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“I coulda had class; I coulda been a contender;I coulda been somebody, instead of a bum,which is what I am.”

— Marlon Brando in“On the Waterfront”

BY JOHN P. BLUMBERG

Loss of earning capacity is like that.It is an item of recoverable damages thatfocuses not on what would have been, buton what could have been. Loss of ability isconsidered general damages, and not spe-cial damages. Accordingly, the standardof proof is not what amount of money isthe probable or reasonably certain lossbut rather, what amount will be reason-able compensation for the loss of the op-portunity and ability to work in a chosenfield. This is not an inconsequential dif-ference; and the failure to appreciate andapply this element properly can have dis-astrous consequences for the plaintiff ’s fi-nancial recovery.

Future wage loss vs. lostearning capacity: What’s thedifference?

Civil Code section 3283 provides:“Damages may be awarded, in a judicialproceeding, for detriment resulting afterthe commencement thereof, or certainto result in the future.” This certainty re-quirement was imported into CACI3903C, which instructs the jury that “torecover damages for future lost earnings,the plaintiff must prove the amount of in-come/earnings/salary/wages, he will bereasonably certain to lose in the future asa result of the injury.” Certainty can be adifficult burden; therefore, CACI 3903Cshould be used only if the future loss is

definite. For example, if the plaintiff is63-years-old and was employed at a com-pany with a union contract that wouldhave been in effect for the remainder ofplaintiff ’s reasonable worklife expectancy,the earnings loss is quantifiable. As such,it is in the category of special damages.(Handelman v. Victor Equipment Co., (1971)21 Cal.App.3d 902, 906.)

Earning capacity, however, is catego-rized as an element of general damages“which can be inferred from the nature ofthe injury, without proof of actual earn-ings or income either before or after theinjury, and damages in this respect areawarded for the loss of ability thereafterto earn money.” (Connelly v. Pre-MixedConcrete Co., (1957) 49 Cal.2d 483, 489.)Hence, CACI 3903D instructs: “To re-cover damages for the loss of the abilityto earn money as a result of the injury,plaintiff must prove the reasonable valueof that loss to him/her. It is not necessarythat he/she have a work history.” • Practice Tip: Always request CACI3903D.

Why does lost earning capacityconstitute general rather thanspecial damages?

Before the phrases “economic dam-ages” and “noneconomic damages” werecoined after the passage of Proposition51, which disallowed joint and several lia-bility for so-called “noneconomic dam-ages,” damages were categorized as eithergeneral or special. In 1865, the CaliforniaSupreme Court explained: “Damages areeither general or special. General dam-ages are such as the law implies, or pre-sumes to have accrued from the wrongcomplained of. Special damages are such

as really took place and are not impliedby law....” (Stevenson v. Smith (1865) 28Cal. 102, 104.)

The distinction was further defined125 years later in Beeman v. Burling(1990) 216 Cal.App.3d 1586, 1600, wherethe Court of Appeal explained that spe-cial damages are those actual out-of-pocket losses that have already occurredthat can be proved by receipts, bills andother financial records. This includes pastearnings loss. But “general damages arethose losses which naturally flow from theinjury and which are not quantifiable byreference to bills or receipts. Thus, dam-ages for pain, suffering and emotionaldistress are paradigmatic examples ofgeneral damages.”

Another way of viewing loss of earn-ing capacity is to compare it to the otherlosses that are considered to be generaldamages – the lost ability to walk, runand lift are general damages, i.e., some-thing taken away by the tortfeasor’s negli-gence. Similarly, the lost ability to work isalso something that was taken away, andtherefore, compensable.

Proving loss of earning capacity

Whether phrased as loss of earnings orloss of earning capacity, attorneys represent-ing plaintiffs must prove “the reasonablevalue of that loss.” Do not fall victim to theargument that such value must be provenby a probability! A victim who has sufferedan amputated limb does not have to provethe value of the loss by a probability be-cause the loss is presumed. One wouldnever hear a legitimate argument regard-ing the probable value of such a loss. Thetest for such valuation is only what is rea-sonable. Accordingly, the test for valuation

Damages for loss of earningcapacity: What could have beenWould have or could have? “Reasonable” loss ofability to earn in the future is a big factor

of lost earning capacity is only what is rea-sonable. “Evidence of actual earnings be-fore or after injury merely assists the jury,as persons of ordinary intelligence and ex-perience, in arriving at the amount of theaward which it is in their power to deter-mine from the nature of the injury.” (Ridleyv. Grifall Trucking Company (1955) 136Cal.App.2d 682, 688.)

Could the amateur have been aprofessional?

If a professional athlete in his or herprime sustains a career-ending injury, it isa reasonable assumption that earningswould have continued at a professionallevel. But what about the promisingamateur? Statisticians would calculatethat the chances that talented amateurswill become professional are much lessthan 50 percent. However, lost earningcapacity differs from medical causationwhich requires a greater than 50 percentlikelihood. (See Dumas v. Cooney (1991)235 Cal.App.3d 1593, 1608.) Eventhough the law does not require proof ofprobability, plaintiff ’s attorney must stillpresent a compelling argument, sup-ported by evidence.

In Connolly v. Pre-Mixed Concrete Co.,supra, the plaintiff had been a cham-pion amateur tennis player whoplanned to turn professional beforebeing injured. Tennis experts testifiedabout her superior athletic prowess andthe income she would have likely re-ceived during a professional career. Thedefendant appealed, claiming excessivedamages were awarded by the jury, butthe Supreme Court affirmed, findingthat, even though she had never earnedmoney as a professional, the evidencesupported the jury’s determination thatthe plaintiff lost the ability to do so. • Practice Tip: Just because the odds arethat a talented amateur won’t be a pro-fessional does not mean that it can’t beproven. If only statistics are used as apredictor, then Magic Johnson, BrettFavre and Babe Ruth all would havebeen predicted not to have a professional

future! (For an in-depth study of this sub-ject, see: Karcher, Rethinking Damages forLost Earning Capacity in a ProfessionalSports Career: How to Translate Today’sAthletic Potential into Tomorrow’s Dollars.Chapman Law Review, Vol. 14, No. 1,2010.)

A teenager had no earningshistory

A high-school teenager has dreamsof being a teacher of “special needs” chil-dren with physical and mental disabili-ties. But during summer camp, her kneeis so badly injured that she now lacks thephysical dexterity and mobility to pursueher desired career. In Gargir v. B’nei Akiva(1998) 66 Cal.App.4th 1269, the juryawarded the young woman damagesbased on lost earning capacity as a specialeducation teacher, and the Court of Ap-peal affirmed, explaining:

One’s earning capacity is not a mat-ter of actual earnings. The impairmentof the power to work is an injury whollyapart from any pecuniary benefit theexercise of such power may bring and ifthe injury has lessened this power, theplaintiff is entitled to recover.... Inshort, the test is not what the plaintiffwould have earned, but what [s]hecould have earned.

(Id. at p. 1283.) (See also Stein, Damagesand Recovery – Personal Injury and DeathActions (1972) § 58, p. 94.)

The important distinction just dis-cussed is particularly applicable when theplaintiff is a student or an apprentice.The jury verdict was affirmed on the basisof the evidence relating to her future as-pirations. The Court of Appeal held thatexpert testimony was notnecessary.• Practice Tip: If a student has provablecareer aspirations that are affected by aninjury, show that the “lost” career wasfinancially more promising than the“average” employment now available toplaintiff. And even if it is not financiallymore remunerative, it is still an item ofgeneral damages that is compensable.

What could the earnings havebeen for the child?

When a child is injured so severelythat she will never be employed, there isan unquestionable loss of earning capac-ity. But how can it be measured? This iswhere expert testimony is absolutely nec-essary. Lost earning capacity of an infantor child can be determined from socio-logical and statistical data. One recog-nized measure of a child’s potential is theeducational attainment and occupationsof the parents. If the parents are collegegraduates in white collar or professionaloccupations, an expert can reasonablyopine that it is probable that their childwould have a similar capacity. Then, U.S.Government surveys can be cited todemonstrate earning levels and worklifeexpectancies.• Practice Tip: A vocational expert andan economist can cover all of the ele-ments required to prove the probableeconomic loss of a child with no futureability to work.

Recovery for “lost years”

As a result of a medical error, a man’slife expectancy is shortened. He can re-cover damages for loss of earning capac-ity. Although lost earning capacity is mostoften thought of in relation to the living,a plaintiff can claim economic damagesfor the “lost years” that his prematuredeath will cause. In Fein v. PermanenteMed. Group (1985) 38 Cal.3d 137, 153,the California Supreme Court held thatsuch damages were proper. The rule wassubsequently applied in Hurlbut v. SonoraCounty. Hosp. (1989) 207 Cal.App.3d 388,405, and Overly v. Ingalls Shipbuilding, Inc.(1999) 74 Cal.App.4th 164, 171. TheOverly court held that, contrary to the“personal consumption” deduction that ismade in wrongful death cases, no deduc-tion is to be made for the injured party’sexpected living expenses during the lostyears. (Id. at 174.) In other words, the lostearning capacity calculation is for 100percent of the earnings that will be lostdue to the anticipated premature death.

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• Practice Tip: Whenever there is a claimthat the injury or disease shortened lifeexpectancy, present evidence establishingthe shortened work-life. The projectedearnings loss is categorized as loss ofearning capacity.

Housewife was never employed

It is not uncommon that manywomen will forsake employment to stayhome and raise a family. Nowadays, thereare men who also fit this category. Can aninjured stay-at-home mom or dad claimdamages for loss of earning capacity? Yes.In Hilliard v. A. H. Robins Co. (1983) 148Cal.App.3d 374, 412-13, after givingbirth to her second child, the plaintiffhad an IUD called a “Dalcon Shield” im-planted in her uterus. It caused disablinginjury. At trial, although no evidence ofmonetary loss was presented, the juryawarded damages therefor. In affirming,the Court of Appeal said:

Loss of earning power is an elementof general damages that may be in-ferred from the nature of the injury,with or without proof of actual earningsor income either before or after the in-jury. [citations omitted.] The test is notwhat the plaintiff would have earned inthe future but what she could haveearned. This is an element of generalcompensatory damages. Such damagesare awarded for the purpose of com-pensating the plaintiff for injury suf-fered, i.e., restoring ... [her] as nearly aspossible to ... [her] former position, orgiving ... [her] some pecuniary equiva-lent. [Citations omitted.] Impairmentof the capacity or power to work is aninjury separate from the actual loss ofearnings. [Citation omitted.] The plain-tiff may recover even where she was notworking and earned nothing. [Emph.added.]

• Practice Tip: The loss isn’t based onwhat the plaintiff would have earned, butwhat he or she could have earned.

75-years-old. Shouldn’tsomeone that age be retiredanyway?

The retirement model used to be re-tirement by age 65. Not anymore. In dif-ficult economic times, or when SocialSecurity doesn’t pay the bills, one needsto have the capacity to earn money. Thisisn’t a new idea; it was recognized over100 years ago in Storrs v. Los Angeles Trac-tion Co. (1901) 134 Cal. 91, 93-95. Upuntil he was injured, the 75-year-oldplaintiff had been active, and in goodhealth, engaged in his own business andhad held positions of trust in several fi-nancial and other corporations. Therewas no evidence, however, that he heldany such positions at the time he was in-jured or that he was earning any money,or the amount of money that he was ca-pable of earning. Nevertheless, the juryawarded damages and the Court of Ap-peal affirmed:

The evidence itself was competent tobe considered by the jury in determin-ing the extent of his earning capacity.... There was also evidence that, as a re-sult of the injury, he had become af-flicted with heart disease, by which hiscapacity for attending to his businesswas seriously impaired. ... His right torecover does not depend upon the factthat at the time of the injury he was ac-tually employed in the service of an-other, nor does the amount of hisrecovery depend upon the amount ofwages which he was receiving. The factthat he was not in the receipt of anysalary or wages, but was attending tohis own business, does not deprive himof right to compensation for the loss ofhis earning capacity, since it is what hewas capable of earning, rather thanwhat he was actually earning, that wasto be considered by the jury.

• Practice tip: Older plaintiffs have theright to be able to work if the need arises.Most jurors – particularly older ones, will

understand the need to supplement in-come. Remember, the current politicaldebate is to raise the Social Security age.

Back to work with fullcompensation

The seeming ability of an injuredperson to return to his or her former em-ployment is not necessarily proof thatthere is no lost earning capacity. In Robi-son v. Atchison Topeka & S.F. Ry. Co. (1962)211 Cal.App.2d 280, 286-288, the plain-tiff was a 50-year-old locomotive switch-man who was injured in a fall.Seventy-five days later, he was back toworking full time, but suffering from re-curring pain that made it much more dif-ficult for him to perform his duties afterhis resumption of work than it had beenbefore the accident. He had difficultysleeping at night. The evidence sup-ported a conclusion that plaintiff ’s condi-tion was one which was reasonably certainto be permanent in nature. Even thoughhe continued working for the four yearspreceding the trial, the jury awardeddamages for loss of earning capacity. TheCourt of Appeal affirmed:

In view of the plaintiff ’s age and theevidence as to the discomfort involvedin the performance of his duties and asto his impaired agility, the trier of factcould properly find that he was reason-ably certain to suffer a loss of futureearnings because of inability to workfor as long a period of time in the fu-ture as he could have done had he notsustained the accident.

Although the Robison court used theterm, “reasonably certain,” it was, mostlikely, a careless confusion between loss ofearnings and loss of earning capacity.Other decisions describing the loss asgeneral damages, and CACI 3903D,correctly recognize the difference. • Practice Tip: Government data col-lected by the U.S. Commerce Depart-ment, the Bureau of Labor Statistics and

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the U.S. Department of Labor can estab-lish that persons with a disability earn lessand work less than their non-disabledcounterparts, even those in sedentaryjobs. For example, a young attorney whosuffers a back injury might still be able towork, but instead of 50-60 hours perweek, she is limited to 30-40 hours. Thishypothetical attorney will likely receivefewer salary increases and be less likely toachieve the recognition that would leadto advancement. Government statisticsshow that a person who continues work-ing with a chronic injury will exit theworkforce earlier than someone withoutsuch a condition. A vocational expert canprovide testimony about these statisticsand calculate the likely income loss.

Is it economic or noneconomicdamage?

Proposition 51 (codified as Civ.Code, § 1431.2) and MICRA (Civ. Code,§ 3333.2) impose consequences ondamages that are categorized as “non-economic.” If there is comparative negli-gence, economic damages are joint andseveral, but noneconomic damages arenot. In medical malpractice cases, non-economic damages are capped at$250,000, but economic damages are not.Although “general damages” includephysical and emotional harm, as shownby this article, it can also include loss ofearning capacity, which is economic innature. Accordingly, even though loss ofearning capacity is in the category ofgeneral damages, it is not noneconomic.

In Fein v. Permanente Med. Group (1985) 38Cal.3d 137, 153, the California SupremeCourt validated the “lost years” theory ofloss of earning capacity, although theydescribed it as “loss of future earnings.”As authority for the proposition, theycited Robison v. Atchison Topeka & S.F. Ry.Co., supra, which was a case dealing withloss of earning capacity, not loss of earn-ings, per se. The Court then observedthat such award would be subject to peri-odic payments under Civil Code section3333.1, which applies only to certain col-lateral source payments, which are eco-nomic damages. (See Fein v. PermanenteMed. Group (1985) 38 Cal.3d 137, 157.)Therefore, any claim based on loss ofearning capacity is economic and notnoneconomic damage.

Advocacy: It’s the reasonablevalue

CACI 3900 instructs jurors that, inawarding damages, they must not specu-late or guess. The defense will likelyargue that the projected loss of earningcapacity is speculation. Although case lawhas firmly established that a plaintiffneed not introduce evidence that proves afuture loss of earning capacity, and eventhough CACI 3903D instructs that noearnings history is required, the plain-tiff ’s advocate must be prepared to per-suade the jury nonetheless. Theappropriate response to the “speculation”argument is to remind the jury that thedefinition of speculation is that whichis based on conjecture rather than

knowledge and information. Hopefully,there would have been testimony of ex-perts and other witnesses about the po-tential future that was destroyed by thedefendant’s negligence.

If future earning loss is presented inconjunction with CACI 3903C, the law re-quires that it must be reasonably certain.However, CACI 3903D – Loss of EarningCapacity – speaks in terms of the reason-able value of plaintiff ’s loss. Loss of earn-ing capacity is like loss of a limb. There isa presumption that it harmed the person.The ability to “make due” or “overcome”the loss does not offset the loss. Be pre-pared to prove what the future could havebeen, but encourage the jurors to think ofit as the loss of hopes, dreams and aspira-tions. In other words, what might havebeen.

John Blumberg haspracticed in Long Beach for34 years, specializing inmedical and legal malprac-tice. He is AV-rated, boardcertified as a Trial Lawyerby the National Board ofTrial Advocacy and boardcertified in Medical Mal-practice by the American

Board of Professional Liability Attorneys.He serves on the National Board of Directorsof the American Board of Trial Advocates(ABOTA) and was nominated as Trial Lawyerof the Year by the Consumer Attorneys Associa-tion of Los Angeles, where he serves on theBoard of Governors.

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