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Absence of Income/Profits Derived from Business is Not Dispositive of Earning Capacity Damage Claims

Absence of Income/Profits Derived from Business is Not Dispositive of Earning Capacity Damage Claims

In the case of Kirkpatrick v. Geico Casualty Company the US District Court for the Western District of Pennsylvania, allowed the question of damages related to the plaintiff’s destruction of earning capacity claim to be submitted to the jury, despite the fact that the plaintiff could not show any loss in business income.

The case involves a first party claim for underinsured motorists’ benefits filed by Ronnie Kirkpatrick and his spouse, Michelle Vensel. At the time of the motor vehicle accident, Mr. Kirkpatrick owned car restoration businesses; however, he had not completed restoration and/or sold any cars by the time of the automobile accident. On the contrary, in the years leading up to the incident, he had only reported losses to the Internal Revenue Service. At trial, Mr. Kirkpatrick testified about his injuries caused by the accident, and how those injuries impacted his ability to perform the manual labor necessary to complete the car restorations and/or sell the cars. Mr. Kirkpatrick’s spouse and business manager, Ms. Vensel, testified based upon the business’ records, it would be reasonable to conclude that the Mr. Kirkpatrick’s businesses’ net loss approximated $2.1 million.

At the conclusion of the plaintiff’s case, Geico asked the court to strike Mr. Kirkpatrick’s past/future loss of earnings claims based on the fact that there was no evidence of lost revenue. The court disagreed, stating that the plaintiff submitted sufficient evidence to get the question of whether he sustained a destruction of earning capacity as a result of the automobile accident. Thereafter, Geico’s expert accountant testified that based upon reasonable certainty, Mr. Kirkpatrick did not lose any monies as a result of the car crash. 

On a side note, Geico attempted to introduce of Mr. Kirkpatrick’s smoking history stating that it was relevant because it would have an adverse impact on his future damages’ claim; however, the court disagreed stating that there was no expert testimony to show that Mr. Kirkpatrick’s work/life expectancy was affected by his past/current smoking history. Moreover, during a break in the trial and outside the presence of the jury, the trial court warned plaintiff’s counsel that during the testimony of Geico’s expert, Ms. Vensel was acting inappropriately, i.e. finger wagging, head nodding, big smiles, head shaking left to right, etc., which was a “no-no.”

Upon the conclusion of the presentation of the evidence, the jury awarded Mr. Kirkpatrick $650,000 for past lost earning capacity, $1,820,000 for future lost earning capacity, and $500,000 for past, present, and future pain and suffering, embarrassment and humiliation, and loss of enjoyment of life; and, awarded Ms. Vensel $250,000 for loss of consortium.

Following the trial, Geico sought a new trial arguing that the jury’s award for past/future damages was against the manifest weight of the evidence. Geico also argued that the trial court erred in disallowing Mr. Kirkpatrick’s smoking history. Finally, Geico argued that Ms. Vensel’s conduct during the trial was prejudicial to Geico and warranted a new trial.

Regarding plaintiff’s loss of earnings claims, the court cited PA Supreme Court law, which holds that damages for loss of earning capacity arise out of an impairment of that capacity, and not out of a loss earnings. Here, the court determined the fact that plaintiff could not demonstrate a loss of income or profits up to the time of the accident was for the jury to consider but was not dispositive as to whether due to his car wreck related injuries, he sustained a loss of earning power. Moreover, the court held that the jury’s verdict for past/future wage loss was not “unduly” speculative as to warrant vacating the award.

Regarding, the evidence of plaintiff’s smoking history, the court held that a smoking habit unaccompanied by any competent medical evidence that such habit reduces a particular individual’s life expectancy has little probative value. Therefore, it the court’s view evidence of plaintiff’s smoking history was both prejudicial and potentially confusing for the jury and outweighed the probative value of the evidence.

Finally, with respect to Ms. Vensel’s conduct at trial, the court noted that Geico’s counsel did not raise the issue during the trial, and in fact it was the court’s staff that brought the matter to the court’s attention. More importantly, Geico did not poll the jury on whether they noticed Ms. Vensel’s conduct and/or what, if any, her conduct had on their deliberations. Moreover, Geico did not seek a special jury instruction as a result of her conduct. As such, there was not clear and convincing evidence of an adverse party’s engagement in misconduct to warrant a new trial.

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