March 23, 2011
RENEE POLLACK, PETITIONER-APPELLANT,
SOUTH ORANGE-MAPLEWOOD BOARD OF EDUCATION, ESSEX COUNTY, RESPONDENT-RESPONDENT.
On appeal from a Final Decision of the Commissioner of the Department of Education of the State of New Jersey, Docket No.354-11/07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted February 15, 2011
Before Judges Yannotti,Espinosa and Skillman.
Renee Pollack (Pollack) appeals from a final determination of the Commissioner of Education (Commissioner) dated February 8, 2010, in which the Commissioner found that the Board of Education of South Orange and Maplewood (Board) did not violate Pollack's tenure or contract rights by terminating her employment effective December 31, 2007. We reverse.
I. Pollack began her employment in the South Orange and Maplewood school district (district) in August 2002, and was assigned to the position of principal of Columbia High School. Pollack continued in that position from 2002 into the 2005-2006 school year. She became tenured on August 26, 2005. In April 2006, Pollack was placed on administrative leave with pay.
It appears that there had been racial discord at Columbia High School, and Pollack had become the focal point of the discontent among certain faculty members and students. In addition, lawsuits had been commenced by students and faculty members against the Board and Pollack. The Board believed that Pollack's removal from her position as principal of Columbia High School would be an appropriate first step in attempting to diffuse the situation.
Sidney Sayovitz (Sayovitz), the Board's outside counsel, engaged in negotiations concerning Pollack's status with Pollack's attorneys: Robert H. Greenwood (Greenwood) and later Robert M. Schwartz (Schwartz). These discussions resulted in a letter dated August 18, 2006, from Schwartz to Sayovitz in which Schwartz made an offer on Pollack's behalf to settle the dispute on certain terms.
The terms included the following. (1) Pollack would agree to reassignment to "a commensurate title in accordance with her rights of tenure." (2) She would submit a letter of resignation, effective as of December 31, 2007. (3) Pollack would be paid for all of her unused vacation and sick days and receive payment for the attorney's fees she had incurred for Greenwood's legal services. (4) If Pollack obtained "other full-time employment" before July 1, 2007, she would be paid her contractual salary through July 1, 2007. (5) Pollack would continue to be fully indemnified for damages and potential attorney's fees with respect to any legal actions that pertain directly or indirectly to her employment by the district. (6) The Board would continue to fulfill its obligations to Pollack's son, a student in the district.
Sayovitz told Schwartz that he would present the proposal to the Board. Thereafter, he wrote a letter to Schwartz dated August 29, 2006, stating that he had been authorized to inform Schwartz that "your proposed resolution is acceptable, subject to our ability to execute a mutually satisfactory settlement agreement and the receipt of an irrevocable letter of resignation." Sayovitz stated, however, that certain terms in Schwartz's August 18, 2006, letter "require[d] clarification".
Sayovitz said that the payment of "reasonable fees" for Greenwood's services was acceptable but he proposed a cap of $2000. He stated that the Board assumed that the provision regarding Pollack's securing "other full time employment" referred to employment in "a school setting." Sayovitz also stated that Pollack's right to indemnification was statutory and the settlement would neither increase nor reduce those rights.
In addition, Sayovitz stated that, although the Board believed that its obligations to Pollack's son should not be included in the agreement, "such obligations [would be] neither increased nor reduced as a result of the settlement." Sayovitz concluded his letter by stating that he would draft the proposed agreement and forward it to Schwartz for his review.
With a letter dated September 5, 2006, Sayovitz provided Schwartz with the proposed settlement agreement, which incorporated the "clarifications" set forth in his August 29, 2006, letter. On September 13, 2006, Schwartz wrote to Sayovitz to "confirm" that Pollack had retracted her offer of settlement, as set forth in his letter of August 18, 2006, and had rejected the Board's "counter offer" as set forth in Sayovitz's August 29, 2006, letter.
Schwartz wrote that Pollack's position regarding the settlement was predicated on a "recent" favorable evaluation she had received from the superintendent of schools, as well as a decision of the United States District Court in an action brought against the Board and Pollack. According to Schwartz, the federal court had given "very little credence" to the claims against Pollack. Schwartz stated that the superintendent's evaluation and the court's decision exonerated Pollack of "any wrongdoing."
Sayovitz responded in a letter of September 26, 2006. He stated that Schwartz's letter "mischaracterize[d] the status of [their] previous negotiations." Sayovitz pointed out that he had advised Schwartz that the Board had accepted Pollack's offer of settlement and, thereafter, both parties had taken actions in furtherance of that agreement. Sayovitz noted that the Board had approved a job description for the position of "Principal on Special Assignment" and had assigned Pollack to that position.
Sayovitz also noted that Pollack had vacated her office at Columbia High School and a new principal had taken over that position. He stated that Pollack was "to report to work immediately." Sayovitz added that the decision of the federal court "was not germane to the agreement" and he had been instructed to advise Schwartz that the "Board will take appropriate action to enforce its agreement" with Pollack.
On October 3, 2006, Pollack began work in the district's central office as a "Principal on Special Assignment." In June 2007, the Board's Human Resource Coordinator (Coordinator) sent Pollack a letter informing her that her reappointment as "Principal on Special Assignment" had been approved and a proposed contract for July 1, 2007, through June 30, 2008, at a salary of $141,413. The letter noted that the salary would be adjusted when the 2007-2008 salary guides were complete. A copy of the contract was enclosed. On September 24, 2007, the Coordinator sent Pollack another letter, indicating that the Board had approved her appointment for July 1, 2007, through June 30, 2008, at a salary of $144,071. The revised contract was enclosed.
On November 5, 2007, Pollack was called to the superintendent's office and informed that the Board would be voting on a resolution to terminate her employment effective December 31, 2007. The Board adopted a resolution which stated that, pursuant to the settlement agreement "as memorialized in the August 18, 2006, correspondence" from Pollack's "representative," the last day of her employment would be December 31, 2007.
II. Thereafter, Pollack filed a petition of appeal with the Commissioner, alleging that she had been terminated in violation of her contractual and tenure rights. The Commissioner referred the matter to the Office of Administrative Law for a hearing before an Administrative Law Judge (ALJ). The ALJ thereafter issued an initial decision in which he concluded that the Board had properly terminated Pollack's employment on December 31, 2007, because she had entered an enforceable agreement with the Board, which called for her resignation as of that date.
Pollack filed exceptions to the ALJ's decision and the Commissioner issued a final decision dated February 8, 2010, concluding that the ALJ had correctly determined that Pollack and the Board had entered into an enforceable agreement, under which Pollack was required to resign as of December 31, 2007.
The Commissioner found that Pollack fully intended to enter into the settlement on the terms set forth in her attorney's letter of August 18, 2006. The Commissioner stated that the Board's acceptance of the offer was shown by the Board's action at its August 28, 2006, meeting and the letter from its attorney on August 29, 2006. The Commissioner rejected Pollack's contention that Sayovitz's August 29, 2006, letter was a counter-offer. The Commissioner found that Sayovitz sought clarification of the proposed terms "to ensure that the Board would not be left open to unanticipated or unreasonable demands[.]"
The Commissioner noted that the written agreement had not been finalized and the Board did not adopt a resolution formally approving the settlement until November 5, 2007. The Commissioner said, however, that a final written agreement was not required to create an enforceable agreement, and the delay in the Board's formal approval of the agreement was "substantially attribut[able] to [Pollack's] refusal to take the steps necessary to finalize the settlement to which she had previously agreed, because she by then no longer wished to abide by it."
The Commissioner additionally noted that the Board had created the position of "Principal on Special Assignment" and immediately assigned Pollack to the position. The Commissioner said that these actions were related to the agreement, despite Pollack's claim to the contrary. The Commissioner also said that it was irrelevant that the Board provided Pollack with two annual contracts which extended her employment beyond the alleged agreed-upon termination date of December 31, 2007. The Commissioner stated that "the documents in question were of the type routinely issued to employees" and had been provided to Pollack by employees who lacked knowledge of the agreement.
The Commissioner dismissed Pollack's petition and ordered the Board to pay her $5275 for the legal fees she had incurred, as required by the settlement agreement. This appeal followed.
III. Pollack argues that the Commissioner erred by finding that the parties had entered into a binding settlement agreement which required that she resign from her employment in the district as of December 31, 2007. We agree.
The scope of our review in an appeal from a final decision of an administrative agency is limited. In re Carter, 191 N.J. 474, 482 (2007). An agency's decision will be upheld "'in the absence of a showing that it was arbitrary, capricious or unreasonable, or that it lacked fair support in the evidence.'" Ibid. (quoting Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963)).
In reviewing the final decision of an administrative agency we consider: (1) whether the decision is consistent with the applicable provisions of the State and Federal Constitutions; (2) whether the agency's decision "violates express or implied legislative policies;" (3) whether the agency's factual findings are supported by substantial credible evidence; and (4) whether "the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors." George Harms Constr. Co. v. N.J. Tpk. Auth., 137 N.J. 8, 27 (1994).
Pollack acknowledges that Schwartz's letter of August 18, 2006, set forth terms on which she would settle her dispute with the Board. She argues, however, that Sayovitz's letter of August 29, 2006, did not constitute acceptance of her offer. Pollack contends that Sayovitz's letter constituted a counter-offer, which she rejected when she rescinded her initial offer.
In determining whether Pollack and the Board had entered into a binding settlement agreement, we consider basic principles of contract law. "A written contract is formed when there is a 'meeting of the minds' between the parties evidenced by a written offer and an unconditional, written acceptance." Morton v. 4 Orchard Land Trust, 180 N.J. 118, 129-30 (2004). "'An expression of assent that modifies the substance of the tender, while it may be operative as a counter-offer, is yet not an acceptance and does not consummate a contract.'" Id. at 130 (quoting Johnson & Johnson v. Charmley Drug Co., 11 N.J. 526, 538 (1953)).
The acceptance must "'precisely match the offer.'" Ibid. (quoting Milton R. Friedman & James Charles Smith, Friedman on Contracts and Conveyances of Real Property § 1.2 (2002)). Furthermore, "prior to acceptance 'either party is at liberty to withdraw his consent[.]'" Ibid. (quoting Trustees of First Presbyterian Church v. Howard Co. Jewelers, 12 N.J. 410, 413 (1953)).
It is undisputed that Schwartz tendered an offer to the Board on Pollack's behalf to settle the dispute on the terms set forth in his August 18, 2006, letter. However, the Board's response, as conveyed in Sayovitz's letter of August 29, 2006, was not an unqualified acceptance of the terms set forth in Schwartz's letter. Sayovitz asserted that he was seeking clarification of certain of the proposed terms, but his letter indicates that there was, in fact, no meeting of the minds on several key provisions.
As noted previously, Schwartz had demanded that the Board pay all of the fees that Pollack had incurred for Greenwood's legal services. The Board did not agree to that proposal. Instead, Sayovitz proposed that the Board only pay "reasonable" attorney's fees for Greenwood's services up to a maximum of $2000. The Commissioner ordered the Board to pay Pollack $5275 for Greenwood's counsel fees. It is clear, however, that there was no agreement regarding the amount of counsel fees that Pollack would receive and the difference from Pollack's perspective cannot be viewed as insubstantial.
Moreover, Schwartz had demanded that Pollack be paid her full salary through July 1, 2007, if prior to that date she obtained "other full time employment." In his letter of August 29, 2006, Sayovitz said that this provision should be "clarified" to mean other "full time employment in a school setting." He included that qualification in the proposed written agreement that he provided to Schwartz with his letter of September 5, 2006.
The difference between any "other full time employment" and "employment in a school setting" was significant because the change would substantially limit the Board's potential exposure to Pollack. The Board would not be obligated to pay Pollack her full salary through July 1, 2007, if she obtained full time employment in other than a "school setting," or if she secured employment on other than a full time basis. As Pollack points out, depending on the circumstances, this change could have cost her more than $100,000 in lost salary.
In our view, the terms regarding reimbursement of Pollack's counsel fees and the payment if she obtained other employment prior to July 1, 2007, were material. Because Sayovitz's letter of August 29, 2006, did not agree to these terms as proposed by Schwartz, Sayovitz's letter of August 29, 2006, did not create a binding agreement but rather represented a counter-offer that Schwartz rejected. Furthermore, Schwartz's letter of September 13, 2006, withdrew his initial offer. Consequently, that offer was no longer subject to acceptance by the Board.
The Board's actions after the exchange of correspondence between the attorneys in August and September 2006 indicate that the Board recognized that it had not entered into a binding agreement with Pollack. The Board did not take formal action to approve the "agreement" until November 5, 2007, fourteen months after Pollack had withdrawn her initial offer. Ellen Bass, the Board's in-house counsel, testified that the Board did not take formal action on the settlement at its August 28, 2006, meeting. Indeed, if it had, there would have been no reason for the Board to approve the "agreement" on November 5, 2007.
Furthermore, despite Sayovitz's statements in his letter of September 26, 2006, the Board took no action to enforce the "agreement" by requiring Pollack to formally execute the written contract and the letter of resignation. Because there was no further correspondence between the attorneys after the exchange of letters in August and September 2006, Pollack could reasonably have assumed that the Board had accepted the withdrawal of her offer of settlement and she could continue in the newly-created position.
Moreover, the Board's formal action in re-appointing Pollack to her position as "Principal on Special Assignment" for the full 2007-2008 school term is further evidence that the Board recognized that there was no binding agreement with Pollack. The Commissioner stated in his decision that the contracts for the 2007-2008 school year had been issued to Pollack as a matter of routine, by employees who were not aware that Pollack had "agreed" to resign as of December 31, 2007.
However, the record shows that the contracts were sent to Pollack after the Board had twice taken formal action on her reappointment. While the district's staff may not have been aware that Pollack had "agreed" to leave her position on December 31, 2007, the Board would have been aware of any such "agreement," if one had been made, since the Board had considered the matter on August 28, 2006. Furthermore, the Board twice approved Pollack's contract and the Board President signed them.
In addition, the fact that Pollack assumed the position as a "Principal on Special Assignment" in October 2006, does not support the conclusion that there was a binding agreement between the parties requiring Pollack to resign as of December 31, 2007. The record indicates that the Board wanted to remove Pollack from Columbia High School because of the problems there. Her reassignment was consistent with that goal. Furthermore, as Pollack points out, she could not have refused the change because that would have left her open to tenure charges seeking her removal on the basis of insubordination.
We therefore conclude that the record does not support the Commissioner's finding that the parties entered into a binding agreement on the terms proposed by Schwartz in his August 18, 2006, letter. Accordingly, we reverse the Commissioner's decision and remand the matter to the Commissioner for entry of appropriate remedial relief.
On remand, the Commissioner shall determine whether Pollack should be reinstated to her position as "Principal on Special Assignment" or some other comparable position, consistent with her seniority and tenure rights. The Commissioner shall also determine the amount of back pay and other compensation to which Pollack is entitled, taking into account any other compensation she may have earned after her termination and her duty to mitigate damages.
Reversed and remanded for further proceedings in accordance with this opinion. We do not retain jurisdiction.
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