Please brief this case in a IRAC format! PETER CALDER, PLAINTIFF-RESPONDENT, v. TODD KOEHLER DEFENDANT-APPELLANT A-108 September Term 1993 Supreme Court of Green March 14, 1994, Argued July 6, 1994, Decided PRIOR HISTORY: [***1] COUNSEL: W. Stephen Leary argued the cause for appellant. Raymond T. Roche argued the cause for respondent OPINIONBY: HANDLER OPINION: On May 21, 1987, Todd Koehler (hereinafter defendant), who was operating a car struck the rear end of a disabled vehicle at or near the shoulder of the Pulaski Skyway. The disabled car had stalled in the right lane of the roadway and its owner, Deloris Haynes, had left the car to seek help. Plaintiff, Peter Calder, who remained in the disabled vehicle, was injured by the impact. Calder, who was thirty-five-years-old at the time of the accident, was examined and treated over the years by various doctors and hospitals. For almost a year after the May 1987 accident, Calder continued treatment with Dr. Sherman, a boardcertified internist, who initially treated Calder for a spasm, tenderness, and a reduced range of motion in his back. Despite Calder's treatment, he remained in pain. Eventually, Dr. Sherman suspected the "possibility of tuberculosis of the spine." Dr. Sherman testified that in his opinion "the accident unmasked or reactivated latent tuberculosis" because he could find no other provoking factors, and medical literature indicated that "significant auto trauma can be a provoking factor." Later, Calder began treatment with Dr. Lee, an orthopedic surgeon. In late 1990, Dr. Lee admitted Calder to the hospital because Calder was still experiencing back pain and his "right leg was still getting numb every now and then." Calder testified that Dr. Lee told him he had tuberculosis of the spine. Dr. Lee's discharge summary indicated the final diagnosis as post-traumatic lumbosacral sprain with spasms, psoas abscess with multiple lumbar abscesses, suspected tuberculosis, and osteomyelitis with destruction of certain vertebrae. Apparently, Dr. Lee's antibiotic treatment of Calder ended the progress of the disease. No 2 evidence suggested that further destruction of spinal bone or other increase in disability had occurred or would occur in the future. Calder testified that his back pain was "sharp," he was "in constant pain every day," and "everything became a problem," including tying his shoes, walking, and driving. Calder denied ever having had any back pain before the accident. Before the accident, plaintiff had been employed for two to three years as a general laborer by a construction company that repaired bridges and tunnels. At the time of the accident, Calder earned $25.65 per hour and worked forty or forty-five hours per week, although his hours varied, seemingly due to the seasonal nature of the work. After the accident Calder missed three months of work. Calder testified that at the construction company he earned an average gross weekly income of about $ 1,000. His testimony suggested that his pre-accident annual salary before taxes had been about $ 44,000. Calder stated that in 1987, the year of the accident in which he missed three months of work, he had earned $ 33,000. However, Calder estimated that his gross wages for the previous year in his work for the same company were only "twenty something" thousand. After the accident and the three-month absence, Calder continued working for the company, with lighter work assignments but at the same salary, until July 1990, more than three years after the accident. In July 1990, the company discharged Calder. Calder testified that he had been fired because he could no longer "do the strenuous work that it would take to do . . . the lifting, and other things like that." Calder also stated that "[b]eing terminated with a construction company means you can be fired one day and back at work the next day just because, you know . . . [t]here's quite a few they would fire one week, hire back the next week. So I was just one of them." That was the first time the company fired Calder. He did not seek to be rehired. Calder remained unemployed for a period of eighteen or nineteen months. In February or March 1992, he found work driving a senior citizens' van twenty hours a week at $ 5.50 per hour. At the time of trial, Calder was earning a little over $ 6,000 per year. He said he was capable of driving a full week, but the job offered only twenty hours. Thus, in addition to the initial three-month absence from work, Calder missed eighteen or nineteen months between the construction and the driving job. Then, he worked part-time during a five- or six-month period during which he had the twenty-hour-per-week driving job. Ultimately, the jury found defendant Todd Koehler 100% liable and awarded Calder a total of $1,550,000: $ 50,000 for past lost wages and $ 1.5 million for future lost wages. On appeal, defendant-appellant sought an order for a new trial on the computation of future lost wages. II. 3 In assessing whether the quantum of damages assessed by the jury is excessive, a trial court must consider the evidence in the light most favorable to the prevailing party in the verdict. Taweel v. Starn's Shoprite Supermarket, 276 A.2d 861 (1971). Therefore, a trial court should not interfere with a jury verdict unless the verdict is clearly against the weight of the evidence. Horn v. Village Supermarkets, Inc., 615 A.2d 663 (App. Div.1992). The verdict must shock the judicial conscience. Carey v. Lovett, 622 A.2d 1279 (1993). III. The principal goal of damages in personal-injury actions is to compensate fairly the injured party. Deemer v. Silk City Textile Mach. Co., 475 A.2d 648 (App.Div.1984). Fair compensatory damages resulting from the tortious infliction of injury encompass no more than the amount that will make the plaintiff whole, that is, the actual loss. Ruff v. Weintraub, 519 A.2d 1384 (1987). "The purpose, then, of personal injury compensation is neither to reward the plaintiff, nor to punish the defendant, but to replace plaintiff's losses." Domeracki v. Humble Oil & Ref. Co., 443 F.2d 1245, 1250 (3d Cir.), (1971). A. An injured party has the right to be compensated for diminished earning capacity. Smith v. Red Top Taxicab Corp., 168 A. 796 (E. & A.1933). The measure of damages for tort recovery encompassing diminished earning capacity can be based on the wages lost as a result of the defendant's wrongdoing. Ibid. That measure includes the value of the decrease in the plaintiff's future earning capacity. Coll v. Sherry, 176, 148 A.2d 481 (1959). When the effects of injury will extend into the future, "the plaintiff is entitled to further compensation -- for [the] capacity to earn in the future has been taken from the plaintiff, either in whole or in part." Robert J. Nordstrom, Income Taxes and Personal Injury Awards, 19 Ohio St.L.J. 213, 217 (1958). However, the evaluation of such a decrease in future earning capacity is necessarily complicated by the uncertainties of the future. Although generally objectionable for the reason that their estimation is conjectural and speculative, loss of future income dependent upon future events are allowed where their nature and occurrence can be shown by evidence of reasonable reliability. Case precedent recognize and apply the general principle that damages for the loss of future income are recoverable where the evidence makes reasonably certain their occurrence and extent. The award of damages for loss of future income depends upon whether there is a satisfactory basis for estimating what the probable earnings would have been had there been no tort. A satisfactory basis for an existing basis may include reliance on specific economic or statistical models based on past earnings record. See Tenore v. Nu Car Carriers, Inc., 67 N.J. 466, 494, 341 A.2d 613 (1975). The "proper measure of damages for lost future income in personal-injury cases is net income after taxes." Ruff, supra, 105 N.J. at 238, 519 A.2d 1384. 4 The net-income rule embodies the principle that "damages in personal-injury actions should reflect, as closely as possible, the plaintiff's actual loss." Ibid.; see Tenore, supra, 67 N.J. at 477, 341 A.2d 613. Hence, "If plaintiff gets, in tax-free damages, an amount on which he would have had to pay taxes if he had gotten it as wages, then plaintiff is getting more than he lost." 4 Fowler V. Harper et al., The Law of Torts 25.12 (2d ed. 1986); see Ruff, supra, 105 N.J. at 238, 519 A.2d 1384. The measurement of aftertax income is the "more accurate, and therefore proper, measure of damages," Ruff, supra, 105 N.J. at 241, 519 A.2d 1384, because personal-injury damage awards are subject to neither federal nor state taxes. 26 U.S.C. 104(a)(2); N.J.S.A. 54A: 6-6. See generally Annotation, John E. Theuman, Propriety of Taking Income Tax into Consideration in Fixing Damages in Personal Injury or Death Action, 16 A.L.R.4th 589, 611 (1982 & Supp.1993). Evidence of loss of future income must be discounted to present value, a procedure that recognizes that the injured party would have had his income spread out over the remaining years of his working life. Tenore, supra, 67 N.J. at 474, 341 A.2d 613. In this case, the jury apparently based its future-lost-income award of $ 1.5 million only on Calder's gross income, given that neither plaintiff nor defendant presented any evidence of net income. The jury probably had calculated the future lost wages award by multiplying the gross income figure of $ 1,000 per week by the number of weeks of Calder's life expectancy. The jury may have reasonably concluded that plaintiff used to make $ 1,000 per week but, despite his demonstrated desire to work steadily and hard, he was now doomed to jobs paying no more than his current earnings of $ 120 per week for the rest of his life. Despite the absence of evidence of plaintiff's net income, the trial court instructed the jury to use net income as the measure of lost wages. Nevertheless, the jury seemingly did not attempt to ascertain or apply net income in its computation of the award. See Lesniak v. County of Bergen, 117 N.J. 12, 28-29, 563 A.2d 795 (1989). In this case, neither party presented the jury with evidence of plaintiff's net income. The deficiencies in the evidence led the jury to reach exaggerated awards for future income. The verdict obviously was distorted by evidence that was limited to gross income. In a fiftyweek year, Calder would lose gross earnings of $ 880 per week or $ 44,000 per year. We may surmise that the jury had multiplied Calder's life expectancy of 34.55 years by the $ 44,000 in lost gross earnings to arrive at $ 1,520,000, which was rounded down to $ 1,500,000. That award contemplated plaintiff working for 2,083 straight weeks without vacation, or over forty years until the age of eighty, again based on defendant's gross, not net, income. A verdict based on evidence of net income would clearly have brought the jury to a different result. Assuming the Appellate Division's hypothesis was correct, the jury simply multiplied Calder's gross income by his life expectancy to reach an award of $ 1.5 million. Accepting Calder's testimony that he had earned $ 1,000 in gross weekly income, and assuming federal and state tax liability to be 28%, his after-tax income would have been $ 5 720. Plaintiff was forty-years-old at the date of the verdict. If the net income figure were multiplied by Calder's life expectancy of 34.55 years, even assuming plaintiff worked all fifty-two weeks a year, at most the verdict would approximate $ 1,290,000. Furthermore, if the jury had based its calculations using work-life expectancy, twenty-five years, again assuming plaintiff worked fifty-two weeks a year, his future lost wages based on net income would equal $ 936,000 ($ 37,440 net annual income multiplied by twentyfive years). Moreover, the income award would have been reduced even further based on plaintiff's earnings as a van driver. Lastly, the income award would have been reduced even more had the jury calculated the present value of the computed award. We conclude that the damages award based on lost future income, was clearly excessive and must be set aside. It was excessive since it used gross income figures, and not net income figures. Also, it was excessive because it failed to base the award on the work life expectancy of the plaintiff. Lastly, it was excessive since the award was not based on the present value of the future lost income. We therefore remand for a retrial of those damages