On certification to the Superior Court, Appellate Division, whose opinion is reported at 338 N.J. Super. 436 (2001).
The opinion of the court was delivered by: LaVECCHIA, J.
At issue in this appeal is the meaning of N.J.S.A. 52:27D-126(b), a statute governing the conferral of tenure on construction code officials. More particularly, we are called on to determine whether Anthony Merlino achieved tenure as the Code Official of the Borough of Midland Park when he served a second four-year term after a ten day break in service. We hold that he did not.
The case arose when Merlino filed a complaint in lieu of prerogative writs against officials of the Borough of Midland Park (collectively the governing body) alleging unlawful termination of his employment as code official and breach of his employment contract. In essence, Merlino claimed that he achieved tenure and was improperly fired.
A trial ensued at which the following facts were established. On May 24, 1990, Merlino was appointed to a four-year term as construction official, building sub-code official, and building inspector by the governing body. His term began on June 4, 1990 and was to expire on June 3, 1994. As the expiration of Merlino's term approached, he appeared at a public meeting of the governing body and indicated his desire to be reappointed. At the meeting, only one member of the governing body voiced specific complaints regarding Merlino's performance. However, a majority of the members were not convinced that Merlino's performance was such that he should receive tenure. Because there was no other candidate for the job, and because an appointment to a second four-year term without tenure would give it the opportunity to recognize improvements or changes in Merlino's performance if they occurred, the governing body proposed a compromise. According to Councilperson Braunius, the governing body discussed the pros and cons of Merlino's performance and decided to give him a second chance by allowing a hiatus before giving him a new appointment without tenure. Councilperson Walker stated that it was "not a matter of choice. [Merlino had] no choice . . . it [was] a take it or leave it situation."
After the issue was discussed at the closed meeting, Councilperson Duffy related the plan to Merlino. Specifically, the plan provided that Merlino would resign effective June 3, 1994, the day his term of office expired and he would be appointed to a new term to commence on June 13, 1994. Councilperson Duffy testified that Merlino understood the plan and appeared to be grateful. Although Merlino equivocated at trial over whether he understood that he would not be appointed to a new term if he did not sign the resignation, he acknowledged that he could have rejected the plan and awaited the results of the vote.
Merlino testified that he consented to the terms of the Council. He admitted that he did not ask Councilperson Duffy for more time to think about the plan or to seek advice from an attorney or other advisor. At about 11:00 p.m., after Councilperson Duffy discussed the plan with Merlino, both joined the meeting in Council Chambers. Approximately ten members of the governing body were present. They explained to Merlino that he lacked support for reappointment and proposed as a solution his resignation and subsequent appointment to a new four-year term after a hiatus. At trial, Merlino acknowledged that he realized that his resignation would cause him not to be afforded tenure. Indeed, we note that because Merlino's initial term had an expiration date, his resignation actually served no discernible purpose other than to eliminate any doubt concerning his lack of "holdover" status. Merlino insisted the governing body vote on the resolution in order to guarantee that he would receive four more years as a code official before he signed the letter of resignation. The governing body enacted Resolution No. 121-94B, dated May 26, 1994, that provides, in pertinent part:
WHEREAS, there will exist a vacancy in the position of Construction Official as of June 13, 1994;
NOW, THEREFORE, BE IT RESOLVED, that Anthony Merlino be and is hereby appointed as Construction Official for a four (4) year term, pursuant to N.J.S.A. 52:27D-136 [sic], effective June 13, 1994, which term will expire on June 12, 1998;
After the governing body passed the resolution, Merlino signed the letter of resignation that stated: "I hereby resign my position of Construction Official, effective June 3, 1994."
On June 13, 1994, Merlino began his new term as the Borough's Construction Official and worked for the next four years. Prior to the expiration of that term, Merlino requested that his third appointment be placed on the Council's schedule for discussion. On May 28, 1998, the governing body met to discuss Merlino's reappointment. He was present at the meeting. Various members of the governing body addressed complaints regarding Merlino's performance and after the discussion, the members unanimously determined not to reappoint him. Merlino received written notice of the governing body's determination in a letter dated May 28, 1998. He responded by letter, stating that he had achieved tenure and demanded either reinstatement or a hearing. This lawsuit followed.
At the conclusion of the trial, the trial court ruled in favor of the governing body and dismissed Merlino's complaint in its entirety, with prejudice. The court found that:
The governing body suggested this plan, it gave the plaintiff the primary relief that he wanted, that was reappointment. If his primary relief was tenure then shame on plaintiff for having that hidden agenda. But the governing body's plan was unmistakable in what it would do; it would deprive, it's [sic] intent was to deprive the plaintiff of obtaining tenure at that time. But he received a valuable appointment in exchange therefore, he was given the second chance . . . .
I do not find that Mr. Merlino's will was overborne, that undue or unfair pressure was brought to bear. This was in some respects a settlement of a risk, the risk being that the governing body would vote in the absence of the plan and vote not to reappoint. Plaintiff obtained a certainty; he was aware he was obtaining the certainty, he obtained what he set out to obtain that night, there was no coercion, there was no duress, there was no obligation on the part of the municipality to advise him that if you want more time you may have it, that you may consult with an attorney.
. . . [P]laintiff was not in a materially unfair bargaining position, because although it's true that the governing body makes the decision[,] the plaintiff could have at any time said I do not go along with the plan and let's see where the votes fall. [It may] have turned out the way Mr. Merlino wanted plus, the plus being he would have been reappointed without a break in service and he would have had tenure. But nobody could have known that . . . .
I conclude . . . that the plan in the abstract and
as implemented was neither intra vires nor ultra vires, that Mr. Merlino therefore did not have tenure in May and June 1998, and the discretionary decision of the governing body not to reappoint him was not arbitrary, capricious[,] or unreasonable, was not violative of either the State Uniform Construction Code Act, its regulations, state common law, federal common law, federal statutory law[,] or any constitutional provision nor any organic natural law.
Merlino appealed. In a published opinion, Merlino v. Borough of Midland Park, 338 N.J. Super. 436 (2001), the Appellate Division affirmed the trial court's dismissal of Merlino's claims for breach of contract and punitive damages, reasoning that no contract of continuing employment had been established and no factual case for punitive damages was offered under state or federal law. Id. at 441. However, the panel reversed the trial court's finding that Merlino did not have tenure. Ibid. Relying on Spiewak v. Rutherford Bd. of Educ., 90 N.J. 63, 76 (1982), the Appellate Division held that if the Legislature establishes a specific term or condition of employment with no room for discretion, negotiation is fully preempted. Merlino, supra, 338 N.J. Super. at 439. Further, the court stated that the parties' contract could not trump the plain terms of N.J.S.A. 52:27D-126(b) that confer tenure on a Code official so long as two conditions are met: (1) appointment to a second consecutive term; or (2) commencement of a fifth consecutive year of service. Id. at 440. The Appellate Division found that Merlino's employment history satisfied both statutory requirements. Id. at 440-41. Finally, the Appellate Division characterized the mechanism employed by the governing body as having "the potential of entirely frustrating the manifest legislative design in enacting N.J.S.A. 52:27D-126(b)" by forestalling the conferral of tenure indefinitely. Id. at 441. The court remanded the matter for a determination of whether Merlino was entitled to attorney's fees and dismissed, as moot, a challenge to an evidential ruling that barred the testimony of a Department of Community Affairs official. Ibid.
The governing body filed a petition for certification limited to two issues: whether Merlino achieved tenure and whether he is entitled to counsel fees. We ...