United States Court of Appeals,

Fifth Circuit.

No. 91–5810

Summary Calendar.

R. Nelson Brunnemann, Plaintiff–Appellee Cross–Appellant,

v.

Terra International, Inc., Defendant–Appellant Cross–Appellee.

Oct. 16, 1992.

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

Before THORNBERRY, HIGGINBOTHAM, and BARKSDALE, Circuit Judges.

THORNBERRY, Circuit Judge:

After Nelson Brunnemann was terminated from his employment with Terra International Inc.,

he brought suit in district court for age discrimination and negligent infliction of emotional distress

under Texas law. The district court dismissed the claim for negligent infliction of emotional distress

and aft er a jury trial, the district court found in favor of Brunnemann, awarding him $100,000 in

compensatory damages and an additional $100,000 in liquidated damages. The district court declined

to grant Terra's motions for new trial, remittitur or modification of reinstatement. Terra appeals these

rulings and contends that the damages awarded were exces sive in light of the evidence presented

during trial and that the district court abused its discretion in ordering reinstatement of the Plaint iff.

Brunnemann cross-appeals on the district court's decision to dismiss his claim for negligent inflict ion

of emotional distress. We affirm the dismissal of the claim for negligent infliction of emotional

distress as well as Brunnemann's reinstatement, ho wever, finding merit in Terra's claim that the

damages were excessive, we reverse the denial of motion for remittitur and remand to the district

court to give plaint iff an opportuni ty to remit. If plaintiff refuses to remit, a new trial will be held on

the issue of damages.

I. Facts and Prior Proceedings1 By mid-October 1988, Brunnemann had secured employment with Mid–Valley Chemical.

After Mid–Valley experienced financial difficulty in Brunnemann's sales territory, he voluntarily

quit on August 31, 1990. Brunnemann was not employed from September 1, 1990 through the

completion of trial, April 24, 1991.

2 Under the ADEA, an aggrieved party is entitled to "[a]mounts owing ... as a result of a

violation," which includes wages, fringe benefits, and other job-related benefits, as well as

liquidated damages for willful violations. 29 U.S.C. § 626(b). Victims of age discrimination are

also entitled to "such legal or equitable relief as may be appropriate," which includes

reinstatement. 29 U.S.C. § 626(b). In addition, the ADEA provides for trial by jury "of any issue

of fact in any such action for recovery of amounts owing as a result of a violation of this chapter."

29 U.S.C. § 626(c)(2).

3 During deliberations, the jury sent a note to the district judge asking if they could award more

than compensatory damages. The judge responded in the negative. In October of 1987, Plaint iff Brunnemann was the Location Manager for Terra International,

Inc. ("Terra"), in Pearsall, Texas. Shortly thereafter, Brunnemann was given the opportunity to

choose between being terminated or demoted to position of Senior Sales Representative until the end

of June, 1988 when his retirement would vest. He chose the demotion and filed an action with the

EEOC. Brunnemann was ultimately terminated on August 31, 1988. 1 On September 21, 1989,

Brunnema n n filed suit in district court under the federal Age Discrimination in Employment Act

("AD EA"), 29 U.S.C. § 621 et seq., seeking recovery for age discrimination in discharge.

Brunnemann also raised a claim under Texas law for negligent inflict ion of emotional distress. This

claim was d ismissed by the district court as being preempted by the ADEA. After trial by jury,

Brunneman was awarded $1 00,000 in compensatory damages and an additional $100,000 in

liquidated damages because the jury found Terra's violation of the ADEA to be willful. 2 Terra moved

for a new trial arguing that the jury displayed passion and prejudice in reaching its verdict. 3 Terra

alternatively moved for remittitur arguing that the verdict was excessiv e in light of the evidence

presented at trial. Terra also moved to modify the order of reinstatement which placed Brunnemann

back in his former management position in Pearsall. Terra urged the court to allow reinstatement in

a comparable but not identical position of employment. The district court denied the motions and

both Terra and Brunnemann appealed.

II. DiscussionA. Monetary Damages

Terra c o nt ends that the district court erred in denying its motion for new trial or in the

alternative, its motion for remittitur, because the jury award was so excessive and against the great

weight of the evidence as to indicate bias or prejudice by the jury. We review the denial of a motion

for new trial or motion for remittitur under an abuse of discretion standard. D eloach v. Delchamps,

897 F.2d 815, 820 (5th Cir.1990); See S am's Style Shop v. Cosmos Broadcasting Corp., 694 F.2d

998, 1006 (5th Cir.1982). In determining whether a new trial or remittitur is the appropriate remedy,

this Circuit has held that when a jury verdict results from pa ssion or prejudice, a new trial, not

remittitur is the proper remedy. W ells v. Dallas Independent School District, 793 F.2d 679, 683 (5th

Cir.1986) (citing Westbrook v. General Tire and Rubber Co., 754 F.2d 1233, 1241 (5th Cir.1985).

Damage awards which are merely excessive or so large as to appear contrary to right reason,

however, are subject to remittitur, not a new trial. I d. "When a jury's award exceed[s] the bounds

of any reasonable recovery, we must suggest a remittitur ourselves or direct the district court to do

so. Our power to grant a remittitur is the same as that of the district court. We determine the size

of the remittitur in accordance with this circuit's "maximum recovery rule," which prescribes that the

verdict must be reduced to the maximum amount the jury could properly have awarded." H ansen

v. Johns–Manville Products C orp., 734 F.2d 1036 (5th Cir.1984) (quoting Caldarera v. Eastern

Airlines, Inc., 705 F.2d 778, 784 (5th Cir.1983). With this in mind, we conclude that the district

court abuse d its discretion when it denied Terra's motion for remittitur because the damages were

excessive as a matter of law. A verdict is excessive as a matter of law if shown to exceed "any

rational appraisal or estimate of the damages that could be based upon the evidence before the jury."

Kolb v. Goldring, Inc., 694 F.2d 869, 871 (1st Cir.1982) (quoting Glazer v. Glazer, 374 F.2d 390,

413 (5th Cir.), cert. denied, 389 U.S. 831, 88 S.Ct. 100, 19 L.Ed.2d 90 (1967)). Although the jury

award in the present case is excessive, the defects in the award are readily ident ifiable and measurable,

and do not seem to be the product of passion or prejudice, t herefore remittitur would be more

appropriate than a new tri al on dam ages. K olb, 694 F.2d at 875. However, if plaintiff refuses to

remit, a new trial should be limited to the question of damages.4 The jury also awarded the matching sum of $100,000 in liquidated damages. Liquidated

damages in an amount equal to compensatory damages are statutorily authorized when there is a

finding that the defendant willfully violated the ADEA. See 29 U.S.C. §§ 216(b), 626(b). Since

this court finds the compensatory award was too high, it follows that the liquidated damages

award must also be reduced to correspond with the corrected compensatory damages sum. Kolb,

694 F.2d at 872 n. 2 (citations omitted).

5 Brunnemann was terminated on August 31, 1988 and the date of judgment was April 24,

1991, therefore, the maximum time period for calculation of the jury award is 32 months. This

Circuit recognizes that the back pay period may end when the plaintiff begins earning higher

wages at his new job than he made at the terminated job. Stephens v. C.I.T. Group/Equipment

Financing, Inc., 955 F.2d 1023, 1029 (5th Cir.1992) (citing Matthew s v. A–1, 748 F.2d 975, 978

(5th Cir.1984)). However, Brunnemann never made more money at Mid–Valley. Terra argued

to the district court that Brunnemann did make more at Mid–Valley, when his pension from Terra

of $197.00 was added into his monthly income. There is little merit in this argument since the

pension benefit was not paid by Mid–Valley. It should be noted that the district court allowed

both parties to argue to the jury the relevant off-sets and time periods for the damages. Appellant

also urged that Brunnemann's back pay should be tolled as of the day he resigned from

Mid–Valley. This Circuit also recognizes that back pay may be tolled when the employee

voluntarily resigns from subsequent employment obtained after termination. Matthew s, 748 F.2d

at 978 n. 5. However, this Circuit recognizes that the determination of back pay period is a

factual matter to be set aside only when clearly erroneous. Matthew s, 748 F.2d at 975. (citation

omitted). We cannot say that the jury's determination that back pay extend to the day of

judgment is clearly erroneous. The jury was in a far better position to weigh Brunnemann's

testimony about his reasons for leaving Mid–Valley. In fact, his testimony indicates that he was

given a choice between resigning or being laid off due to economic conditions in the region. The

jury could have reasonably concluded that Brunnemann was forced to resign, therefore, should A plaint iff suing under the ADEA may rec o ver only pecuniary losses such as wages and

fringe benefits. K

olb, 694 F.2d at 872. Punitive damages are not allowed because damages are meant

to put the plaintiff in the economic position he would have occupied but for the discrimination. Id.

From plaint iff's wages and fringe benefits, post-term i n ation economic benefits must be subtracted.

Id. The jury may select the highest figures that the evidence will support, however, the jury may not

speculate on damages where the calculation of the damages is definable. I d. "Flexibility beyond the

range of the evidence will not be tol erated." I d. (quoting Jamison Co. v. Westvaco Corp., 526 F.2d

922, 936 (5th Cir.1976).

The jury in this case found compensatory damages in the sum of $100,000. 4 This amount

exceeds any rational appraisal based on the evidence presented at trial. The following totals based

on monthly values from the date of termination until judgment were the maximum permissible

inferences from the evidence adduced at trial: 5not have been penalized by tolling the back pay on the day of resignation from Mid–Valley. The

jury was also in a better position to weigh the evidence and argument by counsel concerning

cut-offs for the back pay period. Therefore, we do not find the award of back pay for 32 months

to be clearly erroneous.

6 Brunnemann testified that he incurred additional automobile costs of $725.00 a month only

during his second year with Mid–Valley. He is not entitled to this loss after he left Mid–Valley

because he no longer needed an automobile for business purposes. However, Brunnemann also

testified that Terra provided an automobile for his personal use and paid for the gas and insurance

as well. At Mid–Valley, Brunnemann was given a travel allowance of $750.00 per month, but he

testified that his travel expenses greatly exceeded that amount. Therefore, he incurred a loss of

$725.00 a month for the second year at Mid–Valley. There was no evidence presented as to the

value of the automobile furnished by Terra for Brunneman's personal use, therefore, there can be

no award for loss of that benefit.

7 "Courts uniformly offset interim earnings from back pay awards in order to make the plaintiff

whole, yet avoid windfall awards." Stephens, 955 F.2d at 1028 (citations omitted). In the case

before us, the record shows that the jury was instructed to deduct Brunnemann's interim earnings

from an award of back pay, however, given the excessive amount of the award, it appears they did

not do so. In addition, a deduction is allowed for sums received from retirement benefits. Smith

v. Office of Personnel Management, 778 F.2d 258, 263 (5th Cir.1985). Vacation pay should be

allowed as an off-set because it is compensation based on salary, position and current job

performance and is earned just like wages. See E.E.O.C. v. Boeing Services Intern., 968 F.2d

549, 557 (5th Cir.1992). 1. Salary—$2541.00 × 32 mo.

= $ 81,312.00

2. Pension—$30.49 × 32 mo.

= $ 975.68

3. 401K—$76.23 × 32 mo.

= $ 2,439.36

4. Life Insurance—$12.71 × 32 mo.

= $ 406.72

5. Disability—$15.24 × 32 mo.

= $ 487.68

6. Company Car $725.00 × 12 mo. 6

= $ 8,700.00

7. Increased retiree medical insurance—$47.79 × 10 mo.

= $ 477.90

TOTAL

= $ 97,799.34

Terra is entitled to the following off-setting post-termination earnings and deductions: 7

1. Interim Salary—$2500.00 × 22 mo. plus $1250.00 for Oct. 15–Oct. 31

= $ 56,250.00

2. Vacation Pay

= $ 3,870.00

3. Pension Benefits—$197.00 × 32 mo.

= $ 6,304.00

TOTAL $ 66,424.008 The face value of the life insurance policy was $40,000 and the face value of the accidental

death policy was $100,000. -----

These figures ju st ify a maximum compensatory award of $31,375.34. Following the

"maximum recovery rule" recognized in this circuit, we direct the district court to file a remittitur of

$68,624.66. If the plaintiff refuses to remit, we order a new trial on damages only.

Brun neman argues that he is entitled to recover for additional benefits lost after his

termination from Terra which would support the jury's verdict of $100,000. These benefits are dental

insurance premiums and the face value of a life insurance and accidental de at h policy provided by

Terra. 8 We find no merit in t hese claims. First of all, Brunnemann failed to supply evidence

co ncerning t he cost of the dental insurance premiums. He also failed to provide evidence of any

out-of-pocket expenses paid for dental services which he incurred because he no longer had dental

insurance. If Brunneman had provided such evidence, he was only entitled to recover those expenses

actually incurred by either replacement of the lost insurance or dental expenses actually incurred that

were covered under his former dental insurance plan. P earce v. Carrier Corporation, 966 F.2d 958,

959 (5th Cir.1992). Brunneman provided no such evidence, however. Likewise, Brunneman cannot

recover the face value of the life and acciden t al death policy. An ADEA claimant is limited to

recovery of those expenses actually incurred by either replacement of the lost insurance or occurrence

of the insured risk. P earce, 966 F.2d at 959. Brunneman pro duced no evidence that he incurred

expenses for substituted coverage, a nd Brunneman is not dead, therefore the insured risk has not

occurred and he cannot recover the value of the policy or substituted premiums he never paid. We

find no merit in any other claims that Brunnemann presents to support the $100,000 verdict.

B. Reinstatement

Appellant contends that the district court abused its discretion when it reinstated Brunnemann

in his former position in Pearsall, Texas because that position was already held by another employee.Appellant states that it is more than willing to reinstate Brunnemann into a management level position

in the Waco region. Appellant asks for reasonable latitude in reinstating Brunneman t o a jo b

comparable to his former manager job in salary and prestige. A determination for reinstatement made

by the district court is reviewed for abuse of discretion. D eloach v. Delchamps, Inc., 897 F.2d 815

(5th Cir.1990). In H

ansard v. Pepsi–Cola Metropolitan, 865 F.2d 1461, 1469 (5th Cir.1989), this

Circuit recognized the decided preference by the courts to award reinstatement instead of front pay.

Reinstatement is generally the preferred remedy for a discriminatory discharge. D eloach, 897 F.2d

at 822. This is consistent with the ADEA's "make whole" philosophy. H ansard, 865 F.2d at 1469.

Generally, if reinstatement is not feasible, front pay will be awarded. I d. There are some instances

when reinstatement would not be feasible, for example, when there is discord and antagoni sm

between the parties. D eloach, 897 F.2d at 822. Terra's counsel told the district court that Terra felt

reinstatement would be an unworkable situation, but stated that there was no great hostility or

animosity held by Terra. The selection between reinstatement and front pay is discretionary with the

trial court so long as the relief granted is consistent with the purposes of the ADEA. G oldstein v.

Manhattan Industries, Inc., 758 F.2d 1435, 1448–49 (11th Cir.1985). The district court was entitled

to rely on Terra's statements that there was no animosity or hostility between the parties as well as

Brunnemann's testimony that he was willing to return to Terra to work. The district court was in a

much better position to determine whether or not reinstatement was feasible based on the testimony

and evidenc e at t rial. Based on the record before us, we find no abuse of discretion in ordering

reinstatement to the Pearsall Manager's position.

C. Negligent Infliction of Emotional Distress

Finally, Appellee contends that the district court erred in dismissing his negligent infliction

of emotional distress clai m. The dist rict court's judgment states that the plaintiff's claim was

dismissed because the claim was "preempted" by the ADEA. While we affirm the dismissal of this

claim, we do so for a slightly different reason. When the word "preempted" is used in a legal sense,

it generally means that one act takes precedence over another. The ADEA does not take precedence9 It is true that mere damages for mental anguish or pain and suffering are not recoverable in

this Circuit under the Federal Age Discrimination in Employment Act. Ford v. General Motors,

656 F.2d 117, 119 (5th Cir.1981). However, a claim for damages for mental anguish under the

Act is quite different from a pendent state law cause of action for negligent infliction of emotional

distress. A state cause of action for intentional infliction of emotional distress is recognized in this

Circuit in the employer/employee context. Wilson v. Monarch Paper Co., 939 F.2d 1138 (5th

Cir.1991). over the pendent state law claim of negligent inflict ion of emotional distress 9

, rather, a cause of action

fo r negligent infliction of emotional distress in the employer/employee context has yet t o be

recognized by the Texas Supreme Court. C ona way v. Control Data Corp., 955 F.2d 358 (5th

Cir.1992). We affirm the dismissal of plaintiff's claim for emotional distress.

Conclusion

Aft er reviewing the record we cannot say that the district court erred in denying a

modification of reinsta t ement or in dismissing plaintiff's claim of negligent infliction of emotional

distress; however, the district court's award must be modified to conform with this opinion or a new

trial must be held on the issue of damages.

Based on the foregoing, we affirm in part and reverse in part, and remand to the district court

for the appropriate modifications.