## Facts

- Eric K. Kaczkowski, age 20, died in an automobile collision while riding as a passenger in a vehicle driven by John J. Bolubasz.
- The estate brought a wrongful death and survival action seeking damages, including future lost earning capacity.
- At the damages retrial, witnesses described Eric as healthy, industrious, and progressing in computer-operations training.
- A school placement director provided starting-salary information for computer-operations positions in the public and private sectors.
- The estate offered expert economic testimony projecting lifetime earning capacity and present value, including a 4% annual increment to reflect inflation and productivity gains.
- The trial court barred the 4% increment as speculative and instructed the jury to compute future net earnings and discount them to present value using 6% simple interest, without an inflation/productivity adjustment.
- The jury returned a $30,000 damages verdict; the Superior Court affirmed.

## Issues

1. Whether anticipated inflation and productivity-related wage growth may be considered, including through expert testimony, when calculating future lost earning capacity in tort cases.
2. Whether discounting future earnings to present value should be required where inflation and productivity effects are considered, and what method should govern that relationship.

## Decision

- The Supreme Court of Pennsylvania reversed the Superior Court and the damages judgment and remanded for a new trial limited to damages.
- The court held that evidence of future inflation and productivity increases affecting earning capacity is not categorically too speculative and may be considered by the fact-finder.
- The court adopted the “total offset” method for future lost earnings, presuming that inflation and productivity gains offset the discount rate, so separate present-value discounting generally is not required.
- The trial court erred by excluding the economist’s inflation/productivity increment while simultaneously requiring a fixed 6% discount rate, a combination the court found likely to undervalue future-loss awards.

## Legal Principles

- Fact-finders calculating future lost earning capacity may consider general economic forces affecting wages, including inflation and productivity-related growth; such evidence is not barred per se as speculative.
- Pennsylvania applies the total offset method in assessing future lost earnings: over time, the combined effects of inflation and productivity are presumed to cancel the discount rate.
- When the total offset presumption applies, courts generally should not require a separate mathematical reduction of future earnings to present value after the jury determines the future earnings stream.

## Conclusion

Pennsylvania required a new damages trial and established that future lost-earnings awards may reflect inflation and productivity trends, while generally eliminating a separate present-value discount through adoption of the total offset method.


Kaczkowski v. Bolubasz, 421 A.2d 1027 (Pa. 1980)