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January 2012 Damages Update

January 10, 2012 - The Court of Appeals in Toledo v. Ni Christo, 2012 NY Slip Op 00089, has ruled that the proper method for calculating award interest in a wrongful death action is to discount the verdict to the date of the death and award interest from that point forward to the date of the judgment.

This wrongful death action involved a construction worker who was killed in an accident on September 21, 2002.  Summary Judgment was granted on the issue of liability and a trial was held on the issue of past and future damages.  At the damages trial, the trial court instructed the jury to determine the economic value of the decedent to his wife and children from the date on which he died.  The jury rendered a total verdict in excess of $4,000,000. 

Both of the parties submitted a proposed judgment.  The defendant's proposed judgment, did not discount the verdict back to the date of death or include any pre-verdict interest for the future wrongful death award.  The plaintiff's proposed judgment included pre-verdict interest under CPLR 5041.  The trial court granted the plaintiff’s proposed judgment.  When the court did this, it discounted future wrongful death damages to the date of death, using a discount rate of 4.8%, and then calculated interest at the 9% statutory rate under the CPLR 5004.  On appeal, the parties stipulated that the sole question to be determined was “whether the trial court properly discounted future wrongful death damages back to the date of death, and awarded interest thereon from the date of death to the date of judgment.”   

The Appellate Division affirmed the judgment as did the Court of Appeals (5-2).  The Court of Appeals held that under the EPTL 5-4.3, “interest upon the principal sum recovered by the plaintiff from the date of the decedent’s death shall be added to and be part of the total sum awarded.” Thus, the proper method for calculating pre-verdict interest in a wrongful death action is to discount the verdict to the date of liability (date of death) and award interest on that amount from the date of death to the date of judgment.  

The Court of Appeals found that awarding pre-verdict interest on future damages is not a penalty against the defendant.  Rather, it is the making whole of the plaintiff because the plaintiff has been deprived of the use of money from the moment that liability was determined and to allow the defendant to have the benefit of using this money would be a windfall to the defendant and a detriment to the plaintiff.  To see the entire decision, please click here.

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