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O'Rourke v. Eastern Air Lines Inc.

decided: March 2, 1984.

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



Appeal and cross-appeal from a final judgment of the Eastern District of New York (Bramwell, J.) entered after a non-jury trial awarding the estate of Alexandros Hadzis $982,100 for his wrongful death. Affirmed in part; reversed in part.

Mansfield and Pratt, Circuit Judges, and Tenney, Senior District Judge.*fn* George C. Pratt, Circuit Judge, concurring and dissenting.

Author: Tenney

TENNEY, D.J.

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. § 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 States, brought pursuant to the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §§ 2671-80 (1976),*fn1 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 crash*fn2 and, thus, subject to the terms and conditions of the Warsaw Convention ("the Convention"),*fn3 as supplemented by the Montreal Agreement ("the Agreement"),*fn4 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, 407 F. Supp. 244 (J.P.M.D.L. 1976). After the completion of pretrial discovery, the court consolidated the passenger actions for a trial on the issue of liability. On the eve of trial, the United States consented to a liability judgment. Subsequently, a jury found Eastern negligent. This was affirmed on appeal. 635 F.2d 67 (2d Cir. 1980). Following the affirmance, Eastern moved pursuant to the damage limitation provision of the Warsaw Convention for partial summary judgment to limit its liability to the Hadzis estate to $75,000. The court granted the motion, O'Rourke v. Eastern Air Lines, 16 Avi. L. Rep. 18,367 (E.D.N.Y. Jan. 29, 1982), and on March 1, 1982, after depositing $75,000 with the Clerk of the Court, Eastern withdrew from the proceedings.

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 requirement that awards be discounted to present value, see generally Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523, 103 S. Ct. 2541, 2550, 76 L. Ed. 2d 768 (1983) ("Even in an inflation-free economy the award of damages to replace the lost stream of income cannot be computed simply by totaling up the sum of the periodic payments. For the damages award is paid in a lump sum at the conclusion of the litigation, and when it -- or even a part of it -- is invested, it will earn additional money. . . . 'The ascertained future benefits ought to be discounted in the making up of the award. '") (quoting Chesapeake & Ohio R. Co. v. Kelly, 241 U.S. 485, 490, 36 S. Ct. 630, 60 L. Ed. 1117 (1916) (footnote omitted), the lower court found, based on the testimony of plaintiff's expert, that the "total offset" approach should be applied. Under this approach an award for lost future earnings is adjusted neither upward nor downward since the potential benefit from investing the money is counterbalanced by inflationary forces. See Pfeifer, supra, 103 S. Ct. at 2554. In a related evidentiary ruling the court held that the plaintiff's expert could not testify about the propriety of adjusting the lost future earnings figure upward because his proposed testimony came as a surprise to the government.

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., 553 F. Supp. 226 (E.D.N.Y. 1982).

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, 369 U.S. 1, 82 S. Ct. 585, 7 L. Ed. 2d 492 (1962). Where jurisdiction rests upon diversity of citizenship, the court must apply the whole law of the state in which it sits. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941); Rosenthal v. Warren, 475 F.2d 438 (2d Cir.), cert. denied, 414 U.S. 856, 94 S. Ct. 159, 38 L. Ed. 2d 106 (1973).*fn5

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, 49 N.Y.2d 622, 404 N.E.2d 1288, 427 N.Y.S.2d 746 (1980), or for the survivor's grief. Horton v. State, 50 Misc. 2d 1017, 272 N.Y.S.2d 312 (Ct. Cl. 1966). See also Garland v. Herrin, 724 F.2d 16, slip op. at 7419 (2d Cir. 1983).

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, 299 F.2d 696, 704-05 (2d Cir.), cert. denied, 369 U.S. 885, 82 S. Ct. 1157, 8 L. Ed. 2d 286 (1962)); O'Connor v. Lee-Hy Paving Corp., 579 F.2d 194, 205 (2d Cir.), cert. denied, 439 U.S. 1034, 99 S. Ct. 638, 58 L. Ed. 2d 696 (1978). Furthermore, we have noted that "the district judge's interpretation of . . . choice-of-law precedent is entitled to special deference because of his experience and familiarity with [the] law." Saloomey v. Jeppesen & Co., 707 F.2d 671, 676 (2d Cir. 1983) (citing Bernhardt v. Polygraphci Co. of Am., 350 U.S. 198, 204, 76 S. Ct. 273, 100 L. Ed. 199 (1956)). This principle is especially persuasive when this court is called upon to wade into New York's choice-of-law quagmire.

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.*fn6 In the landmark case of Babcock v. Jackson, 12 N.Y.2d 473, 191 N.E.2d 279, 240 N.Y.S.2d 743 (1963), the court held that an Ontario guest statute would not be applied to bar recovery in an action by a New York guest against a New York automobile driver-host, even though the accident occurred in Ontario. The court stated that:

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.

12 N.Y.2d at 482, 191 N.E.2d at 283, 240 N.Y.S.2d at 749 (citation omitted).

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, 16 N.Y.2d 120, 209 N.E.2d 792, 262 N.Y.S.2d 463 (1965) (applicable law determined by the location of most significant relationship between the parties); Macey v. Rozbicki, 18 N.Y.2d 289, 221 N.E.2d 380, 274 N.Y.S2d 591 (1966) (applicable law determined by a counting of the contacts with the interested states); Tooker v. Lopez, 24 N.Y.2d 569, 249 N.E.2d 394, 301 N.Y.S.2d 519 (1969) (government interest analysis determines choice-of-law question). See generally R. Leflar, American Conflicts Law § 91, at 183-85 (3d ed. 1977); Korn, supra note 6, at 820-902. Thus, the court created an inconsistent body of precedent with seemingly similar cases decided differently.

Finally, in Neumeier v. Kuehner, 31 N.Y.2d 121, 286 N.E.2d 454, 335 N.Y.S.2d 64 (1972), the court acknowledged this lack of consistency in its previous multistate accident cases. Id. at 127, 286 N.E.2d at 457, 335 N.Y.S.2d at 69. In Neumeier, the question before the court again concerned Ontario's guest statute. The issue was whether the statute was applicable in an action between an injured Ontario domiciliary and his New York host arising out of an accident in Ontario. The court held that the statute did apply and promulgated three principles for the resolution of future guest statute problems in conflict situations.*fn7 However, the court did not make clear whether these principles ...


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