Pratt v. George Spalty Sons, Inc.

• Decision Date: 21 May 1987
• Docket Number: MARLEY-WYLAIN
• Citation: 516 N.Y.S.2d 433,135 Misc.2d 588
• Court: New York Supreme Court
• Parties: William H. PRATT and Lincoln First Bank, N.A., Executors of the Estate of Jean McLean Pratt, Plaintiffs, v. GEORGE SPALTY SONS, INC., Brandt Air Conditioning, Inc., Ward Heating Supply Co., Inc., and Marley-Wylain Co., Separately and d/b/a Friedrich Air Conditioning & Refrigeration Co., Defendants. GENERAL ACCIDENT GROUP, Plaintiff, v. GEORGE SPALTY SONS, INC., Brandt Air Conditioning, Inc., Ward Heating Supply Co., Inc., and Friedrich Air Conditioning & Refrigeration Co., Defendants.CO., as Successor in Interest to Friedrich Air Conditioning & Refrigeration Co., Defendant and Third Party Plaintiff v. FLAIR MANUFACTURING CORP., Third Party Defendant.

Page 433

516 N.Y.S.2d 433

135 Misc.2d 588

William H. PRATT and Lincoln First Bank, N.A., Executors of

the Estate of Jean McLean Pratt, Plaintiffs, v. GEORGE SPALTY SONS, INC., Brandt Air Conditioning, Inc.,

Ward Heating Supply Co., Inc., and Marley-Wylain

Co., Separately and d/b/a Friedrich Air

Conditioning & Refrigeration

Co., Defendants.

GENERAL ACCIDENT GROUP, Plaintiff, v. GEORGE SPALTY SONS, INC., Brandt Air Conditioning, Inc.,

Ward Heating Supply Co., Inc., and Friedrich Air

Conditioning & Refrigeration Co., Defendants.

MARLEY-WYLAIN CO., as Successor in Interest to Friedrich Air

Conditioning & Refrigeration Co., Defendant and Third Party Plaintiff v. FLAIR MANUFACTURING CORP., Third Party Defendant.

Supreme Court, Monroe County.

May 21, 1987.

Faraci, Guadagnino, Lange & Johns, Rochester (John A. Bryant, of counsel), for plaintiffs.

Harter, Secrest & Emery, Rochester (Peter M. Blauvelt, of counsel), for defendant George Spalty Sons, Inc.

Chamberlain, D'Amanda, Oppenheimer & Greenfield, Rochester (Henry R. Ippolito, of counsel), for defendant Brandt Air Conditioning, Inc.

Robert J. Burke, Rochester (Leo G. Finucane, of counsel), for defendant Ward Heating Supply Co. Inc.

Harris, Beach, Wilcox, Rubin & Levey, Rochester (William L. Dorr, of counsel), for defendant Marley-Wylain Co.

Bayer & Smith, Rochester (Michael A. Reddy, of counsel), for plaintiff General Acc. Group.

Gough, Skipworth, Petralia, Summers, Eves & Trevett, Rochester (Walter C. Eves, of counsel), for third-party defendant Flair Mfg. Corp.

DAVID O. BOEHM, Justice.

The decedent, Jean Pratt, died on February 19, 1979, 27 days after a fire destroyed her home. The fire was allegedly caused by defects in a gas furnace manufactured by Friedrich Air Conditioning and Refrigeration Co., predecessor in interest to defendant Marley-Wylain Co. In November, 1980, the plaintiffs, executors of the decedent's estate, commenced this action seeking, in part, damages for decedent's wrongful death.

The decedent died testate, and named her three adult children, a daughter and two sons, as residuary beneficiaries in her Will. The Will further provides that the estate taxes are to be paid from the residuary estate. Decedent's three children are also decedent's only statutory distributees (EPTL §§ 1-2.5, 4-1.1).

In their Bill of Particulars plaintiffs assert as an item of special damages the increased estate taxes which resulted from decedent's premature death. Specifically, the plaintiffs claim that the decedent's untimely death resulted in the proceeds from the insurance policies which she had transferred to her children being included in her estate and, by dying when she did, the estate was deprived of phased-in tax credits. All of the defendants in the main action, as well as third-party defendant Flair Manufacturing Corp., move to dismiss this claim for special damages. ^*

Plaintiffs contend that decedent, who was 78 years old at the time of her death, had a statistical life expectancy of about 10 years. In August, 1976, decedent transferred ownership of eleven life insurance policies with total proceeds of $79,683.33 to her three children. Because she did not live the required three year period following these gifts, the policy proceeds were included in her estate for estate tax purposes as gifts in contemplation of death, resulting in additional combined Federal and New York estate taxes of $31,235.86.

In addition, plaintiffs argue that decedent's premature death deprived her estate of the full value of the phased-in "unified credit" (26 U.S.C. § 2010). Added to the Federal estate tax law in 1976 and amended as part of the Economic Recovery Act of 1981, the unified credit provided for a phased-in credit starting at $30,000 for decedents dying in 1977, and reaching a maximum of $192,800. for those dying in 1987 and thereafter. If decedent had lived her normal life expectancy, plaintiffs argue, she would have lived two years longer than necessary to have the benefit of the maximum unified credit. However, since she died in 1979 when the unified credit was $38,000, the resulting estate taxes were $154,800 more than if the maximum unified credit applied.

Since loss of a possibility of inheritance is a proper element of damage in a death action, plaintiffs' position is not without merit (37 NY Jur 2d Death § 322). Indeed, one Court has held that increased estate taxes resulting from a decedent's premature death deprived her estate of the benefit of a higher unified credit, and therefore constituted a recoverable pecuniary loss (Farrar v. Brooklyn Union Gas Co., 131 Misc.2d 936, 502 N.Y.S.2d 610).

Defendant, Marley-Wylain, argues, however, that Farrar is distinguishable because the decedent there died intestate and thus the increased tax burden fell upon the decedent's distributees in their capacity as intestate distributees. Here, however, the decedent executed a Will and therefore, Marley-Wylain contends, the distributees only suffered injury in their capacity as residuary beneficiaries, not as intestate distributees, the only capacity in which they may recover under the wrongful death statute. Marley-Wylain cites no authority for its position.

While it is true that the purpose of a wrongful death action is to compensate a decedent's distributees for pecuniary injuries they sustained as a result of the decedent's death (Parilis v. Feinstein, 49 N.Y.2d 984, 985, 429 N.Y.S.2d 165, 406 N.E.2d 1059), this is not to say that those persons coming within the definition of distributees (EPTL § 1-2.5) may not...