REDACTED

AN APPRAISAL OF ECONOMIC LOSS RESULTING FROM THE DEATH OF DANIEL JONES

Frank D. Tinari, Ph.D.

TINARI ECONOMICS, INC. 220 South Orange Avenue Suite 203 Livingston, NJ 07039 973 / 992-1800 phone 973 / 992-0023 fax www.TinariEconomics.com

March 18, 2005

TABLE OF CONTENTS

Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Purpose of Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Opinion of Economic Damages . . . . . . . . . . . . . . . . . . . . 2 Background Facts and Assumptions . . . . . . . . . . . . . . . . 3 Components of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Net Earnings in Past Years . . . . . . . . . . . . . . . . . . . . . . . 7 Net Earnings in Future Years . . . . . . . . . . . . . . . . . . . . . 10 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 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 a report appraising the value of economic damages as a result of the death of Daniel Jones. Background facts regarding the decedent and his family were provided in a packet of documents pursuant to this matter. These facts as well as additional information gathered from various published documents and utilized in developing this appraisal 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 losses in the case of Daniel Jones.

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 projected losses resulting from the death of Daniel Jones amounts to
SEVEN HUNDRED THOUSAND, THREE HUNDRED FORTY-EIGHT DOLLARS [ $700,348 ]

This amount 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 Mr. Jones spouse or other family members.

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Background Facts and Assumptions 1) Decedent: 2) Date of birth: 3) Date of death: 4) Residence: 5) Education level: 6) Spouse: 7) Health of spouse: 8) Children: Daniel Jones; male July 24, 1961 September 15, 2004 Brooklyn, New York 10 th grade Laura (dob: 9/14/57) assumed good Sarah (dob: 8/18/85) Jennifer (dob: 11/11/89) Jonathan (dob: 10/29/91, handicapped at birth) Daniel, Jr. (dob: 7/12/94)

9) Life expectancy: as of the date of death, males of Mr. Jones age (43.2 years) live, on average, an additional 33.5 years. [SOURCE: New York State Courts, Pattern Jury Instructions, 2004, Appendix A. Based on National Center for Health Statistics, Vital Statistics of the United States , Volume II, Mortality, Part A, Section 6, as published in the National Vital Statistics Reports, Vol. 47, No. 28 (December 13,1999), by interpolation.] Therefore, males of decedents age have an expected total life span averaging 76.7 years, implying a statistical date of death of March 26, 2038. 10) Statistical retirement age: males of Mr. Jones age (43.2 years) and level of education have 18.58 years to 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 61.78 years, occurring on April 25, 2023. 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 September 15, 2004, males of Mr. Jones age/education/labor-force-activity statistical cohort average 15.04 years of remaining labor force activity. [SOURCE: James Ciecka, Thomas Donley, and Jerry Goldman, A Markov Process Model of Work-Life Expectancies by Educational Attainment Based on Labor Market Activity in 1997-98", Journal of Legal Economics, Volume 10, Number 3, Winter 2000-1, pp. 8-20, by interpolation.]

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12) Worklife-to-retirement ratio: the number of years from September 15, 2004, until Mr. Jones statistical retirement date (18.58 years in this case) exceeds the number of expected remaining working years (15.04 in this case). Thus arithmetically, the number of years of worklife for this statistical cohort comprises 80.94% of the total remaining number of years until retirement. 13) Life expectancy of decedents spouse: as of September 15, 2004, females of Mrs. Jones age (47.06 years) live, on average, an additional 34.4 years. [SOURCE: New York State Courts, Pattern Jury Instructions, 2004, Appendix A. Based on National Center for Health Statistics, Vital Statistics of the United States, Volume II, Mortality, Part A, Section 6, as published in the National Vital Statistics Reports, Vol. 47, No. 28 (December 13,1999), by interpolation.] Therefore, females in Mrs. Jones age-cohort live to an average age of 81.46 years, implying a statistical date of death of February 19, 2039. 14) Occupation and employment: at the time of his death, decedent was employed as a union maintenance worker for a Company in New York, New York. Decedent began employment with the Company around October 2000 and became a member of Local 32B-32J six months later. [SOURCES: Oral Examination of Daniel Jones, dated February 26, 2004, pp. 97 & 98, Plaintiffs Answers To Defendants Fourth Amended Standard Set Of Interrogatories And Request For Production Of Documents, and decedents paystubs, various dates.] In or around October 2003, decedent began to experience problems in breathing. He was later diagnosed as having mesothelioma. On October 8, 2003, he stopped working and began collecting a weekly disability payment of $170. [SOURCES: Oral Examination of Daniel Jones, dated June 15, 2004, p. 46, and Answers To Defendants Interrogatories, ibid.] 15) Earnings history and income: [SOURCES: decedents federal income tax returns, and W-2 Wage and Tax Statements.]

(see table on following page)

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Year 2001 2002 2003* 2004**

W-2 Earnings $ 32,471 32,216 32,182^ n/a

* last date at work: October 8 ^ annualized at $41,795 ** date of death: September 15

16) Earnings base: to establish decedents earnings base, we take an average of his actual earnings in the years 2001, 2002, and 2003 (annualized), expressed in 2004 dollars. This is accomplished by first converting these earnings amounts to constant 2004 dollars as shown in the table below. The conversion factor applied is based upon changes in the wages and salaries of private industry, unionized blue-collar workers from 2001 through 2004. [SOURCE: Employment Cost Index, wages and salaries, by industry, occupation, region or union status group, not seasonally adjusted, U.S. Department of Labor, Bureau of Labor S t a ti s t i c s , h t t p : / / d a ta .b l s .g o v / P D Q / s e r v l e t/ S u r v e yO u t p u tS erv le t;js e s s io n i d = f030e45842752$3F$3F$, Series ID: ECU24022I.]
Actual Gross Earnings (2) $32,471 32,216 41,795* Conversion Factor to 2004 Dollars (3) 1.0864 1.0508 1.0247 average: Gross Earnings (2004 Dollars) [(2) x (3)] (4) $35,276 33,853 42,827 $37,319

Year (1) 2001 2002 2003 2004

* annualized

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Decedents earnings base is calculated at $37,319 in 2004 dollars, using the average of his earnings over the years 2001 through 2003. 17) Other income: as noted previously, decedent was receiving $170 per week in disability payments prior to his death. For purposes of this report, we assume that these benefits began at the time decedent stopped work (October 8, 2003) and continued through his date of death. Pending legal interpretation, we do not apply this stream of payments as an offset. 18) Fringe benefits: as a member of Local 32B-32J (Service Employees International Union, AFL-CIO), Mr. Jones received a variety of fringe benefits. These included health insurance (family coverage), pension fund (employer contribution of $43.75 per week), and supplementary retirement and savings fund (SRSF) (employer contribution of $13.00 per week). All employer contributions are in 2004 values. [SOURCE: 2002 Commercial Building Agreement between Local 32B-32J Service Employees International Union, AFLCIO, and The Realty Advisory Board on Labor Relations, Inc. Effective January 1, 2002 to December 31, 2004.] It should be noted that employer-funded annuity (SRSF) contributions are typically paid directly into the union members account. In the present matter, we value the employer contributions at 2% of earnings. In contrast, the employer-funded pension contributions do not correlate to a direct benefit to the union member. Rather, a union members pension benefit is usually derived from a defined benefit formula. At the present time, we do not have sufficient information to calculate the value of Mr. Jones pension as a stream of future pension payments. Instead, we assign a value of 6% of earnings as being representative of the pension benefit. This estimate is based upon an employer contribution of $43.75 per week. Given the prospective nature of insurance, the value of Mr. Jones fringe benefits in past years is limited to out-of-pocket medical expenses (none reported) as well as the employer contribution to the pension and SRSF funds (8% total). It has been reported that Mrs. Jones and children are not receiving any benefits as a result of decedents death. [SOURCE: Laura Jones deposition, dated December 23, 2004, p. 175.] Given the Jones family profile, we estimate the annual cost of medical insurance at $10,000 based upon replacement costs. [SOURCE: https://www.ehealthinsurance.com/ehi/Quote.fs.] Under the Collective Agreement, the employers required annual contribution to the health fund is set at $6,735 for 2004. [SOURCE: Commercial Building Agreement, op. cit.] Thus, we value the loss of the health fund at 19% of earnings using the $6,735 cost figure. With the inclusion of health insurance in future years, the overall value of Mr. Jones lost fringe benefits is estimated at

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approximately 27% of earnings. If additional information becomes available regarding the union pension plan and the SRSF fund, we reserve the right to issue a supplementary report valuing pension income as a separate component of loss upon request. 19) Service losses: pursuant to New York law, pecuniary injuries do not include loss of companionship of a deceased spouse. However, they do include the loss of parental nurture and care, and loss of physical, intellectual training by a parent. Furthermore, proof that the decedent performed household service duties for his spouse and provided love, guidance and advice to their children is sufficient proof to sustain damages. [SOURCE: New York Pattern Jury Instruction 2:320, pp. 1146-1148, 1158.] With the exception of the previously provided set of calculations for the lifetime cost of home health aide services for Alexis Jones, we have not been requested to value service losses in this matter. Should the necessary information be provided and a request made, we could issue a supplementary report.

Components of Loss The pecuniary value of loss resulting from the death of Mr. Jones is estimated by consideration of the following components of loss: 1. net earnings in past years 2. net earnings in future years Each of these components is analyzed separately in the following sections of this appraisal report.

Loss of Net Earnings in Past Years This loss component consists of the net income which Mrs. Jones has lost because of the untimely death of her husband. As stated in the Background Facts and Assumptions section of this report, decedents earnings potential is established at $37,319 in 2004 dollars. Based on historical rates of hourly pay from the Collective Bargaining Agreements, we utilize an annual growth rate of 3.2% in this report. [SOURCE: 2002 Commercial Building Agreement between Local 32B-32J Service Employees International Union, AFL-CIO, and The Realty Advisory Board on Labor Relations, Inc. Effective January 1, 2002 to December 31, 2004.]

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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 80.94% of the total remaining number of years until retirement for persons of decedent's statistical cohort. Another adjustment to gross earnings typically 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. The unemployment adjustment factor is calculated by first considering a time period in the immediate past that is comparable to the number of years until the projected retirement date. Between 1986 and 2004, males in decedents age cohort experienced an unemployment rate averaging 4% per annum. [SOURCE: http://data.bls.gov/cgi-bin/srgate.] Moreover, since state unemployment compensation benefits serve to replace a portion of most workers' lost earnings during periods of unemployment, the percentage is adjusted downward from 4% to 3%. Thus, a downward adjustment of the estimated gross earnings losses is made using that percentage to represent the probability of unemployment (and, hence, lost earnings) during the remaining years of labor force activity. Another adjustment takes into account the value of fringe benefits. Loss of fringe benefits in past years is limited to out-of-pocket medical expenses (none were reported), the SRSF and the pension (8% total). In future years, we value fringe benefits at 27% based upon health insurance (19%), the SRSF (2%), and pension (6%). A final adjustment entails subtraction of the personal consumption expenditures of decedent, which represent monies that would not have been available, in any case, to the other members of the Jones family. Personal consumption expenditures include such things as meals, transportation, job maintenance expenses, and other goods and services persons provide for themselves. In this appraisal, an average consumption adjustment rate of twentyfive (25) percent is applied to decedent's adjusted earnings, and thirty (30) percent is applied after the youngest child turns age 18.

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Algebraically, the preceding adjustments are summarized as follows:

past years 1.0000 0.8094 0.8094 0.9700 0.7851 1.0800 0.8479 0.7500 0.6359 through 7/12/2012 1.0000 0.8094 0.8094 0.9700 0.7851 1.2700 0.9971 0.7500 0.7478 thereafter 1.0000 0.8094 0.8094 0.9700 0.7851 1.2700 0.9971 0.7000 0.6980

Gross Earnings Base x worklife adjustment = Worklife-Adjusted Earnings x (1 - 3% unemployment probability) = Adjusted Earnings Base x (1 + 8%, 27%, 27% fringe benefits) = Fringe-Adjusted Earnings Base x (1 - 25%, 25% , 30% personal consumption) = Net Earnings Factor (NEF)

These calculations indicate that the net income loss amounts to 63.59% of decedents anticipated gross earnings through the present time at the end of April 2005. In the years that follow, net earnings amount to 74.78% through July 12, 2012, and 69.8% through decedents projected retirement date. Given decedents last date at work was October 8, 2003, we calculate the losses beginning then and continue them through his projected date of retirement. Application of the preceding information yields a net income loss through the present time calculated as follows:
Estimated Gross Earnings [ @ 3.2% ] (2) $ 9,613* 37,319 9,628 total:

Year (1) 2003.23 2004 2005.25

Estimated Net Earnings [(2) x 63.59%] (3) $ 6,113 23,731 6,123 $ 35,967

* annualized 2003 earnings less actual 2003 actual earnings

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Loss of Net Earnings in Future Years Losses in future years are calculated beginning April 1, 2005, and extend to Mr. Jones projected date of retirement, April 25, 2023. To project his future earnings, we again apply an annual growth rate of 3.2%. Decedents year 2005 gross earnings base is projected at $38,513. It is our understanding that New York court rules stipulate that future losses are not to be discounted by the economist. Therefore, projected losses are not discounted in this appraisal report. Our calculations are as follows:
Projected Gross Earnings [@ 3.2%] (2) $ 28,885 39,745 41,017 42,330 43,684 45,082 46,525 48,014 49,550 51,136 52,772 54,461 56,204 58,002 59,858 61,774 63,750 65,790 21,048 total: Projected Net Earnings [(2) x NEF^] (3) $ 21,600 29,722 30,673 31,654 32,667 33,713 34,791 34,709 34,586 35,693 36,835 38,014 39,230 40,485 41,781 43,118 44,498 45,922 14,691 $ 664,381

Time Period (1) 2005.75 2006 2007 2008 2009 2010 2011 2012* 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023.31

^ NEF=74.78% through 71/2/12; 69.8% thereafter * younger child reaches age 18 on July 12

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Summary We now combine the previously calculated losses in this matter to arrive at a total loss value, as follows: Total $ 35,967 664,381 $ 700,348 Loss Component net earnings in past years net earnings in future years total value of loss

It should be noted that the total loss figure represents total cumulative losses 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 to 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.]