Derek Armstead v. Local Finance Board ( 2024 )

NOT FOR PUBLICATION WITHOUT THE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 binding only 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-3476-21
DEREK ARMSTEAD,
GRETCHEN HICKEY,
RALPH STRANO, and
ARMANDO MEDINA,
individually,
Petitioners-Appellants,
v.
LOCAL FINANCE BOARD,
Respondent-Respondent.
___________________________
Submitted December 5, 2023 – Decided January 18, 2024
Before Judges Gooden Brown and Puglisi.
On appeal from the New Jersey Department of
Community Affairs, Local Finance Board.
Aloia Law Firm, LLC, attorneys for appellants (Brian
Joseph Aloia and Victoria A. Lucido, on the briefs).
Matthew J. Platkin, Attorney General, attorney for
respondent (Sara M. Gregory, Assistant Attorney
General, of counsel; Steven Michael Gleeson, Deputy
Attorney General, on the brief).
PER CURIAM
Petitioners Derek Armstead, Gretchen Hickey, Ralph Strano and Armando
Medina appeal from the May 31, 2021 final agency decision of the Local
Finance Board (the Board) adopting with modifications the initial decision of
Administrative Law Judge (ALJ) Thomas R. Betancourt, which found
petitioners violated the Local Government Ethics Law (LGEL), N.J.S.A. 40A:9-
22.5(d), and fined them each $100. We affirm as to the decisions regarding
Hickey and Medina, and reverse and remand the decisions as to Armstead and
Strano.
I.
Petitioners were council members in the City of Linden in Union County.
Linden is governed by a mayor and a council president, both of whom are elected
at-large, and ten members of a city council elected by ward.
During their tenure as council members, petitioners were full-time
employees of Union County. As Union County employees, petitioners reported
to their respective county department heads, who reported to the county
manager, who reported to the Union County Board of Commissioners.
The Board of Commissioners, which consists of nine elected members, is
"an area-wide agency of state government empowered to administer state
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functions within the County and as an instrumentality of the people to provide
area-wide services for their use and benefit[.]" Union County, N.J., Code § 1-
13. Among its powers, the Board "[m]ay pass a resolution of disapproval of a
suspension or dismissal" of any Union County employee. Id. at § 1-13(E). From
2012 to 2016, Mohamed Jalloh was an elected Union County Commissioner.
Armstead was employed by Union County as a data processing
programmer from 1998 to 2016. On November 20, 2012, in his capacity as a
Linden council member, Armstead voted in favor of Resolution 2012-389
appointing Jalloh as Acting Public Defender in a Linden municipal court matter.
On December 18, 2012, Armstead voted in favor of Resolution 2012-422
qualifying Jalloh & Jalloh LLC for Acting Public Defender Services, Litigation
Defense Counsel Services, Special Counsel Services, and Sid Committee. On
August 19, 2014, Armstead voted in favor of Resolutions 2014-310, -311
and -312, appointing Jalloh as Acting Public Defender in three Linden municipal
court matters.
Hickey was employed by Union County as a clerk from 2011 to 2016. The
letterhead on Hickey's pre-employment letter dated April 15, 2011, listed the
names of all Union County Commissioners, including Jalloh. On February 17,
2015, in her capacity as a Linden council member, Hickey voted in favor of
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Resolution 2015-112 appointing Jalloh as Assistant Municipal Attorney and
Assistant Municipal Prosecutor. On January 5, 2016, she voted in favor of
Resolution 2016-14 appointing Jalloh as Assistant Municipal Prosecutor.
Strano was employed by Union County as a traffic maintenance worker
since 1999. In his capacity as a Linden council member, he also voted in favor
of Resolution 2016-14.
Medina was hired by Union County as a community service worker on
January 9, 2016, having received a pre-employment letter from Union County
the previous month. The letterhead on the pre-employment letter listed the
names of all Union County Commissioners, including Jalloh. In his capacity as
a Linden council member, Medina also voted in favor of Resolution 2016-14.
On March 19, 2021, the Board issued notices of violation advising
petitioners they violated N.J.S.A. 40A:9-22.5(d) by voting "on matters that
awarded contracts of employment" to Jalloh,1 who was their "ultimate supervisor
as . . . employee[s] of the County," and imposing a fine of $100 on each
petitioner. Petitioners requested a hearing and the Board transferred the case to
the Office of Administrative Law as a contested matter pursuant to N.J.S.A.
1
There were no allegations of any wrongdoing against Jalloh.
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52:14B-1 to -15; N.J.S.A. 52:14F-1 to -13, and both parties cross-moved for
summary decision, stipulating there were no contested facts.
In his initial decision, ALJ Betancourt acknowledged Jalloh was not the
direct supervisor of any petitioner. Pointing to Wyzykowski v. Rizas, 132 N.J.
509, 525 (1993), the ALJ noted there are "four circumstances under which the
[LGEL] requires disqualification," one of which involves "'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[.]" Because Jalloh
was a member of the highest management level in the petitioners' chain of
command as county employees, which the ALJ found akin to sitting on the board
of directors of an employer, the ALJ found recusal was required. Accordingly,
the ALJ granted the Board's motion for summary decision, denied petitioners'
motion for summary decision, and affirmed the notices of violation including
the fine.
After considering petitioners' exceptions to the initial decision, the Board
rendered its final agency decision adopting the initial decision, with
modifications to particular language in the decision and corrections to certain
citations.
On appeal, petitioners raise the following issues for our consideration:
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POINT I
THE ALJ’S DECISION, AS ADOPTED BY [THE
BOARD], IMPROPERLY GRANTED SUMMARY
DECISION IN FAVOR OF RESPONDENT.
POINT II
THE ALJ’S INITIAL DECISION, AS ADOPTED BY
[THE BOARD], FAILED TO CONSIDER WHETHER
ANY ALLEGED CONFLICT IS TOO REMOTE OR
SPECULATIVE FOR A REASONABLE MEMBER
OF THE PUBLIC TO PERCEIVE THAT
[PETITIONERS] HAD A PERSONAL
INVOLVEMENT THAT MIGHT REASONABLY BE
EXPECTED TO IMPAIR [PETITIONERS']
OBJECTIVITY OR INDEPENDENCE OF
JUDGMENT.
POINT III
THE ALJ’S INITIAL DECISION, AS ADOPTED BY
[THE BOARD], WAS INCORRECT IN FINDING
THAT MR. JALLOH IN EFFECT SITS ON THE
BOARD OF DIRECTORS OF THE EMPLOYER FOR
EACH [PETITIONER], WHEN [PETITIONER]
MEDINA WAS NOT EMPLOYED BY THE COUNTY
ON THE DATE OF THE VOTES.
POINT IV
THE ALJ'S INITIAL DECISION, AS ADOPTED BY
[THE BOARD], FAILED TO ACKNOWLEDGE
WHETHER [PETITIONERS] ARMSTEAD AND
STRANO WERE AWARE OF THE ALLEGED
CONFLICT ON THE DATES OF THE VOTES.
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II.
We begin with our standard of review. The ALJ's consideration of a
motion for summary decision under N.J.A.C. 1:1-12.5 is "substantially the
same" as a trial court's consideration of a motion for summary judgment under
Rule 4:46-2. Contini v. Bd. of Educ. of Newark, 286 N.J. Super. 106, 121 (App.
Div. 1995). However, our review of an agency's summary decision differs from
our de novo review of a court's grant of summary judgment. See Henry v. N.J.
Dep't of Human Servs., 204 N.J. 320, 330 (2010). While we review de novo an
agency's determination that there are no genuine issues of material fact, we
"strive to 'give substantial deference to the interpretation [the] agency gives to
a statute that the agency is charged with enforcing.'" In re Application of Virtua-
West Jersey Hosp. Voorhees for a Certificate of Need, 194 N.J. 413, 423 (2008)
(citing Saint Peter's Univ. Hosp. v. Lacy, 185 N.J. 1, 15 (2005)). We generally
will affirm an agency's final quasi-judicial decision unless it is "arbitrary,
capricious, or unreasonable." Russo v. Bd. of Trustees, Police and Firemen's
Ret. Sys., 206 N.J. 14, 27 (2011). Nonetheless, we are "in no way bound by the
agency's interpretation of a statute or its determination of a strictly legal issue."
Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 93 (1973). Applying this
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standard of review, we affirm the Board's determination Hickey and Medina
violated the LGEL by voting on matters benefitting a county commissioner.
The LGEL's purpose is
to provide a method of assuring that standards of ethical
conduct and financial disclosure requirements for local
government officers and employees shall be clear,
consistent, uniform in their application, and
enforceable on a Statewide basis, and to provide local
officers or employees with advice and information
concerning possible conflicts of interest which might
arise in the conduct of their public duties.
[N.J.S.A. 40A:9-22.2(e).]
Therefore, pursuant to N.J.S.A. 40A:9-22.5(d):
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.
Our Supreme Court in Piscitelli v. City of Garfield Zoning Bd. of Adj.,
237 N.J. 333, 351 (2019) held: "We must construe N.J.S.A 40A:9-22.5(d) to
further 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. "A conflicting interest arises when the public official has an interest not
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shared in common with the other members of the public." Meyer v. MW Red
Bank, LLC, 401 N.J. Super. 482, 491 (2008). Therefore, "actual proof of
dishonesty need not be shown. The key is whether there is a potential for
conflict." Shapiro v. Mertz, 368 N.J. Super. 46, 53 (2004).
We find no error in the Board's determination Hickey's and Medina's
voting on matters that financially benefitted a county commissioner raised an
appearance of impropriety which would undermine the public's confidence in
the integrity of the council. As the ALJ found, although Jalloh did not have
direct supervisory authority over them as county employees, he was a member
of the highest governing board of the county. It is neither remote nor speculative
that the relationship, although not a direct supervisory one, "might reasonably
be expected to impair . . . objectivity or independence of judgment." N.J.S.A.
40A:9-22.5(d). In other words, a member of the public would reasonably
believe Hickey and Medina, because they are county employees, would not cast
a vote adverse to a county commissioner's financial interests.
We recognize, as did the ALJ, that Medina's employment with the county
had not yet begun at the time he cast his vote. However, this distinction does
not compel a different result because "[d]ecisions construing N.J.S.A. 40A:9-
22.5(d) adopt [an] expansive view, holding an appearance of impropriety, not
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an actual conflict of interest, creates a disqualifying situation." Mondsini v.
Local Finance Board, 458 N.J. Super. 290, 301 (App. Div. 2019). The fact that
Medina was four days shy of his intended start date with the county does not
alter this appearance of impropriety, because he would nevertheless have "an
interest not shared in common with other members of the public." Meyer, 401
N.J. Super. at 491.
As to Armstead and Strano, however, the record contains no proof they
were aware Jalloh was a commissioner at the time of their votes. Their
employment pre-dated Jalloh's tenure as a commissioner and we cannot assume,
as the Board urges, every county employee readily recognizes their county
commissioners. While the Board argues Armstead and Strano have not provided
any statement or testimony that they were unaware Jalloh was a commissioner,
it is the Board's burden of proof to demonstrate the conflict of interest.
The Board also points to Mondsini to buttress its argument that a section
(d) violation does not require intent or knowledge; however, this contorts the
holding of that case. Mondsini was the Executive Director of the Rockaway
Valley Regional Sewerage Authority. Mondsini, 458 N.J. Super. at 294. Having
lost electric power during Superstorm Sandy, the Authority required certain
essential employees to work to keep the generators running. Id. at 295. Because
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of the gasoline shortage in the aftermath of Sandy, Mondsini permitted those
essential employees to fuel their personal vehicles from the Authority's gas
pump. Ibid. She also permitted a non-essential employee to do so but
unbeknownst to her, that employee fueled two personal vehicles. Ibid. After
investigation, the Board found that by permitting the non-essential employee to
fuel his personal vehicles, Mondsini violated N.J.S.A. 40A:9-22(c), which
prohibits a local employee's using "his official position to secure unwarranted
privileges or advantages for himself or others." Ibid.In addressing whether subsection (c) requires a specific intent, we
surveyed other subsections of the LGEL. We noted to support a subsection (d)
violation, "[i]t is not necessary to demonstrate actual proof of dishonesty
because only the potential for conflict is necessary." Id. at 301 (citing
Wyzykowski, 132 N.J. at 524). "Decisions construing N.J.S.A. 40A:9-22.5(d)
adopt this expansive view, holding an appearance of impropriety, not an actual
conflict of interest, creates a disqualifying situation." Ibid. But contrary to the
Board's insistence here, our holding did not dispense of the knowledge
component: the official must still be aware of the potential conflict in order to
commit a subsection (d) violation, because "the question" is "whether the
circumstances could reasonably be interpreted to show they had the likely
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capacity to tempt the official to depart from his sworn public duty."
Wyzykowski, 132 N.J. at 523. If Armstead and Strano were unaware Jalloh was
a county commissioner, there was no conflict between their private interests and
their public duties, and it is not reasonable to assume that they would be tempted
to depart from their sworn public duty as council members. Therefore, in the
absence of evidence they knew Jalloh was a county commissioner, the charge
against them cannot be sustained.
Although we ordinarily do not consider arguments not raised below,
Neider v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973), it is unclear whether
this factual issue was raised before the ALJ or the Board. We do not have the
parties' submissions to those tribunals, neither the ALJ nor the Board's decision
addressed this point, and the Board did not object to petitioners' brief.
Accordingly, as to Armstead and Strano, we reverse and remand for further
proceedings consistent with this opinion.
Affirmed in part; reversed in part; and remanded for further proceedings.
We do not retain jurisdiction.
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