Robert B. Beim v. Trevor R. Hulfish (071025)

SYLLABUS
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized).
Robert B. Beim v. Trevor R. Hulfish (A-33/34-12) (071025)
Argued September 24, 2013 -- Decided January 28, 2014
PATTERSON, J., writing for a unanimous Court.
In this appeal, the Court considers whether a change in the federal estate tax law after an alleged wrongful
death can give rise to a viable claim for damages under the Wrongful Death Act (the Act), N.J.S.A. 2A:31-1 to -6.
In 2008, at the age of ninety seven, John Kellogg died following a motor vehicle accident allegedly caused
by defendants’ negligence. Kellogg’s estate paid federal estate taxes pursuant to the tax laws applicable to the
estates of decedents who died in 2008. Plaintiffs -- Kellogg’s daughters, the executors of his estate and the trustee
of a marital trust -- filed a wrongful death action seeking economic damages based on their claim that Kellogg’s
estate would have paid substantially less in federal estate taxes had Kellogg survived until 2009. The trial court
dismissed plaintiffs’ claims, holding that estate taxes did not constitute recoverable damages under the Act. It
reasoned that the potential federal tax liability of the Kellogg estate, had Kellogg lived for an additional period after
the accident, was too speculative to calculate, since tax rates for the estates of decedents who died in 2011 and
beyond were yet to be determined by Congress. Plaintiffs moved for reconsideration after Congress enacted estate
tax laws applicable to the estates of decedents who died in 2011 or 2012. The trial court denied reconsideration,
finding that Congress’s passage of the tax laws did not resolve its concern about speculation and that estate taxes
are, in any event, not recoverable under the Act.
The Appellate Division reversed. Beim v. Hulfish, 427 N.J. Super. 560 (App. Div. 2012). The panel
concluded that the estate tax losses alleged by plaintiffs would not compel the factfinder to engage in speculation. It
held that by the time the trial court ruled on the motion for reconsideration, the estate tax laws for 2011 and 2012
had been established, and a jury guided by expert testimony would have been in a position to calculate damages.
The panel accordingly reinstated plaintiffs’ claims for estate tax losses as the measure of damages asserted as an
element of their wrongful death claim. The Court granted certification. 212 N.J. 462 (2012).
HELD: The Wrongful Death Act does not authorize claims for damages based on estate taxes paid by a decedent’s
estate because such claims do not fit within the statutory cause of action defined by N.J.S.A. 2A:31-1 and the
alleged damages do not constitute “pecuniary” losses as required by N.J.S.A. 2A:31-5.
1. Plaintiffs assert that pursuant to 2001 and 2010 amendments to the Internal Revenue Code, the tax burden on
Kellogg’s estate would have been significantly less had he died in any of the four years that followed 2008. The
Court therefore considers whether a distinction in estate tax liability can give rise to a viable claim for damages
under the Act. When interpreting statutory language, the goal is to divine and effectuate the Legislature’s intent.
The Court begins with the language of the statute, giving the terms used therein their ordinary and accepted
meaning, and reads them in the context of the overall scheme so as to give sense to the legislation as a whole. In
addition, the Court broadly construes the Act in accordance with its salutary purpose to eliminate the inequity of
denying all right of recovery for the death of a family member. (pp. 10-16)
2. Two of the Act’s six subsections, N.J.S.A. 2A:31-1 and N.J.S.A. 2A:31-5, are central to the Court’s analysis.
N.J.S.A. 2A:31-1 defines the statutory cause of action as one that “would, if death had not ensued, have entitled the
person injured to maintain an action for damages resulting from the injury.” This Court has construed N.J.S.A.
2A:31-1 to permit a beneficiary to maintain a claim under the Act only if a claim could have been brought by the
decedent had he lived. Graf v. Taggert, 43 N.J. 303 (1964); Aronberg v. Tolbert, 207 N.J. 587 (2011). N.J.S.A.
2A:31-5 permits the recovery of “pecuniary injuries resulting from [the decedent’s] death.” Under that provision, if
the decedent’s survivors prove the defendant’s liability for wrongful death, they may be compensated for the
economic contributions of which they have been deprived by virtue of the death. The inquiry centers not on the
1
needs of the heirs, but on what the decedent would have provided to those heirs during an extended lifetime. Such
losses are compensable because they stand as a substitute for money that would have been provided during the
lifetime of the decedent, had he or she survived. (pp. 16-21)
3. In Green v. Bittner, 85 N.J. 1 (1980), the Court expanded the category of pecuniary damages to include not only
the loss of future financial contributions but also the lost value of services such as companionship and care and the
loss of advice, guidance and counsel. The Court, however, limited damages for companionship and advice “strictly
to their pecuniary element,” with the value of the services determined in accordance with “what the marketplace
would pay a stranger with similar qualifications for performing such services,” with no value attached to the
“emotional pleasure that a parent gets when it is his or her child doing the caretaking rather than a stranger.” Id. at
12. Thus, in assessing both financial and non-financial losses incurred because of a wrongful death, the focus is on
the value of what the decedent would have contributed to his or her survivors during a continued lifetime. This
Court has never deemed a loss that fails to meet that definition to be a “pecuniary” injury under N.J.S.A. 2A:31-5.
(pp. 21-23)
4. While pecuniary losses under N.J.S.A. 2A:31-5 cannot be premised on speculation, an exact calculation of the
plaintiff’s damages may not be feasible in every case. “Where a wrong has been committed, and it is certain that
damages have resulted, mere uncertainty as to the amount will not preclude recovery — courts will fashion a remedy
even though the proof on damages is inexact.” Kozlowski v. Kozlowski, 80 N.J. 378 (1979). In determining
whether the decedent would have contributed to the survivors and, if so, the value of his or her lost contributions, the
jury should consider the various probabilities which, in the course of the years, might determine the pecuniary
advantages which would accrue to the next of kin if the death had not occurred. Accordingly, the Act frames the
determination of damages for pecuniary injuries in a wrongful death case. The survivors’ cause of action is limited
to claims that could have been asserted by the decedent had he or she survived. N.J.S.A. 2A:31-1. When
calculating damages for “pecuniary injuries,” the factfinder values as precisely as possible the financial support and
non-economic services that the decedent would have contributed for the benefit of his or her survivors, had he or she
lived. N.J.S.A. 2A:31-5. (pp. 23-25)
5. Plaintiffs’ theory of damages is starkly different from the categories of losses held to constitute pecuniary injuries
under the Act. Federal estate taxes bear no nexus to the financial support or the services that a decedent would have
provided to his or her heirs had he or she survived. Kellogg’s extended life is significant to plaintiffs’ claims only
insofar as it would have forestalled his estate’s obligation to pay taxes until Congress had generated a more
hospitable tax environment. In short, plaintiffs’ damages theory is premised not on the contributions that Kellogg’s
heirs would have enjoyed during his continued lifetime, but on the tax benefits that they would have achieved as a
result of his deferred death. Recognition of such damages would contravene the Legislature’s clear intent when it
prescribed a cause of action for wrongful death and would not advance the Legislature’s objective to leave a
decedent’s heirs in no worse position economically than if their relative had lived. Accordingly, plaintiffs have not
set forth a claim that is cognizable under N.J.S.A. 2A:31-1, and their alleged damages do not give rise to a
“pecuniary” loss within the meaning of N.J.S.A. 2A:31-5. (pp. 25-29)
The judgment of the Appellate Division is REVERSED, and the judgment of the trial court dismissing
plaintiffs’ claims is REINSTATED.
CHIEF JUSTICE RABNER; JUSTICES LaVECCHIA and ALBIN; and JUDGE CUFF
(temporarily assigned) join in JUSTICE PATTERSON’s opinion. JUDGE RODRÍGUEZ (temporarily
assigned) did not participate.
2
SUPREME COURT OF NEW JERSEY
A-33/34 September Term 2012
071025
ROBERT B. BEIM and FRANKLYN
Z. ARONSON, AS CO-EXECUTORS
OF THE ESTATE OF JOHN G.
KELLOGG AND BARBARA KELLOGG,
FRANKLYN Z. ARONSON AS
TRUSTEE OF THE ANNE D.
KELLOGG MARITAL TRUST AND
JUDITH MEDINA AND PRUDENCE
KRAUSE,
Plaintiffs-Respondents,
v.
TREVOR R. HULFISH AND TERESA
CUPPLES,
Defendants-Appellants,
and
RUSSELL MARKS, JR., AND
PATRICIA H. MARKS,
Defendants,
and
CHUBB INSURANCE COMPANY OF
NEW JERSEY,
Defendant/Intervenor-
Appellant.
Argued September 24, 2013 – Decided January 28, 2014
On certification to the Superior Court,
Appellate Division, whose opinion is
reported at 427 N.J. Super. 560 (2012).
Richard J. Mirra argued the cause for
appellants Trevor R. Hulfish and Teresa
1
Cupples (Hoagland, Longo, Moran, Dunst &
Doukas, attorneys).
John M. Bashwiner argued the cause for
appellant Chubb Insurance Company of New
Jersey (Bashwiner and Deer, attorneys; Mr.
Bashwiner and Joseph A. Deer, on the
briefs).
Jerrold Kamensky argued the cause for
respondents (Kamensky Cohen & Riechelson,
attorneys; Mr. Kamensky and Kristin J.
Teufel, on the brief).
JUSTICE PATTERSON delivered the opinion of the Court.
Under the Wrongful Death Act (the Act), N.J.S.A. 2A:31-1 to
-6, the heirs of a person who has died by virtue of “a wrongful
act, neglect or default” may assert a claim for their “pecuniary
injuries.” N.J.S.A. 2A:31-1, -5. The Court considers, for the
first time, whether the Act authorizes claims for damages in the
form of estate taxes paid by the decedent’s estate.
John Kellogg, ninety-seven years of age, died in 2008
following a motor vehicle accident allegedly caused by the
negligence of two of the defendants. His death occurred on the
eve of significant changes in federal tax law. Plaintiffs --
Kellogg’s daughters, the executors of his estate and the trustee
of a marital trust -- allege that had Kellogg survived until
2009, his estate would have paid substantially less in taxes
than it did under the tax laws governing in 2008. They further
assert that if Kellogg died in any of the three years that
followed, his estate would have paid no federal tax at all.
2
Plaintiffs contend that defendants should be held liable for the
estate tax paid by Kellogg’s estate under the federal tax laws
that governed in 2008.
The trial court rejected this claim and granted defendants’
motion to dismiss and motion for summary judgment. An Appellate
Division panel reversed the trial court’s determination and
reinstated plaintiffs’ claim, holding that the estate taxes
constitute pecuniary injuries under the Act.
We reverse. We hold that the Act does not authorize
plaintiffs’ estate tax damages claim. The Legislature defined
the statutory cause of action as one that “would, if death had
not ensued, have entitled the person injured to maintain an
action for damages resulting from the injury.” N.J.S.A. 2A:31-
1. Although several categories of economic and non-economic
losses sustained by a decedent’s heirs may constitute “pecuniary
injuries resulting from [the decedent’s] death” under N.J.S.A.
2A:31-5, plaintiffs’ proposed estate tax claim would expand the
Act beyond its intended parameters. Damages premised upon the
distinctions between the estate tax laws that governed in
succeeding years are unrelated to any contributions that
decedent would have made to his heirs had he remained alive.
Such damages do not advance the Legislature’s objective to leave
a decedent’s heirs “in no worse position economically than if
[their] relative had lived.” Aronberg v. Tolbert, 207 N.J. 587,
3
603 (2011). Accordingly, the trial court properly dismissed
plaintiffs’ claims.
I.
Kellogg and his first wife, Anne D. Kellogg, were the
parents of two daughters, plaintiffs Judith Medina and Prudence
Krause. At the time of Anne D. Kellogg’s death, the Anne D.
Kellogg Marital Trust (Marital Trust) was formed. Under the
terms of the trust documents, the Marital Trust would provide
income to Kellogg during his lifetime. Following his death, the
Marital Trust would be divided into two sub-trusts, one for each
daughter. Each sub-trust would provide lifetime income for the
daughter, and upon the death of the daughter the principal of
her sub-trust would be paid to her children. Plaintiff Franklyn
Z. Aronson is trustee of the Marital Trust, and he and plaintiff
Robert B. Beim are co-executors of Kellogg’s estate.
On January 25, 2008, Kellogg and his second wife, Barbara
Kellogg, were passengers in a vehicle owned by Patricia Marks
and driven by Russell Marks. The Marks’ vehicle collided with a
car owned by defendant Teresa Cupples and driven by defendant
Trevor Hulfish. Kellogg sustained serious injuries. He was
hospitalized for a week, and then discharged to a rehabilitation
center. On February 6, 2008, Kellogg was readmitted to the
hospital, where he died the following day.
4
On September 23, 2008, plaintiffs Beim and Aronson, as co-
executors of Kellogg’s estate, filed a federal “Estate (and
Generation-Skipping Transfer) Tax Return” on the estate’s
behalf. Under the tax laws applicable to the estates of
decedents who died in 2008, the Kellogg estate paid
$1,196,083.57 in federal estate taxes.
Plaintiffs filed this action in the Law Division in
November 2009.1 In an amended complaint, plaintiffs asserted
claims for negligence, survivorship and per quod damages against
defendants. In one count of the amended complaint, the Kellogg
estate’s executors asserted a wrongful death claim, seeking
damages under the Act. In another, the Marital Trust’s trustee
sought damages based upon “economic losses in the nature of
Federal and State Estate Taxes and other related tax
consequences that would not have been suffered but for
[Kellogg’s] death.”2 In other claims, Kellogg’s daughters
alleged economic losses resulting from the diminution in the
value of the Marital Trust, allegedly due to defendants’
1
Barbara Kellogg was initially named as a plaintiff, but her
claims were withdrawn by stipulation for reasons not relevant to
the proceedings. Patricia and Russell Marks were named as
defendants, but the parties stipulated to the dismissal of all
claims against them, and they are not parties to this appeal.
2
Although the amended complaint alleged a loss based on New
Jersey estate taxes, the record does not indicate whether the
Kellogg estate paid state estate taxes, and no party has
addressed the impact of state estate tax laws. New Jersey
estate tax rates did not change between 2008 and 2012. See
N.J.A.C. 18:26-3A.3.
5
negligence. Chubb Insurance Company of New Jersey (Chubb),
which had provided underinsured motorist coverage to Kellogg,
moved to intervene in the action, and the trial court granted
its motion.
Defendants Hulfish and Cupples, joined by the other
defendants, moved under Rule 4:6-2 to dismiss the claims
asserting economic losses allegedly suffered by the Marital
Trust, or, in the alternative, for summary judgment pursuant to
Rule 4:46-2. Plaintiffs stipulated that the Marital Trust’s
estate tax-based claims should be dismissed. They contended,
however, that estate taxes were an element of damages available
to Kellogg’s heirs under their wrongful death claim. At trial,
plaintiffs took the position that had Kellogg not sustained
injuries in the 2008 accident, he would have lived until 2009 or
2010, but that he would not have lived until 2011. They argued
that they should be permitted to present expert evidence that
the estate would have paid significantly less in taxes had
Kellogg survived until 2009 than it did following his death in
2008.
On December 8, 2010, the trial court granted defendants’
motion to dismiss. The court held that estate taxes did not
constitute recoverable damages under the Act. It reasoned that
the potential federal tax liability of the Kellogg estate, had
Kellogg lived for an additional period after the accident, was
6
too speculative to calculate, since tax rates for the estates of
decedents who died in 2011 and beyond were yet to be determined
by Congress.3
Shortly after the trial court’s decision, and in the wake
of Congress’s extension of the estate tax exemption for estates
up to $5,000,000 in value through the end of 2012, plaintiffs
moved for reconsideration. They argued that with the estate tax
laws governing 2011 and 2012 estates now settled, a jury could
accurately calculate estate tax losses, assuming that Kellogg
would have died in one of those years. The trial court was
unpersuaded that its concern about speculation had been resolved
by Congress’s passage of tax laws governing estates of decedents
who died in 2011 or 2012. It reasoned that the 2011 and 2012
tax laws had yet to be determined when Kellogg died, and that
estate taxes are, in any event, not recoverable under the Act.
The court denied reconsideration of its order dismissing the
three counts in which the Marital Trust asserted claims.
Because no loss other than the payment of estate taxes had been
alleged, the court granted summary judgment dismissing
plaintiffs’ remaining claims.
3
The trial court did not reach defendants’ standing challenge to
plaintiffs’ wrongful death claim. Defendants alleged that
because Kellogg’s daughters were not dependent upon him for
support, they could not recover under the Act.
7
Plaintiffs appealed, and the Appellate Division reversed.
Beim v. Hulfish, 427 N.J. Super. 560, 564 (App. Div. 2012).
Noting that the estate tax damages question was a novel issue
under New Jersey law, and distinguishing decisions by courts in
other jurisdictions rejecting similar claims, the panel
concluded that the estate tax losses alleged by plaintiffs would
not compel the factfinder to engage in speculation. Id. at 563,
568-75. It held that by the time the trial court ruled on the
motion for reconsideration, the estate tax laws for 2011 and
2012 had been established, and a jury guided by expert testimony
would have been in a position to calculate damages. Id. at 573-
74. The panel accordingly reinstated plaintiffs’ claims for
estate tax losses as the measure of damages asserted as an
element of their wrongful death claim. Id. at 563-64. It did
not reach defendants’ challenge to plaintiffs’ standing to
assert their claims. Id. at 576 n.11.
We granted certification. 212 N.J. 462 (2012).
II.
Defendants Hulfish and Cupples argue that estate taxes
cannot be recovered in a wrongful death action. They note that
the Act permits an action only when the person injured would
have been entitled to maintain an action for damages resulting
from the injury “if death had not ensued.” N.J.S.A. 2A:31-1.
Defendants assert that this language constrains the Court from
8
awarding estate tax damages, which would not be available to the
survivor of an accident such as Kellogg’s.
Defendants contest plaintiffs’ construction of the term
“pecuniary injuries” in N.J.S.A. 2A:31-5 to include any loss
sustained by the decedent’s estate. Relying upon authority from
other jurisdictions, defendants argue that even if estate tax
damages were contemplated by N.J.S.A. 2A:31-1 and -5, they would
nonetheless be contrary to New Jersey law because prospective
tax liabilities are inherently speculative. Finally, defendants
challenge plaintiffs’ standing to assert their claims on the
ground that Kellogg’s daughters were not dependent upon him for
financial support at the time of his death.
Defendant-Intervenor Chubb argues that plaintiffs’ claims
are barred by N.J.S.A. 2A:31-1’s limiting language, and by case
law defining a pecuniary injury as the loss of a reasonable
expectation of a pecuniary advantage that the heirs would have
achieved had the decedent survived. Chubb disputes the
Appellate Division panel’s conclusion that estate tax damages
are not unduly speculative. It invokes the example of a
decedent who dies prematurely, decades short of his or her life
expectancy, and contends that the expected tax liability of such
a decedent’s estate, had he or she lived a normal lifespan,
would be impossible to ascertain. Chubb challenges plaintiffs’
reliance on life expectancy tables to determine when Kellogg
9
would likely have died had he not sustained injuries in the 2008
motor vehicle accident.
Plaintiffs counter that the Act is remedial and must be
construed liberally to achieve its legislative purpose. They
argue that N.J.S.A. 2A:31-1 is irrelevant to the analysis,
because it defines only the basis for a wrongful death action
under the Act and does not address damages. Instead, plaintiffs
urge the Court to rely entirely upon N.J.S.A. 2A:31-5. In
plaintiffs’ view, that provision reflects the Legislature’s
intent to expansively define the damages available under the
Act, and authorizes claims for any loss that diminishes the
value of the survivors’ inheritance. To plaintiffs, adverse tax
consequences are losses directly attributable to the decedent’s
death, and are therefore recoverable damages under the Act.
Plaintiffs dispute defendants’ contention that the damages
at issue are speculative. Citing Kellogg’s advanced age and the
restrictive provisions of the Marital Trust, they argue that the
value of the survivors’ inheritance and the impact of federal
estate tax law were readily determinable in this case with the
assistance of expert testimony.
III.
The contention at the heart of this case is that successive
amendments to federal estate tax law gave rise to a significant
distinction between the estate tax burden that was imposed on
10
Kellogg’s estate following his death in 2008 and the estate tax
burden that would have been imposed on his estate had he died in
a subsequent year. Several amendments to federal estate tax law
that took effect shortly after Kellogg’s death are thus germane
to our analysis.
The Internal Revenue Code (Code) imposes “[a] tax . . . on
the transfer of the taxable estate of every decedent who is a
citizen or resident of the United States.” 26 U.S.C.A. § 2001(a).4 The taxable estate is added to any taxable gifts, as
defined in 26 U.S.C.A. § 2001(b)(2), to determine the estate’s
tax base. The tax base is then multiplied by the applicable tax
rate, which varies in accordance with the value of the estate.
26 U.S.C.A. § 2001(c). That calculation generates the tentative
tax, from which any credits authorized by law are deducted to
determine the amount owed as estate tax. 26 U.S.C.A. §§ 2010-
15. The tax credit that is directly pertinent to this case is
the Unified Credit Against Estate Tax (Unified Credit), which
equals the amount of the tentative tax, so long as the tentative
tax does not exceed the applicable exclusion amount. 26
U.S.C.A. § 2010(c)(1). Thus, if the tentative tax calculated
for an estate does not exceed the exclusion amount that applies
4
The taxable estate is calculated by determining the gross
estate, as prescribed by 26 U.S.C.A. § 2031, and “deducting from
the value of the gross estate the deductions provided for” in 26
U.S.C.A. §§ 2051-58. 26 U.S.C.A. § 2051.
11
to the estate, which is prescribed in the relevant provision of
the Code, the estate owes no federal taxes. 26 U.S.C.A. §
2010(c)(1).
The first amendment to the Code that affects this case was
part of the Economic Growth and Tax Relief Reconciliation Act of
2001, Pub. L. No. 107-16, 115 Stat. 38 (2001) (2001 Amendments).
Although the estate tax rate schedule set forth in 26 U.S.C. §
2001(c) was unaltered between 2008 and 2009, the maximum Unified
Credit, which was $780,000 for estates of decedents who died in
2008, rose to $1,455,800 for estates of decedents who died in
2009. In addition, pursuant to the 2001 Amendments, the
exclusion amount rose from $2,000,000 in 2008 to $3,500,000 in
2009. Economic Growth and Tax Relief Reconciliation Act of
2001, sec. 521(a). In short, the 2001 Amendments afforded
significant tax relief to the estates of some decedents who died
in 2009 that was unavailable to Kellogg’s estate following his
death in 2008.
For the estates of decedents who died in 2010, the 2001
Amendments afforded even greater tax relief. Those Amendments
effected a one-year repeal of the federal estate tax for the
estates of all 2010 decedents. Economic Growth and Tax Relief
Reconciliation Act, sec. 501(a). When Kellogg died in February
2008, the estate tax repeal provision was scheduled to expire on
December 31, 2010, limiting its impact to the estates of
12
decedents who died in that year. Economic Growth and Tax Relief
Reconciliation Act of 2001, sec. 901(a)(2). Had the 2001
Amendments expired as scheduled on that date, the tax relief
afforded by those Amendments would have been unavailable to the
estates of 2011 and 2012 decedents, and those estates would have
been taxed in accordance with the provisions of the Code that
had existed before 2001. Economic Growth and Tax Relief
Reconciliation Act of 2001, sec. 901(b).
The federal tax burden on estates of decedents who died in
2011, however, substantially changed during the period between
the trial court’s grant of defendants’ original motion to
dismiss and the court’s denial of plaintiffs’ motion for
reconsideration. On December 17, 2010, Congress passed the Tax
Relief, Unemployment Insurance Reauthorization, and Job Creation
Act of 2010, Pub. L. No. 111-312, 124 Stat. 3296 (2010
Amendments). The 2010 Amendments extended the 2001 Amendments
to estates for an additional two years, applying them to the
estates of decedents who died between December 31, 2010 and
December 31, 2012. Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act of 2010, sec. 101(a)(1).
The 2010 Amendments also changed the tax rates applicable to
estates of decedents who died after December 31, 2009, and
raised the exclusion amount to $5,000,000 for those estates.
13
Tax Relief, Unemployment Insurance Reauthorization, and Job
Creation Act of 2010, sec. 302(a)(1).
Plaintiffs assert that these developments in federal tax
law would have substantially benefited Kellogg’s estate had he
died in any of the four years that followed 2008. According to
plaintiffs’ calculations, if Kellogg had died in 2009 rather
than 2008, his estate would have paid only $521,084 in federal
taxes, less than half of what it paid under the laws in effect
in 2008.5 Plaintiffs further contend that by virtue of the
temporary repeal of the federal estate tax for the estates of
decedents who died in 2010, and the tax relief afforded by the
2010 amendments for the estates of decedents who died in 2011
and 2012, Kellogg’s estate would have paid no tax at all had he
died in any of those years.
IV.
In light of these changes to federal estate tax law, we
consider whether the distinction between the liability imposed
upon estates of decedents who died in 2008, and the liability
imposed upon the estates of decedents who died thereafter, gives
rise to a viable claim for damages under the Act.
5
Because defendants’ motion to dismiss was filed before the case
reached the expert discovery stage, plaintiffs’ calculation of
the taxes that Kellogg’s estate would have owed had he died in
2009 is unsupported by expert opinion, and defendants have not
had the opportunity to contest that calculation.
14
Because the trial court’s dismissal of plaintiffs’ damages
claim was premised upon statutory interpretation rather than the
resolution of a factual dispute, we review its determination de
novo. Zabilowitz v. Kelsey, 200 N.J. 507, 512 (2009); Twp. of
Holmdel v. N.J. Highway Auth., 190 N.J. 74, 86 (2007). Our
analysis is governed by the familiar rules of statutory
construction. “When interpreting statutory language, the goal
is to divine and effectuate the Legislature’s intent.” State v.
Shelley, 205 N.J. 320, 323 (2011). To determine the
Legislature’s intent, we begin with the “language of the
statute, giving the terms used therein their ordinary and
accepted meaning.” Ibid. It is not the Court’s function to
“‘rewrite a plainly-written enactment of the Legislature []or
presume that the Legislature intended something other than that
expressed by way of the plain language.’” DiProspero v. Penn,
183 N.J. 477, 492 (2005) (alteration in original) (quoting
O’Connell v. State, 171 N.J. 484, 488 (2002)). Significantly
for this case, which concerns two provisions of the Act,
“[r]elated parts of an overall scheme can . . . provide relevant
context.” N.J. Dep’t of Children and Families v. A.L., 213 N.J.
1, 20 (2013) (citing Murray v. Plainfield Rescue Squad, 210 N.J.
581, 592 (2012); In re Petition for Referendum on City of
Trenton Ordinance 09-02, 201 N.J. 349, 359 (2010)). The Court
must “ascribe to the statutory words their ordinary meaning and
15
significance . . . and read them in context with related
provisions so as to give sense to the legislation as a whole.”
DiProspero, supra, 183 N.J. at 492 (internal citations omitted).
We broadly construe the Act in accordance with its “salutary
purpose to eliminate the inequity of denying all right of
recovery for the death of a family member.” Alfone v. Sarno, 87
N.J. 99, 109 (1981).
The Act created by statute a remedy that did not exist at
common law. Johnson v. Dobrosky, 187 N.J. 594, 605 (2006)
(citing Negron v. Llarena, 156 N.J. 296, 308 (1998)); Alfone,
supra, 87 N.J. at 107.6 In 1846, Parliament ended the
prohibition on wrongful death actions in English law with the
passage of Lord Campbell’s Act, “An Act for Compensating the
Families of Persons killed by Accidents,” 9 & 10 Vict., c. 93.
Two years later, the New Jersey Legislature enacted its first
wrongful death statute, substantially modeled after Lord
Campbell’s Act. P.L. 1848, p. 151 (March 3, 1848).
Two of the Act’s six subsections are central to our
analysis. The first is N.J.S.A. 2A:31-1, which defines the
statutory cause of action:
6
Prior to legislative regulation of wrongful death actions, “the
theory that death extinguished a personal right of action barred
any claim for wrongful death.” Alfone, supra, 87 N.J. at 104
(citing 1 S. Speiser, Recovery for Wrongful Death, §§ 1:1 to 1:9
at 2-30 (2d ed. 1975)).
16
When the death of a person is caused by a
wrongful act, neglect or default, such as
would, if death had not ensued, have
entitled the person injured to maintain an
action for damages resulting from the
injury, the person who would have been
liable in damages for the injury if death
had not ensued shall be liable in an action
for damages, notwithstanding the death of
the person injured and although the death
was caused under circumstances amounting in
law to a crime.
[N.J.S.A. 2A:31-1.]
In previous cases, this Court has construed the language of
N.J.S.A. 2A:31-1. In Graf v. Taggert, the Court deemed that
N.J.S.A. 2A:31-1 “intended to preclude recovery where the
injured person could not have recovered because the defendant
did not commit a wrongful act or the deceased’s own conduct
would have barred his right to recover.” 43 N.J. 303, 305-06
(1964) (citing Knabe v. Hudson Bus Transp. Co., 111 N.J.L. 333(E. & A. 1933); Batton v. Pub. Serv. Corp. of N.J., 75 N.J.L.
857 (E. & A. 1908)). “In short,” the Court noted, “if the
deceased could not have recovered, his beneficiaries may not
recover.” Id. at 306.
In Aronberg, supra, the Court held that the mother of an
uninsured driver killed in a motor vehicle collision could not
assert an action under the Act, given that any personal injury
claim asserted by her son, had he survived, would have been
17
barred by N.J.S.A. 39:6A-4.5(a). 207 N.J. at 598-602, 605.7
Citing the intent of the Act’s drafters “to bring parity both to
claims by a victim who lives and to claims by his survivors if
he dies,” the Court held:
The statutory language does not suggest that
a claim that a victim cannot bring in life
can only spring forth in the event of his
death. Indeed, N.J.S.A. 2A:31-1 gives the
right of an heir ‘to maintain an action for
damages’ only if a claim could have been
brought by the decedent had he lived. In
this case, Aronberg, as an uninsured driver,
could not have brought a claim against the
alleged tortfeasor as a consequence of the
statutory bar. See N.J.S.A. 39:6A-4.5(a).
His heirs do not have any greater right than
Aronberg possessed himself.
[Id. at 603.]8
The Court’s decisions in Graf and Aronberg reaffirm the
Legislature’s intent, expressed in N.J.S.A. 2A:31-1, to bar a
claim for wrongful death that could not have been asserted by a
7
N.J.S.A. 39:6A-4.5(a), a provision of New Jersey’s Automobile
Insurance Cost Reduction Act, bars an uninsured driver from
claiming “recovery of economic or noneconomic loss sustained as
a result of an accident while operating an uninsured
automobile.” In Aronberg, supra, the decedent had failed to pay
automobile insurance premiums and his policy was cancelled prior
to his fatal accident. 207 N.J. at 592.
8
In Aronberg, supra, the Court distinguished the case before it,
in which the decedent never had the cause of action sought to be
asserted by his mother, from Miller v. Estate of Sperling, 166
N.J. 370 (2001). 207 N.J. at 603-05. In Miller, the decedent
had a viable malpractice claim during her lifetime, but declined
to pursue it prior to the expiration of the statute of
limitations that governed that claim; her heirs were not barred
from asserting that claim after her death. Aronberg, supra, 207
N.J. at 604-05 (citing Miller, supra, 166 N.J. at 382-83).
18
surviving plaintiff on his or her own behalf. See Graf, supra,43 N.J. at 305-06; Aronberg, supra, 207 N.J. at 605. That
expression of legislative intent guides our analysis.
The second section of the Act that is relevant to this case
is N.J.S.A. 2A:31-5, which provides:
In every action brought under the provisions
of this chapter the jury may give such
damages as they shall deem fair and just
with reference to the pecuniary injuries
resulting from such death, together with the
hospital, medical and funeral expenses
incurred for the deceased, to the persons
entitled to any intestate personal property
of the decedent in accordance with the
provisions of N.J.S.A. 2A:31-4.
[N.J.S.A. 2A:31-5.]
Although the limitation to “pecuniary” injuries was not a
feature of Lord Campbell’s Act, “English case law interpreting
it quickly imposed the ‘pecuniary’ limitation, allowing purely
monetary awards but forbidding those for loss of society or
bereavement.” Johnson, supra, 187 N.J. at 606 (citing Stuart M.
Speiser and Stuart S. Malawar, An American Tragedy: Damages for
Mental Anguish of Bereaved Relatives in Wrongful Death Actions,
51 Tul. L. Rev. 1, 5-8 (1976)). From its inception, New
Jersey’s Wrongful Death Act incorporated the “pecuniary”
limitation upon damages, without defining that term in the
statute itself. P.L. 1848, p. 151 (March 3, 1848).
19
From the Legislature’s use of the term “pecuniary
injuries,” two principles can be discerned. First, if the
decedent’s survivors prove the defendant’s liability for
wrongful death, they may be compensated for the economic
contributions of which they have been deprived by virtue of the
death. As the Court, citing federal authority, held in Smith v.
Whitaker:
An award of damages in a wrongful death
action is not a matter of punishment for an
errant defendant or of providing for
decedent’s next of kin to a greater extent
than decedent himself would have been able,
but is rather a replacement for that which
decedent would likely have provided and no
more. The amount of recovery is based upon
the contributions, reduced to monetary
terms, which the decedent might reasonably
have been expected to make to his or her
survivors.
[160 N.J. 221, 231-32 (1999) (internal
quotation marks omitted) (citing Alexander
v. Whitman, 114 F.3d 1392, 1398 (3d Cir.
1997)).]
As the Court has noted, “[t]he measure of damages is the
‘deprivation of a reasonable expectation of a pecuniary
advantage which would have resulted by a continuance of the life
of the deceased.’” Curtis v. Finneran, 83 N.J. 563, 569 (1980)
(quoting Carter v. W. Jersey & Seashore R.R. Co., 76 N.J.L. 602,
603 (E. & A. 1908)). Thus, the inquiry centers not on the needs
of the heirs, but on what the decedent would have provided to
those heirs during an extended lifetime.
20
“The most common class of pecuniary injury under the Act is
the loss of . . . financial contributions.” Johnson, supra, 187
N.J. at 607. Calculation of economic losses in a wrongful death
case “involves two basic determinations: is it probable that
decedent would have contributed to the survivors and, if so, to
what extent would contributions have been made?” Ibid. Thus,
such losses are compensable because they stand as a substitute
for money that would have been provided during the lifetime of
the decedent, had he or she survived. See, e.g., Green v.
Bittner, 85 N.J. 1, 4 (1980) (noting availability of damages for
“anticipated direct financial contributions by the child after
he or she becomes a wage earner”); Curtis, supra, 83 N.J. at
567-68 (permitting damages for future financial loss suffered by
children because of their father’s death); Tenore v. Nu Car
Carriers, Inc., 67 N.J. 466, 470, 481 (1975) (allowing expert
testimony on inflationary trends to show “future wage losses of
the deceased”).
Even when wrongful death damages are premised upon non-
monetary losses, they are measured by the monetary value of the
contributions that the decedent would have made to his survivors
during his or her life had that life not been cut short. In
Green, the Court “expanded the category of pecuniary damages to
include not only the loss of future financial contributions but
also the lost ‘value’ of services such as companionship and care
21
. . . and the loss of advice, guidance and counsel.” Johnson,
supra, 187 N.J. at 609 (citing Green, supra, 85 N.J. at 4). The
Court limited damages for companionship and advice “strictly to
their pecuniary element,” with the value of the services
determined in accordance with “what the marketplace would pay a
stranger with similar qualifications for performing such
services,” with no value attached to the “emotional pleasure
that a parent gets when it is his or her child doing the
caretaking rather than a stranger.” Green, supra, 85 N.J. at 12(footnote omitted). Because the question of damages turns on
the services that the decedent would have provided had he or she
been afforded the chance to live a longer life, the “mental,
moral and physical characteristics of the decedent” relating to
his or her relationship with the survivors “and the concomitant
‘probability’ of lost advice, guidance, and counsel” are
relevant factors. Johnson, supra, 187 N.J. at 610—11.
Thus, in assessing both financial and non-financial losses
incurred because of a wrongful death, the focus is on the value
of what the decedent would have contributed to his or her
survivors during a continued lifetime.9 In its jurisprudence
9
In a 1967 amendment to the Act, the Legislature added language
authorizing three categories of damages that do not represent
the decedent’s lost contributions or his or her survivors:
“hospital, medical and funeral expenses incurred for the
deceased” in a wrongful death case. Assemb., No. 369, L. 1967,
c. 307, §1 (amending N.J.S.A. 2A:31-5). The Assembly Statement
22
interpreting the Act, this Court has never deemed a loss that
fails to meet that definition to be a “pecuniary” injury under
N.J.S.A. 2A:31-5.
A second principle guiding our courts in assessing
pecuniary losses in a wrongful death action under N.J.S.A.
2A:31-5 is that “[t]he Act ‘permits recovery only of a
survivor’s calculable economic loss.’” Aronberg, supra, 207
N.J. at 593 (quoting Smith, supra 160 N.J. at 232). “‘The law
abhors damages’” that are based on “‘mere speculation.’”
Caldwell v. Haynes, 136 N.J. 422, 442 (1994) (quoting Lewis v.
Read, 80 N.J. Super. 148, 174 (App. Div. 1963)). Nevertheless,
our decisions recognize that a factfinder’s determination of
damages premised upon a decedent’s lost contributions cannot
always be conducted with precision. “Where a wrong has been
committed, and it is certain that damages have resulted, mere
uncertainty as to the amount will not preclude recovery — courts
will fashion a remedy even though the proof on damages is
inexact.” Kozlowski v. Kozlowski, 80 N.J. 378, 388 (1979).
specifically notes that the amendment was intended “to allow as
a recoverable item of damage the hospital and medical expenses
of the one wrongfully killed, together with funeral expenses
heretofore not provided for under law.” Statement Accompanying
Assemb., No. 369, L. 1967, c. 307. Thus, the Legislature
evidently considered “hospital, medical and funeral expenses” to
be distinct from the “pecuniary injuries resulting from such
death” that had previously been available to wrongful death
plaintiffs under N.J.S.A. 2A:31-5.
23
In determining whether the decedent would have contributed
to the survivors and, if so, the value of his or her lost
contributions, “‘the jury should . . . consider the various
probabilities which, in the course of the years, might determine
the pecuniary advantages which would accrue to the next of kin
if the tragic event which gave rise to the action had not
occurred.’” Johnson, supra, 187 N.J. at 607 (alteration in
original) (quoting McStay v. Przychocki, 10 N.J. Super. 455, 462
(App. Div. 1950), aff’d 7 N.J. 456 (1951)). Thus, while
pecuniary losses under N.J.S.A. 2A:31-5 cannot be premised on
speculation, an exact calculation of the plaintiff’s damages may
not be feasible in every case.10 As the Court has recognized, in
calculating a pecuniary loss, “[a] jury’s common knowledge and
experience is always available to help it assess whether an
aggregate sum or ‘bottom-line’ figure presented by counsel or an
expert represents fair and just compensation.” DeHanes, supra,
158 N.J. at 102.
Accordingly, the Act frames the determination of damages
for pecuniary injuries in a wrongful death case. The survivors’
10
The trial court’s evidentiary determinations on pecuniary
losses in wrongful death cases are, of course, governed by the
applicable Rules of Evidence, including N.J.R.E. 702 and 703,
which address the admissibility of expert testimony. See
Dehanes v. Rothman, 158 N.J. 90, 100 (1999) (finding that in
wrongful death case, “there is nothing so intrinsically unique
about economic losses that the subject should cause [the Court]
to refrain from following the regular rules regarding the
introduction of expert testimony”).
24
cause of action is limited to claims that could have been
asserted by the decedent had he or she survived. N.J.S.A.
2A:31-1. When calculating damages for “pecuniary injuries,” the
factfinder values as precisely as possible the financial support
and non-economic services that the decedent would have
contributed for the benefit of his or her survivors, had he or
she lived. N.J.S.A. 2A:31-5.
V.
In that setting, we consider whether an increase in the
applicable federal estate taxes between the date of the alleged
wrongful death and subsequent years give rise to a compensable
“pecuniary injur[y]” within the meaning of N.J.S.A. 2A:31-5,
construed in light of the limiting provisions of N.J.S.A. 2A:31-
1.
Plaintiffs’ proposed estate tax damages are starkly
different from the categories of losses held to constitute
pecuniary injuries under the Act. Economic losses, measured in
accordance with educational, occupational, demographic and other
relevant factors, derive from the decedent’s expected
contributions during his or her continued lifetime, whether that
lifetime would have been be measured in months, years or
decades. See, e.g., Johnson, supra, 187 N.J. at 607; Smith,
supra, 160 N.J. at 231; Curtis, supra, 83 N.J. at 570; Dubil v.
Labate, 52 N.J. 255, 259 (1968); McStay v. Przychocki, 7 N.J.
25456, 460 (1951). Non-economic wrongful death damages are
premised on such services as companionship, care, advice,
guidance and counsel that the decedent would have provided to
his or her survivors, had he or she continued to live. See,
e.g., Johnson, supra, 187 N.J. at 609; Green, supra, 85 N.J. at
4; Aronberg, supra, 207 N.J. at 593.
Federal estate taxes are inherently different from the
damages recognized to be “pecuniary injuries” under N.J.S.A.
2A:31-5. They bear no nexus to the financial support or the
services that a decedent would have provided to his or her heirs
had he or she survived. Plaintiffs’ theory of damages is
unrelated to any contributions that Kellogg would have made to
his survivors had he lived for additional weeks, months or
years. Instead, Kellogg’s extended life is significant to
plaintiffs’ claims only insofar as it would have forestalled his
estate’s obligation to pay taxes until Congress had generated a
more hospitable tax environment. In short, plaintiffs’ damages
theory is premised not on the contributions that Kellogg’s heirs
would have enjoyed during his continued lifetime, but on the tax
benefits that they would have achieved as a result of his
deferred death. Recognition of such damages would contravene
26
the Legislature’s clear intent when it prescribed a cause of
action for wrongful death.11
The estate tax damages sought by plaintiffs sharply differ
from the income taxes that were held relevant in Tenore, on
which plaintiffs rely. In Tenore, supra, the Court reversed the
trial court’s order excluding the defendant’s proffered evidence
of the income tax that would have been imposed on the decedent
had he lived. 67 N.J. at 484-85. Rejecting the contentions
that “an individual’s future income tax liability is too
speculative or conjectural,” and that they are “too complicated
for jury consideration,” id. at 485, the Court stated:
[W]e hold that under our wrongful death act,
defendants must have an opportunity to
cross-examine plaintiffs’ witnesses to
elicit testimony concerning deceased’s
11
Several courts in other jurisdictions have rejected similar
claims. See Hiatt v. United States, 910 F.2d 737, 744-45 (11th
Cir. 1990) (applying Florida law to reject plaintiff’s claim
that had decedent “lived out his expected lifespan, his estate
would have owed no estate taxes at the time of his death because
of changes enacted in the tax laws since then”); Farrar v.
Brooklyn Union Gas Co., 533 N.E.2d 1055, 1055 (N.Y. 1988)
(declining to recognize plaintiff’s claim that had his wife
lived until 1987 instead of dying in 1982, her estate “would
have realized the full benefit of the Federal estate tax credit
and no Federal estate tax would have been due and paid”);
Elliott v. Willis, 442 N.E.2d 163, 169 (Ill. 1982) (rejecting
plaintiffs’ claim that “prematurely paid” state and federal
inheritance taxes assessed following death of their decedent
constituted compensable pecuniary losses under Illinois law);
Lindsay v. Allstate Ins. Co., 561 So.2d 427, 427 (Fla. Dist. Ct.
App. 1990) (rejecting wrongful death damages claim based upon
“the increased amount paid to the United States government for
estate taxes as a result of decedent’s premature death,” due to
estate’s failure to achieve maximum unified credit).
27
income tax liability, or to develop the
matter by extrinsic evidence, to the end
that the jury be enabled to make an informed
estimate, based upon the deceased’s
projected net income after taxes, of the
survivor’s pecuniary loss. Consequently,
plaintiff’s recovery must be calculated on
the basis of the deceased’s net income after
taxes giving due regard to the evidence
adduced on the deceased’s income tax
liability.
[Id. at 494-95 (footnote omitted).]
Accordingly, to the extent that it is authorized by the
applicable rules of evidence, the admission of income tax
liability estimates in a wrongful death action is consonant with
the language and purpose of N.J.S.A. 2A:31-1 and -5. Evidence
regarding potential income taxes permits the factfinder to more
accurately evaluate the decedent’s lost financial contributions.
Estate taxes, in contrast, are irrelevant to decedent’s lost
contributions during his or her lifetime. Recognition of such
damages would not further the Legislature’s goal to ensure that
a decedent’s heirs are “in no worse position economically” than
if he or she had survived. Aronberg, supra, 207 N.J. at 603.
Accordingly, we hold that plaintiffs have not set forth a
claim that is cognizable under N.J.S.A. 2A:31-1, and that their
alleged damages do not give rise to a “pecuniary” loss within
the meaning of N.J.S.A. 2A:31-5. In short, plaintiffs’ proposed
damages are not authorized by N.J.S.A. 2A:31-1 and -5, we do not
reach the question of whether a court should apply the law in
28
effect at the time of the decedent’s death or the governing law
at the time of the decision when it determines whether a claim
for damages is unduly speculative. We do not decide the issue
of plaintiffs’ standing, which was raised by defendants but not
reached by the Appellate Division.
VI.
The determination of the Appellate Division is reversed,
and the judgment of the trial court dismissing plaintiffs’
claims is reinstated.
CHIEF JUSTICE RABNER; JUSTICES LaVECCHIA and ALBIN; and
JUDGE CUFF (temporarily assigned) join in JUSTICE PATTERSON’s
opinion. JUDGE RODRÍGUEZ (temporarily assigned) did not
participate.
29
SUPREME COURT OF NEW JERSEY
NO. A-33/34 SEPTEMBER TERM 2012
ON CERTIFICATION TO Appellate Division, Superior Court
ROBERT B. BEIM and FRANKLYN
Z. ARONSON, AS CO-EXECUTORS
OF THE ESTATE OF JOHN G.
KELLOGG AND BARBARA KELLOGG,
FRANKLYN Z. ARONSON AS
TRUSTEE OF THE ANNE D.
KELLOGG MARITAL TRUST AND
JUDITH MEDINA AND PRUDENCE
KRAUSE,
Plaintiffs-Respondents,
v.
TREVOR R. HULFISH AND TERESA
CUPPLES,
Defendants-Appellants.
DECIDED January 28, 2014
Chief Justice Rabner PRESIDING
OPINION BY Justice Patterson
CONCURRING/DISSENTING OPINIONS BY
DISSENTING OPINION BY
REVERSE AND
CHECKLIST
REINSTATE
CHIEF JUSTICE RABNER X
JUSTICE LaVECCHIA X
JUSTICE ALBIN X
JUSTICE PATTERSON X
JUDGE RODRÍGUEZ (t/a) ----------------------- --------------------
JUDGE CUFF (t/a) X
TOTALS 5
1