Wilson v. Am General Corp.

• Decision Date: 15 August 1997
• Docket Number: No. 3:95-CV125RM.,3:95-CV125RM.
• Citation: 979 F.Supp. 800
• Parties: William D. WILSON, Plaintiff, v. AM GENERAL CORPORATION, Defendant.
• Court: U.S. District Court — Northern District of Indiana

979 F.Supp. 800

William D. WILSON, Plaintiff, v. AM GENERAL CORPORATION, Defendant.

No. 3:95-CV125RM.

United States District Court, N.D. Indiana, South Bend Division.

August 15, 1997.

John C. Hamilton, Doran Blackmond Ready Hamilton and Williams, South Bend, IN, for plaintiff.

Janilyn S. Brouwer, Gerald F. Lutkus, John D. LaDue, Barnes and Thornburg, South Bend, IN, for defendant.

MEMORANDUM AND ORDER

MILLER, District Judge.

This cause is before the court on the plaintiff's post-trial motions for an award of attorney's fees and for addition of pre-judgment interest on back pay. For the reasons that follow, the court grants the plaintiff's motion (and amended motion) for an award of attorney's fees, awards the plaintiff $56,890.00 in reasonable attorney fees and expenses grants the plaintiff's motion for addition of pre-judgment interest on back pay, awards the plaintiff $13,604 in pre-judgment interest on the jury's back pay award, and awards the plaintiff $160,194 front pay.

The court presumes the reader's familiarity with the facts underlying this case and orders entered in this case thus far.

I. ADDITION OF PRE-JUDGMENT INTEREST ON BACK PAY

Mr. Wilson testified at trial that his total wage loss for from his termination to trial was $144,834, and that his total losses (including a 40% discount figure) were $238,902. The jury awarded Mr. Wilson $238,902 in damages. Mr. Wilson moves for an award of pre-judgment interest on the jury's implicit award of $144,834 in back pay. In support, Mr. Wilson presents the affidavit of his economic expert, Dr. Roger Skurski, who states that he calculated a pre-judgment interest amount of $13,604, based on the prime interest rate appropriate per month from October 1994 to October 1996 as published by the Center for Business and Economic Research at Northeast Louisiana University and a November 1, 1996 Wall Street Journal article indicating a prime rate of 8.25% since February 1, 1996. Skurski Aff., ¶¶ 3, 4. Dr. Skurski explains that he calculated Mr. Wilson's pre-judgment interest figure by averaging his total income over the entire period in question on a monthly basis.

Pre-judgment interest is "presumptively available to victims of federal law violations." McKnight v. General Motors Corp., 973 F.2d 1366, 1372 (7th Cir.1992); see also Hutchison v. Amateur Electronic Supply, Inc., 42 F.3d 1037, 1047 (7th Cir.1994). Prejudgment interest on back pay awards compensates a plaintiff for the loss of the use of the money. Downes v. Volkswagen of America, Inc., 41 F.3d 1132, 1144 (7th Cir.1994); see also Partington v. Broyhill Furniture Industries, Inc., 999 F.2d 269, 274 (7th Cir. 1993) ("Money has a time value, and prejudgment interest is therefore necessary in the ordinary case to compensate a plaintiff fully for a loss suffered at time t and not compensated until t + 1, 2, 3 ... n."). AM General filed no response or objection to Mr. Wilson's motion for addition of pre-judgment interest on back pay. Based on the evidence Mr. Wilson presents, the court awards Mr. Wilson $13,604 in pre-judgment interest on the jury's implicit award of $144,834 in back pay.

II. REINSTATEMENT AND FRONT PAY

A. Reinstatement

The parties agree, though not for precisely the same reasons, that reinstatement is not appropriate in this case. The ADEA provides for "such legal or equitable relief as may be appropriate to effectuate the purposes of this chapter, including ... judgments compelling employment, reinstatement or promotion." 29 U.S.C. § 626(b). Reinstatement is the preferred remedy, but is not appropriate in every case. Downes v. Volkswagen of America, Inc., 41 F.3d 1132, 1141 (7th Cir.1994). Certain factors may counsel against reinstatement in a particular case, including where the circumstances render it impracticable (the position no longer exists), where the employee's sincere and rational preference is against reinstatement, where friction exists between the employer and employee (unrelated to the discrimination), or where the burden of court supervision does not outweigh the gains achieved from reinstatement. Id; Price v. Marshall Erdman & Associates, Inc., 966 F.2d 320, 325 (7th Cir.1992). The court agrees with the parties that the circumstances in this case counsel against ordering Mr. Wilson's reinstatement. Mr. Wilson's position was eliminated as part of the RIF, and to the extent Mr. Bunnell performs duties Mr. Wilson performed, he would be displaced. Mr. Wilson's desire not to be reinstated, as well as the administrative burden of supervising his employment into the future, provide further support for declining to reinstate Mr. Wilson.

B. Front Pay

Mr. Wilson asks the court to award him $160,194 in front pay, a figure based on the salary he last received from trial to retirement at age 65, less than three years from the judgment in this case. Because his front pay calculation does not include merit pay increases, bonuses, inflation, or cost of living increases, Mr. Wilson urges the court not to reduce that amount to its present value. Mr. Wilson offers two additional bases for not reducing any front pay award to present value: AM General presented no evidence to support such a reduction and arriving at an accurate calculation of present value would prove a complicated task. Mr. Wilson also asserts that the $160,194 front pay award is appropriate in light of the jury's implicit rejection of AM General's claim that he failed to mitigate his damages in awarding him exactly what he requested in back pay.

AM General argues that no award of front pay is appropriate in this case in light of Mr. Wilson's failure to mitigate his damages. AM General reviews the legal authority on the issue of mitigation of damages and the evidence from trial, which it believes showed that Mr. Wilson had no intent to find comparable employment after his termination, that his primary focus was on moving to South Carolina to retire, that he lacks incentive to find other work because of his other sources of income, and that his efforts to secure comparable employment were not reasonable. AM General insists that any front pay award must be discounted to present value, despite its lack of evidence regarding the appropriate discount rate, because the plaintiff seeking a front pay award bears the burden of providing the appropriate discount rate and Mr. Wilson himself applied a 40% discount rate during trial to the lost pension benefits he sought. AM General argues that other independent factors support the calculation of a front pay award without salary adjustments in this case, including that salary increases and bonuses are not an entitlement at AM General, but are based on performance, and the evidence showed that AM General was becoming dissatisfied with Mr. Wilson's performance due in part to complaints regarding his interactions with TACOM and O'Gara-Hess.

The purpose of an award of front pay is to put the plaintiff in the same financial position that he would have occupied had he been reinstated. McNeil v. Economics Laboratory, Inc., 800 F.2d 111, 118 (7th Cir. 1986). Front pay is "the difference (after proper discounting to present value) between what the plaintiff would have earned in the future had he been reinstated at the time of trial and what he would have earned in the future in his next best employment." Avitia v. Metropolitan Club of Chicago, Inc., 49 F.3d 1219, 1231 (7th Cir.1995); Downes v. Volkswagen of America, Inc., 41 F.3d 1132, 1141 n. 8 (7th Cir.1994) ("This court has defined front pay as `a lump sum ... representing the discounted present value of the difference between the earnings [an employee] would have received in his old employment and the earnings he can be expected to receive in his present and future, and by hypothesis inferior, employment.'" (citing McKnight v. General Motors Corp., 908 F.2d 104, 116 (7th Cir.1990))). Relevant to the front pay determination are the plaintiff's prospects of obtaining comparable employment, the time period for the award, the plaintiff's ability to work, and whether liquidated damages have been awarded. Ward v. Tipton County Sheriff Dept., 937 F.Supp. 791, 796 (S.D.Ind.1996) (citing Downes, 41 F.3d at 1141). An award must be reasonable, grounded in fact, and not overly speculative. Downes, 41 F.3d at 1142.

Mr. Wilson is entitled to a front pay award for the time between trial and age 65, at which time he concedes it is reasonable to assume that he would retire. Age plays a role in one's ability to find a new job, see trial testimony of F.K. Dempsey, Jr., and the court believes that Mr. Wilson's prospects of obtaining comparably high-level employment at his age are low. The jury did not find willfulness, so no liquidated damages award has been made, and the time from trial to Mr. Wilson's 65th birthday is not so long as to render the award of front pay speculative, and AM General presents no argument that it is.

AM General devotes several pages of its brief arguing that the evidence at trial established that Mr. Wilson should not receive an award of damages because he failed in his duty of mitigation. As Mr. Wilson points out, however, the jury necessarily found in favor of Mr. Wilson on AM General's defense of failure to mitigate damages in awarding full back pay. Jury instruction 12 informed the jury that if it found intentional discrimination, it could award back pay,¹ and jury instruction 14 directed the jury to "subtract from Mr. Wilson's award of damages any amount he could have earned in a new job" if AM General proved, "by a preponderance of the evidence, that Mr. Wilson unjustifiably failed to take a new job of like kind, status, and pay which was available to him, or failed to make reasonable efforts to find a new job." In awarding Mr. Wilson the entire amount he sought, the jury implicitly but necessarily found against AM General on its defense of failure to mitigate damages. Front pay is a matter within the court's...