Seely v. McEvers, 2

Citation564 P.2d 394,115 Ariz. 171
Decision Date04 February 1977
Docket NumberCA-CIV,No. 2,2
PartiesEmma SEELY, Appellant, v. John H. McEVERS and Betty Lou McEvers, husband and wife, Appellees. 2201.
CourtCourt of Appeals of Arizona
Ronald W. Sommer, Tucson, for appellant
OPINION

HOWARD, Chief Judge.

Appellant brought suit for damages incurred when her car was struck from the rear by appellees' pickup truck. The jury found appellees liable and awarded $10,000 in damages. Judgment was entered November 25, 1975 in favor of appellant. However, the trial court ordered appellant to pay jury fees and all costs incurred by appellees since November 18, 1975, when appellees made an offer of judgment in the amount of $17,500. On appeal from the award of damages and imposition of costs, appellant raises two issues and requests an additur in the amount of at least $50,000 or in the alternative a new trial.

The accident out of which this litigation arose occurred on November 29, 1972. On May 3, 1973, appellant was involved in another rear-end collision. Pror to trial, appellant filed a motion in limine requesting the exclusion of evidence that she had negotiated and received a settlement arising out of the May 3 accident. 1 The motion was denied and at trial appellees introduced both the fact of settlement and the amount.

Appellant claims the trial court erred in allowing the introduction of the evidence of settlement, arguing that it is both irrelevant and privileged. She cites as authority Schneider v. McAleer, 39 Ariz. 190, 4 P.2d 903 (1931) where the court held that a plaintiff may not show as an admission of liability that a defendant has paid third persons on claims arising from the same accident. The court stated in that case:

'The law encourages compromises, and ordinarily allows no evidence of them as admissions of liability or the extent thereof.' 39 Ariz. at 195, 4 P.2d at 904.

Appellant contends that the same policy reflected in Schneider mandates exclusion of the evidence of settlement here. We find, however, that countervailing considerations exist in the present case. Since appellant is entitled to recover only those damages proximately caused by the first accident the question arise as to what extent damages may have been incurred as a result of the subsequent accident. Here the evidence of settlement is relevant to the issue of proximate cause because the settlement of a claim arising from the second accident tends to indicate that appellant was then asserting she received some damage or injury. See Redding v. Braddy, 258 N.C. 154, 128 S.E.2d 147 (1962). Further, because appellant described the second accident in interrogatories as a 'bump' and testified she received no injury, the evidence of settlement also bears on her credibility. See Selgado v. Commercial Warehouse Co., 86 N.M. 633, 526 P.2d 430 (1974). We thus find that the evidence of settlement was proper for the jury to consider and hold it was relevant and admissible under the facts of this case.

Appellant made a motion in limine requesting that appellees be prohibited from mentioning or suggesting in any way that some or all of any recovery may not be subject to taxation. This motion was granted; however, the trial court ruled that appellees could ask appellant's expert witness if he used gross income or adjusted gross income in arriving at his computation of loss of earnings. Based on the court's ruling the following exchange took place during cross-examination of the expert witness:

'A. . . . After the accident of November I have assumed that she would have earned as a housekeeper up through 1980 a certain sum of money as a housekeeper.

Then I have transferred her to a waitress at the current 1980 wage.

Q. I take it that you are--you have used what in tax accounting would be called the adjusted gross income?

A. No.

Q. Oh, just gross income?

A. This would be in tax terms gross income.

Q. Gross income?

A. Yes.

Q. So from those figures there you have not made any deductions for her Federal and State income taxes for example?

A. That's correct.'

In closing argument, counsel for appellees without objection from appellant, stated:

'But, (the expert) did a strange thing anyhow, and I comment on it now, not because it has any importance in the case. It makes you wonder how they go about their work when they are retained to prove a point to a jury. He measured her high earnings before and her low earnings later. And then he said she ought to be entitled to the difference, and so forth. He never considered income tax. Now that may or may not be important, but it is suggestive to me that he could have done it accurately. And for one reason or another he elected not to do it accurately.'

Appellant contends that the questions and argument regarding income taxes should not have been allowed, citing Mitchell v. Emblade, 80 Ariz. 398, 298 P.2d 1034 (1956). In Mitchell, the court held that the jury should not be instructed that an award of damages for pain and suffering and medical expenses is not subject to income taxes, and stated:

'. . . (T)he case (should) be tried on the issues and presented to the jury with a correct measure of damages, of which the incident of income tax has no part.' 80 Ariz. at 405, 298 P.2d at 1038.

The issue here is whether the rule announced in Mitchell is so broad as to encompass the questioning of appellant's expert as to the basis for his computations.

Although courts are divided on this question, the majority view appears to be that income tax consequences should not be taken into consideration in arriving at damages for loss of future earnings or for impairment of future earning capacity. Rather the award of damages should be based upon a plaintiff's gross earnings. The courts have generally reasoned that the amount of...

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11 cases
  • Louissaint v. Hudson Waterways Corp.
    • United States
    • United States State Supreme Court (New York)
    • 7 Agosto 1981
    ......(A) Special damages. (1) Medical expenses. $3,759.83. (2) Loss of Wages--benefits. (i) Gross $567,000. (ii) Less taxes $75,750.00. ... Mitchell v. Emblade, 80 Ariz. 398, 298 P.2d 1034; Seely v. McEvers, 115 Ariz. 171, 564 P.2d 394; Rodriguez v. McDonnell Douglas Corp., 151 Cal.Rptr. 399, ......
  • Nunsuch ex rel. Nunsuch v. U.S., CIV.97-618-PHX-ROX.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. District of Arizona
    • 13 Julio 2001
    .......         On September 2, 1994, Mary Esther underwent mitral valve replacement surgery at University Medical Center in ... See Seely v. McEvers, 115 Ariz. 171, 174, 564 P.2d 394, 397 (1977). However, in FTCA cases, such a deduction ......
  • Jobe v. International Ins. Co., Civ. 93-0074 PHX CAM.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. District of Arizona
    • 7 Marzo 1995
    ......In Jobe v. Lee, the Jobes sued for malpractice involving alleged improper tax advice. SOF 2. The Jobes sought approximately $2 million as compensation for the amount they had to pay to the ...1991). Tax benefits are not considered when determining a party's damages. Seely v. McEvers, 115 Ariz. 171, 564 P.2d 394 (Ct. App.1977). See also Billings Clinic v. Peat ......
  • Air Crash Disaster Near Chicago, Ill., on May 25, 1979, In re
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • 25 Mayo 1979
    ...... evidence relating to the plaintiff's receipt of insurance proceeds should have been admitted; (2) whether evidence of the decedent's income tax liability should have been admitted; and (3) ... or deductions should not be allowed for the purpose of reducing the amount of damages." Seely v. McEvers, 115 Ariz. 171, 174, 564 P.2d 394, 397 (Ct.App.1977). .         Nonetheless, ......
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9 books & journal articles
  • Handling Evidentiary Issues
    • United States
    • James Publishing Practical Law Books Archive Proving Damages to the Jury - 2013 Contents
    • 13 Agosto 2013
    ...tax effects leads the jury into considerations that are conjectural, complicating, and confusing. [See e.g., Seely v. McEvers (1977, App) 115 Ariz. 171, 174, 564 P.2d 394, 397; Rodriguez v. McDonnell Douglas Corp. (1978, 2d Dist) 87 Cal.App. 3d 626, 664-68, 151 Cal.Rptr. 399, 420-23; Johnso......
  • Preparing for common legal and factual issues
    • United States
    • James Publishing Practical Law Books Archive Proving Damages to the Jury - 2020 Part 5: How to handle unique issues in damage cases
    • 5 Agosto 2020
    ...tax e൵ects leads the jury into considerations that are conjectural, complicating, and confusing. [See e.g., Seely v. McEvers (1977, App) 115 Ariz. 171, 174, 564 P.2d 394, 397; Cox v. Superior Court , 98 Cal. App. 4th 670, 674–75, 120 Cal. Rptr. 2d 45, 47–48 (2002); Johnson v. Manhattan & Br......
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    • United States
    • James Publishing Practical Law Books Archive Proving Damages to the Jury - 2020 Part 5: How to handle unique issues in damage cases
    • 5 Agosto 2020
    ...Douglas Corp., 742 F.2d 45 (2nd Cir. 1984), §11:95 Sea-Land Services, Inc. v. Gaudet , 414 U.S. 573, 595 (1974), §23:11 Seely v. McEvers, 564 P.2d 394, 397, 115 Ariz. 171, 174, (App. 1977), §23:22 Seely v. White Motor Co. , 63 Cal.2d 9, 403 P.2d 145 (Cal. 1965), §22:03 Sengsouly v. Allstate......
  • Table of Cases
    • United States
    • James Publishing Practical Law Books Archive Proving Damages to the Jury - 2016 Part 5: How to Handle Unique Issues in Damage Cases
    • 13 Agosto 2016
    ...1984), §11:95 C-8 Table of Cases Table of Cases Sea-Land Services, Inc. v. Gaudet , 414 U.S. 573, 595 (1974), §23:11 Seely v. McEvers, 564 P.2d 394, 397, 115 Ariz. 171, 174, (App. 1977), §23:22 Seely v. White Motor Co. , 63 Cal.2d 9, 403 P.2d 145 (Cal. 1965), §22:03 Sengsouly v. Allstate In......
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