IN RE JOINT E. & SO. DISTRICTS ASBESTOS LIT.
| Decision Date | 28 July 1992 |
| Docket Number | No. NYAL-PH-8888.,NYAL-PH-8888. |
| Citation | 798 F. Supp. 940 |
| Parties | In re JOINT EASTERN AND SOUTHERN DISTRICTS ASBESTOS LITIGATION. This Document Relates To: Lee Lewis, CV-87-5189 (S.D.N.Y.) Martin McPadden, CV-90-3473 (S.D.N.Y.) PH-101. |
| Court | U.S. District Court — Eastern District of New York |
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The two cases treated in this opinion represent what remains of a trial that began with 48 plaintiffs and multiple direct and third-party defendants. This opinion sets forth the basis for the Court's reduction of the jury verdicts in those two cases to final judgments, which are filed simultaneously with this opinion.
Faced with a torrent of personal injury and wrongful death cases stemming from exposure to asbestos, the Chief Judges of the Court of Appeals for the Second Circuit and of the District Courts for the Eastern and Southern Districts of New York transferred all such cases filed in either district to the undersigned. In order to facilitate settlements and trial, those cases, which numbered in the thousands, were thereafter subdivided by the location in which plaintiffs suffered primary exposure.
Forty-eight cases of primary exposure due to the construction or repair of New York state powerhouses, were set down for a reverse bifurcated trial which commenced on April 1, 1991. With the assistance of a special master, all but two of these cases settled. Two went to verdict.
The parties were fortunate to have tried their cases before an astonishingly patient and careful jury. At the end of Phase I of the trial, the jury returned a verdict finding the trial plaintiffs had suffered substantial damages. After settlement, only two defendants —John Crane-Houdaille in McPadden and Keene Corporation in Lewis—remained to hear the jury render a liability verdict against them in Phase II.
In diversity cases such as these, the "method of calculating the recoverable damages is a question of state law." Shu-Tao Lin v. McDonnell Douglas Corp., 742 F.2d 45, 49 n. 5 (2d Cir.1984). Thus New York law controls the issues now before the Court.
Under New York law, the verdict does not speak for itself. New York law initially requires the court to apply to the verdict "any applicable rules of law, including set-offs, credits, comparative negligence ... additures, and remittiturs, in calculating the respective amounts of past and future damages claimants are entitled to recover and defendants are obligated to pay." CPLR § 5041(a).
Important differences exist between the two remaining cases, and those differences affect the molding exercise. Foremost among those differences, the McPadden case involves Article 16 of New York's Civil Practice Law and Rules ("CPLR"), which limits the plaintiff's joint and several recovery for non-economic losses, whereas the Lewis case does not. Because these cases present important and novel questions of law, I discuss them at some length.
The jury found that the McPadden family had suffered $5,917,781.85 in total damages. The jury also found John Crane-Houdaille's equitable share of those damages to be 10%.
The verdict form returned by the jury read as follows:
Type Jury Award
Past lost income $ 565,981.85
Consortium/economic 127,300.00
Consortium/non-economic 400,000.00
Past pecuniary loss 17,500.00
Future pecuniary loss 294,000.00
Funeral expenses 4,500.00
Lost services 8,500.00
Pain and suffering 4,500,000.00
For reasons stated in an opinion denying defendants' motions for post-verdict relief, also filed today, a clerical error regarding the $565,981.85 award for "past lost income" has been corrected by assigning that sum to future pecuniary losses to survivors stretching over a period of 25.7 years. The $294,000 already attributed to future pecuniary losses represents the economic value of decedent's nurture, care, and guidance to his survivors, whereas the $565,981.85 represents their lost stream of income. See Shu-Tao Lin, 742 F.2d 45; Gonzalez v. New York City Housing Authority, 77 N.Y.2d 663, 569 N.Y.S.2d 915, 572 N.E.2d 598 (1991).
Molding this verdict into a judgment requires a number of steps. First, plaintiff argues that she is entitled to an adjustment to bring the award to present value. Second, any collateral source payments must be subtracted. Third, the defendant must receive appropriate set-offs for the shares of settling joint tortfeasors. Fourth, Article 16 must be applied. Fifth, a dollar judgment must be calculated. Finally, part of the judgment must be adjusted to structure the payment of future damages.
Plaintiff's counsel argues that certain kinds of damages — economic losses — should be "increased to present value" at a rate of 6% from the time of the injury to the date of the Phase I verdict and that all damages should bear interest at a 9% rate from the date of the Phase I verdict to the entry of judgment. Defendant's counsel argues that the only increase available to the plaintiff is 9% interest from the date of the Phase II verdict, which established Crane's liability.
Both parties misapply New York law. Crane is correct that plaintiff has not pointed to any authority supporting an increase to present value of the damage awards. Crane fails to acknowledge, however, that New York law entitles plaintiff to pre-verdict interest on certain elements of the damages. See N.Y. E.P.T.L. § 5-4.3(a).
For his part, plaintiff's counsel does not seek pre-verdict interest but, instead, an increase to present value at a rate of 6% compounded annually, a figure that presumably represents the inflation rate. Plaintiff contends that the parties stipulated to such an increase.
Plaintiff errs in his description of what the parties agreed to. Discussion of this issue took place during Phase I of the trial. Plaintiff's counsel argued that all awards for economic losses should be inflated to present value and that wrongful death awards should earn pre-verdict interest in addition to an increase for inflation. Tr. 4048-53, May 17, 1991. Later, the Court stated, "I'm going to assume that all parties are resolved that if some court someday rules that past losses should be inflated to — should be increased to take into account inflation, the way to do it would be simply to use the cost of living index." Tr. at 5792, June 6, 1991. The Court also suggested that it act as the finder of fact with regard to any such increase and termed this "a perfectly reasonable proposal ... which has been accepted by everyone," except one defendant no longer active in this litigation. Tr. at 5792-93, June 6, 1991. Due to this persistent objection, during which the objecting defendant called into question the existence of any stipulation among the parties, the Court finally proposed holding a "hearing" on "what effect ... the passage of time has had on the losses ..., if any, that the plaintiffs are entitled to for the period in the past." Id. at 5797. All parties acceded to this plan. Tr. at 5936, June 10, 1991.
The Court eventually instructed the jury to award past damages "in past dollars without consideration for any inflation that may have occurred from the past until today since after the trial I will make an appropriate adjustment to past damages to compensate for any effects of inflation on those losses." Tr. at 3604, July 29, 1991. The parties had previously agreed to this language at the charge conference. Tr. at 6201, June 17, 1991.
From the foregoing, it appears that the "stipulation," such as it is, simply allows the Court to make findings with regard to the proper amount of increase for inflation, if any. It does not obligate the Court to increase awards at a particular rate or even to increase them at all.
The immediate question, then, is whether such an increase is appropriate, and if so, what the quantum of that increase ought to be.
No New York authority supports an increase to present value. Accordingly, such an adjustment is not appropriate in this case.1 For wrongful death damages, however, plaintiff is entitled to pre-verdict interest, see EPTL § 5-4.3; Milbrandt v. A.P. Green Refractories Co., 79 N.Y.2d 26, 580 N.Y.S.2d 147, 588 N.E.2d 45 (1992), which will effectively increase a portion of the award to present value or an amount approximate to it.2 That law expressly provides for interest from the date of the decedent's death to the verdict on pecuniary losses to survivors, including funeral and medical expenses. EPTL § 5-4.3. The amount of interest is added to these elements of damages and comprises a part of the "principal sum" awarded. Id. Pre-verdict interest on such an award accrues at the "statutory rate" set forth in CPLR § 5004. Shu-Tao Lin, 742 F.2d at 51. Cf. Milbrandt, 580 N.Y.S.2d at 152 n. 5, 588 N.E.2d at 50 n. 5 (1992) (). CPLR § 5004 establishes the rate of interest as 9%. CPLR § 5004.
Until recently, plaintiff might have had a persuasive argument that she was entitled to pre-verdict interest "as a matter of right" pursuant to CPLR § 5001 on all economic injuries.3 Mallis v. Bankers Trust Co., 717 F.2d 683, 693 (2d Cir. 1983); see also Hilford Chem. Corp. v. Ricoh Electronics, Inc., 875 F.2d 32, 39 (2d Cir.1989); Lewis v. S.L. & E., Inc., 831 F.2d 37, 40 (2d Cir.1987). However, current law in this circuit is to the contrary. See In re Brooklyn Navy Yard Asbestos Litigation, 971 F.2d 831, 851 (2d Cir.1992).
At common law, pre-verdict interest was not available to a successful party in a negligence action. See Mallis, 717 F.2d at 694; Delulio v. 320-57 Corp., 99 A.D.2d 253, 472 N.Y.S.2d 379, 381 (1st Dept.1984). However, subsequently enacted statutes have relaxed this rule. One such statute is EPTL § 5-4.3. Another is CPLR § 5001 which, despite the...
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