Hoskie v. U.S., 79-1680

• Citation: 666 F.2d 1353
• Decision Date: 22 December 1981
• Docket Number: No. 79-1680,79-1680
• Parties: Jimmy HOSKIE, individually and as Administrator of the Estate of Pauline Hoskie, deceased, and as father and next friend of Tilman Hoskie, a minor, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

Page 1353

666 F.2d 1353

Jimmy HOSKIE, individually and as Administrator of the

Estate of Pauline Hoskie, deceased, and as father

and next friend of Tilman Hoskie, a

minor, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.

No. 79-1680.

United States Court of Appeals, Tenth Circuit.

Argued and Submitted Jan. 27, 1981.

Decided Dec. 22, 1981.

Laura M. Goldsmith, Gallup, N. M. (William A. Goldsmith, Gallup, N. M., with her on briefs), for plaintiff-appellant.

R. E. Thompson, U. S. Atty., D. N. M., Albuquerque, N. M., for defendant-appellee.

Before SETH, Chief Judge, and HOLLOWAY and McKAY, Circuit Judges.

McKAY, Circuit Judge.

In this case, appellants Tilman Hoskie, a minor, and his parents, Pauline and Jimmy Hoskie, argue that they were awarded insufficient damages in their medical malpractice suit against the United States brought under the Federal Tort Claims Act, 28 U.S.C. § 2671-2680 (1976). This case arises from very serious malpractice by government employees in their treatment of Tilman Hoskie at the Gallup Indian Medical Center in Gallup, New Mexico, on August 17, 1977. When he was two-and-one-half years old, Tilman Hoskie entered the medical facility for a routine bronchoscopy to remove a sunflower seed that had lodged in his bronchial tube a few hours earlier. During the course of treatment, Tilman was given an injection of 10 milligrams of morphine as a sedative, a dose several times that recommended for a child of his age and weight. Within a few hours, Tilman lapsed into a coma and remained unresponsive for several days. When he gradually emerged from unconsciousness, it was determined that the overdose of morphine had depressed his breathing function, depriving his brain of oxygen and causing permanent brain damage. As a result, Tilman's motor functions, his hand-eye coordination, and his intellectual and social abilities were severely and permanently impaired. After a trial in the United States District Court for the District of New Mexico, the trial judge, sitting as trier of fact, concluded that Tilman Hoskie's brain damage occurred as a proximate result of negligence by the employees of the United States public health service facility. A judgment of $236,101 was entered against defendants, which is the subject of this appeal. ¹ Specifically, appellants claim: (1) that the district court applied an inordinately high discount rate to reduce the award for future loss of earning capacity to its present value; (2) that the district court's finding of fact and judgment of $25,000 for pain and suffering was so inadequate as to be clearly erroneous; and (3) that the district court erred in dismissing prior to trial the portion of plaintiffs' complaint seeking damages for the loss of services, society, and affection of their child.

Cases brought under the Federal Tort Claims Act (FTCA) are tried by the court sitting without a jury. 28 U.S.C. § 2402. In reviewing such cases, the appellate court will not set aside the trial court's findings of fact unless they are clearly erroneous. Fed.R.Civ.P. 52(a). The "clearly erroneous" standard applies to the review of findings of fact concerning the amount of damages in a tort action. See, e.g., Sanders v. Leech, 158 F.2d 486, 487 (5th Cir. 1946); Chesser v. United States, 387 F.2d 119, 120 (5th Cir. 1967); Hysell v. Iowa Public Service Co., 534 F.2d 775, 786 (8th Cir. 1976); Felder v. United States, 543 F.2d 657, 664 (9th Cir. 1976). This standard is a stringent one. The Supreme Court has stated that "(a) finding is 'clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948). Trial courts are vested with broad discretion in awarding damages, and appellate courts do not lightly engage in a review of a trial court's actions.

The evidence in this case shows that before entering the medical facility, Tilman Hoskie was a healthy, normal, well-coordinated two-and-one-half-year-old child who could walk, speak in sentences, ride a tricycle and was toilet trained. Since the morphine incident, his body has been spastic and rigid. He has suffered foaming at the mouth and convulsions requiring hospitalization. He now walks with a spastic gait, even with the aid of leg braces. He cannot run, ride a tricycle, nor play even the most elementary sports. At age four-and-one-half, he cannot speak clearly and is no longer toilet trained. In addition, his vision, eye-hand coordination, and speech functions have been adversely affected. Professionals who have examined and treated Tilman have concluded that although his condition may improve gradually, he will remain mentally retarded and his motor abilities will not likely return to normal. Because he will never again function as a normal human being, he will require some form of supervision for the rest of his life. If he is ever able to work, it will only be in a sheltered workshop environment. As a result of defendant's negligence, Tilman is severely and permanently retarded, both physically and mentally.

In examining the sufficiency of this damage award, we note that at every juncture the trial court adopted almost verbatim the defendant's proposed findings of fact with respect to the amount of damages. Although this does not constitute error in itself, United States v. El Paso Natural Gas Co., 376 U.S. 651, 656, 84 S.Ct. 1044, 1047, 12 L.Ed.2d 12 (1964), it requires us to approach this case with full recognition that the trial court adopted the least favorable position with respect to damages for this severely injured young boy.

I. Loss of Earning Capacity

In assessing damages for loss of future earning capacity, the trier of fact must reduce a lump sum award to its present value. Chesapeake & Ohio Railway v. Kelly, 241 U.S. 485, 489-91, 36 S.Ct. 630, 631-32, 60 L.Ed. 1117 (1916). See also Steckler v. United States, 549 F.2d 1372, 1378 (10th Cir. 1977); Deweese v. United States, 576 F.2d 802, 808-09 (10th Cir. 1978). The court must calculate an amount of money that can be invested in a reasonably safe long-term investment available to the average person, which ultimately will yield a sum equal to plaintiff's lost income over the span of his working life expectancy. In this case, the trial judge accepted in its entirety the testimony of the defendant's expert witness on the issue of Tilman's lost earning capacity. In doing so, the judge adopted the expert's use of a 9.5 percent discount rate, which was based on the current yield of triple A-rated corporate bonds. Record, vol. 6, at 409.

On appeal, plaintiffs claim that this discount rate is unreasonably high, resulting in an overly large discount and hence an inadequate award. Plaintiffs' expert testified at trial that a four percent discount rate, the interest rate available on long-term insurance annuity policies, would be appropriate in this case. Although the expert acknowledged that higher interest rates are available on other types of investments, it was his opinion that an annuity policy is better suited to those not well-versed in money market matters, and is the only reasonable investment whereby a fixed rate of return can be guaranteed for the entire span of Tilman's working life expectancy.

In awarding damages, the trial judge selected an exceptionally high discount rate. It is higher than discount rates applied in many reported cases, ² and is based on the interest rate currently available on corporate bonds, one of the highest-paying and most secure investments. Although the trial judge perhaps should have placed more emphasis on the particular facts involved in this case as emphasized by plaintiffs' expert, we do not find that his adoption of the 9.5 percent figure was clearly erroneous. This conclusion is further supported by the fact that defendant's expert did adjust Tilman's future loss of earnings by an estimated 6 percent rate of wage inflation before applying the 9.5 percent discount factor. Record, vol. 6, at 407. The testimony of defendant's expert marginally supported the application of the 9.5 percent rate, and the trial judge could, in his discretion, accept that testimony.

II. Pain and Suffering

Against this backdrop, we review the court's damage award for pain and suffering. At the close of the presentation of evidence, after denying the opportunity for closing arguments, the trial judge stated:

I thought perhaps twenty-five thousand dollars should be given to him for pain and suffering. I don't know. There is no measure for that. If I understand the books right, that's left up to the enlightened conscience of people nowadays, and my enlightened conscience would believe, I think, that twenty-five thousand dollars would be the proper amount for pain and suffering. I don't know how much he had, but I felt that was proper.

Record, vol. 6, at 497, 500-501 (emphasis added). The trial judge's statement, "I don't know how much he had," suggests that perhaps he did not consider all the elements of damage cognizable under the rubric of pain and suffering as defined by New Mexico law, the applicable law in this FTCA case. ³ As the New Mexico appellate courts recently have lamented, the rules applicable to pain and suffering recovery have not been well-defined. In Grammer v. Kohlhaas Tank & Equipment Co., 93 N.M. 685, 604 P.2d 823 (Ct.App.1979), the court stated, "(w)hile most courts, like our own, recognize that pain and suffering constitute legitimate elements of damages in tort claims, one will search in vain for any extensive judicial analysis of its essential components." Id. at 695, 604 P.2d at 833. See also Rael v. F & S Co., 94 N.M. 507, 513-15, 612 P.2d 1318, 1324-26 (Ct.App.1979) (Sutin, J., concurring and dissenting). Nevertheless, in Rutledge v. Johnson, 81 N.M. 217, 465 P.2d 274 (19...