On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, L-1308-07.
The opinion of the court was delivered by: Winkelstein, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Winkelstein, Gilroy and Chambers.
In this appeal, we address whether the conflict-of-interest principles embodied in the common law, the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-1 to -163, and the Local Government Ethics Law (the Ethics Law), N.J.S.A. 40A:9-22.1 to -22.25, require a member of a planning board who has a personal relationship with, and owns a home jointly with, the principal of the engineering firm that employs the planning board engineer, to disqualify herself from applications in which the board's engineer reviews the application and provides recommendations to the board.
Plaintiff, William Randolph, appeals from the trial court's order affirming the Brigantine (the City) Planning Board's (the Board) approval of a preliminary site plan application for a proposed hotel on property owned by defendant Ocean Gold Coast (the applicant or defendant).*fn1 Plaintiff claims that the public notice of the Board's meetings was defective, depriving the Board of jurisdiction; that the Board's decision should be set aside because of a conflict of interest between the Board chairwoman and the Board's engineer; that the Board should have required a variance for parking; and that the Board did not have authority to consider the application before the applicant obtained approval from the City Council for a street vacation for a proposed stormwater management basin.*fn2
Because we find merit to plaintiff's argument that the Board chairwoman had a perceived, if not actual, conflict of interest with the Board engineer, we reverse the trial court order affirming the Board's approval, set aside the approval, and remand to the Board.
Defendant is the owner of an undeveloped parcel of land consisting of approximately 49,000 square feet, located in the City's B-6 zoning district. The zone is a business use district that permits, among other uses, motels, retail trade establishments, restaurants, and parking lots. At the time of the Board hearings, a hotel was not listed in the ordinance as a permitted use.
In September 2006, defendant applied to the Board for preliminary and major site plan approval for a forty-two-room resort hotel with an indoor pool, on-site parking, and a bar and food service facilities. The application was reviewed by the Board's professionals. Among those professionals was Edward P. Stinson, P.E., an employee of the firm of Doran Engineering, P.A. In 2006 and 2007, the years in which the subject application was pending, Stinson had one-year contracts with the Board, which called for him to be paid for his services from the applicants' escrows, but the City would pay him a fee of $75.00 for each meeting he attended. Both contracts were between the Board and "Edward P. Stinson, P.E., of the firm of Doran Engineering, P.A." On behalf of the Board, the 2006 contract was signed by Karen Bew, the vice-chair of the Board; the 2007 contract was signed by Rose Roberts, the Board chairwoman. Stinson signed each contract on his own behalf.
Under the terms of the contracts, Stinson agreed to "perform those engineering services as assigned and authorized to him for the Planning Board, including such advice and assistance to the Board Members and City's personnel, as may be required from time to time." Both contracts also contained the following language: "The parties intend that professional services to be rendered by Engineer to the Planning Board may be undertaken by Engineer through any qualified Engineer who is a partner, associate or agent in the firm of Doran Engineering, P.A."
The principals of Doran Engineering are Matthew Doran and his brother, Patrick. Matthew Doran (Doran) is a professional engineer; his brother provides accounting services to the firm. Defendant Roberts, the chairwoman of the Board, has a personal relationship with Doran and has lived with him for ten years. They own a home together. Doran is also the City zoning officer and was the Board engineer before Stinson was hired for that position. Doran left the position because he became the City building inspector. Roberts has been a Board member since 1981 and has been its chairperson since 1988. She acknowledged that reports generated by the Board's professional staff, including Stinson's, are given "a significant amount of weight" in the Board's analysis of an application.
According to Roberts, Stinson, not Doran, is the engineer who reviews applications and prepares the reports to the Board. Although Doran generally supervises Stinson's work for the engineering firm, the record does not reflect whether he supervises Stinson's work as the Board engineer. Roberts testified that she never discussed Ocean Gold Coast's application with Doran, but she did discuss with him that she was named as a defendant in the instant lawsuit.
Because the Board is a combined board, at times it is called upon to interpret the zoning ordinance. Roberts acknowledged that this presents a conflict for her with Doran in his capacity as the City zoning officer.
The Board held hearings on the application on December 13, 2006, and January 24, 2007.*fn3 Roberts chaired the initial hearing. Approximately halfway through the hearing, which lasted over four hours, the Board voted six to three that a use variance was not needed to construct the hotel, including its accessory food service facilities. Roberts participated in the proceedings and voted with the majority. In allowing the application to proceed without the need for a use variance, the Board rejected Stinson's recommendation in his written report that a variance was necessary. Prior to the vote, Stinson, who was present at the hearing, did not address the Board.
After the Board's vote, the applicant presented the testimony of its professionals, including an architect, a planner, and a real estate broker. The Board also heard testimony from members of the public. Stinson addressed the Board near the end of the proceeding on issues other than the necessity of a use variance for the hotel. The Board did not decide the merits of the application at that meeting.
At the January 24, 2007 Board meeting, plaintiff objected to Roberts continuing to participate on the basis of her involvement with Doran. Roberts recused herself, although she did not consider her relationship with Doran to be a conflict as to the subject application. She therefore did not participate in the second hearing, at the conclusion of which the Board voted six to one to approve defendant's preliminary site plan application subject to a number of conditions, including one that required the applicant to obtain approval from the City to vacate a portion of Beach Avenue for a stormwater management basin. Stinson addressed the Board in substantial detail during the meeting before the Board voted, advising the Board where waivers were required and what conditions were necessary if the Board saw fit to grant the application. The Board memorialized its decision in a February 28, 2007 resolution.
Plaintiff filed a complaint in lieu of prerogative writs challenging the Board's approval. After the case was argued in the trial court, but before the court's decision, the City Council amended its zoning ordinance to include hotels as a permitted use in the zone, and it amended the definition of "restaurant" to read: "An establishment where food and drink is prepared for, and offered and sold to the general public, which food and drink is consumed primarily within the principal building." Prior to this amendment, the ordinance defined a restaurant simply as "an establishment where food and drink is prepared and consumed primarily within the principal building." As a result of the amendment, the food service facilities within the hotel proposed by the applicant did not constitute a "restaurant." The amendments were prepared by the Board planner after conferring with a committee that was composed of Roberts, Bew, Stinson, the Board solicitor, the City building inspector, the City zoning officer (Doran), and the fire chief. The full Board later adopted a resolution recommending the amendments.
On January 15, 2008, the trial court issued a written opinion and final judgment affirming the Board's approval.
Against this factual and procedural setting, we turn to what we consider to be the dispositive issue on appeal: whether a conflict existed between Chairwoman Roberts and the Board's engineer so as to require the Board's approval to be set aside. Determining whether a conflict exists requires a case-by-case, ...