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Cal.App.3d 565

FOX v. PACIFIC SOUTHWEST AIRLINES , 133 Cal.App.3d 565

[Civ. No. 22790. Court of Appeals of California, Fourth Appellate District,

Division One. July 6, 1982.]

ROSALINE H. FOX et al., Plaintiffs and Appellants, v. PACIFIC SOUTHWEST

AIRLINES, Defendant and Appellant.

(Opinion by Cologne, Acting P. J., with Staniforth and Work, JJ.,

concurring.) [133 Cal.App.3d. 566]

COUNSEL

Edgar Simon, Mace Stephen Simon and Leonard Sacks for Plaintiffs and

Appellants.

Kern, Wooley & Maloney and Ralph S. LaMontagne, Jr., for Defendant and

Appellant.

OPINION

COLOGNE, Acting P. J.

Following a denial of their motion for a new trial, Pacific Southwest

Airlines appeals a judgment in a wrongful death action in which the jury

awarded $152,076 to Mr. and Mrs. Jerome Fox, the parents and heirs of Gary

Fox who was killed in the September 25, 1978, commercial jet‑small plane

collision and crash in [133 Cal.App.3d. 568] San Diego, California. PSA did

not contest liability so the sole issue was the amount of damages to

reasonably compensate Mr. and Mrs. Fox for their loss. The Foxes

cross‑appeal on the single issue of prejudgment interest.

The evidence revealed Gary Fox was a young man of exceptional quality. He

graduated summa cum laude from the University of California at Los Angeles

as a member of Phi Beta Kappa and was selected to the "Dean's List" eight

times. When he was killed at age 25, Gary was in his senior year of medical

school and desired to specialize in pediatrics. His parents, brother,

fiancee, high school gymnastics coach, and others related to his academic

pursuits testified Gary was industrious, sensitive, generous and

affectionate. Gary established a close relationship with his peers as well

as his family. In appreciation of his parents' financial and moral support

throughout college and medical school, fn. 1 Gary on several occasions

expressed to his parents a willingness to help support them in the future

if he was able and they were in need, especially if they had medical needs.

Although Gary's promise to support was general rather than specific and his

mother and father were in good health at their respective ages of 52 and

55, and his parents had never depended on Gary for financial support, this

promise was indicative of Gary's character and the cohesiveness of the Fox

family.

PSA raises several issues, some of which are related to the court's

pretrial rulings. [1] PSA first contends the court erred by failing to

instruct the jury the damages to be awarded must be reduced to present

value and by failing to permit PSA to introduce expert testimony on the

proper discount rate to be used in making a present value calculation.

At the outset, we should note PSA requested in its pretrial statement that

BAJI No. 14.70 fn. 2 be given. The court refused this request, believing

present cash value is inapplicable in a wrongful death action. However, the

"Use Note" under BAJI No. 14.70 states: "This instruction should [133

Cal.App.3d. 569] be used in every instance where a future pecuniary loss is

involved." Thus, the question becomes whether Mr. and Mrs. Fox suffered a

future pecuniary loss.

Throughout the development of wrongful death law in California, courts have

permitted recovery of plaintiff's lost present and future economic support

as well as the pecuniary (as opposed to sentimental) value of such factors

as lost comfort, society, companionship, care and protection (Krouse v.

Graham (1977) 19 Cal.3d 59, 67‑69 [137 Cal.Rptr. 863, 562 P.2d 1022],

citing cases such as Bond v. United Railroads (1911) 159 Cal. 270, 285‑286

[113 P. 366], and Ure v. Maggio Bros. Co., Inc. (1938) 24 Cal.App.2d 490,

496 [75 P.2d 534]).

Without altering the century‑long line of cases which firmly establish it

is the pecuniary value of lost society, comfort, companionship, care and

protection which may be recovered in a wrongful death action, the

California Supreme Court labeled these damages as "nonpecuniary" because

they do not have "an ascertainable economic value" (Krouse v. Graham,

supra, 19 Cal.3d 59, 68‑69). Notwithstanding this semantic label, damages

for lost value of: (1) economic contributions; (2) personal service, advice

or training that would probably have been given; and (3) society, comfort,

care, protection and companionship must be monetarily quantified. (See

Vecchione v. Carlin (1980) 111 Cal.App.3d 351, 357‑358 [168 Cal.Rptr. 571];

accord Allen v. Toledo (1980) 109 Cal.App.3d 415, 423 [167 Cal.Rptr. 270];

Grimshaw v. Ford Motor Co. (1981) 119 Cal.App.3d 757, 826 and fn. 20 [174

Cal.Rptr. 348].) Thus, the rule remains and we hold damages for wrongful

death must be reduced to present value. fn. 3

Finally on this issue, we observe a modified BAJI No. 14.51 was given. fn.

4 This instruction, as unmodified, correctly states the law as follows: "If

you return a verdict against the defendant, it shall be in a single sum,

representing the aggregate of the present cash value of the [133

Cal.App.3d. 570] loss suffered by the heirs of the deceased." (Italics

added.) Clearly, wrongful death damages are measured over a future time

period (see Mize v. Atchison, T. & S.F. Ry. Co. (1975) 46 Cal.App.3d 436,

453 [120 Cal.Rptr. 787]), and therefore, recovery for lost future benefits

must be discounted to present value (see Bond v. United Railroads, supra,

159 Cal. 270, 285; Emery v. Southern Cal. Gas Co. (1946) 72 Cal.App.2d 821,

824 [165 P.2d 695]; Johns, California Damages (2d ed. 1977) º 5.31, p.

253).

Applying this well established law, we hold it was prejudicial error for

the court to refuse to admit evidence of present value rates and to fail to

give a corresponding instruction. Because the aggregate award included lost

future benefits, and because the erroneous instructions as given were

likely to mislead the jury in formulating the award of damages, we must

reverse fn. 5 (Krouse v. Graham, supra, 19 Cal.3d 59, 72).

We next address other issues raised on appeal which may face the trial

court on remand. [2] PSA contends the court erred in failing to instruct

the jury that wrongful death awards are not taxable. It is true damages in

a wrongful death action are not subject to state or federal income taxes.

No California case, however, has held it was error to refuse to give such

instruction.

In Helfend v. Southern Cal. Rapid Transit Dist. (1970) 2 Cal.3d 1, 12 [84

Cal.Rptr. 173, 465 P.2d 61, 77 A.L.R.3d 398], the California Supreme Court

stated, "generally the jury is not informed that plaintiff's attorney will

receive a large portion of the plaintiff's recovery in contingent fees or

that personal injury damages are not taxable to the plaintiff and are

normally deductible by the defendant." The court further stated it would

"leave open the proper treatment of the tax consequences of tort verdicts"

because neither party briefed nor argued the point (ibid, fn. 18). [133

Cal.App.3d. 571]

The California appellate courts have consistently held it is not error to

refuse to instruct that damages are nontaxable (e.g., Mackey v. Campbell

Construction Co. (1980) 101 Cal.App.3d 774, 789 [161 Cal.Rptr. 64];

Henninger v. Southern Pacific Co. (1967) 250 Cal.App.2d 872, 878‑880 [59

Cal.Rptr. 76]; cf. Bacciglieri v. Charles C. Meek Milling Co. (1959) 176

Cal.App.2d 822, 826 [1 Cal.Rptr. 706]). We believe the rule in California

is "even though it would have been proper to give the proffered

instruction, it was not reversible error to fail to do so" (Atherley v.

MacDonald, Young & Nelson (1956) 142 Cal.App.2d 575, 589 [298 P.2d 700]).

Because the "income tax" instruction may be confusing or unnecessary, it is

within the discretion of the trial court to give or reject this

instruction.

[3] PSA next contends the court erred in refusing to permit PSA to

introduce evidence of Mr. and Mrs. Fox' financial condition at the time of

Gary's death.

PSA concedes "It is ... the general rule that in a wrongful death action

evidence of the [heir's] wealth or poverty is inadmissible." (Webb v. Van

Noort (1966) 239 Cal.App.2d 472, 479 [48 Cal.Rptr. 823, 29 A.L.R.3d 781];

and see McLaughlin v. United Railroads (1915) 169 Cal. 494, 498 [147 P.

149]). This rule is based on sound policy because such evidence has little

logical relevancy, is highly prejudicial, and if admitted, would permit the

defendant who wrongfully caused the death of another to fortuitously

benefit and receive a windfall because of the plaintiff‑heir's financial

well‑being. (See Johnson v. Western Air Exp. Corp. (1941) 45 Cal.App.2d

614, 622 [114 P.2d 688]; Cherrigan v. City etc. of San Francisco (1968) 262

Cal.App.2d 643, 650‑652 [69 Cal.Rptr. 42].)

PSA contends the normal rule of inadmissibility of plaintiff's financial

condition should not apply because Mr. and Mrs. Fox put the matter in

issue. The testimony of Mrs. Fox was that her son told her he would take

care of her health needs once he got his medical degree. She also testified

he told her, "if I can ever be of any help to you, you can count on me."

While the latter statement was made following her suggestion, "if anything

happens to [Mr. Fox] I might have to call on you because I'm not skilled in

any way. ... I don't have a career ...," neither statement was premised

necessarily on financial help. Just five days before this tragedy, Gary and

Mrs. Fox exchanged their views on the desirability of each not having to

ask the other for money in the future. Another possible reference to

financial help was this question of [133 Cal.App.3d. 572] Mrs. Fox on

cross‑examination: Q. "But what I have reference to is that there was a

discussion just after he [the decedent] got admitted to medical school, but

before he went back there, to the effect that so far as future support

might be concerned, that if the need ever arose for you and your husband,

and if he were able to respond, that he would do what he could?

A. "That's true."

Without more, it is highly speculative exactly what sort of financial

support these kinds of statements would entail. They are vague and

conditional. The Foxes offered no other evidence to establish Gary's offer

as having any monetary value. At best the statements suggest only

gratitude, love and affection of a son "indebted" for the investment his

parents were making in his education. This should not open the door to

admit evidence of the parents' financial condition contrary to the

established general rule. The trial court was well within its discretion

under Evidence Code section 352 to exclude this evidence.

PSA finally contends the award of $152,076 was excessive as a matter of

law. Our decision to reverse on other grounds obviates the need for

discussion of this issue, but we suggest it does not appear to be the

product of passion, prejudice, or corruption.

The final issue concerns Mr. and Mrs. Fox' cross‑appeal. Citing Civil Code

section 3288, the Foxes contend the court erred in refusing to submit the

issue of prejudgment interest to the jury. fn. 6 Both parties rely

onGreater Westchester Homeowners Assn. v. City of Los Angeles (1979) 26

Cal.3d 86 [160 Cal.Rptr. 733, 603 P.2d 1329], as controlling authority.

InGreater Westchester, supra, the court reversed an improper award of

prejudgment interest under section 3288 for the personal injuries and

emotional distress sustained because of airport noise(26 Cal.3d 86, 102).

The court stated at pages 102 and 103: "We have recently affirmed that,

unlike Civil Code section 3287, which relates to liquidated and contractual

claims, section 3288 permits discretionary prejudgment interest for

unliquidated tort claims. Bullis v. Security Pac. Nat. Bank [133

Cal.App.3d. 573] (1978) 21 Cal.3d 801, 814‑815 ....) In Bullis, we

characterized prejudgment interest as 'awarded to compensate a party for

the loss of his or her property.' (Id, at p. 815, italics added; ....) The

award of such interest represents the accretion of wealth which money or

particular property could have produced during a period of loss. Using

recognized and established techniques a fact finder can usually compute

with fair accuracy the interest on a specific sum of money, or on property

subject to specific valuation. Furthermore, the date of loss of the

property is usually ascertainable, thus permitting an accurate interest

computation. (Bullis, supra, at p. 815.)

"However, damages for the intangible, noneconomic aspects of mental and

emotional injury are of a different nature. They are inherently

nonpecuniary, unliquidated and not readily subject to precise calculation.

The amount of such damages is necessarily left to the subjective discretion

of the trier of fact. Retroactive interest on such damages adds uncertain

conjecture to speculation ...."

"* * *

"... No California courts have previously extended section 3288 to general

damages for personal injury, and the prevailing common law view in other

jurisdictions appears to be that prejudgment interest is inappropriate in

such cases. (See authorities collected in 22 Am.Jur.2d (1965) Damages, º

191, p. 269, fn. 8.)" (Italics added.)

[4] Thus, Greater Westchester confirms the purpose of prejudgment interest

is to compensate a party for lost property. (See also Big Bear Properties,

Inc. v. Gherman (1979) 95 Cal.App.3d 908, 914 [157 Cal.Rptr. 443].) Absent

oppression, fraud, or malice, prejudgment interest should not be awarded in

a wrongful death action (Southern Pac. Transportation Co. v. State of

California (1981) 115 Cal.App.3d 116, 122 [171 Cal.Rptr. 187]). This rule

is appropriate because wrongful death damages neither involve lost property

nor are they readily ascertainable without a judicial determination based

upon conflicting evidence. (See Levy‑Zentner Co. v. Southern Pac.

Transportation Co. (1977) 74 Cal.App.3d 762, 795‑799 [142 Cal.Rptr. 1]

[applying º 3287, subd. (a), in property damage tort case]; cf. Esgro

Central, Inc. v. General Ins. Co. (1971) 20 Cal.App.3d 1054, 1060‑1063 [98

Cal.Rptr. 153] [construing º 3287 in a contract context].) [133 Cal.App.3d.

574]

Applying these rules, we hold the trial court properly denied Mr. and Mrs.

Fox' request to submit the prejudgment interest issue to the jury.

Judgment reversed.

Staniforth, J., and Work, J., concurred.

¡FN 1. Gary's three‑year medical school program cost his parents between

$10,000 and $12,000 a year.

¡FN 2. BAJI No. 14.70 reads: "Any [award for] [finding of] future pecuniary

loss must be only for its present cash value.

"Present cash value is the present sum of money which, together with the

investment return thereon when invested so as to yield the highest rate of

return consistent with reasonable security, will pay the equivalent of lost

future benefits at the times, in the amounts, for the period that you find

such future benefits would have been received.

"The present cash value will, of course, be less than the amount you find

to be the loss of such future benefits."

¡FN 3. This rule is consistent with the Restatement Second of Torts,

section 913A, which states: "The measure of a lump‑sum award for future

pecuniary losses arising from a tort is the present worth of the full

amount of the loss of what would have been received at the later time."

The comment to this section explains in part: "If damages are awarded for

losses that will be incurred in the future, it would be over‑compensation

to give at the present time in cash their full amount. They should be

reduced to their present worth, since they are being paid in advance."

¡FN 4. This instruction read: "The verdict shall be in a single sum,

representing the aggregate of the loss suffered by the heirs of the

deceased."

¡FN 5. Contrary to the Foxes' assertion, the issues concerning an

instruction on present value and the admissibility of PSA's expert

testimony concerning an appropriate discount rate were preserved below as

there was a sufficient request and a direct ruling in a pretrial conference

order.

Also, to aid the posture of the parties on remand, we note the Foxes may

present evidence of future inflation rates which may partially offset the

effect of present value discounting (see Rodriguez v. McDonnell Douglas

Corp. (1978) 87 Cal.App.3d 626, 662 [151 Cal.Rptr. 399]; Gall v. Union Ice

Company (1951) 108 Cal.App.2d 303, 320 [239 P.2d 48]; Holder v. Key System

(1948) 88 Cal.App.2d 925, 940 [200 P.2d 98]; Johns, California Damages,

supra, º 5.29, p. 251).

¡FN 6. Civil Code section 3288 reads: "In an action for the breach of an

obligation not arising from contract, and in every case of oppression,

fraud, or malice, interest may be given, in the discretion of the jury."

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