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Ashwal v. Prestige Management Services

October 16, 2007


On appeal from the Superior Court of New Jersey, Law Division, Bergen County, L-3027-03.

Per curiam.


Argued September 17, 2007

Before Judges Graves and Sabatino.

Following a seven-day jury trial, plaintiffs Isaac Ashwal and Robert Winograd obtained a verdict finding that defendants had wrongfully discharged them from their employment with a New Jersey automobile dealership because of their religious affiliation, contrary to the New Jersey Law Against Discrimination ("LAD"), N.J.S.A. 10:5-3. The jury awarded both plaintiffs compensatory damages.

Notwithstanding his recovery under the LAD, plaintiff Ashwal appeals the Law Division's pretrial dismissal of his separate claims of promissory estoppel, which were founded upon a contention that he had detrimentally relied upon defendants' alleged assurances of continued employment. Defendants, meanwhile, have cross-appealed the LAD verdict, alleging various trial errors.

We affirm the judgment in all respects, and accordingly deny the appeal and cross-appeal.


The proofs at trial reflected the following facts pertinent to our consideration of the issues raised by the parties.

Defendant Prestige Management Services, Inc. ("Prestige") is a corporation that owns several automotive dealerships in northern New Jersey.*fn1 As of 1997 Prestige owned four dealerships, respectively affiliated with the BMW, Lexus, Mercedes, and Land Rover manufacturers. Prestige thereafter purchased an Infiniti dealership and a Toyota dealership. At the times relevant to this case, Joseph Dockery was the Chief Executive Officer and primary stockholder of Prestige, and Joseph Antonakakis was Prestige's Chief Financial Officer (CFO). During the relevant time frame, Peter Callaghan was initially Vice President of Prestige and later served as the company's President.

Plaintiff Isaac Ashwal is a practicing member of the Jewish faith. His father was born in Israel. Ashwal's wife, Natalie, is Roman Catholic. Natalie Ashwal was employed by Prestige at the time her husband was discharged from the company. Ashwal has a high school education.

Plaintiff Winograd also is a practicing Jew. Both of Winograd's parents are Jewish. However, neither Winograd's current wife nor his two prior spouses are Jewish, and only some of his children are Jewish. His current wife is Roman Catholic.

Winograd completed one or two years of college at night, and he started in the car business in 1986.

Ashwal began working as a salesperson in a car dealership around 1989. In February 1992 he started working for Prestige. Ashwal started as a salesman in defendants' Lexus dealership. In 1994 he assumed the general sales manager position in that store. He remained in that position until 1997, during which time the dealership rose from being seventh in the country in volume sales of new Lexus cars to third place. By 1996, Ashwal was earning about $140,000, including commissions.

In 1997, Dockery asked Ashwal to become general manager at Prestige's newly-purchased Infiniti dealership. Because Infinities apparently were harder to sell than Lexus vehicles, Ashwal accepted the Infiniti position on the condition that his base salary would be increased to $175,000. The Infiniti employment agreement was completely oral, as there was no Human Resources Department at Prestige at that time. Ashwal's annual bonus at Infiniti was within Dockery's discretion.

Shortly after his arrival at Infiniti, Ashwal brought in Winograd as a general sales manager. Ashwal knew Winograd from working together prior to his employment with Prestige. He thought Winograd would be "capable." Winograd accepted the position at Infiniti because he thought there would be an opportunity for growth there, and the pay was higher than what he previously had been earning.

Under Ashwal's direction, the Infiniti dealership grew in profitability. In August 1998 Dockery honored Ashwal at an owner's dinner for his good work at Infiniti. At this point Ashwal enjoyed a good relationship with both Dockery and Callaghan.

In 1997, Prestige purchased a Toyota dealership for six million dollars, apparently without ever examining the dealership's books and records. Initially the Toyota dealership was not profitable and, according to Dockery, it was "terribly unsuccessful." In fact, Dockery testified that the personal strain from the Toyota dealership's losses put him in the hospital for a month.

In May 1998, Dockery asked Ashwal to take over the general manager's position at Toyota, allegedly because Ashwal was one of the "best sales people in the world [he'd] ever seen." According to Ashwal, at the time he did not want to leave the Infiniti dealership that he had just made profitable. Even so, after a series of entreaties from Dockery and a promised raise to $250,000, Ashwal agreed.

Ashwal started his new duties as general manager at the Toyota dealership in September 1998. At Ashwal's request, Winograd joined the dealership a month or two afterwards. Winograd was then earning approximately $100,000 per year. Ashwal and Winograd proceeded to build a team of personnel at Toyota, which included about twenty salesmen. They installed as sales managers Dave Abby and Gerald Spivak, both of whom were Jewish.

When Ashwal assumed his role at the Toyota dealership, the dealership had the worst Customer Satisfaction Index (CSI) of a Toyota dealership in the world. One of the major reasons for that was the dealership's poor rating on "no match" problems.*fn2 There was conflicting testimony as to whether this recurring problem had subsided not long after Ashwal's management began in 1998 or whether it continued into 2001.

By the time of the company holiday party in 1999, Dockery had singled Ashwal out as Prestige's "Employee of the Year" because the Toyota dealership was no longer "hemorrhaging" millions of dollars. To Ashwal's knowledge, such an award has not been given at Prestige before or since. Dockery testified that he gave Ashwal this award to "motivate him" because Ashwal had "put in so much time." Dockery also transferred to Ashwal a vacation trip to France that he had won as a Toyota dealership owner. According to Ashwal, at his annual performance evaluation at the beginning of 2000, both Callaghan and Dockery were "thankful." They allegedly then told Ashwal that his reviews were "off the charts."

According to Ashwal, in 2000 the dealership made about the same profit as it had in 1999. During this time, the store won Toyota's prestigious "President's Award," a distinction which takes into account profitability. Monthly data placed Prestige first in sales volume among other Toyota dealers in its geographic area during 1999 and 2000. Toyota also recognized that the dealership had eliminated its "no match" problem by March 1999.

Despite these plaudits, the parties hotly contested the actual profitability of the Toyota dealership under Ashwal's management. By August 1998, just prior to Ashwal assuming the duties of general manager, the Toyota dealership reportedly had lost $2.4 million since the time of its purchase by Prestige. In 1999 the records reflected that the dealership made a modest profit of $117,000. However, William Berardino, a Prestige vice-president and general manager of the Lexus store, testified for the defense that although the Toyota store "broke even" in 1999, it had to be infused with cash from the other stores to "stay afloat" in 2000. CFO Antonakakis acknowledged that infusing money into a new dealership is typical. No further infusions were needed after March 2001.

Ashwal contended that around the beginning of 2000, a "sabotage" began. According to Ashwal, the sabotage was led by Christopher Turner, Dockery's son-in-law, and the head of Prestige's wholesale operations. Turner was joined in that effort by his "gang," including Berardino and Richard Lulov,*fn3 a manager at Lexus. As the head of the wholesale division, Turner made decisions as to whether pre-owned cars that came in from trade-ins or at auction would be wholesaled or retailed. Turner also determined how many and what type of used cars would be distributed to each of the Prestige dealerships.

Ashwal asserted that the initial dispute that arose between Turner and him concerned the sale of "track cars." Track cars are vehicles that are used by the other affiliated dealerships for customers who need loaner vehicles while their cars are in for service. The Prestige dealership generally used Toyotas as track cars. The Toyota dealership would then charge back the corresponding dealerships for its customers' use of such cars.

Typically, track cars are used in this fashion for about a year, and then they are sold, either wholesale or as used cars.

According to Ashwal, Turner unfairly sold numerous track cars from the Toyota dealership at auction at a loss. In his defense, Turner claimed that Ashwal had sent him too many track cars, approximately thirty per month. When this situation came to his attention, Ashwal did some market research, and he determined that the track cars should have been sold by Turner at a higher price. Ashwal also contended that he had only sent approximately nineteen or twenty track cars to Turner each month, not thirty. This numerical discrepancy was particularly a problem for Ashwal and the Toyota dealership, because the profit margin on pre-owned cars is higher than it is on new cars.

Ashwal presented his findings on the "track car" dispute at a meeting with Dockery, Antonakakis, and Turner. Ashwal stated at the meeting that he thought Turner had sold the cars for a lot less than they were worth. As this could be regarded as an accusation that Turner was stealing from the company, Turner got angry. In response, Ashwal admitted to calling Turner a "f***ing pussy."*fn4 Most of the trial witnesses recalled this meeting occurring some time between the end of 2000 and the beginning of 2001, and all agree it happened before March 2001.*fn5

In his own testimony, Turner remembered the meeting and Ashwal calling him "a pussy." He also recalled that the disagreement was about used cars. Turner contended that he wanted to sell only higher quality cars, and that Ashwal had wanted to sell cars that were less expensive.

Dockery and Antonakakis also recalled that the argument between Ashwal and Turner at the meeting had been over the availability of inexpensive used cars. Callaghan also remembered a disagreement between Ashwal and Turner arising at a meeting, but did not remember what it was over or discussing it again.

In any event, the day after the meeting, Turner came into Ashwal's office and, according to Ashwal's trial testimony, stated to him:

You f***king Jew, you think you're going to run this company with me[?] We hired you because we had to, not because we liked you. You'll be gone if it's the last thing I do.

This alleged remark apparently led to a screaming argument between the two men on the dealership floor, albeit one without religious slurs.

Ashwal testified that he reported the incident to Jim Moreland in Human Resources, as the company manual required. Ashwal contended that nothing thereafter was done about it. Conversely, Moreland testified that no such complaint was ever made by Ashwal, nor had he ever received a similar complaint.

Turner denied making the anti-Semitic statements to Ashwal. Turner did acknowledge that he and Ashwal did not have a good working relationship because they had disagreed about how the pre-owned cars should be handled.

Up until this time, Ashwal had what he perceived to be a good working relationship with Dockery, Callaghan and Antonakakis. When Ashwal complained to Dockery about Turner's potential sabotage of his efforts, Dockery allegedly assured him "don't worry about it . . . . You've got nothing to worry about."

After this encounter, Turner and Ashwal did not talk much with one another. According to Ashwal, Turner stopped including Ashwal in important decisions about the dealership's movement of used cars, which Ashwal only found out about when he noticed losses appearing in the monthly financial statements. Ashwal thought these losses were unnecessary, and that Turner had deliberately allocated them to the Toyota franchise and not the other dealerships. Ashwal requested that Turner ship used cars to the Toyota dealership, but his e-mails and phone calls to Turner allegedly went unanswered.

In support of his own claims of discrimination, Winograd testified that he, too, had conflicts with Turner. For example, a few months after Winograd started working at the Toyota dealership, he started going down to the wholesale department, which was located at a separate address, about twice a month. On one such trip, Winograd was outside Turner's office and heard him using the phrase "Jewing me down," referring to certain negotiating tactics. Thereafter, Winograd allegedly heard Turner utter that phrase many times, but never directly to Winograd. Winograd also overheard Turner telling an ethnic joke unflattering to Jews at the company holiday party.

Winograd informed Ashwal about the problems he had with Turner. Winograd suspected, however, that there was not a lot they could do, since Turner was the Prestige owner's son-in-law and both Ashwal and Winograd needed to keep making a living. On the other hand, Turner testified that he had no confrontations or problems with Winograd.

In January 2001, Ashwal was named a vice president of Prestige, as were Turner and Berardino. The three were known within the organization as "the boys," and Turner was regarded as the "heir apparent" at Prestige. Callaghan and Antonakakis both testified that they were not involved in the decision to promote Ashwal to general manager. Callaghan thought Ashwal was a "terrific sales manager," but that it was "too soon" to promote him to general manager because he allegedly lacked experience in the parts and service aspect of the business.

In a meeting around that time, possibly at the same meeting during which Ashwal and Turner had their big argument, Berardino recalled Ashwal stating that "the [Toyota] store would never be profitable." Turner had the same recollection. This comment "amazed" Turner, and indicated that Ashwal had a negative attitude about his work. Consequently, Turner met with Berardino the next day to discuss "possible alternatives for the Toyota [s]tore." Turner felt that "[i]f the person . . . [r]unning the [Toyota] store did [not] believe it could be profitable, [the organization] had to make some changes."

As requested, Berardino devised a plan to remove Ashwal from the Toyota dealership's management and restructure the dealership. Dockery approved Berardino's plan. Pursuant to the plan, Ashwal's duties were changed in March 2001. Ashwal transferred from the Toyota dealership back to the Infiniti dealership, where he was to oversee both the Infiniti and Land Rover stores. Ashwal was given the new title "vice president of business operations" and a $50,000 raise, increasing his salary to $300,000. Ashwal concurrently brought along Winograd to Infiniti and promoted him to general manager. In this position, Winograd was not made privy to the dealership's financial statements, even though he was aware that most general managers with Prestige were.

In March 2001 Berardino and Lulov then went in to manage the Toyota dealership and, according to Berardino, found it completely mis-managed. Berardino testified that he told all of the upper management at Prestige about the mismanagement. According to Berardino and Antonakakis, by the end of the year in 2001 the Toyota store made a profit.

Ashwal was discharged at the beginning of May 2001. On the day he was discharged, Ashwal was called by Callaghan over to Prestige's headquarters. The meeting included Callaghan, as well as Moreland from Human Resources. Callaghan and Moreland were generally present at the terminations of managerial-level employees.

Callaghan said to Ashwal that he was very sorry but that the company had to let him go. Ashwal then got "a little angry" and shouted. At that point, Callaghan allegedly told Moreland to step outside. According to Ashwal, Callaghan allegedly then told Ashwal that he was "one of the best assets [this company's] ever had" but that "no Jew is ever going to challenge Chris [Turner] and live to tell about it." Ashwal received $100,000 in severance pay and a new Infiniti Q45 to use for six months.

Ashwal testified that, prior to his discharge, no one at Prestige had ever told him that his sales were not good enough or that the company was downsizing. Nor did defendants' witnesses testify that they had ever given Ashwal any warning of potential discharge.

The defense witnesses presented no consensus as to who had actually made the decision to fire Ashwal. According to Berardino, he had nothing to do with the decision, though he supported it. Berardino perceived that Ashwal had been fired because the Toyota dealership was unprofitable, having lost one million dollars in 2000, and the manufacturer was unhappy with the dealership's performance.

Turner likewise claimed to have had no input into the decision to fire Ashwal. Turner contended that he heard this "welcome news" on or about the day it happened and that he "was relieved." Turner assumed that Callaghan, Dockery, and Antonakakis had made the decision to fire Ashwal, and expressed surprise that both Callaghan and Antonakakis testified that they had nothing to do with the firing. Turner knew of no specific ...

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