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Klusaritz v. Cape May County

August 7, 2006


On appeal from a Final Decision of the Merit System Board, DOP Docket No. 1998-2380.

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



Argued February 28, 2006

Before Judges Collester, Lisa and S.L. Reisner.

Cape May County appeals the final administrative action of the Department of Personnel's Merit System Board (Board) following a disciplinary action the County brought against William C. Klusaritz, Jr., a principal accountant in the county treasurer's office. Following submission of charges and a departmental hearing in November 1997, the County issued a final notice of disciplinary action terminating Klusaritz for reasons of incompetency, inefficiency, inability to perform duties and incorrigibility. Klusaritz appealed to the Office of Administrative Law, and the matter was referred to an administrative law judge (ALJ), who conducted a twenty-one day hearing prior to making a decision.

The evidence presented at the hearing was that Klusaritz, a CPA, was hired on March 11, 1994. At that time the county treasurer was Pamela D. Eaves, who later was replaced by Edmund J. Grant, Jr. Subsequently, Eaves sued the County for violation of her civil rights and retaliation under the New Jersey Law Against Discrimination, and received a favorable verdict. See Eaves v. County of Cape May, 239 F.3d 527 (3d Cir. 2001). Throughout this litigation Klusaritz has claimed that the disciplinary action against him was retaliation for his support of Eaves.

Grant testified that when he took over as county treasurer, the office was in "absolute chaos" with eighty recommendations and material weaknesses noted in the annual audit report. He assigned Jeanette Powers to oversee the accounting and auditing division, which included directly supervising Klusaritz. At the time Klusaritz was an appointed employee and subject to termination at will. Grant said he helped him obtain civil service status without observing his work in any detail. However, when Grant did so, he found significant problems in Klusaritz's preparation of bank reconciliations. One of Klusaritz's reconciliations made no sense to Grant and the independent auditor, even after Klusaritz tried to explain it. Grant said that problems with the bank reconciliations prepared by Klusaritz continued throughout his employment. He added that after Klusaritz was suspended, no one was hired to replace him, and the bank reconciliations were prepared satisfactorily by a non-CPA clerk typist. Both Powers, as Klusaritz's supervisor, and Kenneth W. Moore, the outside auditor, testified as to continued deficiencies in Klusaritz's bank reconciliations. Moore testified the reconciliations were incomprehensible and of no value. He discussed the deficiencies with Klusaritz, who said he would complete the work correctly. When this problem persisted, Moore wrote to Grant in October 1996, to thank him and his staff for cooperating with the annual audit, but added the following:

However, I would like to bring to your attention the work of one employee. William Klusaritz's work and schedules that were provided to Moore & Fitzpatrick were no clearer this year than last year. I made numerous [requests] for him to change the format of these schedules but to no avail.

Numerous schedules were not available almost five months after the close of the year. I asked him to reconcile his information with the general ledger, [but] this could not be accomplished.

Moore said he did not mention any other employees in his letter because they made changes and corrections rather rapidly. However, Klusaritz's work product presented "an on-going problem."

Klusaritz testified that his bank reconciliations and other work for the County was satisfactory. He said that two of the reconciliations the County produced as evidence were either preliminary or complete fabrications designed to make him appear incompetent. He also claimed that other work he had prepared either was hidden or purposely destroyed by the County. He called witnesses to testify that he was a loyal and conscientious employee. Finally, he produced Steven J. Gabey, a CPA, to testify as an expert as to the quality of Klusaritz's work. Gabey stated that the work product he examined, including bank reconciliations, was competent and of professional quality.

The ALJ supplied a written opinion of more than seventy pages in which he defined the County's contentions as follows: (1) Klusaritz failed to prepare bank reconciliations and outstanding check lists in an accurate and proper manner; (2) Klusaritz failed to prepare bank reconciliations in a timely manner; (3) Klusaritz failed to perform the duties of the position of principal accountant in the treasurer's office in a timely and proper manner; and (4) Klusaritz failed or refused to accept direction. He found that the County's proofs established these contentions with the exception of the charge that Klusaritz was not timely in presenting the bank reconciliations. He rejected Klusaritz's argument that he was a victim of a conspiracy or that the County destroyed or deliberately failed to produce documentation that would show he performed his job competently. He said that even by drawing an inference that missing documents would indicate satisfactory work, the documents which were produced showed that they were prepared in an "incomplete and unexplainable manner." He found that the proofs were contrary to Klusaritz's contention that he received no clear instructions about how his supervisor wanted him to prepare the bank reconciliations or perform other accounting work. The ALJ found the County's witnesses credible, especially Moore. He discounted Gabey's testimony, noting that bank reconciliations and other County financial data were to be understood not only by CPAs but also by elected and County officials, as well as the public. His conclusion was that [A]ppellant is guilty of the charges . . . alleging violations of N.J.A.C. 4A:2-2.3(a)(1) incompetence, inefficiency, or failure to perform duties, (a)(2) [i]nsubordination, and (a)(3) [i]nability to perform duties.

Addressing the applicable penalty, the ALJ held that although Klusaritz was "a very pleasant and sincere individual," a "conscientious employee" and a person who "took great pride in his work," and had no prior disciplinary record, the ...

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