(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that,
in the interests of brevity, portions of any opinion may not have been summarized).
Argued September 27, 1995 -- Decided February 22, 1995
COLEMAN, J., writing for a unanimous Court.
The issues raised on this appeal are: 1) whether a plaintiff who institutes litigation for breach of an
employment contract is entitled to damages for litigation-induced stress; and 2) whether an assistant
superintendent of schools who is wrongfully terminated during the third year of a three-year employment
contract acquired tenure.
Joseph Picogna was employed under a written contract with the Cherry Hill Board of Education (Board)
as Assistant Superintendent for Business and Board Secretary for a three-year period beginning July 1, 1985, and
ending June 30, 1988. The contract provided, among other things, that Picogna could be terminated for cause
and that the parties, sixty days prior to the termination of the contract period, could give written notice of the
intention not to renew the employment relationship.
In 1986, Philip Esbrandt became Superintendent of Schools. Initially, Esbrandt evaluated Picogna's
performance favorably, but the relationship between the two men quickly fell apart. Esbrandt perceived that
Picogna was attempting to interfere with his work and embarrass him both professionally and personally.
Therefore, Esbrandt set out to establish a record that would support a recommendation not to renew
Picogna's contract, and ultimately, support the recommendation that the existing contract be terminated. To
accomplish that goal, Esbrandt made false accusations against Picogna, charging him with various acts of
misconduct, including theft, conspiracy, and improper expenditure of tax dollars. Esbrandt also accused
Picogna of covering up facts concerning a fatal school bus accident. Based on Esbrandt's allegations and
recommendation, the Board adopted a resolution ratifying the termination of Picogna's contract as of April
29, 1988, two months prior to the expiration date of his contract.
On July 6, 1988, Picogna sued Esbrandt, the Board, and the individual members of the Board for
breach of contract, denial of tenure, deprivation of due process, violation of the Conscientious Employee
Protection Act (CEPA), and tortious interference with his contract. Picogna sought reinstatement, an
injunction restraining the continued violation of CEPA, compensatory and punitive damages, attorneys fees,
and costs.
On pre-trail motion of the Board and Esbrandt, the trial court dismissed all claims against the Board
except the breach-of-contract claim, finding that Picogna had failed to file a notice of claim required by the
Tort Claims Act. The trial court also dismissed Picogna's claim of tenure denial.
At the conclusion of the bench trial, the judge dismissed all claims against the individual Board members, finding that they acted in good-faith reliance on Esbrandt's evaluations when they voted to terminate Picogna's contract. The court also found no CEPA violation. However, the court did find that the Board had terminated Picogna's contract without cause; that Esbrandt had tortiously interfered with the contract; and that Esbrandt, acting as agent, servant, and employee of the Board, acted intentionally and maliciously to injure Picogna. The court ordered compensatory damages against the Board and Esbrandt as follows: economic damages - $750,000; and emotional distress damages - $560,00, which included recovery for litigation-induced stress. The court also assessed $50,000 in punitive damages against Esbrandt. In
ascertaining the amount of economic damages, the trial court considered that Picogna would have received
tenure if it had not been for the actions of the Board and Esbrandt. The court's award represented what
Picogna would have earned until retirement, reduced by certain variables, such as death and early retirement.
The Board appealed. The Appellate Division affirmed the trial court's finding of liability as well as
the punitive damage and emotional distress damage awards. The court declined to discuss litigation-induced
stress as a component of damages. A majority of the panel reversed and remanded the award of economic
damages, concluding that the calculation of damages over Picogna's projected work-life based on anticipated
tenure was improper and that the lost wages awarded should have been based on net income. One member
of the panel dissented, concluding that Picogna was wrongfully deprived of tenure and that the trial court's
calculation of economic damages was proper.
The Supreme Court granted the Board's petition for certification to address the appropriateness of
the award of litigation-induced stress damages. Picogna did not cross-appeal based on the dissent in the
Appellate Division, nevertheless, the Court addresses the issue of whether Picogna obtained tenure because
of its importance to school districts statewide.
HELD: Litigation-induced stress is not recoverable as a separate component of emotional distress damages.
In addition, an assistant superintendent of schools does not acquire tenure under N.J.S.A. 18A:28-5(a) after working in a school district for three consecutive calendar years unless he or she is
reemployed by that district for at least one day in a fourth year.
1. Absent a court rule or an express statutory provision, a party may not recover litigation expenses in an
action for damages. Because stress and anxiety normally go hand in hand with the litigation process, the
majority of courts addressing litigation-induced stress have treated it as a non-compensable component of
damages, irrespective of whose actions necessitate the litigation. Thus, Picogna may not recover for
litigation-induced distress as a separate component of damages. Because the emotional-distress-damage
award does not reflect the amount intended to compensate Picogna for litigation-induced stress, the entire
award must be vacated and recalculated on remand. (pp. 6-11)
2. Picogna was terminated without cause before serving the requisite three years mandated by statute.
Therefore, he did not acquire tenure status since that status only arises on compliance with the conditions set
forth in the statute. Breach of a contract covering a full probationary period of employment that may have
resulted in tenure had no breach occurred does not confer tenure in the absence of continued employment
after service of the requisite number of consecutive probationary years in the same district. No matter how
likely it is that Picogna would have obtained tenure, wrongful termination that does not violate State or
federal anti-discrimination laws will not result in tenure. Further, the Board's contractual right not to renew
the employment relationship on sixty-days notice is compelling evidence that the parties did not intend to
confer tenure either on entry into the contract or after substantial performance of the contract. (pp. 11-15)
3. Although not discussed by the Appellate Division, Esbrandt's damages for tortious interference may differ
from the Board's breach of contract damages. If that issue is raised on remand, or if Picogna seeks to
impose greater economic damages on Esbrandt than those imposed on the Board, the trial court must decide
whether a conflict of interest exists in having the same attorney represent both defendants. In addition, while
the Court offers no precise limit for what amounts to a reasonable time period, it was a mistaken exercise of
discretion under the circumstances of this case to award damages for the balance of Picogna's expected work
life. (pp. 15-17)
4. Because punitive damages are intimately related to the economic and emotional distress damages, the
punitive damage award must also be vacated and redetermined. (pp. 17-18)
That portion of the judgment of the Appellate Division in respect of the emotional distress damage
award is REVERSED, the punitive damage award is VACATED and the matter is REMANDED to the Law
Division for a new trial on damages only.
CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI and
STEIN join in JUSTICE COLEMAN'S opinion.
SUPREME COURT OF NEW JERSEY
A-
18 September Term 1995
JOSEPH LOUIS PICOGNA,
Plaintiff-Respondent,
v.
BOARD OF EDUCATION OF THE
TOWNSHIP OF CHERRY HILL and
PHILLIP ESBRANDT,
Defendants-Appellants,
and
BARBARA RICHTERMAN, ELEANOR
STOFMAN, ROBERT FREEDMAN,
JEROME HAYM, FAITH JEROME,
JAMES MARINO, DAVID MOLOTSKY,
MARIANNE RAPHAELY, PAT
CARROLL and WILLIAM McCARGO,
individually and/or as agents
and/or employees of the Board
of Education of the Township
of Cherry Hill jointly,
severally, and in the
alternative,
Defendants.
Argued September 27, 1995 -- Decided February 22, 1996
On certification to the Superior Court,
Appellate Division.
Robert M. Tosti argued the cause for
appellants (Rand, Algeier, Tosti & Woodruff,
attorneys; Mr. Tosti and John F. McDonnell,
attorneys).
John J. Finnegan, III, argued the cause for
respondent (Finnegan and Barth, attorneys).
The opinion of the Court was delivered by
COLEMAN, J.
The critical issue raised in this appeal is whether a
plaintiff who institutes litigation for breach of an employment
contract is entitled to damages for litigation-induced stress. A
second issue is whether an assistant superintendent of schools
who is wrongfully terminated during the third year of a three-year employment contract acquired tenure.
We hold that litigation-induced stress is not recoverable as
a separate component of emotional distress damages. We also hold
that an assistant superintendent of schools does not acquire
tenure under N.J.S.A. 18A:28-5(a) after working in a single
school district for three consecutive calendar years unless he or
she is reemployed by that district for at least one day.
Plaintiff, Joseph Picogna, was employed under a written contract with defendant Cherry Hill Board of Education (Board) as Assistant Superintendent for Business and Board Secretary for a three-year period beginning July 1, 1985, and ending June 30, 1988. In that capacity Picogna was responsible for spending district funds, approving the payment of vouchers of Board employees, and bidding and contracting on behalf of the Board. His contract provided that he could be terminated "forthwith" for cause, defined as misconduct, insubordination, or unauthorized absence. The contract also provided that "[o]n or before sixty
(60) days prior to June 30, 1988, either party hereto may give
written notice of the intention not to renew the employment
relationship."
Picogna approached the responsibilities of his job with
extreme seriousness and conscientiously supervised Board
expenditures and adhered strictly to school policy. The trial
court described Picogna as one who insured that the "I's were
dotted and the T's were crossed."
At the time Picogna was hired, John McKeon served as
Superintendent of Schools. McKeon retired in 1986 and was
replaced by defendant Philip Esbrandt. Although Esbrandt's first
two evaluations of Picogna's performance were favorable, the
relationship between Picogna and Esbrandt quickly deteriorated as
Picogna made requests for documentation to support Esbrandt's
expenditures and questioned Esbrandt's retention of school
consultants. Esbrandt perceived Picogna's behavior as an attempt
to interfere with his work and embarrass him personally and
professionally.
Shortly after Esbrandt became superintendent, he set out to
develop a record supporting a recommendation not to renew
Picogna's contract, and ultimately, recommended terminating
Picogna's existing contract. Esbrandt made false accusations
against Picogna, charging him with various acts of misconduct
including theft, conspiracy, and improper expenditure of tax
dollars. He also accused Picogna of covering up the facts
regarding a fatal school bus accident in the district.
Picogna was promptly notified by letter of Esbrandt's
recommendation. A special meeting was held at which Esbrandt
again recommended that Picogna's contract be terminated as of
April 29, 1988, approximately two months before expiration of the
contract. The Board voted accordingly and adopted a resolution
ratifying Picogna's termination.
On July 6, 1988, Picogna instituted suit against Esbrandt,
the Board, and the individual Board members. He alleged breach
of contract, denial of tenure, deprivation of due process,
violation of the Conscientious Employer Protection Act (CEPA),
N.J.S.A. 34:19-1 to -8, and tortious interference with his
contract. Picogna sought reinstatement, an injunction
restraining the continued violation of CEPA, compensatory and
punitive damages, attorney's fees, and costs.
The trial court granted partial summary judgment, dismissing
all claims against the Board except the breach-of-contract claim
on the ground that plaintiff had failed to file a notice of claim
required by the New Jersey Tort Claims Act, N.J.S.A. 59:8-8. The
trial court also granted summary judgment in favor of the Board
on the claim of tenure denial.
At the conclusion of a bench trial, the trial court
dismissed all claims against the individual Board members,
finding that they acted in good faith reliance on Esbrandt's
evaluations when they voted to terminate plaintiff's contract.
The trial court also found no CEPA violation. In addition, the
trial court found that the Board terminated Picogna's contract
without cause and that Esbrandt tortiously interfered with
Picogna's contract. It found that Esbrandt, acting as agent,
servant and employee of the Board, acted intentionally and
maliciously to injure Picogna. Judgment for compensatory damages
was entered against the Board and Esbrandt for economic damages
of $750,000 and emotional distress damages of $560,000, which
included recovery for Picogna's litigation-induced stress. The
court assessed $50,000 in punitive damages against Esbrandt. In
computing the economic damages, the trial court considered that
Picogna would have received tenure but for defendants' actions,
and arrived at a figure representing what Picogna would have
earned until retirement reduced by variables such as the
possibility of death, unemployment or early retirement.
The Board appealed, and the Appellate Division affirmed the
trial court's finding of liability and the award of punitive and
emotional distress damages but declined to discuss litigation-induced stress as a component of damages. A majority of the
panel reversed and remanded the award of economic damages,
finding that the calculation of damages over plaintiff's
projected working life based on anticipated tenure was improper
and that the lost wages awarded should have been based on net
income rather than gross income. One member dissented,
concluding that plaintiff was wrongfully deprived of tenure and
that the trial court's calculation of economic damages was
proper.
We granted defendants' petition for certification to address
the appropriateness of an award of litigation-induced stress
damages.
139 N.J. 443 (1995). Although plaintiff did not submit
a cross-appeal based on the dissent, we will nonetheless address
the issue of whether plaintiff obtained tenure because of its
importance to school districts throughout the State.
Defendants argue that the trial court and the Appellate
Division erred in compensating plaintiff for distress caused by
the litigation itself. They assert that stress is a normal part
of the litigation process and that only emotional distress
associated with pretermination and termination events should be
compensable. Plaintiff contends that because the present
litigation was engendered by defendants' bad faith, any stress
induced thereby should be compensable.
The trial court's award of $560,000 in emotional distress
damages was based on many factors, including the stress resulting
from the litigation. The court reasoned: "[T]he litigation was
necessary because of the actions of the defendants. So they
certainly can't be heard to argue that [plaintiff] shouldn't be
compensated for the pain and suffering as a result of their
conduct. . . . [P]art of that pain and suffering was generated as
a result of the litigation."
As a preliminary matter, New Jersey recognizes the
compensability of litigation-induced economic damages in the form
of expenses in limited circumstances. Absent a court rule or an
express statutory or contractual provision, a party may not
recover litigation expenses in an action for damages. N.J.S.A.
2A:15-59.1; R. 4:42-9; Cohen v. Fair Lawn Dairies, Inc.,
86 N.J.
Super. 206, 212 (App. Div.), aff'd,
44 N.J. 450 (1965); Jersey
City Sewerage Auth. v. Housing Auth.,
70 N.J. Super. 576, 584
(Law Div. 1961), aff'd,
40 N.J. 145 (1963). As a matter of
policy, it is generally the responsibility of each litigant to
pay the costs incurred in utilizing the judicial system.
Although New Jersey permits recovery for emotional distress
damages in some cases, the potential for fabricated claims
justifies a requirement of enhanced proof to support an award of
such damages. Under contract law, recovery is permitted where
the breach of contract involves conduct that is both intentional
and outrageous and proximately causes severe, foreseeable
emotional distress. Buckley v. Trenton Saving Fund Soc'y,
111 N.J. 355, 364-66 (1988); Fiore v. Sears, Roebuck & Co.,
144 N.J.
Super. 74, 76-77 (Law Div. 1976); Restatement (Second) of
Contracts § 353 (1981); 5 Arthur L. Corbin, Corbin on Contracts,
§ 1076, at 427 (1964). The "court decides whether as a matter of
law such emotional distress can be found, and the jury decides
whether it has in fact been proved." Buckley, supra, 111 N.J. at
367; see Strachan v. John F. Kennedy Memorial Hosp.,
109 N.J. 523, 538 (1988) (permitting recovery of emotional distress
damages against hospital for mishandling corpse); Portee v.
Jaffee,
84 N.J. 88, 95-98 (1980) (permitting mother to recover
emotional distress damages for witnessing her child's death);
Berman v. Allan,
80 N.J. 421, 434 (1979) (permitting recovery of
damages for mental and emotional anguish against a physician).
The present posture of our law permitting recovery in some
circumstances for negligent or intentional infliction of
emotional distress has been incremental. No reported decision to
date, however, has decided whether litigation-induced stress
should be recoverable as a component of damages. Stress and
anxiety normally attend the litigation process. For this reason,
the majority of courts addressing litigation-induced stress have
treated it as a non-compensable component of damages regardless
of whose actions necessitate the litigation. In declining to
award litigation-induced emotional distress damages in a
teacher's claim for sex discrimination against a public school,
the Oregon Supreme Court observed:
The [mental suffering] of which [plaintiff] complains
came about principally from the bringing of the legal
proceedings and are the normal results of being a
litigant. . . . She did not suffer any anxiety or
emotional distress for which the law usually allows
damages, since these types of stress are inherent in
most litigation. It can be argued that she should not
have been placed in a position where she had to assert
her rights, but the same can be said of the successful
plaintiff in any case.
[School Dist. v. Nilsen,
534 P.2d 1135, 1146 (Or.
1975).]
In other reported state court decisions, courts are virtually unanimous in holding that litigation-induced stress is not recoverable as a separate component of damages. See, e.g., Buoy v. ERA Helicopters, Inc., 771 P.2d 439, 445 (Alaska 1989)
(holding that trial court did not infringe on plaintiffs' right
to litigate claims arising from helicopter crash when it
permitted private defendant to argue that it was not liable for
plaintiffs' litigation-induced depression); Torres v. Automobile
Club,
43 Cal. Rptr.2d 147, 154 (Ct. App. 1995) (finding in
insurance coverage action no authority to support "the concept of
recovery for the worry, bother and status of being `upset' which
normally attend any litigation"); Pleasant v. Celli,
22 Cal.
Rptr.2d 663, 670 (Ct. App. 1993) (holding in legal malpractice
action that defendant attorney's actions prolonging underlying
medical malpractice litigation did not give rise to damages for
negligent infliction of emotional distress); MacCharles v.
Bilson,
231 Cal. Rptr. 155, 157 (Ct. App. 1986) (denying personal
injury plaintiff additional damages for mental and emotional
stress allegedly caused by having to disprove false affirmative
defense asserted by defendant); but cf. Jarchow v. Transamerica
Title Ins. Co.,
122 Cal. Rptr. 470, 491-92 (1975) (permitting
insured to collect for litigation-induced stress against title
company that refused to remove recorded encumbrance it
negligently failed to discover in title search).
Similarly, federal court decisions are unanimous in holding
that litigation-induced stress may not be recovered as damages.
In a negligence action against a government employer, Judge
Posner observed: "It would be strange if stress induced by
litigation could be attributed in law to the tortfeasor. An
alleged tortfeasor should have the right to defend himself in
court without thereby multiplying his damages . . . ." Stoleson
v. United States,
708 F.2d 1217, 1223 (7th Cir. 1983); see Timms
v. Rosenblum,
713 F. Supp. 948, 955 (E.D. Va. 1989), aff'd,
900 F.2d 256 (4th Cir. 1990) (denying recovery for litigation-induced
stress in legal malpractice case because mental anguish attends
all litigation); Clark v. United States,
660 F. Supp. 1164, 1200
(W.D. Wash. 1987), aff'd,
856 F.2d 1433 (9th Cir. 1988)
(suggesting that although stress of litigation is caused by the
underlying harm, pursuit of litigation is a matter of choice).
Both the state and federal cases reflect the view that
because anxiety is an unavoidable consequence of the litigation
process, it does not form a separate basis for recovery against
one's opponent. Although the damages caused by the wrongful
conduct induce the litigation, and hence the attendant stress, a
plaintiff chooses to pursue litigation cognizant of both the
economic and emotional costs that it will entail. Some of the
stress is caused by a general distaste for litigation, and some
by a plaintiff's vigorous participation in the litigation
process. Yet the substantial emotional investment made by a
plaintiff in a case is merely the normal result of being a
litigant.
We hold, therefore, that plaintiff may not recover for
litigation-induced distress as a separate component of damages.
Plaintiff may, however, recover for severe emotional distress
proximately caused by the pre-and post-termination events
exclusive of the litigation.
Because the emotional distress damages award of $560,000
does not reflect the amount intended to compensate for
litigation-induced stress, the entire amount must be vacated.
The emotional distress damages must be recalculated without a
litigation-induced stress element.
Our next inquiry is whether the deliberate breach of a
contract of employment spanning a period of three consecutive
calendar years confers tenure even though the employee is
discharged before the employee serves the requisite period fixed
by the tenure statute.
Although plaintiff has not filed a cross-appeal from the
Appellate Division's reversal of the economic damage award of
$750,000 as the economic equivalent of tenure, and did not appeal
from the summary judgment dismissing his claim for a tenured
position, he argues nonetheless that the trial court properly
determined the economic damages based on the reasonable
assumption that he would have acquired tenure but for the
wrongful discharge. Defendants assert that the Appellate
Division properly held that tenure should not have been
considered in awarding damages.
Plaintiff's position is untenable on both procedural and
substantive grounds. Prior to trial, the trial court granted
summary judgment to the Board dismissing plaintiff's claim for
tenure, thus removing the issue of tenure from the case. The
trial court nevertheless concluded that plaintiff would have
obtained tenure but for the wrongful termination, and awarded
economic damages for plaintiff's projected working life. We
agree with the Appellate Division that plaintiff did not acquire
tenure.
Plaintiff was terminated without cause before serving the
time required for tenure. Tenure is conferred by statute.
N.J.S.A. 18A:28-5. Plaintiff would acquire tenure as assistant
superintendent only after employment for any one of the following
periods:
(a) three consecutive calendar years, or any shorter
period which may be fixed by the employing board for
such purpose; or
(b) three consecutive academic years, together with
employment at the beginning of the next succeeding
academic year; or
(c) the equivalent of more than three academic years
within a period of any four consecutive academic
years[.]
[N.J.S.A. 18A:28-5.]See footnote 1
Tenure arises only upon compliance with the precise conditions articulated in the statute. Zimmerman v. Board of Educ., 38 N.J. 65, 72 (1962), cert. denied, 371 U.S. 956, 83 S. Ct. 508, 9 L. Ed.2d 502 (1963); see Nissman v. Board of Educ., 272 N.J. Super. 373, 377-81 (App. Div.), certif. denied, 137 N.J. 315 (1994); Jamison v. Morris Sch. Dist., 198 N.J. Super. 411,
416-17 (App. Div. 1985). Other jurisdictions construing similar
statutes have reached the same conclusion. Spicer v. Anchorage
Indep. Sch. Dist.,
410 P.2d 995, 998 (Alaska 1966); Bessler v.
Board of Educ.,
370 N.E.2d 1050, 1053 (Ill. 1977); McGee v.
Humboldt County Sch. Dist.,
561 P.2d 458, 459 (Nev. 1977).
The objective of N.J.S.A. 18A:28-5 is to protect competent
and qualified persons, after a probationary period, from removal
for "unfounded, flimsy, or political reasons." Zimmerman, supra,
38 N.J. at 71. The statute defines with specificity the
requirements plaintiff had to satisfy before he could acquire
tenure. Because plaintiff failed to serve the requisite three
years mandated by N.J.S.A. 18A:28-5(a), he did not acquire
tenured status. Canfield v. Board of Educ.,
51 N.J. 400 (1968),
rev'g on dissent below,
97 N.J. Super. 483, 490-93 (App. Div.
1967); Kletzkin v. Board of Educ.,
261 N.J. Super. 549, 552 (App.
Div. 1993), aff'd,
136 N.J. 275 (1994); Jamison, supra, 198 N.J.
Super. at 418.
In the dissenting opinion in Canfield that this Court
adopted, Judge Gaulkin stated: "[T]enure and contract are two
different concepts; tenure is statutory and arises only by
passage of the time fixed by the statute, and the discharge of an
employee before the passage of the required time bars tenure,
even if the discharge is in breach of an employment contract
which, if not breached, would have extended to a date which would
have given tenure." Canfield, supra, 97 N.J. Super. at 490.
That observation was cited with approval by Justice Stein in his
dissent in Kletzkin, supra, 136 N.J. at 283-84, in which he
agreed that tenure cannot be obtained without actual service of
the time specified in the statute.
We reaffirm this Court's holding in Canfield that breach of
a contract covering a full probationary period of employment that
may have resulted in tenure had no breach occurred does not
confer tenure in the absence of continued employment after
service for the requisite number of consecutive probationary
years in the same district. To obtain tenure based on N.J.S.A.
18A:28-5(a), plaintiff was required to serve three consecutive
calendar years on probation with defendant and then be reemployed
by the Board for at least one day in a fourth year. Zimmerman,
supra, 38 N.J. at 75-76. That is required to satisfy the
statutory requirement of employment after expiration of three
consecutive years. Although N.J.S.A. 18A:28-5(a) permitted the
parties to agree on a shorter period, they did not. In addition,
the Board's absolute right not to renew the employment
relationship on sixty-days notice is compelling evidence that the
parties did not intend to confer tenure upon entry into the
contract or after substantial performance under the contract. No
matter how substantial the likelihood that plaintiff would have
obtained tenure, a wrongful termination that does not violate the
State or federal anti-discrimination laws, will not result in
tenure. Zimmerman, supra, 38 N.J. at 70-71.
Although we have not been asked to decide what the
appropriate standard should be to measure the economic damages in
this case, we wish to make clear what standard the Appellate
Division established. We neither approve nor disapprove that
standard.
In the Appellate Division, defendants challenged the
standard used by the trial court in computing economic damages.
Defendants contended, among other things, "that Esbrandt, as an
agent of the Board acting within the scope of his authority,
could not be liable for interference with plaintiff's contractual
relationship with the Board." The Appellate Division did not
address that legal contention. Nor did the court's discussion of
why economic damages may not be based on loss of tenure indicate
whether economic damages related to Esbrandt's tortious
interference with plaintiff's contract could or should be
different from those related to the Board's breach of contract.
Defendants did not raise that issue in the petition for
certification. We note, however, that Esbrandt's damages for
tortious interference may differ from the Board's breach of
contract damages. If that issue is raised on remand, or if
plaintiff seeks to impose greater economic damages on Esbrandt
than those imposed on the Board, the trial court must decide
whether a conflict of interest exists in having the same attorney
represent both the Board and Esbrandt.
The Appellate Division concluded that
plaintiff's claim for future damages or front
pay should be limited to a reasonable time.
We are satisfied that the award of future
damages based on plaintiff's work life
expectancy was error. We note that plaintiff
obtained a similar but less salaried position
with the Delran School District within three
years of this termination. In addition, the
favorable outcome of this litigation should
remove any prior blemish on his record
resulting from his termination and open up
other employment opportunities for him. We
find no reason to conclude that plaintiff may
not achieve his former income level in the
near future.
The Appellate Division found that the award of $750,000 in
economic damages based on tenure was not contemplated by the
contract. It also found that the award of economic damages based
on plaintiff's working life expectancy was speculative and
shocked the judicial conscience. The case was remanded to the
Law Division "for a determination of a reasonable time period for
future damages as part of the award of its economic damages.
While we offer no precise limit for the reasonable time period,
we are satisfied that under the circumstances of this case it was
a mistaken exercise of discretion to award damages for the
balance of plaintiff's expected work-life." We note further that
in Canfield the contract damages were limited to sixty-days, the
notice requirement for termination of the contract. Canfield,
supra, 97 N.J. Super. at 492. We do not, however, suggest what
the time limit should be.
Defendants contend that once the economic and emotional
distress damages are vacated, the punitive damages should be
vacated as well because they are intertwined with the other
damages awarded.
This Court has consistently held that there is some linkage
between compensatory and punitive damages. Herman v. Sunshine
Chem. Specialties, Inc.,
133 N.J. 329, 337-38 (1993); Nappe v.
Anschelewitz, Barr, Ansell & Bonello,
97 N.J. 37, 50 (1984);
Leimgruber v. Claridge Assocs.,
73 N.J. 450, 457-58 (1977). In
Fischer v. Johns-Manville Corp.,
103 N.J. 643 (1986), the Court
observed:
Punitive damages should bear some reasonable
relationship to actual injury, but we have consistently
declined to require a set numerical ratio between
punitive and compensatory damages . . . . The
reasonableness of the relationship of punitive damages
to actual injury must be considered in light of other
factors in each case. For example, some particularly
egregious conduct may generate only minimal
compensatory damages. In such cases higher punitive
damages would be justified than when substantial
compensatory damages are awarded.
[Fischer, supra, 103 N.J. at 673 (citations omitted).]
This historical relationship was codified recently by the Legislature when it enacted the Punitive Damages Act, N.J.S.A. 2A:15-5.9 to -5.14. The Federal Supreme Court, however, has held that the absence of such a relationship does not violate substantive due process under the Fourteenth Amendment. TXO Prod. Corp. v. Alliance Resources Corp., 509 U.S. ___, ___, 113 S. Ct. 2711, 2721-23, 125 L. Ed.2d 366, 380-82 (1993); Pacific
Mut. Life Ins. Co. v. Haslip,
499 U.S. 1, 23-24,
111 S. Ct. 1032,
1046,
113 L. Ed.2d 1, 23 (1991).
Because the economic damages were vacated by the Appellate
Division and we reverse the emotional distress damages, and
because the punitive damages are intimately related to those
compensatory damages, the punitive damages must also be
redetermined.
We reverse the emotional distress damages and vacate the
punitive damages awards. The matter is remanded to the Law
Division for a new trial on damages only.
CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, O'HERN,
GARIBALDI and STEIN join in JUSTICE COLEMAN'S opinion.
NO. A-18 SEPTEMBER TERM 1995
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court
JOSEPH LOUIS PICOGNA,
Plaintiff-Respondent,
v.
BOARD OF EDUCATION OF THE
TOWNSHIP OF CHERRY HILL and
PHILLIP ESBRANDT,
Defendants-Appellants,
and
BARBARA RICHTERMAN, et al.,
Defendants.
DECIDED February 22, 1996
Chief Justice Wilentz PRESIDING
OPINION BY Justice Coleman
CONCURRING OPINION BY
DISSENTING OPINION BY
Footnote: 1The statute was amended by L. 1991, c. 267, § 3, effective August 24, 1991, but the changes do not affect this case.