Unpublished Disposition, 855 F.2d 860 (9th Cir. 1987)

MEMORANDUM^* 

Dan and Peggy Davidson appeal the denial of their motion for a new trial on the issue of damages. The Davidsons contend that the jury's award of $265,000 for past and future damages was grossly inadequate. They further claim that the jury's failure to award Dan any damages for pain and suffering or future permanent disability, or to award Peggy any damages for loss of consortium was improper. In their cross appeal, Drott Manufacturing Corporation and Drott Manufacturing Corporation, a Division of J.I. Case, a Tenneco Company (Drott) claim the district court improperly awarded prejudgment interest on future losses.

A. We review the district court's denial of a new trial for abuse of discretion. Berns v. Pan American World Airways, Inc., 667 F.2d 826, 831, n. 9 (9th Cir. 1982). We can reverse only if the evidence supporting the jury's verdict was completely lacking or so slight as to make the verdict plainly unreasonable and unjust. Hayes v. Xerox Corp., 718 P.2d 929, 933 (Alaska 1986) (quoting Bailey v. Lenord, 625 P.2d 849, 856 (Alaska 1981)). We view the evidence of the damages sustained by Dan in the light most favorable to the appellees. Id.

A reasonable jury could have found that not all of Dan's physical problems were caused by the accident. Physicians who had treated Dan testified that his age and weight could have caused or aggravated some of his knee problems. Appendix to Opposition to Brief of Appellee (Appendix), C, at 5, 7, 9-10 (Testimony of Declan Nolan, M.D.); Appendix, E, at 24-25 (Testimony of Robert Russell, M.D.). Furthermore, "reasonable minds could differ on the causal relationship" between the pain in Dan's neck and back and the accident. See Hutchins v. Schwartz, 724 P.2d 1194, 1203 (Alaska 1986). According to medical records, Dan did not complain about any pain in his neck and back until nearly five years after the accident, Appendix, D, at 114-15 (Testimony of Edward Voke, M.D.), and these problems could have been a result of the aging process. Appendix, E, at 24 (Testimony of William Gavigan, M.D.)

In addition, a reasonable jury could have found that Dan's physical problems were not as disabling as he claimed. The jury heard testimony that other patients with Dan's condition had fully recovered their ability to operate heavy equipment, perform mechanical work and engage in sports activities. Appendix, C, at 14, 16, 17, 31. (Testimony of Declan Nolan, M.D.). Dan's doctors expected him to make a full recovery. Id. at 14; Appendix, D, at 108-09, 110, 111, 113 (Testimony of Edward Voke, M.D.). One physician indicated there was no "particular anatomic reason" why Dan continued to complain of pain in his knee after surgery. Id. at 112. The jury could have credited expert psychological testimony that Dan was malingering. Appendix, H, at 53-54 (Testimony of Evelyn Frye, Ph.D.).

Finally, the jury could have reasonably believed that Dan had not made sufficient efforts to mitigate his damages. A former employer testified that Dan was able to work as a mechanic after his accident, and in fact was a valued employee. Appendix, I, at 107-110 (Testimony of Richard Wetherald). Other testimony established that Dan failed to pursue medical treatment recommended to reduce his chronic pain. Appendix, F, at 21-22 (Testimony of William Gavigan, M.D.).

In support of their claims for loss of consortium, the Davidsons testified that Peggy and Dan had been married shortly before the accident, and got divorced soon after. Appellants' Brief at 9-10. The jury could have concluded that the accident was not the cause of the Davidsons' marital difficulties. See, e.g., Hayes v. Xerox Corp., 718 P.2d at 934.

Because the jury's verdict was amply supported by the evidence, the district court did not abuse its discretion in denying the Davidsons' motion for a new trial.

B. Drott claims that the district court improperly awarded prejudgment interest on Dan's future losses. In making its award, the jury allocated $125,000 to compensate for past damages and $140,000 to compensate for future damages. The district court awarded prejudgment interest on the full $265,000.

Under Alaska law, " [a]ll damages ... whether liquidated or unliquidated, pecuniary or nonpecuniary, should carry interest from the time the cause of action accrues, unless for some reason peculiar to an individual case such an award of interest would do an injustice." State v. Phillips, 470 P.2d 266, 274 (Alaska 1970). Alaska courts have held an award of prejudgment interest to be unjust when it would give the plaintiff a double recovery. Beech Aircraft Corp. v. Harvey, 558 P.2d 879, 888 (Alaska 1976).

Drott contends that awarding prejudgment interest in this case would result in a double recovery. Prejudgment interest is necessary to compensate a plaintiff for the lost use of money damages from the date of injury to the date of judgment. American National Watermattress Corp. v. Manville, 642 P.2d 1330, 1343 (Alaska 1982) (citations omitted). According to Drott, because Dan's future losses have not yet occurred, he has suffered no deprivation of the money compensating him for those losses. Prejudgment interest is therefore unnecessary to make him whole. Drott further asserts that in determining the amount of loss, Dan's economics expert calculated future lost earnings as if they had been earned at 1987 wage rates. Reporter's Transcript (RT), March 5, 1987 at 36. If the jury relied on these calculations, Drott argues, the award would already include compensation for the passage of time until trial.

Although Drott's reasoning is not without force, it fails to carry the day. First, the Alaska Supreme Court has held that imposing prejudgment interest on a damage award for lost future earning capacity is proper. Hertz v. Berzanske, 704 P.2d 767, 773 (Alaska 1985). State v. Phillips holds that " [w]henever any cause of action accrues ... the amount later adjudicated as damages is immediately 'due.' " 470 P.2d at 274. We interpret this ruling to mean that the total amount adjudicated as damages, including damages for lost future earning capacity, was due at the time Dan was injured. As Dan was deprived of the use of that lump sum from the time of his injury to the time of trial, the court appropriately awarded prejudgment interest on the entire amount.

Nor is it clear that the jury relied on the economist's calculations. Indeed, one can infer that the jury completely disregarded the economist's testimony, as it awarded Dan an amount less than one-third of the expert's most conservative projections. See RT, March 5, 1987, at 28.

Finally, the Alaska Supreme Court has recognized that "failure to award prejudgment interest creates a substantial financial incentive for defendants to litigate even where liability is so clear and the jury award so predictable that they should settle." State v. Phillips, 470 P.2d at 274. Awarding prejudgment interest on future losses is consistent with Alaska's stated policy goal of encouraging settlement.

Drott calls our attention to contract cases where awards of prejudgment interest were held to be improper. City of Whittier v. Whittier Fuel and Marine Corp., 577 P.2d 216 (Alaska 1978), overruled on other grounds, Native Alaskan Reclamation and Pest Control, Inc. v. United Bank Alaska, 685 P.2d 1211 (Alaska 1984) (prejudgment interest should not be awarded on lost future profits not yet accrued at the time of judgment); Sebring v. Colver, 649 P.2d 932 (Alaska 1982) (prejudgment interest should not be awarded to compensate a plaintiff for future repairs where the probable basis for the jury award was the estimated cost of repairs at the time of trial). However, the principles for determining damage awards in contract cases differ from the principles applicable in tort cases. See, e.g., City of Whittier, 577 P.2d at 226. As Hertz v. Berzanske approves the imposition of prejudgment interest on awards of future losses in tort cases, and Drott has pointed to no Alaska tort case disapproving such a practice, we do not find these commercial precedents compelling.

AFFIRMED.