Cole v. U.S., 87-8325

• Decision Date: 19 December 1988
• Docket Number: No. 87-8325,87-8325
• Parties: Joseph E. COLE, Plaintiff-Appellant, Cross-Appellee, v. UNITED STATES of America, Defendant-Appellee, Cross-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1261

861 F.2d 1261

Joseph E. COLE, Plaintiff-Appellant, Cross-Appellee, v. UNITED STATES of America, Defendant-Appellee, Cross-Appellant.

No. 87-8325.

United States Court of Appeals Eleventh Circuit.

Dec. 19, 1988.

Paul R. Bennett, Moore, Taylor & Associates, Columbus, Ga., for plaintiff-appellant, cross-appellee.

Henry L. Whisenhunt, Jr., Asst. U.S. Atty., Augusta, Ga., Mark W. Pennak, Dept. of Justice, Civ. Div., William Kanter, Washington, D.C., for defendant-appellee, cross-appellant.

Appeals from the United States District Court for the Southern District of Georgia.

Before RONEY, Chief Judge, CLARK, Circuit Judge, and MORGAN, Senior Circuit Judge.

PER CURIAM:

While in the military in 1958, plaintiff Joseph E. Cole suffered a leg injury for which the Veterans' Administration determined he was entitled to 10 percent disability payments. In 1979, Cole's disabled leg was negligently treated at a VA hospital for swelling which occurred as the result of two falls, and because of the treatment, has deteriorated to the point where doctors have advised that amputation may be the proper treatment. Because of his leg and an unrelated head injury, Cole has been determined to be 100 percent disabled. Cole brought a negligence action against the Government pursuant to the Federal Tort Claims Act, 28 U.S.C.A. Sec. 1346(b), alleging damages from negligent treatment he received in the VA hospital. After a bench trial, the district court awarded $384,000 in damages.

The court ordered the cessation of all future VA benefits for his leg until the amount of the benefits withheld equals the amount of the tort judgment. Both Cole and the Government appeal. Cole argues that the district court's award failed to adequately compensate him for special damages and pain and suffering, and should not have ordered cessation of all VA payments because only part of the benefits were attributable to the malpractice. The Government, although not disputing liability, argues that the district court improperly awarded Cole damages in excess of the $195,000 he originally sought in his administrative complaint and erred in first reviewing the administrator's decision that Cole's injury resulting from the malpractice was "secondarily service-connected" and then, in applying the setoff provisions of 38 U.S.C.A. Sec. 351.

Amount of Damages

We first hold that the district court could properly award Cole $384,000 in damages even though the award exceeds the $195,000 he originally sought in his administrative complaint. Although generally a plaintiff under the Federal Tort Claims Act may not seek greater damages than that sought in any prior administrative claim, an exception exists where "the increased amount is based upon newly discovered evidence not reasonably discoverable at the time of presenting the claim to the federal agency." 28 U.S.C.A. Sec. 2675(b).

In Cole's administrative complaint dated January 30, 1980, and received by the VA the next day, he described his injury as "severe burns to his knee which resulted in blood clots." He testified that when he filed his complaint he had been told by some doctors, and he believed, that he eventually would be able to return to work for the railroad. It was not until October 1981, some 21 months later, that Cole was diagnosed as having thrombophlebitis, a condition described by one of the Government's expert witnesses as "a clotting of the blood in the venous channels," and he learned that his condition was permanent. He must wear a knee brace and continues to suffer from swelling, weeping ulcers, and pain.

This Court has held that a reasonably based change in expectation as to the severity and permanence of an injury is newly discovered evidence within the meaning of section 2675(b). Fraysier v. United States, 766 F.2d 478 (11th Cir.1985). In Fraysier, the plaintiff was allowed to recover damages in excess of his administrative claim because at the time of filing he reasonably believed, based on a physician's incorrect diagnosis, that his condition would improve, but discovered later that his injuries were permanent. As we stated there, "[p]laintiff should not be charged with knowing what the doctors could not tell him." Id. at 481. See also United States v. Alexander, 238 F.2d 314, 318 (5th Cir.1956) (plaintiff allowed increase in damages when he believed at time of filing that his arm would heal but later discovered that it would not improve without surgery); Husovsky v. United States, 590 F.2d 944, 954-55 (D.C.Cir.1978) (prediction of increased life span warranted increased damages); McDonald v. United States, 555 F.Supp. 935, 957-62 (M.D.Pa.1983) (change in knowledge of severity of impairments in part supported newly discovered evidence determination) aff'd mem., 738 F.2d 423 (3d Cir.1984); Rabovsky v. United States, 265 F.Supp. 587 (D.Conn.1967) (plaintiff allowed to increase damages after securing a medical opinion when, through no fault of his own, he had not consulted a physician and did not know the extent of his injuries at the time of filing his claim.)

This case is distinguishable from Low v. United States, 795 F.2d 466 (5th Cir.1986), on which the Government heavily relies. In that case, the court refused to allow the plaintiff to recover increased damages for her injured child when at the time of filing the claim she knew that the child had cerebral palsy, a seizure disorder, and was blind, deaf, and mentally retarded and there was no evidence that these conditions worsened or that other conditions later developed. The court noted that the case was not one in which the claimant did not know or reasonably could not have known the severity of the injury. Rather, the evidence used to increase the damages sought went to the "precision" of the child's prognosis. Here, Cole learned nearly two years after he filed his administrative complaint that his condition was permanent and that he would never return to work. Thus, the district court's finding that Cole was not bound by the administrative claim because of newly discovered evidence is supported by the record.

Adequacy of Damage Award

Cole contends that the district court's award of $384,000 is insufficient to compensate him for the damages he suffered. The clearly erroneous standard governs the review of factual determinations in FTCA actions, including the determination of damages. Ferrero v. United States, 603 F.2d 510, 512 (5th Cir.1979); Davis v. Marsh, 807 F.2d 908, 913 (11th Cir.1987). A trial judge's findings will be held to be clearly erroneous when, after reviewing all the evidence, we are "left with the definite and firm conviction that a mistake has been committed." United States v. Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948). Because the district court did not itemize the damages in reaching its $384,000 award as required by Fed.R.Civ.P. 52(a), we are in the position of examining the single figure to determine whether clear error has been made. Cole argues that a conservative estimate of his lost future wages is $465,000 and that he has also lost $113,250 in past wages and insurance protection. Because the award does not even cover the special damages, Cole contends, the court must have failed to award him anything for pain and suffering. The Government responds that even accepting Cole's figures, the court's award amply compensated him because lost future earnings must be discounted to present value as required by Georgia law, and Cole neglected to deduct federal and state taxes from his estimates of past and future earnings. See, e.g., Flannery v. United States, 718 F.2d 108, 111 (4th Cir.1983), cert. denied, 467 U.S. 1226, 104 S.Ct. 2679, 81 L.Ed.2d 874 (1984); Harden v. United States, 688 F.2d 1025, 1029 (5th Cir.1982); Mosley v. United States, 538 F.2d 555, 558-59 (4th Cir.1976).

We hold that $384,000 is not on its face clearly insufficient. Nevertheless, because this case must be remanded, the district court should itemize the damages awarded, taking into account the required discount rate and the tax deductions. See Fed.R.Civ.P. 52(a); Hatahley v. United States, 351 U.S. 173, 76 S.Ct. 745, 100 L.Ed. 1065 (1956); Ferrero v. United States, 603 F.2d 510 (5th Cir.1979).

In making its award, the district court ordered that the setoff provisions of section 351 be used. ¹ The Government argues that Cole's increased disability because of the negligent treatment was determined by the VA to be service-connected under section 331, ² and that section must therefore control the district court's treatment of the award with respect to any future benefits to which Cole is entitled.

Apparently the difference between the two sections is who must wait for their money--the Government or Cole. Under section 351, the award is reduced only by the amount of past benefits and Cole then is ineligible for his future increased disability benefits attributable to the malpractice until the aggregate of benefits withheld equals the tort judgment. See United States v. Kubrick, 444 U.S. 111, 116 n. 5, 100 S.Ct. 352, 356 n. 5, 62 L.Ed.2d 259 (1979); Shaw v. U.S.A. Veterans Admin., 711 F.2d 156 (11th Cir.1983) (setoff available against future death benefits a veteran's widow actually receives). The Government argues that under section 331, which does not contain a provision dealing with cessation of benefits, Cole's tort award must be reduced by the present value of his expected future disability benefits in order to prevent double recovery. See Brooks v. United States, 337 U.S. 49, 53, 69 S.Ct. 918, 920, 93 L.Ed. 1200 (1949); United States v. Brown, 348 U.S. 110, 113, 75 S.Ct. 141, 143, 99 L.Ed. 139 (1954).

The district court apparently believed that if the award could not be set off pursuant to section 351, Cole would be doubly compensated for the same injury. Although not explicitly rejecting the Government's position that it had determined Cole to be eligible for benefits under section 331, ...