Court of Appeal holds defendant has burden of proving method for reducing award of future damages to present value
June 27, 2019
Lewis v. Ukran
(B290128, June 26, 2019) __ Cal.App.5th __
The California Court of Appeal has held, in a case of first impression, that defendants have the burden of proving the appropriate method for reducing an award of future damages to present value.
Plaintiff was injured in an automobile accident and awarded over $1.6 million in damages, including $1.2 million for future lost earning capacity. The defendant moved for a new trial arguing that the future damages had to be reduced to present cash value. The trial court denied the new trial motion explaining that there was no evidence presented regarding how the present value calculation should be made.
The Court of Appeal affirmed. The court held that “in a contested case, a party (typically a defendant) seeking to reduce an award of future damages to present value bears the burden of proving an appropriate method of doing so, including an appropriate discount rate. A party (typically a plaintiff) who seeks an upward adjustment of a future damages award to account for inflation bears the burden of proving an appropriate method of doing so, including an appropriate inflation rate. This aligns the burdens of proof with the parties’ respective economic interests. A trier of fact should not reduce damages to present value, or adjust for inflation, absent such evidence or a stipulation of the parties.”
Note: This case emphasizes the importance of defense counsel retaining an economist as an expert witness to offer testimony regarding the appropriate present value calculation, including the appropriate discount rate, to enable the fact finder to make a factual finding on this issue.