CACI No. 3904a. Present Cash Value

Judicial Council of California Civil Jury Instructions (2017 edition)

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3904A.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 economic 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. [Name of defendant] must prove the amount by which
future damages should be reduced to present value.
To fin 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 must [use the interest rate of
percent/[and] [specify other stipulated information]] as agreed to
by the parties in determining the present cash value of future
[economic] damages.]
New September 2003; Revised April 2008; Revised and renumbered from former
CACI No. 3904 December 2010; Revised June 2013
Directions for Use
Give this instruction if future economic damages are sought and there is evidence
from which a reduction to present value can be made. Include “economic” if future
noneconomic damages are also sought. Future noneconomic damages are not
reduced to present cash value because the amount that the jury is to award should
already encompass the idea of today’s dollars for tomorrow’s loss. (See Salgado v.
County of L.A. (1998) 19 Cal.4th 629, 646–647 [80 Cal.Rptr.2d 46, 967 P.2d 585];
CACI No. 3905A, Physical Pain, Mental Suffering, and Emotional Distress
(Noneconomic Damage).)
Give the next-to-last sentence if there has been expert testimony on reduction to
present value. Unless there is a stipulation, expert testimony will usually be
required to accurately establish present values for future economic losses. Give the
last sentence if there has been a stipulation as to the interest rate to use or any
other facts related to present cash value.
It would appear that because reduction to present value benefit the defendant, the
defendant bears the burden of proof on the discount rate. (See Wilson v. Gilbert
(1972) 25 Cal.App.3d 607, 613–614 [102 Cal.Rptr. 31] [no error to refuse
instruction on reduction to present value when defendant presented no evidence].)
Present-value tables may assist the jury in making its determination of present cash
value. Tables, worksheets, and an instruction on how to use them are provided in
CACI No. 3904B, Use of Present-Value Tables.
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 amount 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 beneficiarie 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. Pacifi Southwest Airlines (1983) 148 Cal.App.3d 512, 521 [196
Cal.Rptr. 82].)
• “[I]t 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, supra, 19 Cal.4th at
p. 649, 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.)
Secondary Sources
6 Witkin, Summary of California Law (10th ed. 2005) Torts, § 1552
California Tort Damages (Cont.Ed.Bar) Bodily Injury, § 1.96
4 Levy et al., California Torts, Ch. 52, Medical Expenses and Economic Loss,
§§ 52.21–52.22 (Matthew Bender)
15 California Forms of Pleading and Practice, Ch. 177, Damages, § 177.46
(Matthew Bender)
1 California Civil Practice: Torts § 5:22 (Thomson Reuters)

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