Opinion ID: 2224548
Heading Depth: 2
Heading Rank: 2

Heading: whether the trial court erred in approving an instruction on adjusting the award of damages to present value.

Text: The jury did not ultimately reach this issue; however, because we remand for a new trial, we will address it. Howards contend that the trial court erred in giving an instruction which generally expanded upon the pattern instruction by adding a section on how to calculate the present cash value and included a present worth table, when no evidence was offered to support such an instruction. The trial court's Instruction No. 26, which is nearly identical to the federal instruction from Federal Jury Practice and Instructions, Devitt, Blackmar and Wolff, Vol. 3, § 85.11 (1987), reads as follows: If you should find that plaintiff Jean Howard is entitled to a verdict, and further find that the evidence in the case establishes either: (1) a reasonable likelihood of future medical expense, or (2) a reasonable likelihood of loss of future earnings, or if you should find that plaintiff Jim Howard is entitled to a verdict, and you further find the evidence establishes a reasonable likelihood that he will be deprived of the services, aid, comfort, society, companionship and conjugal affections of his wife then it becomes your duty to ascertain the present worth in dollars of such future damage, since the award of future damages necessarily requires that payment be made now for a loss that will not actually be sustained until some future date. Under these circumstances, the result is that plaintiffs Jean and Jim Howard will in effect be reimbursed in advance of the loss, and so will have the use of money which they would not have received until some future date, but for the verdict. In order to make a reasonable adjustment for the present use, interest free, of money representing a lump-sum payment of anticipated future loss, the law requires that you discount, or reduce to its present worth, the amount of the anticipated future loss, by taking (1) the interest rate or return which such plaintiffs could reasonably be expected to receive on an investment of the lump-sum payment together with (2) the period of time over which the future loss is reasonably certain to be sustained; and then reduce, or in effect deduct from, the total amount of anticipated future loss whatever that amount would be reasonably certain to earn or return, if invested at such rate of interest over such period of time; and include in the verdict an award for only the present-worththe reduced amountof anticipated future loss. As already explained to you, this computation is made by using the so-called present-worth table (present worth of one per period), which the Court had judicially noticed and which are attached to this instruction for your use. Bear in mind that your duty to discount to present value applies only to loss of future earnings, future medical expenses or loss of consortium and not to any other damages the plaintiffs may have sustained in this instance. Also bear in mind that the evidence of Jean Howard's claim for loss of future earnings as submitted by Dr. Brown has already been reduced to present value. It is, however, your duty to determine whether his adjustment for present value of that claim was reasonable, and if not, you should make your own adjustment for present value of any sum to which you determine Jean Howard is entitled, if any. The federal instructions also include an alternative instruction entitled Lost Wages and/or Earning CapacityWhen Economic Experts Testify. See Devitt, Blackmar and Wolff, § 85.12. [2] South Dakota law is silent on the issue of proper computation of the discount rate for estimating the present value of future income. Robichaud v. Theis, 858 F.2d 392, 396 (8th Cir.1988). Additionally, the South Dakota Pattern Jury Instruction does not tell the jury how to reduce the damages. [3] As of yet, neither this court nor the United States Supreme Court has endorsed one particular method for determining present value. Some states have either statutorily or judicially endorsed a method. [4] We determine that, at this time, we should clarify the meaning of our previous holdings on how to properly instruct the jury on reducing awards to present value. We held in Watkins v. Ebach, 291 N.W.2d 765, 767 (S.D.1980): Although it is true this court has never held that the trial court must give a present value instruction regarding loss of future earnings, we think that this requirement should now be imposed. In that case, we adopted the prevailing rule that damages for loss of future earnings should be reduced to present value. However, therein we went on to say that the record did not support the giving of such an instruction because the appellant/defendant offered no testimony upon which the jury could have made an intelligent decision on reducing the award for loss of future earnings to present value. Id. (emphasis added). See also Flagtwet v. Smith, 367 N.W.2d 188 (S.D.1985). We used language in Watkins that might suggest that expert testimony is required in every case where future earnings might be awarded. We now hold that expert testimony on the reduction of future earnings is not required in every case. However, if an expert testifies and reduces the damages to present value for the jury, an instruction (such as the one given in this case) which includes present worth tables must be carefully crafted to prevent confusion. We believe the instruction given by the trial court here was adequate and not confusing. When there is no expert testimony on present value, as in Watkins, then the jury must have some direction to help it intelligently reduce the award to present value. In Watkins, we quoted with approval from Brodie v. Philadelphia Transportation Co., 415 Pa. 296, 203 A.2d 657, 660 (1964), wherein it stated: The involved process of reducing future losses to their present worth has, undoubtedly, led to confusion and guesswork verdicts. Reason, logic and fairness would, therefore, dictate that enlightenment lightenment is necessary. Such can be provided, at least in part, by permitting the use of accepted tables or the testimony of a qualified expert, who can compose the proper computations. This reflects our acceptance of the practice of either providing the jury with instructions including tables or some other helpful means to reduce to present value, or providing an expert to reduce the damages for the jury. We generally approve of the Devitt, Blackmar and Wolff instructions cited above. Accordingly, we reverse and remand for a new trial consistent with the foregoing. WUEST, HENDERSON, SABERS and AMUNDSON, JJ., concur.