McKee ex rel. McKee v. Colt Electronics Co.

849 F.2d 46
CourtCourt of Appeals for the Second Circuit
DecidedMay 27, 1988
DocketNo. 628, Docket 87-7774
StatusPublished
Cited by1 cases

This text of 849 F.2d 46 (McKee ex rel. McKee v. Colt Electronics Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McKee ex rel. McKee v. Colt Electronics Co., 849 F.2d 46 (2d Cir. 1988).

Opinions

GEORGE C. PRATT, Circuit Judge:

This appeal from a damage award is part of the litigation that arose out of the 1981 crash at Westchester County Airport of a corporate jet owned by third-party defendants Texasgulf, Inc., and its wholly-owned subsidiary, Texasgulf Aviation, Inc. (collectively, “Texasgulf”). Plaintiffs decedent, Gordon McKee, who was the vice-president/treasurer of Texasgulf, was among the six passengers killed in that crash.

The estates of the crash victims filed suits pursuant to New York’s wrongful death statute, N.Y.Est. Powers & Trust Law § 5-4.3 (McKinney 1981), the cases were consolidated, and Judge Goettel presided over two jury trials that were held to resolve affirmative defenses and to determine liability. The factual and procedural histories of these cases are outlined more fully in Woodling v. Garrett Corp., 813 F.2d 543 (2d Cir.1987); Texasgulf, Inc. v. Colt Electronics Co., 615 F.Supp. 648 (S.D.N.Y.1984); Morgan Guaranty Trust Co. v. Texasgulf Aviation, Inc., 604 F.Supp. 699 (S.D.N.Y.1985); Gregory v. Garrett Corp., 589 F.Supp. 296 (S.D.N.Y.1984), aff'd in part and vacated in part, 813 F.2d 543 (2d Cir.1987).

The jury found the defendants and third-party defendants jointly and severally liable for negligently causing the crash, and apportioned liability as follows: Texasgulf (owned and operated the aircraft), 70%; Garrett Corporation (installed generator control units), 20%; Phoenix Aerospace, Inc. (designed and manufactured generator control units), 5%; and Colt Electronics Co., Inc. (prepared installation drawings), 5%. We upheld that liability verdict in Woodling v. Garrett, 813 F.2d 543. After those issues were resolved, some of the cases settled, and damage trials were held in others, including McKee’s.

During the McKee damages trial, plaintiffs introduced evidence to show that McKee was survived by his wife Mary and four children, who were 22, 21, 18 and 14 when he died. Mrs. McKee died prior to trial, but her videotaped deposition was shown to the jury. McKee was an athletic, vigorous man and a devoted father who was actively involved with his children. McKee’s concern for his children’s education was demonstrated by his decision to send them to private school, his service as trustee of the youngest child’s school, his commitment to finance their graduate education, and his frequent discussions with the children concerning their educations and careers. In fact, the two older McKee children pursued careers in geology and finance, respectively, fields in which McKee, who was also highly respected in the New York financial community, specialized. The third child has since completed her undergraduate education, and the youngest is now in college.

Both sides presented expert economic testimony on the issues of lost earnings, McKee’s personal expenses, and the value of McKee’s household services. Responding to special interrogatories, the jury awarded damages as follows:

[48]*48loss of financial support $1,763,700
loss of care, guidance, train- 294,000 ing and education
lost household and other ser- 13,900 vices
funeral and burial expenses 5,168
Total $2,076,768

Judge Goettel denied defendants’ and third-party defendants’ motions to set aside the damages verdict as contrary to the evidence and excessive.

Two of the many issues raised on appeal warrant discussion here. The first concerns Judge Goettel’s exclusion of certain evidence of McKee’s prospective income tax liability and his refusal to instruct the jury to reduce any award to account for income tax liability. The second concerns the amount of the award for loss of parental nurture, care, and guidance.

I. Income Taxes.

In Woodling v. Garrett Corp., 813 F.2d 543, 557 (2d Cir.1987), a case arising from the death of a 34-year old accountant who was also aboard the Texasgulf plane, we held that the trial court erred in admitting evidence as to income tax the decedent would have had to pay on projected future earnings and in instructing the jury that it should deduct income taxes from the decedent’s projected gross income in calculating the amount that the plaintiff was entitled to recover for lost support. We refused to overrule Vasina v. Grumman Corp., 644 F.2d 112 (2d Cir.1981), where we had held that New York law does not allow evidence of the effect of taxes on lost income, and interpreted Coleman v. New York City Transit Authority, 37 N.Y.2d 137, 371 N.Y.S.2d 663, 332 N.E.2d 850 (1975), as barring both jury instructions on nontaxa-bility of damage awards and evidence of the effect of taxes on prospective income. 813 F.2d at 557-58.

Unwilling to accept defeat on this issue even in the face of our broad and seemingly unambiguous holding in Woodling, defendants now advance a variation of their Woodling argument in the form of a proffered “McWeeney high-income earner exception” which, defendants argue, requires juries to consider the effect of income taxes in cases involving “high-income earners.” See McWeeney v. New York, N.H. & H.R.R. Co., 282 F.2d 34, 38-39 (2d Cir.), cert. denied, 364 U.S. 870, 81 S.Ct. 115, 5 L.Ed.2d 93 (1960). In McWeeney, we held that “where the question is one of federal law or the applicable state law is silent,” the jury should not be allowed to consider the effect of taxes on earnings. Id. at 39. Writing for the panel, Judge Friendly suggested, however, that in a “limited class of cases” involving high-income earners whose earnings would have been largely consumed by income taxes, “the court may properly give some charge or, perhaps better, use the tools provided by Fed.R.Civ.Proc. 49,” and set aside an excessive verdict. Id. at 38. From this dictum, and in spite of the fact that the applicable state law is not silent, defendants seek to extrapolate what they call the “McWeeney high-income earner exception rule”.

We need not address whether this “rule” actually existed, or, if it did, whether it survived Vasina and Woodling, because, while this appeal was pending, the New York State Court of Appeals decided two cases that clarify New York’s position on both the evidentiary and jury instruction issues. In Johnson v. Manhattan & Bronx Surface Transit Operating Auth., 71 N.Y.2d 198, 206, 524 N.Y.S.2d 415, 519 N.E.2d 326

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