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Sanks-King v. University of Medicine & Dentistry of New Jersey

Superior Court of New Jersey, Appellate Division

July 18, 2013

VIVIAN SANKS-KING, Plaintiff-Appellant,


Argued November 14, 2012

On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-10130-07.

F. Michael Daily, Jr. argued the cause for appellant (F. Michael Daily, Jr., LLC, attorneys; Mr. Daily and Amy B. Sunnergren, on the briefs).

Agnes I. Rymer argued the cause for respondents (Saiber, LLC, attorneys; Joan M. Schwab and Ms. Rymer, on the brief).

Before Judges Lihotz and Ostrer.


Plaintiff, an African-American woman and former general counsel of the University of Medicine and Dentistry of New Jersey (UMDNJ), appeals from the trial court's decision granting summary judgment to defendants and dismissing her claim that she was terminated in violation of the Law Against Discrimination (LAD), and her constitutional rights to due process.[1] She also asserts error in the dismissal of various contract, tort, and due process claims.

For purposes of this appeal, defendants do not contest that plaintiff established a prima facie case of employment discrimination. Defendants responded that UMDNJ was compelled to terminate her employment by the Office of United States Attorney for the District of New Jersey (OUSA), which had threatened to indict UMDNJ, and agreed to enter into a deferred prosecution agreement (DPA) only on the condition that plaintiff and three other employees were terminated.

We view the principal issue on appeal to be whether OUSA's direction that UMDNJ terminate plaintiff constitutes a "legitimate, nondiscriminatory reason" for her termination, rebutting the presumption of unlawful discrimination created by plaintiff's prima facie case. See Bergen Commercial Bank v. Sisler, 157 N.J. 188, 210-11 (1999) (stating that "[i]n order to rebut the presumption [of discrimination], the employer in the second stage of the process must come forward with admissible evidence of a legitimate, non-discriminatory reason for its rejection of the employee").

Plaintiff presented no proof that OUSA's motivation was discriminatory, let alone that UMDNJ was aware of such motivation. We therefore conclude that defendants successfully rebutted the presumption of unlawful discrimination. As plaintiff failed to prove that her termination "was caused by purposeful or intentional discrimination, " id. at 211, we affirm dismissal by summary judgment of plaintiff's LAD claim. We also affirm the court's dismissal of plaintiff's various tort and contract claims, based on plaintiff's failure to serve proper statutory notices of claim. Lastly, we affirm the dismissal of plaintiff's claim that she was denied procedural due process in connection with alleged harm to her reputation.


We discern the following facts from the record, viewed in a light most favorable to plaintiff as the non-moving party. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). As UMDNJ's general counsel, plaintiff was an "at will" employee who could be terminated without cause. Prior to the events leading to her termination, she received positive formal evaluations on an annual basis. Among her various duties, plaintiff was responsible for the compliance department.

In 2005, OUSA began to investigate whether, in violation of law, University Hospital (UH), an entity of UMDNJ, and University Physicians Associates (UPA), a clinical practice program of full-time UMDNJ faculty, had secured payment through Medicaid for the same medical services provided through UH. In May 2001, plaintiff was informed it was likely that UH sought reimbursement for the salaries it paid physicians to service its clinics, while physicians also separately billed Medicaid for those services through UPA. Only in November 2004 did UMDNJ inform the State Medicaid program of the issue.

Plaintiff's actions in the intervening three-and-one-half years are subject to dispute. Generally, plaintiff asserts that others within UMDNJ thwarted her diligent efforts to determine whether double-billing had occurred; and if it did, which of the two entities was entitled to payment from Medicaid. She also alleged she proposed appropriate responses, but she was not authorized to compel other employees to implement them. Plaintiff retained outside attorneys to examine the double-billing issue and suggest responses, and formed a task force to investigate the issue. She testified that she forwarded information to others.

In June 2005, OUSA launched an investigation. Eventually, a criminal complaint was drafted that alleged UMDNJ knowingly and willfully submitted numerous fraudulent cost reports to Medicaid. It alleged the UMDNJ legal department was aware of the double-billing, yet it continued.

At a December 20, 2005, meeting with the UMDNJ Board of Trustees (the Board), then United States Attorney for the District of New Jersey Chris Christie (the USANJ) stated that the university could enter into a DPA or face criminal prosecution for illegally double-billing Medicaid. A board member testified that the USANJ was critical of plaintiff.

Two days later, the USANJ met with Acting Governor Richard Codey's chief counsel, Paul Fader, and UMDNJ's outside attorney, Walter Timpone, to negotiate the DPA. According to Fader and Timpone, the USANJ demanded that UMDNJ terminate plaintiff and three other UMDNJ employees as a condition of entering into the DPA. The four included two attorneys, one of whom was plaintiff, and two compliance officers. All were women and three were African-American. Timpone and Fader relayed the demand to UMDNJ President John J. Petillo, Ph.D.[2]

Petillo testified that Fader and Timpone told him "they were informed that we needed to terminate the employ of four individuals or the . . . deferred prosecutorial agreement would not be signed and there would be the institutional indictment." Petillo said he was told that plaintiff and the others had to be terminated by close of business that day, although he learned that they could resign instead of being fired. Petillo reached plaintiff by telephone at home and told her the USANJ required him to terminate her or to accept her resignation. Plaintiff resigned that same day.

Plaintiff alleges that white males involved in the billing issue were not forced to resign. She named New Jersey Medical School Dean Dr. Russell Joffe; Dr. Stuart Cook, who preceded Petillo as president; and UH chief financial officer James P. Lawler, CPA. However, a December 18, 2005, newspaper article reported that Lawler abruptly quit and was cooperating with federal officials. The record reflects that Joffe separated from his deanship in 2003; Cook was replaced by Petillo in 2004; and Petillo ceased serving as president in February 2006.

Petillo certified that he terminated plaintiff not because of improper bias, but because he understood the action to be a condition of entering the DPA. Timpone and Fader also certified that they saw no indication that UMDNJ terminated plaintiff's employment for any reason other than the university's desire to avoid criminal prosecution.

Plaintiff admitted, "I don't have any facts" to support a claim that Petillo terminated her on the basis of age, race, or gender, or that anyone at UMDNJ wanted her terminated for any reason other than that OUSA demanded her termination. She admitted that, to her knowledge, Petillo only terminated her because OUSA directed him to do so, and she had no evidence to dispute OUSA's demand. She conceded, "I don't know what the U.S. Attorney's motives were" in seeking her termination. Plaintiff agrees that a criminal prosecution would have financially devastated UMDNJ and forced it to close.

After her termination, the Board approved the DPA. The DPA stated that OUSA intended to file a criminal complaint against UMDNJ, but that the USANJ would recommend that the court defer the prosecution for twenty-four to thirty-six months. Under the DPA, UMDNJ agreed to retain an independent monitor who would, among other things, conduct a search for a new general counsel. The monitor would also oversee UMDNJ's remedial measures, conduct a "comprehensive review" of the university's policies, and make written recommendations to the Board pertaining to UMDNJ's financial management and Medicaid billing. Upon compliance with its obligations under the DPA, OUSA agreed to seek the complaint's dismissal.

The record includes documentation that the Board approved the terminations "in its ordinary course of reviewing monthly 'separation reports.'" Plaintiff was not afforded an opportunity to appear before the Board to address her termination, nor was she afforded any other pre- or post-termination hearing. She alleged this was contrary to UMDNJ practice.

Plaintiff was not granted a severance package, although she claims other terminated senior executives received one. She also did not receive full reimbursement for personal legal expenses, although she claimed certain white male employees involved in the billing issue were reimbursed.

The federal investigation of UMDNJ's billing practices and management was the subject of newspaper reports. Plaintiff alleges her reputation was harmed by several published statements that she attributed to UMDNJ. We quote ...

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