Court Opinion

ID: 9772070
Source: CourtListenerOpinion
Date Created: 2023-08-29 17:06:48.638532+00
Date Added: 2024-06-11T15:42:25.061309
License: Public Domain

ON MOTION FOR REHEARING
PER CURIAM:
This cause was argued and submitted to Division Two of this court at its October, 1979, session in St. Louis. On January 22, 1980, the principal opinion was adopted without dissent. On February 6, 1980, the appellant filed its motion for rehearing or transfer to the Supreme Court of Missouri. While appellant’s motion was under consideration, the Supreme Court of the United States, on February 19, 1980, handed down its opinion in Norfolk & W. Ry. v. Liepelt, 444 U.S. 490, 100 S.Ct. 755, 62 L.Ed.2d 689 (1980). Liepelt was an F.E.L.A. death claim and held, among other matters, that it was necessary that the jury be instructed that no damage award shall be subject to federal income tax. On May 6, 1980, appellant’s motion for rehearing was heard en banc on the Liepelt issue regarding income tax instruction and whether its application would be prospective or retrospective.
To apply the Supreme Court’s ruling in Liepelt to the instant case, several principles must be reviewed. We recognize, as indeed we must, that the substantive rights of the parties are governed by federal law and the decision of the U. S. Supreme Court must control, Horn v. Atchison, T. & S. F. Ry., 519 S.W.2d 894, 896 (Tex.Civ.App.1975). It has long been settled that questions concerning the measure of damages in an F.E. L.A. action are federal in character. This is true even if the action is brought in state court. Norfolk & W. Ry. v. Liepelt, supra.
However the Court did not enunciate whether its ruling was to be applied retroactively to pending appellate cases. We must therefore apply existing standards and guidelines. In Chevron Oil Co. v. Huson, 404 U.S. 97, 106-07, 92 S.Ct. 349, 350, 30 L.Ed.2d 296 (1971) the Court stated:
First, the decision to be applied nonretroactively must establish a new principle of law, either by overruling clear past precedent on which litigants may have relied, * * * or by deciding an issue of first impression whose resolution was not clearly foreshadowed * * *. Second, it has been stressed that “we must ... weigh the merits and demerits in each case by looking to the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation.” * * * Finally, we have weighed the inequity imposed by retroactive application, for “[w]here a decision of this Court could produce substantial inequitable results if applied retroactively, there is ample basis in our cases for avoiding the ‘injustice or hardship’ by a holding of nonretroactivi- ^ Í» ♦ ♦ ♦
Applying the above standards to the facts of the instant case, we have determined that Liepelt should be applied prospective*83ly.1 First, the rule promulgated by the Supreme Court is one of first impression. The federal circuits were split on whether the jury should be instructed on income taxes. See Domeracki v. Humble Oil & Refining Co., 443 F.2d 1245, 1252 (3rd Cir. 1971). The Missouri appellate courts forbade such an instruction. Senter v. Ferguson, 486 S.W.2d 644 (Mo.App.1972). Liepelt will, for the first time, unify the federal and state F.E.L.A. instructions on this point. The trial judge in the instant case was executing his duties according to the law, Lemon v. Kurtzman, 411 U.S. 192, 202, 93 S.Ct. 1463, 36 L.Ed.2d 151 (1973), and at that time, it was mandatory that he not give such an instruction. Therefore he was not in error in failing to anticipate future changes in instructions on this subject mandated by the highest court of the land. Smile v. Lawson, 506 S.W.2d 400, 402 (Mo.1974).
Secondly, for us to apply the Liepelt rule retroactively to the instant case would be anomalous. A careful analysis of the “Second” factor in Chevron, requires us to “weigh the merits and demerits in each case by looking to the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation.”
Since the primary purpose underlying Liepelt was the Court’s desire to prevent the rendering of an excessive verdict founded upon improper considerations, retroactive application of Liepelt could in no manner be held to “further” the operation of the rule unless it is apparent in a particular case on direct appeal that the damages awarded are obviously excessive. Accordingly, in the instant case where the damages awarded are clearly reasonable, justified and supported by the evidence,2 indiscriminate retroactive application would not “further” the purpose of the rule and conversely its prospective application would not “retard” its operation.
Such non-retroactive application is supported by the three cases cited and relied upon by the United States Supreme Court in Liepelt: Dempsey v. Thompson, 251 S.W.2d 42 (Mo.1952); Domeracki v. Humble Oil & Refining Co., 443 F.2d 1245 (3rd Cir. 1971) and Burlington Northern, Inc. v. Boxberger, 529 F.2d 284 (9th Cir. 1975). In all three cases the new rule with respect to the income tax instruction was given prospective application only, and its prospectivity was in no manner construed to retard its purpose or operation. Since those cases were cited and relied upon in Liepelt, and since prospective application of the new rule in those cases did not retard its operation, “prior history” clearly supports nonret-roactive application in the instant case.
In cases in which uncertainty exists as to whether retroactive application would further or retard the operation of a new rule, other courts have employed a similar balancing test in applying the “Second” factor in Chevron. They have weighed such factors as reliance upon existing applicable law, the need for stability, resulting hardship and injustice, against the benefits to be gained by applying a new rule retroactively.3
In the case at bar since the damages awarded are not excessive, it is difficult to imagine how the appellant has been prejudiced. Because the award is reasonable and amply supported by the evidence, retroactive application of Liepelt would serve no useful purpose. Retroactivity would not further the purpose of the new rule. Likewise, prospectivity would not retard its operation. There is therefore simply no compelling reason to give retroactive effect to *84Liepeit here. The trial court and respondent scrupulously complied with existing applicable law, as they were compelled to do, and they should not be penalized under such circumstances. Since retroactive application would occasion a reversal in this instance, in which no actual prejudice has been suffered, consideration of this “Second” factor in the above light compels a ruling of prospectivity.
Finally, the third factor to be considered is whether or not retroactively applying Liepeit would produce substantial inequitable results to the plaintiff. In that case the amount of the pecuniary loss was $302,000, according to plaintiff’s economist, and the jury awarded damages of $775,000. The defendant objected and by its expert testimony the net pecuniary loss was $138,327. The Supreme Court believed that based upon those facts, the jury must have considered the tax issue and included it in their decision and therefore the defendant was prejudiced. However in this case we do not have any proof or suggestion that the appellant was prejudiced by the failure of the trial court to submit the requested but not offered cautionary instruction. Further, the appellant did not raise the issue of excessiveness. To briefly review the pertinent facts, the plaintiff was 45 years old, earning $12,000 per year at the time of the accident. He suffered permanent, serious, deteriorating and disabling injuries, including, among other surgery, an insertion of a nerve stimulator affixed to one of his limbs. The jury had the benefit of testimony from four physicians including a neurosurgeon, a neurologist and orthopedic surgeon. The appellant saw fit not to have the plaintiff examined nor to offer any medical evidence from which the jury could evaluate the extent and degree of plaintiff’s injury. It is argued that by the mere fact that the jury made inquiry about taxes, we must assume that the jury acted improperly and inflated the recovery. We do not agree. There is no evidence in the record that the jury was in fact motivated by such fact and, it must be presumed that the jurors followed their oaths and rendered their verdict according to the evidence and the court’s instructions. Cristie v. Gas Service Co., 347 S.W.2d 135, 144[12] (Mo.1961); Beste v. Tadlock, 565 S.W.2d 789, 791-92[4-6] (Mo.App.1978). Appellant’s motion for rehearing and motion to transfer to the Supreme Court are denied.
All judges concur.

. See generally prospective or retrospective operation of overruling decision, Annot., 10 A.L. R.3d 1371 (1966).

. See pp. 83, 84 of this opinion.

. See Ramey v. Harber, 589 F. 753 (4th Cir. 1978), cert. denied 442 U.S. 910, 99 S.Ct. 2823, 61 L.Ed.2d 275; Kacher v. Pittsburgh National Bank, 545 F.2d 842 (3rd Cir. 1976); Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1973); Lemon v. Kurtzman, 411 U.S. 192, 93 S.Ct. 1463, 36 L.Ed.2d 151 (1973); Linkletter v. Walker, 381 U.S. 618, 629, 85 S.Ct. 1731, 14 L.Ed.2d 601 (1965); and Keltner v. Keltner, 589 S.W.2d 235 (Mo. en banc, 1979), regarding preference for prospective application.