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WPI 34.02 Future Economic Damages—Present Cash Value

6 WAPRAC WPI 34.02Washington Practice Series TMWashington Pattern Jury Instructions--Civil

6 Wash. Prac., Wash. Pattern Jury Instr. Civ. WPI 34.02 (7th ed.)

Washington Practice Series TM

Washington Pattern Jury Instructions--Civil

April 2022 Update

Washington State Supreme Court Committee on Jury Instructions

Part IV. Damages

Chapter 34. Damages—Future—Mortality Tables

WPI 34.02 Future Economic Damages—Present Cash Value

[Any award for future economic damages must be for the present cash value of those damages.]

[Noneconomic damages [such as] [pain and suffering] [disability] [disfigurement] [and] [ ] are not reduced to present cash value.]

“Present cash value” means the sum of money needed now which, if invested at a reasonable rate of return, would equal the amount of loss at the time in the future when [the expenses must be paid] [or] [the earnings would have been received] [or] [the benefits would have been received].

The rate of interest to be applied in determining present cash value should be that rate which in your judgment is reasonable under all the circumstances. In this regard, you should take into consideration the prevailing rates of interest in the area that can reasonably be expected from safe investments that a person of ordinary prudence, but without particular financial experience or skill, can make in this locality.

[In determining present cash value, you may also consider decreases in value of money that may be caused by future inflation.]

NOTE ON USE

This instruction should not be given in the absence of evidence of present cash value.

Use bracketed material as applicable. Use the bracketed paragraph on future inflation only if there is supporting evidence. If the expert witnesses have used an inflation factor as a part of their interest figure, it may be necessary to revise the language on future inflation to be consistent with the evidence of the experts.

The bracketed material relating to pain and suffering should not be used in a wrongful death case. See Comment below.

COMMENT

This instruction is based upon Kellerher v. Porter, 29 Wn.2d 650, 666–67, 673–76, 189 P.2d 223 (1948).

Need for definitions and guidelines. It is error to instruct the jury to reduce an award to present cash value without further defining what that term is and how it should be applied. Bartlett v. Hantover, 84 Wn.2d 426, 431–32, 526 P.2d 1217 (1974). An instruction is erroneous if it gives the jury no guidelines as to the appropriate rate of interest to apply. Hinzman v. Palmanteer, 81 Wn.2d 327, 335–36, 501 P.2d 1228 (1972), disapproved of on other grounds, Wooldridge v. Woolett, 96 Wn.2d 659, 666–67, 638 P.2d 566 (1981).

Evidence of the appropriate rate of interest must be presented before jurors are instructed as to discounting damage awards to present cash value. Snow v. Whitney Fidalgo Seafoods, Inc., 38 Wn.App. 220, 230, 686 P.2d 1090 (1984); see also Mendelsohn v. Anderson, 26 Wn.App. 933, 939–40, 614 P.2d 693 (1980) (it is not error to refuse to instruct the jury to discount future medical expenses and lost earning capacity to present cash value if no evidence is introduced as to the proper interest rate or mathematical formula).

In Cornejo v. State, 57 Wn.App. 314, 325–29, 788 P.2d 554 (1990), the court held that expert testimony as to the value of an annuity was admissible as a way of determining the present cash value of future economic losses. The opinion also cites the former version of WPI 34.02.

Offset. The jury is entitled to know that the reduction of an award to present cash value may be offset by a change in the purchasing power of money if the plaintiff produces evidence of the probable reduced value of money at given periods of time in the future. See Hinzman, 81 Wn.2d at 335–36; Sadler v. Wagner, 5 Wn.App. 77, 85, 486 P.2d 330 (1971). It is desirable to require expert testimony to prove the present worth of money invested at a given interest rate, because this allows cross examination or opposing expert testimony as to the probable inflationary trend which might offset the discount. Sadler, 5 Wn.App. at 83–85 (approving the former version of WPI 34.02).

Pain and suffering. Recovery for the decedent's pain and suffering is precluded under the wrongful death statute, RCW 4.20.010, because wrongful death recoveries are for losses incurred by designated surviving beneficiaries rather than injuries suffered by a decedent.

Related statutes. Under RCW 4.20.046 (the general survival statute), the correct measure of damages is the present value of probable future accumulations to the estate of the deceased. This is calculated by subtracting all probable expenditures of the decedent from the probable gross earnings and reducing the net accumulation to present value. Wagner v. Flightcraft, Inc., 31 Wn.App. 558, 568, 643 P.2d 906 (1982).

RCW 4.56.260, enacted as part of the 1986 Tort Reform Act, requires the court, at the request of a party, to order periodic payments of future damages if those damages exceed $100,000. In Esparza v. Skyreach Equipment, Inc., 103 Wn.App. 916, 942, 15 P.3d 188 (2000), the Court of Appeals noted that application of this statute in a jury trial would require significant tailoring of the evidence, instructions, and verdict form. Accordingly, a post-trial request for periodic payments was held to be untimely. The court reasoned:

Conversion of future damages to present value and converting present value to gross amounts can involve several judgment calls and determinations of fact. Such judgment calls and determinations of fact should be made by the jury unless the parties can agree to some other means. The parties have a constitutional right to have the jury determine issues of fact. …
In order for the jury to properly perform its task, it must hear evidence regarding the judgment calls and determinations of fact that need to be made. It must also be instructed whether to award any future damages at present cash value or some other value. …
Each element of future damages accumulates at a different rate, and a single lump-sum figure makes it difficult for a trial court to ascertain how much the jury intended to be for future medical care and how much for future earnings, and what duration of payments the jury found to be appropriate for each kind of future damages. A trial court would have no way of knowing the answers to these questions, absent an appropriate special verdict form, so that any attempt to apply a periodic payment schedule would require arbitrary determinations by the court that could result in under-compensation of the plaintiff or overpayment by the defendant.

Esparza, 103 Wn.App. at 943–44.

[Current as of April 2021.]

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