Cape May Approves $100,000 Settlement with Former Manager Corea

CAPE MAY — City Council approved a $100,000 settlement with former City Manager Luciano V. Corea Jr. Council had voted unanimously June 17, 2008 to approve a resolution to fire City Manager Luciano V. Corea Jr.
Council passed a resolution Tuesday approving the settlement which noted “the litigation involved many issues pertaining to the employment of Luciano V. Corea Jr.” The Litigation was defended by the City’s Municipal Excess Liability (“MEL”) policy, subject to the city’s Self-Insurance Retention.
The resolution that terminated Corea noted the move was based on his failure to follow policies and directives established by City Council by not permitting operators of patios on the Washington Street Mall to continue to operate the patio businesses over Memorial Day weekend based on their failure to submit permit applications before the start of the weekend.
In addition, council’s resolution noted Corea’s failure to confer with each council member individually on matters of importance to the city on a regular basis by not advising each of them of his decision to either close (or not direct the police to permit the reopening) of certain patio businesses on the mall.
The settlement resolution notes: “If the City does not approve the settlement, the MEL will no longer pay for any defense costs and will limit its contribution to the amount proposed in the settlement.”
City Solicitor Tony Monzo said there was a claim in the lawsuit for a violation of the Whistleblower Act and a claim for the termination of Corea’s contract. He said the MEL made the decision to defend the entire claim because the facts and circumstances were related in both counts.
It is unknown what the Whistleblower claim involved. Whistleblower laws are designed to prevent agencies from taking retaliatory action against an employee who reports to an appropriate agency violations of law on the part of a public employer or independent contractor that create a substantial and specific danger to the public’s health, safety, or welfare.
Monzo said the MEL provided coverage for the Whistleblower claim. He said the city would have had liability to the extent there was any judgment on the contract claim. The claim was approximately $180,000 for severance pay based on what Corea called a wrongful termination, he said.
The whistleblower claim had damages that are not easily quantified said Monzo. He said it was a fee shifting case where even if the whistleblower claim is successful with very little damages, the city would be responsible for all the additional fees Corea incurred.
Monzo said the MEL went through comprehensive discovery and unsuccessfully attempted to have the case dismissed by summary judgment motion. After taking some depositions from various defendants in the case, the MEL made a recommendation to the city through its attorney Joseph Scott to settle the case where the city would pay $50,000 and the MEL would pay $50,000, he said.
The MEL will also cover all litigation expenses. Monzo said if the case had proceeded through more discovery and trial, the city would have reached it self-insurance retention of $30,000 and would also have had the risk of liability to the extent any of the contract claims were successful.
Corea’s contract ran until Jan. 31, 2010. He told the Herald last year he expected to be paid until the end of his contract.
The city renewed his contract in February 2007. In 2007, Corea had requested a four-year contract but the city negotiated a three-year deal with no longevity beyond that date,
For 2007, Corea’s salary was $111,062, increasing to $116,616 in 2008 and to $121,115 in 2009.
Corea’s lawsuit named the City of Cape May, Mayor Edward J. Mahaney Jr., former Mayor Jerome E. Inderwies and former city councilman David Craig and current councilpersons Niels Favre, David Kurkowski, Terri Swain and Linda Steenrod for damages and loss of income from his firing earlier this summer.
Corea’s initial complaint noted “the defendants actions in suspending and terminating plaintiff’s employment are in violation of the New Jersey Conscientious Employee Protection Act (CEPA).”
CEPA says if you are conscientious in your job and perform your to job to the best of your abilities and understanding, that you cannot be retaliated against and terminated.