121 A.3d 775 (D.C. 2015), 08-CV-629, Rosella v. Long Rap, Inc.

• Citation: 121 A.3d 775
• Opinion Judge: Pryor, Senior Judge
• Party Name: MICHAEL R. ROSELLA, APPELLANT/CROSS-APPELLEE, v. LONG RAP, INC., et al., APPELLEES/CROSS-APPELLANTS
• Attorney: Lynne Bernabei, with whom Alan R. Kabat was on the brief, for appellant/cross-appellee. Dale A. Cooter for appellees/cross-appellants. Jason M. Zuckerman, with whom R. Scott Oswald filed a brief, for the Government Accountability Project, the Metropolitan Washington Employment Lawyers Association...
• Judge Panel: Before FISHER and THOMPSON, Associate Judges, and PRYOR, Senior Judge.
• Case Date: July 30, 2015
• Court: D.C. Court of Appeals

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121 A.3d 775 (D.C. 2015)

MICHAEL R. ROSELLA, APPELLANT/CROSS-APPELLEE,

v.

LONG RAP, INC., et al., APPELLEES/CROSS-APPELLANTS

Nos. 08-CV-629, 08-CV-630, 08-CV-631, 08-CV-632

Court of Appeals of Columbia District

July 30, 2015

Argued October 24, 2014

Appeals from the Superior Court of the District of Columbia. (CAB-4316-06 and CAB-5758-06). (Hon. Jeanette Jackson Clark, Trial Judge).

Lynne Bernabei, with whom Alan R. Kabat was on the brief, for appellant/cross-appellee.

Dale A. Cooter for appellees/cross-appellants.

Jason M. Zuckerman, with whom R. Scott Oswald filed a brief, for the Government Accountability Project, the Metropolitan Washington Employment Lawyers Association, and the National Whistleblowers Center, as amicus curiae in support of appellant/cross-appellee.

Before FISHER and THOMPSON, Associate Judges, and PRYOR, Senior Judge.

OPINION

Pryor, Senior Judge

Appellant/cross-appellee Michael Rosella (" appellant" ) filed an action in Superior Court alleging he was wrongfully discharged from his employment with Long Rap, Inc. (" Long Rap" ), in retaliation for his ongoing protests of Long Rap's accounting practices. He alleged that his supervisors feared that his expressed disapproval of Long Rap's accounting systems would negatively affect a planned business acquisition of the company, and

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that his employment was terminated in order to ensure a successful transaction. Although the trial court permitted appellant's wrongful discharge claim to proceed to trial, the jury entered a verdict in favor of Long Rap and its named officers. On appeal, appellant alleges multiple errors by the trial court and seeks a new trial. Concluding instead that appellant never stated a proper claim for wrongful termination in the first instance, we affirm the adverse judgment against him.

I.

Long Rap was, at the time these proceedings were initiated, a privately owned corporation that operated a chain of clothing stores. It was operated by its three co-owners and officers, Charles Rendelman, Stuart Ezrailson, and Mitchell Kupchak.¹ Mr. Rendelman acted as Long Rap's Chief Executive Officer, and Mr. Ezrailson acted as Long Rap's President and Chief Merchandiser. Mr. Kupchak was not involved in day-to-day operating decisions within the company.

Long Rap hired appellant on a temporary basis in May 2005. In July 2005, appellant became a full-time at-will employee and began to serve as Long Rap's Director of Finance and Controller, a position similar to a Chief Financial Officer. Soon after this promotion, the relationship between Long Rap's officers and appellant began to deteriorate. Long Rap alleges its officers began to have concerns about appellant's work performance, including the timeliness of financial reporting, poor work ethic, and declining morale in the accounting department.

On the other hand, appellant alleges that after his promotion he began to question and object to a number of directives issued to him by Long Rap officers. Appellant's complaint detailed that he was directed to, inter alia, postdate checks in order to manipulate quarterly financial results, record transactions in different accounting periods than when they occurred, provide sizable cash advances and travel advances to the Rendelmans and Ezrailsons (without documentation), pay for the use of a private automobile for the owners out of corporate funds, and otherwise use corporate funds to pay the owners' personal expenses. Appellant's complaint alleges that he protested multiple " improprieties [and] illegalities" regarding Long Rap's accounting practices on the basis that they were contrary to generally accepted accounting principles. However, when appellant's protests did not cause any change in the practices, appellant largely complied with the officers' orders. In a few instances appellant simply did not comply with the directives, or complied in a different manner.

Ultimately, in April 2006, the differences between the parties resulted in Long Rap terminating appellant's employment. On May 2, 2006, appellant delivered a demand letter to Long Rap indicating that he believed he had been wrongfully terminated from his position. Appellant asserted that he was fired because ongoing negotiations to sell Long Rap would require the potential purchaser, Blue Holdings, Inc. (" Blue Holdings" ), to perform a check of Long Rap's finances. This check, appellant claims, would have involved consulting with him. Since appellant had multiple concerns about the propriety and legality of a number of Long Rap's financial matters, his consultation would have put the

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sale in jeopardy.²

On June 2, 2006, Long Rap responded to appellant's demand letter by filing suit against him, alleging negligence and breach of fiduciary duty. Appellant cross-filed a claim alleging wrongful termination in violation of public policy against Long Rap, and conspiracy claims against Mr. Rendelman and Mr. Ezrailson. The parties' cross-claims were consolidated and proceeded to a jury trial. After the trial, the jury returned verdicts in appellant's favor on Long Rap's breach of fiduciary duty claim and in Long Rap and its officers' favor on appellant's wrongful termination claim. Appellant appealed from the verdict on his claims. Long Rap did not appeal the verdict on its breach of fiduciary duty claim, but cross-appealed the trial court's adverse summary judgment ruling dismissing its negligence claim.

After the cross-appeals were filed and briefed, Long Rap filed for bankruptcy. This appeal was stayed for approximately five years pending resolution of the bankruptcy proceedings. During those proceedings, Long Rap waived its appeal from the trial court's adverse summary judgment ruling dismissing its negligence claim.

Accordingly, the only question before this court is appellant's claim of wrongful discharge from employment by Long Rap. As part of that claim, he asserts that the trial court erred when it (i) instructed the jury that it must find that the conduct appellant complained of was actually illegal (ii) precluded certain expert or lay testimony regarding the legality of Long Rap's actions and (iii) admitted appellant's initial demand letter and suggested settlement sum into evidence.

II.

It has long been the common law in this jurisdiction that an at-will employee may be discharged " at any time and for any reason, or for no reason at all." Adams v....