RUSSELL MOLLICA v. TOWNSHIP OF BLOOMFIELD

NOT FOR PUBLICATION WITHOUT THE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 only binding 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-0

RUSSELL MOLLICA, JAMES WOLLNER,

RAY MCCARTHY and CHRIS STANZIALE,

Plaintiffs-Appellants,

v.

TOWNSHIP OF BLOOMFIELD and

COUNCILMAN NICHOLAS JOANOW,

Defendants-Respondents.

October 17, 2016

Argued September 21, 2016 - Decided

Before Judges Fuentes, Simonelli, and Carroll.

On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-6159-14.

Mark D. Maryanski argued the cause for appellants.

Kevin P. McManimon argued the cause for respondents (McManimon, Scotland & Baumann, LLC, attorneys; Mr. McManimon, William W. Northgrave, Sean P. Duane, and Ted J. Del Guercio, III, on the brief).

PER CURIAM

At issue in this appeal is the validity of Ordinance 3729 (the Ordinance), which was adopted by defendant Township of Bloomfield (the Township) on August 11, 2014. The Ordinance appropriated $10,500,000 for the acquisition and improvement of a tract of land (the property) to be used as a public park, and authorized the issuance of $9,975,000 in Township bonds or notes to finance part of the cost. The property had previously been approved by the Township Planning Board for construction of a 104-unit townhouse development known as Lion Gate.

The Ordinance was first introduced at a July 14, 2014 meeting chaired by defendant Nicholas Joanow, a Township Councilman, who owned a home that directly bordered the property. Joanow also cast the deciding vote approving the Ordinance at the August 11, 2014 Township Council meeting.

On September 3, 2014, plaintiffs Russell Mollica, James Wollner, Ray McCarthy, and Chris Stanziale, a group of Township residents, filed a pro se action in lieu of prerogative writs challenging the validity of the Ordinance. They also sought to enjoin the Township from issuing the bonds. Plaintiffs alleged that Joanow had a disqualifying interest when he voted on the Ordinance under both the common law and the Local Government Ethics Law (LGEL), N.J.S.A. 40A:9-22.1 to -22.25. They also alleged that the Township violated the Open Public Meetings Act (OPMA), N.J.S.A. 10:4-6 to -21 when, without proper notice, it held a special public meeting on July 30, 2014, to discuss the proposed bond ordinance.

Before the trial court, plaintiffs contended that Joanow had publicly voiced his opposition to the Lion Gate project prior to his election to the Township Council. Plaintiffs presented local newspaper articles in which Joanow voiced his concern over flooding in the area, and the effect that runoff water from construction of the townhouse development would have on his and neighboring properties. Plaintiffs also presented certifications from two neighborhood residents who averred that, after becoming a Councilmember, Joanow gave them $1500 in cash and in turn they wrote a check to an attorney Joanow hired to oppose the Lion Gate development before the Planning Board. According to the two residents, Joanow explained "that he wanted to handle the matter anonymously" and "that his hiring of an attorney [to oppose the project] would be seen as unethical because his property abuts the site and because he is an elected Bloomfield Public Official."1

On July 14, 2014, after the Planning Board had approved the townhouse project, the Township Council introduced the Ordinance for first reading. As noted, the Ordinance authorized the Township to appropriate approximately $10,000,000 to acquire the property to be used as a public park rather than a 104-unit townhouse development, and to issue bonds to finance the purchase. Minutes of the July 14 meeting reflect that the mayor was absent, and Joanow was elected to chair the meeting. The minutes further reflect that Joanow took an active part in the discussion and repeatedly advised another Councilmember that if he continued to abstain from voting in favor of the Ordinance, it would not proceed to a second reading. Ultimately, that Councilmember changed his vote, and agreed to allow for further discussion at a future "stand-alone" meeting prior to the vote on second reading of the Ordinance.

On July 30, 2014, the "stand-alone" meeting was conducted, at which the Township's professionals and consultants appeared to discuss the proposed bond ordinance and answer questions from the public. Plaintiffs allege that "adequate notice" of the meeting as defined by the OPMA was not given, and that no Council members were permitted to speak or ask questions other than the Mayor and Joanow. Plaintiffs also allege that no minutes of the July 30 meeting were made available to the public, also in violation of the OPMA.

On August 11, 2014, the Township Council approved the Ordinance by a five-to-two vote. Five affirmative votes were needed for approval,2 and Joanow voted to pass the Ordinance. Prior to the vote, various members of the public spoke in favor of and against the Ordinance. Notably, Stanziale, McCarthy, and two other residents expressed that Joanow had a conflict of interest and that he should recuse himself from voting on the acquisition of the property.3 According to the minutes, "[Councilmember] Joanow stated that the acquisition of the Lion[] Gate property would be a great benefit to the residents of the Township and that he felt extremely proud that the Council could provide the Township with such wonderful open space."

On November 3, 2014, following oral argument, the trial court entered an order dismissing plaintiffs' conflict of interest claims. The court found Joanow did not have a disqualifying personal conflict of interest because the acquisition of the park constituted a benefit to the public. Plaintiffs retained counsel, who timely moved for reconsideration, which the court denied on December 19, 2014. On January 2, 2015, the trial court dismissed plaintiffs' remaining OPMA claim, finding that any deficiency with respect to the July 14, 2014 meeting was cured by the August 11, 2014 meeting. This appeal followed.

Plaintiffs argue on appeal, as they did before the trial court, that Joanow should have recused himself from participating in any of the proceedings that led to the passage of the bond ordinance because his ownership interest in property adjacent to the proposed public park created a legally insurmountable conflict of interest. The bond ordinance was therefore invalid because it would not have been adopted without Joanow s decisive fifth vote in favor of its passage. Defendants in turn characterize plaintiffs' conflict claim as "too remote and speculative." They argue that no conflict exists "because [Councilmember] Joanow is set to gain no more than all the residents of the Township who will benefit from the creation of the public park and maintenance of open space." We disagree. Applying the statutory standards set forth in the LGEL, as well as established common law authority, we hold that Joanow's ownership of a home directly bordering the property that the Township sought to acquire disqualified him from voting on the bond ordinance.

Under the common law, public officials are to "perform their duties free from any personal or pecuniary interests that may affect their judgment." Barrett v. Union Twp. Comm., 230 N.J. Super. 195, 200 (App. Div. 1989). Further, "it is not simply the existence of a conflict that may be cause to overturn an action of a public official, but also the appearance of a conflict." Randolph v. City of Brigantine Planning Bd., 405 N.J. Super. 215, 226 (App. Div. 2009). Municipal officials must "'avoid conflicting interests that convey the perception that a personal rather than the public interest might affect decisionmaking on matters of concern. Officials must be free of even the potential for entangling interests that will erode public trust in government actions.'" Id. at 226-27 (quoting Thompson v. City of Atlantic City, 190 N.J. 359, 374 (2007)). Disqualification is required when the officials' "direct or indirect private interests may be at variance with the impartial performance of their public duty." Randolph, supra, 405 N.J. Super. at 225 (citing Aldom v. Borough of Roseland, 42 N.J. Super. 495, 501 (App. Div. 1956)).

A conflict exists "when the public official has an interest not shared in common with the other members of the public." Wyzykowski v. Rizas, 132 N.J. 509, 524 (1993). The evaluation of whether an interest is

sufficient to disqualify a public official is a factual determination that depends on the circumstances of the particular case; "[t]he question will always be whether the circumstances could reasonably be interpreted to show that they had the likely capacity to tempt the official to depart from his sworn public duty."

[Randolph, supra, 405 N.J. Super. at 226 (quoting Van Itallie v. Franklin Lakes, 28 N.J. 258, 268 (1958)).]

Disqualification is appropriate even if only the appearance of a conflict exists. Id. at 226-27.

In addition to the common law, the LGEL is to be considered when determining whether a conflict exists. Shapiro v. Mertz, 368 N.J. Super. 46, 52 (App. Div. 2004). Our Supreme Court has expressly recognized that the common law doctrines governing public officials "will be influenced by . . . the [LGEL]." Wyzykowski, supra, 132 N.J. at 529. The LGEL expanded what constitutes a conflict of interest. Shapiro, supra, 368 N.J. Super. at 53. Not only personal or financial "interests" but also personal or financial "involvement" may create a conflict of interest. Ibid. N.J.S.A. 40A:9-22.5(d) provides

No local government officer or employee shall act in his official capacity in any matter where he, a member of his immediate family, or a business organization in which he has an interest, has a direct or indirect financial or personal involvement that might reasonably be expected to impair his objectivity or independence of judgment.

[(Emphasis added).]

We draw guidance from the Court's most recent pronouncement in Grabowsky v. Township of Montclair, 221 N.J. 536, 552-53 (2015),4 where it reaffirmed that

The LGEL's objective is to make ethical standards in state and local government "'clear, consistent, uniform in their application, and enforceable on a statewide basis.'" Wyzykowski, supra, 132 N.J. at 531 (emphasis omitted) (quoting N.J.S.A. 40A:9-22.2). Noting that "[w]henever the public perceives a conflict between the private interests and the public duties of a government officer or employee," the public's confidence in the integrity of government is "imperiled," the Legislature recognized the need for standards by which it may be determined "whether public duties are being faithfully performed." N.J.S.A. 40A:9-22.2(c)-(d).

In Grabowsky, the plaintiff challenged an ordinance adopted by the Township of Montclair authorizing construction of an assisted living facility located next to the Unitarian Church. Id. at 540. Specifically, he alleged that the Mayor and a second Council member shared a disqualifying indirect personal interest in the development project because of their membership in the Unitarian Church. Ibid. Applying the statutory standards set forth in the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-1 to -163, and in the LGEL, as well as "established common law authority," the Court held that "when a church or other organization owns property within 200 feet of a site that is the subject of a zoning application, public officials who currently serve in substantive leadership positions in the organization . . . are disqualified from voting on the application." Id. at 541. The Court noted that "[t]he Legislature's notice requirement [in the MLUL]5 'is tantamount to a declaration of interest in the zoning treatment of a particular property on the part of those owning other property within 200 feet.'" Id. at 559 (citing McNamara v. Borough of Saddle River, 64 N.J. Super. 426, 430 (App. Div. 1960).

Before us, defendants contend that the adoption of the bond Ordinance was a legislative act arising under the Local Bond Law, N.J.S.A. 40A:2-1 to -64, and not a judicial or quasi-judicial function involving review of a zoning application under the MLUL. However, we discern no legal or public policy basis not to apply the same conflict of interest standard in this case. Significantly, the strictures of the LGEL apply in the same manner to all "local government officer[s]," who are defined as including those persons "serving on a local government agency which has the authority to enact ordinances, approve development applications or grant zoning variances." N.J.S.A. 40A:9-22.3(g)(2). As a member of the Township Council, whose function it is to enact ordinances, Joanow clearly meets this definition.

Moreover, we deem Joanow's conflict far less attenuated than the indirect interest that was deemed sufficient to warrant disqualification by the Court in Grabowsky. It is clear under Grabowsky that if Joanow held a leadership position in an organization that owned property within 200 feet of the Lion Gate property, he would have a disqualifying conflict of interest that would preclude him from deliberating and voting on the Ordinance. See id. at 561. Here, Joanow has a more direct personal interest as he himself, rather than an organization to which he belongs, owns property directly abutting the Lion Gate site.

We recognize that Joanow's motives in participating in the passage of the Ordinance may well have been laudatory and motivated by his desire to advance the public interest, preserve open space, or limit construction in flood-prone areas. Nonetheless,

[t]he issue is whether or not [the] [Councilmember] [] had a disqualifying interest in the subject matter of the ordinance. His motives in voting for it, absent fraud or bad faith, which no one asserts, are immaterial. If there is "interest," there is disqualification automatically, entirely without regard to actual motive, as the purpose of the rule is prophylactic, that is, to prevent the possibility of an official in a position of self-interest being influenced thereby to deviate from his sworn duty to be guided only by the public interest in voting as such official.

[McNamara, supra, 64 N.J. Super. at 429-30 (citations omitted).]

Here, development of the Lion Gate property as a park rather than a 104-unit townhouse project clearly "would have a financial impact on [Joanow's] property ... whether it be good, bad or whatever." See Care of Tenafly, Inc. v. Tenafly Bd. of Adjustment, 307 N.J. Super. 362, 368 (App. Div.), certif. denied, 154 N.J. 609 (1998). In any event, Joanow's ownership of property immediately adjacent to the Lion Gate site, standing alone, was sufficient to disqualify him from voting on the Ordinance. Grabowsky, supra, 221 N.J. at 541. Because of the disqualifying interest of Joanow in its subject matter, the remedy is that the Ordinance must be invalidated. We note that Joanow's concurrence in the official action taken by the Township Council was essential to the passage of the Ordinance. Regardless, the fact that other Council members may not have had a conflict does not salvage the actions taken by the Council, as Joanow may have affected how the other members voted. Marlboro Manor, Inc. v. Board of Comm'rs, 187 N.J. Super. 359, 363 (App. Div. 1982).6

In view of the foregoing conclusion, we need not decide whether the July 30, 2014 "stand-alone" meeting was conducted contrary to the dictates of the OPMA. We note that the trial court did not decide the issue, but instead determined that any deficiency in the meeting was cured when the Ordinance was later adopted at the Township Council's August 11, 2014 meeting. We simply caution that, in the event the Council seeks to reintroduce the Ordinance, it must do so in a manner that comports with the OPMA and does not involve Councilmember Joanow in the deliberative or voting process.

1 Since the trial court did not conduct an evidentiary hearing, we have no basis to evaluate the credibility of the authors' certifications, and accordingly they play no role in our determination of the conflict issue.

2 See N.J.S.A. 40A:2-17 b, which provides

A bond ordinance shall be finally adopted by the recorded affirmative votes of at least [two-thirds] of the full membership of the governing body. In a local unit in which the approval of any officer is required to make an ordinance or resolution effective, such bond ordinance shall be so approved, or passed over veto before it shall be published after final adoption.

3 Plaintiffs assert that McCarthy asked the Township Attorney whether Joanow had a conflict of interest, and that the Township Attorney would not give an opinion on the issue because Joanow did not seek his opinion directly. However, no reference to such a discussion appears in the minutes of the August 11, 2014 meeting.

4 We note that the Court decided Grabowsky while this appeal was pending and consequently the trial judge did not have the benefit of it in conducting his conflict of interest analysis.

5 Pertinent to this appeal, the Court cited N.J.S.A. 40:55D-12(b), which mandates that "notice of a hearing requiring public notice pursuant to [N.J.S.A. 40:55D-12(a)]" be "given to the owners of all real property as shown on the current tax duplicates, located in the State and within 200 feet in all directions of the property which is the subject of such hearing[.]"

6 We decline to address the argument raised in Point III of defendants' brief that equities and the Local Bond Law preclude us from granting plaintiffs any relief because the Township has since purchased the property and issued the bond anticipation notes. This argument was not presented to the trial court. Moreover, the Township took these actions while well aware of the present litigation and having been given advance notice of the filing of this appeal. On August 28, 2015, defendants filed a motion to supplement the record with documents supporting this argument. Defense counsel conceded at oral argument that this was a strategic decision, that the motion followed the filing of plaintiffs' merits brief on June 5, 2015, and that no motion to dismiss the appeal as moot was filed at the outset, as permitted by Rule 2:8-2. For these reasons, we deny defendants' motion to supplement the record.