The opinion of the court was delivered by: CHARLES E. STEWART, JR.
Defendant Joan Nigro, the Executrix of the Estate of Peter Nigro ("the Executrix"), moves to dismiss the complaints in the above-entitled actions because the death of Peter Nigro terminated the claims under Section 1 of the Sherman Act, 15 U.S.C. § 1, and under the Donnelly Act, § 340 of the New York General Business Law. In the alternative, the Executrix argues that the plaintiffs should only be entitled to actual damages, and not the treble damages permitted by statute. For the following reasons, the motion is denied.
These civil actions allege that seven corporations and twelve individuals, including Peter Nigro, conspired to rig bids and allocate territories for the sale and application of asphalt in Westchester County, New York. Peter Nigro was a defendant in the State of New York action since it was filed in 1990, and he was also a defendant in the New Castle action since its inception in 1988. Peter Nigro's involvement in these matters was as treasurer and part owner of Nigro Bros., Inc., a corporation in the asphalt business. He was also a defendant in a federal Sherman Act prosecution, United States of America v. Yonkers Contracting Co., Inc., et al., 87 Cr. 450, and was ultimately acquitted after two jury trials.
Peter Nigro died on February 16, 1991. There were some initial procedural questions in this case regarding the substitution of an estate representative, in part due to a change in counsel; these issues were resolved in two orders dated June 21, 1991 and February 25, 1992. It is against this background that the Executrix now challenges her substitution as a party, as well as the amount of damages that can be recovered.
The Executrix argues that her substitution should not be permitted because the cause of action abated with Peter Nigro's death.
In support, the Executrix relies on Sullivan v. Associated Billposters and Distributors, 6 F.2d 1000 (2d Cir. 1925), a decision that made a distinction between antitrust actions claiming damages to property as opposed to those actions asserting damages to business. The argument is that because this case is essentially penal in nature, and there has been no business damage to the governmental entities who are the plaintiffs, these antitrust claims cannot be asserted against the Executrix of Peter Nigro's estate.
Contrary to these assertions, the Second Circuit's ruling in Sullivan supports the view that this cause of action survives the death of Peter Nigro. As fleshed out in a 1961 Southern District of New York decision, the Sullivan case expanded the scope of the types of claims that could go forward despite the death of the defendant:
The opinion in Sullivan must be regarded as marking a new development in the law in its extension of the survival of actions against deceased defendants to situations where the plaintiff allegedly sustained "business" damages as a result of the defendant's wrongful conduct. A "benefit" was involved here as in those cases concerned with "property" damages.
Banana Distributors, Inc. v. United Fruit Company, 27 F.R.D. 403, 408 (S.D.N.Y. 1961). Sullivan does not stand for the proposition that damages to business survive, but claims for damages to property do not: it held, for the first time, that federal antitrust claims for either type of damage survive the death of the tortfeasor, because both types result in some type of benefit to the estate of the alleged wrongdoer. Id. at 408.
The allegations in this lawsuit clearly fall within the types of antitrust claims that survive the death of a defendant. The plaintiffs claim that the defendant was part of a conspiracy to fix prices and allocate territories in the asphalt business. This is a situation where there is a "claim that the estate of the decedent has been increased by profits . . . wrongfully diverted from the plaintiff." Sullivan, supra, 6 F.2d at 1007. The fact that the plaintiffs are municipalities is of no moment. This lawsuit is not a governmental enforcement action. As the State of New York and the Town of Newcastle point out, they were purchasers of products from the defendants. Although they are not defendants' business competitors who were harmed by loss of business, these governmental entities paid for goods that allegedly were price-fixed. They were in the same position as any other purchaser who brings a private right of action under the antitrust laws. It is also fair to say that these allegations constitute a claim that the decedent's estate was enriched as a result of whatever artificially inflated profits were obtained as a result of the alleged conspiracy.
We conclude, as have many other courts, that the claims in both lawsuits survived the death of the defendant. Sullivan, supra; Banana Distributors, supra; Rogers v. Douglas Tobacco Board of Trade, Inc., 244 F.2d 471, 483 (5th Cir. 1957); Fishman v. Estate of Wirtz, 807 F.2d 520, 560-61 (7th Cir. 1986): Vandervelde v. Put and Call Brokers & Dealers Association, 271 F. Supp. 697 (S.D.N.Y. 1967). The Executrix's attempts to distinguish these cases are not persuasive. The substitution of parties was appropriate.
In the alternative, the Executrix asserts that even if the plaintiffs prevail, the Estate should only be held liable for the actual damages caused by Peter Nigro, and cannot be charged with the treble damages available to antitrust claims. Although the issue was specifically not decided in Sullivan, the Executrix argues that the case law strongly suggests that an Estate would only be responsible for compensatory damages, and there is no entitlement to punitive or exemplary damages. See Sullivan, supra, 6 F.2d at 1012; Haskell v. Perkins, 28 F.2d 222, 223-224 (D.N.J. 1928), rev'd on other grounds, 31 F.2d 53 (3d Cir. 1929), cert. denied, 279 U.S. 872, 73 L. Ed. 1007, 49 S. Ct. 513, (1929); Rogers, supra, 244 F.2d at 483. Although these cases support the view that treble damages may not be available against an estate, the purpose of the treble damages provision of the ...