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.

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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, noneconomic losses such as human suffering, love, emotional feelings, or consortium that may have been suffered by plaintiff.

Eckerd / Law Firm

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Background Facts and Assumptions 1) Plaintiff: 2) Date of birth: 3) Date of injury: 4) Residence: 5) Prior health: 6) Education: 7) Spouse: 8) Children: Daniel Eckerd, male July 3, 1963 June 2, 1999 New York good, prior knee surgery less than high school Sarah (dob: 5/15/69) 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.]

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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.] Hours Worked Per Year 1,647 1,483 1,536 1,638 1,422 Hours Worked Per Year 1,455 1,886 2,153 1,432 152*

Year 1990 1991 1992 1993 1994

Year 1995 1996 1997 1998 1999

* 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

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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.]
Welfare Fund (Supplemental Benefit Pay) $1,996 2,141 3,992 6,721 2,586 418

Year 1995 1996 1997 1998 1999* 2000

W-2 Earnings $49,590 55,971 67,473 55,115 8,072 0

Total Earnings $51,586 58,112 71,465 61,836 10,658 418

Unemployment Compensation $600 2,100 0 1,825 6,570 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

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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.]
Conversion Factor to 2000 Dollars (2) 1.1578 1.1179 1.0848 1.0481 Actual Gross Earnings (Earnings & Supp. Pay) (3) $58,112 71,465 61,836 41,522 average:

Year (1) 1996 1997 1998 1999 2000

Gross Earnings (2000 Dollars) [(2) x (3)] (4) $67,282 79,890 67,081 43,520 $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).

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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, fulltime, 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

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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.

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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: Gross Earnings [@ 3.5%] $64,443 66,699 69,033 71,449 73,950 76,538

Year 2000 2001 2002 2003 2004 2005

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.

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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: Earnings Gross Earnings Base x Worklife Adjustment = Worklife-adjusted Earnings x (1 + 10%, 0% fringe benefits) = Fringe Adjusted Base x (1 - 10%, 0% job maintenance expenses) = Net Earnings Factor 1.00 0.7781 0.7781 1.10 0.8559 0.90 0.7781 Unemployment Benefits 1.00 0.7781 0.7781 1.00 0.7781 1.00 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.

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Earnings losses through the end of September 2005 are calculated as follows: Earnings Year (1) 1999.56 2000 2001 2002 2003 2004 2005.75 Gross [@ 3.5%] (2) $30,864 * 64,443 66,699 69,033 71,449 73,950 57,404 Net [(2) x 77.81%] (3) $24,015 50,143 51,898 53,715 55,595 57,541 44,666 Unemployment Benefits Gross (4) $ 0^ Net [(4) x 77.81%] (5) $ 0 880 880 880 880 880 660 total:
* assumed gross earnings from date of injury through the end of 1999 ^ no unemployment compensation loss assumed in 1999

Actual Income (6)

Annual Loss [(3) + (5) - (6)] (7) $24,015

1,131 1,131 1,131 1,131 1,131 848

$418

50,605 52,778 54,595 56,475 58,421 45,326 $342,215

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

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Application of the preceding information yields a total value of plaintiff’s future net earnings loss, calculated as follows: Earnings Year (1) 2005.25 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025.53 Gross [@ 3.5%] (2) $19,135 79,217 81,990 84,860 87,830 90,904 94,085 97,378 100,787 104,314 107,965 111,744 115,655 119,703 123,892 128,229 132,717 137,362 142,169 147,145 80,717 Net [(2) x 77.81%] (3) $14,889 61,639 63,796 66,029 68,340 70,732 73,208 75,770 78,422 81,167 84,008 86,948 89,991 93,141 96,401 99,775 103,267 106,881 110,622 114,494 62,806 Unemployment Benefits Gross [@ 3.5%] (4) $ 283 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 599 total: Net [(4) x 77.81%] (5) $220 880 880 880 880 880 880 880 880 880 880 880 880 880 880 880 880 880 880 880 466 Annual Loss [(3) + (5)] (6) $15,109 62,519 64,676 66,909 69,220 71,612 74,088 76,650 79,302 82,047 84,888 87,828 90,871 94,021 97,281 100,655 104,147 107,761 111,502 115,374 63,272 $1,719,731

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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:

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Time Period pre-2004 1/1/04-12/31/05 1/1/06-7/3/25

Credits Earned 39 107 175

Benefit Rate $ 6.00 20.00 29.72 monthly benefit

Benefit Earned $ 234 2,140 5,201 $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).
Projected Normal Retirement Single Annuity (2) Actual Disability Pension Single Annuity (3) $14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 Annual Loss/(Gain) [(2) - (3)] (4) ($14,328) (14,328) (14,328) (14,328) (14,328) (14,328) (14,328) (14,328) (14,328) (14,328) (14,328) (14,328) (14,328) (14,328) (14,328)

Year (1) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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Year (1) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040.25

Projected Normal Retirement Single Annuity (2)

Actual Disability Pension Single Annuity (3) 14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328

Annual Loss/(Gain) [(2) - (3)] (4) (14,328) (14,328) (14,328) (14,328) (14,328) (14,328) (14,328) (14,328) (14,328) (14,328) 28,395 76,572 76,572 76,572 76,572 76,572 76,572 76,572 76,572 76,572 76,572 76,572 76,572 76,572 76,572 19,143 $761,346

$42,723 90,900 90,900 90,900 90,900 90,900 90,900 90,900 90,900 90,900 90,900 90,900 90,900 90,900 90,900 22,725

14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 14,328 3,582 total:

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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

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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:
Age of Youngest Child (2) < 6 years 6 - 11 years 6 - 11 years > 11 years > 11 years n/a n/a n/a Annual Number of Hours (4) 355 344 291 333 269 298 274 228

Number Children (1) 3 3 2 2 1 0 0 0

Age of Plaintiff (3) < 65 years < 65 years < 65 years < 65 years < 65 years < 65 years 65 - 75 years > 75 years

Applicable Time Period (5) 6/2/99 - 2/3/04 2/4/04 - 9/13/05 9/14/05 - 2/3/09 2/4/09 - 10/10/13 10/11/13 - 2/3/16 2/4/16 - 7/2/28 7/3/28 - 7/2/38 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.

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The pecuniary value of the household services that would have been provided through the present time is provided in the following table:
Annual Hours 199 355 355 355 355 345 258 total: $ Annual Value 2,598 4,828 5,027 5,169 5,311 5,270 4,017 $32,219

Year 1999.56 2000 2001 2002 2003 2004 2005.75

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)

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Year 2005.25 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040.25

Annual Hours 73 291 291 291 328 333 333 333 320 269 269 295 298 298 298 298 298 298 298 298 298 298 298 287 274 274 274 274 274 274 274 274 274 252 228 57 total:

Annual Value [@ 4%] $ 1,133 4,712 4,901 5,097 5,974 6,308 6,560 6,823 6,823 5,961 6,200 7,059 7,429 7,726 8,035 8,356 8,690 9,038 9,400 9,775 10,167 10,573 10,996 11,003 10,936 11,373 11,828 12,301 12,793 13,305 13,837 14,390 14,966 14,337 13,470 3,502 $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 Household Services Past Years [$32,219] Future Years [$325,775] Total Loss $ Assumed Range of Loss 50% 16,110 162,887 $ 178,997 $ 60% 19,332 195,465 $ 214,797 $ 70% 22,554 228,042 $ 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%* $ 342,215 1,719,731 761,346 16,110 162,887 $ 3,002,289 $ 60%* 342,215 1,719,731 761,346 19,332 195,465 $ 3,038,089 $ 70%* 342,215 1,719,731 761,346 22,554 228,042 $ 3,073,888 Components of Loss net earnings in past years net earnings in future years pension income *household services in past years *household services in future years 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.]

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