Gallegos v. Dick Simon Trucking

• Decision Date: 23 September 2004
• Docket Number: No. 20020802-CA.,20020802-CA.
• Citation: 2004 UT App 322,110 P.3d 710
• Parties: Anthony and Dawn GALLEGOS, as guardians of Anthony D. RYNES, a minor child; Joyce Dixon; Epifanio Gallegos, individually; and Michael Gallegos, as personal representative of the Estate of Patricia Raquel Gallegos, Plaintiffs and Appellees, v. DICK SIMON TRUCKING, INC.; Ronald D. Purta, individually; and John Does I-V, Defendants and Appellant.
• Court: Utah Court of Appeals

110 P.3d 710

2004 UT App 322

Anthony and Dawn GALLEGOS, as guardians of Anthony D. RYNES, a minor child; Joyce Dixon; Epifanio Gallegos, individually; and Michael Gallegos, as personal representative of the Estate of Patricia Raquel Gallegos, Plaintiffs and Appellees, v. DICK SIMON TRUCKING, INC.; Ronald D. Purta, individually; and John Does I-V, Defendants and Appellant.

No. 20020802-CA.

Court of Appeals of Utah.

September 23, 2004.

Rehearing Denied March 31, 2005.

Andrew M. Morse, John R. Lund, Julianne Blanch, Snow Christensen & Martineau, Michael D. Zimmerman, Tawni J. Sherman, and Troy L. Booher, Snell & Wilmer, Salt Lake City, for Appellant.

Brian J. Romriell, Parr Waddoups Brown Gee & Loveless, Salt Lake City, and Erik M. Ward, Gridley Ward & Shaw, Ogden, for Appellees.

Before Judges DAVIS, Jackson, and ORME.

OPINION

JACKSON, Judge:

¶ 1 Dick Simon Trucking, Inc. Dick Simon appeals the jury verdict award in favor of the guardians the Gallegoses of Anthony Rynes. We reverse and remand.

BACKGROUND

¶ 2 In 1998, Rynes was severely injured in an auto collision caused by a Dick Simon employee. In October 2001, a jury trial was held. Dick Simon admitted liability. The Gallegoses and Dick Simon had relatively minor disagreements. The fact and extent of Rynes's injuries and the future cost of providing Rynes's care were not seriously disputed, and experts for both parties had based their calculations of present value damages on the current cost of Rynes's care, $16,000 per month. Thus, the only contentiously contested question for the jury was how to calculate the present value of Rynes's future damages.

¶ 3 Despite the narrowness of the issue, the case was extremely time and labor intensive for the court. In total, the court ruled on over thirty pretrial motions. In particular, seven months before trial, Dick Simon moved for leave to present expert testimony regarding the cost and features of an annuity,¹ which it would introduce to assist the jury in the calculation of the present value of damages. Two months before trial, the court ruled to admit the proffered annuity evidence, provided that the parties could agree to an appropriate jury instruction.

¶ 4 At the beginning of the three-week trial, the Gallegoses moved for reconsideration of the ruling to admit the annuity evidence. The court deferred ruling on the issue but prohibited the parties from making specific price quotes in their opening statements.

¶ 5 The Gallegoses proceeded with their case-in-chief, calling twenty-one witnesses. The Gallegoses' witnesses included Rynes's uncle, an eyewitness to the collision, two emergency responders, nine of Rynes's therapists and doctors, three staff members of the long-term care facility where Rynes lives, three medical experts, a financial consultant, and a long-term care planning expert. The Gallegoses' financial consultant, who testified regarding Rynes's financial requirements, based his calculations on the amount that could be earned from an investment in United States Treasury bills.

¶ 6 In its case-in-chief, Dick Simon had planned to call five witnesses. Dick Simon did call two medical experts, one of whom the Gallegoses had also called. The medical experts testified regarding Rynes's preexisting conditions and other medical problems that were not directly related to the collision. At that point, Dick Simon had planned to call, as an annuity expert, a long-time executive in an international insurance company who would testify regarding the cost and features of an annuity, which could provide for Rynes's future care expenses. Before this witness was called, however, the trial court granted the Gallegoses' motion to reconsider and ruled to exclude all testimony regarding annuities. The court did not consider whether the annuitist was properly qualified as an expert. The parties did not voir dire the annuitist to determine the exact extent to which he understood the calculations that underlay annuity costs, but the record indicates that the annuitist could provide a substantial amount of information regarding the basis for the calculation of an annuity's cost.

¶ 7 Based on the ruling, Dick Simon instead called a long-term care planning expert whose testimony opposed a similar expert who the Gallegoses had called. Dick Simon next called an economist, who Dick Simon had planned to question regarding annuities but could not because of the court's ruling. Again, the court did not consider the individual's annuity expertise or the expert's ability to lay the foundation for an annuity's cost. The economist did provide testimony to challenge the assumptions used by the Gallegoses' financial consultant regarding expected inflation rates. Ultimately, the jury returned a $12 million award in favor of the Gallegoses. Dick Simon now appeals the award.

ISSUE AND STANDARD OF REVIEW

¶ 8 The issue here is whether the trial court properly ruled to exclude all evidence concerning annuities. Appellate courts review some evidentiary rulings under a "clearly erroneous" standard and others under a "correctness" standard. State v. Pena, 869 P.2d 932, 938-39 (Utah 1994). The clearly erroneous standard applies when the issue relates to factual determinations. See id. at 935. For example, trial courts have broad discretion to determine whether to take judicial notice of a fact, see Riche v. Riche, 784 P.2d 465, 468 (Utah Ct.App.1989),

whether to exclude an expert whose testimony a party had not disclosed prior to trial, see Gerbich v. Numed Inc., 977 P.2d 1205, 1208 (Utah 1999), whether a particular individual qualified as an expert, see Patey v. Lainhart, 977 P.2d 1193, 1196 (Utah 1999), whether expert scientific evidence is sufficiently reliable to be admitted, see Brewer v. Denver & Rio Grande W. R.R., 2001 UT 77, ¶ 16, 31 P.3d 557, and whether expert testimony is properly relevant, see Slisze v. Stanley-Bostitch, 1999 UT 20, ¶ 19, 979 P.2d 317. Trial courts also have discretion in issues concerning court efficiency. See Morton v. Continental Baking Co., 938 P.2d 271, 275 (Utah 1997).

¶ 9 In contrast, the correctness standard applies when the question turns on a legal determination. For example, appellate courts use the correctness standard to evaluate a trial court's ruling on the application of a privilege. See State v. Anderson, 972 P.2d 86, 88 (Utah Ct.App.1998)

. Generally, "[w]hether evidence is admissible is a question of law, which we review for correctness." Cal Wadsworth Constr. v. City of St. George, 898 P.2d 1372, 1378 (Utah 1995) (quoting State v. Diaz, 859 P.2d 19, 23 (Utah Ct.App.1993)) (alteration in original).

¶ 10 In this case, we review the trial court's ruling to exclude all evidence regarding annuities. The trial court based its ruling on the ground that the testimony asked the jury to decide how to invest the award. Thus, the question here is whether a party is entitled to adduce any evidence, through any expert witness, regarding an annuity's cost. This is not a question of fact because the court did not make its ruling on the qualifications of the proposed witness, courtroom efficiency, evidentiary relevancy, or evidentiary reliability. We thus conclude that the appropriate standard of review is that which applies to legal questions on the admissibility of evidence, viz., correctness.

ANALYSIS

I. Cost of Annuity Evidence

¶ 11 In Utah, a finder-of-fact must discount damages for future losses "to the present cash value." Model Utah Jury Instruction 27.11; see also Klinge v. Southern Pac. Co., 89 Utah 284, 57 P.2d 367, 370 (1936). Yet, the required calculation is "almost impossible" for a jury without assistance. Bennett v. Denver & Rio Grande W. R.R. Co., 117 Utah 57, 213 P.2d 325, 328 (1950). Fortunately, a cornucopia of evidence is available with which litigants can equip the jury to compute this calculation. In particular, in this case, Dick Simon sought to introduce evidence relating to an annuity's cost to assist the jury in calculating the present value of future damages.

¶ 12 Evidence relating to annuities comes in two forms: (1) annuity tables and their related data, which provide the formulas used in making annuity calculations, and (2) the cost of an annuity as applied to the facts in the particular case. See Singh v. Air Ill., Inc., 165 Ill.App.3d 923, 117 Ill.Dec. 501, 520 N.E.2d 852, 856-57 (1988)

. Previous Utah cases have permitted the former, the introduction of annuity tables and their related data.²

See Schlatter v. McCarthy, 113 Utah 543, 196 P.2d 968, 974-75 (1948); see also Bruner v. McCarthy, 105 Utah 399, 142 P.2d 649, 656 (1943). Utah has not ruled on the latter, and Utah's sister states split into two schools of thought on the question.

¶ 13 Representing one of these schools, Wisconsin and Illinois reject the admission of the cost of an annuity to compute present value. See, e.g., Lorenz v. Air Ill., Inc., 168 Ill.App.3d 1060, 119 Ill.Dec. 493, 522 N.E.2d 1352, 1356 (1988)

; Singh, 117 Ill.Dec. 501,

520 N.E.2d at 856-57; Herman v. Milwaukee Children's Hosp., 121 Wis.2d 531, 361 N.W.2d 297, 306 (1984). These courts were concerned that annuity cost evidence would have misled the jury. The Herman court expressed concern that the evidence would have "misled the jury into believing it must award a lesser sum than the present value of the future losses." 361 N.W.2d at 306. The Lorenz court worried that this evidence would have "[misled] the jury into accepting [a] hypothetical figure." 119 Ill.Dec. 493,

522 N.E.2d at 1356.³

¶ 14 Following the rationale of the Lorenz and Herman courts, the Gallegoses argue that this evidence would mislead the jury into believing that the cost of an annuity would provide adequate income when, in fact, future medical expenses are difficult to predict and may arise suddenly. Rather than proving the Gallegoses' point, this argument emphasizes that the calculation of future expenses, inherently challenging and inevitably imprecise, is...