{ "id": 8525518, "name": "CHARLES S. SCALLON, Administrator of the Estate of Larry Alan Aiken v. PHILLIP McINTYRE HOOPER and CHARLES KENNETH CALDWELL", "name_abbreviation": "Scallon v. Hooper", "decision_date": "1982-08-03", "docket_number": "No. 8110SC1111", "first_page": "551", "last_page": "557", "citations": [ { "type": "official", "cite": "58 N.C. App. 551" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "276 S.E. 2d 284", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1981, "opinion_index": -1 }, { "cite": "301 N.C. 722", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8571109, 8571036, 8571133, 8571006, 8571071 ], "year": 1981, "opinion_index": -1, "case_paths": [ "/nc/301/0722-04", "/nc/301/0722-02", "/nc/301/0722-05", "/nc/301/0722-01", "/nc/301/0722-03" ] }, { "cite": "270 S.E. 2d 496", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1980, "opinion_index": -1 }, { "cite": "49 N.C. App. 113", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8519648 ], "year": 1980, "opinion_index": -1, "case_paths": [ "/nc-app/49/0113-01" ] }, { "cite": "290 S.E. 2d 599", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1982, "opinion_index": 0 }, { "cite": "305 N.C. 478", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8571152 ], "year": 1982, "opinion_index": 0, "case_paths": [ "/nc/305/0478-01" ] }, { "cite": "90 S.Ct. 93", "category": "reporters:federal", "reporter": "S. Ct.", "year": 1969, "opinion_index": 0 }, { "cite": "24 L.Ed. 2d 85", "category": "reporters:federal", "reporter": "L. Ed. 2d", "year": 1969, "opinion_index": 0 }, { "cite": "396 U.S. 835", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 11354535, 11354443, 11354349, 11354158, 11354067, 11354270 ], "year": 1969, "opinion_index": 0, "case_paths": [ "/us/396/0835-06", "/us/396/0835-05", "/us/396/0835-04", "/us/396/0835-02", "/us/396/0835-01", "/us/396/0835-03" ] }, { "cite": "409 F. 2d 145", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 2199835 ], "opinion_index": 0, "case_paths": [ "/f2d/409/0145-01" ] }, { "cite": "243 S.E. 2d 168", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1978, "opinion_index": 0 }, { "cite": "36 N.C. App. 67", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8551101 ], "year": 1978, "opinion_index": 0, "case_paths": [ "/nc-app/36/0067-01" ] }, { "cite": "281 S.E. 2d 166", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1981, "opinion_index": 0 }, { "cite": "53 N.C. App. 409", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8521492 ], "year": 1981, "opinion_index": 0, "case_paths": [ "/nc-app/53/0409-01" ] }, { "cite": "4 A.L.R. 2d 761", "category": "reporters:specialty", "reporter": "A.L.R. 2d", "year": 1949, "pin_cites": [ { "page": "\u00a7 4" } ], "opinion_index": 0 }, { "cite": "130 S.E. 2d 547", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1963, "opinion_index": 0 }, { "cite": "259 N.C. 354", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8560554 ], "year": 1963, "opinion_index": 0, "case_paths": [ "/nc/259/0354-01" ] }, { "cite": "141 S.E. 2d 808", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1965, "opinion_index": 0 }, { "cite": "264 N.C. 387", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8573458 ], "year": 1965, "opinion_index": 0, "case_paths": [ "/nc/264/0387-01" ] }, { "cite": "64 S.E. 2d 554", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1951, "opinion_index": 0 }, { "cite": "233 N.C. 463", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8611114 ], "year": 1951, "opinion_index": 0, "case_paths": [ "/nc/233/0463-01" ] }, { "cite": "88 S.E. 2d 333", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1955, "opinion_index": 0 }, { "cite": "242 N.C. 332", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8614735 ], "year": 1955, "opinion_index": 0, "case_paths": [ "/nc/242/0332-01" ] }, { "cite": "85 S.Ct. 147", "category": "reporters:federal", "reporter": "S. Ct.", "year": 1964, "opinion_index": 0 }, { "cite": "13 L.Ed. 2d 84", "category": "reporters:federal", "reporter": "L. Ed. 2d", "year": 1964, "opinion_index": 0 }, { "cite": "379 U.S. 15", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 11727454, 11727487 ], "year": 1964, "opinion_index": 0, "case_paths": [ "/us/379/0015-01", "/us/379/0015-02" ] }, { "cite": "52 Tenn. App. 619", "category": "reporters:state", "reporter": "Tenn. App.", "case_ids": [ 8508791 ], "weight": 2, "year": 1963, "opinion_index": 0, "case_paths": [ "/tenn-app/52/0619-01" ] }, { "cite": "99 N.E. 2d 501", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1950, "opinion_index": 0 }, { "cite": "47 Ohio Ops. 49", "category": "reporters:state", "reporter": "Ohio Op.", "year": 1950, "opinion_index": 0 }, { "cite": "363 Mo. 339", "category": "reporters:state", "reporter": "Mo.", "case_ids": [ 1361872 ], "weight": 2, "year": 1952, "opinion_index": 0, "case_paths": [ "/mo/363/0339-01" ] }, { "cite": "134 N.E. 2d 555", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1956, "opinion_index": 0 }, { "cite": "235 Ind. 505", "category": "reporters:state", "reporter": "Ind.", "case_ids": [ 1760176 ], "year": 1956, "opinion_index": 0, "case_paths": [ "/ind/235/0505-01" ] }, { "cite": "50 A.L.R. 2d 661", "category": "reporters:specialty", "reporter": "A.L.R. 2d", "year": 1955, "opinion_index": 0 }, { "cite": "125 N.E. 2d 77", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1955, "opinion_index": 0 }, { "cite": "5 Ill. 2d 135", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2704027 ], "year": 1955, "opinion_index": 0, "case_paths": [ "/ill-2d/5/0135-01" ] }, { "cite": "92 S.E. 2d 874", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1956, "opinion_index": 0 }, { "cite": "93 Ga. App. 805", "category": "reporters:state", "reporter": "Ga. App.", "case_ids": [ 1572518 ], "year": 1956, "opinion_index": 0, "case_paths": [ "/ga-app/93/0805-01" ] }, { "cite": "80 Ariz. 398", "category": "reporters:state", "reporter": "Ariz.", "case_ids": [ 650911 ], "weight": 2, "year": 1956, "opinion_index": 0, "case_paths": [ "/ariz/80/0398-01" ] }, { "cite": "63 A.L.R. 2d 1393", "category": "reporters:specialty", "reporter": "A.L.R. 2d", "weight": 2, "year": 1959, "opinion_index": 0 }, { "cite": "146 S.E. 2d 441", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1966, "opinion_index": 0 }, { "cite": "266 N.C. 458", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561149 ], "year": 1966, "opinion_index": 0, "case_paths": [ "/nc/266/0458-01" ] }, { "cite": "100 S.Ct. 1667", "category": "reporters:federal", "reporter": "S. Ct.", "year": 1980, "opinion_index": 0 }, { "cite": "64 L.Ed. 2d 250", "category": "reporters:federal", "reporter": "L. Ed. 2d", "year": 1980, "opinion_index": 0 }, { "cite": "445 U.S. 972", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 1777499, 1777677, 1777398, 1777891 ], "year": 1980, "opinion_index": 0, "case_paths": [ "/us/445/0972-03", "/us/445/0972-01", "/us/445/0972-04", "/us/445/0972-02" ] }, { "cite": "444 U.S. 490", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 11306989 ], "weight": 4, "year": 1980, "opinion_index": 0, "case_paths": [ "/us/444/0490-01" ] }, { "cite": "26 U.S.C. \u00a7 104", "category": "laws:leg_statute", "reporter": "U.S.C.", "pin_cites": [ { "page": "(a)(2)" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 759, "char_count": 13895, "ocr_confidence": 0.766, "pagerank": { "raw": 5.466727091551067e-07, "percentile": 0.9455813833161701 }, "sha256": "7b1aa4840e8535f32c3825f1c541dd4c8dee0abc8b8c7d7a8d417c79ac607f6a", "simhash": "1:0e6e1c28610ef16b", "word_count": 2390 }, "last_updated": "2023-07-14T18:20:52.636886+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges Webb and Whichard concur." ], "parties": [ "CHARLES S. SCALLON, Administrator of the Estate of Larry Alan Aiken v. PHILLIP McINTYRE HOOPER and CHARLES KENNETH CALDWELL" ], "opinions": [ { "text": "CLARK, Judge.\nPlaintiff has twice appealed from judgments in his favor. His displeasure with the favorable judgments is perhaps explained by defendants\u2019 offer of judgment in the amount of $50,001.00 entered on 21 May 1979. The offer was not accepted by the plaintiff. We cannot ignore this offer of judgment and the substantial disparity which exists between the amount offered and the amounts of the jury verdicts because plaintiff and defendant have excepted and assigned error to that part of the judgment taxing against the plaintiff the costs incurred \u201cup to and including the entry and indexing of judgment of Judge Hamilton Hobgood, setting aside the jury verdict returned in this case on October 15,1979 . . . .\u201d This provision in the judgment was based on G.S. 1A-1, Rule 68(a), which provides in pertinent part that if an offer to allow judgment is not accepted, and \u201cthe judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer.\u201d (Emphasis added.)\nThe purpose of Rule 68 is to encourage settlements and avoid protracted litigation. The offer operates to save the defendant the costs from the time of that offer if the plaintiff ultimately obtains a judgment for less than the sum offered. 7-Pt. 2 Moore\u2019s Federal Practice and Procedure \u00a7 68.06 (2d ed. 1982).\nSince in this case the offer was made and served on 21 May 1979 and the judgment was for less than the sum offered, the trial court erred in taxing costs against the plaintiff up to and including 15 October 1979. Under Rule 68(a) the judgment should have ordered the plaintiff to pay the costs incurred after 21 May 1979. However, we have determined that the judgment must be reversed and the case remanded again for a new trial. Thus, the assessment of costs by the trial court depends upon the judgment finally obtained by the plaintiff.\nThe plaintiff assigns as error the following instruction to the jury: \u201c[Y]ou\u2019re to be aware that any recovery that may be had in this case ... is not subject to income taxes either with the State or Federal Government.\u201d\nThe accuracy of the instruction is not challenged. For the federal exemption see Internal Revenue Code, \u00a7 104(a)(2), 26 U.S.C. \u00a7 104(a)(2), and Norfolk and W. Ry. Co. v. Liepelt, 444 U.S. 490, 62 L.Ed. 2d 689, 100 S.Ct. 755, reh. denied, 445 U.S. 972, 64 L.Ed. 2d 250, 100 S.Ct. 1667 (1980); and for the state exemption see G.S. 105-141(b).\nPlaintiff argues that the instruction violates the collateral source rule, recognized in North Carolina, which refuses to allow the tort-feasor credit for the reasonable value of benefits to which he has contributed nothing. Young v. R.R., 266 N.C. 458, 146 S.E. 2d 441 (1966); 22 Am. Jur. 2d Damages \u00a7 206 (1965); 5 Strong\u2019s N.C. Index 3d Damages \u00a7 10 (1977). On the other hand, defendant argues that the collateral source rule only applies to direct benefits received by an injured party in compensation for the injury, as in Young, supra, in which the court refused to allow credit on damages for medical expenses paid through an insurance policy carried by plaintiffs employer. Defendant relies on Norfolk & W. Ry. Co. v. Liepelt, supra, which held that the refusal to instruct the jury that the award would not be subject to income taxes was reversible error because otherwise the jury would calculate a wrongful death award under the assumption that any award will be taxable to the recipient.\nThe question has never been specifically addressed by the North Carolina courts, but a majority of other jurisdictions have ruled that the incidence of income tax as it relates to the damages award in wrongful death cases should not be mentioned in instructions to the jury. Annot., 63 A.L.R. 2d 1393 (1959); 1 S. Speiser, Recovery for Wrongful Death, \u00a7 8:14 (1975).\nThe majority view is not within, but is closely related to, the collateral source rule. And the reason generally given by the courts in support of the majority view differs from that given to support the collateral source rule. The reason courts adopt the majority view of refusing to take income tax consequences into consideration in awarding damages for wrongful death is that the amount of a recipient\u2019s future income tax liability is too conjectural or speculative a factor. Mitchell v. Emblade, 80 Ariz. 398, 298 P. 2d 1034 (1956); Atlantic Coast Line R. Co. v. Brown, 93 Ga. App. 805, 92 S.E. 2d 874 (1956); Hall v. Chicago & N. W. Ry. Co., 5 Ill. 2d 135, 125 N.E. 2d 77, 50 A.L.R. 2d 661 (1955); Highshew v. Kushto, 235 Ind. 505, 134 N.E. 2d 555 (1956); Dempsey v. Thompson, 363 Mo. 339, 251 S.W. 2d 42 (1952); Smith v. Pa. R. Co., 47 Ohio Ops. 49, 99 N.E. 2d 501 (1950); Dixie Feed & Seed Co. v. Byrd, 52 Tenn. App. 619, 376 S.W. 2d 745 (1963), appeal dismissed, 379 U.S. 15, 13 L.Ed. 2d 84, 85 S.Ct. 147 (1964); and see cases compiled in A.L.R. 2d Later Case Service, Supplementing 63 A.L.R. 2d 1393.\nIn North Carolina the recovery in a wrongful death case is based largely on losses suffered by particular beneficiaries. G.S. 28A-18-1 and -18-2. The purpose of damages is to restore these beneficiaries to the position they would have occupied had there been no death. It would be inequitable to give the income tax exemption instruction to the jury without allowing evidence relative to the effect that the exemption would have on the future tax liability of each of the particular beneficiaries. And consideration of the taxation issue as it relates to each beneficiary would ordinarily involve abundant and intricate evidence and jury instructions on present and future tax and nontax liabilities of each beneficiary. This would unduly complicate a wrongful death action, which is already complicated by our statute, G.S. 28-18-2, requiring many specific and some general elements to be considered in determining the present monetary value of the decedent to beneficiaries.\nWe adopt the majority view that it is reversible error for the trial court to instruct the jury that damages awarded in a wrongful death action are exempt from federal and state income taxes. We note that in the case sub judice, the tax exemption instruction was given to the jury by the trial court, apparently at the request of the defendant after all the evidence was presented and without prior notice to the plaintiff, who thus had no opportunity to present evidence relating to the effect of the income tax exemption on the various beneficiaries.\nHaving determined that the tax exemption instruction was reversible error which requires a new trial, we will determine the issues raised by those other assignments of error which may recur upon retrial, but upon finding error we do not determine whether the error would have been prejudicial.\nPlaintiff assigns as error defendant\u2019s argument to the jury, over his objection, that the defendant would be \u201clegally obligated to pay every single dollar of [the] verdict . . .\u201d and that the jury must deal \u201ccautiously and fairly with the estate and the property of Phillip Hooper.\u201d\nIn a court of justice neither the wealth of one party nor the poverty of the other should be permitted to affect the administration of the law. Lutz Industries, Inc. v. Dixie Home Stores, 242 N.C. 332, 88 S.E. 2d 333 (1955); Yost v. Hall, 233 N.C. 463, 64 S.E. 2d 554 (1951). During the trial of a case it is improper to mention insurance in either a positive or negative manner. Spivey v. Wilcox Company, 264 N.C. 387, 141 S.E. 2d 808 (1965); Electric Company v. Dennis, 259 N.C. 354, 130 S.E. 2d 547 (1963); 1 Stansbury\u2019s N.C. Evidence \u00a7 88 (Brandis rev. 1973); Annot., 4 A.L.R. 2d 761 \u00a7 4 (1949).\nWhen this argument is considered in light of the agency issue \u2014 the jury found that defendant was not the agent of the registered owner of the automobile which defendant was operating \u2014 there is an implication, and the jury could reasonably infer, that defendant had no insurance coverage and that the award of any substantial damages would constitute a significant burden on the young defendant. Plaintiff does not seek punitive damages. The wealth or poverty of the defendant is not an issue. The argument that defendant would be obligated to pay every single dollar of the damage award may be interpreted by the jury as meaning that defendant was not protected by automobile liability insurance. The accuracy of the argument is irrelevant. Insurance was not an issue, and the argument was unfair to the plaintiff and improper.\nThe defendant argues that in the first trial the court abused its discretion in granting a new trial on the issue of damages. The court found that the award of $10,000 was \u201cinadequate and contrary to the greater weight of the evidence.\u201d The defendant relies on Worthington v. Bynum and Cogdell v. Bynum, 53 N.C. App. 409, 281 S.E. 2d 166 (1981); and Howard v. Mercer, 36 N.C. App. 67, 243 S.E. 2d 168 (1978). In these two cases the Court of Appeals approved the rationale in Taylor v. Washington Terminal Co., 409 F. 2d 145 (D.C. Cir.), cert. denied, 396 U.S. 835, 24 L.Ed. 2d 85, 90 S.Ct. 93 (1969), and reversed the trial court\u2019s granting of a new trial for excessive verdict when the quantum of damages found by the jury was clearly within \u201cthe maximum limit of a reasonable range.\u201d But Bynum, supra, was appealed to the Supreme Court of North Carolina, which overruled Howard v. Mercer, supra, reversed the Court of Appeals, and reinstated the trial court\u2019s order for a new trial, 305 N.C. 478, 290 S.E. 2d 599 (1982).\nThe Bynum decision is controlling and we find no abuse of discretion in the order of the trial court setting aside the damage award and granting a new trial.\nThe other assignments of error are not discussed since they are not likely to recur upon retrial.\nThe judgment is reversed, and we order a\nNew trial.\nJudges Webb and Whichard concur.", "type": "majority", "author": "CLARK, Judge." } ], "attorneys": [ "Bailey, Dixon, Wooten, McDonald & Fountain by Wright T. Dixon, Jr., Gary S. Parsons and Carson Carmichael, III, for plaintiff appellant-appellee.", "Ragsdale & Liggett by George R. Ragsdale, Peter M. Foley, and John N. Hutson, Jr., for defendant appellees." ], "corrections": "", "head_matter": "CHARLES S. SCALLON, Administrator of the Estate of Larry Alan Aiken v. PHILLIP McINTYRE HOOPER and CHARLES KENNETH CALDWELL\nNo. 8110SC1111\n(Filed 3 August 1982)\n1. Rules of Civil Procedure \u00a7 68\u2014 offer of judgment \u2014 payment of costs\nWhere an offer of judgment was made by defendant and served on 21 May 1979 and the judgment for plaintiff was for less than the sum offered, the trial court erred in taxing costs against the plaintiff up to and including 15 October 1979, since under G.S. 1A-1, Rule 68(a) the judgment should have ordered the plaintiff to pay costs incurred only after 21 May 1979.\n2. Death g 7.7\u2014 wrongful death action \u2014 instruction on exemption of damages from taxation\nIt is reversible error for the trial court to instruct the jury that damages awarded in a wrongful death action are exempt from federal and state income taxes.\n3. Insurance \u00a7 104; Trial \u00a7 11\u2014 jury argument concerning insurance\nIn a wrongful death action, defense counsel\u2019s argument to the jury that defendant would be \u201clegally obligated to pay every single dollar of [the] verdict\u201d and that the jury must deal \u201ccautiously and fairly with the estate and the property of\u2019 defendant was improper since it could have been interpreted by the jury as meaning that defendant was not protected by automobile liability insurance.\n4. Rules of Civil Procedure 8 59; Trial \u00a7 52.1\u2014 new trial on issue of damages \u2014 no abuse of discretion\nThe trial court in a wrongful death action did not abuse its discretion in setting aside a verdict for plaintiff of $10,000 and in granting a new trial on the issue of damages on the ground that the verdict was \u201cinadequate and contrary to the greater weight of the evidence.\u201d\nAPPEAL by plaintiff and defendants from Godwin, Judge. Judgment entered 11 May 1981 in Superior Court, Wake County. Heard in the Court of Appeals 28 May 1982.\nPlaintiff-administrator instituted this action to recover damages for the alleged wrongful death of Larry Alan Aiken, who died 1 July 1976, at the age of 22, as the result of a collision on 30 June 1976 in Long Beach, North Carolina.\nAt the time of the collision decedent was employed as a Junior Engineer by Soils and Materials Engineers, Inc. He was operating a pickup truck owned by his employer. Defendant Hooper, aged 17, was operating a 1975 Pontiac convertible, registered in the name of Charles K. Caldwell, but in the possession of his estranged wife, Janet A. Caldwell.\nIt was stipulated that the negligence of defendant Hooper was the sole proximate cause of the death of plaintiffs intestate, and that the Pontiac operated by defendant Hooper was registered in the name of defendant Charles K. Caldwell.\nIn October 1979 at trial limited to the issues of agency and damages, the jury answered the agency issue in favor of defendant Caldwell and awarded plaintiff $1,000 for pain and suffering and $10,000 for the wrongful death. On motion of plaintiff the trial court set aside the $10,000 verdict for wrongful death and granted a new trial on that issue only, denying the motion to set aside the $1,000 verdict for pain and suffering. Plaintiff appealed, and this Court ordered a new trial for error related to the agency issue, reported in 49 N.C. App. 113, 270 S.E. 2d 496 (1980), disc, rev. denied, 301 N.C. 722, 276 S.E. 2d 284 (1981).\nAt the second trial in April 1981 the jury again returned a verdict in favor of defendant Caldwell on the agency issue and awarded plaintiff $17,500 for the wrongful death. After the plaintiff gave notice of appeal, defendants gave notice of appeal pursuant to Rule 3, Rules of Appellate Procedure, and assigned as error: (1) the granting by the trial court of plaintiffs motion for a new trial on the issue of damages after the first trial and (2) the taxation of court costs against the defendants.\nBailey, Dixon, Wooten, McDonald & Fountain by Wright T. Dixon, Jr., Gary S. Parsons and Carson Carmichael, III, for plaintiff appellant-appellee.\nRagsdale & Liggett by George R. Ragsdale, Peter M. Foley, and John N. Hutson, Jr., for defendant appellees." }, "file_name": "0551-01", "first_page_order": 583, "last_page_order": 589 }