MARGERUM, EUGENE v. CITY OF BUFFALO ( 2013 )

SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
421
CA 12-01540
PRESENT: SCUDDER, P.J., PERADOTTO, LINDLEY, VALENTINO, AND MARTOCHE, JJ.
EUGENE MARGERUM, ANTHONY HYNES, JOSEPH FAHEY,
TIMOTHY HAZELET, PETER KERTZIE, PETER LOTOCKI,
SCOTT SKINNER, THOMAS REDDINGTON, TIMOTHY CASSEL,
MATTHEW S. OSINSKI, MARK ABAD, BRAD ARNONE AND
DAVID DENZ, PLAINTIFFS-RESPONDENTS,
V MEMORANDUM AND ORDER
CITY OF BUFFALO, CITY OF BUFFALO DEPARTMENT OF
FIRE AND LEONARD MATARESE, INDIVIDUALLY AND AS
COMMISSIONER OF HUMAN RESOURCES FOR CITY OF BUFFALO,
DEFENDANTS-APPELLANTS.
HODGSON RUSS LLP, BUFFALO (STEPHEN W. KELKENBERG OF COUNSEL), FOR
DEFENDANTS-APPELLANTS.
CHIACCHIA & FLEMING, LLP, HAMBURG (CHRISTEN ARCHER PIERROT OF COUNSEL),
FOR PLAINTIFFS-RESPONDENTS.
Appeal from an order of the Supreme Court, Erie County (John A.
Michalek, J.), entered February 8, 2012. The order, inter alia, awarded
economic damages to twelve of the plaintiffs.
It is hereby ORDERED that the order so appealed from is unanimously
modified on the law by reducing the total award for economic damages as
follows: plaintiff Eugene Margerum - $288,445; plaintiff Joseph Fahey -
$70,567; plaintiff Timothy Hazelet - $211,054; plaintiff Peter Kertzie -
$41,638; plaintiff Peter Lotocki - $92,397; plaintiff Scott Skinner -
$228,095; plaintiff Thomas Reddington - $64,455; plaintiff Timothy
Cassel - $282,819; plaintiff Matthew S. Osinski - $46,171; plaintiff
Mark Abad - $0; plaintiff Brad Arnone - $0; and plaintiff David Denz -
$40,966, and as modified the order is affirmed without costs in
accordance with the following Memorandum: Plaintiffs, firefighters
employed by defendant City of Buffalo Department of Fire (Fire
Department), commenced this action alleging that defendants
discriminated against them by allowing promotional eligibility lists
created pursuant to the Civil Service Law to expire solely on the ground
that plaintiffs, who were next in line for promotion, were Caucasian.
Previously, we concluded that Supreme Court erred in granting
plaintiffs’ cross motion for partial summary judgment on liability and
properly denied defendants’ motion to dismiss the complaint, holding in
part that, although the action taken by defendant City of Buffalo (City)
was subject to strict scrutiny, plaintiffs had failed to establish “the
absence of a compelling interest,” particularly because “ ‘a
-2- 421
CA 12-01540
sufficiently serious claim of discrimination’ may constitute a
compelling interest to engage in race-conscious remedial action”
(Margerum v City of Buffalo, 63 AD3d 1574, 1579). Shortly after we
issued our decision, the United States Supreme Court decided Ricci v
DeStefano (557 US 557), wherein it held that, “before an employer can
engage in intentional discrimination for the asserted purpose of
avoiding or remedying an unintentional disparate impact, the employer
must have a strong basis in evidence to believe it will be subject to
disparate-impact liability if it fails to take the race-conscious
discriminatory action” (id. at 585).
Following Ricci, we affirmed an order that, inter alia, granted
those parts of plaintiffs’ motion for partial summary judgment on
liability with respect to the Fire Department and the City (hereafter,
defendants), determining that defendants “did not have a strong basis in
evidence to believe that they would be subject to disparate-impact
liability if they failed to take the race-conscious action, i.e.,
allowing the eligibility lists to expire” (Margerum v City of Buffalo,
83 AD3d 1575, 1576). The court thereafter conducted a nonjury trial on
the issue of damages, and defendants appeal from an order that awarded a
total amount of $2,510,170 in economic damages and a total amount of
$255,000 in emotional distress damages to the 12 remaining plaintiffs
(hereafter, plaintiffs). We now conclude that the court’s awards for
emotional distress were proper, but we agree with defendants that the
court erred with respect to its awards for economic damages.
Preliminarily, we conclude that the court did not err in
determining that plaintiffs established that their damages were
proximately caused by the City’s failure to promote from the 2002
eligibility list. In our view, plaintiffs met their burden of
establishing that they would have been promoted but for the City’s
action in allowing the promotion eligibility lists to expire and
suffered economic damages because they were not promoted (see e.g.
County of Nassau v New York State Div. of Human Rights, 123 AD2d 342,
343).
With respect to the amounts of damages, we note that, upon our
review of the court’s award of damages in this nonjury trial, we may
“independently consider the probative weight of the evidence and the
inferences that may be drawn therefrom, and grant the [relief] that we
deem the facts warrant . . . This Court’s authority, in this regard,
extends to the making of appropriate damage awards” (Walsh v State of
New York, 232 AD2d 939, 940; see Blakesley v State of York, 289 AD2d
979, 979, lv denied 98 NY2d 605). We conclude that each amount of
damages awarded for emotional distress is reasonable. We further
conclude with respect to economic damages, however, that the court
applied the wrong burden of proof and erred in relying on assumptions
not supported by the record.
With respect to the burden of proof, we note that the court erred
in placing the burden of proof on defendants to establish plaintiffs’
economic damages. Rather, a plaintiff seeking, e.g., damages for loss
of future earnings must “provide evidence demonstrating the difference
-3- 421
CA 12-01540
between what he [or she] is now able to earn and what he [or she] could
have earned” in the absence of discrimination (Burdick v Bratt, 203 AD2d
950, 951, lv denied 84 NY2d 801), although recovery for lost earning
capacity may be based on future probabilities and is not limited to
actual past earnings (see Huff v Rodriguez, 45 AD3d 1430, 1433).
Although a plaintiff is not required to establish loss of earnings with
absolute certainty, it is a “fundamental premise that loss of earnings
or earning capacity must be established with reasonable certainty . . .
and will be reduced if based upon mere speculation” (Toscarelli v Purdy,
217 AD2d 815, 818). The parties each presented expert testimony on the
issue of economic damages, and the experts provided separate
calculations for those plaintiffs who were on “injured on duty” (IOD)
status. We conclude that the assumptions on which plaintiffs’ expert
relied are not fairly inferrable from the evidence, and thus his opinion
concerning the non-IOD plaintiffs, which was based on speculation about
their future job prospects, cannot support the awards made by the court.
Instead, we conclude that the awards calculated by defendants’ expert
with respect to the nine non-IOD plaintiffs are accurately inferrable
from the evidence, and we therefore adopt his calculations, as follows:
plaintiff Eugene Margerum - $288,445; plaintiff Joseph Fahey - $70,567;
plaintiff Timothy Hazelet - $211,054; plaintiff Peter Kertzie - $41,638;
plaintiff Peter Lotocki - $92,397; plaintiff Scott Skinner - $228,095;
plaintiff Thomas Reddington - $64,455; plaintiff Timothy Cassel -
$282,819; and plaintiff Matthew S. Osinski - $46,171. We therefore
modify the order accordingly.
Defendants also contend that the court erred in adopting the
assumption of plaintiffs’ expert that the IOD plaintiffs would have had
an 85% chance of becoming permanently disabled, because he based his
calculation on 12 months of injury reports rather than on disability
data, and particularly because his initial calculation, which he changed
when he realized that the tax-free nature of the IOD plaintiffs’
benefits would erase the IOD plaintiffs’ awards, assumed no likelihood
of disability if the IOD plaintiffs had received promotions in 2006. We
conclude that the weighted probability calculation of plaintiffs’ expert
was not established with the requisite “reasonable certainty” (id.), and
that the court instead should have used the weighted probability
calculation of defendants’ expert to determine the economic damages of
the IOD plaintiffs. Notably, all three IOD plaintiffs testified that
they would not have been injured had they been promoted to lieutenant,
and other plaintiffs testified that there was less probability of injury
at higher ranks. Defendants’ expert, using 15 years of disability
retirement data, calculated that the risk of retiring on IOD status as a
lieutenant was only 58.6% as much as that of a firefighter, a
probability higher than the original assumption of plaintiffs’ expert
and higher than plaintiffs’ testimonial probability, but consistent with
plaintiffs’ view that they would be much less likely to be injured as
lieutenants. Because plaintiffs themselves testified that they would
not have been injured and retired on IOD status had they been promoted,
because plaintiffs’ expert initially agreed with that testimony and
changed his calculation only when it became clear that the tax
equalization of his calculations would “wipe out the [IOD plaintiffs’]
loss,” and because the recalculated weighted probability of plaintiffs’
expert relied only on injury data for a single year, not data relating
-4- 421
CA 12-01540
to actual disability retirements, we conclude that the IOD plaintiffs,
through plaintiffs’ own expert, did not establish their economic damages
with reasonable certainty. Thus, the only competent proof in the record
regarding the economic damages to the IOD plaintiffs is the calculation
of defendants’ expert, which awards no damages to plaintiffs Mark Abad
and Brad Arnone and $40,966 to plaintiff David Denz. We therefore
further modify the order accordingly.
Entered: July 5, 2013 Frances E. Cafarell
Clerk of the Court