Imagine this shocking scenario: A dad is driving to pick up his kids from their friends’ house after school. On his way to the house, a drunk driver plows into the dad’s car, severely injuring the dad. An ambulance rushes to the scene and takes the dad to the hospital. His condition is critical; the man is hemorrhaging and has multiple fractures and he has fallen into a coma. His wife later comes to the hospital to find her husband in bad shape. Three days later, the dad dies. After a grieving period, the mom decides to sue the driver of the other car for wrongful death.
Alabama law defines wrongful death as the “wrongful act, omission, or negligence causing death” of another. The deceased’s estate, through his or her personal representative, can bring the suit.
The law also provides that a wrongful death claim may be brought “though there has not been prosecution, conviction, or acquittal of the defendant” for the “wrongful act, omission, or negligence” that caused the death. This means that a party may bring a wrongful death suit even though there is no criminal charges pending against a defendant.
Alabama wrongful death law is unique in that a plaintiff may only recover punitive damages, but not compensatory damages, for wrongful death. In the above example, say the dad earns $80,000 per year. In that instance, a jury would not reward the decedent’s estate $80,000 per year for lost future wages and mental anguish prior to death. Those damages would be compensatory, or an award that compensates for what is lost. Instead, the estate can ask for punitive damages, which are damages made to punish the defendant.
Punitive damages in civil cases are defined in Section 908 of the Restatement (Second) of Torts as those damages awarded “against a person to punish him for his outrageous conduct and to deter him and others like him from similar conduct in the future.”
Generally, when someone recovers punitive damages for wrongful death, such proceeds are subject to the US Tax Code. However, in Alabama, proceeds from wrongful death are not IRS taxation
Punitive damages are taxable by the IRS in most situations. However, in wrongful death claims in Alabama, they are not taxable, and there is a specific exemption in the Internal Revenue Code for that situation which applies only to Alabama.
When to File Suit
When to file a lawsuit is an issue in Alabama. If someone is seriously injured in an accident and is in a comma or lives a few days, weeks, months, then it is prudent to file a lawsuit before death to recover compensatory damages for the time the person remained alive. Once the person passes, damages are limited to punitive damages, and you prefer to have both in your case. So, if death is imminent, file the lawsuit right away.
If a loved one passes due to an accident, call a law firm that will fight on your behalf. For wrongful death, contact the law firm of Parkman White, LLP.