McKinney v. Cal. Portland Cement Co.

• Decision Date: 18 March 2002
• Docket Number: No. A091958.,No. A092102.,A091958.,A092102.
• Citation: 96 Cal.App.4th 1214,117 Cal.Rptr.2d 849
• Court: California Court of Appeals Court of Appeals
• Parties: Sharon McKINNEY et. al., Plaintiffs and Respondents, v. CALIFORNIA PORTLAND CEMENT COMPANY, Defendant and Appellant. Sharon McKinney et. al., Plaintiffs and Respondents, v. Amcord, Inc., Defendant and Appellant.

117 Cal.Rptr.2d 849

96 Cal.App.4th 1214

Sharon McKINNEY et. al., Plaintiffs and Respondents, v. CALIFORNIA PORTLAND CEMENT COMPANY, Defendant and Appellant.

Sharon McKinney et. al., Plaintiffs and Respondents, v. Amcord, Inc., Defendant and Appellant.

No. A091958.

No. A092102.

Court of Appeal, First District, Division 1.

March 18, 2002.

Certified for Partial Publication.^*

Review Denied June 12, 2002.

Berkes Crane Robinson & Seal, LLP, Karl W. Kime, Robert H. Berkes, Mark W. Lau, Los Angeles, for Appellant California Portland Cement Company.

Adams, Nye, Sinunu, Walker, LLP, Barbara R. Adams, San Francisco, for Appellant Amcord, Inc.

Brayton, Purcell, Alan R. Brayton, Gilbert L. Purcell, Novato, Diane L. Abraham, Lloyd LeRoy, for Respondents Sharon McKinney et al.

MARCHIANO, P.J.

Appellants, manufacturers of asbestos products, appeal from an adverse judgment in this wrongful death action. They raise issues recurring in asbestos litigation regarding admissibility of the decedent's pension and Social Security income under the collateral source rule; foundational evidence for damages for lost household services; prejudgment interest in a wrongful death case; failure to allocate fault to tobacco companies; imposition of costs under Code of Civil Procedure section 998; and inadequate foundation for business records.

We decline California Portland Cement Company's (CPC's) invitation to reconstruct the collateral source rule in a way that would reduce respondents' damages. In addition, we find that there was sufficient evidence of the nature of the decedent's household services, together with appropriate reference to a study of household services. It was not error to assess personal injury prejudgment interest in this wrongful death case. Tobacco companies were immune from liability at all relevant times in the case; thus, no allocation of fault was appropriate. In the unpublished portion of the opinion, we determine that the trial court did not abuse its discretion in awarding costs after appellants' failure to accept an offer to compromise and that there was sufficient evidence of reliability to support admission of a number of business records. We therefore affirm the judgment.

BACKGROUND

Roland and Sharon McKinney were married in the early 1950's and had two children, Kevin and Melody Ann. When Roland got out of the Navy in 1955, he returned to work as a plasterer, and was exposed to asbestos-containing products during his working career. In particular, decedent used asbestos-containing gun plastic cement, manufactured by appellants. In the early 1980's, Roland first received a warning about the dangers of asbestos from the plasterer's union. By that time, he was no longer using asbestos products in plastering.

Roland retired, for reasons unrelated to asbestos exposure, and began drawing income from his union pension in 1989. At age 62, he elected to begin receiving Social Security payments.

Two days before his death, Roland and his family learned that he had lung cancer. Although Sharon McKinney believed that cigarette smoking played a role in her husband's death, she also believed that asbestos exposure contributed to his death. Roland McKinney died of lung cancer on August 18, 1996, at the age of 64.

On December 31, 1996, Sharon McKinney and her two children brought an action for damages against a number of asbestos defendants, including appellants CPC and Amcord, Inc. The complaint alleged a survivor's action and a wrongful death action.

On January 14, 1998, McKinney served an offer to compromise on the defendants pursuant to Code of Civil Procedure section 998.¹ CPC and Amcord objected to the offer on the ground that it was premature in that discovery was still at an early stage. By the time of trial, most of the defendants had settled and only CPC and Amcord remained in the action.²

At the trial, Dr. Barry Ben-Zion, McKinney's economist, calculated that Roland McKinney's death resulted in lost financial support in the amount of $154,050. He concluded that the value of lost household services was $65,425.

On January 10, 2000, the jury returned a special verdict finding both Amcord and CPC partially responsible for McKinney's injury. The jury awarded $135,700 as lost financial support and $54,300 as the value of lost home services. In addition, it found that Roland McKinney, a smoker, was 50 percent responsible for his own injuries and that Amcord and CPC were each 17.5 percent responsible. The jury found that Amcord, but not CPC, acted with malice or oppression. Following the court's determination of offsets, judgment was entered jointly and severally against both defendants in the amount of $77,190.06 as economic damages. Non-economic damages were assessed against CPC in the amount of $481,250, and against Amcord in the same amount.

The court filed an amended judgment on October 17, 2000, finding that McKinney's offer to compromise was valid and assessed costs and expert witness fees against appellants. The court also imposed prejudgment interest on the damages awards. Amcord and CPC appealed, and the two appeals were consolidated for purposes of briefing, oral argument and decision.

DISCUSSION

CPC raises three issues on appeal: (1) improper denial of its motion to suppress all evidence of the decedent's pension and social security income; (2) absence of supporting evidence for Dr. Ben-Zion's testimony as to the value of lost household services and improper reliance on a Cornell study; and (3) erroneous imposition of prejudgment interest pursuant to Civil Code section 3291. Amcord also presents three issues: (1) failure to allow allocation of fault to tobacco companies; (2) error in granting enhanced costs and interest pursuant to Code of Civil Procedure section 998; and (3) abuse of discretion by admission of business records absent an adequate foundation.³

We discuss these issues in the order presented, and conclude that reversal is not required for any of the reasons argued by appellants.

I. The Collateral Source Rule Does Not Bar Evidence of a Plaintiffs Damages

CPC filed a motion in limine seeking to preclude evidence of Sharon McKinney's claim of past and future loss of the decedent's union Pension and Social Security benefits. CPC presented the following facts in its motion: Decedent retired in 1989 for reasons unrelated to asbestos exposure; he started receiving pension benefits and Social Security benefits at that time; he died on August 18, 1996; and, Sharon McKinney testified at her deposition that after the death, she received benefits from his Plasterer's Union pension and Social Security benefits calculated on the basis of her husband's income.

Appellants argued that McKinney's expert, Dr. Ben-Zion, testified at his deposition that Sharon McKinney was not receiving any less from the pension's survivor option than she would have received if decedent were alive.⁴ Arguing that Sharon McKinney suffered no actual loss of income, CPC requested an order that she be precluded from introducing evidence regarding any financial loss based on the decedent's Social Security and pension payments. It appears in the record that Mrs. McKinney was receiving only minimal benefits in her own name prior to the death.

When Dr. Ben-Zion testified at the trial, he stated that he computed "two types of economic losses sustained by the plaintiff as a result of the death of her husband." He described lost financial support as "the amount of dollars by which the plaintiff is worse off as a result of premature death of her husband. How many more dollars would she have had available for herself had her husband not died prematurely and had he continued to receive the pension and the social security." CPC argues that Ben-Zion's description demonstrates how admission of the pension and Social Security evidence was misleading.

In opposition, McKinney argued that decedent originally elected reduced pension benefits in order to obtain survivor benefits for his spouse. Sharon McKinney only began collecting the pension's survivor benefits after her husband died. Decedent had elected to receive Social Security payments at age 62, at a reduced rate. Those benefits were available by virtue of his payments into the system for many decades. Sharon McKinney received minimal Social Security benefits in her own name prior to the death. Since her husband's death, McKinney has also received Social Security widow's benefits of 70 percent of her late husband's pre-death benefits.⁵

The trial court denied the motion, stating that Sharon McKinney had not received her husband's Social Security and pension benefits prior to his death and that the benefits decedent received were derived from his employment and were similar to the wage he would have contributed during his life had he been working instead of retired.

CPC's claim is based on its argument that the widow's pension benefits and the Social Security survivor's insurance benefits were not "paid in connection with the injury or death at issue." It also argues that no benefit was lost because of the death since the widow afterwards received pension and Social Security payments. CPC claims that the collateral source rule only applies to pension benefits when they are paid to replace something that was lost because of the death. Contrary to appellants' claim, we find that Sharon McKinney's survivor benefits were paid as a direct result of the death. The loss sustained was the loss of Roland McKinney's contributions to the household from his income. The survivor benefits paid to Sharon McKinney were a replacement for the lost contributions from a source unrelated to appellants.

The collateral source rule operates to prevent a defendant from reducing a plaintiffs damages with evidence that the plaintiff received compensation from a source independent of the defendant. (Pacific Gas & Electric Co. v. Superior Court (1994) 28 Cal.App.4th 174, 176, 33 Cal. Rptr.2d 522.)...