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Seal Tite Corp. v. Bressi

June 19, 1998


Before Judges Havey, Landau and Collester.

The opinion of the court was delivered by: Landau, J.A.D.

[9]    Submitted May 26, 1998

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

Plaintiff Seal Tite Corporation is in the business of performing public road alignment and construction projects. Various problems were encountered during a project performed by Seal Tite on a county road that runs through the Township of Jackson (Township). Resulting delays, safety concerns and inconvenience were a source of widespread local complaints and public attention. This led to adoption and transmittal to the County of Ocean of a resolution by the Mayor and the Township Committee, which then included defendants Peter Carlson, Geoffrey Yalden, Bruce Cottrell (now deceased), Robert Slattery and Kenneth Bressi. Bressi was the Mayor and the other individual defendants were Committeemen. The resolution, unanimously adopted, recites in general terms some of the local problems experienced during the road project. It goes on to formally urge "the County of Ocean to take whatever actions are necessary to delete said Seal-Tite Corporation from its bidding list in the future in order to avoid the disastrous problems which have occurred in connection with this contract for the County Line Road Contract [sic] with Ocean County."

Seal Tite responded by filing a Law Division complaint which, as amended *fn1 , joined all the above named individual defendants and the Township in an action for defamation and conspiracy to defame, interference with public bidding statutes, intentional interference with contractual relations, malicious interference with prospective economic advantage, and violations of the state "RICO" *fn2 Act, (N.J.S.A. 2C:41-1 to -6.2).

Defendants moved for summary judgment. Their motion was granted by two separate orders, each dated May 30, 1997 *fn3 . Seal Tite has appealed, reasserting its contentions below that defendants incorrectly and improperly sought to blame Seal Tite for delays and problems not of its making, and that such fixing of fault was done for political reasons or because of a desire to injure Seal Tite. Seal Tite presents a legal argument that the motion Judge failed adequately to explain the basis for his Conclusion that the challenged resolution was "legislative" and so entirely immune from plaintiff's action, and says the Judge did not respond to its request to decide whether the defendants acted with "malice." We find no such request in the record. Rather, plaintiff's attorney asked the Judge to decide whether the statements contained in the resolution were libelous.

Evidently assuming the prima facie defamatory quality of the publication for purposes of the motion, the Judge expressly found that the above quoted resolution was "passed . . . in a regular manner" and "was . . . essentially a legislative function." In consequence, he held "that it results in protection to the defendants both individually and as a body." Although he felt "there is some merit to the argument that there would nevertheless be qualified immunity," the Judge made clear that the basis for his holding was "immunity" arising out of legislative action, and thus refused the request of plaintiff's counsel to make an express finding as to whether the resolution was actually libelous per se. The Judge stated that he assumed for the purposes of the motion argument that "there were politics involved." Beyond the passing reference quoted above, the Judge did not consider whether qualified immunity or privilege was applicable in the circumstances, or whether, on the motion materials placed before the court, summary judgment could be afforded on the basis of qualified, rather than absolute, privilege or immunity.

We conclude that whether the resolution may be deemed an absolutely privileged act or not, summary judgment was properly afforded to the municipality and to the individual defendants.

The resolution adopted by defendants was clearly aimed at bringing to the attention of the County the views of the Township Committee respecting the performance of only one entity, plaintiff Seal Tite. So viewed, its characterization as an act purely "legislative" may be open to question, see, e.g., Acierno v. Cloutier, 40 F.3d 597, 610-13 (3d Cir. 1994), notwithstanding the validity of the procedural process employed in adoption of the resolution.

In Cuprowski v. City of Jersey City, 101 N.J. Super. 15, 27 (Law Div.), aff'd o.b., 103 N.J. Super. 217 (App. Div.), certif. denied, 53 N.J. 80 (1968), it was held that fixing of a municipal budget was administrative rather than legislative in nature. The court adopted the view expressed at 5 McQuillin, Municipal Corporations, §16.55 (3d ed.) that "`action relating to subjects of permanent and general character are usually regarded as legislative, and those providing for subjects of temporary and special character are regarded as administrative.'" Cuprowski, supra, 101 N.J. Super. at 24. See also Township of North Bergen v. City of Jersey City, 232 N.J. Super. 219, 226 (App. Div.), certif. denied, 117 N.J. 632 (1989). In Burke v. Deiner, 97 N.J. 465 (1984), the Supreme Court considered an allegedly defamatory resolution adopted by a municipal authority against the backdrop of the Tort Claims Act. After reciting applicable case law, it "distill[ed] from these holdings that immunity varies in proportion to the nature of the official functions and the range of decisions that conceivably might be taken in the exercise of those duties." *fn4 Burke, supra, 97 N.J. at 475. The Court held "that in defamation actions against non-constitutional public officers arising from the exercise of administrative discretion, immunity will not be lost unless the defamation is made with actual malice in the New York Times v. Sullivan *fn5 sense: `with knowledge that it was false or with reckless disregard of whether it was false or not.'" Ibid. This must be established by clear and convincing evidence. Burke, supra, 97 N.J. at 481.

While declining to extend absolute immunity to the speech contained in the authority's resolution discharging its executive director, the Burke Court concluded that the plaintiff failed to demonstrate New York Times actual malice by clear and convincing evidence.

Subsequently in Dairy Stores, Inc. v. Sentinel Publ'g Co., 104 N.J. 125 (1986), a case not involving governmental entities, the Court held that expressions of opinion by private parties respecting matters of important public interest are subject to the defense of fair comment which, like the privilege established in Burke, can only be overcome by clear and convincing proof of actual malice. Judge Garibaldi, concurring, believed that criticism of a product affecting the public interest, as distinct from an attack upon the character of a person, should more accurately be considered in the context of product disparagement rather than defamation. Presumably where a service, such as road construction, is the "product," similar criticism of quality of performance would in her view likewise be categorized as "disparagement," but nonetheless remain subject to the same actual malice standard employed in Burke and by the Dairy Stores majority. Indeed, in a private trade libel action, this qualified privilege to publish defamatory information has been recently reaffirmed by the Supreme Court in Kass v. Great Coastal Express, Inc., 152 N.J. 353, 355 (1998). Similarly, in Turf Lawnmower Repair, Inc. v. Bergen Record Corp., 139 N.J. 392 (1995), cert. denied, 516 U.S. 1066, 116 S.Ct. 752, 133 L.Ed.2d 700 (1996), business activities that intrinsically implicated important public interests (as here) were afforded the benefit of the qualified privilege, subject to the heightened standard of proof respecting the publisher's knowledge of falsity or reckless disregard of truth or falsity.

The Township's resolution which is the subject of this appeal reflected a governing body's effort to vindicate interests of Jackson Township, deemed to have been adversely affected by what was locally perceived (whether accurately or not) as plaintiff's deficient performance of the County Line Road contract in Jackson Township. As both opinion and, at least implicitly, facts were asserted in the resolution, the resolution cannot be deemed "pure opinion" entitled to absolute immunity on that basis. See Dairy Stores, supra, 104 N.J. at 155; Kotlikoff v. The Community News, 89 N.J. 62, 69 (1982).

Whether the resolution is deemed wholly legislative or partially administrative, however, the defendant Township is entitled to the unqualified immunity provided under the Tort Claims Act by N.J.S.A. 59:2-3 and particularly by N.J.S.A. 59:2-10. Under the latter section, a public entity is not liable for acts of public employees constituting actual malice or willful misconduct, absent specific contrary statutory authority. Thus the Township would be entitled to summary judgment, see ...

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