I. Introduction

This article is another is the series on calculating economic damages in personal injury and wrongful death cases across the states, published in the Journal of Forensic Economics.¹ The focus of this article is Nebraska. Section II of this paper discusses the Nebraska court system. Section III is broken into three parts: Nebraska law regarding personal injury, wrongful death and survival actions; basic principles of damages in the state; and elements common to both personal injury and wrongful death. This includes items such as collateral source rules, discounting, the treatment of taxes, and benefits. Section IV covers estimating economic losses in cases of personal injury and Section V addresses losses in wrongful death. The role of damage experts within the Nebraska legal system is covered in Section VI. Section VII provides a conclusion.

II. The Nebraska Court System

County courts in Nebraska handle civil cases involving $53,000 or less. District courts handle civil cases involving more than $53,000. In 1991, the Nebraska Court of Appeals was established. The Court of Appeals is divided into two panels consisting of three judges each. The panels decide separate cases to expedite the processing of appeals. The Supreme Court consists of a Chief Justice and six associate justices. The Supreme Court's basic responsibilities are to hear appeals and provide administrative leadership for the state judicial system.

The appeal process requires all tort cases be appealed to the Court of Appeals rather than to the Supreme Court. In cases appealed to the Court of Appeals, a petition to bypass may be filed with the Supreme Court. If the Supreme Court deems it necessary, the petition will be granted and the case will be moved to the Supreme Court docket without first being heard by the Court of Appeals. The Nebraska Supreme Court may also select a case pending before the Court of Appeals on its own initiative. In addition to a case being bypassed directly to the Supreme Court, a petition for further review may be filed. This petition is filed after a case has been decided by the Court of Appeals and one of the parties involved is not satisfied with the ruling. The Supreme Court has the discretionary power to grant or deny the petition.

III. Nebraska Law, Basic Principles of Damages, and Elements Common to Both Personal Injury and Wrongful Death

IV. Personal Injury — Economic Loss

The previous section reviewed the statutes related to personal injury. Nebraska Jury Instruction NJI 2d Civ. § 4.00 lists the following as recoverable damages resulting from personal injury:

• 1. 

  The reasonable value of medical (hospital, nursing, and similar) care and supplies reasonably needed by and actually provided to the plaintiff (and reasonably certain to be needed and provided in the future);

• 2. 

  The (wages, salary, profits, reasonable value of the working time, business) the plaintiff has lost because of (his, her) (inability, diminished ability) to work;

• 3. 

  The reasonable value of the (earning capacity, business or employment opportunities) the plaintiff is reasonably certain to lose in the future;

• 4. 

  Reasonable funeral costs;

• 5. 

  The reasonable value of plaintiff's loss of the use of (his, her) property;

• 6. 

  The reasonable value of the cost of repair or replacement…;

• 7. 

  The reasonable cost of obtaining substitute domestic services. (NJI Civ. 2d § 4.00, pp. 319-320)

The first three categories identified above, as well as the seventh, are by far the most common economic damages pled and proved in Nebraska personal injury claims. The loss of society and companionship, as well as the loss of consortium are covered under non-economic damages. (NJI Civ. 2d § 4.00) Points 2 and 3 above mean that in Nebraska, from the date of the injury to the trial, the plaintiff can only claim loss of earnings while from the trial forward, the claim is for lost earning capacity.

Earnings: Nebraska law allows for recovery of the loss of earnings from the time of an accident to the date of trial. Following Baylor v. Tyrrell (1964), “[l]oss of earnings is an item of special damages, and must be specifically pleaded and proved.” (Baylor v. Tyrrell, 1964, p. 400) The most common method of establishing lost earnings is a simple breakdown of the injured party's work and wage history. Time sheets, pay stubs and related documentation may be utilized. Damage experts may also analyze W-2s, tax returns and other materials that may be instructive. This is an area where the collateral source rule is often relevant. If an injured party receives disability, workers compensation, or any other type of contribution for time spent away from work, such sources of income generally should not be considered in calculating lost earnings at the time of trial. However, the receipt of unemployment benefits may be relevant as to whether plaintiff suffered a complete loss of earning capacity. (See Ferlise v. Raznick, 1979).

An interesting issue arises if the injured party is not working at time of the incident. If an individual had been unemployed for a short period of time, perhaps a few weeks, or a month, and he or she was actively seeking new employment, a case can be made that had the injury not occurred, the individual would already have found gainful employment. This is particularly true if the trial takes place one or more years after the injury. In this case, a damage expert could reasonably predict lost earnings. The longer the plaintiff has been off work prior to injury, and the less it can be shown he or she was actively pursuing employment, the more speculative that argument becomes. As previously discussed, if an individual's unemployment prior to injury causes an expert's opinion to become merely possible, i.e. an opinion that is less than 51% certain, that opinion is likely to be excluded by the judge. If the lost earnings before trial are minimal and the foundation for that calculation is weak, the damage expert may forgo inclusion of lost earnings.

Lost Profits: Past losses may include lost profits as well. However, in supporting such a loss, the Nebraska Supreme Court wrote:

A claim for lost profits must be supported by some financial data which permits an estimate of the actual loss to be made with reasonable certitude and exactness. While damages for lost profits need not be proved with mathematical certainty, neither can they be established by evidence which is speculative and conjectural. (Evergreen Farms v. First Nat'l Bank & Trust, 1996, p. 734)

Earning Capacity: Nebraska is a loss of earning capacity state with respect to future losses in cases of personal injury. In terms of estimating lost earning capacity, the Nebraska Supreme Court wrote:

Proof of an actual loss of earnings or wages is not essential to recovery for loss of earning capacity. [Citations omitted.] Recovery for loss or diminution of the power to earn in the future is based upon such factors as the plaintiff's age, life expectancy, health, habits, occupation, talents, skill, experience, training, and industry. (Washington v. American Community Stores Corp., 1976, p. 289)

The same evidence identified in the previous section is typically utilized in establishing loss of future earning capacity. The prohibition against considering collateral sources of income also is relevant here. However, the collateral source rule does not negate a party's duty to mitigate damages. If an individual retains the ability to be gainfully employed, the diminution in future earning capacity is the difference between the likely earnings in the party's career path prior to injury compared to the party's likely career path post-injury.

Nebraska law establishes that impairment of earning capacity should be based on life expectancy immediately before the injury (Borcherding v. Eklund, 1952), and that impaired earning capacity should be assessed at the time of trial. (Uryasz v. Archbishop Bergan Mercy Hosp., 1988)

The issue of voluntary unemployment is equally relevant in establishing a loss of future earning capacity. A related issue arises if the injured party is voluntarily working in one job, but has the education and experience to find employment in a higher paying field. It obviously benefits the injured party to calculate a loss of future earning capacity based on the higher paying career. There are circumstances where such a calculation is justified. If, for example, a parent is voluntarily working a part time job while a child is still young, but had clearly expressed a plan to return to an original career once the child reached school age, a loss of future earning capacity that incorporates the higher paying field is perfectly justified. This, again, is largely determined by the strength of the facts of each case.

Medical Expenses: Plaintiffs' are allowed to recover for medical expenses reasonably certain to be incurred in the future.³ The projected expenses are typically based upon the opinion of a medical doctor establishing likely future medical needs. The costs associated with those medical and possible assistive needs can be developed by a physician, or may be included as part of a life care plan. The damage expert's testimony is then limited to calculating the present discounted value of those future medical and related costs.

Nebraska Revised Statute § 52-401 states the “measure of damages for medical expenses in personal injury claims shall be the private party rate, not the discounted amount.” In other words, when calculating the present value of future medical costs, the fact that the injured party may have benefitted from reduced or preferred rates with medical providers should not be considered in determining damages for medical costs. Only the medical providers' private party rates (billed rates to individuals without consideration of potential insurance-related discounts) are relevant.

Services: Damage experts may testify about the value of lost domestic services. However, statute and case law provide few guidelines for how the calculations may be performed. The Nebraska Supreme Court wrote:

In an action to recover for [lost services], it is not essential that the exact money value per day, week or month…be proved with mathematical certainty… Ordinarily, the matter must be left to the good judgement and ordinary common sense of the jurors, considering circumstances in each case. (Moses v. Mathews, 1915, p. 698)

V. Wrongful Death — Economic Loss

As indicated in Section III, the right to file suit for wrongful death in Nebraska comes from specific statute. Actions for wrongful death are brought by the personal representative of the deceased for the exclusive benefit of the surviving spouse and next of kin. (Bush v. James, 1950) In Paulk v. Central Laboratory Associates (2001) the plaintiff was suing for the benefit of the decedent's next of kin who were his surviving spouse and two children. Plaintiff argued to expand the interpretation of the phrase “next of kin” in Nebraska's wrongful death statute to encompass any potential heir of the deceased who could prove a pecuniary loss: in the Paulk case, the siblings and parents of the deceased. The Nebraska Supreme Court declined to do so, concluding that “any expansion of the class of persons entitled to recover under the wrongful death statutes falls within the province of the Legislature.” (Paulk v. Central Laboratory Associates, 2001, p. 181) In the same case, the Court also wrote, “there is no constitutional basis for expanding the wrongful death remedy to persons who do not fall within the statutory classification of next of kin as that phrase has been construed by this court.” (Paulk v. Central Laboratory Associates, 2001, p. 181) In Mabe v. Gross, (1959), the Court construed the phrase next of kin to mean “persons nearest in degree of blood surviving… those persons who take the personal estate of the deceased under the statutes of distribution”. (Mabe v. Gross, 1959, p. 14) Hence, Nebraska's wrongful death law is quite restrictive in terms of who may recover. A non-spouse or non-next of kin, even if that person received support from the deceased, would not be entitled to damages under Nebraska law. One result of this narrow definition is that stepchildren living with and receiving substantial support from stepparents are unlikely to be included as next of kin unless they have actually been adopted. While the Nebraska Supreme Court has not directly addressed this issue, other jurisdictions with even broader language have denied stepchildren the benefits of wrongful death claims. (See Jones v. Jones, 1974.)

Damages in a wrongful death case are limited to an “amount that will compensate the next of kin for their pecuniary loss sustained” (Anderson v. Chicago, 1892, p. 996), or in other language, “the pecuniary loss to the statutory beneficiaries”. (Darnell v. Panhandle Coop. Assn., 1963, p. 286) Hence, Nebraska law does not allow recovery for bereavement, etc. on the part of survivors. (See Nelson v. Dolan, 1989) Damages that may be recovered in a Nebraska wrongful death case include: 1) loss of pecuniary support from decedent's lost income and benefits; 2) loss of care, companionship, comfort, and guidance of the deceased person; and 3) lost value of household services the deceased person performed. Damage experts testify as to the first and third elements.

VI. Role of the Damage Expert

Nebraska allows expert witnesses and it is common for plaintiff attorneys to hire damage experts to proffer an expert opinion as to economic losses in a personal injury or wrongful death case. Nebraska recently adopted the Daubert standard for expert testimony. However, formal Daubert hearings are relatively rare in the state.

Nebraska revised statute §27-702 governs testimony by experts. It says:

If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise.

The admissibility of an expert's testimony has been based on four factors: 1) whether the witness is qualified as an expert; 2) whether the testimony is relevant; 3) whether the testimony will assist the trier of fact; and 4) whether the probative value of the testimony, even if relevant, is outweighed by the danger of unfair prejudice or other considerations. (Snyder v. Case, 2000)

In 2001, Nebraska became a Daubert state. Nebraska's transition from a Frye (general acceptance) to a Daubert (reliability) standard is interesting. In the 1999 case Phillips v. Industrial Machine, the majority of the Nebraska Supreme Court held that the Frye test remained applicable to expert witnesses. (Phillips v. Industrial Machine, 1999) In a concurring opinion, Justice Gerrard argued that Nebraska should adopt the Daubert standards instead. By 2001, Justice Gerrard wrote the majority opinion in Schafersman v. Agland Coop (2001) adopting Daubert as the standard for expert witness testimony in the state. In his opinion, Justice Gerrard wrote:

We are persuaded that Nebraska should join the majority of jurisdictions that have already concluded that the Daubert standards provide a more effective and just means of evaluating the admissibility of expert opinion testimony.…We therefore hold prospectively, for trials commencing on or after October 1, 2001, that in trial proceedings, the admissibility of expert opinion testimony under the Nebraska rules of evidence should be determined based upon the standards first set forth in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993)….Specifically, we hold that in those limited situations in which a court is faced with a decision regarding the admissibility of expert opinion evidence, the trial judge must determine at the outset, pursuant to Neb. Evid. R. 702, whether the expert is proposing to testify to (1) scientific, technical, or other specialized knowledge that (2) will assist the trier of fact to understand or determine a fact in issue. (Schafersman v. Agland Coop, 2001 pp. 876-77)

In subsequent cases, the Court has referred to the first condition as “a standard of evidentiary reliability” and the second as “fit” in that the scientific evidence is relevant and appropriately applied to the case. (See McNeel v. Union Pacific Railroad Co., 2008)

Within a decade, the Nebraska Supreme Court brought more clarity as to conditions that must be met in allowing an expert to present evidence and testimony. In Epp v. Lauby (2006), the Court wrote:

Under our recent Daubert/Schafersman jurisprudence, the trial court acts as a gatekeeper to ensure the evidentiary relevance and reliability of an expert's opinion. Schafersman v. Agland Coop, 262 Neb. 215, 631 N.W.2d 862 (2001). See, also, Smith v. Colorado Organ Recovery Sys., 269 Neb. 578, 694 N.W.2d 610 (2005). Most recently, we described a trial court's evaluation of the admissibility of expert testimony as essentially a four-step process. State v. Mason, 271 Neb. 16, 709 N.W.2d 638 (2006). First, the court must determine whether the witness is qualified to testify as an expert. If the expert is and it is necessary for the court to conduct a Daubert analysis, the court must next determine whether the reasoning or methodology underlying the expert testimony is scientifically valid and reliable. Once the reasoning or methodology has been found to be reliable, the court must next determine whether the methodology was properly applied to the facts in issue. Finally, the court determines whether the evidence and opinions related thereto are more probative than prejudicial, as required under Neb. Evid. R. 403, Neb.Rev.Stat. § 27-403 (Reissue 1995). (Epp v. Lauby, 2006, p. 508)

In conducting a Daubert analysis, the Court went on to say that:

We have noted with approval nonexclusive criteria which the trial court may consider in evaluating the reliability of a particular theory. These include (1) whether the theory or technique can be, and has been, tested; (2) whether the theory or technique has been subjected to peer review and publication; (3) whether there is a known or potential rate of error; (4) whether there are standards controlling the technique's operation; and (5) whether the theory or technique enjoys general acceptance within the relevant scientific community. See, Carlson v. Okerstrom, 267 Neb. 397, 675 N.W.2d 89 (2004); Schafersman v. Agland Coop, 262 Neb. 215, 631 N.W.2d 862 (2001). These are, however, neither exclusive nor binding; different factors may prove more significant in different cases, and additional factors may prove relevant under particular circumstances. (Epp v. Lauby, 2006, p. 509)

In Nebraska, a damage expert who estimates economic damages and may eventually testify as to those damages does not have to produce a written report. This would typically be a plaintiff's damage expert. In practice, the opposing counsel will propound Interrogatories and Requests for Production of documents regarding the expert. The Interrogatories require stating all of the opinions the expert has, as well as the facts and evidence the expert relied upon to formulate such opinions. The Requests for Production will ask for any documentation supporting the expert's opinions. While satisfying the Interrogatories and Requests for Production does not precisely require a formal report, it covers much of the content in a report. Hence, in Nebraska, damage experts who may be called to testify typically do produce reports. Additionally, if a report is not produced and some basis for the opinion is omitted during the discovery process, and that basis is offered by the expert at trial, that basis may be excluded.

In our experience deposition of these experts occurs on occasion and most cases are resolved before trial so testimony at a trial is relatively rare.

Experts retained by a party but not expected to testify at trial are often called “consulting experts.” Some defense attorneys in Nebraska will hire a consulting expert to critique a plaintiff expert's report and prepare questions for deposition and trial. The records, opinions, and work of such a consulting expert are generally not discoverable in Nebraska.

VII. Conclusion

In Nebraska personal injury cases, the damage expert's most common role is valuing the loss of past earnings and lost future earning capacity. Lost benefits may be included in a personal injury case, as may lost services. Less frequently, a damage expert may assist in determining the present value of reasonable future medical costs based on a life care plan and/or doctors' opinions.

In wrongful death cases, actions are brought by a personal representative for the benefit of the surviving spouse and next of kin. Damage experts value lost pecuniary support that would have been derived from the decedent's lost income and benefits, as well as lost services. In Nebraska, determining lost pecuniary support has been interpreted to mean the damage expert must deduct personal consumption from lost earnings.

In either personal injury or wrongful death cases, evidence related to collateral sources is typically excluded under both statute and at common law. Nebraska requires discounting to present value, but does not specify methods or discount rates to use. Taxes are not considered in estimating damages. Recovery may be reduced or even denied altogether for contributory negligence. Punitive damages are generally not recoverable in Nebraska.

As for rules governing the admissibility of expert evidence, Nebraska follows the Daubert standard. However, Daubert hearings are relatively rare. Damage experts who may testify in a case typically produce written reports, although they are not specifically required to do so by state law. Deposition of these experts is called for on occasion, but in our experience is infrequent. Trial testimony is even less frequent than deposition as most cases are resolved before trial.

References

Cases

• Anderson v. Chicago, B. & Q. R. Co., 35 Neb. 95, 52 N.W. 840 (1892).

• Baylor v. Tyrrell, 177 Neb. 812, 131 N.W.2d 393 (1964).

• Borcherding v. Eklund, 156 Neb. 196, 55 N.W.2d 643 (1952).

• Bush v. James, 152 Neb. 189, 40 N.W.2d 667 (1950).

• Cassio v. Creighton University, 446 NW 2d 704 (1989).

• Chicago, St. P., M. & O. Ry. Co. v. Lagerkrans, 65 Neb. 566, 91 N.W. 358 (1902), affirmed on rehearing, 65 Neb. 580, 95 N.W. 2 (1903).

• Colvin v. John Powell, 163 Neb. 112, 77 N.W.2d 900 (1956).

• Corona de Camargo v. Schon, 278 Neb. 1045, 776 N.W.2d 1 (2009).

• Darnell v. Panhandle Coop. Assn., 175 Neb. 40, 120 N.W.2d 278 (1963).

• Dorsey v. Yost, 151 Neb. 66, 36 N.W.2d 574 (1949).

• Draper v. Tucker, 69 Neb. 434, 439-40, 95 N.W. 1026 (1903).

• Ensor v. Compton, 110 Neb. 522, 194 N.W.2d 225 (1923).

• Epp v. Lauby, 271 Neb. 640, 715 N.W.2d 501 (2006).

• Evergreen Farms v. First Nat'l Bank & Trust, 250 Neb. 860, 553 N.W.2d, 728 (1996).

• Ferlise v. Raznick, 202 Neb. 745, 277 N.W.2d 94 (1979).

• Garvin v. Cooper, 202 Neb. 582, 586, 276 N.W.2d 225 (1979).

• Hindmarch v. Sulpho Saline Bath Co., 108 Neb. 168, 187 N.W. 806 (1922).

• Hiway 20 Terminal, Inc. v. Tri-County Agri-Supply, Inc., 232 Neb. 763, 443 N.W.2d 872 (1989).

• J.D. Warehouse v. Lutz & Co., 639 N.W.2d 88 (2002).

• Jones v. Jones, 530 P2d 34 (Oregon, 1974).

• Mabe v. Gross, 167 Neb. 593, 94 N.W.2d 12 (1959).

• Maloney v. Kaminski, 220 Neb. 55, 69-70, 368 N.W.2d 447 (1985).

• McNeel v. Union Pacific Railroad Co., 276 Neb 143, 753 N.W.2d 321 (2008).

• Midlands Transportation Co. v. Apple Lines, Inc. 188 Neb. 435, 197 N.W.2d 646 (1972).

• Miller v. Kingsley, 194 Neb. 24, 230 N.W.2d 472 (1975).

• Miracle v. Spiegel, 329 N.W.2d 80 (Neb. 1983).

• Moses v. Mathews, 95 Neb 672, 146 N.W 920, Ann. Cas. 1915A 698.

• Nelson v. Dolan, 230 Neb. 848, 434 N.W.2d 25 (1989).

• Patterson v. Swarr, May, Smith & Anderson, 473 NW 2d 94, 238 Neb. 911 (1991).

• Paulk v. Central Laboratory Associates, 262 Neb. 838, 636 N.W.2d 170 (2001).

• Paulsen v. State, 249 Neb. 112, 541 N.W.2d 636 (1996).

• Phillips v. Industrial Machine, 257 Neb. 256, 597 N.W.2d 377 (1999).

• Pribil v. Koinzan, 266 Neb. 222, 665 N.W.2d 567 (2003).

• Reiser v. Coburn, 255 Neb. 655, 587 N.W.2d 336 (1998)

• Rhein v. Caterpillar Tractor Co., 210 Neb. 321, 314 N.W.2d 19 (1982).

• Schafersman v. Agland Coop, 262 Neb. 215, 631 N.W.2d 862 (2001).

• Snyder v. Case, 259 Neb. 621, 611 N.W.2d 409 (2000).

• Steinauer v. Sarpy County,217 Neb. 830, 353 N.W.2d 715 (1984).

• Uryasz v. Archbishop Bergan Mercy Hosp., 230 Neb. 331, 431 N.W.2d 617 (1988).

• Washington v. American Community Stores Corp., 196 Neb. 624, 244 N.W.2d 286 (1976).

• Wetovick v. County of Nance, 279 Neb. 773, 782 N.W.2d 298 (2010).