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Edwards v. State of New Jersey Casino Control Commission

Superior Court of New Jersey, Appellate Division

November 13, 2013

WILLIAM EDWARDS and CAROLINE EDWARDS, Plaintiffs-Appellants,
v.
STATE OF NEW JERSEY CASINO CONTROL COMMISSION, LINDA KASSEKERT, GARY STEIN, TAMA HUGHES, MARK GIANNANTONIO, individually, jointly, and severally and in the alternative, Defendants-Respondents.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 1, 2013.

On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-1474-09.

George L. Farmer argued the cause for appellants.

David J. Truelove argued the cause for respondents Casino Control Commission and Linda Kassekert (Hill Wallack, attorneys; Paul P. Josephson and Mr. Truelove, of counsel and on the brief).

Sean J. Mack argued the cause for respondent Gary Stein (Pashman Stein, attorneys; John T. Whipple, of counsel and on the brief).

Gerard W. Quinn argued the cause for respondents Tama Hughes and Mark Giannantonio (Cooper Levenson April Niedelman & Wagenheim, attorneys; Mr. Quinn, on the brief).

Before Judges Fisher, Espinosa and O'Connor.

PER CURIAM

In this appeal, we consider the viability of a CEPA[1] claim and other similar employment causes of action, which were asserted by plaintiff William Edwards and his wife in the Law Division and which were unduly complicated by irrelevant concerns about the trial court's jurisdiction. Because the merits of plaintiff's claim that he was wrongfully terminated from his position as executive director of surveillance at the Tropicana Casino and Resort (Tropicana) were never adequately addressed at the time the trial judge granted summary judgment on behalf of all defendants, we affirm in part, reverse in part, and remand.

I

We briefly summarize the upheaval in the employer's status as an operating Atlantic City casino as well as the events that led to plaintiff's termination from employment. We do not suggest the circumstances we briefly unfold are undisputed. Our purpose in outlining these matters is to inform the reader of the setting of this dispute because whether plaintiff was terminated in violation of CEPA, and, if so, which of the named defendants may be held liable, was not adequately illuminated in the trial court.

A

In May 2001, plaintiff was hired by Adamar of New Jersey, Inc., then the owner, operator and casino licensee of the Tropicana. At the time of his termination in 2008, it appears the Tropicana was operating under interim casino authorization (ICA)[2] granted by the Casino Control Commission (the CCC) in November 2006, effective January 3, 2007, at which time another entity was being evaluated for licensure.[3] In December 2007, the CCC refused to renew Adamar's casino licenses and ordered its board of directors to resign. The CCC also summarily instituted a conservatorship, pursuant to N.J.S.A. 5:12-130.1 to -130.11, with a conservator to be named later; in the interim, the CCC activated an ICA trust agreement, Adamar, supra, 401 N.J.Super. at 254, and appointed defendant Gary Stein, a retired Supreme Court Justice, as trustee.

In the wake of these events, plaintiff received two letters from defendant Linda Kassekert, the CCC Chair, concerning a modification to the reporting structure of the executive director of surveillance, namely, plaintiff. In the first letter, dated December 12, 2007, Kassekert advised plaintiff that, "effective immediately" and until "notified in writing otherwise, " plaintiff was "to report only to the Chairperson of the [CCC] or my designee on matters of policy, purpose, responsibility and authority." The letter also authorized plaintiff to report to defendant Tama Hughes for "administrative matters only." The second letter, dated December 13, 2007, advised plaintiff he could continue to report to defendant Mark Giannantonio, president and chief operating officer, for "administrative matters only."

A few days later, the CCC appointed defendant Stein as conservator for the Tropicana. According to Kassekert, the conservator held the casino license and was vested with full operating management and control subject to the CCC's supervision. See also N.J.S.A. 5:12-130.1. The powers transferred to the conservator included the authority to "[h]ire, fire and discipline employees." N.J.S.A. 5:12-130.2(b)(5). The CCC, in fact, enumerated Stein's authority as conservator in a detailed order entered on December 19, 2007, declaring, among other things, that "Stein as conservator shall evaluate whether changes in the management of the former casino licensee are necessary, and he shall be authorized to hire, fire and discipline such staff as in his discretion he deems necessary in furtherance of the policies of the Act and consistent with the requirements thereof and the [CCC's] regulations . . . ."

Notwithstanding the apparent placing of employment decisions in Stein's hands, the record also suggests Kassekert would be and was acting at the time as an internal audit committee (IAC) in place of the IAC that either should have been or would have been appointed. According to Kassekert, she did not formally appoint herself as the IAC or consult with other CCC members; she simply "assumed certain functions related to an [IAC]" because there was no license in place. The record also suggests that Kassekert told Stein "she would perform the function of the [IAC]" while Stein "would have to have ultimate responsibility for the operation of the casino subject to [the CCC's] control, that [he] would have a full management staff to handle the day-to-day responsibilities, that [he] would be ordered to sell the casino's assets, and that [he] would be authorized to retain an investment banking firm [and] corporate counsel to help [him] sell the casino."

B

Turning to the events more directly related to plaintiff's situation, in August 2007, when Adamar petitioned the CCC for renewal of its casino licenses, the CCC's principal inspector, Carol DeFoor, began an evaluation and apprised defendant Tama Hughes, Adamar's chief in-house corporate counsel, that the Tropicana's security supervisor assigned to the casino was also overseeing hotel security in violation of regulatory requirements. Adamar, supra, 401 N.J.Super. at 259. In October 2007, the Division of Gaming Enforcement (DGE) filed a complaint with the CCC, alleging the license applicants failed to have "a properly constituted and functioning [IAC], " or "implement requisite lines of reporting and supervision for its internal control managers and surveillance departments." Id. at 262. When the CCC denied renewal of Adamar's licenses, one of the grounds cited was the lack of an IAC.

DeFoor's concerns came on the heels of an earlier problem with surveillance at the Tropicana. In April 2007, a stipulation of settlement was reached between the DGE and Adamar with the latter admitting it had "failed to obtain [the CCC's] approval prior to the installation and use of digital recording equipment"; consequently, Adamar agreed to pay a $30, 000 civil penalty. The 2007 stipulation of settlement included Tropicana's "reconfirm[ation] with its surveillance personnel that no changes can be made to any aspects of Tropicana's surveillance system without written approval from the [CCC]."

A year later, in April 2008, plaintiff notified DeFoor that the surveillance department was purchasing a new server. DeFoor quickly responded that plaintiff would need to submit additional information if he intended to move forward with that proposal. Plaintiff advised he would "write a draft for [DeFoor] to review" and would also "notify the DGE." A month later, DeFoor told plaintiff she had looked at his "draft of the surveillance submissions" and advised he "need[ed] to add additional information, " including five specific items. And a month after that, DeFoor advised plaintiff of more items he was required to "share . . . with the surveillance directors." She also told plaintiff that "[a]ny changes with regards to the equipment that [are] approved must be resubmitted testing [sic], especially with digital equipment."

On July 24, 2008, plaintiff installed a new computer server in Tropicana's surveillance room. He acknowledged in his deposition that he decided on his own that approval was not necessary. After further inquiries, responses and investigation, the DGE concluded that Adamar had "installed a server in the [s]urveillance monitor room without submitting it for a test or obtaining the appropriate approvals" and recommended legal action against Adamar.

Hughes and Giannantonio met with Stein seeking advice on what steps they could take against plaintiff. Based on the information supplied in their written and oral communications, as well as after consultation with his own counsel, and being further advised by Kassekert that Adamar was authorized to impose a suspension but not final discipline, Stein authorized Giannantonio to suspend plaintiff. On September 16, 2008, plaintiff was suspended without pay pending further investigation. Plaintiff was advised at that time that part of the reason for his suspension was that he had engaged in conduct similar to that which resulted in the 2007 stipulation of settlement.

On October 13, 2008, Adamar filed a request for disciplinary action against plaintiff, alleging sufficient cause existed for his termination. On October 21, 2008, Kassekert notified plaintiff that in three days she would consider the request to terminate his employment or impose such other disciplinary action as might be appropriate "in her capacity as the [IAC]." Plaintiff, through his attorney, advised Kassekert that plaintiff "would not . . . participate at that time." Kassekert responded that plaintiff was not entitled to counsel in the disciplinary matter and that she "had some questions she wished to discuss" with him "before making a determination." Kassekert rescheduled the meeting for October 29, 2008. Plaintiff failed to appear at that time. On November 3, 2008, Kassekert issued a decision terminating plaintiff's employment because the CCC's approval was necessary prior to the installation of the new computer server and because specific information was sought but not provided. Kassekert also found, in reaching her decision to terminate, that it was disturbing that essentially the same thing had occurred a year earlier while plaintiff was executive director of surveillance, resulting in the imposition of liability and a large fine. Kassekert acknowledged at her deposition that she had relied on the information provided by Hughes and Giannantonio in making her decision.

II

On April 21, 2009, plaintiff and his wife filed suit in the Law Division against Adamar, the CCC, Kassekert, Stein, Hughes and Giannantonio, including within the complaint and its later amendments allegations of a CEPA violation, wrongful termination, breach of fiduciary duty, negligence, tortious interference, defamation, vicarious liability, and intentional and negligent infliction of emotional distress.[4] Nearly three years later, plaintiff moved for partial summary judgment regarding his claim that his termination was unlawful, and defendants cross-moved for summary judgment on various grounds. The judge rendered a written decision, dismissing the case in its entirety on what he referred to as "the main issue" – plaintiff did not follow "the correct administrative appeal process." That is, the judge believed plaintiff did not have a right to file a civil action in the Law Division "until the ...


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