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Archive for October, 2018

Qualified Immunity Applied to Employment

Posted on: October 3rd, 2018

By: Owen Rooney

In Kramer v. Cullinan 878 F.3d 1156 (9th Cir., 2018) the Ninth Circuit reversed the denial of a Motion for Summary Judgment, holding that that the employer’s public statement was not “stigmatizing” and defendant was entitled to qualified immunity.

Plaintiff served in dual roles as Executive Director of Public Radio and a related Foundation. He reported to Southern Oregon University President Cullinan who became concerned that plaintiff was engaged in costly projects and a potential conflict of interest existed in plaintiff serving in both capacities. The University system conducted an asset liability investigation which concluded that the projects could cause a financial strain on the university and that the projects were not aligned with the university’s interests. Plaintiff resisted the university’s efforts to remove him from both roles by trying to have the Board pass resolutions to keep him in both positions. The university president sought advice of counsel who authored a letter urging the Foundation not to adopt plaintiff’s resolutions and also raising the potential liability of plaintiff and the Directors. The letter was given to the Board members prior to voting on plaintiff’s resolutions, a meeting at which the press was present.  At the meeting, President Cullinan spoke, again raising the issue of possible legal liability, but expressing hope for an amicable resolution.

Thereafter, plaintiff’s annual appointment was not renewed. Following the grievance procedure, plaintiff filed suit, alleging, among other things, a civil rights violations for deprivation of his liberty without due process. The District Court granted summary judgment as to all claims except the civil rights cause of action. In reversing, the Ninth Circuit held that the letter did not actually impute bad faith, willful or wasteful conduct. Rather, the letter in question stated that “if” plaintiff had engaged in bad faith, willful or wasteful conduct, he would not be entitled to indemnity.

Secondly, the Court recognized that an employer’s statement about an employee may implicate a liberty interest. Thus, an employee charged with fraud, dishonesty or immoral conduct is entitled to a name-clearing hearing under the 14th Amendment. The Court also held that prior legal precedent was not sufficient to put the university president on notice that her conduct violated plaintiff’s constitutional rights because the prior cases did not involve the conditional language at issue here.

The take away is that qualified immunity is still alive in the Ninth Circuit and is applicable in an employment context.

If you have any questions or would like more information please contact Owen Rooney at [email protected].

New Jersey Appellate Court Affirms Association’s Right to Enforce Code of Conduct

Posted on: October 1st, 2018

By: Mark Stephenson

The close-set nature of condominium association communities lends to the adoption of codes of conduct as an effective way to promote efficient dispute resolution and unit owner civility. Such disputes are a too-fruitful source of litigation. Recently, in Chassman v. Longview at Montville Condominium Association, the Superior Court of New Jersey, Appellate Division affirmed the right of a community association to enforce its code of conduct and approved the way in which the association did so. Docket No. A-1660-16Te, 2018 N.J. Super. Unpub. LEXIS 1325 (June 7, 2018)

Plaintiff Jacqueline Chassman lived with her son as a unit owner at the Longview condominium. On February 3, 2014, Chassman and her son were involved in an altercation with an employee of the snow removal company hired by the Association. During the altercation, the son allegedly threw a punch at the snow removal employee. Learning of the incident, the Association sent a “Cease and Desist Order, Notice of Fine” letter to Chassman, advising her that her son’s conduct was a violation of the Association’s code of conduct, resulting in a $100.00 fine.

The Association’s by-laws afforded unit owners with a dispute resolution procedure, which Chassman used to request a hearing to dispute the allegations regarding the incident. The Association’s judicial committee held a hearing and Chassman was afforded the opportunity to testify, call and cross-examine witnesses and present evidence. Based on the record evidence before it, the committee concluded that the evidence showing Chassman’s son had punched the snowplow operator was credible, the conduct violated the code of conduct and increased the fine to $150.00. The committee issued a written decision that Chassman appealed to the Association’s board, which affirmed the original decision. Chassman refused to pay the fine, causing her membership privileges to be suspended. As a result, she was unable to use the condominium’s common facilities, including its clubhouse and swimming pool.

In May 2015, Chassman filed suit against the Association, alleging, among other things, that the code of conduct was invalid, the Association’s dispute resolution procedure was unlawful, and the Board had breached its fiduciary duties owed to her as well seeking $8,500.00 in damages plus interest and costs. The trial court granted summary judgment in the Associations’ favor, holding that its actions, and those of the Board and the Committee in resolving the dispute were authorized by the by-laws. Chassman appealed. In affirming summary judgment and dismissal, the Appellate Division made clear the Association’s broad right to determine and enforce appropriate rules of conduct and impose penalties for violations, a holding helpful to Associations coping daily with vexing and often highly-personalized disputes.

The appellate court observed that a condominium association’s authority is found in the New Jersey Condominium Act and its by-laws. Such by-laws allow an association to establish a method to adopt, amend and enforce reasonable administrative rules and regulations that the association and its board are responsible to enforce, including reasonable fines, assessments and late fees on unit owners as the by-laws may authorize. In this matter, the Association’s by-laws empowered the Board to adopt rules and regulations necessary for operation and use of the property, including rules and regulations regarding the conduct of unit owners and persons residing in their units. The Association’s by-laws expressly authorized the Board to impose a penalty for violations of the code of conduct and suspend unit owners from membership privileges when they fail to pay a duly-imposed penalty. Finally, the appeals court found that the Association’s dispute resolution process fairly addressed Chassman’s claims. Eventually, Chassman paid the fine and her privileges were restored.

Disputes involving condominium associations, their board and committee members, unit owners and residents are often time-consuming, burdensome and costly. Effective dispute resolution procedures and well thought-out codes of conduct can help resolve matters more efficiently and quickly.

If you have any questions or would like more information, please contact Mark Stephenson at [email protected].