On appeal from Superior Court of New Jersey, Law Division, Hudson County, L-514-98.
Before Judges Cuff, Wecker and Winkelstein.
The opinion of the court was delivered by: Winkelstein, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 20, 2001
Robert M. Czech held the positions of municipal clerk and administrator for the Town of Kearny for a three-year term to expire on July 17, 1998. At a special meeting of the Town Council (Council) on December 31, 1997 a resolution was passed accepting Czech's resignation from his positions in return for payment to him of $27,500, plus accrued vacation time and other employment benefits. In a subsequent resolution Council also authorized reimbursement to Czech for his costs to defend this lawsuit. Plaintiffs, a group of taxpayers, filed this action pursuant to N.J.S.A. 2A:49-1 to -3,*fn1 to challenge Council's actions, arguing that an ordinance, rather than a resolution, was required to effectuate the resignation agreement. The Law Division agreed and vacated the resolution, holding that the money paid to Czech for his resignation was the equivalent of a salary which had to be fixed by ordinance. The court ordered Czech to repay the money, but ruled that it was permissible for Czech to receive reimbursement for counsel fees he incurred to defend this suit. We disagree with the judge's conclusion that the consideration paid to Czech for terminating his employment was salary. We also find Czech has neither a statutory nor common-law right to counsel fees under the facts of this case. Accordingly, we reverse on both issues.
The Town of Kearny is governed by the Town form of government pursuant to N.J.S.A. 40A:62-1 to -8, which allows the governing body to exercise all powers of local government in accordance with both its enabling legislation and the provisions of general law. On June 13, 1995 Czech was appointed by resolution to the combined positions of town administrator and town clerk, effective July 17, 1995. By statute, the term for a municipal clerk is three years, N.J.S.A. 40A:9-133, while a municipal administrator serves at the pleasure of the governing body, N.J.S.A. 40A:9-137. The statutory references are incorporated into the Town Code, which defines the terms of office and the general powers and duties for each respective position. Town of Kearny, New Jersey, Code Article 3, §§ 2-6 & 2-7 (1973). The terms and conditions of Czech's employment are detailed in a document captioned "Terms of Employment" dated June 13, 1995, signed by both Czech and the Mayor. The pertinent provisions of the agreement provide that Czech receive an annual salary of $85,000 and his employment as the new full-time administrator/clerk was for a three-year term, beginning July 17, 1995. An ordinance establishing and creating an $85,000 salary for the position of administrator/clerk was passed on second reading on July 11, 1995. In addition to the annual salary, Czech received benefits including medical and dental coverage, life insurance, paid holidays and sick days.
On November 4, 1997 three new Council members were elected, to take office on January 1, 1998. Prior to the election, they expressed a desire to remove Czech from his position. Czech believed his continued employment with the Town would be a "politically divisive issue" so he and the Mayor entered into negotiations for a severance agreement to allow Czech to leave his position prior to the expiration of his term. On December 8, 1997 Czech sat for and passed the Registered Municipal Clerks' Examination, which is a prerequisite for reappointment as the municipal clerk and receiving tenure. N.J.S.A. 40A:9-133.6; N.J.S.A. 40A:9-133.8. There is no dispute that Czech was entitled to remain in his position until July 17, 1998 regardless of the political configuration of the newly elected Council.
A duly advertised special meeting of the Council was held on December 31, 1997 beginning at 11:30 a.m. On the agenda was the resolution regarding Czech's resignation and severance pay. The resolution, 1997-(R)-708, was introduced by the Mayor and reads as follows:
WHEREAS, Robert M. Czech has a statutory term as Town Clerk which pursuant to N.J.S.A. 40A:9-133 ends on July 17, 1998, and
WHEREAS, Robert M. Czech has an agreement with the Town of Kearny to serve as Administrator through July 17, 1998, and
WHEREAS, in order to allow the Municipal Governing Body to commence the new year with the Opportunity to fill these positions;
NOW THEREFORE BE IT RESOLVED by the Mayor and Council of the Town of Kearny, in the County of Hudson, that in consideration for the resignation of Robert M. Czech as Town Clerk and Town Administrator the parties, i.e. Robert M. Czech and the Mayor and Council of the Town of Kearny, mutually agree to the following:
1. The resignation of Robert M. Czech as Town Clerk and Town Administrator shall be effective as of 6 PM on December 31, 1997 subject to the following conditions:
a.) Robert M. Czech whose annual salary is $85,000.00, shall be paid $27,500 plus all vacation time due him through the end of his term on July 17, 1998 with said vacation time not to exceed 13.5 days.
b.) Robert M. Czech shall be covered for all health benefits including the Point of Service Plan, Dental Plan and Prescription Plan through March 31, 1998.
c.) In further consideration of the above and upon fulfillment of the above conditions Robert M. Czech agrees to waive any salary increase due him as required by N.J.S.A. 40A:9-165.
BE IT FURTHER RESOLVED by the Mayor and Council of the Town of Kearny in the County of Hudson that the Mayor and Town Attorney are hereby authorized to execute this resolution on behalf of the Mayor and Council and that this resolution shall take effect immediately upon its signature by all parties.
ADOPTED: December 31, 1997
According to the minutes of the meeting, the amount of severance pay and reimbursement for vacation time were briefly discussed. The resolution, which was to take immediate effect, passed unanimously. It was signed by the Town Attorney, the Mayor and Czech.
Czech resigned at 6 p.m. on December 31, 1997. He received a check in the gross sum of $32,894.21 dated December 31, 1997, allocated as follows: "regular" earnings of $980.76, "special" earnings of $27,500, and "vacation" earnings of $4,413.45. Deductions were made for Federal, State ...