A. RUSSELL STEVENSON v. GARY JOHNSON, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0219-05T20219-05T2

A. RUSSELL STEVENSON,

Plaintiff-Respondent,

v.

GARY JOHNSON and SEA SHORE

CONSTRUCTION CORP.,

Defendants-Appellants.

__________________________________

 

Submitted May 22, 2006 - Decided July 31, 2006

Before Judges Fall and C.L. Miniman.

On appeal from Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-1652-04.

Leo B. Dubler III, attorney for appellants.

Arlene Gilbert Groch, attorney for respondent.

PER CURIAM

This is an appeal from a judgment entered in favor of plaintiff A. Russell Stevenson ("Stevenson") and against defendant Sea Shore Construction Corp. ("Sea Shore") based upon an alleged breach of an employment agreement. The jury awarded damages in favor of plaintiff in the amount of $22,500. In doing so it found that plaintiff had established that the parties entered into an agreement which provided that, if Stevenson's employment were terminated without cause, Sea Shore would continue to pay Stevenson's salary for up to one year or until he found comparable employment, and that Sea Shore breached this agreement. For the reasons expressed in this opinion, we reverse.

Stevenson began working for Sea Shore, a small construction company, in August or September 2003. His starting salary was $90,000 and he was hired to help Sea Shore develop from a small company into a more successful company. Stevenson was also responsible for detecting and correcting company theft, abuses with credit cards, and misuse of company vehicles. He was also to develop a job description and a business plan for the expansion of the business.

Stevenson testified that Sea Shore promised him verbally that if Sea Shore terminated Stevenson's employment for any reason other than dishonesty, his $90,000 salary would be continued for a period of time up to one year or until he found comparable employment. Sea Shore agreed that it could terminate Stevenson's employment for dishonesty, or as Stevenson alleged in his complaint, for moral turpitude. Sea Shore denied that it had entered into an income-continuation agreement with Stevenson if it terminated his services for reasons other than dishonesty or moral turpitude.

By mid-November 2003 Johnson began meeting with Stevenson about twice a week to discuss Stevenson's job performance. Johnson testified that his performance never improved, he never developed a business plan or job description, as he was hired to do. Believing that Stevenson had misrepresented his abilities and unsatisfied with his performance, Sea Shore terminated Stevenson on January 16, 2004. Sea Shore paid Stevenson four weeks severance pay, a practice consistent with severance payments to other employees who had been terminated previously.

At trial, Stevenson testified that he had negotiated for a written employment contract and admitted that he was not given one. Johnson, on the other hand, testified that he was not going to offer Stevenson a contract.

During cross-examination of Stevenson, Sea Shore's counsel attempted to cross-examine Stevenson about his abuse of the company credit card which had been given to him. Specifically, over a twenty-four hour period, Stevenson charged $447 for gasoline to his company credit card. Additionally, the credit card statements revealed that there were multiple times in a month that Stevenson filled up a vehicle with gas, many times twice in a day, charging it to his employer. He also took his company vehicle out of state for personal trips and was using his company credit card for multiple personal meals.

The trial court barred Sea Shore's counsel from questioning Stevenson about these issues. The court ruled that "the issue in the case is whether there was an agreement to pay him after the job was terminated. That is the issue in the case, the only issue in the case." At the end of that day, the trial court reiterated to counsel that the circumstances of plaintiff's termination would not be permitted to be an issue in the case, explaining

this issue is not going to be tried on . . . what the circumstances of the termination of employment were. . . . There's no question here of at will. There was a clear understanding according to the evidence and according to the opening statements that both parties agree that he was an at-will employee. Both parties agree that he could be terminated at any time with or without cause. The issue in the case is whether as a part of any agreement that they reached there was an agreement for what I'm going to call severance.

That ruling, as well as an exception to the charge, are at issue on this appeal.

I.

"As a general rule, admission or exclusion of proffered evidence is within the discretion of the trial judge whose ruling is not disturbed unless there is a clear abuse of discretion." Dinter v. Sears, Roebuck & Co., 252 N.J. Super. 84, 92 (App. Div. 1991); see also Purdy v. Nationwide Mut. Ins. Co., 184 N.J. Super. 123, 130 (App. Div. 1982). Although we are required to disregard an error, if "it is of such a nature as to have been clearly capable of producing an unjust result," we may consider it. R. 2:10-2.

We are constrained to conclude that the trial court did misapply its discretion in precluding Sea Shore's counsel from cross-examining Stevenson about his use of the company credit card and, concomitantly, in precluding counsel from exploring the issue on direct examination of Johnson. Although the employment agreement was at-will, rather than for a definite term, the issue of Stevenson's dishonesty was squarely at issue with respect to his entitlement to severance pay in excess of the four weeks paid voluntarily by Sea Shore. This is so because Stevenson testified as follows:

Basically if we could iron out all the details as far as compensation and salary because of my age I wanted a clause in the - - or a letter stating that if I was terminated after I left my job and started with his company and if I was terminated for any reason other than dishonesty or doing something dishonest or whatever, because of my age - - and I had learned this from managing other businesses - - that I would continue to be paid for a period of up to one year or until I got similar - - when I say similar - - new employment.

Therefore, Stevenson clearly acknowledged that, even were the jury to accept his claim as to severance pay, he was not entitled to severance pay if he was terminated for dishonesty, or moral turpitude. The Supreme Court has specifically held that "[a]n employee's recovery of wages under the contract may be prevented by his misconduct, fraud, or disloyalty in a manner substantially affecting his employment contract." McGarry v. St. Anthony of Padua Catholic Church, 307 N.J. Super. 525, 533 (1998) (quoting 30 Corpus Juris Secondum, 160). Therefore, the issue of dishonesty in Stevenson's employment was directly at issue, and the trial court abused its discretion in precluding Sea Shore's counsel from exploring that issue with Stevenson and Johnson. Because this is such a pivotal issue to the liability of defendant, a new trial is required.

II.

The Supreme Court has stated with respect to civil damage trials that "[c]lear and correct jury charges are essential to a fair trial, and the failure to provide them may constitute plain error." Wade v. Kessler Inst., 172 N.J. 327, 341 (2002) (citing State v. Robinson, 165 N.J. 32, 40 (2000)). The Court also noted that, "[w]e have instructed that '[j]ury charges must outline the function of the jury, set forth the issues, correctly state the applicable law in understandable language, and plainly spell out how the jury should apply the legal principles to the facts as it may find them[.]'" Wade, supra, 172 N.J. at 342 (quoting Velazquez v. Portadin, 163 N.J. 677, 688 (2000). The Court noted further that "[a]s a general rule, an appellate court will not disturb a jury's verdict based on a trial court's instructional error 'where the charge, considered as a whole, adequately conveys the law and is unlikely to confuse or mislead the jury, even though part of the charge, standing alone, might be incorrect.'" Wade, supra, 172 N.J. at 341 (quoting Fischer v. Canario, 143 N.J. 235, 254 (1996)).

Here, Sea Shore contends that the trial judge erred in failing to charge the jury under McGarry respecting employee misconduct, and also erred in charging the jury that there was a contract between Stevenson and Sea Shore. McGarry, supra, 307 N.J. Super. 525. In light of our ruling on the exclusion of evidence of dishonesty, the failure to charge under McGarry will be remedied with a new trial.

The second exception was to the following portion of the charge:

So you can have a contract from any of a variety of ways, by conduct, by conversation, by a writing. I will tell you that as far as this case is concerned, there was a contract. There was an employment contract. Some of the provisions of that contract are not in dispute. The contract, by the way, was entered orally. There's no evidence there was ever a written agreement. There is evidence from both sides that there was an oral agreement and they agree about some of the terms. They agree about how much . . . the plaintiff was to be paid by the defendant. They agree about some of the things that the plaintiff was supposed to do for the defendant for that money. They disagree about others and that's not directly relevant to your focus in this case. The specific provision of this oral agreement that is in dispute is the plaintiff's claim, which the defendant denies, that one of the provisions of the oral agreement was that if the plaintiff's employment were to be terminated without cause, the defendant would continue to pay the plaintiff's salary for up to one year or until the plaintiff found comparable employment, and the plaintiff claims that the defendant did indeed terminate the plaintiff's employment without cause and then failed to pay the continued salary as they had agreed. Now you should keep something else in mind. This contract of employment orally reached between these two parties did not restrict the plaintiff's ability to quit at any time and it did not restrict the defendant's ability to terminate the employment, to fire the plaintiff, at any time.

Sea Shore correctly points out that there is language in two Appellate Division cases that support its claim that the jury should not have been instructed that the parties had an employment contract. See McQuitty v. General Dynamics Corp., 204 N.J. Super. 514, 520 (App. Div. 1985) ("Since plaintiff was working without a contract as an at-will employee, his argument that every contract imposes a duty of good faith and fair dealing is irrelevant."); Noye v. Hoffmann-La Roche, Inc., 238 N.J. Super. 430, 434 (App. Div.) ("In the absence of a contract, there can be no breach of an implied covenant of good faith and fair dealing."), certif. denied, 122 N.J. 146 (1990). Despite those statements, the trial court was technically correct that there was a contract for employment. This is readily apparent from the right of an employee to recover unpaid wages at the stipulated rate of pay. There just is not a contract in the sense that there was a written agreement for a definite term. Furthermore, reading the charge as a whole, it was clear that the statement made by the judge that there was a contract for employment did not confuse the jury. The balance of his charge clearly instructed the jury that the issue in dispute was whether there was an enforceable term of that contract, severance pay. As a result we find no error in the charge as given in this respect.

Reversed and remanded for proceedings consistent with this opinion.

 

The action against defendant Gary Johnson was dismissed prior to trial.

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A-0219-05T2

July 31, 2006