MELODY N. VILLANUEVA-ARROYO VS. HOUSING A-3896-19 AUTHORITY OF THE CITY OF PASSAIC (L-0974-15, PASSAIC COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3896-19
MELODY N. VILLANUEVA-
ARROYO,
Plaintiff-Appellant,
v.
HOUSING AUTHORITY OF THE
CITY OF PASSAIC and VICTOR
CIRILO, individually and in his
capacity as the Executive Director
of the Housing Authority of the
City of Passaic,
Defendants-Respondents.
______________________________
Submitted May 10, 2021 – Decided June 3, 2021
Before Judges Fasciale and Rothstadt.
On appeal from the Superior Court of New Jersey, Law
Division, Passaic County, Docket No. L-0974-15.
Angelo R. Bisceglie, Jr., attorney for appellant.
Keenan & Doris, LLC, attorneys for respondents (Erdal
Turnacioglu, of counsel and on the brief).
PER CURIAM
In this employment discrimination case, plaintiff—a former employee of
defendant Housing Authority of the City of Passaic (Housing Authority)—
appeals from three orders entered on remand.1 The first order is dated August
14, 2019 and denied plaintiff's motion to change venue or recuse a judge. The
remaining orders, dated June 10, 2020, denied plaintiff's cross-motion for
summary judgment and granted the Housing Authority and Victor Cirilo's
(Cirilo) motion for summary judgment dismissing plaintiff's remaining
Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -14,
wrongful termination, and due process claims.
We rely on the facts as set forth in our previous opinion regarding the
circumstances surrounding the award of two general construction contracts to
SAAR Construction, LLC (SAAR) and plaintiff's subsequent termination.
Villanueva-Arroyo, slip op. at 3-8.
1
Defendant successfully obtained dismissal of the remaining count in the complaint.
See Villanueva-Arroyo v. Hous. Auth., No. A-4752-16 (App. Div. Sept. 25, 2018)
(slip op. at 3) (reversing discovery orders, reversing summary judgment on plaintiff's
CEPA and wrongful termination claims, but upholding summary judgment
dismissing plaintiff's allegation that defendants violated the New Jersey Family
Medical Leave Act, N.J.S.A. 24:11B-1 to -16).
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On appeal, plaintiff argues:
POINT I
THE [JUDGE] BELOW ERRED IN GRANTING
DEFENDANTS SUMMARY JUDGMENT AND
FURTHER ERRED IN DENYING PLAINTIFF
PARTIAL SUMMARY JUDGMENT.
A. The [Judge] Erred [I]n Failing [T]o Enforce
Defendants Compliance With Rule 4:46-2.
B. The [Judge] Erred [I]n Dismissing Plaintiff's
CEPA Claim.
C. The [Judge] Erred [I]n Dismissing Plaintiff's
Wrongful Termination Claim.
1. The [Judge] Misapplied The Law When
[He] Failed [T]o Consider [A]n Implied
Employment Contract.
2. The [Judge] [M]isapplied [T]he Waiver
Provision [O]f [T]he CEPA.
D. The [Judge] Erred [I]n Dismissing Plaintiff's
Violation of Due Process Claim
POINT II
[PLAINTIFF] REQUESTS A CHANGE OF VENUE. [2]
2
We reject plaintiff's argument that the judge abused his discretion by denying
plaintiff a change of venue and the recusal of a judge. Plaintiff failed to establish
that she could not obtain an impartial adjudication in Passaic County and not did
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We conclude the judge properly entered summary judgment and dismissed
plaintiff's claims because plaintiff failed to establish a prima facie CEPA claim,
is barred from asserting a wrongful termination claim under the CEPA waiver
provision, and does not have a property right entitling her to due process
protection.
We therefore affirm all three orders.
I.
We first address plaintiff's contention that the judge erred by granting
summary judgment to the Housing Authority and Cirilo and dismissing her
CEPA claim. Plaintiff argues the judge failed to consider her disclosures and
objection to the contract being awarded, and to SAAR's continued performance
of the contract, as potential whistleblowing activities.
We review a ruling on a motion for summary judgment de novo and apply
the same standard as the trial judge. Templo Fuente De Vida Corp. v. Nat'l
Union Fire Ins. Co., 224 N.J. 189, 199 (2016). Thus, we consider, as the motion
judge did, "whether the competent evidential materials presented, when viewed
set forth proof that the judge was biased against her or her counsel. Importantly,
a different judge heard the summary judgment motions which form the basis of
this appeal.
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in the light most favorable to the non-moving party, are sufficient to permit a
rational factfinder to resolve the alleged disputed issue in favor of the non-
moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
If the judge finds no genuine issue of material fact, the judge must then
"decide whether the trial [judge] correctly interpreted the law." DepoLink Court
Reporting & Litig. Support Servs. v. Rochman, 430 N.J. Super. 325, 333 (App.
Div. 2013) (quoting Massachi v. AHL Servs., Inc., 396 N.J. Super. 486, 494
(App. Div. 2007)). We review issues of law de novo, affording no deference to
the trial judge's legal conclusions. Nicholas v. Mynster, 213 N.J. 463, 478
(2013). For mixed questions of law and fact, we defer to the trial judge's
supported factual findings, but review application of legal rules to such factual
findings de novo. State v. Pierre, 223 N.J. 560, 577 (2015).
Under this standard, a judge must grant summary judgment "if the
pleadings, depositions, answers to interrogatories and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to any
material fact challenged and that the moving party is entitled to a judgment or
order as a matter of law." R. 4:46-2(c). "To defeat a motion for summary
judgment, the opponent must '"come forward with evidence" that creates a
genuine issue of material fact.'" Cortez v. Gindhart, 435 N.J. Super. 589, 605
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(App. Div. 2014) (quoting Horizon Blue Cross Blue Shield of N.J. v. State, 425
N.J. Super. 1, 32, (App. Div. 2012)).
CEPA seeks 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." Hitesman v. Bridgeway, Inc., 218
N.J. 8, 27 (2014) (quoting Dzwonar v. McDevitt, 177 N.J. 451, 461 (2003));
accord Sauter v. Colts Neck Volunteer Fire Co. No. 2, 451 N.J. Super. 581, 588
(App. Div. 2017). CEPA prohibits employers from retaliating against
employees who perform a whistleblowing activity. N.J.S.A. 34:19-13; see also
Lippman v. Ethicon, Inc., 222 N.J. 362, 378 (2015). To establish a prima facie
CEPA claim, a plaintiff must demonstrate that:
(1) [H]e or she reasonably believed that his or her
employer's conduct was violating either a law, rule, or
regulation promulgated pursuant to law, or a clear
mandate of public policy;
(2) he or she performed a "whistle-blowing" activity
described in N.J.S.A. 34:19-3[(a) or (c)];
(3) an adverse employment action was taken against
him or her; and
(4) a causal connection exists between the whistle-
blowing activity and the adverse employment action.
[Lippman, 222 N.J. at 380 (quoting Dzwonar, 177 N.J.
at 462)].
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To satisfy the first element of a CEPA claim, a plaintiff "must identify a
statute, regulation, rule, or public policy that closely relates to the complained -
of conduct." Dzwonar, 177 N.J. at 463. A plaintiff "need not show that his or
her employer or another employee actually violated the law or a clear mandate
of public policy," id. at 462, or that the conduct is "an actual violation of a law
or regulation," Estate of Roach v. TRW, Inc., 164 N.J. 598, 613 (2000). The
plaintiff only needs to show that he or she "'reasonably believe[d]' that to be the
case." Ibid. However, if the judge finds no law or policy that closely relates to
complained-of conduct, the judge "can and should enter judgment for [the]
defendant." Dzwonar, 177 N.J. at 463.
The second element of a CEPA claim requires the plaintiff to prove he or
she performed a whistleblowing activity. Lippman, 222 N.J. at 380. An
employee performs a protected whistleblowing activity if he or she:
Discloses, or threatens to disclose to a supervisor or to
a public body an activity, policy or practice of the
employer, or another employer, with whom there is a
business relationship, that the employee reasonably
believes:
(1) is in violation of a law, or a rule or
regulation promulgated pursuant to law
. . . ; or
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(2) is fraudulent or criminal, including any
activity, policy or practice of deception or
misrepresentation[.]
[N.J.S.A. 34:19-3(a).]
Or, relevant to this appeal:
Objects to, or refuses to participate in any activity,
policy or practice which the employee reasonably
believes:
(1) is in violation of a law, or a rule or
regulation promulgated pursuant to law
. . . ; or
(2) is fraudulent or criminal . . . ; or
(3) is incompatible with a clear mandate of
public policy concerning the public health,
safety or welfare or protection of the
environment.
[N.J.S.A. 34:19-3(c).]
Third, a CEPA plaintiff must demonstrate he or she suffered an adverse
employment action. Lippman, 222 N.J. at 380. CEPA defines retaliation as "the
discharge, suspension or demotion of an employee, or other adverse employment
action taken against an employee in the terms and conditions of employment."
N.J.S.A. 34:19-2(e). Finally, to satisfy the fourth element of CEPA, a plaintiff
must demonstrate "a causal connection . . . between the whistle-blowing activity
and the adverse employment action." Dzwonar, 177 N.J. at 462. To determine
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if a plaintiff has established causation, judges should focus on the
"circumstances surrounding the employment action," including temporal
proximity between the protected conduct and the adverse employment action.
Maimone v. City of Atl. City, 188 N.J. 221, 237 (2006). A CEPA plaintiff can
establish causation by providing "evidence of circumstances that justify an
inference of retaliatory motive." Romano v. Brown & Williamson Tobacco
Corp., 284 N.J. Super. 543, 550 (App. Div. 1995); see also Estate of Roach, 164
N.J. at 612.
Here, plaintiff failed to establish a prima facie claim under CEPA. As a
matter of law, the record reflects that plaintiff believed that the Housing
Authority would be violating the Local Public Contract Law (LPCL), N.J.S.A.
40A:11-1, by awarding the contract to SAAR. On our review, plaintiff did not
hold an objectively reasonable belief that an illegal activity occurred related to
the SAAR contract. Plaintiff acknowledged herself that, despite verbal
complaints before public bidding, she was required to award the contract under
the LPCL. Specifically, plaintiff testified as to the statutorily mandated bid
procedure as follows
Q: To your knowledge[,] what would you have to prove
to actually reject the lowest bid based on these verbal
complaints of shoddy work?
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A: I needed more than that[,] than the verbal. I would
have to have concrete evidence that [SAAR] was not a
good contractor to be able to reject it.
....
Q: Does the term "prior negative experience" mean
anything to you?
A: Yes.
Q: What does it mean?
A: That means if there was negative experience prior
to the job.
Q: Do you have an impression as to what level the prior
negative experience has to be before it could justify
rejecting a low bid?
A: I would believe it would have to be something
substantial and in writing with some type of evidence
to show that, other than verbal.
Plaintiff cannot establish the first prong where she is both familiar with the
LPCL and admitted that there was, in fact, no legal basis to disqualify SAAR.
It is worth noting that less than one year later, and even after further complaints
about the company's workmanship, plaintiff recommended SAAR for a second
contract.
As to the second prong, plaintiff failed to establish that she engaged in a
whistleblowing activity in accordance with N.J.S.A. 24:19-3(a) or (c). Plaintiff
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contends that the judge misapplied the statute by only analyzing her refusal to
participate and failed to consider her objections and disclosures. As to this
point, the judge found that
Although Donofry v. Autotote Sys., Inc., 250 N.J.
Super. 276, 288 (App. Div. 2001)[,] indicates that a
CEPA plaintiff's involvement in the violative activity
does not per se bar recovery, the truth here is that the
[p]laintiff's actions in, as applied, objecting to the
actions must rise to more than mere disagreements to
vault the threshold at summary judgment. Young[ v.
Schering Corp., 275 N.J. Super. 221, 236-37 (App. Div.
1994)]. As a threshold matter, the record fails to
establish that [plaintiff] objected to the conduct that
[the Housing Authority] undertook in awarding the
contract.
Plaintiff's initial objection to the award of the contract to SAAR does not
constitute whistleblowing. Plaintiff herself erroneously included prevailing
wage rates in the bid application. She testified that "the bid was . . . already out,
so [she] couldn't pull the bid back in, but there's wasn't enough time from the
time [she] got the rates, so [she] had to move forward with it." Plaintiff cannot
claim she blew the whistle on grounds that the Housing Authority would be
overpaying when she knew that no policy was being violated. In fact, plaintiff
knew that the LPCL required she move forward with the contract, given its strict
bidding procedures, notwithstanding her own error.
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Plaintiff did in fact disclose SAAR's substandard work to Cirilo. Plaintiff
cites to a memo from another employee advising Cirilo and Wynter of the
substandard conditions. Plaintiff testified that she sent e-mails and pictures "to
memorialize [what she] was doing so there was no doubt that I was following
the contractors." She further testified
Q: Okay, you blew the whistle on SAAR, did you not?
A: When I told [Cirilo] that the mangers did not like
the work and that the work wasn't good, if that's the
term that goes with that, yes, then I did.
Given this testimony, and from a review of the record, plaintiff's
communications were for the purpose of doing her diligence, rather in objection
to SAAR's continuation, which is insufficient under the case law. Young, 275
N.J. Super. at 236-37. Such claims were not expressly tied to any allegation of
illegality or any violation of public policy. Her subsequent recommendation to
award a second contract to SAAR in July 2014 after complaints about their
workmanship persisted belies the concerns she raised about SAAR's quality, a
potential wasting of Federal funding, and other issues. The judge therefore
properly dismissed plaintiff's CEPA claim.
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II.
We next address plaintiff's contention that the judge erred in dismissing
her wrongful termination claim. Defendant argues that plaintiff's claim is barred
by CEPA's waiver provision. Plaintiff argues the waiver provision does not
apply and that dismissal was improper because the Housing Authority Employee
Handbook (the Handbook) created an implied employment contract which
required that the Housing Authority implement progressive discipline before
terminating her. We conclude that plaintiff's wrongful termination claim is
barred by the CEPA waiver provision and, even if it was not, it fails on the
merits because plaintiff is an at-will employee.
Under CEPA's waiver provision, "the institution of an action in
accordance with [CEPA] shall be deemed a waiver of the rights and remedies
available . . . under the common law." N.J.S.A. 34:19-8. Thus, "[p]arallel
claims based on those rights, privileges and remedies are waived because they
represent multiple or duplicative claims based on retaliatory discharge." Young
v. Schering Corp., 141 N.J. 16, 29. (1995). The waiver provision does not apply
to claims that are substantially independent of a CEPA claim. Id. at 33. A claim
is substantially independent from a retaliatory discharge claim when, like here,
it "require[s] different proofs than those needed to substantiate [a] CEPA claim."
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Id. at 31 (quoting Young, 275 N.J. Super. at 238); see e.g., Royster v. NJ State
Police, 227 N.J. 482, 498 (2017) (explaining that the Law Against
Discrimination claim at issue was premised on the failure of New Jersey State
Police to accommodate plaintiff's ulcerative colitis, not retaliation, thus CEPA's
waiver provision was not at bar).
Here, plaintiff's wrongful termination claim and CEPA claims stem from
the same alleged retaliatory conduct. Plaintiff waived her right to seek relief for
wrongful termination when she instituted the cause of action alleging a CEPA
claim. Even if plaintiff's claim was not barred—which is not the case—the judge
properly dismissed it on the merits.
Employment is presumed to be at-will, unless specifically stated in
explicit, contractual terms. Witkowski v. Thomas J. Lipton, Inc., 136 N.J. 385,
397 (1994). Employee handbooks or manuals can form implied contracts. Id.
at 392. In Woolley v. Hoffmann-La Roche, 99 N.J. 284, 285-86 (1985), which
governs this implied contract issue, our Court held that an implied promise
contained in an employment manual—like the Handbook here—is enforceable
against an employer absent a clear and prominent disclaimer. Our Court directed
that "[w]hen an employer . . . circulates a manual that, when fairly read, provides
that certain benefits are an incident of the employment (including, especially,
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job security provisions), [judges should enforce that handbook or manual] in
accordance with the reasonable expectations of employees." Id. at 297-98. The
Court further emphasized that "if the employer, for whatever reason, does not
want the [handbook] to be capable of being construed by the [judge] as a binding
contract, there are simple ways to attain that goal. All that need be done is the
inclusion in a very prominent position of an appropriate statement that th ere is
no promise of any kind by the employer contained in the manual." Id. at 309.
We must scrutinize the Handbook to determine whether there exists a
disclaimer that clearly states that the Handbook is neither a promise nor a
contract and that employment is at-will. Ibid.; see Nicosia v. Wakefern Food
Corp., 136 N.J. 401, 415 (1994) (explaining that when a disclaimer is included
it must be set off in a manner that draws the employee's attention).
The Handbook indeed contains a progressive discipline policy. It
provides that "[d]isciplinary action will be taken by the employee's immediate
supervisor based upon the following factors: [s]eriousness of the offense,
employee's past record, the employee's ability to correct his other conduct, [and]
the likelihood of positive responses to guidance by supervisory personnel." It
also states that "based upon the supervisor's review of the aforesaid criteria he
or she may impose the following discipline: (a) oral warning with documentation
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in the employee's file (b) written warning (c) suspension of more than five
working days [or] (d) termination." (emphasis added).
The Handbook also states that "[i]n the event that a supervisor
recommends termination . . . an employee shall be afforded the opportunity for
a hearing prior to imposition of the discipline." Importantly, it contains four
disclaimers indicating that it does not create an employment contract, that no
individual could offer a contract of employment without approval of the
Executive Director of the Housing Authority, and, most importantly, that
plaintiff's employment is at-will. The first disclaimer is included in the
introduction letter to the Handbook and reads as follows
Neither this handbook nor any other [Housing
Authority] document, confers any contractual right,
either express or implied, to remain in the [Housing
Authority's] employ. Nor does it guarantee any fixed
terms and conditions of your employment. The
provisions of the Employee Handbook may be amended
and supplemented from time to time without notice and
at the sole discretion of the [Housing Authority] Board
of Commissioners.
The second disclaimer appears on the third page of the Handbook. It is located
on its own page between the Table of Contents and section titled "General
Personnel Policy." The disclaimer is capitalized, double-spaced, and in bold
font. It states that
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THE CONTENT OF THIS HANDBOOK ARE
GUIDELINES ONLY AND SUPER[S]EDE ANY
PRIOR MANUAL AND/OR HANDBOOK. NEITHER
THIS MANUAL NOR ANY OTHER GUIDELINES,
POLICIES OR PRACTICES CREATE AN
EMPLOYMENT CONTRACT. [THE HOUSING
AUTHORITY] HAS THE RIGHT, WITH OR
WITHOUT NOTICE, IN AN INDIVIDUAL CASE OR
GENERALLY, TO CHANGE ANY OF ITS
GUIDELINES, POLICIES, PRACTICES, WORKING
CONDITIONS OR BENEFITS AT ANY TIME.
NO ONE IS AUTHORIZED TO PROVE ANY
EMPLOYEE WITH AN EMPLOYMENT
CONTRACT OR SPECIAL ARRANGEMENT
CONCERNING TERMS OF CONDITIONS OF
EMPLOYMENT UNLESS THE CONTRACT OR
ARRANGEMENT IS IN WRITING AND SIGNED BY
THE EXECUTIVE DIRECTOR. EMPLOYMENT
WITH [THE HOUSING AUTHORITY] IS AT-WILL
AND MAY BE TERMINATED AT ANY TIME
CAUSE OR NOTICE BY THE EMPLOYEE OR [THE
HOUSING AUTHORITY].
THIS NOTICE APPLIES TO ALL EMPLOYEES
REGARDLESS OF DATE OF HIRE.
The third disclaimer, which clearly sets forth that employment with the Housing
Authority is "at-will," appears on the following page, under the section titled
"General Personnel Policy." It is emphasized in its own textbox and reads
The Personnel Policies and Procedures Manual adopted
by the Board of Commissioners are intended to provide
guidelines covering public service by the [Housing
Authority] employees and is not a contract. This
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manual contains many, but not necessarily all of the
rules, regulations, and conditions of employment for
[Housing Authority] personnel. The provisions of this
manual may be amended and supplemented from time
to time without notice and at the sole discretion of the
[Housing Authority].
To the maximum extent permitted by law, the
employment practices of [the Housing Authority] shall
operate under the legal doctrine known[] as
"employment at[-]will." Within Federal and State law
. . . . [the Housing Authority] shall have the right to
terminate an employee at any time and for any reason,
with or without notice, except [the Housing Authority]
shall comply with all Federal and State legal
requirements requiring notice and an opportunity to be
heard in the event of discipline or dismissal.
A reading of the disciplinary process portion of the Handbook might lead
an employee to expect that they would not immediately be fired, but the
processes listed, which may be followed, do not speak to job security or
employment status. Here, the clear at-will employment language and included
disclaimers remove any implication that an expectation of plaintiff's continued
employment existed. As such, no implied contract exists under Woolley and the
judge properly dismissed plaintiff's wrongful termination claim.
III.
Finally, we address plaintiff's contention that the judge erred by
dismissing her due process claim. Plaintiff's due process arguments align with
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those advanced in support of her wrongful termination claim and hinge on the
same Handbook procedures, which plaintiff argues the Housing Authority
improperly executed.
We analyze allegations under the New Jersey Civil Rights Act (CRA),
N.J.S.A. 10:6-1 to -2, the same as claims under 42 U.S.C. § 1983. See Gormley
v. Wood-El, 218 N.J. 72, 97-98 (2014). N.J.S.A. 10:6-2(c) provides, in relevant
part, that:
[a]ny person who has been deprived of any substantive
due process . . . rights, privileges or immunities secured
by the Constitution or laws of the United States, or . . .
of this State, or whose exercise or enjoyment of those
substantive rights, privileges or immunities has been
interfered with or attempted to be interfered with, by
threats, intimidation, or coercion by a person acting
under color of law, may bring a civil action for damages
and for injunctive or other appropriate relief.
To obtain relief under the substantive component of the due process clause
for deprivation of property, a plaintiff must establish (1) that she has a protected
property interest under the due process protection of the Constitution; and (2)
that defendants' behavior in "depriving [her] of the interest in question was 'so
egregious, so outrageous, that it may fairly be said to shock the contemporary
conscience.'" Desi's Pizza Inc. v. City of Wilkes-Barre, 321 F.3d 411, 427 (3d
Cir. 2003) (quoting Cnty. of Sacramento v. Lewis, 523 U.S. 833, 847 n.8
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(1998)). Pertinent to this appeal, "an employee hired at will has no protected
interest in his [or her] employment and may not prevail on a claim that his or
her discharge constituted a violation of property rights." Morgan v. Union Cty.
Bd. of Chosen Freeholders, 268 N.J. Super. 337, 355 (App. Div. 1993) (citing
Bd. of Regents v. Roth, 408 U.S. 564, 578 (1972)).
Here, plaintiff is clearly an at-will employee. For the reasons stated
above, the Handbook does not create a contract with the Housing Authority and
explicitly disclaims any expectation of plaintiff's retained employment. She
therefore does not have a property right as required to establish a substantive
due process violation under the CRA. At best, and in the light most favorable
to plaintiff, her recourse would be through a procedural due process violation
because the Housing Authority denied her an impartial hearing. This claim
could only exist, however, if the Handbook provided for binding application of
the procedures set forth in it, which it clearly does not. Even if the Handbook
mandated a hearing—which is not the case—the CRA does not provide a remedy
for procedural due process violations. See Tumpson v. Farina, 218 N.J. 450,
477 (2014). As such, the judge properly dismissed plaintiff's due process claim.
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To the extent we have not addressed plaintiff's remaining arguments, we
conclude that they are without merit to warrant discussion in a written decision.
R. 2:11-3(e)(1)(E).
Affirmed.
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