Opinion ID: 705082
Heading Depth: 2
Heading Rank: 1

Heading: Compensatory Damages Properly Determined

Text: 40 Steinberg maintains, as a fourth point, that the district court wrongly formulated the measure of damages suffered by the estate. He avers it was error to accept plaintiff's proposed measure of damages, i.e., that it could recover as compensation all the money that went to the estate's offshore companies and bank accounts regardless of where the money eventually ended up. According to Steinberg, the estate suffered no loss because the funds from the estate's offshore companies and its bank accounts were distributed to estate beneficiaries who were entitled to receive them or were used to pay for the estate's legitimate expenses. 41 As the measure of damages upon which the factual computation is based is a question of law, this question is subject to de novo review. Wolff & Munier, Inc. v. Whiting-Turner Contracting Co., 946 F.2d 1003, 1009 (2d Cir.1991) (internal quotes omitted). Defendant's argument is fundamentally flawed, to the extent that he incorrectly assumes that the beneficiaries of the estate are indistinguishable from the estate itself. An estate, of course, is an entity separate and distinct from its beneficiaries. See In re Dolcater, 106 F.2d 30, 31 (2d Cir.1939) (in suit to recover funds fraudulently extracted from an estate, any recovery will be for the benefit of the estate; such a suit may only be brought by the estate, unless beneficiaries prove executors of estate have refused to bring suit or that a request to do so would be futile). The district court followed this rule when it instructed the jury not to consider Rita Marley's entitlement, if any, as an estate beneficiary, noting that such matters were issues for the Jamaican probate court. We recognize that neither Rita nor any other beneficiary can receive a double recovery--royalty payments paid from the unlawfully diverted song rights plus these same amounts as a component of compensatory damages paid to the estate for ultimate distribution to beneficiaries. But with the estate still in probate at the time of this damages action, it was not error to instruct the jury as the trial judge did. Once the amounts due the beneficiaries are ascertained in the probate proceeding, appropriate applications may be made to the Jamaican probate court or the trial court in this case to avoid a double recovery to the beneficiaries. 42 In addition, the trial court properly instructed the jury that the measure of damages could be reduced if the funds were used to pay legitimate estate obligations and plaintiff would at the time have authorized the payments to be made on its behalf. This instruction is analogous to the rule that states: A tortfeasor cannot diminish the amount of recovery by paying a debt of the injured person without the latter's consent.... Restatement (Second) of Torts Sec. 923 (1979); see also D & G Equip. Co. v. First Nat'l Bank, 764 F.2d 950, 959 (3d Cir.1985) (A depositary or collecting bank, which seeks to establish a defense of mitigation by virtue of payment of the plaintiff's debts, must therefore offer proof that the converted monies were used to discharge the specific debts which the plaintiff would have elected to pay at the time the conversion occurred.). 43 Since a jury is presumed to comply with its instructions, see Casamento, 887 F.2d at 1151, the resulting verdict already accounted for any estate expenses paid by defendants that plaintiff would have authorized. Hence, the compensatory damages award was proper. 44