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Hannigan v. Township of Old Bridge

March 14, 1996


On appeal from the Superior Court of New Jersey, Law Division, Middlesex County.

Approved for Publication March 14, 1996.

Before Judges King, Humphreys and Bilder. The opinion of the court was delivered by King, P.j.a.d.

The opinion of the court was delivered by: King

The opinion of the court was delivered by KING, P.J.A.D.

This is an appeal from an order dismissing a suit for money damages brought by plaintiff, Steven Hannigan, for an alleged breach of a settlement agreement reached in an earlier action with defendants, the Township of Old Bridge and its mayor, Barbara Cannon. The Law Division Judge ruled that plaintiff's sole remedy was through enforcing the stipulation of settlement in the prior action. While enforcement of the settlement in the prior action may often be an appropriate remedy, in this particular circumstance we conclude that plaintiff is entitled to bring an independent action for breach of contract, with the customary panoply of discovery and right to jury trial. We reverse.


Plaintiff, born on February 9, 1956 and now age 40, applied to become a police officer in Old Bridge soon after earning an associate's degree in police science in 1985. Even though he had passed the necessary written and physical tests to qualify for employment as an Old Bridge police officer, the then-mayor refused to appoint him. As a result, he brought an action in lieu of prerogative writ against Old Bridge to compel his appointment to its police department, contending that the mayor's failure to appoint him was arbitrary and unreasonable. Hannigan v. Township of Old Bridge, Docket No. L-77349-85. This lawsuit was amicably resolved when the parties entered into a "memorandum of understanding" on May 5, 1987. This memorandum, signed on behalf of Old Bridge by its then-mayor, Russell Azzarello, stated that at such time in the future when Old Bridge hired additional police officers, following exhaustion of an August 9, 1985 list of twenty-six candidates, plaintiff's application would be given "first consideration." In return, plaintiff voluntarily dismissed his lawsuit.

In April 1990, plaintiff learned that Old Bridge would be filling vacancies in its police department in the near future. His attorney advised Old Bridge's municipal attorney that any failure to consider plaintiff for employment would be regarded as a direct violation of the memorandum of understanding.

By letter of July 31, 1991 Old Bridge's municipal attorney informed plaintiff's counsel that the recent appointees to Old Bridge's police department were experienced police officers from other jurisdictions. The letter enclosed a copy of an announcement for a test scheduled on August 22, 1991 the purpose of which was to develop a list for new police officer candidates. The letter advised that plaintiff was not required to take the test and that when appointments were made after the test, plaintiff would be "the first individual considered for hire as a new inexperienced police officer."

By letter of December 27, 1991 Old Bridge's then-mayor Arthur Haney, advised plaintiff that the testing process had been completed. He stated that all appointments would be based upon the rank order contained on a list attached to his letter. Plaintiff's name appeared on this list but we do not know from the record his position on the list, which is not in the appendix. The letter advised that "the only exception to this process is the appointment of one individual that surrounds the settlement of litigation from the previous police examination." The letter also stated that the first ten names on the list, along with the individual whose appointment was based upon the previous testing, were forwarded to the Chief of Police and to the Director of Public Safety for necessary background checks. Upon completion of this procedure, the incoming mayor, Barbara Cannon, would make the appointments to the police department. The letter congratulated plaintiff on having successfully completed the testing process and ended with the "hope that someday you will be serving as a proud member of the Old Bridge Police Department."

Plaintiff was not appointed to the Old Bridge Police Department. On February 7, 1992 plaintiff commenced another action in lieu of prerogative writ for injunctive relief and for damages against the present defendants, claiming that they had breached the memorandum of understanding, Hannigan v. Township of Old Bridge, Docket No. L-1486-92. This suit was also amicably resolved when the parties signed a "stipulation of settlement and dismissal with prejudice." According to this stipulation, Old Bridge anticipated the imminent opening of five positions for officers in its police department which it intended to fill with individuals who did not have prior police experience. The stipulation provided that Old Bridge would interview plaintiff and the top nine candidates for the positions in October 1993 and that those candidates, including plaintiff, would undergo the same physical and mental examinations and background checks. The stipulation also stated that individuals would be hired in December based upon this process. In addition, the stipulation provided: "If [plaintiff] is on a par with any other individual as determined by Mayor Barbara Cannon, he will, in consideration of the 1987 Memorandum of Understanding, be deemed the candidate superior to said individual and any lower rated candidates." The stipulation also imposed on plaintiff the responsibility to obtain any necessary waivers of current pension and statutory age requirements by December 15, 1993 and made any decision to hire him expressly contingent upon his satisfaction of this requirement. Plaintiff was beyond age thirty-five by that time. Old Bridge was required to act "in complete good faith in the above process." The stipulation provided that this agreement would fully resolve "all issues between the parties arising from past or present litigation including without limitation any obligations arising out of the 1987 Memorandum of Understanding and the December 27, 1991 letter of Mayor Arthur Haney."

By letter dated December 13, 1993 Old Bridge's outside counsel advised plaintiff's attorney that it was imperative to plaintiff's employment prospects that "you obtain a formal indication that his age is not a bar." He stated that Old Bridge would accept a letter to that effect from either the Attorney General's Office or the Division of Pensions.

By letter of December 15, 1993 plaintiff's attorney forwarded to Old Bridge's outside counsel a letter from Thomas Bryan, the Executive Assistant for the Division of Pensions, in which Bryan explained that the entry-age limit of thirty-five for enrollment in the Police and Firemen's Retirement System and a comparable hiring-age limit for municipal police officers under the local government law were currently enforceable under a temporary exception to the Federal Age Discrimination and Employment Act, due to expire on December 31, 1993. Bryan opined that with the expiration on December 31, 1993 both of these age limits would become unenforceable. However, Bryan stated that he would have to receive official advice from the Attorney General's Office to this effect and that the Division of Pensions could not grant a waiver of these age limits.

By letter of December 21, 1993 William Ruggierio, Director of Old Bridge's Department of Law, informed Old Bridge's outside counsel that Mayor Cannon had made her determination concerning the hiring of additional police officers and that plaintiff had not been selected. According to Ruggierio, Cannon "did not find [plaintiff] to be equal or better to the candidates which she selected." Ruggierio further noted that had Cannon decided to hire plaintiff, "the apparent inability of [plaintiff] to ...

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