Court Opinion

ID: 4123545
Source: CourtListenerOpinion
Date Created: 2017-02-06 15:08:53.018159+00
Date Added: 2024-06-11T14:50:22.260130
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                 APPROVAL OF THE APPELLATE DIVISION

                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-2651-13T3

GREG NOREN,
                                            APPROVED FOR PUBLICATION
     Plaintiff-Appellant/
     Cross-Respondent,                         February 6, 2017

v.                                            APPELLATE DIVISION

HEARTLAND PAYMENT SYSTEMS, INC.,

     Defendant-Respondent/
     Cross-Appellant.
________________________________________________________________

         Submitted May 3, 2016 – Decided February 6, 2017

         Before    Judges         Fisher,     Espinosa       and
         Rothstadt.

         On appeal from Superior Court of New Jersey,
         Law Division, Bergen County, Docket No. L-
         4528-06.

         Franzblau   Dratch,    PC,          attorneys       for
         appellant/cross-respondent           (Patrick        T.
         Collins, of counsel; Adam           Shefki, on      the
         briefs).

         Blank Rome, LLP, attorneys for respondent/
         cross-appellant (Seth J. Lapidow, of counsel
         and on the brief; Jaret N. Gronczewski, on
         the brief).

     The opinion of the court was delivered by

ESPINOSA, J.A.D.

     Plaintiff     Greg   Noren   brought   suit   against    his      former

employer, Heartland Payment Systems, Inc. (HPS), alleging breach
of   contract     and   a   violation    of      the    Conscientious   Employee

Protection Act (CEPA), N.J.S.A. 34:19-1 to -14.1                 Pursuant to a

jury-waiver provision in Noren's employment contract, the trial

court denied his demand for a jury.                Following a bench trial,

the trial court dismissed Noren's claims and awarded HPS over $2

million in fees and costs.         Noren's appeal does not require us

to determine the merits of his claims.                 He also does not contest

the application of the jury-waiver provision to his breach of

contract claim or that fees may be awarded on that claim.                       He

challenges the application of the jury-waiver provision to the

CEPA claim and argues that HPS is not entitled to fees related

to   his   CEPA    claim.      Because      we    conclude     the   jury-waiver

provision was not legally enforceable as to Noren's CEPA claim,

we reverse the judgment and fee award on that claim, and remand

for a jury trial on the CEPA claim.              For reasons that follow, we

also dismiss HPS's cross-appeal, challenging the trial judge's

denial of its summary judgment motion.

1
   The complaint also alleged claims of intentional harassment,
wrongful   discharge,   intentional  infliction  of   emotional
distress,   defamation,   false  light,  fraud  and   negligent
misrepresentation. These claims were dismissed before trial and
are not the subject of this appeal.

                                        2                               A-2651-13T3
                                         I.

    Noren was employed as a Relationship Manager (RM) by HPS

from April 1998 until June 2005.                        He sold HPS's credit and

debit,    payroll      and     related          processing      card         services       to

merchants.       On June 14, 2002, HPS terminated Noren's employment

because his contract had expired and he refused to sign a new

Relationship Manager Agreement (2002 RMA).                       On July 15, 2002,

Noren    faxed    a   signed   copy    of       the   2002    RMA   to       HPS    and   was

immediately      rehired.      The     2002       RMA    contained       a    jury-waiver

provision that stated:

            HPS and RM irrevocably waive any right to
            trial by jury in any suit, action or
            proceeding under, in connection with or to
            enforce this Agreement.

    In January 2003, Noren signed a Vested Relationship Manager

Agreement (2003 VRMA), which: superseded all prior agreements

between    Noren      and    HPS,     contained         a    jury-waiver           provision

identical to the provision in the 2002 RMA as well as a fee-

shifting provision, and specified he was an at-will employee.

HPS terminated Noren's employment in June 2005.

    Noren's demand for a jury trial was denied by the court

based on the jury-waiver provision in the 2002 RMA.2                                After a

2
     There was significant motion practice concerning the
complaint.   In addition to a February 2011 order denying HPS's
motion for summary judgment and subsequent denial of HPS's
                                                    (continued)

                                            3                                       A-2651-13T3
twenty-two-day bench trial, the trial court dismissed Noren's

complaint, finding he failed to prove either cause of action,

and awarded HPS $2,059,206.53 in fees and costs.

                                       II.

     The right to a trial by jury is guaranteed by the New

Jersey Constitution, N.J. Const. art. I, ¶ 9, and, in the case

of   Noren's    CEPA    claim,    explicitly    established      by   statute,

N.J.S.A. 34:19-5.       The Legislature's intent that the right to a

jury trial be guaranteed is manifest from its amendment of the

statute   in    1990,     following     our    decision   in     Abbamont    v.

Piscataway     Township   Board   of   Education,   238   N.J.    Super.    603

(App. Div. 1990), aff'd, 138 N.J. 405 (1994), in which we held

there was no right to a jury trial under CEPA.            In response, the

Legislature enacted L. 1990, c. 12, amending both CEPA and the

Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49, to

(continued)
motion for reconsideration, the motion practice included: a
September 2007 order denying HPS's motion to dismiss the
complaint and strike the jury demand, a September 2008 order
dismissing the complaint as to the individual defendants, a
November 2008 order dismissing the complaint, the reinstatement
of Noren's CEPA and breach of contract claims on appeal, a March
2010 order granting HPS's motion to strike previously dismissed
allegations from Noren's second amended complaint, an October
2010 order granting HPS's motion to reconsider the 2007 denial
of its motion to strike Noren's jury demand and striking the
jury demand, and a November 2010 order denying Noren's motion
for reconsideration and disqualification of the judge.

                                        4                             A-2651-13T3
specify that a person who brings a legal action under either

statute is entitled to a jury trial.                See State v. Sailor, 355
N.J. Super. 315, 322 (App. Div. 2001).                As a result, CEPA now

explicitly provides, "Upon the application of any party, a jury

trial shall be directed to try the validity of any claim under

this act specified in the suit."                  N.J.S.A. 34:19-5 (emphasis

added).3     The amendment of CEPA and LAD in a single enactment

reflects     their   shared      character    as    remedial    statutes    that

"promote[] a strong public policy of the State," that should be

liberally construed.           Abbamont, supra, 138 N.J. at 431 (citing

Judiciary,     Law   and       Public   Safety     Committee,   Statement     on

Assembly Bills No. 2872, 2118, 2228 (1990)).

      Noren's appeal therefore turns on whether the provision in

his   2002    RMA    is    a     legally     enforceable   waiver    of     this

constitutionally and statutorily guaranteed right, a question

decided    through   the   application       of    "customary   principles    of

contract law."       Atalese v. U.S. Legal Servs. Grp., L.P., 219
N.J. 430, 442 (2014) (quoting NAACP of Camden Cty. E. v. Foulke

Mgmt., 421 N.J. Super. 404, 424 (App. Div.), certif. granted,

209 N.J. 96 (2011), and appeal dismissed, 213 N.J. 47 (2013)),

3
   But see Kaye v. Rosefielde, 432 N.J. Super. 421, 433 (App.
Div. 2013) (affirming the trial judge's exercise of ancillary
jurisdiction to hear a CEPA claim without a jury, an issue not
addressed in Supreme Court's decision reversing), rev'd, 223
N.J. 218 (2015).

                                        5                             A-2651-13T3
cert. denied, ____ U.S. ____, 135 S. Ct. 2804, 192 L. Ed. 2d 847

(2015).

       "[W]hen a contract contains a waiver of rights . . . the

waiver 'must be clearly and unmistakably established.'"                             Morgan

v. Sanford Brown Inst., 225 N.J. 289, 308-09 (2016) (quoting

Atalese, supra, 219 N.J. at 444).                   The contractual waiver of

rights       provision   "must    reflect     that       [the    party]     has    agreed

clearly and unambiguously to its terms."                        Atalese, supra, 219

N.J. at 443 (alteration in original) (quoting Leodori v. Cigna

Corp., 175 N.J. 293, 302 (2003)).                    Because "[w]aiver is the

voluntary      and   intentional      relinquishment            of   a   known    right,"

Knorr v. Smeal, 178 N.J. 169, 177 (2003), there cannot be a

clear    and    unambiguous      agreement     to    waive       without     a    "mutual

understanding" of the terms of the waiver.                       Atalese, supra, 219

N.J.    at    446-47.     To   be    effective,      a    party      must   "have     full

knowledge of his legal rights and intent to surrender those

rights."       Knorr, supra, 178 N.J. at 177.

       "No magical language is required to accomplish a waiver of

rights," Morgan, supra, 225 N.J. at 309, and the provision need

not "identify the specific constitutional or statutory right"

subject to the waiver.              Atalese, supra, 219 N.J. at 447.                    But

the provision must be grounded in "plain language that would be

clear and understandable to the average" person that statutory

                                          6                                       A-2651-13T3
rights are being waived.        Id. at 446.      In short, to effect a

waiver, the language must clearly explain (1)              what right is

being surrendered and (2) the nature of the claims covered by

the waiver.

    Language that failed to meet that standard includes the

arbitration provision contained in the employment agreement in

Garfinkel   v.    Morristown    Obstetrics   &   Gynecology   Associates,

P.A., 168 N.J. 124 (2001).          The Court found the language too

ambiguous to constitute an enforceable waiver of the employee's

LAD claim, explaining:

            The clause states that "any controversy or
            claim" that arises from the agreement or its
            breach shall be settled by arbitration. That
            language suggests that the parties intended
            to arbitrate only those disputes involving a
            contract term, a condition of employment, or
            some other element of the contract itself.
            Moreover, the language does not mention,
            either expressly or by general reference,
            statutory claims redressable by the LAD.

            [Id. at 134 (emphasis added).]

The Court instructed, "a waiver-of-rights provision should at

least   provide    that   the   employee     agrees   to   arbitrate   all

statutory claims arising out of the employment relationship or

its termination."     Id. at 135.

    In contrast, the arbitration provision in Jaworski v. Ernst

& Young US LLP, 441 N.J. Super. 464 (App. Div.), certif. denied,

223 N.J. 406 (2015) identified "[c]laims based on state statutes

                                     7                           A-2651-13T3
and   local     ordinances,          including     state     and     local        anti-

discrimination       laws,"     as     covered     disputes.         Id.     at     480

(alteration     in     original).        We      observed,     "By    specifically

including state statutory anti-discrimination claims as Covered

Disputes,     [Ernst     &    Young]     clearly     and     unequivocally          put

plaintiffs on notice that any claims arising under the LAD,

regarding termination or otherwise, were subject to mandatory

arbitration."    Ibid.

      Similarly, in Leodori, supra, the Supreme Court found the

relevant    clause      in    the     employee      handbook       "unambiguously"

articulated    the     intent    "to    arbitrate     all    employment-related

claims, including those that might be asserted under CEPA." 175
N.J. at 302.    The Court explained,

            The   relevant    provision   lists   numerous
            federal statutes by name as falling within
            its purview, in addition to "any other
            federal,    state,     or    local    statute,
            regulation,     or     common-law    doctrine,
            regarding      employment      discrimination,
            conditions of employment, or termination of
            employment." That language easily satisfies
            the requirement that such clauses provide an
            unmistakable expression of an employee's
            willingness to waive his or her statutory
            remedies.

            [Id. at 302-03.]

      Although it is plainly preferable for a waiver of rights

provision to explicitly state so when the waiver is intended to

include statutory rights, it is possible to provide the clarity

                                         8                                   A-2651-13T3
necessary for a valid waiver without such specific reference.

The arbitration agreement in Martindale v. Sandvik, Inc., 173
N.J. 76 (2002), stated that plaintiff agreed to waive her right

to a jury trial "in any action or proceeding relating to my

employment with Sandvik" and that "all disputes relating to my

employment with Sandvik or termination thereof" would be subject

to   arbitration.        Id.       at   96.        The    Court     distinguished        this

language from the arbitration provision in Garfinkel, stating it

was free of the "limiting references" that were fatal to the

enforceability of that arbitration provision.                          Ibid.      The Court

concluded the arbitration provision in Martindale "was clear and

unambiguous     [and]    sufficiently             broad    to     encompass       reasonably

plaintiff's statutory causes of action."                     Ibid.

      The jury-waiver provision here applied to "any suit, action

or   proceeding    under,         in    connection        with    or   to    enforce      this

Agreement." (Emphasis added).                 It made no reference to statutory

claims and did not define the scope of claims as including all

claims    relating      to    Noren's        employment.            This     language      was

similar    to    the    language        in    Garfinkel          deemed     too    ambiguous

because it failed to refer to statutory claims.                             And, by using

"this    Agreement"      as       the   defining         threshold     for     all     suits,

actions and proceedings, the provision limits the category of

disputes   for    which       a    jury      trial   is     waived.          We    therefore

                                              9                                      A-2651-13T3
conclude     the     jury-waiver        provision       fails     to     clearly      and

unambiguously explain that the right to a jury trial is waived

as to a CEPA claim and that a remand is necessary for a jury

trial on this claim.

                                         III.

      The trial judge wrote an extensive opinion to support her

award   of   $2,059,260.53       in     attorney       fees   and      costs   to    HPS.

Although fee determinations by the trial court are generally

entitled to our deference, Packard-Bamberger & Co. v. Collier,

167 N.J. 427, 444 (2001), a remand is required here.

      "New Jersey has a strong policy disfavoring shifting of

attorneys'     fees."       N.   Bergen        Rex    Transp.,    Inc.    v.   Trailer

Leasing     Co.,   158 N.J. 561,    569     (1999).         We    allow   for    the

recovery of such fees only "if they are expressly provided for

by statute, court rule, or contract."                  Packard-Bamberger, supra,

167 N.J. at 440.          In this case, there were two possible grounds

for   the    award   of    counsel      fees    and    costs:     the    fee-shifting

provisions contained in CEPA, N.J.S.A. 34:19-6, and in the 2003

VRMA.

      CEPA permits an award of "reasonable attorneys' fees and

court costs" to a prevailing employer "if the court determines

that an action brought by an employee under this act was without

basis in law or in fact."               N.J.S.A. 34:19-6.              This provision

                                          10                                   A-2651-13T3
applies only to "a narrow band of cases" in which "the employer

must be vindicated and the employee must have proceeded without

basis in law or in fact. . . ."           Best v. C&M Door Controls,

Inc., 200 N.J. 348, 358 (2009).           Moreover, because the fee-

shifting   provision   is   in    derogation   of   common      law,    it    is

strictly construed.    See Buccinna v. Micheletti, 311 N.J. Super.
557, 566 (App. Div. 1998) (citing Hirsch v. Tushill, Ltd., 110
N.J. 644, 647 (1988)).

      It must be noted that the threshold for the award of fees

is higher for the CEPA claim.        It was error for the trial judge

to conclude the threshold was met based upon her finding that

Noren "failed to set forth a viable claim against the defendant

pursuant to CEPA."     There is a broad spectrum in the quality of

proofs that fall between a claim that is not "viable" and one

that is "without basis in law or in fact."               N.J.S.A. 34:19-6;

see   Buccinna,   supra,    311    N.J.   Super.    at    562   (concluding

defendant who prevailed at trial was not entitled to counsel

fees under CEPA because there was no finding that plaintiff's

claim was "without basis in law or in fact").              A claim is not

viable if it fails to satisfy all the requisite elements of

proof.     To lack any basis in law or in fact, there must be

either no legal authority to support the claim or the absence of

a factual basis for the claim.

                                    11                                 A-2651-13T3
      The applicable standard is similar to that for Rule 1:4-8,

which authorizes a sanction for an assertion made in a paper

filed with the court when "no rational argument can be advanced

in its support, or it is not supported by any credible evidence,

or   it   is    completely     untenable."     United   Hearts,   L.L.C.   v.

Zahabian, 407 N.J. Super. 379, 389 (App. Div.) (quoting First

Atl. Fed. Credit Union v. Perez, 391 N.J. Super. 419, 432 (App.

Div. 2007)), certif. denied, 200 N.J. 367 (2009).                 In United

Hearts, we concluded,

               [A] pleading cannot be deemed frivolous as a
               whole nor can an attorney be deemed to have
               litigated a matter in bad faith where, as in
               this case, the trial court denies summary
               judgment on at least one count in the
               complaint and allows the matter to proceed
               to trial.

               [Id. at 394.]

      The fact that Noren's CEPA claim survived summary judgment

would similarly appear to preclude a finding that his claim was

"without basis in law or in fact."            N.J.S.A. 34:19-6; see also

Buccinna, supra, 311 N.J. Super. at 562-63 (finding the standard

for an award of fees under CEPA,             N.J.S.A. 34:19-6, similar to

the standard for the frivolous claim law, N.J.S.A. 2A:15-59.1).

      Turning to the fee-shifting provision in the 2003 VRMA, we

note that "when the fee-shifting is controlled by a contractual

provision, the provision should be strictly construed in light

                                      12                            A-2651-13T3
of our general policy disfavoring the award of attorneys' fees."

Litton    Indus.,   Inc.    v.   IMO   Indus.,       Inc.,    200 N.J. 372,   385

(2009).     The 2003 VRMA states:

            In any suit, action or proceeding arising
            out of or related to this Agreement, the
            successful   party   shall  be  awarded,   in
            addition to any other relief to which it is
            found to be entitled, costs of suit, fees of
            experts   and   reasonable  attorneys'   fees
            against the unsuccessful party.

     This    language      tracks   that     of   the    jury-waiver       provision,

which we hold failed to clearly and unequivocally extend to

Noren's CEPA claim.         Further, the provision authorizes an award

of expert fees.         This exceeds the award of what is permitted

under CEPA, i.e., "reasonable attorneys' fees and court costs,"

N.J.S.A. 34:19-6, and is not authorized by another statute or

any court rule.     See Buccinna, supra, 311 N.J. Super. at 565-66.

     The    trial   judge    found     the    CEPA      and   breach   of   contract

claims "inextricably intertwined" and so, drew no distinction

between expenses incurred to defend against either claim.                       To be

sure, this is a difficult task but one that must be performed to

determine what fees are attributable to the breach of contract

claim.4

4
   Relying on Hensley v. Eckerhart, 461 U.S. 424, 434-35, 103 S.
Ct. 1933, 1940, 76 L. Ed. 2d 40, 51-52 (1983), HPS argues that
                                                     (continued)

                                        13                                   A-2651-13T3
                                   IV.

    Finally, we turn to HPS's cross-appeal, in which HPS argues

the trial court erred in denying its summary judgment motion.

Rule 2:6-1(a)(1) states, in pertinent part:

         If the appeal is from a summary judgment,
         the appendix shall . . . include a statement
         of all items submitted to the court on the
         summary judgment motion and all such items
         shall be included in the appendix, except
         that briefs in support of and opposition to
         the motion shall be included only as
         permitted by subparagraph (2) of this rule.

    Contrary to the requirements of this rule, HPS did not

submit the items that had been submitted to the trial court on

the summary judgment motion or even a statement of the items

submitted.       HPS's    appendix        included     the    briefs      and

certifications   of   counsel    for     Noren   and   HPS.    As   to    the

certification submitted in support of its motion, HPS attached

"only relevant exhibits."       The certification on behalf of Noren

was in the appendix, but "excluding exhibits."

(continued)
it is entitled to fees incurred defending both the CEPA and
breach of contract claims because they involved a common core of
facts and related legal theories.        In Hensley, the Court
considered the appropriate measure of attorneys' fees in a case
where a suit filed alleging several civil rights violations was
successful on one claim.    Ibid.   The award of fees was made
pursuant to 42 U.S.C.A. § 1988, which is designed to encourage
litigation   to  vindicate   civil  rights   violations.    That
underlying public policy does not apply here.

                                   14                               A-2651-13T3
    In reviewing a summary judgment, we are required to view

the evidence that was submitted to the trial court "in the light

most favorable to the non-moving party," to determine "if there

is a genuine issue as to any material fact or whether the moving

party is entitled to judgment as a matter of law."                       Rowe v.

Mazel   Thirty,     LLC,    209 N.J. 35,   41   (2012)   (citing   Brill    v.

Guardian Life Ins. Co. of Am., 142 N.J. 520, 529 (1995)). HPS's

selective    inclusion       of     exhibits   it   considers    relevant      and

exclusion of exhibits relied upon by Noren in opposing summary

judgment    makes    that    task    impossible.      Therefore,   the    cross-

appeal is dismissed.

    In sum, we reverse the judgment as to the CEPA claim and

remand for a jury trial.             The judgment regarding the breach of

contract claim remains intact and the fee award is remanded for

the trial judge to apportion the reasonable amount of fees and

costs incurred in defense of the breach of contract claim.                     The

cross-appeal is dismissed.

    Reversed and remanded.            We do not retain jurisdiction.

                                         15                              A-2651-13T3