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South Texas College of Law Houston
Bauman, John H.

I. Compensatory Damages
A. The law of damages attempts to set standards to measure the monetary award needed to compensate a party for losses or injuries.
i. The goal is to restore Π’s rightful position.
i. Compensatory damages may be awarded for actual or substantial injury to realty – to restore property to its former condition, or based on change in value resulting from injury; AND
ii. Attorney’s fees from prior action are allowable as damages in subsequent action only if prior litigation was natural and proximate result of subsequent Δ’s wrongful act, and involved Π as 3rd party.
1. GAVCUS v. POTTS (1986)
a. Π sued for Δ for unauthorized removal of valuable coins (trespass). Court allowed Π to present evidence of new locks & alarm system expenses and attorney’s fees from prior legal action.
b. Court held that: (1) cost of lock and alarm installation was not recoverable as it did not result from damage to property; and (2) attorney’s fees were not recoverable as both actions involved the same parties (prior litigation also not proximate cause of subsequent).
2. Compensatory damages can be awarded for actual or substantial injury to realty. These damages are measured by the cost of restoring property to its former condition, or by the change in value before and after the trespass.
a. Nominal damages may be awarded when no actual or substantial damages have been proven or alleged.
b. Ø demonstrated loss resulting from the trespass. Locks and alarm were installed as a preventative measure. Nothing broken was repaired.
3. Attorney’s fees
a. The loss was caused by assertion of a legitimate claim (prior suit), Ø trespass.
b. “American rule” – each party bears the cost of their own attorney’s fees unless bad conduct is in evidence.
iii. Justification for restoring the rightful position
1. Corrective Justice
a. Restoring the rightful position properly adjusts the relationship between the wrongdoer and the victim.
2. Economic Efficiency
a. Restoring the rightful position provides an efficient incentive for the actor to take the victim’s loss into account; this will deter conduct that causes inefficiently large harms.
i. The Certainty of Damages requirement has two aspects:
1. Π must offer proof that he in fact suffered some actual damage.
a. As this case demonstrates, there must be proof sufficient to demonstrate a probability that damage occurred.
2. Π must offer proof of the amount of damages actually suffered.
a. When the existence of some damage is established, precise proof of the amount of the loss is not always required.
b. If damages can be proved with certainty, Π must do so (i.e., incurred medical expenses).
c. If not, Π must try to provide the trier of fact with a rational means of inferring the amount of damages.
i. Ex: Pennzoil v. Texaco
1. Pennzoil calculated damages according to market value of Getty Oil’s oil reserves, rather than stock price.
ii. A threshold causation requirement in tort is that it must be reasonably probable (either by a substantial certainty or a high probability of success) that the lost economic advantage would have been realized but for Δ’s interference.
1. YOUST v. LONGO (1987)
a. Interference between jockeys ruined racehorse’s “chance” at winning.
b. The court held that Π failed to adequately demonstrate interference with a probable gain. While Π lost an opportunity, the likelihood of actual gain was considered too speculative.
iii. A claim for prospective injury “reasonably certain” and properly submitted to a jury only if Π can show that it is “more probable than not” that she will suffer an injury in the future due to Δ’s conduct.
a. Π seeks to present statistical evidence of increased risk of developing cancer due to asbestos exposure. Injury = increased risk of developing cancer.
b. Court held that merely quantifying the risk of developing cancer does not sufficiently establish that the risk is more probable than not.
2. Greater specificity in medical diagnosis does not cleanly translate into legal rights for compensation.
3. Π must establish either:
a. Medical probability; OR
b. Realization of the risk.
4. Prospective damages are not recoverable unless they are reasonably probable to occur.
a. “More likely than not” = 50% + 1.
b. Here, Π demonstrated only a 43% chance.
5. Medical Monitoring
a. Where proof of damage is just short of sufficient, court may allow regular monitoring of Π’s health through regular exams & testing so that changes in Π’s health related to claim may be identified, treated and compensated as soon as they occur.
b. Based on a strong probability of impact that falls just short of enabling damages.
c. Usually part of mass tort claims.
d. Courts are concerned that lump-sum awards for medical monitoring will not be used appropriately.
iv. To prove damages, Π must present facts which give rise to a reasonable probability that it suffered damages due to defendant’s breach.
a. Law firm sues phone company over lost business resulting from errant publishing of firm phone number.
b. The court held that Π’s demonstration of business losses resulting from Δ’s negligence was not sufficiently certain to warrant compensatory damages.
2. “Evidence (to prove the fact of damages) must do more than merely

s any non-economic, intangible losses that the court deems relevant in determining the full value of the decedent’s life.
i. Surviving family seeks compensatory damages for loss of daughter and her unborn child in wrongful death suit against federal government under FTCA.
ii. The court awarded damages on the loss of the mother, based on her earnings history and expectations; and on the loss of the unborn child, based on the relatively speculative potential of a child in this child’s expected circumstances.
b. “Full Value of Life” to include:
i. Those items having a proven monetary value, such as lost potential lifetime earnings, income or services, reduced to present cash value; OR
ii. Lost intangible items whose value cannot be precisely quantified, such as a parent’s society, advice.
iii. In a wrongful death suit, pain & suffering damages awarded relates to P&S by survivors, Ø the victim/decedent.
iv. Lump-sum awards MUST be discounted for Present Value.
v. Evidence of decedent’s family, work and earning history is a reasonable basis for calculating economic loss of decedent’s life
c. Other recoverable losses:
1. Lost fringe benefits
2. Lost domestic services
3. Intangible values (relationship to close, supportive family)
5. Earning Capacity for Unborn Child?
a. Extremely difficult to predict with meaningful certainty.
b. One approach would be to use loss of companionship as guiding force.
c. Otherwise, court must examine likely lifespan, and reasonably likely earning potential based on family culture and related expectancies (requires assumptions related education and vocational skills).
i. Pain is physical → tissue damage stimulates nerves and this causes pain.
ii. Suffering describes the way people process or perceive pain.
iii. Ø precise means of calculation.
iv. P&S damages are generally perceived as camouflage for an award of attorney’s fees.
v. In order to recover for pain & suffering, there must be proof that Π or victim, in fact, experienced some conscious pain and suffering. (ex. plane crash victims – did they suffer?)