New York Law Review

Tag: preverdict interest

  • Toledo v. Iglesia Ni Christo, 18 N.Y.3d 363 (2012): Preverdict Interest Calculation in Wrongful Death Actions

    18 N.Y.3d 363 (2012)

    In a wrongful death action in New York, preverdict interest on future damages is calculated by discounting the award to the date of the decedent’s death and then adding interest on that discounted amount from the date of death to the date of the judgment.

    Summary

    This case addresses the proper method for calculating preverdict interest on future damages in a wrongful death action under New York law. The Court of Appeals affirmed the lower court’s judgment, which discounted future damages back to the date of the decedent’s death and awarded interest from that date to the date of the verdict. The court held that this method accurately reflects the principle that damages in a wrongful death action are due as of the date of death, compensating the plaintiff for the loss of use of money to which they were entitled from that moment.

    Facts

    Joaquin Martinez Vargas died in a construction accident on September 21, 2002. His estate’s administrator, Jose Luis Toledo, sued Iglesia Ni Christo for negligence and wrongful death. The Supreme Court granted summary judgment on liability. A jury trial determined damages, with instructions to value the economic loss to the decedent’s family as of the date of death. The jury awarded damages for past and future losses. Post-trial, the defendant stipulated to additional damages for future loss of spousal services.

    Procedural History

    The Supreme Court accepted the plaintiff’s proposed judgment, which included discounting future damages to the date of death and adding preverdict interest. The defendant’s motion to resettle was denied. The Appellate Division initially reversed, then recalled its decision and affirmed the Supreme Court’s judgment. The Court of Appeals granted leave to appeal.

    Issue(s)

    Whether the trial court properly discounted future wrongful death damages back to the date of death and awarded interest on that amount from the date of death to the date of the verdict.

    Holding

    Yes, because EPTL 5-4.3 dictates that interest from the date of the decedent’s death should be added to the total sum awarded, reflecting the principle that damages in a wrongful death action are due as of the date of death.

    Court’s Reasoning

    The Court relied on EPTL 5-4.3, which mandates that interest from the date of death be included in wrongful death awards. It emphasized that wrongful death damages are considered due on the date of the decedent’s death. The Court distinguished its prior ruling in Milbrandt v. Green Refractories Co., stating that Milbrandt addressed situations where awards were not properly discounted, which is not the case here. The Court cited Rohring v. City of Niagara Falls, reinforcing the principle that future damages should be discounted to the date of liability (date of death) before calculating interest.

    The Court stated, “[T]he proper method for calculating preverdict interest in a wrongful death action is to discount the verdict to the date of liability, i.e., the date of death, and award interest on that amount from the date of death to the date of judgment.” The Court further reasoned that awarding preverdict interest compensates the plaintiff for the defendant’s use of money that was rightfully owed to the plaintiff since the date of death, and that denying such interest would result in a windfall for the defendant.

    The dissenting opinion argued that the majority’s approach created an unfair windfall for the plaintiff due to the discrepancy between the discount rate and the statutory interest rate. The dissent contended that discounting back to the date of death and adding interest should have the same result as simply awarding the date-of-verdict present value, but the use of different rates skewed the calculation to the plaintiff’s advantage.

  • Milbrandt v. Green Refractories Co., 79 N.Y.2d 26 (1992): Calculation of Preverdict Interest in Wrongful Death Actions

    Milbrandt v. Green Refractories Co., 79 N.Y.2d 26 (1992)

    In wrongful death actions under EPTL 5-4.3, preverdict interest should not be added to awards for future losses if the award has not been discounted to a time prior to the verdict; preverdict interest on past losses should be calculated using the method outlined in CPLR 5001(b).

    Summary

    This case addresses the proper calculation of preverdict interest in wrongful death actions, specifically concerning future and past losses. The Court of Appeals held that preverdict interest should not be added to future loss awards that are discounted only to the date of the verdict, as this would result in a double recovery. Furthermore, preverdict interest on past losses should be calculated from the time each loss was sustained, or from a reasonable intermediate date, as per CPLR 5001(b), rather than from the date of death for the total sum of past losses. This prevents awarding interest on damages not yet incurred.

    Facts

    Milbrandt: Plaintiff’s decedent died in an industrial accident in 1974. A jury awarded damages for both past pecuniary losses (from the death to the verdict) and future losses. The jury was instructed to discount future damages to their present cash value at the time of the verdict.

    Schmertz: Plaintiff’s decedent died in 1975. The jury awarded damages for loss of inheritance and loss of parental guidance. The loss of inheritance award compensated for the projected increase in the decedent’s estate had he lived his full life expectancy. The jury was presented with expert testimony discounting future damages to the date of the verdict, but the court did not explicitly instruct them to do so.

    Procedural History

    Milbrandt: After a mistrial, the second trial resulted in a verdict for the plaintiff. The defendant appealed, objecting to the preverdict interest calculation. The Appellate Division affirmed. The defendant then appealed to the Court of Appeals.

    Schmertz: The jury returned a verdict for the plaintiff. The defendant hospital objected to the inclusion of preverdict interest on the future loss awards and the calculation of interest on the past losses. The trial court denied the motion, and the Appellate Division affirmed. The defendant hospital appealed to the Court of Appeals with leave from the Appellate Division.

    Issue(s)

    1. Whether EPTL 5-4.3 requires preverdict interest to be added to awards for future pecuniary losses when the award is not discounted to a time earlier than the verdict.

    2. Whether preverdict interest under EPTL 5-4.3 should be calculated on the entire sum awarded for past accrued pecuniary losses from the date of death, or by calculating interest on each item of damage from the date it was incurred or on all damages from some reasonable intermediate date, as prescribed in CPLR 5001(b).

    Holding

    1. No, because adding preverdict interest to postverdict damages not discounted to the date of death results in a double recovery, conflicting with the statutory purpose of fair and just compensation.

    2. No, because preverdict interest on awards for past losses should be calculated under the method in CPLR 5001(b) to avoid awarding interest on damages not yet sustained.

    Court’s Reasoning

    The court reasoned that EPTL 5-4.3 aims to provide fair and just compensation for pecuniary injuries resulting from the decedent’s death. Adding preverdict interest to future loss awards that are only discounted to the date of the verdict leads to a double recovery, as the award already includes the return that would be earned on the principal from the date of death to the date of the verdict. The court emphasized that the statutory term “principal sum” refers to the discounted sum without any included interest, i.e., discounted to the date of death.

    Regarding past losses, the court determined that calculating interest on the total amount from the date of death includes interest for damages not yet sustained, resulting in a windfall. The court adopted the Second Circuit’s view in Woodling v. Garrett Corp., stating that the proper procedure is outlined in CPLR 5001(b): calculating interest “upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date.” This approach ensures that interest is only awarded on losses actually incurred.

    The court noted that a literal reading of EPTL 5-4.3 would lead to absurd results, depending on whether the court discounts future damages to the date of the award or back to the date of death. To avoid this, the court construed the statute to align with its intended effect: providing fair and just compensation. The court quoted EPTL 5-4.3 (a), emphasizing that the damages should be “fair and just compensation for the pecuniary injuries resulting from the decedent’s death.”