Ramos v. Davis & Geck Inc.

• Decision Date: 06 June 2000
• Docket Number: No. 99-2113,99-2113
• Citation: 224 F.3d 30
• Parties: (1st Cir. 2000) RAFAEL RAMOS, PLAINTIFF, APPELLANT, V. DAVIS & GECK, INC., DEFENDANT, APPELLEE. Heard
• Court: U.S. Court of Appeals — First Circuit

Page 30

224 F.3d 30 (1st Cir. 2000)

RAFAEL RAMOS, PLAINTIFF, APPELLANT,

V.

DAVIS & GECK, INC., DEFENDANT, APPELLEE.

No. 99-2113

United States Court of Appeals For the First Circuit

Heard June 6, 2000

Decided August 23, 2000

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO [Hon. Heector M. Laffitte, U.S. District Judge]

David W. Roman, with whom Herbert W. Brown III, Jose Luis Ubarri, and Brown & Ubarri were on brief, for appellant.

Pedro J. Manzano-Yates, with whom Juan J. Casillas-Ayala and Fiddler Gonzalez & Rodriguez were on brief, for appellee.

Before Torruella, Chief Judge, Stahl and Lipez, Circuit Judges.

Lipez, Circuit Judge.

Rafael Ramos appeals from a decision of the district court for the District of Puerto Rico ordering that his award of damages against Davis & Geck, Inc., be subject to withholding for FICA and Puerto Rico income taxes because part of the damages represented back pay. See Ramos v. Davis & Geck, Inc., 64 F. Supp. 2d 6, 8 (D.P.R. 1999). Ramos contends that the court erred in deciding what portion of the damages found by the jury was back pay. We agree.

I.

The underlying facts of this case are recited in our prior opinion, Ramos v. Davis & Geck, Inc., 167 F.3d 727 (1st Cir. 1999), and we sketch here only the facts relevant to this appeal. Ramos sued Davis & Geck, his former employer, alleging that he had been discharged because of his age in violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq., and Puerto Rico's Law 100, P.R. Laws Ann. tit 29, § 146 et seq. The case was tried to a jury in January 1997. The jury found for Davis & Geck on the ADEA claim. On the Law 100 claim, the verdict form asked the jury:

Do you find that the Defendant constructively discharged the Plaintiff Rafael Ramos without just cause because of his age in violation of Law 100? .

If your answer is YES, state the amount of damages in the space below, double that amount, and write the total amount of damages.

The jury answered "YES" and found damages of $150,000, doubled pursuant to Law 100 to $300,000. The verdict form did not require the jury to specify what portion of the damages represented back pay and what portion was compensation for emotional distress.

Davis & Geck appealed and we affirmed. See 167 F.3d at 735. After our decision, Davis & Geck refused to pay Ramos the full amount of the judgment, contending that part of the jury's damage award represented back pay, from which it was required to withhold payments for Puerto Rico income taxes and federal social security (FICA) taxes. Ramos brought the issue before the district court, which agreed with Davis & Geck. The court calculated Ramos's lost wages as $178,062.30 by multiplying his monthly salary, $3,123.90, by the number of months between his termination and the jury verdict, fifty-seven. It then subtracted the $52,518.50 Ramos had received in social security benefits during the fifty-seven months and concluded that the net amount of the back pay award represented $125,543.80 of the $150,000 in damages found by the jury. Accordingly, the court ordered $8,788.07 withheld from the damages for Puerto Rico income tax, see P.R. Laws Ann. tit. 13, § 8542(a) (mandating 7% withholding), and $9,604.10 withheld for FICA, see 26 U.S.C. § 3101(a), (b)(6) (mandating 7.65% withholding). ¹ This appeal followed.

II.

In its opinion ordering the withholding, the district court did not discuss its authority to determine the amount of the back pay award. Instead, the court stated that because the verdict form did not indicate what portion of the damages represented back pay, "the Court must determine to what extent the award is subject to withholding . . . ." 64 F. Supp. 2d at 7-8. The court concluded that withholding was necessary because an award of back pay was "require[d]" by its jury instructions, and it accepted Davis & Geck's calculation of the amount of back pay as $125,543.80. Id. at 8.

We do not agree with the district court that its jury instructions required an award of back pay by the jury. The court told the jury that "[i]f you find for the plaintiff under Law 100, you may award an amount of monetary damages that will reasonably compensate the plaintiff for his loss of salary and for any moral or emotional anguish or distress suffered as a result of the age discrimination." The court then explained to the jury how to calculate a back pay award. At most, these instructions demonstrate that the jury should have awarded back pay. Likewise, the calculations accepted by the court show at best that the jury should have found the amount of the back pay to be $125,543.80. But we are aware of no law imposing tax withholding on a plaintiff for a back pay award he should have received. On the contrary, we think it self-evident that Ramos is only subject to withholding for the back pay award he actually did receive.

On this record, there is no way to determine what the jury did. It might have awarded what it should have, but it might also have awarded $150,000 for emotional distress and nothing for back pay, or nothing for emotional distress and $150,000 for back pay, or something in between. Although in many contexts we presume that a jury follows its instructions, see, e.g., United States v. Gonzalez-Vazquez, 219 F.3d 37, 47-48 (1st Cir.2000) (jury presumed to follow instruction to disregard stricken evidence), that presumption cannot extend so far that a jury is deemed to have made a complex damage calculation in exactly the amount the district court believes its instructions required. The problem with the court's back pay determination, then, "is that the jury may or may not have reached the same conclusions as the court on the proper damage elements." Payton v. Abbott Labs, 780 F.2d 147, 151-52 (1st Cir. 1985) (quoting Durant v. Surety Homes Corp., 582 F.2d 1081, 1085-86 (7th Cir. 1978)). To the extent that the court made a factual finding that the jury awarded $125,543.80 in back pay, that finding was based on pure speculation and was clearly erroneous. See id. at 154 (finding clear error in district court's attempt to allocate among multiple claims damages found by jury in lump sum).

Alternatively, the district court might have concluded that, in the absence of a finding by the jury, it could determine the amount of back pay itself. Davis & Geck argues that the court was authorized to do so by Rule 49(a) of the Federal Rules of Civil Procedure, although the court's opinion makes no mention of that rule. Rule 49(a) allows the court to require the jury to return a special verdict. See generally Anderson v. Cryovac, Inc., 862 F.2d 910 (1st Cir. 1988). It provides that if in instructing the jury on the special verdict:

the court omits any issue of fact raised by the pleadings or by the evidence, each party waives the right to a trial by jury of the issue so omitted unless before the jury retires the party demands its submission to the jury. As to an issue omitted without such a demand the court may make a finding; or, if it fails to do so, it shall be deemed to have made a finding in accord with the judgment on the special verdict.

Fed. R. Civ. P. 49(a). Davis & Geck says that because the issue of the amount of back pay was omitted from the verdict form in this case, Rule 49(a) authorizes the court to make a finding on the issue.

We...