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Schroeder v. County of Atlantic

Superior Court of New Jersey, Law Division, Atlantic

December 3, 2014


Approved for Publication April 2, 2015.

Page 614

Bard L. Shober for plaintiff.

James F. Ferguson, County Counsel, for defendant County of Atlantic.

Roger C. Steedle for defendant Board of Chosen Freeholders of the County of Atlantic ( Law Offices of Roger C. Steedle, P.A., attorneys).

Benjamin Zeltner for defendant Ford-Scott & Associates ( Levine, Staller, Sklar, Chan & Brown, P.A., attorneys).


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[440 N.J.Super. 253] MENDEZ, A.J.S.C.

A verified complaint in lieu of prerogative writ and order to show cause was filed on May 29, 2014, by plaintiff against the defendants. Plaintiff claims that defendants have violated Ordinance No. 10, Atlantic County's " pay to play" ordinance, in awarding Ford-Scott & Associates (hereinafter " Ford-Scott" ) a county contract after the firm had contributed monies to Sheriff Frank Balles' State Senate campaign. For the reasons set forth in this opinion, the court finds that defendants have violated Ordinance No. 10. The court grants the plaintiff's request for relief, ordering the imposition of the Section 7(b) penalty disqualifying Ford-Scott from eligibility for future Atlantic County contracts for a period of four calendar years from the date the complaint was filed. The court denies plaintiff's request for relief declaring the Ford-Scott contract awarded under Resolution 219-2014 null and void and orders payment for services performed under the contract.


On or about September 25, 2007, defendant County of Atlantic (hereinafter " Atlantic County" ) adopted Ordinance 10-2007 (hereinafter the " ordinance" ), the County's " pay-to-play" ordinance. The ordinance places limitations on the County's ability to award a contract to any " professional business entity" that contributed more than $300 to " any campaign committee for any elective County office or to the current holders of any elective County office" within one calendar year preceding the date of the contract. The ordinance also prohibits any professional business entity under contract with the County from making any contribution to " any campaign committee for any elective County office or to current holders of any elective county office" during the duration of the contract.

Defendant Ford-Scott is a New Jersey limited liability company in Ocean City, New Jersey. Ford-Scott was under contract with Atlantic County to serve as the County's external auditor during 2013, to perform the 2012 annual audit. During the 2013 year, Ford-Scott made four political contributions, including contributions to the following: (1) Friends for Chris Brown, on May 15, 2013; (2) Lobiondo for Congress, on June 10, 2013; (3) Friends of Balles, Amodeo & Brown, on September 26, 2013; and (4) Friends of Frank Balles for Senate, on March 15, 2013. Balles, the recipient of the fourth contribution listed above, was and is the Sheriff of Atlantic County. At the time of the donations in 2013, Balles was also running for State Senate.

The next year, on or about April 2, 2014, Ford-Scott submitted an application to Atlantic County to perform the 2013 annual audit, which included a " Political Contribution Disclosure Form," as required by N.J.S.A. 19:44A-20.26. The disclosure form disclosed the aforementioned contributions. On April 15, 2014, in an eight-to-one vote, Atlantic County adopted Resolution 219, awarding Ford-Scott the contract to perform the 2013 annual audit. At the hearing held on April 15, at least one board member expressed their opinion that the contributions violated the ordinance. The [440 N.J.Super. 255] text of the resolution states that Ford-Scott had not made any disqualifying political contributions.

Plaintiff is a resident and taxpayer of Atlantic County. He filed an order to show cause and prerogative writ on May 29, 2014, before this court, forty-four days

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after the passing of Resolution 219, and after Ford-Scott had completed the audit. The audit was performed between the resolution approving the audit on April 15, 2014, and the date of filing the complaint on May 29, 2014. On June 9, 2014, this court entered an order granting plaintiff's request for temporary restraints, setting a briefing schedule, and setting a return date. The order temporarily restrained Atlantic County from awarding any new contract to Ford-Scott and from issuing any payments to Ford-Scott, including payments for services that have already been rendered. These temporary restraints were entered subject to Ford-Scott's right to request a dissolution of the temporary restraints at any time. A final hearing in this matter was heard on August 18, 2014, during which the parties expressed their positions, as detailed below.

Plaintiff argues that the contributions made by Ford-Scott in 2013 were prohibited both because the contributions were made during the duration of Ford-Scott's 2013 contract, and because the contributions were made within one year of the date of the 2014 contract. Therefore, plaintiff argues that the County's decision to award Ford-Scott the 2014 contract was arbitrary, capricious, and in violation of the ordinance. Plaintiff argues that, pursuant to the ordinance, the contract is " declared null and void" and Ford-Scott must be disqualified from eligibility for future contracts with Atlantic County for four years. Plaintiff seeks an order declaring as much, and enjoining Atlantic County from paying Ford-Scott for any services performed under the voided contract, and ordering Ford-Scott to return the monies received under the contract.

Although Ford-Scott's contributions to Balles were made to Balles' campaign for State Senate rather than for Sheriff, plaintiff argues that the public policy considerations behind the ordinance would be subverted if these contributions were permitted:

[440 N.J.Super. 256] Thus, allowing professional business entities to make contributions in violation of the Ordinance to the holders of elective County office simply by making those contributions to a campaign for another office does nothing to assuage the reasonable concerns of the taxpayers as to their trust in government contract nor does it establish an effective maximum amount of donations that can be made. Every elected County official could open campaign accounts for a variety of non-county offices and accepted unlimited contributions from professional business entities while at the same time awarding them no-bid public contracts. It is an exception that literally renders the Ordinance illusory.

On the other hand, all of the defendants argue that the ordinance was intended to preclude influence-seeking contributions to those acting in their role as county official or as candidates for specifically designated elective county offices. In Atlantic County's view, the ordinance was never intended to preclude campaign contributions to those running for state office. Similarly, defendants argue that the ordinance has no applicability to the campaign contributions at issue, as those contributions were made to a candidate for state office, the provisions of which defendants argue are governed by state contribution and campaign finance laws. In other words, defendants argue that plaintiff's interpretation of the ordinance is preempted by state law. Lastly, defendants argue that the doctrine of laches applies, in that plaintiff waited until Ford-Scott had completed the audit until he filed suit.

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