Panhandle Eastern Pipe Line Co. v. Smith ( 1981 )

THOMAS, Justice,

specially concurring and dissenting, with whom ROSE, Chief Justice, joins.

I agree with all that is said in the majority opinion with respect to the existence of a contract and the right of Smith to recover for breach of that contract. I cannot agree with the disposition made of the issue of Smith’s damages dealt with under Part IV of the majority opinion, and I dissent therefrom.

It is interesting to note that the majority opinion correctly states the rule with respect to damages as follows:

“ * * * In a suit for a breach of an employment contract, then, the damages are the amount of compensation agreed upon for the remainder of the period involved less the amount which the employee earned or with reasonable diligence could have earned from other employment.”

The rule is stated thusly in 11 Williston on Contracts, § 1358, p. 302 (3d Ed., Baker, Voorhis & Co., Inc., 1968).

“ * * * Therefore, in an action by the employee against the employer for a wrongful discharge, a deduction of the net amount of what the employee earned, or what he might reasonably have earned in other employment of like nature, from what he would have received had there been no breach, furnishes the ordinary measure of damages [footnote 5 omitted].”

In footnote 5 cases are cited from 23 other jurisdictions without any contrary authority being noted.

Turning then to the facts as recited in the majority opinion, it appears that a value should be assigned to Smith’s wages at Panhandle Eastern Pipeline Company of $12.53 an hour. This is based upon his hourly wage of $8.35 plus one-half of that amount for fringe benefits. As recited in the majority opinion, Smith was earning $12.50 an hour at the time of trial. Assuming a 40-hour week for 52 weeks a year, Smith would have been paid for 2,080 hours per year multiplied by an assumed continued period of employment with Panhandle Eastern Pipeline Company of 8 years. This is a total of 16,640 hours for which he would have been paid at Panhandle Eastern Pipeline Company $208,499.20. At $12.50 an hour for the same period, he would have earned $208,000.00.

I recognize that he did experience a period when he was not employed, and that his new job may not have resulted in a 40-hour work week in all instances. I would remand the case to the trial court for those value determinations, and having made the appropriate adjustments the trial court would then deduct his earnings at his new job for the 8-year period from the $208,-499.20 he would have earned at Panhandle Eastern Pipeline Company. It appears that that amount would be substantially less than the $40,000.00 which was awarded.

The majority opinion goes astray when it suggests that Smith selected a job that was qualitatively less desirable than his employment with Panhandle Eastern Pipeline Company. This qualitative difference might have excused Smith from accepting that employment. He would not then be chargeable with amounts he might have earned in a position substantially qualitatively less desirable than the one he had with Panhandle Eastern Pipeline Company. Since he did accept the new employment the question of qualitative difference disappears under the rule of damages, and he must account for his actual earnings. I would hold that when the employee actually accepts new employment he is in effect conceding that there is no qualitative difference in the nature of the two employments, and the only matter to be accounted for is the actual difference in dollar value between the new employment and the old employment. In my view, the majority in this instance injects a classic speculative factor into the damage formula, and that should be avoided.

I find that in Webster’s Third International Dictionary, Unabridged, page 1173 (G. & C. Mirriam Co., Publishers, 1961), one of the definitions of the word “intangible” is, “incapable of being defined or determined with certainty or precision: vague, elusive.” Using this word to describe benefits lost by Smith, the majority concludes that the trial court was able to determine “the amount of damages with a reasonable degree of certainty.” It seems to me that the rule is antithetical to the description of the benefits for which Smith is being compensated. This is confessed by the majority opinion in the sentence “We would also still have the problem of just how to assign a value to the less mathmatically ascertainable benefits which we referred to earlier.” I am satisfied that the reason there is a problem is that Smith has been awarded damages which are speculative. In effect the court is supporting a holding that Smith’s job with Panhandle Eastern Pipeline Company was worth $5,000 a year more than his actual compensation or, without supporting evidence, it is concluding that Smith’s new employment somehow is worth $5,000 a year less than he apparently is being paid.

I would reverse and remand to the district court for a different computation of damages, while agreeing with the majority that the right to recover damages is present.