# Purcell v. Seguin State Bank and Trust Co.

> Court of Appeals for the Fifth Circuit · September 2, 1993 · 999 F.2d 950

URL: https://www.frixlaw.com/law-library/cases/5912

## Case

- **Full name:** Walter P. PURCELL, Plaintiff-Appellee, Cross-Appellant, v. SEGUIN STATE BANK AND TRUST COMPANY, Defendant-Appellant, Cross-Appellee
- **Court:** Court of Appeals for the Fifth Circuit
- **Decided:** September 2, 1993
- **Citations:** 999 F.2d 950; 62 Empl. Prac. Dec. (CCH) 42,573; 62 Fair Empl. Prac. Cas. (BNA) 1336; 1993 U.S. App. LEXIS 22338; 1993 WL 311615
- **Precedential status:** Published
- **Opinion:** Opinion by Williams
- **Judges:** Garza, Williams, Jones
- **Cited by:** 28 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/5912

## How later opinions describe it (automated extraction)

- finding that employer’s consulting with a lawyer, supervisor’s “making notes of problems” with plaintiff “only after he had decided to replace [plaintiff],” employer’s complaining about “matters... beyond [plaintiffs] job purview” and employer’s failure to provide “better-trai…
- holding that an ADEA back-pay award more than twice the amount of net lost wages was excessive because the award is not taxable and a reduction to reflect net income was therefore proper
- holding unexcusable failure to make motion for judgment as matter of law results in review under plain error standard and relief limited to ordering new trial
- noting that “Texas courts ... recognize the narrow exception of self-compelled defamation"

## Opinion text

United States Court of Appeals,

Fifth Circuit.

No. 92-5598.

Walter P. PURCELL, Plaintiff-Appellee, Cross-Appellant,

v.

SEGUIN STATE BANK AND TRUST COMPANY, Defendant-Appellant, Cross-
Appellee.

Sept. 2, 1993.

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

Before REYNALDO G. GARZA, WILLIAMS, and JONES, Circuit Judges.1

JERRE S. WILLIAMS, Circuit Judge:

In early 1989, Seguin State Bank and Trust Company replaced

60-year-old plaintiff, Walter P. Purcell, as manager of the Bank's

trust department. His replacement was a man 37 years of age;

Purcell was 60. Purcell brought suit in federal court, claiming

violations of the Age Discrimination in Employment Act (ADEA) and

of the Employee Retirement Income Security Act of 1974 (ERISA).

Purcell also asserted a state claim of self-compelled defamation.

The district court granted the Bank judgment as a matter of law on

the defamation claim, and the jury found for Purcell on the ADEA

claim. The Bank timely appealed the judgment against it, and

Purcell has cross-appealed the judgment on the defamation claim.

After a thorough review of the record, we affirm the judgment

that the Bank discharged Purcell because of his age. We also

affirm the district court's judgment for defendant on the

1
Judge Williams authored this opinion before his death on
August 29, 1993.
defamation claim and its award of attorney's fees. We reverse and

remand for new trial the finding of willfulness, necessarily

reversing the award of liquidated damages. Finally, we remand the

award of compensatory damages for remittitur or for a new trial on

damages only.

In 1984, Seguin State Bank and Trust Company (the Bank) hired

Walter P. Purcell to help create and to manage a trust department.

Purcell was 55 years old when he was hired. Purcell had worked

previously in the Estate and Gift Tax Division of the Internal

Revenue Service for sixteen years. In early 1989, however, the

Bank hired a 37-year-old replacement for Purcell, citing Purcell's

poor management techniques and technical deficiencies. Despite

some conversation about the possibility of a marketing position for

him, Purcell left the bank.

Joe Bruns, president of the Bank, had thought Purcell was 56

when he was hired. Purcell was thus ineligible to participate in

the Bank's retirement program because employees at that time had to

work ten years before vesting, which had to occur by the time an

employee reached 65. Bruns subsequently learned that Purcell had

been 55 when he was hired and informed him of his eligibility for

the retirement program.

Problems arose during Purcell's years in the trust department.

First, Bruns repeatedly counseled Purcell about improving his

marketing efforts. Second, monthly computer reports prepared by

Purcell's secretary sometimes contained mistakes and

miscategorization of assets. Purcell claimed these errors resulted

from his secretary's inability to understand and manipulate the
accounting software the department was using. The Bank worried, on

the other hand, that Purcell did not fully grasp substantive trust

accounting procedures. Third, Purcell incorrectly advised the Bank

that it did not need to comply with a particular tax code

provision. Fourth, the trust department realized net profit for

the first time in 1988. The Bank noted, however, that Purcell

arrived at the profit figure by collecting fees in 1988 for work

not performed until 1989. Fifth, clerical employees in the trust

department complained of Purcell's poor management and requested

transfers. The Bank's officers thus became concerned that Purcell

was mismanaging trust assets and subjecting the bank to serious

potential liability.

The Bank also faced changes in its retirement plan. These

changes had been mandated by the 1986 amendments to ERISA and were

to go into effect on November 1, 1989. One amendment shortened the

vesting period from ten years to five, allowing Purcell's

retirement benefits to vest while he was between the ages of 60 and

65.

In late 1988, Bruns consulted an employment law attorney for

advice regarding the situation with Purcell. He also advertised

anonymously for applicants to replace Purcell and interviewed Mike

Barrow in January 1989. Barrow was then in his thirties. The Bank

hired Barrow as trust department manager on January 19, 1989.

Bruns, however, did not inform Purcell that he was being replaced

until February 3, three days before Barrow was to begin working.

At that meeting, Bruns first told Purcell he was being replaced

because of poor management and technical deficiencies. Bruns then
told Purcell that if Purcell would maintain a positive attitude,

cure his technical deficiencies, and help train Barrow, the Bank

would pay him three months' salary. At the end of that indefinite

period of time, Bruns said, he would evaluate Purcell and possibly

create a marketing position for him at a substantially reduced

salary.

In the days following Purcell's replacement, Bruns told

Purcell that he had not been fired and that the officers wanted

Purcell to return to the Bank to concentrate on sales. By February

23, however, Purcell notified the Bank that he had no intention of

continuing to work there. Purcell then practiced law in Seguin for

about one year, moved to Galveston where his son was attending

school, and worked most recently as a substitute school crossing

guard.

Purcell's case was tried before a jury in March 1992. After

Purcell rested, the Bank moved for Judgment as a Matter of Law

under Federal Rule of Civil Procedure 50(a). The district court

granted judgment for the Bank on the self-compelled defamation

claim, which was based upon Purcell's assertion that he was forced

to defame himself by telling prospective employers why he left his

position with the Bank. The court then sent the ADEA claim to the

jury for decision. The jury reached a verdict, finding that:

1. Purcell was discharged;

2. age was a "determining" factor in Purcell's discharge;

3. the Bank's actions were willful; and

4. Purcell had sustained damages in the amount of $250,000.

The Bank filed a Motion for Judgment as a Matter of Law, a
Motion for New Trial, and a Motion for Remittitur and Denial of

Liquidated Damages. The district court denied all motions and

entered final judgment, awarding Purcell $250,000 compensatory

damages; $250,000 liquidated damages for willfulness;

reinstatement; $75,000 in attorney's fees; and post-judgment

interest. The Bank timely appealed, and Purcell cross-appealed the

district court's judgment on the self-compelled defamation claim.

Pending appeal, the Bank filed a supersedeas bond with the court,

which stayed all facets of the judgment, including reinstatement.

ERISA Claim

Purcell offers as support for his ADEA claim evidence that

the Bank discharged him to prevent him from vesting in his pension

benefits. Vesting in the Bank's pension program, however, was

triggered by years of service instead of by reaching a certain age.

Because Purcell's vesting was not age-based, any interference with

his pension benefits may have been actionable under ERISA, but not

under the ADEA. Hazen Paper Co. v. Biggins, --- U.S. ----, ----,

113 S.Ct. 1701, 1707-08, 123 L.Ed.2d 338 (1993). There is "no

disparate treatment under the ADEA when the factor motivating the

employer is some feature other than the employee's age." Id. at --

--, 113 S.Ct. at 1705.

Purcell pleaded that the Bank had violated ERISA by

discharging him so that he would not vest in the retirement

program. He presented evidence at trial to support this

contention. He failed, however, to request that the jury make a

finding about whether the Bank violated ERISA. Only the ADEA and

defamation claims were presented to the jury. Under Federal Rule
of Civil Procedure 49(a), Purcell waived his right to a trial by

jury on the claim that the Bank violated ERISA. In re Letterman

Bros. Energy Sec. Litig., 799 F.2d 967, 976 (5th Cir.1986). Rule

49(a) authorizes the court to make a finding on omitted issues, but

here the district court made no mention of the ERISA claim in its

judgment. Consequently, "it shall be deemed to have made a finding

in accord with the judgment on the special verdict." Because the

ERISA and ADEA claims are separate, there is no court finding on

the ERISA claim. See, e.g., MBank Forth Worth, N.A. v. Trans

Meridian, Inc., 820 F.2d 716, 723-24 (5th Cir.1987) (finding waiver

of plaintiff's RICO counterclaim). We do not consider it.

ADEA Claim

The ADEA makes it unlawful for employers "to discharge any

individual or otherwise discriminate against any individual with

respect to his compensation, terms, conditions, or privileges of

employment, because of such individual's age." 29 U.S.C. § 623(a).

To succeed on his claim, Purcell had to prove both that he was

discharged and that his age had "a determinative influence on the

outcome." Hazen Paper Co. v. Biggins, --- U.S. ----, ----, 113

S.Ct. 1701, 1706, 123 L.Ed.2d 338 (1993). Congress additionally

created a "two-tiered liability scheme" in the ADEA by providing

that "some but not all ADEA violations would give rise to

liquidated damages." Id. at ----, 113 S.Ct. at 1709. Section 7(b)

of the ADEA provides for liquidated damages in the event of a

willful violation. 29 U.S.C. § 626(b). A defendant has acted

willfully when it knows or shows reckless disregard for whether its

conduct violated the ADEA. Biggins, --- U.S. at ----, 113 S.Ct. at
1710. But a willful violation does not necessarily occur just

because the employer knew that the ADEA was "in the picture." When

an employer believes in good faith that its decision is permissible

under the ADEA, then liquidated damages are unwarranted. Id. at --

--, 113 S.Ct. at 1709. Further, even when the plaintiff has proved

willfulness, the court has discretion about whether to award

liquidated damages. Elliott v. Group Medical and Surgical Serv.,

714 F.2d 556, 558 n. 2 (5th Cir.1983), cert. denied, 467 U.S. 1215,

104 S.Ct. 2658, 81 L.Ed.2d 364 (1984).

The jury found that the Bank willfully discharged Purcell and

that a determining factor in the discharge was his age. The court

then denied the Bank's Motion for Judgment on the ADEA claim. The

Bank asserts that the evidence was insufficient to support the

jury's findings of discharge, of age discrimination, and of

willfulness.

Waiver

We must first decide whether the Bank has properly preserved

these points of error. After Purcell rested his case, the Bank

moved for Judgment as a Matter of Law under Federal Rule of Civil

Procedure 50(a).1 The Bank then renewed its Motion for Judgment

after the verdict, in accordance with Rule 50(b).2 It did not,

however, reurge its motion at the close of all the evidence. The

failure to renew the motion for judgment at the close of all

evidence can have two consequences. First, the Bank may have

1
Before the 1991 amendments to Rule 50, this motion was
known as the motion for directed verdict.
2
Before the 1991 amendments to Rule 50, this motion was
known as the motion for Judgment Non Obstante Verdicto, or JNOV.
waived its right to complain on appeal about the sufficiency of the

evidence. Second, the Bank may have also waived its right to file

a post-verdict Motion for Judgment. McCann v. Texas City Ref.,

Inc., 984 F.2d 667, 671 (5th Cir.1993); FED.R.CIV.P. 50(b).

We have construed Rule 50(b) to allow review when the

purposes of the rule have been satisfied because the court has had

the opportunity to reconsider sufficiency as a matter of law and

because the nonmovant has had the opportunity to cure any

insufficiencies. See, e.g., Davis v. First Nat'l Bank, 976 F.2d

944, 948-49 (5th Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct.

2341, 124 L.Ed.2d 251 (1993). We hold generally that "when the

trial court reserves its ruling on the defendant's motion for a

directed verdict and the only evidence introduced after the motion

is not related to the motion, the defendant's failure to renew his

motion should not preclude a judgment n.o.v. in his favor." Miller

v. Rowan Cos., Inc., 815 F.2d 1021, 1025 (5th Cir.1987). In such

cases, the judge took the defendant's motion under advisement or

declined to grant it "at this time." The defendants then offered

little or no evidence, and there was little or no rebuttal. Very

little time passed between the first motion and the close of all

evidence. In Davis, for example, the defendant called one witness,

the plaintiff was recalled, and the case was closed within a few

minutes of the original motion. Finally, if the defendant objected

to the proposed jury instructions on grounds pertaining to

sufficiency of the evidence, we have held that to satisfy the

purposes of Rule 50(b). Villanueva v. McInnis, 723 F.2d 414, 417-

18 (5th Cir.1984).
On the other hand, when those purposes have not been

satisfied, the operation of the rule results in waiver. See, e.g.,

McCann, 984 F.2d at 671-73; Hinojosa v. City of Terrell, Texas,

834 F.2d 1223, 1228 (5th Cir.1988), cert. denied, 493 U.S. 822, 110

S.Ct. 80, 107 L.Ed.2d 46 (1989). In Hinojosa, the defendant did

not move for judgment at any time before the verdict was returned.

In McCann, the judge flatly denied the motion at the close of

plaintiff's evidence, the defendant offered its case followed by

rebuttal, and it then failed to renew the motion in any way.

Finally, if the first motion for judgment fails to state specific

grounds that the defendant then urges in the post-verdict motion,

we cannot consider the motion. McCann, 984 F.2d at 672 (citing

FED.R.CIV.P. 50(a)).

Examining the facts before us, we conclude that the Bank has

waived its right to complain about sufficiency of the evidence in

a post-verdict motion for judgment. As in McCann, the judge flatly

denied the Bank's initial motion for judgment instead of taking the

motion under advisement. The Bank then presented its case.

Although the time between the close of Purcell's evidence and the

close of the case was a matter of hours, the Bank offered five

witnesses, followed by rebuttal testimony from Purcell. The Bank

did not object to the proposed jury instructions and charge.

Finally, also as in McCann, the initial motion focused on the

evidence of age discrimination. The Bank's post-verdict motion

specifically challenged the sufficiency of the evidence of

willfulness for the first time. We find that McCann controls.

It follows that the Bank is raising these issues for the first
time on appeal. We can review them only for plain error. Under

the plain error standard, we reverse a judgment only if it results

in the "manifest miscarriage of justice." McCann, 984 F.2d at 673

(quoting Coughlin v. Capitol Cement Co., 571 F.2d 290, 297 (5th

Cir.1978)). We consider "not whether there was substantial

evidence to support the jury verdict, but whether there was any

evidence to support the jury verdict." Id.

Age Discrimination

To prove age discrimination, a plaintiff must first establish

a prima facie case by showing (1) that he was within the protected

age group, (2) that he was adversely affected (in this case,

discharged), (3) that he was replaced by a younger person, and (4)

that he was qualified for the job. Then the burden of production

shifts to the defendant to articulate a legitimate,

non-discriminatory reason for its employment decision. If the

defendant presents non-discriminatory reasons, the plaintiff has

the burden of persuading the factfinder that those reasons are

pretexts for unlawful discrimination. St. Mary's Honor Center v.

Hicks, --- U.S. ----, ---- - ----, 113 S.Ct. 2742, 2750-55, 125

L.Ed.2d 407 (1993) (reaffirming Texas Dep't of Community Affairs v.

Burdine, 450 U.S. 248, 253-56, 101 S.Ct. 1089, 1093-95, 67 L.Ed.2d

207 (1981)). Because the case before us was tried fully on the

merits, we need not consider the adequacy of either party's showing

at these three stages. We instead focus on the record as a whole

to determine the sufficiency of the evidence. Atkin v. Lincoln

Property Co., 991 F.2d 268, 271 (5th Cir.1993) (quoting Molnar v.

Ebasco Constructors, Inc., 986 F.2d 115, 118 (5th Cir.1993)).
The Bank claims that it neither discharged Purcell nor

replaced him because of his age. Applying the plain error

standard, however, we find the record contains some evidence to

support the jury verdict. Most of Purcell's evidence was

circumstantial, which is not unusual in an employment

discrimination case. Burns v. Texas City Ref., Inc., 890 F.2d 747,

750-51 (5th Cir.1989). The accumulation of circumstantial evidence

more than meets the "any evidence" requirement of the plain error

standard.

On the question of discharge, the Bank points to Bruns's notes

from the February 3 meeting, where the officers informed Purcell he

was being replaced. The Bank presented evidence that the officers

told Purcell he would continue with the Bank, albeit for an

unspecified time, and then move into a newly-created marketing

position at a reduced salary. The Bank further cites evidence that

Bruns informed the executive officers of Purcell's move into the

marketing position; that Bruns reiterated the offer in a letter to

Purcell on February 21, 1989; that the Bank reconfirmed Purcell as

an officer on February 16, 1989; and that Purcell had told a

friend, John Donegan, that he was refusing to accept the more

"menial" marketing job.

Purcell in turn considers Bruns's notes, which were titled

"TERMINATION COMMENTS." Purcell's evidence argues that Bruns made

a vague, conditional offer by saying that IF Purcell maintained a

positive attitude and helped with the transition, and IF Purcell

acquired some unspecified technical knowledge, then the Bank would

pay three months' salary and "would consider creating a sales
position for [Purcell], but at a reduced salary" (emphasis added).

Purcell offered further evidence that Bruns's letter of February 21

and reconfirmation of Purcell as a bank officer were merely

self-serving acts and that the Bank contested Purcell's right to

unemployment compensation, to which Purcell would not have been

entitled if he had resigned. On the question of whether discharge

occurred, there clearly was enough evidence to support the jury

finding as not in plain error.

On the age discrimination issue itself, the Bank cites

evidence that Purcell's performance evaluations began in 1987 to

reflect concerns about how Purcell was reporting and managing trust

accounts; that the problems with the monthly reports indicated

Purcell's lack of technical trust knowledge; that Purcell's pay

raises were consistently lower than those of other officers; that

a trust department customer actually sued the bank over mishandling

of the customer's account; and that significant personnel problems

beginning in 1988 resulted from Purcell's management style. The

Bank also offered evidence of its pro-age policy.

Purcell's evidence, on the other hand, emphasizes that Bruns

questioned Purcell about his age in the interview. More important,

Purcell cites Bruns's response to problems with the

computer-generated reports. Bruns stated that Purcell was being

replaced in part because of "technical deficiencies," which led to

errors on the monthly reports. Purcell asserts, however, that

these errors were the result of incompetent clerical help; that he

had continually requested more effective clerical help to catch up

on a backlog of work; that Bruns did not respond to Purcell's
requests until three months before Purcell's discharge; that most

of the computer errors were corrected by training the new

employees; and that Bruns believed a younger employee would more

likely have computer knowledge than an older employee. Bruns

testified: "[M]ost younger trust officers that I've seen, as well

as most younger officers, have the ability to make entries in

computers. Because they've been trained in that way.... The older

ones have tended not to be as knowledgeable about computers."

"It is the very essence of age discrimination for an older

employee to be fired because the employer believes that

productivity and competence decline with old age." Hazen Paper Co.

v. Biggins, --- U.S. ----, ----, 113 S.Ct. 1701, 1706, 123 L.Ed.2d

338 (1993). While the Bank offered strong evidence of its pro-age

attitude, Purcell offered evidence answering the Bank's emphasis on

the problems with the computer and the report errors. Purcell's

evidence suggested that Bruns believed Purcell to be incompetent on

the computer and incapable of learning to use it, in large part

because of his age. He presented adequate evidence to deny a plain

error claim attacking the jury verdict that age was a determining

factor in Purcell's discharge.

Willfulness

In addition to finding that the Bank had discharged Purcell

because of his age, the jury found that the Bank had acted

willfully. The Bank claims that the only evidence of willfulness

was the fact that it consulted an employment law attorney before

replacing Purcell, and it argues that this evidence indicates only

its effort to avoid liability. Purcell counters that all of the
Bank's actions indicate reckless disregard of the ADEA's mandates.

Purcell claims that Bruns began making notes of problems with

Purcell only after he had decided to replace Purcell. According to

Purcell, the Bank's complaint that Purcell was not versed in

general tax matters rings hollow because those matters were beyond

his job purview. Likewise, Purcell points out his evidence showed

that he had no control over the personnel in his department and

repeatedly asked for more or better-trained clerical help, all to

no avail.

A review of the record reveals no evidence of willfulness.

True, the Bank consulted an attorney about Purcell and knew the

ADEA was "in the picture." But the evidence does not show that the

Bank violated the ADEA either knowingly or with reckless disregard.

We find, therefore, that the district court erred in denying the

Bank's Motion for Judgment on the issue of willfulness. Because we

review this question under the plain error standard, however,

relief is limited to ordering a new trial. McCann, 984 F.2d at 673

(citing Hinojosa v. City of Terrell, Texas, 834 F.2d 1223, 1228

(5th Cir.1988), cert. denied, 493 U.S. 822, 110 S.Ct. 80, 107

L.Ed.2d 46 (1989)); see also 5A JAMES W. MOORE & JO D. LUCAS, MOORE'S

FEDERAL PRACTICE ¶ 50.05[1] (2d ed. 1993). We therefore remand for

a new trial on the issue of willful violation of the ADEA.

Defamation Claim

The district court granted the Bank's Motion for Judgment on

Purcell's defamation claim. Purcell cross-appeals this decision,

arguing that there was sufficient evidence of both self-compelled

defamation and malice to justify submitting this claim to the jury.
We review all the evidence in the light most favorable to the party

opposed to the motion and consider whether there was substantial

evidence of defamation so that reasonable jurors could exercise

impartial judgment and arrive at differing conclusions. If so, the

district court erred in granting judgment as a matter of law.

Boeing v. Shipman, 411 F.2d 365, 374-75 (5th Cir.1969) (en banc).

In the controlling Texas law, a plaintiff cannot recover for

injuries from publication of defamatory material if the plaintiff

consented to, authorized, invited, or procured the publication.

Lyle v. Waddle, 188 S.W.2d 770 (Tex.1945). The Texas courts,

however, recognize the narrow exception of self-compelled

defamation. For example, in Chasewood Construction Co. v. Rico,

696 S.W.2d 439 (Tex.App.-San Antonio 1985, writ ref'd n.r.e.), the

court held that self-compelled defamation occurred. A

subcontractor was accused of stealing and was fired. The general

contractor then ordered the subcontractor's crew offsite

immediately. The crew demanded to know the reason for its sudden

ouster, and the subcontractor had little choice but to reveal the

defamation by way of explanation. Likewise, in First State Bank of

Corpus Christi v. Ake, 606 S.W.2d 696 (Tex.Civ.App.-Corpus Christi

1980, writ ref'd n.r.e.), the court found defamation occurred when

the plaintiff had to disclose to prospective employers that his

former employer had discharged him and filed a fidelity bond

against him. The bond was later withdrawn as improperly filed.

Purcell argues that the Bank gave him false reasons for his

discharge, and by doing so, created a foreseeable and unreasonable

risk those reasons would be communicated to prospective employers.
Purcell testified that he was forced to admit the reasons given for

his discharge when interviewing for new employment. Because the

Bank had a common interest in Purcell's discharge and the reasons

for it, however, the Bank enjoyed a qualified privilege that could

only be overcome if Purcell proved that the Bank acted with malice.

See RESTATEMENT (SECOND) OF TORTS § 577 cmt. n (1977). Malice has been

defined as "knowledge of falsity or reckless disregard" for the

truth of the statement. Gillum v. Republic Health Corp., 778

S.W.2d 558, 571-72 (Tex.App.-Dallas 1989, no writ). Proof of

malice may be inferred from the circumstances of the case. Buck v.

Savage, 323 S.W.2d 363, 373 (Tex.Civ.App.-Houston 1959, writ ref'd

n.r.e.).

Purcell argues that the standard for malice and for

willfulness under the ADEA are similar. Purcell cites the evidence

he presented to prove willfulness as sufficient to prove malice.

Our review of the record, however, has convinced us that there is

virtually no evidence the Bank willfully violated the ADEA. There

was not sufficient evidence of malice to justify submitting the

defamation issue to the jury. The district court thus did not err

in granting the Bank's Motion for Judgment on the question of

self-compelled defamation.

Damages

The Bank contends that the jury award of $250,000 in

compensatory damages is clearly excessive. Purcell presented

evidence of lost earnings, of the value of his health insurance

benefits, and of pension benefits. Purcell's economist concluded

that his total net loss, discounted to present value, was $308,296.
Although Congress has given courts broad discretion to fashion

remedies, courts prefer in these cases to order reinstatement.

They will award front pay only if they find that reinstatement is

not feasible. Hansard v. Pepsi Cola Metro. Bottling Co., Inc., 865

F.2d 1461, 1468-69 (5th Cir.), cert. denied, 493 U.S. 842, 110

S.Ct. 129, 107 L.Ed.2d 89 (1989). The district court found that

reinstatement was feasible. It therefore sent to the jury only the

question of lost back pay from discharge to trial. The jury

determined that Purcell was entitled to $250,000.

Purcell presented evidence of back pay of $85,232 and lost

insurance benefits of $27,227. The requested award thus totaled at

most $112,459, less than half of the jury award. The Bank argues

that even $112,459 is too much because the award of insurance

benefits was improper under Pearce v. Carrier Corp., 966 F.2d 958

(5th Cir.1992). In Pearce, we considered whether a successful ADEA

claimant could recoup automatically the value of a health insurance

fringe benefit. We held that the ADEA claimant was limited to

recovery of actual expenses incurred either to purchase replacement

health insurance or to pay for actual medical expenses. And the

record shows that Purcell presented no evidence that he either

purchased substitute insurance or paid for medical treatment that

insurance would have covered.

Purcell argues, on the other hand, that in addition to back

pay many elements justify the jury's award. Purcell applies

Pearce, maintaining that it should be read to allow recovery of the

value of insurance he tried to buy but could not afford. And he

says he had to buy expensive medication for his wife. Purcell next
asserts that he was entitled to deferred compensation. He further

points out that employment discrimination awards are not excludable

from income, citing United States v. Burke, --- U.S. ----, ----,

112 S.Ct. 1867, 1874, 119 L.Ed.2d 34 (1992). See also Johnston v.

Harris County Flood Control Dist., 869 F.2d 1565, 1579-80 (5th

Cir.1989), cert. denied, 493 U.S. 1019, 110 S.Ct. 718, 107 L.Ed.2d

738 (1990). Purcell claims he should receive an amount that

includes the taxes he will owe. Additionally, because the court

ordered reinstatement but stayed reinstatement pending appeal,

Purcell argues he should receive the amount of loss between trial

and disposition of the appeal. Finally, Purcell contends that he

had to sell his house at a loss after his departure from the Bank.

Because he obtained his loan from the Bank, and because the payment

of the loan was accelerated when Purcell left the Bank's employ,

Purcell asserts that the Bank should cover this loss as well.

Purcell now claims the following amounts to justify the award:

Back Pay: $ 85,232

Fringe Benefits: 27,227

Income Taxes: 33,107

Loss To Date of Appeal: 17,026

Loss on Sale of House: 10,000

_________

TOTAL: $172,592 (plus any additional loss until the appeal
has been exhausted)

-----

Purcell's contentions have little merit. Only the back pay

and fringe benefits were submitted to the jury. Regarding

insurance benefits, Purcell testified that he had elected to
continue his insurance coverage pursuant to the Consolidated

Omnibus Budget Reconciliation Act of 1985 (COBRA), and that since

those benefits expired he had been unable to purchase replacement

insurance because it was too expensive. He nonetheless presented

no specific evidence to prove that he had paid for the COBRA

benefits, that he had attempted to buy replacement insurance, or

that he had purchased medication for his wife. The insurance award

was clearly improper. Regarding deferred compensation, Purcell's

expert mentioned that it would increase the amount of lost

earnings. She nevertheless presented no specific evidence of

deferred compensation.

As far as income taxes are concerned, damages awarded "on

account of personal injuries or sickness" are exempt from federal

income tax. 26 U.S.C. § 104(a)(2). Purcell's economist expressly

excluded income taxes from her calculations before she applied the

discount rate to calculate the nontaxable, net present value of

lost earnings. Back pay awards are nontaxable when they redress a

tort-like injury. When Title VII awarded only backwages, it did

not contemplate a tort-like injury, and back pay awards under Title

VII were taxable. Burke, --- U.S. at ----, 112 S.Ct. at 1873-74.

We have also held that the district court should calculate a Title

VII award without reducing it to reflect income tax liability.

Johnston, 869 F.2d at 1580.

Neither Burke nor Johnston, however, involved the ADEA. The

Third, Sixth, and Ninth Circuit Courts of Appeals view the ADEA as

redressing a tort-like injury. See, e.g., Redfield v. Insurance

Co. of N. Am., 940 F.2d 542 (9th Cir.1991); Pistillo v.
Commissioner, 912 F.2d 145 (6th Cir.1990); Rickel v. Commissioner,

900 F.2d 655 (3d Cir.1990). We have held that age discrimination

is a tort claim for purposes of calculating the statute of

limitations. Jay v. International Salt Co., 868 F.2d 179, 180 (5th

Cir.1989). Recently, the Tax Court reconsidered this issue in

light of Burke, holding that ADEA claims are tort-like and that an

entire ADEA award is nontaxable. Downey v. Commissioner, 100 T.C.

40, 1993 WL 231740 (1993). Applying Downey, we find the evidence

properly presented a lost earnings amount net of tax. Increasing

the award to reflect tax liability is improper.

Purcell's other justifications for the jury award come too

late. Purcell's loss pending appeal was not relevant to the jury

determination of back pay. And the loss Purcell incurred on the

sale of his house bears no reasonable relationship to his departure

from the Bank. The parties agreed to submit to the jury back pay

from discharge to trial. Even including taxes, the maximum amount

possible on the evidence was no more than $150,000. A jury may

award a high amount, but it may not speculate beyond the range

presented by the evidence. Brunnemann v. Terra Int'l, Inc., 975

F.2d 175 (5th Cir.1992). The $250,000 award was excessive, and the

district court abused its discretion in refusing to order a

remittitur. We remand the case to the district court to

recalculate the damages.

Purcell's final complaint concerns the district court's order

to stay the judgment pending appeal. The stay also applied to the

reinstatement order. Thus while the appeal has proceeded, Purcell

has not been able to return to work at the Bank. Nevertheless, the
Bank filed a supersedeas bond to cover the costs of appeal and the

damages, including Purcell's loss pending appeal. On remand, the

district court can reconsider its reinstatement order in light of

the passage of time. It can either award compensation to cover the

lost wages during the stay, or it can determine that reinstatement

is no longer feasible and award front pay.

Attorney's Fees

After trial, Purcell requested $92,800 in attorney's fees.

He claimed that his attorney worked outside of court for 552 hours

at a rate of $150 per hour and in court for 50 hours at $200 per

hour. The Bank countered that Purcell's attorney was entitled to

only $37,500, based on 300 hours of work at $125 per hour. The

district court granted Purcell attorney's fees of $75,000 for 500

hours of work at $150 per hour. The Bank now contends that Purcell

failed to support sufficiently its request for attorney's fees. We

review the district court's award for abuse of discretion. Hedrick

v. Hercules, Inc., 658 F.2d 1088, 1097 (5th Cir. Unit B 1981).

The ADEA incorporated the remedies authorized by the Fair

Labor Standards Act. 29 U.S.C. § 626(b). The relevant provision

of the Fair Labor Standards Act, 29 U.S.C. § 216(b), provides that

the "court in such action shall, in addition to any judgment

awarded to the plaintiff or plaintiffs, allow a reasonable

attorney's fee to be paid by the defendant" (emphasis added). The

language of the statute thus mandates that the district court award

attorney's fees to the prevailing party, but it gives the court

discretion in deciding what is reasonable.

To calculate reasonable attorney's fees, the district court
multiplies the number of hours worked by the hourly rate. Both

hours and rate must be reasonable, and the court should consider

only the hours spent on the successful claims. Hensley v.

Eckerhart, 461 U.S. 424, 433-34, 440, 103 S.Ct. 1933, 1939, 1943,

76 L.Ed.2d 40 (1983). After calculating the basic fee, the

district court can adjust the amount upward or downward to account

for the well-established Johnson factors. Johnson v. Georgia

Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir.1974). In

this case the district court expressly took into account several of

the Johnson factors when calculating the $75,000. It then declined

to make any further adjustments.

The Bank argues that Purcell failed to present sufficient

evidence because he did not submit detailed timesheets as required

by Fifth Circuit Local Rule 47.8.1. The applicable rule, however,

is the Western District of Texas Local Rule CV-7(j). Under Rule

CV-7(j), a motion for attorney's fees must contain a listing of the

activity, the attorney's name, the date, and the hours expended,

all supported by an affidavit. The requesting attorney should also

be prepared to submit timesheets if required "upon further order of

the court." Purcell complied with the rule by submitting a motion,

a supporting affidavit, a memorandum, and a detailed summary of the

time his attorney spent on each activity. The district court

requested no further documentation. The Bank responded thoroughly.

Because the district court has reasonably calculated the fee and

considered the Johnson factors, we hold that the district court did

not abuse its discretion in awarding $75,000 in attorney's fees.

CONCLUSION
The district court did not err in submitting to the jury the

questions of discharge and age discrimination, in granting the

Motion for Judgment on the slander claim, and in awarding $75,000

in attorney's fees. The district court did err in denying the

Bank's Motion for Judgment on the question of willfulness, and it

abused its discretion in denying the Motion for New Trial or

Remittitur and in awarding the $250,000 compensatory damages. We

affirm the jury verdict's finding of discharge and age

discrimination. We affirm the district court's judgment for the

Bank on the slander claim. We reverse the finding of willfulness

and remand for a new trial on this issue. Finally, we remand the

case to the district court to order remittitur of the damages and

reconsider reinstatement.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/5912. Public record. Not legal advice.
