Oldham, Nan M. v. Korean Airln Co Ltd
127 F.3d 43 | D.C. Cir. | 1997
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 6, 1997 Decided September 23, 1997
No. 94-5321
Nan M. Oldham, Individually and as Personal Representative
of the Estate of John R. Oldham, Deceased,
Appellee/Cross-Appellant
v.
Korean Air Lines Co., Ltd.,
Appellant/Cross-Appellee
Consolidated with Nos. 94-5323, 94-5324, 94-5371 & 94-5382
Appeals from the United States District Court
for the District of Columbia
(No. 83cv02941)
(No. 83cv03792)
(No. 83cv03889)
---------
Andrew J. Harakas argued the cause for appellant, with
whom Deborah A. Elsasser was on the briefs. Timothy J.
Lynes entered an appearance.
Juanita M. Madole argued the cause and filed the briefs
for appellees.
Before Wald and Randolph, Circuit Judges, and Buckley,
Senior Circuit Judge.
Opinion for the court filed by Senior Judge Buckley.
Buckley, Senior Judge: These consolidated cross-appeals
concern pecuniary and nonpecuniary damages awarded in
three separate actions brought against Korean Air Lines Co.,
Ltd., by the survivors and estates of four passengers killed on
a flight from New York City to Seoul, Korea in 1983. As
explained more fully below, we affirm in part, reverse in part,
and remand for certain proceedings.
I. Background
A. Proceedings in and Disposition by the District Court
On September 1, 1983, Korean Air Lines ("KAL") flight
KE007 deviated from its plotted course and strayed into the
airspace of the former Soviet Union. The plane crashed into
the Sea of Japan after being struck by missiles fired from a
Soviet military fighter plane. The crash killed all 269 persons
aboard. See generally In re Korean Air Lines Disaster of
September 1, 1983, 932 F.2d 1475, 1477-79 (D.C. Cir. 1991).
Multi-district litigation proceedings established KAL's liabili- ty for this disaster. The individual cases were then separate- ly tried for damages. In this appeal, KAL challenges damage
awards in three of those trials.
In 1993, KAL filed a number of motions in the cases then
awaiting trial in the United States District Court for the
District of Columbia, two of which now come before us on
appeal. The first motion sought to limit recoverable damages
to those authorized by the Death on the High Seas Act
("DOHSA"), 46 U.S.C. App. ss 761-768, which prohibits re- covery of nonpecuniary damages. In the second, KAL op-
posed the plaintiffs' requests for the award of prejudgment
interest and argued that in the event the court made such an
award, interest should be based on the rates paid on 52-week
Treasury Bills.
On April 8, 1993, the district court denied the motions. It
held that DOHSA did not preclude the recovery of damages
for non-pecuniary injuries because, in the court's view, dam- ages for loss of society, survivor's grief, and pre-death pain
and suffering were recoverable under Article 17 of the War- saw Convention governing international air transportation.
See Convention for the Unification of Certain Rules Relating
to International Transportation by Air, Oct. 12, 1929, art.
XVII, 49 Stat. 3000 (1934) (reprinted in note following 49
U.S.C. s 40105 (1994)) ("Warsaw Convention"). The court
also ruled that prejudgment interest is recoverable at a rate
to be determined after trial.
The cases were then tried in order to determine KAL's
liability for the four deaths. The juries made the following
awards: Oldham v. KAL: Death of John Oldham:
a. to Nan M. Oldham (mother):
(1) loss of support: $ 26,000
(2) loss of society: $100,000
(3) grief: $225,000*
b. to Charlotte Oldham-Moore (sister):
(1) loss of financial support: $ 8,000
(2) loss of guidance, training, and advice: $ 25,000
(3) loss of society: $ 20,000
(4) grief: $ 65,000*
c. to Nancy Oldham Raab (sister):
(1) loss of society: $ 15,000
(2) grief: $ 40,000*
d. to William D. Oldham III (brother):
(1) loss of society: $ 20,000
(2) grief: $ 60,000*
e. Pre-death pain and suffering: $100,000 Maikovich v. KAL: 1.Death of Allen Kohn:
a. to Robert Kohn (son):
(1) loss of support, gifts, and contribu-
tions $120,000
(2) loss of inheritance: $434,000
(3) loss of guideance, training, aand advice: $ 50,000
(4) loss of society: $150,000
(5) grief: $180,000*
b. to Joseph Kohn (son):
(1) loss of gifts and contributions: $ 60,000
(2) loss of inheritance: $433,000
(3) loss of guidance, training, and advice: $ 30,000
(4) loss of society: $ 80,000
(5) grief: $ 80,000*
c. to Marsha Maikovich (daughter):
(1) loss of gifts and contributions: $ 70,000
(2) loss of inheritance: $433,000
(3) loss of guidance, training, and advice: $ 30,000
(4) loss of society: $100,000
(5) grief: $100,000*
d. Pre-death pain and suffering: $100,000
2. Death of Lillian Kohn:
a. to Robert Kohn (son):
(1) loss of gifts and contributions: $ 70,000
(2) loss of guidance, training, and advice: $ 50,000
(3) loss of society: $150,000
(4) grief: $130,000*
b. to Joseph Kohn (son):
(1) loss of gifts and contributions: $ 60,000
(2) loss of guidance, training, and advice: $ 30,000
(3) loss of society: $ 80,000
(4) grief: $ 80,000*
c. to Marsha Maikovich (daughter):
(1) loss of gifts and contributions: $ 70,000
(2) loss of guidance, training, and advice: $ 30,000
(3) loss of society: $100,000
(4) grief: $100,000*
d. to Lillian Percy Beale (mother):
(1) loss of society: $ 50,000
(2) grief: $ 50,000*
e. Pre-death pain and suffering: $100,000 Ocampo v. KAL: Death of Suellen Ocampo:
a. to Edward Ocampo (husband):
(1) loss of services: $ 26,000
(2) loss of society: $ 35,000
(3) grief: $ 75,000*
b. to the Estate of Suellen Ocampo:
(1) loss of net accumulated assets: $ 63,016
(2) pre-death pain and suffering: $ 0
* All jury awards for grief were later stricken by the
district court.
Following entry of final judgment in each case, KAL timely
moved for judgment as a matter of law or, in the alternative,
for a new trial or remittitur of damages. The district court
granted KAL's motions to set aside all damage awards for
survivors' grief but denied the motions in all other respects. B. Statement of Relevant Facts in the Individual Cases
1. Oldham v. KAL
This action was brought by Nan Oldham, the mother of
decedent John R. Oldham, on her own behalf and as personal
representative of his estate. She seeks pecuniary and nonpe- cuniary damages for herself, the estate, and the decedent's
three surviving siblings, Charlotte Oldham-Moore, Nancy
Oldham Raab, and William D. Oldham III.
Mr. Oldham's parents, Dr. William Oldham and Nan Old- ham, became separated in 1970 when she and her children
returned to the United States from Taipei, Taiwan, where the
family had lived since 1966. They were divorced in the
following year. Since that time, Dr. Oldham has continued to
live overseas and has had virtually no contact with his chil- dren. In fact, at the time of Mr. Oldham's death, his younger
sister Charlotte, who was then 18, had not seen her father
since she was one-and-one-half years old.
Mr. Oldham received his undergraduate degree from
Princeton University. During his years there, he returned
home during holidays and in the summers to be with his
mother and siblings. In 1980, after a year abroad as a
Fulbright scholar during his senior year of college, Mr.
Oldham began a three-year program at Columbia University's
law school, returning home to be with his family during
vacations, in the summer, and about twice a month on week- ends during the school year. There is ample testimony that
during all these years, he took a special interest in the
upbringing and education of his sister Charlotte and that she
came to regard him as a surrogate father.
Following his graduation from law school in 1983, the law
firm of Surrey & Morse offered him a job as an associate.
Because he had an opportunity to teach the American legal
system in China as a Ford Foundation Fellow, the firm
rescheduled his starting date for June 1984 at the same
salary. Mr. Oldham told a professor at the law school and a
lawyer at Surrey & Morse about his family's background and
about his belief that he bore the financial responsibility for
supporting his mother and his sister Charlotte. (His sister
Nancy had married in 1982.)
Mr. Oldham also mentioned to family members that he
intended to provide financial assistance to his mother and
Charlotte once he was earning a salary. Charlotte admitted
that she had never received financial assistance from her
brother. Although she expected that he would have helped
finance her education, she did not know how much he would
have contributed.
2. Maikovich v. KAL
Marsha J.K. Maikovich, daughter of decedents Allen and
Lillian Kohn, sued for pecuniary and non-pecuniary damages
on her own behalf and on behalf of her parents' estates. The
Kohns were survived by three children, Marsha Maikovich,
Joseph Kohn, and Robert Kohn, and Lillian Kohn's mother,
Lillian Percy Beale. At the time of the crash, Allen Kohn
was a 64-year-old stockbroker with Drexel Burnham Lam- bert ("Drexel Burnham"). He had spent his entire career at
Drexel Burnham, having started to work for the firm in the
mid-1950's. His compensation during the years from 1978
through 1982 ranged between $58,425 and $78,355. In 1983,
his earnings up to September 1, the day he died, totaled
$106,365. In the approximately 30 years that he had worked,
he had accumulated an estate of $1,500,000, all of which was
distributed to his children after his death.
Decedent Lillian Kohn was 55 years old when she died.
She was a homemaker who worked on occasion as a freelance
writer. The only evidence of her earnings presented at the
trial showed that she had been paid $11,654 in 1979.
The Kohns' two oldest children, Marsha Maikovich (age 29)
and Joseph Kohn (age 26), were college educated, financially
independent adults at the time of the crash. Both testified at
the trial that, at the time of the crash, they were not receiving
any money from the decedents for necessities and did not
expect to need or receive financial support from them in the
future. Nevertheless, the Kohns' children remained extreme- ly close to their parents and telephoned them one or more
times a week to share experiences and to discuss their
problems. The evidence also indicated that the Kohns made
frequent financial contributions to or on behalf of the adult
children.
Their third child, Robert Kohn, was 17 years old and
preparing to attend college at the time of the crash. When
he turned 18, Robert assumed control of a custodial account
containing $102,449 that had been established by Allen Kohn
for Robert's education. Although the Kohns had established
similar accounts for their other two children, their father paid
for their college and post-graduate expenses out of other
funds and gave these children the money in the custodial
accounts. Robert ultimately received undergraduate and
graduate degrees and, at the time of the trial, was working
for a consulting firm outside of Pittsburgh.
3. Ocampo v. KAL
Decedent Suellen Ocampo, who was 39 years old at the
time of her death, lived with her husband Edward Ocampo
(the plaintiff in this case), their two minor children (ages 3
and 4), and her mother. Although Mrs. Ocampo's mother and
two children were also killed in the KE007 crash, their claims
were settled prior to trial. The trial therefore concerned only
KAL's liability to Mr. Ocampo and to his wife's estate.
The decedent was a licensed pharmacist who earned ap- proximately $32,000 a year. At the time of the crash, Mr.
Ocampo was employed at a brokerage firm. He had previ- ously worked as a housekeeper and as a restaurant manager.
His mother-in-law looked after the two children and was fully
dependent on the Ocampos for her financial support.
At the trial, Mr. Ocampo testified that he had contributed
about 40 percent of the family's total support and that he and
his wife had placed all of their money in a joint account from
which he received $20 a week. He also testified that his wife
paid the household bills from the account. The Ocampos
owned a home in Staten Island, New York, for which they
had made a $20,000 down payment that virtually exhausted
their savings. Mr. Ocampo failed to present any evidence
that would indicate either the size of their family expenses or
the extent to which the expenses had been paid by the
decedent.
II. Analysis
We will address the issues common to all three cases and
then discuss the issues particular to Oldham, Maikovich, and
Ocampo in that order. A. Claims Common to the Three Cases
1. This Court's July 26, 1996 Order
Following the parties' submissions of briefs in these ap- peals, we ordered that the cases be held in abeyance pending
the decision of the Supreme Court in Zicherman v. Korean
Air Lines Co., Ltd., 116 S. Ct. 629 (1996). Order dated
September 20, 1995. The Supreme Court issued its decision
on January 16, 1996, which held, inter alia, that
Articles 17 and 24(2) of the Warsaw Convention permit
compensation only for legally cognizable harm, but leave
the specification of what harm is legally cognizable to the
domestic law applicable under the forum's choice-of-law
rules. Where, as [in the case of Flight KE007], an
airplane crash occurs on the high seas, DOHSA supplies
the substantive United States law.... DOHSA permits
only pecuniary damages.... Id. at 637. The Court, however, explicitly declined to consid- er whether DOHSA permits the recovery of damages for a
decedent's pain and suffering. Id. at 636 n.4. KAL moved
for permission to submit a supplemental brief to address the
recoverability of such damages under DOHSA. We directed
the parties to file replacement briefs "limited in scope to
those issues which were raised in the parties' first [submis- sions]" and dismissed as moot KAL's motion for leave to file
supplemental papers. Order dated July 26, 1996.
In its replacement briefs, KAL challenged the availability
of damages for pre-death pain and suffering under DOHSA
even though it had failed to raise that issue in its earlier
submission. KAL claims that our July 26 Order implicitly
permitted it to argue the question because, it asserts, we
would not have dismissed its request as moot unless we
intended to allow it to discuss the matter. KAL is mistaken.
Our July 26 Order clearly stated that the parties' replacement
briefs would be "limited in scope to those issues" raised in the
first submissions. We dismissed KAL's motion as moot
because our instructions indicated that KAL could not ad- dress the availability of pre-death pain and suffering damages
if the question had not previously been raised.
KAL offers no reason why it could not have raised the
issue in its initial briefs. This is hardly surprising because it
was well aware of its existence long before the Supreme
Court's decision in Zicherman. In fact, KAL's counsel had
argued the unavailability of damages for pre-death pain and
suffering before the district court and in several related cases
elsewhere in the country. Accordingly, we will not consider
KAL's claim that such damages are unavailable as a matter of
law. See Bickel v. Korean Air Lines Co., Ltd., 96 F.3d 151,
153-54 (6th Cir. 1996) (declining, in a related case, to address
pre-death pain and suffering claims because issue was not
raised in initial briefs), cert. denied, 117 S. Ct. 770 (1997).
2. Loss of Society
KAL contends that the district court erred in holding that
damages for loss of society were available under Article 17 of
the Warsaw Convention. Although such damages are recov- erable under general maritime law, see Sea-Land Servs., Inc.
v. Gaudet, 414 U.S. 573, 585 (1974), the Supreme Court ruled,
in Zicherman, that "where DOHSA applies, neither state law
... nor general maritime law ... can provide a basis for
recovery of loss-of-society damages," 116 S. Ct. at 632 (cita- tions omitted), and that "[b]ecause DOHSA permits only
pecuniary damages, petitioners are not entitled to recover for
loss of society." Id. at 637. Accordingly, the awards for loss
of society are disallowed. B. Oldham v. KAL
The jury awarded decedent John Oldham's younger sister,
Charlotte Oldham-Moore, $8,000 for loss of support and
$25,000 for loss of guidance, training, and advice. KAL
argues that because Charlotte was not dependent on her
brother prior to or at the time of his death, she cannot
recover these damages under DOHSA.
The district court rejected this argument, reasoning that
[a]lthough KAL is correct that recovery for loss of
guidance, training, and advice under ... DOHSA[ ] has
generally been limited to a decedent's children, in light of
the Warsaw Convention's intent to compensate claimants
for "damage sustained," this Court finds that whether
recovery for loss of guidance, training, and advice is
permissible depends upon the factual circumstances giv-
ing rise to such a claim. Oldham v. Korean Air Lines Co., Ltd., C.A. No. 83-3889,
mem. op. at 16 (D.D.C. Oct. 11, 1994). The court noted that it
had instructed the jury that "in order for Charlotte to recov- er, you must find from the evidence that John Oldham acted
in place of a parent or a father for her." Id. With respect to
loss of support, the court found that, because the mother and
sister had testified to conversations in which Mr. Oldham had
pledged to provide them with financial assistance in the
future, there was sufficient evidence in the record to sustain
the jury award.
As we have explained, the district court erred in relying on
the Warsaw Convention. See Zicherman, 116 S. Ct. at 634- 36. Moreover, under DOHSA, a suit for damages may be
brought only "for the exclusive benefit of the decedent's wife,
husband, parent, child or dependent relative." 46 U.S.C. app.
s 761; see Evich v. Connelly, 759 F.2d 1432, 1433 (9th Cir.
1985) ("Siblings must prove their dependency in order to
bring a DOHSA action."). For dependency to exist, "there
must be a legal or voluntarily created status where the
contributions are made for the purpose and have the result of
maintaining or helping to maintain the dependent in his
customary standard of living." Petition of United States, 418
F.2d 264, 272 (1st Cir. 1969) (quoting United States Fidelity
& Casualty Co. v. Britton, 188 F.2d 674, 675 (D.C. Cir. 1951)).
We agree with KAL that there is no evidence that Char- lotte was financially dependent upon her brother. To the
contrary, the record shows that she was supported by her
mother and that Mr. Oldham had never provided her with
any financial support prior to his death. Although there was
evidence that Mr. Oldham had promised his mother and sister
that he would support them in the future, a pledge of future
performance is insufficient to establish a present state of
dependency. Accordingly, we reverse the awards. C. Maikovich v. KAL
KAL argues that, in Maikovich, the district court erred in
allowing damage awards for the following: (1) the Kohn
children's loss of inheritance; (2) their loss of gifts and
contributions and of support; (3) their loss of guidance,
training, and advice; and (4) the decedent's pain and suffer- ing.
1. Loss of Inheritance
The jury awarded the Kohn children $1.3 million for loss of
inheritance. The district court then employed the "Ibbotson
Index" (a stock market index that tracks the rate of return on
investments in traded securities) in calculating the pre- judgment interest, which increased the total to approximately
$5 million. KAL challenges this award on four grounds.
KAL claims, first, that the court abused its discretion when it
admitted testimony by the plaintiff's expert witness, Dr.
Thomas C. Borzilleri. KAL relies on Joy v. Bell Helicopter
Textron, Inc., 999 F.2d 549, 568 (D.C. Cir. 1993) (holding that
admission of expert testimony was abuse of discretion when
testimony was pure conjecture unsupported by the record), to
argue that Dr. Borzilleri's testimony should have been exclud- ed because his calculations and method of projecting the loss
of inheritance were "rampant speculation." Second, it argues
that the award is not supported by sufficient evidence in the
record. Third, KAL contends that the amounts awarded for
the losses of gifts and contributions should have been deduct- ed from the awards for losses of inheritance. Fourth, it
argues that the court erred in its calculation of prejudgment
interest.
Each side presented expert testimony on the value of the
Kohn children's lost inheritance. The testimony focused on
two related questions: (1) How much would have been added
to the children's inheritance out of Mr. Kohn's future earn- ings if he had not died prematurely; and (2) how much larger,
if at all, would the inheritance have been if Mr. Kohn had
been able to continue to manage the $1.5 million securities
portfolio beyond 1983.
With respect to the first question, the parties' experts
projected Mr. Kohn's future earnings over their respective
estimates of his future work life, added a percentage for
fringe benefits that Mr. Kohn would have received from his
employer, and deducted taxes and personal/family expenses
in order to arrive at annual savings that his children would
have ultimately inherited. In his initial presentation, Dr.
Borzilleri estimated the value of the accrued savings to be
$1.6 million in 1993 dollars (1993 being the year the trial took
place), while KAL's expert, Dr. John Glennie, valued the
savings at $256,000 in 1983 dollars (the year of the crash).
The disparity between Dr. Borzilleri's and Dr. Glennie's
initial estimates results largely from three critical differences
in their assumptions and methodologies. First, the experts
used different "base" incomes for their projections. While
they both attributed to Mr. Kohn an annualized 1983 income
of approximately $162,000 based on his earnings prior to his
death on September 1, 1983, Dr. Borzilleri used that figure as
his base in computing what Mr. Kohn would have earned in
succeeding years. But because Dr. Glennie considered those
earnings aberrational (they were more than twice as large as
those of any previous year), he used Mr. Kohn's 1982 earn- ings of $76,118 as the basis for his projections.
Second, because a stockbroker's compensation usually con- sists of commissions, both experts agreed that Mr. Kohn's
income would reflect changes in the volume or value of the
trading on the New York Stock Exchange ("Exchange"), but
they arrived at different correlations between his earnings
and those changes. Dr. Borzilleri assumed that Mr. Kohn's
income would have gone up or down in direct proportion to
any increase or decrease in the prices of stocks traded on the
Exchange (e.g., if the value of the market increased by 10
percent, so would Mr. Kohn's commissions). Dr. Glennie,
however, examined Mr. Kohn's brokerage income for the
years 1972 through 1982 (once again rejecting the 1983
earnings as unrepresentative) and determined that, on aver- age, Mr. Kohn's earnings rose or fell at about half the rate of
change in the trading volume on the Exchange (e.g., if the
trading volume increased by 10 percent, his earnings would
increase by five percent). While Dr. Borzilleri based his
projections on changes in prices on the Exchange and Dr.
Glennie based his on changes in trading volume, they both
agreed that whether one looks at price or volume makes little
difference in the final outcome.
Third, the experts disagreed on the age at which Mr. Kohn
would have retired. Dr. Borzilleri testified that, although the
children had never heard their father speak of retiring and
believed that he would have died on the job, he adopted the
more conservative assumption that Mr. Kohn would have
worked until he reached the age of 74. In contrast, Dr.
Glennie relied solely on work life expectancy charts published
by the Bureau of Labor Statistics of the U.S. Department of
Labor to conclude that Mr. Kohn would have retired four- and-a-half years earlier, at age 69. He claimed that these
charts were more objective than the children's testimony. On
cross-examination, Dr. Borzilleri stated that he had done his
doctoral thesis on the subject of retirement and emphasized
that the Department of Labor chart reflected the average
retirement age of all persons. He noted that while laborers
tended to retire before they reached the average age, high
income professionals tended to fall into two groups: those
who retire very early and "fish the rest of their lives" and the
rest, who continue working past the average retirement age.
He also indicated that the charts yield strange results for
certain groups of people. For example, an 18-year-old is
estimated to retire at age 55 even though, in reality, most
people are not financially able to do so.
There were other differences in the two experts' assump- tions. Dr. Borzilleri, for example, estimated that Mr. Kohn
would have received fringe benefits amounting to 10 percent
of his annual compensation whereas Dr. Glennie assumed a
rate of 23 percent; and although Dr. Borzilleri's calculations
of accrued savings ended with Mr. Kohn's actuarial death in
1998, Dr. Glennie's projections extended to the year 2008,
when his widow would have reached the end of her life
expectancy, on the assumption that there would have been no
distribution to the children until that time.
We need not analyze these differences because, on rebuttal,
Dr. Borzilleri adopted Dr. Glennie's methodology and as- sumptions in all but two respects. First, he rejected the
assumption that Mr. Kohn's 1983 earnings were aberrational.
He therefore used them both as his base for projecting Mr.
Kohn's subsequent earnings and in determining the correla- tion of those earnings with fluctuations of the market. Thus,
employing Dr. Glennie's methodology but including the 1983
earnings in his calculations, he concluded that, on average,
Mr. Kohn's earnings changed at about 87 percent of the rate
of change in trading volume on the Exchange. Second, Dr.
Borzilleri continued to assume that Mr. Kohn would have
worked until he reached the age of 74.
Having adopted Dr. Glennie's assumptions and methodolo- gy in every respect but these, Dr. Borzilleri calculated the
children's loss, in 1983 dollars, to be $1.3 million. Dr. Borzil- leri noted that this result was virtually the same as the one he
had reached in his initial presentation because the net lost
earnings of $1.6 million to which he had earlier testified was
stated in 1993 dollars, which is equivalent to $1.2 million in
1983 dollars.
Because, in awarding damages for the loss of inheritance,
the jury used the exact figure Dr. Borzilleri had arrived at in
his rebuttal testimony, we conclude that the award was based
on that testimony. See Sandberg v. Virginia Bankshares,
Inc., 891 F.2d 1112, 1123 (4th Cir. 1989) ("The verdict that
Sandberg's stock was worth $60 at the time of the merger
clearly evinces acceptance by the jury of the testimony of her
expert witness."); Cities Service Gas Co. v. FPC, 535 F.2d
1278, 1287 & n.46 (D.C. Cir. 1976) (finding that where jury
award differed from expert's multimillion dollar evaluation by
only 67 cents, the jury "must have accepted" that expert's
assumptions). The question before us, then, is whether there
was sufficient evidence to support the two key changes that
Dr. Borzilleri made in his opposing expert's assumptions. We
believe there was.
In his cross-examination, KAL's counsel sought to discredit
Dr. Borzilleri's use of Mr. Kohn's 1983 compensation in his
projections of Mr. Kohn's post-1983 income. He specifically
challenged their inclusion in the calculation of "average earn- ings" that Dr. Borzilleri used to correlate his earnings with
the volume of trading on the New York Stock Exchange. In
answering counsel's questions, Dr. Borzilleri acknowledged
that economists and statisticians typically used the median
sum, i.e., the middle of a set of numbers, rather than the
average because averages are influenced by extreme values
whereas medians are not. He nevertheless defended his
reliance on the 1983 earnings, stating that he knew of no
basis for ignoring a number merely because it was too big
and that anomalies must be scrutinized, not discarded out of
hand.
Dr. Borzilleri agreed that the 1983 earnings were large
when compared with those of previous years. But given the
dramatic developments that had taken place in the securities
markets in late 1982 and 1983, he thought they provided an
appropriate basis for projecting future income. As he had
earlier testified while presenting an Ibbotson Associates chart
illustrating the returns on various kinds of investments, Au- gust 1982 marked the beginning of one of the three strongest
bull markets in our nation's history. Between then and the
end of the bull market in August 1987, the value of invest- ments in stocks with dividends reinvested nearly quadrupled,
which represented a compound rate of return of 30.1 percent.
Dr. Borzilleri maintained, therefore, that the likely explana- tion for the size of Mr. Kohn's 1983 earnings was that the
stock market had "taken off." We believe that this evidence,
combined with the correlation that both experts agreed exist- ed between the market and a stockbroker's earnings, was
sufficient to enable a reasonable jury to conclude that Dr.
Borzilleri's use of the 1983 earnings was appropriate.
There was also ample support in the record for his assump- tion that Mr. Kohn would have continued to work until he was
74. As we noted earlier, his children testified that their
father had stated that he would never retire. The record also
indicates that there was no retirement age at Drexel Burn- ham, that a former colleague at that firm was 73 years old
and still working, and that Mr. Kohn had been a healthy,
vigorous man. Accordingly, it would not have been irrational
for the jury to accept this key assumption.
Because the award for the loss of inheritance was based on
Dr. Borzilleri's computation, in rebuttal, of the savings Mr.
Kohn would have accumulated but for his premature death,
we do not reach the second question the experts were asked
to address, namely, whether the heirs had suffered a loss
resulting from the distribution to them of $1.5 million in
securities that would otherwise have remained under their
father's management.
Although we reject KAL's challenges to the jury's loss of
inheritance award, we are persuaded by its contention that
the Kohn children may well have received a double recovery
in this case resulting from the awards to them of a total of
$450,000 for the loss of gifts and contributions from their
parents. Because the computation on which the $1.3 million
loss of inheritance award was predicated did not include
deductions for such gifts, these losses should have been
deducted from the amounts awarded for loss of inheritance
unless there was evidence that the parents would have used
funds other than those earned and saved by Mr. Kohn in
making the gifts. Accordingly, we vacate the district court's
decision not to deduct the awards for gifts and contributions
from those for the loss of inheritance and remand for further
proceedings to determine whether the awards resulted in
double recoveries, and if so, to what degree.
Lastly, KAL objects both to the district court's award of
prejudgment interest on the loss of inheritance awards and to
the means by which the interest rate was calculated.
"[W]hether pre-judgment interest is to be awarded is subject
to the discretion of the court and equitable considerations."
Motion Picture Ass'n of Amer., Inc. v. Oman, 969 F.2d 1154,
1157 (D.C. Cir. 1992). The purpose of such awards is to
compensate the plaintiff for any delay in payment resulting
from the litigation. See id. ("interest compensates for the
time value of money, and thus is often necessary for full
compensation"). KAL argues that because Dr. Borzilleri
stated his loss of inheritance calculations in 1993 dollars,
there was no need to add prejudgment interest. Although
that was true of his initial presentation, we have concluded
that the jury's $1.3 million award was based on Dr. Borzil- leri's rebuttal testimony, which was stated in 1983 dollars.
Accordingly, the court did not abuse its discretion in award- ing prejudgment interest.
The question that remains is whether the court abused its
discretion when it directed that the Ibbotson Index be used to
determine how much interest was payable. We observed in a
recent case that the prime rate, i.e., the rate that banks
charge for short-term unsecured loans to credit-worthy cus- tomers, is an appropriate measure of prejudgment interest.
Forman v. Korean Air Lines Co., Ltd., 84 F.3d 446, 450 (D.C.
Cir.), cert. denied, 117 S. Ct. 582 (1996). Although the court
used the prime rate for all the other damage awards in these
cases, it employed the Ibbotson Index in the case of the loss
of inheritance award. The court reasoned that because that
loss reflected
what Mr. Kohn would have made as a stockbroker and
what he had saved through stock market transactions,
... the Ibbotson Index is the best tool for determining
what interest the children could have made on the money
if they had received it in 1983--when the accident oc-
curred. Maikovich v. Korean Air Lines Co., Ltd., C.A. No. 83-3792,
mem. op. at 3 (D.D.C. July 16, 1993). We are not persuaded
by this reasoning. What Mr. Kohn would have made and
saved is irrelevant to the question of what constitutes appro- priate compensation for a delay in a successful party's receipt
of a cash payment. The time value of the money is the same
whether paid in satisfaction of an award for a loss of inheri- tance or a loss of society. Accordingly, we strike the award
and remand for recomputation.
2. Loss of Support, Gifts, and Contributions
Under DOHSA, recovery in a wrongful death action occur- ring on the high seas "shall be a fair and just compensation
for the pecuniary loss" sustained by the decedent's wife,
husband, parent, child, or dependent relative. 46 U.S.C. app.
ss 761, 762. The district court determined that the Kohns'
17-year-old son, Robert, but not their two adult children,
could recover for loss of support, which "includes all the
financial contributions that the decedent would have made to
his dependents had he lived," Gaudet, 414 U.S. at 584-85.
The court decided, however, that all three could recover for
the loss of gifts and financial contributions that, based on past
experience, they could reasonably have expected to receive
from their parents in the future. The jury awarded the three
children an aggregate of $250,000 to compensate them for the
loss of their father's support (in the case of Robert), gifts, and
contributions and an aggregate of $200,000 for the loss of
their mother's gifts and contributions.
KAL challenges these awards on three grounds. First, it
claims that the loss of support award for Robert should have
been limited to support until he reached the age of 18.
Second, it argues that the awards to the adult children for
loss of gifts and of contributions are not permitted under
DOHSA. Third, it contends that the awards for the losses of
gifts from Lillian Kohn should be struck because she had
virtually no income independent of her husband.
a. Loss of Support for Robert Kohn
KAL contends that the award for loss of support of Robert
Kohn should be set aside. Although Robert was a 17-year- old minor at the time of the plane crash, he was preparing to
go away to college. Mr. Kohn had established a custodial
account containing more than $100,000 for his education,
which was distributed to him when he turned 18. According
to KAL, there was no evidence that Robert would have been
financially dependent on his parents after reaching that age
because the money in the account was sufficient to meet his
education and living expenses.
KAL ignores uncontradicted testimony that the Kohns had
provided their older children, Marsha and Joseph, with com- plete financial support through college and graduate school
notwithstanding the existence of similar custodial accounts for
their benefit. Under the circumstances, we are satisfied that
the jury was entitled to conclude that, had they survived, the
Kohns would have continued to support Robert financially
until he had completed his college and graduate school edu- cation. Accordingly, we affirm the award.
b. Loss of Gifts and Contributions to Adult Children
Contrary to what KAL argues, there is nothing in DOHSA
that prohibits an award for an adult's loss of financial gifts
and contributions. In fact, the statute does not limit the
kinds of losses for which damages may be awarded so long as
they are pecuniary in nature. There is no question that the
loss of prospective financial contributions is pecuniary in
nature. Accordingly, we find no error.
c. Loss of Gifts and Contributions from Lillian Kohn
KAL maintains that the district court erred when it reject- ed KAL's motion to set aside the jury awards to the three
children for the loss of gifts and contributions from their
mother. It notes that the record contains no evidence that
Mrs. Kohn received any income other than the $11,653 she
earned in 1979 or that she provided gifts or contributions out
of her own resources. Therefore, KAL argues, these awards
represent double recoveries by the children. We agree with
the court, however, that there was sufficient evidence that
Mrs. Kohn had used funds from the joint checking account
she shared with her husband to make gifts and contributions
to her children to support the conclusion that she would have
continued to do so in the future. Accordingly, we affirm the
awards.
3. Loss of Guidance, Training, and Advice
DOHSA permits recovery for the monetary value of ser- vices a decedent would have continued to provide but for his
wrongful death. "Such services include ... the nurture,
training, education, and guidance that a child would have
received had not the parent been wrongfully killed." Gaudet,
414 U.S. at 585. The district court recognized that, under
DOHSA, recovery for loss of guidance, training, and advice
has generally been limited to that provided a decedent's
minor children. It nevertheless concluded that awards to
adult children for such losses were permissible under the
Warsaw Convention.
As became clear when the Supreme Court issued its inter- vening decision in Zicherman, 116 S. Ct. at 634-36, the
district court erred in relying on the Convention. Moreover,
we agree with the Second and Fifth Circuits that, under
DOHSA, damages for loss of parental guidance and training
are available to adult children only if there is a very specific
showing that "their parents' guidance had a pecuniary value
beyond the irreplaceable values of companionship and affec- tion." Solomon v. Warren, 540 F.2d 777, 789 (5th Cir. 1976)
(quoting First Nat'l Bank in Greenwich v. National Airlines,
Inc., 288 F.2d 621, 624 (2d Cir. 1961)); see also In re Air
Disaster at Lockerbie Scotland on Dec. 21, 1988, 37 F.3d 804,
830 (2d Cir. 1994).
The evidence at the trial indicated that, after reaching her
majority, Marsha Maikovich lived with her parents during her
first year of law school, sought advice and guidance from
them about career choices after she had received her law
degree, discussed medical options when she was ill in the
hospital, discussed childbearing and parenting issues with her
mother, and sought her father's advice on financial matters
such as investments and home ownership. Similarly, Joseph
Kohn testified that he lived with his parents after graduating
from college, worked at Drexel Burnham with his father, and
discussed with him his decision to pursue a master's degree in
business. After leaving graduate school, he sought advice
from his father about workplace dynamics and investment
matters.
In short, the evidence showed that the Kohns were inter- ested, loving, and helpful parents. Although we have no
doubt that Marsha and Joseph placed great value on the
counseling that they sought and continued to receive from
their parents, there is nothing in the record to show that
these children suffered a financial loss as a result of their
inability to receive such guidance after 1983. Accordingly, we
reverse the awards to Marsha and Joseph for loss of guid- ance, training, and advice and remand the award to Robert so
that the district court may determine the value of the loss
that he suffered between the time of the crash and his
eighteenth birthday.
Because we reverse the jury awards on this issue, we need
not consider KAL's argument that the claimants are not
entitled to prejudgment interest on those awards. We ex- press no opinion on whether prejudgment interest may be
appropriate on any award that Robert may receive for the
loss of guidance, training, and advice prior to his eighteenth
birthday but leave that determination to the district court.
4. Pre-Death Pain and Suffering
Although we have declined to consider KAL's claim that
damages for pre-death pain and suffering are not available
under DOHSA because it was not raised in its initial briefs,
see supra at 10, we will consider its timely argument that
there was insufficient evidence to support the jury awards of
$100,000 for the pre-death pain and suffering of each of the
three decedents in Maikovich and Oldham.
As we noted in Forman, the "key factual dispute turns on
whether the passengers were immediately rendered uncon- scious." 84 F.3d at 449. Expert witnesses for the plaintiffs
in Maikovich and Oldham addressed this issue. In Maiko- vich, one expert testified that although shrapnel from a Soviet
missile had penetrated the rear of the plane, it had not caused
the aircraft to explode or to disintegrate. He then stated
that because Mr. and Mrs. Kohn were seated over the wing,
they would have been able to don their oxygen masks after
the missile attack and would have been fully conscious and
aware of the events around them until the plane hit the
water. Similarly, an expert for the plaintiff in Oldham
testified that the shrapnel would not have reached the seat
assigned to John Oldham and that the drop in pressure within
the plane automatically would have caused the oxygen masks
to drop in front of the passengers.
A second expert in Maikovich testified that a rapid de- crease in air pressure within the cabin could have resulted in
ruptured eardrums, the tearing of sinus tissue and of the
lungs, and a buildup of pressure in the stomach or intestines.
He stated that the Kohns would have experienced physical
pain from one or more of these causes and would have
suffered mental pain as well. An expert in Oldham described
the effects of decompression on the human body and testified
that Mr. Oldham would have experienced physical pain, anxi- ety, and fear.
Although KAL asks us to dismiss this testimony as specula- tive because there was nothing in the record to confirm that
the three decedents had in fact survived the Soviet strike and
had remained conscious and experienced pain, we find that
the evidence presented in these cases was substantially simi- lar to that which we found sufficient in Forman. See 84 F.3d
at 449-50; see also Bickel, 96 F.3d at 155-56 (finding suffi- cient evidence of pre-death pain and suffering in same acci- dent); Hollie v. KAL, 60 F.3d 90, 92-93 (2d Cir. 1995) (same),
judgment vacated on other grounds and case remanded, 116
S. Ct. 808 (1996); Zicherman v. KAL, 43 F.3d 18, 23 (2d Cir.
1994) (same), rev'd in part on other grounds, 116 S. Ct. 629
(1996). Accordingly, we affirm the awards.
D. Ocampo v. KAL
Plaintiff Edward Ocampo, who brought this action on his
own behalf and as administrator of his wife's estate, contends
that the district court made three trial errors: (1) it employed
an overly narrow definition of loss of support and, as a result,
incorrectly directed a verdict for KAL; (2) it improperly
instructed the jury on his claim of "loss of the net accumulat- ed assets"; and (3) it improperly admitted evidence of his
salary.
1. Loss of Support
Mr. Ocampo argues that the district court misunderstood
the nature of a loss of support claim by equating it with the
costs associated with the basic necessities of life. According
to him, the trial judge should have permitted damages for
"loss of pecuniary benefits" or "loss of financial contributions"
equivalent to his wife's gross earnings less taxes and her
personal consumption.
We disagree. As an initial matter, the record does not
support Mr. Ocampo's assertion that the district court limited
his claims to the costs associated with the basic necessities of
life. Rather, it characterized loss of support as
the loss of anything from which he economically benefit-
ted directly. If [Mrs. Ocampo] made a contribution
toward his ability to maintain himself, in any form that
can be measured economically, that's what he lost when
she died. Transcript of Trial Proceedings, May 5, 1993, at 135. The
court also noted that in order to determine what that contri- bution was, it would be necessary to take into account Mrs.
Ocampo's expenditures for the benefit of her children and
mother as well as such family expenses as the payments due
on their mortgage.
Regardless of how the loss is defined, we find no error.
Mr. Ocampo failed to present any evidence that would demon- strate the extent to which he personally benefitted from the
decedent's earnings. He testified that he and his wife both
worked full time, that he earned approximately 40 percent of
the family's income, and that they deposited their earnings in
a joint bank account from which he received approximately
$20 a week. He did not testify to having received any other
money from either the account or his wife, and he presented
no evidence concerning the breakdown of household expenses.
We find this case distinguishable from Forman because the
evidence there indicated that the "Formans' was a share-and- share-alike household such that the jury could reasonably find
that whatever portion of Evelyn's earnings remained after
taxes and after her personal consumption would redound to
Eric's benefit." 84 F.3d at 450. In this case, Mr. Ocampo
failed to provide any evidence that would indicate how much
of his wife's earnings would redound to his benefit as com- pared to that of his children and mother-in-law. Thus, the
district court properly directed a verdict for KAL on this
issue.
2. Loss of Net Accumulated Assets
The district court instructed the jury that Mr. Ocampo was
entitled to recover damages for the "loss of the net accumu- lated assets" suffered by him in his capacity as administrator
of his wife's estate. Mr. Ocampo argues that because the
instruction limited the recovery to losses suffered by him in
his capacity as administrator and because it equated the loss
with a mere loss of inheritance, the court hopelessly confused
the jury. As a consequence, he states, the jury ignored
expert testimony to the effect that had she not died in the
crash, his wife would have accrued more than $1.5 million in
net earnings that would have been available to him.
We see no reason to question the district court's instruc- tion. The court had already ruled that Mr. Ocampo had
failed to introduce any evidence that would have enabled a
jury to award damages for the loss of financial contributions.
Therefore, it was entirely appropriate for it to advise the jury
that the claim for loss of net accumulated assets was being
made on behalf of the estate and that, in making the award,
the jury would have to determine what property Mrs. Ocam- po would probably have accumulated from her earnings and
pension benefits had she not died. The jury was not confused
by this instruction. Mr. Ocampo's economist testified that,
based on the decedent's earnings and after appropriate de- ductions, his wife would have been able to save approximately
$18,562 between 1983 and the time of trial and an additional
$34,454 thereafter. The jury awarded $18,562 for the past
loss of net accumulated assets and $44,454 for future losses
(i.e., $10,000 more than the expert's estimate).
3. Evidence of Mr. Ocampo's Salary
Mr. Ocampo also argues that the district court erred in
admitting the amount of his salary into evidence, which he
claims is inadmissible in a wrongful death action. He fails to
explain how he has been harmed by this admission. The
district court did not rely on this evidence when it found in
favor of KAL on the loss of support claim. Accordingly, if
there was any error, it was harmless.
III. Conclusion
For the reasons set forth above, the district court's rulings
are affirmed in part, reversed in part, and remanded for
further proceedings consistent with this opinion. It is so ordered.
