ASSESSING ECONOMIC LOSSES

IN THE PERSONAL INJURY CASE OF

ALAN J. POLLACK, v. PLAY-SET SYSTEMS, INC.
Analysis Prepared by a Forensic Economics Expert
Retained by the Law Firm of the Plaintiff

I. CERTIFICATION
I certify that all assumptions, sources, methods, and calculations contained herein stem from the
objective application of the existing body of knowledge and methodology available to me for the
purpose of determining pecuniary losses.
I further certify that my professional compensation associated with this economic loss report and
possible subsequent services is strictly remuneration for time expended on such services and not
contingent on the outcome of subject matter.
As part of my responsibility as practitioner of forensic economics, I pledge adherence to the
Statement of Ethical Principles and Principles of Professional Practice of the National
Association of Forensic Economics (NAFE). A printable copy of this Statement is available at
http://nafe.net/Pages/Ethics.aspx and can also be provided on request.
_________________________
Elias C. Grivoyannis, Ph.D.
II. OPINION OF ECONOMIC LOSS
Plaintiffs counsel retained me in order to calculate economic damages suffered by plaintiff
allegedly as a result of personal injury. The analysis set forth herein is based on information
provided to me by plaintiff and plaintiff's counsel, either written or verbal, as it pertains to this
matter.
Having relied on this information, as cited in the report, and in accordance with generally
accepted economic and statistical principles, it is my professional opinion that the total value of
pecuniary losses sustained by Allan J. Pollack, based on alternative probable future events
described in the report, is between
$ 749,402 and $ 801,158 after tax on his adjusted income
or
$845,114 and $902,185 before tax on his adjusted income

III. CASE BACKGROUND AND STATISTICAL ASSUMPTIONS

Plaintiff Information

Plaintiff:
Injury date and age:
Residence:
Prior health:
Education:
Marital status:
Spouse:
Son:
Daughter:
Case Venue:

Allan J. Pollack; born July 13, 1973

August 6, 2006; 33.07 years
Phillipsburg, NJ
Good
Associate's degree
Married at the date of injury. Separated now
Natalie; born November 12, 1976
Abraham; born November 6, 1998
Elizabeth; born January 29, 2005
New Jersey

Relevant Statistical Information (as of date of injury)

Life expectancy1: an additional 46.40 years.

Expected total life span:
Statistical date of death:
Expected years to retirement2:
an additional 28.2 years
Statistical retirement age:
Date of statistical retirement:

79.46 years
December 31, 2053
61.27 years
October 19, 2034

Social Security Administration work life expectancy

The current Social Security full benefits age for retirement is sixty-seven (67). At the time of his
injury, Mr. Pollacks Social Security Administration full benefits work life expectancy was 32.93
years. He was expected to retire with full benefits at age 67 on July 13, 2040.

1Based on data contained in life tables of the National Vital Statistics Reports, Volume 56, No. 9, Table 1,
published by the National Center for Health Statistics (a division of the U.S. Department of Health and
Human Services), December 28, 2007.

2Based on median years to retirement tables for plaintiff's age, gender, education level, and labor-forceactivity statistical cohort, contained in article Median Years To Retirement and Worklife Expectancy for
the Civilian U.S. Population, authored by Hunt, Pickersgill and Rutemiller, (using 1998/99 BLS labor
force participation rates), Journal of Forensic Economics, 14(3), 2001, Appendix A, Tables 3-4, pp. 212213.

Intended work life expectancy

At the time of his injury, Mr. Pollack was planning to retire at age 67 on July 13, 2040
[SOURCE: Plaintiff]. His intended work life expectancy was 32.93 years.
Life expectancy
In order to measure plaintiffs earning capacity or expected earnings, a lost earnings evaluation
must take into account the probability of living, which is determined from life expectancy data.
At the time of his injury, Mr. Pollacks life expectancy was 46.40 years [SOURCE: National
Vital Statistics Reports, Volume 56, No. 9, Table 1, published by the National Center for Health
Statistics (a division of the U.S. Department of Health and Human Services), December 28,
2007]. He was expected to live up to December 31, 2053, at which time he would have been
79.46 years old.
Circumstances of injury
According to the amended complaint, on August 6, 2006, Mr. Pollack allegedly sustained injuries
as a result of a fall from a rock climbing wall belonging to an outdoor play set located at the
home of his brother-in-law. It is further reported that the incident took place while Mr. Pollack
was supervising his daughter who was on the deck of the same play set. The fall reportedly
occurred when he began climbing the wall to attend to his daughter, using the quickest way to
reach her. The Monster Castle II Supersized and Loaded play set was purchased from Swings
R-Us, LLC, a retailer operating a show room of play sets manufactured by Play-Set Systems,
Inc., distributed by Play-Set Direct, and assembled by an independent contractor, all defendants
in this matter.3
Pre-injury employment, compensation and benefits
From December 2003 to March 2006, Air Contracting, LLC in Manville, New Jersey, employed
Mr. Pollack as a Heating, Ventilation, and Air Conditioning (HVAC/R) technician. 4 His preinjury full year compensation for 2005 is summarized as follows:
3Amended Complaint filed on February 20, 2009 with the Bergen County Superior Court, pp. 2-5, and
Plaintiff's Answers to Form A Uniform Interrogatories, dated June 5, 2008, pp. 3-4

4ibid., p. 5 and p. 4, respectively, responses to Personal Injury Questionnaire formulated by Dr.

Grivoyannis, and State of New Jersey, Division of Temporary Disability Insurance, Notice of Eligible
Determinations, dated August 30, 2006.

2005 PRE-INJURY EARNINGS

PERIOD OF 52 WEEKS
HOURLY
WAGES

ANNUAL
W-2 GROSS
WAGES

ANNUAL
BASE
EARNINGS

ANNUAL
OVERTIME
EARNINGS

WEEKLY AVG
HOURS of
WORK

(d)=(b)-(c)

WEEKLY
AVG.HOURS
OVERTIME
(e) = [(d)/(a)x
(1+ 0.5)]/52

YEAR

(a)

(b)

(c)=(a )x40x52

2005

$15.00

$ 53,464

$ 31,200

$ 22,264

19.03

59.03

(f) = 40+(e)

SOURCE: Income tax statement and plaintiffs response to our questioner

The year before his injury, Mr. Pollack worked a regular forty (40) hours week plus an
average of nineteen (19) hours per week overtime.
Since March of 2006 and at the time of his injury, Kopyt Services, LLC in Flemington,
New Jersey, employed Mr. Pollack in the same capacity. His 23 weeks of pre-injury
compensation for 2006 is summarized as follows:

2006 PRE-INJURY EARNINGS

PERIOD OF 23 WEEKS
February 27, 2006 to August 6, 2006

PERIOD

HOURLY
WAGES

YTD PAYSTUB
GROSS
WAGES

2/27/2006
-8/6/2006

$24.50

$28,366

YTD
REGULAR
EARNING
S

YTD
OVERTIME
EARNINGS

AVERAGE
WEEKLY
HOURS OF
OVERTIME

AVERAGE
HOURS
OF WORK
PER WEEK

$21,216

$7,150

6.63

46.63

SOURCE: Bates 754 and our calculations

Mr. Pollacks annualized pre-injury compensation at Kopyt Services, LLC during the year of his
injury is summarized in the following table.
ANNUALIZED PRE-INJURY EARNINGS
PERIOD OF 52 WEEKS
January 1, 2006 to December 31, 2006

PERIOD

HOURLY
WAGES

ANNUAL
PAYSTUB
GROSS
WAGES

2006

$24.50

$64,131

ANNUAL
REGULAR
EARNING
S

ANNUAL
OVERTIME
EARNINGS

AVERAGE
WEEKLY
HOURS OF
OVERTIME

AVERAGE
HOURS
OF WORK
PER WEEK

$47,965

$16,166

6.34

46.34

During the year of his injury, Mr. Pollack was expected to work a regular forty (40) hour week
plus an average of 6.34 hours per week overtime. Overtime is an integral part of Mr. Pollacks
work. If he is on a job that needs to be finished, he needs to finish the job by working overtime
[SOURCE: Plaintiffs Deposition dated June, 29, 2009, page 147]. His overtime does not
depend on current economic conditions but on the maintenance of heating and air-conditioning
equipment [SOURCE: Plaintiffs Deposition dated June, 29, 2009, page 149].
Mr. Pollack received health, prescription, dental, and eyeglass/vision insurance coverage through
his employer5 estimated at 15% of gross earnings after adjusting for the contributions of the
employee.
Post-injury functionality, current employment status, compensation and benefits
Mr. Pollack reports that, prior to his injury, excepting a fracture of his left clavicle in July 1994
while he was in the army6; he enjoyed good health and actively participated in the labor force. As
a result of the incident on August 6, 2006, Mr. Pollack reportedly fractured his left rib, rotator
cuff, and clavicle. He remained out of work between August 6 and September 18, 2006. Mr.
Pollack underwent his first surgery, performed by Dr. Friedman on January 23, 2007, and did not
resume work until April 1, 2007. On November 13, 2007, Mr. Pollack had a second surgery
performed by Dr. Golomberk, and was not scheduled to return to work until the spring of 2008.
Mr. Pollack reports that, after his injury he lost his ability to complete many of his job
assignments. His surgeons, Dr. Friedman and Dr. Golomberk advised him to stop working in his
field and change occupation because of the amount of physical labor in what he was doing
[SOURCE: Plaintiffs Deposition, dated June 29, 2009, page 11].
Mr. Pollack further reports that in his daily job assignments he had to carry a 55 to 60 pounds
tool bag up a 32 step ladder to do repairs. He also had to do a lot of crawling and getting his
body in different positions to get to specific areas to repair compressors. He had to carry 15 to
200 pounds blower motors and 75 to 500 pound compressors to complete his daily tasks
[SOURCE: Plaintiffs Deposition, dated June 29, 2009, page 132]. Due to continued pain after
his injury, plaintiff also consulted with Dr. Gerald Williams at the Rothman Institute in
Philadelphia on April 8, 2008. Reportedly, Dr. Williams, along with Dr. Golomberk were both of
the opinion that Mr. Pollack should perhaps consider changing his present field of employment
to one not involving the same level of physical labor which may have contributed to his unabated
pain [SOURCE: Plaintiffs Answers to Form A Uniform Interrogatories]. Mr. Pollacks
subsequent work hours at Kopyt Services decreased after his injury from 55 to 60 hours a week
down to 35 to 40 hours a week [SOURCE: Plaintiffs Deposition, dated June 29, 2009, page 10].
5ibid., Questionnaire, p. 2.

6ibid., Interrogatories, p. 9, and Medical Record Consultation Sheet, Orthopedic Clinic, Darnall Army
Community Hospital, Fort Hood, Texas, dated July 6, 1994.

In response, Kopyt Services, LLC had to train other employees to perform Mr. Pollacks tasks
[SOURCE: Plaintiffs Deposition, dated June 29, 2009, page 148, and Plaintiffs response to our
Personal Injury Questionnaire]. The following table reports Mr. Pollacks actual gross wages
during the last four years, from 2005 to 2008, and reveals the declining average hours of work
per week after his injury in 2006.
PLAINTIFFS ACTUAL EARNINGS
PERIOD OF 4 YEARS
2005 to 2008

PERIOD

2005
2006
2007
2008

HOURLY
WAGE
RATE

ACTUAL
ANNUAL
W-2 GROSS
WAGES

ACTUAL
ANNUAL
REGULAR
EARNINGS

ACTUAL
ANNUAL
OVERTIME
EARNINGS

AVERAGE
WEEKLY
HOURS OF
OVERTIME

ACTUAL
AVERAGE
HOURS of WORK
PER WEEK

(a)

(b)

(c)=(a)x40x52

(d)=(b)-(c)

(e) = [(d)/(a)x
(1+ 0.5)]/52

(f) = 40+(e)

19.03
0.81
-7.33
-3.87

59.03
40.81
32.67
36.13

$15.00
24.50
27.50
28.50

$53,464
52,507
46,714
53,548

$31,200
50,960
57,200
59,280

$22,264
1,547
-10,486
-5,732

The above table shows the existence of impairment of plaintiffs earning capacity with
reasonable degree of economic certainty. Although plaintiffs hourly wage rate has been rising
from an average of $15 per hour in 2005 to $28.50 per hour in 2008, his annual gross wages have
been declining from $53,464 in 2005 to $46,714 in 2007 and then back up to $53,548 in 2008.
The reductions were because of plaintiffs reduced hours of work per week due to his injury in
2006. The increase in 2008 was due primarily to the increase in his hourly wage.
Plaintiff has been approved and has received state of New Jersey short-term disability benefits of
$488 per week. These benefits total $18,072 and are included in our calculations as mitigation to
plaintiffs economic damages.
Mr. Pollack continues to receive fringe benefits post-injury. These benefits are valued at 15% of
gross earnings and no loss of fringe benefits is assessed.
Future Employment
Mr. Pollack had plans on starting his own business in commercial refrigeration service work
[SOURCE: Plaintiffs response to our Personal Injury Questionnaire]. As a result of his 2006
injury his plans on starting his own business are destroyed. He is even forced to consider leaving
his present field of employment because it involves physical labor that becomes painful, because
of his injuries, and impossible [SOURCE: Deposition of Natalie A. Pollack, dated October 2,
2009, pages 33-34]. He believes that his transition to a public relations job would come naturally
to him because his current job is customer relations based. More specifically, he is contemplating
possibly joining the public relations company of his step-mother in New Jersey. [SOURCE:
Plaintiffs response to our Personal Injury Questionnaire]

Such a transition will have the following implications for Mr. Pollack. According to the Bureau
of Labor Statistics, public relations specialists engage in promoting or creating good will for
individuals, groups, or organizations by writing or selecting favorable publicity material and
releasing it through various communications media. May prepare and arrange displays, and make
speeches. There are no defined standards for entry into a public relations career. A college
degree in a communications-related field combined with public relations experience is excellent
preparation for public relations work. Many entry-level public relations specialists have a college
degree in public relations, journalism, advertising, or communication. [SOURCE:
http://www.bls.gov/oco/ocos086.htm].
Since Mr. Pollack has the personal connections in this industry, but he does not have the
academic training for this occupation, it is expected that his starting salary will be in the first 10 th
or 25th percentile of the wage scale for this occupation. The Bureau of Labor Statistics,
Occupational Employment and Wages, May 2008 report, estimate these percentiles and they are
summarized below.
Percentile Wage Estimates for [27-3031] Public Relations Specialists
Percentile
Hourly Wage
Annual Wage

10 %
$14.49
$30,140

25 %
$18.46
$38,400

[SOURCE: http://www.bls.gov/oes/2008/may/oes273031.htm#nat ]

For purposes of this report we will assume that Mr. Pollack will not transition to a public
relations job in the near future, because starting his new career at the 25 th percentile of the
compensation scale, by earning an annual wage of $38,400 will be catastrophic for his family
because he will not be able to support himself and his two young children. Mr. Pollacks original
plan of starting his own business is also not considered in this report.
For purposes of this report we will assume that Mr. Pollack will remain employed on a full-time
basis in his pre-injury occupation, and will not transition to any alternate career paths more
suitable to his post-injury state of health that he is currently contemplating.

Earning Capacity
An economic damage due to loss of wages or salary caused by injury is measured by an earning
capacity standard7. Earning Capacity is defined as "the ability to earn money" and "impairment
of earning capacity means the diminution or loss of the ability to earn money 8." The loss of the
ability to work is in itself a compensable element of damages. Earning capacity goes beyond
someones actual loss; even an unemployed, or sporadically employed, plaintiff is entitled to
recover for the deprivation of what he could have earned. Earning capacity could encompass
what a person could conceivably earn if such possibilities can be demonstrated with reasonable
certainty9. Past behavior is strong evidence of what a person was capable of doing in the past,
and absent identifiable changes, strong evidence of what that person would be capable of doing
in the future. Actual earnings data is often the starting point for measuring capacity.
For purposes of this report we will assess earning capacity impairment by comparing plaintiffs
actual pre-injury earnings with his post-injury earnings. The pre-injury earning capacity of Mr.
Pollack has been assessed to be $64,131 in 2006 dollars, which is equal to Mr. Pollacks
annualized pre-injury earnings during the year of his injury.
Household Services
Prior to his accident, Mr. Pollack did share significantly in household services with his spouse
such as mowing the lawn, weed-whacking, house maintenance and up keeping. Mrs. Pollack
reports that, as a result of his injury, the plaintiff is unable to perform such household tasks
[SOURCE: Deposition of Natalie A. Pollack, dated October 2, 2009, pages 50-53].
A number of studies have been made over the years that measure the value of services and the
hours devoted to each service in the average family. These studies involve preparing a list of
services and a time study sheet that is then taken into a sample of homes of various sizes and
7Stephen M. Homer and Frank Slesnick, The Valuation of Earning Capacity: Definition, Measurement
and EvidenceJournal Of Forensic Economics 12(1), 1999, pp. 13--32

8Minzer, M., J. Nates, C. Kimball, D. Axelrod, and R. Goldstein, Damages ~n Tort Actions; August 1991
Cumulative Supplement, Volume 2, by Deitz and Sokol, M., New York, NY: Matthew Bender, 1991, p. 31.

9 See: (Fitzpatrick v. United States, 1991, p. 1038), (Courtney v. Allied Filter Engineering, Inc., 1989, p.
959), and (Walker v. Bankston, 1990, p. 697)

used to record precisely the type of work and the time spent in accomplishing it. The results of
these studies are summarized below:
Hours per Week Spent in Household Work
Researcher
Sanik
Bryant
Sanik
Hunt/Kiker
Peskin
Walker
Sanik
Gauger
Average

Husband
13.00
12.75
14.16
10.86
15.12
11.20
11.90
10.50
12.40

Wife
43.00
34.85
41.12
44.46
33.77
51.10
47.60
39.90
41.52

By combining the results of these eight studies, we see that the results are reasonably close.
Accordingly, an average has been taken of all the studies to represent the time spent, on the
average, by the husband and the wife in household work. A representative wife spends on
average 41.52 hours per week (5.93 hours per day) in household work and a representative
husband spends 12.40 hours per week (1.77 hours per day).
It is assumed in this appraisal report, very conservatively, that before his injury Mr. Pollack
performed household services averaging seven point five (7.5) hours per week, or 1.07 hours per
day. This estimate is only sixty percent (60%) of the national average of household services
performed by a married male in the United States and we refer to it as the lowest bound of this
estimate.
Years of Healthy Life for Performance of Household Services:
As a person ages, it is quite common to find that s/he can no longer do the same amount of work
as they could in younger, healthier years. This seems true for work outside the home as well as
for work inside the home and for the family. As a result, it is not reasonable to assume that a
person would perform services right to the end of life expectancy. In order to account for the
likelihood of reduced performance of household services, as age progresses, we reduce the
annual hours of household services by 11.3% between the ages of sixty-five (65) and seventyfive (75) and by 30.7% after age seventy-five (75). [SOURCE: U.S. Department of Commerce,
Current Population Reports, Disability, Functional, Limitation, and Health Insurance Coverage:
1984/85, Household Economic Studies, Series P-70, No. 8, Table G, p. 8.] This adjustment yields
the following number of hours of household services performed by plaintiff during his life
expectancy.

Age
Up to 65
65 to 75
Over 75

Hour per Day

1.07
0.95
0.74

Hours per Week

7.5
6.7
5.2

Hours per Year

390
346
270

Unreimbursed Medical Expenses

Mr. Pollack incurred out-of-pocket medical expenses related to the treatment of his injury. He
had to cover co-payments for prescription medications and for doctors visits. He also had to pay
tolls when he was going to his physical therapist in Pennsylvania three times a week.

CALCULATION OF ECONOMIC DAMAGES

The date of the anticipated trial establishes the present value date for plaintiffs economic
damages. Any losses to that date are past losses and are not compounded to present value, while
losses after that date must be forecast and discounted.
The pecuniary value of economic damages resulting from the injuries of Mr. Pollack may be
estimated by calculating the following components of loss:
1. Loss of Net Earnings in Prior Years (Back Pay Losses)
2. Loss of Net Earnings in Future Years (Front Pay Losses)
3. Household services in Prior Years (Back Pay Losses)
4. Household services in Future Years (Front Pay Losses)
4. Un-reimbursed medical expenses in Prior Years (Back Pay)
5. Future medical expenses in connection with the injury (Front Pay)
Each of these loss components is analyzed separately in the following sections of this appraisal
report.
IV. ECONOMIC LOSS CALCULATIONS
As a result of his alleged injury, plaintiff has lost a stream of income, and he has been required to
incur and pay out of pocket medical expenditures. In this section, pecuniary losses to Mr. Pollack
are calculated in detail.
We first establish a baseline level of annual earnings based on plaintiff's available earnings
history or line of occupation. We then make any necessary adjustments to estimated gross
earnings by taking into consideration those factors that would impact plaintiff's earnings. We
finally project plaintiff's adjusted net earnings through the present time and, subsequently, into
the future by applying the appropriate annual growth rate.

Baseline Earnings
Mr. Pollacks earnings history at the year of his injury is presented in the table that follows.
Year
2005
2006

Employer
Air Contracting, LLC
Kopyt Services, LLC

Wage Rate

Annual Earnings

$15.00
$24.50

$53,465
$64,131

Based on the annualized pre-injury earnings at the time of his injury on August 6, 2006, Mr.
Pollacks baseline earnings are established at his earning capacity of $64,131 in 2006 dollars.
Estimated Gross Earnings Adjustments
Typical adjustments are made for the likelihood of becoming unemployed during one's worklife,
accounting for fringe benefits, federal and state tax liabilities, and job maintenance expenses.
Unemployment Adjustment
This downward adjustment is necessary since worklife expectancy is not typically reduced to
include participants' time out of the active labor force due to unemployment. Although
unemployment impacts all labor sectors, different statistical cohorts may experience different
rates. This is an average rate over a time period comparable to the number of years until
plaintiff's projected retirement, in this case, a period of approximately 23 years. Thus, between
1986 and April 2009, males in Mr. Pollacks age cohort experienced an average unemployment
rate of about 5% per annum. [SOURCE: U.S. Department of Labor, Bureau of Labor Statistics,
Labor Force Statistics from the Current Population Survey, Unemployment Rate,
http://www.bls.gov/cps.] However, since many workers recover part of their lost earnings
through state unemployment compensation benefits, we lower this rate to 3.8%.
Income Tax Adjustment
This downward adjustment accounts for the reduction in income due to the potential payment of
federal and state income tax liabilities. Tax burdens can vary significantly from taxpayer to
taxpayer and to accurately estimate income taxes without extensive knowledge of the taxpayer's
profile can be a daunting task. By analyzing Mr. Pollacks 2005 to 2008 federal and state tax
returns, we calculated an effective combined federal and state tax rate of 14 %. [SOURCES:
Plaintiffs Federal Income Tax Returns, State of New Jersey Resident Income Tax Returns, W-2
Wage and Tax Statements, 2005-2008, and 2006 pay stubs].
Fringe Benefits Adjustment
Plaintiff reports receiving health insurance, prescription coverage, dental insurance, an
eyeglass/vision plan through his employers. Mr. Pollack continues to receive these fringe
benefits post-injury. Due to the prospective nature of insurance we value fringe benefits at 15 %
of gross earnings and we dont assess any loss of fringe benefits in past years and future years.
Loss of Net Earnings in Prior Years

(Back Pay Losses)

This loss component consists of the income Mr. Pollack most likely would have earned, had he
not been injured, from August 6, 2006, through the anticipated date of trial.
The loss in prior years is assumed to begin on August 6, 2006 (date of Mr. Pollacks injury) and
continue through June 30, 2010, the anticipated date of trial. The basis for calculating plaintiffs
net earnings loss is the difference between the gross income he would have most likely earned
had he not been injured and what can now earn after his injury.
Based upon the information previously discussed in the Background Facts and Assumptions
section of this report, plaintiffs earnings potential in his pre-injury condition was $64,131 in
2006. To project Mr. Pollacks earnings potential through the date of trial, we apply an annual
growth rate of eight percent (8%) in prior years, reflecting the actual average annual growth rate
in his current employment from 2006 to 2008, as summarized in the following table.
AVERAGE ANNUAL GROWTH RATE
OF PLAINTIFFS ACTUAL HOURLY WAGE RATE
YEAR
2006
2008
Average Annual Growth Rate

ACTUAL HOURLY WAGE RATE

24.50
28.50
8.16 %

To project Mr. Pollacks earnings potential from the date of trial through the date of his
retirement, we apply a very conservative annual growth rate of four percent (4%) in future years
reflecting average wage trends in the economy in recent years. [SOURCE: Hours and earnings
in private nonagricultural industries, 1960-2007, Economic Report of the President, February 11,
2008, Table B-47, http://www.gpo.access.gov/eop/tables08.html, percentage calculated by
author.]
Lost gross earnings are adjusted downwards by 3.8% to take into account the likelihood of
periods of unemployment during a person's expected working life.
Gross earnings losses are not adjusted upwards to take into account the loss of fringe benefits. In
this appraisal, as noted previously, Mr. Pollacks fringe benefit package in his former and current
employment is valued at 15 % percent of gross earnings and our adjustment rate is zero percent
(0%).
The preceding adjustments are detailed in the following tables.
Projected Potential Earnings of the Plaintiff Date of Injury to Trial

Year
Ending
12/31/2006
12/31/2007
12/31/2008
12/31/2009
6/30/2010

Part
of the
Year
0.40
1.00
1.00
1.00
0.50

Years
from Trial
6/30/2010
3.50
2.50
1.49
0.50
0.00

Gross
Potential
Earnings
25,899
74,803
80,787
87,250
47,115

Unempl
oyment
Adjustm
ent
984
2,843
3,070
3,316
1,790

Fringe
Benefits
0
0
0
0
0

Income
Tax
Adjustm
ent
3,488
10,074
10,880
11,751
6,345

Plaintiff
Would
Have
Earned
21,427
61,886
66,837
72,184
38,979

Actual Earnings of the Plaintiff Date of Injury to Trial

Year
Ending
12/31/2006
12/31/2007
12/31/2008
12/31/2009
6/30/2010

Part
of the
Year
0.40
1.00
1.00
1.00
0.50

Years
from
6/30/2010
3.50
2.50
1.49
0.50
0.00

Gross
Actual
Earnings
$21,003
46,714
53,548
63,195
34,125

Unempl
oyment
Adjustm
ent
$0
0
0
0
0

Fringe
Benefits
$0
0
0
0
0

Income
Tax
Adjustm
ent
$2,940
6,540
7,497
8,847
4,778

Plaintiff
Has
Actually
Earned
$18,062
40,174
46,051
54,348
29,348

Evaluation of Pre-Trial Lost Net Earnings by Year

Year
Ending
12/31/2006
12/31/2007
12/31/2008
12/31/2009
6/30/2010

Part of
the Year
0.40
1.00
1.00
1.00
0.50

Years
from
6/30/2010
3.50
2.50
1.49
0.50
0.00

Plaintiff Would
Have Earned
$21,427
61,886
66,837
72,184
38,979

Plaintiff Has
Actually
Earned
$18,062
40,174
46,051
54,348
29,348

Lost Net
Earnings
$3,365
21,712
20,786
17,836
9,631

Cumulative
Loss of Net
Earnings
$3,365
25,077
45,862
63,698
73,329

The calculations cited in the previous three tables indicate that the total value of plaintiffs loss
of past net earnings until June 30, 2010 amounts to $73,329. This amount should be augmented
by the amount of interest necessary to compensate for the lost purchasing power during the

period the plaintiff did not have constructive use of the money. In the absence of specific
instructions, it is assumed that the court will undertake the calculation of this interest.
It is noted that plaintiffs past-lost earnings (lost back pay) of $73,329 are after tax calculations.
Pre-tax lost past earnings can be calculated simply by comparing the Gross Potential Earnings
and Gross Actual Earnings in the above charts. This calculation, adjusted for unemployment,
becomes $85,267.
Plaintiff has been approved and has received state of New Jersey short-term disability benefits
that total $18,072. In our calculations we treat these benefits as mitigation to plaintiffs economic
damages. When we subtract those benefits from plaintiffs past lost earnings we assess his lost
back pay after tax to be $55,257 and his lost back pay before tax to be $67,195.

Loss of Future Net Earnings

(Front Pay Losses)
The loss in future years is assumed to begin on July 1 st, 2010 and continue for 30.53 years to Mr.
Pollacks 67th birthday on July 13, 2040. The basis for calculating plaintiffs net earnings loss in
the future is the difference between the gross income he would have most likely earned had he
not been injured and what can now earn after his injury. Plaintiffs 2010 gross earnings base in
his pre-injury condition is estimated to be $87,250 and in his current condition to be $63,195, if
he stays in his current occupation. To estimate future annual values of Mr. Pollacks gross
earnings, we apply a growth rate of 4.00% which is consistent with future expected annual wage
growth economy-wide. [SOURCE: Principal Economic Assumptions, 2008Annual Report to the
Board of Trustees of the Federal Old-age and Survivors Insurance and Disability Insurance
Trust Funds, Table V.B1, http://www.ssa.gov/OACT/TR/TR08/V_economic.html#wp188118.]
This is a very conservative rate compared with the eight percent (8%) actual average annual
growth rate in plaintiffs current employment from 2006 to 2008.
All adjustments of gross earnings discussed in the previous section continue to apply and all
annual earnings losses are to be expressed in present dollar value terms. To calculate the present
value of all annual earnings losses, we have to select an appropriate discount rate. The tax-free
return on high-grade municipal bonds serves as the basis of our discount rate. Over the past 5
years, the yield on high-grade municipal bonds of varying maturities has averaged 4.4%. Over
the past 10 years, it has averaged 4.88%, and over the past 20 years, the yield has averaged
5.57%. [SOURCE: Bond Yields and Interest Rates, 1929-2008, Economic Report of the
President, February 2009, Table B-73, http://www.gpoaccess.gov/eop/ tables09.html.] In light of
historical municipal bond returns and current financial market trends, we select 4.75% as the
appropriate discount rate.
The calculated present value of all annual earnings losses represents the amount of the necessary
award that is required today to compensate the plaintiff for his losses of earnings in the future.
The goal of a loss award is to provide the plaintiff now with a sum of money, which, if invested

safely in a portfolio of financial instruments, would allow the individual to draw out a stream of
earnings year by year that was just large enough to replace the losses projected for each
succeeding year.
We note that interest earnings from any award in this case will be subject to future income
taxation in each subsequent year. This poses a problem since the award will be, in effect, taxed
indirectly when no provision has been made for this tax burden. Thus, it is assumed that any
lump-sum award will be used to purchase investment instruments that will provide a flow of
nontaxable payments to plaintiff.
The present value of plaintiffs future loss of earnings [front-pay] after taxes is found to be
$514,610, if plaintiff retires at age 65,and$547,265, if plaintiff retires at age 67. Plaintiffs future
losses are calculated as follows:

Projected Future Potential Earnings of the Plaintiff if Not Injured

Trial to Retirement
Part
Year
Ending
12/31/2010
12/31/2011
12/31/2012
12/31/2013
12/31/2014
12/31/2015
12/31/2016
12/31/2017
12/31/2018
12/31/2019
12/31/2020
12/31/2021
12/31/2022
12/31/2023
12/31/2024
12/31/2025
12/31/2026
12/31/2027
12/31/2028
12/31/2029
12/31/2030
12/31/2031
12/31/2032
12/31/2033
12/31/2034
12/31/2035
12/31/2036
12/31/2037
7/13/2038
12/31/2038
12/31/2039
7/13/2040

Years

Gross

Age

of the
Year

6/30/2010

Potential
Earnings

Unemployment
Adjustment

37.47
38.47
39.47
40.47
41.47
42.47
43.47
44.47
45.47
46.47
47.47
48.47
49.47
50.47
51.47
52.47
53.47
54.47
55.47
56.47
57.47
58.47
59.47
60.47
61.47
62.47
63.47
64.47
65.00
65.47
66.47
67.00

0.50
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
0.54
0.46
1.00
0.53

0.50
1.50
2.51
3.50
4.50
5.50
6.51
7.50
8.50
9.50
10.51
11.50
12.50
13.50
14.51
15.50
16.50
17.50
18.51
19.50
20.50
21.50
22.51
23.50
24.50
25.50
26.51
27.50
28.04
28.50
29.50
30.04

$45,370
94,370
98,145
102,070
106,153
110,399
114,815
119,408
124,184
129,152
134,318
139,690
145,278
151,089
157,133
163,418
169,955
176,753
183,823
191,176
198,823
206,776
215,047
223,649
232,595
241,898
251,574
261,637
145,736
126,041
282,987
155,982

$1,724
3,586
3,729
3,879
4,034
4,195
4,363
4,538
4,719
4,908
5,104
5,308
5,521
5,741
5,971
6,210
6,458
6,717
6,985
7,265
7,555
7,857
8,172
8,499
8,839
9,192
9,560
9,942
5,538
4,790
10,754
5,927

From

Lost

Income

Fringe
Benefits

Tax
Adjustment

Plaintiff
Would
Have
Earned

$0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

$6,110
12,710
13,218
13,747
14,297
14,869
15,463
16,082
16,725
17,394
18,090
18,813
19,566
20,349
21,163
22,009
22,889
23,805
24,757
25,748
26,777
27,849
28,963
30,121
31,326
32,579
33,882
35,237
19,628
16,975
38,113
21,008

$37,536
78,074
81,197
84,445
87,823
91,336
94,989
98,789
102,740
106,850
111,124
115,569
120,191
124,999
129,999
135,199
140,607
146,231
152,080
158,164
164,490
171,070
177,913
185,029
192,430
200,127
208,133
216,458
120,570
104,276
234,121
129,047

Projected Future Actual Earnings of the Plaintiff

if he Remains in the Same Occupation with his Injury:
Date of Trial to Retirement
Part

Years

Gross

Ending

Age

Year

12/31/2009

Earnings

Unemploy
-ment
Adjustme
nt

12/31/2010

37.47
38.47
39.47
40.47
41.47
42.47
43.47
44.47
45.47
46.47
47.47
48.47
49.47
50.47
51.47
52.47
53.47
54.47
55.47
56.47
57.47
58.47
59.47
60.47
61.47
62.47
63.47
64.47
65.00
65.47
66.47
67.00

1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
0.54
0.46
1.00
0.54

0.50
1.50
2.51
3.50
4.50
5.50
6.51
7.50
8.50
9.50
10.51
11.50
12.50
13.50
14.51
15.50
16.50
17.50
18.51
19.50
20.50
21.50
22.51
23.50
24.50
25.50
26.51
27.50
28.04
28.50
29.50
30.04

31,598
68,352
71,086
73,930
76,887
79,962
83,161
86,487
89,947
93,544
97,286
101,178
105,225
109,434
113,811
118,364
123,098
128,022
133,143
138,469
144,007
149,768
155,758
161,989
168,468
175,207
182,215
189,504
105,557
91,291
204,967
114,170

1,201
2,597
2,701
2,809
2,922
3,039
3,160
3,287
3,418
3,555
3,697
3,845
3,999
4,158
4,325
4,498
4,678
4,865
5,059
5,262
5,472
5,691
5,919
6,156
6,402
6,658
6,924
7,201
4,011
3,469
7,789
4,338

Year

12/31/2011
12/31/2012
12/31/2013
12/31/2014
12/31/2015
12/31/2016
12/31/2017
12/31/2018
12/31/2019
12/31/2020
12/31/2021
12/31/2022
12/31/2023
12/31/2024
12/31/2025
12/31/2026
12/31/2027
12/31/2028
12/31/2029
12/31/2030
12/31/2031
12/31/2032
12/31/2033
12/31/2034
12/31/2035
12/31/2036
12/31/2037
7/13/2038
12/31/2038
12/31/2039
7/13/2040

of the

From

Actual

Lost

Income

Fringe

Tax

Plaintiff
Will
Actually

Benefits

Adjustment

Earn

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

4,256
9,206
9,574
9,957
10,355
10,769
11,200
11,648
12,114
12,599
13,103
13,627
14,172
14,739
15,328
15,941
16,579
17,242
17,932
18,649
19,395
20,171
20,978
21,817
22,689
23,597
24,541
25,522
14,216
12,295
27,605
15,376

26,141
56,549
58,811
61,163
63,610
66,154
68,801
71,553
74,415
77,391
80,487
83,706
87,055
90,537
94,158
97,925
101,842
105,915
110,152
114,558
119,140
123,906
128,862
134,017
139,377
144,952
150,750
156,780
87,329
75,527
169,574
94,455

Evaluation of Future Lost Earnings by Year if Plaintiff Remains in Same Occupation

Year
Ending
12/31/2010
12/31/2011
12/31/2012
12/31/2013
12/31/2014
12/31/2015
12/31/2016
12/31/2017
12/31/2018
12/31/2019
12/31/2020
12/31/2021
12/31/2022
12/31/2023
12/31/2024
12/31/2025
12/31/2026
12/31/2027
12/31/2028
12/31/2029
12/31/2030
12/31/2031
12/31/2032
12/31/2033
12/31/2034
12/31/2035
12/31/2036
12/31/2037
7/13/2038
12/31/2038
12/31/2039
7/13/2040

Age

Part
of the
Year

Years
from
8/1/2009

Would
Have
Earned

Plaintiff
Would
Actually
Earn

37.47
38.47
39.47
40.47
41.47
42.47
43.47
44.47
45.47
46.47
47.47
48.47
49.47
50.47
51.47
52.47
53.47
54.47
55.47
56.47
57.47
58.47
59.47
60.47
61.47
62.47
63.47
64.47
65.00
65.47
66.47
67.00

1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
0.54
0.46
1.00
0.53

0.50
1.50
2.51
3.50
4.50
5.50
6.51
7.50
8.50
9.50
10.51
11.50
12.50
13.50
14.51
15.50
16.50
17.50
18.51
19.50
20.50
21.50
22.51
23.50
24.50
25.50
26.51
27.50
28.04
28.50
29.50
30.04

37,536
78,074
81,197
84,445
87,823
91,336
94,989
98,789
102,740
106,850
111,124
115,569
120,191
124,999
129,999
135,199
140,607
146,231
152,080
158,164
164,490
171,070
177,913
185,029
192,430
200,127
208,133
216,458
120,570
104,276
234,121
129,047

26,141
56,549
58,811
61,163
63,610
66,154
68,801
71,553
74,415
77,391
80,487
83,706
87,055
90,537
94,158
97,925
101,842
105,915
110,152
114,558
119,140
123,906
128,862
134,017
139,377
144,952
150,750
156,780
87,329
75,527
169,574
94,455

Lost
Net
Income

Net Present
Value
of Loss

Cumulative
Net Present
Value
of Loss

11,394
21,525
22,386
23,281
24,213
25,181
26,188
27,236
28,325
29,458
30,637
31,862
33,137
34,462
35,841
37,274
38,765
40,316
41,929
43,606
45,350
47,164
49,051
51,013
53,053
55,175
57,382
59,677
33,241
28,749
64,547
34,592

11,131
20,075
19,929
19,787
19,646
19,506
19,364
19,226
19,089
18,953
18,816
18,682
18,549
18,416
18,283
18,152
18,023
17,894
17,765
17,638
17,512
17,387
17,261
17,138
17,016
16,895
16,772
16,653
9,050
7,659
16,416
8,582

11,131
31,206
51,135
70,922
90,568
110,074
129,438
148,665
167,754
186,707
205,523
224,205
242,753
261,170
279,452
297,605
315,628
333,522
351,287
368,925
386,437
403,825
421,086
438,224
455,240
472,135
488,907
505,560
514,610
522,269
538,685
547,267

It is noted that plaintiffs future lost earnings (lost front pay) of $514,610 and or $547,267 are
after tax calculations. Pre-tax lost future earnings can be calculated simply by comparing the
Gross Potential Earnings and Gross Actual Earnings in the above charts. This calculation,
adjusted for unemployment, shows the following: $598,384 and or $636,357 respectively.
Wage Growth Over Time
It may not seem plausible that Mr. Pollack whose net earnings are $75,072 today would earn
$234,121 thirty years from now. However, thirty years ago, it also did not seem plausible that the
average annual compensation for many professions would double or even triple over the same
period of time. The table below helps us understand the impact of time on wages. It shows
extrapolations of wages from the Bureau of Labor Statistics for different occupations in the state
of New Jersey all of which have more than doubled or tripled over a 30-year span in the past.
Annual Mean Wage Growth for Selective Occupations in New Jersey
Over a 30-year Period
Stat Occupation
e
Code
Occupational Title
History Teachers,
NJ
25-1125 Postsecondary
NJ
25-4021 Librarians
NJ
29-1051 Pharmacists
NJ
29-2021 Dental Hygienists
NJ
33-2011 Fire Fighters
NJ
47-2111 Electricians
NJ
47-2121 Glaziers
NJ
49-9043 Maintenance Workers, Machinery

1978
$28,984
30,538
24,022
30,429
27,416
29,102
20,094
21,472

Annual Mean Wage

1988
1998
2008
$56,55
$40,485
0 $78,990
38,639 48,890
61,860
38,943 63,130 102,340
40,824 54,770
73,480
37,404 51,030
69,620
37,573 48,510
62,630
27,756 38,340
52,960
26,864 33,610
42,050

Source: website: http://stats.bls.gov/oes/

The reason for such wage increases is attributed to increases in the rate of inflation and the rise in
worker productivity over time. The table below helps us understand the impact of inflation on
commodity prices. It shows historic data from the Bureau of the Census for the market prices of
different commodities in the state of New Jersey all of which have more than doubled or tripled
over a 30-year span in the past. When consumer items become more expensive, workers have to
get paid more to pay their bills (to afford the same items they could buy with their income
before). If they dont get an increase in their income, to compensate them for inflation, they will
quit their job and try to get a better one. As a result, employers have to keep increasing the
compensation of their employees before they will loose them to their competition. But that
increases their operating cost! In order to maintain their profit margins they have to increase
their prices. This is how we get the vicious spiral of wage-price increases over time. It is easy to
see the impact of inflation on the prices of consumer items from the historic prices of selective
items in the following table:

Price Inflation of Selected Consumer Items in New Jersey

Over a 30-year Period
Stat
e

Survey Items in the Daily

Record

County

NJ
NJ
NJ
NJ
NJ

Morris
Morris
Morris
Morris
Morris

Median Home Values

Median Gross Monthly Rents
Orange Juice half gallon carton
Coffee /lb
Newspaper

NJ

Morris

New Automobiles

Cost in Morris County New Jersey

1970
1980
1990
2000
$162,30 $170,80
$23,400 $60,200
0
0
126
270
592
751
0.39
1.19
2.00
0.76
4.00
0.15
0.25
0.35
19,999^
3,176* 7,727** 14,995^
^

SOURCES:
www.census.gov/hhes/www/housing/census/historic/values.html;
http://www.gti.net/mocolib1//prices/1970.html
* 1970 Ford Galaxie 500;
** 1980 Buick Grand Prix;
^ 1990 Plymouth Voyager SE Minivan;
^^ 2000 Buick Regal

The sale price of the median home in Morris County New Jersey was $23,400 in 1970 and
$170,800 thirty years later in the year 2000. Likewise the price of a pound of coffee increased
from 76 cents in 1970 to $4.00 a pound thirty years later in the year 2000. This price inflation
resulted into a wage increase from $28,984 in 1978 to $78,990 in 2008 for History Teachers and
from $27,416 in 1978 to $69,620 in 2008 for Fire Fighters in the State of New Jersey.
Loss of Household Services
The services performed by homemakers are not sold in the marketplace, but this does not imply
they are not valuable. One method to place a value on homemakers services is to measure how
much a homemakers services would cost if they were to be individually purchased in the
marketplace.
As stated in the Background Facts and Assumption section, it is assumed that prior to being
injured, Mr. Pollack provided household services averaging 1.07 hours per day. It is further
assumed that as a result of his August 6, 2006 injury plaintiff has suffered a loss of his former
ability to provide household services. The monetary value of these services is assessed at $11.62
in 2006 dollars. [SOURCE: The Dollar Value of a Day, Expectancy Data Corp., Shawnee Mission, KS, and U.S.
Department of Labor, Bureau of Labor Statistics, Monthly Labor Review, August 2008, Table 14, p. 71,
http://www.bls.gov/opub/mlr/2008/08/cls0808.pdf.] To obtain corresponding values in the future, an

annual growth of 3.8 % is used to compensate for inflation and productivity.

The pecuniary value of the household services that would have been provided through June 30,
2010 is provided in the table that follows.

Lost Household Services of the Plaintiff Date of Injury to Trial

Year
Ending
12/31/2006
12/31/2007
12/31/2008
12/31/2009
6/30/2010

Part
of the
Year
0.40
1.00
1.00
1.00
0.50

Years
From
Trial
6/30/2010
3.50
2.50
1.49
0.50
0.00

Hours
Per Year
390
390
390
390
390

Hourly
Rate
11.62
12.06
12.52
13.00
13.49

Monetized
Value
of Annual
Loss
1,813
4,704
4,883
5,068
2,630

Cumulative
Value
of Loss
1,813
6,517
11,399
16,468
19,098

Lost Household Services of the Plaintiff in Future Years

The loss of household services in future years begins on July 1, 2010 and extends through
December 31, 2052, Mr. Pollacks statistical life expectancy. To obtain the present value of this
loss a discount rate of 4.75% is applied to the estimated annual household services loss over the
remaining years of his statistical life expectancy. This gives the present value of future
household services losses to Mr. Pollack as a result of his impairment. The total value of
household services lost in future years is calculated as follows:
Lost Household Services of the Plaintiff Date of Trial to Statistical Date of Death
Year
Ending
12/31/2010
12/31/2011
12/31/2012
12/31/2013
12/31/2014
12/31/2015
12/31/2016
12/31/2017
12/31/2018
12/31/2019
12/31/2020
12/31/2021
12/31/2022
12/31/2023
12/31/2024
12/31/2025

Age

Part
of the
Year

37.47
38.47
39.47
40.47
41.47
42.47
43.47
44.47
45.47
46.47
47.47
48.47
49.47
50.47
51.47
52.47

0.50
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00

Years
From
6/30/2010

Hours
Per Year

Hourly
Rate

Value of
Annual
Loss

Present
Value of
Loss

Cumulative
PV of
Loss

0.50
1.50
2.51
3.50
4.50
5.50
6.51
7.50
8.50
9.50
10.51
11.50
12.50
13.50
14.51
15.50

390
390
390
390
390
390
390
390
390
390
390
390
390
390
390
390

$13.49
14.00
14.53
15.09
15.66
16.25
16.87
17.51
18.18
18.87
19.59
20.33
21.10
21.91
22.74
23.60

$2,630
5,461
5,668
5,884
6,107
6,339
6,580
6,830
7,090
7,359
7,639
7,929
8,231
8,543
8,868
9,205

$2,570
5,093
5,046
5,001
4,955
4,911
4,866
4,822
4,778
4,735
4,692
4,649
4,607
4,565
4,524
4,483

$2,570
7,663
12,709
17,709
22,665
27,575
32,441
37,263
42,041
46,776
51,467
56,116
60,723
65,289
69,813
74,295

12/31/2026
12/31/2027
12/31/2028
12/31/2029
12/31/2030
12/31/2031
12/31/2032
12/31/2033
12/31/2034
12/31/2035
12/31/2036
12/31/2037
7/13/2038
12/31/2038
12/31/2039
12/31/2040
12/31/2040
12/31/2041
12/31/2042
12/31/2043
12/31/2044
12/31/2045
12/31/2046
12/31/2047
7/13/2048
12/31/2048
12/31/2049
12/31/2050
12/31/2051
12/31/2052

53.47
54.47
55.47
56.47
57.47
58.47
59.47
60.47
61.47
62.47
63.47
64.47
65.00
65.47
66.47
67.47
67.47
68.47
69.47
70.47
71.47
72.47
73.47
74.47
75.00
75.47
76.47
77.47
78.47
79.47

1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
0.54
0.46
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
0.54
0.46
1.00
1.00
1.00
1.00

16.50
17.50
18.51
19.50
20.50
21.50
22.51
23.50
24.50
25.50
26.51
27.50
28.04
28.50
29.50
30.51
30.51
31.50
32.50
33.50
34.51
35.50
36.50
37.50
38.04
38.51
39.50
40.50
41.50
42.51

390
390
390
390
390
390
390
390
390
390
390
390
390
346
346
346
346
346
346
346
346
346
346
346
346
270
270
270
270
270

24.50
25.43
26.40
27.40
28.44
29.52
30.64
31.81
33.02
34.27
35.57
36.93
38.33
38.33
39.78
41.30
42.87
44.49
46.19
47.94
49.76
51.65
53.62
55.65
57.77
57.77
59.96
62.24
64.61
67.06

9,555
9,918
10,295
10,686
11,092
11,513
11,951
12,405
12,876
13,366
13,874
14,401
8,006
6,143
13,766
14,289
14,832
15,395
15,980
16,588
17,218
17,872
18,551
19,256
10,705
7,225
16,190
16,805
17,444
18,107
TOTAL

4,442
4,402
4,362
4,322
4,283
4,245
4,206
4,168
4,130
4,093
4,055
4,018
2,180
1,636
3,501
3,469
3,601
3,568
3,536
3,504
3,472
3,440
3,409
3,379
1,832
1,210
2,589
2,565
2,542
2,519
$176,973

78,737
83,140
87,501
91,824
96,107
100,351
104,557
108,725
112,855
116,947
121,002
125,021
127,201
128,837
132,338
135,807
139,408
142,976
146,512
150,016
153,488
156,928
160,337
163,716
165,548
166,758
169,347
171,912
174,454
$176,973

Unreimbursed Medical Expenses in Prior Years

Mr. Pollack incurred $2,561.24 out-of-pocket medical expenses related to the treatment of his
injury in prior years. He had to cover co-payments for prescription medications and for doctors
visits. He also had to pay tolls when he was going to his physical therapist three times a week.
These expenses are documented below.
Orthopedic Associates of Lehigh
Bates
Date
Amount

Delaware River Bridge Toll

Bates
Date
Amount

Phillipsburg Pharmacy
Bates
Date
Amount

419

08/24/06

30

431

02/21/07

0.75

433

419

09/13/06

30

431

02/23/07

0.75

406

607

11/15/06

30

431

02/27/07

0.75

401

431

12/13/06

30

431

03/06/07

0.75

422

418

10/11/06

30

609

03/08/07

0.75

422

418

11/16/06

30

430

02/02/07

0.75

719

418

01/30/07

30

611

03/15/07

0.75

721

608

01/10/07

30

612

03/20/07

0.75

723

432

02/23/07

90

622

12/11/07

0.75

731

432

02/27/07

30

618

11/20/07

0.75

725

433
433
609
610
611
612

03/02/07
03/06/07
03/08/07
03/13/07
03/15/07
03/20/07

30
30
30
30
30
90

Total

$7.50

Warren Radiology Associates

Bates
Date
Amount

Hillcrest Emergency Services

Bates
Date
Amount

614

03/22/07

30

732

06/06/08

7.97

405

616

05/14/07

30

733

03/18/08

34.00

736

617

08/29/07

30

734

03/18/08

594.00

410

619
620

11/27/07
11/30/07

30
30

735
403

08/29/08
08/14/06

34.00
14.37

11/12/0
6
11/20/0
6
12/31/0
6
11/16/0
6
01/23/0
7
12/31/0
7
05/14/0
7
04/08/0
8
08/06/0
8
04/11/0
8
Total

08/08/0
6
01/12/0
7
12/10/0
6
Total

18.53
18.53
85.00
18.53
24.92
10.00
10.00
20.00
12.89
10.00
$228.4
0

70
129
129
$328.0
0

621
622
623
624
406
406
423
625
722
730
729

12/05/07
12/11/07
01/28/08
03/28/08
11/17/06
11/20/06
08/18/06
04/08/08
05/12/08
05/08/09
05/19/09
Total

30
30
30
30
30
30
30
30
30
50
40
$1,110

Total

$684.34

Orthopedic Associates Lehigh

Bates
Date
Amount

708
711
724

06/06/07
03/15/07
05/18/09
Total

33
120
50
$203

Presby Chiropractic

Unreimbursed Medical Expenses

in Future Years
We assume that most of Mr. Pollacks medical expenses related to the treatment of his injury in
the future will be covered by his medical insurance policy. As a result, for purposes of this
report, we assume that Mr. Pollacks will have no unreimbursed medical expenses in future
years.
Summary of Economic Loss
We now combine the previously calculated losses in this case to arrive at the following total loss
values in present (2010) dollar amounts after tax:

SOURCE OF ECONOMIC LOSS

Net earnings loss in prior years
Net earnings loss in future years
Household services loss in prior years
Household services loss in future years

Out of pocket medical expenses

TOTAL

AMOUNT OF ECONOMIC LOSS AFTER TAX

FUTURE YEARS
TOTAL
PRIOR
at Age
at Age
at Age
at Age
YEARS
65
67
65
67
$55,257
$55,257
$55,257
514,610 547,267
514,610
547,267
19,098
19,098
176,973 176,973
176,973
176,973
2,561
2,561
2,561
$76,917 $691,583 $724,241
$749,402
$801,158

Plaintiffs total loss values in present (2010) dollar amounts before tax are summarized as
follows:

SOURCE OF ECONOMIC
LOSS
Net earnings loss in prior years
Net earnings loss in future years
Household services loss in prior years
Household services loss in future years

Out of pocket medical expenses

TOTAL

AMOUNT OF ECONOMIC LOSS BEFORE TAX

FUTURE YEARS
TOTAL
PRIOR
at Age
at Age
YEARS
65
67
at Age 65 at Age 67
$67,195
$67,195
$67,195
598,384 636,357
598,384
636,357
19,098
19,098
176,973 176,973
176,973
176,973
2,561
2,561
2,561
$775,35 $813,33
$88,854
7
0
$845,114 $902,185

It is important to understand that this total loss figure is a present value amount (in 2010 dollars),
representing a lump-sum payment made at present needed to generate a flow of payments
sufficient to compensate for the losses in each year of loss included in this appraisal. In addition,
please note that pre-trial or pre-judgment interest has not been calculated. These interest losses
are typically determined at the time of trial and would be in addition to the losses calculated in
this appraisal report.
The preceding findings are based on information provided to us to date. They are subject to
revision should additional information be forthcoming that would change any facts or
assumptions upon which this analysis rests. We also note that pecuniary losses are an
approximation and are provided by the economic expert as a guide to the trier of fact. Because a
lost stream cannot be computed with absolute certainty, a lump-sum payment represents a rough
and ready attempt to put plaintiff in the same position had he/she not been injured. [ SOURCE:
Jones v. Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523, 545-47 (1983).]

ASSIGNMENT
Assume that you were engaged by the defendants attorney to review the previous report and
give him your professional opinion on the accuracy of the data, on the appropriateness of the
assumptions and the methodology used, and on the accuracy of the calculations and numerical
findings.
Discuss your observations with your classmates and your instructor and write a report stating
your professional opinion for the defense attorney that engaged you.