Tierney A. O'ROURKE, Public Administrator of Queens County,
New York, as Administrator of the Estate of
Alexandros Hadzis, deceased,
Plaintiff-Appellee- Cross-Appellant,
v.
EASTERN AIR LINES, INC., Defendant-Cross-Appellee,
and
United States of America, Defendant-Appellant-Cross-Appellee.
Nos. 56, 182, Dockets 83-6065, 83-6071.
United States Court of Appeals,
Second Circuit.
Argued Sept. 7, 1983.
Decided March 2, 1984.
Milton G. Sincoff, New York City (Steven R. Pounian, Kreindler & Kreindler, New York City, Chauncey E. Wilowski, Jamaica, N.Y., on brief), for plaintiff-appellee-cross-appellant.
Alan D. Reitzfeld, New York City (Walter E. Rutherford, Haight, Gardner, Poor & Havens, New York City, on brief), for defendant-cross-appellee.
Thomas B. Roberts, Asst. U.S. Atty., Brooklyn, N.Y. (Raymond J. Dearie, U.S. Atty., E.D.N.Y., Miles M. Tepper and Cyril Hyman, Asst. U.S. Attys., Brooklyn, N.Y., on brief), for defendant-appellant-cross-appellee.
Before MANSFIELD and PRATT, Circuit Judges, and TENNEY, Senior District Judge.*
TENNEY, District Judge.
Defendant, United States of America ("the United States"), appeals from a final judgment of the United States District Court for the Eastern District of New York, Henry Bramwell, District Judge, awarding plaintiff $982,100 in damages for the wrongful death of plaintiff's decedent. The United States contends that the award was excessive as a matter of law and, in addition, that the district court erred when it permitted the plaintiff to increase the ad damnum clause in the amended complaint to an amount in excess of the administrative claim filed pursuant to 28 U.S.C. Sec. 2675 (1976).
On cross-appeal, plaintiff, Tierney A. O'Rourke, the Public Administrator of Queens County, New York ("the Public Administrator") challenges (1) the application of New York law instead of Greek law to the question of damages, (2) the court's refusal to award prejudgment interest on a sum due from Eastern Air Lines, Inc. ("Eastern") under the absolute liability provision of the Warsaw Convention, (3) the exclusion of circumstantial evidence on the decedent's conscious pain and suffering, and (4) the exclusion of certain testimony on the issue of lost future earnings.
For the reasons stated below, we affirm the rulings contested by plaintiff on cross-appeal, but reverse on the issues raised by the government concerning the award of damages. The district court erred in allowing the plaintiff to amend the ad damnum clause. Furthermore, the award of damages is excessive, and, accordingly, the district court is instructed to retry the issue of damages unless the plaintiff is willing to remit 21% of the award.
BACKGROUND
On June 24, 1975 Eastern Air Lines Flight 66 en route from New Orleans to New York City crashed on its approach to John F. Kennedy International Airport ("JFK"). Among those killed in the crash was Alexandros Hadzis ("Hadzis"), a Greek citizen and seaman who was on his way home to Greece. The Public Administrator brought an action against Eastern and the United States on behalf of Hadzis' estate initially seeking $925,000 in damages for his wrongful death and conscious pain and suffering. The claim against the United Statеs, brought pursuant to the Federal Tort Claims Act ("FTCA"), 28 U.S.C. Secs. 2671-80 (1976),1 alleged that the air traffic controllers at JFK had been negligent. In addition, because Hadzis was engaged in international transportation at the time of the crash2 and, thus, subject to the terms and conditions of the Warsaw Convention ("the Convention"),3 as supplemented by the Montreal Agreement ("the Agreement"),4 plaintiff brought a separate claim for $75,000 against Eastern under the absolute liability provision of the Convention. All of the actions arising out of the crash were transferred to the Eastern District of New York and were consolidated for pretrial purposes. See In re Air Crash Disaster at John F. Kennedy Int'l Airport on June 24, 1975,
Plaintiff had previously made two motions. One sought a ruling that the damage law of Greece applied to the action on behalf of the Hadzis estate. The other sought permission to amend the complaint in that action to increase the ad damnum clause from $925,000 to $1,400,000. The district court ruled that New York law rather than Greek law applied and, with the other motion still pending, commenced a non-jury trial on the issue of damages.
On June 21, 1982, the lower court entered two orders. In one, the court granted plaintiff's motion to increase the ad damnum clause. In the other, which included the court's findings of fact and conclusions of law, the court awarded the plaintiff $982,100 for the wrongful death of Hadzis. The court made no award for his conscious pain and suffering apparently because no evidence had been admitted at the trial to substantiate this claim. During the course of the trial, the court ruled that the proffered testimony of Mary Mooney ("Mooney"), an Eastern flight attendant who survived the crash, was not relevant on the question of Hadzis' pain and suffering and was therefore inadmissible.
The district court also found that the $982,100 award did not have to be discounted. While it recognized the usual requirеment that awards be discounted to present value, see generally Jones & Laughlin Steel Corp. v. Pfeifer, --- U.S. ----,
Finally, in a post-trial motion, the plaintiff moved for an order directing Eastern to pay prejudgment interest on the $75,000. Finding that the damage limitation provisions of the Convention and Agreement were inclusive of prejudgment interest, the lower court denied the motion. O'Rourke v. Eastern Air Lines, Inc.,
Since we do not agree with the plaintiff-cross-appellant that the district court erred in its rulings on the prejudgment interest, the admissibility of testimony, or the choice-of-law question, we affirm on those issues. We do believe, however, that the court erred in allowing the plaintiff to amend the ad damnum clause and that the final damage award is excessive. Thus, a retrial of the damage issue is required unless the plaintiff agrees to a remittitur as set out below.
Because a determination of the appropriate substantive law to be applied in this case is necessary before we may consider in particular the prejudgment interest issue, and the award of damages, we will address the questions raised on cross-appeal first.
DISCUSSION
A. The Cross-Appeal
1. Choice-of-law
The Public Administrator argues that Judge Bramwell erred in applying New York's wrongful death law. Although New York's choice-of-law rules are far from clear, we do not believe that a New York court would agree with the plaintiff and apply the law of Greece in this case where the tortious conduct occurred in the state and New York is the forum state.
Under the FTCA a district court must apply the whole law of the state in which the acts of negligence occurred, including the choice-of-law rules of that state. Richards v. United States,
Following these guidelines, the district court held that under New York's choice-of-law rules a New York court would apply its own substantive law concerning wrongful death because it was either the place of the wrong or the place with the greater governmental interest. New York's Wrongful Death Statute, unlike that of Greece, does not provide for recovery in wrongful death actions for loss of consortium, Liff v. Schildkrout,
Our task is to determine what law New York courts would apply in this situation rather than a " 'rule we [might] think better or wiser.' " See id., at 17 (quoting Hausman v. Buckley,
The New York Court of Appeals was one of the first courts to reject the rigid lex loci delicti (place of the wrong) rule in favor of a more flexible modern approach to tort choice-of-law questions.6 In the landmark case of Babcock v. Jackson,
Justice, fairness and "the best practical result" ... may best be achieved by giving controlling effect to the law of the jurisdiction which, because of its relationship or contact with the occurrence or the parties has the greatest concern with the specific issue raised in the litigation.
However, over the next nine years, as a number of conflict-of-law cases involving wrongful death and guest statutes reached the court, the analytical methodology on which the court relied in selecting the appropriate law appeared to change. See, e.g., Dym v. Gordon,
Finally, in Neumeier v. Kuehner,
After Neumeier, the flow of explicative decisions dealing with tort chоice-of-law issues dwindled, and only a few short opinions have been issued by the Court of Appeals. See, e.g., Croft v. National Car Rental,
In Cousins, the court signaled an apparent retreat from its modern approach. It stated in dictum that "[i]t is true that lex loci delicti remains the general rule in tort cases to be displaced only in extraordinary circumstances. But it has been acknowledged that in airplane crash cases, the place of the wrong, if it can even be ascertained, is most often fortuitous."
Notwithstanding these uncertainties, a district court judge faced with a New York choice-of-law question can not throw up his or her hands and walk away from the problem. With the above discussion in mind, we have cоncluded that Judge Bramwell did not commit reversible error in ruling that a New York court would apply its own substantive law in this case.
We are not convinced that, as the Public Administrator argues, the lex loci delicti rule in New York applies only to choice-of-law issues involving tortious conduct and not to the issue of damages. The Court of Appeals in Cousins, albeit in dictum, stated that "lex loci delicti remains the general rule in tort cases." (Emphasis added).10 The court did not indicate that this statement applied only to tortious conduct. Moreover, we do not believe that claims arising out of an airplane crash require the application of the Cousins "extraordinary circumstances" exception simply because of the transitory nature of the tort. See Grancaris v. J.I. Hass Co., supra,
Even if a New York court applied interest analysis in the instant сase, we do not believe that it would agree with plaintiff that the law of the decedent's beneficiaries' domicile should always be applied in aviation wrongful death cases because that jurisdiction has the superior interest.11 This court has observed that " 'a domiciliary conceptualism that rest[s] on a vested right accruing from the fact of domicile' [should not be substituted] for New York's sophisticated 'interest analysis' approach to choice of law problems. The New York precedents require more." Rosenthal, supra,
In applying governmental interest analysis to a choice-of-law problem, a court examines the policies underlying the alleged conflicting laws to determine which state has the greatest interest in the application of its own law. See id. at 576-77,
Plaintiff has not persuaded us that the result should be otherwise. This is not a situation where one party seeks the application of an anachronistic law that would drastically limit or eliminate the damage award. See Kilberg v. Northeast Airlines, Inc.,
Thus, under either a government interest analysis approach or the rule of lex loci delicti, the law of New York should be applied to this case. Having determined this, we need not consider the government's alternate argument that under the FTCA a claim may not be brought against the United States if it is based on a foreign law. Nor is it necessary for us to decide whether a New York court would accept the public policy considerations relied on by the court in In re Paris Air Crash of March 3, 1974,
2. Prejudgment Interest on the Warsaw Convention Damage Award
The Public Administrator asserts that the district court erred in holding that the plaintiff could not recover prejudgment interest pursuant to New York law14 on the $75,000 damage award that it received from Eastern. We disagree.
Article 22 of the Warsaw Convention15 provides in pertinent part that:
(1) In the transportation of passengers the liability of the carrier for each passenger shall be limited to the sum of 125,000 francs [about $8,300 in 1934]. Where, in accordance with the law of the court to which the case is submitted, damages may be awarded in the form of periodical payments, the equivalent capital value of the said payments shall not exceed 125,000 francs [about $8,300 in 1934]. Nevertheless, by special contract, the carrier and the passenger may agree to a higher limit of liability.16
See supra note 3.
In 1965, the United States, dissatisfied with the inadequate liability limits afforded its citizens under Article 22, filed a formal notification of denunciation of the Convention to be effective May 15, 1966. Fearful that the world's largest air power would withdraw from the Convention, the majority of airlines signed what has become known as the Montreal Agreement. See Reed v. Wiser,
The limit of liability for each passenger for death, wounding, or оther bodily injury shall be the sum of US $75,000 inclusive of legal fees and costs, except that, in case of a claim brought in a State where provision is made for separate award of legal fees and costs, the limit shall be the sum of US $58,000 exclusive of legal fees and costs.
See supra note 4.
The Public Administrator argues that since paragraph 1(1) of the Montreal Agreement specifically states that the "$75,000 [is] inclusive of legal fees and costs" but makes no reference to the payment of prejudgment interest,18 the absence of express language addressing prejudgment interest should be construed to mean that the figure is exclusive of prejudgment interest. According to the Administrator, his interpretation would advance one of the main purposes of both the Convention and the Agreement, namely, the speedy resolution of claims.
We are not convinced that the payment of prejudgment interest would necessarily have any impact on the speed with which claims under the Convention are resolved. See 1 L. Kreindler, supra, at Sec. 12 A.08. Further, we are not satisfied that this is one of the main purposes of these agreements. In Reed v. Wiser,19 supra, a previous case in which this court examined the underlying purposes of the Warsaw Convention, we stated that:
It is beyond dispute that the purpose of the liability limitation prescribed by Article 22 was to fix at a definite level the cost to airlines of damages sustained by their passengers and of insurance to cover such damages....
....
... [A]t no time has this country ever abandoned the basic principle that, whatever the limits may be, air carriers should be protected from having to pay out more than a fixed and definite sum for passenger injuries sustained in international air disasters.
Id. at 1089 (emphasis in original) (footnotes omitted). We also noted that:
Another fundamental purpose of the signatories to the Warsaw Convention, which is entitled to great weight in interpreting that pact, was their desire to establish a uniform body of world-wide liability rules to govern international aviation, which would supersede with respect to international flights the scores of differing domestic laws, leaving the latter applicable only to the internal flights of each of the countries involved.
Id. at 1090 (footnotes omitted).
There is no indication that the contracting parties to the Montreal Agreement intended to modify these principles so that they would be liable for more than the fixed and definite sum of $75,000. See id. at 1089. See generally 1 L. Kreindler, supra, at Sec. 12 A.02-.06; Sheinfeld, From Warsaw to Tenerife: A Chronological Analysis of the Liability Limitations Imposed Pursuant to the Warsaw Convention, 5 J. of Air L. & Com. 653, 665-71 (1980). Although the $75,000 limitation may be anachronistic, the awarding of prejudgment interest in excess of this amount would be contrary to the purposes of the two agreements and would thus undercut the fundamental intent of their framers.
Nor can any support be found for the Public Administrator's position in the language of either document. We have noted that the specific words of a treaty should be given " 'a meaning consistent with the genuine shared expectations of the contracting parties.' " Reed, supra,
Furthermore, the Montreal Agreement must be read in the context of the Warsaw Convention. See id. at 597. The Convention indicates that any liabilities that the airlines may be subject to must be found within that document. Article 24 states that:
(1) In the cases covered by articles 18 and 19 any action for damages, however founded, can only be brought subject to the conditions and limits set out in this convention.
(2) In the cases covered by article 17 the provisions of the preceding paragraph shall also apply ....
See supra note 3 (emphasis added). In the five instances where the law of the forum is applicable, the articles so state explicitly. Reed, supra,
As a treaty adhered to by the United States, the Warsaw Convention is the supreme law of the land, see Reed, supra,
3. The Evidentiary Rulings
The Public Administrator contends that the district court made two erroneous evidentiary rulings concerning the admissibility of testimony during the course of the non-jury trial. First, the Administrator argues that the lower court should have admitted the testimony of Mary Mooney, one of the survivors of the crash, on the issue of the decedent's pain and suffering during the moments between the time when the wing of the descending airplane first struck the ground and the time of final impact. It was established in an offer of proof that Mooney, who was sitting about ten to fifteen feet behind Hadzis at the time of the crash, did not see Hadzis or know what happened to him during this five to ten second period. The Administrator argues, however, that her proffered testimony concerning the conditions within the airplane cabin was not irrelevant, as the court ruled. According to the Administrator, "if admitted, [this testimony would have been] sufficient circumstantial evidence to allow the trial court to draw the reasonable inference that Mr. Hadzis probably suffered consciously ...." Brief of Plaintiff-Appellee-Cross-Appellant at 21 (emphasis added).
We do not agree. The question of relevancy is entrusted to the trial judge's discretion, see United States v. Carter,
As for the second contested ruling, the plaintiff argues that thе district court erred when it ruled that certain proffered testimony of David Bunin ("Bunin"), plaintiff's economic expert, was inadmissible. The offer of proof made to the court demonstrates that Bunin was prepared to testify that a 2% negative growth rate factor should be applied to the award for lost future earnings, and that Hadzis would have been promoted to port captain, thus improving his earning potential.
The government argues that a number of adequate evidentiary and procedural grounds support the court's ruling. We agree. "[A] trial judge has broad discretion in the matter of the admission or exclusion of expert evidence, and his action is to be sustained unless manifestly erroneous." Salem v. United States Lines Co.,
The record indicates that Bunin's proffered testimony came as a surprise to the government because it was not within the scope of the pretrial order nor produced on discovery and that Judge Bramwell excluded the testimony on these grounds.21 In addition, the court found the testimony regarding Hadzis' potential promotion to port captain to be speculative and, thus, irrelevant. See Fed.R.Evid. 401; see also Fiederlein v. New York City Health and Hosp. Corp., supra. The plaintiff has not demonstrated that the exclusion of this testimony was manifestly erroneous. Accordingly, the lower court is affirmed on this issue.
B. The Appeal
1. The Ad Damnum Clause
The district court erred in granting plaintiff's motion to amend the ad damnum clause. As a jurisdictional prerequisite to a suit under the FTCA an administrative claim must be filed with the appropriate federal agency before an action may be commenced against the United States. 28 U.S.C. Sec. 2675(a). See also Adams v. United States,
Action under this section shall not be instituted for any sum in excess of the amount of the claim presented to the federal agency, except where the increased amount is based upon newly discovered evidence not reasonably discoverable at the time of presenting the claim to the federal agency, or upon allegation and proof of intervening facts, relating to the amount of the claim.
(Emphasis added).
Shortly before trial plaintiff moved pursuant to Sec. 2675(b) to increase the ad damnum clause from $925,000 to $1,400,000. Plaintiff asserted that, in the six years since it filed the administrative claim, an unprecedented rise had occurred in the salaries paid to Greek captains and mates. Finding that this circumstance constituted an "intervening fact" within the meaning of Sec. 2675(b), the court granted plaintiff's motion.
Under the circumstances of this case, however, the motion should not have been granted. While this is our first opportunity to examine Sec. 2675(b), other courts that have ruled on the scope of this section have granted motions to amend ad damnum clauses only when an unexpected change occurred either in the law or in a medical diagnosis. For example, in Husovsky v. United States,
In all of these cases, there was some indication that the amount of the original claim was calculated on the basis of known facts at the time of the filing and that, subsequently, some new and previously unforeseen information came to light. Here, no such showing has been made. Although it is uncontroverted that the salaries of Greek seamen increased dramatically during the intervening six years, plaintiff does not claim that this was unforeseen. More important, he failed to assert sufficient concrete facts demonstrating that he relied on the old salary structure data in the calculation of his original $925,000 claim.
The FTCA, as a statute waiving sovereign immunity, must be complied with strictly. See United States v. Kubrick,
2. Award of Damages
The government contends that the $982,100 damages award to Hadzis' estate is clearly excessive.22 According to the government this resulted from (1) the use of the total offset method to discount the award to present value, (2) the erroneous calculation of the amount of support that Hadzis would have supplied to his family, and (3) the excessive awards for loss of parental guidance and services.23 Although we do not agree with all of the government's contentions, we find that the district court made some errors in the calculation of the award, and that a retrial on the issue of damages is required unless the plaintiff is willing to remit 21% of the award.
The district court's use of the total offset method was not clearly erroneous or incorrect as a matter of New York law.24 While we have suggested that a 2% discount rate would be fair to all sides in cases involving federal law, Doca, supra,
The plaintiff's actuarial economist testified that, after studying data on the decedent's earning potential and the Greek economy, it was his conservative opinion that future interest and inflation rates in Greece would be equal and would cancel each other out.25 These factual findings were adopted by the district court. See Findings 43-45, J.A. at 241-42.
The government now contends that the lower court's use of the total offset approach was without an adequate factual basis. The government, relying on language from Stratis v. Eastern Air Lines, Inc.,
We do not agree. If the government had wanted the lower court to adopt one of the alternate discount rates that it now urges upon us, it should have had its own experts testify on this matter.27 The government was well aware before trial of Bunin's qualifications and that he intended to propose that the court adopt the total offset method for discounting the award. See J.A. at 73, 652-53. Nevertheless, the government did not object to Bunin's qualifications to testify on this matter during the trial. More important, the government did not introduce any experts of its own to refute Bunin's contentions; it "contented itself with cross-examination of plaintiff's expert." Vasina v. Grumman Corp., supra,
However, the district court's determination of the proportion of the decedent's income that would have gone to the support of his family is more problematic. The district court, relying on the testimony of Bunin, found that Hadzis provided his family with 88% of his earnings. The court reduced this figure to 80% to acсount for that portion of the money that was saved and later put to his own personal use. See Finding 47, J.A. at 242. At the trial, however, Bunin testified that Hadzis' gross pay for the 12 months preceding his death was approximately $18,500 and that he gave his family approximately $14,500. Id. at 629. He also testified that Hadzis used $2,000 for his own personal expenses and that he was carrying approximately $2,500 when the plane crashed. Id. at 630. The government argues that since $14,500 is 78% of $18,500 rather than 88%, Bunin obviously made a mathematical error in his calculation that the district court repeated in its findings of fact. See Finding 47, J.A. at 242.
The government contends that the amounts for past and future support should therefore be reduced by 10%. We agree, and unless the plaintiff is willing to remit 10% of the amounts awarded for support a new damage trial must be conducted.28
There is no support for the government's additional contention that the district court erred in the calculation of lost support because it excluded $2,000 that Hadzis sent annually to his parents. The district court acknowledged the existence of the gift, see supra, note 22, but found that this amount should not be included in the calculation for lost support on the theory that this amount was cancelled out by $2,000 in bonuses that Hadzis earned each year. Id. The bonuses also were not included in the calculation. Although the government contends that the bonuses were illegal and should not have been considered, the district court found that they were "customary and legitimate [and] could have been expected to continue throughout ... Hadzis' career." Finding 19, J.A. at 238. The government presents no evidence to the contrary, and while an ambiguity appears in the record concerning the calculation of lost support,29 the ruling that the bonus cancelled out the gift was not clearly erroneous.
Both the $75,000 awards for each child for loss of parental guidance and training, Findings 59, 60, J.A. at 244, and the award of $44,000 for loss of services, Finding 61, id., are so excessive as to shock the Court's conscience. See Franchell v. Sims,
In light of the above, we would grant a conditional remittitur to $779,981.30 If the plaintiff is unwilling to accept this, a new trial on damages is hereby ordered.
GEORGE C. PRATT, Circuit Judge, concurring and dissenting:
I concur in that part of the majority opinion addressed to the appeal by the United States of America, but dissent from the disposition of plaintiff's cross-appeal because it denies plaintiff prejudgment interest.
While the central purpose of the liability limitation established by the Warsaw Convention, as modified by the Montreal Agreement, was "to fix at a definite level the cost to airlines of damages sustained by their passengers and of insurance to cover such damages", Reed v. Wiser,
More importantly, as the various lawsuits wore on, Eastern had the use of that money and was able to earn interest on it. By the majority's own calculation, plaintiff's $75,000 recovery here would have earned $31,604.79 in interest even if calculated at New York's unrealistically low legal rates. Stated differently, therefore, "the cost to [Eastern Air Lines]," Reed v. Wiser,
Since Eastern was clearly and absolutely liable to pay plaintiff the $75,000 from the moment of death, interest on that sum earned during the legal proceedings required to compel its payment should accrue to plaintiff, not Eastern. Airline defendants and their insurers should not have an incentive to use the litigation process in order to reduce costs by delaying payment of moneys clearly due and owing.
Absent any language in, or purpose behind, either the Montreal Agreement or the Warsaw Convention that would preclude prejudgment interest, I agree with the view of the Fifth Circuit in Domangue v. Eastern Air Lines, Inc.,
Notes
Of the Southern District of New York, sitting by designation
The law of New York governs the substantive issues in this case. 28 U.S.C. Sec. 1346(b) (1976); see infra discussion
Hadzis' plane ticket provided for him to transfer from Eastern Flight 66 to TWA Flight 880, which flew from JFK to Greece
Convention for the Unification of Certain Rules Relating to International Transportation by Air, 49 Stat. 3000 (reprinted in 49 U.S.C. Sec. 1502 note, T.S. No. 876, 137 L.N.T.S. 11)
Agreement Relating tо Liability Limitations of the Warsaw Convention and the Hague Protocol, Agreement CAB 18990, approved by order E-23680, May 13, 1966 (Docket 17325), 31 Fed.Reg. 7302 (1966)
The court's jurisdiction in this case rested on 28 U.S.C. Sec. 1346(b) for the FTCA claim against the government and 28 U.S.C. Sec. 1332 (diversity of citizenship) for the claim against Eastern
For a comprehensive discussion of New York's choice-of-law rules and precedents see Korn, The Choice-of-Law Revolution: A Critique, 83 Colum.L.Rev. 772 (1983)
The following three principles were proposed by the Neumeier court:
When the guest-passenger and the host-driver are domiciled in the same state, and the car is there registered, the law of that state should control and determine the standard of care which the host owes to his guest
When the driver's conduct occurred in the state of his domicile and that state does not cast him in liability for that conduct, he should not be held liable by reason of the fact that liability would be imposed upon him under the tort law of the state of the victim's domicile. Conversely, when the guest was injured in the state of his own domicile and its law permits recovery, the driver who has come into that state should not--in the absence of special circumstances--be permitted to interpose the law of his stаte as a defense
In other situations, when the passenger and the driver are domiciled in different states, the rule is necessarily less categorical. Normally, the applicable rule of decision will be that of the state where the accident occurred but not if it can be shown that displacing that normally applicable rule will advance the relevant substantive law purposes without impairing the smooth working of the multi-state system or producing great uncertainty for litigants
N.Y.2d at 128,
Cousins was a strict products liability action arising out of a crash in Pennsylvania of a plane rented from a New Jersey corporation by a New York resident. The president of the corporation resided in New York, and the plane had been manufactured in Florida by a Pennsylvania corporation. The parties proceeded to trial on the assumption that New York law applied. Only belatedly did the plaintiff suggest that Pennsylvania law should apply. Under then-applicable New York law, contributory negligence barred recovery; under either New Jersey or Pennsylvania law it did not. The court held that it was not error for the trial judge "to apply New York law, [because it was] not only the law of the forum, but [also] the law apрlicable to significant events in this multi-State trip by air in the absence of compelling reason to apply belatedly another law, whether on the doctrine of lex loci delicti or otherwise."
The lower state courts have had difficulty with the "extraordinary circumstances" qualifier and uncertainty exists over whether lex loci delicti or "interest analysis" applies. See, e.g., Grancaris v. J.I. Hass Co.,
That the New York Court of Appeals never totally rejected the rule of lex loci delicti is apparent from a number of earlier opinions. See, e.g., Neumeier v. Kuehner, supra,
In support of its argument, plaintiff contends that in aviation wrongful death cases New York courts always apply the law of the decedent's or the beneficiaries' domicile. The Public Administrator cites Junco v. Eastern Air Lines, Inc.,
In addition, as the above discussion of the recent history of New York's conflict-of-law rules indicates, the precedential value of the older cases has been diminished by the evolution of the law. Long, for example, relied on the "most significant relationship" branch of the governmental interest analysis, confirmed by the court in Dym v. Gordon, supra. Dym, however, was later discredited by Tooker, supra,
Although only the United States responded to the Public Administrator's appeal of the choice-of-law issue, at the time the motion was made Eastern was still actively engaged in the litigation. Thus, the contacts of both defendants are relevant here. Eastern is incorporated in the State of Delaware and has its principal place of business in Florida. It does substantial business in New York. The United States, of course, is neither incorporated nor domiciled in any one state. If either defendant were domiciled in New York this would be a much easier case. Even though one court has reached a contrary conclusion concerning the importance of a defendаnt's New York domicile when this is also the tort locus, see Haydu v. Hosp. for Joint Diseases Orthopaedic Inst.,
Under the principles espoused by the late Professor Brainerd Currie--the leading exponent of "interest analysis"--the forum court would normally apply its own law unless the court found that another state had an interest in the application of its policy and the forum state had no interest. See Notes on Methods and Objectives in the Conflict of Laws, 1959 Duke L.J. 171, reprinted in B. Currie, Selected Essays on the Conflict of Laws, 177, 183-87 (1963). Thus, under this system, in cases where a true conflict exists or the forum state is disinterested it would apply its own law. Id. In contrast, under the system of interest analysis that New York has evidently adopted, see Cousins, supra; Neumeier, supra; see generally Korn, supra note 6, at 880-81, the law of the place of the wrong normally applies unless another state has a significant interest in the application of its own law. Under either approach New York law would be applied in this case since the place of the wrong and the forum are the same, and since Greece has not demonstrated that it has an interest significant enough to displace the normal rule
Prejudgment interest in a wrongful death action under the New York statute is considered to be a matter of substantive law. See Circle Line Sightseeing Yachts, Inc. v. Storbeck,
Under New York law prejudgment interest starting from the date of death is added to the damage award. N.Y.Est.Powers & Trusts Law Sec. 5-4.3 (McKinney 1981). Interest is calculated at a rate of 6% to June 25, 1981 and 9% thereafter. N.Y.Civ.Prac.Law Sec. 5004 (McKinney & Supp.1983). Thus, the amount of interest on $75,000 from the date of Hadzis' death until Eastern's deposit with the Clerk of the Court would be $31,604.79.
For a history of the Warsaw Convention, which was adopted in 1934, see Lowenfeld & Mendelsohn, The United States and the Warsaw Convention, 80 Harv.L.Rev. 497 (1967)
Article 17 of the Convention, under the chapter providing for the liability of carriers, states that:
The carrier shall be liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on boаrd the aircraft or in the course of any of the operations of embarking or disembarking.
See supra note 3.
The Montreal Agreement did not, however, affect Article 25 of the Convention which provides for recovery beyond the limitation amount if the plaintiff proves "wilful conduct" on the part of the carrier
The Warsaw Convention also makes no reference to the payment of prejudgment interest. Moreover, the agreement raising the liability limit to $75,000 was intended to be only an interim provision. See 1 L. Kreindler, Aviation Accident Law Sec. 12A.07 (1983); Lowenfeld & Mendelsohn, supra note 15, at 596. Indeed, the viability of the liability limitation provisions appears to be diminishing due to economic changes. See Franklin Mint Corp. v. Trans World Airlines, Inc.,
In Reed we held that airline employees are shielded by the liability limitation provision of the Warsaw Convention, as modified by the Montreal Agreement. We stated that:
To permit a suit for an unlimited amount of damages against a carrier's employees for personal injuries to a passenger would unquestionably undermine this purpose behind Article 22, since it would permit plаintiffs to recover from the carrier through its employees damages in excess of the Convention's limits.
None of the cases that the Public Administrator has cited in support of the proposition that the $75,000 amount is subject to prejudgment interest is persuasive. However, after oral argument in this case, the Court of Appeals for the Fifth Circuit rendered its decision in Domangue v. Eastern Air Lines, Inc.,
The instant case, however, differs significantly from Domangue. Here the plaintiff seeks an award of prejudgment interest pursuant to state law. As we noted, and as the fifth circuit acknowledged, this is contrary to one of the major objectives of the Convention, namely the establishment of a "uniform body of world-wide liability" rules. See Reed, supra,
Moreover, we do not agree with the fifth circuit's interpretation of the Montreal Agreement. The speedy resolution of claims was apparently not an important United States objective at the conference. See Lowenfeld & Mendelsohn, supra note 15, at 572. The principal purpose of the United States at the Montreal Conference was to increase the liability limit to $100,000. The absolute liability provision was introduced as a meаns of getting the United States to accept a liability limit lower than $100,000, see id. at 563, 570-71, and was not one of the prime objectives of the American delegation. See id. at 572 ("The United States delegation was itself divided on [this] issue, and its instructions were not firm on the point."). Thus, the payment of prejudgment interest would not advance any of the underlying objectives of the Convention or the Agreement, but it would undercut, as we discussed above, two of the Convention's major objectives.
Finally, even if we were to adopt the fifth circuit's discretionary approach, as the district court noted, this case would not be an appropriate one for an award of prejudgment interest. After an initial question was settled regarding who would represent the Hadzis estate, see Winbourne v. Eastern Air Lines, Inc.,
We note that contrary to the government's contention surprise is not one of the enumerated grounds for the exclusion of evidence under Federal Rule of Evidence 403. In fact, the Advisory Committee's Note to Rule 403 points out that surprise should not be a ground for exclusion of evidence and that "the granting of a continuance is a more appropriate remedy than exclusion of evidence." See also 1 J. Weinstein & M. Berger, supra, p 403, at 403-12 to -13. While there may be some situations in which unfair surprise alone would constitute a ground for the exclusion of evidence under Rule 403, see F & S Offshore, Inc. v. K.O. Steel Castings, Inc.,
In its Findings of Fact and Conclusions of Law the district court found: that Hadzis was a 31 year old Greek sailor who had obtained the rank of chief mate at the time of his death; that he would have been promoted to captain not long after the crash; that he was away from home an average of ten months a year; that his gross earnings for the twelve months before his death were $18,482; that he earned an annual $2,000 bonus for work related to the loading and unloading of ships, a bonus which brought his gross income to $20,482 for the twelve months before his death; that with a life expectancy of 75 years he could continue to work as a captain until age 62.5; that he would be eligible for a pension at age 50, even if he continued working; that at his death he was married and had two small children--one age 4 1/2 and the other age 11 months; that during one of the two months that he was home on leave he did the necessary repairs around the house; that he was the sole support for his wife and children; that he provided approximately $2,000 per annum to his parents; that based on the testimony of plaintiff's two witnesses--Spyros Varras ("Varras"), the American representative for the PanHellenic Seamen's Federation, and Bunin, an actuarial economist--the "total offset" method was the appropriate means to determine the present value of the award for lost future earnings; that until age 50 80% of Hadzis' income would have gone to support his family and that thereafter, from age 50 to 75, the figure would have been 70%; and that, for Hadzis' wrongful death, the decedent's estate was entitled to $982,100 which included, among other things, $75,000 for each child for loss of guidance and $44,000 for loss of services to Mrs. Hadzis. See Decision and Order, O'Rourke v. Eastern Air Lines, Inc., 76 Civ. 1025 (HB), dated June 21, 1982, reprinted in J.A. at 234-53
The award can be summarized as follows:
Past lost support $117,000
Future lost support 668,000
Loss of guidance 150,000
Loss of services 44,000
Funeral services 3,100
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$982,100
The government also argues that the excessiveness of the award is demonstrated by its size relative to other wrongful death awards in factually similar cases, and by the fact that, if the award were conservatively invested, the first annual return would yield an amount much greater than the decedent's last annual salary. Both contentions are specious
As this Court has previously pointed out, a "simplistic comparison of current bond yields with [the decedent's annual] income ignores the complexity of this (and almost every) damage-award calculation." Vasina v. Grumman Corp.,
As for any comparison to other wrongful death awards, "[i]t is recognized [under New York law] that there is no magic or precise mathematical formula for computing damages in a case of this kind and, since an award [for wrongful death] must be based upon intangible pecuniary losses, it is not surprising that differences of opinion occur. Each case is necessarily different." Rinaldi v. Statе,
Although both the government and the Public Administrator assumed on appeal that our recent decision in Doca, supra, governs the issue of discounting, we must first look to New York law. While a number of states have adopted a form of discounting that takes inflation into account, see, e.g., Kaczkowski v. Bolubasz,
Indeed, the plaintiff attempted to introduce evidence to prove that a negative discount figure should be applied to increase the amount of the award. See supra discussion at page 23
In Stratis, a damage action brought by a Greek seaman who survived the crash of Eastern Flight 66, we held that "the testimony about past and future losses, presented through a Greek lawyer rather than a person expert in the marine industry, is insufficient to support the award."
The government argues that, based on the data supplied by plaintiff's expert and the analysis in Doca, supra, a 10%, 5% or 2% discount rate would be more appropriate than the total offset method. The alternate percentages were derived from various scenarios in which some of the assumptions put forward by the plaintiff's expert are accepted and others rejected
Thus, the support figures for the years prior to Hadzis reaching age 50 would be reduced from 80% to 70% and from age 50 to 75 from 70% to 60%. See Findings 47-48, 51-58, J.A. at 242, 243-44
It is unclear from the record whether the $2,500 that Hadzis was carrying with him on the trip was for his personal use or the use of his family, or some combination thereof
The amounts awarded would be reduced to the following figures:
Past lost support $102,375
Future lost support 577,506
Loss of guidance 75,000
Loss of services 22,000
Funeral expenses 3,100
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$779,981