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Franco v. AT&T Corp.


August 14, 2007


On appeal from the Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-413-04.

Per curiam.


Submitted August 7, 2007

Before Judges Sabatino and Baxter.

Plaintiff Patricia De Franco appeals from an October 6, 2006 order granting summary judgment to defendant AT&T Corporation. Plaintiff was a district manager in AT&T's Business Services organization. In April 2001, she met with her supervisor and admitted that she had used her corporate credit card to improperly purchase alcohol for personal use, and conceded that this infraction subjected her to termination. Plaintiff offered to submit her resignation, but her supervisor did not accept the resignation, instead directing plaintiff to enter an alcohol rehabilitation program and obtain help for her problem. Plaintiff did so, but when she returned to work a year later, she was immediately terminated.

On appeal, plaintiff argues that she was repeatedly told by defendant's Employee Assistance Program (EAP) staff that her job was secure and that she would be able to return to work. She argues that the trial court committed reversible error of law when it rejected her fraud and equitable estoppel claims. We disagree and affirm.


Plaintiff's employment with AT&T began in 1987. After four promotions, she assumed the position of district manager in the Business Services organization where she reported to Division Manager Tracey Thorsen. In April 2001, plaintiff informed Thorsen that she had used her corporate American Express credit card to purchase alcohol for personal use and that she had contacted a representative of defendant's Employee Assistance Program (EAP) seeking help for her alcoholism problem. During that April 2001 conversation, plaintiff admitted to Thorsen that she was aware that purchasing alcohol with her corporate credit card was a terminable offense, and she offered to submit her resignation.

At the time of plaintiff's conversation with Thorsen, the AT&T Personnel Guide (Guide), which plaintiff concedes was applicable to her, contained a section entitled "Terminating Employment." The Guide states in pertinent part that "[a]t AT&T, there is no fixed duration to the employment relationship. Employees can terminate their employment whenever they wish and for whatever reason they might have, just as AT&T may terminate the employment of any employee at any time for any reason. This is known as 'employment-at-will.'"

The Guide also contained a provision specifying that its provisions cannot be modified by oral statements of supervisors or managers. In particular, in a section entitled "What Employees Need To Know About The AT&T Personnel Guide and Employment At AT&T," the Guide expressly states that its provisions cannot be modified by oral statements and warns employees that any oral statements inconsistent with the provisions of the Guide are not binding on the company. The Guide provided:

[The Guide] supersedes all past handbooks, manuals, policies, procedures, understandings, and standards, whether written or oral. . . . Any written or oral statement by any AT&T manager that conflicts with anything in the Guide is not binding on AT&T. If employees think that they've been told something that's inconsistent with the Guide, they should realize that information in the Guide can't be changed orally, and they should notify their BU HR representative, who in turn will inform the Human Resources Policy Group. [(emphasis added).]

Another document that was applicable at the time of plaintiff's conversation with Thorsen in April 2001 was the AT&T Code of Conduct (Code). The Code expressly provides that failure to comply with its provisions entitles AT&T to terminate an employee, even if the infraction is the employee's first violation of company rules.

The Code also contains standards of conduct that directly apply to plaintiff's misuse of the corporate credit card. In particular, the Code specifies:

Company Funds and Property - All AT&T employees are responsible for safeguarding and making proper and efficient use of company funds and property by following procedures to prevent their loss, theft, or unauthorized use. Company funds and property include company time; cash, checks, drafts, and charge cards . . . and all other funds and property.

Here are some ways to protect company funds and property:

* Make sure expenditures are for legitimate business purposes.

* Use corporate charge cards only for business purposes.

[emphasis added.]

Shortly after plaintiff's conversation with Thorsen in April 2001, EAP contacted plaintiff and advised her that arrangements had been made for her to enter the Marworth Treatment Center for treatment of her alcohol problem. Plaintiff entered Marworth on April 27, 2001 and remained there through May 21, 2001. Following her discharge from Marworth, plaintiff obtained out-patient treatment and remained on medical leave through April 2002.

During plaintiff's one-year leave of absence, consistent with its applicable leave policies, AT&T paid plaintiff her full salary for a portion of the time and partial salary for the balance. AT&T also paid for all of plaintiff's alcoholism treatment, both in-patient and out-patient, during her entire medical leave. According to plaintiff's deposition testimony, she was advised by EAP staff during her leave of absence that her job was secure and that she would be welcome to return to work as soon as her doctor certified that she was recovered and able to do so.

A few months after plaintiff commenced her medical leave, Thorsen was advised by the AT&T mailroom that there was mail accumulating for plaintiff that was not being picked up.

Thorsen retrieved the mail, and found that it included a list of purchases made with plaintiff's AT&T credit card including what appeared to be multiple purchases of alcohol. During her April 2001 conversation with Thorsen, plaintiff admitted to using the corporate credit card improperly on only one occasion and asserted that she had already repaid the improperly-charged amount. The letters were defendant's first indication that plaintiff had improperly used the card on more than one occasion.

Because the letters indicated multiple instances of such improper use, Thorsen requested AT&T Corporate Security to conduct an investigation. Ultimately, that investigation revealed the magnitude of plaintiff's misuse of the credit card, identifying more than forty-three instances during a period of eighteen months where plaintiff had purchased alcohol for personal use and charged it to AT&T. The investigation further revealed that on twenty-five other occasions, plaintiff had made additional unauthorized purchases. All tolled, AT&T Corporate Security assembled a list of more than sixty improper charges made by plaintiff, totaling $1300.

Upon her return to work in April 2002, plaintiff was fired. Thorsen advised plaintiff that AT&T was terminating her employment based on her inappropriate use of her corporate credit card. On that same day, at the request of AT&T Corporate Security, plaintiff signed a promissory note agreeing to repay AT&T the $1300 that she had improperly charged.

On March 18, 2004, plaintiff filed suit against AT&T alleging five causes of action: violation of the New Jersey Law Against Discrimination; breach of an express or implied contract promising continued employment with AT&T; breach of an implied covenant of good faith and fair dealing; equitable estoppel; and fraud.

After discovery was completed, AT&T moved for summary judgment on all counts, and on October 6, 2006, the trial court, after oral argument, granted AT&T's motion. Plaintiff filed an appeal, seeking reversal only as to the dismissal of her equitable estoppel and fraud claims.

When the summary judgment motion was argued, Judge Accurso assumed, for purposes of the motion, that there were facts that could support a jury determination that AT&T had made a misrepresentation about plaintiff's continued employment; nonetheless, the judge found that the record before her did not support submitting the equitable estoppel and fraud claims to the jury because of the absence of evidence to support the other elements of those claims. In particular, the judge held that summary judgment should be granted to defendant on plaintiff's equitable estoppel claim because plaintiff was unable to establish that defendant induced her to rely on any such misrepresentation or that she had relied on it to her detriment. As to the fraud claim, the judge made similar findings.


On appeal, we apply the same legal standard as the trial court did in determining whether the grant of summary judgment was correct. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). Additionally, we do not make new findings of fact, but instead accept the trial judge's findings so long as the findings made were supported by "adequate, substantial and credible" evidence present in the record, considering the proof as a whole. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). A motion for summary judgment should be granted when the facts are so "'one-sided that one party must prevail as a matter of law.'" Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed. 2d 202, 214 (1986)).

To state a claim for equitable estoppel, a plaintiff must establish that the defendant made a misrepresentation or concealment of material facts; that such misrepresentation or concealment of material fact was done with the intention or expectation that it would be acted upon by the plaintiff; and that the plaintiff reasonably and justifiably relied upon the misrepresentation or concealment to her detriment. Eileen T. Quigley, Inc. v. Miller Family Farms, Inc., 266 N.J. Super. 283, 296 (App. Div. 1993).

Judge Accurso assumed for the sake of discussion that the first prong, material misrepresentation, had been satisfied, but granted summary judgment after finding that plaintiff had failed to raise a genuine issue of material fact as to the other two. Because the judge did not address the first prong, we likewise will confine our analysis to the other two.

As to the second prong, we agree with defendant that the trial court's evaluation of plaintiff's proffer was correct. In particular, plaintiff's proofs cannot demonstrate any wrongful intent on the part of defendant. We agree with defendant that the uncontroverted evidence establishes that AT&T's only "intent" once it learned the full extent of plaintiff's misconduct in June 2001, was to allow plaintiff to continue her medical leave and medical treatment with pay, with full medical benefits, and to allow her recovery to proceed without burdening her with the decision it had made in the summer of 2001 regarding her future employment.

AT&T's actions provided significant financial advantage to plaintiff both in terms of continuation of her salary and providing her with medical insurance that paid for her in-patient treatment at Marworth. We agree with the trial court's observation that a reasonable jury could not conclude that by refraining from firing plaintiff earlier, in the midst of her rehabilitative process, and that by paying her a salary, defendant's intent was to mislead plaintiff about her future employment.

Plaintiff claims that if she had known her job was in jeopardy, she would have applied for other jobs. Yet she failed to specify in her certification what jobs were available in the months before defendant fired her, and presented no evidence demonstrating a likelihood that she would have been hired by any of them. Nor did she present an expert report or any other evidence demonstrating that she suffered any adverse financial consequences as a result of defendant's failure to terminate her earlier. Instead, in her opposition to defendants' summary judgment motion, plaintiff merely stated "I did not seek alternative employment during the one year of rehabilitation because of AT&T's representations to me that my job was secure." That was the extent of her evidence that she was harmed by relying on the assurances she claims AT&T made.

Such assertion is not sufficient to raise a genuine issue of material fact where plaintiff fails to specify the other jobs that were available. "[C]onclusory and self-serving assertions . . . are insufficient to overcome the [summary judgment] motion." Puder v. Buechel, 183 N.J. 428, 440-41 (2005) (holding that "a feeling" or "a judgment call" that the trial judge was likely to bind her to the first settlement had she not entered into a subsequent one was insufficient to raise a genuine issue of material fact). Plaintiff's failure here to provide any evidence of the jobs that were available to her in the months prior to April 2002 suffers from the same deficiency as the plaintiff's submission in Puder. Plaintiff's conclusory assertion is no better than the "feeling" or "judgment call" found insufficient there. Id. at 441.

Plaintiff's equitable estoppel argument also ignores the unambiguous provision of the Guide, which specifies that no verbal statement of a manager or employee can be understood as superseding any provisions of the Code. Woolley v. Hoffman-LaRoche, 99 N.J. 284, 297-98, modified 101 N.J. 10 (1985) (holding that absent a clear and prominent disclaimer, the terms of an employment handbook or manual are contractually enforceable). Where, as here, the Code specifies that improper use of the corporate credit card is an offense subjecting an employee to termination, any purported statement of EAP staff that plaintiff's job was preserved would have been in contravention of the Guide's provisions that a manager's comments, if at odds with at-will employment, are invalid.

We also agree with defendant's argument that plaintiff cannot claim on the one hand that she was well enough to have obtained and commenced employment during that one-year period while at the same having represented to her employer that she was totally disabled, unable to work and entitled to collect salary payments and medical benefits from defendant because she was disabled. For all of these reasons, the judge properly rejected plaintiff's equitable estoppel claim.


To establish a claim of fraud, a plaintiff must establish that the defendant made a material misrepresentation of fact; the defendant knew or believed such statement to be false at the time it was made; the defendant intended the plaintiff to rely on such misrepresentation; the plaintiff reasonably relied; and thereby sustained damage. Gennari v. Weichert Co. Realtors, 148 N.J. 582, 610 (1997). As we have noted above, plaintiff failed to raise a genuine issue of material fact as to whether her reliance on any such misrepresentation was reasonable in light of the at-will language in the Guide. Woolley, supra, 99 N.J. at 297-98. As we have also discussed, no reasonable jury could conclude that plaintiff sustained any damages.



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