Stephens v. C.I.T. Group/Equipment Financing, Inc. ( 1992 )


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  •                    UNITED STATES COURT OF APPEALS
    FOR THE FIFTH CIRCUIT
    NO.   90-5646
    H. RON STEPHENS,
    Plaintiff-Appellee,
    versus
    THE C.I.T. GROUP/
    EQUIPMENT FINANCING, INC.
    Defendant-Appellant.
    Appeal from the United States District Court
    for the Western District of Texas
    (March 23, 1992)
    Before THORNBERRY, GARWOOD, and DAVIS, Circuit Judges.
    THORNBERRY, Circuit Judge:
    In this age discrimination case, the district court entered
    judgment on the jury's verdict awarding the plaintiff-appellee, Ron
    Stephens, $135,500 in damages, and the district court awarded
    Stephens an equal amount in liquidated damages pursuant to 29
    U.S.C. § 216(b).     The defendant-appellant, CIT Group/Equipment
    Financing, Inc. (CIT), appeals the district court's denial of its
    motion for judgment notwithstanding the verdict (judgment n.o.v.)
    and motion for new trial.
    Background
    Stephens began working for CIT as a senior credit analyst in
    April 1975 at an annual salary of $14,100.    Stephens was promoted
    to the position of District Sales Manager (DSM), a sales position,
    in November 1975 with an annual salary of $15,600.         Stephens
    received many salary increases as a DSM; his final annual salary as
    a DSM was $23,500.
    In December 1978, CIT opened a new division in San Antonio,
    Texas and appointed Stephens to the position of Division Head of
    the new division.     Stephens's annual salary as Division Head
    started at $25,300.   By 1985, Stephens's annual salary as Division
    Head was $53,500.     As a Division Head of CIT, Stephens was
    responsible for overseeing the operations of the San Antonio
    Division, including supervision of the Division Operations Manager
    (DOM), the DSM's, and other staff in the office.
    Stephens was demoted from Division Head to DSM on August 27,
    1985.   Stephens testified that he was not given any reason for the
    demotion other than the fact that his supervisors, the Regional
    Manager and the Executive Vice-President of the Western Division,
    wanted a younger man in the position.     On the other hand, CIT's
    witnesses testified that Stephens was demoted due to his inability
    to work with the DOM.      Stephens also testified that when the
    Regional Manager and the Executive Vice-President of the Western
    Division informed him of the demotion to DSM, they told him that
    his salary would remain the same and that he would be paid bonuses
    through September as if he were a Division Head.    They also asked
    him to help train the new Division Head.     Yet, a few days later,
    Stephens was informed that his salary would be reduced to $43,200,
    the highest salary allowable for a DSM under the company's policy.
    Stephens     resigned      from       CIT    on    September       30, 1985,
    approximately thirty days after the demotion, and immediately went
    to work for a competing company, Credit Alliance.                    On April 10,
    1987, Stephens filed an age discrimination complaint with the Equal
    Employment Opportunity Commission ("E.E.O.C.").               On July 29, 1987,
    Stephens filed a complaint in federal district court alleging that
    CIT had constructively discharged him based on his age in violation
    of the Age Discrimination in Employment Act, 29 U.S.C. § 626(b),
    and the Fair Labor Standards Act, 29 U.S.C § 216(b).                      Stephens
    requested relief in the form of reinstatement, payment of back
    wages and other unpaid benefits, and attorney's fees.
    The case was tried to a jury.           In answers to special issues,
    the jury found that CIT constructively discharged Stephens, that
    Stephens'   age   was   a   determining     factor      in   CIT's    decision   to
    constructively    discharge     him,       that   CIT    acted       willfully   in
    constructively discharging Stephens, and that Stephens's damages
    amounted to $135,500.       Pursuant to 29 U.S.C. § 216, the district
    court awarded an equal amount in liquidated damages based on CIT's
    willful discrimination.       The court also ordered CIT to reinstate
    Stephens to his former position or an equivalent position.
    CIT moved for judgment notwithstanding the verdict or for a
    new trial. The district court denied CIT's motion and also awarded
    Stephens attorney's fees in the amount of $49,875.               On appeal, CIT
    asserts that the district court abused its discretion in denying
    3
    its motion for judgment n.o.v. or new trial.               First, CIT argues
    that it was entitled to judgment n.o.v. because the evidence does
    not support a finding of constructive discharge.                   Second, CIT
    contends that the damage award is excessive and that the district
    court abused its discretion by not granting a remittitur or a new
    trial on damages.    We affirm the jury's finding that Stephens was
    constructively discharged but reverse the damage award and remand
    for a new trial on damages.
    CIT also raises the defense of statute of limitations in its
    reply   brief.   For    reasons    discussed      below,     the   statute   of
    limitations defense is not properly before this court.
    II.   Analysis
    A.   The Statute of Limitations
    CIT argues in its reply brief that Stephens's claims are time
    barred because   Stephens    failed       to   file   a   complaint   with   the
    E.E.O.C. within the time period required by the Age Discrimination
    in Employment Act.     CIT correctly argues that the notice or filing
    requirement contained in 29 U.S.C. § 626(d)(2) "is a condition
    precedent-- . . . in the nature of a statute of limitations--" to
    filing suit in federal district court.          Coke v. General Adjustment
    Bureau, Inc., 
    640 F.2d 584
    , 595 (5th Cir. 1981) (en banc) (holding
    that the filing requirement is not a jurisdictional requirement but
    a condition precedent or statute of limitations which can be
    waived).   However, this court cannot properly consider the statute
    of limitations defense because CIT failed to raise it in their
    4
    original brief. "[An] appellant cannot raise new issues in a reply
    brief; he can only respond to arguments raised for the first time
    in the appellee's brief."            16 C. WRIGHT, A. MILLER, E. COOPER & E.
    GREESMAN, FEDERAL PRACTICE   AND   PROCEDURE § 3974 at 428 (1977); see also
    Light v. Blue Cross and Blue Shield of Alabama, 
    790 F.2d 1247
    , 1248
    n.2 (5th Cir. 1986) (finding that appellants waived review of an
    issue by failing to raise it in their original brief); Peteet v.
    Dow Chemical Co., 
    868 F.2d 1428
    , 1437 (5th Cir.) ("We may not
    review arguments raised for the first time in the appellant's reply
    brief."), cert. denied sub nom., Dow Chemical Co. v. Greenhill, 
    493 U.S. 935
    , 
    110 S. Ct. 328
    (1989).
    Additionally, CIT waived the defense of statute of limitations
    at the trial court level.           In fact, aside from urging a general
    statute of limitations defense in its answer, CIT never mentioned
    limitations in       the trial court proceedings:             the statute of
    limitations defense was not listed as an issue in the pretrial
    conference or order; CIT did not move for summary judgment based on
    the statute of limitations defense; CIT did not present evidence on
    the   issue   at   trial;    and    CIT   did   not   raise   the   statute   of
    limitations defense in its motion for judgment n.o.v. or motion for
    new trial.    By failing to assert the defense in the trial court
    proceedings, CIT waived the statute of limitations defense.
    B.    The Constructive Discharge
    In order to prove a prima facie case of age discrimination, a
    plaintiff must show, among other things, that he was discharged
    5
    from his position.           Even if the plaintiff resigned from the
    position,    he     can   satisfy     the     discharge     element   of    an   age
    discrimination       claim   by     proving     that   he    was   constructively
    discharged.       Junior v. Texaco, 
    688 F.2d 377
    , 378 (5th Cir. 1982).
    This circuit has held that a constructive discharge occurs when the
    ". . . working conditions are so difficult or unpleasant that a
    reasonable person in the employee's shoes would feel compelled to
    resign."     Bourque v. Powell Electrical Mfg. Co., 
    617 F.2d 61
    , 65
    (5th Cir. 1980) (quoting Alicea Rosado v. Garcia Santiago, 
    562 F.2d 114
    , 119 (1st Cir. 1977)).             The jury found that Stephens was
    constructively discharged.          CIT argues that the evidence does not
    support a finding of constructive discharge and that the district
    court erred in denying its motion for judgment n.o.v. on the issue
    of constructive discharge.
    In reviewing the district court's denial of CIT's motion for
    judgment n.o.v., we must consider all of the evidence in the light
    most favorable and with all reasonable inferences to Stephens.
    Jett v. Dallas Indep. School Dist., 
    798 F.2d 748
    , 755 (5th Cir.
    1986) modified on other grounds, 
    109 S. Ct. 2702
    (1989).                    "Factual
    findings in employment discrimination cases are reviewed on the
    same standard as in other cases.             Consequently, the Court will not
    overturn the jury verdict unless it is not supported by substantial
    evidence."     Guthrie v. J.C. Penney Co., Inc., 
    803 F.2d 202
    , 207
    (5th Cir. 1986) (citing Boeing Co. v. Shipman, 
    411 F.2d 365
    , 374-75
    (5th Cir. 1969) (en banc)).
    6
    CIT asserts that Stephens did not face working conditions that
    would compel a reasonable employee to quit.      Upon a careful review
    of the evidence under the proper standard, however, we think
    otherwise.     A reasonable juror could find that the cumulative
    effect of CIT's actions made the working conditions so intolerable
    that a reasonable person would have felt compelled to resign.
    Therefore, the district court did not err in denying CIT's motion
    for judgment n.o.v..
    The evidence shows that Stephens was demoted from Division
    Head to DSM, a sales position, and was asked to help train his
    young successor, Roy Keller. (Tr. at 45-46).       As a DSM he had no
    supervisory duties, and in fact had to report to Keller.      (Tr. at
    49).   He was asked to explain his demotion and introduce Keller as
    the new boss to the division's biggest client, Holt Machinery.
    (Tr. at 62-63).    He was first told that he alone would handle the
    Holt Machinery account, but was later informed that "ultimately,
    [Keller] is Division Manager and will make the decisions on how the
    account will be handled."       (Pl.'s Ex. 4).     Stephens, who had
    formerly supervised the entire San Antonio Division, was also
    informed that he "was permitted to assist the Credit Department as
    needed" but that "whenever possible, [he] must have a member of the
    credit department along as designated by Division Management."
    (Pl.'s Ex. 4).    On top of all this, his salary was reduced from
    $53,500 to $43,200 after he had been told that there would be no
    reduction in his salary.      Finally, each time CIT imposed a new
    restraint on Stephens or cut his salary or responsibility, Keller
    7
    asked him whether he was going to quit his job. (Tr. at 56, 71).
    The combination of the demotion, the continuing limitations on his
    salary and responsibility, and Keller's repeatedly asking him
    whether he was going to quit his job, could make working conditions
    intolerable for a reasonable person in Stephens's position.
    CIT correctly argues that this circuit has held that a "slight
    decrease   in   pay     coupled    with       some        loss   of      supervisory
    responsibilities   is   insufficient         to    constitute       a   constructive
    discharge."      See    Jett,     
    798 F.2d 748
        (loss       of   coaching
    responsibilities was not so intolerable that a reasonable person
    would feel compelled to resign); Jurgens v. E.E.O.C., 
    903 F.2d 386
    (5th Cir. 1990).   In both Jett and Jurgens, in which the employees
    claimed to have received discriminatory demotions and constructive
    discharges, this court found insufficient evidence of constructive
    discharge, stating that the employer had not harassed the employees
    after the demotion and the demotions were not a "harbinger of [the
    employee's] dismissal."     
    Jurgens, 903 F.2d at 392
    .                   On the other
    hand, in Guthrie v. J.C. Penney Co., Inc., 
    803 F.2d 202
    (5th Cir.
    1986), this court held that Guthrie, who believed that termination
    was inevitable, had been constructively discharged.                     
    Guthrie, 803 F.2d at 207
    .    Although the evidence is less overwhelming in this
    case than in the Guthrie case, Stephens reasonably could have
    believed that his demotion was a harbinger of dismissal.                       CIT's
    actions after demoting Stephens could make a reasonable employee
    believe that he risked termination if he remained on the job.                   Even
    if CIT did not plan to terminate Stephens, it certainly had no
    8
    intentions of promoting him, and the "permanence of [a] demotion is
    a factor to consider under the constructive discharge analysis
    . . . ."    
    Jurgens, 903 F.2d at 392
    .   We find that when viewed in
    the light most favorable to Stephens, sufficient evidence supports
    the jury's verdict.
    C.   Damages
    Before discussing CIT's arguments regarding the excessiveness
    of the damages awarded, we must first address Stephens's argument
    that CIT failed to preserve error on damages issues.       Stephens
    maintains that CIT failed to raise the issue of damages in its
    motion for directed verdict and is therefore precluded by Rule 50
    of the Federal Rules of Civil Procedure from raising the issue for
    the first time on appeal.1    Stephens's argument is without merit.
    To support his contention that CIT failed to preserve error on the
    issue of damages, Stephens cites the portion of the record in which
    CIT moved for a directed verdict at the close of the plaintiff's
    evidence.      CIT moved for a directed verdict at the close of all
    evidence, however, and argued that ". . . plaintiff has failed to
    establish any damages . . . ." (Tr. at 538).     CIT also argued in
    its motion for judgment n.o.v. or new trial that Stephens failed to
    1
    Actually, Stephens's brief states that CIT is precluded
    by Rule 50 of the Federal Rules of Appellate Procedure from
    raising any damages issues on appeal. Since Rule 50 does not
    exist in the Rules of Appellate Procedure, we assume that
    Stephens actually means to cite Rule 50 of the Federal Rules of
    Civil Procedure.
    9
    provide sufficient proof of damages.             Therefore, CIT properly
    preserved the issue of damages for appeal.
    CIT advances three separate arguments as to why the district
    court abused its discretion in denying remittitur or a new trial on
    damages:    (1) the jury failed to follow the court's instruction to
    offset interim earnings from the back pay award, making the award
    excessive as a matter of law; (2) the amounts awarded for lost
    bonuses and car allowance were speculative and not supported by the
    evidence; and (3) the district court erred in instructing the jury
    that the relevant back pay period ran from the date of Stephens's
    resignation to the date of trial.            Since we reverse the damage
    award and remand for a new trial on damages based on the court's
    failure to offset Stephens's interim earnings, we only briefly
    discuss CIT's other two contentions.
    "We review the denial of a motion for new trial for an abuse
    of discretion."     Deloach v. Delchamps, 
    897 F.2d 815
    , 820 (5th Cir.
    1990).   The district court's denial of CIT's motion for new trial
    was an     abuse   of   discretion   because   the   damages   awarded   were
    excessive as a matter of law.              "Damages are meant to put the
    plaintiff in the economic position he would have occupied but for
    the discrimination."       Kolb v. Goldring, 
    694 F.2d 869
    , 872 (1982).
    Courts uniformly offset interim earnings from back pay awards in
    order to make the plaintiff whole, yet avoid windfall awards.            See
    Brennan v. Ace Hardware Corp., 
    495 F.2d 368
    , 373 (8th Cir. 1974);
    Rodriguez v. Taylor, 
    569 F.2d 1231
    , 1243 n. 23 (3rd Cir. 1977);
    Deloach v. Delchamps, 
    897 F.2d 815
    , 823 (5th Cir. 1990).                 Even
    10
    though the district court instructed the jury to deduct Stephens's
    interim earnings from an award of back pay, the jury failed to do
    so.2       Without a reduction for interim earnings, the award was
    clearly excessive, and the district court abused its discretion in
    denying CIT's motion for new trial or remittitur.                 We therefore
    reverse the damage award and remand for a new trial on damages.
    See    Whiteman   v.   Pitrie,   
    220 F.2d 914
    ,   921   (5th    Cir.   1955)
    (recognizing the appellate court's duty to reverse the district
    court's denial of motion for new trial when the award is excessive
    as a matter of law).
    We also note that there is no evidence in the record to
    support Stephens's claim that his lost bonuses equaled $14,000 a
    year.       Stephens never earned a $14,000 bonus while at CIT and
    produced no evidence showing that he would have earned such a bonus
    in the years 1985 through 1990.        The only evidence of past bonuses
    that Stephens produced showed that he earned $10,357 in 1981,
    $6,688 in 1982, $0 in 1983, and $3,852 in 1984.            Thus, the jury's
    award of $14,000 a year in lost bonuses was not supported by the
    record.
    2
    In fact, the jury apparently adopted Stephens's own
    calculation of his damages which did not offset his interim
    earnings from the amount he claimed as back pay. Since
    Stephens's calculation did not account for his interim earnings,
    the jury's wholesale adoption of his calculations resulted in an
    award that was greater than the evidence allowed and the jury
    reasonably could have found. See Stapleton v. Kowasaki Heavy
    Industries, Ltd., 
    608 F.2d 571
    (5th Cir. 1979) (The jury
    "borrowed" the amount sued for as the proper amount of damages,
    but the amount sued for was actually "greater than the maximum
    the jury could find.").
    11
    Finally, CIT failed to object to the district court's
    instruction that the relevant back pay period extended from the
    date of Stephens's resignation until the date of trial.          According
    to Rule 51 of the Federal Rules of Civil Procedure, "[n]o party may
    assign as error the giving or the failure to give an instruction
    unless that party objects thereto before the jury retires to
    consider its verdict, . . . ."         Fed. R. Civ. Pro. 51.    Therefore,
    review of the instruction by this court is precluded unless the
    error is so fundamental as to result in a miscarriage of justice."
    Nowell By and Through Nowell v. Universal Electric Co., 
    792 F.2d 1310
    , 1316 (5th Cir.) cert. denied, 
    479 U.S. 987
    , 
    107 S. Ct. 578
    .
    We   need    not   address   whether   this   instruction   resulted   in   a
    miscarriage of justice since we remand on other grounds.          We note,
    however, that damages are "settled and complete" and the back pay
    period ends, when the plaintiff begins earning more at his new job
    than he did at the job from which he was discharged.               Kolb v.
    Goldring, 
    694 F.2d 869
    , 874 (1st Cir. 1982); Matthews v. A-1, 
    748 F.2d 975
    , 978 (5th Cir. 1984).          Whether or when Stephens earned
    more at Credit Alliance than he did at CIT must be determined on
    remand.
    We AFFIRM the jury's finding of constructive discharge and
    REVERSE the damage award and REMAND for a new trial on the issue of
    damages.
    12
    

Document Info

Docket Number: 90-5646

Filed Date: 5/20/1992

Precedential Status: Precedential

Modified Date: 12/21/2014

Authorities (17)

Jett v. Dallas Independent School District , 109 S. Ct. 2702 ( 1989 )

Peter J. Brennan, Secretary of Labor, United States ... , 24 A.L.R. Fed. 795 ( 1974 )

Dale H. Jurgens v. Equal Employment Opportunity Commission ... , 903 F.2d 386 ( 1990 )

Allen Peteet, Ann I. Greenhill, Individually and on Behalf ... , 868 F.2d 1428 ( 1989 )

The Boeing Company v. Daniel C. Shipman , 411 F.2d 365 ( 1969 )

Lames JUNIOR, Plaintiff-Appellant, v. TEXACO, INC., ... , 688 F.2d 377 ( 1982 )

16-fair-emplpraccas-533-15-empl-prac-dec-p-8029-luis-a-rodriguez , 569 F.2d 1231 ( 1977 )

Ellen L. Stapleton v. Kawasaki Heavy Industries, Ltd. And ... , 608 F.2d 571 ( 1979 )

George W. Whiteman v. Elsoyd Pitrie , 220 F.2d 914 ( 1955 )

Ray Light, Jr. And Barbara J. Light v. Blue Cross and Blue ... , 790 F.2d 1247 ( 1986 )

Israel Alicea Rosado v. Ramon Garcia Santiago , 562 F.2d 114 ( 1977 )

Richard Deloach, Cross-Appellant v. Delchamps, Inc., Cross-... , 897 F.2d 815 ( 1990 )

Kathryn Davis MATTHEWS, Plaintiff-Appellee, v. A-1, INC., ... , 748 F.2d 975 ( 1984 )

42-fair-emplpraccas-185-42-empl-prac-dec-p-36763-william-j , 803 F.2d 202 ( 1986 )

30 Fair empl.prac.cas. 633, 30 Empl. Prac. Dec. P 33,169 ... , 694 F.2d 869 ( 1982 )

Norman Jett v. Dallas Independent School District and ... , 798 F.2d 748 ( 1986 )

donald-joe-nowell-ii-by-and-through-his-mother-and-next-friend-pamela-mae , 792 F.2d 1310 ( 1986 )

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