On appeal from Superior Court of New Jersey, Law Division, Morris County.
J. H. Coleman, O'Brien and Stern. The opinion of the court was delivered by J. H. Coleman, P.J.A.D.
The crucial question raised in this appeal is whether a bank president and chief executive officer who blows the whistle on suspected laundering of Panamanian drug money is protected from retaliatory discharge by the public policy of this State. We answer in the affirmative. We also hold that the retaliatory discharge in this case constituted an intentional tort which exposed defendants to compensatory and punitive damages. We affirm the judgment.
Plaintiff Dale G. Potter became the president and chief executive officer of the Village Bank of New Jersey (Village Bank) on November 15, 1982. His employment was terminated in May or June 1984. On June 13, 1984 plaintiff filed a complaint in the Chancery Division against Village Bank alleging that his job had been wrongfully terminated. Plaintiff sought reinstatement to his position as chief executive officer and president of the bank.
The same day, the Chancery Judge issued an order to show cause with temporary restraints which required Village Bank to continue paying plaintiff's salary and other benefits. By order of June 27, 1984 the bank was required to pay plaintiff's salary and benefits until November 15, 1984, the termination date under plaintiff's employment contract. The Chancery Judge transferred the case to the Law Division.
After the matter was transferred to the Law Division, plaintiff filed an amended complaint against Village Bank, Mory Kraselnick, Allan Bart, Moises Kroitoro, Em Kay Inc., Em Kay Holding Corporation and Em Kay Financing Corporation. In the four-count amended complaint plaintiff sought compensatory and punitive damages based on (1) fraudulent inducement, (2) breach of contract, (3) tortious interference with the employment relationship and (4) wrongful termination.
The case was tried to a jury over a four-day period. During trial, plaintiff voluntarily dismissed the case against Bart, Kroitoro, Em Kay Inc. and Em Kay Financing. At the end of plaintiff's case, the trial judge granted defendants' motion for involuntary dismissal of plaintiff's claims of fraudulent inducement, breach of contract and wrongful interference with the employment relationship. The only remaining claim was for wrongful discharge. The trial judge held that Kraselnick was not named as a defendant in the count alleging wrongful discharge and dismissed the complaint against him.
The claim of wrongful discharge was submitted to the jury as to the remaining defendants, Village Bank and Em Kay. The jury answered the following special interrogatories:
Q1. Did the Defendants wrongfully discharge the plaintiff?
Q2. Was the plaintiff damaged by such wrongful discharge?
Q3. What amount of compensatory damages, if any, should the plaintiff be awarded for such wrongful discharge?
Q4. What amount of punitive damages, if any, should the plaintiff be awarded for such wrongful discharge?
After the trial judge denied defendants' motion for judgment notwithstanding the verdict, final judgment was entered in the sum of $162,575.40, which consisted of $100,000 in punitive damages, $50,000 in compensatory damages plus $12,575.40 in prejudgment interest on the compensatory damages.
Village Bank and Em Kay Holding Corporation have appealed from the entire judgment. Plaintiff has cross-appealed from the involuntary dismissals at the end of plaintiff's evidence.
The pivotal issue presented to the jury was whether plaintiff resigned or was discharged in violation of a clear mandate of public policy. Based on the evidence presented, the jury concluded he was fired contrary to a clear mandate of public policy. The following evidence supports that finding. Em Kay Holding Corporation (Em Kay) owns 93% of the stock of Village Bank.
The remaining 7% is distributed among other shareholders. Em Kay is owned by the Em Kay Group which has its headquarters in Panama City, Panama. Em Kay Group is owned by Mory Kraselnick and Moises Kroitoro.
Bart and Kraselnick negotiated with plaintiff for employment at Village Bank. In September 1982 when the president of Village Bank suffered a heart attack, plaintiff was offered and accepted a position with the bank as a "holding company consultant." Plaintiff became president and chief executive officer of Village Bank two months later. Between then and January 1983, Kraselnick frequently telephoned plaintiff to request that Village Bank make large loans to companies ...