Farrar v. Brooklyn Union Gas Co.
| Decision Date | 31 December 1987 |
| Citation | 134 A.D.2d 31,523 N.Y.S.2d 839 |
| Parties | Arthur M. FARRAR, etc., Respondent, v. BROOKLYN UNION GAS COMPANY, Appellant (and another title). |
| Court | New York Supreme Court — Appellate Division |
Cullen and Dykman, Brooklyn (Timothy J. Flanagan, of counsel), for appellant.
John J. Brennan, Staten Island, for respondent.
Before NIEHOFF, J.P., and EIBER, KUNZEMAN and SPATT, JJ.
The sole issue presented on appeal is whether the loss of a prospective Federal estate tax credit as a consequence of the decedent's premature death constitutes an element of "pecuniary loss" which may be recoverable as damages in an action for wrongful death. We answer this question in the affirmative.
The facts, insofar as they pertain to this appeal, are substantially undisputed. On January 21, 1982, the decedent, Gladys Lowe Farrar, died of asphyxia by smoke inhalation during a fire in the cellar of her Staten Island home. The fire allegedly resulted when natural gas, supplied by the defendant, Brooklyn Union Gas Company, ignited. The "flaming gas" was then propelled into the cellar of the decedent's home. The decedent was 72 years of age at the time of her death and had an alleged life expectancy of 12.9 years. She died intestate and was survived by two brothers and two sisters.
On or about January 14, 1984, Arthur M. Farrar, the administrator of the decedent's estate, commenced the instant action to recover damages for wrongful death. The complaint alleged that the Brooklyn Union Gas Company was negligent, inter alia, in failing to inspect its equipment and gas distribution system; in failing to ensure that the distribution system and component parts were "free from any leaks and hazards or fumes" and in installing a system which enabled the natural gas to flow under excess pressure into the cellar of the decedent's premises. The complaint further alleged that the Brooklyn Union Gas Company should be held accountable under theories of strict liability and breach of warranty.
The decedent, who was retired at the time of her death, subsisted on Social Security benefits as well as the income generated from two pensions. The complaint specified only two items of pecuniary loss for which recovery was sought, to wit, the sum of $3,133.51, which represented the funeral expenses and the sum of $125,562.15 which had been paid to the Internal Revenue Service for the Federal estate taxes.
The essential thrust of plaintiff's claim is that the payment of the sum of $125,562.15 in satisfaction of the estate tax liability would not have been required had the decedent survived for the period of time commensurate with her natural life expectancy so as to have enabled her estate to take full advantage of the unified credit against estate tax contained in 26 U.S.C. § 2010(a).
26 U.S.C. § 2010(a), enacted as part of the Economic Recovery Tax Act of 1981, allows for a unified credit against the estate tax liability imposed by the Federal government. The statute provides that a credit of up to $192,800 "shall be allowed to the estate of every decedent". Subsection (b) of 26 U.S.C. § 2010, however, allows for a "[p]hase-in of credit" in accordance with the following schedule:
Subsection (a) shall be
applied by substituting
In the case of decedents for "$192,800" the
dying in: following amount:
1982 ................... $62,800
1983 ................... 79,300
1984 ................... 96,300
1985 ................... 121,800
1986 ................... 155,800
Pursuant to the terms of 26 U.S.C. § 2010(b), the beneficiaries of decedent's estate were permitted a unified tax credit of $62,800, since Ms. Farrar died in 1982. Indeed, according to the Supreme Court, the Federal tax liability of the Farrar estate was computed as follows:
Total Gross Estate ............. $728,038.86
Allowable Deductions ........... - 99.062.64
------------
Taxable Estate .................. 628,976.22
Gross Estimate Tax .............. 203,521.20
Allowable Unified Credit ....... - 62,800.00
Adjusted Estate Tax ............. 140.721.20
Credit for State Death Taxes ... - 15,159.05
------------
Tax Due ....................... $125,562.15
However, had Ms. Farrar survived until 1987, her estate would have been entitled to the full amount of the unified tax credit provided in 26 U.S.C. § 2010(a), (i.e. $192,800). Other factors remaining equal, the application of this larger credit would have absolved the estate of any liability for Federal estate taxes. 1
Based upon the foregoing, the plaintiff theorized that the estate, as a direct result of the defendant's wrongful acts, was unnecessarily exposed to a tax liability in the amount of $125,562.15, which resulted in a parallel reduction in the amount of money which the beneficiaries might reasonably have expected to receive upon the distribution of the assets of the estate. Accordingly, the plaintiff asserted that since the decedent was made to suffer an untimely and premature death, the increased tax which the estate was obligated to pay and for which it would not otherwise have been liable, should be deemed a proper element of damages recoverable in a wrongful death action commenced pursuant to EPTL 5-4.1.
In response to this contention, the Brooklyn Union Gas Company maintained that tax liabilities do not constitute a "pecuniary loss" within the meaning of EPTL 5-4.3 and that the loss of the estate tax credit was "too remote, speculative and conjectural a claim to support a cause of action for wrongful death".
The Supreme Court, upon the defendant's motion for summary judgment dismissing the complaint, essentially agreed with the plaintiff and concluded:
( Farrar v. Brooklyn Union Gas Co., 131 Misc.2d 936, 937, 502 N.Y.S.2d 610).
After discussing the factors which the trier of fact may properly consider in ascertaining the amount of damages which should be awarded, the court declared that the plaintiff should be entitled to recover "an amount equal to the inheritance taxes which effectuated a reduction in the decedent's estate (and a concomitant reduction in the amount distributable to decedent's kin)" ( Farrar v. Brooklyn Union Gas Co., supra, at 940, 502 N.Y.S.2d 610). In so ruling, the court added:
"If the United States Government was willing to confer greater tax benefits on the estates of persons dying in 1987 rather than in 1982, there is no reason why the victims of defendant's tortious conduct should have to suffer the pecuniary losses of additional tax due as a direct result of the decedent's premature death" ( Farrar v. Brooklyn Union Gas Co., supra, at 941, 502 N.Y.S.2d 610).
We find the rationale employed by the Supreme Court to be persuasive and we, accordingly, affirm.
EPTL 5-4.3 fixes the standard by which damages in a wrongful death action are to be measured. According to that statute, the personal representative of a decedent is entitled to recover, on behalf of the persons for whose benefit the action is brought, an amount which the trier of fact "deems to be fair and just compensation for the pecuniary injuries resulting from the decedent's death" (see, EPTL 5-4.3[a] ). While there is no precise formula which may be applied in determining an appropriate award of damages for wrongful death, it has been noted that the concept of pecuniary loss "extends to all injuries which are capable of being measured in monetary terms" (see, Rohan, 9A New York Civ Prac EPTL p 5-4.3[2], at 5-434) and that the amount of damages depends upon "the value of the reasonable expectation of pecuniary benefits from the continuance in life by the decedent to the * * * next of kin" ( see, Horton v. State of New York, 50 Misc.2d 1017, 1021, 272 N.Y.S.2d 312; see also, Loetsch v. New York City Omnibus Corp., 291 N.Y. 308, 52 N.E.2d 448). Put somewhat differently, the statute "looks to prospective advantages of a pecuniary nature, which have been cut off by the premature death of the person from whom they would have proceeded" (see, Tilley v. Hudson River Railroad Company, 24 N.Y. 471, 475).
The elements of damage for which recovery may be had in a wrongful death action include, inter alia, the loss of support, services, and voluntary assistance as well as other forms of financial benefits which would have been bestowed upon the distributees had death not intervened ( see, Parilis v. Feinstein, 49 N.Y.2d 984, 429 N.Y.S.2d 165, 406 N.E.2d 1059; Odom v. Byrne, 104 A.D.2d 863, 480 N.Y.S.2d 247; Fell v. Presbyterian Hosp. in City of N.Y at Columbia-Presbyt. Med. Center, 98 A.D.2d 624, 469 N.Y.S.2d 375; Amble v. Tewari, 128 Misc.2d 990, 491 N.Y.S.2d...
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Lindsay v. Allstate Ins. Co., 88-2416
...mainly on New York authority, Farrar v. Brooklyn Union Gas Co., 131 Misc.2d 936, 502 N.Y.S.2d 610 (Sup.Ct.1986), aff'd, 134 A.D.2d 31, 523 N.Y.S.2d 839 (App.Div.1987), and Pratt v. George Spalty Sons, Inc., 135 Misc.2d 588, 516 N.Y.S.2d 433 (Sup.Ct.1987), in support of their contention that......
- Farrar v. Brooklyn Union Gas Co.