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Newman-Steele v. The Mayor and Council of the Borough of Tinton Falls

A-1812-08T2 (N.J. Super. App. Div. 2010) (Unpublished)

ZONING; CONFLICTS — Where a land use board member recuses himself before a potential conflict matter remotely comes before his or her board and then resigns from the board before any vote is taken on the matter, even a board’s recommendation that a municipality adopt a redevelopment plan, the board member is not guilty of any conflict and a municipality does not have a claim against the now former board member.

A member of a municipal planning board, its zoning board, and of the municipality’s environmental commission was also a real estate broker. One summer, he began discussions with the owner of a vacant property for him to serve as a real estate consultant for the redevelopment of the owner’s property. There had been a historical entanglement between the owner and municipal authorities over the redevelopment. Upon signing a consulting agreement with the owner, he resigned from the planning board and the zoning board. The municipal council only accepted his resignation from the planning board, finding the broker’s business relationship with the undeveloped site only implicated his planning board responsibilities.

Prior to the broker’s resignation from the planning board, the board had considered an amendment to the municipality’s zoning master plan, including an amendment to allow age-restricted or active adult residential development at the site of the undeveloped parcel. Four days after his resignation, the board planner recommended this use, and several months later at a regular workshop meeting, the municipal council discussed the amendment. The broker sent a copy of the proposed ordinance, which permitted adult residential housing at the site, to the developer.

Three months earlier, the broker, acting only in his capacity as a broker and as an agent for the developer, had submitted an offer to purchase a parcel adjacent to the site. The owners of that parcel rejected that and repeated offers. Two memoranda indicated that the board planner knew that the broker was attempting to facilitate development of that parcel. Later, the municipal council adopted a resolution recommending the owner’s parcel, the adjacent parcel, and surrounding land be declared “an area in need of redevelopment,” and amended its land use ordinance to create an active adult residential zone encompassing the vacant site.

The owners of the adjacent parcel filed suit, asserting that all of these government actions were tainted by the relationship between the broker and the developer. The municipality filed a complaint against both the broker and the developer, alleging that the broker, as a public official, and the developer, as his client, acted to form a corrupt enterprise to use the broker’s public positions for a private end. While that litigation proceeded, the planning board granted preliminary major subdivision approval and preliminary major site plan approval to allow construction of 151 detached, single family age restricted homes.

The lower court granted summary judgment in favor of the broker, finding that the relationship between broker and developer did not violate any criminal statute. This ruling was based upon the County Prosecutor failing to develop evidence that the broker had acted illegally in any of his positions, either as a consultant for the developer or as a member of land use boards. The lower court also found that neither the municipality nor its municipal officials had suffered damage or monetary loss sufficient to allow them standing to seek a declaration that the consulting agreement between the broker and developer was unlawful.

On appeal, the Appellate Division affirmed. It reviewed the record, and concurred that the municipality was not entitled to recover damages from the broker because it had not established that the broker’s conduct violated any ethical standard governing a public official or that it had suffered a monetary loss. The Court said that the record failed to demonstrate any action by the broker in his role as a member of the planning board that furthered the interests of the developer over the interests of the public. At the time he sent offers to purchase the adjacent parcel, no matter specific to that property or the vacant property was before the planning board. When the issue was raised, the broker recused himself, and by the time the planning board voted and made its recommendation to the municipal council, the broker had resigned his position. The subsequent record indicated the broker had interacted with the council, but not the planning board. Further, the municipal governing body could not identify any financial loss to it occasioned by the broker’s conduct.

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