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11 N.J.A.R. 215

Resorts International Hotel, Inc., In the Matter of the Contract Between Seymour Alter and
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Citation: 11 N.J.A.R. 215
Decision Date: 1980
Synopsis: Seymour Alter and Resorts International had entered into a contract by which Alter was to provide consultant services. Pursuant to its authority under N.J.S..4. 5:121-104(b), the Commission ordered that the contractual relationship had to be terminated because of Aiter's prior disqualification under Section 86(c) of the Casino Control Act. Alter had been associated with Resorts at the time Resorts applied for a casino license. Resorts was licensed with the condition that Resorts would not be associated with Alter until such time as he was licensed as an employee. Aiter's application for a casino key employee license was subsequently denied because of statutory disqualifying offenses. Resorts could therefore no longer employ Alter and entered into a severance agreement with him which included a pension, health insurance and other benefits for Alter. The Commission approved only two aspects of the severance agreement, those which reimbursed legal expenses and continued health insurance coverage. Resorts later agreed to a consuitancy contract with Alter, subject to Commission approval. The agreement was informally approved by the Commission Chairman, responding to a letter from Alter's attorney, but the Chairman later ordered the parties to show cause why the contract should not be terminated. At the hearing before the Commission, Alter argued that the Commission was equitably estopped from terminating the consultancy contract because of the Chairman's earlier approval. The Commission concluded that estoppel did not preclude consideration of the-contract. The Chairman's informal resolution of the question was not a full and fair treatment of the issues raised, since there was no factual hearing or legal argument. The Chairman's response was not such a complete and thorough decision as to estop reconsideration by the entire Commission. In addition, estoppel would prevent the Commission from carrying out the central policy of the Casino Control Act, which is to prescribe unsuitable persons from participating in the casino industry. Alter also objected to the use of certain evidence in prior proceedings which resulted in his application for a key employee license being denied. The Commission declined to address the merits of the issue, saying any attack on the underlying basis of Alter's disqualification was foreclosed by res judicata. The issue was fully considered and disposed of in prior proceedings. Finally, the Commission determined that Alter would not be approved as a vendor because the reapplication regulation, N.J.A.C. 19:41-8.8, barred his seeking any licensure, qualification or approval for five years from the date he was denied a casino key employee license. Alter would have to be approved as a vendor before the Commission could approve the consultancy contract with Resorts. However, he could not apply for licensure until the five-year period under the reapplication provision was completed. The restriction would not expire until May 1, 1985. Accordingly, the Commission concluded that unless and until Alter is found qualified for licensure, he cannot enter into any contract with a casino licensee that is subject to Commission approval. The existing agreement between Alter and Resorts was ordered terminated.
Rule(s) Cited: 19:41-8.8(g) 
Statute(s) Cited: 5:12-64 5:12-86c 5:12-104b