Before WATERMAN, MOORE and SMITH, Circuit Judges.
On January 29, 1959, the vessel M/S Trolleggen stood moored in New York's North River, on the south side of Pier No. 7, while her cargo was being unloaded.During the unloading operations, one Roman Cunningham, a fifty year old longshoreman working on the vessel, was killed when he was struck by a two ton hatch boom which fell on him without warning. His wife and administratrix, Ethel Cunningham (hereinafter libelant), his sole survivor, subsequently instituted this admiralty suit in the United States District Court for the Southern District of New York against the M/S Trolleggen and her owner Rederiet Vindeggen A/S (hereinafter respondent) to recover damages for the wrongful death of her husband.
Trial was had before the court, Levet, J., sitting without a jury. Since the accident which caused decedent's death occurred while the M/S Trolleggen was moored in New York territorial waters, libelant's rights in this action depended upon New York's Wrongful Death Act*fn1, and the doctrine that "where death * * * results from a maritime tort committed on navigable waters within a State whose statutes give a right of action on account of death by wrongful act, the admiralty courts will entertain a libel in personam for the damages sustained by those to whom such right is given." Western Fuel Co. v. Garcia, 257 U.S. 233, 242, 42 S. Ct. 89, 90, 66 L. Ed. 210 (1921), quoted in The Tungus v. Skovgaard, 358 U.S. 588, 591, 79 S. Ct. 503, 506, 3 L. Ed. 2d 524 (1959). The court below found that the hatch boom which struck and killed decedent had fallen because of its unseaworthy condition*fn2 and the negligent operation by the M/S Trolleggen's crew members of certain machinery connected to the boom, and that libelant was entitled to damages of $41,461.32, together with interest. Libelant has appealed on the ground that the damages awarded were inadequate, and respondent has cross-appealed on the ground that an error by the court below resulted in an award that was excessive. No issue was raised on this appeal concerning the liability of the respondent under the law of New York, and the only problem we are concerned with is the correctness of the amount of damages awarded.
We shall first discuss the issues raised by libelant's appeal. Libelant argues that the trial court committed five separate errors in computing damages, each of which served to reduce the award below its proper level. The five claimed errors are as follows: (1) the refusal to evaluate at more than $100 per year certain special services performed by decedent for his wife; (2) the limiting of decedent's work expectancy to age 65; (3) the failure to find that decedent had contributed to libelant more than half his income; (4) the failure to increase the award of damages to allow for inflation over the course of future years; (5) the computation of decedent's future lost earnings on the basis of his net income after the deduction of predicted federal and state income taxes rather than on the basis of his gross income. We find no merit in the first four points raised by libelant but we hold that the trial court committed an error in its treatment of the fifth point which requires us to reverse and remand for recomputation of damages in accord with this opinion.
The first three claimed errors cited by libelant call into question findings which the trial court made on the basis of evidence introduced on the issue of damages. These are findings of fact, and it is clear that a trial court's findings as to damages are to be accorded just as much weight on review as other findings of fact, e.g., Lukmanis v. United States, 208 F.2d 260 (2 Cir. 1953) (per curiam); Carroll v. United States, 133 F.2d 690 (2 Cir. 1943); and, in suits in admiralty as well as in other cases, a reviewing court may not overturn a lower court's finding of fact unless the reviewing court is convinced that the finding is "clearly erroneous." McAllister v. United States, 348 U.S. 19, 20, 75 S. Ct. 6, 8, 99 L. Ed. 20 (1954); M. W. Zack Metal Co. v. S.S. Birmingham City, 311 F.2d 334 (2 Cir. 1962), cert. denied, 375 U.S. 816, 84 S. Ct. 50, 11 L. Ed. 2d 51 (1963). "A finding is 'clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S. Ct. 525, 542, 92 L. Ed. 746 (1948).
We have examined carefully the record in this case, we have considered the evidence upon which the lower court based its findings of fact as to these elements of damages, and, while we would perhaps have arrived at figures a bit more generous to libelant had we been sitting as the trier of fact, we cannot say that the lower court committed clear error in making the assessment it did.
As to the value of the various special services which it was claimed decedent had performed for libelant, libelant testified in a general way as to the nature of the services and the approximate frequency with which they had been performed. When one recognizes, however, the difficulty of estimating accurately the money value of those services where the libelant failed to introduce evidence as to their money value, the $100 per year figure arrived at by the trial court, while perhaps near the lower end of the permissible range of estimation, cannot be called clearly erroneous. As to the finding that decedent shared his income with his wife on a fifty-fifty basis, a great deal of testimony was adduced from libelant on direct and crossexamination dealing with the particular types of expenditures she and decedent usually made, and we cannot characterize as clearly erroneous the trial court's conclusion that a synthesis of this testimony established a pattern that decedent's income was shared equally by husband and wife. Finally, though there was evidence that the average age of retirement for social security applicants is currently 67 years, the trial court could legitimately conclude that, in view of the demanding nature of decedent's work as a longshoreman, it was more probable that he would have retired at age 65 had he lived.
Libelant characterizes her fourth claim of error, that dealing with the lower court's refusal to increase the damage award to compensate for future inflation, as one involving an alleged mistake in the application of New York law. But we feel that it only involves, as do libelant's other claims of error already discussed, dissatisfaction with one of the lower court's findings of fact. While there is some lower court authority in New York to the effect that the trier of facts, in computing damages, may make allowance for the factor of inflation, Lucivero v. Long Island R.R. Co., 22 Misc.2d 674, 200 N.Y.S.2d 728, 730 (Sup. Ct., Kings County 1960); Neddo v. State, 194 Misc. 379, 85 N.Y.S.2d 54, 63 (Ct. of Claims 1948), aff'd, 275 App. Div. 492, 90 N.Y.S.2d 650 (3d Dep't, aff'd mem., 300 N.Y. 533, 89 N.E.2d 253 (1949), the only evidence introduced by libelant on the issue of an inflationary trend was the rather equivocal testimony of one expert witness, and the lower court was not clearly in error in refusing to be persuaded by it.
We now come to a consideration of libelant's contention that the trial court erred in computing decedent's future lost earnings on the basis of net income after taxes. The court, after estimating decedent's projected income for each of the remaining years of his work expectancy, deducted from the income figure for each year a sum for federal and state income taxes computed at current withholding rates. The resulting figures were then used to compute the lump sum due libelant as compensation for the loss of her share of decedent's future income, the court also crediting libelant with the anticipated future income tax on the portion of the award that was discounted for present enjoyment. We agree with libelant that the trial court erred in adjusting her award so as to take into account future income taxes so estimated.
Our decision here would be simple indeed if the courts of New York had as yet ruled on whether to use a decedent's gross or net income when computing the damages resulting from a wrongful death, for, as the court below correctly noted, when an admiralty court adopts a state's right of action for wrongful death, the court is obliged to enforce that right subject to whatever conditions and limitations the state has attached to it. The Tungus v. Skovgaard, supra, 358 U.S. at 592, 79 S. Ct. at 506. As we are unable to find any New York decision ruling on whether gross or net income is to be used in damage computations under New York's Wrongful Death Act, we are constrained to follow our own court's dictum in McWeeney v. New York, N.H. & H.R.R., 282 F.2d 34, 39 (2 Cir.), cert. denied, 364 U.S. 870, 81 S. Ct. 115, 5 L. Ed. 2d 93 (1960), later recognized in this court's holding in Montellier v. United States, 315 F.2d 180 (2 Cir. 1963), which indicates that a federal court should use the gross income measure where applicable state law is silent as to any standard to use.
Respondent argues, however, that the applicable state law is not really silent on this issue. Our attention is called to that part of Section 132 of the New York Decedent Estate Law which limits the recovery in a wrongful death action to "compensation for the pecuniary injuries" suffered by the person for whose benefit the action has been brought*fn3, and we are cited to several New York cases recognizing that a distributee's pecuniary loss is measured by the amounts the survivor would have received from decedent's earnings if decedent had lived. Webster v. State, 18 A.D.2d 774, 235 N.Y.S.2d 620 (4th Dep't 1962) (mem.); Holmes v. City of New York, 269 App.Div. 95, 54 N.Y.S.2d 289, 292 (2d Dep't), aff'd per curiam, 295 N.Y. 615, 64 N.E.2d 449 (1945); Wilkinson v. Boehm, 231 App.Div. 295, 247 N.Y.S. 343 (3d Dep't 1931) (per curiam). Respondent then uses these statements of New York law as the basis for advancing the following three step proposition: Since New York law permits recovery in this suit for only that portion of decedent's future income which libelant would have received had decedent lived, and since libelant could not possibly have received that portion of decedent's future earnings which would have been withheld from him for income taxes, a sum representing decedent's net income after taxes must be used in computing libelant's award of damages.
The argument has a certain gloss of persuasiveness about it, due no doubt to its neatness and simplicity, but a careful analysis of respondent's reasoning convinces us that the argument completely misses the point. That New York's Wrongful Death Act permits recovery for only pecuniary losses suffered by a decedent's distributees aids respondent not one whit. The courts in the McWeeney and Montellier cases, supra, and, for that matter, every court which has ever undertaken to estimate damages resulting from the loss of future earnings, were concerned with determining the amount of "pecuniary losses" sustained by an aggrieved party. The crucial issue is not, as respondent would have us believe, simply whether libelant would ever have received any of that portion of decedent's future earnings which would have been withheld for taxes. Rather, the crucial issue is whether a court can predict with sufficient certitude just what portion of decedent's earnings would have been placed beyond libelant's reach by future tax laws so as to permit the court justly to reduce the damage award which libelant would otherwise be entitled to. We think that the resolution of this issue in the McWeeney case, supra, based in part on an earlier decision of our court in Stokes v. United States, 144 F.2d 82 (2 Cir. 1944), requires us to rule that because of the speculative nature of any deduction for future income taxes the court below should have calculated libelant's damage award on the basis of her husband's future gross income before taxes*fn4
Nor are we persuaded by respondent's efforts to distinguish the McWeeney case on the ground that we were there concerned with the propriety of refusing to instruct a jury to use a net income figure in computing damages, while in this case the damages were computed by a court sitting without a jury*fn5 While McWeeney did indeed deal with the difficulty a jury would have in applying an instruction framed in terms of net income after taxes, the important factors cited as causing difficulty there would appear to apply with almost equal force to a court sitting without a jury. Thus, the court in McWeeney pointed to the impossibility of predicting the number of future exemptions a taxpayer might become entitled to as well as the effective dates of such exemptions. Can it be seriously argued that a trial judge is for some reason more adept at making such predictions than a jury? Moreover, the McWeeney decision was based in part on the fact that plaintiff's judgment in a case like this is usually less than compensatory because of inflation and attorney fees, elements that are certainly unaffected by whether a court or a jury sits as the trier of fact. Finally, the way this court in McWeeney related its decision there to prior case law is a further indication that McWeeney cannot be legitimately distinguished on the ground that it dealt with jury instructions. The decision was explained as a continued adherence to Stokes v. United States, supra, where this court, branding deductions for future taxes as ...