## Facts

- Simmons, a bedding manufacturer, operated a warehouse in Munster, Indiana and contracted with Pinkerton’s to provide continuous security services.
- Pinkerton’s assigned guard William Hayne to the warehouse and allegedly failed to conduct adequate background screening or provide fire-protection training despite internal policies calling for such measures.
- On September 25, 1978, while Hayne was on duty, a fire broke out and caused substantial damage to the warehouse and its contents; Hayne’s attempts to control the fire were unsuccessful.
- Fire investigators indicated the fire might have been incendiary and might have been started by Hayne.
- Simmons sued Pinkerton’s and Pinkerton’s surety (National Surety Corporation) for breach of contract and negligence, alleging inadequate hiring, training, and supervision and failure to provide competent protective services.
- During the fire investigation, Hayne took one polygraph examination with inconclusive results, agreed to a second but did not take it, and later lied to a Pinkerton’s investigator by claiming he had taken and passed the second test.
- At trial, over objection, Simmons cross-examined Hayne about that lie; the court admitted the inquiry only for impeachment of truthfulness (not as substantive proof of arson).
- A jury found for Simmons and awarded damages including prejudgment interest; Pinkerton’s and National Surety appealed.

## Issues

1. Whether instructing the jury on the Indiana Detective Licensing Law was erroneous and, if so, whether it required reversal.
2. Whether the district court abused its discretion by admitting evidence about Pinkerton’s hiring/training/supervision practices and allowing Rule 608(b) cross-examination of Hayne about his polygraph-related lie.
3. Whether prejudgment interest was proper under Indiana law because the loss was ascertainable by objective standards when it accrued.

## Decision

- The Seventh Circuit affirmed the judgment for Simmons.
- Any reference to the Indiana Detective Licensing Law in the instructions was, at most, unnecessary and did not mislead the jury, shift burdens, or introduce an improper liability theory; no reversible prejudice was shown.
- Evidence about Pinkerton’s internal policies and its actual hiring, training, and supervision of Hayne was relevant to the pleaded contract and negligence claims and was within the trial court’s discretion to admit.
- Cross-examination of Hayne regarding his lie about taking and passing a second polygraph was permissible impeachment under Federal Rule of Evidence 608(b), subject to the trial court’s control and Rule 403 balancing.
- Prejudgment interest was upheld because the property-loss damages were ascertainable under Indiana’s standard using accepted valuation methods.

## Legal Principles

- A challenged jury instruction warrants reversal only if, considering the charge as a whole, it likely misled the jury on controlling legal issues or otherwise affected substantial rights; surplus or background statutory references may be harmless.
- Evidence of a service provider’s hiring, training, and supervision practices can be relevant to negligence and breach-of-contract claims when competency of provided personnel and services is at issue.
- Federal Rule of Evidence 608(b) permits cross-examination about specific acts probative of a witness’s character for truthfulness (including lies related to polygraph testing) for impeachment, not as substantive proof of underlying misconduct.
- Under Indiana law, prejudgment interest may be awarded when damages are ascertainable at the time of loss by fixed rules of evidence and accepted standards of valuation.

## Conclusion

The Seventh Circuit left intact a jury verdict holding a security firm and its surety liable for fire-related losses, concluding that the licensing-law instruction was not prejudicial, the contested hiring/training and Rule 608(b) impeachment evidence was properly admitted, and prejudgment interest was appropriate because the damages were objectively measurable under Indiana law.


Simmons, Inc. v. Pinkerton's, Inc., 762 F.2d 591 (7th Cir. 1985)