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Weisgarber v. New Jersey Dep't of Community Affairs

October 2, 2009


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

Per curiam.


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 ...

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