Nature of the Case
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Facts
Liepelt (P) sued Norfolk & Western Ry. Co. (D) for the wrongful death of a fireman. P suffered fatal injuries in a collision caused by D’s negligence. D computed the fireman's net economic loss at $138,327. However, the jury awarded P $775,000. D appealed, claiming that the award was too high because it failed to take income taxes into account and that the court erred by not instructing the jury that the award was not subject to income taxes. On appeal, the Illinois Court held that it was not error to refuse to instruct the jury as to the nontaxability of the award and also that it was not error to exclude evidence of the effect of income taxes on future earnings of P, the deceased. The Illinois Supreme Court denied leave to appeal. Testimony at the trial showed that P was a 37-year-old man who was living with his second wife and two young children. His gross earnings for 11 months in 1973 were almost $12,000. An expert estimated that P’s earnings would have increased at the rate of 5% per year and would have been $51,600 by 2000, the year of his expected retirement. These gross earnings plus the value of his services less the amounts P would have spent on himself produced a total which when discounted to present value amounted to $302,000. D objected to the use of gross earnings without any deduction for income taxes. P contends that taking into account income taxes and disputing the rate of income increases, P’s present loss value was only $138,327. D argues that the jury must have assumed its award was subject to federal income taxation, or the verdict would not have exceeded D’s expert testimony by such a large amount. D contends that it was prejudiced by the trial judge’s refusal to instruct that jury that the award will not be subject to any income taxes and you should not consider such taxes in fixing the amount of the award.
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