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April 5, 1993


The opinion of the court was delivered by: SHARON E. GRUBIN


 SHARON E. GRUBIN, United States Magistrate Judge:


 In September 1991 your Honor directed entry of a default judgment herein against the defendants, who had failed to answer or otherwise appear, and referred the case to me for a determination of the damages to be awarded to the plaintiffs. On October 24, 1991 I held an inquest at which plaintiffs presented evidence on damages. The defendants did not appear at the inquest or otherwise communicate with the court, despite our having sent letters addressed to each of them in Kampala, Uganda in September informing them of the inquest date and advising them of their right to attend and present evidence. Apparently, however, on the day of the inquest the Permanent Mission of the Republic of Uganda to the United Nations contacted the United States Mission, requesting the latter to "liaise with the relevant authorities as appropriate." *fn1" Thereafter, defendants moved to vacate the default judgment. For the reasons thoughtfully explained in your Memorandum Opinion and Order dated December 28, 1992 ("Opinion") and supplemented by a Memorandum Order of January 26, 1993, your Honor granted the motion to set aside the default on the condition that defendants post security for plaintiffs' claim. Rather than require them to post the very large amount of damages demanded in the complaint, however ($ 50,000,000.00 for Christopher Sales and $ 10,000,000.00 for Carol Sales), your Honor directed that I complete a report and recommendation on the amount of plaintiffs' provable damages and that defendants post that amount prior to proceeding to defend the case on the merits.

 Accordingly, this report and recommendation contains my findings and conclusions on the issue of damages. It is rendered on the basis of the legal standards applicable to default judgments and, of course, without the benefit of any evidence or argument having been presented on the issue by defendants. Upon entry of a default judgment, the well-pleaded allegations of a complaint are to be accepted as true, except those relating to the amount of damages. Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981); Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974); Trans World Airlines, Inc. v. Hughes, 449 F.2d 51, 69-70 (2d Cir. 1971), rev'd on other grounds, 409 U.S. 363, 34 L. Ed. 2d 577, 93 S. Ct. 647 (1973).


 At the inquest four witnesses testified: plaintiff, Christopher Sales; his treating physician, Joseph C. Andolino; plaintiff's wife and co-plaintiff, Carol Sales; and a rehabilitation and vocational analyst, Dr. Valerie J. Ellien. The following statement of facts is based on the complaint and those portions of testimony that I found credible. While employed by Henry Restoration Ltd. and performing caulking work on the exterior of the premises owned by the defendants at 336 East 45th Street, New York, New York, the ladder which plaintiff *fn2" was using started to move as a result of defendants' negligence, causing plaintiff to fall from the ladder 30 to 35 feet to the ground. Plaintiff landed erect on his feet, crushing the ankle/heel bones on both feet. He was taken that day, February 2, 1990, to Bellevue Hospital and transferred ten days later to a hospital in New Jersey closer to his home. Dr. Andolino, a Board-certified orthopedic surgeon, first examined plaintiff on February 12, 1990 and remains his treating physician. Plaintiff at that time was wearing a soft cast and a back brace. His x-rays showed comminuted interarticular fractures of the heel bones into six to eight pieces on each foot, multiple fractures of his lumbar spine and a tear in the major medial cartilage of his left knee. These injuries were consistent with the fall from a height that plaintiff described. The pain was so severe as to require intermuscular narcotic medication around the clock. Initially in February 1990, Dr. Andolino performed arthroscopic surgery on the knee to remove damaged tissue. Plaintiff wore a lumbar thoracic brace until August 1990. At that time Dr. Andolino performed arthrodesis (fusion procedure) in which he took bone from plaintiff's pelvis and inserted it into plaintiff's left heel to reconstruct destroyed bone. In January 1991 the same surgical operation was performed on the right foot. After each surgery plaintiff wore a cast for about three months and throughout that time was unable to walk and confined to bed or a wheelchair.

 Dr. Andolino explained at the hearing that surgical procedures had accomplished as much as could be expected and that no additional surgery is planned. He testified that plaintiff's injuries are permanently fixed and will not respond in any appreciable way to further medical treatment. While physical therapy could alleviate his pain, it will not change his functional capacity on a permanent basis. Plaintiff will be unable ever to walk normally. His feet show "compression with the heel bone being quite retracted and crushed on both sides." (Report dated October 8, 1991, admitted as Exhibit 2.) The doctor related that when people have one foot crushed, they are generally lost to the work force in terms of walking, climbing ladders or doing any heavy manual work. Plaintiff has suffered destruction of the bones in both feet, and his problems are compounded even more by the multiple compression fractures in his back. His work capacity, therefore, will be limited to use of his upper extremities in a sitting position. He is unable to lift objects heavier than ten or fifteen pounds. At the time of the hearing plaintiff was ambulatory for short distances with the use of a walker or cane. Plaintiff testified that he tries to walk without any aids, but after about a block the pain becomes too severe. He tries to accompany his wife to do shopping, but must use a wheelchair. Dr. Andolino said plaintiff will always have pain; some days will be better than others, but the more he tries to exert himself, the more he will suffer afterwards. While plaintiff continually asks Dr. Andolino for pain medication, the doctor now refuses to allow him anything stronger than Advil or Tylenol because of the problems of potential addiction.

 Plaintiff was married in July 1985 and has a son who was eight months old at the time of the accident. He and his wife had planned to have one or two more children, but the accident has made fulfillment of their plans unlikely. Plaintiff has been unable to engage in sexual intercourse since the accident. He spends most of his day on a couch with constant pain in both feet and, apparently, intermittent pain in his back. He explained that when he stands on his feet the pain goes up his legs and into his back. He is, however, unable to stay seated for lengthy periods because of the back pain. Plaintiff had a relatively active lifestyle prior to the accident. He has five brothers and engaged in various sports on weekends. He says he liked being a construction worker because it kept him fit and allowed him to work outdoors.

 Mrs. Sales works as an assistant manager at New Jersey Bell Telephone Company. When she is not at work or doing shopping for the family, she stays home doing chores and tending to plaintiff. She has not gone out for fun or relaxation "for even an hour" since the accident. (Transcript of inquest, p. 50.) While she is at work, her mother and father, aged 66 and 71, come to stay with plaintiff and their young grandson because plaintiff cannot take care of the boy by himself. He is unable to run or even walk after him. He does some cooking for his son, but must kneel or sit on a chair by the stove to do so. He bathes him in the kitchen sink because he cannot bend over the bathtub.

 Dr. Valerie J. Ellien is a "rehabilitation counselor and a vocational economic analyst" (Transcript of inquest, p. 18) with impressive credentials, including a master's degree in rehabilitation assessment, a doctorate in rehabilitation counseling and postdoctoral studies in economics. She is certified as a diplomate by the American Board for Vocational Experts. She has worked at varied jobs in the rehabilitation counseling field and was an associate professor in New York University's Department of Rehabilitation Counseling, specializing in the placing of disabled people. She currently maintains her own private practice. Her expertise lies in knowledge of the physical and intellectual demands of jobs in the workplace and the effects of disabilities on jobs. She also claims an expertise in "how to project lost earnings," requiring an "understanding of wage growth and interest rates, the relationship between those in determining lost capacity to earn money." (Transcript of inquest, p. 19.)

 Dr. Ellien was retained by plaintiff to compute his loss of future earnings. To do so, she took into account the following. Plaintiff was 30 years old at the time of the hearing and had only a ninth-grade education. He had worked twelve years as a construction worker, earning a yearly salary of $ 30,000 - $ 31,000 prior to the accident. Dr. Ellien assessed plaintiff's work capabilities to be those in an unskilled or semiskilled category and, as limited by the injury, to those of a sedentary nature. Then, using Bureau of the Census statistics, she determined that unskilled to semiskilled sedentary jobs represented less than 1% (0.44%) of the labor market in the New York-New Jersey metropolitan area. This small percentage of jobs in this category leads Dr. Ellien to conclude that plaintiff is essentially unemployable or "100% occupationally disabled as a result of injury." (Report dated October 14, 1991, admitted as Exhibit 3, p. 1.) *fn3"

 Dr. Ellien concluded that plaintiff's lost earnings over his lifetime will be $ 1,313,446.93. She arrived at this figure on the basis of the following data and assumptions: (1) his earnings as a Journeyman Mechanic in his union at the time of his injury would have yielded $ 39,706.16 for 1990 and, on the "assumption that future increases in real wage growth will be offset by the real rate of interest or discount over the remaining worklife expectancy" (Exhibit 3, p. 2), the same figure should be used for subsequent years; (2) an additional 20% should be added apparently to represent the value of fringe benefits; (3) based on Bureau of the Census statistics applicable to non-disabled 30-year-old males with plaintiff's educational level, plaintiff's work-life expectancy at the time of his injury was 27.566 years.

 Plaintiffs request the following damages: lost wages in the amount found by Dr. Ellien, $ 1,313,446.93; $ 10,000,000.00 to plaintiff Christopher Sales for past and future pain and suffering; and $ 3,000,000.00 to plaintiff Carol Sales for loss of consortium.


 Initially, we must determine what forum's laws of damages should be applied to this case because federal law and New York state law would yield different results, largely because of differing concepts of discounting awards for future damages, application of interest rates and the manner in which judgments are to be calculated for payment. *fn4" For example, while a plaintiff under federal law is entitled to immediate payment of a judgment, under New York law he or she receives only a specified lump sum upon entry of a judgment with periodic payments of the remainder over the course of what could be many years. This New York "structured judgment" scheme, which will be discussed fully below, enables a defendant to satisfy a judgment with a far less monetary amount than would be due under federal law. The question turns on the jurisdictional basis for this action. Plaintiff rests jurisdiction herein on the Foreign Sovereign Immunities Act of 1976 ("FSIA") (codified as amended in 28 U.S.C. §§ 1330, 1332(a)(4), 1391(f), 1441(d), 1602-11).

 The exceptions set forth in the FSIA provide the sole bases for obtaining jurisdiction over a foreign state in United States courts. Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434, 443, 102 L. Ed. 2d 818, 109 S. Ct. 683 (1989); Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 488-89, 76 L. Ed. 2d 81, 103 S. Ct. 1962 (1983); see 28 U.S.C. §§ 1330(a, b), 1604-08. Section 1606 of the FSIA provides in pertinent part:


As to any claim for relief with respect to which a foreign state is not entitled to immunity . . ., the foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances. . . .

 Under § 1606, the general rule is that the court is to apply state substantive law to FSIA claims. Barkanic v. General Admin. of Civil Aviation, 923 F.2d 957, 959-60 & n.2 (2d Cir. 1991). See also First Nat'l City Bank v. Banco Para El Comercio Exterior de Cuba, 462 U.S. 611, 622, 77 L. Ed. 2d 46, 103 S. Ct. 2591 n.11 (1983) (under § 1606, "where state law provides a rule of liability governing private individuals, the FSIA requires the application of that rule to foreign states in like circumstances"). While in matters involving peculiar considerations of international relations, application of state law may yield to that of federal law, there appear to be no such countervailing considerations in this case. See, e.g., Barkanic v. General Admin. of Civil Aviation, 923 F.2d at 959-60 & n.2. Therefore, New York law on damages must be applied. See Woodling v. Garrett Corp., 813 F.2d 543, 557 (2d Cir. 1987); In re Joint Eastern & Southern Dists. Asbestos Litig., 798 F. Supp. 940, 961 (E. & S.D.N.Y. 1992); Alisandrelli v. Kenwood, 724 F. Supp. 235, 242 (S.D.N.Y. 1989).

 Under New York law, plaintiff is entitled to compensation for loss of past earnings, for loss of future earnings and for past and future pain and suffering, and co-plaintiff Mrs. Sales is entitled to compensation for the loss of her husband's services and society. See N.Y. Civ. Prac. L. & R. §§ 4111(f), 4213(b) (McKinney 1992); PJI 2:280, 2:280.1, 2:290, 2:300, 2:301, 2:315 (1974 & 1991 Supp.); Millington v. Southeastern Elevator Co., 22 N.Y.2d 498, 293 N.Y.S.2d 305, 239 N.E.2d 897 (1968). *fn5" The trier of fact must itemize a damages award into amounts representing these categories of damage, N.Y. Civ. Prac. L. & R. §§ 4111(f), 4213(b), and the determination of future damages is to be made without reduction to present value. Id. Upon the determination of these items of damage, Article 50-B of the New York Civil Practice Law and Rules, known as New York's "structured judgment" provisions, control the method, timing and amounts of payments. §§ 5041-5049 (McKinney 1992).

 Under § 5041 (referred to recently by a state court as "every judge's nightmare," Rohring v. City of Niagara Falls, 153 Misc. 2d 1001, 584 N.Y.S.2d 513 (Sup. Ct. Niagara Co. 1992)), the court is to enter judgment for a damages award as follows. First, a lump sum is to be entered consisting of the amount found owed for all lost past earnings and past pain and suffering and up to the first $ 250,000 of lost future earnings and pain and suffering. (The proportions of the $ 250,000 representing earnings vis-a-vis pain and suffering are to be determined by the percentage each of those elements bears to the total award for future damages found by the trier of fact.) Also included in this lump sum are that portion of the plaintiff's attorney's fees related to past damages and an additional amount for the remaining attorney's fees related to future damages calculated on a basis that will be described below. The remainder of the judgment -- i.e., damages for future lost earnings and pain and suffering beyond the first $ 250,000 -- is to be in the amount of the present value of an annuity contract that would provide for the payment of those future damages in monthly installments over the number of years for which the trier of fact found the plaintiff entitled to such damage, except that the pain and suffering payments must be calculated and paid over a period not to exceed ten years. The present value of an annuity contract is to be determined "in accordance with generally accepted actuarial practice by applying the discount rate in effect at the time of the award to the full amount of the remaining future damages." § 5041(e). The court, as part of its judgment, must require the defendant (and/or its insurance carrier) to offer and guarantee the purchase and payment of such annuity contract. The annual payment for the first year is calculated by dividing the amount of future damages by the number of years over which the payments are to be made, and each succeeding year's payment is determined by adding 4% to the previous year's amount.

 As may have become apparent from the foregoing exegesis, the calculation of judgments in New York personal injury cases has become somewhat complex. (Indeed, there are additional further complicating aspects to it which I have omitted as not necessary for present purposes.) The statutory scheme was enacted in 1985 and 1986 as a response to burgeoning insurance premiums resulting from increasingly high verdicts. See Siegel, "Practice Commentaries" to Articles 50-A and 50-B, 7B McKinney's Consolidated Laws of New York Annotated (1992), pp. 711-14, 730-31. While it gives a plaintiff an immediate payment of a segment of damages, it structures remaining amounts into future periodic installments to strike a balance between moderating insurance premiums and providing adequate compensation to injured plaintiffs. See Alisandrelli v. Kenwood, 724 F. Supp. 235, 238-40 (S.D.N.Y. 1989). In the half-dozen years it has been operating, however, the statute has given the courts of New York quite a bit of trouble both because of the complexity in carrying out its express provisions and because of its failure to address additional issues that a court must address in carrying it out and fashioning a judgment pursuant to it. *fn6"

 The remainder of this Report and Recommendation fixes the damages I find plaintiffs here should be awarded, itemized into the requisite categories, and then recommends the amount that I believe is appropriate for defendants to post as security at this time based upon the calculations required under Article 50-B which I have undertaken to do. *fn7"

 Lost Earnings

 In the absence of particularized evidence concerning future earnings, past earnings may serve as an adequate guide to loss of earning capacity, see Earl v. Bouchard Transportation Co., 735 F. Supp. 1167, 1176 (E.D.N.Y.), aff'd in part, rev'd in part on other grounds, 917 F.2d 1320 (2d Cir. 1990), and "statistical charts, such as the mortality tables and work-life expectancy table prepared by the United States Department of Labor . . . are often deemed authoritative" and are regularly used by the federal and state courts. Id. at 1175; see New York Pattern Jury Instruction 2:290 and tables in 1 NY PJI2d Appendix B (1974 & 1991 Supp.).

 Having been given no other relevant information, plaintiff's salary at the time of the injury and the work-life expectancy figure based on Bureau of the Census statistics and submitted by plaintiff's expert may be employed in the calculation of lost earnings. However, plaintiff has not offered a basis for including an additional 20% representing lost fringe benefits, since no evidence whatsoever has been submitted about the fringe benefits, if any, plaintiff enjoyed or that were available either to him specifically or to journeymen mechanics generally at the time of his injury. Indeed, the only reference to such benefits is Dr. Ellien's inclusion of a mysterious 20% under the word "Fringe" in the table attached to her report. I have calculated the amount of lost earnings to which plaintiff is presently entitled as follows. Using the 1990 salary figure of $ 39,706.16 as earnings for the last eleven months of 1990 and the first nine months of 1991, n8 lost past earnings thus equal $ 66,176.93: 1990 (11 months) 36,397.31 1990 (9 months 29,779.62 66,176.93


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