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Sauter v. Colts Neck Volunteer Fire Company No. 2

Superior Court of New Jersey, Appellate Division

September 13, 2017

JEFFREY SAUTER, Plaintiff-Appellant,
COLTS NECK VOLUNTEER FIRE COMPANY NO. 2; CHRISTOPHER QUINCANNON, individually and as a Supervisor of Colts Neck Volunteer Fire Company No. 2; KEVIN KETELSEN, JR., individually and as a Supervisor of Colts Neck Volunteer Fire Company No. 2; and JOHN SAUTER, individually and as a Supervisor of Colts Neck Volunteer Fire Company No. 2, Defendants-Respondents.

          Submitted December 14, 2016

         On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-2637-13.

          Richard C. Sciria, attorney for appellant.

          Dvorak & Associates, LLC, attorneys for respondents (Danielle Abouzeid, of counsel and on the brief; Courtney E. Dowd, on the brief).

          Before Judges Alvarez, Accurso and Manahan.


          ACCURSO, J.A.D.

         Plaintiff Jeffrey Sauter, a volunteer firefighter, appeals from a summary judgment dismissing his complaint against defendant Colts Neck Volunteer Fire Company No. 2, and several individual officers and members of the fire company, including his brother. Plaintiff contends the vote of the fire company terminating his membership constituted a violation of the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -14. Because we agree with the trial court that plaintiff is not an employee of Fire Company No. 2 entitled to the protections of CEPA, we affirm.

         The essential facts are undisputed. Colts Neck's fire department consists of two all-volunteer companies, Colts Neck Volunteer Fire Company No. 1 and Fire Company No. 2, overseen by an Executive Fire Council made up of representatives from each company and members or designees of the Township Committee. See Colts Neck Municipal Code, §§ 28-1 to -3. Volunteer firefighters in Colts Neck are eligible for Emergency Services Volunteer Length of Service Award Program[1] (LOSAP), N.J.S.A. 40A:14-183 to -193, deferred compensation benefits of between $400 and $1150 per year of active service, Colts Neck Municipal Code, § 36-4. The Township maintains workers' compensation and liability insurance on their behalf for incidents arising out of the performance of their firefighting duties. Colts Neck Municipal Code, § 28-17. Members are also entitled to reduced fees for certain municipally issued permits and licenses. Id. at § 68-2.

         Plaintiff was a life member of Fire Company No. 2, having joined when he was in high school and served for over twenty years until 2013, when he was voted out by the general membership. His LOSAP account contained $5871.71 as of the motion date, which he will be eligible to receive when he turns fifty-five, several years from now. At all times relevant to this litigation, plaintiff has been a full-time employee of the Monmouth County Sheriff's Office.

         It is fair to say that plaintiff's relations with Fire Company No. 2 over his twenty-year tenure were not always harmonious. This is his second CEPA action against the fire company. He first sued the fire company in 2004 after it suspended him for eighteen months. Plaintiff claimed the suspension was in retaliation for his complaints about the bid process for renovations to the company's fire hall after his brother was denied the contract. Although that suit was eventually settled for $10, 000, inclusive of plaintiff's attorney's fees, plaintiff continued to believe the fire company "owed" him another seven or eight thousand dollars to make him "whole" for his fees in that suit.

         Several years after that settlement, plaintiff again raised the issue of his legal fees with various members of Fire Company No. 2. In response to plaintiff's request, the general membership voted to reimburse him for what remained of his fees from the first suit. The fire company, however, subsequently got legal advice that doing so would jeopardize its 501(c)(3) tax status and so advised plaintiff. As a consequence, the company declined to make any further payment to him.

         At about the same time as these events, Fire Company No. 2 discovered after the death of its long-time treasurer that he had embezzled approximately $300, 000 from its accounts. The company subsequently made a claim under its fidelity policy for the loss. After the fire company notified plaintiff it would not reimburse his fees, he wrote to the fire company's fidelity carrier claiming the company's 2011 proof of loss for the defalcation was fraudulent. The alleged fraud was failing to disclose a letter plaintiff had written to the Monmouth County Prosecutor in 2003 in connection with the complaints he made in his first suit, which that office investigated and found did not warrant further action. The member who submitted the claim on behalf of the fire company is a lawyer, and the first person to have questioned the legality of the fire company reimbursing plaintiff for his attorneys' fees.

         Following his letter to the company's fidelity carrier, plaintiff reported to the Executive Fire Council that Fire Company No. 2 was permitting members to dispose of their household trash in the fire company's dumpster, something plaintiff himself admitted doing on occasion. Plaintiff, employing the advice the fire company got about not reimbursing his fees, asked that the Executive Council obtain a legal opinion that members using the dumpster did not threaten the fire department's 501(c)(3) status by conferring a financial benefit on insiders.

         Days later, several members of Fire Company No. 2, including plaintiff's brother, signed a letter to the president and the membership committee lodging a formal complaint against plaintiff. Those members alleged plaintiff had been disrespectful and abusive to members at meetings, drills and fire calls after "the outcome of the legal opinion was not in [his] favor"; went "out on his own to sabotage the company's insurance claim, " by "falsely claiming that the company intentionally attempted to defraud the insurance company"; and made "a frivolous charge" to the Executive Fire Council that use of the dumpster by members could threaten the company's 501(c)(3) status. The complainants alleged plaintiff's "angry and belligerent" conduct was "unbecoming of a Company #2 member, " and "detrimental to the Company and the safety of members both at the fire house and on the fire ground."

         The membership committee took the matter under advisement and made the decision to terminate plaintiff's membership in Fire Company No. 2. Thereafter, several members wrote to the president and the membership committee asking that plaintiff be immediately reinstated to allow him "to defend himself against the charges" in accordance with the bylaws and that the membership committee bring its recommendation to the company for a vote.

         The membership committee rescinded the termination and suspended plaintiff pending investigation and presentation of the matter to the membership. The committee subsequently sustained each of the charges against plaintiff and again determined to terminate his membership. Plaintiff appealed its decision to the general membership, which voted fourteen to eight against reinstatement.

         Plaintiff filed suit in the Law Division alleging violations of CEPA, the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49, and defamation. After discovery, defendants moved for summary judgment on all counts. Plaintiff withdrew his LAD claim at argument, and Judge Gummer granted summary judgment dismissing the remainder of the complaint in an opinion from the bench. After undertaking a comprehensive review of the law, the judge dismissed the CEPA claim finding plaintiff was not an employee entitled to the statute's protections. In addition to relying on the plain language of the statute and State and federal case law interpreting it, the judge also adopted the analysis Judge Quinn applied in dismissing a very similar CEPA claim against the same fire company by another of its members in 2005.

         On appeal, plaintiff argues the court erred in finding he was not an employee as defined in CEPA and in relying on unpublished decisions and other cases with no precedential value to reach its decision. Alternatively, plaintiff contends "public policy dictates" we should expand CEPA, as "the [LAD] has [been expanded], " to permit plaintiff to pursue a CEPA claim against the fire company. We reject those arguments.

         CEPA was enacted in 198 6 to "protect employees who report illegal or unethical work-place activities." Higgins v. Pascack Valley Hosp., 158 N.J. 404, 417 (1999) (quoting Barratt v. Cushman & Wakefield, 144 N.J. 120, 127 (1996)). The statute codified and extended the Supreme Court's ruling in Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 72, (1980), which created a common law cause of action for at-will employees wrongfully discharged in violation of a clear mandate of public policy. Barratt, supra, 144 N.J. at 127. The common law cause of action is grounded in the employment at-will doctrine. Pierce, supra, 84 N.J. at 72. As the Court explained in Pierce, "[a]n employer's right to discharge an employee at will carries a correlative duty not to discharge an employee who declines to perform an act that would require a violation of a clear mandate of public policy." Ibid. CEPA created "a statutory exception to the general rule that an employer may terminate an at-will employee with or without cause." Higgins, supra, 158 N.J. at 418. Just as in the common law action, the employer-employee relation is at the heart of the statute.

         In CEPA, the Legislature extended Pierce by prohibiting an employer from taking retaliatory action, defined as "discharge, suspension or demotion ... or other adverse employment action . . . in the terms and conditions of employment, " against an employee who discloses, threatens to disclose, or refuses to participate in an activity of the employer "that the employee reasonably believes is in violation of a law, or a rule or regulation promulgated pursuant to law." N.J.S.A. 34:19-2, 19-3; Barratt, supra, 144 N.J. at 127. The statute defines an employee broadly as "any individual who performs services for and under the control and direction of an employer for wages or other remuneration." N.J.S.A. 34:19-2b.

         In signing the bill, Governor Kean noted the "unfortunate" fact "that conscientious employees have been subjected to firing, demotion or suspension for calling attention to illegal activity on the part of . . . employer[s], " and, conversely, "that illegal activities have not been brought to light because of the deep-seated fear on the part of an employee that his or her livelihood will be taken away without recourse." Abbamont v. Piscataway Twp. Bd. of Educ, 138 N.J. 405, 418 (1994) (quoting Office of the Governor, News Release at 1 (Sept. 8, 1986)). The Court has proclaimed the purpose of CEPA is "'to protect and encourage employees to report illegal or unethical workplace activities and to discourage public and private sector employers from engaging in such conduct.'" Mehlman v. Mobil Oil Corp., 153 N.J. 163, 179 (1998) (quoting Abbamont, supra, 138 N.J. at 431). The statute "seeks to overcome the ...

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