Damages
3 Types of Damages
3 Types of Damages
- *Compensatory** = meant to equal the value of actual harm caused by defendant
- *Punitive** = meant to punish defendant
- *Nominal** = token amount, signifying that defendant committed an intentional tort
Damages
Compensatory Damages
General Damages
General Damages:
- Also called “non-economic damages”,
- compensate for consequences like pain and suffering that are difficult to quantify in terms of money but arise typically from any injury.
- Because these damages are hard to quantify, much discretion is given to the jury finding
Damages
Compensatory Damages: General Damages
**Remittitur **and Additur
Remittitur: when court decreases damages awarded by the jury
- this is used everywhere
**Additur: **when court increases damages awarded (rather than simply granting new trial)…
- only used in a minority of jurisdictions
Damages
Compensatory Damages: General Damages
Pain and Suffering
This is the most typical form of general damages, but really hard to quantify because pain and suffering is different for different people
2 Categories of Future Pain and Suffering –> Difference in Proof Standards
(1) Objective Injury: Jury can infer future P&S –> Plainly apparent from the nature of the injury that plaintiff will suffer in future
(2) Subjective Injury: Need expert testimony that plaintiff will suffer in future.
* We can’t know for sure whether P&S will occur in future
* Reason we need expert testimony is because the victim doesn’t know any better whether he will continue to suffer. For past P&S, he can just tell jury whether he suffered and they decide if they believe him…but for future, we need some expertise if the injury is one we would not expect to cause P&S
Damages
Compensatory Damages
Per Diem Argument
Per Diem Argument: damages should be calculated based on certain amount awarded each day, multiplied by life expectancy of the victim.
- Saying to the jury “Would you think $7.50 per day would be too much to compensate for this broken neck?”
- Some courts allow these arguments…others do not. TX Courts allow per diem arguments
- Pros: Jury shouldn’t have to make guess, this helps them calculate damages, harmless because it is merely suggestive.
- Cons: Lacks evidentiary support, leads to larger awards, misleads jury.
- Some courts accompany instruction with disclaimer that per diem argument is not evidence, and jury should still use their own discretion
Damages
Compensatory Damages
Golden Rule Argument
Golden Rule Argument: “Put yourself in victims shoes, how much would it take to compensate you for this pain and suffering?”
Most courts do not allow the Golden Rule Argument
- general damages are supposed to be calculated based on circumstances of that particular victim…so “what I feel” has no bearing.
Damages
Compensatory Damages
Hedonic Damages
Hedonic Damages: Loss of enjoyment of life’s pleasures
- Some courts treat this as separate from P&S; most say the two are essentially the same.
- Most courts say that loss of enjoyment of life may be considered by the jury and testified to by the plaintiff BUT expert testimony not allowed
Damages
Special Damages
Special Damages: Compensate for readily calculable types of expenses that plaintiff incurred, such as medical expenses, funeral expenses, or lost earnings.
- Special damages must be tailored to the circumstances of the plaintiff and must be supported by evidence showing their type and amount
- Plaintiff may be awarded all past & future medical expenses –> remember Eggshell Plaintiff Rule (take them as you find them)
- Past / Future Wages
- Property Damages
Damages
Special Damages
Past / Future Wages
- *Past Wages** are relatively easy to calculate –> just based on what the plaintiff was making before and how much time he had to miss work
- *Future Wages** –> more messy
- Discount to Present Value –> Mathematical process by which the law adjusts damages for future losses so that the compensation is accurate…damages are normally awarded in lump sum, so plaintiff could make more money (by earning interest on lump sum) than he would have earned by working
- Inflation also plays a factor –> money is worth less in the future because of inflation
- Increased productivity also plays a factor –> victim was probably going to “climb the ladder” and make more money
Damages
Special Damages
3 Approaches to Offsetting Damages
3 Approaches to Offsetting Damages
- **Traditional: **Ignores the effect of productivity and inflation on lost future earning capacity
- Middle Ground: Allows the jury to consider effects of productivity and inflation, but it can hear no evidence
- Evidentiary: Allows jury to hear evidence as to productivity and inflation
Damages
Special Damages
2 Evidentiary Approaches to Calculating Effect of Inflation/Productivity
2 Evidentiary Approaches to Calculating Effect of Inflation/Productivity
(1) Feldman Approach (This is the majority approach)
- Inflation: Net Discount Rate: Subtract the Estimated Inflation Rate from the Discount Rate (reduce to present value by this net discount)
- Productivity: Allows complete extrapolation based on personal characteristics to determine likely increases in salary
(2) Alaska Approach
- Inflation: Total Offset –> Court just assumes that inflation rate and discount rate essentially cancel out (no need to discount present value at all)
- Productivity: Allows jury only to consider automatic, stair step increases in salary rather than speculative non-scheduled increases and bonuses
Damages
Special Damages: Property Damages
Property Damage –> Difference in FMV of the property before and after the traumatic event (cost of repair is alternative only if less than difference in FMV)
Damages
Past vs. Future Damages
Past vs. Future Damages
Past damages are for harms that have occurred up to the time of the verdict
Future damages are for harms that are predicted to occur after the verdict
Survival Statutes vs. Wrongful Death Statutes
- At CL, the cause of action died with the victim –> silly because it was sometimes cheaper for victim to die. No longer the case because states have passed legislation allowing suit for the tort that caused death
- Survival Statute: Permits the victim’s cause of action to survive the death, so that the estate can sue on behalf of the decedent & can recover for lost wages, medical expenses, pain and suffering, and funeral expenses incurred up to time of death.
- Wrongful Death Statute: Creates a new cause of action in favor of the survivors of the victim for their loss occasioned by the death. 2 kinds are: (1) Pecuniary/Economic Damages (Loss of economic support) & (2) Loss of Consortium (Loss of companionship)
- NB: Wrongful Death is not a COA on its own…there must be some COA for it to piggy-back on
Damages
Wrongful Death
- Creates a new cause of action in favor of the survivors of the victim for their loss occasioned by the death.
- Based on the theory of compensating the survivors for the lost economic benefit which they might reasonably have expected to received from the decedent in the form of support, services, or contribution.
- NB: Wrongful Death is not a COA on its own…there must be some COA for it to piggy-back on
Two Kinds of Wrongful Death Damages
- *(1) Pecuniary/Economic Damages** (Loss of economic support)
- *(2) Loss of Consortium** (Loss of companionship)
- Loss of Consortium relates to the value of mutual society and protection
- For kids: education and training a parent would give is of real economic value to child
- For spouses: companionship and provision is very important
- However, adult children may be too attenuated from their parents in some cases to proffer sufficient evidence of loss of consortium…depends on the circumstances (age, closeness, dependence, etc)
- but not pain and suffering.
- Recovery, however, is limited to what the deceased would have recovered had he lived.
- Additionally, the decedent’s creditors have no right to institute a claim against the amount awarded.
Punative Damages
Punitive Damages (Exemplary Damages in TX)
- Intended to punish defendants for conduct that demonstrates some sort of malice or ill will
- awarded when there is proof of some element of aggravation in addition to proof that defendant’s conduct was reckless or constituted an intentional tort
In TX, punitive damages awarded if the harm results from:
- *(1) Fraud
(2) Malice (Ill Will)
(3) Gross Negligence** –> Objective: High probability of large loss (substantial risk); Subjective: Conscious disregard of the risk by the defendant
Punitive Damages
Corporate Liability for Punitive Damages
Rule: Corporation is liable if:
- It authorizes or ratifies an agent’s gross negligence, OR
- Commits gross negligence through actions of its vice-principals.
- Vice principal is corporate officer, those with power to hire/fire, the engaged in non-delegable or absolute duties of the master, and managers of a department or division.
- In other words, if grossly negligent actor is important enough, the corporation itself is grossly negligent.
Limitations on the Amount of Punative Damages
Due Process Clause prohibits the impositions of grossly excessive or arbitrary punishments
3 Gore Guideposts in considering excessiveness of punitive damages
(1) Reprehensibility of Conduct
- This is the most important consideration
- Consider a number of factors like physical/economic harm, reckless disregard of safety of others, repeated actions, intentional malice, etc
- Remember, plaintiff has been made whole by compensatory damages, so punitive damages should only be awarded if the conduct is so reprehensible as to warrant further damages
- May only consider actions of defendant in relation to the plaintiff…can’t consider evidence having nothing to do with injury
(2) Ratio between actual/punitive damages –> No bright-line ratio but single digit ration is a good rule of thumb
(3) Ratio to other civil fines
Note: Deep pockets of defendant may be considered because some defendants need a bigger award to properly be punished/deterred
Chapter 41 of Texas Civil Practice and Remedies Code:
Exemplary Damages
Protection for Defendant
- Plaintiff must prove elements and amount of exemplary damages by clear and convincing evidence
- No exemplary damages awarded if nominal damages were awarded
- Jury has to be unanimous in regard to liability and amount of exemplary damages
- Right to Bifurcated Trial as to punitive damages –> jury can only know net worth after determining liability
Chapter 41 of Texas Civil Practice and Remedies Code:
Exemplary Damages
Limitation on Amount of Recovery
Rule: Punitive Damages may not exceed the greater of:
- Two times the amount of economic damages + amount (no more than $750,000) of non-economic damages found by jury, OR
- $200,000.
- Jury is not instructed on these limits. They decide amount of punitive damages and judge will only enter judgment on the amount allowed.
- Note: If jury awards non-economic damages in medical malpractice case above the statutory limit and the non economic damages are reduced to limit, the amount awarded by the jury is still considered in punitive damage limit
Limits on Damages
Collateral Source Rule
- Rule: Jury may not consider evidence of benefits independently procured by plaintiff from collateral source in order to reduce damages. (Don’t want to penalize plaintiff for having the foresight to get insurance)
- Plaintiff is doubly compensated to an extent by recovering same payment from defendant and insurance company, for instance (Plaintiff gets a windfall)
- Insurance company sometimes has subrogation rights –> right to get that money paid back from the plaintiff after being paid by the defendant (Insurance Co. gets windfall)
- Some states have gotten rid of the collateral source rule (Defendant gets a windfall)
- These choices are all dripping with policy –> protect insurance companies, make health care affordable, etc
- TX is generally a Traditional Collateral Source Rule jurisdictions
Limits on Damages
Statutory Limits
Part of Tort Reform Movement was to put statutory limits on damages
Arguments for Why Statutory Limits are Unconstitutional
- Violates Right to Jury Trial
- Some courts say that function of jury is to find damages…should not be disturbed
- Other courts say that jury still hears case and finds damages…then the court (law) determines how much of the remedy should actually be allowed
- Violates Due Process
- Some (including federal) courts use rational basis standardà and damage limits to have rational basis
- Other courts use a more stringent test that it must bear and real and substantial relation to the objective sought to be attained
Statutory Limits on Damages
TX Statutory Cap on Damages
Only applies to healthcare liability (don’t want healthcare costs to skyrocket) and only applies to non-economic damages
Non-economic damages limited to
- **Suing a doctor: **$250,000 for each claimant
- Suing a health care institution: $250,000 for each claimant
- NOTE: Can add the first two together
- $250,000 for each claimant against each health care institution, but not to exceed $500,000 (when suing more than one health care institution)
These caps are constitutional under TX constitution because it was amended to allow it –> but still may be unconstitutional under the US Constitution
Actual Damages
The plaintiff must prove ________.
Actual Damages
The plaintiff must prove actual harm, i.e., personal injury or property damages, in order to complete the requirements of liability for negligence.
