CENTRAL 25, LLC VS. ZONING BOARD OF THE CITY OF UNION CITY (L-1246-16, HUDSON COUNTY AND STATEWIDE) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0263-17T1
CENTRAL 25, LLC,
Plaintiff-Appellant, APPROVED FOR PUBLICATION
July 24, 2019
v.
APPELLATE DIVISION
ZONING BOARD OF THE CITY
OF UNION CITY,
Defendant-Respondent.
______________________________
Argued November 28, 2018 – Decided July 24, 2019
Before Judges Fuentes, Accurso and Vernoia.
On appeal from the Superior Court of New Jersey, Law
Division, Hudson County, Docket No. L-1246-16.
Ronald H. Shaljian and Seth I. Davenport argued the
cause for appellant (Shumann Hanlon, LLC, attorneys;
Ronald H. Shaljian, of counsel; Seth I. Davenport and
Joseph Elmo Cauda, Jr., on the brief).
Gregory F. Kotchick argued the cause for respondent
(Durkin & Durkin, LLC, attorneys; Gregory F.
Kotchick, of counsel and on the brief).
The opinion of the court was delivered by
FUENTES, P.J.A.D.
In Piscitelli v. City of Garfield Zoning Bd. of Adjustment, 237 N.J. 333
(2019), our Supreme Court recently addressed and clarified the standards
governing disqualifying conflicts of interests for municipal planning and zoning
board members and officials. Writing for the Court, Justice Albin explained that
members of these municipal boards must be "free of conflicting interests that
have the capacity to compromise their judgments." Id. at 338. Applying the
Court's reasoning in Piscitelli, we hold that plaintiff presented sufficient
evidence to establish reasonable grounds to question the impartiality of two
members of the Union City Zoning Board of Adjustment (Board). Under the
circumstances presented here, the Law Division erred in failing to conduct an
evidentiary hearing to determine whether these two Board members should have
been barred from hearing plaintiff's application for a use variance because their
personal interests might reasonably be expected to impair their objectivity or
independence of judgment.
We derive the following facts from the record developed before the Board
and the Law Division.
I
In 2001, Manuel Alvarez rented a commercial space located at the 2400
block of Bergenline Avenue in Union City, and began operating Panorama Live
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Poultry Market Corp. Mr. Alvarez lost his sight "in a tragic accident" in 2003,
causing his wife Niurka Alvarez to take over the day-to-day operation of the
business. The business operated at this location until 2014, when the landlord
raised the rent. In February 2015, the Alvarezes found a property for sale at the
2500 block of Central Avenue in Union City (City), that they thought was
suitable to relocate the business. This area of the City, however, is zoned for
residential use. Thus, to make the relocation possible, the Alvarezes needed to
secure a use variance.
According to Mr. Alvarez, the seller initially was not willing to provide
an open-ended "zoning contingency" clause in the purchase contract because
"there was another person bidding on the property." To secure a two-month
"investigation" contingency, Mr. Alvarez agreed to pay $50,000 over his initial
offer, for a total purchase price of $685,000. Mr. Alvarez testified that at the
time he made this decision, he was aware that: "I needed to make sure that I was
going to have the blessing by the Mayor."
On March 5, 2015, Mr. Alvarez and his wife Niurka met with Mayor Brian
P. Stack1 and Alex Velazquez, the head of the City's Health and Housing
1
Mayor Stack is also a State Senator who represents the 33rd Legislative
District.
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Department. According to Mr. Alvarez, this was the "one day in the week that
[Mayor Stack] receive[s] people to listen to their problems." Mr. Alvarez told
Mayor Stack that the owner of the property where his business was located on
Bergenline Avenue had raised the rent from $2100 to $3800 per month. He told
the Mayor he was unable to remain in business paying this much rent.
Fortunately, he found a suitable property for sale located on Central Avenue and
25th street, only two blocks from his current location. This was within walking
distance of ninety percent of his customers. Mr. Alvarez testified he emphasized
to the Mayor this was a larger one-story standalone structure with "good . . .
ventilation."
Mr. Alvarez testified that the Mayor told him this "was not his decision.
It was up to the . . . Zoning Board members, but that he had no objections."
According to Mr. Alvarez, the Mayor asked Velazquez for his opinion on the
matter. In response, Velazquez allegedly characterized the project as a
"magnificent idea" because the building was a corner property, with good
ventilation, and "no apartments above." Mr. Alvarez testified that he left the
Mayor's office "with the feeling that I have his blessing, and with the confidence
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that we could go out and ask for the loan 2 to buy the property." The appellate
record includes a printed copy of an email Mrs. Alvarez sent to Mayor Stack
dated March 6, 2015, memorializing what she claims was discussed at the
meeting the previous day. The Alvarezes formed Central 25, LLC to hold the
title of the property and listed themselves as the only principals. They closed
title on June 18, 2015.
On September 4, 2015, Central 25, LLC submitted an application to the
Board for preliminary and final site plan approval, which required a number of
bulk variances and a use variance to operate two retail uses: (1) a fish market;
and (2) a live poultry market. The application was originally scheduled to be
heard on October 15, 2015. At plaintiff's request, the hearing was adjourned to
November 12, 2015, to accommodate its planner's scheduling conflict.
According to plaintiff's counsel, on that same day, the Board's attorney recused
himself "presumably because his family owns the building where [the
Alvarezes'] existing poultry market is located."
Plaintiff's counsel apprised the Board that on November 7, 2015, the
Alvarezes invited area residents to attend a neighborhood meeting at the Central
2
In his introductory remarks to the Board at the December 10, 2015 meeting,
plaintiff's counsel claimed the Alvarezes mortgaged their home to finance the
purchase of the Central Avenue property.
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Avenue property "to address concerns that they may have." Counsel claimed
that at this gathering, "one of our client's customers produced two letters, over
Mayor Stack's signature, [written] in both Spanish and English, which had been
slipped under the doorway of her home on official Union City stationery." The
letters were marked as exhibits at the Board hearing and are part of the appellate
record.
The letters are not dated; they are written on paper embossed with the seal
of the City of Union City, identify an affiliation with the Department of Public
Safety, and list the City Hall as its address. "Brian P. Stack, Mayor" is printed
on the top left corner of the letter; the right corner lists the Mayor's Office
telephone and fax numbers. The content of the letter is formatted as a flyer; it
states the following message written in large capital letters, using fonts of
different sizes. We recite the content of the flyer verbatim:
Please Read Correction to previous flyer!3
3
The record before us includes two letters/flyers written in Spanish. In response
to a question from a member of the Board, plaintiff's counsel asserted that the
Spanish language version of the first letter reflects that Mayor Stack "was in
favor" of the proposal to construct a live poultry market located on 25th Street
and Central Avenue. According to plaintiff's counsel, "a subsequent letter
appeared with the Mayor's signature" correcting this mistake. Although the
appellate record contains copies of the letters written in Spanish, plaintiff did
not provide this court with a certified translation of these documents.
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RESIDENTS IN THE AREA OF 25TH STREET & CENTRAL AVENUE
Dear Friend,
I am writing this letter to inform you that I am personally not in
favor of the live poultry market that is proposed for 25th Street
and Central Avenue. This is not something I believe would benefit or
improve your neighborhood. I know you see, first hand, how hard and how
diligent the Commissioners and I are working to improve your neighborhood
and the City.
All I ask is if you can attend the meeting on November 12th at 6:00 PM
at City Hall – 2nd Floor at 3715 Palisade Avenue. It is important to voice your
opinion and concerns. I do not have a vote on the board that will hear this
proposal so it is important for you to let your voice be heard.
Thank you for your dedication to your neighborhood the love we share for
Union City (sic). As always, call me anytime – 7 days a week – if I can help. It
is an honor to serve as your Mayor.
Your friend,
Brian P. Stack
Mayor
Cell: [contains a telephone number.]
Without a citation to the appendix 4, plaintiff's counsel states that on
November 17, 2015, he received a letter from Board Secretary Carlos Vallejo
advising him that the location of the Board meeting to hear plaintiff's application
4
Pursuant to Rule 2:6-2(a)(5), all factual claims on appeal must be supported
"by references to the appendix and transcript." Although counsel's statement is
reflected in the transcript of the hearing before the Board, appellate counsel
should have included a copy of the Board Secretary's November 17, 2015 letter
as part of the appendix.
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had been changed to Robert Waters Elementary School, located at 2800 Summit
Avenue. The hearing date was also changed to December 10, 2015. Vallejo
directed plaintiff's counsel to send notice of this new date and location, as
required by N.J.S.A. 40:55D-12.
Plaintiff's counsel marked as an exhibit before the Board an additional
undated flyer5 sent from Mayor Stack on official City stationery, addressed to
the "RESIDENTS IN THE AREA OF 25TH STREET & CENTRAL AVENUE,"
in which the Mayor reaffirmed his condemnation of plaintiff's application. The
Mayor also exhorted the area residents "to attend the meeting on December 10th
at 6:00 PM at Robert Waters Elementary School . . . to voice your opinion and
concerns."
The Board's Vice Chairman Victor Grullon made the following comments
concerning the Mayor's flyers:
I just want to clarify for the members of the Board that
we don’t - - we don’t consider any letter of anybody
that is not present in the - - in the audience here, to
defend themselves.
If you have a letter, and you want to - - for that letter to
stay in the record, that person has to be present.
5
This letter/flyer includes a photograph of the Mayor with the City's seal
embossed above it.
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With that said, we don’t consider any letter that you
have, or any propaganda. It's probably an opinion of a
resident of Union City, but we don’t consider that as
anything that will guide our decisions here.
In response to Vice-Chairman Grullon's statement, plaintiff's counsel
noted that "the Mayor and Commissioners appoint each of the members of the
Zoning Board." This prompted the following exchange by the attorneys:
BOARD ATTORNEY: Counsel? Counsel? Counsel?
This is an independent body. Client just testified that
he knew that this is an independent body . . . that has to
make the decision. I would tread softly on what you
say next.
PLAINTIFF'S ATTORNEY: And the Mayor's letter, all
of the Mayor's letters, were sent out intentionally to
enflame this application.
BOARD ATTORNEY: Counsel, again - -
PLAINTIFF'S ATTORNEY: And sabotage - -
BOARD ATTORNEY: Counsel, I don’t - -
PLAINTIFF'S ATTORNEY: - - this application.
BOARD ATTORNEY: The Mayor's not here to testify
and he's a resident of the town. Any one of these
residents can contact - -
PLAINTIFF'S ATTORNEY: The letter was in his
official capacity, counsel. It wasn’t a letter from a
private citizen.
....
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BOARD ATTORNEY: - - and I think - - what I think -
- I think what . . . the Chairman was saying is it doesn’t
really affect us.
....
It doesn’t really affect this body.
And whether . . . the Mayor was for it or against it, they
don’t - - it's not for their - - it's not for their ears. 6
In addition to the Alvarezes' testimony, plaintiff presented the testimony
of a licensed architect, an Animal Health Technician employed by the New
Jersey Department of Agriculture, Division of Animal Health, a licensed
professional engineer, an architect who specialized in environmental services
and indoor air purification systems, and a licensed professional engineer and
planner. Because the focus of our review is limited to ethical considerations,
we have opted not to summarize their testimony.
Eleven members of the public testified during the Board's public session.
At the conclusion of the public comment session, Vice-Chairman Grullon moved
to deny the application "because it's going to change the characteristic of the
6
The record also includes copies of anonymous flyers condemning the proposed
live poultry store and characterizing the Alvarezes as "some out-of-towners
[who] want to open a live poultry market that they would never allow to open in
their own town." These flyers were also written in Spanish. There is no
evidence to indicate these flyers were prepared or distributed by the Mayor or
anyone acting on his behalf.
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neighborhood, established residential zone and we . . . are here to respect the
Zoning Ordinance." Without further discussion or comment, six members voted
to deny the application and one voted to grant it. At the time the application
came before the Board for a vote, Board member Margarita Gutierrez was the
Chief Executive Officer (CEO) of the Brian Stack Civic Association
(Association) and Vice-Chairman Grullon was its Vice-President.
II
On March 21, 2016, plaintiff filed this action in lieu of prerogative writs
challenging the Board's decision pursuant to Rule 4:69-6(b)(3). The judge
originally assigned to hear this matter held a case management conference on
June 13, 2016, as required by Rule 4:69-4 and established the parties' briefing
schedule. This judge thereafter recused himself based on a conflict of interest,
the nature of which was not disclosed on the record. The case was reassigned
to a different judge who heard oral argument November 9, 2016.
Plaintiff argued the Board's decision denying the application should be
reversed because: (1) the decision was arbitrary and capricious; (2) the
resolution memorializing the denial of the application did not include "findings
of fact and conclusions based thereon" as required by N.J.S.A. 40:55D-10(g);
and (3) the Mayor's improper interference in the application process irreparably
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tainted the Board's impartiality and denied plaintiff a fair hearing. With respect
to the Board's impartiality, plaintiff's counsel noted that at the time of the
hearing, Vice-Chairman Grullon, Board member Gutierrez, and the Board's
Secretary Carlos Vallejo "were all officers and trustees of the Brian Stack Civic
Association."
Plaintiff argued these individuals should have disclosed their membership
and participation in the Association and thereafter recused themselves because
the Mayor's campaign against the application created an impermissible conflict
of interest. The judge initially decided that the Board's memorializing resolution
was deficient "because it did not give enough facts for their basis for the denial,
and a great deal of those statements were conclusions without enough facts."
However, the judge rejected plaintiff's argument based on a conflict of interest
by the two members of the Board who were listed as directors of the Mayor's
Association. The judge provided the following explanation to support of his
decision:
Plaintiff also contends that Mayor Stack's Civic
Association is a tool used to secure Mayor Stack's
alleged political stronghold in Union City.
While the issue is not - - those statements are without
evidentiary support.
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Plaintiff has specifically acknowledged that he does not
have personal knowledge as to the allegations made in
regard to the Mayor's Civic Association.
Moreover, plaintiff has not submitted a certification in
support of the same, yet plaintiff asks the [c]ourt to
infer improper behavior on behalf of the Mayor because
of his Civic Association, essentially, and its influence,
citing the donation of turkey baskets or candies for
seniors, but there is no evidence of wrongdoing or
improper behavior on behalf of the Civic Association,
and it specifically fails to show that the alleged
behavior has somehow tainted the Union City Zoning
Board.
....
In addition, the plaintiff asserts that there are various
conflicts of interest between the Board and Mayor
Stack because three7 members of the Zoning Board of
Adjustment are members of Mayor Stack's Civic
Association.
But the [c]ourt is unconvinced that being merely
members of an association or a political organization
would disallow someone from being a member of a . . .
Board such as the Board of Adjustment, the Library
Board, the Rent Leveling Board, et cetera.
Therefore, the accusations lack merit, and the [c]ourt is
unpersuaded that the Board is so irreparably tainted by
Mayor Stack's influence, as to render a fair decision.
7
Only Grullon and Gutierrez are members of the Board. Secretary Vallejo, who
is listed as a director of the Mayor's Association, is not a member of the Board.
He is employed by the City to serve as Secretary to the Board.
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In an order dated November 28, 2016, the court remanded the matter for
the Board to adopt "a memorializing resolution setting forth more specific
findings and conclusions of law" within forty-five days. In response to the
court's order, the Board passed a "Revised Resolution" on January 12, 2017, on
a vote of four to zero with two absent. In an order dated April 4, 2017, the trial
judge established a new briefing schedule and directed the parties to appear on
June 16, 2017, to present oral argument.
On the day of oral argument, plaintiff's counsel argued that the Revised
Resolution remained deficient. Counsel characterized the first eleven pages of
the resolution as "merely a regurgitation of a summary of the transcript." He
also noted that the resolution does not "evaluate, question, [or] reject . . . the
testimony of plaintiff's experts in this matter." According to plaintiff's counsel,
the Board used "boilerplate language" in lieu of actual fact-finding. Counsel
urged the judge "to take a very hard look" because, in his opinion, the Board had
once again failed to carry out its fact-finding statutory duty. The Board's
attorney argued the Revised Resolution fully responded to the court's earlier
ruling and contained the required factual findings. The judge reserved decision
at the end of oral argument.
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In an oral decision delivered from the bench on July 27, 2017, the judge
found no grounds to disturb the Board's decision and dismissed plaintiff's cause
of action with prejudice. Although the testimony of plaintiff's experts was not
challenged, the judge held the Board was not obligated to accept their findings
and opinions. The judge entered a final order on August 8, 2017, memorializing
his decision.8
III
We start our analysis with Justice Albin's cautionary proclamation in
Piscitelli: "Public confidence in the integrity of our municipal planning and
zoning boards requires that board members be free of conflicting interests that
have the capacity to compromise their judgments." 237 N.J. at 338 (emphasis
added). Thus, the question here is not whether Mayor Stack attempted to unduly
influence the Board's evaluation of this application. What we are required to
8
Although not raised by the parties or noted by the trial judge in his oral
opinion, we are compelled to point out the following irregularity. The second
Revised Resolution dated January 12, 2017 was signed by Board Chairman
Andres Garcia. The transcript of the December 10, 2015 Board meeting lists
Chairman Garcia as "absent" at that meeting. Thus, the resolution denying
plaintiff's application was signed by Vice-Chairman Grullon, who presided at
the meeting. The appellate record does not include a transcript of the January
12, 2017 Board meeting, at which the Board presumably passed the final
"Revised Resolution." On remand, the Law Division must determine whether
Chairman Garcia was legally competent to vote and sign the final Revised
Resolution pursuant to N.J.S.A. 40:55D-10.2.
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determine is whether any members of the Board who voted to deny this
application had a personal interest that "might reasonably be expected to impair
[their] objectivity or independence of judgment." Ibid. (citing N.J.S.A. 40A:9-
22.5(d); N.J.S.A. 40:55D-69; N.J.S.A. 40:55D-23(b)).
Here, the record shows that Board member Margarita Gutierrez was the
CEO of the Brian Stack Civic Association and Vice-Chairman Victor Grullon
was its Vice President. The record also shows that Mayor Stack actively
campaigned against plaintiff's application to obtain a variance from the Board
to operate a live poultry market in a residential zone. Based on these
uncontested facts, we hold the trial judge erroneously framed the dispositive
question. The issue here is not: Did plaintiff present sufficient evidence to show
that the Board's judgment as a whole was irreparably tainted by Mayor's Stack's
activities? The Mayor, as an elected public official and a resident of the City,
had the right to express his opinion on this proposed project. The question we
must answer here is: Were the two members of the Board who held high ranking
positions in a highly visible, public civic association which bears the Mayor's
name, barred from voting on this application? As was the case in Piscitelli, the
record before us is not sufficient to definitively answer this question.
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In Piscitelli, members of a prominent family in the City of Garfield
submitted an application to the Garfield Board of Adjustment for site plan
approval and variances to construct a gas station, car wash, and other related car
services on three lots. 237 N.J. at 338. As framed by the Court, the issue was
"whether any members of the Garfield Zoning Board of Adjustment had a
disqualifying conflict of interest because of the involvement of certain Con te
family members in the Zoning Board proceedings." Ibid. The three members
of this prominent family who owned these lots were all physicians.
One of the doctors had also served as a member of the Garfield Board of
Education for many years, and was its president at the time the site plan
application came before the Zoning Board. Id. at 339. Five members of the
Zoning Board were employed by the Board of Education or had immediate
family members who worked for the school district. Ibid. To avoid an
appearance of a conflict, the owners of the lots made a series of intra-family
transfers of title. Thereafter, the doctor, who also served as the president of the
Board of Education, attended the Zoning Board hearing "and made clear his
position favoring the project." Ibid.
Two objectors to the application addressed the Zoning Board and noted
that the doctor, as President of the Board of Education, voted on personnel
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matters. Ibid. Therefore, the five Zoning Board members who were employed
or had immediate family members employed by the Board of Education had a
conflict of interest that barred them from hearing the application. Ibid. These
objectors also claimed that any member of the Zoning Board who was a patient
or had immediate family members who were patients of this doctor or his brother
were equally barred from voting on the outcome of this application. Ibid.
However, none of the Zoning Board members disqualified themselves on
conflict-of-interest grounds. Ibid. The Zoning Board approved the application
and granted all of the necessary variances. Ibid.
The objectors filed an action in lieu of prerogative writs arguing the failure
of the Zoning Board members to recuse themselves based on this conflict of
interest "undermined the legality of the proceedings." Ibid. The trial court not
only upheld the Zoning Board's decision "finding that no conflicts of interest
had impaired the Board members[,]" but it also denied the objectors' request to
determine whether any Zoning Board members or their family members were
patients of the President of the Board of Education, his brother, or his nephew.
Ibid. This court affirmed the trial court's decisions. Id. at 340.
The Supreme Court reversed and remanded the matter "for further
proceedings to decide whether any Zoning Board member had a disqualifying
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conflict of interest in hearing the application[.]" Ibid. The Court gave the trial
court the following instructions:
The trial court must assess two separate bases for a
potential conflict of interest. First, did [the doctor] . . .
as president or a member of the Board of Education --
have the authority to vote on significant matters relating
to the employment of Zoning Board members or their
immediate family members? Second, did any Zoning
Board members or an immediate family member have a
meaningful patient-physician relationship with any of
the three . . . doctors? If the answer to either of those
questions is yes, then a conflict of interest mandated
disqualification and the decision of the Zoning Board
must be vacated. We do not possess sufficient
information to answer those questions. We therefore
reverse the judgment of the Appellate Division and
remand to the trial court to determine whether any
disqualifying conflicts impaired the Zoning Board
proceedings.
[Ibid.]
In reaching this conclusion, the Court in Piscitelli emphasized and
reaffirmed that the overarching purpose of conflict of interest laws are: (1) "to
ensure that public officials provide disinterested service to their communities;"
and (2) to "promote confidence in the integrity of governmental operations." Id.
at 349 (quoting Thompson v. City of Atlantic City, 190 N.J. 359, 364 (2007)).
The Court identified the following three "distinct" sources of authority to
determine whether zoning board members have a disqualifying conflict of
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interest that require their recusal: (1) the Local Government Ethics Law,
N.J.S.A. 40A:9-22.2; (2) the Municipal Land Use Law (MLUL), N.J.S.A.
40:55D-69; and (3) the common law, which, although now codified in those
conflict statutes, remains a useful tool of construction in those cases requiring
judicial oversight. Id. at 350.
The Local Government Ethics Law defines a "local government officer"
as a person "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). The statute also provides that:
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;
[N.J.S.A. 40A:9-22.5(d) (emphasis added).]
In the following passage in Piscitelli, Justice Albin dispelled any ambiguity that
may have existed about the scope of the ethical standards the Legislature
imposed to govern the conduct of local government officers:
In enacting this code of ethics for municipal officers
and employees, the Legislature declared its intent by
stating:
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a. Public office and employment are a
public trust;
b. The vitality and stability of
representative democracy depend upon the
public's confidence in the integrity of its
elected and appointed representatives;
c. Whenever the public perceives a
conflict between the private interests and
the public duties of a government officer or
employee, that confidence is imperiled.
[Id. at 351 (quoting N.J.S.A. 40A:9-22.2(a)
to (c)).]
Of particular relevance to the case before us, Justice Albin emphasized
that proper judicial oversight requires judges to construe N.J.S.A. 40A:9-22.5(d)
in a manner that "further[s] the Legislature's expressed intent that '[w]henever
the public perceives a conflict between the private interests and the public duties
of a government officer,' 'the public's confidence in the integrity' of that officer
is 'imperiled.'" Ibid. (Emphasis added).
However, this code of ethics is not the only law that regulates the conduct
of members of zoning boards. The MLUL describes the composition of the
zoning board of adjustment, sets strict eligibility standards on who may be
appointed to serve as a member, and describes what type of conduct or personal
interest may disqualify a member from deciding a particular application.
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Specifically: "No member of the board of adjustment shall be permitted to act
on any matter in which he has, either directly or indirectly, any personal or
financial interest." N.J.S.A. 40:55D-69 (emphasis added).
As Justice Albin noted in Piscitelli:
The overlapping conflict-of-interest codes that apply to
this case can be distilled into a few common-sense
principles. A citizen's right to "a fair and impartial
tribunal" requires a public official to disqualify himself
or herself whenever "the official has a conflicting
interest that may interfere with the impartial
performance of his duties as a member of the public
body." The question is not "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.'" "The question will
always be whether the circumstances could reasonably
be interpreted to show that [conflicting interests] had
the likely capacity to tempt the official to depart from
his sworn public duty."
A conflict of interest arises whenever a public official
faces "contradictory desires tugging [him or her] in
opposite directions." This objective inquiry into
whether a disqualifying conflict is present dispenses
with any probing into an official's motive because the
ultimate goal is to ensure not only impartial justice but
also public confidence in the integrity of the
proceedings.
[237 N.J. at 352-53 (emphasis added) (citations
omitted).]
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Guided by these ethical standards, we are satisfied the record developed
before the Board does not provide sufficient information to determine whether
the circumstances surrounding Board member Gutierrez's and Vice-Chairman
Grullon's membership in and relationship with the Brian Stack Civic Association
and Mayor Stack's active opposition to plaintiff's application could reasonably
be construed to show a likely capacity to tempt the officials to depart from their
sworn public duty at the time they voted to deny plaintiff's application.
Piscitelli, 237 N.J. at 353.
It is undisputed that Mayor Stack actively campaigned against plaintiff's
application, disseminated flyers that expressed his opinion on the matter, and
urged area residents to attend the Board meeting and testify against the
application. The record also shows that at the time the application came before
the Board, Gutierrez was the CEO of the Civic Association that bears the
Mayor's name and Grullon was its Vice-President.
The Law Division judge did not consider the ethical implications of this
information. The high-level of participation in the Mayor's Association by these
two Board members might reasonably be viewed by the applicant and the public
at large as significant factors capable of impairing their objectivity or
independence of judgment.
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The record plaintiff presented to the Law Division included a copy of the
Mayor's Civic Association's 2014 tax returns, which showed it was registered
with the Internal Revenue Service as a tax exempt organization. The list of
officers and directors obtained from the New Jersey Business Entity and Records
Service lists Grullon, the Board's Vice-Chairman, as Vice-President of the
Association and Board member Gutierrez as the Association's CEO. The
Board's Secretary is listed as one of the Association's Directors.
The Law Division Judge minimized the Association's activities and
influence as involving merely "the donation of turkey baskets or candies for
seniors." The filed tax returns of the Association for 2014 indicate it received
contributions totaling $660,419 and spent $673,253, leaving a net deficit of
$12,834. This document also shows the Association's contributions for 2013
totaled $557,402, with expenditures of $546,429, leaving a net positive balance
of $10,973. The first page for the Association's tax returns for 2012 shows
contributions totaling $500,619, and expenditures of $500,257, leaving a net
positive balance of $362; the first page of the returns for 2011 shows
contributions totaling $477,512, and expenditures of $477,065, leaving a net
positive balance of $447; the tax returns for 2011 also show contributions
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received in 2010 totaling $477,070, and expenditures for that same year of
$490,157, leaving a net deficit of $13,087.
It is well-settled that hearings conducted before a zoning board of
adjustment to decide an application for a land use approval are quasi-judicial
proceedings. Dolan v. DeCapua, 16 N.J. 599, 612 (1954). Zoning boards must
make factual determinations based on the record developed before them and
decide whether the applicant has satisfied the statutory criteria for variances.
Baghdikian v. Board of Adjustment of Ramsey, 247 N.J. Super. 45, 49 (App.
Div. 1991). Its powers include the "judicial" role of deciding questions of
credibility and whether to accept or reject testimony, expert or otherwise.
Griggs v. Zoning Bd. of Adjustment of Princeton, 75 N.J. Super. 438, 446 (App.
Div. 1962). Although our Supreme Court has recognized that based on their
familiarity of their community's characteristics and interests, zoning boards'
members are "best equipped to pass initially on such applications for variance."
Ward v. Scott, 16 N.J. 16, 23 (1954), they may not rely on undisclosed facts that
are not part of the record. Gougeon v. Board of Adjustment of Stone Harbor,
52 N.J. 212, 221 (1968).
As the Court made clear in Piscitelli, "common law conflict-of-interest
principles inform our understanding of the Local Government Ethics Law and
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the MLUL." 237 N.J. at 352. "A public official is disqualified from participating
in judicial or quasi-judicial proceedings in which the official has a conflicting
interest that may interfere with the impartial performance of his duties as a
member of the public body." Scotch Plains-Fanwood Bd. of Educ. v. Syvertsen,
251 N.J. Super. 566, 568 (App. Div. 1991).
The tax return records of the Brian Stack Civic Association show that in
the five-year period, from 2010 to 2014, it received contributions totaling
$2,673,022 and disbursed $2,687,161. These records do not disclose the nature
of the Association's activities. It is reasonable to presume, however, that these
activities are intended and designed to promote the Mayor's interests. Even a
cursory review of the limited financial information plaintiff gathered from
public records shows that its activities may be far more expansive than "the
donation of turkey baskets or candies for seniors." Board Vice-Chairman
Grullon's role as the Association's Vice-President and Board member's
Gutierrez's role as the Association's CEO requires a thorough, objective inquiry
into whether these dual roles created a disqualifying conflict in this case.
Piscitelli, 237 N.J. at 353.
The Law Division judge must review, consider, and determine whether
the high level positions Grullon and Gutierrez had in the Mayor's Association at
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the time plaintiff's application came before the Board, viewed in the context of
the Mayor's aggressive opposition to plaintiff's application, constituted an
indirect personal interest under N.J.S.A. 40:55D-69, precluding both of them
from participating in this matter. The judge must also determine whether the
Mayor's aggressive advocacy against the granting of plaintiff's application
created reasonable grounds to establish a conflict of interest for Grullon and
Gutierrez under N.J.S.A. 40A:9-22.2 and/or provided reasonable grounds under
the common law for the public to doubt the impartiality of these two Board
members. Finally, we leave it to the trial judge's discretion to determine whether
plaintiff is entitled to discovery in the form of a limited number of written
interrogatories and/or deposition testimony from Grullon and Gutierrez. In the
words of Justice Albin in Piscitelli: "the ultimate goal is to ensure not only
impartial justice but also public confidence in the integrity of the proceedings."
237 N.J. at 353.
Reversed and remanded. We do not retain jurisdiction.
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