California Civil Jury Instructions (CACI)
3904. Present Cash Value
If you decide that [name of plaintiff]'s harm includes future [economic] damages for [loss of earnings/future medical expenses/ lost profits/[insert other damages]], then the amount of those future damages must be reduced to their present cash value. This is necessary because money received now will, through investment, grow to a larger amount in the future.
To find present cash value, you must determine the amount of money that, if reasonably invested today, will provide [name of plaintiff] with the amount of [his/her/its] future damages.
[You may consider expert testimony in determining the present cash value of future [economic] damages.]
[You will be provided with a table to help you calculate the present cash value.]
Directions for Use
Give the second bracketed option if parties have stipulated to a discount rate or if evidence from which the jury can determine an appropriate discount rate has been presented. A table appropriate to this calculation should be provided. (See Schiernbeck v. Haight (1992) 7 Cal.App.4th 869, 877 [9 Cal.Rptr.2d 716].)
Expert testimony will usually be required to accurately establish present values for future economic losses. However, tables may be helpful to the jury in many cases.
Sources and Authority
"The present value of a gross award of future damages is that sum of money prudently invested at the time of judgment which will return, over the period the future damages are incurred, the gross amount of the award. 'The concept of present value recognizes that money received after a given period is worth less than the same amount received today. This is the case in part because money received today can be used to generate additional value in the interim.' The present value of an award of future damages will vary depending on the gross mount of the award, and the timing and amount of the individual payments." (Holt v. Regents of the University of California (1999) 73 Cal.App.4th 871, 878 [86 Cal.Rptr.2d 752], internal citations omitted.)
"Exact actuarial computation should result in a lump-sum, present-value award which if prudently invested will provide the beneficiaries with an investment return allowing them to regularly withdraw matching support money so that, by reinvesting the surplus earnings during the earlier years of the expected support period, they may maintain the anticipated future support level throughout the period and, upon the last withdrawal, have depleted both principal and interest." (Canavin v. Pacific Southwest Airlines (1983) 148 Cal.App.3d 512, 521 [196 Cal.Rptr. 82].)
The Supreme Court has held that "it is not a violation of the plaintiff's jury trial right for the court to submit only the issue of the gross amount of future economic damages to the jury, with the timing of periodic payments—and hence their present value—to be set by the court in the exercise of its sound discretion." (Salgado v. County of Los Angeles (1998) 19 Cal.4th 629, 649 [80 Cal.Rptr.2d 46, 967 P.2d 585], internal citation omitted.)
"Neither party introduced any evidence of compounding or discounting factors, including how to calculate an appropriate rate of return throughout the relevant years. Under such circumstances, the 'jury would have been put to sheer speculation in determining . . . "the present sum of money which . . . will pay to the plaintiff . . . the equivalent of his [future economic] loss . . . ." ' " (Schiernbeck v. Haight (1992) 7 Cal.App.4th 869, 877 [9 Cal.Rptr.2d 716], internal citations omitted.)
6 Witkin, Summary of California Law (9th ed. 1988) Torts, § 1326, pp.
4 Levy et al., California Torts, Ch. 52, Medical Expenses and Economic Loss, §§ 52.21-52.22 (Matthew Bender)
California Tort Damages (Cont.Ed.Bar 1988) Bodily Injury, § 1.96
15 California Forms of Pleading and Practice, Ch. 177, Damages (Matthew Bender)
6 California Points and Authorities, Ch. 65, Damages (Matthew Bender)
1 Bancroft-Whitney's California Civil Practice (1992) Torts, § 5:22
(New September 2003)