Opinion ID: 533630
Heading Depth: 2
Heading Rank: 2

Heading: The Alleged Double Compensation for Living Accommodations

Text: 55 The district court awarded Daniel $1,090,179 for the loss of earning capacity and $1,345,000 to cover residential care in a facility for handicapped adults 8 after his twenty-first birthday, for his life expectancy of 50.46 years. Daniel's residential care must include specialized treatment and therapy. Alaska law allows recovery for lost future earnings and for medical and custodial care costs. See, e.g., Alaska Airlines, Inc. v. Sweat, 568 P.2d 916, 934 (Alaska 1977) (loss of future earnings); Morrison v. State, 516 P.2d 402, 406 (Alaska 1973) (anticipated medical and custodial care). 56 The government contends this award is duplicative, in that much of the earnings of a healthy, working person will be used to provide his own residential care, including such expenses as food and lodging. The government argues the amount of earnings that would normally be spent on residential care should be subtracted from the total lost earnings figure. The district court rejected this argument at trial. 57 For support, the government cites Flannery v. United States, 718 F.2d 108, 112-13 (4th Cir.1983), cert. denied, 467 U.S. 1226, 104 S.Ct. 2679, 81 L.Ed.2d 874 (1984), a FTCA case in which the Fourth Circuit considered the prohibition in 28 U.S.C. § 2674 against punitive damages. Considering the issue sua sponte, a divided panel of that court held that since the plaintiff in Flannery was comatose and unable to spend any of the money awarded to him, he was unlike the usual cases where 58 a living plaintiff must pay his own living expenses, though an award for lost earnings may be the source of his funds. In this case, however, the plaintiff will be required to pay nothing, for the award of future medical expenses includes all of the personal expense that the plaintiff will incur. 59 718 F.2d at 112. The Fourth Circuit found that awards of future care expenses and future lost earnings required the government to pay twice for a plaintiff's personal living expenses, are thereby punitive, and must be offset. Id. at 112-13. 60 Aside from the fact that Daniel Yako is not comatose, every court outside the Fourth Circuit, when faced with this issue, has rejected Flannery 's approach, including this circuit. Shaw, 741 F.2d at 1208. See, e.g., Reilly v. United States, 863 F.2d 149, 163-66 (1st Cir.1988); Rufino v. United States, 829 F.2d 354 (2d Cir.1987) (citing this circuit's decision in Shaw ). 61 The courts reject Flannery for two main reasons: (1) they do not believe separate awards for future medical and maintenance costs and for lost earnings are in fact punitive, see, e.g., Kalavity v. United States, 584 F.2d 809, 811 (6th Cir.1978) (the FTCA's prohibition against punitive damages is designed to prevent use of retributive theory of punishment against the government); and (2) the refusal to award separate costs for these items may interfere with the FTCA's provision for recovery in accordance with local law. 62 This circuit is widely quoted for providing the latter reason why Flannery should not be followed. In Shaw, this circuit explicitly rejected Flannery, stating: we recognized that such an expansive view of federal law would 'impinge seriously upon the architecture of the Act which provides for recovery according to the lex loci delictus.'  741 F.2d at 1208 (quoting Felder v. United States, 543 F.2d 657, 675 (9th Cir.1976)). This circuit also approved of the Sixth Circuit's refusal in Kalavity to adopt the view that any award of damages in excess of a plaintiff's direct or out-of-pocket loss is punitive. Shaw, 741 F.2d at 1208. 63 Because Alaska permits recovery for future medical and maintenance costs and lost future earnings, the precedent in Shaw, and the general rejection of Flannery by other courts, the district court's award of separate amounts for future residential care and lost earnings capacity is not clearly erroneous and is affirmed. 64