Stephen A. Sposato, Administrator, Estate of Jody Jones Sposato v. Electronic Data Systems, Corp., David Wire

188 F.3d 1146, 99 Cal. Daily Op. Serv. 6969, 23 Employee Benefits Cas. (BNA) 2897, 99 Daily Journal DAR 8911, 1999 U.S. App. LEXIS 20182, 76 Empl. Prac. Dec. (CCH) 46,048, 80 Fair Empl. Prac. Cas. (BNA) 918, 1999 WL 646896
CourtCourt of Appeals for the Ninth Circuit
DecidedAugust 26, 1999
Docket98-16573
StatusPublished
Cited by1 cases

This text of 188 F.3d 1146 (Stephen A. Sposato, Administrator, Estate of Jody Jones Sposato v. Electronic Data Systems, Corp., David Wire) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stephen A. Sposato, Administrator, Estate of Jody Jones Sposato v. Electronic Data Systems, Corp., David Wire, 188 F.3d 1146, 99 Cal. Daily Op. Serv. 6969, 23 Employee Benefits Cas. (BNA) 2897, 99 Daily Journal DAR 8911, 1999 U.S. App. LEXIS 20182, 76 Empl. Prac. Dec. (CCH) 46,048, 80 Fair Empl. Prac. Cas. (BNA) 918, 1999 WL 646896 (9th Cir. 1999).

Opinions

GOODWIN, Circuit Judge:

This appeal presents a narrow question of California law: On stipulated facts, what is the proper measure of damages where an employer is liable to a former employee for wrongful termination under the state Fair Employment and Housing Act (“FEHA”), part of the back pay and benefits package includes a life insurance policy, and the employee is killed during the back pay period? We have jurisdiction under 28 U.S.C. § 1291, and hold that on the unusual facts of this case, the employer is liable for the face value of the employer-provided policy, less the proceeds received under the substitute policy obtained by the employee in an effort to mitigate the damages caused by the loss of her employment benefits.

BACKGROUND

This action began in California state court in 1992 when Jody Sposato, who had been employed by Electronic Data Systems (EDS), sued her former employer for wrongful discharge under California law. The case was removed to federal court on diversity grounds, and the parties engaged in extensive settlement negotiations. During the pendency of the proceedings before the district court, Jody Sposato was accidentally killed and her husband was substituted as plaintiff. The bulk of the factual issues in this case were resolved by stipulation of the parties, but when the case came before this panel in 1997, we remanded the case to the district court to address a fact question not resolved by the stipulation. See Sposato v. Electronic Data Sys., Corp., 111 F.3d 138, 1997 WL 196733 (9th Cir.1997) (unpublished disposition).

With respect to the narrow issue now before this court, the relevant and undisputed facts are: (1) Jody Sposato was wrongfully terminated from her employment at EDS; (2) under the FEHA and the terms of the settlement agreement signed by the parties, EDS was liable to Ms. Sposato for back pay, which included a life insurance policy with a double indemnity provision; (3) the back pay period began with her employment termination and ended with her death; (4) the life insurance policy provided by EDS would have been in effect at the time of Ms. Sposato’s death, but for her wrongful termination; (5) Ms. Sposato fully mitigated her damages by purchasing a substitute insurance policy, even though the policy she was then able to purchase did not include a double indemnity provision.

DISCUSSION

Ms. Sposato’s estate brought this action seeking to obtain from EDS the face value of the life insurance policy that would have been in effect at the time of Ms. Sposato’s death, but for her wrongful termination. EDS, by contrast, contends that Ms. Spo-[1148]*1148sato’s estate is entitled only to the value of the premiums that would have been paid to provide the insurance policy. EDS advances two theories in support of its position, and we examine each in turn.

I. Proper Measure of Damages

Federal courts have considerable discretion to fashion remedies that provide “the most complete relief possible” to victims of workplace discrimination who bring an action against their employer under Title VII. Albemarle Paper Co. v. Moody, 422 U.S. 405, 421, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975) (noting that Title VII “is intended to make the victims of unlawful discrimination whole,” and that the Act “requires that persons aggrieved by the consequences and effects of the unlawful employment practice be, so far as possible, restored to a position where they would have been were it not for the unlawful discrimination.”); Galindo v. Stoody Co., 793 F.2d 1502, 1517-18 (9th Cir.1986) (noting that the cash equivalent of medical or life insurance premiums that would have been paid by an employer is not necessarily an accurate measure of plaintiffs damages). California courts have adopted a similar approach in wrongful termination cases brought under state law. See, e.g., City and County of San Francisco v. Fair Employment and Housing Comm’n, 191 Cal.App.3d 976, 985, 236 Cal.Rptr. 716 (Cal.Ct.App.1987) (recognizing that the objectives and purposes of the FEHA and Title VII are identical, and observing that California courts have often turned to federal Title VII authority to interpret provisions of the FEHA); and see generally DFEH v. Madera County, FEHC Dec. No. 90-03 (1990); DFEH v. Rayne Water Conditioning, FEHC Dec. No. 84-01 (1984).

Although the precise question at bar has not been addressed in this circuit or by the state courts, we believe that the California courts would apply their traditionally broad remedial approach to the unusual facts of this case. Accordingly, the proper measure of Ms. Sposato’s damages is the face value of the employer-provided life insurance policy that would have been in effect but for the wrongful termination, less any proceeds received by Ms. Sposato’s estate from the pay-out on the substitute life insurance coverage.

Appellee’s contention that Fariss v. Lynchburg Foundry, 769 F.2d 958 (4th Cir.1985), should control here is unpersuasive. In Fariss, as in this case, the complainant brought a wrongful termination suit against his former employer but died during the pendency of the proceedings. Id. at 961. Mr. Fariss’ wife was substituted as plaintiff, but the district court granted summary judgment in favor of the employer on the wrongful termination claim. Id. On appeal, a panel of the Fourth Circuit considered whether Mrs. Fariss would be able to recover any damages, assuming that she could prove that her husband had been wrongfully terminated. Id. at 963.

As in this case, Mrs. Fariss sought to recover the face value of an employer-provided life insurance policy that would have been in effect but for her husband’s allegedly wrongful termination. Id. The court held that the “insurance coverage, not the proceeds, is the benefit for which the employer must be held liable,” and that the proper measure of the Fariss’ damages would be the amount of the premiums the employer would have paid had the termination not occurred. Id. at 965-66. However, the court stated that “[b]e-cause there [was] no evidence here that Mr. Fariss attempted to obtain any substitute coverage, plaintiff can recover only the premiums the employer would have paid.” Id. at 966.

We believe that Fariss is inapposite here because, while the complainant in Fariss chose not to self-insure after his termination, the parties have stipulated in this case, pursuant to arbitration, that Ms. Spo-sato mitigated her damages fully by obtaining substitute life insurance coverage. The employer should bear the economic consequences of its choice to terminate Ms. Sposato’s employment and her life insurance policy.

[1149]*1149II. California’s Survival Statute

EDS contends that Ms.

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188 F.3d 1146, 99 Cal. Daily Op. Serv. 6969, 23 Employee Benefits Cas. (BNA) 2897, 99 Daily Journal DAR 8911, 1999 U.S. App. LEXIS 20182, 76 Empl. Prac. Dec. (CCH) 46,048, 80 Fair Empl. Prac. Cas. (BNA) 918, 1999 WL 646896, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stephen-a-sposato-administrator-estate-of-jody-jones-sposato-v-ca9-1999.