Torts

Damages

The goal of damages in tort actions is to make the injured party whole through the substitutionary remedy of money to compensate for tangible and intangible losses caused by the tort.

Damages for Injuries to Personalty

The measure of damages for injury to personalty is the difference between the market value immediately before and after the injury.

The measurement of damages for destroyed property is its fair market value. The measure of damages for injured property is its cost of repair. The cost of repair can be no greater than the fair market value of the property in order to avoid economic waste.

Damages for Losses to Real Property

The measure of damages for permanent injury to real property is the difference in the fair market value of the land before and after the injury. Diminished fair market value is not used as the measure of recovery, however, if an injury to real property is temporary in nature. Temporary damages represent the reasonable cost of repairing the property "which may include the value of the use thereof during the period covered by the suit, or it may be the diminution in the rental value of the property."

When a nuisance is permanent, full damages for permanent injury must be assessed in one action. When a nuisance is temporary an injured party can bring a subsequent action for injuries sustained by the continuation of a temporary nuisance. The recovery is for damage actually sustained to the commencement of suit, but not for prospective injury.

Permanent injury to unimproved land occurs where "the cost of restoration exceeds the market value prior to injury. If the injury is permanent, the measure of damages is limited to the difference between the fair market value of the property before and after the injury.

PERSONAL INJURY DAMAGES

ADJUSTMENTS TO COMPENSATORY DAMAGES

Present Value and Inflation

The present value of a sum is the amount of money that a party must have today in order to the amount equal to the loss at a date in the future.  The propriety of taking into account the factors of present value and inflation in damage awards was recognized by the U.S. Supreme Court in Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523 (1983).

Factoring inflation into an award increases it.  Taking into consideration the time value of money decreases it.  Therefore, an award of money for expenses to be incurred in the future should be reduced to present value.  This is done by calculating present value.  For example, applying an interest rate of 5%, $15,000.00 in five years has a present value of $11, 752.89.  An interest rate of 10% reduces present value to $9,313.82.  The higher the interest rate that is applied, the lower the award to the plaintiff.  The discount rate should be based on the interest rate available for the "best and safest investments."

Loss of future earnings is proved with reasonable certainty by evidence of (1) the amount of wages lost for some determinable period and (2) the future period over which wages will be lost.

The measure of damages for a wage loss is the gross amount of wages. Social Security, retirement contributions or other withholdings may not be used to reduce a plaintiff's recovery for lost wages.

Loss of Consortium

At common law "consortium" was defined as consisting of services, society and sexual relations. The original common law action was only available to the husband for loss of consortium of the wife.

There is a split of authority as to whether a minor child has a legally cognizable claim for loss or impairment of parental consortium.The majority of jurisdictions do not recognize such a cause of action nor does the Restatement Second of Torts.

WRONGFUL DEATH AND SURVIVAL

These actions were unknown at common law. From a civil liability standpoint, a tortfeasor was better off killing his victim then injuring him. In the former case, there was simply no civil remedy available to the victim's dependents or to his or her estate. To cure this harsh rule, all states have now enacted statutes attaching civil liability for wrongful death or by providing that personal injury claims "survive" the death of the decedent. The U.S. Supreme Court abrogated the common law rule with respect to maritime cases in Moragne v. States Marine Lines, Inc., 398 U.S. 375 (1970).

Wrongful death = action by dependents or relatives.  (See, Calif.Code.Civ.Proc. § 377.60)

Survival = Action by the decedent's estate which survives the death of the decedent. It allows the estate's representative to bring an action to recover any damages which the decedent may have recovered had he or she lived.  (See, Calif.Code.Civ.Proc. § 377.30)

The damages prior to death will go to the decedent's estate and be subject to claims of creditors of the estate. Anything left over will go to the beneficiaries of the decedent's will (if he or she had one) or the decedent's heirs at law. Damages after death will go to the decedent's survivors (usually the decedent's immediate family) who may not necessarily be the beneficiaries of any will. Such damages will not be subject to claims by creditors of the decedent's estate. I.e., a decedent's dependents and heirs will not always be identical.

Prejudgment Interest

One purpose of prejudgment interest is to compensate the plaintiff for the loss of the use of money from the date of the injury until the date of judgment. A corollary purpose is to deprive the defendant of unjust enrichment resulting from the use of the money from the date of injury, thereby encouraging settlement.

When a court fixes damages to compensate for a loss which occurred in the past, there should be some allowance for the period between the date of the loss and the date of the judgment.

The prevailing rule is to deny prejudgment interest except where damages can be easily ascertained prior to trial.  The distinction between ascertainable and unascertainable amounts applies to both tort and contract actions.

Cal.Civ.Code § 3291.  In any action brought to recover damages for personal injury sustained by any person resulting from or occasioned by the tort of any other person,  it is lawful for the plaintiff in the complaint to claim interest on the damages alleged as provided in this section. If the plaintiff makes an offer pursuant to section 998 of the Code of Civil Procedure which the defendant does not accept prior to trial or within 30 days, whichever occurs first, and the plaintiff obtains a more favorable judgment, the judgment shall bear interest at the legal rate of 10 percent per annum calculated from the date of the plaintiff's first offer pursuant to Section 998 of the Code of Civil Procedure which is exceeded by the judgment, and interest shall accrue until the satisfaction of judgment.

Prejudgment interest is appropriate only for past losses and not for future losses.

There is a long-established deeply-embedded principle that interest is not allowed on monetary claims against the federal government unless Congress (or a contract) plainly authorizes such an addition.

The Back Pay Act (5 U.S.C. § 5596(b)(1)(A)) now specifically provides for prejudgment interest in suits by federal agency employees covered by the Act.

The court may, in an exercise of its discretion, limit or deny recovery of prejudgment interest if the plaintiff has unduly delayed in pursing his or her claim. (General Motors Corp. v. Devex Corp., 461 U.S. 648 (1983).)

Certainty

The rule which precludes the recovery of speculative damages applies to such as are not the certain result of the wrong, not to those damages which are definitely attributable to the wrong and only uncertain in respect to their amount. While the damages may not be determined by mere speculation or guess, it will be enough if the evidence shows the extent of damages as a matter of just and reasonable inference, although the result may be only approximate. The risk of uncertainty should be thrown upon the wrongdoer instead of the injured party.

Punitive Damages

Punitive damages may properly be imposed to further a state's legitimate interests in punishing unlawful conduct and deterring its repetition.  The most important indice of the reasonableness of a punitive damage award is the degree of reprehensibility of the defendant's conduct.  Punitive damages should reflect the enormity of the offense.  Punitive or exemplary damages must bear a reasonable relationship to compensatory damages.  The proper inquiry is whether there is a reasonable relationship between the punitive damages award and the harm likely to result from the defendant's conduct as well as the harm that actually has occurred. (BMW of North America, Inc. v. Gore   ___ U.S. ___ (1996)

In addition to bearing a reasonable relationship to the actual injury, the amount of punitive damages should account for the profitability of the defendant's misconduct, the plaintiff's litigation expenses, the punishment the defendant will probably receive from other sources, the defendant's financial condition, and the effect on its condition of a judgment for the plaintiff. Defendant's financial status is a relevant factor in all punitive damage awards. I.e., in assessing exemplary damages, a jury must take into account the wealth of the defendant.

A decision to punish a tortfeasor by means of an exaction of exemplary damages is an exercise of state power that must comply with the Due Process Clause of the Fourteenth Amendment. (Honda Motor Co., Ltd v. Oberg, ___ U.S. ____, 114 S.Ct. 2331 (1994).)

In California, punitive damages are available if the plaintiff can show, by clear and convincing evidence, that the defendant was guilty of malice, fraud or oppression.  (Cal.Civ.Code § 3294)

Collateral Source Rule

Under the collateral source rule, a plaintiff may recover damages from a tortfeasor, although the plaintiff has received money or services in reparation of the injury from a source other than the tortfeasor. The benefit conferred on the injured person from the collateral source is not credited against the tortfeasor's liability although it may partially or completely reimburse the plaintiff for his injuries. The rule has been applied where plaintiff has received insurance proceeds, employment benefits, gifts of money or medical services, welfare benefits or tax advantages. Courts have split over whether the collateral source rule should be applied to allow an injured party to recover the reasonable value of gratuitously supplied medical treatment or services.

Emotional Distress Damages

Bystanders may recover for emotional distress damage only under very limited circumstances. The emotional disturbance suffered must be "serious and verifiable," and must be tied as a matter of proximate causation to the observation of the serious injury or death of an immediate family member. Finally, the plaintiff himself must have been in the "zone of danger" i.e, must have been exposed to a risk of bodily harm by the conduct of the defendant.

Economic Loss

The majority of jurisdictions have not permitted the recovery of purely economic loss in a products liability action sounding in tort. In actions for negligence, a manufacturer's liability is limited to damages for physical injuries and there is no recovery for economic loss alone.

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