Appendix — Gulf Offshore Co. v. Mobil Oil Corp.

OPINIONS AND JUDGMENTS BELOW

A-1

Court of Appeals Opinion on Remand

No. B2159

Affirmed, and Opinion filed January 28, 1982.

GULF OFFSHORE COMPANY,

A DIVISION OF THE POOL COMPANY, Appellant

v.

MOBIL OIL CORPORATION, Appellee

Appeal from 129th District Court of Harris County

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On appeal to this court the trial court judgment was

affirmed. Gulf Offshore Co. v. Mobil Oil Corp., 594 S.W.

2d 496 (Tex. Civ. App.—Houston [14th] 1979). After

the Texas Supreme Court refused writ of error, n.r.c.,

the Supreme Court of the United States granted certiorari

and ia a decision handed down on July 1, 1981, affirmed

this court's holding that the Outer Continental Shelf

Harris County, Texas, had subject matter jurisdiction,

but vacated this court’s holding that it was not error for

the trial court to refuse to instruct the jury that its award

was not subject to income taxes. The U. S. Supreme

Court’s decision in Norfolk & Wes.crn Railway Co. v.

Liepelt, 444 U.S. 490 (1980), displaces the State rule

in an OCSLA case. Finally, the Supreme Court stated

in its opinion that if this court holds the trial court erred

in refusing the requested instruction we may then address

1. Does Louisiana law require a jury instruction that

£23

an explanatory instruction concerning income taxation

discretionary with the trial court.

Gulf Offshore relies principally on the case of Debose

v. Trapani, 295 So.2d 72 (La. App. 4th Cir. 1974),

writ denied, 299 So.2d 359 (La. 1974), in support of

its contention that the instruction is mandatory. Nowhere

in its opinion does the court imply that the instruction

is mandatory. The court simply rejected the argument

that it was error to give the instruction.

Ten years before the Debose decision a different panel

of the same Louisiana appellate court found no error

in the trial court’s refusal to give such an instruction

and noted that the court had properly instructed the jury

as to the compensatory nature of damages and had specifi-

cally listed nine elements of damages which the jury

might consider in arriving at its award. Guerra v. W. J.

Young Construction Co., 165 So.2d 882 (La. App. 4th

Cir. 1964), writ ref'd, 167 So.2d 676 (La. 1964). The

trial judge gave a similar instruction in the instant case.

In the third case, Francis v. Government Employees

Insurance Co., 376 So.2d 609 (La. App. 4th Cir. 1979)

writ denied, 378 So.2d 1391 (La. 1980), the court

simply stated that the requested instruction was authorized

by DeBose and held that the trial court had not erred

in giving it.

It is clear that Guerra is the only case in which the

A-4

2. Does Liepelt displace the Louisiana rule in this

OCSLA case?

In Norfolk & Western Railway Co. vy. Liepelt, 444

U.S. 490, the United States Supreme Court held that a

defendant in an FELA death case is entitled to an in-

struction that damage awards are not subject to federal

income taxation and that the Illinois trial court had erred

in refusing the requested instruction. The case was re-

versed and remanded to the Illinois state court.

Gulf Offshore contends that Liepelt controls our deci-

sion on this question in the instant case.

The OCSLA mandates that the laws of the adjacent

state apply as surrogate federal law “(t)o the extent that

they are applicable and not inconsistent with this Act

or with other Federal laws.” 43 U.S.C. § 1333(a)(2).

To help explain the question we have been requested

to answer, we quote from the majority opinion of the

United States Supreme Court in the instant case as follows:

Liepelt would require that the instruction be given.

But Congress was not silent. It incorporated for

this case the applicable law of Louisiana, but only

“[t]o the extent [it is] not inconsistent” with federal

law. heme a Pe nace ee. gna egy ma

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Louisiana rather than federal common law provided

the federal statute of limitations for personal injury

damages actions under OCSLA. We recognized that

law; did not intend thet foleral coors

in law; it did not intend that courts

fill those ‘gaps’ themselves by ing new federal

common law.” Id., at 104-105, 92 S.Ct. at 354. In

this case, we face an analogous question: does the

incorporation of state law preclude a court from

finding that state law is “inconsistent” with a federal

common law rule generally applicable to federal

damages actions?

101 S.Ct. at 2880.

Our study of the OCSLA and the United States

Supreme Court’s decisions in Rodrigue v. Aetna Casualty

& Surety Co., 395 U.S. 352 (1969), Chevron Oil Co. v.

Huson, 404 U.S. 97 (1971), and the instant case leads

us to the conclusion that the incorporation of state law

does not preclude a court from finding that state law is

inconsistent with a federal common rule generally applic-

borrowed a remedy provided by the state law of Louisi-

ana: a cause of action for damages for personal injuries.

We think that when OCSLA borrowed the remedy, it

A6

borrowed the remedy in its entirety. In other words,

OCSLA made the entire state cause of action applicable

federal law, enforceable as federal law. This conclusion

leads to our holding that OCSLA has borrowed from the

law of Louisiana and has made applicable federal law in

this case the Louisiana law which makes discretionary the

giving of a jury instruction that damage awards are not

subject to income taxation. It follows that if the Louisi-

ana law concerning the requested instruction has become

surrogate federal law applicable in this case, then the

Liepelt rule is not applicable federal law and hence the

surrogate federal law is not inconsistent with the rule

announced in Liepelt.

We are of the opinion that our decision on this point

is not in conflict with the Supreme Court’s opinion in the

instant case. If the Supreme Court had not intended to

leave open the possibility of this very decision, it would

have not expressed doubt about the application of the

Liepelt rule and would have decided the question itself

and not remanded to this court for determination.

Also, our decision on this question is in harmony with

the opinion of the Supreme Court of the United States in

Huson. In that case the court recognized that a “compre-

hensive body of federal law” was not necessarily applic-

able under OCSLA. 404 U.S. at 101. Holding that the

Louisiana statute of limitations applied as federal surro-

gate law, the Supreme Court noted in Huson that a cause

of action for personal injuries must be governed by the

law of the adjacent state of Louisiana, applied as federal

law, including the state statute of limitations. Then the

court said in Huson:

State law was needed. Rodrigue v. Aetna Casualty

404 USS. at 103.

Our decision also comports with Congress’ recognition

as pointed out in both Rodrigue and Huson that special

relationships between the men working on these artificial

islands and the adjacent shore to which they

favors application of state law with which these men and

Also as stated by the court in Huson, “If

goal was to provide a comprehensive and i

of law, it would defeat that goal to apply only certain

aspects of a state personal injury remedy in federal court.”

404 U.S. at 103. This statement applies to the question

here presented with just as much, if not more, force than

to the question pre~ented in Huson.

E

formity” as a paramount goal. 101 S.Ct. at 2880.

For the reasons set forth above we hold that the

announced in Liepelt does not displace the state rule in

an OCSLA case.

Judgment rendered, and Opinion filed January 28, 1982.

A9

Court of Appeals

JUDGMENT ON REMAND

GULF OFFSHORE COMPANY,

A DIVISION OF THE POOL COMPANY

VS. NO. B2159

MOBIL OIL CORPORATION, ET AL

“This cause, an appeal from the judgment signed De-

cember 18, 1978, came on to be heard on the transcript

of the record on remand from the Supreme Court of the

United States. We have inspected the record and decided

the questions mandated by the Supreme Court of the

United States and find no error in the judgment of the

trial court.

We order Gulf Offshore Co. and its Surety, Western

Surety Co., to pay all costs incurred by reason of this

appeal.

This decision is ordered certified below for observance.”

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CLERK’S OFFICE - SUPREME COURT

Austin, Texas

May 5, 1982

Dear Sir:

You are hereby notified that the Application for Writ

of Error in the case of

GULF OFFSHORE COMPANY,

DIVISION OF POOL COMPANY

vs.

MOBIL OIL CORPORATION ET AL.

was this day refused. No reversible error. (Motion to dis-

miss overruled).

Very truly yours,

C-1169 GARSON R. JACKSON, Clerk

A-12

CLERK’S OFFICE - SUPREME COURT

Austin, Texas

June 2, 1982

Dear Sir:

Te ime hereby notified that the Motion for

in the case of OFFSHORE CO. v. MOBIL

CORPN. ET AL., No. C-1169

was this day overruled.

Very truly yours,

GARSON R. JACKSON, Clerk

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A-13

JUDGMENT ENTERED: Volume 1655, Page 767,

— Minutes District Courts, in and for Harris Coun-

ty, Texas.

NO. 1,052,262

In The

DISTRICT COURT OF HARRIS COUNTY, TEXAS

129th Judicial District

STEVEN GAEDECKE

v.

MOBIL OIL CORPORATION, ET AL

v.

GULF OFFSHORE CO.,

A DIVISION OF THE POOL COMPANY

JUDGMENT

BE IT REMEMBERED that on the 20th day of No-

vember, 1978, came on to be heard the above styled and

numbered cause, wherein Steven Gaedecke is Plaintiff,

Prior to the voir dire examination of the jury panel, Plain-

tiff, in open court, took a voluntary non-suit as to De-

fendants Arthur Levy Boat Company, Arthur Levy, Inc.,

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SPECIAL ISSUE NO. 2

Was such a proximate cause of the injuries suffered

by Steven Gaedecke?

Issue No. 1, and only in that event, then answer

To which the jury answered “yes”.

(b) Loss of earning capacity which in reasonable

probability he will sustain in the future;

(c) Physical and mental anguish which he has

(d) Physical pain and mental which in

reasonable probability he suffer in the

(e) Physical impairment he has sustained in the past;

(f) impairment which in reasonable

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Answer in dollars and cents, if any.

To which the jury answered “$900,000.00”.

Do you find from a of the evidence

that Steven s were incident to,

or resulted or indirectly from the work to

be performed by Gulf Offshore Company under its

fendant Mobil Oil Corporation the sum of $900,000.00,

together with interest thereon at the rate of 9% per

annum from the date of entry of the Judgment until paid;

surance Company should have and recover the sum of

$32,712.09;

The Court is further of the opinion that Plaintiff should

have and take nothing of and from the Defendants,

Arthur Levy Boat Company, Arthur Levy, Inc. and Off-

shore Crews, Inc.;

The Court is further of the opinion that Third-Party

Plaintiff Mobil Oil Corporation is entitled to and is

granted indemnity of and from Third-Party Defendant

Guif Offshore Co., A Division of the Pool Company for

all sums, including interest and costs of court, that the

Defendant Mobil Oil Corporation is required to pay to

‘Plaintiff by the terms of this Judgment;

The Court having further heard arguments and having

read the briefs is of the opinion that the Law of Louisiana

does apply and hereby applies such law in this action;

It is therefore, = 8 —

ORDERED, ADJUDGED and DECREED by the

Court that Plaintiff Steven Gaedecke do have and recover

Ack7

of and from the Defendant Mobil Oil Corporation the

sum of $900,000.00, together with interest thereon at

the rate of 9% per annum from the date of the entry of

Judgment until paid;

ORDERED, ADJUDGED and DECREED by the

Court that out of such amount recovered by the Plaintiff

against Defendant Mobil Oil Corporation, the Intervenor

. Employers’ National Insurance Company do have and

recover the sum of $32,712.09;

ORDERED, ADJUDGED DECREED that all

SIGNED, RENDERED and ENTERED this 18th day

of December, 1978.

/s/ THOMAS J. STOVALL, JR.

Judge Presiding

A-18

‘APPROVED AS TO FORM ONLY:

JAMAIL AND KOLIUS

Attorneys for Plaintiff

FULBRIGHT AND JAWORSKI

Attorneys for Intervenor,

Employers’ National Insurance Company

CRAIN, CATON, JAMES & OBERWETTER

Attorneys for Defendant-Third-Party

Plaintiff, Mobil Oil Corporation

ROYSTON, RAYZOR, VICKERY & WILLIAMS

Attorneys for Third-Party Defendant,

Gulf Offshore Company, a Division of

the Pool Company

BAKER & BOTTS

Attorneys for Defendants, Arthur

Levy Boat Company, Arthur Levy, Inc.

and Offshore Crews, Inc.

A-19

Court of Civil Appeals First Opinion

No. B2159

Affirmed, and Opinion filed December 12, 1979.

GULF OFFSHORE COMPANY,

A DIVISION OF THE POOL COMPANY,

Appellant

Vv.

MOBIL OIL CORPORATION,

Appellee

Appeal from 129th District Court of Harris County

A-20

Prior to trial, plaintiff Gaedecke settled with the Levy

defendants for a guaranteed recovery of $100,000.00

and proceeded to take a non-suit against them. Plaintiff

also reached agreement with defendant Mobil, that if

Mobil did not obtain indemnity from Gulf, plaintiff's

recovery against Mobil would be limited to $200,000.00

plus the compensation lien. Also present in the trial court

was intervenor, Employers’ National Insurance Company.

On September 22, 1975, plaintiff Gaedecke was safely

aboard the vessel Salton-Seahorse, having been evacuated

pursuant to the implementation of Mobil’s hurricane

evacuation plan. Defendant Mobil had arranged for the

vessel, owned and operated by Levy, to stand by for the

evacuation. Following preparation for evacuation, all

machinery was shut down, and after evacuation from the

platform of all but two platform workers employed by

Gulf Offshore by use of the crane, even its generator was

shut off. As the last two workers, the crane operator and

his helper, attempted to evacuate from the platform using

a rope to swing onto the deck of the Salton-Seahorse,

plaintiff heard some party yell down to him to go aft and

provide assistance. A large wave washed across the aft

area of the vessel where he had positioned himself and

plaintiff was swept along the deck of the vessel and ended

up against a pallet loaded with sand. Plaintiff Gaedecke

suffered injuries primarily to his back.

At trial in response to special issues, the jury returned

a verdict which found that defendant, Mobil Oil Cor-

poration, failed to exercise that degree of care that should

have been exercised by a reasonably prudent offshore

platform operator in waiting until approximately 9:00

a.m. on September 22, 1975, to evacuate the platform

and in the selection of the method used to evacuate the

A-21

crew from the platform; that such were a proximate cause

of the plaintiff's injuries; that $900,000.00 would be a

sum which would fairly and reasonably compensate plain-

tiff for injuries suffered; and that plaintiff's injuries were

incident to, or resulted directly or indirectly from, the

work to be performed by Gulf Offshore under its contract

with Mobil. The trial court entered judgment based on

the jury’s answers to the special issues and granted in-

demnity to Mobil from Gulf Offshore for $900,000.00

less the compensation lien of $32,712.09. Gulf Offshore

appeals from the judgment of indemnity.

Defendant Mobil and third party defendant Gulf Off-

shore entered into contract number 1159, which con-

15. enenen See rere:

or cubigenin sagen SAAN and be

or its employees, and whether due to im

of cap ead baehdad ter Mh oc Ge oe.

ises themselves or any equipment thereon, whether

latent or patent, or for any other cause whatso-

ever; and for damages for infringement of any

patent as more particularly set forth in Paragraph

23 hereof.

Appellant’s first point of error addresses the threshold

question of the jurisdiction of the courts of the State of

Texas to entertain causes of action filed pursuant to the

Outer Continental Shelf Lands Act, 43 U.S.C.A. § 1331-

1356 (1979). There is no dispute as to the applicability

of the Outer Continental Shelf Lands Act to this case.

43 U.S.C.A. § 1333(a)(1) (1975), in effect at the time

of this accident, states chat:

The Constitution and laws of civil and political

jurisdiction of the United States are extended to the

subsoil and seabed of the outer Continental Shelf

——

A-23

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of the Act in effect in this case, 43 U.S.

C.A. § 1333(b) (1975), governing jurisdiction specifies

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Rucker Company, 341 F.Supp. 757 (E.D. La. 1972),

and Borne v. Tenneco Oil Company, et al., 1973 A.M.C.

388 (E.D. La. 1972), Judge Rubin held that the Act

conferred exclusive jurisdiction on the U.S. district courts

for causes of action arising out of operations conducted

on the outer Continental Shelf and further held in Fluor

that the intent of Congress was to make such operations

subject to the exclusive control and jurisdiction of the

federal government. We disagree for the reasons stated

in the foregoing paragraph. We also note that in the

penultimate paragraph of the opinion in Fluor, Judge

Rubin merely found that the federal district court had

original jurisdiction.

Judge Rubin wrote that as a matter of policy, “. . .

an area where the federal government had exerted ex-

clusive sovereignty, such as the outer Continental Shelf,

a single federal forum would be more appropriate than

multiple state forums to decide disputes that arise there.”

Fluor Ocean Services, Inc. v. Rucker Company, supra at

760. We do not believe this to be necessarily so. The Act

provides that the Constitution and laws of the United

States govern the outer Continental Shelf, 43 U.S.C.A.

§ 1333(a)(1) (1975), and where applicable and not

inconsistent with this Act or with federal laws, the laws

of the adjacent state are declared to be the law of the

United States regarding the outer Continental Shelf. 43

U.S.C.A. § 1333(a)(2) (1975). The end result would

be an application of the same laws no matter where the

forum was located, whether state or federal.

Following Fluor is the recent decision of Friedrich v.

Whittaker Corporation, 467 F.Supp. 1012 (S.D. Tex.

1979). Here Judge Sterling recognized that the holding

in Fluor, which acknowledged that such jurisdiction was

One Louisiana decision, Gravois v. Travelers Indemnity

Company, 173 So.2d 550 (La. Ct. App.), writ refd,

247 La. 1016, 175 So.2d 301 (1965), has also faced

Company, 173 So.2d at 556, 559.

43 US.C.A. § 1333(b) (1975) of the Outer Contin-

ental Shelf Lands Act was amended and renumbered in

1978 to 43 US.C.A. § 1349(b)(1) (1978) and now

reads ip pertinent part as follows:

. . . the district courts of the United States shall

have jurisdiction of cases and controversies arising

out of, or in connection with (A) any operation

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demnity as a matter of law. A motion for judgment non

obstante veredicto is proper “. . . if a directed verdict

would have been proper. . .” Tex. R. Civ. P. 301.

In determining whether the trial court erred in refus-

ing to grant a motion for judgment notwithstanding the

verdict, the inquiry is whether there is any evidence of

probative force to support the verdict of the jury. City

of San Augustine v. Roy W. Green Company, 548 S.W.

2d 467, 472 (Tex. Civ. App.—Tyler 1977, writ refd

n.r.c.). In determining whether there is any evidence of

probative force to support the verdict, we are required

court reporter. Counsel for appellant Gulf

Offshore was given ample opportunity to question the

attorneys for the plaintiff and appellee Mobil at that time.

Attorneys engaged in the trial of cases have heavy

responsibilities, and must have latitude in making tactical

decisions as how to best represent their clients within the

operate with counsel ior plaintiff to limit Mobil’s potential

liability in the event Mobil did not obtain indemnity from

Gulf Offshore. Point of error two is overruled.

Points of error three, four, five and six complain of the

lack of evidence to support the judgment for contractual

indemnity given the language in Section 15.4 of the

contract. Section 15.4 states in pertinent part:

Contractor [Gulf Offshore} shall protect, indem-

nify and save Mobil harmless against any and all

Appellant Gulf Offshore contends that the plaintiff's in-

juries were not incident to or the result of Gulf Offshore’s

work to be performed under the contract with Mobil.

We find sufficient evidence in the record to support

the jury’s answer to special issue four which inquired

whether or not plaintiff's injuries were incident to, or

resulted directly or indirectly from, the work to be per-

formed by Gulf Offshore under its contract with Mobil.

Plaintiff's own testimony that it was the normal thing to

do to assist the last two Gulf Offshore employees off the

platform even though an evacuation was in progress and

that it was customary to help other Gulf Offshore em-

ployees in the regular course of their work was uncon-

troverted. The evidence elicited regarding the work opera-

tions on the platform justifies the jury’s answer that the

injuries suffered by the plaintiff were incident to, or re-

sulting directly or indirectly from the work required.

These points of error are overruled.

In points of error seven, eight and nine, appeliant Gulf

Offshore contends that Louisiana law, applied as con-

trolling federal law in this case, and Texas law prohibit

contractual indemnity between an oil company and a

contractor unless there is insurance coverage or alterna-

tively, that any liability for indemnity should be limited

A-29

to the amount of insurance required by the contract.

Furthermore, appellant by relying on Tex. Rev. Civ.

Stat. ANN. art. 2212b (Vernon Supp. 1978-1979) urges

that the public policy of the State of Texas prohibits con-

tractual indemnity unless covered by insurance and then

only to a maximum ceiling of $300,000.00.

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is to be applied to drilling rigs as artificial islands

though they were federal enclaves in an upland state.

Rodrigue v. Aetna Casualty and Surety Company, 395

U.S. 353, 355 (1969). It is evident that federal law is

exclusive in its regulation of this area, and that state law

is adopted only as surrogate federal law. Jd. at 357.

In Day v. Ocean Drilling and Exploration Company,

353 F. Supp. 1350 (E.D. La. 1973), a motion for sum-

mary judgment was presented to the federal district court

regarding interpretation of a contract containing an in-

demnity agreement similar to the one in our case. The

contract before that court provided minimum limits of

$300,000.00 for insurance coverage of contractual lia-

bilities and indemnities assumed by the contractor cover-

ing all claims “incident to, arising out of, in connection

with, or resulting from the activities of Subcontractor, its

employees and agents . . . or in connection with the work

to be performed, services to be rendered, or materials

to be furnished, under this contract . . .” Jd. at 1351.

Plaintiff Day was working on a fixed platform located

on the outer Continental Shelf. As he passed by a com-

pressor, it suddenly exploded, injuring him.

Louisiana law was applied in Day as surrogate federal

law to interpret the contract. The court held that while

Louisiana courts have read such an indemnity agreement

narrowly, the agreement must be given effect according

to the intention of the parties. Jd. at 1352. Judge Rubin

did not limit his interpretation to any one of the phrases

in the indemnity agreement, e.g. “arising out of” and “in

connection with.” Instead, taking the contract as a whole,

the court held that it was the intention of the parties to

require indemnity against all risks of harm with insurance

A-31

coverage and that such an indemnity agreement would

be upheld.

We disagree with respect to the position taken by ap-

pellant Gulf Offshore that indemnity agreements are not

enforceable under Louisiana law without insurance cover-

age. This issue was not reached in Day as insurance

coverage was undisputedly provided pursuant to the con-

tract in that case. In the two cases cited by appellant,

Dickerson v. Continental Oil Company, 449 F.2d 1209

(Sth Cir. 1971), and Hicks v. Ocean Drilling and Ex-

ploration Company, 512 F.2d 817 (Sth Cir. 1975), the

limits of liability for the indemnitors in both cases were

limited to the amounts of insurance coverage provided in

the respective contracts. Unlike the facts before us, in

neither case was there any dispute as to the limits of

liability contracted for or that insurance coverage was in

fact obtained.

A-32

clusion of the exhibit. The trial court in the post-trial

proceeding properly excluded the exhibit from the record

since it was evidence on a controversial matter. State

v. Harrington, 407 S.W.2d 467 (Tex. 1966), cert. den.,

386 U.S. 944 (1967); Tex. R. Civ. P. 270. For these

reasons, we overrule as well appellant’s alternative as-

sertion that its liability for contractual indemnity should

be limited to $100,000.CO0, that being the limit of liability

allegedly required by the contract.

Tex. Rev. Crv. Stat. ANN. art. 2212b (Vernon Supp.

1978-1979) declares indemnity provisions in agreements

pertaining to wells for oil, gas, or water, or mines for

other minerals, where there is negligence attributable to

itee, void and unenforceable as against the

public policy of the State of Texas, except if the parties

iting, that such indemnity obligation will be

rogate federal law, where not inconsistent with federal

Hicks v. Ocean Drilling and Exploration Company, 512

F.2d at 826; Dickerson v. Continental Oil Company, 449

F.2d at 1221. Following Justice Guittard in Mamlin v.

Susan Thomas, Incorporated, 490 S.W.2d 634, 636-37

(Tex. Civ. App.—Dallas 1973, no writ), we hold that

the Texas concept of public policy cannot prevail against

the national policy enunciated in a federal act as declared

whether the interests of the parties within the meaning

of Tex. R. Civ. P. 233 are, at least in part, antagonistic

in a matter that the jury is to be concerned with. Perkins

v. Freeman, 518 S.W.2d 532 (Tex. 1974). Tex. Rev.

Civ. Stat. ANN. art. 215la (Vernon Supp. 1978-1979)

Gulf Offshore. 33 U.S.C.A. § 905 (b) (1978) precludes

liability of an employer by agreement directly or in-

We do not find any evidence in the record nor do the

pieadings reveal that the issue of sole cause was raised.

Tex. R. Civ. P. 279 requires that when a case is sub-

submitted. There was evidence from which the jury could

have appellee Mobil negligent as a fixed platform

operator or as a vessel-charterer. Given the jury’s answers

to the special issue actually submitted, finding Mobil

negligent in the capacity as fixed platform operator, the

result would not have changed. We find no error in the

refusal to submit the requested issues.

In its last three points of error, appellant attacks the

The trial court properly refused to permit the jury from

considering evidence as to inflationary trends as an ele-

ment of damages for future wage loss. Davis v. Hill

Engineering Company, 549 F.2d 314 (Sth Cir. 1977);

Johnson v. Penrod Drilling Company, 510 F.2d 234

(5th Cir.) (en banc), cert. den., 423 U.S. 839 (1975).

Increases in productivity were not proper for consideration

by the jury. Davis v. Hill Engineering Company, 549

F.2d at 335. Davis, Johnson, and another case cited by

appellant, Blue v. Western Railway of Alabama, 469

F.2d 487 (5th Cir. 1972), cert. den., 410 US. 956

A-35

(1973), do not hold that appellant would be entitled to

an affirmative instruction prohibiting the jury’s considera-

tion of these factors. Furthermore, the record before us

gives no indication that the jury in fact considered in-

fla.ionary trends or increases in productivity in calculat-

ing the damages award.

Johnson v. Penrod Drilling Company, 510 F.2d at

236-37, specifically prohibits consideration by the jury

by evidence or instruction, of the impact of income taxes

in the calculation of a proper award for loss of future

wages.

Davis, Johnson and Blue permit a trial court to admit

evidence pertaining to the reduction of the award for

future damages, to present value by the use of an appro-

priate interest rate prevailing at the time and place of

tri’. We hold that this was adequately provided for in

the damage issue which was actually submitted and which

inquired: “What sum of money, if any, if paid now in cash

” would reasonably compensate plaintiff Gaedecke.

Davis, Johnson, and Blue do not bold that appellant would

be entitled to an instruction solely directing the jury to

apply an appropriate interest rate to reduce to present

value any sum awarded for future damages. Points of

error twelve, thirteen and fourteen are overruled.

Having carefully reviewed all the points of error and

the authorities cited in the briefs, we accordingly affirm

the judgment of the trial court.

/s/ Felix Salazar, Jr.

Justice

Judgment rendered, and Opinion filed December 12, 1979.

Panel consists of Associate Justices Coulson, Salazar and

Junell.

B-1

APPENDIX B

RAISING THE FEDERAL QUESTION

PRESENTED

THIRD PARTY DEFENDANT’S REQUESTED

INSTRUCTION C

Filed: November 22, 1978. Ray Hardy, District Clerk,

Harris County, Texas. By R. Trinkle, Deputy.

Requested Instruction No. C

You are instructed that, as a matter of law, any award

made to the plaintiff in this case, if any is made, is not

income to the plaintiff within the meaning of the Federal

Income Tax Law. In determining damages sustained by

plaintiff, if any, you are to follow the instructions already

given you by this court in measuring those damages and

in no event should you either add to or subtract from

that award on account of such damages not being subject

to federal income taxes.