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I. Introduction

This article is one in a series of articles in the Journal of Forensic Economics detailing the different and the common methods for assessing economic damages in the various states. In this article we discuss the legal framework by which economic damages are computed in personal injury (PI) and wrongful death (WD) cases in the state courts of North Carolina. Section II presents the legal framework for these torts; Section III discusses the calculation of damages in Wrongful Death torts, while Section IV deals with Personal Injury torts where they differ from Wrongful Death. Section V highlights practice and other issues for forensic economists in North Carolina.

II. Legal Framework

A. General

An expert economist's testimony as to the present monetary value of economic damages arising from personal injury or wrongful death is admissible. The testimony of an expert can provide a reasonable basis for the computation of damages even though, at best, the result is approximate. (Beck v. Carolina Power & Light Co.,1982) In Beck the court wrote:

In allowing recovery under this statute [North Carolina General Statutes 28A-18-2], the North Carolina courts have recognized that, by necessity, some speculation is necessary in determining damages. In Bowen v. Constructors Equip. Rental Co., 283 N.C. 395, 196 S.E.2d 789 (1973), the court noted that monetary recovery cannot be denied simply because no yardstick for ascertaining the amount thereof has been provided.

In Powell v. Parker (1983), it is recognized that "some speculation is necessary in determining damages" and that recovery can not be denied simply because the loss may be difficult to measure. Courts will not allow expert testimony "based upon obviously inadequate data." (Rutherford v. Air Conditioning Co., 1978) However, "whether certain data is a sufficient basis for an opinion will often be a matter within the witness' expertise."

In general, questions of sufficient basis for the opinion are left for cross-examination. (Short v. Chapman, 1964)

In determining the appropriate amount of compensation for such loss, "the age and occupation of the injured person, the nature and extent of his employment, the value of his services and the amount of his income at the time, whether from fixed wages or salary, are matters properly to be considered by the jury," and "great latitude" is allowed in the introduction of such evidence. "The right of cross-examination provides the opposing party opportunity to challenge estimates of this nature."

B. Wrongful Death

North Carolina has established statutory rights for dealing with wrongful death torts and their associated damages-a right that did not exist under common law. Damages in wrongful death cases are governed by General Statute 28A-18-2 (b). The damages recoverable for death by wrongful act include:

  1. Expenses for care, treatment and hospitalization incident to the injury resulting in death;
  2. Compensation for pain and suffering of the decedent;
  3. The reasonable funeral expenses of the decedent;
  4. The present monetary value of the decedent to the persons entitled to receive the damages recovered, including but not limited to compensation for the loss of the reasonably expected:
    a. Net income of the decedent,
    b. Services, protection, care and assistance of the decedent, whether voluntary or obligatory, to the persons entitled to the damages recovered,
    c. Society, companionship, comfort, guidance, kindly offices and advice of the decedent to the persons entitled to the damages recovered;
  5. Such punitive damages as the decedent could have recovered had he survived, and punitive damages for wrongfully causing the death of the decedent through maliciousness, willful or wanton injury, or gross negligence;
  6. Nominal damages when the jury so finds.

The wrongful death statute confers a right of action for fair and just compensation for the pecuniary injury resulting from death, recoverable by the personal representative for the benefit of a specific class of heirs. Only the personal representative of the deceased, his executor or administrator, may bring suit for damages, and any damages recovered must be distributed under the laws of intestacy in North Carolina. Proceeds recovered under the wrongful death statute are not part of the estate and are not distributed by provisions of a will, but according to the Intestate Succession Act. (Harrison v. Carter, 1946; Bowen v. Constructors Equip. Rental Co., 1973)

The damages are to individuals who may have reasonably expected to receive benefit(s) from the deceased. Cases confirming that damages are limited to those who may have reasonably expected to receive benefits include: Bowen v. Constructors Equip. Rental Co., 1973; Carver v. Carver, 1984; and more recently, Bahl v. Talford, 2000. These cases all involved the death of children. Such cases are exceptions to the norm and as such, have generated a number of recorded appeals. Initially, in the Bahl v. Talford case, the parents were awarded money for income they might reasonably have expected from the deceased daughters. This case was remanded because no evidence was presented at trial to show that the deceased had ever expressed intent to provide income to the parents. The daughters were 11 and 16 at the time of death.

The "services" in paragraph 4(b) of the statute have been construed in actual cases to be the household maintenance services typically considered by forensic economists. These would include care of a dwelling, inside and out, care of children or adults unable to provide their own care, food preparation, etc.

In State v. Smith, 1988, the deceased's annual gross income was estimated to be $25,000. The parents' life expectancy was 30 years resulting in a loss estimated to be $750,000 with a present value of $500,000. The Appeals Court stated that the trial court:

...erred, however, in using the victim's annual salary as a base figure... only the "reasonably expected" net income of the decedent can be recovered...
No evidence was presented at the sentencing hearing to show that either of the victim's parents reasonably expected to receive any, let alone all, of his income. Since the restitution order is not supported by the evidence, it cannot be allowed to stand.

The reason the judgment was vacated appears to be either because (a) gross instead of net income was used or (b) no evidence was provided that the parents could be expected to receive any income from the daughters. This decision was affirmed by the North Carolina Supreme Court in State v. Smith, 1989.

There does not seem to be any question concerning reasonably expected when the survivor is a spouse and/or child. From Bowen v. Constructors Equip. Rental Co., 1973:

If the persons entitled to receive the damages recovered were a wife and child or children, obviously the present value of their monetary loss would involve different considerations. If the persons entitled to the damages recovered were collateral relatives whose contacts with the decedent were casual and infrequent, there may be no basis for the recovery of any significant amount under paragraph (4).

The legislature intended the damages recoverable under the wrongful death statute to compensate the beneficiaries in manner such as restores them to the position they would have had experienced had there been no death. (Scallon v. Hooper, 1982, cert. denied, 306 N.C. 744, 295 S.E. 2d 480, 1980) and Beck v. Carolina Power & Light Co., 1982) In addition to lost earnings and services, these recoverable damages include such items as lost health care insurance and reduced pension benefits to which the beneficiaries would have been entitled.

C. Personal Injury

The North Carolina Pattern Instructions (NCPI-810.00, p. 1) for personal injury state:

The plaintiff may also be entitled to recover actual damages. On this issue the burden of proof is on the plaintiff. This means that the plaintiff must prove, by the greater weight of the evidence, the amount of actual damages [proximately caused by the negligence] [caused by the wrongful conduct] of the defendant.

The possible damages are enumerated in NCPI-810.02, p. 1:

Actual damages are the fair compensation to be awarded to a person for any [past] [present] [future] injury [proximately caused by the negligence] [caused by the wrongful conduct] of another.
In determining the amount, if any, you award the plaintiff, you will consider the evidence you have heard as to:
[medical expenses]
[loss of earnings]
[pain and suffering]
[scars or disfigurement]
[(partial) loss (of use) of part of the body]
[permanent injury]
[any other type of damage supported by the evidence; e.g. loss of consortium]

III. Wrongful Death Damages

. . .Continue to read rest of article (PDF).

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Dr. Gary R. Albrecht has more than 25 years of experience specializing in Economic Forecasting and Forensic Economics. The Director of Econometric Modeling at the University of Kansas, his research has been published in the Journal of Forensic Economics, Journal of Legal Economics, Trial Briefs, and The Earnings Analyst.

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