On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. MID- L-3313-00.
Before Judges Newman, Fall and Axelrad.
The opinion of the court was delivered by: Fall, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
In this appeal we examine a challenge to the trial court's application of the doctrine of equitable estoppel to compel a municipality to pay benefits and compensation promised to an employee lawfully appointed by the mayor under circumstances where the mayor lacked the power to bind the municipality.
Defendant, Township of North Brunswick, appeals from entry of orders on May 25, 2001, granting summary judgment in favor of plaintiff, Thomas Maltese, against the Township in the amount of $123,216.68, and denying the Township's motion for summary judgment seeking dismissal of plaintiff's complaint.
We conclude that summary judgment was improvidently granted. The promises and representations of the mayor were ultra vires. The mayor possessed the statutory authority to appoint plaintiff but lacked the power to establish his compensation and benefits. That authority was vested with the council, which had the power to provide plaintiff with the benefits promised by the mayor.
Accordingly, we hold that the focus of the equitable estoppel analysis must be upon the actions taken by the council, not the mayor. The record presented is insufficient to determine whether any actions taken by the council justify application of equitable estoppel against the municipality to compel payment of the benefits sought or otherwise manifested an intention to ratify the mayor's agreement with plaintiff. We therefore reverse the grant of summary judgment in favor of plaintiff, affirm the denial of summary judgment to the Township, and remand for further proceedings consistent with this opinion.
The facts giving rise to plaintiff's claim against the Township are not disputed. Plaintiff served as Deputy Director of Public Safety for the Township of North Brunswick from June 1, 1994 through December 31, 1994, and then as Director of Public Safety from January 1, 1995 through December 31, 1999.
Plaintiff was appointed to those positions by Paul Matacera, then the Mayor of North Brunswick. Beginning in early 1994, Mayor Matacera recruited plaintiff, who at the time was Deputy Chief of Investigations with the Middlesex County Prosecutor's Office. During his recruitment of plaintiff, Mayor Matacera advised plaintiff the starting annual gross salary would be $67,500 as Deputy Director of Public Safety, and in six months he would be elevated to the position of Director of Public Safety with an annual gross salary of approximately $71,000.
Plaintiff was interested in the offered position; however his gross annual salary with the prosecutor's office was $95,000, and plaintiff was reluctant to suffer such a significant decrease in income. After additional discussions, plaintiff informed the mayor that he would accept the position if he could also be provided all of the benefits that were included in the Township's collective bargaining agreement with the North Brunswick Superior Officers' Association (SOA).
Benefits under the SOA agreement included, inter alia, longevity pay equal to 12.5% of base salary for those officers with twenty-five years' seniority, overtime, cashing-in of accrued vacation time, holiday pay, reimbursement for college education tuition and the cost of books, payment for accumulated sick days, schedule adjustment pay, and compensatory time.
The mayor represented to plaintiff that he would receive all of the benefits afforded to employees covered under the SOA collective bargaining agreement and agreed that plaintiff's longevity pay would be computed based upon twenty-five years of seniority, since plaintiff had been employed in law enforcement for twenty-five years. This agreement to cover plaintiff under the SOA agreement was not reduced to writing, nor was it voted on by the Township Council. Plaintiff contends that prior to accepting the position, he was aware that the Township's prior Director of Public Safety had been provided benefits under the SOA agreement.
Toward the end of plaintiff's employment with the Township, Mayor Matacera sent a memorandum dated August 6, 1999 to Suzanne Veitengruber, the Township's Finance Director, essentially confirming plaintiff's contentions as to his entitlement to benefits.
The salaries, wages and compensation of officials and employees of the Township, including those employees covered by collective-bargaining agreements, were set by a salary ordinance, and amendments thereto, adopted by the Township Council and approved by the mayor. The salary ordinance contains minimum and maximum salary ranges for each position, including the positions to which plaintiff was appointed. The salary ordinance also provides for longevity compensation in accordance with a schedule set forth therein. However, the terms of the Township's salary ordinance, and the benefits enumerated thereunder, are significantly different from the benefits afforded to employees covered by the SOA collective bargaining agreement.
On January 3, 1995, the Township Council passed a resolution stating:
WHEREAS, the Mayor of the Township of North Brunswick has appointed THOMAS MALTESE to the position of Director of Public Safety for a term beginning January 1, 1995 and ending December 31, 1995; and
WHEREAS, The Township Council of North Brunswick does hereby consent to such appointment in accordance with the statutes of the State of New Jersey;
NOW, THEREFORE, BE IT RESOLVED on this 3rd day of January, 1995, that THOMAS MALTESE is hereby appointed to the position of Director of Public Safety for the Township of North Brunswick ending December 31, 1995.
The parties agree that the specific terms of the SOA collective bargaining agreement do not cover the position of Deputy Public Safety Director or that of Public Safety Director; that the resolution approving the Mayor's appointment did not state that the terms of the SOA agreement would be applicable to plaintiff's appointment; and that during his course of his employment with the Township, plaintiff was paid for certain benefits that were afforded to persons covered by the SOA agreement. Specifically, plaintiff "sold back" accumulated sick time to the Township in accordance with the SOA agreement. Plaintiff was also reimbursed his expenses for courses that he took at Seton Hall University towards his Master's degree. The evidence in the record discloses that plaintiff was not compensated for longevity pay during the first two years of his employment with the Township. However, when the Finance Department discovered the "error," plaintiff was offered retroactive longevity pay for those two years, but he declined. Thereafter, plaintiff received longevity pay for the remaining years, paid in accordance with the terms of the SOA collective bargaining agreement.
When a new mayor was elected, plaintiff resigned his position effective December 31, 1999. As he neared termination of his employment with the Township, plaintiff submitted a claim for payment of 590.5 unused sick-day hours; 938 unused vacation hours; 191.25 hours of unpaid compensatory time; and 836 hours of schedule-adjustment time. Those hours computed to the sum of $123,216.68 being owed plaintiff if the terms of the SOA collective bargaining agreement were applied.
The Township denied plaintiff's claim, contending his position was not covered by the SOA collective bargaining agreement, and that the Township Council's resolution confirming the Mayor's appointment did not so provide.
On April 13, 2000, plaintiff filed suit against the Township seeking enforcement of the terms of his oral contract of employment. On or about January 18, 2001, defendant moved for entry of summary judgment. The specific issue presented to the trial court was whether the doctrine of equitable estoppel was available to plaintiff to estop the Township from denying plaintiff those benefits. The motion was argued in the Law Division on March 16, 2001. In denying the Township's motion for summary judgment, the judge stated, in pertinent part:
I think everybody agrees that the issue here is whether equitable estoppel can apply. Whether it is a concept or a legal theory . . . I think everyone would agree too, is if the action is deemed to be ultra vires, it's void ab initio, the Town does not have the power to do this, or if it's simply void then you can apply the doctrine of equitable estoppel. I look at whether something is ultra vires perhaps in a very simplistic way. Did the Town have the statutory authority to approve the contract? If it did not, if . . . this was something that the Town, even if it was presented with the contract, could not have approved it, in my view then it's ultra vires. That's not the case here. The council could have approved it if it had been presented. In [my] view it was not ultra vires. So because I conclude it was not ultra vires, it's not void ab initio, and the doctrine of equitable estoppel can apply. So I am going to deny the motion, and I'm not going to tell you that it's absolutely clear one way or another, but that is the way I look at it and that is the way I'm going to rule.
On or about April 26, 2001, plaintiff moved for summary judgment, seeking an order granting him the relief requested in his complaint. Defendant cross-moved, seeking summary judgment dismissing plaintiff's complaint. The motions were argued in the Law Division on May 25, 2001. In denying defendant's motion and granting plaintiff's motion for summary judgment, the judge stated, in pertinent part:
As I understand it of the five criteria of equitable estoppel, the only issue that is in dispute is the reliance part of the equitable estoppel five part test. And I also understand that the town conceded that [plaintiff], in fact, relied. So that the only issue here is the reasonableness of his reliance.
I also understand . . . that the only argument that the town is presenting to establish that [plaintiff's] reliance was not reasonable is the legal argument that, as a matter of law, he is held to the knowledge that, in fact, his contract could not be approved . . . or . . . carried through with absent approval by the council, and I reject ...