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MONAGHAN v. UITERWYK LINES

April 10, 1985

Francis Joseph Monaghan, Jr. and Andrea Marion Monaghan, his wife, Plaintiffs,
v.
Uiterwyk Lines, LTD. and Uiterwyk Corporation, Defendants



The opinion of the court was delivered by: SHAPIRO

 SHAPIRO, District Judge.

 This is an action by a longshoreman and his wife against the ship on which he was injured on March 27, 1981; there is jurisdiction by reason of diversity of citizenship and under the Longshoremen's and Harbor Workers' Compensation Act (the "Act"), 33 U.S.C. §§ 901 et seq. After the institution of the lawsuit, defendants filed a Petition in Bankruptcy; the Bankruptcy Court subsequently permitted plaintiffs to proceed with this action so long as the debtor incurred no expense and recovery was sought only under any available insurance coverage. The lawyer who had previously entered an appearance for defendants lacked authority to act and was permitted to withdraw. No other appearance having been entered for defendants, when the case was called for trial a default judgment was entered for plaintiffs. The court then heard plaintiffs' testimony on damages in accordance with Fed.R.Civ.P. 55(b)(2).

 The default judgment held defendants legally responsible for plaintiff Francis Monaghan's injuries. Therefore, he was entitled to an award of damages to compensate him for: past lost wages, reduced by the effective tax rate; his probable pecuniary loss over the duration of his career, reduced to its present value; past medical expenses; future estimated medical expenses, if any; past and future pain and suffering; and loss of life's pleasures. Prejudgment interest (at 10%) has also been requested. Plaintiff's wife, Andrewa Marion Monaghan, is entitled to a sum for loss of consortium, that is the loss of her husband's society, caused by defendants' negligence. American Export Lines v. Alvez, 446 U.S. 274, 64 L. Ed. 2d 284, 100 S. Ct. 1673 (1980).

 Past lost earnings are measured from the date of the accident to the date of trial. The accident occurred on March 27, 1981 and plaintiff was out of work until June 24, 1983, when he returned to work as a water boy approximately one day a week. Plaintiff earned $25,760 in 1980. On this basis, allowing for increases in wages of longshoremen, the total gross past lost earnings (without deduction for taxes) would be $130,221. From this sum must be deducted the income plaintiff has actually received and reasonably should have received since the date of the accident. Plaintiff's evidence was that he had earned $20,966 (also without deduction of taxes) since the date of the accident so that the total gross lost earnings would be $130,221 minus $20,966, or the sum of $109,255.

 But the court finds the plaintiff could have earned more than $20,966 since returning to work after the accident. His testimony that he can only work one day a week is not persuasive, especially since he has chosen work requiring him to lift pails of water. It seems likely that plaintiff has been more concerned to work only at the waterfront than to maximize his earned income and mitigate his damages. That, of course, is his choice and it may make good sense to him but defendants are not required to pay for plaintiff's reluctance to work elsewhere. Therefore, the court deducts double the earned income of $20,966, or $41,932, because plaintiff could have worked at least the equivalent of two days a week. So calculated, the total lost past gross wages is $88,289.

 A portion of past lost earnings must also be deducted for the amount plaintiff would have paid in federal, state and local income taxes. Based on testimony of plaintiffs' expert that plaintiff Francis Monaghan would pay 16% of his income in federal taxes and 6-1/2% in state and local taxes, total past lost net wages as a longshoreman is $88,289 minus $19,886 or $68,403.

 Plaintiff is also entitled to the loss of fringe benefits which included a pension plan as well as health and welfare benefits. The rate of his former employer's contribution is approximately 36% of the wages for longshoremen; his past lost fringe benefits would amount to 36% of $88,289, or $31,784.

 To determine future lost earnings, we first consider the amount that the employee would have been able to earn were it not for the injury. Mr. Monaghan's current earnings would have been $38,520 per year as of the end of 1985. The court recognizes that some increases in such wages would be likely in the next 25 years and agrees with plaintiffs' expert in taking such increases into account. But the court rejects plaintiff's testimony that he might have become a gang boss or supervisor as speculative. While he loved being a longshoreman and it was a family tradition, in view of the number of persons his own age similarly situated and working on the docks, including his cousins, there is no reason to believe on this record that he had so much more initiative, competitive drive and incentive to work that he rather than others would have earned such advancement.

 Also, the court disagrees with the expert that plaintiff's present earnings of $6,656 per year are a true measure of his loss of earning capacity. Plaintiff is evidently a personable, articulate man of at least average intelligence who now has a high school education, drives both a car and a lift truck, and could certainly find gainful employment for more than one day a week if he were motivated to do so. Many persons with more pain than that of Mr. Monaghan perform many jobs (although not necessarily on the waterfront). Therefore, the court reduces the plaintiff's estimated loss of future earning capacity ($38,520 minus $6,656 = $31,864) by one-third and calculates same at $21,243 per year this essentially posits that plaintiff will be able to hold a half-time position (15-20 hours per week) in the future.

 Future lost earning capacity is measured for the duration of the work-life expectancy period based on plaintiff's current loss of earning capacity. Mr. Monaghan is 39 years of age; his life expectancy, based on 1980 United States Life Tables (prepared by the United States Department of Health and Human Services) is 34 years. His work life expectancy at time of trial is 25.7 years if he would have retired at 65.

 Future lost earning capacity must be calculated and reduced to its present value in accordance with Jones and Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523, 76 L. Ed. 2d 768, 103 S. Ct. 2541 (1983). The damage award represents the present value of a lost stream of earnings in an inflation-free economy. The two elements in the calculation are: 1) the amount that the employee would have earned during each year he would be expected to work after the injury; and 2) the appropriate discount rate, reflecting the safest available investment. The entire lost stream of earnings must be discounted back to the date of injury rather than date of trial if the plaintiff is to be awarded interest on the discounted sum for the period between injury and judgment. See Jones, U.S. at , 76 L. Ed. 2d at 784 n.22.

 Mr. Monaghan has incurred total medical expenses to date of $21,198.42. There is no basis on the record for questioning the reasonableness or necessity of the past medical expenses and they will be awarded. But plaintiffs project future medical expenses caused by the accident in suit of $2,000 per year for hospitalization and $4,000 per year for physician ...


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