Petition for Writ of Certiorari — Hillier v. Southern Towing Co.

84-765. FILED

OCT 20 194

| ALEXANDER L. STEVAS.

No. I CLeaRER

IN THE

Supreme Court of the United States

OCTOBER TERM, 1984

EVELYN HI vier, Individually and as Administratrix of

the Estate of Henry Hillier, Deceased,

Petitioners,

vs *

SOUTHERN TOWING COMPANY, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

JEROME J. SCHLICHTER*

CHARLENE Novick

CARR, KOREIN, KUNIN,

SCHLICHTER and BRENNAN

412 Missouri Avenue

East St. Louis, Illinois 62201

(618) 274-0434

Attorneys for Plaintiff

*Counsel of Record

St. Louis Law Printing Co., Inc., 411 No. Tenth Street 63101 314-231-4477

QUESTION PRESENTED

Whether loss of society is an exception to the rule under

general maritime law that pre-judgment interest applies to non-

pecuniary damages recoverable for death resulting from injuries

on territorial waters.

ili

TABLE OF CONTENTS

Page

Question Presented for Review ..................2:. i

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Appendix:

A. Decision of the Seventh Circuit ............ A-1

B. Order of U.S. District Court .............. A-8

C. Stipulation and Supplemental Stipulation

EY ec iccvcccentecvesescs A-12

TABLE OF AUTHORITIES

American Zinc Co. v. Foster, 441 F.2d 1101 (Sth Cir.

Ae eh tise wks eV ewe koe Wk k wees es 4

Complaint of Metcalf, 530 F.Supp. 446 (S.D. Tex. 1981) 5,9

Consolidated Machines, Inc. v. Protein Products Corp.,

428 F.Supp. 209 (M.D. Fla. 1976)............... 5,6

Drachenberg v. Canal Barge Co., Inc., 621 F.2d 760

toes s Nav es bah dee’ Sb Ka Saws 5,6,7,9

iv

Elgin, J. & E. Ry. Co. v. Commercial Line, 317 F.Supp.

Ee GE es SOF 6k GAGA ERAD CARER RE RAGNS As

First Nat. Bank of Chicago v. Material Serv. Corp., 597

ye et oe a er rr ree

Flanigan v. Burlington Northern, Inc., 632 F.2d 880

MU 8865 coke nod den cedean Cae heen

Gardner v. National Bulk Carriers, Inc., 333 F.2d 676

Des MIEN sini tho Hae ehéw cae eNelahenaea kes

Independent Bulk Transport, Inc. v. Vessel Morania

Abaco, 676 F.2d 23 (2d Cir. 1982)...............

Moore-McCormack Lines, Inc. v. Richardson, 295 F.2d

SE i KK a SUES SS eR Dba kOe RAD Oa eREO

Moragne v. States Marine Lines, Inc., 398 U.S. 375,

90 S.Ct. 1772, 26 L.Ed.2d 339 (1970) ............

National Airlines, Inc. v. Stiles, 268 F.2d 400

A EE 2 icc cc pee ueraseeneebacbeweate

Petition of Marina Mercante Nicaraguense, S.A., 248

Fs SMEG as BOD wo cacdcchasascceans

Sea-Land Services v. Gaudet, 414 U.S. 573, 93 S.Ct.

806, 39 L.Ed.2d 9 (1974) .......... eee eee

Comment, U. Ill. L. Rev., 453 (1961) ...........0008.

22 Am.Jur.2d Damages § 108..................0005.

4,5

5,9

“9

4,9

No.

IN THE

Supreme Court of the United States

OCTOBER TERM, 1984

EVELYN HIL.ier, Individually and as Administratrix of

the Estate of Henry Hillier, Deceased,

Petitioners,

vs.

SOUTHERN TOWING COMPANY, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Evelyn Hillier respectfully prays that a writ of certiorari issue

to review the judgment and opinion of the United States Court

of Appeals for the Seventh Circuit entered in this proceeding

August 3, 1984.

OPINION BELOW

The opinion of the Court of Appeals is reported at 740 F.2d

583 (7th Cir. 1984), a copy is attached as Appendix A. The opi-

nion of the District Court is reported at ___ F.Supp. ___ (N..D.

Ill 1983), a copy is attached as Appendix B.

JURISDICTION

The judgment of the Court of Appeals for the Seventh Circuit

was entered August 3, 1984. Rehearing was not sought. This

petition for certiorari is filed within 90 days of that date.

Jurisdiction of this court is invoked under 28 U.S.C. § 1254.

a ee

STATEMENT OF THE CASE

This suit arises from the September, 1979 death of Henry

Hillier, a 23-year old seaman, as a result of an unfortunate

work-related exposure to a cloud of dangerous gases. Hillier

was survived by his widow and a young minor daughter. The

defendants-respondents filed petitions for exoneration or

limitation of liability in admiralty. Prior to trial, the defendants

filed unqualified admissions of liability. The case was tried in

Admiralty under general maritime law solely on the issue of

damages. There was a contemporaneous companion jury trial

against Southern Towing, which is not involved in the present

appeal; the jury there served in an advisory capacity to the ad-

miralty court herein.

The district court judge adopted the jury’s assessment of

damages at $520,000.00 and entered judgment in that amount.

The damages awards relevant to this petition are: $172,743.65

for loss of society; $5,000 for decedent’s conscious pain and suf-

fering; $210,000 as the present value of the future loss of sup-

port (discounted to time of trial); and $95,000 as the present

value of future services. Also awarded were : $35,000 for past

support; and $6,583.35 for past loss of services.

The district court awarded pre-judgment interest cnly on past

loss of support and services, discounted future losses to the date

of trial and withheld pre-judgment interest on the remaining

damages for the stated reason that ‘‘the law does not allow for

[it].’’ (App. B p. A-10) The Seventh Circuit Court of Appeals

on review affirmed the trial court’s conclusion that the law does

not allow for pre-judgment interest on future pecuniary losses

which had been discounted to their present value as of the date

of trial and held: ‘‘{[W]e reverse and remand that portion of the

case denying the p’aintiff pre-judgment interest for pain and

suffering or for past loss of society.”’ (App. A p. A-7) Plain-

tiff appeals from the portion of the judgment of the appellate

court limiting pre-judgment interest to past loss of society.

re

_ yn

ARGUMENT

This writ should be aliowed because the issue of recovery of

pre-judgment interest on an award for loss of society for death

resulting from injury on territorial waters under general

maritime law has not been determined by this court and the

absence of judicial guidelines for the application of pre-

judgment interest has resulted in the denial of complete com-

pensation for maritime injuries and death. In addition, the

decision of the Court of Appeals below limiting pre-judgment

interest to past loss of society is in conflict with decisions in

other circuits.

The district court below specifically divided the awards for

loss of support and for loss of services into past and future

categories. (App. B p. A-9-10) Future losses were discounted

and given present value at the time of trial. The trial court,

however, did not make express findings of future and past loss

of society or pain and suffering. Instead, it rendered lump sum

damages both for loss of society and for pain and suffering

(App. B p. A-10).

On appeal, the Seventh Circuit accepted the lump sum award

as the basis for allowing a pre-judgment interest on pain and

suffering, but it rejected the lump sum award for loss of society

to the extent that it remanded for determination of pre-

judgment interest based only upon ‘‘past loss of society.”’

Under the facts and findings of this case, the decision of the

Seventh Circuit is in conflict with the holdings and policy

established by the United States Supreme Court and the courts

of other circuits. Further, this case illustrates the need for stan-

dards for District Courts to follow in assessing pre-judgment in-

terest on awards for loss of society in cases of wrongful death

brought under general maritime law. The district court’s

unitary award for loss of society supports recovery of pre-

judgment interest for the entire award, and not just for some

past component of lost society.

— yo

The Supreme Court established a remedy for maritime

wrongful death in the watershed case of Moragne v. States

Marine Lines Inc., 398 US 375, 90 S.Ct. 1772, 26 L.Ed 2d 339

(1970) by permitting recovery under the unseaworthiness doc-

trine for death in territorial waters. The Moragne court sought

to ‘‘assure uniform vindication of federal policies.’’ 398 US at

401, 90 S.Ct. at 1788, 26 L.Ed. 2d at 357. Moragne specifically

did not resolve how damages would be determined under

gener’ maritime law.

Four years later, in Sea-Land Services v. Gaudet, 414 US 573,

94 S.Ct. 806, 39 L.Ed 2d 9 (1974), the Supreme Court held that

under Moragne a longshoreman killed in inland waters could

recover damages for loss of society. The Gaudet court explain-

ed: ‘‘[O]ur decision is compelled if we are to shape the remedy

to comport with the humanitariar. policy of the maritime law to

show ‘special solicitude’ for these who are injured within its

jurisdiction.”’ 415 US at 588, 39 L.Ed 2d at 23.

Damages for loss of society are intangible and accrue at the

moment of death. Loss of society, as noted in Gaudet,

“*feJmbraces a broad range of mutual benefits each family

member receives from the others’ continued existence, including

love, affection, care, attention, companionship, comfort and

protection.”’ 414 US at 585, 94 S.Ct. at 815, 39 L.Ed. 2d at 21.

The determination of damages for loss of society turns mainly

upon a good sense determination of what is just compensation,

employing an analysis akin to that used in tortious injury cases.

414 US at 589-590, 39 L.Ed. 2d at 23-24. See Moragne, 398 US

at 406, 26 L.Ed 24 at 360. Cf. Flanigan v. Burlington Northern,

Inc., 632 F.2d 880, 886 (8th Cir. 1980) (Pain and suffering not

reducible to precise calculation).

As a rule, under general maritime law, pre-judgment interest

is allowed on damage awards from the date of loss. American

Zinc Co. v. Foster, 441 F.2d 1101 (Sth Cir. 1971); National

Airlines, Inc. v. Stiles, 268 F.2d 400, 405 (Sth Cir. 1959); Elgin,

~ oo

J. & E. Ry. Co. v. American Commercial Lines, 317 F.Supp.

175, 177(N.D. Ill. 1970). Cf. Independent Bulk Transport, Inc.

v. Vessel Morania Abaco, 676 F.2d 23 (2d Cir. 1982) (Abuse of

discretion to deny pre-judgment interest except in exceptional

circumstances); Gardner v. National Bulk Carriers, Inc., 333

F.2d 676, 677 (4th Cir. 1964) (Not abuse to grant pre-judgment

interest when award computed from date of death). Pre-

judgment interest is the method by which the party who suf-

fered the loss may recover the value of the actual loss suffered

by compensating for the deficiency which arises during the

period from the date the injury was sustained to the date of pay-

ment. It compensates for the use of the monetary award in the

control of the defendant under the doctrine of restitutio in in-

tegrum. Stiles, 268 F.2d at 405.

In this context, it is important to note that, under general

maritime law, whether a claim is unliquidated or liquidated is. ir-

relevant to determination of pre-judgment interest. First Nat.

Bank of Chicago v. Material Serv. Corp., 597 F.2d 1110, 1121

(7th Cir. 1979), citing Stiles, 268 F.2d at 405. Thus, damage

sustained of a non-pecuniary nature is recoverable as of a cer-

tain date, regardless of when the amount is judicially ascertain-

ed. Pre-judgment interest simply compensates for the dif-

ference in the value of the award at payment and the value of

that award at the time of the injury or death.

Pre-judgment interest may be recovered upon an award for

loss of society under getcral maritime law without division into

future and past losses. Drachenberg v. Canal Barge Co., Inc.,

621 F.2d 760 (Sth Cir. 1980); Complaint of Metcalf, 530

F.Supp. 446, 460-461 (S.D. Tex. 1981); Consolidated Machines,

Inc. v. Protein Products Corp., 428 F.Supp. 209 (M.D. Fla.

1976). Such treatment is consistent with the line of cases allow-

ing pre-judgment interest from the time cf death on awards for

pain and suffering under the theory that pain and suffering are

not reducible to precise calculation. See, e.g., Moore-

McCormack Lines, Inc. v. Richardson, 295 F.2d 583, 594 (2d

~_~ oe

Cir. 1961); Consolidated Machines, Inc. v. Protein Prod.

Corp., 428 F.Supp. 209, 240-241 (M.D. Fla. 1976); Petition of

Marina Mercante Nicaraguense, S.A., 248 F.Supp. 15, 25

(S.D.N.Y. 1965).

As distinct from the treatment of damages for pecuniary

losses such as lost earnings or services, damages for loss of

society are not discounted to the date of trial. Cf. Consolidated

Machines, Inc. v. Protein Prod. Corp., 428 F.Supp. 209,

230-231 (M.D. Fla. 1976) (loss of society requires different

analysis from post-award pecuniary damages). Discounting is

premised on the theory that the plaintiff who receives payment

for losses which will not accrue until some future date would be

over-compensated unless the sum is reduced to account for the

interest he will receive upon investment of the award. Discoun-

ting establishes the amount of money that will produce the dece-

dent’s lost future earnings or support if the award is invested at

prevailing interest rates. Comment, U. /ii. L. Rev. 453, 470

(1981). Compensable losses which cannot be reduced to a

mathematical certaintly, i.e. pain and suffering and loss of

society, are the types of losses that accrue at the moment of

death, are not subject to discounting, but are subject to pre-

judgment interest.

The courts of other circuits have applied the measure of

damages for loss of society without reducing the award to its

present value. Drachenberg v. Canal Barge Co., Inc., 621 F.2d

760 (Sth Cir. 1980).

When the element of damage has accrued prior to the date of

judgment, the compensation received at judgment or settlement

necessarily is not an advance payment. Accordingly, when an

award for loss of society is computed from the date of its ac-

crual, upon the death of decedent, pre-judgment interest must

be given if the plaintiff is to recover for the actual amount of her

losses, which are equal to the amount of damage plus interest to

the date of payment. This is the only method to remedy the

=

deficiency between the actual value of the award at payment

and the value of that award at the time it accrued.

No federal court has ever suggested that intangible damages

must be discounted to present value in wrongful death cases;

such damages have always been undiscounted because of their

very nature. In cases of death, loss of society accrues at the mo-

ment of death. It is fixed; to the extent that loss of society is

capable of quantification under Gaudet, it follows that any

delay between the time of death and time of receipt of compen-

sation for the loss must be compensated for by allowing pre-

judgment interest on the entirety of the award. No authority

supports dividing loss of society into subparts which have

already accrued and ones which have not yet accrued. To the

contrary, the Fifth Circuit Court of Appeals, in contrast to the

Seventh Circuit below, clearly allows pre-judgment interest on

the entirety of an award. Drachenberg v. Canal Barge Co.,

inc., 621 F.2d 760 (Sth Cir. 1980).

In the case at bar, the Sevenih Circuit opinion concedes the

lack of clarity in determining how and when pre-judgment in-

terest is to be added to the damages award. (App. A p. A-5)

The court also unequivocally states: ‘‘We cannot conclude the

law precludes an award of pre-judgment interest on intangible

damages.’” (App. A p. A-7) Then the court continues by

remanding the case to the district court to determine ‘‘pre-

judgment interest for pain and suffering or for past loss of

society’’ (App. A p. A-7) (emphasis supplied). The appellate

court’s opinion requires by its terms that the award for loss of

society must be divided into temporal components. Yet the trial

court found that loss of society, like pain and suffering, is com-

pensable in a lump sum, without reduction for present value.

The trial court treated non-pecuniary losses differently from the

pecuniary losses for which it made specific findings

distinguishing past from future accrual of loss. The reason for

this distinction is a practical one. The division into temporal

units for non-pecuniary loss is an impossible determination for

a judge or jury.

=

The appellate court’s remand for computation of “‘past loss

of society’’ illustrates the confusion which persists in determin-

ing pre-judgment interest under maritime law. The appellate

court has gone too far in making a temporal distinction where

none exists. The absence of standards for courts to follow in

this area results in the inconsistent analysis and imposition of

pre-judgment interest, as well as conflict among the circuits, as

evidenced in the case at bar.

Damages for loss of society, like those for pain and suffering

or disfigurement, ‘‘turn mainly upon the good sense and

deliberate judgment of the tribunal assigned by law to ascertain

what is a just compensation. . . . [i]nsistence on mathematical

precision would be illusory.’ Gaudet, 414 US at 590; 39 L.Ed.

2d at 24 (citations omitted). A just estimation of loss of society

upon death of a loved one does not turn upon any certain quan-

tification, nor is it easily reducible to a yearly rate. The total in-

jury to the family unit accrues upon the fatal event. Reducing

loss of society into temporal components for the purpose of

limiting recovery of pre-judgment interest would be an arbitrary

and illusory transformation of the intangible loss into one of a

pecuniary nature capable of precise mathematical quantifica-

tion. As with an award for pain and suffering, an attempt to

reduce to present worth the factfinder’s common sense assess-

ment of the value of the cost of society is both arbitrary and ar-

tificial. See 22 Am. Jur. 2d Damages § 108.

To the extent that its opinion requires a division of loss of

society into past and future components, the Seventh Circuit

has abandoned ‘‘the humanitarian policy of the maritime law to

show ‘special solicitude’ for those who are injured within its

jurisdiction.’’ Gaudet, 414 US at 588, 39 L.Ed. 2d at 23. It has

also arbitrarily reduced the recovery of the widow and child

herein to an amount less than that to which they were entitled

after waiting three and one-half years for compensation. The

artificiality of this result is particularly poignant in the case at

bar where there was no dispute as to the defendant’s liability.

a

Defendant’s admission of liability herein reinforces the fact that

not only was the loss final on the day of death, but also this was

not a case which required a trial to determine the culpable party;

liability was admitted. Further, the decision is in conflict with

the treatment of pre-judgment interest in the Fifth Circuit,

which clearly allows pre-judgment interest on the entirety of the

award.

The policy of solicitude as expressed in Moragne and Gaudet,

and their progeny, Stiles, Moore, Drachenberg and Metcalf, re-

quires rejection of the Seventh Circuit’s analysis.

CONCLUSION

For the foregoing reasons, it is imperative that this court issue

its writ of certiorari to the United States Court of Appea!s for

the Seventh Circuit to eliminate the conflict among the Circuits

and to establish specific standards for admiralty courts, clearly

establishing that there is full pre-judgment interest for loss of

society caused by wrongful death.

Respectfully submitted,

JEROME J. SCHLICHTER*

CHARLENE NOVICK

CARR, KOREIN, KUNIN,

SCHLICHTER AND BRENNAN

412 Missouri Avenue

East St. Louis, IL 62201

(618) 274-0434

Attorneys for Plaintiff

*Counsel of Record

APPENDIX

—_ rs pe

APPENDIX A

IN THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

No. 83-1702

Evelyn Hillier, Individually and as

Administratrix of the Estate of

Henry Hillier, Deceased,

Plaintiff-Appellant,

v.

Southern Towing Company,

Defendant and Third-Party Plaintiff,

and

United States of America,

Third Party Defendant,

and

In The Matter Of The Complaint Of

Memphis Towing Company, a Corporation,

for Exoneration from, or Limitation

of Liability,

Appellee,

and

In The Matter Of The Complaint Of

C. F. Industries, Inc., as Bareboat

Charterer and Owner pro hac vice

of the Barge CF-105-B, for Exoneration

from, or Limitation of Liability,

Appellee.

Appeal from the United States District Court for the

Southern District of Illinois, Alton Division.

Nos 80 C 5030 and 80 C 5331—William L. Beatty, Judge.

ARGUED MAY 11, 1984—DECIDED AUGUST 3, 1984

Before FLAUM, Circuit Judge, PELL, Senior Circuit Judge,

and KELLAM, Senior District Judge. *

FLAUM, Circuit Judge. The sole issue presented for review

in this court is whether the district court, pursuant to its ad-

miralty jurisdiction, erroneously denied the plaintiff prejudg-

ment interest on the damages award for future loss of support

and services, pain and suffering, and loss of society for the

death of her husband. For the reasons which follow, we affirm

in part and reverse in part.

is

This suit stems from the accidental death of Henry Hillier in

September 1979. The defendants-appellees filed Petitions for

Exoneration or Limitation of Liability in Admiralty. Although

defendants initially denied liability for plaintiff's wrongful

death claims, prior to trial they filed unqualifed admissions of

liability. The case proceeded to trial only on the issue of

damages. A companion civil case against Southern Towing

Company was tried contemporaneously before a jury and the

same jury served in an advisory capacity for the admiralty

claims. '

* Honorable Richard B. Kellam, Senior District Judge for the

Eastern District of Virginia, is sitting by designation.

' For related litigation see Hillier v. Southern Towing Co., 714 F.2d

714 (7th Cir. 1983).

—< po

After trial the jury assessed the plaintiff’s damages at

$520,000. The district judge, sitting in admiralty, adopted the

jury’s assessment and entered judgment against defendants-

appellees in that amount. The damages were broken down as

follows: $35,000 for past support; $210,000 as the present value

of the future loss of support (discounted to time of trial);

$95,673 as the present value for future services; $6,583.35 for

past loss of services; $5,000 for decedent’s conscious pain and

suffering; and $172,743.65 for loss of society. After extensive

briefing on the issue, the district court awarded prejudgment in-

terest on past loss of support and services but denied prejudg-

ment interest on the damages for future loss of support and ser-

vices and on damages for pain and suffering and loss of society.

Plaintiff appeals from the judgment of the district court.

II.

Upon a review of the case law cited by the parties it is evident

that there are ‘‘well-established’’ rules that, upon further in-

vestigation, are not that ‘‘well-established”’ in actuality. Plain-

tiffs assert that the propriety of awards of prejudgment interest

in admiralty cases is clearly settled.? Masters v. Transworld

Drilling Co., 688 F.2d 1013 (Sth Cir. 1982). McCormack v. No-

ble Drilling Corp., 608 F.2d 169 (Sth Cir. 1979). The decision of

whether to award prejudgment interest lies within the sound

discretion of the district court; however, it is an abuse of discre-

tion to deny prejudgment interest absent ‘“‘peculiar cir-

cumstances’’ justifying denial. Noritake Co., Inc. v. M/V

Hellenic Champion, 627 F.2d 724 (Sth Cir. 1980); see also First

National Bank of Chicago v. Material Service Corp.

? Federal courts sitting in admiralty have generally been favorable to

awards of prejudgment interest and there is a relatively separate body

of admiralty case law dealing with the issue. First National Bank

of Chicago v. Material Service Corp., 597 F.2d 1110 (7th Cir. 1979);

National Airlines v. Stiles, 268 F.2d 400, 405 (Sth Cir. 1959). See also

Comment ‘‘Prejudgment Interest: Survey and Suggestion’’ 77 Nw. U.

a oe

‘Peculiar circumstances’’ have been found to justify denial

of prejudgment interest in circumstances where, for example,

the plaintiff improperly delays the pursuit of a claim; or where

there is a genuine dispute over a good faith claim in situations of

mutual fault. Noritake, 627 F.2d at 728. The existence of

‘*peculiar circumstances’’ is a factual issue and is reviewed on

the basis of a ‘‘clearly erroneous’’ standard. /d. at 729. If the

determination is not clearly erroneous, the appellate court

reviews the award or denial of prejudgment interest for abuse of

the trial court’s discretion. /d.

The other ‘‘well-establishe@’’ rule in admiralty cases, cited by

defendants, is that the doctrine of restitutio in integrum con-

trols the determination of the appropriateness of the award of

prejudgment interest. The doctrine of restitutio in integrum

provides that a plaintiff is to be placed in the position previously

enjoyed prior to the time he or she sustained damages; the plain-

tiff is to be made whole, in monetary terms. See Petition of the

City of New York, 332 F.2d 1006 (2d Cir. 1964); National

Airlines v. Stiles, 268 F.2d at 405. Defendants suggest that

plaintiff has already been made whole by the award and,

therefore, prejudgment interest was appropriately denied.

These two ‘‘well-established’’ doctrines are not mutually ex-

clusive, rather, the two doctrines complement one another. Pre-

judgment interest has often been awarded to recovering plain-

tiffs in order to award ‘‘fair and just compensation for the

pecuniary loss sustained’? thereby making plaintiffs whole.

First National Bank of Chicago v. Material Service Corp., 597

L. Rev. 192, 214 (1982). The rationale for awarding prejudgment in-

terest was that such an award fairly and completely compensated the

party sustaining damages because the damaged party lost the use of

the ship as well as the use of the damages money prior to judgment.

The general admiralty rule favoring awards of prejudgment interest

has also been expanded to wrongful death claims and personal injury

claims under the Death on the High Seas Act, 46 U.S.C. § 761 ef seq.,

and under the Jones Act, 46 U.S.C. § 688. McCormack v. Noble

Drilling Corp., 608 F.2d 169 (Sth Cir. 1979); National Airlines v.

Stiles, 268 F.2d at 400.

Se

F.2d at 1121; National Airlines v. Stiles, 268 F.2d at 405. The

award of prejudgment interest is only designed to compensate a

plaintiff and is not awarded as a penalty. Noritake, 627 F.2d at

728. The real dispute arises in the interpretation of the doctrine

of restitutio in integrum and how courts assess damages.

While it is clear that an award of prejudgment interest in ad-

miralty is appropriate, what is unclear is how and when prejudg-

ment interest is to be added to the damages award. See general-

ly Annot., 34 A. L. R. Fed. 126 (1977). Several courts, without

much discussion have awarded prejudgment interest on the en-

tire damages award. See Drachenberg v. Canal Barge Com-

pany, 621 F.2d 760 (Sth Cir. 1980); McCormack v. Noble Drill-

ing Corp., 608 F.2d 169 (Sth Cir. 1979). Other courts have tried

to calculate damages more precisely by dividing damages into

past and future losses. These courts have discounted the present

value for future losses to the date of trial and awarded prejudg-

ment interest oniy for those losses accruing prior to judgment.

Petition of the City of New York, 332 F.2d at 1008-9; Red Star

Towing & Transportation Co., Inc. v. Cargo Ship ‘‘Ming

Giant’’, 563 F. Supp. 224 (S.D. N.Y. 1983); Hamilton v. Canal

Barge Company, Inc., 395 F. Supp. 978 (E.D. La. 1975); Peti-

tion of Marina Mercante Nicaraguense, S.A., 248 F. Supp. 15

(S.D. N.Y. 1965), modified on other grounds, 364 F.2d 118 (2d

Cir. 1966), cert. denied, 385 U.S. 1005 (1967). Cf. In Re Air

Crash Disaster Near Chicago, 644 F.2d 633 (7th Cir. 1981).’

> In Re Air Crash Disaster Near Chicago, while not directly relevant

because it is a diversity case rather than an admiralty suit, is useful as

an example of how damages may be calculated. In that case, the

district court instructed the jury to calculate the present cash value of

plaintiff’s damages to be computed as of the date of death. The

district court awarded prejudgment interest to bring ‘‘death value’’ to

present value as part of plaintiff’s ‘‘fair and just compensation.’’ This

Court affirmed the award of prejudgment interest but instructed that

in future cases juries should be instructed to calculate both future and

past losses to the date of trial thereby precluding the need to award

prejudgment interest. Jd. A district court, sitting in admiralty, could

follow the same formula.

— i

In turning to the facts of this case, we note that the district

judge (and the advisory jury) divided damages for support and

loss of services into future and past components. Another

aspect of the damages award, loss of society, was not divided in-

to the same components. The judge granted prejudgment in-

terest only for past losses. The district court did not award pre-

judgment interest on the amount of decedent’s pain and suffer-

ing or for the plaintiff's loss of society. The district judge noted

that the law does not allow for prejudgment interest for the in-

tangible damages of pain and suffering and loss of society.

The district court, within its discretion, appropriately divided

damages between past and future losses. In addition, the

district court properly, within its discretion, refused to award

prejudgment interest on the future damages which had been dis-

counted to present value as of the date of the trial. See Petition

of the City of New York, 332 F.2d at 1008 (‘‘[t]o the extent that

there are elements of future losses which are represented in the

final damages prejudgment interest is, of course, not ap-

propriate’’); Red Star Towing v. Cargo Ship ‘‘Ming Giant’’;

Hamilton v. Canal Barge Company, Inc., 395 F. Supp. at 992;

Petition of Marina Mercante Nicaraguense, 248 F. Supp. at 26.

The district court erred, however, in its determination that

‘the law does not allow for prejudgment interest for . . . in-

tangible damages (pain and suffering and loss of society).’’ Slip

op. at 4. Several courts, sitting in admiralty, have awarded pre-

judgment interest on such intangible damages as pain and suf-

fering, loss of society and loss of nurture and guidance (in cases

where there are surviving children). In Petition of Marina Mer-

cante Nicaraguense, the court divided up damages into past and

future damages and awarded prejudgment interest on all past

damages, including damages for pain and suffering and loss of

nurture and guidance. /d. at 25-36. In Hamilton v. Canal

Barge Company, Inc., the court divided the damages awards

between past and future damages and awarded prejudgment in-

terest on all past damages. The past damages included loss of

== Ac] «=

society and loss of nurture and guidance. (The court found

there was no conscious pain and suffering and, consequently,

did not award anything on that element of damages.) /d. In

Drachenberg v. Canal Barge Company, the court of appeals ap-

proved an award of damages that was not divided into past and

future components. Prejudgment interest was granted on the

entire damages award. The damages included compensation for

pain and suffering and loss of society. /d. at 762. We cannot

conclude that the law precludes an award of prejudgment in-

terest on intangible damages.‘ We do not find that a court

might properly conclude that an award of prejudgment interest

is inappropriate under certain circumstances for only intangible

damages; we merely conclude that the law does not preclude

such an award. The district court erred in concluding that the

law did not allow such an award.

III.

The district court erred in its determination that it could not

award prejudgment interest for pain and suffering and for past

loss of society. Consequently, we reverse and remand that por-

tion of the case denying the plaintiff prejudgment interest for

pain and suffering or for past loss of society. The district court

should consider if there are any peculiar circumstances

precluding awards of prejudgment interest on those two aspects

of the damages. If there are no peculiar circumstances, the

district court should award the plaintiff pretudgment interest on

all the past losses. The district court’s judgment denying pre-

judgment interest of future losses is affirmed. |

A true Copy:

Teste:

Clerk of the United States Court

of Appeals for the Seventh Circuit

* The distinction between ‘“‘liquidated’’ and ‘‘unliquidated”’

damages has not been determit.ative in admiralty cases. See First Ne-

tional Rank v. Material Service Corp.; Moore-McCormack Lines v.

Richardson, 295 F.2d 583, 592 (2d Cir. 1961).

— >

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF ILLINOIS

No. 80 5030

Evelyn Hillier, Individually and as

Administratrix of the Estate of

Henry Hillier, Deceased,

Plaintiff,

v.

Southern Towing Company,

Defendant and

Third Party Plaintiff,

and

United States of America,

Third Party Defendant,

and

No. 80 5331

In the Matter of the Complaint of

Memphis Towing Company, a Corporation,

for Exoneration from, or Limitation of,

Liability.

and

No. 81 $216

In the Matter of the Complaint of

C.F. Industries, Inc., as Bareboat

Charterer and Owner pro hac vice

of the Barge CF-105-B for Exoneration

from or Limitation of Liability.

—_*

ORDER

This Court having heard the evidence and the arguments of

counsel, and the jury in the case of Hillier v. Southern Towing

having rendered its verdict, THE COURT HEREBY FINDS AS

FOLLOWS:

1. Plaintiff, Evelyn Hillier, is the widow and administratrix of

the Estate of Henry Hillier, deceased. On September 27, 1979,

Hillier was 23 years old and was employed by the United States

Coast Guard as a marine safety inspector. At that time, he was

inspecting a group of three anhydrous ammonia barges which

were discharging cargo at a C.F. Industries, Inc., dock, near

Pine Bend, Minnesota. These barges carry liquid anhydrous

ammonia at a low temperature. While plaintiff was walking

across one of the barges during the unloading process, a relief

valve discharged anhydrous ammonia into the atmosphere im-

mediately above where Henry Hillier was standing. Hillier was

caught in an ammonia vapor cloud and was unable to get off the

barge, though he ran toward the dock until he collapsed and

died on the barge, leaving a two-year old daughter and his wife,

age 24 surviving. Defendants, Memphis Towing Company and

C.F. Industries, Inc. have admitted that they were negligent,

that their vessels were unseaworthy, and that their negligence

and the unseaworthiness of the vessels caused the death. They

have also admitted that decedent was free of contributory

negligence. Thus, this Court need only decide the proper

amount of the judgment herein and assess the prejudgment in-

terest. The jury, (which was advisory for the limitation pro-

ceeding) found on January 13, 1983 that the plaintiff’s total

damages were $520,000.00.

2. The family’s share of loss of support herein is found to be

$9,000.00 from the date of death until October 1, 1980,

$10,000.00 for the following year, October 1, 1980 to October 1,

1981, $12,000.00 for the following year, October 1, 1981 to Oc-

tober 1, 1982 and $4,000.00 from October 1, 1982 to the pre-

sent, for a total of $35,000.00 for past support. These figures

— ie —

were stipulated by the parties. The Court further finds the

figure of $210,000.00 as the present value at the time of trial of

the future loss of support.

3. This Court finds the reasonable value of the services which

the decedent would have provided had he lived to be $2000.00

per year. This amounts to $6583.35 for services up to January

13, 1983 and a present cash value of future services in the

amount of $95,673.00.

4. This Court finds that the value of decedent’ conscious pain

and suffering is $5,000.00.

5. This Court finds that the loss of society herein is

$172,743.65.

6. Judgment is entered in favor of claimant, Evelyn Hillier,

and against Memphis Towing Company in the sum of

$520,000.00 plus pre-judgment interest in the amount of 112

percent on only that portion of the award which includes past

loss of support and past loss of services which is computed as

follows:

9000.00 + 2000.00 x .115 + 12 x 30mo. = 3162.60

12000.00 + 2000.00 x .115 + 12 x 18 mo. = 2070.00

14000.00 +. 2000.00 x .115 + 12 k 6mo. = 805.02

4000.00 + 583.35 x .115 + 12 x2.5mo. = 109.80

$6147.42

*}

The total judgment against Memphis Towing Company is

$526,147.42 including pre-judgment interest. Judgment is

entered against Memphis Towing Company in that amount.

7. Claimant’s motion for pre-judgment interest on the re-

mainder of the award is denied for the reason that this Court is

of the opinion that the law does not allow for pre-judgment in-

terest for the intangible damages (pain and suffering and loss of

society) or for the future loss of support and services.

— A-ll —

8. Judgment is rendered in favor of claimant, Evelyn Hhilier,

and against C.F. Industries, Inc. in the sum of $526,147.42 in-

cluding pre-judgment interest in the sum of $6147.42 plus costs

and expenses in the sum of $13,270.25 for a total judgment in

favor of claimant, Evelyn Hillier, against C.F. Industries, inc.,

in the sum of $539,417.67.

DATED: This 5 day of April, A.D. 1983.

/s/ WILLIAM L. BEATTY

UNITED STATES DISTRICT JUDGE

NOTE: CLERK TO SEND COPIES TO ALL PARTIES.

— A-12 —

APPENDIX C

iN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ILLINOIS

No. 80-5030

Evelyn Hillier, Individually, and

as Administratrix of the Estate of

Henry Hillier, Deceased,

Plaintiff,

v.

Southern Towing Company,

Defendant and Third-

Party Plaintiff,

and

United States of America,

Third-Party Defendant.

and

No. 80-5331

In The Matter Of The Complaint

Of Memphis Towing Company, A

Corporation, For Exoneration

From, Or Limitation Of,

Liability.

and

No. 82-5216

In The Matter Of The Complaint Of

C.F. Industries, Inc., as Bareboat

Charterer and Owner pro hac vice

of the Barge CF-105-B for Exonera-

tion from, or Limitation of,

Liability.

— A-13 —

STIPULATION REGARDING LIABILITY

Come now C.F. Industries, Inc., Southern Towing Company

and Memphis Towing Company, by their attorneys, and

stipulate that C.F. Industries, Inc. and either Southern Towing

Company or Memphis Towing Company (whichever is found to

be the operator of the M/V BAXTER SOUTHERN, a fact

which Memphis Towing Company admits but Southern Towing

Company denies and which must therefore later be determined

at trial) are liable for the death of decedent Henry Hillier and

are willing to pay a reasonable amount of damages to the dece-

dent’s personal representative, Evelyn Hillier, to be determined

at trial. If trial should result in a judgment in excess of the

respective limitation funds, C.F. Industries, Inc. and Memphis

Towing Company reserve the right to introduce evidence at a

subsequent hearing in support of their claims for limitation of

liability.

C. F. INDUSTRIES, INC.

By Its Attorneys

SOUTHERN TOWING

COMPANY

By Its Attorneys

MEMPHIS TOWING

COMPANY

By Its Attorneys

ato Full a

SUPPLEMENTAL STIPULATION REGARDING

LIABILITY

Come now Southern Towing Company and Memphis Towing

Company, by their attorneys, and stipulate they are liable for

the death of decedent Henry Hillier and are willing to pay a

reasonable amount of damages to the decedent’s personal

representative, Evelyn Hillier, to be determined at trial. If trial

should result in a judgment in excess of Memphis Towing Com-

pany’s limitation fund, Memphis Towing Company reserves the

right to introduce evidence at a subsequent hearing in support

of its claim for limitation of liability.

SOUTHERN TOWING

COMPANY

By Its Attorneys

MEMPHIS TOWING

COMPANY

By Its Attorneys