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State, Dept. of Law and Public Safety, Div. of Gaming Enforcement v. Gonzalez

Decided: May 10, 1994.


On appeal from the Casino Control Commission.

Before Judges Michels, Skillman and Wefing.


The opinion of the court was delivered by WEFING, J.S.C. (temporarily assigned).

Adriel Gonzalez*fn1 held a casino employee license under § 7 of the Casino Control Act, N.J.S.A. 5:12-1 et seq. That license permitted Gonzalez to be employed by the Sands Hotel and Casino as a security officer.

In 1990, Gonzalez was indicted for possession of a controlled dangerous substance with intent to distribute (N.J.S.A. 2C:35-5b(12)); distribution of a controlled dangerous substance (N.J.S.A. 2C:35-5b(12)); distributing drugs within 1,000 feet of school property (N.J.S.A. 2C:35-7); and conspiracy to commit distribution of a controlled dangerous substance (N.J.S.A. 2C:5-2; N.J.S.A. 2C:35-5b(3)). Approximately two and one-half months after his indictment, Gonzalez, represented by counsel, entered a plea of guilty to two counts of the indictment, distributing drugs within 1,000 feet of school property and conspiracy.

Entry of that guilty plea triggered proceedings before the Casino Control Commission (Commission) when the Division of Gaming Enforcement (Division) filed a complaint with the Commission seeking revocation of Gonzalez's casino employee license. A hearing was held before one of the commissioners, sitting as a hearing examiner, during which Gonzalez testified, in response to the hearing examiner's questions, that despite his entry of a plea of guilty on two of the counts of the indictment, he in fact did not commit the offenses charged. At a subsequent hearing Gonzalez was again allowed to testify, over the Division's strenuous objections, that he was not guilty of these offenses. The examiner ultimately concluded that Gonzalez's denial was more credible than the testimony of the arresting officer whom the Division felt compelled to bring in to meet Gonzalez's testimony. The examiner accepted the testimony of Gonzalez that he entered a false plea of guilty "because he could not afford to have a private attorney represent him in court and because he wanted to get the matter over with as quickly as possible." She concluded that Gonzalez had been rehabilitated pursuant to N.J.S.A. 5:12-90(h), and possessed the "good character, honesty and integrity" required under N.J.S.A. 5:12-89(b)(2) and -90(b) to retain his casino employee license. The Commission, Chairman Perskie Dissenting, adopted her determination and this appeal resulted.

The Division argues on appeal that the Commission erred in permitting Gonzalez to re-litigate before it the basis of his convictions for distribution of a controlled dangerous substance and conspiracy. We agree with the Division's position for we are satisfied that one who has been convicted of a crime, whether by way of trial or a plea of guilty, should not be permitted to re-litigate, in another forum, the fact of his guilt.

The doctrine of issue preclusion prohibits, as a general rule, the re-litigation of any factual or legal issue that was actually determined in an earlier proceeding. State v. Gonzalez, 75 N.J. 181, 380 A.2d 1128 (1977); Morton Int'l Inc. v. Gen. Accident Ins. Co. of America, 266 N.J. Super. 300, 629 A.2d 895 (App. Div. 1991), aff'd, 134 N.J. 1, 629 A.2d 831 (1993). To invoke the doctrine of issue preclusion, the issues presented within the two proceedings must be identical, Ettin v. Ava Truck Leasing, Inc., 53 N.J. 463, 251 A.2d 278 (1969), and the earlier proceedings must have afforded "a full and fair opportunity" to the party against whom the doctrine of issue preclusion is invoked to litigate the contested issue. Prudential Property and Casualty Ins. Co. v. Kollar, 243 N.J. Super. 150, 578 A.2d 1238 (App. Div. 1990).

We are satisfied that, within the particular context of these proceedings, both elements have been met. Gonzalez sought to place the same issue - whether he distributed a controlled dangerous substance within 1,000 feet of school property, and conspired to distribute a controlled dangerous substance - in question in two different fora, the Superior Court of New Jersey when he pled guilty to those charges and the Casino Control Commission when he denied his guilt.

Commentators have differed on the consequences the entry of a plea of guilty should have upon later civil actions. See, e.g., David L. Shapiro, Should a Guilty Plea Have Preclusive Effect?, 70 Iowa L. Rev. 27 (1984); Geoffrey C. Hazard, Revisiting the Second Restatement of Judgments: Issue Preclusion and Related Problems, 66 Cornell L. Rev. 564 (1981); Allan D. Vestal, The Restatement (Second) of Judgments: A Modest Dissent, 66 Cornell L. Rev. 464 (1981). Much of the unwillingness to accord a preclusive effect to a guilty plea in subsequent civil litigation stems from two bases, the first of which is concern for the consequences of such an approach upon a third party who is seeking compensation, in a civil context, for injuries received as a result of the conduct which supported the guilty plea. This concern is reflected in cases such as Prudential property and Casualty Ins. Co. v. Kollar, supra (plea of guilty to aggravated arson not conclusive on insurer's attempt to disclaim coverage in subsequent subrogation action brought on behalf of victim), and Garden State Fire & Casualty Co. v. Keefe, 172 N.J. Super. 53, 410 A.2d 718 (App. Div.), certif. denied, 84 N.J. 389 (1980) (plea of guilty to atrocious assault and battery not conclusive on insurer's attempt to disclaim coverage in subsequent negligence actions brought by victim of shooting).

Indeed concern for the victim seeking damages for injuries has even led to a determination that a conviction for atrocious assault and battery following a jury trial is not dispositive of a carrier's obligations to defend and indemnify its insured in a subsequent suit brought by the insured's victim. Burd v. Sussex Mut. Ins. Co., 56 N.J. 383, 267 A.2d 7 (1970). That an injured party not be left remediless has led another court to conclude that a juvenile, who pled guilty before the then Juvenile and Domestic Relations Court to theft of an automobile, was not barred by N.J.S.A. 39:6A-7(a) from recovering personal injury protection (PIP) benefits for injuries he received when he lost control of the stolen car he was driving and cracked into a tree. Kaplowitz v. State Farm Mut. Auto. Ins. Co., 201 N.J. Super. 593, 493 A.2d 637 (Law Div. 1985).

This court, however, is not confronted in this case with the public policy considerations attendant to an innocent victim's attempt to recover damages or an insured's attempt to receive maximum protection under previously purchased insurance policies. Garden State Fire & Casualty Co. v. Keefe, supra, 172 N.J. Super. at 57. Further, unlike the present case, those cases within New Jersey which have permitted subsequent civil litigation of the issues underlying a previously entered guilty plea have involved an attempt to litigate in the civil forum the intent of the party committing certain acts, rather than whether the acts were committed at all. See, e.g., Allstate Ins. Co. v. Schmitt, 238 N.J. Super. 619, 633, 570 A.2d 488 (App. Div.), certif. denied, 122 N.J. 395 (1990).

The second basis often advanced to justify permitting re-litigation in a civil forum of facts previously established by a guilty plea is a concern about the sufficiency and fairness of the plea process itself. As to this rationale, the record on review provides absolutely no basis for this court to infer that Mr. Gonzalez's entry of a plea of guilty did not comply in all respects with the requirements of R. 3:9-2. Nor is there any indication that Mr. Gonzalez has at any time sought to return to the trial court to attempt to withdraw his guilty plea. We consider it inappropriate to conclude, without more, that a conviction which follows from a guilty plea automatically stands on a lesser footing, and should have different consequences, than a conviction which follows a trial. To so hold would, in our view, denigrate the conscientious efforts of all those involved in the administration of our criminal Justice system.

We recognize that our Supreme Court has stated:

A guilty plea is merely evidence, not conclusive proof, of the facts underlying the offense. Wigmore, supra, § 1066 at 86. Because such a plea is entered without litigation of the underlying facts, it does not estop the pleading party from contesting the admitted fact. Teitelbaum Furs v. Dominion Ins. Co., 58 Cal.2d 601, 603, 375 P.2d 439, 441, 25 Cal.Rptr. 559, 561 (1962); cf. Mazzilli v. Accident & Casualty Ins. Co., 26 N.J. 307, 314, 139 A.2d 741 (1958) (collateral estoppel applies "as to those questions, issues or facts which were actually litigated and determined in the prior action."). The plea is merely an admission of a party. As with other admissions, the party who has entered the plea may rebut or otherwise explain the circumstances surrounding the admission. Stoelting, supra, 32 N.J. at 107, 159 A.2d 385; Brohawn v. Transamerica Ins. Co., 276 Md. 396, 403, 347 A.2d 842, 848 (1975). Thus, a party who has pled guilty may try to persuade the jury that the plea was merely a compromise, or less a reflection of guilt than a balancing of the costs of contesting the charge with the burden of the conviction. That explanation, however, does not affect the admissibility of the plea. Stoelting, supra, 32 N.J. at 108, 159 A.2d 385.

[Eaton v. Eaton, 119 N.J. 628, 644-45, 575 A.2d 858 (1990).]

That case, however, is wholly distinguishable. In Eaton, a wrongful death action was brought by Gerald Eaton, husband of the deceased, against his defendant daughter Donna, following his wife's death in a single vehicle accident. Immediately after the accident, Mrs. Eaton and Donna each identified the other as the driver of the vehicle. Some six weeks after the accident, without entering a court appearance and contrary to the provisions of R. 7:7-3, Donna pled guilty to careless driving and paid a $60 fine to the appropriate municipal violations bureau. In the later civil action, Donna returned to her original position that, despite the physical evidence to the contrary, her mother was driving when the car went off the road. It is within that context that the Court's Conclusion that a guilty plea is merely the equivalent of an admission of a party must be understood. Paying a traffic summons by mail for a motor vehicle offense is not, in our view, the procedural and substantive equivalent to pleading guilty, under R. 3:9-2, to distribution of a controlled dangerous substance within 1,000 feet of school property.

Further, the out-of-state authorities cited by the Eaton Court are also distinguishable. Teitelbaum Furs, Inc. v. Dominion Ins. Co., 58 Cal. 2d 601, 375 P.2d 439, 25 Cal. Rptr. 559 (Cal. 1962), cert. denied, 372 U.S. 966, 83 S. Ct. 1091, 10 L. Ed. 2d 130 (1963), did not deal with a conviction following a guilty plea therefore rendering the court's Discussion of a guilty plea dicta. Brohawn v. Transamerica Ins. Co., 276 Md. 396, 347 A.2d 842 (Md. 1975), involved a declaratory judgment action following a carrier's refusal to defend its insured in a civil action after the insured pled guilty to assault. It thus reflects the same concerns expressed in Prudential Property and Casualty Ins. Co. v. Kollar, supra, and Garden State Fire & Casualty Co. v. Keefe, supra.

Finally, both California and Maryland permit a defendant to plead guilty and yet assert innocence. People v. Watts, 67 Cal. App. 3d 173, 136 Cal. Rptr. 496 (Ct. App. 1977); Ward v. State of Maryland, 83 Md. App. 474, 575 A.2d 771 (Md. Ct. Spec. App. 1990). New Jersey, however, does not permit the entry of such a plea, commonly referred to as an Alford plea.*fn2 State v. Smullen, 118 N.J. 408, 571 A.2d 1305 (1990); State v. Spano, 69 N.J. 231, 353 A.2d 97 (1976); State v. Reali, 26 N.J. 222, 139 A.2d 300 (1958).

We note further the particular factual context in which the issue has been presented to us. Gonzalez held a license which permitted him to work in the casino industry, a business which is, of necessity, highly regulated to preserve public confidence in its integrity. State of New Jersey, Dep't of Law and Public Safety v. Hannah, 221 N.J. Super. 98 (App. Div. 1987). To permit Gonzalez to assert such diametrically opposite positions, and to have the Commission reach Conclusions at variance with the judicial record, hardly fosters public confidence in either the casino industry or the judicial system.

The doctrine of issue preclusion is an equitable doctrine and will only be applied when it is fair to do so. Morton Int'l, Inc. v. Gen. Accident Ins. Co. of America, supra, 266 N.J. Super. at 321. We perceive nothing unfair in refusing to let Gonzalez seek to retain a state license by denying his prior representations to the Superior Court.

We agree with the Division that the issue of whether Gonzalez should be permitted to retain his casino employee license is analogous to attorney disciplinary proceedings in which the Court has not permitted re-examination of underlying facts established through guilty pleas. Matter of Stier, 108 N.J. 455, 530 A.2d 786 (1987); In re Mirabelli, 79 N.J. 597, 401 A.2d 1090 (1979).

The limited scope of our determination should be noted. We conclude only that one who has pled guilty to the commission of a criminal offense may not, thereafter, seek in a different forum to deny commission of the very acts previously admitted. We acknowledge that there may well be attendant circumstances which would serve to mitigate, in that different forum, the consequences which might otherwise flow from the commission of those acts. Indeed, the Division ...

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