A large percentage of auto accidents result in lost income. A person is injured, unable to work, and thus loses time and pay from that work. This is just one of many reasons why people are entitled to compensation after being injured in an accident. For over 23 years, the Law Office of Doug Goyen has handled personal injury cases. We will begin working on your case right away, providing expertise and strong representation. Call us at (972) 599 4100 for a free case review.
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Lost Earning CapacityIn personal injury cases plaintiffs can recover for lost earning capacity. Bonney v. San Antonio Transit Co., 325 S.W.2d 117, 120-21 (Tex.1959); U-Haul Int’l v. Waldrip, 322 S.W.3d 821, 853 (Tex.App.-Dallas 2010).
Loss of earning capacity is distingueshed from lost earnings or lost income. Loss of earning capacity is the diminished ability to earn a living. Big Bird Tree Servs. v. Gallegos, 365 S.W.3d 173, 178 (Tex.App.-Dallas 2012); Bituminous Cas. Corp. v. Cleveland, 223 S.W.3d 485, 491 (Tex.App.-Amarillo 2006, no pet.); Gilbreath v. Hathaway 108 S.W.3d 365, 366-67 (Tex.App.-Beaumont 2003, pet. denied); Strauss v. Continental Airlines, Inc., 67 S.W.3d 428, 435 (Tex.App.-Houston [14th Dist.] 2002, no pet.). Loss of earnings is the loss of actual income because of the inability to perform a certain job. Koko Motel, Inc. v. Mayo, 91 S.W.3d 41, 51 (Tex.App.-Amarillo 2002, pet. denied). The proper measure of damages is loss of earning capacity, not loss of earnings. Dallas Ry. & Terminal Co. v. Guthrie, 210 S.W.2d 550, 552 (Tex.1948).
Even an unemployed person can recover for lost earning capacity. Big Bird, 365 S.W.3d at 179; Brazoria Cty. v. Davenport, 780 S.W.2d 827, 832 (Tex.App-Houston [1st Dist.] 1989 no writ); North Houston Pole Line Corp. v. McAllister, 667 S.W.2d 829, 833 (Tex.App-Houston [14th Dist.] 1983, no writ); see General Motors Corp. v. Burry, 203 S.W.3d 514, 554 (Tex.App.-Fort Worth 2006, pet. denied)(P who had been out of the workforce for almost 10 years was allowed to recover for lost earning capacity). Specific proof of loss of earnings simply provides evidence on the ultimate issue of loss of earning capacity. Southwestern Bell Te. Co. v. Sims, 615 S.W.2d 858, 864 (Tex.App.-Houston [1st Dist] 1981, no writ).
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Lost Earning Capacity Law in TexasLost earning capacity covers both the past and future losses. A loss of earning capacity must be the result of a physical injury that impairs their earning capacity. A jury will decide on future earning capacity awards. U-Haul Int’l, 332 S.W.3d at 853; Strauss v. Continental Airlines, Inc., 67 S.W.3d 428, 435 (Tex.App.-Houston [14th Dist.] 2002, no pet.); see Big Bird Tree Servs. v. Gallegos, 365 S.W.3d 173, 179 (Tex.App-Dallas 2012).
Making the Wrong Pleading of Lost Income or Lost Earnings: If the plaintiff’s attorney mistakenly submits a jury question asking for lost income or lost earnings instead of lost earning capacity, the plaintiff then has a heavier burden, because the plaintiff then must produce precise evidence of actual loss of income. See Ortiz v. Furr’s Supermkrs., 26 S.W.3d 646, 654 (Tex.App.-El Paso 2000, no pet); Home interiors & Gifts, Inc. v. Veliz, 695 S.W.2d 35, 42 (Tex.App.-Corpus Christi 1985, writ ref’d n.r.e.). Additionally, if the sufficiency of the evidence supporting lost earnings is challenged on appeal, it faces stricter scrutiny than lost earning capacity. Ryan v. Hardin, 495 S.W.2d 345, 350 (Tex.App.-Austin 1973, no writ).
Past Lost Earning Capacity: Loss of past earning capacity is the diminished capacity to earn a living during the period between the injury and the date of trial. Bituminous, 223 S.W.3d at 491. The controlling questions are a) what was the plaintiff’s capacity to earn, and b) what extent was that capacity impaired by the injury. A recovery of damages for loss of earning capacity is not a recovery of actual earnings lost. Pilgrim’s Pride Corp. v. Cernat, 205 S.W.3d 110, 120 (Tex.App.-Texarkana 2006, pet. denied); Stauss, 67 S.W.3d at 435, Davenport, 780 S.W.2d at 832. Damages can be recovered for lost earning capacity from an occupation even if the person never actually earned income from that occupation before their injury. Pilgrim’s Pride, 205 S.W.3d at 120 (evidence supported lost-earning-capacity damages for P who did occassional mechanic work but was not employed as a mechanic).
Future Lost Earning Capacity: Lost future earning capacity is the plaintiff’s diminished capacity to earn a liing after the trial. Bituminous, 223 S.W.3d at 491; Beneficial Pers., 927 S.W.2d at 176. The amount of money someone might earn in the future is always uncertain, so the jury is given considerable discretion in determining the amount. McIver v. Gloria, 169 S.W.2d 710, 712 (Tex.1943); Bituminous, 223 S.W.3d at 491; Tri-State Motor Transit Co. v. Nicar, 765 S.W.2d 486, 492 (Tex.App.-Houston [14th Dist.] 1989, no writ).
Evidence of Net Loss: To support an award of loss of earning capacity (both past and future) the plaintiff must introduce evidence of the loss in the form of a net loss after reduction for income-tax payments or unpaid tax liability under federal income-tax law. Tex. Civ. Prac. & Rem. Code section 18.091(a). The jury must also be instructed on whether any damages the plaintiff may recover are subject to federal or state income taxes. Texas CPRC 18.091(b).
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In the event of a loss of earning capacity, the following factors are taken into account: 1) endurance; 2) weakness and degenerative injury as a result of the injury; 3) ability to work with pain; and 4) efficiency.
Even if a plaintiff has not suffered a direct loss, he may still recover loss of earning capacity in the following circumstances:
An employer continues to pay him despite the fact that he is not working (the collateral source rule would normally keep this information hidden anyway);
If the plaintiff was a student or housewife who did not work but could have if the injury had not prevented them from finding work if they had wanted to, they may be able to recover under loss of earning capacity.
If they continued to work despite the injury, they may be able to recover for lost earning capacity.
Even if they earned more than before, they can still file a claim for loss of earning capacity.
Where the plaintiff could have taken a higher-paying job but was unable to do so due to the injury, he can recover loss of earning capacity.
In order to recover for loss of earning capacity, there must be proof that the plaintiff could work in some capacity before the injury, but that the injury impaired this ability in some way.
A minor’s claim for loss of earning capacity must be made by the minor’s parent.
In determining the loss of earning capacity, all factors are considered.
Loss of earning capacity is a claim for the ability to earn money rather than actual past lost income. However, the plaintiff bears the burden of proving how to calculate their loss of earning capacity. This is often made easier by comparing earnings before and after the injury.
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Proof Required in Texas CasesActual lost earnings are sufficient evidence. The amount of lost work time, regardless of direct economic loss, is sufficient evidence. Proof of efficiency, consistency, duration, and ability to return to work due to injury are all examples of lost earning capacity.
Despite the fact that he was not working, a 7-year-old boy with a brain injury was awarded loss of earning capacity. Recovery is not hampered by one’s citizenship or immigration status. If there is another way to calculate the loss of earning capacity, past earnings are not required to be shown (see 7 year old above). On the loss of earning capacity, an economist’s opinion is admissible.
Proving Lost Earning Capacity With Self EmploymentMethods of proof for self-employed individuals include comparing the amount of money he would have made if he had worked for another company doing the same work instead of for himself. Comparison of business returns and financials before and after. Profits were lost due to the inability to continue working normally. The cost of hiring someone to do the Plaintiff’s work.
You must demonstrate the value of the self-employed worker’s services with some degree of certainty that is susceptible (which varies by the case).
Cases where loss of earning capacity was not permitted: Plaintiff was receiving a draw from his business (but did not testify about any type of loss). Plaintiff turned down nine construction jobs but provided no evidence as to what the profits on those jobs were supposed to be. The retired person testified that he “might” work again in the future, but he never stated that he was looking for work before or during the injury period, or that he had any plans to work during that time.
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Evidence Needed for Lost Earning CapacityJobs held in the past and the amount earned; tax records; education and training; fringe benefits; and reasonable opportunities for advancement and promotion are all examples of evidence of loss of earning capacity. Our personal injury attorney has the experience to produce the evidence needed to get all your damages paid, including lost earnings related damages.
How the Collateral Source Rule is ConsideredThe collateral source rule prohibits mentioning payments from welfare, Social Security, workers’ compensation, and other similar programs. The jury is not permitted to consider whether the amount awarded is taxable or not. (Of course, by law, the court reduces the award to 80% – ostensibly to account for the tax issue.) Experts (economists) may testify about lost earning capacity based on hearsay evidence.
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Those who have lost income as a result of an accident deserve to be compensated for their losses. For a free phone consultation and strategy session, call (972) 599 4100 to speak to our Dallas car crash attorney about your lost income situation from your accident. A summary of your case, identification of the legal issues involved in your case, and identification of which legal issues are most important to maximize recovery in your case are all part of the strategy session. We will email you a copy of the strategy session for your records. You can contact our Dallas accident lost income attorney on our website contact form as well.
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