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Ralph J. Brown PhD |
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Economic Analysts & Associates
Ralph J. Brown PhD
Economic Analysts & Associates™ Our company provides forensic economic
consulting services. We prepare reports and testimony in wrongful death, personal injury,
business losses, business valuation, and divorce cases.Company Address:
Economic Analysts & Associates
P.O. Box 303
Vermillion, South Dakota 57069
For UPS:
937 Deerfield Road
Vermillion, South Dakota 57069
TEL: 1-605-624-9500
FAX: 1-605-624-9500
Email:
RalphBrownPhD@msn.com
Useful Links
Checklist for WD/PI cases with farmers.
Checklist for wrongful discharge cases.
Curriculum Vitae. Acrobat PDF File
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On the issue of lost earnings the Court includes wages and fringe benefits. Adjustments are made for inflation and productivity factors.
"Even in an inflation-free economy - that is to say one in which the prices of consumer goods remain stable - a worker's wages tend to "inflate." This "real" wage inflation reflects a number of factors, some linked to the specific individual and some linked to broader societal forces."
"With the passage of time, an individual worker often becomes more valuable to his employer. His personal work experiences increase his hourly contributions to firm profits. To reflect that heightened value, he will often receive "seniority" or "experience" raises, "merit" raises, or even promotions."
"Furthermore, the wages of workers as a class may increase over time. See Grunenthal v. Long Island R. Co., 393 U.S. 156, 160 (1968). Through more efficient interaction among labor, capital, and technology, industrial productivity may increase, and workers' wages may enjoy a share of that growth. 16 Such productivity increases - reflected in real increases [462 U.S. 523, 536] in the gross national product per worker-hour - have been a permanent feature of the national economy since the conclusion of World War II."
On the issue of the discount rate the Court states as follows.
"The discount rate should be based on the rate of interest that would be earned on "the best and safest investments." Id., at 491. Once it is assumed that the injured worker would definitely have worked for a specific term of years, he is entitled to a risk-free stream of future income to replace his lost wages; therefore, the discount rate should not reflect the market's premium for investors who are willing to accept some risk of default."
Taxes not to be considered in SD cases.
In Dehn v. Prouty, 321 N.W.2d 534 (S.D. 1982) the court stated:
"We hold that income tax liability is a matter foreign to the award of damages in that it is not a pertinent issue bearing on the award thereof. An amount of income tax which might become due on one's prospective earnings, for example, is too conjectural to be considered in fixing damages. Interjecting an income tax issue into a personal injury lawsuit would unduly complicate an award of damages and be confusing to the jury." Id. at 539.
Use of business tax returns as proof of loss.
Olson v. Aldren, 84 S.D. 292, 170 N.W.2d 891 (1969) disallowed income tax returns of farm business to be used in proof of loss.
See also Byre v. Wieczorek, 88 S.D. 185, 217 N.W.2d 151 (1974) "[l]oss of earnings, which involves a past loss capable of fairly definite and certain proof must be given a reasonable interpretation...." Factors to be considered include "whether the injured party is an employee on a straight salary or salary and commissions or whether the party injured is one engaged in business." In this case where the income tax returns "were really in the nature of business returns which took into account inventory, depreciation, etc.,...." the Supreme Court of South Dakota upheld the inadmissibility of this evidence.
