*1 A.2d KACZKOWSKI, Eric Estate of Administrator Theodore Deceased, Kaczkowski, of Eric behalf of the Estate K. Deceased, Appellant, Kaczkowski, K. BOLUBASZ, Appellee. J. John Pennsylvania. Supreme Court 10, 1980. Argued March Sept. Decided *2 Sikov, Love, Pittsburgh, & for
Seymour appellant. Sikov Reale, Warren for Ferry, Pittsburgh, appel- CosmosJ. D. lee. Feldman, Feldman, M. &
Stephen Philadelphia, Feldman Trial amicus curiae Pa. Lawyers. ROBERTS, LARSEN, J., O’BRIEN, NIX, EAGEN, C. KAUFFMAN, JJ. FLAHERTY and
OPINION NIX, Justice. trespass instituted
Appellant
complaint
Allegheny
suit arose from an
County Court of Common Pleas. The
decedent,
K. Kac-
Eric
in which the
accident
automobile
a vehicle operated
as a
zkowski,
passenger
was riding
matter,
the jury
trial of this
original
At the
appellee.
appellant’s
Upon
the appellee.
the liability
established
trial
was returned
Trial,
case
a New
Motion For
damages.
the issue
for a retrial on
court
damages,
jury
of the question
the retrial
During
facts: the decedent was
following
with the
was presented
death;
of his
he
time
at the
male,
age
twenty years
white
Springs, Pennsylvania
Cambridge
College,
attended Alliance
attend-
death,
of his
he was
at the time
for two years;
a division of
Management,
of Computer
the Institute
ing
relatives
friends and
close
Decedent’s
Litton Industries.
health, industrious, and
good
was in
testified that decedent
computer operations.
study
in his course of
interested
Computer
Institute for
at the
Director of Placement
*3
decedent,
with the
familiarity
to his
testified
Management
student, and that
for a beginning
his
was
progress
good
to learn.
willingness
evidenced motivation
the decedent
employers
contact
his professional
Based upon
Director
the Placement
graduates,
experience
placing
which the decedent
testified to the
of salaries
range
in the private
stated that
have
He
qualified.
would
been
to
from
sector,
ranged
$585.77
the
salaries
average
$538.36
salaries
sector,
average
the
month,
in the public
per
to
month.
per
from
ranged
$600
$900
discussion,
counsel of-
appellant’s
an in-chambers
During
witness, Doctor Reuben E. Slesing-
fered
call
expert
to
as an
of Pittsburgh.
the
er,
University
an Economics Professor at
to
counsel offered
Slesinger,
the
of Doctor
By
testimony
of the
earning capacity
a
of the
prove
potential
projection
Dr.
not prohibit
the trial court did
Although
decedent.1
previous-
projection
which had
factors
1. The
took into consideration
appellant.
by
of
ly
on behalf
been testified to
various witnesses called
Slesinger would
appellant
that Dr.
advised the Court
Counsel for
productivity
and inflation
of
increases
have testified as to the effects
proffered
potential earning capacity
of the decedent.
on the
security
pensions, social
projection
not take into consideration
did
to
of future lost
projection
his
testifying
from
Slesinger
court refused to allow
value,
to
the
earnings
present
reduced
increment to
(4%)
use a
annual
Slesinger
percent
Dr.
to
four
the combined
of
represent
impact
the victim’s
to
salary
base
future increases in
on the
gains
inflation and productivity
was based
The trial court’s refusal
earnings.
the victim’s
Tonner,
case
Havens v.
the
decided
of
recently
upon
which the trial court
(1976),2
146,
(1979);
I. Law Current have Commonwealth, we held consistently this full extent of the are to be damages compensatory 299, 307, 444 282 Ewing, sustained. v. Pa. Incollingo injury Co., 206, McLane v. 230 Pa. (1971); Pittsburgh Rys. A.2d 210 Reese, Bank v. 26 29, 79 A. Pa. (1911); Montgomery 237 actual compensation, by The rule “is to (1850). give the extent of exactly the amount of graduating damages Palmer, 14 Pa. Loss of the loss.” v. Forsyth which if item of damages, future is a distinct for the recovery plaintiff.7 result properly proved, may judi demand productivity increasingly Inflation and respect personal injury cial attention, particularly evi earnings. Traditionally, action for lost future damages increases have dence of future inflation and productivity to be included calculating been deemed too speculative in even inflation and damages though future award. generous reduce an drastically initially creases may However, today, light Washburn L.J. 499 fact that inflation and pro clear scientific evidence of the of our it part economy, an established have become ductivity one, injury permanent will cause a loss or one which When an is a recovery may lessening earning power, be had for of future McCormick, (20th Damages, probable earnings. loss of future survives, reprint 1975). injured party undi- If he should receive dies, minished, earnings, if he but his total estimated proper damages dece- includes a deduction based measure of Ewing, Incollingo personal dent’s cost of maintenance. 263, 307, (1971). Today’s opinion not disturb does 282 A.2d requirement personal our maintenance deductions. be considered such these factors necessary becomes awards. *6 in proof support not require
The “law does
must
compensation
or
damages
support
claims for
exactness.” Lach
standard of mathematical
conform to the
821,
All that
Fleth,
340, 352,
(1949).
64 A.2d
827
v.
361 Pa.
must be
damages
for
“(a)
the law
is that
claim
requires
calculation; mere guess
for
basis
a reasonable
supported by
v.
Bank
Economy
is not
Stevenson
enough.”
or speculation
442, 453-54,
721,
(1964).
197 A.2d
727
413 Pa.
Ambridge,
Flock,
148,
(1962);
Pa.
Personal
injury
installments.8
ments,
or
weekly monthly
and are not paid
Thus,
injuries, including damages
damages
personal
all
future,9
be
and
proved
in the
must
to accrue
expected
Remedies,
Dobbs,
(1973).
8.1
The
calculated
trial. D.
at
§
value
present
is discounted to its
wages
loss of future
interest
(6%) simple
figure.10
the six
using
percent
exception,
Compensation
is the most notable
Act
8. The Workmen’s
amended,
28, 1956,
February
seq., (1955)
77
as
Act of
P.L. 1120
et
§
Act, Act
seq.
Motor Vehicle Insurance
P.S. 1 et
See also No-Fault
§
1009.106(a)(1).
19, 1974,
176, 106(a)(7),
July
40 P.S. §
P.L. No.
§
precise measure of dam-
to assess the
In order for the factfinder
subject
testimony
of the
ages, expert
if “the
matter
is admissiblie
training beyond
involving special
inquiry
the ken of
is one
skills
Meehan,
460, 465, 227
ordinary laymen.”
A.2d
Reardon v.
667,
(1967).
present
reducing
lump-sum
to its
award
10. The rationale for
is that:
plaintiff
will invest the sum awarded
it is assumed that the
over the num-
That interest accumulated
receive interest thereon.
available,
capital,
years
be
in addition to the
of relevant
will
ber
support
plaintiff
the total
is
provide
his future
until
period.
projected interest must
The
at the end of the
exhausted
to the limitation of the
relating
Specifically,
principles
affecting
of the economic factors
and consideration
proof
recently
have been articulated
Tonner,
What I
account
have taken
for
future,
in the
and allow
try
increases
come
due to
future increases in
which would
about
wages
time has
long period
the fact that
over a
economy
in the
had a
to exhibit an increase
propensity
tendency
more
rate.
services at a faster
efficient
produce goods and
This, over the longrun
due to better
Namely,
technology.
is the
reason
principal
why
cause or the
principal
[sic]
rise;
twice much in an
wages
if he can
person’s
produce
better, his
can
employer
hour after
to do his
learning
job
has more
employer
afford to
him more because the
pay
he
offer
can now
goods
produced
this individual
and,
fact,
sale
the American
the longrun [sic]
or
ability
has increased
economy, productivity
*8
American
more
and services
produce
goods
workers to
cent,
an hour
around three and
half per
somewhere
increase
therefore, I
here
wage
approxi-
have allowed
perannum
three and a half
mately
percent
about
[sic]
for the
of his work-life
remaining period
expectancy.
277-78.
at
365 A.2d at
Pa.Super.
accept
The
refused to
economist’s
Superior Court
rea-
a 3V2%
factor.
It
testimony concerning
productivity
based
“was
upon nothing
soned that the
factor
productivity
experience
but the
assertion that
demonstrated
economist’s
at
annually
that industrial
least
by
increased
productivity
and that
this im-
technology
that much due to improved
form of in-
in the
along
was normally passed
provement
378,
Thus, the Haven’s Court it appears and distinct separate were that inflation and productivity between the distinguish failed to and the court phenomena factor that rejection two its blanket Therefore, teaching under was offered in evidence. an who institutes Havens, in Pennsylvania a tort victim receives only compen- action to recover lost future date of the as of the salary or her sation based his is multi- amount earning event. The current debilitating in the victim’s remaining the number of plied by years to its then reduced figure worklife The total span. made in the allowance There is no value. alleged present of either po- formula for consideration earning lost future or inflation. tential productivity
571 II. Havens Fallacy should achieve the computation award damage Ideally, predictability. and efficiency, of accuracy, goals tripartite 300, Hermosa, 308-12 526 F.2d Co. v. S. S. Sulphur Freeport Pennsylvania note that Commentators (5th 1976). Cir. achieves the lost future calculating method of on inflation testimony by precluding expert efficiency goal to inquiry the relevant confining and while debilitating event. at the date determining wages 105, 63 Va.L.Rev. 108 Comment, Inflation and Damages, Lost Fu Considering Calculating Inflation Note, (1977); Infla 499, (1979), Fleming, 18 Wash.L.J. Earnings, ture 51, (1977). 26 Am.J.C.L. Compensation, tion and Tort variables are removed inflation and productivity Since the award, the damage in calculating from consideration of settlement and the possibility award is more predictable However, assuming even out of is enhanced. court efficiency with simplification synonymous premise sacrifices method accu Pennsylvania predictability, to failing compensate to the of the victim racy prejudice anBy sustained. injury the victim to the full extent to inflation and to any recognition obstinate refusal give to attempt we our ignore responsibility productivity, award damage exactly “graduate the amount 96, Forsyth Palmer, 2 Harris loss.” extent of the of the law development orderly We are aware that “[T]he the persuasion must be new conditions responsive Lines, Air superior Griffith v. United reasoning.” A.2d tested rule, duly by experi- has been after it [W]hen the sense ence, to be has been found inconsistent welfare, should be less there or with the social justice . . . full abandonment. hesitation frank avowal and an untena- There to abandon greater should be readiness not discarded reason- may ble when the rule be position conduct of the to have determined ably supposed be its it was the origin when litigants, particularly *10 have or which a gained institutions conditions product of of with the the progress or significance development new years.” Process,
Cardozo, 150-51 Nature of the Judicial court, the the belief of Haven’s inflation uninformed Despite are capable are not and speculative and factors productivity For dec- experts. of definition and economic prediction by tools forecast eco- ades, refining have been economists accura- tools with proven nomic and have used these growth are economic forecasts relied upon by cy. Sophisticated and corporation, financial every major government agency, all that are based is institution. These forecasts small despite known the American and economy toleranc- in the error, past. have been accurate es of these projections Barriteau, See, A.2d D.C.App., District of Columbia Thus, there basis in 563, 566 exists reasonable fact this of inflation and impact produc- for court to consider the A court has a responsibility lost future tivity earnings. changes society. of in our In keep abreast citizenry the the of science of econom- of light recognized acceptance ics, can no longer the of this Commonwealth maintain courts the admissibility their ostrich-like stance and and deny impact of economic data of relevancy concerning reliable Indeed, inflation on lost future earnings. there will realities that be ignore presume economic because of changes no in an individual’s future factors from than vari- any is further removed reality such predict ance that result from our efforts to these may factors.
a. Inflation It would to the Haven cling be ludicrous this Court of inflation our Court’s conclusion the presence is a influenced economy temporary passing phenomenon, Information “war unusual and other circumstances.”11 index, government’s price 11. From 1940 to consumer inflation, purchasing percent. measure of rose terms of Bureau Labor Statistics the United States gathered by has economy experi- American been demonstrates living history. in the over its increase cost encing steady has not been numerically rate of inflation though Even as a inflation presence the same for the years, past Purchasing in our has constant.12 factor been economy Census, Bureau Power Dollar: U.S. (99th Edit.).13 of the United States: Statistical Abstract Thus, vary during given while the rate of inflation may any its as a fact life our period, term long presence certain. picture economic
b. Productivity
*11
Moreover,
factors are too
the assertion
lost future
is
earnings
to consider in
speculative
computing
is
earning
also fallacious.14 An
capacity
individual’s future
power,
purchase
$1.00
it
$3.00
took almost
in 1972 to
what
would
purchased
compounded
have
period
rate of advances over this
in 1940. The
approximately
Purchasing
annually.
is
Power of the
3.5%
Census,
1940-78,
Dollar:
Bureau of
Statistical Abstract of
U.S.
(99th Edit.) Washington,
United
States: 1978
D.C.
1972,
(CPI) has
12. Since
Price
not declined
the Consumer
Index
any
through
month.
has
From 1967
1978 the CPI
risen 102%.
-
-
1976
1972
4.8%
3.4%
-
-
1977
1973
6.8%
8.8% 8.8%
-
-
1978
1974
9.0%
12.2%
-
-
13.3%
7.0%
Statistics,
Labor,
Report
Dept.
of
Bureau Labor
U.S.
of
CPI Detailed
(Dec. 1972-1979).
through
June
From June 1979
1980 the CPI
increased 14.3%.
York,
Judge Friendly
McWeeney
13.
Haven and
noted
v. New
New
34,
Co.,
1960):
(2d
Hartford Railroad
282 F.2d
Cir.
degree
continuing
regard
“There are few who do not
some
stay
willing
to
inflation
here to
and would be
translate their own
earning power
scarcely
annuity,
expect-
into a fixed
it is
and
to be
average personal injury plaintiff
ed that the
will
have acumen
proof
depres-
against
find investments that are
both inflation and
expert
(Footnote
sion-a task formidable for the most
investor.”
omitted.)
compound
14. From 1947to
rate of increase in
1973there was 5.6%
average
persons
private
compensation
in the
of all
non-farm
sector,
approximately A'h
or an
increase of
times. United
overall
Statistics,
Labor,
Dept, of
Labor
States
Statistics 175
Bureau of Labor
Handbook of
objective factors of
capable
age,
of estimation based
Henderson,
Consideration of
maturity, education
skill.15
of Future
Discounting
Earnings
Increased
Productivity
307,
A determi
Value,
Present
20 S.D.L.Rev.
an
future
based on
earning capacity
nation of
individual’s
criteria
far
less
than most other
objective
speculative
of fact.
e.
Hamil v.
g.,
estimates made
trier
have
Bashline,
(1978) (what might
481 Pa.
575
number
joins
growing
now
This Commonwealth
productivity
and
which consider inflation
jurisdictions
future
computing
factors to be included
integral
Elliott,
(Alaska
v.
III. Jurisdictions Formulas Other Suggested By are traditional, There three middle significant approaches, which has ground, adopted evidentiary judiciary of future inflation considering impact productivity on lost 63 Va.L.Rev. at 128 n.155. earning capacity. future The ignores altogether traditional effects approach as being specu- future and future inflation “too to by lative.” This view was adhered this Com- previously monwealth, above, it is reject- for reasons hereby but stated ed.
The that it approach per- middle anomalous ground mits the consider effects of productivity factfinder future capacity, prohibits inflation on lost but earning either of these issues. expert proponents on testimony testimony of this approach argue expert acknowledge that such “speculative,” economic trends is yet *13 and, jurors of all facts are within the “common experience” 576
therefore,
from
prohibited
applying
not be
jurors should
a
Bach v.
reaching
their common
verdict.
knowledge
Co.,
(6th
502
1117
Cir.
Penn Central
F.2d
Transportation
1974),
Aggregates
overruled
Morvant
Construction
by
1978); and,
Jasper
570 F.2d
Riha v.
Corp.,
(6th
626
Cir.
However,
(8th Cir.
it
1975).
Blackburn
The first of
two variants
the evidentiary
these
was
court
Feldman v. Allegheny
proach
developed by
Airlines,
aff’d,
The court then to its value. present task of the award discounting and the present as the “offset The court a formula known developed method” it the estimated inflation value in which subtracted the inflation adjust- rate from the discount rate to calculate were or “real” year’s earnings ed rate of interest. Each testimony expert had an estimated 19. Based that the decedent probably age years remaining in work-life retire at 40 65, her and would assigned the court value dollar to decedent’s by accomplished forty years. task for each of the The court this scales, salary utilizing government pay since this federal GS earnings throughout potential was schedule reflective of the Washington metropolitan area. “According process, valuation ‘fiscal the value the decedent’s this 1972,’ year beginning July earning capacity fiscal GS-12, $15,040. salary step is the for the This first years, over four that for fiscal 1976 the increases the next so $17,044, salary earning capacity is the 1971 for the fifth decedent’s step earning capacity remains GS-12. The decedent’s then rearing unchanged years-eight years of child over the next nine year employment and the thereafter. decedent’s first GS-12, earning capacity goes up step sixth the decedent’s to the time, $17,545, step and continues to rise one at a thereafter step change being grade grade from each the tenth one year, step grade. higher in the fifth next In the fortieth fiscal GS-16, step salary with a the decedent at the seventh I, $33,757. infra, generally p. Table F.Supp. at 1287.
then discounted to by this “real” discount rate. The “real” discount rate the court was by 1.5%. employed The court rationalized its formula: trial,
... on the of the adduced at basis evidence evidence noticed' and collated at the judicially Appendix, notice judicial inflation- continuing erratically ary behavior of the American that 1.5 economy, per cent per is an which to year appropriate figure discount an award of based on the destruction of future damages earning when that award has itself capacity comput- been *15 ed without consideration inflation that affecting amount to the date of the subsequent injury upon which the award is premised.
Id. at 1294-129520 The second variant of the method was evidentiary adopted by Elliott, Alaska in Beaulieu v. Supreme Court 434 P.2d 665 (1967), Guinn, in refined 555 P.2d State Pursuant formula, to this Alaska courts first calculate lost future earning of the victim over his or her capacity work-life to expectancy. As productivity, Alaska court has stated: “Automatic increases to step keyed length service are their nature by very certain and at predictable the time of trial” and the court takes them into account when the lost future estimating earnings. Guinn, State v. 555 P.2d However, at 546. the court excluded as speculative evidence the “non-scheduled increases salary and bonuses appellate process 20. The court court’s summarized the district as follows: rate, calculating appellee’s expert, “In the discount relied on court, average earnings (from the district used an of 4.14% savings investments) representative prudent, mutual bank of a non-sophisticated average investment and subtracted as the 2.87% yearly Department inflation rate revealed of Labor’s Con- 18-year period, yielding sumer Price Index over an a differ- 1.27% up Judge ence which was rounded to Blumenfeld corrobo- 1.5%. ‘inflation-adjusted by calculating rated this discount rate’ of 1.5% yields government the real of investments since federal (with out) securities inflation factored from the 1974 Economic Report President, by appellant Alleghe- a source referred to ny’s expert.” Airlines, Inc., Allegheny (2nd Feldman v. 524 F.2d Cir. 1974). occupation in his chosen progresses as one granted that are Id. employer.” and value to skill, experience in terms im- inflationary component’s for the to account order of future interest the effect pact lost future that court applied the Alaska on lump-sum payment, rates method, a offset the total “total offset method.” Under value but present to its the award court does not discount rate will future inflation the effect of the assumes that rate, eliminating thereby any interest offset the completely value. to its present need to discount the award
IV. Discussion damage award formula should goal Mindful our accurate, as well as efficient, predictable strive to be this Commonwealth earning capacity lost future computing calculating to court’s approach the Feldman adopts total offset approach and the Alaska court’s value.21 We believe discounting inflation and award computes damage this method best eclectic a victim to the full extent of which will fairly compensate complexities injuries unnecessary likely his or her and avoids contributing little although reality confusion produce be obtained. accuracy Although judges degree *16 balls, with crystal tellers juries equipped are not fortune a productivity as approach determining the Feldman to approximates factor in future lost best awarding earning triers of fact all the the soothsayers by presenting foundation, expert relevant evidence. After a laying proper victim’s testify called to as to the lay witnesses are The defense possibilities. may and future past employment present the witnesses and evidence cross-examine plaintiff’s all thorough their a evaluation of Upon own behalf. requires damage be award dis- 21. This now that a Commonwealth using present percent simple six interest counted its calculating figure. requirement We not wish to disturb this do damages attempting to future contexts. We refrain “from other obviously general panacea. wiser fashion broad rules as disputes case-by-case until we is to on a basis course resolve area, experiences develop- develop, through basis a sound for [an] College ing principles.” Area School overall Pa.L.R.Bd. State District, Pa. 337 A.2d evidence the factfinder makes an presented, informed esti- mation of the victim’s lost earning capacity.22 Although this approach may be time like all estimations of consuming, future events be may subject to a it is degree speculation, more exceedingly accurate to assume that the future will not remain with the stagnant past.
We cannot embrace the Alaska court’s restrictive method as a computing productivity component of lost future since the Alaska court limits its to those inquiry step advances of service. The keyed length Alaska court’s refusal to consider the of merit possibility based increases, unfairly discriminates those against victims whose salary skill, dependent on their experience, and value to their Moreover, employer. it appears Alaska court’s conception that merit based increases are “specula- tive” is a throwback to the previously rejected traditional approach.
In support of our “total adoption offset method” in allowing factor, we inflationary note that it is no longer legitimate assume the of future inter- availability est rates by value without also discounting assum- ing concomitant of future necessary inflation. We rec- ognize that inflation has been and will probably always be an inherent part of our economy. Although specific rate of inflation during any given period may vary, we accept the fact that inflation plays an integral part effectuating increases in an we employee’s salary, and choose to adopt damage formula which will allow for that factor without actually the factfinder to consider it requiring as an inde- pendent element of the award.
Current economic
demonstrates the
theory
accuracy
total offset
approach
noted,
inflation. As previously
total offset method
run,
assumes that in the long
inflation and the discount rate will offset each other. “At
*17
approach
earing capacity
accepted by
This tailor-made
to lost
many jurisdictions,
jurisdictions
even those
which do not admit
grounds
speculative.
evidence of inflation on the
that
it is
Higginbotham
Corp.,
(5th
1977).
Mobil
Oil
Modern interest offset method: tends to are the rate of interest
“¡Wjhen rising, prices compensate it be but not so as should be high high rise; rate of interest falling, and when are prices be low, compen- to be but so low as it should tends not for the fall.” sate Fisher,
I. of Interest The Theory therefore, rates, and, interest long Since over the run we inflation, shall rates, will rise and fall discount the two factors adjustment offsetting this natural exploit Accord, Freeport capacity. future earning computing Hermosa, (5th Cir. 526 F.2d Sulphur Co. v. S. S. 1976) are satisfied that total opinion). We (concurring much, if not greater, offset method at least provides would a factor that attempt assign than an accuracy in the rate of inflation over the reflect the changes varying *18 582 Our with the use of the six
years. percent experiences discount rate the suggest difficulties inherent such an As to the concomitant of approach. goals efficiency the the predictability, of total offset method is desirability obvious. There nois method that can assure absolute accu- An racy. additional feature of the total offset method is variance, where there is a it will inbe favor of the innocent victim and not the tortfeasor who caused the loss. of the total superiority approach offset becomes ap- offset parent with the value meth- upon comparison present Feldman, than od. rather the forecasting of impact inflation on an earnings, through future use of inflation adjusted rate, interest Blumenfeld Judge discounted future However, based upon dollars. from an analy- sis of involved, the formula it appears predicting pro- spective interest rates is as difficult as forecasting future inflation. Hermosa, Co. v. Freeport Sulphur S. S. F.2d (5th 1976) Cir. (concurring opinion). Notably, the merit of value an discounting present inflation adjusted interest rate was court questioned by very which it. originally proposed
“. . . [Sjince Connecticut law requires discounting to of for the destruction of damages and since such earning capacity, discounting demands assessment of the future earning power money, Court is compelled to in economic engage forecasting despite the inexactitude of the dismal science’s soothsay- It ing. is not open this Court decide that ascertainment of a discount rate has become too specula- tive to be fair, and that the mandate of statutory award- ing ‘just death would damages’ wrongful be better served by dispensing discounting process with the alto- gether. at 1293 n.30 F.Supp.
Moreover, the inherent in complexities factoring infla- tion out of the market rate interest moved Blu- Judge menfeld to observe that: is more “Nothing conclusively established the instant memorandum decision than the due in this damages amount ascertaining difficulty at 1295.23 F.Supp. case.....” offset method its the total virtue of An additional freed from are Litigators efficiency. judicial contribution to Judge economic data. complex verifying introducing consum- time complicated, are not burdened juries the varia- eliminating Finally, by economic testimony. ing *19 the damage rates from interest inflation and future bles of predictable. is more calculation, ultimate award
V. Conclusion Commonwealth, damages will be Henceforth, this the victim compensate awarded for lost future Upon proper sustained. of the injury to the full extent victim’s future foundation, consider the the court shall of law that a matter Moreover, find as we productivity. to future interest equal be future inflation shall presumed Thus, the courts of this offsetting. rates with these factors of practice to abandon are instructed Commonwealth method, we are this earnings. By discounting lost these cases without able to reflect the of inflation impact jury. question this specifically submitting to permit appellant of court’s refusal to view the trial factor to a future relating introduce evidence to be used for of a new standard and our formulation cases, we reverse the judg- in these accommodating inflation explained that: independent method offset 23. One critic of the standpoint. According practical from a “Feldman also flawed price calculations, changes in the level to the court’s own sudden vary percent .2.9 to from the real rate of interest have caused _8.9 bills, percent Treasury percent and from + term 2.0 on short percent long with these notes. Faced to +3.7 term federal interest, judge should have the trial variations in the real rate of Instead, wary adjusted selecting discount rate. an inflation been inflation, judge simply a condition a stable rate assumed percent, historically yield and arbi- of two associated with real percent trarily a half of interest to one -and lowered the real rate approach The Feldman to allow for unforeseeable fluctuations. clearly required strong assumptions both future rates about inflation and future rates of real interest.” 63 Va.L.Rev. at 105. ment below and remand the cause for a new trial as to the damage question.
ROBERTS, J., filed a concurring opinion.
FLAHERTY, J., filed a concurring and dissenting opinion. ROBERTS, Justice, concurring.
I
agree
that the
majority
practice
reducing
present value the lost future earnings component of personal
awards should
injury
abrogated
be
and the “total offset”
rule adopted in its stead. The
practice
reducing
present value is
unrealistic
its failure to take into account
either future inflation or deflation.
generally
Restate-
ment (Second) of Torts
913A
at p.
Comment
492 (1979).
§
Though perhaps somewhat
the total
imprecise,
offset rule
will fairly accommodate parties in both
inflationary
too,
times.
deflationary
So
the total offset rule “has admin-
istrative
it,
simplicity
recommend
since it avoids rather
complex calculations involved in reducing to present value.”
*20
Dobbs,
D.
Indeed,
Remedies
8.7 at
p.
(1973).
§
any
person who has heard a court’s
value”
“present
will
charge
attest to the wisdom of
abrogating
practice. See Brodie
v.
Co.,
Philadelphia
296,
415 Pa.
Transportation
I also agree that a jury majority may consider of evidence a victim’s lost future earning increases. It is my however, that understanding, law Pennsylvania has long permitted consideration both of jury earning decreases and increases. earning For example, Proposed Jury Instruc- tion 6.22 (Civil) on Fluctuations” “Earnings provides:
“If you find that the will suffer an plaintiff impairment or loss of as earning power ., the result of this accident . . take you may into possible consideration fluctuations with respect words, such losses. In other if you find that the plaintiff’s . .. wages would have increased or decreased over the years, will take you that factor into consideration so that proper can compensation be made.” Committee for Stan- Proposed Court Supreme Pennsylvania Draft October dard Instructions Subcommittee Jury Schwartz, McCaffrey also e.g., Brodie v. other Philadel- grounds, overruled on (1926), A. 810 Bernstein, Co., M. “Dam- Robert supra; phia Transportation in Pennsylvania,” Cases in and Death ages Injury Personal 9Q. (1951). 23 Pa. Bar Ass’n result does not today’s
It also be observed should increases. only earning reflecting mandate verdicts jury free to evidence, both sides are rules of accepted Within to establish their proof respec- and relevant offer competent the evidence offered in challenge as to tive well positions opposition. the exclusive represent result does not
Finally, today’s into factors account future economic taking means losses over future covering cases of awards larger damage be of fact may helpful special findings For years. example, injured not the the tortfeasor making certain that neither future economic condi- or unduly benefited prejudiced California, states, Also, including tions. at least thirteen laws allow- have enacted Delaware, Florida, and Maryland, in medical mal- periodic form of payments some ing “The Periodic Payment T. practice Elligett, actions. See 134 n.49 Very J. 46 Ins. Counsel Judgments,” of Commissioners Uni- Conference recently National draft a “Uniform form Laws an adopted approved State which in- Act” authorizes Periodic Payment Judgments injury cases. See of awards payment personal stallment Henderson, of Bodily “Periodic Payments generally Roger C. Awards,” Installment pay- 66 A.B.A.J. Injury ment of the uniform act provisions speculation involved guesswork
“eliminate[ ] *21 is asked to discount the jury when lump-sum system and, an awards of future damages present future rates of predict of jurisdictions, number increasing accrue, as losses paid will be damages inflation. Since With regard value. there is no need to discount in the inflation, adjustments unpaid provides the act award is damages installments so that the not eroded by inflation.” approaches,
Id. at 736. common-law Appropriate including like, and the special installment findings, payments, may, course, that full and real effect be fashioned to assure and given adjudication liability damages. e.g., 438, 429, v. Allegheny, Ellenbogen County Schaefer, 730, A.2d “Precedent and Poli- (1978); 734-35 W. 34 U.Chi.L.Rev. 3 cy,”
FLAHERTY, Justice, and concurring dissenting. Tonner, I concur in the view that- v. While Havens fully 1271 (1976), 365 A.2d should be unceremo- Pa.Super. law of this Commonwealth niously eliminated from the as unrealistic, majority’s adoption I must dissent to the of what method”, it calls the se rule” of doubtful “per “total offset one, True, such an is a but it does validity. approach simple and, not achieve has been one justice, only adopted i.e., We jurisdiction, Alaska. should simply permit expert and productivity. the issues of inflation Such testimony issue, is, course, subject on both testimony, sides to its validity cross-examination argument Thus, weigh is free to evidence before weight. jury it and This is also simple, provides render its verdict. justice in with our time honored principles. accordance A.2d Pennsylvania
COMMONWEALTH Wayne Spann, Appellant. Levan FORD a/k/a
Supreme Pennsylvania. Court of Jan. 1979.
Submitted Sept. Decided