Firm Newsletter - April 2015

Photo by AndreyPopov/iStock / Getty Images

Photo by AndreyPopov/iStock / Getty Images

Damages for Loss of Earning Capacity

Texas allows for the recovery of many different types of damages, including physical pain, mental anguish, disfigurement, physical impairment, medical expenses, loss of earning capacity, loss of consortium, and loss of services. A person who is injured and seeks to recover damages for loss of earning capacity must prove by a preponderance of the evidence that a defendant’s act has prevented such individual from receiving earnings through the date of the judgment and also that it will prevent such individual from receiving earnings throughout their life.

Damages for loss of past earning capacity and loss of future earning capacity are special damages, which means they must be specifically stated and proved. Weingartens, Inc. v. Price, 461 S.W.2d 260, 264 (Tex.App—Houston [14th Dist.] 1970, writ ref’d n.r.e.). The correct measure of damages in a personal injury case is loss of earning capacity instead of loss of earnings in the past. Loss of earnings is simply the income a plaintiff actually lost due to not being able to perform his or her job as a result of an injury such plaintiff sustained. Proof of loss of earnings can be useful to provide evidence on the issue of loss of earning capacity.

To support an award of damages for loss of past earning capacity, a plaintiff has the burden of introducing evidence sufficient to allow the jury to reasonably measure such plaintiff’s earning capacity in monetary terms. Bituminous Cas. Corp. v. Cleveland, 223 S.W.3d 485, 491 (Tex.App— Amarillo 2006, no pet.). The plaintiff should introduce evidence of past earnings, time missed from work, and any other factors that illustrate the plaintiff’s reduced ability to perform work in the past. If the plaintiff actually operated his or her own business, the plaintiff should introduce evidence of lost profits, the character and size of the business, the capital and labor employed, and the extent and nature of the plaintiff’s participation in the business.

Texas law defines future loss of earnings as a pecuniary loss incurred after the date of the judgment, including loss of income, wages, or earning capacity. See Tex. Civ. Prac. & Rem. §41.001(10). Similar to past earning capacity, to support an award of damages for loss of future earning capacity the plaintiff must introduce evidence sufficient to allow the jury to reasonably measure the plaintiff’s earning capacity in monetary terms. The amount of damages for lost earning capacity is largely within the discretion of the jury, but the plaintiff is required to prove his or her lost earning capacity with a degree of certainty.

There are some interesting aspects of damages related to lost earning capacity. The issue focuses on how much the amount of the plaintiff’s earning capacity has been reduced through the conduct of the defendant, and not necessarily the conduct or intentions of the plaintiff. For example, a plaintiff who had been unemployed with no immediate desire to get a job prior to a car accident, could still prove loss of earning capacity due to a car accident, if such plaintiff can show his or her earning capacity was reduced. Even though this plaintiff may have had no desire to get a job, the plaintiff is still entitled to damages for future loss of earning capacity as long as such plaintiff can prove the defendant’s conduct resulted in the loss. On the other hand, a plaintiff who is wealthy and has no need to work can still be awarded earning capacity damages if the defendant’s conduct injures such plaintiff in a way that reduces his or her future earning capacity. However, the fact that a plaintiff could not have obtained work even prior to an injury should be taken into account and could significantly reduce any possible loss of earning damages. Loss of earning capacity focuses primarily on the plaintiff’s ability to prove that the injury reduced their earning capacity.

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