Johnson v. Manhattan & Bronx Surface Transit Operating Authority

• Decision Date: 12 January 1988
• Citation: 71 N.Y.2d 198,524 N.Y.S.2d 415,519 N.E.2d 326
• Court: New York Court of Appeals Court of Appeals
• Parties: , 519 N.E.2d 326 Kathryn JOHNSON, Individually and as Administratrix of the Estate of Veronica Ashby, Deceased, Respondent, v. MANHATTAN & BRONX SURFACE TRANSIT OPERATING AUTHORITY, Appellant, et al., Defendant.

Page 415

524 N.Y.S.2d 415

71 N.Y.2d 198, 519 N.E.2d 326

Kathryn JOHNSON, Individually and as Administratrix of the Estate of Veronica Ashby, Deceased, Respondent, v. MANHATTAN & BRONX SURFACE TRANSIT OPERATING AUTHORITY Appellant, et al., Defendant.

Court of Appeals of New York.

Jan. 12, 1988.

John A. Murray and Albert C. Cosenza, Brooklyn, for appellant

Theodore H. Friedman, New York City, Bernard S. Meyer, Mineola, Edward T. Chase, New York City, and Michael A. Ciaffa, Mineola, for respondent.

OPINION OF THE COURT

BELLACOSA, Judge.

In this action for wrongful death and conscious pain and suffering, we focus primarily on defendant's argument that the trial court erred in two respects on damages: (1) excluding evidence of the decedent's after-tax income for calculating damages based on the lost wages component; and (2) refusing to instruct the jury that, despite the over-all nontaxability of the award, the part of the damages calculation on decedent's lost wages component should nevertheless be based on decedent's net rather than gross income. Defendant also argues that, in any event, it should not be held liable in negligence under any theories advanced at trial.

We affirm the order of the Appellate Division, 125 A.D.2d 1010, 508 N.Y.S.2d 964, and hold that the trial court did not err in its evidentiary or charge rulings on the tax aspects of the damages calculation. We further hold that liability was properly imposed against MABSTOA.

I. FACTS AND TRIAL

On the morning of September 27, 1979, a bus driver employed by defendant Manhattan and Bronx Surface Transit Operating Authority (MABSTOA) returned the bus he had been driving to defendant's depot located between 146th Street and 147th Street and reported that he was sick. The MABSTOA dispatcher told the driver to "park the bus" and to sign himself out for the day. The driver parked the bus on 146th Street, outside the depot.

Shortly afterwards, the bus was driven away by one Thomas Jones, who had been drinking since the night before and who was, by his own admission, "loaded". According to his testimony, Jones was walking towards Lenox Avenue to catch a bus to the Port Authority bus terminal when he spotted the parked unattended bus. He entered the bus by opening the driver's side window and pulling the lever to open the door. Once inside the bus, he pushed the starter button on the dashboard, put the bus in gear, closed the door and drove off. At the corner of 146th Street, Jones made a wide left turn onto Lenox Avenue and struck the decedent, Veronica Ashby. The bus dragged the victim nearly a block, striking other vehicles, and killing another pedestrian before coming to rest.

Plaintiff, the decedent's mother and administratrix of her estate on behalf of decedent's minor child, commenced this action for wrongful death and conscious pain and suffering. MABSTOA's liability was premised on common-law negligence and violation of Vehicle and Traffic Law § 1210(a), which provides that "person driving or in charge of a motor vehicle shall permit it to stand unattended without first stopping the engine, locking the ignition, removing the key from the vehicle, and effectively setting the brake thereon".

At trial, plaintiff's economist testified as to the decedent's lost earnings. On cross-examination in this respect, defense counsel questioned only whether the calculation was based on gross income or after-tax income. The economist responded that the figures were based on the decedent's gross income at the time of death. At that point, the court interjected and informed the jury: "Income taxes of whatever nature, be they federal, state or city, should not be considered by the jury in arriving at the ultimate determination." Defense counsel made no objection to the economist's response or to the instruction.

At the close of proof, defense counsel requested that the jury be instructed to calculate the pecuniary loss to decedent's daughter in the following manner:

"In considering what award you made for any loss by decedent's children of decedent's past and future earnings, please consider the following:

"Had decedent lived, the money she earned at her job as a police aide would have been subject to federal, state and city tax withholdings.

"But any award you make to decedent's pecuniary beneficiaries for the loss of their mother's income will not be subject to any tax, federal, state or city. In arriving at any decision on the award for the loss of decedent's future earnings you should consider the fact that your award will not be subject to taxes, and will therefore exceed what decedent's take-home pay would have been during her working career.

"Your award, if any, should only equal the net pay decedent would have received had she lived [emphasis supplied]."

The court, over defense counsel's objection, refused to give the requested charge.

The jury found defendant MABSTOA liable on common-law negligence and on the statutory violation. Plaintiff was awarded $800,000 for the wrongful death and $3.2 million for the conscious pain and suffering of the decedent. The trial court later granted defendant's motion to set aside the verdict unless plaintiff accepted a reduction of the award for conscious pain and suffering to $250,000. Plaintiff stipulated to accept the lower amount and the judgment then fixed damages at $800,000 for wrongful death and $250,000 for pain and suffering. The Appellate Division affirmed, without opinion.

Defendant MABSTOA appeals, urging: (1) the trial court erred in excluding proof of decedent's after-tax income and in refusing defendant's requested jury instruction for a net income computation; (2) the "key-in-the-ignition" statute (Vehicle and Traffic Law § 1210 ) is not applicable to vehicles equipped with a push button starter; (3) common-law negligence was not established.

II. DAMAGES--TAX IMPLICATIONS

One of the important issues raised by defendant relates to claimed excessiveness of the final award in that it was improperly inflated due to the jury's misunderstanding of tax implications resulting from the allegedly erroneous evidentiary ruling and from the lack of proper jury instruction.

In wrongful death cases, an award of damages is limited to the "fair and just compensation for the pecuniary injuries resulting from the decedent's death to the persons for whose benefit the action is brought" (EPTL 5-4.3). In determining what is "fair and just compensation", factors which have traditionally been considered include: the age, health and life expectancy of the decedent at the time of the injury; the decedent's future earning capacity and potential for career advancement; and the number, age and health of the decedent's distributees (Rohan, Practice Commentary, McKinney's Cons. Laws of N.Y., Book 17B, EPTL 5-4.3, at 497-498). Generally, evidence of a decedent's gross income at the time of death is the standard to measure the value of income already lost and to measure the loss of future earnings ( Woodling v. Garrett Corp., 813 F.2d 543, 557-558 ).

On appeal, defendant urges that a worker's ability to contribute to the support of a family is directly affected by the amount of taxes owed to the government, and after-tax or net income rather than gross income provides the more realistic and legally correct measure of the monetary loss suffered. While there is respectable authority ( Norfolk & W. Ry. Co. v. Liepelt, 444 U.S. 490, 494, 100 S.Ct. 755, 758, 62 L.Ed.2d 689 reh. denied 445 U.S. 972, 100 S.Ct. 1667, 64 L.Ed.2d 250; Morgan Guar. Trust Co. v. Texasgulf Aviation, 604 F.Supp. 699 ), and while abstract logic could favor defendant's view, we conclude that such a rule would inject an unacceptably speculative and distracting feature into the jury's consideration of damages, and thus we reject it as a matter of statutory construction, practical policy and sound jurisprudence.

No crystal ball is available to juries to overcome the inevitable speculation concerning future tax status of...