Davidson v. Prince, 900461-CA

Decision Date18 June 1991
Docket NumberNo. 900461-CA,900461-CA
Citation813 P.2d 1225
PartiesGrant DAVIDSON, Plaintiff and Appellant, v. Erwin M. PRINCE and Folkens Brothers Trucking, Defendants and Appellees.
CourtUtah Court of Appeals

Ray H. Ivie, R. Phil Ivie, Jeffrey Peatross (argued), Provo.

H. James Clegg (argued), Robert C. Keller, Snow, Christensen & Martineau, Salt Lake City.

Before BILLINGS, Associate P.J., and ORME and RUSSON, JJ.

OPINION

BILLINGS, Associate Presiding Judge:

Appellant Grant Davidson was injured by a cow or a steer that had escaped from a wrecked truck driven by Erwin M. Prince, an employee of appellee Folkens Brothers Trucking. Subsequently, Davidson filed a negligence action against Prince and Folkens. A jury found appellees sixty percent negligent and appellant forty percent contributorily negligent. Based on this verdict, the judge entered a judgment in favor of appellant in the amount of $27,323.88 plus interest. Appellant moved for a new trial. The court denied this motion. Appellant appeals from the denial of his motion for a new trial. We affirm.

FACTS

On May 28, 1986, appellee was driving a truck containing animals. Appellee negligently overturned the truck, releasing animals onto the highway and into the surrounding area. Appellant was injured when he was attacked by a steer that had escaped from appellee's vehicle.

At trial, conflicting evidence was introduced regarding the proximity of appellant to the steer before the steer charged, ranging from forty feet to ten feet. Over appellant's objections, appellee's counsel introduced into evidence a statement from a letter written to the appellee wherein appellant estimated the distance as ten feet. Based on this evidence, appellee argued that appellant had cornered the steer and was therefore partly responsible for his injuries.

At trial, the jury awarded appellant total damages in the amount of $45,539.80. The jury, however, found appellant forty percent at fault and accordingly, appellant was ultimately awarded a judgment of only $27,323.88.

Appellant filed a motion for a new trial, contending the trial court had committed three errors of law. First, appellant argued the trial court erred in instructing the jury regarding the tax consequences of a personal injury judgment. Second, appellant contended the trial court erred in precluding his expert from testifying that appellee was negligent. Third, appellant claimed the trial court erred in admitting a statement made in a settlement letter.

The trial court denied appellant's motion for a new trial, concluding that even if error had occurred, it was harmless. Appellant appeals this decision, claiming the errors committed by the trial court were prejudicial.

I. JURY INSTRUCTION REGARDING THE TAX CONSEQUENCES OF A PERSONAL INJURY JUDGMENT

The trial court instructed the jury on the tax consequences of any award received by appellant as follows: "In determining the amount of damages you may not include in, or add to an otherwise just award, any sum for the purpose of punishing the defendants, or to serve as an example or warning for others. In addition you may not include in your award any sum for court costs or attorney fees. Neither may any sum of money be added to that amount for federal income taxes. I charge you as a matter of law, that the amount awarded by your verdict is exempt from federal income taxation." (emphasis added).

Appellant properly objected to the portion of this instruction stating that the verdict was exempt from federal taxation but his objection was overruled. On appeal, appellant contends the trial court erred by instructing the jury that any recovery received by appellant would not be subject to federal taxation. The propriety of the instructions given to the jury is a question of law and we therefore review the trial court's instructions for correctness. Knapstad v. Smith's Management Corp., 774 P.2d 1, 2 (Utah App.1989).

Utah courts have yet to consider the propriety of instructing a jury on the tax consequences of a personal injury judgment. However, "[t]he majority view in this nation, by nearly a five-to-one ratio, is that income tax considerations should not be impressed upon a jury." Dehn v. Prouty, 321 N.W.2d 534, 538 (S.D.1982). The overwhelming majority of state courts which have addressed this issue have held that, "as a general rule, it is improper to instruct the jury on the tax consequence of a personal injury judgment, and have upheld the refusal of trial courts to do so." Annotation, Propriety of Taking Income Tax Into Consideration in Fixing Damages in Personal Injury or Death Action, 16 A.L.R. 4th 595 (1982). 1

Courts following the majority view have based their decisions on varying grounds. Some courts have held that jury instructions concerning the tax consequences of a personal injury or wrongful death award are improper because they interject a collateral and irrelevant matter. See, e.g., Dehn, 321 N.W.2d at 539 ("income tax liability is a matter foreign to the award of damages in that it is not a pertinent issue bearing on the award thereof"); Mitchell v. Emblade, 80 Ariz. 398, 298 P.2d 1034 (1956) (holding that taxability of award is collateral to the calculation of damages). According to these courts, if a jury were instructed regarding the tax consequences of a personal injury or wrongful death judgment, other cautionary instructions would also be required on other collateral matters which might affect the amount of damages awarded by a jury, such as the fact the injured party will have to pay attorney fees out of the judgment. See Dehn, 321 N.W.2d at 539. As noted by the Emblade court, if a jury is instructed on the tax consequences of an award,

what objection can there be for plaintiff's counsel to state that the expense of trial is not provided for in the instruction concerning damages, that the cost of medical witnesses is not paid by the defendant, that the expense of taking depositions, as well as court reporting at the trial, must be borne by the individual litigants, that the fees of plaintiff's attorney are not recognized as an element, [and] that the defendant can deduct any award it pays from its income and excess profits tax return.

Emblade, 298 P.2d at 1037-38. 2

Other courts aligning themselves with the majority have done so to prevent unnecessary complication of trials. See, e.g. Scallon v. Hooper, 58 N.C.App. 551, 293 S.E.2d 843, 845 ("consideration of the taxation issue ... would ordinarily involve abundant and intricate evidence and jury instructions on present and future tax and nontax liabilities") review denied, 306 N.C. 744, 295 S.E.2d 480 (1982); Emblade, 298 P.2d at 1038 (noting that interjecting this issue into the calculation of damages would unduly "complicate the trial by requiring an intricate discussion of tax and nontax liabilities"); Combs v. Chicago St. Paul, Minneapolis & Omaha Ry. Co., 135 F.Supp. 750, 757 (N.D.Iowa 1955) (noting that interjecting this issue into the calculation of damages "would probably give rise to more problems than it would solve"); Klawonn v. Mitchell, 105 Ill.2d 450, 475 N.E.2d 857, 861 (1985) ("proof of pecuniary loss, not simple under the best of circumstances, should not be rendered more complex by injecting the question of income tax or other extraneous factors"). 3

Courts adopting the majority position also note that there is no evidence that juries increase damage awards because of a belief that such awards are taxable. See, e.g., Dehn, 321 N.W.2d at 538 (noting that there is "no evidence ... or empirical data demonstrating that ... juries in general regularly increase damage awards because of a mistaken belief that the state and federal governments share in the award through income taxes"); Klawonn, 475 N.E.2d at 860 (quoting Norfolk & W. Ry. Co. v. Liepelt, 444 U.S. 490, 503, 100 S.Ct. 755, 62 L.Ed.2d 689 (1980) (Blackmun, J., dissenting)) (" '[t]here certainly is no evidence in this record to indicate that the jury is any more likely to act upon an erroneous assumption about any other collateral matter' ").

A fourth reason given by courts which have adopted the majority position is that the taxability of the award is an issue which concerns only the recipient of the award and the Internal Revenue Service. See, e.g., Eriksen v. Boyer, 225 N.W.2d 66, 74 (N.D.1974) (quoting Hall v. Chicago & N.W. Ry. Co., 5 Ill.2d 135, 125 N.E.2d 77, 86 (1955)) (" 'whether the plaintiff has to pay a tax on the award is a matter that concerns only the plaintiff and the government' "). As noted by the Eriksen court, " 'if the jury were to mitigate the damages of the plaintiff by reason of the income tax exemption accorded him, then the very Congressional intent of the income tax law to give an injured party a tax benefit would be nullified.' " Id.

Finally, some courts have rejected jury consideration of income tax consequences because such instructions are too conjectural and speculative. See, e.g., Canavin v. Pacific S.W. Airlines, 148 Cal.App.3d 512, 541, 196 Cal.Rptr. 82, 102 (1983) ("Income tax instructions are conjectural and open the door to intense speculation."); Scallon, 293 S.E.2d at 845 ("The reason courts adopt the majority view of refusing to take income tax consequences into consideration in awarding damages for wrongful death is that the amount of a recipient's future income tax liability is too conjectural or speculative a factor.").

We are persuaded by the aforestated arguments supporting the exclusion of an instruction in a personal injury or wrongful death action informing the jury that the judgment will not be subject to taxation. We, therefore, adopt the majority view that it is improper to instruct the jury as to the tax consequences of a personal injury or wrongful death award. We do so, however, cognizant of the fact that most courts addressing this issue have done so in the context of deciding whether it was error for the trial...

To continue reading

Request your trial
17 cases
  • Beckman v. Cybertary Franchising LLC
    • United States
    • Utah Court of Appeals
    • March 22, 2018
    ...in the course thereof excluded must show that the discussions in question were made in compromise negotiations." Davidson v. Prince , 813 P.2d 1225, 1232 (Utah Ct. App. 1991) (citation and internal quotation marks omitted). The rule is " ‘premised on the idea that encouraging settlement of ......
  • Lee v. Williams
    • United States
    • Utah Court of Appeals
    • March 29, 2018
    ...For instance, evidence "wastes time" if it will "do little more than tell the jury what result to reach," see Davidson v. Prince , 813 P.2d 1225, 1232 n.7 (Utah Ct. App. 1991), or if it is "utterly unrelated" to the issues central to a proceeding, see State v. Martin , 2017 UT 63, ¶ 49, –––......
  • State v. Tenney
    • United States
    • Utah Court of Appeals
    • March 14, 1996
    ...to reach are not permitted. Nor is the rule [Rule 704] intended to allow a witness to give legal conclusions.' " Davidson v. Prince, 813 P.2d 1225, 1231 (Utah App.) (quoting Owen v. Kerr-McGee Corp., 698 F.2d 236, 240 (5th Cir.1983)), cert. denied, 826 P.2d 651 (Utah 1991); accord State v. ......
  • Anderson v. Thompson
    • United States
    • Utah Court of Appeals
    • January 4, 2008
    ...the trial court's advantageous position, and do not overturn the result unless it is clear the trial court erred." Davidson v. Prince, 813 P.2d 1225, 1230 (Utah Ct.App.1991). ¶ 13 Next, Husband claims that Wife should be equitably estopped from receiving past alimony and child support and t......
  • Request a trial to view additional results
2 books & journal articles
  • Preparing for common legal and factual issues
    • United States
    • James Publishing Practical Law Books Proving Damages to the Jury Part 5
    • May 4, 2022
    ...matter into damages deliberations. [See e.g., Turner v. Gen. Motors Corp. , 584 S.W.2d 844, 853 (Tex. 1979); Davidson v. Prince , 813 P.2d 1225, 1227–28 (Utah Ct. App. 1991); but see Tex. Civ. Prac. & Rem. Code § 18.091, enacted in 2003, requiring some losses, including loss of earnings or ......
  • The Law and Economics of Tort Damages
    • United States
    • Utah State Bar Utah Bar Journal No. 9-7, September 1996
    • Invalid date
    ...are exempt from income tax, Utah courts have directed that pretax, not post tax, lost earnings should be awarded. See Davidson v. Prince, 813 P.2d 1225 (Utah App. 1991). Even an accurately calculated award based solely on lost income under compensates an injury victim. The reason is that, a......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT