The opinion of the court was delivered by
JONATHAN N. HARRIS, J.A.D.
This appeal arises in connection with the Wrongful Death Act, N.J.S.A. 2A:31-1 to -6. The novel issue presented is whether an heir's loss of a prospective inheritance resulting from the imposition of increased estate taxes — incurred due to the premature death of a decedent — is recoverable in a wrongful death action. Because such a tangible, readily-calculable diminishment in an heir's expectancy is in the nature of "pecuniary injuries resulting from such death," N.J.S.A. 2A:31-5, we conclude that it is an element of damages for the jury to consider in this case, subject to appropriate expert evidence. We reverse and remand for further proceedings.
On January 25, 2008, John G. Kellogg and his second wife, Barbara Kellogg,
Mr. Kellogg was ninety-seven years old at the time of the accident. Immediately following the collision, he was treated at the University Medical Center at Princeton. He remained in the hospital for one week, and on February 1, 2008, he was discharged to the Merwick Rehabilitation Center. At the time of discharge, Mr. Kellogg was diagnosed with a displaced rib fracture, non-displaced rib-fracture, and a possible pulmonary contusion. Although showing initial signs of improvement, Mr. Kellogg's condition rapidly deteriorated, and on February 6, 2008, he returned to the hospital. Mr. Kellogg died one day later due to "blunt force injury sustained during the car crash."
Plaintiffs Robert B. Beim and Franklyn Z. Aronson are the co-executors of the Estate of John G. Kellogg. Aronson is also trustee of the Anne D. Kellogg Marital Trust, which for many years served as Mr. Kellogg's primary source of income. Plaintiffs Judith Medina and Prudence Krause are John's and Anne's daughters.
In 2008, Mr. Kellogg's estate paid $1,196,083.57 in estate taxes. Plaintiffs allege that had Mr. Kellogg survived until 2009 or later, his estate's tax obligation would have been reduced by $626,083 in 2009, and by the full amount of $1,196,083.57 in 2010. See Economic Growth and Tax Relief Reconciliation Act of 2001 (the 2001 Act), Pub.L. No. 107-16, 115 Stat. 38, (codified as amended in scattered sections of 26 U.S.C.) (reducing estate taxes in 2009 and eliminating them entirely for 2010 only). The 2001 Act was set to expire on December 31, 2010, returning the estate tax to its pre-2001 configuration pursuant to a built-in sunset provision.
On December 17, 2010, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the 2010 Act), Pub.L. No. 111-312, § 301, 124 Stat.
In the Law Division, plaintiffs sought to recover the difference in estate tax consequences between 2008 and a later year with reduced estate taxes (depending upon what year the jury determined was the appropriate date of death), as damages under the Wrongful Death Act. Their theory was that Mr. Kellogg's heirs suffered a lost inheritance — or at least the loss of a substantial portion of an inheritance — by the early imposition of greater estate taxes, and that such loss is recoverable as "pecuniary injuries" under N.J.S.A. 2A:31-5 since it was the fault of defendants' tortious conduct.
Plaintiffs' First Amended Complaint included the following theories of liability: wrongful death on behalf of the co-executors and Estate (count one); survival action on behalf of the co-executors and the Estate (count two); negligence on behalf of plaintiff Barbara Kellogg (count three); agency on behalf of Barbara Kellogg (count four); per quod on behalf of Barbara Kellogg (count five); negligence on behalf of the trustee and Marital Trust (count six); negligence on behalf of Medina (count seven); and negligence on behalf of Krause (count eight). The last three counts of the First Amended Complaint did not expressly cite the Wrongful Death Act as a source of liability, but instead claimed that:
Defendants moved to dismiss counts six, seven, and eight pursuant to Rule 4:6-2(e). Plaintiffs conceded that dismissal was proper, but continued to press their theory of damages, presumably as encompassed by the wrongful death claim set forth in count one. The Law Division granted defendants' motion on December 8, 2010 (nine days before the 2010 Act became effective), stating that plaintiffs' damages were "too speculative in nature." The motion court recognized that "the concept of allowing the plaintiff[s] to introduce evidence of the deceased's tax liability resulting from the tax associated with the decedent's very death to establish damages is a matter of first impression in this state." It explained that the estate tax reprieve was established for 2009 and 2010, and that Congress was still debating what would apply in 2011 and beyond. Based upon Rule 1:13-5's mortality table, Mr. Kellogg was likely to live beyond 2010, and so his estate's tax liability could not be proven.
Plaintiffs filed a motion for reconsideration, which was argued on February 4, 2011, several weeks after the 2010 Act was signed into law. Plaintiffs argued that the passage of the 2010 Act removed any speculation in the determination of damages because the estate tax structure for 2008 to 2012 was now firmly known, and the mortality table suggested that Mr. Kellogg would pass away during this time period. Thus, according to plaintiffs, an expert in estate taxation — most likely an accountant or tax lawyer — could readily compute the probable impact of the year of death on the estate's tax responsibility, and the net effect upon the heirs would be a mere mathematical computation.
Because the relevant facts are undisputed, we turn to a de novo consideration of whether the motion judge correctly interpreted the breadth and scope of the Wrongful Death Act. See Zabilowicz v. Kelsey, 200 N.J. 507, 512-13, 984 A.2d 872 (2009).
The goal of the Wrongful Death Act is to compensate survivors of those wrongfully killed for their pecuniary losses. Tenore v. Nu Car Carriers, Inc., 67 N.J. 466, 473, 341 A.2d 613 (1975). It "provides to decedent's heirs a right of recovery for pecuniary damages for their direct losses as a result of their relative's death due to the tortious conduct of another." Aronberg v. Tolbert, 207 N.J. 587, 593, 25 A.3d 1121 (2011). More than fifty years ago the Wrongful Death Act was recognized as remedial legislation, Turon v. J. & L. Construction Company, 8 N.J. 543, 555, 86 A.2d 192 (1952), but was limited to "pecuniary injuries" sustained by qualified beneficiaries. N.J.S.A. 2A:31-4 and -5. The legislative remedy "permits recovery only of a survivor's calculable economic loss." Smith v. Whitaker, 160 N.J. 221, 232, 734 A.2d 243 (1999).
A common form of pecuniary loss is future earnings that the "decedent would have contributed to his ... survivors had he lived." Johnson v. Dobrosky, 187 N.J. 594, 607, 902 A.2d 238 (2006) (citing Curtis v. Finneran, 83 N.J. 563, 567-68, 417 A.2d 15 (1980)). However, pecuniary loss encompasses other forms of damages as well, including "the `lost' value of services such as companionship and care... and the loss of advice, guidance and counsel." Id. at 607, 902 A.2d 238 (citing Green v. Bittner, 85 N.J. 1, 4, 424 A.2d 210 (1980)). The proper measure of damages in a wrongful death action is the deprivation of a reasonable expectation of a pecuniary advantage that would have resulted by a continuance of the life of the deceased. Curtis, supra, 83 N.J. at 569, 417 A.2d 15 (internal quotation and citations omitted).
A wrongful death action can only be brought for the benefit of a decedent's heirs. N.J.S.A. 2A:31-4. The action is commenced by either an administrator ad prosequendum of the decedent or an executor, if the decedent dies testate. N.J.S.A. 2A:31-2. As a matter of law, a wrongful death action does not accrue to the decedent. Gershon v. Regency Diving Ctr., Inc., 368 N.J.Super. 237, 246, 845 A.2d 720 (App.Div.2004) (citing Miller v. Estate of Sperling, 166 N.J. 370, 383-84, 766 A.2d 738 (2001)). Accordingly, plaintiffs' claims for recovery of the increased estate taxes may be pursued, if at all, by Mr. Kellogg's co-executors Beim and Aronson in count one. Counts six, seven, and eight were properly dismissed.
Our research reveals only two reported decisions by state courts of last resort that have addressed whether increased estate taxes are pecuniary injuries under wrongful death statutes that are similar to our legislation. See Elliott v. Willis, 92 Ill.2d 530, 65 Ill.Dec. 852, 442 N.E.2d 163, 169 (1982) (holding that premature payment of estate taxes was not a recoverable loss in a wrongful death action because "[t]he test is a measurement of benefits of pecuniary value that the decedent might have been
In Elliot, the Illinois Supreme Court reviewed the plaintiff estate's claim that the payment of State inheritance and Federal estate taxes should be considered by the jury employing a loss-to-estate analysis that looked to the amount the decedent would reasonably be expected to save and accumulate. As part of its one-paragraph analysis rejecting such consideration, the court held:
We find this rationale neither persuasive nor consonant with the remedial purposes of our Wrongful Death Act.
In Farrar, the decedent's administrator sought recovery of $125,562 resulting from the loss of a Federal estate tax credit. Farrar, supra, 537 N.Y.S.2d at 26, 533 N.E.2d 1055. The administrator, successful in the lower courts, contended that had the decedent lived until 1987 instead of dying by asphyxiation in 1982 as a result of defendant's alleged negligence, the estate would have realized the full benefit of the Federal estate tax credit and no Federal estate tax would have been due and paid. Ibid. In its brief memorandum decision, the Court of Appeals held:
Beyond the foregoing, the opinion contains no further guidance. Its reference to Johnson, however, is illuminating.
In Johnson, an appeal arising under New York's wrongful death legislation, the same court held that evidence of a decedent's gross income at the time of death is the standard to measure the value of income already lost and to measure the loss of future earnings. Supra, 524 N.Y.S.2d at 418, 519 N.E.2d 326. The rationale for this economically-unreal doctrine was couched in terms of trial management, rather than embedded in the legislation itself:
The New Jersey Supreme Court does not share the view that providing expert tax opinions to juries on the question of pecuniary injuries injects impermissible speculation and conjecture in wrongful death actions:
The Court fortified this view of jury sophistication by noting:
Moreover, "although ... some degree of conjecture is involved in making this adjustment in estimating losses in death cases, we are not persuaded that this degree
Although New York and New Jersey share similar statutory language, our wrongful death jurisprudence has developed differently. Because we readily consider tax consequences in the determination of pecuniary injuries, Farrar and its progeny are inapposite to the issue at hand.
In Lindsay, the Florida Third District Court of Appeal noted that its wrongful death legislation differed from New York's (and inferentially New Jersey's) statutory framework. It held as follows:
Because the Florida wrongful death legislation is so unlike ours, we do not find Lindsay instructive.
We have recognized that "[t]he measure of damages under the Wrongful Death Act is the `deprivation of a reasonable expectation of a pecuniary advantage which would have resulted by a continuance of the life of the deceased.'" Weiman v. Ippolito, 129 N.J.Super. 578, 585, 324 A.2d 582 (App.Div.) (quoting Dubil v. Labate, 52 N.J. 255, 259, 245 A.2d 177 (1968)), modified, 130 N.J.Super. 207, 326 A.2d 70 (1974). In Weiman, we considered whether it was error not to award damages for a lost inheritance because the decedent's sons would have inherited money from the increase of their father's estate attributable to the growth of his insurance business. Ibid. In analyzing the specific proffer in Weiman — an expert's projections of the growth of decedent's business and the retention or accumulation of earnings — we agreed that such evidence was "too speculative and unreliable to be used as a basis for awarding damages for loss of inheritance."
We acknowledge that a conventional lost inheritance claim is not the same as a lost (or diminished) inheritance caused by the premature imposition of estate taxes. However, both reflect a "deprivation of a reasonable expectation of a pecuniary advantage which would have resulted by a continuance of the life of the deceased." Curtis, supra, 83 N.J. at 569, 417 A.2d 15. "All probabilities and every reasonable expectation should be considered." Ibid.
Unfortunately, we do not have the benefit of specific expert opinion to accurately gauge whether plaintiffs' proofs suffer from the type of deficiencies identified in Farrar or Weiman. At the time the Law Division ruled on defendants' motions, plaintiffs were not yet obliged to produce their expert reports. However, we do not conceive that the methodology likely to be employed will be any more complicated or conjectural than that contemplated by Tenore and its progeny. Here, at the time of death (and at the time the complaint was filed), the estate tax consequences through the end of 2010 were known. It appears unchallenged that application of the 2008 estate tax structure resulted in a substantial diminution in Mr. Kellogg's heirs' net recovery compared to the consequences of applying the estate tax structures of either 2009 or 2010.
Similarly, in early December 2010 — at the time when defendants' motion to dismiss was decided — the estate tax legal landscape continued unchanged, but it was undergoing intense political scrutiny.
However, when the reconsideration motion was decided in February 2011, the estate tax consequences for 2011 and 2012 were firmly (if newly) adjusted. Given the narrow window of Mr. Kellogg's life expectancy, it was not unduly speculative to recognize that but for defendants' alleged tortious conduct he might have survived to a point that his estate's tax liability was eliminated, resulting in a tangible economic advantage to his heirs. The amendatory provisions control the disposition of this case. Stancil v. ACE USA, 418 N.J.Super. 79, 82, 12 A.3d 223 (App. Div.) (citing Pizzo Mantin Grp. v. Twp. of Randolph, 137 N.J. 216, 235, 645 A.2d 89 (1994) (holding that under the time-of-decision rule, courts ordinarily apply the statute in effect at the time of the decision in order to effectuate current policy)), certif. granted, 207 N.J. 66, 23 A.3d 338 (2011).
Additionally, we conclude, subject to the admissibility of plaintiffs' expert evidence, that there is nothing unduly speculative about submitting the potential estate tax consequence of Mr. Kellogg's alleged premature death to a jury. Juries regularly consider the life expectancy of individuals in personal injury actions. See Model Jury Charge (Civil), § 8.11(G) "Life Expectancy" (1996). We find nothing unseemly about a jury considering — in assessing "such damages as they shall deem fair and just"
Without impinging upon the creativity and imagination of counsel, we could expect the parties to offer expert opinions in the fields of medicine and economics to illuminate life expectancy and mortality issues. Cf. R. 1:13-5 (providing that the table of mortality and life expectancy in the Rules' Appendix "shall be admissible in evidence as prima facie proof of the facts therein contained"); see also Marendino v. Spitz, 121 N.J.L. 556, 558, 3 A.2d 601 (E. & A.1938) (recognizing the utility of mortality tables but not requiring their use in the estimation of life expectancy in wrongful death actions). Additionally, accounting-related opinions could be mustered to explain taxation issues. This catalog of disciplines is for illustrative purposes only and is not intended to represent a minimum threshold or a maximum limit upon what could be made available to assist the jury in determining "such damages as they shall deem fair and just with reference to the pecuniary injuries resulting from such death." N.J.S.A. 2A:31-5.
There is nothing in this case that engenders unacceptable conjecture or speculation about the estate tax structure. In wrongful death cases, we tolerate relaxed evidentiary standards with respect to proof of damages. See Lesniak v. Cnty. of Bergen, 117 N.J. 12, 27, 563 A.2d 795 (1989) (using analogy from wrongful death jurisprudence to ease elements of proof of loss of future income by an injured infant); see also Green, supra, 85 N.J. at 15-17, 424 A.2d 210 (allowing damages in wrongful death cases, even though the inferences, and estimate of damages, are based on uncertainties). We harbor no fears that a properly instructed jury will produce a verdict that is based upon mere speculation.
Understandably, at the time of defendants' motion, the Law Division could confidently state that if Mr. Kellogg had lived to his actuarial life expectancy — beyond 2010 — there would be no damages under plaintiffs' theory. This, however, did not eliminate a plausible argument that Mr. Kellogg might have perished in either 2009 or 2010, but plaintiffs were never allowed to proffer such evidence, even if it could have been assembled. However, at the time of the reconsideration motion, the law had changed, and the estate tax structure through 2012 was now known. Since it was probable — but not impossible — that Mr. Kellogg might not have survived beyond 2012, virtually all of the perceived uncertainty in the case was eliminated. Nevertheless, we do not discount the possibility that Mr. Kellogg could have lived into 2013,
In summary, we conclude that the Law Division's dismissal of all counts except for count one was correct. Count one's prayer for wrongful death remedies includes an element of damages for the estate tax impact, if any, to Mr. Kellogg's heirs occasioned by his death in 2008, rather than in a subsequent year.
Affirmed in part; reversed and remanded in part for further proceedings in conformity with this opinion.