The Court of Appeals Confirms That Prejudgement Interest in Wrongful Death Actions is a Part of Damages Running From the Date of Death

January 12, 2012

On January 10, 2012, New York’s highest court, the Court of Appeals, decided in Toledo v. Christo, that the proper method for calculating preverdict interest on future wrongful death damages in personal injury cases is to discount damages to the date of death and award interest on that amount from the date of death to the date of the verdict. The Court’s decision in calculating interest from the date of death, rather than verdict, confirms the rule that prejudgment interest in a wrongful death case is an “element” or “part” of the damages and rejects the defense argument that awarding interest on future damages that have yet to be realized is an unfair windfall for the plaintiff.

In Toledo, the plaintiff was killed in a construction accident on September 21, 2002, and the decedent’s estate brought a negligence and wrongful death action against the defendant church. On December 3, 2007, the jury rendered an award in favor of the plaintiff which included future damages in the amount of $3,562,000. The plaintiff submitted a proposed judgment to the trial court pursuant to the New York statute which discounted the jury’s award of future damages to the date of verdict and then further to the date of the decedent’s death arriving at a value of $2,487,465. The interest was then calculated on that discounted rate at the statutory interest rate of 9% from the date of death to the date of verdict, arriving at a total future damages award of $4,295,595.

The Appellate Division, First Department, initially reversed holding that interest on future damages should only been calculated from the date of the verdict. Upon reargument, the First Department vacated its decision and held “where as here, the award of future damages was discounted by the court to the date of liability, which is the date of death, the award of interest from that date to the date of judgment was proper.” The Court of Appeals granted the defendant leave to appeal and affirmed the First Department’s decision.

The Court of Appeals’ reasoning in holding that preverdict interest on future damages calculated from the date of death does not constitute a windfall for the plaintiff is premised upon the theory that damages should have been paid at the time the loss was suffered, which is the date of death. Thus, the Court confirmed that future damages are owed as of the date of death, and such award should include interest calculated from the date of death as well. In essence, what the Court’s decision means for litigants in wrongful death cases is that prejudgment interest is a part of the damages, running from the date of death, and not the verdict date.

As a result of the Court’s holding in Toledo, defendants should heed that the already large awards upheld in wrongful death cases will be significantly increased by a statutory interest of 9% that is calculated from the date of death to the date of verdict, particularly in light of the fact that these cases take many years to litigate before a jury verdict is rendered.