CAMDEN CITY SCHOOL DISTRICT VS. TRACEY PITTS (L-4198-15, CAMDEN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-2389-16T4

CAMDEN CITY SCHOOL
DISTRICT,

Plaintiff-Respondent,

v.

TRACEY PITTS,

Defendant-Appellant.
_________________________

Argued March 4, 2019 – Decided July 26, 2019

Before Judges Haas and Sumners.

On appeal from the Superior Court of New Jersey, Law
Division, Camden County, Docket No. L-4198-15.

Morrison Kent Fairbairn argued the cause for appellant
(Michael A. Armstrong & Associates, LLC, attorneys;
Morrison Kent Fairbairn, on the brief).

Joseph G. Antinori argued the cause for respondent
(Brown & Connery, LLP, attorneys; Joseph G.
Antinori, on the brief).

PER CURIAM
 This appeal asks us to determine whether plaintiff Camden City School

District (the District) and defendant Tracey Pitts reached a binding settlement

agreement in which the District would not certify tenure charges to terminate

her employment as a tenured teacher in consideration for her resignation and

continuing to pay her salary until the effective date of her resignation. The trial

court denied Pitts' summary judgment motion seeking a declaration that she

should be allowed to return to employment because the settlement agreement

was not binding upon her, as she did not sign it, or in the alternative, she revoked

it within seven days after it was presented to her. Instead, the court granted the

District's cross-motion for summary judgment asserting that there was a binding

agreement despite Pitts' refusal to sign the agreement because the District did

not pursue her termination and paid her salary through her intended resignation

date based upon her promise to resign. The court also denied Pitts' motion for

reconsideration.

Even though we conclude the parties' failure to sign the settlement

agreement was contrary to an essential term of the agreement and Pitts' exercised

her right to revoke the agreement, we affirm because the District detrimentally

relied on Pitts' promise to resign by paying her salary up to her intended

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resignation date and not pursuing the administrative process under school law

to terminate her employment.

I.

We glean the following facts from the record. On August 21, 2015, the

District served tenure charges on Pitts, a teacher in the District for twenty-seven

years, pursuant to the Teacher Effectiveness and Accountability for the Children

of New Jersey Act, N.J.S.A. 18A:6-10 to -18.1, to terminate her for reasons of

inefficiency. However, the prosecution of the tenure charges was curtailed when

the parties engaged in settlement negotiations.

Initiation of Settlement

After serving the tenure charges on Pitts, the District was required to

certify them by filing them with the Commissioner of Education within thirty

days, by September 20. N.J.S.A. 18A:6-17.3(b); N.J.A.C. 6A:3-5.1(c)(4). Once

the charges were certified, the District could have suspended Pitts without pay

for 120 calendar days, but thereafter would have had to return her to the payroll

until the Commissioner determined whether to uphold her termination. N.J.S.A.

18A:6-14.

In order to avoid the prosecution of tenure charges, Pitts' counsel advised

the District's counsel via email on September 9, that Pitts was willing to retire.

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The email further indicated Pitts wanted to "remain on the payroll until January

1, 2016, since it was her intention to retire at the end of the 2016-2017 school

year[,]" because "this date will make a big difference in the amount of her

monthly pension that she receives." Negotiations between the parties' respective

attorneys began thereafter to formalize the agreement in writing.

On October 15, Pitts' counsel emailed the District's counsel requesting that

the settlement agreement provide that Pitts' resignation be October 31, rather

than retirement. The District's counsel forwarded a final draft of the written

settlement agreement to Pitts' counsel on October 23.

The Written Settlement Agreement

We detail several provisions of the five-page written "SETTLEMENT

AGREEMENT AND RELEASE" that are relevant to our decision. The first

paragraph provided that it "shall take effect on the date it is fully executed by

the Parties, and as such, deemed ratified by the State Superintendent as the

authorized representative of the District in accordance with N.J.S.A. 18A:7A-

35." The second paragraph stated that Pitts was required to author an

"irrevocable letter of intent to resign" effective October 31, 2015, in

consideration for the District not certifying the tenure charges and to pay her

salary through October 31.

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 Referencing the requirements of the federal Age Discrimination in

Employment Act (ADEA), 29 U.S.C. §§ 621-634, and the Older Workers

Benefit Protection Act (OWBPA), 29 U.S.C. § 626(f), the sixth paragraph

indicated that Pitts acknowledged: she was afforded twenty-one days to review

the agreement; she had seven days following its execution to revoke the

agreement through written notice by her counsel; and the agreement would not

become effective until after the revocation period expired. See 29 U.S.C. §

626(f).

Non-execution of the Settlement Agreement

Despite the parties' settlement negotiations, neither Pitts nor the District's

State Superintendent signed the agreement. Pitts did not show up at her

counsel's office on October 23, to review and execute the settlement agreement,

according to her counsel. Consequently, after an early-morning phone call with

Pitts on October 26, her counsel emailed the District's counsel at 8:24 a.m.

advising that Pitts had a change of heart and would not sign the agreement. Her

counsel nonetheless indicated she would confirm Pitts' decision later that day.

Within two minutes of the email, the District's counsel responded with an email

asserting that an agreement was "confirmed whether [Pitts] signs the

[a]greement or not."

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 Three days later, on October 29, District's counsel emailed Pitts' counsel

a letter detailing the parties' settlement efforts and contending Pitts resigned

from employment in the District effective October 31, and she would be paid

her salary through that date. About an hour later, Pitts' counsel emailed a letter

responding that Pitts no longer desired to resolve the tenure charges by

executing the settlement agreement. The letter further asserted that by keeping

Pitts off the payroll since September, despite counsel's requests that her salary

be paid, the District had breached any agreement it claimed was reached by the

parties.1

Lawsuit and Summary Judgment In Favor Of The District

The District responded to Pitts' refusal to execute the settlement

agreement by filing a complaint in the Law Division on November 5, alleging

breach of contract and seeking a declaratory judgment that she must resign in

accordance with the settlement agreement negotiated by the parties' attorneys.

The trial court granted the District's motion to proceed summarily on

January 8, 2016, subject to a brief discovery period. The District later amended

1
Pitts was not paid her salary for the first half of October 2015. This was
inadvertent, according to District counsel, who had the situation promptly
corrected upon being notified by Pitts' counsel.
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its complaint by also seeking relief based upon promissory estoppel; contending

that Pitts caused the District to rely on her promise to resign to its detriment.

At the conclusion of discovery, Pitts moved for summary judgment. She

argued there were no material facts at issue that would prevent a ruling as a

matter of law because there was no binding settlement agreement between her

and the District. Conversely, the District cross-moved for summary judgment

contending there was a binding agreement upon which it performed.

On July 22, the court denied Pitts' summary judgment motion to dismiss

the District's complaint and granted the District's cross-motion. The court ruled:

I find that there was a clear agreement and that clear
agreement was embodied by the discussions between
counsel all the way up to the point in time where [Pitts'
counsel] told [the District's counsel] in terms of
reviewing the agreement that the agreement was in
order subject to some revisions that [Pitts' counsel]
sought on behalf of [Pitts], and [the District's counsel]
on behalf of the District agreed to those and sent the
document to [Pitts' attorney] at which point even [Pitts'
attorney] believed that the only thing . . . that was gonna
happen thereafter was that her client was gonna sign the
document and formalize it in writing. [Pitts' counsel]
agreed with [the District's counsel] on behalf of their
clients that they had a deal. No misgivings, no caveats.
The two attorneys representing these entities had a
meeting of the minds. They were authorized to
represent the entities and they did so, and the deal was
embodied fully in the document that was revised . . .
and sent back to [Pitts' counsel] . . . .

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 So I find there was an agreement and that was the
agreement . . . drafted as of October 23 . . . .

After the ruling, Pitts sent a letter to the District indicating that she was

revoking her court-ordered acceptance of the settlement agreement within seven

days of the judge's ruling. The District rebuked the request, contending it was

untimely and inconsistent with the court's order.

Pitts filed a motion for reconsideration, which was denied on the papers

on September 2, for the same reasons as the court's earlier rulings. However,

for reasons that are unclear, neither party received the court's September 2 order

until Pitts' counsel received it on November 22. Given that the forty-five day

timeline under Rule 2:4-1 to appeal the September 2 order had expired, Pitts

moved to amend the effective date of the order to January 3, 2017, to allow her

to file a timely appeal. The motion was denied on January 6. This appeal

followed.

On November 17, we denied the District's motion to dismiss the appeal

but granted its request to strike portions of Pitts' brief addressing the trial court's

summary judgment and reconsideration orders as being untimely appealed.

Revised briefs were submitted thereafter.

At oral argument for the appeal on September 17, 2018, we sua sponte

directed Pitts to file a motion to appeal the July 22, 2016 and September 2, 2016

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orders, regarding summary judgment and reconsideration, respectively, as

timely filed. On October 18, we granted Pitts' opposed motion in the interest of

justice, "[b]ased on the idiosyncratic facts presented in this case[,]" and ordered

a schedule for the submission of revised briefs. Thus, Pitts was permitted to

appeal the merits of the summary judgment and reconsideration orders.

Related Administrative Agency Proceedings

Almost two months after the District sought relief in this civil action, the

first of two administrative proceedings were initiated on December 28, 2015,

when Pitts filed a petition, including an application for emergent relief, with the

Commissioner. She claimed the settlement agreement was never finalized and,

therefore, the District had violated her tenure rights by removing her from the

payroll without certifying the tenure charges to the Commissioner.

An Administrative Law Judge (ALJ) denied the emergent relief request

on January 22, 2016. 2 The ALJ reasoned Pitts was not entitled to emergent relief

under Crowe v. DeGoia, 90 N.J. 126, 132-33 (1892), because she failed to

establish that she would suffer irreparable harm if she was not reinstated to her

teaching position. The Commissioner adopted the ALJ's decision. The decision

was not appealed.

2
The decision was incorrectly dated "January 22, 2015."
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 The merits of the petition were determined following the trial court's

denial of Pitts' reconsideration motion. On January 30, 2017, the then acting

Commissioner adopted the initial decision of a different ALJ, with modification.

The Commissioner ruled that the tenure dispute involved the interpretation of a

contract – whether the settlement agreement was revoked by Pitts – which was

beyond his jurisdiction, as it did not involve the interpretation of school law.

Tracey Pitts v. State-Operated Sch. Dist. of the City of Camden, Camden Cty.,

EDU 23-16, final decision, (Jan. 30, 2017),

http://njlaw.rutgers.edu/collections/oal/html/initial/edu00023-16_1.html. Thus,

Pitts' petition was dismissed without prejudice. She did not appeal the decision.

The second administrative proceeding was initiated on May 6, 2016, when

the District certified the tenure charges to the Commissioner, which it served on

Pitts on August 21, 2015. Two months later on July 14, 2016, the matter was

promptly decided when the Commissioner granted Pitts' motion to dismiss the

tenure charges. The Commissioner determined the tenure charges were

untimely under N.J.S.A. 18A:6-17.3(b) and N.J.A.C. 6A:3-5.1(c)(4), because

they were not certified within thirty days after they were served on Pitts. The

District also did not appeal the decision.

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 II.

In her appeal, Pitts contends there was no enforceable settlement

agreement between her and the District because she never signed the agreement;

the agreement was not ratified by the State superintendent; and the written

agreement indicates that the parties had not reached an enforceable agreement

prior to the execution of the written agreement. In rebuttal, the District argues

there is an enforceable agreement because there was a binding settlement

agreement based upon a meeting of the minds, and Pitts' counsel exercised his

authority to bind her to the settlement agreement. The District also argues that,

based upon promissory estoppel, Pitts should be estopped from contending she

is not bound by her agreement to resign in order to avoid tenure proceedings

because the District acted on that agreement by not certifying the tenure charges

and paid Pitts' salary up until her anticipated resignation date. Accordingly, we

review the relevant law and consider it in the context of the facts pertinent to

these arguments.

We first acknowledge that "[o]n a disputed motion to enforce a

settlement," a trial judge must apply the same standards "as on a motion for

summary judgment[.]" Amatuzzo v. Kozmiuk, 305 N.J. Super. 469, 474 (App.

Div. 1997). "If there is no genuine issue of material fact," then we must "decide

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whether the trial court correctly interpreted the law." DepoLink Court Reporting

& Litig. Support Servs. v. Rochman, 430 N.J. Super. 325, 333 (App. Div. 2013)

(citation omitted). Appellate review of a ruling on a motion for summary

judgment is de novo, applying the same standard governing the trial court.

Davis v. Brickman Landscaping, Ltd., 219 N.J. 395, 405 (2014). In addition,

we review the court's denial of reconsideration only for abuse of discretion.

Cummings v. Bahr, 295 N.J. Super. 374, 389 (App. Div. 1996). We accord no

deference to the trial judge's legal conclusions. Nicholas v. Mynster, 213 N.J.

463, 478 (2013) (citing Zabilowicz v. Kelsey, 200 N.J. 507, 512-13 (2009)).

Reconsideration is "a matter within the sound discretion of the [c]ourt, to be

exercised in the interest of justice." Palombi v. Palombi, 414 N.J. Super. 274,

288 (App. Div. 2010) (quoting D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch.

Div. 1990)).

A.

We are fully aware that our state has a strong public policy in favor of

settlements. Brundage v. Estate of Carambio, 195 N.J. 575, 601, (2008).

Essentially, a settlement agreement is a contract. See Nolan v. Lee Ho, 120 N.J.

465, 472 (1990) (citing Pascarella v. Bruck, 190 N.J. Super. 118, 124 (App. Div.

1983). "As a general rule, courts should enforce contracts as the parties

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intended." Pacifico v. Pacifico, 190 N.J. 258, 266 (2007) (citations omitted).

"[P]arties may orally, by informal memorandum, or by both agree upon all the

essential terms of a contract and effectively bind themselves thereon, if that is

their intention, even though they contemplate the execution later of a formal

document to memorialize their undertaking." Comerata v. Chaumont, Inc., 52

N.J. Super. 299, 305 (App. Div. 1958). However, when parties contemplate that

terms of a preliminary agreement will later be reduced to a formal written

contract, whether the preliminary agreement is binding is a matter of the parties'

intent. Morales v. Santiago, 217 N.J. Super. 496, 501 (App. Div. 1987).

"Absence of essential terms from a preliminary agreement is persuasive

evidence that the parties did not intend to be bound by it." Id. at 502. It is well

settled that "[a] contract arises from offer and acceptance, and must be

sufficiently definite 'that the performance to be rendered by each party can be

ascertained with reasonable certainty.'" Weichert Co. Realtors v. Ryan, 128 N.J.

427, 435 (1992) (quoting Borough of W. Caldwell v. Borough of Caldwell, 26

N.J. 9, 24-25 (1958)). If the parties agree on the essential terms and agree to be

bound by those terms, they have created an enforceable contract. Ibid.

In the case at hand, it is clear that the parties intended, and the settlement

agreement so reflected, that the District would forgo the termination of Pitts'

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employment in return for her letter of resignation effective October 31, 2015,

and keeping her on the payroll until she resigned. It is equally clear that these

terms were satisfied. However, an essential term of the agreement was not

performed: the parties did not execute the settlement agreement. Based upon

the written agreement that was finalized by the parties' attorneys on October 23,

it was clearly intended that the agreement only take effect when the parties

signed it. As noted above, the agreement stated it "shall take effect on the date

it is fully executed" by the parties. Thus, if it was not signed, it could not take

effect. The fact that the requirement was set forth in the agreement's first

paragraph, to some extent, emphasizes its importance.

Moreover, the provision that gave Pitts seven-days to revoke the

agreement after it was executed is also an essential term of the agreement. The

District maintains that the seven-day revocation clause applies in limited

circumstances where an employee seeks to assert an age discrimination claim

under federal law. The District asserts Congress amended the ADEA when it

passed the OWBPA in 1990 under which an employee can only waive a claim

of age discrimination under the ADEA if the employee is provided up to twenty-

one days to review an agreement and then seven days to revoke if executed. See

29 U.S.C. § 626(f). Therefore, the District argues that contrary to defendant’s

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assertion that federal law "requires" a revocation provision, instead the OWBPA

provisions are inserted into settlement agreements at the parties' discretion and

only apply in the narrow and limited situation where the employee agrees to

waive an ADEA age discrimination claim. Since Pitts never alleged age

discrimination or that the settlement should be revoked because the District

discriminated against her because of her age, the revocation period does not

apply here.

We take no issue with the District's contention that the revocation

provision was attributed to federal law pertaining to the ADEA. Yet, the

provision was placed in the agreement without any precondition that she had to

make an ADEA claim. It affords Pitts the right to revoke the agreement within

seven days after she executes the agreement and sets forth the manner in which

she can do so. It thus appears that in order to take advantage of this escape

clause, Pitts would have to sign the agreement. If her actions would have bound

her to the agreement without her execution of the agreement as the court

determined and the District argues before us, it would appear that Pitts still had

seven days to revoke the agreement. Seemingly, this revocation occurred when

her counsel advised the District's counsel on October 26 and 29, that Pitts did

not want to go through with the settlement.

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 B.

To rebut Pitts' contention that her lack of signing the agreement was

immaterial, the District contends that she was bound to the agreement because

her counsel had the authority to bind her and did so through the negotiations

with the District's counsel. We disagree.

While a party's counsel can enter into a settlement on behalf of his or her

client, there must be "actual or apparent authority to do so." Seacoast Realty

Co. v. W. Long Branch Borough, 14 N.J. Tax. 197, 202-03 (Tax 1994) (citing

United States Plywood Corp. v. Neidlinger, 41 N.J. 66, 73-74 (1963)). Apparent

authority is created when "the client's voluntary act has placed the attorney in a

situation wherein a person of ordinary prudence would be justified in presuming

that the attorney had authority to enter into a settlement, not just negotiations,

on behalf of [a] client." Amatuzzo, 305 N.J. Super. at 475. Where the principal

"places the attorney in a position where 'a person of ordinary prudence,

conversant with business usages and the nature of the particular business, is

justified in presuming that such agent has authority to perform the particular act

in question.'" Seacoast Realty Co., 14 N.J. Tax at 204-05 (quoting Neidlinger,

41 N.J. at 74); see also LoBiondo v. O'Callaghan, 357 N.J. Super. 488, 497 (App.

Div. 2003) (creation of apparent authority is based on "the actions of the

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principal, not the alleged agent."). Therefore, "sending an attorney to a

settlement conference presumptively establishes that the attorney has authority

to settle . . . ." Id. at 204.

There are no facts that support the District's contention that Pitts' counsel

had actual or apparent authority to bind her client by accepting the settlement

agreement. Nothing in the emails or letters between the parties' attorneys would

suggest that Pitts' counsel had the authority to bind Pitts to settlement terms that

were being negotiated. This appeared to be the standard negotiations process in

which the parties used their legal representatives to work out the terms of an

agreement that was subject to the parties' approval. In fact, the final written

agreement transmitted by the District's counsel to Pitts' counsel provided that

the parties had to execute the agreement in order for it to be effective.

Furthermore, we find no legal support for the contention of the District's

counsel, made at argument before us, that he had the authority to bind the

District, a public body, to an agreement intended to avoid or terminate its

statutory authority to litigate a matter. See Jersey City v. Roosevelt Stadium

Marina, 210 N.J. Super 315, 327 (App. Div. 1986) (citing Stout v. Stout, 155

N.J. 196, 203-04 (App. Div. 1977)).

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 C.

Lastly, we find merit to the District's claim that Pitts should be estopped

from rescinding her promise to resign effective October 31, 2015, because it

acted on that promise to its detriment by not certifying the tenure charges and

paying her salary through October 31.

To prove a claim based on promissory estoppel, a party must show: "(1) a

clear and definite promise; (2) made with the expectation that the promisee will

rely on it; (3) reasonable reliance; and (4) definite and substantial detriment."

Toll Bros., Inc. v. Bd. of Chosen Freeholders of Burlington, 194 N.J. 223, 253

(2008). Here, all these factors have been satisfied.

There is no question that Pitts promised to resign effective October 31,

2015, if the District agreed not to pursue her termination and keep her on the

payroll until her resignation date. In reasonable reliance on that promise, the

District agreed not to move forward with its planned termination proceedings by

certifying the tenure charges and paying her through her intended resignation

date. And when Pitts changed her mind after the full written terms were

negotiated and confirmed by their respective attorneys in the settlement

agreement, the District could not pursue tenure charges because it was too late;

the Commissioner ruled the District failed to certify the charges within thirty

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days after Pitts received them on August 21, 2015, and, therefore, was untimely

under N.J.S.A. 18A:6-17.3(b) and N.J.A.C. 6A:3-5.1(c)(4), when the charges

were filed on May 31, 2016. Consequently, Pitts must be bound by her decision

to resign to avoid tenure proceedings to terminate her employment.

D.

Based upon the principles for granting reconsideration and our ruling that

Pitts is bound by her agreement to resign due to promissory estoppel, we discern

no reason to disturb the trial court's September 2, 2016 order denying

reconsideration of its July 22, 2016 order granting summary judgment to the

District and denying summary judgment to Pitts.

Affirmed.

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