Opinion ID: 1401911
Heading Depth: 3
Heading Rank: 3

Heading: The Superior Court Correctly Refused to Reduce the Award of Future Medical Expenses to Present Value.

Text: Sherbahn and SBS next argue that even if the evidence supported the jury's award of future medical expenses, the superior court should have reduced it to present value under AS 09.17.040(b). They contend that the $15,000 award should have been reduced to $5,535.06, based upon Kerkove's remaining life expectancy of thirty-six years. Kerkove counters that the reduction of the jury's award in this manner would lead to an absurd result because he intend[s] to use the entire amount of money within a very short period of time. [18] Alaska Statute 09.17.040 provides that the fact finder must reduce future economic losses to present value: (b) The fact finder shall reduce future economic damages to present value. In computing the portion of a lump-sum award that is attributable to future economic loss, the fact finder shall determine the present amount that, if invested at long-term future interest rates in the best and safest investments, will produce over the life expectancy of the injured party the amount necessary to compensate the injured party for .... (2) the amount of money necessary during future years to provide for all additional economic losses related to the injury, taking into account future anticipated inflation. (c) Subsection (b) of this section does not apply to future economic damages if the parties agree that the award of future damages may be computed under the rule adopted in the case of Beaulieu v. Elliott, 434 P.2d 665 (Alaska 1967). We agree with Sherbahn and SBS that AS 09.17.040 contemplates the reduction of future medical expenses to present value. But we believe that application of the statute in cases such as this one would lead to a result that the legislature did not envision. Interpretation of a statute begins with an examination of its language construed in light of its purpose. [19] In Beaulieu v. Elliott , [20] we held that the trier of fact should be permitted to compute loss of future earnings without reduction to present value. [21] The legislature then reversed the Beaulieu rule by enacting AS 09.17.040: [T]he clear purpose of [AS 09.17.040] was to bring Alaska in line with other states which reduce future economic awards to present value and to reverse the rule we established [in Beaulieu ] that the trier of fact should be allowed to compute loss of future earnings without reduction to present value. [22] The plain language of subsection (b) does not specifically designate the categories of damages that must be reduced to present value. But in discussing this issue prior to passage of AS 09.17.040, members of the judiciary committee commented that [t]he Alaska Supreme Court has not indicated specifically whether future medical expenses should be reduced to present value, but it would appear that the same analysis relating to loss of earning capacity would apply. [23] Thus, by enacting AS 09.17.040, the legislature appears to have intended that the trier of fact reduce all future economic damages to present value. [24] Nevertheless, Kerkove points to the purpose of the statute to support his argument that AS 09.17.040 does not require reduction of the award in this case. [25] We recognized in Beaulieu v. Elliott that the general purpose of reducing future damages to present value in tort cases is to prevent a plaintiff, through investments, from being placed in a better position than he or she would have occupied but for the defendant's tort. [26] But because he would already have undergone the injection treatment had he been able to afford it and intends to use the money for trigger-point injections as soon as possible, Kerkove posits that the award should not be computed over his remaining thirty-six-year expectancy. We agree. In ascertaining the legislature's intent, we are obliged to avoid construing a statute in a way that leads to a glaringly absurd result. [27] The legislature intended that the sum remaining after reduction to present value would provide a plaintiff with the amount of money necessary during future years to provide for all additional economic losses related to the injury. [28] Reducing the $15,000 award for trigger-point injections to present value over Kerkove's full life expectancy would lead to an absurd result because Kerkove would be left with only a third of the money he needs to obtain the intended treatment. By Sherbahn and SBS's computation, Kerkove would not have the full amount necessary for treatment until after he has invested it for thirty-six years. As we commented in Beaulieu, the purpose of reducing future damages is to avoid overcompensating a plaintiff for future loss. [29] In cases such as this, where the plaintiff will be using the entire award for medical treatment almost immediately, the danger of overcompensation is not present. Because Kerkove testified that he would already have undergone Dr. Ferris's treatment had he been financially able and because the jury awarded him only the amount necessary to undergo that particular treatment at this time, any reduction of the future damage award would not serve the statute's purpose. Thus, we affirm the trial court's refusal to reduce the award for future medical expenses to present value.