COVER NL 09_06.qxd - Nassau County Bar Association

18 n July/August 2012 n Nassau Lawyer
WRONGFUL DEATH ...
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gives the plaintiff a windfall, which
Milbrandt prohibits. 14
The Appellate Division affirmed the
judgment, as did the Court of Appeals.
Article 50–B delays payment of damages,
the court held, but not liability itself.
Adding interest from when liability
accrued, therefore, was not a windfall. 15
Milbrandt and Rohring confirm the
procedure as laid out in the statutes. If
the verdict awards the full value of future
damages, the judgment should discount
that award to the date of liability, i.e., the
date of death, and add interest up to the
date of judgment. In Toledo, however,
this procedure did not prove so simple to
follow.
Toledo: Restating the Rule,
then Ignoring It
In Toledo the decedent’s estate sued
for negligence and wrongful death over a
construction accident. The plaintiff won
summary judgment in August 2006, and
after a jury trial in December 2007 won a
verdict that included future damages.
The parties then submitted proposed
judgments, neither of which followed the
statutes or precedent.
The plaintiff at first discounted future
damages from the date of judgment to
the date of verdict. Then the plaintiff discounted
again, to the date of death. Then
the plaintiff calculated interest from date
of death to the verdict. Then the plaintiff
added that interest to the award as discounted
to the verdict. Further, the plaintiff
discounted at a rate of roughly 4.33%
but then calculated interest at the statutory
rate of 9%. 16
The defendant, on the other hand, neither
discounted the award nor included
any preverdict interest. The trial court
adopted the plaintiff’s proposed judgment.
The defendant appealed, but on
appeal the parties entered into an unusual
stipulation:
The sole issue to be presented on this
appeal is the question whether the
trial court properly discounted the
future wrongful death damages back
to the date of death, and awarded
interest thereon from the date of death
to the date of judgment.
The Appellate Division affirmed, relying
on Milbrandt and Rohring. 17 The
Court of Appeals also affirmed, restating
the rule:
We now conclude that the proper
method for calculating preverdict
interest in a wrongful death action is
DEBT ...
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mary purpose of suing on them, in order to make a
windfall. This ancient doctrine of “champerty” is
provided for in Judiciary Law Section 489. 12 It
implies that an assignee acquiring a claim must
make some reasonable attempt to try and collect on
it by legal means before commencing a lawsuit; as
long as litigation is merely an incident to the larger
transaction and is used as a last resort, the defense
will not be established. Debt buyers should also use
caution to make sure that the applicable statute of
limitations has not expired before bringing their
claims, since consumers may be pressured into
defending actions or settling claims that are otherwise
unenforceable. 13
The clear message from the courts to debt buyers,
as assignees of credit card debt, is that they are
obliged to have all of their paperwork in order to
to discount the verdict to the date of
liability, i.e., the date of death, and
award interest on that amount from
the date of death to the date of judgment.
18
The judgment affirmed, however,
obviously did not apply this method. It
awarded interest not to the judgment,
but only to the verdict. And, it added that
interest to the present value of the award
at the verdict, not at liability.
The Court of Appeals, however, felt
constrained by the stipulation: “[W]e do
not address whether the preverdict
interest should have been added to the
award discounted to the date of death or
to the award discounted to the date of
verdict.” 19
How this question was not within the
ambit of the stipulation, however narrowly
construed, the court did not
explain.
In dissent Judge Smith raised two
concerns. If under Milbrandt an award
discounted to verdict already includes
preverdict interest, he wrote, then there
is no reason to further discount to date of
liability and then add back preverdict
interest. 20
But those two calculations should cancel
each other out, Judge Smith contended,
because you would discount and add
interest at the same rate. That fact that
the judgment did not do so most frustrated
Judge Smith:
I do not find in plaintiff’s submissions,
or in the opinions below, or in today’s
majority opinion, any reasoned argument
that supports discounting with a
lower interest rate, and then adding
back interest at a higher one. 21
Looking to the Future
The problem with Toledo is that it prescribes
a method for awarding future
damages that clearly is at odds with the
lower court judgment that Toledo
affirmed. Whatever the defendant’s rea-
sons for stipulating to limit the issues on
appeal, it cannot have sought the outcome
it received, a lesson to those who
might seek to limit an appeal.
Procedural setting aside, Toledo merely
restates what statute and precedent
already told us: judgments should discount
future damages to the date of liability
and add interest therefrom to the
date of judgment.
It certainly appears that, but for the
stipulation, the Court of Appeals would
not have affirmed the judgment below.
Plaintiffs should not therefore rely on
Toledo to defend a similar judgment in a
future case.
Plaintiffs and defendants should, however,
apply the broad guidance of Toledo:
establish their claims before bringing an action; otherwise
the courts will not hesitate to deny their
applications, even if they are unopposed.
Jeff Morgenstern, Esq. maintains an office in Carle Place,
New York, where he concentrates in bankruptcy, creditors’
rights, and commercial and real estate litigation.
1. MBNA America Bank N.A. v. Nelson, 15 Misc. 3d 1148(A),
841 N.Y.S. 2d 826 (N.Y. Civ. Ct. Richmond Cty. 2007).
2. CACH LLC v. Fatima, 32 Misc. 3d 1231(A), 936 N.Y.S. 2d 58
(Dist. Ct. Nassau, 2011).
3. Citibank v. Martin, 11 Misc. 3d 219, 807 N.Y.S. 2d 284
(N.Y.C. Civ. Ct. 2005).
4. MBNA America Bank v. Nelson, 15 Misc. 3d 1148(A), 841
N.Y.S. 2d 826 (N.Y. Civ. Ct. 2007); Palisaides Collection LLC
v. Gonzalez, 10 Misc. 3d 1058 (A), 809 N.Y.S. 2d 482 (N.Y.
Civ. Ct. 2005); DNS Equity Group Inc. v. LaVallee, 26 Misc,
3d 1228(A), 907 N.Y.S. 2d 436 (Nassau Cty. Dist. Ct. 2010);
LVNV Funding LLC v. Delgado, 24 Misc. 3d 1230(A) 899
N.Y.S. 2d 60 (Dist. Ct. Nassau Cty 2009); Midland Funding
LLC v. Wallace, 34 Misc. 3d 1206(A), (Mt. Vernon City Court,
2012); Worldwide Asset Purchasing LLC v. Akrofi, 25 Misc.
3d 768, 884 N.Y.S. 2d 631 (Ithaca City Ct. 2009).
5. In re: Taranto, 2012 WL 1066300; also available at
www.nyeb.uscourts.gov – “Written Opinions”.
6. In re: Taranto, at p.19 of decision on Court website.
1. Using the prevailing discount rate,
discount the jury award for future damages
to the date of liability, which for
most such damages will be the date of
death;
2. Subtract from the discounted value
attorney’s fees and other amounts per
Article 50–B; and
3. Using the statutory rate, add interest
to the remainder up to the date of
judgment.
This is not to say that crafting future
damages judgment will be easy or without
controversy.
Defendants may try to argue Judge
Smith’s position, that discounting at one
rate and adding interest at another (a
much higher rate) gives plaintiffs a windfall
and is hardly “fair and just compensation.”
Plaintiffs, however, appear to
have the letter of the law on their side,
making the fairness of this a matter for
the legislature, not the courts.
Article 50–B remains, as Rohring
charitably put it, “technical and complicated.”
22 In fact, after further discussion
the Court found the statutory scheme
“patently ambiguous and ... impossible to
apply as written.” 23 After Toledo, though,
parties should be able to at least agree on
the basic procedure and confine their disagreements
to factual issues particular to
each case.
Christopher J. DelliCarpini and John M.
DelliCarpini are partners in the DelliCarpini
Law Firm with offices in Melville, specializing
in personal injury litigation. For more information
visit www.DelliCarpiniLaw.com.
1. 18 N.Y.3d 363 (2012).
2. See also CPLR 5001–03 (awarding preverdict,
prejudgment, and postjudgment interest).
3. CPLR 5041(e). See also CPLR 4111(e)(jury to
enter award for full value of future wrongful
death damages).
4. CPLR 5041(b)–(d). See also Rohring v. Niagara
Falls, 84 N.Y.2d 60, 67–68 (1994)(interpreting
“patently ambiguous” Article 50–B to require
determination of present value of future damages
before deducting attorney’s fees).
5. 79 N.Y.2d 26, 32 (1992).
6. The action was commenced before the effective date
of CPLR 4111(f), since renamed CPLR 4111(e).
7. 79 N.Y.2d at 32.
8. Id. at 36.
9. Id. at 35.
10. Id.
11. Id. at 37.
12. 84 N.Y.2d 60 (1994).
13. Id. at 65.
14. Id. at 69.
15. Id. at 69–70.
16. 18 N.Y.3d at 366. See also CPLR 5004 (setting
interest at 9% per annum).
17. Id. at 367 (quoting Toledo v. Iglesia Ni Christo,
75 A.D.3d 436 (1st Dept. 2010)).
18. Id. at 368 (emphasis added).
19. Id. at 369.
20. Id. at 370 (Smith, J., dissenting).
21. Id. at 373 (Smith, J., dissenting).
22. 84 N.Y.2d at 66.
23. Id. at 67.
7. UCC 9-406.
8. Velocity Investments LLC v. McCaffrey, 31 Misc. 3d 308, 921
N.Y.S. 2d 799 (Dist. Ct. Nassau Cty. 2011); CACH LLC v. Sliss,
28 Misc. 3d 1230(A) (City Ct. Auburn, 2010); CACH v. Fatima,
32 Misc. 3d 1231(A) 936 N.Y.S. 2d 58, (Dist. Ct. Nassau, 2011);
Rushmore Recoveries X LLC v. Skolnick, 15 Misc. 3d 1139(A),
841 N.Y.S. 2d 823 (Dist. Ct. Nassau Cty. 2007).
9. Velocity Investments LLC v. McCaffrey, 31 Misc. 3d 308, 921
N.Y.S. 2d 799 (Dist. Ct. Nassau Cty. 2011); CACH LLC v.
Sliss, 28 Misc. 3d 1230(A) (City Ct. Auburn, 2010); CACH v.
Fatima, 32 Misc. 3d 1231(A) 936 N.Y.S. 2d 58 (Dist. Ct.
Nassau, 2011); South Shore Adjustment Co. v. Pierre, 32
Misc. 3d 1227(A) (N.Y. City Civ. Ct. Kings County, 2011);
LVNV Funding LLC v. Delgado, supra.; Collins Financial
Services v. Vigilante, 30 Misc. 3d. 908, 915 N.Y.S. 2d 912 (NY
Civ. Ct. Richmond 2011).
10. DNS Equity Group Inc. v. Lavallee, supra; LVNV Funding
LLC v. Delgado, supra.
11. Midland Funding LLC v. Wallace, supra, LVNV Funding
LLC v. Guest, 35 Misc. 3d 1232(A), (City Ct. Mt. Vernon
2012); Worldwide Asset Purchasing LLC v. Akrofi, supra.
12. DNS Equity Group Inc. v. Lavallee, supra; CACH LLC v.
Fatima, supra.
13. Portfolio Recovery Associates v. Rand, 34 Misc. 3d 52, 938
N.Y.S. 2d 872 (Sup. Ct. App. Term, 2011); Centurion Capital
Corp. v. Guarino, 35 Misc. 3d 1219(A) (NY Civ. Ct.
Richmond Cty., 2012).