Court Opinion

ID: 9782600
Source: CourtListenerOpinion
Date Created: 2023-08-30 18:59:42.290963+00
Date Added: 2024-06-11T07:35:06.347981
License: Public Domain

Smith, J. (dissenting).
In Milbrandt v Green Refractories Co. (79 NY2d 26, 36 [1992]) we held that, where future damages *370have been discounted to the date of a jury’s verdict, the amount so calculated already includes interest up to that date and no further calculation of pre-verdict interest is necessary or appropriate. Milbrandt was a well-reasoned decision that reached a fair result, and the application of Milbrandt would produce a fair result in this case.
The majority here, however, holds that the date-of-verdict damages must be discounted back to the date of decedent’s death, and that interest must then be added from the date of death to the date of verdict. This should be a useless but harmless exercise, for the two calculations should cancel each other; but here, for reasons no one has attempted to explain, the discounting was done using an interest rate of roughly 4%, while interest was calculated at the statutory rate of 9%—in effect doubling the interest and giving plaintiff a significant windfall. I see no justification for this procedure, and I therefore dissent.
I
Milbrandt, like this case, was an action for wrongful death. In Milbrandt, as in this case, part of the jury’s award was for “postverdict losses”—i.e., “what decedent would, in the future, have contributed to the care and support of his family” (79 NY2d at 32). In Milbrandt, “the court instructed the jury to discount the [post-verdict] damages by reducing the award to its cash value on the day of the verdict” (id.). Here, pursuant to CPLR article 50-B, the jury verdict included an undiscounted amount of post-verdict damages; the trial court, after modifying the verdict as the result of a pretrial motion and making certain other adjustments required by statute, calculated a date-of-verdict present value (see majority op at 366).* I see no reason why this difference—the difference between a calculation by the jury and one by the judge—should be significant, and I find Milbrandt controlling here.
In Milbrandt, we rejected the idea that the date-of-verdict present value needed to be the subject of any further interest calculation. We said:
“When, as with the awards in the cases before us, an intended amount is not discounted to the date of *371death, but only to the date of the verdict, the award includes the return that would be earned on the principal from the date of death to the date of the verdict. . . .
“If, as in the cases before us, the damages are discounted only to the date of verdict, then that award already includes interest on the principal sum from the date of death to the date of verdict, and additional interest is a windfall.” (79 NY2d at 35-36 [emphasis added].)
We therefore held in Milbrandt that no pre-verdict damages should be added to future damages discounted by the jury to present value at date of verdict. For the same reason, in this case there is no reason to add anything to the $3,104,848 in date-of-verdict present value calculated by the court. That amount fully compensates plaintiff for his future losses as of the date of verdict.
II
Plaintiff nevertheless asked the trial court for, and was granted, what he called “Interest on Future Wrongful Death Damages.” He began his calculation of this amount by discounting the $3,104,848 from the date of verdict to the date of death. He did not disclose the interest rate he used in the discounting process, but it is clear from his result that it was approximately (or perhaps exactly) 4.36%. He arrived at a date-of-death value of $2,487,465, then calculated interest going forward to the date of verdict at 9%, producing an interest figure of $1,190,747. Then—for reasons I cannot fathom, and which plaintiff has not explained—he added this interest not to the date-of-death value, but to the date-of-verdict value of $3,104,848 (an amount which, by definition, already included interest at 4.36% from date of death to date of verdict), reaching a sum of $4,295,595 in future damages plus interest.
I put aside plaintiffs bizarre choice to add the interest to the date-of-verdict value, rather than to the date-of-death value on which it was calculated. This was obviously wrong—by adding interest to an amount that already included interest, plaintiff essentially claimed, and obtained, interest at more than 13% on his date-of-death value—but I acknowledge that, since defendant failed to complain of this error, we may be powerless to correct it. The more basic problem, of which defendant did *372complain, is that plaintiff’s whole calculation of “Interest on Future Wrongful Death Damages” makes no sense.
In principle, there is no harm in discounting back from date of verdict to date of death and adding interest from date of death to date of verdict—because if the discounting is done correctly, there is no difference between following that procedure and simply awarding the date-of-verdict present value, as Milbrandt did. The discount rate and the interest rate should be identical, and the amount subtracted and the amount added will thus cancel each other. As a federal Court of Appeals explained in Woodling v Garrett Corp. (813 F2d 543, 560 [2d Cir 1987]), a case we approved in Milbrandt (79 NY2d at 36, 37): “Assuming that the inflation-adjusted discount rate is based on the legal rate of interest, which is used in calculating prejudgment interest, this practice [discounting and adding interest] reaches precisely the same result as [awarding date-of-verdict value].”
The calculations, if done properly, reach the same result because the whole point of discounting is to find the amount of money on an earlier date that is equivalent in value to a given amount on a later date. To do so, one must choose a discount rate equal to the rate of interest the person holding the funds between the two dates is expected to earn (see generally Gilbert, Forensic Discount Rates, 1 J Legal Econ 40 [1991]). Here, choosing the discount rate is an easy task, because we know the interest rate plaintiff could expect to earn from the date of death to the date of verdict: 9%, by statute (CPLR 5004). And if we use that discount rate there is no need to do the exercise at all, because it consists in effect of subtracting and adding the same amount of money.
In Rohring v City of Niagara Falls (84 NY2d 60, 69 [1994]), we recognized the equivalence between the Milbrandt approach of awarding date-of-verdict value and the discounting and adding approach. We said in Rohring, “in [Milbrandt] we held that future damages should be discounted to the date of liability, which by statute is the date of death, before interest is calculated on them” (84 NY2d at 69). The majority quotes part of this language (majority op at 368), but omits Rohring’s reference to Milbrandt and thus obscures the key point: The discounting and adding approach is identical in substance to the Milbrandt approach—if the discounting and adding is done correctly.
*373It was not done correctly here. Plaintiff presented to Supreme Court, and obtained approval of, a calculation in which the discount rate was 4.36% and the interest rate from date of death was 9%. (I am ignoring the distinction between compound and simple interest, which does not affect the argument.) I do not find in plaintiffs submissions, or in the opinions below, or in today’s majority opinion, any reasoned argument that supports discounting with a lower interest rate, and then adding back interest at a higher one. That is not only inconsistent with Milbrandt: it is an irrational procedure that accomplishes nothing except putting defendant’s money in plaintiffs pocket.
Chief Judge Lippman and Judges Graffeo, Pigott and Jones concur with Judge Ciparick; Judge Smith dissents in a separate opinion in which Judge Read concurs.
Order affirmed, with costs.

 The parties and the majority assume, as do I, that the date of the damages verdict is an appropriate date for a present value calculation. In principle, for the reasons I explain below, it should not matter what date is chosen as long as there is no discrepancy between the rate used in discounting back to a date and in adding interest after that date.