daniel.eckerd.inj.ny.redacted.tinari
TRANSCRIPT
Redacted Report
AN APPRAISAL OF ECONOMIC LOSS
RESULTING FROM INJURY TO
DANIEL ECKERD
Frank D. Tinari, Ph.D.
TINARI ECONOMICS GROUP
220 South Orange Avenue
Suite 203
Livingston, NJ 07039
973 / 992-1800 phone
973 / 992-0023 fax
www.TinariEconomics.com
October 4, 2005
TABLE OF CONTENTS
Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purpose of Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Opinion of Economic Damages . . . . . . . . . . . . . . . . . . . . 2
Background Facts and Assumptions . . . . . . . . . . . . . . . . 3
Components of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Net Earnings in Past Years . . . . . . . . . . . . . . . . . . . . . . . 9
Net Earnings in Future Years . . . . . . . . . . . . . . . . . . . . . 11
Pension Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Household Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Appendix of Tables
Qualifications Profile
Statement of Ethical Principles and Principles of
Professional Practice
Certification
This is to certify that I am not related to any of the parties to subject action, nor do I have
any present or intended financial interest in this case beyond the fees due for professional
services rendered in connection with this report and possible subsequent services. Further,
I certify that my professional fees are not contingent on the outcome of this matter but are
based on the time expended on the services provided to counsel in connection with subject
action.
This is to further certify that all assumptions, methodologies, and calculations utilized in
this appraisal report are based on current knowledge and methods applied in the
determination of projected pecuniary losses.
In addition, this is to further certify that I pledge to abide by the spirit and the letter of the
Statement of Ethical Principles and Principles of Professional Practice of the National
Association of Forensic Economics, a copy of which is attached to this report.
Frank D. Tinari, Ph.D.
Eckerd / Law Firm page 2
Purpose of Appraisal
Counsel requested us to prepare an evaluation of the economic damages suffered by Daniel
Eckerd due to his injury. Background facts regarding the plaintiff were provided in a packet
of documents pursuant to this matter. Additional information was obtained subsequent to the
initial communication. Facts from these sources as well as additional information gathered
from published government documents are fully referenced at the point of use in this report.
The purpose of this report, therefore, is to provide a written appraisal of economic loss in the
case of Daniel Eckerd.
Opinion of Economic Damages
Within a reasonable degree of economic certainty, and based on the analysis contained in this
report, it is our professional opinion that the total value of the past and future pecuniary
losses resulting from injuries suffered by Daniel Eckerd amounts to between
THREE MILLION,TWO THOUSAND,
TWO HUNDRED EIGHT-NINE DOLLARS
[ $3,002,289 ]
and
THREE MILLION,SEVENTY-THREE THOUSAND,
EIGHT HUNDRED EIGHTY-EIGHT DOLLARS
[ $3,073,888 ]
This range of estimated losses is a function of the degree of plaintiff’s impairment in
performing household services, a matter ultimately to be determined by the trier-of-fact.
Further, our valuation does not take into account the ramifications of intangible, non-
economic losses such as human suffering, love, emotional feelings, or consortium that may
have been suffered by plaintiff.
Eckerd / Law Firm page 3
Background Facts and Assumptions
1) Plaintiff: Daniel Eckerd, male
2) Date of birth: July 3, 1963
3) Date of injury: June 2, 1999
4) Residence: New York
5) Prior health: good, prior knee surgery
6) Education: less than high school
7) Spouse: Sarah (dob: 5/15/69)
8) Children: Timothy (dob: 9/14/87)
Joan (dob: 10/11/95)
Jennifer (dob: 2/4/98)
9) Life expectancy: as of June 2, 1999, males of Mr. Eckerd’s age (35.92 years) live, on
average, an additional 40.80 years. [SOURCE: New York State Courts, Pattern Jury
Instructions 2002, based on National Center for Health Statistics, Vital Statistics of the
United States, Vol. II, Mortality, Part A, Section 6.] Therefore, persons of plaintiff’s gender
and age have an expected total life span averaging 76.72 years, implying a statistical date of
death of March 31, 2040.
10) Statistical retirement age: as of June 2, 1999, males of Mr. Eckerd’s age (35.92 years)
and level of education (less than high school) have 25.57 years until statistical retirement.
[SOURCE: Tamorah Hunt, Joyce Pickersgill and Herbert Rutemiller, “Median Years To
Retirement and Work Life Expectancy for the Civilian U.S. Population” (Prepared Using
1992/93 BLS Labor Force Participation Rates), Journal of Forensic Economics, 10(2), 1997,
pp. 171-205, Appendix A - Table 4, by interpolation.] Applying these years results in a
projected date of retirement of 61.49 years, occurring on January 7, 2025. However, the
normal retirement age under plaintiff’s union pension plan is age 62. [SOURCE: Pension
Fund.] Therefore, we project plaintiff’s statistical age of retirement to age 62 years, occurring
on July 3, 2025 (26.09 years from the date of injury).
11) Expected working years: worklife expectancy tables provide statistics descriptive of the
actual working life experience of the civilian population by age, employment status, and
schooling. As of June 2, 1999, males of Mr. Eckerd’s age/education/labor-force-activity
statistical cohort average 20.30 years of remaining labor force activity. [SOURCE: James
Ciecka, Thomas Donley, and Jerry Goldman, “A Markov Process of Work-Life Expectancies
Based on Labor Market Activity in 1997-98,” Journal of Legal Economics, 9 (3), Winter
1999-00, pp.33-68.]
Eckerd / Law Firm page 4
12) Worklife-to-retirement ratio: the number of years from June 2, 1999, until Mr. Eckerd’s
projected retirement date (26.09 years) exceeds the number of expected working years (20.30
years). Thus, arithmetically, the number of years of worklife for this statistical cohort
comprises 77.81% of the total remaining years until retirement.
13) Occupation and employment history: prior to his injury, plaintiff was employed as a
union laborer. Plaintiff primarily worked for Allen Construction, and was first hired by the
company in 1989. (A review of plaintiff’s W-2 Wage and Tax Statements indicates that Mr.
Eckerd worked for various other companies over the years preceding his injury.) During his
employment with the union Mr. Eckerd had worked primarily as a laborer, but had also
worked in a foreman capacity on several jobs. [SOURCES: interview with Daniel Eckerd,
deposition transcript of Daniel Eckerd, and W-2 Wage and Tax Statements.] For the purpose
of our analysis we assume plaintiff would have continued working as a construction laborer
through his retirement at age 62. Had Mr. Eckerd received a promotion to the position of
foreman, the loss of earnings associated with his injury would be significantly higher than
that calculated in this appraisal report.
Between the years 1990 and 1998 plaintiff worked an average of 1,628 hours per annum. A
history of plaintiff’s annual hours worked through the union is presented in the following
table. [SOURCE: Pension History.]
YearHours Worked
Per Year YearHours Worked
Per Year
1990 1,647 1995 1,455
1991 1,483 1996 1,886
1992 1,536 1997 2,153
1993 1,638 1998 1,432
1994 1,422 1999 152*
* hours worked through date of injury: June 2
In the early part of 1999 plaintiff experienced short-term unemployment, as represented by
the reduced hours worked, limited earnings and increased unemployment compensation in
1999. As noted above, prior to 1999 plaintiff worked, on average, 1,628 hours per year,
which is equivalent to 31.3 hours per week (1,628 hours / 52 weeks). In 1999, plaintiff
worked a total of 152 hours which represents approximately 5 weeks (152 hours / 31.3
hrs/week) of employment in 1999, prior to his injuries. At the time of the injury plaintiff was
Eckerd / Law Firm page 5
employed. Based on plaintiff’s past earnings and work history, we assume Mr. Eckerd would
have continued his normal employment through the union in the second half of 1999.
14) Earnings history: [SOURCES: personal income tax returns, W-2 Wage and Tax
Statements, and 1099 forms.]
Year W-2 Earnings
Welfare Fund(SupplementalBenefit Pay)
TotalEarnings
UnemploymentCompensation
1995 $49,590 $1,996 $51,586 $600
1996 55,971 2,141 58,112 2,100
1997 67,473 3,992 71,465 0
1998 55,115 6,721 61,836 1,825
1999* 8,072 2,586 10,658 6,570
2000 0 418 418 0
* date of injury: June 2
For the purpose of this analysis we include the supplemental benefit pay received by plaintiff
in his annual earnings.
It should also be noted that prior to his injuries, Mr. Eckerd received unemployment
compensation for the years 1995, 1996, and 1998. Because plaintiff will no longer receive
unemployment compensation, this represents an additional loss of income. To calculate the
loss of unemployment compensation we take an average of plaintiff’s unemployment benefits
during the years prior to the injury (1995-1998). This yields average annual unemployment
benefits of $1,131, in 1999 dollars.
As noted previously, Mr. Eckerd experience short-term employment in 1999, but had
returned to work at the date of the accident, which would have continued but for the accident.
We assume normal employment from the date of the accident (June 2, 1999) through the end
of the year, approximately 56% of the year. We then apply this percentage to Mr. Eckerd’s
1998 earnings, yielding a value of $30,864 ($55,115 x 56%). Thus, we assume, but for the
injury, plaintiff would have earned $38,936 ($8,072 + $30,864) plus a supplemental benefit
of $2,586 in 1999.
To establish plaintiff’s earnings potential in this report, we take an average of his earnings
of the years 1996 to 1999, expressed in 2000 dollars. This is accomplished by first converting
Eckerd / Law Firm page 6
these earnings amounts to constant 2000 dollars as shown in the table below. The conversion
factor applied is based upon changes in the wages and salaries of private industry,
construction workers from 1996 through 2000. [SOURCE: Employment Cost Index, wages
and salaries, by occupation and industry group, not seasonally adjusted, U.S. Department of
Labor, Bureau of Labor Statistics, http://www.bls.gov/ncs/home.htm.]
Year
Conversion Factor to 2000Dollars
Actual Gross Earnings
(Earnings &Supp. Pay)
Gross Earnings (2000 Dollars)
[(2) x (3)]
(1) (2) (3) (4)
1996 1.1578 $58,112 $67,282
1997 1.1179 71,465 79,890
1998 1.0848 61,836 67,081
1999 1.0481 41,522 43,520
2000 average: $64,443
As shown above, plaintiff’s pre-injury base earnings are established at $64,443 in 2000
dollars.
15) Fringe benefits: as a union member plaintiff received various fringe benefits in his
employment including, health insurance, prescription coverage, dental insurance, pension
plan, and annuity contributions. Given the prospective nature of insurance, we limit the loss
of fringe benefits in past years to out-of-pocket medical expenses (none reported) and annuity
contributions. It is our understanding that Mr. Eckerd currently receives health insurance
coverage through his wife’s employer. [SOURCE: interview with Daniel Eckerd.] Therefore,
we do not quantify a loss of health insurance. The loss of employer contributions to the union
annuity fund is valued at 10% of earnings in past and future years. The loss of pension
income is valued in a separate section of this report.
16) Pension income: as a union member, Mr. Eckerd is eligible for a pension. As a result of
his injury Mr. Eckerd took early retirement, and applied for a disability pension. As of
January 1, 2000, Mr. Eckerd was eligible to receive a joint and survivor pension benefit of
$857 per month, or a single annuity pension of $1,194 per month. Plaintiff elected to receive
the survivor pension ($857/month). [SOURCE: Pension Fund: Joint and Survivor Annuity
Benefit Statement.] However, in order to make an accurate comparison, we assume Mr.
Eckerd is receiving the single annuity ($1,194/month).
Eckerd / Law Firm page 7
17) Functionality and employment prospects: subsequent to his injuries Mr. Eckerd has not
returned to work. He continues to suffer from pain in his knees, low pack pain, fatigue,
headaches, difficulty sleeping, numbness in his right foot, weakness in his lower extremities,
and occasional dizziness. A vocational evaluation prepared by Edmond Provder concludes
that “Mr. Eckerd is unable to perform his past relevant work as a Construction Laborer.” Mr.
Provder further opines that “Mr. Eckerd is unable to perform any Sedentary, Light, Medium,
Heavy, or Very Heavy Work existing in the local or national economy on a sustained, full-
time, regular, competitive basis.” He further states that plaintiff is “unemployable for any job
existing in the competitive labor market.” [SOURCE: Edmond Provder, Employability and
Earning Capacity Evaluation on Daniel Eckerd.]
Since the date of injury, Mr. Eckerd has undergone several surgeries. Most recently plaintiff
underwent a total knee replacement. [SOURCE: interview with Daniel Eckerd.] Based upon
the foregoing information and for purposes of this report, we assume that Mr. Eckerd will
not reenter the competitive labor force. Should new information become available regarding
other potential vocational alternatives for the plaintiff, we reserve the right to issue an
amended report.
18) Other sources of income: Mr. Eckerd received $16,321 in Social Security Disability
benefits for the period December 1999 through November 2000. Thereafter, he received
$1,408 per month. Plaintiff then received a retroactive increase in his benefits based on
additional earnings not included in the initial award calculation. Mr. Eckerd received $3,181
for benefits due from December 1999 through November 2003. Thereafter, his monthly
benefit was increased to $1,446. [SOURCES: Notice of Award, Social Security
Administration, dated and Notice of Change in Benefits, Social Security Administration.]
Because it is our understanding that Social Security Disability benefits are considered in a
separate hearing subsequent to the trial, this appraisal makes no subtraction for the Social
Security benefits received by plaintiff.
19) Job-maintenance expenses: we have assumed that, as a result of this injury, Mr. Eckerd
will not be returning to work. His earnings, therefore, must be adjusted (downward) to
account for those job maintenance expenses he would have continued to incur in maintaining
his employment. These expenses typically include transportation expenses, union dues,
clothing, meals outside the home, and other costs. For purposes of this analysis we estimate
Mr. Eckerd’s job maintenance expenses in his former occupation at ten (10) percent of
earnings based on a review of plaintiff’s tax returns.
Eckerd / Law Firm page 8
20) Household services: prior to his injury, plaintiff reportedly performed basic household
services, such as cleaning and cooking, and would also fix items around the residence and
assist in moving the larger objects around his apartment (i.e., furniture). Mr. Eckerd is also
less able to care for the children. [SOURCES: deposition transcript of Daniel Eckerd,
interview with Daniel Eckerd, and deposition transcript of Sarah Eckerd.]
Based on the above information, we estimate a range of lost ability to perform household
services of 50%, 60%, and 70%. The precise degree of loss is left to a determination of the
trier-of-fact upon a full hearing of all relevant facts in this matter. We reserve the right to
amend this report should further information become available.
Components of Loss
The pecuniary value of loss resulting from injury to plaintiff is estimated by consideration
of the following components:
1. net earnings in past years
2. net earnings in future years
3. pension income
4. household service losses
These components are analyzed separately in the following sections of this appraisal report.
Eckerd / Law Firm page 9
Loss of Net Earnings in Past Years
This loss component consists of the net earnings Mr. Eckerd, had he not been injured, would
have been able to earn from date of injury to the present. Plaintiff’s earnings potential as an
union worker is established at $64,443 supplemented with annual unemployment benefits of
$1,131. We assume the unemployment benefits stay fixed at their current value. To generate
earnings values for subsequent years, we apply a 3.5% wage growth, rate reflecting union
wage trends. [SOURCE: Union Wage Schedules, effective from July 1, 1996 to June 30,
2006.] Application of this growth rate yields gross earnings figures through the present, as
follows:
YearGross Earnings
[@ 3.5%]
2000 $64,443
2001 66,699
2002 69,033
2003 71,449
2004 73,950
2005 76,538
Gross earnings are adjusted to take into account several factors that help determine net
earnings. An adjustment for worklife expectancy is necessary because the number of years
of actual working life is generally less than the total number of years until retirement. The
estimated remaining years of worklife, given in the Background Facts and Assumptions
section above, amounts to 77.81% of the total remaining number of years until retirement for
persons of plaintiff's statistical cohort.
Another adjustment made in such appraisals takes into consideration the likelihood of periods
of unemployment during a person’s expected working life. Unemployment is an
economy-wide phenomenon, but various statistical cohorts of the labor force experience
different rates of unemployment. This adjustment is usually necessary since unemployment
is not taken into consideration by worklife expectancy figures. The latter indicate the number
of expected years of participation in the labor force, whereas unemployment refers to periods
of no work of those persons already active in the labor force. However, because Mr. Eckerd’s
earnings already reflect periods of unemployment, no additional adjustment is made.
Eckerd / Law Firm page 10
Another adjustment to earnings losses takes into account the value of fringe benefits. As
mentioned in the previous section, fringe benefits are valued at ten (10) percent in past and
future years.
A final adjustment is job maintenance expenses which Mr. Eckerd will no longer incur.
These include travel expenses and vehicle maintenance, work clothes, union dues and meals
away from home. These expenses are estimated at ten (10) percent of earnings.
Algebraically, the preceding adjustments are summarized as follows:
UnemploymentEarnings Benefits
Gross Earnings Base 1.00 1.00x Worklife Adjustment 0.7781 0.7781= Worklife-adjusted Earnings 0.7781 0.7781x (1 + 10%, 0% fringe benefits) 1.10 1.00= Fringe Adjusted Base 0.8559 0.7781x (1 - 10%, 0% job maintenance expenses) 0.90 1.00= Net Earnings Factor 0.7781 0.7781
The preceding calculations indicate that net earnings are 77.81% of gross earnings in past
and future years as are net unemployment benefits.
Eckerd / Law Firm page 11
Earnings losses through the end of September 2005 are calculated as follows:
Year
Earnings Unemployment Benefits
Actual Income
Annual Loss[(3) + (5) - (6)]
Gross[@ 3.5%]
Net[(2) x 77.81%] Gross
Net[(4) x 77.81%]
(1) (2) (3) (4) (5) (6) (7)
1999.56 $30,864 * $24,015 $ 0^ $ 0 $24,015
2000 64,443 50,143 1,131 880 $418 50,605
2001 66,699 51,898 1,131 880 52,778
2002 69,033 53,715 1,131 880 54,595
2003 71,449 55,595 1,131 880 56,475
2004 73,950 57,541 1,131 880 58,421
2005.75 57,404 44,666 848 660 45,326
total: $342,215
* assumed gross earnings from date of injury through the end of 1999^ no unemployment compensation loss assumed in 1999
Loss of Net Earnings in Future Years
Future losses are calculated beginning October 1, 2005, and continue through plaintiff’s
statistical date of retirement on July 3, 2025. Plaintiff’s 2005 gross base earnings are
established at $76,538 with annual unemployment benefits established at $1,131. A growth
rate of 3.5% per annum is applied to project future earnings, as previously established.
It is our understanding that New York court rules stipulate that future losses are not to be
discounted to present value by the economist. Therefore, future loss values are not discounted
in this appraisal report.
Eckerd / Law Firm page 12
Application of the preceding information yields a total value of plaintiff’s future net earnings
loss, calculated as follows:
Year
Earnings Unemployment Benefits
Annual Loss[(3) + (5)]
Gross[@ 3.5%]
Net[(2) x 77.81%]
Gross[@ 3.5%]
Net[(4) x 77.81%]
(1) (2) (3) (4) (5) (6)
2005.25 $19,135 $14,889 $ 283 $220 $15,109
2006 79,217 61,639 1,131 880 62,519
2007 81,990 63,796 1,131 880 64,676
2008 84,860 66,029 1,131 880 66,909
2009 87,830 68,340 1,131 880 69,220
2010 90,904 70,732 1,131 880 71,612
2011 94,085 73,208 1,131 880 74,088
2012 97,378 75,770 1,131 880 76,650
2013 100,787 78,422 1,131 880 79,302
2014 104,314 81,167 1,131 880 82,047
2015 107,965 84,008 1,131 880 84,888
2016 111,744 86,948 1,131 880 87,828
2017 115,655 89,991 1,131 880 90,871
2018 119,703 93,141 1,131 880 94,021
2019 123,892 96,401 1,131 880 97,281
2020 128,229 99,775 1,131 880 100,655
2021 132,717 103,267 1,131 880 104,147
2022 137,362 106,881 1,131 880 107,761
2023 142,169 110,622 1,131 880 111,502
2024 147,145 114,494 1,131 880 115,374
2025.53 80,717 62,806 599 466 63,272
total: $1,719,731
Eckerd / Law Firm page 13
Pension Income
As stated in the Background Facts and Assumption section, plaintiff’s pension payout has
been compromised as a result of his early retirement due to injury. Based on union pension
guidelines, pension benefits for a member working after 1980 are established as follows:
Credits Earned x Benefit Rate = Monthly Pension Benefit
Under the pension guidelines, pension credits are earned based on the number of hours
worked per year. For each 150 hours worked, the member earns one (1) credit, with a
maximum of ten (10) credits per year. The benefit rate is currently defined at $6 for credits
earned through 1993, and $20 thereafter. [SOURCE: Union Pension Fund.]
Had he not been injured plaintiff would have be eligible to accrue additional service credits,
increasing his pension benefit. At the time of his injury, plaintiff had accrued 39 credits
through 1993, 47 credits from 1994 through 1998, and 1 credit for 1999 (the year of injury).
As previously stated, service credits are determined by dividing the number of hours worked
by 150 hours, rounded down to the nearest whole number. The number of service credits
accumulated in one (1) year cannot exceed ten (10).
From 1990 to 1998 plaintiff worked an average of 1,628 hours per annum, which is
equivalent ten (10) service credits. During the period 1995 through 1998 plaintiff averaged
1,732 hours. During this time period Mr. Eckerd had two (2) years in which he earned nine
(9) service credits, and two (2) years in which he earned ten (10) service credits. At no point
between 1990 and 1998, did Mr. Eckerd earn less than nine (9) service credits. For the
purposes of our calculations, we assume plaintiff would continue to earn nine (9) service
credits per year. Therefore, from the date of injury to his statistical date of retirement we
project plaintiff would have earned an additional 234 credits (9 credits/yr. x 26.09 years of
loss).
Based on current pension guidelines, a retiree’s benefit is derived by multiplying 1) the
service credits earned through 1993 by $6, and 2) the credits earned thereafter by $20.
[SOURCE: Union Pension Fund, Section XIV - Appendix A.] However, a review of the
pension plan guidelines indicates that the benefit rate has increased over time. Based on past
historical growth we apply a conservative two (2) percent growth rate to project the future
benefit rate beginning in 2006. Application of this assumption yields a benefit rate of $29.72
in 2025. Therefore, we calculate plaintiff’s pre-injury monthly pension at retirement, as
follows:
Eckerd / Law Firm page 14
Time Period Credits Earned Benefit Rate Benefit Earned
pre-2004 39 $ 6.00 $ 234
1/1/04-12/31/05 107 20.00 2,140
1/1/06-7/3/25 175 29.72 5,201
monthly benefit $7,575
As established above, plaintiff’s projected monthly pension benefit in 2025 is established at
$7,575, or $90,900 per annum. We assume that Mr. Eckerd would have begun to collect his
pension upon retirement at age 62 on July 3, 2025.
Plaintiff began to collect a monthly Disability Pension benefit of $857 beginning in January
2000 (paid retroactively). This payment is based on a joint survivor annuity benefit option.
To calculate the future pension loss/(gain), we use the single annuity benefit which was
$1,194 per month, or $14,328 per annum.
Based on the preceding analysis, the following table shows our calculations of pension
income loss/(gain).
Year
Projected
Normal Retirement
Single Annuity
Actual
Disability Pension
Single Annuity
Annual
Loss/(Gain)
[(2) - (3)]
(1) (2) (3) (4)
2000 $14,328 ($14,328)
2001 14,328 (14,328)
2002 14,328 (14,328)
2003 14,328 (14,328)
2004 14,328 (14,328)
2005 14,328 (14,328)
2006 14,328 (14,328)
2007 14,328 (14,328)
2008 14,328 (14,328)
2009 14,328 (14,328)
2010 14,328 (14,328)
2011 14,328 (14,328)
2012 14,328 (14,328)
2013 14,328 (14,328)
2014 14,328 (14,328)
Eckerd / Law Firm page 15
Year
Projected
Normal Retirement
Single Annuity
Actual
Disability Pension
Single Annuity
Annual
Loss/(Gain)
[(2) - (3)]
(1) (2) (3) (4)
2015 14,328 (14,328)
2016 14,328 (14,328)
2017 14,328 (14,328)
2018 14,328 (14,328)
2019 14,328 (14,328)
2020 14,328 (14,328)
2021 14,328 (14,328)
2022 14,328 (14,328)
2023 14,328 (14,328)
2024 14,328 (14,328)
2025 $42,723 14,328 28,395
2026 90,900 14,328 76,572
2027 90,900 14,328 76,572
2028 90,900 14,328 76,572
2029 90,900 14,328 76,572
2030 90,900 14,328 76,572
2031 90,900 14,328 76,572
2032 90,900 14,328 76,572
2033 90,900 14,328 76,572
2034 90,900 14,328 76,572
2035 90,900 14,328 76,572
2036 90,900 14,328 76,572
2037 90,900 14,328 76,572
2038 90,900 14,328 76,572
2039 90,900 14,328 76,572
2040.25 22,725 3,582 19,143
total: $761,346
Eckerd / Law Firm page 16
Loss of Household Services
In the United States, time devoted to work is usually compensated in
dollars and cents. A major exception is household work. Those who do
this work include most of the women, children and men in our society.
A significant cost of this work to the family is time, and not just a little
of it!
Household work is indispensable to the functioning of the family and
society. It generally takes place outside the context of the business
world, however, and therefore time spent at it is not normally given a
dollar value. ... Household services take time to provide, if not the
housewife's then the time of someone else. ... When the household
services are turned over to someone else to produce, they have a money
value--the value of the time spent by the worker. The same services are
just as valuable when provided by a family member. Consequently, a
money value can be given to the services... [SOURCE: William H.
Gauger and Kathryn E. Walker, The Dollar Value of Household Work.
Information Bulletin 60, New York State College of Human Ecology,
Cornell University, September 1980, pages 1, 3.]
As noted previously, the assumption is made that plaintiff has lost a portion of his former
ability to perform household services. Based on the information noted in the Background
Facts and Assumptions section of this report, it is reasonably assumed that plaintiff's loss of
household services began on the date of his injury and will continue through his statistical
date of death. In this appraisal, the assumption is made that Mr. Eckerd has lost between fifty
(50) and seventy (70) percent of his former ability to perform household services.
Studies have been conducted to determine the extent and value of household services
performed by various members of the family unit. According to a well known study, the
amount of household services provided by a married male in the labor force varies with the
number and age of dependent children, as shown in the table below. [SOURCE: David H.
Ciscel and David C. Sharp, “Household Labor in Hours by Family Type,” Journal of
Forensic Economics, 8(2), 1995, page 117 Table 1.] We reduce these hours by twenty (20)
percent because plaintiff resides in an apartment.
Moreover, with advancement in years, physical strength naturally diminishes. As people age,
the probability of being able to perform all of the household chores which were once done
Eckerd / Law Firm page 17
also diminishes. The elderly are more prone to slips, falls and various disabling illnesses.
Statistical research provides data on the probability of such disabling occurrences by gender.
Thus, we reduce the annual hours of household services by 8% between the ages of sixty-five
(65) and seventy-four (74) and by 23.4% after age seventy-five (75) to account for the
probability of plaintiff becoming disabled over his remaining statistical life expectancy.
[SOURCE: U.S. Department of Commerce, Current Population Reports, Disability,
Functional, Limitation, and Health Insurance Coverage: 1984/85, Household Economic
Studies, Series P-70, No. 8, Table G, p. 8.]
Application of the preceding information yields the adjusted number of hours assumed for
each time period as described above:
NumberChildren
Age ofYoungest
ChildAge of
Plaintiff
AnnualNumberof Hours
ApplicableTime Period
(1) (2) (3) (4) (5)
3 < 6 years < 65 years 355 6/2/99 - 2/3/04
3 6 - 11 years < 65 years 344 2/4/04 - 9/13/05
2 6 - 11 years < 65 years 291 9/14/05 - 2/3/09
2 > 11 years < 65 years 333 2/4/09 - 10/10/13
1 > 11 years < 65 years 269 10/11/13 - 2/3/16
0 n/a < 65 years 298 2/4/16 - 7/2/28
0 n/a 65 - 75 years 274 7/3/28 - 7/2/38
0 n/a > 75 years 228 7/3/38 - 3/31/40
Turning to the monetary value of these hours, average hourly earnings of nonsupervisory
workers in the Private Service-Providing industry sector were $13.07 in 1999, $13.60 in
2000, $14.16 in 2001, $14.56 in 2002, $14.96 in 2003, and $15.26 in 2004. [SOURCE: U.S.
Department of Labor, Bureau of Labor Statistics, Monthly Labor Review, March 2005, Table
29, p. 101, http://www.bls.gov/opub/mlr/2005/03/cls0503.pdf.] To obtain a corresponding
value for 2005, we apply a growth rate of 2.0%, which is the rate exhibited by the data
between 2003 and 2004. This yields a wage rate of $15.57 for 2005.
Eckerd / Law Firm page 18
The pecuniary value of the household services that would have been provided through the
present time is provided in the following table:
YearAnnualHours
AnnualValue
1999.56 199 $ 2,598
2000 355 4,828
2001 355 5,027
2002 355 5,169
2003 355 5,311
2004 345 5,270
2005.75 258 4,017
total: $32,219
Services in future years are calculated beginning October 1, 2005, and extend until Mr.
Eckerd’s statistical date of death on March 31, 2040. A growth rate of 4% per annum is
applied to project future wage growth. [SOURCE: Principal Economic Assumptions, 2005
Annual Report to the Board of Trustees of the Federal Old-age and Survivors Insurance and
Disability Insurance Trust Funds, Table V.B1, http://www.ssa.gov/OACT/TR/TR05
/tr05.pdf.]
Application of the aforementioned information yields a total value of future household
services as calculated below:
(see table on following page)
Eckerd / Law Firm page 19
Year Annual HoursAnnual Value
[@ 4%]
2005.25 73 $ 1,133
2006 291 4,712
2007 291 4,901
2008 291 5,097
2009 328 5,974
2010 333 6,308
2011 333 6,560
2012 333 6,823
2013 320 6,823
2014 269 5,961
2015 269 6,200
2016 295 7,059
2017 298 7,429
2018 298 7,726
2019 298 8,035
2020 298 8,356
2021 298 8,690
2022 298 9,038
2023 298 9,400
2024 298 9,775
2025 298 10,167
2026 298 10,573
2027 298 10,996
2028 287 11,003
2029 274 10,936
2030 274 11,373
2031 274 11,828
2032 274 12,301
2033 274 12,793
2034 274 13,305
2035 274 13,837
2036 274 14,390
2037 274 14,966
2038 252 14,337
2039 228 13,470
2040.25 57 3,502
total: $325,775
Eckerd / Law Firm page 20
Correspondingly, in light of these findings, the range of losses, based on a diminution of
ability to perform household services estimated at between fifty (50) and seventy (70)
percent, is provided in the following table:
Value of HouseholdServices
Assumed Range of Loss
50% 60% 70%
Past Years[$32,219]
$ 16,110 $ 19,332 $ 22,554
Future Years[$325,775]
162,887 195,465 228,042
Total Loss $ 178,997 $ 214,797 $ 250,596
Eckerd / Law Firm page 21
Summary
The preceding findings evaluating the magnitude of the loss components analyzed in this
appraisal report are summarized as follows:
Range of Value of Loss
50%* 60%* 70%* Components of Loss
$ 342,215 $ 342,215 $ 342,215 net earnings in past years
1,719,731 1,719,731 1,719,731 net earnings in future years
761,346 761,346 761,346 pension income
16,110 19,332 22,554 *household services in past years
162,887 195,465 228,042 *household services in future years
$ 3,002,289 $ 3,038,089 $ 3,073,888 total value of loss
It is important to understand that each total loss figure is a cumulative value of loss and has
not been discounted to present value. In addition, please note that pre-trial or pre-judgment
interest has not been calculated. These interest losses are typically determined at the time of
trial and would be in addition to the losses calculated in this appraisal report.
The preceding findings are based on information provided to us as of this date. They are
subject to revision should additional information be forthcoming that would change any facts
or assumptions upon which this analysis rests. We also note that damages are an
approximation and are provided by the economic expert as a guide to the trier-of-fact.
[SOURCE: Jones & Laughlin Steel Corp. v. Pfiefer, (1983), 103 S. Ct. at 2555.]