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Township of Lafayette v. Board of Chosen Freeholders of County of Sussex

Decided: February 11, 1986.

TOWNSHIP OF LAFAYETTE, A MUNICIPAL CORPORATION IN THE COUNTY OF SUSSEX; JOHN NAFZIGER, INDIVIDUALLY AND AS MAYOR AND A MEMBER OF THE TOWNSHIP COMMITTEE; JOHN KAVANAGH, INDIVIDUALLY AND AS A MEMBER OF THE TOWNSHIP COMMITTEE; JAMES WHITMAN, INDIVIDUALLY AND AS A MEMBER OF THE TOWNSHIP COMMITTEE; ROBERT STRUBLE, INDIVIDUALLY AND AS A MEMBER OF THE TOWNSHIP COMMITTEE; AND THE BOARD OF HEALTH OF THE TOWNSHIP OF LAFAYETTE, PLAINTIFFS-RESPONDENTS,
v.
THE BOARD OF CHOSEN FREEHOLDERS OF THE COUNTY OF SUSSEX; EDMUND J. ZUKOWSKI, INDIVIDUALLY AND AS CHAIRMAN OF THE BOARD; JAMES J. CAMPBELL, INDIVIDUALLY AND AS A FREEHOLDER; AND JOSEPH KESLO, JR., INDIVIDUALLY AND AS A FREEHOLDER, DEFENDANTS-APPELLANTS, AND NORTHWEST JERSEY DEVELOPMENT CO., INC.; SUSSEX COUNTY RESOURCE RECOVERY, INC.; LAFAYETTE DEVELOPMENT COMPANY; AND H.S.L., INC., INTERVENOR-RESPONDENTS



On appeal from Superior Court of New Jersey, Chancery Division, Sussex County.

Shebell, Muir and Matthews. The opinion of the court was delivered by Muir, J.s.c. (temporarily assigned).

Muir

Defendants, Sussex County Board of Freeholders, collectively and individually, appeal from a summary judgment of the Chancery Division invalidating the selection of a solid waste disposal site and a contract to make that site a County-owned/privately-operated sanitary landfill. The Chancery Judge held the appearance of conflict of interest on the part of County Counsel who advised and represented the defendants during all aspects of the site selection and all events leading to approval of the contract by the defendants, required voiding of both transactions. He also held the failure to submit the contract to public bidding was violative of the Local Public Contracts Law, N.J.S.A. 40A:11-1 et seq. and the Local Lands and Buildings Law, N.J.S.A.: 40A:12-1 et seq.

In October 1978, the defendant, with Donald Kovach as County Counsel, initiated a program to adopt a Sussex County Solid Waste Management Plan as required by N.J.S.A. 13:1E-1 et seq. The ultimate goal was to establish a solid waste disposal site in the County.

A hired consultant selected and ranked 91 potential sanitary landfill sites. One of those sites, Site 40, the subject of this litigation, was under option to corporations in the control of Ambrose Hamm.

Hamm was and is, with his wife, the single largest stockholder (a little more than ten percent of the outstanding stock) of the Sussex County State Bank. Kovach, a four percent stockholder of the bank, was and is the bank's President and Chairman of its Board of Directors. Further, Kovach's law firm handled almost all of the bank's legal work.

The consultant reduced the number of sites for in-depth analysis to four. Site 40, initially ranked 38th, was not included.

The selection process continued into 1985, when the DEP brought an action to close Hamm's Sanitary Landfill (HSL), the

County's major sanitary landfill site. As the result of the DEP action, Hamm proposed the County select Site 40, which was contiguous to HSL.

Subsequent negotiations and meetings led to Site 40 becoming the only site considered after modification of the County Solid Waste Management Plan which the DEP approved in March 1984.

Just prior to DEP approval, in February 1984, the County began negotiations with Hamm to acquire title to Site 40. By that time, two Hamm-owned and controlled corporations, Northwest Development Co., Inc. and ...


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