Opinion ID: 599255
Heading Depth: 1
Heading Rank: 6

Heading: Benefits Offset

Text: 83 Exxon has claimed error in the district court's instruction to the jury not to offset the damages award by the amount of special retirement benefits the company has paid or will pay to Ellenwood. Under a special sea service plan, Exxon contributed to an annuity that distributed monthly payments to retired employees in amounts based on life expectancy. Ellenwood began receiving annuity payments of nearly $20,000 a year following his retirement in 1991 at age 45. It is these payments that Exxon seeks to have offset. 84 Exxon's argument is based on the general principle that an award of lost earnings makes the wrongfully discharged employee whole and that to add pension benefits would give the employee a windfall. Ellenwood counters with his own windfall argument: subtracting the expected benefits from the damages award treats the employer who breaches an employment contract more charitably than one who has observed one faithfully. Both parties cite caselaw to support their claims. 85 In fact, however, we conclude that the record made in this case, rather than general principles, dictates the result. The relevant facts are contained in a letter from an Exxon official in response to a request from Ellenwood's counsel to provide [t]he 1990 percentages of payroll for the various benefits provided to employees. Brief of Plaintiffs-Appellees at Addendum 18. The letter, which is not mentioned in Exxon's brief, itemized the percentages of payroll attributable to life insurance, medical and dental insurance, Medicare, a thrift plan, long term disability insurance, workers' compensation, and all other. These items totalled 20.8% But included in the listing, indeed heading the list, was Annuity and its percentage, (2.7%). In other words, this percentage was deducted from the total of the above listed items, making the bottom line total percentage for fringe benefits 18.1%. 86 The effect of this listing was to indicate to Ellenwood's economic expert on damages that he should add to his computation of lost earnings 18.1% of those earnings to reflect compensation in the form of fringe benefits. Exxon did not add into the benefits total the 2.7% annuity item, which would amount to an annual payment of approximately $2,300. Indeed, the letter subtracted the 2.7% from the remaining total of benefits, thereby reducing by a substantial amount the present discounted value of Ellenwood's fringe benefits. 87 Had there been no breach of the employment contract, the $2,300 yearly contribution apparently would have bought an annuity that, upon Ellenwood's retirement at age 65, would have yielded annual payments in an amount much larger than the present $20,000 amount. We look upon this amount as having been bought by prior Exxon contributions and earned by Ellenwood as part of Exxon's compensation package. To allow Exxon a further deduction for the income stream purchased by the annual $2,300 payment would seem to be, as Ellenwood argues, to allow a double credit. 88 This, at least, is how we read the testimony of plaintiff's economist, Dr. McCausland, who had asked for the percentages applicable to fringe benefits. He testified that 89 the fringe benefit [sic] had to be put into present value terms ..., it's how many dollars do we have to give him today so he'll have that amount of money available to him in each year to pay for the same fringe benefits. 90 And I based it on their fringe benefit package.... And what I did, I took 18.1 percent of the present value of lost earnings, and that works out to be $294,528.79. 91 Tr. Vol. V, at 111. On cross examination Exxon's counsel asked, Now you were also aware that Mr. Ellenwood is receiving almost $20,000 a year in pension benefits currently from Exxon Shipping Company? To this, Ellenwood's counsel objected, saying, that's his money, and it is not properly considered to be mitigation. Whereupon Exxon's counsel withdrew the question. Id. at 121-122. 92 On this record the district court ruled that it was the burden of proof of the defendant to come forward and show that these are benefits being received that should be subtracted from the amounts that plaintiff would otherwise ... receive and that the state of the record doesn't permit that determination. Tr. Vol. XI, at 35. We agree. Indeed, it seems to us that the record is not merely insufficient to support a basis for offset, but points affirmatively to an already accomplished deduction.