This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2002).
STATE OF MINNESOTA
IN COURT OF APPEALS
Filed August 10, 2004
Robert H. Schumacher, Judge
Robert W. Kettering, Jr., Douglas D. McGhee, Arthur, Chapman, Kettering, Smetak & Pikala P.A., 500 Young Quinlan Building, 81 South Ninth Street, Minneapolis, MN 55402 (for appellant)
Considered and decided by Stoneburner, Presiding Judge; Schumacher, Judge; and Forsberg, Judge.*
U N P U B L I S H E D O P I N I O N
ROBERT H. SCHUMACHER, Judge
Appellant Lavelle Company challenges the district court's postverdict determination that the entire $180,000 jury award for "future earning capacity" may be used to pay State Fund Insurance Company's subrogation claim. Lavelle argues that because State Fund's expert witness testified that the present value of respondent Harvey McGrane's total future earnings was approximately $316,000, the jury must have determined McGrane was only partially disabled. Under Lavelle's reading of the supreme court's decision in Tyroll v. Private Label Chem., Inc., 505 N.W.2d 54 (Minn. 1993), State Fund is only entitled to $32,000 of the $180,000 jury award. We affirm.
In 1998 in the course of McGrane's employment, a bar fell from a semi-truck owned by Lavelle and struck McGrane on the head, resulting in permanent injuries. McGrane was employed by Merickel Lumber Mills Incorporated. State Fund is Merickel's insurance provider. At the time of the trial, McGrane was 49 years old.
In September 1998, McGrane sued Lavelle, claiming negligence, strict liability, and breach of warranty. In 1999, Merickel and State Fund intervened because State Fund had provided McGrane with workers' compensation benefits and it claimed a subrogation right under Minn. Stat. § 176.061 (1998). McGrane and Lavelle reached a settlement pursuant to the supreme court's decision in Naig v. Bloomington Sanitation, 258 N.W.2d 891 (Minn. 1977), by which Lavelle agreed to pay McGrane $250,000 for all claims against it other than State Fund's subrogation claims.
Pursuant to the supreme court's decision in M.W. Ettinger Transfer v. Schaper Mfg., 494 N.W.2d 29 (Minn. 1992), State Fund proceeded to trial where it was required to prove the full amount of tort damages McGrane suffered, even though it could only recover the amount of its subrogation claims. State Fund offered the testimony of its expert witness, Scott Stradley, to prove the present value of McGrane's lost future earning capacity that resulted from the blow to his head. Stradley testified that in his opinion the present value of McGrane's lost future earnings was $316,565. That value was based on the assumptions that McGrane would have worked until he was 67 years old and that he would have obtained a 2% rate of return.
Lavelle questioned Stradley about other possible values based on different rates of return and the length of time McGrane would have worked had he not been injured. One such scenario was the present value of McGrane's lost future earnings if he would have stopped working at the age of 62 and would have achieved a 5% rate of return. Based on those factors, Stradley testified that the present value would be approximately $183,000. The jury returned a special verdict as follows:
Question No. 1
What total sum of money will fairly and adequately compensate Harvey McGrane for damages caused by the accident from May 27, 1998, to the date of this verdict for:
a. Medical and hospital expenses $ 61,165.43
b. Loss of earnings 56,523.39
c. Disability 15,000.00
Question No. 2
What total sum of money will fairly and adequately compensate Harvey McGrane for future damages, caused by the accident and reasonably certain to occur for:
a. Medical expenses $ 0.00
b. Future earnings capacity 180,000.00
c. Future Disability 27,000.00
Thereafter, the parties moved for a hearing, pursuant to the supreme court's decision in Tyroll v. Private Label Chem., Inc., 505 N.W.2d 54 (Minn. 1993), to determine what portion of the jury's award was available to pay State Fund's subrogation claims. Before the hearing, Lavelle and State Fund were able to settle all issues except how much of the jury's future earning capacity award was available to pay State Fund for permanent total disability benefits payable to McGrane. The parties agreed that the amount of State Fund's subrogation claim for permanent disability benefits was $132,000.
At issue was whether the entire $180,000 jury award was available to cover this claim. Lavelle argued the jury's award implies that the jury found McGrane was only partially disabled and the award did not "overlap" with a subrogation claim for permanent total disability benefits.
The district court concluded "State Fund is entitled to entry of judgment in its favor against Lavelle in the amount of $132,000." In the memorandum incorporated into the district court's order, the court stated:
On the loss of future earning capacity issue, Lavelle took the position that injuries sustained by Mr. McGrane when he was struck on the head by a falling piece of Lavelle Company pipe were temporary, that he had recovered from them, that any continuing disability or inability to work was not caused by or attributable to negligence on Lavelle Company's part, and that there should therefore be no award for future loss of capacity.
. . . .
[T]he most basic flaw in the methodology suggested by Lavelle is Lavelle's contention that the jury 'found' (that is, affirmatively determined) that Mr. McGrane had sustained a partial (as opposed to a total) loss of earning capacity. The jury did no such thing. No question was posed on the verdict form asking the jury to tell us whether a loss of future earning capacity (if one was proved) was either partial or permanent (total) in character.
Lavelle claims there is an "unavoidable" conclusion that the jury found McGrane partially disabled. We disagree. The jury was presented with evidence that McGrane's injuries might not have been solely the result of this accident. Further, Stradley testified the present value of McGrane's future loss of earnings was based on an assumed age of retirement and an assumed rate of return. Stradley admitted that if one assumed McGrane would have retired at age 62 and obtained a 5% rate of return, the present value of his future loss of earnings was $183,000.
There are many factors that go into a jury's determination of the appropriate amount of damages. See Fallin v. Maplewood-N. St. Paul Dist. No. 622, 348 N.W.2d 811, 813 (Minn. App. 1984) (noting amount of damages is issue "fraught with factual problems and subjective assessments"), rev'd on other grounds, 362 N.W.2d 318 (Minn. 1985). This court will review a jury verdict to ensure that the verdict is based on the evidence and not the result of passion or prejudice. See Ouellette by Ouellette v. Subak, 391 N.W.2d 810, 817 (Minn. 1986) (stating jury verdict will not be set aside "unless the evidence against it is practically conclusive"); see also Flanagan v. Lindberg, 404 N.W.2d 799, 800 (Minn. 1987) (affirming jury's damage award that was less than amount parties stipulated to because it was not so inadequate that it "could only have been rendered on account of passion or prejudice") (quotation omitted). It would be speculation to conclude that the jury's special finding on the amount of lost future earning capacity implies the jury made a determination on a question that was not presented to them.
We therefore turn to whether the district court properly applied the supreme court's ruling in Tyroll. In Tyroll,the supreme court provided the method by which the insurer's subrogation action is paid out of the jury's verdict for the injured party's total tort damages, stating that
the employer's subrogation action should be limited to recovery of common law damages for past and future wage loss, loss of earning capacity, and similar items of damages, if any. . . . Any such tort damages recovered shall apply to payment of benefits paid and payable and judgment so entered. If the tort damages exceed benefits paid and payable, the excess is moot, deemed settled under the Naig release; if less, the employer's ultimate recovery is less by that amount. . . . The amount of compensation benefits entitled to be recovered out of the common law damages award involves the administration of the Workers' Compensation Act in all its intricacies, and, as such, is a separate matter for the court, not the jury, to determine.
505 N.W.2d at 60-61.
Here, the parties agreed that State Fund's subrogation claim for benefits paid or payable for future earnings is $132,000. The district court in applying Tyroll determined this number was less than the $180,000 that the jury awarded for McGrane's loss of future earning capacity and State Fund was entitled to judgment in the amount of $132,000. The court correctly applied the supreme court's ruling in Tyroll to the facts of this case.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.