Opinion
DOCKET NO. A-2736-12T2
06-19-2014
MARK SHARIN, Plaintiff-Appellant, v. STAVOLA MANAGEMENT COMPANY, INC., RICK YOUNG, and DOMINIQUE GOODE, Defendants-Respondents.
Lueddeke Law Firm, attorneys for appellant (Karri Lueddeke, on the briefs). Margolis Edelstein, attorneys for respondents (Michael R. Miller, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Maven and Hoffman.
On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-1918-12.
Lueddeke Law Firm, attorneys for appellant (Karri Lueddeke, on the briefs).
Margolis Edelstein, attorneys for respondents (Michael R. Miller, on the brief). PER CURIAM
Plaintiff appeals from the August 10, 2012 order dismissing with prejudice his complaint against Stavola Management Company, Inc. (Stavola), Rick Young, and Dominique Goode (hereinafter defendants) for failure to state a claim upon which relief may be granted, pursuant to Rule 4:6-2(e). For the reasons that follow, we affirm the dismissal of the Conscientious Employee Protection Act (CEPA) claim as time-barred, and reverse and remand for further proceedings on the negligence claim.
I.
We review a grant of a motion to dismiss a complaint for failure to state a cause of action de novo, applying the same standard under Rule 4:6-2(e) that governed the motion court. See Frederick v. Smith, 416 N.J. Super. 594, 597 (App. Div. 2010), certif. denied, 205 N.J. 317 (2011). Such review "is limited to examining the legal sufficiency of the facts alleged on the face of the complaint." Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989). "[I]f the complaint states no basis for relief and discovery would not provide one, dismissal is the appropriate remedy." Banco Popular N. Am. v. Gandi, 184 N.J. 161, 166 (2005). A trial court should grant the dismissal "in only the rarest of instances." Printing Mart-Morristown, supra, 116 N.J. at 772.
We discern the following facts from the face of plaintiff's complaint, giving plaintiff the benefit of all reasonable factual inferences. See ibid. Stavola employed plaintiff from November 2004 through February 2011, as its Safety Director and Risk Manager. Rick Young served as the company's Chief Executive Officer from February 2006 to September 2008. In October 2007, plaintiff reported to the company owner that Young was having a sexual affair with a female employee. Plaintiff averred that immediately following this report, Young retaliated against him by cutting his salary, not paying his bonus, requiring him to work Saturdays without pay, and giving him a negative performance review.
In addition, plaintiff reported to Stavola family members that Young made misrepresentations with respect to safety issues on company properties to local police and federal safety officials during an investigation into a conveyor collapse, and pressured him, as the company safety officer, to do the same. Plaintiff asserted the company did not act to remedy the retaliation perpetrated by Young.
The complaint does not specify any dates for these allegations.
The next action took place years later. In April 2010, plaintiff borrowed $20,000 from his Prudential Insurance 401K plan to cover anticipated medical expenses, and took a medical leave of absence in June 2010. In November, plaintiff informed the company that he had been cleared to return to work, however the new CEO informed him his leave was extended until April 2011. On February 15, 2011, Stavola terminated plaintiff's employment.
When plaintiff sought direction on repaying the 401K loan, Dominique Goode, Stavola's H.R. manager, told plaintiff he had to repay the loan through the company. The instruction was contrary to the information he received from Prudential, indicating he could send payments directly to Prudential. Nevertheless, he made his payments to Stavola.
Several months later, plaintiff learned Stavola had moved funds totaling $1,912.54 from plaintiff's vested 401K account to a non-vested account without his knowledge or consent. The company had also failed to remit several 401K loan repayments to Prudential, thereby causing a default and the loan deemed an early distribution. Thereafter, Stavola repaid plaintiff $1,912.54 for the non-payments, but refused to accept responsibility for the $7,000 plaintiff allegedly incurred as the tax consequences for the early distribution.
On April 26, 2012, plaintiff filed a complaint against defendants, asserting a violation of CEPA (count one), and claims of common law wrongful termination (count two), intentional and negligent infliction of emotional distress (count three), and negligence (count four). In July 2012, defendants moved to dismiss the complaint for failure to state a claim under Rule 4:6-2(e), asserting (1) the CEPA claim was time-barred by the one-year statute of limitations; (2) the wrongful termination claim failed to adequately allege causation; (3) the complaint failed to allege facts necessary to state a claim of intentional infliction of emotional distress; (4) the complaint failed to allege serious injuries as needed for a negligent infliction of emotional distress claim; and (5) plaintiff failed to allege defendant owed him a duty as needed for a negligence claim. The trial court entered an order on August 10, 2012, granting defendants' motion and dismissing plaintiff's complaint with prejudice.
In granting defendants' motion, the judge summarily dismissed counts two and three as unopposed by plaintiff. The judge barred plaintiff's CEPA claim because (1) the purported retaliatory conduct (the misappropriation) occurred at a time when he was no longer employed by Stavola, and (2) any retaliatory conduct which occurred during plaintiff's employment was time-barred by the one-year statute of limitations on CEPA claims. The judge did not address plaintiff's continuing violation basis for extending the statute of limitations. The judge dismissed the negligence claim finding plaintiff failed to establish the duty Stavola owed to him.
On appeal, plaintiff argues the trial court erroneously determined that his CEPA claim is time-barred, contending the complaint is based on a continuing violation exception to the statute of limitations. Additionally, plaintiff argues the trial court erred in finding Stavola did not owe a duty to plaintiff.
Plaintiff does not challenge the dismissal of counts two and three.
II.
We begin by reviewing the dismissal of plaintiff's CEPA claim. In his first point, plaintiff contends he was retaliated against and discharged from his employment in violation of CEPA. Furthermore, he contends the 401K misappropriation was a continuing violation done in retaliation of his earlier whistle-blowing report against the former CEO in 2007. In that regard, he argues the continuing violation doctrine applies to the CEPA claim making his claim of post-termination retaliatory conduct timely, as it was filed within one-year of learning of the misappropriation of funds.
Our Supreme Court has long recognized the purpose of CEPA is "to protect and encourage employees to report illegal or unethical workplace activities and to discourage public and private sector employers from engaging in such conduct," and held that CEPA should be liberally construed to achieve its remedial purpose. Abbamont v. Piscataway Twp. Bd. of Educ, 138 N.J. 405, 431 (1994). As such, an employer is prohibited from retaliating against an employee who reports "to a supervisor . . . an activity, policy or practice of the employer . . . that the employee reasonably believes . . . is in violation of a law . . . or regulation." N.J.S.A. 34:19-3(a). Retaliation includes "discharge . . . or other adverse employment action." N.J.S.A. 34:19-2(e). CEPA claims are often analyzed utilizing the same framework we employ in Law Against Discrimination (LAD) cases. See Abbamont, supra, 138 N.J. at 417 (citing Green v. Jersey City Bd. of Educ, 177 N.J. 434, 448 (2003)); see also Racanelli v. Cnty. of Passaic, 417 N.J. Super. 52, 58 (2010).
The statute of limitations for filing a CEPA action is one year. N.J.S.A. 34:19-5. The accrued dates for discrete acts are dates upon which the events occurred. Roa v. Roa, 200 N.J. 555, 567 (2010). Thus, "[a]n employee's CEPA claim accrues on the date of his actual demotion, suspension or termination of employment." Villalobos v. Fava, 342 N.J. Super. 38, 50 (App. Div.), certif. denied, 170 N.J. 210 (2001). "A plaintiff need not know with certainty that there is a factual basis for a claim under CEPA for the one year limitation period to be triggered; it is sufficient that he should have discovered that he may have a basis for a claim." Id. at 49 (emphasis removed).
As in LAD, "determining when the limitation period begins to run depends on when the cause of action accrued, which in turn is affected by the type of conduct" alleged to have violated the statute. Alexander v. Seton Hall Univ., 204 N.J. 219, 228 (2010). Here, the CEPA one year statute of limitations began to run on the date of plaintiff's termination, February 15, 2011. The termination is a discrete act. Ibid.
Plaintiff filed the complaint in the Law Division on April 26, 2012, more than one year following his termination. We conclude, any claims alleging retaliatory conduct during plaintiff's employment are time-barred by the late filing of the complaint.
Although the complaint is devoid of specific dates, we deduce the initial adverse employment actions occurred between 2007 and 2008 after the reports of Young's alleged office affair and misrepresentation to safety officials, as Young's tenure as CEO ended in 2008.
--------
Plaintiff, further argues the misappropriation of funds from his 401K account and the non-payments to Prudential in 2011 after his termination were continuing violations done in retaliation for his earlier whistle-blowing report against the former CEO in 2007, which extends the statute of limitations. This argument lacks merit.
Under the continuing violation doctrine, "[w]hen an individual is subject to a continual, cumulative pattern of tortious conduct, the statute of limitations does not begin to run until the wrongful action ceases." Shepherd v. Hunterdon Developmental Ctr., 174 N.J. 1, 18 (2002) (alternation in original) (quoting Wilson v. Wal-Mart Stores, 158 N.J. 263, 272 (1999)). The continuing violation doctrine is applicable in CEPA cases. Green v. Jersey City Bd. of Educ, 177 N.J. 434, 448 (2003). However, the continuing violation doctrine "does not permit . . . the aggregation of discrete discriminatory acts for the purpose of reviving an untimely act of discrimination that the victim knew or should have known was actionable." Alexander, supra, 204 N.J. at 229-30 (quoting Roa, supra, 200 N.J. at 569.) Here, the alleged misappropriation of plaintiff's 401K account is a discrete act, which may not be aggregated to his retaliatory discharge claim.
We therefore conclude Stavola's misappropriation of plaintiff's funds and mishandling of the loan payments are discrete acts for which the continuing violation doctrine does not apply. Thus, there was no basis to extend the one-year statute of limitation and the claim was time-barred.
Likewise, plaintiff may not separately maintain a CEPA claim based upon defendant's alleged post-employment retaliatory actions related to his 401K account. CEPA's express language, as well as the Supreme Court's opinion in Young v. Schering Corp. , 141 N.J. 16 (1995), clearly indicate that CEPA does not apply to post-employment retaliatory activities. Beck v. Tribert, 312 N.J. Super. 335, 343-44 (App. Div.), certif. denied, 156 N.J. 424 (1998)). While a former employee may file a CEPA claim post-employment, the cause of action must be based upon conduct occurring during the course of the aggrieved employee's employment. See N.J.S.A. 34:19-2(e) (defining retaliatory action as "the discharge, suspension or demotion of an employee, or other adverse employment action taken against an employee in the terms and conditions of employment.") As applied here, we agree that CEPA does not impose liability upon Stavola for any alleged post-employment actions that affect plaintiff. See Zubrycky v. ASA Apple, Inc., 381 N.J. Super. 162, 168 n.2 (App. Div. 2005) (citing Young, supra, 141 N.J. at 32); Beck, supra, 312 N.J. Super. at 343-44.
In sum, the CEPA claim was time-barred and based upon conduct not viable as a matter of law because it relates to post-employment. We conclude count one of the complaint was properly dismissed.
III.
Next, we address plaintiff's negligence claim. He argues Stavola owed him a duty once it demanded that he make the loan repayments directly to the company, and contends Stavola assumed the responsibility of remitting the payments to Prudential. As such, plaintiff maintains Stavola breached its duty to him by failing to remit the loan payments to Prudential causing plaintiff to suffer financial damages. Defendants argue Stavola did not owe plaintiff a duty with respect to how he paid the loan back and, therefore, could not be held liable for the resulting tax liability.
It is fundamental that cases sounding in negligence require a showing of a duty, a breach of that duty, and foreseeable resulting injury proximately caused by the breach. Mergel v. Colgate-Palmolive-Peet Co., 41 N.J. Super. 372, 379 (App. Div.), certif. denied, 22 N.J. 453 (1956). The existence of a duty is a question of law to be determined by the court. Hirsch v. Gen. Motors Corp., 266 N.J. Super. 222, 249 (Law Div. 1993). Questions of the breach of the duty, foreseeability, and proximate cause are, under the circumstances, peculiarly within the competence of a jury. Hambright v. Yglesias, 200 N.J. Super. 392, 396 (App. Div. 1985).
The four corners of the complaint plainly suggests that Stavola directed plaintiff to repay the 401K loan through the company. The complaint equally suggests the company failed to make a number of payments and allegedly acknowledged awareness of the obligation to remit the payments as evidenced by the repayment to plaintiff of the diverted funds. The tax liability is asserted to be another consequence of the defaulted loan. Plaintiff should be permitted to proceed on this cause of action.
If "the fundament of a cause of action may be gleaned even from an obscure statement of claim," then the complaint should survive this preliminary stage. Craig v. Suburban Cablevision, Inc., 140 N.J. 623, 626 (1995). Thus, dismissal of this cause of action was improvidently granted. R. 4:6-2(e).
Affirmed in part, reversed and remanded for further proceedings on count four of the complaint. We do not retain jurisdiction.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF APPELLATE DIVIDION