Wallace C. Clissold and Ingebord Clissold v. St. Louis-San Francisco Railway Company , 600 F.2d 35 ( 1979 )

WEICK, Circuit Judge.

The defendant has appealed from a judgment in favor of the plaintiffs in this personal injury diversity action governed by Michigan law.

The complaint was filed in the District Court on November 20, 1972. However, the case was not reached for trial until October 6,1976. The reason for this long delay does not appear to be attributable to any activities of the parties, as the docket entries show only the filing of the complaint and the answer.

The ease was tried for three days by the District Court without a jury. At the end of the second day the Court announced from the bench its opinion on the issue of liability, deciding in favor of the plaintiffs. At the end of the third day the District Court announced from the bench its opinion on damages and awarded to Wallace C. Clissold $500,482.83, and to his wife, Inge-bord Clissold, $30,100. The District Judge indicated that he would write an opinion later, which was filed and judgment entered on October 22, 1976.

The record on appeal was not filed in this Court until February 17, 1977. We mention these dates only because the plaintiff was deprived of money to which he was justly entitled, and the defendant, who was not responsible for the delay, is being charged with interest from the date of the filing of the complaint on November 20, 1972. We have considered these facts in reaching our decision that it is not necessary to remand for further findings.

In this appeal the defendant does not dispute the District Court’s finding of liability, but instead, it claims that there are errors in six of the nine specific items of damages awarded below. In our opinion as hereinafter pointed out, the awards in certain respects were grossly excessive, were speculative, and were clearly erroneous. Accordingly, we will modify the judgment of the District Court, and as modified, we affirm. See 28 U.S.C. § 2106.

Wallace Clissold was a long-time employee of the Kellogg Company when on August 31, 1971 a 1500-pound steel bulkhead door in a railway boxcar owned by the defendant, fell on him. He suffered a broken nose, a broken ankle, and a broken foot. Clissold remained hospitalized for one month, and was totally disabled for another five months. He returned to work in March, 1972, and was eventually returned to the foreman’s job which he held prior to the accident. He was unable, however, to perform all of the duties that he had previously been able to accomplish, and he was provided with a three-wheel cart which improved his mobility on the job.

Two years after the accident surgery was again required on Clissold’s feet. One and one-half years later he was hospitalized for treatment of an ulcer which, it was contended, resulted from the injury. Medical evidence showed that Clissold is permanently partially disabled. It is also possible that he may develop arthritis in his right foot, and he is not expected to regain full mobility. Based on this evidence the District Court concluded that Clissold would not be able to continue his foreman’s job, and that the most he could expect was a staff job at reduced pay and overtime.

The District Court made the following specific awards:

In this appeal the defendant does not contest items 1, 4, and 8:

(1) Pain and suffering for first six months $25,000.

(4) Wage loss prior to trial 11,556.

(8) Medical and hospital costs 3,869.

Pain and Suffering

The defendant challenges as excessive the awards for pain and suffering for the period from six months following the accident until trial ($22,500), and for future pain and suffering ($68,390). Under Michigan law damages are excessive and unlawful when they shock the judicial conscience. Yates v. Wenk, 363 Mich. 311, 319, 109 N.W.2d 828, 831 (1961).

For pain and suffering for the period of four and one-half years prior to trial, the District Court awarded $5,000 per year. During this time Wallace Clissold was hospitalized for additional surgery on his feet and for a bleeding ulcer; evidence further showed that he suffered considerable pain and swelling of the ankles, and reduced mobility. In view of these facts we do not find this award shocking. In addition, the Michigan courts have approved the use of the per diem formula, a variation of which was used by the District Court here. See Yates, supra; Pippen v. Denison Div. Abex Corp., 66 Mich.App. 664, 239 N.W.2d 704 (1976).

As to future pain and suffering, we find the award grossly excessive. The District Court based its award on the same rate of $5,000 per annum as was used to arrive at the award for pretrial pain and suffering. This award was based on the fact that Clissold will likely continue to suffer pain and loss of mobility for the rest of his life. It was not shown, however, that he will necessarily suffer the same level of pain, or that he will require additional hospitalization and surgery in the future as he has in the past. At most there is a possibility that Clissold will develop traumatic arthritis at some future time as a result of the accident. It has not yet happened and it is by no means a reasonable medical certainty. On these facts the Court acted erroneously in awarding the same annual amount for pain and suffering in the future as allowed for pain and suffering during the difficult period of the first few years following the accident.¹

The District Court made one additional error with respect to its award for pain and suffering. Under Michigan law all future damages must be reduced to their value as of the date of the complaint. Bruno v. Detroit Inst, of Technology, 51 Mich. App. 593, 599-600 & n. 1, 215 N.W.2d 745, 749 & n. 1 (1974); see Currie v. Fiting, 375 Mich. 440, 453-54, 134 N.W.2d 611, 616 (1965) (plurality opinion). Although the Bruno decision involved the breach of an employment contract, and not tort liability, the Court expressed the rule broadly. Additionally, we believe that this is the correct approach in the present case because the Michigan interest-on-judgment statute, M.C.L.A. § 600.6013, M.S.A. § 27A.6013², mandates that interest run from the date of the filing of the complaint.³ The application of the Bruno rule thus prevents unwarranted double recoveries.

Applying these rules, and noting the other error of the District Court, we believe that the maximum permissible award for pain and suffering under the facts of this case (including the award for the first six months) is $70,445. This accounts for the necessary discounting to the date of the filing of the complaint, as well as interest, up to the time of the entry of judgment by this Court.

Lost Wages

The defendant does not contest the award for the past wages, but complains only about the award for the loss of future earning capacity. In arriving at its award of $143,684.83 (valued as of the date of judgment), the District Court compared Clissold’s future earning capacity as a foreman, his old job, with that of a staff employee, the job to which the Court assumed Clissold would be transferred but actually had not been so transferred. The Court assumed that Clissold’s history of receiving 7.44% annual wage increases which he had received since the accident, would continue in the future, and that as a staff employee Clissold would be paid 25% less than he would be paid as a foreman.

Under Michigan law damages for future consequences of an injury are recoverable only where there is “such a degree of probability of such consequences as to amount to [a] reasonable certainty that they will result . . . .” Kellom v. City of Ecorse, 329 Mich. 303, 308, 45 N.W.2d 293, 295 (1951), (quoting Brininstool v. Michigan United Rys., 157 Mich. 172, 180, 121 N.W. 728, 731 (1909); accord, Gilson v. Bronkhorst, 353 Mich. 148, 154 n. *, 90 N.W.2d 701, 705 n. 2 (1958). We believe that the District Court’s award of lost future wages was in certain aspects based on undue speculation so that the loss was not in all respects “a reasonable certainty.”

The primary basis for the District Court’s award was its conclusion that Clissold would be unable to continue his foreman’s job. Yet at the time of trial Clissold was in fact serving in the same foreman’s position that he held prior to the accident. It is true that Kellogg had made certain accommodations in the job requirements to enable Clis-sold to continue. It is also true that Kellogg had been seeking another, more suitable, position for Clissold. It was by no means reasonably certain, however, that Clissold would be demoted to a staff position solely because of his disability. Indeed, several other foremen had lost their jobs and had been transferred to staff positions at lower salaries because Kellogg shut down one of its operations, and not because of any employees’ physical disabilities. While it was likely, and indeed probable, that Clis-sold would suffer some loss of future earnings, it was not a reasonable certainty that Clissold would be demoted immediately to a staff position, as the District Court assumed. For similar reasons the Court’s assumption that Clissold would suffer an immediate, permanent 25% reduction in wages was in error. As of the trial date four years after the accident Clissold was again performing his duties as foreman and had not yet been demoted or transferred.

We have no quarrel with the District Court’s inclusion of an annual wage increase factor, including cost of living adjustments, because we believe that Michigan courts would permit such inclusions. See Routsaw v. McClain, 365 Mich. 167, 112 N.W.2d 123 (1961). The factor used was based on Clissold’s past experience and is supported in the record.

The Court erred, however, both in its method of reducing the loss to present value, and in failing to reduce it to the value as of the date of the filing of the complaint. The proper method was stated in Bruno, supra, 51 Mich.App. at 600-01, 215 N.W.2d 745, 749, as follows:

(1) On the basis of past experience, project the anticipated level of compensation [for persons situated similarly to the plaintiff] . . .;

(2) On the basis of past experience, project the anticipated earnings of plaintiff premised on good-faith attempts on plaintiff’s part to secure employment in his chosen profession;

(3) Subtract the anticipated earnings of plaintiff for each of the years from the anticipated salary he would have received . in the corresponding year;

(4) Reduce the difference for each year to its worth as of the date of the filing of the complaint; and

(5) Take the sum of these properly mitigated and reduced figures.

Taking into account the errors we have noted and again accounting for interest from the time of the filing of the complaint until the filing of this opinion, we believe that the maximum permissible award for all lost wages, including wages lost prior to trial, is $83,398.41.

Lost Overtime

The District Court made substantial awards for lost overtime: $13,142 for overtime lost prior to trial, and $212,341 for lost future overtime. The award for past overtime lost is supported in the record and is not in error except that the Court failed to discount the award to reflect its value as of the date of the complaint.

The award for lost future overtime presents greater problems. First, however, we agree that Clissold’s disability will likely cause a reduction in overtime, and we note that prior to the accident he consistently availed himself of opportunities to work overtime. The proof also supports the inference that Kellogg will continue to offer overtime in the future. The problem is that here again the District Court assumed that Clissold would necessarily be transferred to a staff job where there would be no overtime opportunities. This was of course possible but not reasonably certain. Further, the District Court assumed that except for the accident Clissold would have continued to work the same amount of .overtime, at age 60, and until retirement, as he had worked at age 40. We believe that this is unlikely. The Court also overlooked the fact that Kellogg requires workers to take some of their earned overtime as compensatory time off rather than as overtime pay. Finally, we note that the Court used an incorrect method of calculation, one which is similar to that which was employed in computing lost future wages. The correct method is stated in Bruno, supra.

Considering the errors noted, and also accounting for the required discounting and interest to the date of the entry of judgment of this court, we believe that the maximum permissible award for lost overtime, past and future, is $119,312.50.⁴

Loss of Consortium

The District Court awarded Ingebord Clissold $30,100 for loss of consortium. To establish a loss of consortium there must be a showing of harm to the marital relationship caused by the injury to Wallace Clissold. Washington v. Jones, 386 Mich. 466, 192 N.W.2d 234 (1971). There must be a showing of harm to the incidents of the relationship, including society, companionship, services, and affection. Id., Montgomery v. Stephan, 359 Mich. 33, 101 N.W.2d 227 (1960). In this case the proof established that Wallace Clissold had become irritable on occasions and that he was unable to perform satisfactorily certain household duties. While we believe that this evidence was sufficient to support an award for loss of consortium, we also believe that the amount of the award was excessive, or shocking, on these facts. See Yates v. Wenk, supra.

In addition, the Court failed to make the required discounting under Bruno, supra. In our opinion the maximum permissible award for loss of consortium, after discounting and interest to the date of the filing of this opinion, is $15,050.

The judgment of the District Court is modified as follows:

To Wallace Clissold $ 277,024.91

To Ingebord Clissold $ 15,050.00

These amounts include the award for hospital and medical expenses and reflect the discounting of appropriate amounts to the date of the complaint. Although the defendant did not raise this point in every appropriate item, we view the District Court’s improper discounting as plain error. The amounts before stated also reflect the addition of interest to the date of the entry of judgment of this Court.

As modified, the judgment of the District Court is affirmed. See Drayton v. Jiffee Chemical Corp., 591 F.2d 352, 366-67 (6th Cir. 1978); 28 U.S.C. § 2106; 6A Moore’s Federal Practice 1) 59.05[3] at 59-68. Where remittiturs or reductions in clearly erroneous awards of excessive damages are ordered by an appellate court they are not regarded as taken out of thin air, as the dissent seems to indicate.

1 . Plaintiffs’ reliance on Pippen, supra, is misplaced. In Pippen, unlike this case, the plaintiff suffered the total loss of a limb.

2 . The statute provides:

Interest on money judgment. Sec. 6013. Interest shall be allowed on any money judgment recovered in a civil action, such interest to be calculated from the date of filing the complaint at the rate of [6%] per year unless the judgment is rendered on a written instrument having a higher rate of interest in which case interest shall be computed at the rate specified in the instrument if such rate was legal at the time the instrument was executed. In no case shall the rate exceed 7% per year after the date judgment is entered. In the discretion of the judge, if a bona fide written offer of settlement in a civil action based on tort is made by the party against whom the judgment is subsequently rendered and the offer of settlement is substantially identical or substantially more favorable to the prevailing party than the judgment, then no interest shall be allowed beyond the date the written offer of settlement is made.

3 . We have previously held that federal courts sitting in Michigan diversity cases are required to apply this particular interest-on-judgment statute. Lynch v. Electro Refractories & Abrasives Corp., 408 F.2d 363 (6th Cir. 1969) (per curiam). This holding stemmed from our earlier decision in Glens Falls Ins. Co. v, Danville Motors, Inc., 333 F.2d 187, 191 (6th Cir. 1964), that although 28 U.S.C. § 1961 requires post-judgment interest, the matter of prejudgment interest is governed, in diversity cases, by state law. See Klaxon Co. v. Stentor Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941).

4 . The defendant has argued that the awards for lost future wages and overtime should be reduced by future income tax payments. No Michigan appellate decision has been found which supports this view. Where state law is silent we have refused to make such an adjustment, at least at middle income levels. Kalavity v. United States, 584 F.2d 809, 812 (6th Cir. 1978) (citing cases).