Opinion ID: 173192
Heading Depth: 4
Heading Rank: 1

Heading: The U.S. Equity Fund Determination

Text: On remand, the district court first considered the question of whether Mr. O’Toole would have left his money in the U.S. Equity Fund if his money had remained in the SIP. Although noting that the question was “inherently speculative,” the court found that Mr. O’Toole would have kept his money in the U.S. Equity Fund. Aplt. App., Vol. VI at 1135. This finding was based on the evidence that Mr. O’Toole introduced at trial showing that he had invested in two funds in the SIP—the U.S. Equity Fund and the Equity Growth (Magellan) Fund—from 1996 through 1999. Because the Magellan Fund was ultimately discontinued, the district court agreed with our observation in O’Toole III that “‘[i]t seems reasonable to assume that Mr. O’Toole would have left his money invested in [the U.S. Equity Fund] after the other fund in which he was invested was discontinued.’” Id. (quoting O’Toole III, 499 F.3d at 1225). On appeal, 3 (...continued) 1997. He withdrew all of the funds from his SIP by the end of 1999. -7- Mr. O’Toole asserts that the district court erred in determining that he would have left his investments in the U.S. Equity Fund. “We review the district court’s findings on damages for clear error. To reverse under this standard requires that, based on the entire evidence, we have a definite and firm conviction that a mistake has been committed.” O’Toole III, 499 F.3d at 1221 (quotations and citations omitted). Mr. O’Toole fails to cite to any evidence demonstrating clear error. As noted above, the only evidence at trial about Mr. O’Toole’s investment history was his testimony that for the years 1996-1999 he invested his retirement savings in two funds, the U.S. Equity Fund and the Equity Growth (Magellan) Fund. Aplt. Supp. App. at 178-79. He did not introduce any other evidence about his investment history or his investment strategy. Instead, Mr. O’Toole relied on his investment performance in those funds during the 1996-1999 time period to provide the basis for his proposal that the district court use a 12% average rate of return for the subsequent years when his money was no longer in the SIP. Id. at 179-80. Based on the evidence introduced at trial, the district court did not err in finding that Mr. O’Toole would have left his money in the U.S. Equity Fund. In conjunction with this argument, Mr. O’Toole argues that the district court erred by denying his request for a supplemental hearing to introduce new evidence about his investment strategy and in refusing to consider new evidence attached to his post-trial brief. Mr. O’Toole made the supplemental hearing -8- request in his second post-trial brief and also attached additional evidence about his investment strategy as exhibits to the brief. In its memorandum opinion, the district court denied the request to reopen the record for the receipt of more evidence. Mr. O’Toole argues that the introduction of supplemental evidence is necessary because of the passage of time. But some of the new evidence Mr. O’Toole now wants to introduce could have been introduced at trial in 2003. For example, Mr. O’Toole proposes to offer opinions from his investment advisors regarding the funds in which he likely would have invested in the SIP based on his non-SIP investments during the period from 1999 through 2003. This evidence was available and could have been presented at trial in 2003. Moreover, we did not remand to the district court with directions to reopen the case and retry it. Although we issued our decision in O’Toole III in 2007—four years after the trial—we directed the district court to base the damage award on judicial notice of the earnings for the Northrop Grumman funds, which was the method Mr. O’Toole requested in his first post-trial brief on damages, see Aplt. App., Vol. V at 953 n.60. Accordingly, we conclude that the district court did not abuse its discretion in refusing to consider Mr. O’Toole’s new evidence and in denying his request for a supplemental hearing. See Mason v. Okla. Tpk. Auth., 182 F.3d 1212, 1215 (10th Cir. 1999) (concluding district court did not abuse its discretion in rejecting defendant’s attempt to augment the evidentiary record on -9- remand); see Otero v. Mesa County Valley Sch. Dist. No. 51, 628 F.2d 1271, 1272 (10th Cir. 1980) (holding that district court did not err in refusing to reopen case and receive additional evidence when we did not remand with directions to do so). 2. Rate of Return for the U.S. Equity Fund Next, the district court considered what interest rate the U.S. Equity Fund would have yielded. Following our directions, the district court took judicial notice of the proof of earnings for the U.S. Equity Fund from Northrop Grumman’s website. The district court then took the ten-year average rate of return for the U.S. Equity Fund as published on the website, which was 4.5%, and used that as the interest rate for Mr. O’Toole’s claim. Based on this determination, the district court concluded that Mr. O’Toole’s estimate of 12% growth was not a reasonable average interest rate. Mr. O’Toole contends that the district court erred by using the ten-year average earnings rate for the U.S. Equity Fund from the Northrop Grumman SIP report. He asserts instead that the district court should have used the actual quarter-by-quarter interest rates for the U.S. Equity Fund, which would result in a significantly higher return. Mr. O’Toole illustrates this difference in Table 1 attached to his brief, which shows the calculations using the quarter-by-quarter earnings rates. See Aplt. Br. at 46-47. The quarter-by-quarter rate analysis results in an award of $69,578.47, as compared to the ten-year average rate used by the district court, which resulted in an award of $48,817.02. Compare id. -10- with Aplt. App., Vol. VI at 1136-37. Northrop Grumman concedes that the district court erred in using the ten-year average earnings rate to calculate the U.S. Equity Fund’s rate of growth. Northrop Grumman agrees with Mr. O’Toole that his “lost earnings from the retirement plan through the date of the district court’s judgment should be calculated . . . on a quarter-by-quarter basis using, for each quarter, the actual earnings rate figures published by Northrop Grumman.” Aplee. Br. at 12. Because the district court’s ten-year average rate does not yield the same result as calculating the interest on a quarter-by-quarter basis using the actual rate figures published by Northrop Grumman, we agree that the district court erred. Accordingly, we reverse the district court’s decision on this issue, and we direct the district court on remand to amend its judgment to reflect the quarter-by-quarter earnings for the U.S. Equity Fund through the date of the amended judgment.