AMI 2206 Measure of Damages—Loss of Earnings or Profits—Past and Future

This clause is to be inserted between the two paragraphs of AMI 2201 when the evidence justifies its use.

Do not use the bracketed reference to future losses when AMI 2207 is given.

The court cited AMI 2206 as reflecting “settled law” in Ishie, 302 Ark. at 114, 788 S.W.2d at 226 (reversing the trial court for giving AMI 2206 absent adequate evidence of lost past and future profits).

Loss of future earnings and loss of earning capacity are separate elements of damages. Cates v. Brown, 278 Ark. 242, 245, 645 S.W.2d 658, 660 (1983) (referring to AMI on damages with approval). Loss of future earnings requires proof, with reasonable certainty, of (1) the amount of wages lost for some determinable period and (2) the future period over which wages will be lost. Id., 645 S.W.2d at 660; Arthur v. Zearley, 337 Ark. 125, 143, 992 S.W.2d 67, 78 (1999). Thus, where there is proof that the plaintiff, at the time of the trial, is still unable to earn as much as he did before he was injured, an instruction on the loss of future earnings is proper. Check v. Meredith, 243 Ark. 498, 500, 420 S.W.2d 866, 867 (1967). Testimony by the plaintiff, his wife, and his employer regarding plaintiff's earnings, unsupported by documentary proof of earnings, was held to be sufficient to support the trial court's giving of this instruction in Davis v. Davis, 313 Ark. 549, 554–55, 856 S.W.2d 284, 286–87 (1993) (noting that the test is “reasonable certainty,” not “exactness,” and distinguishing Swenson v. Hampton, 244 Ark. 104, 424 S.W.2d 165 (1968)).

The gravamen of loss of future earning capacity, by contrast, is the loss of the ability to earn in the future resulting from a permanent injury, proof of which loss does not require the same specificity or detail as does proof of loss of future wages, nor does it require proof of specific pecuniary loss. Cates, 278 Ark. at 245, 645 S.W.2d at 660 (citing Henry Woods, Earnings Capacity as Elements of Damage in Personal Injury Litigation, 18 Ark. L. Rev. 304 (1965) and AMI 2207). The evidence in a particular case might support an award for either element; but, because of the danger of double recovery, it is error to disregard the Note on Use and give the lost future earnings portion of this instruction along with AMI 2207. Coleman v. Cathey, 263 Ark. 450, 454, 565 S.W.2d 426, 429 (1978).

The measure of damages for lost wages is the gross amount of those wages and is not to be reduced by taxes, retirement, Social Security contributions, or other withholdings. Cates, 278 Ark. at 247–48, 645 S.W.2d at 661–62. It is error to admit evidence of such withholdings. Id., 645 S.W.2d at 661–62. The plaintiff may recover as damages lost leave (whether vacation or sick time). Freeman v. Reeves, 241 Ark. 867, 877, 410 S.W.2d 740, 746 (1967) (citing Swindle v. Thornton, 229 Ark. 437, 316 S.W.2d 202 (1958)).

Lost profits are a recoverable element of damages in both tort and contract actions when proved with reasonable certainty. Ishie, 302 Ark. at 114, 788 S.W.2d at 226; Boellner v. Clinical Study Centers, LLC, 2011 Ark. 83, 378 S.W.3d 745 (2011). Lost net profits, not lost gross profits, are recoverable. Id. A party seeking lost profits must present a reasonably complete set of figures to the fact-finder and should not leave it to speculate as to whether there could have been any profits. Boellner, 2011 Ark. 83, 378 S.W.3d 745. Less certainty is required to calculate the amount of lost profits than is required to establish that such profits were lost and are recoverable. Reed v. Williams, 247 Ark. 314, 445 S.W.2d 90 (1969). In 2017, the Arkansas General Assembly, noting in its legislative findings that Arkansas courts “may have perceived” Arkansas as a “new business rule” state with respect to the availability of lost profit damages for a newly established business, amended Ark. Code Ann. § 16-64-131 to clarify that “there is no absolute denial of damages for lost profits to a newly established business” and that such damages are potentially available to all businesses based on the same standard of proof. Act 1103 of 2017. In calculating damages, neither expert testimony nor specificity is required. In Agracat, Inc. v. AFS-NWA, LLC, the court held that while testimony from an expert witness or other officer would have reduced the difficulty of determining the amount of damages, nevertheless “[d]amages should not be deemed unrecoverable simply because they are problematic to ascertain.” 2010 Ark. App. 458, at 7. Further, the court clarified: “Arkansas law has never insisted on exactness of proof in determining damages, and if it is reasonably certain that some loss occurred, it is enough that damages can be stated only approximately.” Id.

It was not an abuse of discretion for the trial court to give AMI 2206 on a claim for breach of fiduciary duty, as opposed to a claim for breach of contract. Sealing Devices, Inc. v. McKinney, 2009 Ark. App. 412, at 3–6, 321 S.W.3d 270, 272–73 (distinguishing Interstate Oil & Supply Co. v. Troutman Oil Co., 334 Ark. 1, 972 S.W.2d 941 (1998)).