July 11, 2008
SUSSEX COMMONS ASSOCIATES, LLC, PLAINTIFF-RESPONDENT/ CROSS-APPELLANT,
TOWNSHIP OF FRANKFORD LAND USE BOARD, DEFENDANT-RESPONDENT.
CHELSEA PROPERTY GROUP, INC. AND CPG PARTNERS, L.P., INTERVENORS/CROSS-RESPONDENTS, AND ROBERT MCDOWELL, INTERVENOR-APPELLANT/CROSS-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Sussex County, Docket No. L-685-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted April 16, 2008
Before Judges Axelrad, Sapp-Peterson and Messano.
Plaintiff, Sussex Commons Associates, LLC, commenced this action in lieu of prerogative writs challenging defendant Township of Frankford Land Use Board's (the Board) decision to adopt the "Frankford Center Plan" as part of Frankford Township's (the Township) Master Plan. Plaintiff contended that in doing so, the Board violated various agreements plaintiff had previously reached with the Township that were intended to facilitate the development of a shopping center at an intersection known as Ross' Corner. In addition, plaintiff sought disqualification of a member of the Board, intervenor Robert McDowell, who was also Deputy Mayor and member of the Township Committee, "from all further involvement in [p]laintiff's application and the Frankford Center Plan process, in his capacities as a member of the Township Committee and [the Board]." Specifically, plaintiff alleged that McDowell, individually and as a member of amicus curiae Citizens For Responsible Development of Ross' Corner (CRDRC), had "entered into an agreement with another developer to prevent [p]laintiff from developing a shopping center at Ross' Corner." The other developer was alleged to be intervenors Chelsea Property Group, Inc. and CPG Partners, L.P. (collectively, Chelsea), competitors against whom plaintiff had filed a separate lawsuit in the Law Division.
McDowell, supported by CRDRC, appeals from two orders entered by the trial judge. The first, dated March 30, 2006, "preclud[ed] his further participation in plaintiff's . . . application and property in [the] Township in his capacities as a member of the Township Committee and [the Board]." The second order, dated June 6, 2006, entered in response to McDowell's motion to intervene and for reconsideration, continued McDowell's disqualification only during the Board's consideration of plaintiff's then-pending site plan and subdivision application.
Plaintiff cross-appeals from the judge's August 4, 2006, order that denied its motion to disqualify McDowell completely from any participation in matters related to its interests, and denied its request to depose McDowell and obtain discovery from him. However, plaintiff has completely failed to address any of the issues raised by its cross-appeal in its brief. Under such circumstances, we conclude plaintiff has abandoned its cross-appeal, and it is dismissed. Zavodnick v. Leven, 340 N.J. Super. 94, 103 (App. Div. 2001); Pressler, Current N.J. Court Rules, comment 4 on R. 2:6-2 (2008).
We have considered the arguments raised by the parties in light of the record and applicable legal standards. We reverse.
Plaintiff filed its complaint on December 7, 2005, naming only the Board as defendant. It contended that as contract purchaser for a number of parcels in the Ross' Corner area, it had negotiated "a series of contracts with [the] Township and public entities . . . in 2003, and again in 2004." Plaintiff further alleged that on November 12, 2004, and February 18, 2005, it filed "an extensive application" with the Board. The application was deemed complete on March 30, 2005, and plaintiff contended "public hearings [were] continuing with respect to this subdivision and site plan application." The complaint alleged that on October 26, 2005, the Board adopted the "Frankford Center Plan," which plaintiff claimed had several "detrimental effects" on its application and otherwise violated the previously-negotiated contracts.
In count two of the complaint, plaintiff alleged that McDowell as a member of the Board had spoken in favor of the Frankford Center Plan "which led to its adoption" in October. It also alleged that McDowell had agreed both individually and through his participation with CRDRC to thwart plaintiff's development in favor of a competitor, Chelsea. Plaintiff further contended that McDowell "ha[d] an illegal conflict of interest with respect to [p]laintiff's application." It sought his disqualification as both a member of the Board and the Township Committee from any further involvement with plaintiff's application of the Frankford Center Plan process. Despite the pendency of its application before the Board for some time, and McDowell's participation in those hearings, plaintiff never sought his disqualification before the Board itself.
On December 28, 2005, plaintiff moved for an order granting the permanent relief sought in the complaint regarding McDowell. A supporting certification of Kevin D. Kelly, counsel for plaintiff, detailed plaintiff's allegations regarding McDowell's conflict of interest. While the certification sometimes referenced specific documentary evidence, it often recounted facts not within counsel's personal knowledge or otherwise relied upon hearsay. For example, Kelly certified that, "[M]embers of the office of Smart Growth ("OSG") advised [his] client that  McDowell had traveled to Trenton, met with OSG, and advised OSG . . . that [the] Township was officially opposed to [his] client's project."*fn1
Specifically, plaintiff asserted that McDowell openly expressed opposition to plaintiff's project while running for election to the Township Committee; that he was involved with Paul Sutphen, who later founded CRDRC, in securing a traffic expert from the engineering firm of Schoor DePalma to prepare a report in opposition to plaintiff's project; that he was represented in related litigation by David Mintz, an objector to plaintiff's proposed development at Ross' Corner; and that efforts of the objectors were financed at least in part by Chelsea. Plaintiff contended that, although no discovery had yet occurred in the matter, sufficient evidence already existed to determine that McDowell should be disqualified because of a conflict of interest.
On January 11, 2006, counsel for the Board filed his certification in opposition to plaintiff's motion. Specifically, he noted that plaintiff's exhibits in support of the motion all pre-dated its application to the Board and predated McDowell's membership on the Board. He further noted that none of the Board members, including McDowell, expressed a belief that they were in a conflict of interest regarding plaintiff's application, and that plaintiff commenced the application hearings in May 2005 and never objected to McDowell's or any other Board member's participation. He denied that Mintz represented McDowell, noting that Mintz was not admitted to the practice of law in New Jersey. Finally, the Board's counsel certified that the Township Committee agreed to provide independent counsel to McDowell, and that after discussions with his appointed attorney, McDowell had not recused himself.
On February 1, 2006, plaintiff filed the supplemental certification of its counsel in further support of its motion. In particular, exhibits attached to Kelly's certification included evidence obtained through discovery in plaintiff's lawsuit against Chelsea, e.g., excerpts of depositions taken from Sutphen and Chelsea's principal officers, all of which it claimed supported the conclusion that McDowell had personally supported CRDRC's efforts to thwart plaintiff's development and that Chelsea had funded the efforts.*fn2
The record reveals no written response by the Board. By letter of March 6, 2006, to the judge, personal counsel for McDowell indicated that he would not appear at oral argument, noting the Board was represented by other counsel and "the Board . . . includes  McDowell."
On March 7, 2006, the judge considered oral argument on plaintiff's motion. Noting the lack of any response to plaintiff's supplemental certification, the judge observed, "[I]t appears to be unopposed in terms of the factual scenario . . . . In other words, there's been no response to this." The Board's counsel argued that whatever his actions were, McDowell was not in a conflict of interest such that he should be disqualified from consideration of plaintiff's then-pending application before the Board.
The judge disagreed. Referencing specifically to allegations that McDowell had met with and facilitated the hiring of Schoor DePalma by CRDRC, knowing that the engineering firm would present testimony in objection to plaintiff's development proposal before the Board, and that Chelsea was financing the expert's participation, the judge concluded that McDowell had "such personal involvement that it may reasonably be expected to impair his objectivity or independ[ence] of judgment." He granted plaintiff's motion.
However, the judge left open the issue of whether McDowell's disqualification required plaintiff's development application before the Board to begin anew. He noted that plaintiff's presentation was almost complete, but that the objectors, including CRDRC, had not commenced their case. The judge ordered plaintiff and the Board to consider the issue and provide their respective positions to him prior to the next-scheduled Board hearing on plaintiff's application. Counsel for the Board subsequently sent a letter to the judge urging that the Board be permitted to continue its review of plaintiff's development application and not be compelled to start anew.
On March 30, 2006, the court entered an order disqualifying McDowell from any further participation regarding plaintiff's application or property as a member of both the Board and the Township Committee. Moreover, the order provided that any previous participation by McDowell as a Board member had been "harmless error," because there was "no evidence of taint to other Board members." As a result, the order provided that "the prior proceedings [were] not void and may continue without being restarted and repeated."
Chelsea and McDowell then moved at different times to intervene, and both sought reconsideration of the order; CRDRC moved for leave to appear as amicus curiae. Materials filed in connection with the motions for reconsideration challenged the assertions contained in Kelly's supplemental certification. For example, Chelsea argued that it had no contact with McDowell, and that any assistance it provided to CRDRC in funding the Schoor DePalma study was the result of contact between Sutphen and his neighbor, one of Chelsea's principals. McDowell's application was supported by his certification in which he explained the reason for his failure to submit any opposition initially when plaintiff's motion was heard. McDowell claimed that his omission was the "result of a communication gap" that occurred when the Board's attorney recused himself from the litigation and substitute counsel, who was less familiar with the facts, argued the motion. McDowell took issue with many of the facts alleged in Kelly's prior certification and reiterated before the judge on March 7.
The judge entertained oral argument on Chelsea's motion on April 12, 2006, and granted the application to intervene, noting Chelsea's interests 1) in protecting documents attached to Kelly's supplemental certification that were under seal in the other litigation; and 2) in having an opportunity to be heard regarding any factual findings that might be made in the prerogative writs litigation regarding Chelsea's alleged connection to McDowell, since those findings might impact the other litigation. On May 5, 2006, the judge entertained argument on McDowell's motion to intervene and for reconsideration, and CRDRC's motion to appear as amicus curiae. The judge reasoned that his initial decision was based upon essentially uncontested evidence. He further noted that the evidence McDowell now produced in support of the motion for reconsideration was not new, and that it could have, and should have, been produced in opposition to plaintiff's motion.
Given the unusual procedural history of the case, however, the judge granted the motion for reconsideration "for a very limited purpose." He noted that McDowell had "not sat on a number of hearings" involving plaintiff's application since the entry of the March disqualification order, and that both the other members of the Board and the public at large were aware of the reason for his absence. Further, the judge recognized that the contradictory assertions in the parties' certifications as to McDowell's role in assisting CRDRC might make it difficult for plaintiff to now continue its presentation with McDowell as a sitting member.
However, the judge noted that he "never made a finding as to what the correct facts are or are not" in the case, noting his earlier ruling was based upon facts that were "unopposed at the time." Because of the "procedural" aspects of what had occurred, however, the judge concluded that McDowell's limited disqualification was appropriate. He concluded that McDowell should remain disqualified as a member of the Board for the balance of its consideration of plaintiff's then-pending application. As a result, the judge modified his earlier order, limiting McDowell's disqualification only as a Board member, and only to plaintiff's then-pending application. He entered an order memorializing his decision on June 6, 2006.
Because we have dismissed plaintiff's cross-appeal, we need not consider the events that took place at a subsequent hearing on July 28, 2006, in any great detail. However, since plaintiff's then-pending application had been approved by the Board, in McDowell's absence, and a memorializing resolution was approved by a vote of seven to two on July 26, 2006, plaintiff conceded that the balance of the relief it sought in its complaint was now moot. The judge's order, entered on August 4, 2006, noted plaintiff's request to further disqualify McDowell was "withdrawn," and plaintiff's complaint was dismissed with prejudice.
McDowell contends that the judge erred in disqualifying him from participation as a member of the Board in the consideration of plaintiff's then-pending application because 1) there was no finding of any conflict of interest; 2) the judge's determination was based upon Kelly's improper certification; and 3) McDowell was not a party before the court because plaintiff never named him as a defendant in the suit. He asks us to "reinstate [him] on the [Board] for the purpose of rehearing the plaintiff's application for site plan approval." CRDRC supports this position and argues further that the judge lacked jurisdiction over the controversy in the first instance, not only because McDowell was not a party, but also because plaintiff never sought his disqualification before the Board; thus, it argues plaintiff never availed itself of available administrative remedies and the suit was an improper attempt to invoke the court's jurisdiction before those remedies were exhausted.
The Board takes no position regarding the merits of the appeal but it opposes the remedy plaintiff seeks. The Board argues that there is no reason for us to now vacate approval of plaintiff's application and thus force the entire review process to commence anew. The Board argues that plaintiff never sought this relief before the trial judge. Furthermore, the Board contends that McDowell has cited no authority for the proposition that even if his disqualification were improper, the appropriate remedy should be vacation of the approval and an entirely new hearing.
Plaintiff argues that the judge properly entered the first order because McDowell, who had actual notice of the hearing and was represented by counsel, never opposed the factual assertions made in Kelly's certification. It further contends that the limited disqualification provided by the second order was proper because on the record as it then existed, the judge appropriately determined that McDowell could no longer sit on the Board and consider plaintiff's application.*fn3
We begin by addressing briefly the argument raised by CRDRC regarding plaintiff's failure to challenge McDowell's status before the Board prior to invoking the court's prerogative writs jurisdiction. While the role of amicus curiae is significantly limited, see Casey v. Male, 63 N.J. Super. 255, 258-59 (Cty. Ct. 1960)(noting status of amicus curiae "is advisory rather than adversary," and it "must accept the case as [it] finds it with the issues as framed")(citations omitted), issues of jurisdiction and the failure to exhaust administrative remedies may be raised sua sponte by the court, even for the first time on appeal. Pepper v. Princeton Univ. Bd. of Trustees, 77 N.J. 55, 65-66 (1978); Theodore v. Dover Bd. of Education, 183 N.J. Super. 407, 412-414 (App. Div. 1982).
While it may have been preferable in the first instance for plaintiff to have raised its objection to McDowell's continued participation before the Board prior to filing this suit, the Law Division clearly had jurisdiction to hear the complaint within the broad prerogative writ powers that it routinely exercises. Wyzykowski v. Rizas, 132 N.J. 509, 522 (1993). Given the current posture of the proceedings, we find no basis to reverse on this ground.
We also agree with McDowell that the court should have refused to grant plaintiff any relief until it joined McDowell as a party to the litigation. Rule 4:28-1(a) requires
A person who is subject to service of process shall be joined as a party to the action if . . . (2) the person claims an interest in the subject of the action and is so situated that the disposition of the action in the person's absence may either (i) as a practical matter impair or impede the person's ability to protect that interest . . . . If the person has not been so joined, the court shall order that the person be made a party.
A party is indispensable and must be joined if feasible if it "has an interest inevitably involved in the subject matter before the court and a judgment cannot justly be made between the litigants without either adjudging or necessarily affecting the absentee's interest." Toll Bros., Inc. v. Twp. of West Windsor, 334 N.J. Super. 77, 90-91 (App. Div. 2000) (quoting Allen B. DuMont Labs., Inc. v. Marcalus Mfg. Co., 30 N.J. 290, 298 (1959)), certif. denied, 168 N.J. 295 (2001). In short, McDowell was an indispensable party if for no other reason than because plaintiff sought his disqualification.
However, having said that, we cannot conclude that the failure to do so under the unusual facts of this case resulted in reversible error. The undisputed facts are that McDowell was represented at the hearing, and at that time, counsel for the Board made a judgment that his representation of the Board completely subsumed any need for McDowell to have separate representation. There is nothing in the record to support the conclusion that McDowell was in fact unaware of the proceeding or the contents of Kelly's certification at the time of the hearing. At the subsequent motion to intervene and for reconsideration, McDowell's private counsel admitted that his client's certification, that now denied the facts asserted in Kelly's certification, could have been offered at the time of the hearing on plaintiff's initial motion, but was not. In short, though not named as a party in plaintiff's lawsuit, McDowell was aware of the proceedings and the accusation made against him, was represented by counsel, and had the opportunity to participate, but chose not to. Under these circumstances, plaintiff's failure to name him initially as a defendant in the complaint provides no basis for reversal.
Any argument that CRDRC has made regarding the timeliness of plaintiff's complaint pursuant to the time constraints established in Rule 4:69-6 is of insufficient merit to warrant any further discussion in this opinion. R. 2:11-3(e)(1)(E).
As we view the case, the sole question presented is whether the decision by the judge to continue McDowell's disqualification as a Board member, limited to the then-pending subdivision and site plan application of plaintiff, was reversible error. If it was, we are then faced with consideration of the appropriate remedy.
It is clear that the judge never made factual findings regarding the allegations of McDowell's conflict of interest.
As the judge noted at oral argument on the reconsideration motion, This Court never made a finding as to what the correct facts are or are not. I haven't to this date. We should not lose sight of the fact that the facts I had before me were unopposed at the time that I made this decision. So there was no decision on the merits as to exactly what the time line is, exactly what Mr. McDowell's involvement was, if it wasn't during that time line did he have any involvement at all. I never reached those merits . . . .
My decision regarding Mr. McDowell is not a finding as to factual information based on the merits. My finding is that no one opposed the information concerning Mr. McDowell at my March 7th hearing.
When disqualification of a public official is sought based upon an allegation of a conflict of interest, proper consideration of the issue requires a fact-sensitive analysis. Wyzykowski, supra, 132 N.J. at 523 (citing Van Itallie v. Franklin Lakes, 28 N.J. 258, 268 (1958)). Based upon the judge's own characterization of his ruling, that clearly did not occur in this case. Thus, we need not consider whether Kelly's certifications were proper, under Rule 1:4-4(b), and whether they provided sufficient evidence upon which the judge could have based his initial ruling, even if unopposed. See Claypotch v. Heller, Inc., 360 N.J. Super. 472, 488 (App. Div. 2003)(noting that even unchallenged statements of material fact should not be deemed admitted for purposes of summary judgment unless the court determines that they are substantiated).
The judge gave the following reasons for his decision to continue the limited disqualification of McDowell: 1) he had missed some meetings since being disqualified following the March 7, 2006 hearing; 2) his disqualification and the reasons for it had received considerable public notoriety and was known to his fellow Board members; and 3) Kelly's certifications that included plaintiff's allegations regarding McDowell's conflict of interest, and McDowell's pointed response in opposition made it unlikely that he could continue to serve on the Board and consider the application in an impartial manner. We find none of these reasons, on their face, to have been a sufficient basis to disqualify McDowell.
Even though McDowell missed some of the meetings because of the prior order, N.J.S.A. 40:55D-10.2 permits absent Board members to cast their votes upon reviewing transcripts and recordings of prior hearings and certifying that they have reviewed same. As for the public notoriety or McDowell's fellow Board members knowledge of the prior order, the Board took the position that McDowell was not in a conflict of interest at all. Following the initial disqualification decision, the Board urged the judge to allow it to continue the process without starting anew, thus implicitly recognizing that its members were unaffected by the court's decision. Public knowledge of the plaintiff's allegations and the events that followed also fails to provide a basis for the continued disqualification. Had plaintiff presented its argument before the Board in the first instance, the public would have known of the allegations. We see nothing about a judge's decision to reconsider a prior order as somehow negatively affecting the public's confidence in the proceedings. If the judge felt the conflict of interest issues were still extant, he could have conducted a hearing himself, or remanded the matter to the Board.
In that way, the various controversial accusations and contrary assertions would have been publicly aired. McDowell would have had to respond, as he subsequently did in his motion for reconsideration. The Board would have decided the issue, and, if not disqualified, McDowell would have continued to sit on plaintiff's application. In other words, the mere fact that plaintiff made accusations regarding the alleged conflict of interest should not have provided a basis for disqualification without some adjudication of the claims.
Therefore, we find the third rationale offered by the trial judge to be inadequate. In essence, the judge determined that even if there was no conflict of interest that pre-existed the litigation, a conflict of interest arose because of the litigation. Any conclusion he may have reached about McDowell's inability to sit on plaintiff's application because of the litigation was not supported by any factual findings whatsoever. We therefore are constrained to reverse the orders under review.
McDowell argues that we should reseat him on the Board "for the purpose of rehearing plaintiff's application for site plan approval." This implies, of course, that the approvals already awarded nearly two years ago should be vacated and that plaintiff, the Board, and the public-at-large should all be required to start the process anew. We find no principled reason for according McDowell such relief.
The Board argues that McDowell never sought this relief from the motion judge. We would therefore usually decline consideration of the issue. Nieder v. Royal Indemnity Ins. Co., 62 N.J. 229, 234 (1973). However, McDowell was not in a position to raise the issue below since the judge ordered his limited disqualification from the approval process. In other words, once the Board approved the application, McDowell's basis for challenging that action, his improper disqualification, did not exist.*fn4
However, McDowell has brought no precedent to our attention that mirrors the facts at hand. The cases he cited all required the court to vacate a board's action in order to insure the public's right to the impartial consideration of an application otherwise marred by a disqualifying conflict of interest. None of them address this situation.*fn5
Based solely on the record presented to us, there is no indication that plaintiff's application was not duly considered by the remaining members of the Board or that McDowell's absence somehow changed the result. There is absolutely no evidence in the record that the public's interest in an impartial review of plaintiff's application was in any way compromised. When we consider the balance the expenditure of public and private monies that a re-presentation of plaintiff's application would require, we do not hesitate to conclude that the relief McDowell seeks is unwarranted.