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Perrella v. Board of Education

Decided: March 18, 1968.


For reversal and remandment -- Chief Justice Weintraub and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For affirmance -- None. The opinion of the court was delivered by Francis, J.


[51 NJ Page 325] On December 7, 1961, the Board of Education of the City of Jersey City, by resolution, established a Legal Department. This was done because, as the resolution asserted, "a careful and diligent survey" showed the existence of "complex and extensive legal matters." The department as created was to be headed by a Chief Administrative Counsel, a Counsel and an Assistant Counsel. The Counsel

and Assistant Counsel were to be under the general supervision of the Chief Administrative Counsel. The latter, however, did not establish their duties or his own. The duties of each attorney were set forth specifically in the resolution. The Chief Administrative Counsel was not given the authority to hire or to fire his assistants or to fix their salaries; nor was he given authority to hire or fire any clerical or other help in the so-called department. Control of all of those matters was retained by the Board.

An additional resolution adopted at the same time appointed the plaintiff, Michael R. Perrella, Chief Administrative Counsel at an annual salary of $8,000. No term of service was fixed. A Counsel and an Assistant Counsel were named also at substantial salaries. At the time of the event which produced this suit Perrella's salary had been increased to $15,000, and provision had been made for a $1,000 increment to be added the following year.

Perrella continued to act as Chief Administrative Counsel until July 8, 1964. On that date the Board adopted a resolution abolishing the "office or position" in order "to effect economies and greater efficiency." A second resolution of the same date, effective immediately, terminated Perrella's services.

There is nothing in the resolutions creating the position of Chief Administrative Counsel and appointing Perrella to it which specified that full-time services were required. The overwhelming evidence in the record shows that devotion of full time was neither expected by the Board nor given by Perrella or his two assistants. His testimony was that every third week when he was on duty according to the schedule established for himself and his assistants, he would average about three hours a day or 15 hours a week at the Board. During the other weeks when the assistants were on duty he would average "on the job" about five hours a week. These hours were said to be daytime hours, and it was testified that many hours were spent at evening meetings and on Board work. Perrella was engaged in the private practice

of law all during the period he was Chief Administrative Counsel. He testified:

"Q. So you would say that you were able to continue your private practice of law to the fullest extent during your service as chief administrative counsel?

A. Yes, I could and I did.

Q. Did your duties as chief administrative counsel, Mr. Perrella, interfere with your handling of private practice in any way?

A. It did not."

No member of the Board of Education denied Perrella's assertion that his appointment was for part-time employment.

It is undisputed that Perrella is a veteran within the meaning of N.J.S.A. 38:16-1. A few weeks after the termination of his services he instituted this proceeding in lieu of prerogative writ alleging that N.J.S.A. 38:16-1 gave him tenure as a veteran and that he could not be deprived of his position except for good cause and after a hearing. He asserted also that his removal was political in nature and not to effect economy. Accordingly he claimed that the resolution purporting to remove him was void, and that he should be restored in his position with back pay.

After answer and pretrial conference a partial trial was held on the basic legal issues, exclusive of damages. At the conclusion thereof, the trial court held that plaintiff had tenure as a veteran and the termination of his services was not for good cause, but for political reasons. Consequently the resolution ousting him was adjudged invalid, plaintiff's restoration was ordered, and the cause was set down for further hearing on the matter of the compensation due him. Instead of completing the proceeding, defendant appealed from this judgment under R.R. 4:55-2.

While the appeal was pending, the Board passed another resolution on September 20, 1965 abolishing its Legal Department. The Appellate Division was so advised. After argument of the appeal, however, in an unreported opinion, it

affirmed the trial court's partial judgment, saying the evidence in the record sufficiently supported the trial court's finding that plaintiff, a veteran, had been removed for political reasons. The Appellate Division did not consider the effect of the new resolution abolishing the Legal Department. It declared, however, that the trial court's judgment should be modified to make the order restoring plaintiff to his position subject to "any lawful disposition" thereof in the meantime. Presumably because of the interlocutory nature of the matter, defendant made no application to this Court for certification to review the Appellate Division's judgment. On remand, the trial court modified its judgment as directed.

Thereafter, in an independent action, the resolution of the Board of Education abolishing the Legal Department was sustained in the trial court and later in an unreported opinion of the Appellate Division. This Court denied certification. Witkowski v. Board of Education, 50 N.J. 294 (1967).

Plaintiff accepted the decision in Witkowski that the Board's Legal Department was abolished properly on September 20, 1965. But he claimed on the basis of his earlier favorable judgment he was entitled to back pay between July 8, 1964 and September 20, 1965. The trial court agreed with that view and set the matter down to determine the compensation to which plaintiff was entitled. At that hearing, on the basis of the testimony previously taken, the court adjudged as a matter of law that the position of Chief Administrative Counsel was a full-time position; further, that in computing Perrella's back pay, his earnings from the practice of law should be applied in mitigation. Again, although final judgment had not been achieved, plaintiff appealed under R.R. 4:55-2.

The Appellate Division, in an unreported opinion, affirmed the trial court's holding that a back-pay award would be subject to mitigation. In view of the brevity of the record, however, it declined to review the finding that plaintiff's

position was a "full-time position." The Appellate Division remanded to the trial court for the taking of further evidence, "the completion of the trial and the entry of a final judgment on all issues." In doing so it directed, and properly so, that "further appeals from interlocutory orders in this litigation, pursuant to R.R. 4:55-2, should be avoided."

At the renewed hearing in the trial court the parties stipulated (1) that the resolutions creating the position of Chief Administrative Counsel contained no language to the effect that devotion of full time to the Board's duties was required; (2) that they contained no language prohibiting him from practicing or continuing to practice law privately; and (3) that during the time Perrella was Chief Administrative Counsel he did continue his private practice of law and derived income therefrom.

Testimony and income tax returns were then introduced to show Perrella's gross income from the private practice of law for the years 1961 through 1965. After referring to the stipulation mentioned above, the trial judge decided plaintiff was entitled to his full annual $16,000 salary for the 14-1/2 months between July 8, 1964 and September 20, 1965. He concluded also, without stating a supporting legal rule, that under the circumstances no mitigation would be ordered. In addition, and despite the award of full salary totaling $19,333.32 without mitigation, a fee of $3,000 was allowed plaintiff's counsel, also chargeable against defendant. Upon entry of judgment, a third appeal was taken. The Appellate Division affirmed in an unreported opinion, and we granted defendant's petition for certification. 50 N.J. 292 (1967).

The piecemeal processing of this litigation has now reached a final judgment. Our certification has brought to this Court for the first time all aspects of the controversy. At oral argument we questioned whether plaintiff had tenure status with the Board at the time of his discharge. ...

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