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Weisgarber v. New Jersey Dep't of Community Affairs

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


October 2, 2009

WILLIAM M. WEISGARBER, SR., AND TYSON GROUP, PLAINTIFFS-APPELLANTS,
v.
NEW JERSEY DEPARTMENT OF COMMUNITY AFFAIRS, DIVISION OF CODES AND STANDARDS, WILLIAM CONNOLLY, RICHARD OSWORTH, CHRYSTENE WYLUDA, DEFENDANTS-RESPONDENTS.

On appeal from the Superior Court of New Jersey, Law Division, Mercer County, L-311-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted September 29, 2008

Before Judges Carchman, R. B. Coleman and Simonelli.

Plaintiffs William M. Weisgarber, Sr., and Tyson Group appeal from an order dated August 3, 2007, granting summary judgment in favor of the Department of Community Affairs (DCA or the Department) and several of DCA's employees: William Connolly (Director of Codes and Standards), Richard Osworth (Chief of Bureau Code Services) and Chrystene Wyluda (Supervisor of Enforcement for DCA's Asbestos Hazard Abatement Program). The complaint alleged tortious interference of employment and tortious interference of contract by defendants. Plaintiffs also appeal a November 17, 2006 order quashing their subpoena to depose the deputy attorney general who drafted a 1998 settlement agreement between DCA and Weisgarber's employer, and to depose a second deputy attorney general concerning a suggestion that Weisgarber should be terminated in order to resolve a 2002 Notice of Revocation issued by the Department to Vertical Technologies, Inc. (VTI). We affirm each of the orders from which plaintiffs appeal, substantially for the reasons expressed orally by Judge Paul Innes when he rendered each decision.

The material facts are not in dispute. Prior to 1998, plaintiff Weisgarber and Daniel Morocco were the two majority shareholders of Contamination Control Engineering, Inc. (CCE), an asbestos removal firm that held an Asbestos Safety Control Monitor (ASCM) license. During 1996 and 1997, the DCA, which issues and regulates such ASCM licenses, issued eight Notices of Violations to CCE, three of which sought to revoke its ASCM license, and one of which sought to suspend that license. CCE contested all of these notices and the matters were referred to the Office of Administrative Law, where they were resolved by way of a settlement agreement signed in early May 1998 (the Bureau of Code Services, a subdivision of the DCA appears as a party to the settlement agreement representing the DCA). As part of that settlement agreement, it was agreed that DCA would waive any suspension or revocation of CCE's authorization as an ASCM based on the then-present violations. It was also agreed that CCE, whose license was due to expire on September 30, 1998, would not seek licensure or re-licensure as an ASCM or Lead Hazard Evaluation or Abatement Contractor at any time in the future.

However, VTI, a company to whom all the shares of CCE had been sold, including those owned by Weisgarber and Morocco, would be permitted to file an application for authorization as an ASCM within forty-five days of the date of the settlement. It could also secure licensure through acquisition of an "acquired corporation," with a valid ASCM license. The owners of all the shares of VTI agreed that Weisgarber and Morocco would have no financial interest in the company. More particularly, the settlement agreement provided:

13. As part of the purchase of his shares, William Weisgarber entered into an employment agreement which terminates on or before December 31, 2000. W. Steven Mania, Domenic Marino and Richard Beach [the shareholders of VTI] certify that William Weisgarber's duties as an employee are outside the scope of the Bureau's jurisdiction. They further agree that William Weisgarber's authority to make decisions, legally bind or legally represent CCE, VTI and any other "acquired corporation" will be limited to that part of the business outside the scope of the Bureau's jurisdiction.

14. W. Steven Mania, Domenic Marino and Richard Beach agree on behalf of CCE, VTI or any "acquired corporation" that William Weisgarber and Daniel Morocco will have absolutely no control, influence or input whatsoever in the corporate management or operations of CCE, VTI or any "acquired corporation" at any time in the future. Notwithstanding such provisions in the settlement agreement limiting the financial interest and involvement of Weisgarber in VTI or any "acquired corporation," a VTI organizational chart submitted by VTI to the New Jersey Economic Development Authority showed plaintiff in the management tier of the company. VTI indicated that the organizational chart was inaccurate, and it erroneously implied that Weisgarber held a managerial position. DCA nevertheless issued a 2002 Notice of Revocation to VTI for its alleged breach of the 1998 settlement agreement. The parties eventually agreed to a settlement of that matter in early July 2003.

As part of that 2003 settlement agreement, VTI agreed that it could engage the services of Weisgarber only on work performed outside of the State of New Jersey or, if for work within New Jersey, on activities that are not regulated by DCA.

More fully, the settlement agreement provided for the termination of Weisgarber as a VTI employee:

2. [VTI] has represented it will terminate Mr. Weisgarber as an employee, removing him from its payroll and eliminating his role in all activities that he presently conducts on behalf of [VTI], except as noted in Paragraph 5, below. [VTI] represents that it will give notice to Mr. Weisgarber of his termination within three business days immediately following execution of this Settlement Agreement between [VTI] and DCA. [VTI] represents Mr. Weisgarber's termination will be effective no later than sixty days from execution of this agreement or October 1, 2003 whichever is sooner.

3. [VTI] represents that it has revised its organizational chart to remove Mr. Weisgarber's name from same in any capacity.

5. [VTI] reserves a limited right to engage the services of Mr. Weisgarber, should he obtain employment with another company or go into business for himself as an independent contractor. These services would be limited to work performed outside the State of New Jersey or, if for work within the State of New Jersey, on activities that are not regulated by the DCA. [VTI] further reserves the right to consult with Mr. Weisgarber occasionally to follow up on work in progress as of the date of his separation from [VTI].

The settlement agreement also provided that VTI could purchase from Tyson Group the building in which VTI operated its business. Alternatively, VTI would be required to relocate. The specific language of the agreement provided as follows:

4. [VTI] will either purchase the building in which it operates, presently owned by Tyson Group, a partnership consisting of Mr. Weisgarber and his wife; or relocate, to be accomplished no later than October 1, 2003. [VTI] represents that it is under contract to purchase a building at 120 North Warren Street in the City of Trenton, and the relocation date is predicated upon the current tenant of that building vacating at the expiration of his lease on August 31, 2003. [VTI] represents that in the event the aforesaid tenant does not vacate in a timely fashion, [VTI] will take necessary legal action to effectuate an eviction.

Weisgarber and the Tyson Group contend these limitations imposed by DCA in the settlement agreement with the owners of VTI constitute tortious interference with their contracts and with their prospective economic advantage in dealing with VTI and its subsidiaries. The Law Division rejected plaintiff's claims and granted summary judgment in favor of DCA.

The Law Division heard oral argument on defendants' motion for summary judgment on August 3, 2007. At the conclusion of those arguments, Judge Innes reasoned:

The DCA was faced with a potential violation and assessed a penalty. Such an action was well within the DCA's discretion. VTI was afforded the opportunity to contest the violation and the choice to terminate Weisgarber was their own volition. Accordingly, the court finds that DCA's actions were objectively reasonable and protected by statutory immunity, and the court will grant summary judgment in favor of defendants.

We are satisfied that the Law Division appropriately rejected plaintiff's claims because plaintiff cannot demonstrate that DCA acted maliciously when it insisted on Weisgarber's limited involvement with VTI. Weisgarber had an unsatisfactory record as an asbestos control monitor. DCA had a duty to protect the public, and it reasonably believed it was upholding that duty when it insisted that Weisgarber have no involvement whatsoever with the activities it regulated. In short, its actions were justified.

I. STANDARD OF REVIEW

This court applies a de novo standard of review in regard to summary judgment motions. Trinity Church v. Atkin Olshin Lawson-Bell, 394 N.J. Super. 159, 166 (App. Div. 2007). Thus, we must consider, as the Law Division did, "'whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007) (quoting Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 536 (1995) (internal quotations omitted)).

The judgment or order sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged . . . .

[R. 4:46-2(c).]

II. TORTIOUS INTERFERENCE

This matter concerns, on the one hand, the asserted right of Weisgarber to maintain his employment with VTI despite the settlement agreements between VTI and DCA and, on the other hand, whether DCA had the authority to compel a private company to terminate a particular employee. We are convinced DCA has such authority, and that it acted reasonably and responsibly in exercising that authority. In this regard, we observe that "[t]he right to a particular job, unlike the right to work in general, has never been regarded as fundamental." Greenberg v. Kimmelman, 99 N.J. 552, 573 (1985).

An action for tortious interference with a prospective business relation or employment relationship protects the right "to pursue one's business, calling or occupation free from undue interference or molestation." Louis Kamm, Inc. v. Flink, 113 N.J.L. 582, 586 (E. & A. 1934). In its opinion in Printing Mart-Morristown v. Sharp Elecs. Corp., the Supreme Court delineated the elements of a cause of action for tortious interference:

A complaint based on tortious interference must allege facts that show some protectable right -- a prospective economic or contractual relationship. Although the right need not equate with that found in an enforceable contract, there must be allegations of fact giving rise to some "reasonable expectation of economic advantage." A complaint must demonstrate that a plaintiff was in "pursuit" of business. Second, the complaint must allege facts claiming that the interference was done intentionally and with "malice." For purposes of this tort, "[t]he term malice is not used in the literal sense requiring ill will toward the plaintiff." Rather, malice is defined to mean that the harm was inflicted intentionally and without justification or excuse. Third, the complaint must allege facts leading to the conclusion that the interference caused the loss of prospective gain. A plaintiff must show that "if there had been no interference[,] there was a reasonable probability that the victim of the interference would have received the anticipated economic benefits." Fourth, the complaint must allege that the injury caused damage.

[116 N.J. 739, 751-52 (1989) (internal citations omitted).]

Plaintiffs did not and cannot demonstrate that defendants acted with malice when they insisted on settlement terms that adversely affected Weisgarber's employment. To show malice, plaintiffs must prove that the DCA acted without justification or excuse. Printing Mart-Morristown, supra, 116 N.J. at 756; MacDougall v. Weichert, 144 N.J. 380, 404 (1996). Malice is analyzed on a case-by-case basis, Singer v. Beach Trading Co., 379 N.J. Super. 63, 81-82 (App. Div. 2005), but among the factors most pertinent to an inquiry on the malice prong are the following: "(a) the nature of the actor's conduct, (b) the actor's motive, (d[sic]) the interests sought to be advanced by the actor, and (e) the social interest in protecting the freedom of action of the actor and the contractual interests of the other." See MacDougall, supra, 144 N.J. at 404-05. When considering these factors, we are reminded that "a threat to terminate ordinary business relations with an employer, even if intended to cause the discharge of an employee and even though undertaken with malice, is not actionable unless it is for a reason not reasonably related to the protection of a legitimate business interest of the actor." Id. at 405 (internal quotations omitted).

Plaintiffs rely largely on Wear-Ever Aluminum, Inc. v. Townecraft Indus., Inc., to support their claim of malice. 75 N.J. Super. 135 (Ch. Div. 1962). The plaintiff in Wear-Ever alleged that the defendant, a business competitor, tortiously interfered with the business relationship between the plaintiff and seventy eight of its employees. Id. at 139. The defendant initiated an active recruitment process whereby it would encourage the plaintiff's employees to terminate their employment relationship with the plaintiff. Ibid. A meeting was held where the sole purpose was to convince employees of the plaintiff to come to work for defendant-competitor. Id. at 141. The court found that such conduct amounted to "[u]njustified officious meddling" and held that the defendant acted maliciously. Id. at 145, 147. The defendant's conduct in Wear-Ever was later classified as a "midnight raid" of employees. Palm Bay Imps., Inc. v. Miron, 55 Fed. Appx. 52, 60 (3d Cir. 2002).

Clearly, the matter at hand is distinguishable from that analyzed in Wear-Ever. Here, the entity alleged to have tortiously interfered with Weisgarber's employment was a public agency empowered to ensure compliance with the Asbestos Hazard Abatement Subcode. That agency was in no way a business competitor to plaintiffs, nor would it garner any economic relief from encouraging Weisgarber's termination. Instead, DCA had a duty to "provide and ensure public safety, health, and welfare insofar as they are affected by asbestos and asbestos-containing materials." N.J.A.C. 5:23-8.1(e). The protection of public health serves as a valid justification for DCA's action and obviates the element of malice. Furthermore, utilizing the factors enumerated in MacDougall, we find that the nature of the actors' conduct was not egregious. The purpose of defendants' alleged interference was to ensure Weisgarber would be isolated from any work involving asbestos monitoring and control. This action is sensible when one views DCA's duty to the public in the context of Weisgarber's history of violations and his alleged negligent mishandling of his previous company.

Weisgarber contends his claim of malice is supported by a showing that members of the DCA called him a canker and referred to him by other unflattering names. Such a showing might fulfill the traditional definition of malice as it relates to ill-will, but it does not satisfy the applicable definition of malice necessary to establish a claim of tortious interference of contract or a prospective economic advantage. See Printing-Mart Morristown, supra, 116 N.J. at 751. The actor must have acted without plausible justification. Plaintiffs have not met their burden of proving a lack of plausible justification.

Plaintiffs also contend that defendants tortiously interfered with their real estate contractual relations with VTI. More particularly, plaintiffs contend that DCA forced VTI to break the lease that VTI had with the Tyson Group, a company owned by plaintiff and his wife. As with the claim of tortious interference with a contract, plaintiff must show the elements already identified:

(1) . . . some reasonable expectation of economic advantage; (2) the defendants' actions were malicious in the sense that the harm was inflicted intentionally and without justification or excuse; (3) the interference caused the loss of the prospective gain or there was a reasonable probability that the plaintiff would have obtained the anticipated economic benefit, and (4) the injury caused the plaintiff damage.

[Mandel v. UBS/PaineWebber, Inc., 373 N.J. Super. 55, 79-80 (App. Div. 2004), certif. denied, 183 N.J. 213 (2005).]

The lease in question was an oral month-to-month agreement between VTI and the Tyson Group for occupation of the company building. In their depositions, VTI management personnel admitted, however, that they were searching for a new building to lease at the time they terminated their leasehold with the Tyson Group. Indeed, the 2003 settlement agreement itself identifies, in Paragraph 4, a building on North Warren Street in Trenton that VTI was under contract to purchase, subject to the current tenant vacating the building. Thus, the month-to-month verbal lease was subject to termination by VTI at any time, provided that VTI gave the proper notice. Moreover, and giving plaintiff every reasonable inference, the facts in the record cannot support a finding of malice with respect to the termination of the lease. That claim was justly dismissed on summary judgment.

III. QUASHING OF THE SUBPOENAS

Plaintiffs argue that the trial court wrongly granted DCA's motion, pursuant to Rule 1:9-2, to quash the deposition testimony of Cheryl Clarke and Leslie Lefkowitz. DCA argues, however, that the motion to quash was providently granted because such depositions would violate the attorney-client privilege as well as the attorney work-product doctrine. Both Clarke and Lefkowitz were attorneys employed by DCA who were involved in drafting the settlement agreements between VTI and DCA.

The trial court aptly ruled that

[t]he proffered reason for plaintiff's desire to depose Clarke and Lefkowitz is to inquire as to their interpretations of this contract. The Court finds that it's really irrelevant what the interpretations of the contract were by these attorneys. The fact is that whatever position they may have taken is not relevant to the action brought by the plaintiff on the contract. Under the circumstances the Court rejects the plaintiff's request under this doctrine.

The State also seeks to protect or to quash the subpoenas based upon attorney work product. Here, Clarke and Lefkowitz may have drafted the contract and participated in discussions with regard to settlement. The Court finds that this is the type of thought process which would be protected by attorney work product. And under the circumstances, the plaintiff's application with regard to the subpoenas or the plaintiff's subpoenaing of these two individuals is inappropriate for I find that it would not lead to any relevant and discoverable information. And the Court will grant the State's motion to quash the subpoenas.

We agree with the trial court's ruling.

Even if the court had not found that the attorney-client privilege insulates Clark and Lefkowitz from being deposed, the attorney work-product doctrine would have operated to do so. The fundamental test of applicability of the work-product privilege is whether the materials sought to be discovered were prepared in anticipation of litigation rather than in the ordinary course of business. Rivard v. Am. Home Prods., Inc., 391 N.J. Super. 129, 155 (App. Div 2007); Miller v. J.B. Hunt Transp., Inc., 339 N.J. Super. 144, 148 (App. Div. 2001). The rule protects from disclosure an attorney's "'mental impressions, conclusions, opinions or legal theories of an attorney or other representative of the party concerning the litigation.'" Jenkins v. Rainner, 69 N.J. 50, 55 (1976)(quoting Pressler, Current N.J. Court Rules, comment on R. 4:10-2 (1976)).

In this case, plaintiffs sought to elicit the witnesses' thoughts regarding the meaning of certain terms of the settlement agreement. Their interpretation of an agreement they themselves prepared fits squarely within the attorneys' mental impressions about the legal problem before them. The plain language of the agreement speaks for itself. Any questioning of the attorneys would interfere with the long cherished notions of the attorney-client privilege and the protection of attorney work-product.

IV. IMMUNITY OF RESPONDENT

DCA claims that it is exempt from liability in this action pursuant to the provisions of N.J.S.A. 59:3-6. That statute reads:

A public employee is not liable for an injury caused by his issuance, denial, suspension or revocation of, . . . any permit, license, certificate, approval, order or similar authorizations where he is authorized by law to determine whether or not such authorization should be issued, denied, suspended or revoked.

N.J.A.C. 5:23-8.11(e)(1) specifically provides that the Department has the power to suspend or revoke its authorization of any asbestos safety control monitor or assess a civil penalty . . . if the Department determines that the authorization or reauthorization was based on the submission of fraudulent or materially inaccurate information, or that the authorization or reauthorization was issued in violation of this subchapter, or that a change of facts or circumstances makes it unlikely that the asbestos safety control monitor can continue to discharge its responsibilities under this subchapter in a satisfactory manner, or any provision of this subchapter has been violated, or that the asbestos safety control monitor has been negligent or has engaged in misconduct in the performance of any of its duties, or that the asbestos safety control monitor has failed to maintain a minimally acceptable level of competence.

Under the relevant statute and regulation, the Department was well within its power to suspend or revoke VTI's license because the organizational charts submitted to it disclosed that Weisgarber was in a position of management in the company. That would have been a breach of the settlement agreement. Given that DCA had the power to revoke or withhold a license, we have no hesitation in holding that it could condition the grant of a license on the agreement of the applicant not to allow influence of one who is disqualified by his history of mismanagement and poor performance.

Finally, DCA and its employees assert that they are immune from liability under the Tort Claims Act because they properly exercised their discretion when issuing a notice to revoke VTI's license and declining certain settlement offers. The pertinent section of the Tort Claims Act reads: "A public employee is not liable for an injury resulting from the exercise of judgment or discretion vested in him . . . ." N.J.S.A. 59:3-2(a). Thus, the statute shields public officials with absolute immunity when they act in accord with the statute's provisions.

Our courts have interpreted N.J.S.A. 59:3-2 "to protect 'the exercise of judgment or discretion in making basic policy . . . upon proof that discretion was actually exercised at that level by an official who, faced with alternative approaches, weighed the competing policy considerations and made a conscious choice.'" Snyder v. Am. Ass'n of Blood Banks, 144 N.J. 269, 310 (1996) (Garibaldi, J., dissenting) (quoting Costa v. Josey, 83 N.J. 49, 59 (1980)).

N.J.S.A. 59:3-2 does not "exonerate a public employee for negligence arising out of his acts or omissions in carrying out his ministerial functions." N.J.S.A. 59:3-2(d). A ministerial act is one in which a "person . . . performs under a given state of facts in a prescribed manner . . . without regard to or the exercise of . . . judgment upon the propriety of the act being done." Kemp by Wright v. State, 147 N.J. 294, 308, 687 A.2d 715 (1997). A public entity is liable for injury caused by its employee acting or failing to act within the scope of his employment. N.J.S.A. 59:2-2(a). It is not liable where the public employee is not liable. N.J.S.A. 59:2-2(b).

[Massachi v. AHL Servs., Inc., 396 N.J. Super. 486, 495-96 (App. Div. 2007).]

Again, the statute and relevant regulations clearly give the Department discretion to revoke a company's license for asbestos inspection. While the statutes do not plainly bestow the Department with authority to insist on certain settlement terms, that authority is implicit. The Department and its members were faced with an important decision when they received VTI's corporate organizational chart. The chart clearly illustrated plaintiff as being in the management level of the flow chart. At that point, they reviewed the 1998 settlement agreement and concluded that VTI was in violation. They then made the decision to issue notice of revocation to VTI and would not agree to any settlement which would allow plaintiff to remain employed by VTI. We agree with the holding of Judge Innes that these decisions were discretionary rather than ministerial. The original purpose of the 1998 settlement agreement was to settle the several violations accrued by plaintiff when he was the proprietor of his own asbestos company. His record indicated to the Department that he was a hazard to public health. The determination to compel Weisgarber's total separation from asbestos activities was as legitimate an exercise of discretion as the issuance of the notices of violation. The Department and other defendants are immune from liability under this lawsuit for such action.

In light of our disposition on the foregoing grounds, we decline to address defendants' contention that they are entitled to absolute immunity or qualified immunity under N.J.S.A. 59:3-3. We merely note that the statute states, "[a] public employee is not liable if he acts in good faith in the execution or enforcement of any law." Ibid. New Jersey has adopted the same objective reasonableness standard for qualified immunity that applies to claims filed under 42 U.S.C.A. § 1983.

A public employee either must demonstrate "objective reasonableness" or that he behaved with "subjective good faith." A public employee need prove only one component. Immunity attaches if the employee can show either objective or subjective good faith. We note that both forms of good faith overlap as a matter of fact and law. [Alston v. City of Camden, 168 N.J. 170, 186 (2001) (internal citations omitted).]

Pertinent to the instant matter, "bare allegations of malice are not sufficient to subject a public employee to broad reaching discovery or trial." Delbridge v. Schaeffer, 238 N.J. Super. 323, 346 (Law Div. 1989) (emphasis added). If the public employee or agency reasonably believed its actions were lawful, then they should remain protected by the qualified immunity of N.J.S.A. 59:3-3. Ibid.

Indeed, the record does not carry proof that defendants held any unreasonable belief as to their contractual interpretation or as to their rights under the law. The contractual language of the 1998 settlement agreement allowed for the objective interpretation that plaintiff would no longer be employed by VTI in the year 2000. Therefore, the Department maintained an objectively reasonable belief that plaintiff's existing employment relationship with VTI constituted a breach of this agreement. They had little alternative then but to seek to remediate this breach.

Affirmed.

20091002

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