Economic Damages for Personal Injuries

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July 21, 2009

Impairment of Earning Capacity

One who has been injured through another's fault and whose earning capacity has been impaired by the injury is entitled to recover damages for the loss sustained by reason of such impairment.[1] The essential question is whether the plaintiff's capacity to earn was hurt.[2] If it was, he is entitled to damages for any loss, past or future, attributable with reasonable probability to the impairment in his earning capacity.[3] It is not of controlling significance that a plaintiff was not receiving wages for his services at the time of the injury, but rather a share of the net profits of a business.[4] Recovery of damages for loss of earning capacity is not merely a recovery for lost wages.[5] Salary or wages earned at the time of the injury are merely evidential facts, relevant but not conclusive, in the inquiry as to the pecuniary value of the impairment of earning capacity which an injured person has sustained.[6]

In the Lashin case[7], the services of the plaintiff wife were rendered in the prosecution of a business of which she was a part owner and from which she derived income in the form of a share. The Connecticut Supreme Court held that in such a situation, the value of her earning capacity is to be measured by the value of the services she contributed to the business.[8] It was further determined that she made no claim that her services were of a special or peculiar nature and, therefore, her damages for loss of earning capacity could be determined by the market value of the services which she was prevented from contributing, i.e., the amount commonly paid for such services in businesses of like nature.[9]

The Connecticut Supreme Court has deemed loss of earnings as special damages and the defendant is entitled to notice of them by a special allegation.[10]

Under the collateral source rule, the Connecticut cases uniformly deny the defendant credit for the plaintiff's continued salary payments from his employer during disability.[11] The cases make the distinction that the loss being compensated is "earning capacity," not actual wages and, therefore, whether or not the plaintiff in fact received his salary during his disability is not material.[12] However, any payments that go toward medical, dental, or hospital costs through insurance coverage and/or through a contract with a group, partnership, corporation, or organization will be considered collateral sources that must be deducted from the amount of economic damages.[13] This is so, whether or not the plaintiff purchased these benefits or whether they were provided by others.

In order to maximize economic damages, future medical expenses may also be claimed.[14] It is not speculation or conjecture to calculate future medical expenses based upon the history of medical expenses that have accrued as of the trial date, particularly when there is also a degree of medical certainty that future medical expenses will be necessary. Future medical expenses do not require the same degree of certainty as past medical expenses. Where the doctor testifies that the injured party might need future treatment and the injured party testifies he still suffers pain, that testimony is sufficient for consideration of the element of future medical expense.[15]

In demonstrating an injured party's impairment of earning capacity, consideration should be given by trial counsel to the following:[16]

a. Age of injured party;

b. Previous employment;

c. Usual occupation;

d. Experience and training, including all formal education;

e. Highest position attained;

f. Opportunities for promotion;

g. Total basic wages for reasonable period prior to injury;

h. Amount of commissions and customers obtained;

i. Number of commissions and customers obtained;

j. Total amount of commissions during typical period;

k. Amount and basis of bonus payments;

l. Availability of overtime work;

m. Secondary occupations (the second job);

n. Eligibility for sick leave and vacations;

o. Availability of retirement plan;

p. Loss of income, from any source, as directly traceable to injuries; and

q. Inability to ever recover this loss.

[1] Mihalek v. Cichowski, 4 Conn. App. 484 (1985).

[2] Lashin v. Corcoran, 146 Conn. 512, 514 (1959). Note that where the evidence of diminished earning capacity is merely speculative, claims should not be submitted to the jury. See Bombero v. Marchionne, 11 Conn. App. 485 (1987) (trial court refused to charge the jury with a diminished earnings claim where the evidence indicated that the plaintiff was making more money after the accident and was practicing the profession he was trained in).

[3] Parkins v. United States, 842 F. Supp. 617 (D. Conn. 1993).

[4] Lashin v. Corcoran, 146 Conn. 512, 514 (1959).

[5] Eisenbach v. Downey, 45 Conn. App. 165 (1997) (defining future lost wages as "time away from one's work due to sickness or doctor or therapy appointments and the like that may cause one to lose some earnings").

[6] Delott v. Roraback, 179 Conn. 406 (1980) (holding that an instruction regarding loss of earning capacity with respect to the plaintiff's sales business was proper, even though plaintiff's income tax returns showed a net loss for his business during and following the year of the accident).

[7] Lashin v. Corcoran, 146 Conn. 512, 514 (1959).

[8] Lashin v. Corcoran, 146 Conn. 512, 515 (1959).

[9] Berndston v. Annino, 177 Conn. 41 (1979).

[10] Varley v. Motyl, 139 Conn. 128, 134 (1952).

[11] Hammer v. Mount Sinai Hosp., 25 Conn. App. 702 (1991).

[12] Lashin v. Corcoran, 146 Conn. 512, 515 (1959); 1 Conn. L. Rev. 93, 106 (1968).

[13] Conn. Gen. Stat. §§ 52-225a, 52-225b. Note that life insurance is excluded from collateral sources in § 52-225b.