### No. 12104 INTHE SUPREME COURT OF THE 

### STATE OF MONTANA

CHAROLETTE 

### L. RESNER, Administratrix of the Estate of Herbert Re 

### Resner, Deceased, Plaintiff and Appellant,

THE NORTHERN PACIFIC RAILWAY, a Wisconsin Corporation, Defendant and Respondent,

Appeal from: District Court of theFourth Judicial

### District, Honorable Jack L. 

### Green, Judge presiding. Counsel of Record: For Appellant: Daniel J. 

### Shea argued, Missoula, Montana. For Respondent: Garlington, Lohn and Robinson, Missoula, Montana. J. C. 

### Garlington appeared and Lawrence F. Daly, argued,

Missoula, Montana.

Submitted: September 20, 

### 1972 Decided: 

## JAN12

## 197. Filed:

## JAN121973Krr.Justice John Conway Harrison delivered the Opinion of the Court.

This appeal arose out of 

### a wrongful death actionbrought under the Federal ~m~lo~ers' LiabilityAct, 

### 45 U.S.C.A. 

### 5 51et seq. Herbert R. Resner and his section foreman, Benny Adams,

werekilledwhen the track motor car on which they were riding collidedwith a Northern Pacific freight train on August 15, 1967. The collision occurred between Alberton and Cyr, Montana, between Mileposts 158 and 159 on the Northern Pacific tracks. At the time of their death, both Resner and Adams were employees of the defendant railroad company and were acting within the scope of their employment. Charolette L. Resner, widow of Herbert R. Resner and administratrix of his estate, brought this action forhiswrongful death on behalf of herself and their children. Trial with a jury was held inthe district court of the fourth judicial district, Mineral County, Hon. Jack L. Green, presiding. By special verdict, thejury found Northern Pacific Railway negligent in two ways: (1) Failure to enforce, observe and obey the safety rules of the railroad for obtaining and using train lineups and operating track motor cars, and 

### (2) failure, by and through itsagent Adams,to see and observe the approaching train and avoid the collision. Resner was found tobe ten percent contributorilynegligent. The jury returned a verdict forplaintiff in the amount of $175,000. In answer to special verdict questions, thejury found fivepercent tobe a reasonable rate of increase inwages and prices to determine future damages, and ECve percent tobe a reasonable rate of discount tobe used in determining the present worth of future damages. The evidence concerning future earnings was introduced through the testimony of plaintiff's witness Dr. George B. Heliker, a recognized expert inthe field of labor economics. He gave several opinions with regard to future damages as concerns

### this case. One opinion was that Herbert Resner could reasonably have expected an annual fivepercent increase inwages during the remainder of hiswork lifeexpectancy. He testified that sinceWorld War I1 wages have increased atleast fivepercent per year and that as applied toResner, hiswages as a section

man kept pace with the increases of section men throughout the United States. Too, wages for sectionmen continued toincrease afterResner's death. Resner's base hourly wage atthe time of his deathwas $2.6699. By December 1970, this ratehad increased to $3.4444. This testimony was not controverted attrialby defendant railroad company, Dr. 

### Heliker also testified extensively on the discount rate tobe applied inreducing future earnings topresent worth, The process of discounting involved taking the product of the base earning capacity plus the growth rate of wages and applying

a discount rate toreduce those amounts topresent worth. As a result of his calculations, he concluded that a fivepercent discount ratewas most reasonable. In so finding, he noted that

If it

### was strictlyaccidentalffthat the wage growth rate equaled the discount rate. He further concluded that future economic losses could best be estimated by projecting them on a flat ratebasis, that 

### is, no increase forwage growth and no decrease for discount. On 

### February 23, 1971, defendant fileda motion for entry of judgment, requesting the jury's verdict be reduced, The motion stated (1) it

### was erroneous for thejury tobe allowed to speculate on futurewage increases and tooffset those increases against thediscount topresent worth, (2) by thewording of the special interrogatories to thejury the future damages would be increased, by failuretoapply the discount rate, to

a figure not supportableby the evidence. On 

### April 20, 1971, Judge Green granted defendant's motion for entry of judgment and recomputed the plaintiff's award tobe

### $91,740.49, plus costs. A 

### number of plaintiff's motions were denied, On April 30, 1971, defendant sent plaintiff a check

ror the amount of thejudgment, plus costs. Plaintiff refused tender and returnedthe check to defendant. On 

### May 3, 1971, plaintiff moved to alter or amend the judgment, stating that the defendant had previously agreed to have the interest on thejudgment run from February 10, 1971, and 

### that interestwas not included inthe check. Defendant deposited the check for the amount of thejudgment plus costs in a savings account inplaintiff's name atthe Southside National 

### Bank, Missoula, Montana on Play 19, 1971. Defendant contended the deposit of the check inthe bank constituted compliance with section 

### 58-423, R.C.M. 

### 1947, relating tothe extinction of money obligations, and thereby the interest on thejudgment was terminated. Plaintiff, on the other hand, maintained that since the defendant did not deposit the amount of interest on thejudgment along with thejudgment, the statute

was not satisfied and the interest did not terminate. Defendant conceded that it

### had been previously agreed that interest should

run from February 10, 1971. The court ruled that plaintiff should receive interest from February 10, 1971through 

### May 

### 24, 1971, and later overruled plaintiff's objections tothe court deducting ten percent forHerbert Resner's contributory negligence. On June 

### 21, 1971, finaljudgment for $91,740.49, plus costs and interestwas entered by the court. Plaintiff appeals from that finaljudgment and allrelated rulings. The basic issuehere iswhether the trialcourt was correct in 

### granting defendant's motion for entry of judgment, In granting the motion, the court recomputed thejury's award, reducing it 

### considerably. At 

### the hearing on plaintiff's motion to amend, May 28, 

### 1971, the court indicated that thereason fornot using the fivepercent figure deduced by the jury tobe a reasonable

II 

### figure for determining futurewage increaseswas that as a matter of law

# * 9~ 

### the question of inflation is speculative,conjectural, uncertain, and is an improper element of damages

#, ,, ,, 

### " " ".I' We hold the trial court was inerror in granting defendant's motion. The jury was allowed toconsider extensive expert testimony

on the subject of futurewage increases. Dr. Heliker testified at length concerning future wage increases. Based on his appraisal of past economic history of this country, he indicated why wages and prices 

### willcontinue to rise in the future:

lIJc L. 5: because prices have been increasing, the value of money has been decreasing or declining. It isnecessary topay higher wages in order to maintain purchasing power and because output per man hour has been increased steadily, you see

# **

# * it [man's productivity] has been rising the entire period very steadilyata steady rate. 

### At the present time, it 

### is rising around about 3 percent per year, which means that even ifprices didn't increase atall, that wages would tend to rise about 

### 3 percent per year simply because labor 

### is more active. It turns out more per man hour, so it 

### ispossible topay higher wages. Two reasons why wages 

### willgo up 

### isbecause productivity increases and they go up alsobecause it 

### isnecessary that they go up, prices go up,II This Court, aswell as others, has allowed the testimony of actuaries and economists toproduce testimony on future earning capacity, recognizing that such testimony removes considerable speculation and conjecture from thejury's deliberation, Krohmer v, Dahl, 145 Mont. 491, 495, 402 P.2d 979; Scruggs v. Chesapeake and Ohio Railway Company, 320 F.Supp. 1248, 1251; Magill v. Westinghouse Electric Corporation, 327 F.Supp. 1097, 1105. The jury determined that fivepercent was a reasonable figure todetermine futurewage increases. It apparently accepted Dr. ~eliker's testimony infull on that point, which ithad a right to do. Defendant did not produce expert testimony demonstrating a different figure tobe more appropriate. Dr. Heliker explained how he arrived atthe fivepercent figure: ''I?ow actually ifyou add together the rates of increase of prices and productivity inpost-war periods, post-second World War period, you add them together, you would getjust about exactly the rate of increase of wages thatwe have hadover this period since the second World War and increased prices between 

### 1and a half to 

### 2 percent, much higher atthe present time. Over that whole period, ithas averaged somewhere around 

### 1and a half to 2 percent. Productivity has increased at somewhere around 3 to 3 and a half percent. '"ow ifyou add those two things together and you getjust about exactly the rate of increase c ~rom wages, about 

### 5 percent or a littlemore. 11 Dr. Heliker's computations were extensive and involved, but essentiallyhe said: 

# "* fc

# * here iswhat happened inthe past and, as far as I can see, this same thing is going to 

# ,. happen in the future. +C +C "'I At the same time Dr. Heliker predicted a five percent wage growth rate, he foresaw fivepercent tobe a reasonable discount rate. Although thewage growth rate and the discount ratewere both fivepercent, the figures were arrived at independently. In selecting the fivepercent figure, Dr. Heliker rejected thehistorical four percent figure used as a discount rate. As a result, the wage growth rate equaled the discount race, thereby canceling each other. Of necessity, the effect would have been that the jury's special verdict would only be reduced by Resner's ten percent contributorynegligence. However, the trialjudge's ruling after the special verdict was returned that inflationwas speculative and not a proper element of damages, removed the cancellation effect. The judgment ignored the fivepercent futurewage growth rate, but used the fivepercent discount rate. Defendant repeatedly asserted initsmotion for entry of judgment and initsbrief before this Court, that futurewage increases are speculative and conjectural. This 

### isnot enough. This Court's function in 

### a Federal ~rn~lo~ers' Liability Act case isclear. In Lavender v. Kurn, 327 

### U.S. 645, 653, 66 S.Ct. 740, 90 L.Ed 916, 923, a Federal Employers' Liability case, the United States Supreme Court said:

IIIt isno answer to say that thejury's verdict involved speculation and conjecture. Whenever facts are indispute or the evidence 

### is such that Fair-minded men may draw different inferences, ameasure of speculation and conjecture isrequired on the part of those whose duty it isto settle the disputeby choosing what seems to them tobe he most reasonable inference. Only when there is a complete absence of probative facts to support the conclusion reached does a reversible error appear. But where f: 9: there isan evidentiarybasis for thejury's verdict, thejury isfree to discard or disbelieve whatever facts are inconsistentwith its conclusion. And the appellate court's function is exhausted when that evidentiary basis becomes apparent, it being immaterial that the court might draw a contrary inference or feel that another conclusion is more reasonable." (Emphasis added). Here, the evidentiarybasis for determining the discount rate and the futurewage growth rate isapparent tous, and most certainly it was to thejury. Furthermore, the testimony of Dr. Heliker was not the only evidentiary basis on which the jury could make itsaward, There

was other evidence equally as convinchg. For example, certain wage agreements, not yet finalized atthe date of trial, pertaining tocontracts between the Brotherhood of Maintenance of Way Employees and Burlington Northern Railway, were introduced into evidence. The wage increases in those contracts have now been scheduled and indicate substantialwage growth over even a short period of time. Such evidence offered thejury an evidentiary basis for itsdecision, independent of Dr. ~eliker's testimony. It would be sufficient toreverse the trialcourt's ruling

on thebasis of Lavender alone. However, sinceboth plaintiff and defendant raise issues concerning futurewage increases, we shalldetermine them. We are aware that federal law governs damages in a Federal ~mplo~ers' Liability Act case. Further, as defendant pointed out, the United States Supreme Court held in Chesapeake & Ohio Railway Company v. Kelly, 241

### U.S. 485, 4-91,

lIfc

# - ik that when futurepayments or other pecuniary benefits are tobe anticipated, the verdict should be made upon thebasis of their present value only. 11 Defendant reliedheavily on Kelly and on the more recent

case of Sleeman v. Chesapeake and Ohio Railway Company, 414 F.2d 305, 307, wherein the court said:"To date [theKelly case]has not been amended or overruled, and itwas error to fail to apply it to the computation of future earnings. '1 However, there that court went on topoint out: "As to the inflationary trend offset, this record provides no evidentiarybasis for the decision of the District Judge." (Emphasis added). That cannot be said inthe instant case; clearly, therewas an eviden~iary basis for the jury's finding of fivepercent tobe

a reasonable rate of increase in futurewages. Therefore, we find Sleeman not applicable. We arenot persuaded by the cases citedby defendant holding futurewage growth as speculative. In Scruggs v. Chesapeake and Ohio Railway Company, 320 F.Supp. 1248, 1250, 1251, a Federal Employers' LiabilityAct case citedby plaintiff, the opposite point of view istaken. There the court said: "Courts have split on the question whether juries should be allowed to consider future trends in the purchasing power of money.

"The question before thejury was the pecuniary loss which would be sufferedby the plaintiff and her son inthe future. The probability of increases in decedent's income was certainlyrelevant tothat issue. It seems unlikely that their conclusion 

### willbe any lessvalid from having heard the testimony objected to, and they may be much more correct than otherwise. Inflation isa topic of almost universal discussion and it seems improbable that the jury could avoid taking it into account even in the absence of any testimony about it. The defendant cross-examined 

### Dr. Sandridge and also argued 

### its analysis of the trends, which thejury apparently did not accept. Each day juries are required to assess damages for future pain and suffering, which are also somewhat speculative, and the court believes that the defendant was not unfairly prejudiced by the admission of 

### Dr. sandridge's testimony. II We find the situation in Scruggs and the instant case tobe analogous. Also, we find further support for allowing thejury's determination to stand undiminished in Grunenthal v. Long Island K.Co., 393 U.S. 156, 89 S.Ct. 331, 21 L ed 2d 309, 312, 313. There, in the original action, 292 F.Supp. 813, 815, the plaintiff moved to amend the ad damnum clause of the complaint to increase it in conformity with the higher verdict rendered by thejury. Ingranting the motion, the judge indicated therewas a likelihood,

on the basis of the evidence presented, that the discount rate may be setoff by future increases. As inthe instant case, the testinloi-iy went unrefuted. In a 

### 2 to 

### 1decision, the court of appeals remanded the case for a new trialunless the plaintiff agreed to accept a reduction in the amount of the award. Grunenthal v. Long Island R.Co., 388 F.2d 480,484. The United States Supreme Court, on the other hand, agreed with the district court decision and reversed the court of appeals. Judge Brennan, delivering the opinion for the court, noted that the trialjudge considered the petitioner's present salary "plus likely increases over a lifeexpectancy of 27.5 years" and then went on to say: "The trialjudge 9; J; -?; appraised the evidence on future earnings as sufficient to support an award of $150,000 for loss of futurewages in light of the Iconvincing testimony not refuted J; demonstrating the steady wage increases inrecent time forwork equivalent to that rendered by plaintiff, and the strong likelihood that similar increases would continue

# .I "We cannot say that the trialjudge's view that the jury might properly have awarded $150,000 for loss of future earnings iswithout support in the evidence. II The court more than tacitly approved a calculated and expert investigation of futurewage increases tobe a proper and necessary element in awarding future damages. To do otherwise is to ignore reality. Here, defendant would have this Court take the position of an ostrichwith hishead in the sand. Economic reality requires us toconsider not only what the plaintiff isto receive in theory, but in fact. Abstract rules of law are of littlecomfort to a plaintiff whose injuries remain unrequited. The United States Supreme Court has recognized that where competent expert testimony supported by mathematical data is presented concerning future damages, more certainty isadded to thejury's deliberation. In Krohmer v. Dahl, 145 Mont. 491, 496, 402 P.2d 979, this

I I Court recognized that the testimony of a specialist [ineconomics]presented

### thejury a reasonable basis llpvn which ilo -.sti~naLe with

some degree of certainty the probable future earnings of the

11 deceased. In Krohmer, the Court cited with approval the New Nexico case of Turrietta v. Wyche, 54 N.M, 

### 5, 212 P.2d 1041, 1047,

11 wherein itwas said the probability of its [a man's future earning capacity] increase or decrease in the future ought tobe admitted." If it isadmitted, it ought tobe considered by the jury. Surelyhere, the defendant had as much opportunity to refute the futurewage increase of a railroad section hand as the plaintiff had the opportunity to prove it. The Alaska Supreme Court in a recent non-Federal Employers' Liability Act case, Beaulieu v. Elliott, (Alaska 1967), 

### 434 P.2d 665, 671, considered the subject of future wage increase: "Annual inflation ata varying rate isand has been with us for many years. There isno reason toexpect that it

### willnot be with us in the future. This rate :~f depreciation offsets the interest that could be 1 earned on government bonds and many other safe' investments. As a result the plaintiff, who through no fault of his own isgiven his future earnings reduced topresent value must, inorder torealizehis full earnings and not be penalized by reduction of future earnings topresent value, invest his money in dnter rises, other than those which are considered 

# I: 'safe investments, which promise a return ininterest 

### Jr dividends greater than the offsetting rate of annual inflation.II no There can belquestion that the award inthe instant case

was a generous one, but not so generous as to take it out of the realm of possibility presented by the evidence. It 

### isnot for this Court todetermine the award tobe given toplaintiff, but only whether the jury had a reasonable basis, supported by the evidence, to award the sum. We believe the jury had that basis. Plaintiff contends defendant's failure to object to certain jury instructionswaived the defendant's right to later complain. The specific instructions referred towere (1) Instruction No. 26, regarding what the jury might consider in awarding damages, and (2) Instruction No. 34, the special verdict form. Defendant awaited the jury's verdict before asserting, in defendant's motion for entry of judgment, that the jury should not have been allowedto speculate on future wage increases and that the special interrogatories were improperly worded. It is fundamental that failure to object to the giving of instructions at trialprecludes raising the issue on appeal. In this case defendant raised the issue to the trialjudge after thejury had rendered itsverdict. We cannot allow defendant towager on the outcome of thejury's deliberation before availing itself of the proper procedural remedies. Since the objection cannot be raised on appeal, then, likewise, it cannot be raised 

### atthe post-trial level. Plaintiff raises the issue of interest on thejudgment contending that since defendant's deposit into the bank account did not include the interest from February 10, 1971, as agreed, then the deposit did not satisfy the statute and interest continued to run. The statute, section 58-423, R.C.M. 1947, reads:

IIAn obligation for the payment of money is extinguished by a due offer of payment, if the amount is immediately deposited inthe name of the creditor, with some bank of deposit within this state, of good reute, and notice thereof 

### is ~iven to the creditor.

# R
?laintiff relies on the word obligation, implying that its deiinition includes allinterest to the date of deposit. Plaintiff had, prior to the date of deposit, refused tender of the deposited amount on the same ground--that interest from February 10, 

### 1371was not included. Plaintiff, however, ismerely arguing rhetoric, Uefendant in good faithmade an attempt at substantial compliance with the statute inorder that future interestwould not continue
tu increase. The trialcourt's ruling in the first amended judgment, that the defendant pay interest on the $91,740.49, from February10, 1971 to Nay 24, 1971, shall remain in effecc, The result is that allinterest on that amount terminated on May 24, 1971, by the terms of the statute and by order of the trialcourt. Our decision reinstates thejury's award of $175,000, less ten percent for Resner's contributorynegligence, resulting in ajudgment of $157,500. The rules for interest on judgments were correctly statedby the California Supreme Court in Stockton Theatres, Inc.

v. Palermo, 

### 55 Cal.2d 439, 

### 11 Cal.Rptr. 580, 582, 360 P.2d 

### 76: "A judgment bears legal interest from the date of 

### its entry in the trialcourt even though it isstill subject to direct attack. 9: 

# * When a judgment 

### is modified upon appeal, whether upward or downward, the new sum draws interest from the date of entry of the original order, not from the date of the new judgment.

;I< 9; -f. db On the other hand, when ajudgment 

### isreversed on appeal the new award subsequently entered by the crial court can bear interest only from the date of entry of such new judgment. 1I The second rule enunciated 

### is applicable here. This cause isreturned tothe district court tocompute the interest tobe granted inaccordance with the law, not inconsistentwith this decision. / 

# / ysociateJustice

'

# /Chief Justice



## ................................. Associate Justices.Mr. Justice Wesley Castles dissenting: L dissent. The majority opinion states thac the jury rerurned a verdict in the amount of $175,000. This 

### is not 1-egallyaccurate. Rather, thejury answered a special verdict 4 question in that amount. And, as the trialcourt carefully pointed out in

### its closing remarks, thejury was to answer only Che specific questions posed in the special verdict. The court, not the jury, was to make the determination of final damages 

### and enterjudgment accordingly. 

### As provided in the Montana Rules of Civil Procedure, if a matter is submitted to thejury in the form of a special verdict an issuenot specifically included in the special verdict may be decided by the court, and each party is deemed tohave waived itsright to trialby jury on that specific issue. The vice of the majority opinion is that it approves speculative, highly speculative, inflation trends for thirty years as to futurewage increases. Speculation on the future of railroads, much less the future of jobs and wage increases, is a never-never land. Except for one Federal District Court case, Scruggs v. Chesapeake and OhioRailway Company, 320 F.Supp. 1248, I have been unable to find any Federal Employers' Liabi1i.t~ Act case to support the majority opinion. I believe the correct law to be that statedby the 6th Circuit in 1969 in Sleeman v. Chesapeake 6 Ohio Railway Company, 414 F.2d 305,308, where that court sai.d:

I1

Nor do we encourage the trialcourts of our circuit to explore such speculative influences on future damages as inflation and deflation. "Of course, the nation's economic hlstory since the 1930's would appear tomake the use of present wages as the standard for loss of future earnings somewhat unfair toplaintiffs

# . 8ut as tothe future, the inflationversus deElation debate rages inconclusively atthe highest policy levels of our government, in national electoral campaigns, in learned eco110mi.cjournals and 

### is exemplified 

### in the daily syrations of the stock markets. The debate seems unlikely tobe resolved satisfactorilyin one personal tnjury trial. And 

### ir testimonial resolution of this factor bearing on the future isattempted, the door isopened to similarly speculative and debatable offsets tending in other directions. See McWeeney v. New York N.H. & H.R.R., 282 F.2d 

### 34 (2d Cir. 

### 1960). If In Sleeman the court found the following quotation from 2 Harper & James, The Law of Torts, 

### 5 25.11, tobe applicable:

111Future trends in the value of money arenecessarilyunlcnown and so always render such damages speculative in a way we cannot escape. If the estimates represent a straight-line projection of present living costs, they willbe frustrated by fluctuations either way. If prophecy of change 

### isheeded, frustrationwillfollow if no change, or the opposite change, occurs. When courts have con~c~ously grappled with the problem they have either found allprophecy too speculative and so, perforce, have taken the equally speculative course of betting on a continuance of the status quo; or they have made intuitive and not always very wise judgments that present conditions represent a departure from some imaginary norm to which they thinlc we shallrapidly return. It is not atallclear that courtswould be willing to hear experts on the matter, or that they would get much real help if they did. For the most part che problem--which isinevitably present in every case of future loss--is not analyzed and the present value of money isassumed tobe the proper basis. 1I1 Sleeman was confirmed by the 6th Circuit in 1970 in Peticion of United States Steel Corporation, 

### 436 F.2d 1256, 1280: "It is equally well settled in this Circuit that the prospect of a future decline in the purchasing power of the dollar may not be used to offset the reduction topresent value. I1 L would affirm thejudgment.

~ssocibde Justice.