Douglass v. Delta Air Lines, Inc.

• Citation: 897 F.2d 1336
• Decision Date: 09 April 1990
• Docket Number: No. 89-5545,89-5545
• Parties: Pamela J. DOUGLASS, Individually and as Next Friend of Christopher Douglass, Byron Douglass, and Jennifer Douglass, Minors, and Steven Takus as Independent Executor of the Estate of Michael Douglass, Deceased, Plaintiffs-Appellees, v. DELTA AIR LINES, INC., Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 1336

897 F.2d 1336

Pamela J. DOUGLASS, Individually and as Next Friend of

Christopher Douglass, Byron Douglass, and Jennifer Douglass, Minors, and Steven Takus as Independent Executor of the Estate of Michael Douglass, Deceased, Plaintiffs-Appellees, v. DELTA AIR LINES, INC., Defendant-Appellant.

No. 89-5545.

United States Court of Appeals, Fifth Circuit.

April 9, 1990.

James D. Guess, Ron A. Sprague, Preston H. Dial, Jr., Sharon E. Callaway, Thomas H. Crofts, Jr., Groce, Licke & Hebdon, San Antonio, Tex., for defendant-appellant.

Michael Lynn Cook, Shapiro, Edens & Cook, Alan D. Albright, Akin, Gump, Strauss, Hauer & Feld, Austin, Tex., R. Jack Ayres, Jr., Thomas V. Murto, III, Dallas, Tex., for plaintiffs-appellees.

Appeal from the United States District Court for the Western District of Texas.

Before HIGGINBOTHAM, SMITH, and DUHE, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

This dispute arose as a consequence of a fatal commercial airline crash. We are asked to decide whether the measure of wrongful-death damages awarded to a decedent's immediate family comports with Texas law; with two notable exceptions, we conclude that it is. We depart with the district court, first, in its assessment of lost inheritance, which, we conclude, erroneously incorporates a measure of double recovery. Second, we find the recovery for lost society and companionship secured by the minor children to be far in excess of what state law tolerates, and such a departure is not explained by any unique facts presented. Accordingly, we affirm in part, reverse in part, and remand.

I.

Michael Douglass was killed in a tragic airplane crash in 1985 at the Dallas/Fort Worth International Airport. His wife sued Delta Air Lines, Inc. (Delta), for wrongful-death damages on behalf of herself and three minor children. Delta agreed not to contest its liability in the disaster as long as the plaintiffs agreed to limit their claims to compensatory damages.

The issue of damages was tried to the court, which awarded the wife and three children (ages 11, 9, and 5 at the time of the accident) $6,901,822, plus $481,759 in prejudgment interest. ¹ There is little dispute concerning the strong family ties, the anguish that the survivors have suffered or the types of damages recoverable in this case: loss of future earnings, mental anguish on the part of the plaintiffs, loss of society and companionship, and loss of inheritance. There is considerable dispute, however, concerning the proper measure of these recoverable damages.

Delta believes that the trial judge erroneously framed the measure of recovery around certain "speculative" estimates offered by the plaintiffs' experts. Their expert on the subject of loss of future inheritance, for example, offered the court three separate growth strategies for the decedent's then-current net worth, estimated at the time of his death in 1985 to be over $400,000. The various growth models offered at trial were derived from a 1983 Federal Reserve study of consumer finances in the United States that contained demographic data concerning the value of estates based upon age, wealth, and other factors. Further testimony sought to demonstrate that the decedent was an adept and aggressive investor who would have left his family, at his natural death, with a considerable estate.

The statistical average of the estimates for lost inheritance offered by the plaintiffs' expert, in present value terms, was over $2,900,000. The court found this expert to be much more credible than Delta's, who discredited himself by proffering testimony to the effect that the decedent would have accomplished nothing to increase his estate during the remainder of his natural life.

The court found the decedent to have been, in fact, a sophisticated saver and investor. However, without explaining its mathematical reasoning the court concluded that the evidence demonstrated that the decedent would have left, in present value terms, at least $1,130,207 to his wife and children. That figure reflects the least ambitious growth prediction of the decedent's future estate offered by the plaintiffs' expert.

By so finding, the court valued the plaintiffs' lost inheritance in accordance with the most conservative growth scenario presented and rejected all objections raised by Delta to minimize the value of the estate. The court stated that there was no suggestion that the decedent would have squandered his estate or disinherited his family. Moreover, at age forty the decedent already had amassed a net worth of over $400,000 and owned several rental properties. Further, at the time of his death he was building a new family home in Florida.

Delta also contests the generous recovery for lost earnings arising from the decedent's premature death ($3,531,615 in total, excluding prejudgment interest). Experts for the plaintiffs testified as to the decedent's work history, the prospects for growth in the telecommunications industry in which he worked, likely advancements in employment based upon his reputation, and the documented advancement of his peers.

The experts offered the court three separate "future earnings" scenarios, complete with projected job promotions, dates for such promotions, and expected salaries. ² The three "career paths" offered a full range of possibilities: a conservative scenario of no job advancement for the decedent in career path I, as well as an ambitious career projection in path III, in which it was envisioned that the decedent eventually would have attained the management position of chief operating officer in a major telecommunications firm.

There is little dispute that the decedent was well educated, a former military officer and FBI special agent, and a gifted regional vice president for a telecommunications firm. Based upon the evidence presented, the court awarded a total of $3.5 million for pecuniary losses, or the average of the pecuniary losses estimated for career paths II and III. Declaring itself sensitive to speculative career and salary projections, the court nonetheless concluded that the evidence demonstrated rapid future advancement for the decedent and awarded lost earnings to the plaintiffs accordingly.

Lastly, Delta challenges the award of $725,000, in total, for "mental anguish" and $1,515,000 for "loss of society and companionship." Delta argues that these intangible damages are far in excess of any that this circuit has been willing to tolerate under similar factual situations governed by Texas law. Accordingly, Delta seeks to have the district court's substantial award reduced under this circuit's "maximum recovery rule" to the more conservative level reflected in the caselaw authority that it cites for purposes of comparison.

II.

A.

Federal jurisdiction is premised herein upon diversity of citizenship. Sitting as an Erie court, we are bound to apply the substantive law of the forum state in this wrongful-death action. See Smith v. Industrial Constructors, Inc., 783 F.2d 1249, 1250 (5th Cir.1986); Budge v. Post, 643 F.2d 372, 375 (5th Cir. Unit A Apr. 1981). Neither party disputes that Texas law controls the measure of wrongful-death damages in this case.

District courts enjoy "wide discretion" in awarding damages. Wheat v. United States, 860 F.2d 1256, 1259 (5th Cir.1988); accord Wakefield v. United States, 765 F.2d 55, 59 (5th Cir.1985) (citing Hyde v. Chevron U.S.A., Inc., 697 F.2d 614, 632 (5th Cir.1983)). A trial court's assessment of damages is a finding of fact, which we scrutinize for excessiveness under the clearly-erroneous standard. Wheat, 860 F.2d at 1259; Johnson v. Offshore Express, Inc., 845 F.2d 1347, 1356 (5th Cir.), cert. denied, --- U.S. ----, 109 S.Ct. 497, 102 L.Ed.2d 533 (1988). Under this standard, we compare damages awarded in factually similar cases, and arising within the controlling jurisdiction, in order to construct an objective framework for comparison. Wheat, 860 F.2d at 1259-60. Excessive awards that are entirely disproportionate to the injury sustained will not be upheld. ³

However, we note that the "reassessment of damage awards is not an exact science; rather, it is inherently subjective, involving the interplay of experience, emotions and calculation." Wheat, id. at 1259. A departure from precedent is merited if unique facts are present that are not reflected within the controlling caselaw. Id. at 1260.

Thus, we look to Texas authority, or those federal cases governed by Texas substantive law, in drawing an initial point of reference for the damages awarded in this case. Where departures from precedent are evident, and such departures cannot be justified fairly by the novel facts presented by the case, remittitur of the trial court's award, or a new trial on damages, is appropriate. ⁴

B.

The court-made rule in Texas, only recently adopted, is that recovery for "loss of inheritance" is available in wrongful-death cases and is separate from loss of future earnings. In Yowell v. Piper Aircraft Corp., 703 S.W.2d 630, 633 (Tex.1986), for example, the court defined loss of inheritance "as the present value that the deceased, in reasonable probability, would have added to the estate and left at natural death to the statutory wrongful death beneficiaries but for the wrongful act causing the premature death." Id. (emphasis added). The court flatly rejected the argument that assessing damages for lost inheritance is inherently too speculative ⁵ and held that the measure of lost future inheritance is for the trier of fact to decide. ⁶ However, the court did not announce a precise mathematical formula to be applied.

Presumably, no recovery would be available if the factfinder were convinced that the decedent would have consumed his earnings entirely or would have outlived his statutory beneficiaries. ⁷ However, damages are recoverable "where the wrongful death plaintiff shows that the decedent (1) would have enhanced his estate by some amount by...