For affirmance as modified -- Chief Justice Hughes, Justices Mountain, Sullivan, Pashman and Clifford and Judge Conford. For reversal -- None. The opinion of the Court was delivered by Pashman, J.
This is a wrongful death action in which plaintiff appealed a $200,000 jury verdict contending that the trial court had erroneously refused to allow expert economic testimony concerning inflationary trends on the issue of future wage losses of the deceased. In an unreported opinion, the Appellate Division concluded that the evidence should have been admitted and ordered a new trial on the issue of damages only. We granted defendant's petition for certification, 66 N.J. 319 (1974), to consider the proper scope of expert testimony in this context.
The deceased, Richard Tenore, a 40-year old union electrician, was killed when he was struck by a wheel that broke free from one of defendant's trucks. The accident occurred on December 27, 1971 while Tenore and another electrician were working on the New Jersey Turnpike in the vicinity of the Newark Airport. At the time of his death Tenore was employed as a foreman by the Daidone Electric Company. In 1971 his gross salary was $20,323.43, exclusive of a $3,000 bonus which was paid to his wife shortly after his death.
In February 1972 Tenore's widow commenced a wrongful death action against defendant Nu Car Carriers, Inc., alleging that its negligence caused her husband's death. The jury found defendant negligent.
In support of the claim for damages, plaintiff offered the testimony of Arthur Schoenwald, an economist who specialized in the practical application of economic principles to problems of valuations. In response to specific questions by the court, the witness stated that his area of expertise included the training of an actuary in the determination of present value of future losses. Having qualified as an expert, Dr. Schoenwald testified that his examination of wage trends over the past 36 years showed an average increase of 5 1/2% a year.*fn1 In preparing his testimony, the witness extrapolated from these data and applied the projected wage increases to Tenore's most recent base earnings through the year 1996 (Tenore's projected work life expectancy would have been 24 years and 7 months) when the deceased would have reached the normal retirement age of 65.*fn2 When Dr. Schoenwald attempted to testify concerning his projections of Tenore's salary in future years, however, the court ruled the projections inadmissible:
THE COURT: . . . I will not allow projection in the future.
MR. GREENFIELD: May I respectfully ask why * * *?
THE COURT: Because it is a guess.
It was plaintiff's intention to have the expert testify from a prepared report to specific figures of projected future income and net losses of such income after deduction of personal expenses of decedent had he lived, and then to calculate the present value at a discount rate of 4% of such future
losses. In the projections the decedent would be shown as earning $35,584 in 1980, $52,672 in 1990 and $64,084 in 1995, the last working year of decedent's statistical expectancy. The report would have shown net future losses to the next of kin in the aggregate sum of $925,361, having a present value at the discount rate of 4% of $559,949. That would have been the figure presented to the jury as the expert's appraisal of the damages in this case.
Plaintiff was also concerned about the admissibility of testimony concerning the effect of income taxes on the deceased's future earnings, and after a discussion held out of the presence of the jury, the court, over objection, decided that the income tax liability on Tenore's earnings could not be brought out on cross-examination.*fn3
Despite the total absence of testimony concerning either factor and the court's express ruling on the tax question, the court permitted the jury to consider inflation in fixing damages and instructed them to consider the effect of income taxes upon income which the deceased might have earned had he lived.*fn4
Although the jury awarded her a verdict, plaintiff appealed on the basis of the trial court's exclusion of expert economic testimony on the question of deceased's future earnings. In remanding the case for retrial on damages, the Appellate Division reasoned that the economic evidence proffered by plaintiff was relevant to the determination of the aggregate anticipated loss of future earnings resulting from the untimely death of decedent. Acknowledging that this form of evidence "does not enjoy the quality of the absolute," the court nonetheless concluded that it did not warrant dismissal as speculation. Indeed, in the court's view, plaintiff's evidence would have reduced the degree of jury speculation by providing some guidelines for the practical application of inflation to the determination of the survivor's damages. We are only in partial agreement with that conclusion. In our judgment, the Appellate Division was correct in remanding the case for retrial as to the proper measure of damages, and approving expert testimony as to expected inflationary wage trends but not in implying that the witness might be allowed to present his conclusion as to damages in aggregate dollar terms.
The fundamental aim of our Wrongful Death Act, N.J.S.A. 2A:31-1 et seq., is compensation for the pecuniary losses suffered by the survivors of those killed by wrongful act, neglect or default.*fn5 In assessing damages for pecuniary
loss, the Legislature has directed the jury to award an amount which is fair and just under the circumstances:
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. [ N.J.S.A. 2A:31-5 (Supp. 1975-76)].
Under our practice, however, the defendant in a wrongful death action is entitled to have the recovery discounted to present value, a procedure which recognizes that the deceased would have had his income spread out over the remaining years of his working life, had he lived. See Matthews v. Nelson, 57 N.J. Super. 515, 520 (App. Div. 1959), certif. den., 31 N.J. 296 (1960); Kappel v. Public Service Ry., 105 N.J.L. 264, 265 (Sup. Ct. 1929). See also Russell v. City of Wildwood, 428 F.2d 1176, 1181-82 (3 Cir. 1970); Noa v. LeGore, 131 N.J.L. 229, 235-36 (E. & A. 1944).*fn6
At a time when past history and present economic trends prognosticate generally rising wage scales attributable largely to an inflationary cycle, there is no sound reason why the opinion of a qualified expert on that subject should not be made available for the assistance of the jury in appraising damages. Precluding this element from the damage determination would work an injustice upon the survivor, particularly when it is recalled that the verdict awarded the successful plaintiff represents current compensation for future loss.
The difficulty in the present case, however, was not in the trial court's failure to permit the jury to consider an inflation factor, but rather in the exclusion of evidence which was offered to provide expert testimony to guide the jury in its application of inflation to the verdict. We conclude that the jury should, within limitations stated hereinafter, have had the benefit of expert testimony on inflation to provide them with informed guidelines in assessing the effect of future wage increases on plaintiff's losses.
The problem of the effect of inflation upon damage awards is not a new one, but in the past the question has usually come before the courts either in the context of permitting the jury in the first instance to consider it in fixing damages, or in recognizing changes in the purchasing power of the dollar in reviewing verdicts. See generally Annotation, "Changes in the cost of living or in the purchasing power of money as affecting damages for personal injuries or death," 12 A.L.R. 2d 611 (1950); Note, 48 Colum. L. Rev. 264 (1948).*fn7 See Andryishyn v. Ballinger, 61 N.J. Super. 386 [67 NJ Page 476] (App. Div. 1960), certif. den., 33 N.J. 120 (1960) where the court observed that, in general, damages must be left to the discretion of the jury, "and the value of the award must be appraised in light of existing economic conditions." Id. at 393. See also Cermak v. Hertz Corp., 53 N.J. Super. 455, 465 (App. Div. 1958), aff'd per curiam, 28 N.J. 568 (1959); Cabakov v. Thatcher, 37 N.J. Super. 249, 258 (App. Div. 1955); Paparazzo v. Perkel, 16 N.J. Super. 128, 133 (App. Div. 1951); Moore v. Public Service Coordinated Transport, 15 N.J. Super. 499, 512 (App. Div. 1951); Dandrea v. Centofante, 13 N.J. Super. 445, 447 (App. Div. 1951); Bardack v. Extract, 13 N.J. Super. 350, 356 (App. Div. 1951); Nusser v. United Parcel Service, 3 N.J. Super. 64, 69-70 (App. Div. 1949); Bowes v. Public Service Ry., 94 N.J.L. 378, 379 (Sup. Ct. 1920); Clifford
Although inflation has thus often been recognized in a general way in fixing or reviewing damage awards, attempts to introduce expert testimony to provide guidelines for evaluating its impact on future pecuniary loss is a relatively recent development, one which has been applauded by several commentators. One of the leading writers on the subject of wrongful death, for example, has argued:
See also Leonard, "Future Economic Value in Wrongful Death Litigation," 30 Ohio State L.J. 502 (1969).*fn8
The principal argument against the admission of expert testimony on the relationship between future inflationary trends and the claimant's pecuniary losses is the assertion that the ...