NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-2478-23
THE ATLANTIC CITY POLICEMEN'S BENEVOLENT ASSOCIATION LOCAL 24 and THE ATLANTIC CITY SUPERIOR OFFICERS' ASSOCIATION,
Plaintiffs-Appellants,
v.
CITY OF ATLANTIC CITY, STATE OF NEW JERSEY, NEW JERSEY DIVISION OF LOCAL GOVERNMENT SERVICES IN THE DEPARTMENT OF COMMUNITY AFFAIRS, and JACQUELYN SUAREZ, Director of the Division of Local Government Services in the Department of Community Affairs in her official capacity,
Defendants-Respondents. _____________________________
Argued on March 12, 2025 – Decided April 7, 2025
Before Judges Mayer and Rose. On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-2790-23. Kevin D. Jarvis argued the cause for appellants (O'Brien, Belland & Bushinsky, LLC, attorneys; Kevin D. Jarvis and David F. Watkins, Jr., on the briefs).
Ronald L. Israel argued the cause for respondents (Chiesa Shahinian & Giantomasi, PC, attorneys; Ronald L. Israel and Melissa F. Wernick, on the brief).
PER CURIAM
Plaintiffs The Atlantic City Policemen's Benevolent Association Local 24
(PBA) and The Atlantic City Superior Officers' Association (SOA) appeal from
a March 4, 2024 order dismissing with prejudice their complaint against
defendants City of Atlantic City (City), State of New Jersey (State), New Jersey
Division of Local Government Services (DLGS) in the Department of
Community Affairs, and Jacquelyn Suarez, Director of the DLGS (Director).
We affirm.
A-2478-23 2 We recite the facts from the motion record and prior opinions involving
the same parties and similar issues. 1 The 2008 economic recession created an
unprecedented financial crisis in the City. Two years later, the City's continued
financial instability resulted in the State's monitorship of the municipality. From
2010 to 2016, the City's taxable property values fell almost $14 billion. See
Police, slip op. at 6. The City lost $63 million in municipal tax revenue. Ibid.
Fueled by successful tax appeals by casinos, the City's debt reached nearly $500
million. Id. at 7. "Despite the sharp decline in tax revenue, the City failed to
reduce the municipal budget . . . , placing the City in further economic distress."
Id. at 7-8.
The City's financial situation reached a breaking point in 2016, and the
mayor announced plans to shut down non-essential government services.
Associated Press, Atlantic City May Shut Down Nonessential Services for 3
Weeks, N.Y. Times (Mar. 21, 2016). On May 26, 2016, in the midst of the City's
1 See Atl. City Superior Officers' Ass'n v. City of Atlantic City, No. A-3117-20 (App. Div. June 30, 2022); Atl. City Policemen's Benevolent Ass'n Loc. 24 v. Christie, No. ATL-L-0554-17 (Law Div. May 23, 2017) (Police). Although Rule 1:36-3 generally prohibits citation to unpublished cases, courts may cite unpublished decisions for factual and procedural history or "to provide a full understanding of the issues presented." Zahl v. Eastland, 465 N.J. Super. 79, 86 n.1 (App. Div. 2020); see also Pressler & Verniero, Current N.J. Court Rules, cmt. 2 on R. 1:36-3 (2025).
A-2478-23 3 fiscal crisis, plaintiffs and the City entered into memoranda of agreements
(MOAs) for promotion of police officers with no increase in pay until the parties
and the State ratified a salary increase, or salary increases were awarded by an
interest arbitrator.
The Municipal Stablization and Recovery Act
The following day, on May 27, 2016, Governor Chris Christie signed the
Municipal Stablization and Recovery Act (MSRA), N.J.S.A. 52:27BBBB-1 to -
17, into law addressing the City's dismal financial situation. The MSRA
established a procedure for determining "whether a municipality should be
deemed a municipality in need of stabilization and recovery." 2 N.J.S.A.
52:27BBBB-4(a).
The MSRA authorized an appointed Director to take "any and all actions
that, in the exclusive discretion of the [D]irector, may help stabilize the finances,
restructure the debts, or assist in the financial rehabilitation and recovery of the
municipality in need of stabilization and recovery." N.J.S.A. 52:27BBBB -
5(a)(3). Those actions included:
2 A municipality in need of stabilization and recovery is a municipality that, within the last five years (1) "has experienced a decrease of more than [fifty] percent in its total" property values; and (2) "has experienced an increase in outstanding debt exceeding [fifty] percent." N.J.S.A. 52:27BBBB-3. A-2478-23 4 (f) . . . unilaterally amending or terminating any contracts or agreements . . . to which the municipality is a party, provided that the [D]irector determines that the unilateral termination or amendment is reasonable and directly related to stabilizing the finances or assisting with the fiscal rehabilitation and recovery of the municipality in need of stabilization and recovery;
(g) unilaterally modifying, amending, or terminating any collective negotiations agreements, except those related to school districts, to which the municipality is a party, or unilaterally modifying, amending, or terminating the terms and conditions of employment during the term of any applicable collective negotiations agreement, or both, provided that the [D]irector determines that the modifications, amendments, or terminations are reasonable and directly related to stabilizing the finances or assisting with the fiscal rehabilitation and recovery of the municipality in need of stabilization and recovery; [and] ....
(i) with respect to any expired collective negotiations agreement to which the municipality in need of stabilization and recovery is a party, unilaterally modifying wages, hours, or any other terms and conditions of employment[.]
[Ibid.]
On June 6, 2016, the Commissioner of the Department of Community
Affairs (Commissioner) designated the City a municipality in need of
stabilization and recovery. Police, slip op. at 10. On November 9, 2016, the
Local Finance Board vested the Director with the MSRA's powers. The MSRA
A-2478-23 5 authorized the appointment of a Designee for the Director. The Designee was
authorized to exercise all powers entrusted to the Director under the MSRA.
The MOAs
Plaintiffs are employed by the City as police officers. In 2013, plaintiffs
executed collective negotiation agreements (CNAs) with the City through the
end of 2015. The parties were unable to agree to new CNAs before January 1,
2016, but continued to negotiate. During the continued negotiations, the City
recognized the need to promote police officers but lacked the financial ability to
pay salary increases associated with job promotions.
The day before enactment of the MSRA, the City entered into MOAs with
plaintiffs, authorizing police department promotions without concomitant raises.
The PBA's MOA provided:
[T]he City may effectuate . . . promotions . . . from Police Officer to Sergeant with no increase in pay until a salary increase, including rank [differential] and any other increase, is ratified between the City, the State Monitor, and the PBA, or until such salary increases are awarded by an interest arbitrator . . . . All increases shall be retroactive to the date of promotion.
The SOA's MOA provided:
[T]he City may effectuate . . . promotions . . . from Sergeant to Lieutenant, and/or Lieutenant to Captain with no increase in pay until a salary increase, including rank [differential] and any other increase, is ratified
A-2478-23 6 between the City, the State Monitor and the SOA, or until such salary increases are awarded by an interest arbitrator . . . . All increases shall be retroactive to the date of promotion.
On June 8, 2016, two days after the State designated the City a
municipality in need of stabilization and recovery, the City's governing body
approved the MOAs.
The Decision in Police
In October 2016, the City ratified new CNAs with plaintiffs. Police, slip
op. at 10-11. "Plaintiffs knew, and the terms of the [CNAs] indicated, that the
[CNAs] were subject to approval by the [DLGS]." Id. at 12. "Ultimately, the
DLGS rejected both [CNAs]." Ibid. In December, the State "informed plaintiffs
that unless the parties reach[ed] an agreement [over new CNA terms], it would
unilaterally impose changes on the [City's Police Department] pursuant to the
[MSRA]." Ibid.
In January 2017, the Designee proposed changes to the CNAs, including
"[n]ew [s]alary guides for all employees." Ibid. For the next three months, the
State, the City, and plaintiffs extensively negotiated new CNA terms. Id. at 13.
Negotiations ceased in March. Ibid.
A-2478-23 7 On March 15, 2017, the Designee unilaterally imposed new CNA terms.
Ibid. Those terms included "[n]ew salary guides for all employees, . . . .
resulting in across the board salary reductions ranging from 17-29%." Ibid.
Plaintiffs filed an order to show cause (OTSC) to restrain implementation
of the new CNAs and a verified complaint to enjoin the Designee from imposing
the proposed changes. Id. at 23-24. The trial judge entered plaintiffs' OTSC
with the requested temporary restraints pending an April 10, 2017 hearing date.
On May 23, 2017, the judge partially granted the relief requested by
plaintiffs. Id. at 4-5. The judge rejected plaintiffs' constitutional challenge to
the MSRA. Id. at 31-44. He denied injunctive relief related to the Designee's
change in officers' salary and certain other benefits, finding plaintiffs failed to
establish irreparable harm. Id. at 57. However, the judge enjoined the
Designee's proposals as to reductions in force and changes to work schedules,
finding injunctive relief was "appropriate to ensure public safety." Ibid. The
judge memorialized his decision in a May 23, 2017 order.
The Implementation Memos
On June 7, 2017, the Designee unilaterally imposed new CNA terms by
issuing two Notices of Implementation (Implementation Memos). The PBA's
Implementation Memo stated:
A-2478-23 8 Effective June 7, 2017, a new salary guide is hereby established for all current and future employees (including future promotions to rank of Sergeant). . . . The [new] salaries shall be the entire compensation for each employee. There shall be no supplemental compensation except for overtime where applicable.
The SOA's Implementation Memo similarly provided:
Effective June 7, 2017, a new salary guide is hereby established for all employees, (including future promotions to the rank of Lieutenant and Captain[).] The [new] salaries shall be the entire compensation for each employee. There shall be no supplemental compensation except for overtime where applicable.
Between June 8, 2016, when the City's governing body approved the
MOAs, and June 7, 2017, when the Designee issued the Implementation Memos,
twenty-four City police officers accepted promotions without pay raises: sixteen
were promoted to Sergeant, six were promoted to Lieutenant, and two were
promoted to Captain. The City never issued retroactive pay raises to those
officers.
The Settlement in Police
On January 16, 2018, the parties executed a settlement agreement
resolving their dispute in Police. The settlement agreement stipulated "[t]he
salaries and steps specifically set forth in the [Implementation Memos] shall not
A-2478-23 9 be altered," except "all currently employed Sergeants will be increased to a new
base salary of $100,000.00 per year." The parties further agreed:
[T]he Implementation Memo[s] . . . shall remain in full force and effect except as modified by this Settlement Agreement. All terms contained in the Implementation Memo[s] . . . shall be incorporated into the [CNAs] between [plaintiffs] including, but not limited to, that the Settlement Agreement is in effect through December 31, 2021.
Plaintiffs, the Designee, and the Director signed the settlement agreement, and
plaintiffs' members subsequently ratified the settlement.
Procedural History Leading to this Appeal
On May 4, 2018, four months after resolving Police, plaintiffs sued
defendants for retroactive pay raises purportedly due under the MOAs. The
parties agreed to dismissal of that complaint without prejudice to allow plaintiffs
to refile their claims at a future date.
On October 5, 2023, plaintiffs refiled their complaint, asserting causes of
action against defendants for (1) breach of contract, (2) breach of the implied
covenant of good faith and fair dealing, (3) promissory estoppel, and (4)
violations of the Wage Payment Law (WPL), N.J.S.A. 34:11-4.1 to -4.14, and
Wage Collection Law (WCL), N.J.S.A. 34:11-57 to -67.2.
A-2478-23 10 Defendants moved to dismiss the complaint under Rule 4:6-2(e).
Defendants argued (1) the MSRA permitted the State to unilaterally terminate
or modify the MOAs, (2) the Implementation Memos unilaterally terminated or
modified the MOAs, (3) the MOAs were subject to contingencies which never
materialized, and (4) the entire controversy doctrine and res judicata barred
plaintiffs' claims.
In a March 4, 2024 order, the motion judge dismissed plaintiffs' complaint
with prejudice and issued an eleven-page written memorandum of decision. The
judge found the "central issue . . . [was] whether the terms of the June 7, 2017
[Implementation Memos] unilaterally modified the terms of the 2016 MOAs."
Relying on an unpublished case, Atlantic City Superior Officers' Association v.
City of Atlantic City,3 the judge concluded the MSRA granted the State
"substantial authority" to "terminate and modify existing agreements involving
municipalities in need of stabilization and recovery." The judge found the State
was authorized to issue the Implementation Memos, which "supersede[d] all
prior agreements or contracts, including the 2016 MOAs."
3 Rule 1:36-3, addressing citation to unpublished cases, does not preclude courts "from acknowledging the persuasiveness of a reasoned decision on analogous facts." Sauter v. Colts Neck Volunteer Fire Co. No. 2, 451 N.J. Super. 581, 600, (App. Div. 2017). The motion judge found the reasoning in Superior Officers persuasive on analogous facts regarding the extent of the MSRA's powers. A-2478-23 11 The motion judge then addressed "whether the MSRA authorize[d] the
deprivation of earned wages." He found the MOAs did not deprive plaintiffs of
"earned wages" because the MOAs were "subject to contingencies." The judge
concluded the MOAs allowed plaintiffs to accept promotions without a pay
increase "until a salary increase . . . [was] ratified between the City, the State
Monitor, and [plaintiffs], or . . . awarded by an interest arbitrator." The judge
explained the contingencies in the MOAs "never occurred," thus, "[d]efendants
did not deprive [p]laintiffs of earned wages." The judge stated the MOAs "were
entered into at [p]laintiffs' risk and understanding that the contingencies may
never materialize."
Additionally, the judge found the Implementation Memos "encompass[ed]
all prior salary agreements," including the MOAs. The judge explained the
Implementation Memos "provided for an updated salary scale . . . [and]
indicat[ed] that the revised compensation scale would be the 'entire
compensation' for each employee." The judge determined "the intent of the
Implementation [Memos was] to supersede all prior agreements relat[ed] to
compensation and salary, including the 2016 MOAs" and "coupled with the
broad authority under the MSRA to modify and terminate existing agreements,
A-2478-23 12 [that was] enough to persuade the [c]ourt that the [Implementation Memos]
[were] not silent on the issue of [p]laintiffs' earned wages."
Even if the Implementation Memos deprived plaintiffs of earned wages,
the judge concluded "the MSRA specifically vest[ed] authority in [d]efendants
to act in this manner." Citing N.J.S.A. 52:27BBBB-5(a)(3)(f) and (g), the judge
explained, "[d]efendants' decision to modify the 2016 MOAs via the 2017
[Implementation Memos] was 'reasonable and directly related to stabilizing the
finances . . . of the municipality in need of stabilization and recovery.'"
The judge also found plaintiffs' WPL and WCL claims were "futile."
Citing N.J.S.A. 52:27BBBB-14, the judge concluded the terms of the MSRA
prevailed in the event of any inconsistency between the MSRA and other
applicable laws.
Based on his fact findings and legal conclusions, the judge declined to
address defendants' res judicata and entire controversy arguments. Because
defendants did not file a cross-appeal, we need not decide whether res judicata
or the entire controversy doctrine also supported dismissal of plaintiffs'
complaint.
On appeal, plaintiffs argue their entitlement to retroactive pay raises under
the MOAs as "earned wages." They further contend the judge erred in
A-2478-23 13 dismissing their complaint because (1) the MSRA does not authorize defendants
to withhold earned wages, (2) cancelling the MOAs deprived plaintiffs of a
"vested benefit," (3) the Implementation Memos did not cancel the MOAs, (4)
the Designee failed to demonstrate the Implementation Memos were
"reasonable," and (5) causes of action for breach of the duty of good faith and
fair dealing and promissory estoppel were adequately pleaded to survive a
motion to dismiss.
I.
We review de novo a judge's decision on a Rule 4:6-2(e) motion to
dismiss. Baskin v. P.C. Richard & Son, LLC, 246 N.J. 157, 171 (2021) (citing
Dimitrakopoulos v. Borrus, Goldin, Foley, Vignuolo, Hyman & Stahl, P.C., 237
N.J. 91, 108 (2019)). "The standard . . . to determine whether to dismiss a
pleading for failure to state a claim on which relief may be granted is a generous
one." Green v. Morgan Props., 215 N.J. 431, 451 (2013). "[O]ur inquiry is
limited to examining the legal sufficiency of the facts alleged on the face of the
complaint." Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746
(1989). The test is "whether a cause of action is 'suggested' by the facts." Ibid.
(quoting Velantzas v. Colgate–Palmolive Co., 109 N.J. 189, 192 (1988)).
A-2478-23 14 A complaint must be searched "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." Ibid.
(quoting Di Cristofaro v. Laurel Grove Mem'l Park, 43 N.J. Super. 244, 252
(App. Div. 1957)). "At this preliminary stage of the litigation the [c]ourt is not
concerned with the ability of plaintiffs to prove the allegation[s] contained in
the complaint." Ibid. On a motion to dismiss, "plaintiffs are entitled to every
reasonable inference of fact." Ibid. "Nonetheless, if the complaint states no
claim that supports relief, and discovery will not give rise to such a claim, the
action should be dismissed." Dimitrakopoulos, 237 N.J. at 107.
II.
We first address plaintiffs' claim that defendants breached the MOAs by
failing to provide retroactive pay raises to the promoted police officers. To
establish a claim for breach of contract, plaintiffs must prove (1) "the parties
entered into a contract containing certain terms," (2) the "plaintiffs did what the
contract required them to do," (3) the "defendants did not do what the contract
required them to do," and (4) the "defendants' breach, or failure to do what the
contract required, caused a loss to the plaintiffs." Goldfarb v. Solimine, 245
A-2478-23 15 N.J. 326, 338-39 (2021) (quoting Globe Motor Co. v. Igdalev, 225 N.J. 469, 482
(2016)).
In support of their breach of contract claim, plaintiffs argue (1) the MSRA
does not authorize withholding wages plaintiffs earned under the MOAs, (2) the
Implementation Memos did not cancel the MOAs, and (3) defendants did not
comply with the MSRA in cancelling the MOAs.
A.
Whether the MSRA Authorized Defendants to Cancel the MOAs
A court's "primary goal when interpreting a statute is to determine and
carry out the Legislature's intent." In re Kollman, 210 N.J. 557, 568 (2012)
(citing Allen v. V & A Bros., Inc., 208 N.J. 114, 127 (2011)). In interpreting a
statute, "courts look first to the plain language of the statute." In re D.J.B., 216
N.J. 433, 440 (2014) (citing DiProspero v. Penn, 183 N.J. 477, 493 (2005)).
Statutes are given their "ordinary and common-sense meaning." Saccone v. Bd.
of Trs. of Police & Firemen's Ret. Sys., 219 N.J. 369, 380 (2014). "If the
language is clear, the court's job is complete." D.J.B., 216 N.J. at 440 (citing
Kollman, 210 N.J. at 568). On the other hand, a statute is ambiguous if it "leads
to more than one plausible interpretation." DiProspero, 183 N.J. at 492.
A-2478-23 16 The MSRA provides "the [D]irector shall have the authority to take any
steps to stabilize the finances, restructure the debts, or assist in the financial
rehabilitation and recovery of the municipality in need of stabilization and
recovery." N.J.S.A. 52:27BBBB-5(a)(3). To stabilize the finances or assist with
the fiscal rehabilitation and recovery of the municipality in need of stabilization
and recovery, the Director or Designee has the power to: (a) unilaterally amend
or terminate contracts with the City, provided doing so is reasonable and directly
related to stabilizing the City's finances; (b) unilaterally modify, amend, or
terminate any CNA or term under such a CNA with the City, provided doing so
is reasonable and directly related to stabilizing the City's finances; and (c)
unilaterally modify any terms and conditions of employment under an expired
CNA with the City. See N.J.S.A. 52:27BBBB-5(a)(3)(f),(g),(i). The MSRA
"shall be construed liberally to give effect to its intent that severe fiscal dis tress
in municipalities in need of stabilization and recovery shall be addressed and
corrected." N.J.S.A. 52:27BBBB-13.
The MSRA's ordinary and common-sense language reflects the
Legislature's intent to remedy the City's severe fiscal crisis. It is undisputed that
the MOAs were contracts with the City. As such, the Designee was authorized
to amend or terminate the MOAs under the MSRA. Moreover, because
A-2478-23 17 plaintiffs' CNAs expired, the Designee could unilaterally terminate the MOAs
and modify plaintiffs' terms and conditions of employment, including salary.
B.
Whether the Conditions for Retroactive Pay Raises Materialized
In light of the MSRA's plain and unambiguous language, plaintiffs argue
the MOAs are distinct from other State contracts and entitled the promoted
officers to salary increases as "earned wages." Plaintiffs assert the MSRA does
not authorize the withholding of earned wages. However, we agree with the
motion judge that plaintiffs did not earn wages under the MOAs.
"It is a 'settled principle that parties bargaining at arm's-length may
generally contract as they wish.'" JPC Merger Sub LLC v. Tricon Enters., Inc.,
474 N.J. Super. 145, 164 (App. Div. 2022) (quoting Whalen v. Schoor, DePalma
& Canger Grp., Inc., 305 N.J. Super. 501, 505 (App. Div. 1997)). "[P]arties may
make contractual liability dependent upon the performance of a condition
precedent." Duff v. Trenton Beverage Co., 4 N.J. 595, 604 (1950). "Generally,
no liability can arise on a promise subject to a condition precedent until the
condition is met." Ibid. "As a general rule, there must be strict compliance with
conditions precedent to the obligations created by a contract." JPC Merger Sub
LLC, 474 N.J. Super. at 164.
A-2478-23 18 Here, the MOAs included two specific conditions precedent to retroactive
pay raises for promoted officers. A salary increase had to be (1) "ratified
between the City, the State Monitor, and [plaintiffs]" or (2) "awarded by an
interest arbitrator." Neither event occurred. The City, State Monitor, and
plaintiffs never ratified a salary increase. Nor did an interest arbitrator award
the promoted officers a salary increase. Because the MOAs' two contingencies
were not met, there were no "accrued unpaid wages."
We also reject plaintiffs' assertion that the MOAs created vested rights. A
vested right is "a present fixed interest which . . . should be protected against
arbitrary state action." Barila v. Bd. of Educ. of Cliffside Park, 241 N.J. 595,
617-18 (2020) (quoting Phillips v. Curiale, 128 N.J. 608, 620 (1992)). Plaintiffs
had no "present fixed interest" in retroactive pay raises. At best, plaintiffs had
a conditional future interest that never materialized.
C.
Whether the Implementation Memos Terminated the MOAs
Alternatively, plaintiffs argue the Implementation Memos did not
terminate the MOAs. Plaintiffs contend neither the Implementation Memos nor
the settlement agreement in Police addressed the MOAs. They assert the judge
A-2478-23 19 erred in relying on "the vague statement of 'entire compensation'" in the
Implementation Memos to dismiss their claims.
A word or phrase is ambiguous if it is susceptible to "more than one
plausible interpretation." DiProspero, 183 N.J. at 492. The Implementation
Memos have but one plausible interpretation and were not ambiguous. The new
salaries established under the Implementation Memos provided Sergeants would
receive $95,000, Lieutenants would receive $115,000, and Captains would
receive $125,000. A plain reading of the Implementation Memos reveals those
"salaries shall be the entire compensation for each employee." Further, the
Implementation Memos expressly stated, "[t]here shall be no supplemental
compensation except for overtime where applicable." Under the Police
settlement agreement, the parties explicitly agreed to the salaries and steps
established under the Implementation Memos. We discern nothing ambiguous
or susceptible to an alternative plausible meaning related to the phrase "no
supplemental compensation."
D.
Whether the Implementation Memos Met the MSRA's Reasonableness Requirements
Plaintiffs alternatively argue that if we determine the Implementation
Memos terminated the MOAs, then the Designee failed to satisfy the MSRA's
A-2478-23 20 reasonableness requirement. The MSRA allows the Designee to unilaterally
change or terminate any agreements to which the municipality was a party,
including CNAs, if doing so is "reasonable and directly related to stabilizing the
[municipality's] finances." N.J.S.A. 52:27BBBB-5(a)(3)(f) and (g).
Relying on Police, plaintiffs argue the MSRA required the Designee to (1)
consider the public health, safety, and welfare, (2) ensure public services are
provided in an efficient and cost-effective manner, (3) ensure the development
of a comprehensive plan for financial rehabilitation and recovery, and (4) take
action that is reasonable and directly related to financial stabilization. The judge
in Police held the Designee's proposals must also be "factually based, uniform,
fairly implemented, and objective" and "accompanied by an adequate
explanation and foundation." Slip op. at 29. Plaintiffs contend "nothing in the
record . . . suggests that the State's actions, . . . if permitted by the MSRA[,]
were reasonable."
Because Police is an unpublished Law Division case, we are not required
to adopt its reasonable test. See R. 1:36-3. Even if we were inclined to follow
the reasonable test in Police, we are satisfied that test does not apply to the
Implementation Memos. Police involved N.J.S.A. 52:27BBBB-5(a)(3)(g),
which allowed the Designee to modify, amend, or terminate CNAs, provided
A-2478-23 21 doing so was "reasonable and directly related to stabilizing" the municipality's
finances.
However, this appeal involves subsection (i) of the same statute because
the CNAs between the City and plaintiffs expired. N.J.S.A. 52:27BBBB-
5(a)(3)(i) states, "with respect to any expired collective negotiations agreement
. . . , [the Designee has the power to] unilaterally modify[] wages, hours, or any
other terms and conditions of employment." The retroactive pay raises in the
MOAs were a "terms [or] conditions of employment." Thus, under subsection
(i), the Designee was authorized to modify any "terms [or] conditions of
employment" absent the "reasonable" test triggered under subsections (f) and
(g) of N.J.S.A. 52:27BBBB-5(a)(3).
It is well-settled that courts cannot "rewrite a plainly-written enactment
of the Legislature." DiProspero, 183 N.J. at 492 (quoting O'Connell v. State,
171 N.J. 484, 488 (2002)). Nor can courts "write in an additional qualification
which the Legislature pointedly omitted in drafting its own enactment." Ibid.
(quoting Craster v. Bd. of Comm'rs of Newark, 9 N.J. 225, 230 (1952)). The
Legislature chose to omit the word "reasonable" in subsection (i). Thus, we
decline to read that term into subsection (i).
A-2478-23 22 Even if we were to apply a reasonableness requirement, we are satisfied
the Implementation Memos are reasonable because they were designed to
address the City's dire financial situation. At the time the Designee issued the
Implementation Memos, the City lacked sufficient revenue to operate. The
CNAs constituted a significant portion of the City's overall budget. Police I,
slip op. at 8. The Implementation Memos reduced the City's budget deficit to
foster the City's financial recovery. Under the circumstances, the
Implementation Memos were clearly reasonable.
III.
We next address plaintiffs' argument that the judge erroneously dismissed
their good faith and fair dealing claim. We are not persuaded.
"[E]very contract in New Jersey contains an implied covenant of good
faith and fair dealing." Sons of Thunder, Inc. v. Borden, Inc., 148 N.J. 396, 420
(1997). "Good faith is a concept that defies precise definition." Brunswick Hills
Racquet Club, Inc. v. Route 18 Shopping Ctr. Assocs., 182 N.J. 210, 224 (2005).
"Good faith conduct is conduct that does not 'violate community standards of
decency, fairness or reasonableness.'" Ibid. (quoting Wilson v. Amerada Hess
Corp., 168 N.J. 236, 245 (2001)). "The covenant of good faith and fair dealing
calls for parties to a contract to refrain from doing 'anything which will have the
A-2478-23 23 effect of destroying or injuring the right of the other party to receive' the benefits
of the contract." Id. at 224-25 (quoting Palisades Props., Inc. v. Brunetti, 44
N.J. 117, 130 (1965)). The covenant binds parties in "both the performance and
enforcement of [a] contract." Id. at 224. However, the duty of "good faith and
fair dealing cannot override an express [contract] clause." Sons of Thunder,
Inc., 148 N.J. at 419.
"Proof of 'bad motive or intention' is vital to an action for breach of the
covenant." Brunswick Hills Racquet Club, Inc., 182 N.J. at 225 (quoting
Wilson, 168 N.J. at 251). A plaintiff must also show "the defendant's alleged
misdeeds prevented the plaintiff from enjoying the full benefit of the terms of a
particular bargain." Comprehensive Neurosurgical, P.C. v. Valley Hosp., 257
N.J. 33, 63 (2024). A plaintiff is required to demonstrate a defendant's alleged
misconduct thwarted his or her "reasonable expectations" under the contract.
Ibid. (quoting Brunswick Hills Racquet Club, Inc., 182 N.J. at 226).
Here, plaintiffs did not allege defendants violated "community standards
of decency, fairness or reasonableness." Brunswick Hills Racquet Club, Inc.,
182 N.J. at 224 (quoting Wilson, 168 N.J. at 245). Defendants acted consistent
with the MSRA to aid the City's financial recovery. Nothing in the record
demonstrates defendants acted in bad faith by complying with the mandates
A-2478-23 24 under the MSRA, and the judge properly dismissed plaintiffs' claim for breach
of the implied duty of good faith and fair dealing.
IV.
Plaintiffs also assert entitlement to retroactive pay raises based on the
doctrine of promissory estoppel. We disagree.
To prevail on a claim for promissory estoppel, a party must demonstrate
the following: "(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). "Principles of estoppel must be evaluated
with care when a party seeks to apply them against the government." In re Att'y
Gen. Law Enf't Directive Nos. 2020-5 & 2020-6, 246 N.J. 462, 498 (2021). This
is especially true when estoppel would "interfere with essential governmental
functions." O'Malley v. Dep't of Energy, 109 N.J. 309, 316 (1987) (quoting Vogt
v. Borough of Belmar, 14 N.J. 195, 205 (1954)).
Here, plaintiffs failed to establish a clear and definite promise, "the [s]ine
qua non for applicability of this theory of recovery." Malaker Corp. S'holders
Protective Comm. v. First Jersey Nat'l Bank, 163 N.J. Super. 463, 479 (App.
Div. 1978). Nothing in the record supports a clear and definite promise by
A-2478-23 25 defendants that police officers would receive retroactive pay raises. Rather, the
pay raises were expressly contingent on future salary increases based on a
ratified agreement among the parties or an interest arbitrator's award. While
plaintiffs asserted "a general expectation" that a salary increase would happen,
nothing in the record indicated defendants represented or guaranteed the parties
would ratify a salary increase or an interest arbitrator would award a salary
increase. See E. Orange Bd. of Educ. v. N.J. Schs. Constr. Corp., 405 N.J.
Super. 132, 147 (App. Div. 2009).
Even assuming defendants specified a clear and definite promise to invoke
promissory estoppel, any reliance by plaintiffs would not have been reasonable
under the circumstances. Before executing the MOAs, the City's financial
difficulties were well-known. Indeed, the police officers who accepted
promotions without pay raises did so at the time the State asserted its MSRA
powers to aid the City in its fiscal recovery. In the absence of reasonable
reliance, plaintiffs were unable to satisfy the elements necessary to prevail on a
promissory estoppel claim, and the judge properly dismissed that claim.
Plaintiffs also contend they are entitled to retroactive pay raises under the
WPL and WCL. We reject these arguments.
A-2478-23 26 The WPL "governs the time and mode of payment of wages due to
employees." Hargrove v. Sleepy's, LLC, 220 N.J. 289, 302 (2015.) "The WPL
is designed to protect an employee's wages and to assure timely and predictable
payment." Id. at 313.
The WCL "prescribes a process for the collection of unpaid wages due."
Musker v. Suuchi, Inc., 479 N.J. Super. 38, 43 (App. Div. 2024), reversed on
other grounds, ___ N.J. ___ (2025). "Among other things, the [WCL] empowers
the New Jersey Department of Labor and Workforce Development to investigate
and remedy alleged wage violations." Ibid.
Plaintiffs failed to state a claim under the WPL and WCL because they
were never due retroactive pay raises. As we previously stated, the retroactive
pay raises under the MOAs were contingent on a salary increase either ratified
by the City, State, and plaintiffs, or awarded by an interest arbitrator. Neither
event happened in this case.
Moreover, the unequivocal language of the MSRA warrants rejection of
plaintiffs' WPL and WCL claims. The MSRA provides:
Notwithstanding the provisions of any other law, rule, regulation, or contract to the contrary, . . . the [D]irector shall have the authority to take any steps to stabilize the finances . . . of the municipality in need of stabilization and recovery.
A-2478-23 27 [N.J.S.A. 52:27BBBB-5(a)(3) (emphasis added).]
"The Legislature's use of the word 'notwithstanding' is significant."
Kennedy v. Weichert Co., 257 N.J. 290, 310 (2024). "In construing statutes, the
use of such a 'notwithstanding' clause clearly signals the drafter's intention that
the provisions of the 'notwithstanding' section override conflicting provisions of
any other section." Ibid. (quoting Cisneros v. Alpine Ridge Grp., 508 U.S. 10,
18 (1993)).
In using the term "notwithstanding" in the MSRA, the Legislature
expressed its clear intent that the Director's authority would supersede any
conflicting law, rule, regulation, or contract. The MSRA states: "[t]o the extent
any inconsistency exists between the terms of [the MSRA] and other applicable
laws, the terms of [the MSRA] shall prevail." N.J.S.A. 52:27BBBB-14.
When applying the unambiguous language of the MSRA, if the WPL and
WCL conflict or create any inconsistency with the Director's authority under the
MSRA, the MSRA prevails. Because plaintiffs' interpretation of the WPL and
WCL conflict with the Director's authority under the MSRA, the MSRA
prevails.
Further, the WPL provides "[n]o employer may withhold or divert any
portion of an employee's wages unless . . . [t]he employer is required or
A-2478-23 28 empowered to do so by New Jersey or United States law." N.J.S.A. 34:11-4.4
(a). Because the MSRA empowered the Director to withhold wages for City
employees as a municipality in need of stabilization and recovery, there was no
violation of the WPL.
Having reviewed the record, we are satisfied the motion judge correctly
dismissed plaintiffs' complaint for failure to state a claim upon which relief may
be granted.
To the extent we have not addressed any of plaintiffs' remaining
arguments, the arguments lack sufficient merit to warrant discussion. R. 2:11-
3(e)(1)(E).
Affirmed.
A-2478-23 29