Helpin v. Trustees of the University of Pennsylvania
10 A.3d 267
| Pa. | 2010Background
- Dr. Mark L. Helpin, a D.M.D., joined UPenn in 1989 as Director of Pediatric Dentistry at CHOP with a base salary of $60,000 and a profit-sharing provision granting 50% of CHOP Dental's net operations for increases.
- Starting in 1996, Helpin attained associate professor status and could be terminated only for just cause or if unable to offset salary and expenses, under Penn policies.
- From 1996 through December 2003, Helpin remained at CHOP with 50% of CHOP dental clinic profits available to him for use in various ways, including paying himself or reinvesting.
- In December 2003, Dean Jeffcoat transferred Helpin from CHOP to Penn’s Bryn Mawr dental clinic; in September 2004 he gave notice of resignation, alleging intolerable conditions and a salary cut not tied to CHOP profits.
- In 2005 Helpin sued for breach of contract and tortious interference with prospective economic relations; a jury awarded about $4.04 million for breach of contract, finding constructive discharge without just cause and improper failure to continue CHOP profits sharing.
- Penn challenged damages, arguing among other things that future profits should be discounted to present value; Helpin sought post-trial relief, and the case progressed to this Court on the present issue of damages valuation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Should future profits be discounted to present value? | Helpin argues discounting is proper to reflect present value. | Penn contends Kaczkowski total-offset applies, avoiding discounting for profits. | Yes; discounting is required to reflect inflation and present value considerations, and total-offset does not foreclose proper valuation in this case. |
| Does Kaczkowski's total-offset method apply to lost future earnings from business profits? | Helpin asserts Kaczkowski applies generally to lost earnings, including profits. | Penn argues Kaczkowski is limited to certain contexts and should not extend to future profits from CHOP clinic. | Yes; the Court affirmatively applies Kaczkowski's total-offset approach to lost future earnings from business profits. |
| Is there under-compensation or overcompensation by applying total-offset to profits case? | Helpin contends total-offset better reflects inflation/interest interplay and prevents under-compensation. | Penn argues total-offset risks overcompensation and is inappropriate for contract-based lost profits. | Total-offset is applicable and appropriate, preserving full compensation while recognizing inflation/interest dynamics. |
Key Cases Cited
- Kaczkowski v. Bolubasz, 491 Pa. 561 (Pa. 1980) (developed total-offset approach for lost future earnings)
- Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523 (U.S. 1983) (inflation/discounting considerations in lost earnings at the federal level)
- Gregorius v. Safeway Steel Scaffolds Co. of Pittsburgh, 409 Pa. 578 (Pa. 1963) (six-percent interest rule historically used for discounting)
- Windle v. Davis, 275 Pa. 23 (Pa. 1922) (six percent discount rate for present value in personal injury damages)
- Chesapeake & Ohio Ry. Co. v. Kelly, 241 U.S. 485 (U.S. 1916) (present-value discounting of future pecuniary benefits)
- Monessen Southwestern Ry. Co. v. Morgan, 486 U.S. 330 (U.S. 1988) (recognizes limits of applying state-law rules to federal claims; context for discounting in some remedies)
- Feldman v. Allegheny Airlines, Inc., 524 F.2d 384 (2d Cir. 1975) (inflation/real-growth considerations in earnings projections)