Robert L. Abernathy and Joyce Abernathy v. Superior Hardwoods, Inc.
1983 U.S. App. LEXIS 29079, 36 Fed. R. Serv. 2d 269, 704 F.2d 963 (1983)
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Rule of Law:
A jury's damage award for future losses, such as pain and suffering, must be supported by evidence and must be reduced to its present discounted value to be considered rational and not excessive. An appellate court may order a remittitur when a verdict is "monstrously excessive" due to a failure to properly calculate or support the damages.
Facts:
- Robert Abernathy drove a flatbed truck loaded with logs to a sawmill owned by Superior Hardwoods.
- The logs were secured by four chains, which Abernathy released upon arrival.
- Abernathy testified that he had a prior arrangement with Superior Hardwoods' forklift operator to wait for a hand signal before beginning to unload the logs.
- Before Abernathy could stow the chains and give the signal, the forklift operator began unloading the truck.
- A log fell from the truck and struck Abernathy in the back, causing significant injuries.
- Prior to the accident, Abernathy had a pre-existing degenerative disc disease.
Procedural Posture:
- Robert Abernathy and his wife sued Superior Hardwoods for negligence in a federal district court, with jurisdiction based on diversity of citizenship.
- The case was tried before a jury.
- The jury returned a verdict in favor of the Abernathys, awarding them $291,309.
- Superior Hardwoods, the defendant, appealed the jury's verdict to the U.S. Court of Appeals for the Seventh Circuit.
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Issue:
Is a jury's damage award for future pain and suffering excessive if it is not reduced to present value and lacks a rational connection to the evidence presented at trial?
Opinions:
Majority - Posner, Circuit Judge.
Yes. A jury's damage award is excessive when it lacks a rational connection to the evidence, which requires reducing future damages to their present value. The court found sufficient evidence to uphold the jury's findings on negligence and contributory negligence, as the jury was entitled to believe Abernathy's testimony about the hand-signal agreement. The court reasoned that even if unloading logs is inherently dangerous, due care requires taking precautions like ensuring the driver is clear. Further, the court upheld the trial judge's evidentiary rulings, finding no abuse of discretion in excluding an unreliable videotape soundtrack or in allowing expert testimony despite its late disclosure, noting that surprise is a poor reason for exclusion under the Federal Rules of Civil Procedure. However, the court found the $291,309 damage award to be "monstrously excessive" because there was no evidentiary basis for lost earnings and the jury failed to discount the award for future pain and suffering to its present value. Applying a real discount rate, the court calculated a maximum rational award and offered the plaintiffs a remittitur to that amount as an alternative to a new trial on damages.
Analysis:
This case is a classic example of the law and economics approach, championed by Judge Posner, applied to tort damages. It establishes the critical principle that awards for future damages must be discounted to present value to be considered rational. This decision reinforces the appellate court's supervisory role in ensuring that jury verdicts have a sound evidentiary and economic basis, preventing awards based on speculation or improper calculations. The case serves as a key precedent for the use of remittitur to correct excessive verdicts and for the methodology of using a real (inflation-free) interest rate in damage calculations.
