restatement (Second) of Judgments (1980) addresses the preclu-sive effect of a criminal case conviction in a later civil suit. Section 85 states in pertinent part:

With respect to issues determined in a criminal prosecution:
(2) A judgment in favor of the prosecuting authority is preclusive in favor of a third person in a civil action:
(a) Against the defendant in the criminal prosecution as stated in section 29; and
(b) Against a person having a relationship with the defendant specified in sections 46, 48, 56(1), and 59-61, or analogous rules.
An illustration of the rule set forth in section 85 states as follows:
[D is convicted of arson of a building.] ... P is the owner of a building adjacent to D’s building. P’s building was severely damaged as the result of spread of the fire from D’s building. In a civil action by P against D to recover for the damage to P’s building, the determination in the criminal prosecution that D deliberately set the fire is conclusive in favor of P.

Restatement (Second) of Judgments § 85, at 299 illus. 8.

In his commentary on the preclusive effect of a criminal conviction in a later civil suit, Professor Allan D. Vestal noted that courts traditionally “have held that a conviction is not admissible in a civil action to prove issues determined in the criminal prosecution.” Allan D. Vestal, Issue Preclusion and Criminal Prosecutions, 65 Iowa L.Rev. 281, 322 (1980). See also 47 Am.Jur.2d Judgments § 732, at 207 (noting that under traditional rules, a judgment in a criminal proceeding does not act as a complete bar to later civil proceedings, but that under modern rule, as expressed in section 85 of the Restatement (Second) of Judgments, judgments in criminal proceedings are preclusive to issues raised in later civil proceedings). Professor Vestal also noted, however, that some courts have applied issue preclusion even absent mutuality of parties, adopting the theory that a convicted person is precluded on fact issues necessarily decided if he or she had the incentive and opportunity to litigate the issue in the prior criminal proceeding. Vestal, at 329.

Professor Vestal concluded his commentary by stating that “[t]he present trend seems to be toward an acceptance of preclusion when applied in civil litigation subsequent to criminal prosecution.” Id. at 340. Professor Vestal explains that certain factors must be considered in determining whether a criminal conviction is preclusive in a later civil case.

One of the factors that must be considered by the courts is the effect this trend will have on criminal prosecutions. If a criminal defendant knows that the finding in the criminal prosecution may have some preclusive effect in subsequent civil litigation, the defendant’s attitude toward the criminal proceeding may change. The criminal defendant is engaged in a weighing process to decide whether to plead guilty or to defend. If giving preclusive effect to a criminal conviction would measurably increase the time spent in prosecutions, it might be urged that the expansion of preclusion into the criminal/civil situation should be limited. It must be remembered, however, that preclusive effect is given to a judgment only if the party precluded had the opportunity and incentive to litigate the matter fully. In criminal prosecutions this would probably prevent giving preclusive effect to misdemeanor prosecutions; in situations in which a felony is involved in the antecedent criminal action, the second court must decide, if the question is raised, whether there was an opportunity and incentive to litigate. "When the court answers this question, it must consider the protections afforded criminal defendants and the assistance given them under the present criminal justice standards.
Possibly, some defendants will defend when, absent possible preclusion, they would plead guilty. Such cases will arise only infrequently; the more common situation will be that in which the defendant intended to litigate the matter fully and the preclusive effect is not a factor affecting the decision.
Admittedly, giving preclusive effect to criminal prosecutions will occasionally result in additional litigation, as when the criminal defendant decides to defend because of the possible preclusion and is acquitted, but the civil action is carried through anyway. The criminal trial is an increment attributable to the giving of preclusive effect. Conversely, preclusion can save much time by avoiding retrial of factual issues that have been fully litigated in criminal prosecutions in which the defendant has been found guilty. On balance, society will be best served by providing for preclusion.
The primary inquiry is whether there was an opportunity and an incentive to fully litigate the issue. If so, it follows that preclusive effect can be given to the earlier decision. Second, the precise issue faced and settled in the first proceeding must be identified.... Third, the courts must recognize the different standards of proof required in civil and criminal proceedings.... Fourth, certain overriding societal considerations apply in some situations. When such interests are involved, the doctrine of preclusion may be forced to give way. Fifth, in the application of preclusion, the rights of individuals must be protected....

Id. at 341-42 (footnotes omitted).

Several courts have followed Professor Vestal’s theory that a criminal conviction is preclusive as to issues raised in a later civil suit that were essential to the final judgment of conviction in the criminal case. See, e.g., Kowalski v. Gagne, 914 F.2d 299, 303 (1st Cir.1990) (defendant’s criminal conviction for murder precluded defendant from contesting liability in later wrongful death action brought by victim’s wife and from contesting applicability of intentional acts exclusion in insurance policy); Teitelbaum Furs, Inc. v. Dominion Ins. Co., 58 Cal.2d 601, 25 Cal.Rptr. 559, 375 P.2d 439, 442 (1962) (conviction of corporate president for theft of furs precluded later civil suit by corporations against insurance companies to recover for loss; corporate president was afforded a full opportunity to litigate guilt and thus, any issue necessarily decided in the prior criminal proceeding was conclusively determined as to the parties in the later civil action); Hanover Ins. Co. v. Hayward, 464 A.2d 156, 160 (Me.1983) (citing section 85 of Restatement (Second) of Judgments and holding, that in action by insurer against insured to recover benefits paid to insured for loss caused by fire, defendant’s criminal arson conviction for burning his home conclusively established that defendant/insured intentionally burned his home with the intent to collect insurance proceeds and insurer was entitled to judgment against insured); Aetna Cas. & Sur. Co. v. Niziolek, 395 Mass. 737, 481 N.E.2d 1356, 1360 (1985) (citing section 85 of Restatement (Second) of Judgments and collecting cases holding “that a party to a civil action against a former criminal defendant may invoke the doctrine of collateral estoppel to preclude the criminal defendant from relitigating an issue decided in the criminal prosecution”); Jordan v. McKenna, 573 So.2d 1371, 1377 (Miss.1990) (defendant’s criminal conviction for sexual assault precluded defendant from relitigating the fact issue in later civil suit of whether he assaulted victim); Aetna Life & Cas. Ins. Co. v. Johnson, 207 Mont. 409, 673 P.2d 1277, 1280 (1984) (holding that in an action by insurance company against insured to recover amounts paid for loss caused by fire, insured’s criminal arson conviction barred insured from litigating whether insured intentionally set the fire to his business premises); Hurtt v. Stirone, 416 Pa. 493, 206 A.2d 624, 626 (1965) (noting that general rule in Pennsylvania was that judgments in criminal cases were inadmissible to establish facts in a civil case, but holding that defendant’s federal criminal conviction for racketeering and extortion is conclusive proof of extortion in later civil suit against criminal defendant to recover money extorted); 47 Am.Jur. Judgments 2d § 733, at 210-11 (“Under the modern approach, a judgment of conviction precludes the defendant from denying the allegations in a subsequent civil complaint as to issues that were actually litigated and adjudicated in the prior proceeding.”).

As one court has explained:

To preclude a civil litigant from relit-igating an issue previously found against him in a criminal prosecution is less severe than to preclude him from relit-igating such an issue in successive civil trials, for there are rigorous safeguards against unjust conviction, including the requirements of proof beyond a reasonable doubt .... and of a unanimous verdict, ... the right to counsel, ... and a record paid for by the state on appeal .... Stability of judgments and expeditious trials are served and no injustice done, when criminal defendants are es-topped from relitigating issues determined in conformity with these safeguards.

Teitelbaum Furs, 25 CaLRptr. 559, 375 P.2d at 441 (emphasis added).

The following comments from the Massachusetts supreme judicial court are also persuasive.

In the context we face here — a civil action following a criminal prosecution— application of issue preclusion will not relieve parties of the cost and vexation of multiple lawsuits, but it will conserve scarce judicial resources, prevent people from profiting from their criminal conduct and, perhaps most importantly, prevent the diminution of public confidence in our judicial system that would result if civil juries repeatedly found by a preponderance of the evidence that a convicted criminal defendant had not done something that a criminal jury had found beyond a reasonable doubt that he had done.

Niziolek, 481 N.E.2d at 1359-60 (emphasis added).

Our court rule 118.7, also, provides an example of when a judgment in a prior proceeding may be used in a subsequent proceeding. Specifically, rule 118.7 allows a judgment entered against a lawyer in a prior civil proceeding to be used to prove allegations made in a lawyer disciplinary proceeding when the burden of proof in the prior proceeding was greater than a mere preponderance of the evidence.

3. Application of law to facts.

Based on the above authorities, we conclude that in appropriate cases a criminal case conviction may be preclusive in a later civil suit as to those issues that were previously litigated in the criminal proceeding. We next consider whether the issue preclusion requirements have been satisfied in the present case to justify application of the doctrine.

Upon our review, we conclude that the district court properly decided that the requirements of issue preclusion were satisfied. First, the jury in the criminal case found Michael guilty beyond a reasonable doubt of the charge of vehicular homicide. Implicit in the jury’s finding was that Michael was driving the Kruckenberg vehicle at the time it collided with Laurie Dett-mann’s vehicle. Second, Michael’s criminal conviction was only used in the present civil action for purposes of conclusively establishing that Michael was driving the Kruckenberg vehicle at the time of the accident. Additionally, the driver issue was raised and litigated in the criminal trial and on appeal, it was material and relevant to the disposition of the criminal action as an essential element of the crime, and determination of the issue was necessary and essential to the judgment entered in the criminal case. We also agree with the trial court that Michael had a full and fair opportunity to litigate the driver issue in the criminal case and had every incentive to do so. In fact, Michael was serving his prison term at the time of the civil case trial. Additionally, Michael’s decision not to testify in the criminal case was presumably made on the assumption that he would benefit thereby. Any error in this trial strategy, however, no more defeats the preclusive effect of his criminal conviction in the civil case than the failure of a litigant to introduce relevant available evidence in any other situation. See Teitelbaurn Furs, 25 Cal.Rptr. 559, 375 P.2d at 442. We believe that statements by the Montana supreme court accurately illustrate the point.

We will not show such lack of faith in the criminal judicial system to allow an issue fully and fairly litigated in a criminal trial to be completely relitigated in a subsequent civil trial.

Johnson, 673 P.2d at 1280. We further point out that if the legislature had intended that convictions under Iowa Code chapter 707 would be inadmissible to prove an underlying fact in the later civil suit, it easily could and presumably would have so indicated.

We also reject Keith’s contention that even if Michael’s criminal conviction is pre-clusive as to Michael on the driver issue, it is not preclusive as to the issue of Keith’s liability under Iowa Code section 321.493(l)(b) as the vehicle owner because Keith was not a party to the criminal proceeding and is not otherwise in privy with Michael. First, the trial court found that Keith himself testified in the criminal case and therefore had the opportunity to present any relevant evidence concerning the driver issue. Second, an identity of interests existed between Michael and Keith at the time of the criminal proceeding. Keith, as Michael’s father and the vehicle owner, had a great personal interest in seeing that all evidence relevant to Michael’s defense was presented in the criminal trial. Additionally, Keith should have been on notice that he was subject to potential civil liability under Iowa Code section 321.493(l)(b) concerning Michael’s fault in causing the accident. We believe these facts and section 321.493(l)(b) show that Keith was in privy with Michael for purposes of application of issue preclusion principles concerning the driver issue.

Based on the circumstances presented in this case, we conclude that Michael’s criminal case conviction was preclusive in the present civil suit on the issue of who was driving the Kruckenberg vehicle at the time it collided with Laurie Dettmann’s vehicle. The district court therefore properly ruled that the Kruckenbergs were precluded from introducing any evidence that Aaron Jones, and not Michael, was the driver. Accordingly, we find no error by the district court and affirm on this issue.

B. Expert witness testimony.

The Kruckenbergs also contend that the district court erred in refusing to allow an expert to testify as to the speed that the Kruckenberg vehicle was traveling at the time of the accident. We review alleged errors concerning the admission of evidence under an abuse of discretion standard. See Williams v. Hedican, 561 N.W.2d 817, 823 (Iowa 1997).

During trial, state trooper Kelly Hindman was called by plaintiff to testify concerning the report that Hindman prepared following his investigation of the accident scene. The following exchange occurred between plaintiffs attorney and trooper Hindman.

Q. Who did you speak to? A. I spoke to Aaron Jones. Q. Did he indicate to you the speed at which the [Kruekenberg] vehicle was traveling immediately before impact? A. He did. Q. And what did he tell you? A. He thought it was probably going between seventy and eighty. Q. Now, when you examined the damage to the Dett-mann vehicle as reflected in the exhibits that we’ve just published to the jury, would Aaron Jone’s estimate of the speed be consistent with the damage sustained?
MR. ENKE: Just a minute, Your Honor. I’m going to have an objection. Failure to supplement answers to interrogatories. Expert opinion not contained in his report.
THE COURT: Overruled. You may answer.
A. I think it’s consistent with his estimate.

Later, in putting on their evidence, the Kruckenbergs requested that they be allowed to call an expert witness to rebut trooper Hindman’s testimony as to the speed that the Kruekenberg vehicle was traveling at the time of the accident. In their offer of proof on the matter, the Kruckenbergs stated that their expert would testify that the speed of the Kruck-enberg vehicle at the time of the collision was traveling forty-eight to fifty-three miles per hour. The Kruckenbergs also argued that plaintiff had not designated trooper Hindman as an expert witness and that Hindman’s testimony, as quoted above, was the first time in the case that Hindman had expressed an opinion as to the speed of the Kruekenberg vehicle, and that Hindman testified in the criminal trial that he was not able to determine the speed of either vehicle at the time of the collision. The district court denied the request.

Upon our review, we find no abuse of discretion by the district court on this issue. First, although Hindman testified that the damage to the Dettmann vehicle was consistent with that vehicle being struck by a vehicle traveling seventy to eighty miles an hour, Hindman also testified that he was unable to determine the exact speed of either vehicle. The jury was therefore left to assess the credibility of Hindman’s testimony. Additionally, the Kruckenbergs’ request and offer came late in the trial and the testimony would have been from an alleged expert witness not previously identified by the Kruckenbergs in their answers to interrogatories as an expert who might testify at trial. Finally, the parties regarded speed as bearing only on the issue of punitive damages. The jury, however, did not award plaintiff punitive damages even though it found that Michael’s conduct was in willful and wanton disregard for the safety of another. Punitive damages are not an issue on appeal. We find no reversible error on this assignment.

III. Plaintiff Dettmann’s cross-appeal of directed verdict ruling.

On cross-appeal, plaintiff Dettmann contends that the district court erred in sustaining a motion for directed verdict in favor of defendants Anderson and Auen [hereinafter again collectively referred to as Anderson] at the close of all evidence. The court ruled that defendant Anderson owed no duty to plaintiff Dettmann, and even if a duty was owed, the conduct of Anderson was not a proximate cause of plaintiffs damages.

Our standard of review concerning appeal from the grant of a motion for directed verdict is for correction of errors at law. Mensink v. American Grain, 564 N.W.2d 376, 379 (Iowa 1997). In such cases, we review the evidence presented in the light most favorable to the nonmoving party to determine whether a fact question was generated. Id. Where substantial evidence does not exist to support each element of a plaintiffs claim, the court may sustain the motion. Olson v. Nieman’s Ltd., 579 N.W.2d 299, 313 (Iowa 1998). “Evidence is substantial if reasonable minds could accept it as adequate to reach the same findings.” Id.

A. Applicable legal principles.

The rule is well established that before a plaintiff may recover damages allegedly caused by another’s negligence, the plaintiff must establish a legal duty owed to the plaintiff by the wrongdoer. Ries v. Steffensmeier, 570 N.W.2d 111, 114 (Iowa 1997). In those situations where the injured party alleges a failure to act on the part of the defendant, the law ordinarily requires the existence of a special relationship between the injured party and the alleged negligent party before a legal duty will be found to exist. See Bohan v. Hogan, 567 N.W.2d 234, 236-37 (Iowa 1997); Keller v. State, 475 N.W.2d 174, 179 (Iowa 1991) (stating that linkage between existence of legal duty and particular relationship of the parties is not required when the direct consequences of a negligent, affirmative act cause harm to another); Kelly v. Sinclair Oil Corp., 476 N.W.2d 341, 354 (Iowa 1991). “The issue of whether a particular duty arises out of parties’ relationships is always a matter of law for the court to decide.” Kelly, 476 N.W.2d at 354.

B. Application of law to facts.

In the present case, plaintiff seeks to impose liability on Anderson, alleging that Anderson had a duty to prevent the theft of beer from the beer truck by Michael and Jones and that Anderson’s failure to properly secure the beer trailer from theft was negligence that was a proximate cause of the accident. Plaintiff also contends that the theft, possession and consumption of beer by minors, and operation of a motor vehicle by a minor while intoxicated, were within the scope of the original risk related to Anderson’s failure to properly secure the beer trailer from theft.

Upon our review, we conclude that defendant Anderson owed no duty to plaintiffs decedent to guard against theft from the beer truck. First, there is no evidence in the record that Ike Auen Distributing had experienced a theft of beer from a beer truck or that a theft of this type had ever before been reported to law enforcement authorities. Moreover, there are no special circumstances to create liability in this case. For instance, the convenience store where the theft occurred is located in a rural, low-traffic, low-crime area, not in a high-crime or “hard-drinking” area. See Roadway Express, Inc. v. Piekenbrock, 306 N.W.2d 784, 786 (Iowa 1981) (discussing cases where issues of motorist’s negligence, liability and proximate cause relating to owner’s alleged negligence in leaving keys in ignition of parked car were questions for the jury because those cases involved “special circumstances,” i.e., parking vehicle in high crime area, but holding that motorist’s act of leaving keys in ignition was not a proximate cause of injuries caused to third-party by car thief who caused accident). In any event, Anderson was entitled to assume that Michael and Aaron would obey the law and not steal beer from the truck. See id. (“one may assume others will obey the law”). These facts also show that no special relationship existed between defendant Anderson and members of the driving public in this factual situation. We therefore conclude that the district court properly sustained defendant Anderson’s motion for directed verdict due to lack of duty on the part of Anderson to plaintiff, and we need not address the proximate cause question. We affirm on this issue.

In light of the conclusions reached above, we need not address the issues raised in the briefs of defendants Aaron Jones and Jennifer Orth.

IV. Disposition.

We conclude that the district court correctly determined that defendant Michael Kruckenberg’s criminal conviction was preclusive in the present civil case on the issue of who was driving the Kruckenberg vehicle at the time it collided with Laurie Dettmann’s vehicle. We further conclude that the court committed no reversible error in not allowing the Kruckenbergs to call an expert witness to testify regarding the speed that the Kruckenberg vehicle was traveling at the time of the accident. We affirm the district court on these issues as to defendants Kruckenberg.

We also conclude that the district court properly sustained the motion for directed verdict of defendants Anderson and Auen and correctly entered judgment in their favor. We find no reversible error on other issues raised by the parties and affirm the judgment of the district court.

AFFIRMED.

All justices concur except NEUMAN, J., who takes no part.

      . The marshaling instruction in the state's criminal case against Michael Kruckenberg listed the following essential elements of the vehicular homicide offense:

        "The State must prove both of the following elements of Homicide by Vehicle:
      1. On or about the 16th day of August, 1995, the Defendant:
      a. Operated a motor vehicle while under the influence of alcohol; or
      b. Drove a motor vehicle in a reckless manner.
      It is not necessary for all jurors to agree to just 1(a) or 1(b). It is only necessary that all jurors agree to at least one of the two alternatives.
      2. The Defendant's acts unintentionally caused the death of Laurie Dettmann.
      If the State has proved both of the above elements, the Defendant is guilty of Homicide by Vehicle...."

      . Iowa rule of evidence 803 states in pertinent part:
      The following are not excluded by the hearsay rule, even though the declarant is available as a witness:

      (22) Judgment of Previous Conviction. Evidence of a final judgment, entered after a trial or upon a plea of guilty (but not upon a plea of nolo contendere), adjudging a person guilty of a crime punishable by death or imprisonment in excess of one year, to prove any fact essential to sustain the judgment .... The pendency of an appeal may be shown but does not affect admissibility.

      . Professor Vestal was a well-respected authority on issue preclusion principles. See Ruth Bader Ginsburg, The Work of Professor Allan Delker Vestal, 70 Iowa L.Rev. 13 (1984) (presenting a survey of state and federal authorities citing articles and publications written by Professor Vestal). He served as an Adviser throughout preparation of the Restatement (Second) of Judgments. See David L. Shapiro, Should a Guilty Plea Have Preclusive Effect? 70 Iowa L.Rev. 27, 27, n. 1 (1984).

      . Professor Vestal states that when the defendant in the prior criminal proceeding had the opportunity and incentive to litigate the issue and lost, there seems to be no reason why he or she should be allowed to relitigate the issue in a later civil case. Vestal, at 325-26.

      . For cases holding to the contrary, see Prosise v. Haring, 667 F.2d 1133, 1139 (4th Cir.1981), aff’d, 462 U.S. 306, 103 S.Ct. 2368, 76 L.Ed.2d 595 (1983) (stating that under Virginia law, with the exception of where an insured's conviction for arson precluded recovery of proceeds under a fire insurance policy, criminal judgments, whether by guilty plea or adjudicated guilt, have no preclusive effect in subsequent civil litigation); General Elec. v. Taalohimoineddin, 579 A.2d 729, 732 (D.C.App.1990) (stating general rule that disposition of criminal charges arising out the same events leading to a civil suit is generally inadmissible in civil trial; holding that reference to traffic ticket issued to driver who caused accident was improper but opposing parly failed to object to remark); Estate of Wallace v. Fisher, 567 So.2d 505, 507 n. 2 (Fla.Dist.Ct.App.1990) (stating that "Florida courts have consistently held that a judgment of conviction in a criminal prosecution is not admissible in a civil action as evidence of the facts upon which it is based"); Phillips v. Rayburn, 113 Ohio App.3d 374, 680 N.E.2d 1279, 1283 (1996) (stating that procedural and discovery differences between criminal and civil proceedings, coupled with defendant’s dilemma over whether to testify or present any defense to criminal charges, weighs against application of issue preclusion principles to criminal judgment); 47 Am. Jur.2d Judgments § 732, at 210 (and cases cited therein).

      . Rule 118.7 states that issue preclusion principles may be used by either party in a lawyer disciplinary case if:
      (1) The issue has been resolved ih a civil proceeding that resulted in a final judgment, even if the Iowa Supreme Court Board of Professional Ethics and Conduct was not a party to the prior proceeding;
      (2) The burden of proof in the prior proceeding was greater than a mere preponderance of the evidence; and
      (3) The party seeking preclusive effect has given written notice to the opposing party, not less than ten days prior to the hearing of the party's intention to invoke issue preclusion.
      (Emphasis added); see Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. D.J.I., 545 N.W.2d 866, 872 (Iowa 1996).