SPACEAGE CONSULTING CORP. VS. MARIA VIZCONDE(L-1196-14, HUDSON COUNTY AND STATEWIDE) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE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-3444-15T1
SPACEAGE CONSULTING CORP.,
Plaintiff-Appellant,
v.
MARIA VIZCONDE and
HOME BOX OFFICE, INC.,
Defendants-Respondents.
Argued September 12, 2017 – Decided September 22, 2017
Before Judges Yannotti, Carroll and Mawla.
On appeal from the Superior Court of New
Jersey, Law Division, Hudson County, Docket
No. L-1196-14.
Paul A. Clark, Corporate Counsel, argued the
cause for appellant (SpaceAge Consulting
Corp., attorneys; Mr. Clark, on the briefs).
Colin M. Page argued the cause for respondent
Maria Vizconde (Colin M. Page & Associates,
attorneys; Mr. Page, on the brief).
Robyn L. Aversa argued the cause for
respondent Home Box Office, Inc. (Jackson
Lewis, PC, attorneys; Ms. Aversa, of counsel
and on the brief; Janet O. Lee, on the brief).
PER CURIAM
The trial court granted summary judgment dismissing plaintiff
SpaceAge Consulting Corp.'s action against defendant Maria
Vizconde on the basis that the employment agreement between
plaintiff and Vizconde was unenforceable because it violated
federal law. The court also dismissed plaintiff's complaint
against Vizconde's subsequent employer, Home Box Office, Inc.
(HBO), for failure to state a claim. Plaintiff's motions for
reconsideration, to amend the complaint, and to disqualify the
motion judge were thereafter denied. Plaintiff challenges these
orders on appeal. For the reasons that follow, we affirm.
I.
Plaintiff is a software services company that trains
employees and then assigns them to its clients to provide software
development, application integration, and technology training
services. Plaintiff is an employer governed by the H1-B non-
immigrant worker provisions of the Immigration and Nationality Act
of 1952, 8 U.S.C.A. § 1101 to § 1537, and its implementing
regulations, 20 C.F.R. § 655.700 to 655.855.
In February 2003, the United States Department of Labor (DOL)
began investigating plaintiff for allegedly violating federal law
governing H-1B employees by not paying wages during their training
periods. After the DOL completed its investigation, on March 1,
2006, it issued a determination letter advising that the employment
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relationship between plaintiff and its employees, as well as
plaintiff's obligation to pay wages to its H-1B employees, began
when training commenced. The DOL alleged that plaintiff willfully
failed to pay required prevailing wages to its H-1B employees
during the training period, as required by 8 U.S.C.A. §
1182(n)(2)(C)(vii), 20 C.F.R. § 655.731(c)(6)(i), and 20 C.F.R. §
655.805(a)(2), and wilfully misrepresented the prevailing wage
rate on two labor condition applications, as required by 8 U.S.C.A.
§ 1182(n)(2)(C)(ii) and 20 C.F.R. §§ 655.730 and 655.805(a)(1),
among other violations.
The DOL subsequently discovered that plaintiff was
threatening to file lawsuits against H-1B employees if they
resigned. On August 4, 2006, the DOL warned plaintiff that it was
a violation of 20 C.F.R § 655.731(c)(10)(i) to require H-1B
employees to pay a penalty for ceasing employment prior to the
dates in their contracts, and a violation of 20 C.F.R. § 655.801(a)
to intimidate and threaten H-1B employees.
Plaintiff appealed the DOL's March 1, 2006 determination and
requested a hearing. In a November 16, 2006 order, a federal
administrative law judge concluded that plaintiff committed the
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violations found by the DOL and ordered plaintiff to pay back
wages and civil monetary penalties, among other things.1
It is within this timeframe that Vizconde's involvement with
plaintiff commenced. According to plaintiff, Vizconde was
residing in the Philippines in January 2004 when she sent an email
to plaintiff stating: "I have read from an advertisement that you
are in need of an [information technology] professional and I
would like to apply for the said position." On June 3, 2004,
Vizconde entered into a written "train-to-hire" employment
agreement with plaintiff. The agreement included an Appendix A,
which provided in relevant part:
I, Ms. Maria Vizconde[,] hereby agree to a
three year employment with SpaceAge and hence
would agree to a three year H1-B visa to be
filed for me by SpaceAge. I understand that
the three year period begins when I begin work
at a project on SpaceAge site or at one of its
client sites and it does not include any
training period, leave in excess of authorized
leave[,] or any other nature of unauthorized
absence from work.
The agreement also contained a non-compete clause that
prohibited Vizconde from working for a client for whom she rendered
services during the contract term and for one year after employment
terminated. If Vizconde decided to leave plaintiff or otherwise
breached the agreement before completing the contract term, the
1
We take judicial notice of these administrative proceedings.
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agreement required her to pay all training and recruitment fees
at specified rates, as well as other damages and litigation costs.
Vizconde completed nineteen weeks of training with SpaceAge
from February through June, 2006. It is undisputed that she was
not paid during this training period.
On June 13, 2006, Vizconde entered into a new train-to-hire
employment agreement with plaintiff's "sister company," SpaceLabs
Software Services Inc. (SpaceLabs). The new agreement mandated
that Vizconde remain employed by SpaceLabs for five years,
subjected her to prescribed business losses and training costs
should she not do so, and contained a one-year non-compete covenant
following termination of her employment. The agreement further
specified that it "supersedes all proposals, oral or written,
[and] all other communciations between them relating [to the
agreement]." SpaceLabs "agree[d] to sponsor Employee['s] [H-1B]
visa and bear all legal fees and costs associated therewith[,]"
and it applied for a H-1B visa for Vizconde that same month. The
application was approved, and Vizconde's H-1B visa became
effective in October 2006.
In June 2007, plaintiff entered into a contract with Computer
Generated Solutions, Inc. (CGS) for plaintiff to provide
information technology professionals to CGS. CGS in turn placed
Vizconde at HBO, where she began working as a computer programmer
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on July 9, 2007. The contract between CGS and HBO specified that
HBO would not hire Vizconde without CGS's consent within the first
year, but was thereafter free to hire Vizconde after the one-year
period expired.
In November 2007, HBO contacted Vizconde to discuss her
employment options. In or about April 2008, HBO discussed with
Vizconde the possibility of hiring her directly. Vizconde provided
her SpaceLabs contract to HBO. Consequently, HBO learned that
Vizconde was not a CGS employee, but rather a contract employee
of SpaceLabs, and it declined to extend an offer to Vizconde at
the time.
The situation changed when, toward the end of April, Surender
Malhan, the owner of SpaceAge and SpaceLabs, was informed that
CGS's contract for Vizconde to work at HBO would end on May 5,
2008. According to Malhan, he then "told [Vizconde] that her
employment will be transferred from SpaceLabs to SpaceAge which
as per my understanding of [H-1B] laws requires ending the
employment with SpaceLabs and commencing employment with
SpaceAge[,] i.e.[,] cancelling the [H-1B] visa from SpaceLabs and
obtaining an [H-1B] visa from SpaceAge." Malhan confirmed in a
May 14, 2008 e-mail to Vizconde: "Your employment with SpaceLabs
is terminated effective 5/7/08. Your visa is being transferred
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to SpaceAge." Vizconde declined Malhan's offer of employment with
SpaceAge by return e-mail.
HBO sought verification that Vizconde was no longer employed
by SpaceLabs. On May 13, 2008, Vizconde's attorney provided an
opinion letter to HBO, stating: "I have reviewed [Vizconde's]
employment contract . . . and have concluded she is currently not
employed by SpaceLabs." Counsel continued:
Given that Ms. Vizconde is not on a paid
vacation, and is not assigned to work on any
client software projects, the contract states
that the "Employee-Employer relationship
ceases to exist. If Employee-Employer
relationship ceases to exist[,] Employee is
free to seek employment with another Company."
Therefore, in light of the quoted language,
it is my opinion that Ms. Vizconde is free to
pursue employment with your Company.
HBO then offered Vizconde a position, which she accepted.
On March 17, 2014, plaintiff filed a complaint against
Vizconde for breach of contract and unjust enrichment, and against
HBO for tortiously interfering with plaintiff's contract with
Vizconde.2 Plaintiff sought damages in the amount of $9850 for
"training fees" and $72,500 for business damages.
HBO moved to dismiss the complaint for failure to state a
claim, pursuant to Rule 4:6-2(e). On July 25, 2014, the motion
2
Plaintiff filed an amended complaint on May 13, 2014, asserting
the same causes of action.
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judge dismissed plaintiff's complaint without prejudice as to HBO.
The judge found the factual allegations pled by plaintiff
insufficient to establish a cause of action regarding HBO's alleged
interference with plaintiff's contractual relations with Vizconde.
The judge reserved plaintiff's right to move to reinstate the
complaint against HBO if it could develop additional facts to
support its claim.
On June 23, 2015, plaintiff moved to file a second amended
complaint alleging additional facts and seeking to reinstate its
tortious interference claim against HBO and add new claims against
Vizconde. On July 31, 2015, while plaintiff's motion to amend was
pending, Vizconde moved for summary judgment. She argued, among
other things, that plaintiff's contract was void and unenforceable
because it violated H-1B visa violations.
The motion judge agreed that the "SpaceAge/SpaceLab
agreements violate[d] [f]ederal H[-1]B [r]egulations[,]" and hence
found them unenforceable. On September 4, 2015, the motion judge
entered a memorializing order dismissing the complaint. On
September 10, 2015, the presiding judge of the Civil Part denied
plaintiff's motion to amend, finding it was "now moot in light of
the [motion judge's] decision that the contract(s) are void as
against public policy since they violate a federal statute."
8 A-3444-15T1
Plaintiff moved for reconsideration of the September 4 and
September 10 orders, and to disqualify the motion judge "pursuant
to Rules 1:12 and 1:13 as having expressed bias towards the owner
of SpaceAge and having formed an opinion about the honesty and
credibility of Malhan as a witness based on alleged facts not
before the court." On October 26, 2015, the motion judge denied
the disqualification motion and the motion to reconsider the
summary judgment order.
On November 20, 2015, the presiding judge of the Civil Part
denied the motion to reconsider the September 10 order. On January
7, 2016, plaintiff moved to vacate the September 4, 2015 and
October 26, 2015 orders, based on "newly discovered evidence,"
which the motion judge denied on March 4, 2016. Plaintiff now
appeals from the July 25, 2014, September 4, 2015, October 26,
2015, and March 4, 2016 orders.
II.
A.
We first address plaintiff's contention that the motion judge
erred by granting summary judgment on its claims against Vizconde.
Plaintiff argues, among other things, that the judge erred in
viewing the evidence in the light most favorable to Vizconde, and
in holding the contract void and unenforceable as contrary to
federal law and public policy. We disagree.
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We review a grant of summary judgment de novo, observing the
same standard as the trial court. Townsend v. Pierre, 221 N.J.
36, 59 (2015). Summary judgment should be granted only if the
record demonstrates 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). We consider "whether
the competent evidential materials presented, when viewed 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." Davis v. Brickman Landscaping,
Ltd., 219 N.J. 395, 406 (2014) (quoting Brill v. Guardian Life
Ins. Co. of Am., 142 N.J. 520, 540 (1995)). If no genuine issue
of material fact exists, the inquiry then turns to "whether the
trial court correctly interpreted the law." DepoLink Ct. Reporting
& Litig. Support Servs. v. Rochman, 430 N.J. Super. 325, 333 (App.
Div. 2013) (citations omitted). We review issues of law de novo
and accord no deference to the trial judge's legal conclusions.
Nicholas v. Mynster, 213 N.J. 463, 478 (2013).
Federal law requires an employer to pay wages to an H-1B non-
immigrant worker beginning on the date when the worker enters into
employment with the employer. 20 C.F.R. § 655.731(c)(6) and
(7)(i). The H-1B worker is considered to have entered into
employment with the employer "when he/she first makes him/herself
10 A-3444-15T1
available for work or otherwise comes under the control of the
employer, such as by waiting for an assignment, reporting for
orientation or training, going to an interview or meeting with a
customer, or studying for a licensing examination, and includes
all activities thereafter." 20 C.F.R. § 655.731(c)(6)(i)
(emphasis added).
Plaintiff provided Vizconde with training services from
February 1, 2006 to June 18, 2006. She thus entered into
employment with plaintiff, within the meaning of 20 C.F.R. §
655.731(c)(6)(i), as of February 1, 2006. Also, within the
training period, she entered into a new employment agreement with
SpaceLabs. It is undisputed that Vizconde received no wages during
her training period; consequently, both the SpaceAge and SpaceLabs
employment agreements violated federal law.3 We will "refuse to
enforce contracts that are unconscionable or violate public
policy." Saxon Constr. & Mgmt. Corp. v. Masterclean of North
Carolina, Inc., 273 N.J. Super. 231, 236 (App. Div.), certif.
denied, 137 N.J. 314 (1994). "[S]ources of public policy include
federal and state legislation." Gamble v. Connolly, 399 N.J.
3Because we invalidate the employment agreements on this basis,
we need not decide whether the contract provisions that purport
to assess damages against Vizconde for ceasing employment prior
to the expiration of the employment period constitute a penalty
and thus also violate 20 C.F.R. § 655.731(c)(10)(i).
11 A-3444-15T1
Super. 130, 144 (Law Div. 2007). Because both agreements violated
federal law, they were void and unenforceable ab initio.
Accordingly, summary judgment dismissing all claims against
Vizconde was properly granted.
B.
Plaintiff also argues that the motion judge erred by
dismissing its tortious interference claim against HBO pursuant
to Rule 4:6-2(e). In addressing this argument, we note that we
review de novo Rule 4:6-2(e) motions to dismiss for failure to
state a claim. Rezem Family Assocs., LP v. Borough of Millstone,
423 N.J. Super. 103, 114 (App. Div.), certif. denied, 208 N.J. 366(2011). We consider only "'the legal sufficiency of the facts
alleged on the face of the complaint[.]'" Nostrame v. Santiago,
213 N.J. 109, 127 (2013) (quoting Printing Mart-Morristown v.
Sharp Elecs. Corp., 116 N.J. 739, 746 (1989)).
The issue is simply "whether a cause of action is suggested
by the facts." Velantzas v. Colgate-Palmolive Co., 109 N.J. 189,
192 (1988). We "'search[] the complaint in depth and with
liberality to ascertain whether the fundament of a cause of action
may be gleaned even from an obscure statement of claim, opportunity
being given to amend if necessary.'" Printing Mart-Morristown,
supra, 116 N.J. at 746 (quoting Di Cristofaro v. Laurel Grove
Mem'l Park, 43 N.J. Super. 244, 252 (App. Div. 1957)).
12 A-3444-15T1
Rule 4:6-2(e) dismissals "should ordinarily be without
prejudice and . . . plaintiffs generally should be permitted to
file an amended complaint . . . ." Nostrame, supra, 213 N.J. at
128; accord Hoffman v. Hampshire Labs, Inc., 405 N.J. Super. 105,
116 (App. Div. 2009). Dismissal with prejudice should be limited
to situations where the plaintiff's complaint cannot be amended
to state a proper claim. See Nostrame, supra, 213 N.J. at 128
(affirming dismissal with prejudice where "plaintiff conceded that
he had no further facts to plead").
"A complaint based on tortious interference must allege facts
that show some protectable right — a prospective economic or
contractual relationship." Printing Mart-Morristown, supra, 116
N.J. at 751. Further, (1) the plaintiff must have a "reasonable
expectation of economic advantage"; (2) the interference and harm
inflicted must be done "intentionally and with malice," not
necessarily "ill will," but in the sense of conduct that is
wrongful and "without justification or excuse" under all the
circumstances; (3) the interference must have caused a "loss of
the prospective gain"; and (4) the loss or injury caused damage.
Ibid. (citations omitted). Ultimately, a plaintiff bears the
"burden to prove that defendants acted intentionally and
wrongfully without justification[.]" Id. at 756. The factors
most pertinent to the "malice" standard are: "(a) the nature of
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the actor's conduct, (b) the actor's motive, [(c)] the interests
sought to be advanced by the actor, and [(d)] the social interest
protecting the freedom of action of the actor and the contractual
interests of the other." MacDougall v. Weichert, 144 N.J. 380,
404-05 (1996).
In plaintiff's amended complaint, it averred that "[b]y
assigning [] Vizconde to work at [] HBO, HBO would have been on
notice that Vizconde was an employee of SpaceAge and under contract
to work for SpaceAge for not less than three years." The motion
judge found this allegation insufficient to satisfy the second
"malice" prong.
Even if the court erred in reaching that conclusion at this
preliminary stage of the proceedings, ultimately we discern no
reversible error. The court dismissed plaintiff's complaint
against HBO without prejudice, thereby preserving plaintiff's
right to reassert its claim against HBO should it adduce sufficient
facts to support it. Subsequent discovery revealed no evidence
that HBO acted maliciously in hiring Vizconde. Plaintiff did not
have a valid agreement with Vizconde because that agreement had
been superseded by the SpaceLabs agreement. HBO was informed that
SpaceLabs had terminated Vizconde, and her attorney provided HBO
with a letter stating she was thus free to pursue employment with
HBO. In short, plaintiff failed to show that HBO acted with intent
14 A-3444-15T1
to inflict harm on it without justification or excuse. Moreover,
plaintiff is hard-pressed to claim a protectable right in a
contract that we have found illegal under federal law.
C.
In its brief, plaintiff argues that the trial court erred in
denying its motion to amend the complaint (1) to allege additional
facts demonstrating that HBO knew that in hiring Vizconde it was
violating the non-compete clause in her contract with plaintiff;
and (2) to assert breach of duty of loyalty and tortious
interference claims against Vizconde.
As a threshold matter, we conclude that these arguments are
not properly before us. As noted, the orders plaintiff identified
in its Notice of Appeal were those entered by the motion judge on
July 25, 2014, September 4, 2015, October 26, 2015, and March 4,
2016. Importantly, the Notice of Appeal does not include the
orders entered by the presiding judge of the Civil Part on
September 10, 2015, denying plaintiff's motion to amend, and on
November 20, 2015, denying reconsideration of that motion.
Our review of a trial court's decisions is strictly
circumscribed by the notice of appeal. R. 2:5-1(f)(3)(A). We
review "only the judgment or orders designated in the notice of
appeal[.]" 1266 Apartment Corp. v. New Horizon Deli, Inc., 368
N.J. Super. 456, 459 (App. Div. 2004) (citing Sikes v. Twp. of
15 A-3444-15T1
Rockaway, 269 N.J. Super. 463, 465-66 (App. Div.), aff'd o.b., 138
N.J. 41 (1994)). See also R. 2:5-1(f)(3)(A). Stated differently,
any arguments raised by plaintiff that fall outside the four
corners of the notice of appeal, such as these, fall outside the
scope of our appellate jurisdiction in this case, and are therefore
not reviewable as a matter of law.
D.
To the extent that we have not specifically addressed them,
having reviewed the record, we determine that the remaining issues
raised by plaintiff, including its contention that the trial court
erred in denying the disqualification motion, lack sufficient
merit to warrant further discussion in a written opinion. R.
2:11-3(e)(1)(E).
Affirmed.
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