On appeal from Superior Court of New Jersey, Law Division, Monmouth County.
Michels, McElroy and J. H. Coleman. The opinion of the court was delivered by McElroy, J.A.D.
These consolidated appeals raise the issue of whether defendant Freehold Raceway Association (FRA) and its racing secretary, defendant, Frank Ferrone, possess the unlimited right, for asserted business reasons, to bar Lord John C, a standard-bred horse owned by plaintiff-appellant John Marzocca, from racing at FRA's track.
The relevant facts follow. After racing his horse at Freehold Raceway in three successful and successive races Marzocca, on May 8, 1981, instructed his trainer to remove Lord John C from that race meeting and enter him at Yonkers Raceway in New York. The reason for this removal was the hope of winning larger purses than those available to this horse at Freehold. When plaintiff's trainer informed FRA's racing secretary of this decision, Ferrone advised the trainer that if the horse were removed at that time it would never be permitted to race at the Freehold facility again. Marzocca, nevertheless, removed the horse and entered it at Yonkers. True to his word, Ferrone refused to permit Lord John C to race at Freehold when Marzocca twice attempted to enter the horse in July 1981. Another standard-bred owned by Marzocca, Olympic Charley, was accepted by Ferrone and permitted to race.
The certification filed by Ferrone gives the reasons for barring Lord John C. Ferrone has a duty to his employer to establish daily programs. Part of that task requires him to have available a sufficient number of horses in a given class to attract significant betting, thus ensuring profitability to the track and revenue to the State. If there are fewer than six horses in a race, and particularly if late scratches develop, there is a "short
field." Such a race depresses betting and the track may face the possibility of a minus pool, requiring the FRA to pay out more than was wagered. Moreover, a track needs committed sound horses so that races may be drawn up in advance as to type of race and size of purse. Lord John C "developed in the spring of 1981 into a good $15,000 class horse" and in this class Ferrone "consistently had extreme difficulty filling races." He regarded Marzocca's transfer of Lord John C, without advance notice, as a discourtesy and a selfish action that threatened the interests of other horse owners and the track. Ferrone's attempt to persuade the trainer to race at Freehold for one or two further weeks was rebuffed. It is clear that Ferrone's refusal to permit Lord John C to race was not pursuant to any state rule or regulation. The record is silent as to whether this action was taken pursuant to any internal rule of FRA in force and known to horse owners prior to the race meeting being held in May 1981.
We take notice that FRA operates a private track in Freehold, New Jersey, and is given quasi -monopolistic protection. N.J.S.A. 5:5-45 and 5:5-46; N.J.A.C. 13:70-3.1. During some months it is the only track in this State scheduling races for standard-bred horses. During other months its season may conflict with harness racing at the Meadowlands Raceway or the track at Atlantic City. Freehold is subject to statutory and administrative regulations. See N.J.A.C. 13:70-1.1 et seq. There are state employees present at the track on a full-time basis, including New Jersey State Police (see N.J.A.C. 13:70-1.27), state stewards and a state veterinarian. See N.J.S.A. 5:5-37. All owners, drivers, jockeys and trainers must be licensed by the New Jersey Racing Commission (NJRC) before they can race on a New Jersey track. N.J.A.C. 13:70-4.1, N.J.A.C. 13:70-9.1.
When plaintiff was denied the right to race Lord John C at Freehold Raceway he responded by filing a verified complaint in the Chancery Division, seeking a restraining order against FRA, Ferrone and the New Jersey Racing Commission. On July 27,
1981 the court signed an order to show cause returnable August 3, 1981. The hearing was held on August 4, 1981 after FRA and Ferrone filed a motion to dismiss the complaint as failing to state a claim upon which relief can be granted. On that date the court granted defendants' motion.*fn1 An order was entered September 16, 1981 dismissing the verified complaint and discharging the order to show cause "for lack of subject matter jurisdiction in this court and for failure of the plaintiff to state a claim upon which relief can be granted."*fn2 Appeal number A-5579-80T2 is from this order and will be addressed as appeal number one.
Appeal number A-5580-80T2, hereafter addressed as appeal number two, comes to us in the following fashion. On August 5, 1981, without notice to defendants FRA and Ferrone, plaintiff by letter demanded a hearing before the New Jersey Racing Commission. In a letter dated August 11, 1981 the Commission, through its counsel, refused plaintiff a hearing. The NJRC letter stated, in part:
Our review of the factual basis of your dispute reveals that it concerns a purely business related decision of the Freehold Raceway and its racing secretary. Although the raceway is a permit holder licensed by the Commission, the composition of the racing card is a matter left entirely to the discretion of the permit holder. Hence, there is no contested case pursuant to N.J.S.A. 52:14B-2(b) which the Commission would have jurisdiction to hear. Further, N.J.S.A. 52:14B-9 only requires a hearing in contested cases. Since there is no contested case, no hearing is required and none will be held.
The foregoing substantially reflects the position of NJRC on this consolidated appeal. With respect to appeal number two,
FRA and Ferrone contend that they are not proper parties because they were not given notice of plaintiff's request for an NJRC hearing and did not participate in the ...