Case Title: Morgan v. Monessen Southwestern Ry.

Citation: 513 Pa. 86, 518 A.2d 1171

Docket Number: 

State: pennsylvania

Court: Pennsylvania Supreme Court

Date: 1986-12-12T00:00:00Z

Document:
513 Pa. 86 (1986) 518 A.2d 1171 Gerald L. MORGAN, Appellee, v. MONESSEN SOUTHWESTERN RAILWAY COMPANY, a corporation, Appellant. Supreme Court of Pennsylvania. Argued September 15, 1986. Decided December 12, 1986. *87 Paul A. Manion, James G. McLean, Manion, Alder & Cohen, P.C., Pittsburgh, for appellant. John J. Repcheck, Pittsburgh, amici curiae B & O Consolidated Ry. Ralph G. Wellington, Philadelphia, for Ass'n of American Railroads and Nat. Assoc. of R.R. Trial Counsel. Thomas Hollander, Evans, Ivory & Evans, Pittsburgh, for appellee. Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, HUTCHINSON, ZAPPALA and PAPADAKOS, JJ. LARSEN, Justice. The issues raised in this appeal are: (1) whether in an action for personal injuries under the Federal Employers Liability Act (FELA), 45 U.S.C. § 51, et seq., the "total offset method," established as the law in this jurisdiction by *88 Kaczkowski v. Bolubasz, 491 Pa. 561, 421 A.2d 1027 (1980), may be applied in calculating damages, and; (2) whether the prejudgment interest provisions of Pa.R.Civ.P. No. 238 may be applied to an FELA action tried in a Pennsylvania state court. The Superior Court, in affirming the trial court, held that use of the "total offset method" in this FELA case was proper and, approved the addition of prejudgment interest under Rule 238 to the verdict. On August 27, 1977, appellee, Gerald L. Morgan, sustained injuries to his back when he fell as he alighted from a railroad car while carrying out his duties of employment. The appellee alleged that his fall was caused by the negligence of his employer, appellant, Monessen Southwestern Railway Company. He initiated this suit under the provisions of the Federal Employers Liability Act, in the Court of Common Pleas of Allegheny County. At the conclusion of the trial, the appellant requested the trial judge to instruct the jury that any verdict for loss of future earnings must be reduced to present worth. The trial judge declined to give such an instruction. Instead, the judge instructed the jury on the total offset method for calculating damages. The jury found in favor of the appellee and awarded him a verdict in the sum of $125,000. On motion of the appellee and pursuant to Rule 238 of Pa.R.Civ.P., the court added prejudgment interest to the verdict. The appellant filed post-trial motions seeking a judgment N.O.V. or in the alternative, a new trial. In these two motions, appellant alleged, inter alia, that the trial court erred in refusing to charge the jury that any award of future damages must be reduced to present value. The appellant also alleged that the trial court erred in molding the verdict by adding "delay damages" pursuant to Rule 238. By order dated July 22, 1982, the lower court dismissed appellant's motions. The Superior Court affirmed. Morgan v. Monessen Southwestern Railway Company, 339 Pa.Super. 465, 489 A.2d 254 (1985). Relying on Humphries v. Pittsburgh & Lake Erie *89 Railroad Company, 328 Pa.Super 119, 476 A.2d 919 (1984), the Superior Court held that the use of the total offset method for determining present value of future damages was correct in this case. Further, the Superior Court concluded that "[T]he trial court's addition of delay damages to the jury's verdict was proper." In St. Louis Southwestern Railway Co. v. Dickerson, 470 U.S. 409, 105 S. Ct. 1347, 84 L. Ed. 2d 303 (1985), the United States Supreme Court said: The question then of whether it was error for the trial court to refuse to instruct the jury that an award for future damages must be reduced to present worth, and to charge instead on the total offset method, is governed by federal law. Citing the United States Supreme Court's Opinions in Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523, 103 S. Ct. 2541, 76 L. Ed. 2d 768 (1983) and St. Louis Southwestern Railway Company v. Dickerson, supra., the appellant argues that, as a matter of federal law, awards of future damages in FELA actions must be reduced to present value. The appellant insists that the trial court's charge to apply the total offset rule of Kaczkowski v. Bolubasz, supra. in calculating future damages in this case is contrary to federal law and constitutes reversible error. *90 The case of Jones & Laughlin Steel Corp. v. Pfeifer, supra. involved a claim for injuries under the Longshoremen's and Harbor Workers' Compensation Act, 44 Stat. 1426, 33 U.S.C. § 904. The District Court, citing Kaczkowski, applied the total offset method for the calculation of damages and the Third Circuit Court of Appeals approved its use. The United States Supreme Court reversed and remanded, rejecting the Third Circuit's conclusion that the total offset method was a mandatory rule in the federal courts. The Court refused to adopt the total offset rule or any other rule as the exclusive method for calculating future damages in federal trials. The Supreme Court said: Id. 103 S. Ct. at 2555. The court went on to observe: Id. 103 S. Ct. at 2556, 2557. The court further stated: Id. 103 S. Ct. at 2558. In summary, the United States Supreme Court in Pfeifer: held that the total offset method adopted for use in Pennsylvania negligence cases is not a mandatory rule in federal *92 trials; declined to adopt the total offset rule, or any rule, as the mandatory method for determining future damages in federal court cases; ruled that use of the total offset rule is not prohibited if the trial court finds it to be the appropriate method under the circumstances; and held that the trial court "must make a deliberate choice, rather than assuming that it is bound by a rule of state law." Id. Thus, in final analysis, the Supreme Court, limiting its attention to suits arising under § 5(b) of the Longshoremen's and Harbor Workers Compensation Act, refused to adopt a mandatory rule and held that the total offset formula is a permitted method for calculating future damages in cases under that Act. Even though Pfeifer involved a claim under Section 5 of the Longshoremen's and Harbor Workers Compensation Act, we believe the approval of the total offset rule as a permissive method in that case applies as well to the instant FELA action. We agree with the observation of the Superior Court that: Morgan v. Monessen Southwestern Railway Company, 339 Pa.Superior Ct. at 471, 489 A.2d at 258. The total offset method is the rule adopted by this court for application in negligence cases tried in Pennsylvania courts. The use of that method is permitted in federal trials where the district court makes a deliberate choice as to its application. Jones & Laughlin Steel Corp. v. Pfeifer, supra. The adoption of the total offset rule as the method to be used in calculating damages in negligence trials in Pennsylvania was made after a thorough consideration of various present worth theories and rules. It was deliberately selected by this Court as the rule that most nearly provides an injured claimant with damages to the full *93 extent of the injuries sustained. Kaczkowski v. Bolubasz, 491 Pa. 561, 421 A.2d 1027. In Kaczkowski, we stated: Id. 491 Pa. at 579, 421 A.2d 1027. We stated further: Id., 491 Pa. at 583, 421 A.2d 1027. Accordingly, we hold that the trial court's use of the total offset method to determine the present value of future damages in the instant FELA action satisfies the requirements of federal law as enunciated in Pfeifer. Four days before the Superior Court filed its opinion in this case upholding the use of the total offset method, the United States Supreme Court, on March 4, 1985, decided the case of St. Louis Southwestern Railway Company v. Dickerson, 470 U.S. 409, 105 S. Ct. 1347, 84 L. Ed. 2d 303 (1985) involving an FELA claim tried in the Missouri state courts. In Dickerson, the jury returned a verdict in favor of the appellee in the amount of $1,000,000. The appellant Railway Company appealed alleging that the trial judge erred in refusing to instruct the jury that any award for *94 loss of future earnings must be reduced to present value. The Supreme Court noted that: Id. 105 S. Ct. at 1348. The Court reasoned that the fact that an instruction on present value was not included in the Missouri Approved Instructions was insufficient reason, under federal law, to deny appellant's request for such an instruction. "Whether such an instruction should have been given is a federal question." Id. 105 S. Ct. at 1348. Citing Chesapeake & Ohio R.C. v. Kelly, 241 U.S. 485, 36 S. Ct. 630, 60 L. Ed. 1117, (1916), the Court said: "[A] defendant in a FELA case is entitled to have the jury instructed that `when future payments or other pecuniary benefits are to be anticipated, the verdict should be made up on the basis of their present value only.'" Id. 105 S. Ct. at 1348, 1349. The court went on to say: In Dickerson, the Missouri court gave no instruction at all concerning present worth. By contrast, in the instant case, *95 the trial judge did instruct the jury on present value by charging on the total offset method. In applying the total offset method, future inflation and future interest rates are deemed equivalent thereby eliminating the previous practice of reducing the award to reach present worth. Present worth is established by use of the total offset rule.[1] We believe that the instructions given by the trial judge in the present case adequately apprised the jury on present value and satisfies the dictates of Dickerson. Next, the appellant complains that the trial court erred in adding $26,712.50 to the verdict as prejudgment interest pursuant to Rule 238 of the Pa.R.Civ.P. The appellant argues that the measure of damages in FELA actions is a matter of federal law. Appellant insists that under federal law prejudgment interest may not be awarded in FELA cases.[2] It is urged that federal law permits interest only on a judgment. Appellant cites 28 U.S.C. § 1961 which provides in relevant part: The Superior Court, citing its decision in Humphries v. Pittsburgh & Lake Erie Railroad Company, 328 Pa.Super 119, 476 A.2d 919 (1984) as controlling, held that the addition of Rule 238 prejudgment interest to the jury verdict was proper.[3] In Humphries, the Superior court observed: Id., 328 Pa.Superior Ct. at 125, 476 A.2d at 922. The court went on to say: *97 In response to this diversity of opinion that had manifested itself in the circuit, the Court opted to renounce its former, unfavorable position on the issue of prejudgment interest and adopted, instead, a posture consonant with that espoused in Ellis v. Chevron U.S.A., Inc., 650 F.2d 94 (5th Cir.1981). In doing so, the Court made statements that are quite germane to the case at bar; viz.: Id., 328 Pa.Superior Ct. at 127, 476 A.2d at 923. The Superior Court concluded that Olsen endorsed "the awarding of prejudgment interest to a plaintiff, who sues under a federal statute, when the remedy is based upon and supported by the state law where the district court sits." (Emphasis in original.) Id., 328 Pa.Superior Ct. at 128, 476 A.2d at 924. We agree. *98 On November 20, 1978, we promulgated Rule 238, which states in part as follows: In Laudenberger v. Port Authority of Allegheny County, 496 Pa. 52, 436 A.2d 147 (1981) we said that "[T]he format of Rule 238 is responsive to its fundamental goal of prompting meaningful negotiations in major cases so as to unclutter the courts." This worthy goal in no manner conflicts with the purpose of the FELA, nor do the prejudgment interest provisions of Rule 238 contravene any provision of the federal act. This Court has the right to institute procedural rules designed to alleviate congestion in the trial courts. Cases brought under the FELA, as well as other federal statutes, contribute to such congestion the same as cases instituted under state laws. A rule of procedure,[4]*99 such as Rule 238, which does not conflict with any provision of the FELA is properly applied to FELA cases brought in Pennsylvania courts.[5] The order of the Superior Court is affirmed. HUTCHINSON, J., filed a dissenting opinion joined by McDERMOTT and ZAPPALA, JJ. HUTCHINSON, Justice, dissenting. I dissent. FELA cases brought in state courts are subject to state procedure, but the governing substantive law is federal. St. Louis Southwestern Railway Co. v. Dickerson, 470 U.S. 409, 105 S. Ct. 1347, 84 L. Ed. 2d 303 (1985). The majority correctly states that the measure of damages in these cases is a matter of federal substantive law, Norfolk and Western Railway Co. v. Liepelt, 444 U.S. 490, 100 S. Ct. 755, 62 L. Ed. 2d 689 (1980); Chesapeake & Ohio Railroad Co. v. Kelly, 241 U.S. 485, 36 S. Ct. 630, 60 L. Ed. 1117 (1916). Under longstanding federal precedent those damages must be discounted to present value. Id. Though *100 the United States Supreme Court has not established a particular method for discounting damages to present value, it has given us guidance on the selection of a method. In Jones and Laughlin Steel Corp. v. Pfeifer,[1] 462 U.S. 523, 103 S. Ct. 2541, 76 L. Ed. 2d 768 (1983), the court held that the judge is not bound to follow state law on discounting to present value and, indeed, may not blindly follow the state procedure.[2]Id. at 550-53, 103 S. Ct. at 2557-58. In Pfeifer, the judge blindly applied the total offset method we adopted in Kaczkowski v. Bolubasz, 491 Pa. 561, 421 A.2d 1027 (1980). This record shows that the trial judge did the same thing. Reproduced Record at 68a-70a. Judge Finkelhor's comments reveal that she did not consider other methods, but blindly followed our teaching in Bolubasz, and that she disagrees with the concept of discounting to present value required by federal law. In addition, her reliance on Liepelt seems misplaced in light of the subsequent decisions in Dickerson and Pfeifer. A state judge is not free to consider the discounting question procedural in FELA cases because the United States Supreme Court has held it is substantive. Liepelt, supra; Kelly, supra. The damages found by the jury were not reduced to present value as required by federal law.[3] Likewise, I believe that the trial court's award of delay damages under Pa.R.C.P. 238 conflicts with federal law. Though state procedure generally applies in FELA cases brought in state courts, "so called" procedural rules which interfere with federal substantive law do not. Brown v. Western Railroad of Alabama, 338 U.S. 294, 70 S. Ct. 105, 94 L. Ed. 100 (1949). Damages, of course, are a matter of federal substantive law. The majority states that Rule 238 is nothing more than a procedural device used to encourage negotiation and settlement and lighten court dockets. This is pure sophistry. Any rule which increases a damage *102 award by twenty-five percent has an undeniably material effect on damages. Application of our so-called procedural rule not only interferes with governing federal substantive law but undermines the national uniformity FELA was designed to achieve. See Liepelt, supra at 493 n. 5, 100 S. Ct. at 757 n. 5. Appellee's entitlement to delay damages or pre-judgment interest should be determined under federal substantive law not Pennsylvania procedure. In addition, for the reasons contained in my concurring opinion in Craig v. Magee Memorial Rehabilitation Center, 512 Pa. 60, 515 A.2d 1350 (1986), I do not believe that delay damages are under any circumstances a matter to be handled by a procedural rule. Therefore, I would reverse Superior Court and remand for a new trial on damages. McDERMOTT and ZAPPALA, JJ., join in this dissenting opinion. [1] See O'Rourke v. Eastern Air Lines, Inc., 730 F.2d 842 (2nd Cir., 1984) (approved the district court's use of the total offset method to establish present value). [2] In support of this proposition, appellant cites, inter alia, the following federal cases: Faulkenberry v. Louisiana & Arkansas Railway Company, 551 F.2d 650 (5th Cir.), rehearing den. 555 F.2d 1391 (5th Cir.1977) (interest on judgment from date of judicial demand is contrary to law in the fifth circuit); Kozar v. Cheasapeake & Ohio Railway Company, 449 F.2d 1238 (6th Cir.1971) (error to add interest to sums awarded as damages from the date of the filing of the complaint; interest should be paid from the entry of judgment); Louisiana & Arkansas Railway v. Pratt, 142 F.2d 847 (5th Cir.1944) (interest to be calculated from the date of entry of judgment). But see, Garcia v. Burlington Northern Railroad Company, 597 F. Supp. 1304 (1984) (U.S. District Court in Colorado allowed prejudgment interest in FELA case. The court found strong policy considerations in approving such an award fairness and efficiency. It was found that granting prejudgment interest was fair in that it often was necessary to fully compensate an injured railroad worker. Such a rule also promoted efficiency in the courts by providing an incentive for early settlement.) [3] Morgan v. Monessen Southwestern Railway Company, 339 Pa.Super. 465, 489 A.2d 254 (1985). [4] In Laudenberger, we said that Rule 238 was a rule of procedure "aimed at furthering litigation in a meaningful way while protecting the rights of the litigants." Id., 496 Pa. at 65, 436 A.2d 147. We stated that the purpose and effect of Rule 238 are procedural though there may be a collateral effect on the substative right of both parties. Id. [5] In the recent case of Craig v. Magee Memorial Rehabilitation Center, 512 Pa. 60, 515 A.2d 1350 (1986), this Court suspended the operation of the mandatory provisions of Rule 238 and directed the following post-trial procedure: [W]e direct that claims for delay damages are to presented in petition within five days of a jury verdict or arbitration award. Within five days thereafter the respondent's answer shall be due. If the plaintiff's recovery resulted from a jury verdict, the judge who presided over the trial is to consider the petition and answer. Prior to reaching a decision, the judge may hold a hearing to resolve any factual disputes. If the plaintiff's recovery resulted from an arbitration proceeding, the parties' petition and answer shall be submitted to the next available arbitration panel, and a hearing shall be conducted to resolve any factual disputes. Thereafter a decision shall be rendered, awarding or denying delay damages consistent with Pa.R.Civ.P. 238(a)(1). In Craig though, it was held that "the suspension of the mandatory initiated provisions of Rule 238 is to be given prospective effect only" Id., 512 Pa. at p. 66, 515 A.2d 1350. The appellant in the instant case did not assert an attack on the Rule on grounds that it offended due process by failing to provide a forum to assess fault for delay as held in Craig. The post-trial procedure adopted in Craig therefore, is not applicable here. [1] As the majority notes, Pfeifer arose under the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. §§ 901-950; however, the same federal law on damages applies. [2] We may label discounting as procedural for our own purposes. Nevertheless, it retains its substance for FELA purposes. [3] The United States Supreme Court does not clearly state in Pfeifer and Dickerson who should determine the method to be used to discount damages to present value. Since it is the jury's task to determine damages and discount them to present value, I believe that the jury should choose the method. Expert testimony on the various methods should be presented to aid the jury, and the judge should instruct the jury on all methods advanced by the parties.