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Alienation of Affection and Criminal Conversation Part 5

JURY INSTRUCTION – PER DIEM

N.C.P.I.—Civil 810.56
WRONGFUL DEATH DAMAGES—FINAL MANDATE (PER DIEM ARGUMENT BY COUNSEL).
GENERAL CIVIL VOLUME
JUNE 2012


(For medical malpractice cases filed on or after 1 October 2011, use

N.C.P.I.Civil 809.156. Use this instruction in place of 810.54 when a per diem argument has been made.)

I instruct you that, your findings on the (state number) issue must be based on the evidence and the rules of law I have given you with respect to the measure of damages.1 You are not required to accept the amount of damages suggested by the parties or their attorneys. (Use only if counsel makes a per diem argument: An attorney is allowed to suggest an amount of damages and therefore can suggest an amount for each (specify unit(s) of time, e.g., "day, hour or minute") of physical pain or mental suffering. However, I instruct you that there is no fixed mathematical formula for computing damages for physical pain or mental suffering. Furthermore, an attorney's argument is not evidence but is merely an approach to the damage issue which you may consider but need not adopt.2) Your award must be fair and just. You should remember that you are not seeking to punish either party, and you are not awarding or withholding anything on the basis of sympathy or pity. Finally, as to the (state number) issue on which the estate has the burden of proof, if you find by the greater weight of the evidence the amount of actual damages [proximately caused by the negligence] [caused by the wrongful conduct] of the defendant, then it would be your duty to write that amount in the blank space provided. If, on the other hand, you fail to so find, then it would be your duty to write a nominal sum such as "One Dollar" in the blank space provided.

1 Damages may not be based on sheer speculation, Stetson v. Easterling, 274 N.C. 152, 161 S.E.2d 531 (1968) and Gay v. Thompson, 266 N.C. 394, 146 S.E.2d 425 (1966), but, by necessity, some speculation is necessary to determine damages, Beck v. Carolina Power & Light Co., 57 N.C. App. 373, 291 S.E.2d 897, aff'd, 307 N.C. 267, 297 S.E.2d 397 (1982), and this is acceptable as long as there are sufficient facts to support necessary speculation, Gay, supra, and Beck, supra.

2 See Weeks v. Holsclaw, 306 N.C. 655, 661, 295 S.E.2d 596, 600 (1982), where the court held that the per diem argument is appropriate, but only if (1) there is a factual basis for it, and (2) cautionary instructions are given. In

Weeks, the factual basis was the plaintiff's testimony that he suffered pain almost constantly, backed up by details of the pain and the ways in which the pain had altered his lifestyle.

JURY INSTRUCTIONS-PUNITIVE DAMAGES

N.C.P.I.—Civil 810.98
GENERAL CIVIL VOLUME
PUNITIVE DAMAGES--ISSUE OF WHETHER TO MAKE AWARD AND AMOUNT OF AWARD.


NOTE WELL: Use this instruction in conjunction with claims for relief arising on or after January 1, 1996.1 For claims for relief arising prior to January 1, 1996, use N.C.P.I.—Civil 810.93 or 810.94, as applicable.

ALSO NOTE WELL: Statutory limitations are placed on the amount of punitive damages that may be awarded in all cases (except driving while impaired offenses). N.C. Gen. Stat. § 1D-25(c) specifically directs that the statutory limitations "not be made known to the trier of fact through any means, including voir dire, the introduction into evidence, argument, or instructions to the jury." Thus, it would be error to do so. If the limitations are exceeded by the jury, "the trial court shall reduce the award and enter judgment for punitive damages in the maximum amount." N.C. Gen. Stat. § 1D-25(b) (1996).

The (state number) issue reads:

"What amount of punitive damages, if any, does the jury in its discretion award to the plaintiff?"

You are to answer this issue only if you have answered the (state number issue) "Yes" in favor of the plaintiff.

Whether to award punitive damages is a matter within the sound discretion of the jury. Punitive damages are not awarded for the purpose of compensating the plaintiff for his [injury] [damage], nor are they awarded as a matter of right.

If you decide, in your discretion, to award punitive damages, any amount you award must bear a rational relationship2 to the sum reasonably needed to punish the defendant for egregiously wrongful acts committed against the plaintiff[s] and to deter the defendant and others from committing similar wrongful acts.3 In making this determination, you may consider only that evidence which relates to

[the reprehensibility of the defendant's motives and conduct]4

[the likelihood, at the relevant time, of serious harm (to the plaintiff or others similarly situated)]

[the degree of the defendant's awareness of the probable consequences of his conduct]

[the duration of the defendant's conduct] [the actual damages suffered by the plaintiff]

[any concealment by the defendant of the facts or consequences of his conduct] [the existence and frequency of any similar past conduct by the defendant] [whether the defendant profited by the conduct]

[the defendant's ability to pay punitive damages, as evidenced by his revenues or net worth].5

Finally, if you determine, in your discretion, to award punitive damages, then you may award to the plaintiff an amount which bears a rational relationship to the sum reasonably needed to punish the defendant for egregiously wrongful acts and to deter the defendant and others from committing similar wrongful acts. That amount should be written in the space provided on the verdict sheet.

If, on the other hand, you determine, in your discretion, not to award the plaintiff any amount of punitive damages, then you should write the word "None" in the space provided on the verdict sheet.


1 N.C. Gen. Stat. § 1D-1 became effective January 1, 1996, displacing common law punitive damages. It applies to all "claims for relief arising on or after that date." 1995 N.C. Sess. Laws 514, § 5.

2 To meet due process requirements, jury discretion must be exercised "within reasonable constraints."

Pacific Mutual Life Insurance Co. v. Haslip, 499 U.S. 1, 20, 113 L.E.2d 1, 46 (1991). The enactment of N.C. Gen. Stat. § 1D does not obviate the need for this constitutionally mandated standard. Pre-enactment cases also embraced this standard. See Swinton v. Savoy Realty Co., 236 N.C. 723, 725, 73 S.E.2d 785, 787 (1953), overruled on other grounds, Newton v. Standard Fire Ins. Co., 291 N.C. 105, 229 S.E.2d 297 (1976) (stating that "it has been uniformly held with us that punitive damages may be awarded in the sound discretion of the jury and within reasonable limits" (emphasis added)) and Baker v. Winslow, 184 N.C. 1, 5, 113 S.E. 570, 572 (1922).

3 N.C. Gen. Stat. § 1D-35(1) (1996).

4 NOTE WELL: In Phillip Morris USA v. Williams, 549 U.S. 346, 166 L.Ed.2d 940 (2007), the United States Supreme Court observed that "[e]vidence of actual harm to nonparties can help to show that the conduct that harmed the plaintiff also posed a substantial risk of harm to the general public, and so was particularly reprehensible." Id. at 355, 166 L.Ed.2d at 949. The Court also "recognize[d] that conduct that risks harm to many is likely more reprehensible than conduct that risks harm to only a few. And a jury consequently may take this fact into account in determining reprehensibility." Id. at 357, 166 L.Ed.2d at 951.

Notwithstanding, the Court held that "the Constitution's Due Process Clause forbids a [jury] to use a punitive damages award to punish a defendant for injury that it inflicts upon nonparties or those whom they directly represent, i.e., injury that it inflicts upon those who are, essentially, strangers to the litigation." Id. at 353, 166 L.Ed.2d at 948.

The Court concluded by recognizing a practical problem. That is, "[h]ow can we know whether a jury, in taking account of harm caused others under the rubric of reprehensibility, also seeks to punish the defendant for having caused injury to others?" Id. at 357, 166 L.Ed.2d at 951 (emphasis in original). Without proffering a specific solution, the Court directed that where the "risk of any such confusion occurring . . . is a significant one—because, for instance, of the sort of evidence that was introduced at trial or the kinds of argument the plaintiff made to the jury—a court, upon request, must protect against that risk. Although the States have some flexibility to determine what kinds of procedures they will implement, federal constitutional law obligates them to provide some form of protection in appropriate cases." Id. (emphasis in original).

The Pattern Jury Instruction Civil Subcommittee, after careful deliberation, has interpreted the foregoing to require, "upon request" and "in appropriate cases," that a limiting instruction, such as the following, be given: "Evidence which may tend to show that the defendant's conduct caused harm or created the risk of harm to the general public or to persons who are not a party to this lawsuit, if you find that the evidence does so show, may be considered by you only in your determination of the reprehensibility of the defendant's motives and conduct, and not for any other purpose. You may not award the plaintiff punitive damages in this case to punish the defendant for harm it may have caused to others that are not parties to this lawsuit."

5 N.C. Gen. Stat. § 1D-35(2).

DR. BROD ECONOMIC REPORT

Memorandum

To: Carolyn Woodruff
From: Andrew Brod, forensic economist
Date: ___________

Re: Projection of net lost earnings and services for ___________

1. Introduction

In this memorandum, I summarize my preliminary calculation of the projected lost earnings and benefits plus the projected value of lost household services for ___________, less the value of real estate given to her former husband, ___________. The trigger date for these calculations is ___________, the date of ___________’ separation from ___________.

I calculated the present value of the lost earnings and services through the remainder of ___________’ expected life, expressing the results in 2018 dollars. I have not assumed a trial date for this analysis, nor have I applied pre-judgment interest (on the assumption that if there is a verdict for the plaintiff, the court will apply such interest).

As further information becomes available on any of the issues addressed in this memorandum, I may update my analysis further.

2. Earnings

The basic equation I used to calculate net earnings is:

Earnings = Income + Fringe Benefits − Personal Consumption

I subtracted personal consumption to reflect the amount that would not have been available to ___________.

On the date of separation, ___________ was working as a Certified Medical Assistant in a physician’s office. Over the years ___________, her average W-2 income was $___________, which I used as the base income for this analysis.

According to data provided by the North Carolina Department of Commerce, wages in the Offices of Physicians sector rose at an average of 2.22% per year from 2000 to 2017. I used that figure as the growth rate for my projections of lost earnings.

3. Benefits

___________ received fringe benefits as well as a salary. I ignored her health benefits, on the assumption that they accrued primarily to her personal benefit. That leaves retirement and legally required benefits; the latter includes such benefits as unemployment insurance and FICA. According to the federal government’s national survey of employee benefits, the value of these benefits in the Health Care and Social Assistance sector amounts to 15.3% of workers’ money earnings. I added this amount to ___________’ lost earnings in each year to obtain a value of lost total compensation.

4. Adjustment for Personal Consumption

Not all of ___________’ lost earnings would have benefited ___________, because some of her income would have been spent on herself. Therefore, I subtracted a projection of ___________’ personal-consumption spending from her total compensation.

The exclusion for personal consumption depends on the number of children in the family and is a function of total household income. ___________ had no minor children in the home.

Based on estimates in an authoritative and frequently cited study on personal consumption, I determined that the share of ___________ income that was spent on herself was 65.8%.

5. Projected Net Earnings

Based on the calculations described above, I obtained a value of ___________ total compensation for each year, net of her personal consumption. I then calculated the reasonably expected value of net earnings and benefits in each year by adjusting for various probabilities.

My projections extend until the end of ___________’ life. Of course we cannot know how long ___________ will live. Therefore, instead of assuming with certainty that she will live until some specific age, my analysis employed year-by-year probabilities of being alive, of being able to work, and not being unemployed. I performed these calculations until the year ___________, when ___________ will turn 85. By the time ___________ reaches that age in my analysis, each year’s contribution to lost earnings and benefits is quite small.

I calculated year-by-year survival probabilities of a female who had reached the age of ___________’ age on her last birthday), based on the United States Life Tables for 2014.

For the probability of being able to work, I used a combination of nondisability probabilities and labor-force participation rates. Because ___________ was working as of the trigger date, she would probably have continued to work. The most likely reason for her not working in the near future would be a severe disability. Of course she could simply decide not to work at some point, but I assume that she would have continued working if not disabled. But beyond some age, nondisability rates greatly overstate a person’s presence in the labor force. Therefore, at age 65 in my analysis, I switched from nondisability rates to labor-force participation rates to reflect the probability that ___________ would retire. I obtained probabilities of severe disability from Census data derived from the 2002 Survey of Income and Program Participation. I used labor-force participation rates for women, by age group, produced by the U.S Bureau of Labor Statistics.

For the probability of unemployment, I used the national unemployment rate for women aged 20 and over, averaged over the years 1990-2017. The result was an unemployment rate of 5.21%.

Finally, I discounted all future values of expected net earnings based on the well-under-stood principle of the “time value of money”: a dollar today is worth more than a dollar tomorrow. To calculate the discount rate, I used interest rates on both short-term (one-year) and long-term Treasury bills. For each year, I took the average of short-term and long-term interest rates. I assumed that this average would increase over the next few years, from the very low current rates up to the long-run average for the years 1986 through 2017. That average is 4.61% and is, after the first few years, the discount rate for this analysis.

Based on this methodology, the expected present value of ___________ projected future net lost earnings and benefits is $158,054.

6. Lost Household Services

The economic damages related to the separation go beyond the calculation described in the previous section. ___________ performed a variety of tasks around the house, many of which have value. It is reasonable to compensate for those tasks for which replacement assistance will now have to be hired.

The federal government compiles data on how much time Americans spend in various activities each day. I used average data for employed women in the following activity categories: household activities; purchasing goods and services; and caring for and helping household members. Household activities include housework, food preparation and clean-up, lawn and garden care, and household management.

Based on these data, and factoring in the assumption of no minor children in the home, I calculated ___________ service hours to be 18.83 hours per week.

To obtain a value of these lost services, I used North Carolina data on various relevant occupations: home-health aides, maids and housekeepers, landscaping workers and groundskeepers, and personal-care aides. In 2017, the average hourly wage for those occupations was $10.86, and I used that figure as the base wage for this analysis. This, too, is a conservative assumption, because those services are often provided by companies that charge prices above the cost of wages. At the national level, the average earnings of those occupations increased by an average of 2.26% per year from 2000 to 2017. I used that rate of increase to project future growth in the cost of these lost services.

As with the earnings projection, I adjusted each year’s figure for the probability of mortality and disability, and I discounted all future values to obtain a present value of household services. The expected present value of projected future lost household services is $___________

7. Value of Real Property

In the separation agreement of ___________, ___________ relinquished all ownership interest in three properties the couple had previously owned jointly. Under the separation agreement, ___________ will not profit from the sale of the property on ___________ in ___________, and he says the same is true for the property on F___________ in ___________. In effect, he will pass his ownership equity in these properties to others. The remaining property is the former marital residence on ___________ in ___________. His newly acquired equity in that property mitigates his economic damages in this matter.

Prior to the separation, both ___________ had an equal share in the property. Therefore, under the separation agreement, ___________ acquired ___________’ share of the equity, which means he gained half of the total equity as it existed on the separation date.

The equity in that property on ___________, is unknown, because we don’t have an as-is valuation of the property on that date. However, we have two appraisals of the property that were conducted for sale purposes and assumed that the house was in saleable condition. Those two values were $___________ and $___________, and for purposes of this analysis, I used the average, $___________, as the value of the property in saleable condition.

According to ___________, the Cread Court property will require another $___________ in construction expense to render it saleable. I used $___________ minus $___________, or $___________, as my estimate of the property’s value at the time of separation.

The equity in a property is the property’s value minus debt owed on it. The separation agreement identifies two home-equity lines of credit (HELOCs) used as construction loans for the ___________ property. The balances of the HELOCs on the separation date were $___________ and $___________. Their sum, $___________, is the outstanding debt on the property as of the couple’s separation.

Therefore, the total equity in the Cread Court property on the separation date was $___________ minus $___________, or $___________. The equity acquired by ___________ in the separation was half of that, or $45,135.

Mitigating ___________’ economic damages by this amount is conservative. ___________ is the defendant in a lawsuit regarding construction costs for the Cread Court property, and he has freed ___________ from financial liability in that action. The lawsuit, of which both ___________ were aware on the separation date, represents a further debt attached to that property, though one of unknown value. Whatever amount ___________ ends up owing as part of a settlement or judgment against him would reduce the equity in the property. If ___________ ends up owing $___________ or more, his equity in the property would be zero.

8. Net Economic Damages

Total damages are the sum of lost earnings/benefits and household services, less the acquired equity in the ___________ property:

Total Economic Damages

TypeAmount
Lost Earnings/Benefits$___________
Lost Household Services$___________
Less: Acquired Equity$___________
Total$___________

The sum of the present values of lost earnings and lost services is $___________. If the loss is mitigated by the equity ___________ acquired on ___________, the present value of his economic damages is $___________.

9. Sources

I relied upon the following sources:

  • ___________: tax returns and worksheets for ___________
  • Personal communications with ___________
  • Separation agreement, ___________
  • U.S. Department of Labor, Bureau of Labor Statistics:
    • Occupational wage data at http://www.bls.gov/oes/
    • Benefits data at http://www.bls.gov/ect/
    • Unemployment and labor-force participation data at http://www.bls.gov/cps/
    • Time-use data at http://www.bls.gov/tus/
  • North Carolina Division of Employment Security: Industrial wage data at http://d4.nccommerce.com/QCEWSelection.aspx
  • U.S. Census Bureau, Survey of Income and Program Participation: disability statistics at www.census.gov/hhes/www/disability/sipp/disab02/ds02t1.pdf
  • Federal Reserve Board: Interest rate data at www.federalreserve.gov
  • Wells Fargo Securities Economics Group: Monthly Economic Outlook, November 2018
  • “United States Life Tables, 2014,” National Vital Statistics Reports, Vol. 66, No. 4, August 14, 2017
  • Ruble, Michael R., Patton, Robert T., and Nelson, David M., “Patton-Nelson Personal Consumption Tables 2011-12,” Journal of Legal Economics, Vol. 21, No. 1, 2014
10. Author Information

My business name and address are:

Andrew Brod, Ph.D.
Brod Forensic Economics
4 Dunkirk Place
Greensboro, NC 27410

« Alienation of Affection and Criminal Conversation Part 4