I. EMPLOYMENT LITIGATION

Testimony on the Issues of Front Pay and Back Pay Damages is of a Specialized or Technical Nature and Not Within Plaintiff's Personal Knowledge, Therefore, Requiring Expert Testimony.

n Donlin v. Philips Lighting North America Corp., --- F.3d ---, 2009 WL 1081856 (3d. Cir. (Pa.) April 23, 2009), plaintiff, Colleen Donlin, was employed as a temporary employee for Philips. Plaintiff applied for full-time employment, but was not hired. Shortly thereafter Philips ended plaintiff's temporary assignment. Plaintiff brought action against Philips under Title VII alleging gender discrimination and retaliation after Philips failed to hire her as full-time employee. Plaintiff sought compensatory and punitive damages. The District Court dismissed plaintiff's claim for punitive damages but allowed the matter to go to trial on liability and compensatory damages in the form of back pay and front pay.

The case proceeded to the jury on the issue of liability as well as compensatory damages in the form of back pay and front pay. The jury rendered a verdict in Donlin's favor on liability and recommended $63,050 in back pay and $395,795 in front pay, for a total of $458,845. The jury's advisory verdict on front pay was based on the premise that Donlin would have worked for 25 more years until retirement.

Following post-verdict briefing, the District Court heeded the advice of the jury on the back-pay issue, but modified its front-pay award by reducing it to account for only 10 years of damages, finding that calculating damages for a 25-year period was too speculative. The final front pay award was $101,800, for a total of $164,850 in compensatory damages.

Philips appealed, asserting errors with, among other things, damages. Philips contends that the District Court's damages analysis was an error under Rule 701 of the Federal Rules of Evidence in allowing Donlin to provide specialized or technical testimony regarding her compensatory damages. As to back pay, the District Court allowed Donlin to testify not only about her actual earnings, but also about her estimated lost earnings and pension benefits. With regard to front pay, Donlin's testimony detailed the number of years she intended to work and the annual salary differential between Philips and the other companies where she was employed. In addition, Donlin estimated her future pension value, performed a probability of death calculation, and reduced her front pay award to its present value.

The Third Circuit held that Donlin's testimony crossed the line into subject areas that demand expert testimony. Specifically, the court found that plaintiff's testimony regarding the pension component of her back pay damages was improper. On the issue of front pay, the court found that the 2000 amendment to Rule 701, regarding " technical " or " specialized " testimony, all but requires there to be expert testimony regarding the calculation of front pay that involves " life-expectancy, assessing amortization rates, estimating pay raises, discounting to present value or calculating earnings potential in a pension portfolio. " Because this testimony was of a specialized or technical nature and was not within plaintiff's personal knowledge, the District Court abused its discretion in allowing her to offer it.

Furthermore, the court held that the District Court's error was not harmless, finding that plaintiff's improper testimony constituted a significant share of the damages evidence presented at trial, and therefore, it was " highly probable " that the erroneous admission of her testimony contributed to the damages award. As such, the court vacated the judgment of the District Court and remanded for a new trial on damages.

The Age-Based Exception in N.J.S.A. 10:5-12 Does Not Apply To Non-renewal Of Contracts

In Nini v. Mercer County Community College, 406 N.J. Super. 547 (A.D. April 23, 2009), Plaintiff Rose Nini filed a complaint alleging age-based discrimination when her employment contract with defendant Mercer County Community College (MCCC) was not renewed in 2005.

Plaintiff began her employment at MCCC in 1979 as an executive assistant to the college president. In 1982, she became dean of the Division of Corporate and Community Programs (DCCP). As a non-faculty employee, plaintiff was employed through a series of contracts. Under the agreement between the board and the MCCC Professional Staff Federation, she was entitled to three-year reappointments and to a full year's notice of non-reappointment.

In June 2004, when plaintiff was 72 years old, college president Robert Rose notified her that she was not recommended for reappointment and that her contract would expire June 30, 2005. The decision was based on performance-related reasons.

Plaintiff's complaint alleged age-based discrimination and retaliation against defendants. Defendants moved for summary judgment. The motion judge held that the college did not violate the New Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-4 to -49, because the statute allows an employer to refuse to renew an employment contract of an employee over seventy years of age. Plaintiff appealed.

N.J.S.A. 10:5-12, states in pertinent part:

It shall be an unlawful employment practice, or, as the case may be, an unlawful discrimination:

a. For an employer, because of the ... age ... of any individual ... to refuse to hire or employ or to bar or to discharge or require to retire, unless justified by lawful considerations other than age, from employment such individual or to discriminate against such individual in compensation or in terms, conditions or privileges of employment; ...provided further that nothing herein contained shall be construed to bar an employer from refusing to accept for employment or to promote any person over 70 years of age.... (emphasis added).

The issue before the court was whether this over-seventy exception extended to renewal of employment contracts of existing employees.

The parties agreed that the over-seventy exception is unambiguous in that it does not insulate terminations. Relying on prior case law, the court noted that the plain meaning of refusal to accept for employment is refusal to hire. Thus, in order for plaintiff to escape from the exception, a contract nonrenewal must be equivalent to a termination rather than a refusal to hire. The court found that case law supported such a proposition.

In Battaglia v. Union County Welfare Board, 88 N.J. 48 (1981), cert. denied, 456 U.S. 965 (1982), the Court ruled that " no functional difference exists between the failure to reappoint at the end of a fixed term and the dismissal of an at-will employee." Similarly, in Blume v. Denville Township Board of Education, 334 N.J.Super. 13 (App.Div.2000), the court considered a disabled individual's discriminatory contract nonrenewal an improper termination under the LAD. And, contract nonrenewals have been equated to terminations in at least one age discrimination case. Rubin v. Forest S. Chilton, 3rd, Memorial Hospital, Inc.,359 N.J.Super. 105 (App.Div.2003).

The court found that although plaintiff's contract did not provide her with the expectation that her employment would continue beyond the contract's expiration, if defendants' decision not to renew was based on plaintiff's age, there is no difference for purposes of the LAD between plaintiff's nonrenewal and termination. Further, the court held that if independent contractors are entitled to the protection of the LAD when their contracts are not renewed for discriminatory reasons, then plaintiff, who had lengthy employment relationship with MCCC, although contractual rather than at-will, is entitled to the same protections. To find otherwise would " impede the general purpose of the LAD &lsquo to eradicate the cancer of discrimination.&rsquo "

Therefore, the court held that the over-seventy exception of N.J.S.A. 10:5-12a should not be interpreted to equate contract nonrenewals with a new hire. Or, in other words, the over-seventy statutory exception should be interpreted to equate a contract nonrenewal with a termination and to bar an age-based nonrenewal.

II. PROFESSIONAL MALPRACTICE

Court Has No Authority to Switch, On Its Own, a Client's Professional Malpractice Claim Against a Law Firm to a Breach Of Contract Claim When the Breach Of Contract Claim Was Never Raised By Any Party

In Steiner v. Markel, ---A.2d ---, 2009 WL 1143283 (Pa. April 29, 2009), Clifford and Bonnie Steiner ( " Clients ") filed suit against attorneys that represented them in a real estate transaction, asserting claims of professional malpractice, third party beneficiary, and breach of duty of good faith and fair dealing. The professional malpractice claim was thrown out at the trial court level because of the two-year statute of limitations for tort actions. But the Superior Court found sua sponte that the complaint stated a timely claim for breach of contract, which has a four-year statute of limitations, even if the clients didn't advance that theory in their complaint or appeal.

This appeal raised the issue of whether an appellate court may, sua sponte, search within a complaint to find a cause of action that the plaintiffs never argued was present in the complaint. The Supreme Court ruled that the Superior Court has no authority to switch, on its own, a client's professional malpractice claim against a law firm to a breach of contract claim when the breach of contract claim was never raised by any party.

First, the court found that the Clients did not preserve for appeal the issue of whether their Complaint contained a claim for breach of contract. The Clients argued that they preserved the issue by claiming in their Rule 1925(b) statement of matters complained of on appeal (the " Concise Statement " ) that the trial court had a duty to review the Complaint for " any theory " is wholly without merit. The court provided that in general, a Rule 1925(b) statement cannot resurrect an otherwise untimely claim or objection stating " [b]ecause issues not raised in the lower court are waived and cannot be raised for the first time on appeal, a 1925(b) statement can therefore never be used to raise a claim in the first instance. " The court found the Clients failed to ever allege that Count I was based in contract and, as such, waived their right to do so on appeal. The court further found that by raising this argument sua sponte, the Superior Court deprived the attorneys of an opportunity to respond thereto.

Second, the court held that, contrary to the Clients' argument, the trial court did not have a duty to scour the Complaint and uncover all potential claims therein. As the basis for their argument, the Clients rely upon a line of Superior Court cases, most recently Cardenas v. Schober. The Supreme Court said the 2001 opinion in Cardenas in which the Superior Court found a plaintiff's complaint included an intentional interference with inheritance claim, was distinguishable from this case. In Cardenas , the plaintiffs asked the court on appeal whether facts were sufficiently pleaded in the complaint to meet that claim and they had raised that claim throughout the litigation. In this matter, the court evaluated whether the complaint had " an entirely different, previously unstated, theory of recovery. " The court held that the Superior Court should not recast a pleading in a way not intended by the parties. "

The court stated that under the facts of the instant case, the trial court did not have a duty to find a breach of contract claim within the Complaint.