Alan Schorr’s Employment Case of The Week ending December 13, 2013

Will v. Caruso Thompson, LLP, 2013 WL 6508480 (Unpublished, decided December 13, 2013)

The Appellate Division did not break any new ground in its opinion in Will v. Caruso Thompson, LLP, but the case is notable in that Appellate Division reversed the dismissal of a CEPA claim and admonished the trial judge for weighing credibility and giving the defendant the benefit of a dispute of material facts. Too often summary judgments are granted because trial judges believe the defendant and do not believe the plaintiff. But such credibility determinations are improper at summary judgment, and the Appellate Division here explains why such credibility determinations are improper at summary judgment.

Plaintiff Bernice Will is an accountant who was employed with defendant accounting firm Caruso Thompson, L.L.P. for approximately seven weeks. Defendant Robert Caruso, one of the firm’s partners, claimed that Ms. Will’s employment was terminated due to incompetence and insubordination. Ms. Will alleged that her employment was terminated because she voiced objection to a fraudulent compensation scheme by the employer.

Ms. Will’s compensation package with Caruso Thompson was $100,000 per year plus bonuses, plus a $12,000 per year “business development expense”. In order to collect the business development expense, Ms. Caruso was required to submit false expense reports; she had to report that she incurred expenses she never actually incurred. She admitted that she understood the illegality of this arrangement when she accepted the job and that she submitted false expense reports, but she claims she “had no choice” if she wanted to receive the promised additional $12,000 each year.

Ms. Will asserted that she complained to Caruso or his partner Michael Thompson “[a]t least four or five times” about this practice, but her objections were met with displeasure at raising the subject. She also claimed to have expressed her disapproval of the arrangement in a conversation with Mary Lou Bayer, a certified public accountant at the firm. Bayer allegedly responded only by saying that “this is how it is done.” Caruso and Bayer denied that those conversations with plaintiff ever occurred, and there is no evidence other than plaintiff’s testimony that she expressed any objection to Thompson or Bayer.

This is a classic “he said, she said” situation in which a trier of fact needs to hear the testimony and determine credibility. There was ample evidence that the employer may have created pretextual reasons for terminating Ms. Will. For example, Caruso testified the reasons for the termination included “gross insubordination, failure to follow company procedures, failure to be a team member,” only “cursory” knowledge of how to prepare tax returns, and generally poor performance culminating in the mishandling of a client’s tax return in early February of 2009. Caruso admitted, however, that he wrote on Ms. Will’s unemployment paperwork that the reason for her termination was “lack of work,” but he claims that he did so in order to allow Ms. Will to receive unemployment benefits. Caruso Thompson gave Ms. Will two weeks of severance pay and continued to pay for plaintiff’s health insurance “probably through the end of February,” according to Caruso. The firm also wrote a reference letter for Ms. Will in May 2009 stating that she was an “intelligent, personable and hardworking” senior tax manager.

Despite all of the above, the trial judge granted summary judgment. In ruling on defendants’ summary judgment motion, the motion judge only addressed the second CEPA element, “assuming, for the purposes of the motion, the plaintiff can meet the first, third, and fourth” elements. The court found plaintiff had not produced sufficient evidence that she performed a whistle-blowing activity. The trial court explained, “There’s only allegations of conversations, which are disputed. Discovery is over for the last six months. She informed defendant Robert Caruso and other employees of alleged fraudulent practices. The evidence is insufficient to survive a motion for summary judgment; and, therefore, it’s granted.”

The Appellate Division reversed the trial court holding that the judge erred in assessing credibility regarding whether Ms. Will had complained as she alleged she repeatedly did, and which the defendants adamantly denied. The Court stated:

It appears that the court granted summary judgment based on its assessment that defendants’ denials were more credible than plaintiff’s allegations. “Where issues of credibility are presented, summary judgment is generally inappropriate.” Singer [v. Beach Trading Co., 379 N.J.Super. 63, 73 (App.Div.2005)]. Assuming the conversations took place, as a court must for purposes of ruling on a motion for summary judgment, plaintiff disclosed to her supervisors a fraudulent activity: a practice of providing compensation through tax evasion. Such action constitutes whistle-blowing under N.J.S.A. 34:19–3(c). Battaglia, [v. United Parcel Serv., 214 N.J. 518, 556 (2013)]. Summary judgment was therefore inappropriately granted to defendants with respect to the CEPA claim.

Hopefully, if panels continue to reverse these cases where trial judges improperly credit the defendants’ testimony over directly opposing testimony from the plaintiff, trial judges will stop granting summary judgment where there are credibility issues that need to be decided by a trier of fact and not a judge upon summary judgment.

Plaintiffs’ Counsel: Mark G. Yates and William J. Courtney, Law Offices of William J. Courtney, L.L.C.

Defendants’ Counsel: Margarita Romanova and Alan Genitempo, Piro, Zinna, Cifelli, Paris & Genitempo, P.C.

Trial Judge: Somerset County Civil Division.

Appellate Judges: Fisher, Espinosa, and Koblitz (opinion per curiam).