Opinion
DOCKET NO. A-5705-12T1
08-21-2015
CAROL MATULA, Plaintiff-Appellant, v. TOWNSHIP OF BERKELEY HEIGHTS, TOWNSHIP OF BERKELEY HEIGHTS PLANNING BOARD, and CHURCH OF THE LITTLE FLOWER, Defendants-Respondents.
Carol Matula, appellant pro se. Joseph V. Sordillo argued the cause for respondent Township of Berkeley Heights (McElroy, Deutsch, Mulvaney & Carpenter, LLP, attorneys; Mr. Sordillo, on the brief). Albert E. Cruz argued the cause for respondent Township of Berkeley Heights Planning Board (DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum, P.C., attorneys; Mr. Cruz, on the brief). Avram S. Eule argued the cause for respondent Church of the Little Flower (Carella, Byrne, Cecchi, Olstein, Brody & Agnello, P.C., attorneys; Mr. Eule and Donald F. Miceli, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Ostrer and Hayden. On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. L-1299-13. Carol Matula, appellant pro se. Joseph V. Sordillo argued the cause for respondent Township of Berkeley Heights (McElroy, Deutsch, Mulvaney & Carpenter, LLP, attorneys; Mr. Sordillo, on the brief). Albert E. Cruz argued the cause for respondent Township of Berkeley Heights Planning Board (DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum, P.C., attorneys; Mr. Cruz, on the brief). Avram S. Eule argued the cause for respondent Church of the Little Flower (Carella, Byrne, Cecchi, Olstein, Brody & Agnello, P.C., attorneys; Mr. Eule and Donald F. Miceli, on the brief). PER CURIAM
Plaintiff Carol Matula appeals from a June 21, 2013 Law Division order denying her order to show cause and dismissing her complaint in lieu of prerogative writs. Matula sought to enjoin municipal defendants, the Township of Berkeley Heights (Township) and the Planning Board of the Township of Berkeley Heights (Board), from taking any action on a proposal to exchange certain municipal property with defendant Church of the Little Flower (Church). She alleged that, because the majority of members of the Board and Township Council were members of the Church, a conflict of interest prevented the Council and the Board from considering the proposal. The trial court denied all requests for injunctive relief and dismissed the complaint because plaintiff had not exhausted her administrative remedies. For the reasons that follow, we affirm in part and reverse and remand in part.
Accepting all of Matula's allegations as true, Nostrame v. Santiago, 213 N.J. 109, 113 (2013), and giving her the benefit of all reasonable inferences, Stubaus v. Whitman, 339 N.J. Super. 38, 52 (App. Div. 2001), the record reveals the following facts. Matula is a resident of the Township. The Township owned property, known as Lot 26, where its library currently sits. Located on a property adjoining the library is the place of worship that belongs to the Church, known as Lot 21. The Church also owns a piece of property located nearby on Roosevelt Avenue, known as Lot 19.
We apply this standard because Matula does not appeal the denial of injunctive relief, only the dismissal of her complaint for failure to state a claim. See R. 4:6-2.
When the Church purchased the lots that currently comprise Lots 19 and 21 in 1960 and 1961 from the Township, they were subject to the following deed restriction:
To have and to hold same unto the said party of the second part [Church], its successors and assigns, to the only proper use, benefit and behoof of the said party of the second part, its successors and assigns, forever, and according to the form of the statute, in such case made and provided; upon condition however that the said lands and premise be used for educational purposes otherwise same is to revert to the party of the first part [the Township], its successors and assigns[.] (emphasis added).The Church initially built a school on Lot 19, but closed the school in 1987. Since then, it has conducted weekly religious education classes in the building located on the property.
The Township has a Mayor-Council-Administrator form of government with a six-member Council, pursuant to the Faulkner Act, N.J.S.A. 40:69A-1 to -149. When plaintiff filed the complaint, the mayor and three of the six Council members were all Church members. One Council member, Jeanne M. Kingsley, was also a parish trustee and served on the Church's finance committee.
In December 2012, after having been approached by the Church pastor, the mayor announced at a council meeting that the Township was considering the Church's proposal that the Church transfer Lot 19 to the Township in exchange for the Township transferring Lot 26 and an undetermined amount of money to the Church. Kingsley stated that she would recuse herself from any vote on the land exchange because of her involvement with the Church finance committee. However, she continued to participate in the Council's closed-door executive sessions where the project was discussed.
Matula alleged collusion between the mayor and council members and the Church, claiming that secret meetings were held prior to announcing the proposal and that the Church's pastor shared a draft of a sermon with Council members prior to publicly discussing the proposal. When announcing the investigation of the proposal, the mayor also made a statement that Matula asserted demonstrated that the mayor had a conflict of interest. Namely, the mayor said that any final agreement "has to be right for the township and it has to be right for [the Church]," which Matula maintained showed his concern not just for the Township but also for the Church.
In determining whether to move forward with the proposal, the Township obtained an appraisal of the two lots. Additionally, the Township hired GRA Architects (GRA), which had a Church member as one of its principals. On February 19, 2013, the Council passed a resolution authorizing the expenditure of $16,000 for GRA to "determine the size and likely cost of a new municipal complex and how that complex would be configured within the existing school/church buildings. . . ." On that same day, the Council adopted a resolution authorizing the Board to conduct a preliminary investigation of the municipal complex to determine if it was an area in need of development under the Local Redevelopment and Housing Law (LRHL), N.J.S.A. 40A:12A-1 to -49. In furtherance of this investigation, the Council passed a third resolution, which authorized Michael Mistretta and Harbor Consultants, Inc., to prepare a preliminary investigation report, a request for proposal and a request for quotation, and to prepare a redevelopment plan. Prior to voting on these resolutions, the Council members did not disclose their affiliations with the Church.
Under the LRHL, after the Council passes a resolution requiring an investigation, N.J.S.A. 40A:12A-6(a), the Board is tasked with recommending whether an area is in need of redevelopment. N.J.S.A. 40A:12A-6(b). The Board consists of nine members and two alternates. At the time the proposal was under consideration, seven Board members were members of the Church. Matula filed the action in lieu of prerogative writs before the Board considered the Council's municipal complex redevelopment resolution.
According to the parties' briefs, since the appeal was filed, the composition of the Board has changed, and the Board is no longer composed of a majority of members of the Church.
On April 5, 2013, Matula filed the complaint at issue here along with an order to show cause seeking immediate injunctive relief. In her five-count complaint, she alleged that: (1) the Council and Board were disqualified from acting on the proposed land exchange due to conflicts of interest; (2) the Township was required to exercise its power of reversion over the Church's property; (3) the Township breached its fiduciary duty to the residents in pursuing the property exchange in light of the conflict of interest; (4) the Township improperly spent funds in furtherance of the proposed exchange, which Township officials had already decided should occur; and (5) the transfer of land to the Church violated the New Jersey Constitution.
In this count, Matula stated that the Township had failed to utilize monies from a 2012 bond issuance to maintain the municipal complex, but did not seek any relief based on this allegation.
The complaint requested preliminary injunctive relief prohibiting the Council from transferring any Township property to the Church; from determining that the municipal complex is in need of redevelopment; and from performing any work toward determining that the municipal complex is in need of redevelopment or concerning the proposed transfer of property. The complaint also requested further relief, specifically rescission of contracts to GRA and Michael Mistretta and Harbor Consultants; a "mandatory injunction" requiring the Township to rescind the Church's deeds to Lots 19 and 21; an accounting by the Township of all funds spent on the property exchange; and an order prohibiting the Township from collecting any additional taxes to replace those used in furtherance of the proposal.
At the oral argument on the order to show cause, the court denied Matula's request for injunctive relief and dismissed the complaint without prejudice. The court found that Matula had not established the grounds necessary for injunctive relief. Further, the court found that Matula was seeking to appeal possible actions of the Township and the Board that had not yet occurred. The court pointed out that an action in lieu of prerogative writs cannot be brought if there is an available right of review before the municipality. The court observed that the Township was in the beginning of a process whereby Matula could appear before the Council or the Board and make her concerns known at several junctures before there was a final vote permitting or prohibiting the property exchange. As Matula had failed to exhaust her administrative remedies, the court found that Rule 4:69-5 prohibited the bringing of an action in lieu of prerogative writs. This appeal followed.
The court stated at the hearing that the Township opposed Matula's application and also "sought dismissal of the complaint for failure to state a claim upon which relief can be granted, which was joined by the other defendants." No one at the hearing disagreed with the court's statement. The record does not include defendants' complete opposition papers.
On appeal, Matula argues that the trial court erred in dismissing her complaint. She contends that the matter was ripe for adjudication because the Township had already decided to participate in the proposal even though no vote had been taken. Matula also argues that she did not need to exhaust administrative remedies as the resolutions were final actions for which there was no further review. She does not appeal the denial of injunctive relief or the dismissal of the count in the complaint concerning the constitutionality of the land exchange. She also requested that we remand the case to a different judge. Defendants argue that the complaint was properly dismissed because there was no final action at the time Matula brought her complaint and that she failed to exhaust administrative remedies.
The Township and the Board also requested that Matula be sanctioned for bringing the action as it was frivolous. Neither defendant raised the issue below or filed a cross-appeal. We do not consider issues that were not raised at the trial level. US Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 483 (2012) (quoting Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973)). The Board also argues that Matula should be subject to sanctions for bringing this appeal. Such sanctions are not available in the Appellate Division. See Zavodnick v. Leven, 340 N.J. Super. 94, 103 (App. Div. 2001) (holding that N.J.S.A. 2A:15-59.1(a)(1) does not apply to an appeal). Accordingly, we decline to consider this issue. --------
An action in lieu of prerogative writs is "'a comprehensive safeguard against official wrong.'" Mullen v. Ippolito Corp., 428 N.J. Super. 85, 102 (App. Div. 2012) (quoting Garrou v. Teaneck Tryon Co., 11 N.J. 294 (1953)). While it authorizes a citizen to challenge a municipality's action or inaction, it is a profound remedy that should be exercised cautiously. See ibid.
A court will only review final municipal actions, declining review even if that municipality is about to act. Pressler & Verniero, Current N.J. Court Rules, comment on 1 on R. 4:69 (2014) (citing Harris v. Borough of Fair Haven, 317 N.J. Super. 226, 230 (Ch. Div. 1998)). Rule 4:69-5 states "[e]xcept where it is manifest that the interest of justice requires otherwise, actions under R. 4:69 shall not be maintainable as long as there is available a right of review before an administrative agency which has not been exhausted." The exhaustion rule is intended to ensure that claims will initially be heard by a body with expertise in the area, permit administrative resolution to eliminate the need for suit, and create a factual record for appellate review. Adams v. Delmonte, 309 N.J. Super. 572, 579 (App. Div. 1998). While municipal action may be reviewed even if further local approval is needed, there must be some interim final action prior to permitting court review. Id. at 580.
In addition to wrongful municipal action, actions in lieu of prerogative writs permit judicial intervention in cases of municipal inaction. See Mullen, supra, 428 N.J. Super. at 102. In the case of inaction, a plaintiff can challenge an official's failure to perform a public duty. Ibid. However, relief from inaction is limited to cases where a plaintiff can demonstrate (1) a clear violation of a municipal ordinance or duty that has especially affected the plaintiff; (2) the municipality failed to take appropriate action despite having had its attention brought to the matter; and (3) the party seeking judicial intervention shows that an adequate and realistic alternative form of relief is unavailable. Id. at 103.
We agree that the Council and Board did not take any final action approving the property exchange but was in the process of investigating its possible value to the municipality. Until a final decision happened, there was no way of knowing whether anyone who votes has a disqualifying conflict of interest. Matula has not exhausted all the avenues of appeal before the Board and Council to make her opinion known of the land transfer. In addition, Matula does not allege that she requested the Township rescind the 1960 and 1961 deeds to the Church. Accordingly, we agree that the dismissal of these claims in the complaint for failure to exhaust administrative remedies was appropriate.
That said, Matula also alleged in the fourth count of her complaint that the Council passed three resolutions on February 19, 2013, which were voted on by Council members who had disqualifying conflicts. Specifically, she challenges the resolution authorizing investigation of a land swap between the Township and Church, and the award of two separate contracts to perform services with respect to the potential land swap. As these resolutions represent final actions culminating in a binding vote of the Council, we agree with Matula that there do not appear to be any administrative remedies to exhaust as to the resolutions. Hence, we must consider whether this count of the complaint stated a claim that should not have been dismissed. See Printing Mart v. Sharp Elecs., 116 N.J. 739, 746 (1989).
Municipal officials are required to avoid conflicts of interest, a duty derived from the common law principal entitling persons "'to a fair and impartial tribunal.'" Wyzykowski v. Rizas, 132 N.J. 509, 522 (1993). This duty has been codified into two relevant statutes, the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-1 to -163, which is applicable to the Board, and the Local Government Ethics Law (LGEL), N.J.S.A. 40A:9-22.1 to -22.25, which is applicable to both the Township and the Board. Grabowsky v. Twp. of Montclair, 221 N.J. 536, 552 (2015). The MLUL dictates that members of a planning board not "'act on any matter in which he [or she] has, either directly or indirectly, any personal or financial interest.'" Ibid. (quoting N.J.S.A. 40:55D-23(b)). The LGEL goes beyond the obligations of the MLUL, barring action by any
local government officer or employee . . . in any matter where he [or she], a member of his [or her] immediate family, or a business organization in which he [or she] has an interest, has a direct or indirect financial or personal involvement that might reasonably be expected to impair his [or her] objectivity or independence of judgment.
[Id. at 553 (quoting N.J.S.A. 40A:9:22-5(d)) (internal quotations omitted).]
The case law identifies four specific types of interests that require disqualification:
(1) "Direct pecuniary interests," when an official votes on a matter benefitting the official's own property or affording a direct financial gain; (2) "Indirect pecuniary interests," when an official votes on a matter that financially benefits one closely tied to the official, such as an employer, or family member; (3) "Direct personal interest," when an official votes on a matter that benefits a blood relative or close friend in a non-financial way, but a matter of great importance, as in the case of a councilman's mother being in the nursing home subject to the zoning issue; and (4) "Indirect [p]ersonal
[i]nterest," when an official votes on a matter in which an individual's judgment may be affected because of membership in some organization and a desire to help that organization further its policies.
[Wyzykowski, supra, 132 N.J. at 525-26.]
To determine that a conflict of interest exists, a court "need not ascertain whether a public official has acted dishonestly or has sought to further a personal or financial interest;" the decisive factor is "whether there is a potential for conflict." Id. at 524. Nevertheless, ethics rules must be applied with caution as local governments would operate under considerable restraints "'if every possible interest, no matter how remote and speculative, would serve as a disqualification of an official.'" Grabowsky, supra, 221 N.J. at 554 (quoting Wyzykowski, supra, 132 N.J. at 523). Thus, an official's interest must be evaluated based on the individual circumstances of the case. Ibid. (citing Van Itallie v. Borough of Franklin Lakes, 28 N.J. 258, 268 (1958)).
Here, Matula challenges the Council's adoption of three resolutions on the basis that certain Council members were disqualified from voting based on their membership in the Church. In a conflict of interest dispute where an organizational association is the source of the dispute, the inquiry is twofold: (1) does the organization or church have an interest in the outcome of a proceeding, and (2) is the organization's interest in the outcome of a proceeding imputed to the officials in the local government? Id. at 558-60. Organizations that are either applicants or objectors clearly have interests in the outcome of a proceeding. Id. at 558. While the outer boundaries of what level of involvement will impute an organization's interests to an official have not yet been defined, at the very least an individual "who holds, or who will imminently hold, a position of substantive leadership in an organization reasonably is understood to share its interest in the outcome of a zoning dispute." Id. at 561. Thus, if an organization has a particular interest in an application, the "official has a disqualifying indirect personal interest and should refrain from deliberating and voting on the zoning application." Ibid.
The Supreme Court's recent articulation of these principles in Grabowsky is instructive here. There, the Court considered a challenge to an amendment to a municipal ordinance where a voting mayor and council member belonged to a church whose property was contiguous to property of a developer seeking amendments to the redevelopment plan in order to build an assisted living facility. Id. at 542-43. We had agreed with the trial court that there was no conflict of interest because the church was not an applicant or intervenor before the municipal council. Id. at 547. The Supreme Court reversed, finding that the proximity of the church to the property with the pending zoning application meant the church "clearly held an interest in the [] application to amend the ordinance." Id. at 559-60. The Court qualified that finding by stating that "[i]n order for public officials affiliated with a church [] to be disqualified from voting on such an application, the organization's interest in that issue must be imputed to those officials." Id. at 560.
The Grabowsky Court rejected the argument that an interest by an organization in an application in front of a board or council "is automatically imputed to all its members." Id. at 561. The Court found that these interests must be examined on "a case-by-case basis." Ibid. However, where, as in Grabowsky, an official occupies a position of "substantive leadership" in a church, the Court reasoned that he or she is "understood to share its interest in the outcome" of the dispute such that he or she should "refrain from deliberating and voting" on the application. Ibid.
On the limited record here, it is not possible to determine if any Council member had a conflict of interest for any of the three resolutions. No answers were filed and the record does not show whether defendants agree with Matula's representations about the mayor's and members of the Council's membership in the Church or that one Council member had a leadership position. After the relevant facts are established, the trial court must determine for each resolution if the Church had a direct interest in the resolution that can be imputed to the official and if any public official who voted on the resolution had a disqualifying interest by carefully evaluating the interest based on the facts. See Van Itallie, supra, 28 N.J. at 268. For an interest to be disqualifying, it must be distinct from that shared by members of the general public. See Wyzykowski, supra, 132 N.J. at 524 (citing Griggs, supra, 33 N.J. at 207). Certain interests can be too remote to influence an official's conduct. Grabowsky, supra, 221 N.J. at 555 (citing Van Itallie, supra, 28 N.J. at 269).
Matula also requested that the case be sent to a different judge, chiefly because the judge discussed an unpublished opinion after it was raised by defendants and the judge summarily dismissed her complaint. We find this claim to be without sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E). Suffice it to say that we perceive no evidence of prejudice or bias in the record or anything that would warrant an order removing the judge from the case. See Strahan v. Strahan, 402 N.J. Super. 298, 318 (App. Div. 2005) (noting there was no reason to disqualify a trial judge on remand where there was no basis in the record for a claim of bias or prejudice).
Affirmed in part and reversed in part and remanded for proceedings consistent with this opinion. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION