Opinion
DOCKET NO. A-5717-13T2
04-11-2016
WILLIAM EDWARDS and CAROLINE EDWARDS, Plaintiffs-Appellants, v. STATE OF NEW JERSEY CASINO CONTROL COMMISSION, LINDA KASSEKERT and GARY STEIN, Defendants-Respondents, and TAMA HUGHES and MARK GIANNANTONIO, Defendants.
George L. Farmer argued the cause for appellants. David J. Truelove argued the cause for respondents Casino Control Commission and Linda Kassekert (Hill Wallack, attorneys; Mr. Truelove and Jordan S. Friedman, of counsel and on the brief). Sean J. Mack argued the cause for respondent Gary Stein (Pashman Stein, attorneys; Mr. Mack, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Fisher, Rothstadt and Currier. On appeal from Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-1474-09. George L. Farmer argued the cause for appellants. David J. Truelove argued the cause for respondents Casino Control Commission and Linda Kassekert (Hill Wallack, attorneys; Mr. Truelove and Jordan S. Friedman, of counsel and on the brief). Sean J. Mack argued the cause for respondent Gary Stein (Pashman Stein, attorneys; Mr. Mack, of counsel and on the brief). PER CURIAM
Plaintiff William Edwards appeals from the Law Division's order denying his motion for summary judgment, granting summary judgment in favor of defendants, and dismissing his complaint. The claims asserted in his complaint arose out of plaintiff's termination from his employment as the director of surveillance for Tropicana Casino and Resort Atlantic City (Tropicana). According to plaintiff, his termination was wrongful because, among other reasons, it was not authorized by his employer's independent audit committee, as required by law. In his pleading, plaintiff asserted numerous causes of action against each defendant.
William Edwards' wife, Caroline Edwards, sued per quod. Because her claim is derivative, we refer solely to William Edwards as plaintiff in this opinion.
Plaintiff's complaint asserted claims against defendants Gary Stein, a retired New Jersey Supreme Court Justice who had been appointed as Tropicana's conservator; Mark Giannantonio, Tropicana's president and chief operating officer; Tama Hughes, Tropicana's vice president and general counsel; the New Jersey Casino Control Commission (CCC); and Linda Kassekert, the CCC chairperson. Specifically, the complaint alleged breach of fiduciary duty against Stein, Kassekert, and the CCC; defamation and slander against Kassekert, Hughes, Giannantonio, and the CCC; tortious interference of contract against the individual defendants; vicarious liability against the CCC for the actions of Kassekert and Stein; and negligence, wrongful discharge, violation of the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -14, intentional infliction of emotional distress, negligent infliction of emotional distress, and a per quod claim against all defendants. Plaintiff later amended his complaint to further allege professional malpractice against Hughes; failure to train against the CCC and Kassekert; and violation of state and federal constitutional rights, as well as federal statutory rights, against all defendants.
Before the parties filed their summary judgment motions, they entered into a partial stipulation of dismissal with prejudice as to "all causes of action, claims and allegations based upon alleged claims of retaliatory discharge including, but not limited to, alleged violations of [CEPA] . . . filed by [p]laintiff in this matter and in any previous or subsequently filed pleadings in this matter." The summary judgment motions, therefore, related only to the remaining claims.
On May 28, 2014, Judge James P. Savio entered the order under appeal, setting forth his reasons in a comprehensive thirty-three page written decision. In his decision, the judge essentially found that none of plaintiff's outstanding claims had any merit.
In October 2014, the parties entered into a stipulation of dismissal of the instant appeal as to Hughes and Giannantonio.
On appeal, plaintiff advances five main contentions, which he divides into forty-five subparts and sub-subparts. We summarize them as follows. According to plaintiff, the motion judge failed to consider the entire motion record; mischaracterized the scope of the parties' partial stipulation of settlement; made errors in his findings of fact surrounding plaintiff's termination of employment, including that it was justified; improperly found that plaintiff's firing was authorized by the proper authority; failed to find that plaintiff's due process and other civil rights were violated; incorrectly determined the nature of plaintiff's employment by finding that it was at-will rather than subject to an implied contract; ignored material issues of fact when granting defendant's summary judgment motions; and misapplied the law as to several of plaintiff's claims.
We have considered each of plaintiff's arguments in light of our review of the record and applicable principles of law. We affirm.
We review an order granting summary judgment de novo, applying the same standard used by the trial court, Manahawkin Convalescent v. O'Neill, 217 N.J. 99, 115 (2014), which requires summary judgment be denied if "the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Townsend v. Pierre, 221 N.J. 36, 59 (2015) (quoting Davis v. Brickman Landscaping, Ltd., 219 N.J. 395, 406 (2014)); see R. 4:46-2(c). The salient facts in this case, drawn from the competent evidential materials, and viewed "in the light most favorable to . . . the non-moving part[ies]," Lippman v. Ethicon, Inc., 222 N.J. 362, 367 (2015) (citing Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523, 540 (1995)), can be summarized as follows.
Plaintiff was employed as Tropicana's executive director of surveillance, working as a security supervisor from May 2001 until his termination in September of 2008. He was responsible for Tropicana's CCC and Division of Gaming Enforcement regulation compliance. According to state regulations, while Tropicana was licensed and not operating under a conservatorship, plaintiff could only be terminated by Tropicana's independent audit committee (IAC).
The purpose of this requirement is to insulate a surveillance department from casino management in order to ensure the department's independence, thereby preventing its corruption. See N.J.A.C. 13:69D-1.11(c)(2); In re Adamar of N.J., Inc., 401 N.J. Super. 247, 268 (App. Div.), aff'd o.b., 197 N.J. 179 (2008). Where, as here, the casino is not under corporate control, the IAC's responsibilities can be carried out by an IAC equivalent. See N.J.A.C. 13:69D-1.11(c)(2)(iv).
At the time of plaintiff's employment termination, Tropicana did not have an IAC, and was under a conservatorship and control of the CCC because of changes to its ownership in 2006 and suspension in 2007. Tropicana was required to execute a trust agreement appointing Stein as trustee to hold its interest in the casino until the CCC determined whether the casino was qualified, but was allowed to operate under an "interim casino authorization" (ICA). Stein, as the "ICA trustee," was obligated to "exercise all rights incident to the ownership of the property subject to [the] Trust." On August 2, 2007, Tropicana sought to renew its casino license, which the CCC denied largely because Tropicana never formed an IAC as required by regulation. On December 12, 2007, the CCC appointed Stein as a conservator "for the purpose of ensuring continuity and stability in casino operations pending a disposition of the property."
In an earlier consideration of this matter, we issued an unpublished opinion, see Edwards v. State Casino Control Comm'n, No. A-4738-11 (App. Div. Nov. 13, 2013), in which we partially affirmed, reversed and remanded the trial court's entry of summary judgment in favor of defendants based on jurisdictional grounds. We described in greater detail the "upheaval" experienced by Tropicana due to its restructuring and the denial of its renewal application. As we noted in our earlier opinion, additional details were also included in our opinion in Adamar, supra, 401 N.J. Super. at 254-64. We find it unnecessary to detail those facts here again.
After the CCC placed Tropicana under the conservatorship, Kassekert wrote to plaintiff, ordering him "to report only to [her] or [her] designee on matters of policy, purpose, responsibility and authority." According to Kassekert, she "assumed certain functions" of the non-existent IAC, and believed this was permissible as Tropicana was unlicensed and "under the control of a state conservator who was responsible for maintaining the casino." Stein acknowledged that "Kassekert had determined that she would fulfill the responsibilities of an [IAC] because [the casino's owner] no longer was a licensee."
Prior to the reorganization of Tropicana's ownership and the appointment of Stein, plaintiff failed to execute his responsibilities related to the casino's surveillance system, causing the casino to be fined and subjected to certain limitations in the performance of its operations. Between February 2003 and April 2004, Tropicana purchased eight digital recording units and attached seventy-one cameras to them without plaintiff insuring that it first obtained the CCC's approval, thereby violating specific regulations. Tropicana was also "the subject of four warning letters related to its Surveillance Department." Consequently, in April 2007, Tropicana entered into a stipulation with the CCC in which Tropicana "reconfirmed with its surveillance personnel that no changes can be made to any aspects of Tropicana's surveillance system without written approval from the [c]ommission," and agreed to pay a civil penalty of $30,000.
This was a violation of N.J.A.C. 19:46-1.10(i), now N.J.S.A. 13:69D-1.10, which requires notification to the State before any "addition or change to the [casino's] CCTV system and computer equipment in the monitoring room."
Despite the stipulation's terms, plaintiff violated the same regulation in July 2008 by installing surveillance equipment without obtaining prior approval. As a result, Giannantonio and Hughes met with Kassekert and informed her about plaintiff's unauthorized actions. Plaintiff ultimately admitted that, on April 10, 2008, he was advised "that Tropicana was not approved for server based recording of surveillance," and that he never "obtain[ed] any approval" to install that equipment. Due to the violation, Kassekert authorized Giannantonio "to proceed with whatever disciplinary action he deemed appropriate, short of termination."
In September 2008, Giannantonio placed plaintiff on "investigative suspension." The suspension was authorized by Stein based upon "the clear representation of management . . . that [plaintiff] had not done what he should have done, that he knew he had to do it, that he acknowledged he had to do it and then he didn't do it, and that failure to do what he should have done combined with the prior event that resulted in a $30,000 fine, [which] persuaded management to recommend his suspension."
After investigating the matter further, on October 13, 2008, Tropicana requested that Kassekert either terminate plaintiff's employment or impose a form of disciplinary action she deemed appropriate. On October 21, Tracy E. Richardson, counsel for the CCC, wrote to plaintiff to advise him that his termination would be considered by Kassekert on October 24 at the CCC's office. Plaintiff's counsel responded on October 23, asserting that his client had "already been terminated" and informing the Commission that plaintiff would not be attending the meeting. On October 24, Richardson again wrote to plaintiff, stating that, while Edwards was not entitled to a hearing on the matter, Kassekert "had some questions she wished to discuss . . . shortly before making a determination." Thus, Richardson again invited plaintiff to meet with Kassekert on October 29, but told plaintiff he was not entitled to bring counsel. On October 27, plaintiff's counsel again informed the CCC that his client would not attend the meeting.
Kassekert wrote to plaintiff, explaining that he was being terminated. In her letter, Kassekert noted:
I find it particularly disturbing that this course of conduct took place the year after Tropicana had entered into a Stipulation of Settlement and agreed to pay a fine of $30,000 for virtually the same misconduct. In the April 25, 2007 stipulation, Tropicana admits that it failed to obtain Commission approval to install and utilize digital recording equipment . . . . Moreover, that equipment was installed and utilized between February 2003 and April 2004, at which time you were Tropicana's Director of
Surveillance, having been hired into that position in May 2001.
. . . It is almost incomprehensible that the Director of a department required by Commission regulation could allow that department to commit a violation that resulted in a $30,000 fine, then personally engage in seemingly identical conduct the following year.
Since this prior violation made it clear to Tropicana and you, as Executive Director of Surveillance, that any changes to the surveillance system needed written approval by the Commission, I see no reason why you may have thought that regulatory approval was not required for the new digital storage unit installed on July 24, 2008. Because of your failure to obtain necessary approvals for the digital storage unit, and in light of your knowledge of a previous regulatory violation that lead [sic] to imposition of a monetary penalty, your termination is appropriate.
Plaintiff filed suit against all defendants. The applications for summary judgment were filed subsequent to the close of discovery.
In his written decision, Judge Savio initially reviewed the procedural background of the matter and expressly identified the remaining claims, in light of the parties' stipulation of dismissal of plaintiff's claims based on retaliation. He stated:
Due to the dismissal of portions of the complaint alleging a CEPA violation and claims based upon alleged claims of retaliatory discharge, all claims alleging
wrongful discharge, wrongful termination, or other CEPA related claims are dismissed by agreement of the parties. Obviously, the partial stipulation of dismissal is broader than the dismissal of only CEPA claims; including all claims of retaliatory discharge and related common law claims.
Upon reviewing the facts as alleged by the parties, the judge observed that "[o]ne of the most significant issues . . . is whether plaintiff was an employee at will." He then turned to plaintiff's statements in the record that there was no written contract of employment and that "no one ever verbally expressed to him that he had a verbal contract of employment." The judge noted that plaintiff confirmed as much when he testified at deposition that he understood he was an employee at-will. Further, the judge identified plaintiff's contentions despite those admissions and defendants' response to them.
Judge Savio discussed at length the legal principles governing each of plaintiff's outstanding claims. He began with those governing the court's consideration of summary judgment. The judge considered the applicable law for determining whether an employee is at-will; whether plaintiff's constitutional claims were viable; the applicability of the New Jersey Tort Claims Act, N.J.S.A. 59:1-1 to 12-3; and the viability of plaintiff's causes of action for breach of fiduciary duty, negligence, defamation, intentional and negligent infliction of emotional distress, failure to train, plaintiff's wife's per quod claim, and the CCC's and Tropicana's liability under the theory of respondeat superior.
Judge Savio applied each of the identified legal principles to plaintiff's claims, which he concluded were without merit. The judge found that, as a matter of law, plaintiff was an at-will employee and was properly terminated for cause without violation of legal or constitutional rights. He also concluded that there was no fiduciary relationship between plaintiff and any defendant to be breached by terminating plaintiff's employment; no proof of negligence or tortious interference with a contract, especially absent a contract; and no factual or legal basis to maintain plaintiff's remaining claims of defamation, infliction of emotional distress, failure to train, or liability under the theory of respondeat superior.
We conclude from our review of the motion record that all of plaintiff's arguments challenging the dismissal of his complaint on summary judgment are of insufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). Suffice it to say, the CCC and Stein acting on behalf of Tropicana had more than sufficient cause to terminate plaintiff's employment and their actions were authorized under the circumstances. We therefore affirm, substantially for the reasons set forth by Judge Savio in his thorough and well-reasoned written decision.
Tropicana was under a conservatorship, not corporate control, when it fired plaintiff. N.J.A.C. 13:69D-1.11(c)(2)(iv) states that directors of casino licensees that are not under corporate control can be terminated by an IAC equivalent. Under the conservatorship, Kassekert took that role. This was consistent with the Commission's broad regulatory power over casino control. See Adamar, supra, 401 N.J. Super. at 267. --------
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION