Opinion
Madonna Canavin, individually and as guardian ad litem for her three children, appeals the $750,000 lump-sum jury judgment in a wrongful death action against Pacific Southwest Airlines (PSA) after a plane crash killed Joseph Reed Canavin, her husband and their father. She contends the trial court erred in: (1) not instructing the jury to award damages for grief and sorrow; (2) improperly considering decedent’s income taxes in determining future pecuniary losses; (3) excluding relevant evidence so as to deprive them of a fair trial; (4) improperly denying prejudgment interest; (5) failing to acquire individual jury verdicts for each heir; and (6) engaging in other misconduct.
The doctrine of stare decisis and the state of the pleadings in this case force us to conclude the trial court properly refused to instruct on grief and sorrow. We redetermine a portion of our decision in
Fox
v.
Southwest Airlines
(1982)
Factual and Procedural Background
Dr. Joseph Canavin, age 33, died in a PSA aircrash September 25, 1978, in San Diego. He was a brilliant dynamics engineer with a national reputation in the research field of dynamics and control of large flexible space
The Canavins were married in 1969, and maintained a strong familial unit. Decedent was a loving, caring and devoted husband and a proud, considerate, conscientious and active father who, at age 32, was recognized for his contributions in structural dynamics and was the leading authority in his specialty. After graduating from Case Institute of Technology in 1967, he received his masters and Ph.D. from U.C.L.A. From mid-1976 his research included control of the vibration of large space craft, such as satellite shuttles and missiles, and he assisted the government in evaluating contractors’ proposals and monitoring their progress. His salary at death was approximately $32,000 a year, plus fringe benefits.
PSA conceded liability and the matter was tried solely on damages, the jury returning an unapportioned verdict for all heirs in the sum of $750,000. A motion for additur was denied.
I. The Trial Court Properly Refused to Instruct the Jury to Award Damages for Grief and Sorrow
In contending the trial court erred by not instructing the jury grief and sorrow is a proper element of damages in a wrongful death action, the Canavins ask us to reverse a “ ‘judicially created’ misinterpretation of a statute that is medieval, unjust, and out-of-touch with 20th century reality.” However, as an intermediate appellate court, the doctrine of stare decisis compels us to deny the request.
(Auto Equity Sales, Inc.
v.
Superior Court
(1962)
The Canavins ask us to ignore this case precedent under the rationale of
Molien
v.
Kaiser Foundation Hospitals
(1980)
More basically,
Molien
is inapposite because emotional injuries to the heirs are not relevant to a cause of action for wrongful death. “Rather, the measure of damages [in a wrongful death action] is the value of the benefits the heirs could reasonably expect to receive from the deceased if [he or] she had lived [citations].”
(Allen
v.
Toledo
(1980)
II. Although the Trial Court Did Not Prejudicially Err in Admitting Evidence of Decedent’s After-tax Earnings, It Did So in Refusing to Instruct the Jury on Applicable Discount Rates
Where, as here, decedent was a husband and father, a significant element of damages is the loss of financial benefits he was contributing to his family
Both the Canavins and PSA presented expert testimony to assist the jury in determining the proper present value factor to include in its total award. There were no significant differences in the formula each party gave the jury to measure the family’s total future lost support. Each factored in decedent’s age and death, his work-life expectancy, his annual income and fringes at death, a projected earnings growth rate for his expected work life, the present and future rate of decedent’s personal earning consumption and the age and life expectancy of each beneficiary. Although there was considerable dispute over the appropriate value to be given each factor in the formula, the major controversy on this appeal is that given to decedent’s annualized income. The Canavins claim the multiples in the formula should be applied to the gross earnings; PSA contends the figure should be the net spendable (take-home) pay. The trial court took no position, permitting PSA to introduce evidence of decedent’s after-tax, take-home pay and to argue it represented the true net spendable income from which the beneficiaries past and future loss of support should be computed.
2
At the same time, the
There was no direct evidence of projected future income tax consequences on the issues of: (1) future pecuniary loss of support, (2) the earnings generated by investing the award, or (3) the statutory nontaxability of the judgment itself. This avoided concerns expressed in reported decisions rejecting such evidence on the ground it is too speculative or complicated for jurors to comprehend, or raises too many collateral issues to permit a fair and expeditious trial. (See
Rodriguez
v.
McDonald Douglas Corporation
(1978)
For reasons expressed in the concurring opinion, a majority of this panel believe it is error to compute a survivor’s lost support based upon the decedent’s projected net income which would have been available for support except for the wrongful death. 3 However, even if such conduct constitutes error, it is not reversible per se, but mandates reversal only where it is reasonably probable a result more favorable to the appealing party would have been obtained in the absence of the error. Here, the Canavins do not allege, and the record does not show, any prejudice emanating solely from the evidence of after-tax (net) income. The prejudice in this record arose only because the trial court refused to instruct the jurors to use the lower discount rate of an appropriate tax-free investment when reducing the award to present value if they based their computation of lost future support on projected net earnings. Indeed, plaintiffs assert on this appeal, giving this curative instruction would have resulted in consistency and fairness.
Here the trial court admitted evidence of both decedent’s gross income and his net income after taxes and evidence of interest rates on discount rates derived from both long-term taxable government bonds (1214 percent) and on shorter term, more flexible tax-free government bonds (8 percent). The lower the discount rate applied, the greater the total lump-sum award after reduction to present value. (Johns, California Damages, supra, § 1.87(b), p. 96.) Understandably, PSA strenuously urged the jurors to adopt the discount rate applicable to 1214 percent, long-term government bonds, while the Canavins vigorously exhorted them to use the lower rate.
Recognizing the likelihood the jury logically could compute the family members’ lost support by using decedent’s net spendable take-home pay and, at the same time accept PSA’s argument the 1214 percent government bond availability made it the most reasonably secure investment for the lump-sum award, the Canavins asked the trial court to instruct the jurors, should they choose to base their computation on after-tax net income: “Regarding present cash values, when considering the subject of deceased’s spendable income or take-home pay rather than his gross salary, you should consider as the discount rate the interest on tax-free bonds.” 4 The trial court erroneously denied the request and, in fact, gave no legal guidance at all to the jurors on this critically material point. 5
Refusal to give a requested instruction is reversible error where the omission misleads and confuses the jury and it is reasonably probable a result more favorable to the requesting party would have been reached in
III. The Trial Court Erred in Denying Prejudgment Interest for Past Economic Losses
Relying on Civil Code
6
sections 3287 and 3288 and Code of Civil Procedure section 377, the Canavins asked prejudgment interest on the total verdict sum from the date of death to trial on both their economic and noneconomic losses. Since section 3287, subdivision (a) applies to situations “where there is essentially no dispute between the parties concerning the basis of computation of damages if any are recoverable but where their dispute centers on the issue of liability giving rise to damage”
(Esgro Central, Inc.
v.
General Ins. Co. of America, Inc.
(1971)
On the other hand, section 3288 provides: “In an action for the breach of an obligation not arising from contract, and in every case of oppression, fraud, or malice, interest may be given, in the discretion of the jury. ” “[A] party does not have to prove both a breach of a noncontractual obli
PSA correctly cites our decision in
Fox
v.
Pacific Southwest Airlines, supra,
“However, damages for the intangible, noneconomic aspects of mental and emotional injury are of a different nature. They are inherently nonpecuniary, unliquidated and not readily subject to precise calculation. The amount of such damages is necessarily left to the subjective discretion of the trier of fact. Retroactive interest on such damages adds uncertain conjecture to speculation. Moreover where, as here, the injury was of a continuing nature, it is particularly difficult to determine when any particular increment of intangible loss arose. Acknowledging the problem, the trial court arbitrarily resorted to an ‘averaging’ method applied to both the amount and duration of the loss. In our view this process was impermissibly speculative.
“Furthermore, a fact finder in assessing a claim of general damages for physical, mental and emotional suffering, possesses full authority to consider the duration of the alleged suffering. Accordingly, the
disallowance of any interest on such a claim does not deprive the claimant of compensation
“For the foregoing reasons, some respected commentators have disapproved the allowance of prejudgment interest on a claim of general damages for suffering.”
(Greater Westchester Homeowners Assn.
v.
City of Los Angeles, supra, 26
Cal.3d 86, 103; italics added.) In
Fox,
after quoting a substantial portion of the cited text from
Greater Westchester,
we rationalized our holding as follows: “Thus,
Greater Westchester
confirms the purpose of prejudgment interest is to compensate a party for lost
property.
(See also
Big Bear Properties, Inc.
v.
Gherman
(1979)
On reflection, our blanket reliance on
Greater Westchester
in
Fox
was overbroad. The policy underlying an award of prejudgment interest under section 3288 is to fully compensate the injured party.
(In re Pago-Pago Air Crash of January 30, 1974, supra,
Under the statutory cause of action for wrongful death, “damages may be given as under all the circumstances of the case, may be just . . . .” (Code Civ. Proc., § 377.) Recovery for wrongful death is not restricted to only elements of an ascertainable economic value, such as loss of household services or earning capacity, but also includes the monetary value of such factors as lost comfort, society, companionship, care and protection.
(Krouse
v.
Graham, supra,
IV. Failure to Instruct the Jury to Return Separate Verdicts for Each Heir Did Not Deny Them Their Right to a Jury Trial
Historically, an action for wrongful death in this state is rooted not in common law doctrine, but in legislative enactment which both created and limited the remedy.
(Justus
v.
Atchison
(1977)
Throughout the provision’s various amendments, case precedent has consistently held “only
one action
[can] be brought for the wrongful death of a person thereby preventing multiple actions by individual heirs and the personal representative.”
(Mayerhoff v. Kaiser Foundation Health Plan, Inc., supra,
Historical case precedent establishes that, in computing the damages, the court or jury must consider the pecuniary damage suffered by each heir and return an aggregate verdict for one sum.
(Watkins
v.
Nutting, supra,
Long before the 1949 amendment to section 377 providing for judicial apportionment, the established procedure in this state where plaintiffs recovered judgment was for the court, in a separate proceeding, to apportion the amount to be awarded each heir.
(Watkins
v.
Nutting, supra,
Because the cause of action for wrongful death is wholly statutory in origin, we are accordingly bound unless there exists a constitutional basis for departing from the clear expression of legislative intent.
(Mayerhoff v. Kaiser Foundation Health Plan, Inc., supra,
“It is beyond dispute that the parties to an action for wrongful death have a right to trial by jury. (Cal. Const., art. I, § [16]; Code Civ. Proc., § 592.)”
(De Castro
v.
Rowe
(1963)
As already noted, section 377 originally was silent regarding apportionment of the lump-sum award among the heirs. This was apparently due to the underlying theory of the California statutory remedy for wrongful death as being a means of providing for the family and each member of it that which each would have expected to receive by way of comfort and support from the decedent had he or she lived and kept the family together and, thus, the statute was framed upon the theory the heirs would always consti
The 1949 statutory amendment to provide for judicial apportionment appears based upon legislative acknowledgment of the respective heirs’ competing interests in the lump-sum award. The amendment reflects a belief it was more desirable not to add to the jury’s burden the task of apportioning the damages (see
Wrongful Death Actions,
at p. 184), and the practical consideration the trial judge had already heard the evidence of the pecuniary loss as to each heir and thus was the most desirable party to apportion the damages. (Ibid.; see also,
Changaris
v.
Marvel, supra,
Our review of the foregoing historical background of the California wrongful death remedy compels us to conclude legislative delegation of apportionment to the court is constitutional, promoting the nature of the remedy as envisioned by its creators without substantively depriving any heir of the right to a jury trial. As to the former, the lump-sum award reflects the underlying theory the family unit suffered as a whole and the
The determination of the total amount of lost monetary support derived from earnings is not affected by the individual interests the heirs have in that fund. Consequently, determination of the heirs’ respective interests in that portion of the recovery is unnecessary in reaching the aggregate award and, where minor children are involved, need not and should not be later apportioned under most circumstances by the court in a separate proceeding. For, aside from the difficulty in ascertaining respective interests in such a fund as the demand for support varies among minor heirs from day to day due to their individual age and particular circumstances, in the present case where the recovery for loss of monetary support is for the benefit of a widow and her minor children, there is no recognizable need to apportion the amount between them as naturally the minor children will receive full benefit from any award made to the mother, enjoying through their minority the benefits provided by the fund while they are protected by the umbrella and security of the family unit.
(Sabine Towing Co.
v.
Brennan
(5th Cir. 1936)
In summary, the competing and conflicting interests of the respective heirs, the difficulty in ascertaining individual shares of lost economic support when dealing with minors, the lack of any reason under most circumstances to apportion the lump-sum award attributable to loss of monetary support where minors are involved, the irrelevance of the heirs’ respective interests in that portion of the award pertaining to lost economic
However, our Supreme Court has expressly characterized section 377 as a “procedural” and “not jurisdictional” statute whose procedural provisions can be waived.
(Cross
v.
Pacific Gas & Elec. Co., supra,
Although we conclude the trial court did not err in refusing to instruct the jury to return separate verdicts, we find no reason why, when all properly represented plaintiffs request, the trial court in a wrongful death action should not instruct the jury to return special findings regarding damages as to each heir where the evidence presented permits such findings. In other words, in this case special interrogatories as requested should have been submitted to the jury regarding its determination of both the total unapportioned loss of past and future economic loss. Regarding the remaining recoverable damages related to nonmonetary support, where the evidence discloses the expectations for recovery of the various heirs would vary, the jury should be permitted to render special findings on a joint request by all plaintiffs. Although the findings would normally be advisory to the trial court at a later apportionment proceeding, valid stipulations by all parties should make them binding. We see no potential prejudice to either party. Assuming valid stipulations, we anticipate no potential conflict of interest among the plaintiffs and their respective counsel who may ethically argue each client’s cause in an attempt to maximize the size of the lump-sum award. Further, “[t]he defendant has no interest in the division
Disposition: 13
Judgment reversed.
STANIFORTH, J.,-Concurring and Dissenting.
Numerous California decisions as well as rulings of the courts of other jurisdictions exclude income tax projections from the jury’s consideration. The leading California case holds “income tax consequences are of no relevance in personal injury litigation.”
(Rodriguez
v.
McDonnell Douglas Corp.
(1978)
The California view was fully expressed in
Henninger
v.
Southern Pacific Co.
(1967)
This court in
Irwin
v.
Pacific Southwest Airlines
(1982)
Justice Work’s dissent relies on federal cases, particularly
Norfolk & Western R. Co.
v.
Liepelt
(1980)
Several lower federal courts have excluded, even
after the Liepelt decision,
consideration of income tax in computing damages where state laws are involved.
(Draisma
v.
United States
(W.D.Mich. 1980)
For a wide variety of good reasons courts have rejected jury consideration of income tax consequences. The rationale for exclusion are: (1) Income tax instructions are conjectural and open the door to intense speculation.
(Rodriguez
v.
McDonnell Douglas Corp., supra,
Finally, to allow the defendant to reduce the award by the estimated amount of income tax would create a windfall for the defendant. The negligent defendant should not benefit by the fortuitous event the person injured may be subject (or not subject), in a totally unknown and unpredictable amount, to income tax. A defendant should not be allowed to “take advantage of his own wrong.” (Civ. Code, § 3517.) “The justice of the [exclusion] rule is that damages wrought by a wrongdoer are measured by the whole loss. The party injured is entitled to recover for all the loss inflicted and the wrongdoer may not take advantage of the contracts or other relation that may exist between injured persons and third persons. The ethics of the rule are that the wrongdoer should not have the benefit of a fund or contract directly or indirectly or by circumvention, to which he in no wise has contributed.”
(Majestic
v.
Louisville & N. R. Co.
(6th Cir. 1945)
Brown (Gerald), P. J., concurred.
I respectfully dissent to Justice Staniforth’s concurring opinion holding evidence of a decedent’s after-tax earnings as a base for the jury’s assessment of damages for lost future financial support is too conjectural to be admitted. 1 Rather, I believe such evidence is admissible subject to the discretion of the trial court, and find the impact of future income taxes to be a matter much less speculative than other issues ordinarily resolved by the jury. 2
The precise issue posed here is whether the trier of fact, “in assessing the pecuniary loss sustained by each heir, may, in determining how much money the deceased would have had to contribute to the support of the heirs, consider the deceased’s income after payment of income taxes, and whether the parties may introduce evidence to show the deceased’s income tax liability.” (Johns, California Damages (2d ed. 1977) § 5.30, p. 252.) I concur with Johns’ statement: “Obviously, the deceased could not have contributed more money for the heirs’ support than he would have had. Therefore, if the plaintiff testifies as to the deceased’s gross earnings before his death, the defendant should be allowed to cross-examine the plaintiff concerning the amount of income taxes the deceased would have had to pay on those earnings.”
(Ibid.)
In
Norfolk & Western R. Co.
v.
Liepelt
(1980)
The Canavins argue the use of decedent’s after-tax income should be rejected because basic fairness should permit claimants to receive a support award greater than their actual lost support to compensate them for attorney fees which will otherwise diminish their net recovery. However, equitable as this may be, fees are a plaintiff’s obligation, a cost of doing business not chargeable to the tortfeasor in the absence of statutory or contractual imposition. (Code Civ. Proc., § 1021;
Douglas
v.
Los Angeles Herald-Examiner
(1975)
Failing to reduce decedent’s gross earnings by the amount of income taxes the decedent would have paid effectively awards claimants greater financial support than they would have received had decedent lived. This overcompensation has been characterized as punitive.
(Felder
v.
United States, supra,
Where decedent’s net earnings after taxes are used to determine future economic loss, undercompensation may be avoided in two ways. First, the trier of fact may be instructed to increase the lump-sum damage award by the amount of income tax payable upon the earnings of the award.
(DeLucca
v.
United States
(9th Cir. 1982)
As summarized in the lead opinion, the second method available to insure claimants’ awards are not unfairly reduced is to discount the total amount of future lost support by the smaller factor derived from interest rates generated by tax-free investments. The use of such a rate when relying upon net income after taxes in arriving at lost future earnings approximates the result obtained by using decedent’s net income, applying a discount rate based upon a taxable investment and increasing the lump-sum award proportionately to offset the amount of income tax payable on the future earnings generated from investing the award. (See Fitzgerald,
Economic Loss in Wrongful Death: Principles of Evaluation
(July 1977) 44 Insurance Counsel J. 427, 432; see also
DeLucca
v.
United States, supra,
A petition for a rehearing was denied November 14, 1983, and the petitions of all parties for a hearing by the Supreme Court were denied January 5, 1984. Bird, C. J., and Mosk, J., were of the opinion that the appellants’ petition should be granted.
Notes
For an example of a complaint alleging separate causes of action for wrongful death and emotional distress, see
Sesma
v.
Cueto, supra,
This conforms to what one authority refers to as the “established practice” of California courts (in personal injury cases) to prevent plaintiffs from being reimbursed for more than their actual loss. (Johns, California Damages (2d ed. 1977) § 1.79, p. 90.)
I disagree, see my dissenting opinion to Justice Staniforth’s concurring opinion.
To offset any potential double tax windfall to themselves, the Canavins also asked the jurors be instructed to use a discount rate from taxable investments if it used, as a beginning point, decedent’s gross salary. This instruction was also refused.
However, when reducing to present value the remaining, non-monetary support elements of the total pecuniary loss, including loss of society, comfort and protection (Johns, California Damages, supra, § 1.86, p. 95), the jury, if it relied on net income after taxes and properly applied the lower discount rate based on tax-free investments, should independently determine the proper discount rate to apply to the award for damages not related to lost support.
All statutory references are to the Civil Code unless otherwise specified.
We conclude this court erred in stating: “[a]bsent oppression, fraud, or malice, prejudgment interest should not be awarded in wrongful death actions” relying on
Southern Pacific Transportation Co.
v.
State of California, supra,
The trial court instructed the jury on BAJI Nos. 14.50 and 14.51. The former instructs it to award damages to justly compensate for the loss each heir suffered, while the latter directs the jury to return a verdict in a single sum, representing the aggregate of the loss suffered by the heirs of the deceased.
Several courts have held it is the duty of the jury, or at least proper for it, to apportion the recovery by rendering separate verdicts for each of the plaintiffs, including:
Mobile &
For a review of the varying and conflicting state rules on this question, see
Finally, we note the Model Survival and Death Act (U.L.A.) § 3(f), provides in pertinent part: “The trier of fact shall make separate awards to each of the survivors entitled to damages.” The accompanying comment explains: “The duty of determining individual awards could be assigned to either judge or jury, or both. There are definite advantages in having the apportionment of the damages made by the same person or group that fixes the amount of the total award. This normally would be the jury.”
Judicial apportionment in this case is consistent with historical precedent which has relied upon the equity powers of the court in dividing such funds, regardless whether the recovery was the result of compromise, settlement, litigation instituted by a personal representative of the decedent as a statutory trustee for the heirs, or trial litigation pursued by any of the heirs. (See, e.g.,
Hernandez
v.
Fujioka, supra,
As implied in our analysis, we do not believe the proposition that because an action for wrongful death constitutes a creature of statute, it exists only so far and in favor of such persons the legislative power may declare
(Justus
v.
Atchison, supra,
Parties here concede there would have been no potential prejudice to either.
Plaintiffs’ remaining contentions are not addressed in the body of this opinion. We dispose of them in the following manner:
Plaintiffs’ Evidentiary Contentions Are Meritless
The Canavins next contend the trial court erroneously excluded evidence on several occasions, rejecting: (1) evidence regarding the credentials of the scientists employed within decedent’s field of expertise regarding decedent’s future earning capacity; (2) offers of proof relating to the abilities and earning capacity of the decedent; (3) postaccident facts as not relevant while inconsistently permitting PSA to offer postaccident economic facts of interest rates; (4) Madonna Canavin’s offer of proof regarding relevant subjects pertinent to care, comfort, society, companionship, solace, moral support, protection, love and loss of support; and (5) “huge hunks of important deposition testimony of out-of-state witnesses.”
(1)
The Credentials and Qualifications of the Scientists
The trial court curtailment of the Canavins’ effort to establish every credential and qualification of Dr. Leonard Meirovitch, Dr. Sherman Seltzer, Dr. Peter Likens, Dr. Keto Soosaar and Dr. Andrew Milstead was well within its discretion to refuse to admit cumulative evidence. “ ‘ [T]he exclusion of evidence which has only a cumulative effect will not justify reversal on appeal. . . .’” (Horn v.
General Motors Corp.
(1976)
(2) Offers of Proof of Decedent’s Abilities Earnings and Destroyed Future Earnings
The Canavins argue the trial court improperly excluded testimony of Dr. Milstead, aerospace engineer Quarterraro and Colonel Alen F. Herzberg, that witnesses Dr. Likens and Dr. Meirovitch were considered the top two men in their field. They contend the jury was unable to properly weigh those scientists’ testimony regarding decedent’s outstanding qualifications. Exclusion was within the proper exercise of the trial court’s discretion. The record is replete with uncontradicted evidence of decedent’s stature in his career field and excluding the proffered evidence was not an abuse of discretion.
(3) The Trial Court's Ruling Regarding Postaccident Facts
The Canavins argue the trial court ruled inconsistently and erroneously in excluding postaccident economic facts of actual salaries earned by decedent’s peers to show decedent’s future earning potential as evidence of lost support, while allowing PSA to offer postaccident economic facts of interest rates to attempt to reduce the family’s loss by the higher discount rate. However, no arguments are made, no authority is cited, and no prejudice is shown. We may presume the contention is without foundation.
(Morris
v.
Associated Securities, Inc.
(1965)
In any event, regarding the alleged inconsistent rulings by the trial court, it was the Canavins who first introduced evidence of postaccident interest rates, not PSA. Upon tender of the evidence, the trial judge promptly determined defense counsel had no objection to the material. The court then allowed the evidence. The Canavins may not now complain PSA was allowed to introduce similar evidence.
(4) Madonna Canavin’s Offer of Proof
The Canavins urge the trial court refused to receive Madonna’s offer of proof pertinent to care, comfort, society, companionship, solace, moral support, protection, love and loss of support. Again, as in the contention above, they fail either to explain why the exclusion of the evidence was prejudicial or to clothe their naked assertion with citation to authority, or
(5) Deposition Testimony of Out-of-state Witnesses
“The trial court improperly disallowed huge hunks of important deposition testimony of out-of-state witnesses.” The Canavins allege approximately 40 percent of Likens’ deposition, 60 percent of Robert Duffy’s deposition, 67 percent of Soosaar’s deposition, 50 percent of Herzberg’s deposition, 25 percent of O’Connor’s deposition, and all but 11 pages of Martin Furey’s deposition was not read to the jury. Having recited these bare statistics, they do not drop the other shoe. We are not told where, if at all, error lurks in this matrix, nor how prejudice may have resulted. None appears from reading the record.
The Canavins’ Assertion the Trial Court’s Conduct Denied Them a Fair Trial
The Canavins contend the trial court intimidated and argued with witnesses, was hostile toward their counsel and constantly employed sarcasm and lacked judicial patience. We do not address this charge because of our reversal of the judgment; however, we assume such conduct, if it occurred, will be avoided on any retrial.
Admitting this evidence (or instructions thereon of the court) flies in the face of the decisions of an overwhelming majority of the American jurisdictions that have considered the question. “It is the general view, supported directly or inferentially by a majority of American cases, that in fixing damages for destruction of earning capacity because of death, the income tax consequences on the award should not be taken into consideration; on the contrary, the award of damages should be based on
gross
earnings or earning capacity and should not be reduced because of any income tax savings which may result from the fact that the damage award will be exempt from income tax.” (Speiser, Recovery for Wrongful Death 2d (1975) at pp. 744-745, fn. omitted.) (See Annot.
See
Rodriguez
v.
McDonnell Douglas Corp., supra,
Although future earnings will be alfected by fluctuating economic conditions, they are the subject of scholarly analysis, recordation and prediction. Income tax consequences are influenced by the economy and political trends—totally unpredictable forces. Who could predict the course of real property taxation in California, or the precipitous decline in income tax payable by corporations since 1970 or the equally precipitous decline of taxes paid by individual taxpayers in higher income brackets since 1981. Historically, income tax rates are as variable as political views of the voting public. Predicting wind velocity and direction is much less speculative. State or national Legislatures or the people by the initiative process can radically change taxes or abolish them in the time it takes to hold an election. (See Butter, The Flat Tax: The Challenge of Finding the Right Formula, L.A. Daily J. (Oct. 5, 1982) p. 4.)
Most courts refusing to admit incidents of future tax as too conjectural do so in the context of requested cautionary instructions advising jurors the claimant’s award will be nontaxable. (See Comment, Computation of Lost Future Earnings in Personal Injury and Wrongful Death Actions (1977-1978) 11 Ind.L.Rev. 667, 687-691.) This is the single issue to which the majority of cases cited in the concurring opinion are confined. It is not the issue here.
For instance, choosing a proper rate to discount an award to present value based upon the rate of return on a prudent investment. The marked fluctuation in interest rates immediately before and since the trial of this case is a striking example.
“Although many of the courts that have considered the question have rejected evidence of future tax liability, most of the commentators who have carefully analyzed the issue have vigorously disagreed. [Fns. omitted.]”
{Burlington Northern, Inc.
v.
Boxberger, supra,
Several jurisdictions have been persuaded by the sound rationale espoused by the vast majority of legal commentators holding that income tax consequences should be considered, including
Furumizo
v.
United States
(D.Hawaii 1965)
In fact, it may be less so. Professor John Maher, in a table showing the ratio of income tax to adjusted gross income for the years 1913 through 1975, shows the federal income tax rate has remained fairly static within narrow bounds from 1941 (the year the income tax rate became a significant factor) through 1975, regardless of war-time or peace-time influences, and remained considerably more stable than inflation. (Maher,
Personal Income Taxes and Claims for Damages
(1978) vol. 50, No. 3, N.Y. State Bar J. 200; see also Nordstrom,
Income Taxes and Personal Injury Awards
(1958) Ohio State L.J. 212, 226-227; Speiser, Recovery for Wrongful Death, Economic Handbook (Cum. Supp. 1982) § 11.8, p. 92.) Thus, the predictability of future income tax rates is not likely beyond the understanding of jurors who daily grapple with tax realities in their personal lives. As stated in
Burlington Northern, Inc.
v.
Boxberger, supra,
That allowing the trier of fact to consider future income tax consequences of both decedent and the family beneficiaries in this manner may actually result in a greater overall recovery by the beneficiaries is illustrated in some reported economic projections. (See Brady, Brookshire and Cobb, Calculating the Effects of Income Taxes on Lost Earnings (1982) 18 Trial No. 9, 65, 66-68 and Benich, The Reverse Tax Effect in Wrongful Death or Injury Estimates (1981) 17 Trial No. 5, 16.)