July 26, 2012
ANTHONY CANCRO, PLAINTIFF-APPELLANT,
TOWNSHIP OF EDISON, DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Law Division. Middlesex County, Docket No. L-2362-10.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted July 3, 2012
Before Judges Payne and Messano.
Plaintiff, Anthony Cancro, appeals from an order of summary judgment entered in favor of defendant, Township of Edison, on his claim of entitlement to three months of severance pay, following a determination by the Township's newly elected mayor not to appoint him as the Township's Business Administrator, a position that he had held in the prior administration. Plaintiff claims that the court erred in entering summary judgment in favor of the Township, and that summary judgment should, instead, have been awarded in his favor.
On appeal from the entry of summary judgment in favor of the Township, we view the facts in a light most favorable to plaintiff. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995); Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). In considering whether summary judgment should have been awarded to plaintiff, we reverse our focus.
The record discloses that, in 2006, plaintiff, who was then employed by the United States Department of Environmental Protection, was recruited for the position of Business Administrator for the Township of Edison, under the administration of Township Mayor, Jun Choi. Prior to his appointment to that position, he had informed the consultant hired by the Township to assist in recruitment, Gregory Fehrenbach, the Mayor, and the Township Council that he required, as a condition for accepting employment, that he be given three-months' severance pay if released or not reappointed.
Nonetheless, the resolution passed by the Township Council on June 14, 2006, giving its consent to plaintiff's appointment as Business Administrator by the Mayor, made no mention of severance. The Term Sheet incorporated by reference into the resolution provided, in relevant part, only:
1. Term: The term of appointment of Cancro shall be coterminous with the term of office of the Mayor. Reappointment shall be based upon job performance.
A July 17, 2006 letter from the Mayor to plaintiff informing him of his appointment similarly contained no reference to severance.
However, prior to plaintiff's appointment, the Mayor had requested that the Township's attorney, Jeffery Lehrer, draft an ordinance with respect to severance. According to Lehrer's certification, he "was informed by Mayor Choi and Mr. Fehrenbach that an express term of Mr. Cancro's employment agreement with the Township was that he would be given three months of severance or three months of notice in the event that he was removed or not reappointed." The ordinance drafted by Lehrer and adopted by the Township Council as Section 2-22.1(c), according to Lehrer, "largely mirrored" a State statute that expressly authorized the Township's agreement with plaintiff.
The statute, N.J.S.A. 40:69A-43(c), governs removal of department heads by a mayor and provides that, if a mayor's decision is not vetoed by two thirds of the members of the municipal council, the mayor may remove any department head from his position, after notice and an opportunity to be heard. The statute then provides:
In the event of the removal or failure of reappointment of a business administrator, that administrator may, upon the enactment of an ordinance, be entitled to a three-months' written notice of the removal or non-reappointment, or if the mayor determines that the removal shall be immediate, then the administrator may, upon the enactment of an ordinance, be paid any unpaid balance of his salary plus his salary for a maximum of the next three calendar months following the effective date of the mayor's action unless the removal is for good cause. . . .
As initially proposed, this section, which was added to the statute by amendment in 1997, had used the word "shall" rather than "may." According to the Assembly Local Government Committee Statement to Assembly, No. 1223 with committee amendments, dated December 5, 1996:
The committee amended the bill to make the mandatory language of the bill permissive so that the municipal council would have the discretion to offer a business administrator a severance package.
The ordinance drafted by Lehrer contained the permissive language contained in the statute, stating:
Removal or Failure to Reappoint; Notice. In the event of a removal or failure of reappointment of the Business Administrator, that Administrator may be entitled to a three-months' written notice of the removal or non-reappointment, or if the Mayor determines that the removal shall be immediate, then the Administrator may be paid any unpaid balance of his salary plus his salary for a maximum of the next three
(3) calendar months following the effective date of the Mayor's action unless the removal is for good cause.
In June 2009, Mayor Choi was defeated in a primary election by Antonia Ricigliano, a person who had been a member of the Township Council at the time of plaintiff's appointment as Business Administrator. In deposition testimony, plaintiff admitted that "following the primary election in 2009 . . . it was clear at that point that [Mayor Choi] was no longer going to be the mayor of Edison effective December 31, 2009." Further, it was clear to plaintiff "after the primary the individual who was known as Council[woman] Ricigliano was going to be mayor effective January 1, 2010."
Ricigliano was elected Mayor on November 4, 2009, and then, according to plaintiff's certification: "I knew my job was now in jeopardy." In fact, the record reflects that in October, plaintiff had commenced planning for his departure. An October 20, 2009 memo from Human Resources Manager Karen Infanger to Mayor Choi, with a copy to plaintiff, that concerns calculation of plaintiff's unused vacation time "when he is separated from employment at the end of 2009" provides evidence that planning was underway. As of late November 2009, plaintiff had not been invited to join the new Mayor's administration. On November 30, 2009, plaintiff applied for State retirement benefits, generating a response by the State on December 7, 2009 to plaintiff's "application for retirement with retirement effective January 1, 2010."
By letter dated December 11, 2009, plaintiff was formally notified that his employment would soon end. The letter from Mayor-elect Ricigliano stated:
Thank you for your service to the residents of Edison Township, however a new administration will be sworn into office on January 1, 2010. Please submit your letter of resignation effective December 31, 2009.
I am in receipt of your December 11, 2009 letter regarding my position as Business Administrator.
As I am sure you are aware, under Edison code: C.2.22.1(c.) and State Statute NJSA 40:69A-43c, I am entitled to three months severance pay. I would request the amount to be paid out in one lump sum.
I enjoyed my position as Business Administrator for the Township and will continue to make myself available for an orderly transition.
The Mayor declined to make the requested payment, stating in her deposition that plaintiff was not entitled to severance because his employment ended at the conclusion of Mayor Choi's term. Prior to that, "he was not terminated by Mayor Choi, and Mayor Choi didn't win the election, so he couldn't possibly reappoint him." At that point, Mayor Choi "didn't have the authority to reappoint [plaintiff], and [she] did not appoint him." The Mayor testified that as she understood the phrase "he was removed or not reappointed[,]" it meant: "once he was appointed by Mayor Choi, that if Mayor Choi removed him or did not reappoint him, that he would be entitled to severance." To her mind, the phrase applied only to the former mayor's term of office.
If Mayor Choi terminated him, then he would be entitled to three months. Or in the event that Mayor Choi was reelected and then did not reappoint him for his second term, then I would assume that he would be entitled.
Plaintiff was, in fact, given twenty days of severance pay, in accordance with the Township's employee handbook as applicable to non-unionized, confidential employees. Plaintiff was employed as Township Administrator for the Township of Springfield, effective March 16, 2010.
On March 30, 2010, plaintiff filed a one-count complaint alleging a right to three months' severance pay of $38,844 plus interest from January 1, 2010, pursuant to N.J.S.A. 40:69A-43(c) and Edison Ordinance section 2-22.1(c). On December 2, 2010, plaintiff filed an amended complaint in which he added claims of breach of contract and promissory estoppel.
Following the filing of cross-motions for summary judgment and a hearing, the court ruled in favor of the Township, holding "the ordinance and the resolution and the other documentation do not create a legal obligation upon the Township to pay this outgoing Business Administrator three months of severance." In reaching this conclusion, the court relied in part on the fact that the Township counsel had utilized the permissive term "may" in the governing ordinance. Further, the court did not find a contract to exist between plaintiff and the Township, declaring that the discussions during the recruitment process were insufficient to create a binding agreement. And finally, it declined to recognize the applicability of promissory estoppel.
As stated, in the first count of plaintiff's complaint, he claims an entitlement to severance payments under the optional provisions of N.J.S.A. 40:69A-43(c) and Edison Ordinance 2-22.1(c). We reject plaintiff's argument, agreeing with the motion court that, because of the optional nature of the relief accorded through the use of the word "may" in those provisions, payment was not required. Given the plain language of the statute and the ordinance, and the legislative history that we have set forth, we decline to give the word "may" any other effect. Mun. Council of the City of Newark v. James, 183 N.J. 361, 370 (2005); Merin v. Maglaki, 126 N.J. 430, 434-35 (1992) (discussing rules of statutory construction). While we recognize the fact that plaintiff sought greater protections at the time that he was hired, and that his demands were recognized by the Mayor, the Township's consultant, and the Township's Council, the fact of the matter is that he did not receive them.*fn1
Nor do we think the result was unfair. First of all, plaintiff cannot claim that he was unaware of the terms of the ordinance passed by the Township Council. We see nothing in the record that would suggest an effort on his part to strengthen its terms.
Further, the record establishes that plaintiff's term of employment was coterminous with that of Mayor Choi, as set forth in the Term Sheet appended to the resolution consenting to his appointment. Plaintiff knew as early as June 2009, when the Mayor lost the mayoral primary, that Mayor Choi's term would end on December 31, 2009, and thus that his own term of employment would end then, as well. As a consequence, plaintiff had ample notice of the need to seek alternative employment or other means of supporting his family, which he in fact did, albeit late. In the circumstances presented, the purpose of the statute and ordinance was fulfilled, because plaintiff was afforded ample time to obtain other work. We see no basis for concluding that plaintiff should have been granted both notice and optional severance pay.
Plaintiff additionally claims the existence of an oral contract for the payment of three months' severance. However, such a contract, even if factually supported, would not be legally enforceable in the circumstances presented. The Township operated pursuant to the Faulkner Act, N.J.S.A. 40:69A-1 to -210, under a mayor-council plan, N.J.S.A. 40:69A-31 to -48, that vested executive and administrative power in the mayor and legislative and investigative power in the council.
N.J.S.A. 40:69A-32b. Under that form of government, the mayor lacked the power to enter into a contract without the approval of the council. James, supra, 183 N.J. at 371-72 (discussing the operation of N.J.S.A. 40:69A-36(l), -40(g) and -40(j)). And any agreement by him without the council's ratification would be ultra vires. Maltese v. Twp. of N. Brunswick, 353 N.J. Super.
226, 229, 237 (App. Div. 2002). While the council could have ratified the mayor's commitments, id. at 237, the evidence in this case demonstrates that it did so only partially by adopting an ordinance that made severance payments optional. Contrary to plaintiff's arguments, no further oral agreement by the Township Council with respect to compensation can be recognized. Rather, existing law requires that the salaries, wages or other compensation of municipal officers and employees be fixed by the governing body, in this case, the Township Council, N.J.S.A. 40A:9-10, and established by ordinance. N.J.S.A. 40A:9-165. See Liebeskind v. Mayor and Mun. Council of Bayonne, 265 N.J. Super. 389, 397-98 (App. Div. 1993) (recognizing that these statutory provisions are applicable to Faulkner Act municipalities); see also Maltese, supra, 353 N.J. Super. at 238.
As a final matter, plaintiff claims that the motion court erred when it did not equitably estop the Township from denying his right to severance payments. "The essential principle of the policy of estoppel . . . is that one may, by voluntary conduct, be precluded from taking a course of action that would work injustice and wrong to one who with good reason and in good faith has relied upon such conduct." Summer Cottagers' Ass'n. of Cape May v. City of Cape May, 19 N.J. 493, 503-04 (1955).
However, equitable estoppel will be applied against a municipality only "in very compelling circumstances, where the interests of justice, morality and common fairness dictate that course." Maltese, supra, 353 N.J. Super. at 244-45 (citations omitted).
Our review of the facts of the present matter satisfies us that the motion court properly determined not to invoke equitable estoppel in this case to provide plaintiff with the relief that he sought. In reaching that conclusion, we are persuaded that, given plaintiff's knowledge that the term of his employment would end at the conclusion of Mayor Choi's service as mayor on December 31, 2009, as well as his knowledge of the conditional nature of the severance payment ordinance, plaintiff could not reasonably have relied upon the receipt of severance payments, and that the denial of such payments worked no injustice.