Evidence of Future Earnings for More than Past Earnings
In my last blog I covered how to support a claim for lost earnings when you are self-employed. Today I would like to cover the law that will support how you can make a claim for future lost earnings for more than what you have made in the past.
In Lewis v. Pruitt, 487 A.2d 16, 21 (Pa. Super. Ct. 1985), the Superior Court stated the test for “impaired earning capacity” as being “whether the economic horizon of the disabled person has been shortened because of the injuries sustained as a result of the tortfeasor’s negligence.” (Citing Bochar v. J.B. Martin Motors, 97 A.2d 813 (Pa. Super. Ct. 1953); Janson v. Hughes, 455 A.2d 670 (Pa. Super. Ct. 1982).)
In Lewis, the plaintiff was employed at a dress manufacturing plant at the time of her accident. However, she had graduated from the Empire Beauty School in York, Pa. and was licensed as a beautician. She had previously maintained her own shop with equipment in her home, working thirty to forty hours a week for eleven years. Id. at 20. Plaintiff had continued to do beauty work for friends and family, while employed at the dress manufacturing plant, “and had even discussed reopening a beauty shop with two of her fellow workers.” Id. at 20. Defendant argued that the plaintiff needed to evidence a “definite plan to return to work in a given occupation” in order for it to be permissible to introduce evidence to demonstrate a loss of earning capacity in that field. Id. at 21. The court rejected this argument. Id. Instead, the court held, “Where, as here, the plaintiff has maintained her skills…continued to practice in her trade albeit on a part-time basis and engaged in discussions pointing towards a return to that occupation, we hold that it was not an abuse of discretion for the trial judge to submit this evidence to the jury on the issue of impairment of earning capacity.” Id. In fact, the plaintiff in Lewis even “introduced evidence of the probable compensation available to her were she to resume full-time work as of the time of trial.”
Lewis shows that a plaintiff need not even be practicing in a given trade at the time of the injury in order to submit to the jury evidence of future lost earnings in that trade. As such, if you may not have been earning much in the job at the time of the incident because of your choice to be self-employed or have a job in a field that will not allow you to make as much as in another field, if you could make more money in the future by working for someone else or in a second trade you are skilled in, is relevant as to what you could earn based on your skills and experience; regardless of whether you had a “definite intent” to do so. Thus, if it was permissible for the plaintiff in Lewis to introduce evidence of “probable compensation” were she was to return to a trade she did not actively practice, it should be permissible for you to introduce evidence of probable compensation if you were to practice your trade in a different way (i.e., through transitioning from self-employment to employment for someone else or in the second trade you are skilled in).
Restatement (Second) of Torts § 924 cmt. d states, in regard to lost future earnings, “The extent of future harm to the earning capacity of the injured person is measured by the difference, viewed as of the time of trial, between the value of the plaintiff's services as they will be in view of the harm and as they would have been had there been no harm.” Accordingly, “the trier of fact must ascertain, as nearly as can be done in advance, the difference between the earnings that the plaintiff probably would or could have received during his life expectancy but for the harm and the earnings that he will probably be able to receive during the period of his life expectancy as now determined.” Id. (emphasis added). The use of the phrase “could have received” suggests that future earnings can be measured not just with reference to what a plaintiff would have earned, with mathematical precision or certainty, but also to what a plaintiff could earn, taking into account relevant factors such as “the type of work that the plaintiff has done and the type of work that, in view of his physical condition, education, experience and age, he would have been doing and will be likely to do in the future during the working period of his life.” Id.
§ 924 cmt. d was cited approvingly by the Pennsylvania Superior Court in Pratt v. Stein, 444 A.2d 674, 696 n.36 (Pa. Super. Ct. 1982). In Pratt, appellants argued, inter alia, that “the trial judge erred in charging the jury that an award for loss of future earnings represents the amount which appellee ‘would have or could have earned during his life expectancy but for the injuries that he sustained in this case.’” Id. (Emphasis in original.) Citing the Restatement (Second) § 924, the Superior Court stated that this approach “is axiomatic,” and that the trial court’s charge aligned precisely with the Restatement; therefore, there was no error. Id.
Restatement (Second) § 924 cmt. d. and Pratt support calculation of a future lost earnings based not just on what one would have earned through self-employment, but also on what could have earned in other employment, but for injury.
In Gillingham v. Consol Energy, Inc., 51 A.3d 841, 864 (Pa. Super. Ct. 2012), the Superior Court stated that a future earnings calculation “requires a reasonable basis to support such an award…Furthermore, to ensure that a plaintiff is fully compensated for loss future earnings [sic], projected increases in productivity must be taken into account… [which is gauged] by factors that include age, maturity, education, skill, and technology advances” (citing Helpin v. Trustees of University of Pennsylvania, 969 A.2d 601 (Pa. Super. Ct. 2009)). Moreover, a plaintiff need not have expert testimony to show loss of earning capacity; rather, a plaintiff can rely on his own testimony. Gillingham, 51 A.3d at 866. In Gillingham—which was a case of consolidated appeals made by Consol Energy, Inc. against rulings made at the trial level in favor of appellees the Gillinghams and the Deckers, id. at 847. The Superior Court affirmed the trial court’s award of future lost earnings and future earning capacity as to both appellees. The case of Mr. Decker is elucidating, as the court held that Decker could be awarded damages for future lost earnings and future lost earning capacity which exceeded what he was currently making with his employer at the time of the accident.
Regarding Mr. Decker, the tortfeasor, Consol, challenged “the evidence [of his] lost future earnings [relating] to whether he would have earned commissions [at his job].” Id. at 864. Consol alleged that the lost future earnings were “based on speculation.” Id. Decker, at the time of the accident, had been earning no commission, for the two years he was with his current employer, Pump Action; and he was earning $100,000 per year, though he had been earning $125,000 with a prior employer. Id. Decker anticipated that his salary at his current employer would have continued to increase to $125,000 (while he was only earning $60,000 - $80,000 per year post-accident). Decker v. Consol Energy, Inc., 2011 Pa. D. & C. LEXIS 167 at *27 (Pa. D. & C. 2011). The jury awarded Decker $528,000, or $44,000 per year ($125,000 - $81,000), in lost wages, and $15,000 per year in lost commission for 12 remaining work years, which totaled $708,000. Id. at *24.
In holding that the evidence supported the jury’s determination as to Mr. Decker’s future ability to earn commission, the court noted that “Mr. Decker had twenty-seven years’ experience in… [and] a vast amount of skill in the field. Additionally he had many contacts in the pertinent industry from working at [his previous employer]. He stated that he planned to work until age seventy because he did not have much in retirement savings. There was nothing speculative or uncertain about the proof offered, and the jury verdict was within the range of that established by the evidence.” Gillingham, 51 A.3d at 865.
As in Gillingham, an injured person may expect to earn more in the future based on increases in productivity. In Gillingham, Mr. Decker anticipated using his skills and contacts in the future to receive more commission than he had received in his employment prior to the accident. Thus, there are numerous examples of which somebody could actually recover more money than they had in the past. Examples would be a recent college grad, a resident becoming a doctor, a person who was making less money being self-employed then he could had he worked for somebody else, and a person who just recently changed jobs. In short, there are various arguments, if the facts support it, to actually recover more money than they had earned in the past. It is important to understand, one is not always limited by their past earnings.
In his last blog, Jim Heneghan covered how to support a claim for lost earnings when you are self-employed. Today, he covers the law that will support how you can make a claim for future lost earnings for more than what you have made in the past.