DAMAGES
A. COMPENSATORY
* amount of money necessary to restore P to pre-injury condition
1.
EXPENSES
* Must be reasonably related to "Ds wrongful conduct
* Expense must be reasonable amount
* Future medical expenses recoverable
* Where covered by insurance P cannot recover medical expenses.
William v.
Bright
Facts:
A. COLLATERAL SOURCE
* As long as payment for any aspect of harm is not made by the D, the P's
recovery from D is NOT DIMINISHED by the amount of these payments. (Bell v.
Primeau)
1. CS RULE APPLIES WHEN...
(a) Employment benefits
(b) Insurance
(c) Social Security & Welfare Payments
(d) Free Services
COYNE says the opposite & uses DRINKWATER as
support.
Ex. COYNE V. CAMPBELL
Facts
* P was a physician & sustained whiplash injury.
* P received Medical care & follow up from colleagues at no charge.
* P is claiming the value of those services for his damages.
Held
* Gratuitous services rendered by relatives, neighbors & friends are not
compensable - can only recover out of pocket expenses. No recovery for P
on services given gratuitously by colleagues.
* Services were gratuities.
* Future moral obligations are not compensible.
Ex.
DRINKWATER V. DINSMORE
Held
* P can recover only so much as he paid or was bound to pay.
2.
CS ISSUES
In Favor:
* COYNE says that you should be able to recover what you paid for insurance
premiums.
* SUBROGATION - There is no double recovery. The insurer can be reimbursed
by the P for what the P receives from the D.
Against:
* There is a N.Y. statute that abolishes the CS Rule.
* Those against the CS Rule say that it prevents P gets a windfall.
* If there is no CS Rule it will be less attractive for P's to bring suits,
therefore there is less litigation costs to the system.
* There will be less cost in the system if 1st party insurers take care of the P
and then go after the D
2. AVOIDABLE CONSEQUENCES
* The P has a duty to Mitigate his damages.
* The P cannot recover for any harm that would probably been avoided had he
sought Adequate Medical Care.
* Ex. William v. Bright
Facts:
* P hurt by accident caused by father
* Needed blood transfusion, but refused b/c of religious (Johovah witness)
belief.
a. REASONABLE CARE REQUIRED
* The P is only required to use reasonable care.
* In determining what is "Reasonable" it should be particularized to
the P.
b. BURDEN OF PROOF
* The burden is on the D to show that the P's harm could have been reasonably
avoided.
3. LOSS OF EARNINGS
* Problem: What a hurt, female lawyer would have made if she hadn't had the
accident.
5 year - 2004 @ 100,000 = $ 500,000
5 year - 2009 @ 140,000 = $ 700,000
5 year - 2014 @ 200,000 = 1,000,000
5 year - 2034 @ 300,000 = 6,000,000
8,200,000
* We have to discount that amount to the present value.
Question:
* Why does some people get more damages for lost earnings than others?
* To ask these question is to inform us about our other choices
* We do these things cause it is more exact to ascertain
* Other damages may be harder to determine b/c can't really place a value on
what they lost due to the injuries.
* Look at ch. 3 in AJ
* Why give people money for lost earnings?
1. Pg. 649: for life of subsistence and dependence on others
a.
CALCULATION
(1) Determine P's earning capacity. (do not engage in too much speculation; very
difficult if you are dealing w/ homemakers or children)
* Wheeler Tarpeh-Doe v. United States (SM: 332: if we allow courts to based
award on a calculation of average earnings of all college graduates in US,
without regard to sex or race. However, there is still hidden
discrimination in these seemingly neutral statistics. The court's job
should only to allow awards that will put the P in the same position before
he/she was hurt).
* In Grayson (talented future opera singer, accident destroyed her vocal cord),
the jury awarded $50,000 for impairment or frustration of her inchoate operatic
career, the court says the amount of damages was excessive so need to
reduce. Thus, court requires attorneys to venture in area where harder to
determine the exact figure.
(2) Determine the extent of the
Disability
* Is it Total or Partial?
* Can the P get a lesser job therefore the D owes the difference.
* P generally cannot recover for the consequences of the D's wrong that the P
could have been avoided by taking reasonable harm-reducing measures; thus, in
personal injury cases, to recover fully the P ordinarily must take reasonable
steps to mitigate the injuries.
(3) Determine the Expected
duration of the Disability.
* If the disability is permanent look at life expectancy tables or look at
Working Life Expectancy tables.
b. COMMON SITUATIONS OF WRONG
ASSESSMENT OF DAMAGES
(1) Wrong jury instructions.
(2) This category of jury instructions should not have been submitted to the
jury. (McDougle, lost of enjoyment of life; also, in Gibson.)
(3) The judge or jury gave the wrong amount. (excessive award = appellant
arguing that there should be a...remittitur or additur)
c. ADDITUR
* The power of the trial court to increase the amount of an inadequate award
made by a jury verdict, as a condition of denial of motion for new trial, with
consent of D whether or not P consents to such action.
* The standard used is if it is "Grossly Inadequate" or "Shocks
the Court".
d. REMITTITUR
* If money damages awarded by a jury are grossly excessive as a matter of law,
the judge may order the P to remit a portion of the award. (either you except or
we will reverse and remand for a new trial can't say that P get this amount,
court can say that P has a choice between: 1) to take that amount or 2) remand
for a new trial)
* P 643, Grayson.
* The standard used is ... grant this if it is "Grossly Excessive" or
"Shocks the Court".
* Not at all extraordinary, while unusual. The reduction of award after P
gets it, in 15% of jury cases the award was reduced. In biggest case
(large award) P gets 2/3 of awards.
e. ADJUSTMENTS
(i)
TAXES (C: 649)
* There is a split of authority on this.
* IRC ¤104 makes any recovery or settlement for personal injuries Tax Free, but
in reality these would have been taxed.
* Ordinary Taxpayers are usually calculated on a Gross earnings basis.
* High Bracket Taxpayers are usually given after tax awards.
(ii)PRESENT
VALUE (C: p. 645)
* To offset a windfall of collecting future damages now, courts instruct the
jury to award the P only the "Present Value" of losses
* that is the sum of money which, invested at a given rate of interest, will
permit the P to withdraw a monthly payment for the amount of years. Courts
refer to the process of calculating tis lump sum as reducing the revoery to
peresent value, calculated in the first instance, from the standard charts ...
* Discount to present value: why do we look at these charts (p. 646-47)?
Need to give her salary yearly, need to give her money now so she can invest it,
so she can get steady income from it. Need to consider inflation...
(iii)INFLATION
a. TOTAL OFFSET METHOD
* Some courts have refused to require Discounting an award to Present Value, on
the assumption that Inflation & Discounting cancel each other out.
This is called the TOTAL OFFSET METHOD(BEAULIEU V. ELLIOT)
* It is easier to let them cancel each other out.
* Has theoretical justication that this amount represent real rate of return
(value get over and above rate)
b. PARTIAL OFFSET METHOD
* The Partial Offset Method uses a 1-3% rate to account for inflation.
c. PERIODIC PAYMENTS
* One way to deal with inflation is through PERIODIC PAYMENTS.
* *P's recovery is paid in Installments over the years & is indexed
according to inflation.
* *But what if D disappears, goes bankrupt, or stops paying?
4. NON-ECONOMIC
A. COMPONENTS
* Physical Pain.
* Mental Suffering.
* Loss of Enjoyment.
B. PER DIUM ARGUMENT
* Putting a price on daily pain & then multiplying it by the number of days
in the life expectancy table.
D's say:
* You should not use a mathematical formula.
* If you're going to use a day to measure why not an hour or second?
P's say
* It is fair & rational.
* It helps juries visualize the amount of damages.
* Awards will not be arbitrary.
C. ABOLISH OR LIMIT?
P's say
* If you put a cap on the limit then D's will be able to assess the risk of
liability.
* Caps are Unconstitutional.
D's say
* You cannot effectively measure the damages.
* Caps are necessary in order to allow D's to determine how much insurance they
need.
* There is more certainty, which leads to decreased transaction costs.
B.
PUNITIVE
1. SHOULD EXIST?
* A study has shown that over the last 25 years most Corporations have not had
to pay $1 in punitive damages.
* Constant piece of efforts to reform tort law
* Don't happen a lot. When happens, usually in cases where Ps were seriously
hurt, or Ds outrageously negligence, etc.
* Issue:
1. What is the standard?
a. Implied Malice and willful misconduct:
* Owens-Illinois v. Zenobia
* Does not allow award b/c there has to be actual malice, and wanton disregard.
Split authority. Majority will go with standard that P est. D aware and
willfully
b. Insurability:
* Court split on this issue, will make insurer pay for punitive damages?
* First look at the K, does it say that it will pay for punitive damages as well
as ordinary liability.
* If does cover, is it void as against public policy? Sme courts say yes, it is
void, insurer not require to pay for punitive removes punishment and prevents
what punitive punishment is all about. Some courts say "no" because
premium are paid and insurance should pay out in return
c. Vicarious
liability
* Split of authority; court generally follow RS 499 can have punitive damages if
employer authorize the conduct by D, or employer was reckless in hiring the
wrong doing
d. Should punitive damages exist?
1. Facing multiple of punishment, punishment will be excessive; no $ left to
later compensate others; don't need this to deter wrongdoing by D;
2.
Windfall to P (P get this on top of full compensation);
2. Concern
for lack of procedural safeguard that we have in criminal cases.
4.
Constitutionality of punitive damages?
a. Focus need to be on reprehensibility
b. Disparity b/w the harm or potential harm suffered by P and punitive award
c. Difference b/w this remedy and the civil penalties authorized or imposed in
comparable cases
* award has to be confine effects of conduct
within that jurisdiction
* due process clause question will be raise by punitive damages issue, clear
state must have judicial review for all excessiveness of this award
* burden of proof: (Owen case) conduct that actually by clear and convincing
evidence (Geressy case; more likely than not)
D's say
* Compensatory damages are enough.
* There will be a windfall to the P.
* There are no protections given to P like there are in Criminal cases.
* Double punishment.
* It goes to the point of vengeance.
P's say
* We need them to punish & deter.
* Deterrence.
2. WHAT CONDUCT?
* Punitive damages are usually awarded only where the D's conduct was
"Reckless" or "Willful & Wanton".
* Owens-Illinois v. Zenobia
* "Deliberate Disregard of a high probability of injury" is the
conduct required in order to receive Punitive damages. (TAYLOR V. SUPERIOR CT.)
3.
INSURABLE?
* Many Insurance policies exclude payment of Punitive Damages.
* There is a split of authority on allowing coverage of punitive damages,
because some courts say that it is against Public Policy & should not be
paid.
* Reason Against: If you allow insurance companies to pay for Punitive damages,
it cancels out any deterrent value.
* In N.Y. you cannot insure against Punitive damages.
DAMAGES CASES
Ex.
HOLTON V. GIBSON
Held
* A D is not entitled to a reduction in his financial responsibility to P
because, through fortuitous circumstances the wages of the P following the
accident are as high or even higher than they were prior to the accident.
* It is not the immediate present, which determines capacity for renumerative
employment.
* Where permanent injury is involved, the whole span of life must be considered.
Ex.
HEALY V. WHITE
Facts
* P's (a 7yr old) learning disability was worsened as a result of accident.
Held
* In determining the extent of a P's increase injury or injury, an expert
witness is competent to express an opinion so long as the expert's opinion is
stated in terms of the Probable.
Ex. GRAYSON V. IRVMAR REALTY CORP.
Facts
* P was 21 & studying to be an opera singer when she was injured.
Issue
* Whether P could be awarded damages for nonexistent inchoate operatic career?
Held
* Yes she could.
* Factors to consider in determining the award:
* The gift attributed to the P;
* Training (received & future;
* Past income;
* Past recognition;
* Other risks & contingencies.
Ex. WALTERS V. HITCHCOCK
Facts
* P was a housewife.
* P was to have her thyroid gland removed & Dr. took out part of her
esophagus.
* D appealed the excessive verdict of 2,000,000.
Held
* The court's conscience was not shocked.
* The award was not excessive.
P's life expectancy was 41 years.
