Lost Earnings

Lost earnings are often a critical part of a personal injury lawsuit. From the union construction

worker who falls from several feet to the ground due to a defective and unsecured ladder, thereby denying him an opportunity to rise through the ranks of his union, to the officer worker who is passed over for a promotion she once thought was all but certain, a personal injury plaintiff may be entitled to lost earnings caused by an accident.

The Q&A below addresses lost earnings in a personal injury lawsuit and seeks to provide an understanding as to the nature and scope of lost earnings in this context.

Q. What are lost earnings in a personal injury lawsuit?

A. In a personal injury case, “lost earnings” refers to income a plaintiff would have earned had she or he not been injured in an accident that is the subject of the lawsuit.

Under CPLR §4111(e) (“General and special verdicts and written interrogatories”):

(e) Itemized Verdict in Certain Actions. In an action brought to recover damages for personal injury, injury to property or wrongful death, which is not subject to subdivision (d) of this rule, the court shall instruct the jury that if the jury finds a verdict awarding damages, it shall in its verdict specify the applicable elements of special and general damages upon which the award is based and the amount assigned to each element including, but not limited to, medical expenses, dental expenses, loss of earnings, impairment of earning ability, and pain and suffering. Each element shall be further itemized into amounts intended to compensate for damages that have been incurred prior to the verdict and amounts intended to compensate for damages to be incurred in the future. In itemizing amounts intended to compensate for future damages, the jury shall set forth the period of years over which such amounts are intended to provide compensation. In actions in which article fifty-A or fifty-B of this chapter applies, in computing said damages, the jury shall be instructed to award the full amount of future damages, as calculated, without reduction to present value. (emphases added)

Q. What is the difference between past lost earnings and future lost earnings?

A. Past lost earnings concern what the plaintiff has lost in earnings from the date of the accident to the time of either trial or settlement. Future lost earnings concern lost earnings and/or lost or diminished future employment that the injured plaintiff has suffered as a result of the accident for the rest of their working life. Future lost earnings are not necessarily confined to a plaintiff’s pre-accident lost earnings.

Q. Who bears the initial burden of establishing damages for past and future lost earnings in a personal injury case?

A. The plaintiff bears the initial burden of proving their lost earnings. See O’Brien v. Mbugua, 49 A.D.3d 937, 939 (3rd Dept. 2008). In addition, "[a] party claiming lost earnings has the burden of proving the amount of actual past earnings with reasonable certainty, by means of tax returns or other documentation". Tarpley v. New York City Tr. Auth., 177 A.D.3d 929, 932 (2nd Dept. 2019) (emphases added). Henriquez-Rodriguez v. 160 W. 118th St. Corp., 193 A.D.3d 645, 646 (1st Dept. 2021); See also Deans v. Jamaica Hosp. Med. Ctr., 64 A.D.3d 842, 744 (2nd Dept. 2019); O’Brien v. Mbugua, 49 A.D.3d 937, 939 (3rd Dept. 2008); and Strangio v. New York Power Auth., 275 A.D.2d 945 (4th Dept. 2000). Failure to establish past and future lost earnings with reasonable certainty means such earnings “cannot be permitted to stand.” DelValle v. White Castle Sys., 277 A.D.2d 13, 14 (1st Dept. 2000).

Q. How does a plaintiff in a personal injury matter prove lost earnings?

A. To prove lost earnings in a personal injury matter, a plaintiff must show a causal connection between the accident and the lost earnings as well as sufficient documentation which shows, with reasonable certainty, the amount of the lost earnings alleged. See Walker v. City of New York, 205 A.D.2d 755 (2nd Dept. 1994); Clause v. E.I. Du Pont De Nemours & Co., 284 A.D.2d 966 (4th Dept. 2001). A plaintiff may also “introduce expert testimony assessing damages based upon future probabilities”. Petrilli v. Federated Dept. Stores, Inc., 40 A.D.3d 1339 (3rd Dept. 2007). “The loss, however, must be more than speculative. Hence, a plaintiff who was never employed in the position upon which he or she bases lost earnings, or never obtained the training or credentials necessary to secure such employment, may not seek lost earnings because the proof will be deemed speculative (see Naveja v Hillcrest General Hosp., 148 AD2d 429, 430, 538 N.Y.S.2d 584 [2d Dept 1989]).” Saginor v. OSIB-BCRE 50th St. Holdings, LLC, 2019 N.Y. Misc. LEXIS 6190, *10 (N.Y. Co. Sup. Ct. Nov. 18, 2019). Further, where “the nature of a plaintiff's employment possibilities subsequent to an accident is reasonably certain, he or she satisfies the burden of establishing the right to recover lost earnings even where he or she has not actually commenced that employment.” Saginor, supra, at *10.

For example, in Keefe v. E & D Specialty Stands, Inc., 272 A.D.2d 949, 949 (4th Dept. 2000), the Court “reject[ed] defendant's contention that Supreme Court erred in admitting evidence regarding the wage rates and fringe benefits of union ironworkers. Although plaintiff had not begun his apprenticeship at the time of the accident, he had completed all written and physical tests and had been notified that he would be accepted into the apprenticeship program. Thus, the loss of earnings was established with reasonable certainty” (internal page number omitted).

Another good example is Cranston v. Oxford Resources Corp., 173 A.D.2d 757 (2nd Dept. 1991). In Cranston:

The defendants contend that the jury's verdict for lost earnings (past and future) cannot stand since it is based entirely on speculation. The record reveals that the plaintiff had [***3] taken the necessary steps toward joining the New York City Police Department prior to the accident and that the jury's verdict is based upon this information. The evidence presented showed that the plaintiff had passed the medical, written and psychological examinations given by the police department and was tentatively scheduled to enter the January 1986 class at the Police Academy. The accident occurred subsequent to the plaintiff's passing of these examinations but prior to the final "mini-medical" examination. This final medical examination was the last step before admission into the Police Academy upon which admission the applicant is placed on the police department's payroll. Due to the injuries the plaintiff received in the accident, the plaintiff was found medically unfit at this "mini medical" examination. Given the fact that the plaintiff had taken all of the steps necessary to become a police officer, we find that the jury's verdict concerning lost earnings (past and future) was not based on speculative evidence (cf., Naveja v Hillcrest Gen. Hosp., 148 AD2d 429). Cranston at 758 (bold emphasis added).

Q. What sort of proof do you need to establish lost earnings with reasonable certainty?

A. Certain documentation may or may not establish lost earnings with reasonable certainty, i.e. each case is fact-specific and that documentation which may establish lost earnings with reasonable certainty does not necessarily mean that it will (e.g. Karwacki v. Astoria Med. Anesthesia Assoc., P.C., 23 A.D.3d 438 (2nd Dept. 2005)). In addition, while the following documentation/proof may or may not establish lost earnings, a plaintiff must also “lay a proper foundation for the admission of these records”. See Schleger v. Jurcsak, 186 A.D.3d 771, 774 (2nd Dept. 2020).

Documentation Reasonable Certainty? Case

Tax Returns Yes Henriquez-Rodriguez v. 160 W. 118th St. Corp., 193 A.D.3d 645 (1st Dept. 2021); Karwacki v. Astoria Med. Anesthesia Assoc., P.C., 23 A.D.3d 438 (2nd Dept. 2005)

Unsubstantiated Testimony No Martinez v. Metropolitan Transp. Auth., 159 A.D.3d 584 (1st Dept. 2018); Tarpley v. New York City Tr. Auth., 177 A.D.3d 929, 932 (2nd Dept. 2019)

W-2 Yes Gonzalez v. 1436 Beach Realty LLC, 203 A.D.3d 658 (1st Dept. 2022); Gore v. Cardany, 167 A.D.3d 851 (2nd Dept. 2018)

Q. In the context of establishing future lost earnings, how do you prove lost earning capacity?

A. "Recovery for lost earning capacity is not limited to a plaintiff's actual earnings before the accident, … and the assessment of damages may instead be based upon future probabilities". Beh v. Jim Willis & Sons Bldrs., Inc., 28 A.D.3d 1227, 1228 (4th Dept. 2006) (internal page number omitted). Like lost earnings, “earning capacity must be established with reasonable certainty”. Kirschoffer v. Van Dyke, 173 A.D.2d 7, 10 (3rd Dept. 1991).

In Kirschhoffer, supra, the Court held that:

[T]he record demonstrates that there were employment opportunities in the local school district, that Kirschhoffer did not require further training or education because she had worked as a secretary in the past (cf., Naveja v Hillcrest Gen. Hosp., 148 AD2d 429, 430) and that Kirschhoffer's child began school five months after Kirschhoffer's accident. In our view, under the circumstances, plaintiffs demonstrated lost earning capacity with reasonable certainty (see, Johnston v Colvin, supra, at 848-849).

By contrast, in Naveja v. Hillcrest General Hosp., 148 A.D.2d 429, 430 (2nd Dept. 1989), the Court held that:

Although the liability of the appellants has been established, the award for past and future earnings must be reduced. The record reveals that the award, based on an assumption that the plaintiff would have become employed as a medical lab technician, if not for her stroke, is too speculative (see, Marmo v Southside Hosp., 143 AD2d 891). The plaintiff had never been employed in that position and had never even obtained the degree necessary to seek employment. Although she had taken several courses toward the degree she dropped out of school in 1973 and never returned. This is not a situation where loss of future earnings can be based on the plaintiff's active pursuit of a degree which would have enabled her to work as a lab technician (see, Horan v Dormitory Auth., 43 AD2d 65, 69). (internal page number omitted)

Q. Are undocumented workers entitled to lost earnings?

A. Yes. The Court of Appeals case of Balbuena v. IDR Realty LLC, 6 N.Y.3d 338 (2006), is on point. Balbuena was a Labor Law §240(1) case where the injured plaintiff was “a native of Mexico who entered the United States without the permission of federal immigration authorities.” Balbuena at 348 (internal page number omitted). Defendant moved for partial summary judgment dismissing Balbuena’s lost wages claim. “The central issue in these appeals, stated broadly, [was] whether an undocumented alien injured at a work site as a result of state Labor Law violations is precluded from recovering lost wages due to immigration status.” Id. at 351. In deciding that federal law does not preempt a personal injury claimant’s right to lost earnings, regardless of his or her immigration status, and that the Labor Law “applies to all workers in qualifying employment situations—regardless of immigration status” (id. at 358), the Court of Appeals held as follows:

Additionally, limiting a lost wages claim by an injured undocumented alien would lessen an employer's incentive to comply with the Labor Law and supply all of its workers the safe workplace that the Legislature demands (cf. Continental PET Tech., Inc. v Palacias, 269 Ga [10] App 561, 562-563, 604 S.E.2d 627, 630 [Ga App 2004] [IRCA and immigration regulations "do not purport to intrude into the area of what protections a State may afford these aliens"], cert denied 546 U.S. ___, 126 S. Ct. 362, 163 L. Ed. 2d 69 [2005]). Given the clear statement in IRCA's legislative history that the Act was not intended "to undermine or diminish in any way labor protections in existing law" (HR Rep No. 99-682, part I, 99th Cong, 2d Sess, at 58, reprinted in 1986 US Code Cong & Admin News, at 5662), we are unpersuaded that IRCA requires such a diminution in the force and effect of state workplace safety mandates. To the contrary, in order to further the laudable purposes of IRCA and our Labor Law, "tort deterrence principles provide a compelling reason to allow an award of such damages against a person responsible for an illegal alien's employment when that person knew [****27] or should have known of that illegal alien's status" (Rosa v Partners in Progress, Inc., 152 N.H. at 13, 868 A.2d at 1000).

As the Second Department cogently observed, a different conclusion would not only diminish the protections afforded by the Labor Law, it would also improvidently reward employers who knowingly disregard the employment verification system in defiance of the primary purposes of federal immigration laws. An absolute bar to recovery of lost wages by an undocumented worker would lessen the unscrupulous employer's potential liability to its alien workers and make it more financially attractive to hire undocumented aliens (see generally Patel v Quality Inn S., 846 F.2d 700, 704 [11th Cir 1988], cert denied 489 U.S. 1011, 109 S. Ct. 1120, 103 L. Ed. 2d 182 [1989]; Dowling v Slotnik, 244 Conn. 781, 796, 712 A.2d [*360] 396, 404 [Conn 1998]; Nizamuddowlah v Bengal Cabaret, 69 A.D.2d 875, 876, 415 N.Y.S.2d 685 [2d Dept 1979], [***428] [**1258] lv dismissed 48 N.Y.2d 609 [1979]; 48 N.Y.2d 883 [1979]). This, coupled with the fact that illegal aliens are willing to work in jobs that are more dangerous and undesirable--and [****28] for less money--than their legal immigrant and citizen counterparts, would actually increase employment levels of undocumented aliens, not decrease it as Congress sought by its passage of IRCA (see Sure-Tan Inc. v NLRB, 467 U.S. at 893-894; see also HR Rep No. 99-682, part I, 99th Cong, 2d Sess, at 58, reprinted in 1986 US Code Cong & Admin News, at 5662).

Following Balbuena, in order for an immigrant worker who submits false documentation to an employer to not be entitled to lost wages, such false documentation must have “actually induce[d] the employer to offer employment to the plaintiff.” Coque v. Wildflower Estates Developers, Inc., 58 A.D.3d 44, 52 (2nd Dept. 2008). In other words, under the Second Department decision in Coque, the rule barring a plaintiff, who submits fraudulent documentation, from pursuing a claim for lost wages, “is limited to situations in which an innocent employer is duped by fraudulent documentation into believing that the employee is a United States citizen or otherwise eligible for employment, as was the employer in Hoffman, for example.” Coque v. Wildflower Estates Developers, Inc., 58 A.D.3d 44, 52 (2nd Dept. 2008). As the Second Department in Coque made clear:

We do not believe that the Balbuenadecision should be read so broadly as to stand for the proposition that a worker forfeits his or her right to recover lost earnings merely by virtue of submitting a false document at the time he or she is hired. Rather, the false document must actually induce the employer to offer employment to the plaintiff. At the conclusion of its decision, the Court of Appeals stated: "We therefore hold, on the records before us in these Labor Law §§ 200, 240 (1) and § 241 (6) cases, and in the absence of proof that plaintiffs tendered false work authorization documents to obtain employment, that IRCA does not bar maintenance of a claim for lost wages by an undocumented alien" (Balbuena, 6 NY3d at 363 [emphasis added]). Thus, the Court of Appeals did not hold that HN6 the mere submission of any false document would preclude a plaintiff from recovering damages for [***18] lost wages, but rather, that such damages would be unavailable if the plaintiff submitted such [*53] documents to obtain employment. If the employer was, or should have been, aware of the plaintiff's immigration status, and nonetheless hired the plaintiff "with a wink and a nod" (Hoffman, 535 US at 156 [Breyer, J., dissenting]), the false document was not necessary "to obtain employment."

Q. May a plaintiff be entitled to lost earnings even if they are still working?

A. Yes. See, e.g., Petrilli, supra (Plaintiff’s lost earnings calculated, at least in part, by diminished work hours following surgery).

Q. Is the possibility of a plaintiff being removed/deported from the United States enough for the plaintiff to be deprived of lost earnings?

A. No. The mere speculation of deportation or voluntarily return to a home country is insufficient. See, e.g., Angamarca v. New York City Partnership Hous. Dev. Fund, Inc., Inc., 87 A.D.3d 206, 209 (1st Dept. 2011).

Q. How are lost earnings calculated where it’s unclear how many days or hours a week a plaintiff worked?

A. In such a situation, lost earnings may be calculated based on the mean of the gross income on pre-accident tax returns. See, e.g., Henriquez-Rodriguez v. 160 W. 118th St. Corp., 193 A.D.3d 645, 646 (1st Dept. 2021).