M Civ JI 53.03 Future Damages (Non-personal Injury Action) - Reduction to Present Cash Value

If you decide plaintiff will sustain damages in the future, you must reduce that amount to its present cash value. The amount of damages you determine [ he / she ] will sustain the first year is to be divided by 1.05. The amount of damages you determine [ he / she ] will sustain the second year is to be divided by 1.10. The amount [ he / she ] will sustain the third year is to be divided by 1.15. You then continue to use a similar procedure for each additional year you determine [ he / she ] will sustain damages. The total of your yearly computations is the present cash value of plaintiff’s future damages.

Note on Use

This instruction is not for use in personal injury actions filed on or after October 1, 1986. MCL 600.6306; 1986 PA 178, §3. In personal injury actions, MCivJI 53.03A should be given.

The jury should be instructed to reduce future damages to present cash value in cases other than personal injury actions. Nation v WDE Electric Co, 454 Mich 489; 563 NW2d 233 (1997). In the absence of a stipulation to the contrary, the trial court is required to instruct the jury to reduce future damages to present cash value. Freeman v Lanning Corp, 61 Mich App 527 (1975); Goins v Ford Motor Co, 131 Mich App 185; 347 NW2d 184 (1983); Lagalo v Allied Corporation (On Remand), 233 Mich App 514; 592 NW2d 786 (1999).

The reduction to present value called for by this instruction is based on a 5 percent simple interest calculation. This rate has been approved in numerous cases. See cases collected in Pontiac School District v Miller, Canfield, Paddock & Stone, 221 Mich App 602; 563 NW2d 693 (1997). In cases in which the court determines that a 5 percent simple interest rate is not appropriate, this instruction should be revised. See Pontiac School District.

Comment

The obligation to reduce future damages to present cash value in cases other than personal injury actions filed on or after October 1, 1986 remains with the jury. Nation. Non-personal injury action cases have approved the 5 percent rate in this instruction. See, e.g., Goins; Foehr v Republic Automotive Parts, 212 Mich App 663; 538 NW2d 420 (1995). But see, Pontiac School District.

History

M Civ JI 53.03 was SJI 34.03. Amended April 1, 2004.