Opinion ID: 1131538
Heading Depth: 1
Heading Rank: 4

Heading: Damage awards of the children

Text: ¶ 18. The Administrators argue that the Court of Appeals erred in reversing the damage awards of the children. Specifically, they argue that the Court of Appeals erred when it rejected the testimony of all of the economists and held that the damages should be based on some type of average income for persons of the community in which the decedents lived. See Greyhound Lines, slip op. ¶ 33. Greyhound agrees that the Court of Appeals erred in holding that on remand the damages should be based on some sort of average income of the community in which the children lived. ¶ 19. On this issue, the Court of Appeals found: An award of damages by a chancellor is a finding of fact. As stated time and again, we will not disturb the findings of a chancellor unless those findings are clearly erroneous or an erroneous legal standard was applied. Matter of Estate of Chambers, 711 So.2d 878, 880-81 (Miss.1998) (citations omitted).... . . . . To calculate the present cash value of the life expectancy of the deceased one need merely to take the projected annual future income of the deceased multiplied by their work life expectancy, discount it to present cash value and deduct a percentage for the deceased's personal living expenses. Sheffield v. Sheffield, 405 So.2d 1314, 1318, (Miss. 1981); see also Jones v. Shaffer, 573 So.2d 740, 742 (Miss.1990) (In computing a person's lost net cash value, a personal consumption factor must be taken into account.). The plaintiffs' economic expert, Carroll David Channell, fixed Marcus's economic loss at $613,436, Nicholas's economic loss at $589,697, and Sumone's economic loss at $334,074. The defense's economic expert, Kenneth J. Boudreaux, testified that the present net cash value of the three children was for Marcus $1,753.04, for Nicholas $1,602.67, and for Sumone $520.30. Channell based his figures on the projected work life expectancy for each child that he attained from a February 1986 bulletin of the U.S. Department of Labor, entitled Effects of Race and Education Bulletin 2254; on the average earnings of a high school graduate, including the employer paid portion of social security adjusted for taxes, taken from the U.S. Bureau of Census CD Rom, entitled Income and Poverty 1993, with a real wage growth of .87% per year; and a personal maintenance allowance of 30% based on a study by economist Earl Cheit. Channell also discounted his sums to present value. The discrepancies between the children's economic losses were based on the discount factors used as each child would enter the workforce at different years, and the fact that a female child will earn less money and work less time over her lifetime. Boudreaux based his figures on the estimate [sic] life expectancies of each of the children using the U.S. government vital statistics tables and the work life tables of the U.S. Government Bureau of Labor Statistics; an earning amount of slightly over $8,000 a year, based on Cheryl May's income, with an allowance of a 5% increase a year; and a consumption rate of 94% from the U.S. statistical abstract of the United States. Boudreaux also discounted his sums to present value. We should start by saying that the calculation of the present net cash value of the life expectancy of a child is speculative at best for a child has no work history upon which to draw conclusions. The paramount question to be answered is what future annual income should be assigned to a child with no work history? Channell used an average income figure for a high school graduate, while Boudreaux used Cheryl May's yearly income of $8,000. The chancellor in his opinion assumed that both economists based their figures on the earning background of the [sic] Cheryl May. This was simply not true, and it was manifest error for the chancellor to state so in his opinion. Furthermore, it is manifest error to tie the children's projected future income to that of their mother. Boudreaux himself testified that he had no opinion about what the proper base income was for any of his calculations, and he simply used Cheryl May's income figure provided to him. We see no reason to ground the future income of the children based solely on the income of the mother. We can only guess if Greyhound would still want to tie the children's future income to that of their mother if at the time of her death she was making six figures. We hold that the base income of the children should be established with some type of average income for persons of the community in which the decedents lived. Greyhound Lines, Inc., slip op. ¶¶ 27-33. ¶ 20. The conclusion by the Court of Appeals that the income for the children should be based on some sort of average income for persons of the community in which they lived, as far as we can find, has no basis in our law. Additionally, such a method is just as speculative as basing the recovery on the earning history of the parents. It is both unfair and prejudicial to ground the projected future income of a deceased child on either basis. Both methods result in potentially disparate recoveries for children from affluent communities or with affluent parents, as opposed to children from less affluent areas or with less affluent parents. ¶ 21. Who is to say that a child from the most impoverished part of the state or with extremely poor parents has less of a future earnings potential than a child from the wealthiest part of the state or with wealthy parents? Today's society is much more mobile than in the past. Additionally, there are many more educational and job-training opportunities available for children as a whole today. We must not assume that individuals forever remain shackled by the bounds of community or class. The law loves certainty and economy of effort, but the law also respects individual aptitudes and differences. ¶ 22. Therefore, we hold that in cases brought for the wrongful death of a child where there is no past income upon which to base a calculation of projected future income, there is a rebuttable presumption that the deceased child's income would have been the equivalent of the national average as set forth by the United States Department of Labor. This presumption will give both parties in civil actions a reasonable benchmark to follow in assessing damages. Either party may rebut the presumption by presenting relevant credible evidence to the finder of fact. Such evidence might include, but is certainly not limited to, testimony regarding the child's age, life expectancy, precocity, mental and physical health, intellectual development, and relevant family circumstances. This evidence will allow the litigants to tailor their proof to the aptitudes and talents of the individual's life being measured. ¶ 23. We find this standard to be equitable for all the parties because it allows the fact finder to take into account the unique circumstances of each individual person in accordance with current Mississippi case law. Each case must depend upon its own facts. New Orleans & Northeastern R.R. Co. v. Thornton, 191 So.2d 547, 551 (Miss.1966) (citing Illinois Cent. R.R. v. Ragan, 252 Miss. 335, 173 So.2d 433 (1965)). ¶ 24. The Administrators also argue that the Court of Appeals erred in holding that it was error for the chancellor to use a consumption rate which was based on hypothetical spouses and children which would require support. They argue that it was not improper for their economist to base his opinions on hypothetical spouses and children because this Court in Jones v. Shaffer, 573 So.2d 740 (Miss.1990), reversed a damage award for funeral expenses only where the economist in that case had based his calculations on a hypothetical spouse. Greyhound, on the other hand, argues that the Court of Appeals was correct in holding that hypothetical beneficiaries could not be used to reduce the decedents' personal consumption factor. ¶ 25. On this issue, the Court of Appeals found: The chancellor next used the personal consumption rate of 30% as advocated by Channell. Channell testified that this consumption rate was based on the projection that the children would marry and have children, or that they would have partners who would share common expenses. Channell testified that the consumption rate is lowered because with children one would consume less on oneself, and if married one would consume less than if one were single. Channell further testified that for a forty-five year old man who had never married and lived alone, he would use a 60% consumption rate. On cross-examination, Channell testified as follows: Well, case specific, no. For young children you have an issue thatthe question isthe economic question is, what position are they going to be in over the remainder of their lives? Are they going to be married? Are they going to live with someone? Are they going to have a roommate? Are they going todo they have sisters or other relatives that are going to survive them? If that's the case, then a thirty percent consumption allowance is certainly appropriate because the income they earn could be available to the support of family members, could be available to the support of parents in their old age. There are numerous things that are allocations that can be made from that income. When [you] go up toyou try to use personal savings rates of three percent and a consumption rate of ninety-seven percent, then certainly that's out of line in my view. That's not personal consumption. In fact, I would argue that the maintenance allowance should consist of that amount of monies necessary to sustain a meaningful life style. In other words, food, clothes, shelter, transportation. Channell's testimony was that the children would be spending money on hypothetical future spouses and children, therefore their consumption rate is lowered to account for the money that would have been spent on support of the hypothetical future spouses and children. It is an attempt to allow beneficiaries to recover money that the deceased would have spent on them during the deceased's lifetime by lowering the deceased's personal consumption rate. In essence, to allow beneficiaries to recover everything they would have received if the deceased had lived. We hold that it was manifest error for the chancellor to use a consumption rate which is based on a hypothetical prospect that the children would eventually have a spouse and have children of their own, both of which require support. . . . . Mississippi has never adopted the idea of lowering a consumption rate or increasing a saving rate to specifically make up for money spent on statutory beneficiaries during the deceased's lifetime. We decline to offer any opinion as to whether Mississippi recognizes such a calculation in determining the present net cash value of the life expectancy of the deceased. However, even if Mississippi recognized such, it would not be proper in this instance as the children were not supporting anyone at the time of their deaths. Greyhound Lines slip op. ¶¶ 34-37. ¶ 26. Contrary to the opinion of the Court of Appeals, we have indeed recognized personal consumption factors. In Jones v. Shaffer, 573 So.2d 740 (Miss. 1990), a wrongful death action was brought for the death of an unmarried twenty-two year old who only left his five brothers and three sisters surviving him. We found that the trial court erred in not granting a new trial when the jury awarded damages for funeral expenses only, and in so doing, we stated: Dr. Paul Oliver, an expert in the field of economics, testified for the plaintiff. He was the only such expert to testify in the case. According to Dr. Oliver, the average work life expectancy of a 22 year old male person is 41 years. In computing a person's lost net cash value, a personal consumption factor must be taken into account. In his direct testimony, he indicated that the decedent's personal maintenance consumption allowance would be twenty-six per cent, which is for a two person family and the highest percentage shown by the tables of the Department of Labor. Using that rate, Dr. Oliver testified for the last full year the decedent worked, he earned $9,900, which computed the present value of the decedent's lost income at $171,000.00. This did not take into account any taxes that might be paid during the decedent's life, had he lived. On cross examination by Mr. Sanders, attorney for the defendant, Kim Shaffer, Dr. Oliver was asked to compute the decedent's lost income using 40% as the deceased personal consumption rate and Dr. Oliver arrived at the decedent's lost net income as $101,142.00. On further cross examination by the attorney for Jeffries' Trucking, Dr. Oliver was asked to assume that the decedent's personal consumption rate was 67% and Dr. Oliver arrived at the decedent's lost net income at $70,495.00. It is incredible that the verdict ignored and did not respond favorably to this element of damages Id. at 742 (emphasis added). ¶ 27. Today we hold that the consumption rate is another factor which may be argued by the parties to the finder of fact in support of increasing or decreasing the presumption that the deceased child's income would have been equivalent to the national average. The credibility and weight of such testimony as are to be determined solely by the finder of fact. As the Court of Appeals observed in the present case, Channell based his testimony and calculations on the average earnings of a high school graduate and a personal maintenance allowance of 30% based on a study by economist Earl Cheit. Greyhound Lines, slip op. ¶ 30. The chancellor chose to give credence to Channell's testimony, and rendered a verdict accordingly. This aspect of the chancellor's decision was supported by substantial evidence, and as a result, we cannot say that the chancellor erred. We therefore reverse the decision of the Court of Appeals and reinstate the damage awards for the death of the children.