8.11 DAMAGES CHARGES ‑ GENERAL
C. LOSS OF EARNINGS (Approved
12/88; Revised 7/10)
[Plaintiff] has a right to be compensated
for any earnings lost as a result of injuries caused by defendant's negligence
[or other wrongdoing].
Any award for lost earnings must be based
on net [take-home] pay, not on gross income. This is because only take‑home pay — the
amount left after taking out taxes — would have been received by [plaintiff],
and the amount you award is not subject to Federal and New Jersey income taxes.
So, first, you must decide whether [plaintiff]
proved that he/she was disabled by his/her injuries which in turn resulted in lost
income? If so, you must then decide and
fix the amount of lost earnings. Do this
by considering the length of time during which [plaintiff] was not able to
work, what his/her income was before the injuries, how much he/she earned upon
return to work, whether the injuries affected his/her ability to do any tasks
required on the job, and any lessening or decrease in his/her income after
returning to work.
In your analysis, think about any special
skills [plaintiff] has and whether there were other jobs available that he/she
was able to do to earn income. [Plaintiff]
must have tried to minimize the earnings lost, but extraordinary or impractical
efforts are not necessary. All that is
required are reasonable efforts and ordinary care in trying to reduce the loss.
a. Preliminary
Charge to be Given Before Any Expert Testimony
You
will shortly hear expert opinion testimony on certain economic claims
made. You will be the final judges of
the reliability of an expert’s projections of future economic losses. Any bottom line figure offered by the expert
will be based on certain assumptions made by the expert concerning probable
future economic trends.
In evaluating the reliability of the
expert's testimony, consider the cross-examination by counsel, as well as any
evidence presented by the opposing party on this issue, such as other expert
testimony. Keep an open mind as to the reliability
of any bottom-line figures; do not automatically accept them. It is your responsibility alone to determine
the amount of economic losses suffered by [plaintiff], based on all the
credible evidence you choose to accept on this question.
b. Final
Charge to be Given at Conclusion of Case if There is No Expert Testimony
[Plaintiff] also seeks to recover earnings
that will be lost in the future. He/she
has a right to be compensated for any earnings which you find will probably be
lost and proximately caused by the injuries brought about by defendant's negligence
[or other wrongdoing].
If you decide from the evidence that it is
reasonably probable that plaintiff will lose income in the future, because
[either] he/she has not been able to return to work, [or] he/she has not been
able to keep the same job, [or] he/she will be able to work for a shorter
period of time only, then you should include an amount to compensate for those
lost earnings. In deciding how much your
verdict should be to cover future lost earnings, think about those discussed
regarding past earning losses, including the nature, extent and duration of
injury. Consider [plaintiff's] age
today, his/her general state of health before [date of incident], how long you
reasonably expect the loss of income to continue, and how much plaintiff can
earn in any available job that he/she physically will be able to do. Obviously, the time period covering [plaintiff's]
future lost earnings cannot go beyond that point when it was expected that
he/she would stop working because of retirement, had he/she not been injured.
Consider the probabilities of increases in earnings resulting from raises for
productivity or promotion and plaintiff's life expectancy and work‑life
expectancy before the injury.
Any figures you have heard on life
expectancy and work‑life expectancy are only statistical averages. They are not fixed rules; they are general
estimates. Use them with caution. Use your sound judgment in taking them into
account.
For future lost earnings, as well as past
lost earnings, you must base your decision on probable net [take-home] earnings,
the amount left after taxes are deducted.
[Plaintiff] has the burden to prove, by a preponderance of the evidence,
his/her net income and the probable loss of future earnings. In deciding what [plaintiff's] future losses
are, the law does not require of you mathematical exactness. The law requires that you must use sound
judgment based on reasonable probability.
[Verbal Threshold cases]
[If the lawsuit is brought pursuant to N.J.S.A. 39:6A-8a, the “verbal
threshold” statute, the jury must be instructed: “regardless of whether you
found that [plaintiff] proved that he/she sustained a permanent injury by a
preponderance of the evidence, the jury may award [plaintiff] a sum of money
for past lost earnings. If you find that
[plaintiff] has proved a claim for future lost earnings by a preponderance of
the evidence, your award must be limited only to that reasonable period of
recuperation and recovery that proximately results from the non-permanent
injury sustained.]
Note to Judge
Haywood v. Harris, et al., A-1120-09T-3,
decided July 2, 2010, addresses claims for future lost earnings in a case
brought under N.J.S.A. 39:6A-8a, the
“verbal threshold” statute. There, the
Appellate Division mandated the charge parenthetically stated above. That decision also requires that the verdict
sheet contain language in the appropriate case limiting “future lost earnings”
to a “reasonable period of recuperation and recovery.”
c. Effects
of Interest and Inflation on Future Earnings
Note to Judge
Do not charge if
parties stipulate that interest and inflation rates will offset each
other.
Once you have decided how much money
plaintiff will lose in the future, you must then consider the effects of
inflation and interest. Consider the
probable effects of inflation on reducing the purchasing power of money in the
future. Your award for future losses may
be increased to account for a loss in the purchasing power of money because of
inflation.
Consider the probable effects of interest
which will be earned on your award. You
must not award [plaintiff] the exact amount of money that he/she will be losing
in the future, because he/she will have that money now, although he/she will
not have incurred the loss of that money until some time in the future. That means that he/she can invest the money
and earn interest on it now, even though he/she otherwise would not have had
that money to invest until a future date.
Therefore, you must make an adjustment for
the award being available now, even though the loss will not be experienced until
the future. This adjustment is called “discounting”;
it gives you the present value of the money one receives now instead of at some
future time. Discounting gives you the
present value or present worth in a single amount of money which otherwise would
to be received over a number of years at so much per year.
Your goal is to create a fund of money,
which, if paid today, will fairly compensate plaintiff for his/her future loss
of earnings. In doing so — in finding
the present value of future losses — you must consider the interest the fund
will probably earn in future years, as well as the effects of taxation on the
interest earned and the effects of inflation in decreasing the purchase power
of money. The higher the interest rate
you believe the fund will earn in the future, the lower will be the amount of
the fund needed today to fairly compensate [plaintiff] for future
earnings. The higher the probable rate
of inflation in the future, the higher the amount of the fund will be needed to
fairly compensate [plaintiff]. Possibly,
interest earned in the future could be offset exactly by the rate of inflation,
causing these factors to cancel each other out; in that event, you need not
adjust your award of future lost earnings for inflation or interest.
d. Final
Charge to be Given at Conclusion of Case if There was Expert Testimony on the
"Bottom Line"
You have heard expert testimony about the
present value of [plaintiff’s] future lost earnings, including projections as
to future interest, including its tax consequences, and inflation rates. You may consider some, all, or none of the
opinions of the expert[s] in determining a fair figure to compensate [plaintiff]
for his/her future lost earnings. You
[may] have heard [a] "bottom line" figure[s] as to [plaintiff's]
future lost earnings. Do not automatically
accept these figures. You are free to
determine, based on all the evidence, including the expert testimony you choose
to accept, what amount will fairly compensate [plaintiff] for his/her future lost
earnings.
3. Loss
of Future Earning Capacity: Infant Plaintiff With Permanent, Severe Injury
If
you find the evidence establishes that [the infant plaintiff] suffered a severe
injury with lasting or permanent effects and that the injury will within
reasonable probability reduce [his/her] future earning capacity, you may consider
that reduction. No one knows what job or
profession [the infant plaintiff] would eventually undertake, without this
severe injury.
Therefore, as to an infant's loss of future
earning capacity, the law provides no better yardstick than your own sound
judgment and experience. You must not
award damages for [an infant plaintiff's] loss of earning capacity arbitrarily;
rather, you must use your own good conscience, sound judgment, and experience
and determine what loss of future earning capacity is reasonably probable to
result from plaintiff's injury.
Note to Judge
Add appropriate
language concerning present value of future loss of earnings.
4. Loss of Earnings Where Plaintiff has
Received P.I.P. Income Continuation Benefits (Approved
12/88, Deleted 2/04)
Note to Judge
This charge is
deleted in its entirety. While Ruff
v. Weintraub, supra, requires all
wage losses to be determined by the jury on a “net” basis rather than “gross”
wages, N.J.S.A. 39:6A-12 bars the admission of PIP benefits, wage losses
or medical expenses into evidence. See,
Clifford v. Opdyke, 156 N.J. Super. 208, 213 (App. Div. 1978).
Note that N.J.S.A.
39:6A-12 bars admission of wage loss benefits into evidence whether they are
“paid” or just “collectible.”
In practice, the
jury should determine plaintiff’s “net” wage loss after taxes are deducted from
“gross” income, and counsel should disclose to the court if the plaintiff was
covered by a policy of insurance that would provide PIP wage loss
benefits. The court would then mold the
jury’s verdict to credit defendant according to each week that the jury found
plaintiff lost wages. Unless the
plaintiff purchased supplemental, increased PIP coverages, the maximum credit
is set by statute. See N.J.S.A. 39:6A-4. These benefits would be treated similar to
other “collateral sources.” See
Adamson v. Chiavaro, 308 N.J. Super. 70, 78-81 (App. Div. 1998) (New
York PIP policy).
Source: https://njcourts.gov/attorneys/civilcharges.html
It is unclear to the Committee whether
economic damage awards and/or emotional distress damage awards under the New Jersey Law Against Discrimination
are subject to either Federal and/or New
Jersey State
income taxation. See generally,
26 U.S.C. § 104(a); IRS Rev. Ruling 96-56; United States v. Burke,
504 U.S. 229, 112 S.
Ct. 1867 (1992); and Commissioner v. Schleier, 515 U.S. 323, 115 S.
Ct. 2159 (1995), regarding Federal taxation of awards under
Federal discrimination law. Thus, it is
unclear to the Committee whether the statement in the Charge that an award for
lost earnings (Charge 8.11C) and an award for personal injury (Charge 8.48) is
“not subject to federal or state income tax” is accurate with respect to awards
under the New Jersey Law Against
Discrimination. In Wachstein v.
Slocum, 265 N.J. Super. 6, 24 (App. Div. 1993) certif. denied,
134 N.J. 563 (1993), the Appellate Division noted the “present
uncertainty of the law in this area” and observed that “we believe the wisest
course would be for the trial court to omit any reference to taxability in its
instructions to the jury.” See also,
Abrams v. Lightolier, Inc., 50 F. 3d 1204, 1220 (3rd Cir. 1995)
(citing Wachstein, the court states that “we are confident that the New Jersey courts would
not require that the award be calculated on net income”). The Committee believes that the nature and
scope of instructions, if any, on the tax consequences of these awards should
await further guidance from the appellate courts.
This section applies only where the plaintiff
alleges a loss of salary. Where there is
an allegation that plaintiff lost other benefits, such as medical coverage,
pension benefits, etc., the instructions must be molded to incorporate those
concepts.
Smith v. Red Top Taxicab Corp., 111 N.J.L.
439, 443 (E.&A. 1933).
Ruff v. Weintraub, 105 N.J.
233, 238 (1987).
Ibid.; Bussell v. DeWalt Products,
105 N.J. 233, 228-229 (1987).
McDonald v. Mianecki, 79 N.J.
275, 299 (1979), as to general duty to mitigate damages. Refer also to Assoc. Metals Corp. v. Dixon
Chem., 82 N.J.Super. 281, 307 (App. Div. 1964), and Robinson v.
Gonzalez, 213 N.J.Super. 364, 371-372 (App. Div. 1986).
Moore
v. Pub. Serv. Coordin. Transp., 15 N.J.Super. 499, 510 (App. Div.
1951).
These instructions are based upon DeHanes
v. Rothman, 158 N.J. 90 (1999), overruling Tenore v. NuCar
Carriers, Inc. 67 N.J. 466 (1975).
Coll v. Sherry, 29 N.J.
166, 175 (1959).
The collateral source rule (see cases under Model Civil Charge
8.11A) applies to loss of earnings as well as to medical and hospital
expenses. Plaintiff may recover damages
for loss of earnings although having been paid wages or their equivalent by
employer pursuant to sick or annual leave benefits or retirement on half salary
under a pension contract. Rusk v.
Jeffries, 110 N.J.L. 307, 311 (E. & A. 1933). Chap. 326, L. 1987, eliminates
the collateral source rule as to causes of action arising on or after December
18, 1987. Deduction of benefits, less premiums, is done by the court, not the
jury. See also N.J.S.A. 59:9-2(3) for similar effect of New Jersey Tort Claims Act.
This concept should be charged if there is
appropriate evidence received on the subject.
See Charge 8.11G regarding
life expectancy.
See Caldwell v. Haynes, 136 N.J.
422, 436 (1994), which requires that the plaintiff prove net income in personal
injury and wrongful death cases.
By analogy to future income loss in a
wrongful death case, see Tenore v.
NuCar Carriers, Inc., supra, at
494‑495. See also, Friedman v. C. S. Car Service, 108 N.J. 72, 78‑79
(1987).
Lesniak v. Cty. of Bergen, 117 N.J. 12 (1989).
