Seaboard Coast Line R. Co. v. Garrison

• Decision Date: 04 August 1976
• Docket Number: No. 75--1672,75--1672
• Citation: 336 So.2d 423
• Parties: SEABOARD COAST LINE RAILROAD COMPANY, Appellant, v. Nancy Hagan GARRISON et al., Appellees.
• Court: Florida District Court of Appeals

Page 423

336 So.2d 423

SEABOARD COAST LINE RAILROAD COMPANY, Appellant, v. Nancy Hagan GARRISON et al., Appellees.

No. 75--1672.

District Court of Appeal of Florida, Second District.

Aug. 4, 1976.

Rehearing Denied Sept. 10, 1976.

M. David Alexander and Dabney L. Conner, of Boswell, Boswell & Conner, Bartow, for appellant.

Kenneth L. Connor, of Gibson & Connor, Lake Wales, and Summerlin & Connor, Winter Haven, for appellees.

SCHEB, Judge.

This appeal is from a judgment entered in favor of the appellees/plaintiffs in a wrongful death action. The question posed is a novel one to Florida law; I.e., Is expert testimony concerning future inflationary trends admissible as a basis to determine the estimated value of loss of future support for a decedent's survivor?

Elijah Hagan died on August 30, 1974, in a crossing accident between an automobile driven by him and appellant/defendant's train. Hagan, a truck driver, was 46 years old at the time of the accident. Testimony showed he was a good and reliable employee. The decedent's estate and his surviving child, Timothy Bankston, age 5, recovered judgments against the appellant Railroad and David Barnaby Bach. We affirm.

Appellant contends that the court erred in permitting the plaintiff's economist, Dr. Roberts, to give expert testimony to the effect that inflation would probably continue at a minimum annual rate of 5% For the next thirteen years; I.e., until the decedent's son attained his majority. This testimony occurred when Roberts was calculating the loss in support money caused by Hagan's death. Roberts' calculations were based on the premise that had Hagan lived, the amount of his money available for support and so used would have kept up with inflation. Dr. Roberts, a professor of economics at the University of Tampa, based his testimony upon what he called 'reasonable economic probability' which was derived from historcial trends. Appellant, relying primarily on Johnson v. Penrod Drilling Co., 5th Cir. 1975, 510 F.2d 234 (a case brought under the Jones Act), says that such testimony as to future rates of inflation is too speculative and should not be permitted.

Neither party has cited us to a Florida case on point, and our own research has not disclosed any. However, while novel to Florida, this question has been frequently decided elsewhere, and numerous recent cases both permit ¹ and prohibit ² such testimony. See Annot., 12 A.L.R.2d 611, § 15. We think that to require the finder of fact to ignore evidence of reasonably predictable inflationary trends is inconsistent with the realities of present day economics. We align ourselves with the courts that permit such testimony.

First, even in the absence of any evidence whatsoever on this matter, we think it likely that juries will consider the impact of future inflation. Inflation has become a fact of life within the experience of everyone. It has continued to a greater or lesser extent throughout most of our lifetimes. Most people have found it necessary to reckon with this in their own financial planning for the future. Certainly juries, which are drawn from citizens from every walk of life, are aware of the effects of inflation. Quite likely they will be prone to consider it in their attempts to fully compensate a plaintiff. ³ On this premise, we think it proper that their judgments be aided by such competent expert testimony as may be relevant to this issue.

Second, the mere fact that the future rate of inflation is uncertain is not a sufficient ground to prohibit the jury from considering expert testimony as to inflationary trends. Juries are constantly called upon to evaluate the effect of future or hypothetical events. As the court stated in United States v. English, 9th Cir. 1975, 521 F.2d 63:

'While predicting future inflationary trends, or extrapolating from present ones, may be speculative, so are most predictions courts make about future incomes, expenses (as, for example, in the case of the wrongful death of an infant). Since it is still more probable that there will in the future be changes in the purchasing power of the dollar, it is better to try as best we can to predict them rather than to ignore them altogether.'

Third, we note that Standard Jury Instruction 6.10 requires Reduction of Damages to Present Value, and failure to instruct the jury on this point is error. Norman v. Mullin, Fla.App.2d 1971, 249 So.2d 733. This instruction is based on the concept that the plaintiff will be able to profitably invest his award, so that less money is required now to compensate him for money which, absent defendant's negligence, he would not have received until some future time. Yet, the Standard Jury Instruction fails to mention any specific interest rate. The matter is for determination by the jury within reasonable limits. Renuart Lumber Yards, Inc. v. Levine, Fla.1950, 49 So.2d 97. And, expert opinion on the proper discount rate is commonly received for this purpose. 25A C.J.S. Damages § 194; 22 Am.Jur.2d, Damages, § 96 at n. 14.

In the present case, Dr. Roberts used an interest rate of 7% In his calculations, while on cross-examination appellant vigorously attempted to get Dr. Roberts to admit that safe investments were available paying 8% Or higher. A higher interest rate would, of course; result in a smaller present value. But, it does not seem fair to us to allow the defendant to argue for the use of a high anticipated interest rate as a basis of discounting an award, without allowing the plaintiff to show that the purchasing power of the money he receives and invests may be substantially offset by increases in the cost of living. To this extent, we disagree with Penrod, supra, in which the Fifth Circuit held that inflation could not be considered and that future damages must be 'reduced to present value by the use of an appropriate interest rate prevailing at the time and place of trial.' 510 F.2d at 237. We think fairer results may be obtained by following the procedure used in the instant case; I.e., permitting expert testimony not only on future inflation, but also on the interest rate used in computing the present value of the award. With all the evidence before it, the jury will better fulfill its function of awarding a sum which, when invested, will fairly compensate the plaintiff for further...