HARRY JAY LEVIN v. BOARD OF TRUSTEES OF OCEAN COUNTY BUSINESS ASSOCIATION

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5596-11T2

HARRY JAY LEVIN and LEVIN

CYPHERS,

Plaintiffs-Appellants,

v.

BOARD OF TRUSTEES OF OCEAN COUNTY

BUSINESS ASSOCIATION; CHUCK LAING;

JAMES EVERETT; PETER FERRO; GLENN

VANPELL; STEVE POLLACK; LISA

MCCOMSEY; CHRIS ROSATI; GERRY

RODELLI; SHEREE ROBINSON; PAUL

LOSSEFF; and CHAD WHITE, as Members

of the Board of Trustees; OCEAN

COUNTY BUSINESS ASSOCIATION GRIEVANCE

COMMITTEE; and MEMBERS OF THE

GRIEVANCE COMMITTEE, Individually,

Defendants-Respondents.

________________________________________________________

March 1, 2013

 

Argued January 29, 2013 - Decided

 

Before Judges Fisher, Alvarez and Waugh.

 

On appeal from the Superior Court of New Jersey, Chancery Division, Ocean County, Docket No. C-123-11.

 

Harry Jay Levin argued the cause for appellants (Levin Cyphers, attorneys; Mr. Levin and Jarrod M. Miller, on the brief).

 

Cynthia A. Satter argued the cause for respondents (Law Offices of Stephen E. Gertler, attorneys; Ms. Satter, on the brief).

PER CURIAM

In this appeal, plaintiffs Harry Jay Levin and his law firm, Levin Cyphers, argue they were wrongfully expelled from defendant Ocean County Business Association (OCBA), a private business organization. Because the manner in which the OCBA expelled plaintiffs1 was fundamentally unfair, we reverse and remand for reinstitution of the grievance process.

I

Judicial intervention into the affairs of a private organization is quite limited. As a general matter, "courts will not compel admission of an individual into a voluntary association, [but] they have been willing to intervene and compel the reinstatement of a member who has been wrongfully expelled." Higgins v. Am. Soc'y of Clinical Pathologists, 51 N.J. 191, 199 (1968). When considering a claim of an unjustified expulsion, as argued here, two questions must be asked: "(1) does the plaintiff have an interest sufficient to warrant judicial action, and (2) has that interest been subjected to an unjustifiable interference by the defendant?" Rutledge v. Gulian, 93 N.J. 113, 118 (1983); see also Cipriani Builders, Inc. v. Madden, 389 N.J. Super. 154, 165 (App. Div. 2006).

Our courts will also extend greater protection to membership in a professional or trade association, as here, as opposed to a fraternal or social organization. Higgins, supra, 51 N.J. at 198-202. As Judge Skillman explained:

If membership in a trade or professional association provides tangible economic benefits, those benefits may create a property interest or contract right in continued membership that protects a member from arbitrary expulsion. Even if a member receives no tangible economic benefits from membership, the loss of reputation or status resulting from expulsion may be sufficient to warrant judicial review.

 

[Cipriani Builders, Inc., supra, 389 N.J. Super. at 166 (citations omitted)]

 

When these standards suggest a need for judicial intervention, the court must examine whether the association's procedures were "fundamentally unfair," including consideration of the association's compliance "with its own internal rules." Ibid.

Upon the association's failure to treat the member in a fundamentally fair manner, the court must balance the association's "interest in autonomy and its reason for straying from its rules against the magnitude of interference with the member's interest" in the association and "the likelihood that the established procedures would safeguard that interest." Rutledge, supra, 93 N.J. at 123. A court may provide the member with relief "not only if a membership decision violates public policy but also if the procedures the association followed in making that decision were fundamentally unfair." Cipriani Builders, Inc., supra, 389 N.J. Super. at 167.2

II

The OCBA was formed in 1980; its membership generally consists of a single representative from each category of service, industry and profession in Ocean County. It meets twice a month for the purpose of developing friendships and business networking.3

Plaintiffs became members in 2007. Levin was named "member of the year" in 2010; he published articles in an OCBA publication. Levin was also elected as OCBA's second vice-president, in line of succession to the OCBA's presidency.

In December 2010, another OCBA member filed suit in the Special Civil Part against Levin Cyphers, alleging the firm's failure to pay invoices for services rendered; Levin Cyphers asserted the invoices were incorrect and the services were not provided.

A few months later, Levin received a letter from the chair of the OCBA's grievance committee. The letter sought responses to three questions; contrary to OCBA's constitution,4 Levin was not provided with a copy of the grievance. Responses were provided within the time prescribed. Plaintiffs unsuccessfully sought an adjournment of the grievance process pending resolution of the Special Civil Part suit.

On March 8, 2011, Levin was denied admission to an OCBA board meeting. The next day he received an email from the OCBA president, advising that plaintiffs had been expelled from the OCBA.

Plaintiffs commenced this action in the Chancery Division, seeking reinstatement. On September 20, 2011, after hearing argument on the return date of an order to show cause, the Chancery judge held that the process by which plaintiffs were expelled "was flawed and did not comply with the OCBA [c]onstitution." The judge reinstated the grievance process, directing that plaintiffs be provided with "the opportunity to address the grievance as part of a fair and impartial process." In addition, the judge ordered the empaneling of a new grievance committee consisting of the OCBA president and two members who were not part "of the prior committee or the [b]oard who participated in the prior decision." The judge also directed that plaintiffs be given "formal notice" of the grievance, the right to respond in writing, and the right to see the grievance committee's written recommendations. In addition, the judge ordered that the board consider the recommendations and provide a written decision by specified dates. In his oral decision, the judge described the specifics of what he deemed in this instance to be a "fair and impartial process," namely, that the new grievance committee

has to tell [Levin] that this is the grievance and what the board is going to consider, [and] ask him to respond . . . . They have to delineate to whom they have spoken and . . . what they are relying their recommendation on . . . . I am requiring that the full [b]oard meet, . . . that [Levin] may be represented by counsel or appear in person without counsel. I think the person who has filed with the [g]rievance [c]ommittee should be there.

 

This was further clarified during the following colloquy:

MR. LEVIN: So what you're thinking conceptually is, the [g]rievance [c]ommittee gets properly reconstituted.

 

THE COURT: Correct.

 

MR. LEVIN: They --

 

THE COURT: Including the president, the current president.

 

MR. LEVIN: Yeah. They get properly reconstituted. They do their thing the way they're supposed to, then they make the recommendation to the [b]oard.

 

THE COURT: And the [b]oard will give you a hearing at this time.

 

MR. LEVIN: And the [b]oard will give me a hearing.

 

THE COURT: I'm not going to let the [b]oard say they don't have to give you a hearing. This time we're going to have the hearing, and it'll be properly constituted.

 

As the judge explained in later proceedings, his order was intended to provide plaintiffs with "the right to confront the grievant and/or [sic] a hearing with the opportunity to be heard before a fully constituted [b]oard."

Pursuant to the judge's order, plaintiffs were timely provided with the grievance and other supporting documents. When plaintiffs objected to the makeup of the grievance committee, the Chancery judge appointed a new member and scheduled the remaining procedural steps. Levin filed a timely response and, later, met with the grievance committee.

On April 9, 2012, Levin was advised that the grievance committee had recommended expulsion because Levin had failed to "resolve all complaints in a timely manner" and to "respect all customers, employees, suppliers and competitors" in violation of the OCBA's constitution and its code of ethics. This communication also advised that Levin's membership had been terminated5; the board neither gave Levin prior notice of the grievance committee's recommendation or the opportunity to state his case to the board, as required by the judge's earlier opinion and by the OCBA's constitution.

Plaintiffs moved in the Chancery Division for summary judgment, seeking reinstatement based on the argument that the OCBA failed to follow its own constitution as well as the court's prior orders. The OCBA filed a cross-motion for summary judgment, arguing that plaintiffs did not have a sufficient interest to warrant judicial intervention.

In an about-face from his earlier actions, the Chancery judge held that plaintiffs did not have a sufficient interest to warrant "further" judicial intervention. He concluded the OCBA was entitled to summary judgment and dismissed the complaint.

Plaintiffs appeal.

III

The appeal requires our examination of three discrete issues: (a) whether the trial judge correctly entered summary judgment on the basis that plaintiffs did not have a sufficient interest warranting judicial intervention; (b) whether the OCBA substantially complied with the judge's earlier orders and its own constitution; and (c) whether the OCBA's failure to comply warrants reinstatement or further grievance proceedings.

A

Our review of this record commences with the troubling circumstance that the judge expressed two inconsistent views as to whether plaintiff had a sufficient interest to warrant intervention. The applicable legal principles presuppose that there should be no judicial interference with the affairs of a private organization until there is a determination that the expelled member has "an interest sufficient to warrant judicial action." Rutledge, supra, 93 N.J. at 118. Here, on the surface, it appears that the judge first intervened, presumably finding a sufficient interest, and then later concluded plaintiffs' interest was insufficient to warrant intervention. On closer examination, however, the judge's view was more nuanced. He did not hold, when granting summary judgment, that plaintiffs never had an adequate interest only that plaintiffs "no longer" have an interest that warranted "any further" judicial intervention.6 In other words, the judge concluded that plaintiffs had a sufficient interest to warrant his earlier intervention but that interest ceased to be adequate when he was again asked to examine whether the OCBA had ordered expulsion in a fundamentally fair manner.

Since the value of membership in the OCBA has not been shown to have changed in the interim, we find no principled reason for the judge's later conclusion. We agree with the judge's original view, expressed when the matter was first before him: plaintiffs' membership in the OCBA was "very important" and expulsion was harmful to his reputation in the community. See Cipriani Builders, Inc., supra, 389 N.J. Super. at 166. The OCBA selects only a single member from each trade or profession, and plaintiffs have argued -- and not been contradicted by the OCBA -- that membership carries significant weight in the community. The OCBA advertises that it has, for twenty-five years, "gathered the finest business owners in our community to create and refer business." We, thus, reverse the summary judgment entered in favor of the OCBA.

B

That determination does not end the matter. It only leads to our consideration of whether the OCBA complied with the earlier orders regarding the reconstitution of the grievance committee and the other procedural elements imposed by the judge.

In his last ruling, the Chancery judge determined that the OCBA had "substantially complied" with his prior orders. Considering, however, as the judge made clear -- even in this later decision -- that the earlier orders were designed to allow plaintiffs "to confront the grievant" and to provide them with "a hearing with the opportunity to be heard before a fully constituted [b]oard," this conclusion was clearly mistaken.7

The record demonstrates that, once reconstituted, the grievance committee met with the grievant and Levin separately. Levin was not permitted to hear what the grievant said to the committee or examine any other documentation the grievant may have provided. There is no doubt that plaintiffs were not given the opportunity to "confront" the grievant. And plaintiffs never received "a hearing with the opportunity to be heard before a fully constituted [b]oard" after the grievance committee provided its conclusory recommendations; the board simply informed Levin by email that he had been expelled. The OCBA did not "substantial[ly] compl[y]" with what the judge had previously ordered or even its own constitution, which guarantees members the opportunity to appear before the board and "state [their] case."

C

Our determination that the OCBA did not comply with its constitution or the judge's prior orders does not, however, inexorably require reinstatement, as plaintiffs argue. Such a conclusion would be inconsistent with an appreciation of the parties' competing rights. On the one hand, as we have held, plaintiffs possess an interest in retaining their membership in the OCBA, but, on the other, the OCBA and its other members have an interest in obtaining plaintiffs' expulsion if that result is warranted by the facts and circumstances.

The OCBA's failure to yet expel plaintiffs in a fundamentally fair manner does not foreclose the OCBA's right to continue to seek expulsion based on the same circumstances. We, thus, find no error in the denial of plaintiffs' motion for summary judgment, with the understanding that plaintiffs may continue to seek reinstatement.

IV

To summarize, we reverse the summary judgment entered in favor of the OCBA and reinstate the complaint. We also affirm the denial of plaintiffs' motion for summary judgment insofar as it sought immediate reinstatement.

As we have observed, plaintiffs were provided with the written grievance prior to Levin's interview before the grievance committee. The OCBA has not, however, provided plaintiffs with the right to confront the grievant nor have they been given a hearing before the board. The judge originally recognized -- and correctly so -- that expulsion in the absence of these procedures is fundamentally unfair. In remanding, we do not mean to suggest that these procedures, which we now mandate, are to be equated with the similar rights guaranteed by our federal and state constitutions. The right to confront the grievant at the hearing before the board may be brief and informal, but plaintiffs have a right to be present at all stages at which the grievant provides information both before the grievance committee, which should be reconstituted with members not involved in the prior proceedings, and before the board. Plaintiffs should be offered the right to elicit information from the grievant in the proceedings before the grievance committee as may ultimately be helpful to the board in determining whether the recommendations of the grievance committee are to be adopted. Without these opportunities, the rights afforded plaintiffs by the OCBA constitution would be meaningless; plaintiffs would be unable to "state [their] case," as the OCBA permits, without fairly understanding what the case is that has been made against them.

The scope of the hearing before the board may be similarly informal, but plaintiffs should be afforded a fair opportunity to address the grievance and the information marshaled against them, and should be entitled to argue why the grievance committee's recommendations should not be adopted by the board. We remand for the Chancery judge's entry of an order compelling the procedures we have outlined and his scheduling of the completion of the OCBA's grievance process.

Affirmed in part, reversed in part, and remanded. We do not retain jurisdiction.

1We assume that both Levin and the law firm were members of the OCBA and both were ultimately expelled, even though the parties' submissions are not consistent in this regard. Unless context otherwise requires, we will refer to the member or members as "plaintiffs."

2Plaintiffs do not argue their expulsion implicates public policy.

3The OCBA has declared that "its sole purpose [is] to conduct and refer business within the group." It claims that for more than twenty-five years, it has "gathered the finest business owners in our community to create and refer business."

4In relevant part, the OCBA constitution provides a member with ten days' notice in writing "of a pending action [for expulsion] and an opportunity to submit the [b]oard a written answer," as well as "the privilege of appearing before the [b]oard to state his/her case."

5As noted earlier, the parties have not been consistent or have not always distinguished between Levin and his law firm. The email referred to purports to expel only Levin; no reference is made to the law firm.

6The judge similarly observed in his oral decision that the cross-motions required that he "look at whether or not, at this point in time, the [c]ourt should further intrude itself into the outcome of this particular case" (emphasis added).

7We recognize that, in providing plaintiffs with a right to "confront the grievant," the judge may have awarded rights ostensibly more extensive than what the OCBA constitution required. The OCBA constitution, however, does provide a member facing expulsion with "an opportunity to submit the [b]oard a written answer" and "the privilege of appearing before the [b]oard to state his/her case" -- rights that would be meaningless if the member is not given the means of learning about the grievance through hearing the grievant's presentation and reviewing the grievant's evidence.