Petition — Oltersdorf v. Chesapeake & Ohio Railroad

Supreme Court, U.S.

ILED

DEC 23 1980

Supreme Court of the United RODAK. Je, CLE

Octoser TEEM, 1980

DAVID OLTERSDORF,

Petitioner,

VS.

CHESAPEAKE & OHIO RAILROAD COMPANY,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

APPELLATE COURT OF ILLINOIS,

FIRST DISTRICT, FIRST DIVISION

JOHN J. NAUGHTON,

30 N. LaSalle Street,

Suite 2100,

Chicago, Illinois 60602,

782-5925,

Counsel of Record.

Rosert KE. Harrineton,

Harrincton & Harrineton, LT0.,

Hensuez, Monek & HENSLEE,

30 N. LaSalle Street,

Suite 2100,

Chicago, Illinois 60602,

782-5925,

Of Counsel.

December, 1980

Keenan Printing Company 312-648-0050 <Gi 365

I

QUESTIONS PRESENTED

1. Whether Norfolk & Western Ry. Co. v. Liepelt, 444

U.S. 490 was correctly applied to reverse a Federal Em-

ployers’ Liability Act personal injury case in which the

petitioner was working in a different industry at the time

of trial because of a rejected offer of proof which deducted

income taxes and Railroad Retirement Act contributions

from both railroad earnings and earnings as a non-railroad

watchman to compute a ‘‘present value’’ of the net future

lost earnings and which estimated the net return on the

fund by reducing the discount rate from 7% to 6% and be-

cause of a slanted cautionary instruction as to income taxes.

2. Whether the Appellate Court erred in refusing to

consider the justifiable reliance by the plaintiff on Illinois

law and on ‘‘significant impact’’ cases and in refusing to

permit plaintiff to brief or argue the meaning of Liepelt.

lit

TABLE OF CONTENTS

PaGE

patorence te Meperte: os 6s oe oo Ads cee 1

BP ee eee ee 2

Statutory Provision for Jurisdiction ................ 2

ntaed: SUVORVON (oi o5 bic d haha kas ase cee 3

NONE OE TONE iS. oi ic actin cg59ctne eee 4

How the Federal Questions Were Presented ......... 7

RBC 65 i's co 0 he Sahn apie coe 8

FMT errr re retry ee er ete e yy ae 18

Appendices

Opinion Of The Appellate Court ................. A-1

Order And Mandate Of The Illinois Supreme Court .A-14

Excerpts From The Trial Record ................ A-15

TABLE OF CITATIONS

CasEs PaGE

Boxberger v. Burlington Northern, 9th Cir., 529 F. 2d

BO AEOIOD en ev bWicatuk sane cane onctteouee 13

Cazad v. Chesapeake & Ohio Ry. Co., 4th Cir., 622 F.

Oe ED (ROOG) inn sc ccctdweskdcindeke aur 10

Chevron Oil v. Huson, 404 U.S. 97 (1971) ........... 11, 13

Chicago, Rock Island & Pacific RR Co. vy. Rediker

(1977), 1 Kan. App. 2d 581, 571 P. 2d 70, cert. grant-

ed, 435 U.S. 922, cert. dismissed, 435 U.S. 982 ...... 13

Crabtree v. St. Lowis-San Francisco Ry. Co., 88 Il.

App. 3rd 351, 411 N.E. 2d 19 (1980) .............. 10

Croce v. Bromley Corp., 623 F. 2d 1084, 1097 (1980) . .14, 15

PREVIOUS PAGE WAS BLANK |

CasEs Pacs

Ingle v. Illinois Central RR Co., Mo. App., 603 S.W. 2d

ey MOREE Ee CE CLS PRET E oe PB e 10, 11

Johnson v. Penrod Drilling Co., 510 F. 2d 234 (1975),

SNE BO, Me A Eo hk oo bho oe beck ceed 15, 16

Lang v. Texas & Pacific Ry. Co., 5th Cir., 624 F. 2d

RN 4k poe bs 28g 0a ec ge ae ks 10, 11

McWeeney v. N.Y. é N.Y. RR Co., 2nd Cir., 282 F. 2d

WUE Snes vos once eaatks ice ecke Ph Lees ,

Nesmith v. Texaco, Inc., D.C., W.D. La. 491 F. Supp.

PE SEE i ois coca ack ae id bbs cae 15, 16

Norfolk & Western Ry. Co. v. Liepelt, 444 U.S. 490, 62

L. Ed. 2d 689, 100 S. Ct. 755 (1980) ....6, 7, 8, 9, 10, 11,

12, 13, 14, 15, 16,17

Raines v. New York Central R. Co., 51 Ill. 2d 428, 283

Pe ee Ae ons chs eee ee ys cee ne. 16

Seaboard Coast Line R. Co. v. Yow, 384 So. 2d 13

SNE ria WEAR oe so cbs Rees Ske ade eee 10

Simon v. Plotkin, 50 Ill. App. 3d 603, 365 N.E. 2d 1022,

ETS PEP che vnw ive ck COR Ce ek cask wee rea 12

STATUTES

OMIT « 6o5:c bi-v scene Es eee, 3

eh I A EE oe aise Phe ea hes pats See. 2

RE, Oks obs os Klee eo NERO oe 3

MiscELLANEOUS

II Harper & James, The Law of Torts § 25.11 at 1323-

MG is A heh pa a bask he od CAS be 9

IN THE

Supreme Court of the United States

Octoser TreRM, 1980

DAVID OLTERSDORF,

Petitioner,

VS.

CHESAPEAKE & OHIO RAILROAD COMPANY,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

APPELLATE COURT OF ILLINOIS,

FIRST DISTRICT, FIRST DIVISION

REFERENCE TO REPORTS

The opinion of the Appellate Court of Illinois, First Dis-

trict, First Division is reported at 83 Ill. App. 3rd 457,

404 N.E. 2d 1320 (1980) and is appended hereto at pages

A-1 through A-13. The order and mandate of the Supreme

Court of Illinois denying Petitioner’s Petition for Leave

to Appeal appears at pages A-14 through A-15.

2

JURISDICTION

The judgment of the Appellate Court of Illinois, First

District, First Division was entered on March 24, 1980. Peti-

tioner’s timely Petition for Leave to Appeal was denied by

the Supreme Court of Illinois on September 29, 1980 and

this Petition for Certioravi was filed within 90 days of that

date. This Court’s jurisdiction is invoked under 28 U.S.C.

§ 1257(3).

STATUTORY PROVISION FOR JURISDICTION

62 Stat. 929, as amended, 28 U.S.C. § 1257(3)

“Final judgments or decrees rendered by the highest

court of a State in which a decision could be had, may be

reviewed by the Supreme Court as follows:

(3) By writ of certiorari, where the validity of a

treaty or statute of the United States is drawn in ques-

tion or where the validity of a State statute is drawn

in question on the ground of its being repugnant to the

Constitution, treaties or laws of the United States, or

where any title, right, privilege or immunity is spe-

cially set up or claimed under the Constitution, treaties

or statutes of, or commission held or authority exer-

cised under, the United States. June 25, 1948, c. 646,

62 Stat. 929.’

3

STATUTES INVOLVED

35 Stat. 66, as amended, 45 U.S.C. § 51.

“‘Liability of common carriers by railroad, m imterstate

or foreign co. merce, for injuries tc employees from negli-

gence; definition of employees.

‘‘Every common carrier by railroad while engaging in

commerce between any of the several States or Territories,

or between any of the States and Territories, or between the

District of Columbia and any of the States or Territories,

or between the District of Columbia or any of the States or

Territories and any foreign nation or nations, shall be

liable in damages to any person suffering injury while

he is employed by such carrier in such commerce, or, in

case of the death of such employee, to his or her personal

representative, for the benefit of the surviving widow or

husband and children of such employee; and, if none, then

of such employee’s parents; and, if none, then of the next

of kin dependent upon such employee, for such injury or

death resulting in whole or in part from the negligence of

any of the officers, agents, or employees of such carrier,

or by reason of any defect or insufficiency, due to its

negligence, in its cars, engines, appliances, machinery,

track, roadbed, works, boats, wharves, or other equipment.’’

26 U.S.C. § 104(a) (2), Int. Rev. Code of 1954 § 104(a) (2).

‘‘E\xcept in the case of amounts attributable to (and not

in excess of) deductions allowed under Section 213 (re-

lating to medical, etc., expense) for any prior taxable year,

gross income does not include —... (2) the amount of

any damages received (whether by suit or agreement) on

account of personal injuries or sickness... .”’

STATEMENT OF FACTS

The right leg of the petitioner, a 36 year old switchman,

was partially severed because a cut of cars was switched

into the cars between which he was working. His leg was

amputated at the hospital. He suffered additional opera-

tions on the stump following the amputation and was per-

manently disqualified from railroad work. At the time of

trial, he was working as a watchman. Additional facts con-

cerning the accident are stated in the Opinion which found

the railroad’s negligence to be ‘‘strongly supported by the

evidence”’ (A-8),

The facts relevant here involve the railroad’s attempt

to introduce evidence concerning income taxes and railroad

retirement deductions from the plaintiff’s future lost rail-

road earnings and from his projected future earnings as

a watchman. Prior to trial, the railroad filed a motion in

limine to permit such evidence (C. 131) and was met by

a like motion to refuse such evidence (C. 128). After oral

argument, the income tax evidence was refused by the

trial court with leave to the railroad to present its offer

of proof (R. 20, 21).

The petitioner presented no actuarial evidence. The rail-

road, however, presented such evidence as to gross earn-

ings. The railroad’s actuary testified that the plaintiff, who

was 39 at the time of trial (R. 27), had an estimated railroad

work life of 18.5 years. This figure was derived from an

evalution of assets and liabilities under the railroad retire-

ment act pension system (R. 397, 398). The actuary as-

sumed that the plaintiff would retire from all work at the

age of 57 and would have no further earnings. The plain-

tiff was not compelled to retire until the age of 68 on the

defendant railroad (R. 228). His life expectancy at the time

of trial was 32 years (R. 225).

5)

The actuary further assumed a “‘historical’’ 5% annual

increase in general employment earnings. The actuary had

reviewed earnings in the railroad industry, but they were

substantially higher than 5% (R. 401). He chose the general

employment figures because they were for a longer period

of time and he was talking about 18 years in his projection

(R. 402). The actuary used a 7% discount rate because he

looked for a safe rate of interest at which the money could

be invested today (R. 399). Using those percentages, he

testified that the present value of the plaintiff’s earnings

as a railroad conductor over the 18.5 years of ‘‘work ex-

pectancy’’ would create a present value of $453,721.00 (R.

403). Using the same percentages over the same period, the

actuary calculated the present value of plaintiff’s earnings

at his then employment as a security guard would be $126,-

352.00 (R. 404). [Petitioner is now unemployed because the

company for which he worked as a security guard went

bankrupt.) The actuary arrived at the present value of

the plaintiff’s net future lost earnings as $327,369 by de-

ducting the present value of security guard earnings from

the present value of railroad conductor earnings (R. 404),

After the actuary’s testimony. the respondent made an

offer of proof outside the presence of the jury by inter-

rogating the actuary (R. 413-418). In that offer of proof

the actuary stated that he made similar computations as

to earnings, but deducted from those earnings future in-

come taxes, Michigan State income taxes and railroad re-

tirement taxes. In the offer, no percentages or rates were

stated nor did the actuary state whether the figures used

were for a single or married taxpayer. There was no testi-

mony as to the consideration of any deductions which the

plaintiff might have had as a homeowner. The actuary did

recognize that the earnings on the present value of after

tax earnings would also be taxable. He stated that he had

6

compensated for such taxation because he ‘‘subtracted in-

come taxes from the interest rate used to discount the

figures and discounted it at a 6 percent rate rather than

7 percent’? (R. 416). The earnings on the fund were thus

reduced at an effective tax rate of 14.28%. The actuary then

stated that such calculations reduced the present value

of plaintiff’s lost future earnings over the same period of

time from $327,369.00 down to $166,051.00 (R. 417), or a

reduction of almost 50%.

The trial court correctly rejected that offer of proof, but

the Appellate Court accepted it and summarized it in its

Opinion. The trial court also refused the defendant’s in-

struction which stated:

‘*In reaching your verdict, you will not increase the

amount of your verdict by reason of federal, state or

local income taxes, since the amount awarded tc plain-

tiff is not taxable income to plaintiff within the mean-

ing of these tax laws.’’

Oral argument on appeal was heard before this Court

handed down its decision in Norfolk & Western Ry. Co. v.

Inepelt, 444 U.S. 490, 62 L. Ed. 2d 689, 100 S. Ct. 755

(1980). Plaintiff’s counsel called the attention of the court

to the Liepelt decision in a letter in which he requested

further oral argument or further briefs. The Appellate

Court rejected that request and issued its Opinion with-

out any attempt to discover the plaintiff’s position in de-

tail. It is on the basis of that letter that the court states

that plaintiff’s counsel attempted to distinguish the Liepelt

decision. It mentions the fact that counsel contended that

Inepelt applied only to wrongful death cases, but it does

not mention that this Court found in Liepelt that the ver-

dict was ‘‘improperly inflated’’. A Petition for Rehearing

was filed which was denied without requiring respondent

to file an answering brief.

7

HOW THE FEDERAL QUESTIONS

WERE PRESENTED

Petitioner asserted its position on the federal claims

raised by the respondent at every level of the Illinois court

system.

Prior to trial, petitioner and respondent filed Motions

In Limine, the respondent asserting that income tax evi-

dence should be permitted while petitioner opposed such

evidence. The trial court refused to permit such evidence to

be admitted, but permitted respondent to make an offer of

proof of such evidence (R. 413 through 418, A-16 through

A-18). The cautionary instruction was refused by the trial

court (R. 432). The respondent raised the federal questions

in its brief for appellant. The Illinois Supreme Court de-

cided the federal question on the basis of this Court’s

Opinion in Norfolk € Western Ry. Co. v. Liepelt, 444 U.S.

490 (A-10).

Petitioner filed a timely Petition for Leave to Appeal

to the Supreme Court of Illinois which was denied on

September 29, 1980. Thus, the Appellate Court of Illinois,

First District, First Division is the ‘‘highest court in [the]

state in which decision could be had.’’ 28 U.S.C. § 1257.

ARGUMENT

LIEPELT DID NOT DECIDE NOR CONSIDER THE

ISSUES RAISED BELOW IN A FEDERAL EMPLOY-

ERS’ LIABILITY ACT PERSONAL INJURY CASE

WHERE THE PETITIONER WAS EMPLOYED IN

ANOTHER INDUSTRY BECAUSE HE WAS PHYSI-

CALLY DISQUALIFIED FROM RAILROAD EM.

PLOYMENT. THIS COURT SHOULD DECLARE THE

APPLICATION AND LIMITATIONS OF LIEPELT

TO SUCH CASES AND SHOULD MAKE ITS RULING

PROSPECTIVE ONLY.

This Court’s Opinion in Norfolk & Western Railway Co.

v. Liepelt, 444 U.S. 490, 62 L. Ed. 2d 689, 100 S. Ct. 755

(1980) declared that income tax evidence and a cautionary

instruction were improperly refused in a FELA wrong-

ful death case. The instant case is a personal injury case

under the same Act and, as such, it was not specifically

treated in Liepelt. This case is further complicated be-

cause petitioner was employed as a watchman at the time

of trial. (He is now unemployed because his employer

became bankrupt and went out of business.) The income

tax computations below were thus based on two different

incomes causing the plaintiff reduced lost earnings because

of the progressivity of the federal income tax. The com-

plexity of the problems here involved requires specific

treatment of those problems not reached in Liepelt.

Those problems certainly require more than the cavalier

disregard received from the Appellate Court. For ex-

ample, the Opinion states that the railroad contended the

verdict was excessive (A. 1), but does not rule on that

contention. Instead, it reverses the judgment because Lie-

pelt reversed the same Appellate Court. The Appellate

9

Court may have been gun-shy because it was overturned,

but its fears were a totally inadequate basis on which to

base its reversal. Its acceptance of the actuary’s testimony

as to gross earnings and its further acceptance of his non-

sensical computations of a present value of $166,000 for the

loss of plaintiff’s livelihood at the age of 39 deserves sum-

mary reversal from this Court.

This Court specifically assumed that evidence was pre-

sented of ‘‘future inflation’’, but no such evidence was per-

mitted below because of Illinois law. In that assumption,

the Court follows JJ Harper & James, The Law of Torts,

§ 25.11 at 1323-1326 which it relied upon for admitting evi-

dence as to income tax. The court below not only made no

allowance for future inflation, it allowed for ‘‘future de-

flation’’ when it accepted the actuary’s estimate of annual

future wage increases of 5% in a time of double digit in-

flation.

The unrealistic nature of this 5% wage increase pro-

jection is further shown by comparison with the wage in-

creases from the time of the plaintiff’s injury in 1974

until the time of trial in 1978. During that period of time,

the wages for plaintiff’s job were increased by 40%. The

gross earnings of that job in 1978 would have been $29,000.

Thus, the $166,000 present value of future earnings would

be slightly more than 5 times plaintiff’s railroad earnings

in 1978. The court also ignored his wage loss up to the time

of trial of $71,000.

Petitioner attempted to point out that his case is almost

entirely composed of intangible items of damage, unlike

Liepelt which contained only one such item. Here, the jury

was instructed that they could award damages for the fol-

lowing intangibles: 1) the nature, extent and duration of

his injury, 2) his disability, 3) his resulting disfigurement,

10

4) his past pain and suffering and 5) his future pain and

suffering. Only the loss of future earnings and future medi-

eal costs were required to be reduced to present value. No

estimate was made as to the present value of future medical

costs. Thus, by far the greater percentage of the 1 million

dollar verdict consisted of intangible damages. By ignoring

those elements, the court reversed the judgment below.

Unfortunately, the Oltersdorf Opinion has been relied

upon by other courts in cases tried before this Court’s

Opinion in Liepelt. The judgment in a FELA personal

injury case of $234,000 was reversed because of a failure

to give a cautionary instruction in Cazad v. Chesapeake &

Ohio Ry. Co., 4th Cir., 622 F. 2d 72 (1980). A verdict of

$75,000 in a personal injury FELA case was reversed by

the Supreme Court of Alabama because of the failure to

give a cautionary instruction in Seaboard Coast Line R. Co.

v. Yow, 384 So. 2d 13 (1980). The Fifth District of the

Appellate Court of Illinois reversed a personal injury

FELA judgment of $315,000 because of the refusal of the

cautionary instruction relying on this Court’s Liepelt de-

cision. It adhered to its view on rehearing, stating that

retroactive application was required because this Court

did not say that Liepelt was to be applied prospectively

only. Crabtree v. St. Louis-San Francisco Ry. Co., 88 Il.

App. 3rd 351, 411 N.E. 2d 19 (1980).

The only two FELA cases which specifically decided the

question of the prospective application of the Livpelt de-

cision were Ingle v. Illinois Central RR Co., Mo. App., 603

S.W. 2d 32 (1980) and Lang v. Texas & Pavific Ry. Co., 5th

Cir., 624 F, 2d 1275 (1980). Ingle decided that the Opinion

should be applied prospectively, finding specifically that the

damages were not excessive, but were clearly reasonable

in the case before it. On the other hand, Lang found in 4

11

wrongful death case that it must apply the Liepelt decision

unless that application would result in ‘‘manifest injustice’’.

It then specifically found that a retrial would not amount

to a manifest injustice under the facts of that case.

Both appellate courts rely upon this Court’s Opinion in

Chevron Oil v. Huson, 404 U.S. 97 (1971) as establishing

the standards for deciding prospective application. Both

analyze the three criteria set out in Chevron Oil. Lang de-

cides the question on the basis of a lack of ‘“‘manifest in-

justice’. That test is not contained in Chevron Oil, rather

this Court refers to “substantial inequitable results’’.

In any event, petitioner submits that Ingle is far better

reasoned and that Lang is shortsighted in seeing no injus-

tice imposed upon a widow who had a verdict reduced by

over one-third by a remittitur ordered by the District Court

and who relied upon the law as it existed at the time of

trial. While it may be true that the widow may settle or

obtain a verdict at the retrial; it is equally true that the

money she receives will be of substantially less value be-

cause of inflation and because of the many years that the

widow waited because of the Appellate process and the

remand for a retrial.

Indeed, there is no assurance that the defendant may not

appeal after the retrial causing still further delay. At the

very least, a retrial almost necessarily causes ‘‘substantial

inequitable results’’. The Ingle court decided each of the

three tests in a reasoned exposition taking particular note

of the fact that cases mentioned in Liepelt by this Court

required the income tax instruction only prospectively.

Ingle involved a personal injury claim by a 45 year old

plaintiff. The Missouri court, however, did not rely on the

difference between such a case and a wrongful death case.

It cogently stated that since the damages were reasonable,

12

not excessive and were amply supported by the evidence,

the retroactive application of Liepelt would serve no useful

purpose.

Here also, retroactive application would serve no useful

purpose. The Appellate Court found the trial to be error

free with the exception of the refusal of the incompetent

income tax evidence and of the slanted in-truction. The trial

court properly relied upon the settled law in Illinois that

such income tax aspects were not to be given to the jury.

The trial court also relied upon the settled law in Illinois

which requires that an offer of proof contain competent

probative evidence before acceptance. Simon v. Plotkin,

50 Ill. App. 3d 603, 365 N.E. 2d 1022, 1025 (1977), where

Justice, now United States District Judge, Bua stated:

‘¢An offer of proof is necessary to preserve a ques-

tion for review where, as here, the trial court refuses

to allow the testimony of a witness as to a certain mat-

ter or at all. (Citations omitted). An offer of proof

must be made in a proper manner, and show what the

offered proof is, or what the expected testimony will

be, by whom or how it was made, and what its purpose

is. (Citations omitted). After carefully scrutinizing the

record before us we note the absence of a proper of-

fer of proof as hereinbefore outlined. When plaintiff’s

testimony was refused, the record evinces that counsel

merely made a general statement of his desire to elicit

testimony from the witness, without the requisite speci-

ficity of a proper offer of proof. Therefore, we hold

that the question of plaintiff’s competency to testify

was not properly preserved for review and has been

waived.”’

The slanted instruction was likewise objectionable. The

Appellate Court, however, refused plaintiff an opportunity

to brief or argue such points before it reversed the other-

wise error free judgment. In doing so, it impliedly assumed

13

that plaintiff’s counsel was a fool because it nowhere con-

sidered the fact that counsel knew that this Court had pre-

viously granted certiorari (R. 8-19) in Chicago, Rock Island

& Pacific RR Co. v. Rediker (1977), 1 Kan. App. 2d 581,

971 P. 2d 70, cert. granted, 435 U.S, 922, cert. dismissed,

435 U.S. 982, even though the Appellate Court mentions that

fact in its Opinion. It also ignored the fact that Boxberger

v. Burlington Northern, 9th Cir., 529 F. 2d 284 (1976) was

argued at length in the trial court. During that’ argument,

railroad counsel relied only upon the Boxberger ‘‘signifi-

cant impact’’ test which he stated occurred when annual

income exceeded $20,000 (R. 19, 20). Not by coincidence,

this happened to be the earnings of the plaintiff in the year

in which he was injured.

Plaintiff, as part of his trial strategy, was entitled to

rely upen the fact that defendant had not satisfied the

‘‘significant impact test’? of Boxberger and McWeeney v.

N.Y. € N.Y. RR Co., 2nd Cir., 282 F. 2d 34 (1960). In-

deed, counsel was astounded when Liepelt completely aban-

doned that test and announced a test which permits income

tax evidence except in certain undefined de minimis situa-

tions in its footnote No. 7. This announcement of a com-

pletely new rule of law in and of itself fulfills the Chevron

Oil Company test.

Plaintiff relied upon the fact that the cautionary instrue-

tion was improperly drafted as compared to the suggested

instruction contained in Boxberger v. Burlington Northern,

9th Cir., 529 F. 2d 284 (1976) in footnote No. 17 at page

298. Counsel also relied upon the fact that the language

in Boxberger and prior cases dealing with the cautionary

instruction required it only prospectively. There is no in-

dication in the prior case law that the refusal of the caution-

ary instruction would constitute prejudicial error, The ret-

14

roactive application by the Appellate Court demolished the

reasonable expectations of the plaintiff and in a purely

reflex action mindlessly reversed the judgment solely be-

cause of its extrapolation of Norfolk & Western Railway

Co. v. Liepelt, 444 U.S. 490, 62 L. Ed. 2d 689, 100 S. Ct. 755

(1980).

This Court’s Opinion specifically applies to the delinea-

tion of the ‘‘pecuniary benefits’’ of beneficiaries in a

wrongful death action arising under the FELA. This Court

nowhere treats the different issues arising in a personal

injury case. To the contrary, the Court states in its 10th

footnote that netting out the taxes that the decedent would

have paid does not confer a benefit on the tort-feasor any

more than netting out the decedent’s personal expenditures.

In a personal injury case, of course, there is no netting

out of personal expenditures. The present status of the law

requires speculation and conjecture on the part of any

judge or lawyer who attempts to decide whether the deci-

sion applies in FELA personal injury cases or in other

wrongful death or personal injury cases.

The 5th Circuit has decided in Croce v. Bromley Corp.,

623 F. 2d 1084 (1980) that Liepelt does not apply to state

wrongful death actions. It also decides that it may not apply

in certain FELA wrongful death cases stating at 623 F. 2d

1097 :

‘Moreover, the jury in Liepelt awarded the plaintiffs

$775,000, far in excess of the estimation of the plain-

tiffs’ pecuniary loss ($302,000) made by their own

expert witness. The Court, noting this discrepancy,

opined: “It is surely not fanciful to suppose that the

jury erroneously believed that a large portion of the

award would be payable te the Federal Government in

taxes and that therefore it improperly inflated the re-

covery.’ Id. 100 S. Ct. at 759 (emphasis added). At

the trial below on the issue of damages, there was no

15

inflation of the recovery beyond the amounts testified

to by the expert witnesses. We thus have no reason to

suppose, as the Court in Liepelt did, that the jury la-

bored under the misconception that federal taxes would

be imposed.”’

The need for clarification of Liepelt is strikingly demon-

strated in Nesmith v. Texaco, Inc., D.C., W.D. La. 491 F.

Supp. 561 (1980). In that ease, Senior District Judge Put-

nam applied Liepelt to a personal injury action which oc-

curred while the plaintiff was being transferred in a per-

sonnel basket from a vessel to an oil drilling platform off

the Louisiana coast. The question of liability having been

decided, the District Judge required briefs on the quantum

of damages.

The rule in the 5th Cireuit as to damages had been an-

nounced in Johnson vy. Penrod Drilling Co., 510 F. 2d 234

(1975), cert. den. 423 U.S. 839. That case is mentioned in

Inepelt as an example of the general rule in the federal

courts that income taxes are not to be treated as a personal

expenditure. The case, however, not only refused income

tax evidence as speculative, but also refused to permit evi-

dence as to inflationary raises. As the District Court suc-

cinctly put it at page 563:

‘‘The teachings of Johnson are premised upon the propo-

sition that future taxes, inflationary cost of living pay

raises, and fluctuating interest rates are too specula-

tive to provide a firm foundation for fixing a reason-

able and fair present value for a future loss accruing

over a protracted period of time.’’

The Court also notes that the action was brought under the

Jones Act which incorporates the FELA.

The District Court then quotes from Liepelt and applies

that case to the facts before it. It estimates the future lost

earnings which it discounts at 8% per year and applies a

16

growth factor of 6% per year resulting in a net discount

rate of 2% over 31 years. It then arrives at a present value

of some $600,000 from which it deducts 15% income tax

and then gives credit for wages at the minimum wage rate

over the same period at the same discount rate.

Because of its interpretation of Liepelt as reversing the

holding of Johnson not only as to income taxes but also as

to inflation and the other factors which Johnson had barred,

the amount awarded applying Liepelt exceeds the amount

that would have awarded had the Johnson test been ap-

plied by over $100,000.

Nesmith is directly applicable to the facts in our case

because, as we have pointed out above, no evidence of in-

flation was presented to the jury in compliance with TIIli-

nois law. Raines v. New York Central RR, 51 Ill. 2d 428,

283 N.E. 2d 230 (1972). Thus, plaintiff was not permitted

to prove future inflationary trends. Using the Nesmith

test, judgment may be inadequate rather than excessive

rendering the Appellate Court’s holding even less defen-

sible. Nevertheless, plaintiff seeks an affirmance of the

judgment of the Circuit Court and a reversal of the Appel-

late Court because the reversal stripped him of the interest

which had accumulated since judgment was entered on the

verdict. Neither Illinois nor Nesmith assesses pre-judgment

interest.

Because of the foregoing, plaintiff submits that the re-

versal and remandment by the Appellate Court was without

reason or understanding. The refusal to permit the plain-

tiff the opportunity to file a Brief or to orally argue the

meaning and application of this Court’s Opinion is contrary

to the essence of the appellate process and of due process.

It summarily denied plaintiff’s petition for rehearing with-

out even requiring the railroad to answer the plaintiff’s

17

contentions. Its statement that it ‘‘... must apply the teach-

ing of the United States Supreme Court in Liepelt to the

case before us’’ (A. 10) assumes the result and begs the

question. The irrational decision below is part of the con-

tinuing controversey and litigation in both state and federal

courts resulting in conflicting interpretations of this Court’s

Opinion. The federai issue involved in this case has been

finally decided by the high state court which would take

the case. In order to clarify the law, this Court should grant

the Petition for a Writ of Certiorari and should reverse

the Appellate Court either summarily or after Briefing and

oral argument.

18

CONCLUSION

For the reasons adverted to above, it is respectfully sub-

mitted that this Court should grant the Petition for a Writ

of Certiorari. .

Respectfully submitted,

Joun J. NauGuron,

30 N. LaSalle Street,

Suite 2100,

Chicago, Illinois 60602,

782-5925,

Counsel of Record.

Rosert E. Harrineton,

Harrineton & Harrineton, Lp.,

Henstez, Monek & Hens er,

30 N. LaSalle Street,

Suite 2100,

Chicago, Illinois 60602,

782-5925,

Of Counsel.

December, 1980

Al

DAVID OLTERSDORY, ) APPEAL from the

Plaintiff-Appellee, Circuit Court of

v. Cook County; the

CHESAPEAKE & OHIO Honorable

RAILROAD COMPANY, | LAWRENCE P. HICKEY,

Defendant-Appellant. | Judge, presiding.

Mr. PRESIDING JUSTICE GOLDBERG delivered the

opinion of the court:

David Oltersdorf (plaintiff) brought this action under

the Federal Employers’ Liability Act, for injuries in the

course of duty, against Chesapeake & Ohio Railroad Com-

pany (defendant). A jury awarded plaintiff $1 million.

Defendant appeals.

In this court, defendant contends the trial court erred

in refusing to give defendant’s requested special interroga-

tories relating to the plaintiff’s contributory negligence;

in refusing to allow evidence of the impact of taxation on

plaintiff’s projected future lost earnings; in refusing to

instruct the jury its award of damages was not subject to

taxation; and, finally, the verdict is excessive.

On September 16, 1974, plaintiff was working as a mem-

ber of a 4-man crew employed by the defendant. Their

assignment was to switch freight cars in and out of in-

dustrial plants at the ‘‘ Kelsey-Hayes”’ switching area near

Romulus, Michigan.

Kelsey-Hayes is a 6-track switching area. The two main

tracks there are called the northbound main and the south-

bound main. At the south end of Kelsey-Hayes, the four

other tracks diverge to the west from the main tracks and

A2

run adjacent to the main tracks through the switching

area. Moving east to west, the third track is known as the

‘‘new lead’’. It is used only for switching cars. The ‘‘new

lead’’ ends at the north end of Kelsey-Hayes where it

merges into the main tracks. The fourth and fifth tracks

are called the ‘‘Kelsey lead’’ and the ‘‘environ lead’’,

respectively. These tracks service the Kelsey-Hayes and

Eaton Chemical industrial plants located northwest of the

switching area. The sixth, westernmost track, is called the

‘‘Barrett lead’’. It services the Buffalo Tank industrial

plant, also located northwest of the switching area.

At 10 p.m. on September 16, 1974, the 4-man crew, includ-

ing plaintiff, reported to work at defendant’s railroad yard

in Wayne, Michigan. Plaintiff was a brakeman, or ‘‘field-

man’’. Paul Laisure was the engineer. Lewis Burghardt

was conductor and Alfred Long was the headman.

Burghardt was in charge of the switching operations and

of all the movements of the train and crew. Plaintiff

described the conductor as the ‘“‘foreman’’ of the crew.

Laisure operated the engine. Long, the headman, was re-

sponsible for relaying signals between the engineer and

the rest of the crew and for hooking the engine on and

off various cars during switching operations. As fieldman,

plaintiff’s duties were to ride in the caboose with the con-

ductor. When the crew was conducting switching opera-

tions, plaintiff would be stationed on the ground at the

rear of the train. He would assist in the switching of cars

and operating the hand brakes on cars which were unhooked

or ‘‘eut’’ from the train.

Plaintiff testified the crew left the Wayne, Michigan

railroad yard with an engine, 17 boxcars and a caboose,

Plaintiff was riding in the caboose with Burghardt. The

train stopped at the Romulus, Michigan depot. Plaintiff

A3

picked up switching orders assembled by one of defendant’s

agents from directions given to him by the three plants

serviced from Kelsey-Hayes. Plaintiff gave Burghardt the

orders, gave a copy of them to Long and kept a copy for

himself, The train left Romulus on the southbound main

track heading for Kelsey-Hayes. Plaintiff’s best recollec-

tion was he rode in the caboose with Burghardt and Long

rode in the engine with the engineer. Burghardt carried a

“walkie-talkie’’ and there was a radio in the engine, There

was no communication between the caboose and the engine

during the 5 minute ride from Romulus to Kelsey-Hayes.

Plaintiff stated he discussed the switching work to be

done with Burghardt on the way to Kelsey-Hayes. Burg-

hardt told plaintiff he planned to release or ‘‘cut’’ the

engine from the remainder of the train and leave the 17

boxears and the caboose on the southbound main track.

Burghardt would then take the engine to the new lead

track, the next track to the west. There, he would connect

9 cars to the engine. The 9 cars were already standing on

the new lead as part of a longer train. From front to rear

these cars were 4 boxcars, 2 tank cars, 2 more boxears

and a flatear. Burghardt told plaintiff they would then pull

out the 9 cars, put the flatear on the Barrett lead, the

farthest track to the west, put the next 2 boxears back on

the new lead, and then put 2 tank cars on the Barrett lead.

The 4 boxears left on the train would be connected to the

remaining cars on the new lead and then ‘‘doubled up”’

with the boxcars remaining on the southbound main track

which the crew had brought from Wayne. All these cars

would then be taken to the Kelsey lead, west of the new

lead, and pushed into the Kelsey-Hayes plant.

When the train arrived at Kelsey-Hayes, the engine was

detached from the 17 boxears and caboose. They were left

A4

standing on the southbound main as Burghardt had said.

Burghardt alighted from the caboose and uncoupled 9 cars

on the new lead from the other cars there. The engine was

then brought to the new lead and attached to these 9 cars

which Burghardt had just ‘‘cut’’. Plaintiff testified that at

this point, Long, the headman, asked Burghardt ‘‘what he

had in mind’’. Burghardt repeated to Long, as Burghardt

had previously told plaintiff in the caboose, about these

9 cars. The crew was to take the flatear to the Barrett lead,

the 2 boxcars back to the new lead, the 2 tank cars to the

Barrett lead, and then they would double up the remaining

ears with the 17 boxcars which remained on the southbound

main track, all to be taken to the Kelsey lead.

Plaintiff’s testimony as to what happened up to this point

was contradicted by Burghardt and Long. These witnesses

testified that on the trip from Romulus to Kelsey-Hayes,

plaintiff was not in the caboose with Burghardt but was

riding in the engine with Long, the headman, and the engi-

neer. Plaintiff’s counsel virtually conceded this fact in his

closing argument. Both witnesses also testified that while

plaintiff received the switching list at Romulus, he did not

give it to Burghardt until the train arrived at Kelsey-

Hayes. Burghardt testified he did not communicate by

radio with anyone in the engine during the trip from

Romulus. However, Long stated plaintiff did converse with

Burghardt on the radio. Plaintiff told Burghardt he had

received the switching list ‘‘and went over a few things on

the list.’’ Long could not recall any more of the conversa-

tion.

Burghardt testified that after he reviewed the switching

list, he told plaintiff and Long they would take the first 9

ears off of the train on the new lead, put the flatcar into

the Barrett lead, put the 2 box cars and 2 tank cars back

A5

into the new lead, and then take the remaining 4 boxears

and connect them to the 17 cars they had brought from

Wayne. Burghardt specifically denied he ever told plain-

tiff he was going to put the 2 tank cars on the Barrett lead.

Burghardt stated his intention was to put another flatear

(which he claimed was on the train they brought from

Wayne) on the Barrett lead. He testified putting the tank

cars on the Barrett lead would be ‘‘totally contrary’ to

his method of switching. This would require him to handle

the tank cars at least one more time to get them out from

between the flatcars and on to the Kelsey lead where they

would be pushed into the Eaton Chemical plant.

Long testified he could only remember Burghardt telling

plaintiff and himself that the flatear at the rear of the 9

cars on the new lead had to go to the Barrett lead.

Events which transpired after the conversation between

plaintiff, Burghardt and Long at Kelsey-Hayes are basic-

ally undisputed. After the engine was coupled to the eut

of 9 cars on the new lead, it pulled these cars 1,000 yards

south on the new lead past the switch regulating entry into

each track. The switch was then thrown so that the engine

could ‘‘kick’’ the flatcar on the north, rear end of the train

into the Barrett lead, to the extreme west, as planned. The

“kick’’ is a maneuver by which the engine begins to push

the cars and the coupler pin is pulled to disconnect the cars

from the engine. The engine is then stopped and the re-

leased cars continue to roll ahead on their own momentum.

The flatear was kicked. Plaintiff boarded it and set the

hand brake as the car rolled into the Barrett lead. Plaintiff

then lined up the coupling mechanism on the flatcar so the

next car to enter the track would couple with the flatear.

After the flatcar was released, the engine went south

past the switch once more. Burghardt reset the switch for

A6

the train to enter the new lead. As Burghardt was standing

by the switch, he told Long, ‘‘I want two boxcars and two

tank ears.’’ Long stood at the rear ot the train. He testified

he interpreted Burghardt’s directions as meaning he

wanted two separate cuts of 2 cars each. He did not know

where Burghardt intended to put the tank cars. Long un-

coupled the last 2 boxcars from the 2 tank cars and the 2

boxcars were kicked into the new lead. When Burghardt

saw only the 2 boxcars entering the new lead, he told Long,

‘‘Let the tank cars go, too.’’ Long accordingly uncoupled

the 2 tank cars and they were also kicked into the new lead.

According to Burghardt, the time between these two kicks

was 5 to 15 seconds. Burghardt did not know where plain-

tiff was at this time.

Meanwhile, plaintiff had left the flatear standing on the

Barrett lead and was walking toward the new lead track.

As he walked, he could see the silhouettes of Long and

Burghardt and he also saw the 2 boxecars coming into the

new lead. When plaintiff arrived at the new lead, he pulled

the coupling pin on the southernmost stationary car which

the boxcars were about to connect with. He did this to

insure a clean connection. The boxcars coupled with the

standing cars and plaintiff stepped across the rail to con-

nect the air hoses between the coupled ears. Plaintiff

testified he could hear the engine ‘‘revving’’ to kick the 2

tank cars but he thought they were being kicked into the

Barrett lead. As plaintiff started to step out from between

the boxcars, the 2 oncoming tank cars made contact and

coupled onto the boxcars. The resulting jolt caused plaintiff

to fall between the boxcars. Plaintiff’s right leg was par-

tially severed below the knee by the wheel of one of the cars.

Neither Burghardt nor Long realized what happened un-

til plaintiff asked for them to come over and help him. A

A7

tourniquet was applied to plaintiff’s leg. At the hospital

his leg was amputated just below the knee.

Plaintiff, Burghardt and Long further testified as to the

customs and practices involved in switching operations.

Burghardt testified it was not the usual custom and practice

to lace or connect air hoses between cars while cars were

in the process of being switched. Usually, the hoses on a

cut of cars would be connected after the engine was at-

tached to the cut and the cars were stretched out. However,

plaintiff stated it was never his custom to wait until the

engine was attached to the train to connect the air hoses.

Long corroborated the plaintiff’s testimony. Long stated

plaintiff performed a usual and customary act in lacing the

air hoses as he did. Long noted that since those cars were

going to be switched out, they were required to have air

supply.

Plaintiff testified the usual custom and practice when a

conductor wanted to switch 4 cars onto one track would be

for him to ask for 4 cars and not to request 2 and 2 as

Burghardt had done on the night of the accident. Plaintiff

and Long had never heard Burghardt ask for a cut of 4

cars in that manner before the night of the accident.

Burghardt stated he intended to put the 4 cars on the new

lead but he admitted that his manner of asking may have

been confusing to plaintiff and Long.

Safety rules were introduced into evidence by both

parties. Plaintiff introduced a rule from defendant’s own

book of safety rules. The rule states:

“Planning work. To expedite switching the conductor

or yard foreman will see that all members of the crew,

including the engineer, when practical, are fully in-

formed of the switching movement to be made as many

moves in advance as possible thereby giving them an

opportunity to be prepared for such movement.

A8

‘After other members of the crew have been in-

formed of the sequence of switching movements to be

made, changes should not be made unless those con-

cerned have been fully informed of the changed condi-

tions.’’

When asked if Burghardt had complied with this rule,

Long answered, ‘‘ Well, no.’’

Defendant introduced a safety rule applicable to switch-

ing operations from the ‘‘Chessie System Operating Rules’’

which states:

‘‘They [switchmen] must expect movement of trains,

engines or cars at any time on any track in either

direction.’’

Predicated upon these facts, it is our opinion the verdict

as regards the negligence of defendant is strongly sup-

ported by the evidence. This portion of the verdict is ap-

proved.

An actuarial expert called by defendant testified as to

plaintiff’s projected lost future earnings. The actuary

calculated that, assuming a 5 percent annual increase in

wages, an 18.5 year future work life and a 7 percent dis-

count rate, the then present value of plaintiff’s lost future

earnings, after deducting the amount he would make in his

present job as a security guard, was $327,369. This amount

did not take into consideration any deductions for income

taxes. Prior to this testimony, the trial court had granted

plaintiff’s motion im limine to exclude any evidence on the

impact of taxation on lost future earnings. Defendant

offered to prove that if Federal income taxes, state income

taxes and railroad retirement taxes were considered in the

calculations and the discount rate was lowered to 6 percent,

the net lost future earnings would be $166,051. As already

noted, the jury returned a verdict of $1 million.

AY

The trial court also refused a defendant’s instruction

which stated:

‘‘In reaching your verdict, you will not increase the

amount of your verdict by reason of federal, state or

local income taxes, since the amount awarded to plain-

tiff is not taxable income to plaintiff within the mean-

ing of these tax laws.”’

Since oral argument before this court on January 12,

1980, we have had the benefit of a decision by the Supreme

Court of the United States in Norfolk and Western Ry. Co.

v. Liepelt (Docket No. 78-1323, filed February 19, 1980),

US. ——, L. Ed. 2d , S. Ct. —.

Inepelt originated in the circuit court of Cook County. This

court affirmed on appeal. (Liepelt v. Norfolk and Western

Ry. Co. (1978), 62 Ill. App. 3d 653, 378 N.F. 2d 1232, leave

to appeal denied, 71 Ill. 2d 618). Liepelt involved a wrong-

ful death action under the Federal Employers’ Liability

Act (FELA). At trial, actuarial evidence was heard as to

the lost future earnings of the decedent, which were cal-

culated to be $302,000. The trial court there also refused

to allow evidence of the impact of taxation on the lost

earnings. In an offer of proof by defendant, an actuary

calculated that the net amount of lost earnings, after con-

sideration of the impact of Federal income taxes and mak-

ing adjustments to the annual increase in wages and the

discount rate, was $138,327. The trial court also refused to

instruct the jury that ‘‘your award will not be subject to

any income taxes, and you should not consider such taxes

in fixing the amount of your award.’’ Liepelt, (Docket No.

78-1323, filed February 19, 1980), U.S. ——.

At the time this court reviewed Licpelt, the United States

Supreme Court had not decided these issues. Therefore, we

followed the decisions of the Illinois Supreme Court there-

on and affirmed the trial court. (See Liepelt, 62 Ill. App. 3d

A10

653, 668-69). However, the United States Supreme Court

reversed our decision and held that ‘‘the wage earner’s

income tax is a relevant factor in calculating the monetary

loss suffered***’’ and “it was error to refuse the requested

instruction in this case.’’ The Supreme Court remanded

the cause for further proceedings.

Plaintiff’s counsel has attempted to distinguish Liepelt

from the instant case. He contends Liepelt deals only with

wrongful death actions under the FELA in which damages

are limited to decedent’s contributions to the surviving de-

pendents. We find no merit to this contention and conclude

the Liepelt decision controls this case.

There is no language in the opinion of the United States

Supreme Court to indicate it is limited to wrongful death

cases under the FELA. Furthermore, the Court had pre-

viously granted certiorari on precisely these same issues

on instructions in a personal injury action under the FELA

where, as in the instant case, the plaintiff suffered the loss

of a leg. Chicago, Rock Island & Pacific R.R. Co, v. Rediker

(1977), 1 Kan. App. 2d 581, 571 P. 2d 70, cert. granted,

435 U.S. 922, cert. dismissed, 435 U.S. 982 (pursuant to

Supreme Court Rule 60).

Therefore, we must apply the teaching of the United

States Supreme Court in Liepelt to the case before us. We

hold the trial court erred in refusing to allow evidence of

the impact of taxation on plaintiff’s lost future earnings

and in refusing to instruct the jury its award of damages

was not subject to taxation.

Under the view we take of the instant case, it is also

necessary for us to pass upon the propriety of defendant’s

special interrogatories relating to plaintiff’s contributory

negligence which were refused by the trial court.

All

Under the FELA, ‘‘the fact that the employee may have

been guilty of contributory negligence shall not bar a re-

covery, but the damages shall be diminished by the jury in

proportion to the amount of negligence attributable to such

employee***.’? 45 U.S.C. §53 (1977).

In our opinion, the contradictory nature of the testimony

in the instant case raised an issue of fact as to whether

plaintiff exercised ordinary care for his own safety before

and at the time of the occurrence. We conclude the issue of

plaintiff’s contributory negligence was properly left for the

jury to resolve,

Defendant tendered two special interrogatories pertain-

ing to the contributory negligence issue. They were:

“SPECIAL INTERROGATORY NO. 1.

‘Do you find that the plaintiff was guilty of con-

tributory negligence which was a proximate cause of

his injury?

“Ves

‘“*No

“SPECIAL INTERROGATORY NO. 2.

‘‘Tf you have answered the preceding question ‘Yes’,

what portion or percentage of the plaintiff’s negligence

contributed to his injury?

6c ie]

The trial court rejected these special interrogatories on

the theory they did not control the verdict. Defendant con-

tends this was reversible error. It has long been the rule

that ‘‘[t]he court is not required to submit a special in-

terrogatory unless it relates to ultimate facts of such a

character that it would control a general verdict.’’ (Spring-

field Coal Mining Co. v. Gedutis (1907), 227 Ill. 9, 13, 81

N.E. 9; Stephenson v. Air Products & Chemicals, Inc.

Al2

(1969), 114 Ill. App. 2d 124, 137, 252 N.E. 2d 366, leave to

appeal denied, 42 Ill. 2d 585). Therefore, interrogatories of

this type should necessarily be framed ‘‘for the purpose of

controlling any general verdict that may be returned for

the plaintiff.’’ Chicago € Alton R.R. Co. v. Harrington

(1901), 192 Ill. 9, 34, 61 N.E. 622.

Defendant argues the above special interrogatories would

have been controlling on the ultimate issue of damages. We

disagree. In the instant case, the jury was properly in-

structed as to how damages should be computed in event

of contributory negligence (Illinois Pattern Jury Instruc-

tion, Civil No. 160.13 (2d ed. 1971) (hereinafter cited as

IPI Civil)):

‘‘Tf you find that plaintiff’s injury was proximately

caused by a combination of plaintiff’s contributory

negligence and negligence on the part of the defendant,

then in assessing the damages you should proceed in

the following manner: First, determine the amount of

the plaintiff’s damages without reference to the ques-

tion of contributory negligence. Second, decide what

proportion or percentage of the total combined negli-

gence of both parties causing the injury consisted of

the plaintiff’s negligence. Finally, reduce by this pro-

portion or percentage the amount of damages you

would have awarded had the plaintiff’s negligence

not contributed to the injury.’’

If these two special interrogatories had been given there

would be no possibility of ascertaining whether the above

instruction was followed. The only fact that could be de-

duced from the answers to these interrogatories is the

degree or percentage of plaintiff’s contributory negligence,

if any. We could not be aware of the amount of damages

without reference to the question of contributory negli-

gence. Without knowledge of the jury’s thinking on this

A13

point, the special interrogatories could not control ‘fany

general verdict that may have been returned for the plain-

tiff.’’

In addition, the defendant’s first special interrogatory

is improper in form. It fails to limit the inquiry of whether

plaintiff was guilty of contributory negligence to “before

and at the time of the occurrenee.’’ (Stephenson, 114 Tll,

App. 2d 124, 137, citing IPI Civil No. 10.03.) Thus, the trial

court properly refused to submit these interrogatories to

the jury. See Skinner v. Baker (1978), 67 Ill. App. 3d 773,

786, 384 N.E. 2d 1360, leave to appeal demed, 75 Ill. 2d 594.

For these reasons, the judgment appealed from is re-

versed and the cause is remanded for a new trial on the

issue of damages only. In fixing the amount of plaintiff’s

damages, the jury will be required to determine if plaintiff

was guilty of contributory negligence; and, if so, what

proportion or percentage of the total combined negligence

of both parties consisted of the plaintiff’s contributory

negligence.

Reversed and remanded with directions.

McGLOON and O’CONN OR, JR., JJ., concur.

A-14

UNITED STATES OF AMERICA

STATE OF ILLINOIS

SupreME Court

Ar A Term or THE Supreme Court, begun and held in

Springfield, on Monday, the eighth day of September, in

the year of our Lord, one thousand nine hundred and

eighty, within and for the State of Illinois.

Present: JosepH H. GoLpENHERSH, CHIEF JUSTICE

Justice Rosperr C. UNDERWOOD

Justice Howarp C. Ryan

Justice THomas J. Moran

Justice DanieL P. Warp

Justice WILLIAM G, CLaRK

Justice THomas E. KiuczyNskI

Tyrone C. Fanner, ATTORNEY GENERAL

Lovigz F. Dean, MarsHALL

Arrest: CLELL L. Woops, CLERK

Be Ir Rememseren, that, to-wit: on the 29th day of

September, 1980, the same being one of the days of the

term of Court aforesaid, the following proceedings were,

by said Court, had and entered of record, to-wit:

.

Davip OLTERSDORF,

Petitioner Petition for Leave to

No. 53478 vs. , Appeal from Appellate

Court First District

CHESAPEAKE & OnIo RAILROAD

Company, 78-1828

Respondent

Al5

And now on this day the Court having duly considered

the Petition for Leave to Appeal herein and being now

fully advised of and concerning the premises, doth over-

rule the prayer of the petition and denies Leave to Appeal

herein.

And it is further considered by the Court that the said

Respondent recover of and from the said Petitioner costs

by it in this behalf expended, to be taxed, and that it have

execution therefor.

I, Crett L. Woops, Clerk of the Supreme Court of the

State of Illinois and keeper of the records, files and Seal

thereof, do hereby certify that the foregoing is a true copy

of the final order of the said Supreme Court in the above

entitled cause of record in my office.

In Witness Wuenreor, I have

hereunto subscribed my name

and affixed the Seal of said

Court this 23rd day of October,

1980.

(Sax) /s/ Curtt L. Woops,

Clerk,

Supreme Court of the State of

Illinois.

EXCERPTS FROM THE TRIAL RECORD

MR. DOMASH: Let the record show that this is an

offer of proof being made in chambers with regard to the

question of using net figures as opposed to gross and

the question of impact of inflation as previously raised

by the parties to this lawsuit to which trial briefs were

filed and certain Court rulings were made.

A16

Mr.Sherfey, there was mention made to you of the rail-

road increase rate of 8.7 percent over the past 9-year

period.

If that were used in the future, how much of that 8.7

percent would be inflation as opposed to true growth and

productivity?

THE WITNESS: The historic figures I used indicating

5 percent annual increase are generally thought of to be

2 percent increase in productivity and 3 percent inflation.

That fluctuates somewhat from year to year, but over a

long period of time those are the figures.

In recent years, we have had higher inflation than in

prior years, and then the entire increase is due to inflation.

So, an 8.7 total would be about 6.7 inflation and 2 per-

cent for increases in productivity.

MR. DOMASH: So, you would be projecting continuing

inflation for 18.5 years?

THE WITNESS: Yes.

MR. DOMASH: Now, at my instance and request did

you make similar calculations taking into account the

impact of income taxes?

MR. DOMASH: Federal income taxes?

THE WITNESS: We considered Federal income taxes,

Michigan State and Railroad Retirement taxes.

MR. DOMASH: Can you tell us generally then what

the impact of income taxes would be on this individual’s

earnings?

THE WITNESS: Well, yes.

If you are trying to measure his net loss, the true loss is

really the difference between his take-home pay from his

railroad job and his take-home pay in the alternate

occupation.

A17

MR. DOMASH: All right.

THE WITNESS: That is, the basic measure of that is

to subtract the taxes that he would have to pay out of

his income.

MR. DOMASH: First of all, would the taxes that you

have mentioned have a significant impact on the figures?

THE WITNESS: Yes, they do.

MR. DOMASH: Why is that?

THE WITNESS: Because we pay a lot of taxes.

MR. DOMASH: Does it depend on the bracket or level

of income that the individual is in?

THE WITNESS: Well, your Federal income taxes are

progressive and the higher the income the greater effect,

greater proportionate effect it will have.

MR. DOMASH: Well, rather than doing that now, you

used the same formula, the same inathematics, that you

testified to previously except you caleulated it for net

income rather than gross, is that correct?

THE WITNESS: One other change. We subtracted out

the taxes and then we also felt that since the investment

income earned on the money invested today would be sub-

ject to income taxes, we also subtracted income taxes from

the interest rate used to discount the figures and discounted

it at a 6 percent interest rate rather than 7 percent,

MR. DOMASH: In other words, since the money would

be earning interest you have to pay income tax on the

interest?

THE WITNESS: Yes.

MR. DOMASH: You then lowered your discount rate—

THE WITNESS: Yes. |

MR. DOMASH: (Continuing) — to 6 percent, and

A18

other than that you used the formula that you previously

testified to other than the changes you have just mentioned?

THE WITNESs: Yes.

MR. DOMASH: With regard to railroad earnings sub-

tracting security guard earnings, what would the net loss

of future earnings be?

THE WITNESS: The present value of a railroad con-

ductor would be $268,408. The present value of security

guard earnings would be $102,357, for a net loss of $166,051.

MR. DOMASH: In other words, the net, if you were

calculating a net take-home pay, it would be $268,408 as a

switchman as opposed to $453,721 as a switchman?

THE WITNESS: I understand that was both for con-

ductors.

MR. DOMASH: For conductors. I am sorry.

THE WITNESS: These are the correct figures, yes.

MR. DOMASH: Okay. And similarly as a security

guard it would be $102,357 as opposed to $126,3521

THE WITNESS: Correct.

MR. DOMASH: All right. You did not make the cal-

culations with regard to working as a yard master yet?

THE WITNESS: No, I did not.

MR. DOMASH: We will have that calculated later if

necessary, whatever that figure might be.

That is all I have.

MR. HARRINGTON: I object. The objection stands.

We have argued it previously.

THE COURT: Yes.

Thank you, sir.

(Whereupon the further hearing of the above-entitled

matter was recessed until 2:00 o’clock p.m., this same date.)