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Harmon v. Borough of Belmar

United States District Court, D. New Jersey

October 23, 2017

TIMOTHY HARMON, et al., Plaintiffs,
v.
BOROUGH OF BELMAR, et al., Defendants.

          MEMORANDUM AND ORDER

          PETER G. SHERIDAN, U.S.D.J.

         This matter comes before the Court pursuant to the Motion to Dismiss filed by Defendants Borough of Belmar, Mayor Matthew Doherty, Colleen Connolly, Andrew Huisman, Jennifer Nicolay, Janis Keown-Blackburn, Thomas Brennan, Brian Magovern, Thomas Palmisano, Thomas Cox, Tina Scott, Ted Bianchi, and Robert Poff (collectively, “Defendants”). (ECF No. 12). Defendants are seeking dismissal of Plaintiffs Timothy Harmon, Matthew Harmon, DCJ Belmar, Inc., Dockside Dining, LLC, and Two Dawgs's (collectively, “Plaintiffs”) First Amended Complaint (“FAC”) (ECF No. 9), wherein Plaintiffs raised seven claims: (1) violation of due process pursuant to 42 U.S.C. § 1983; (2) violation of equal protection pursuant to 42 U.S.C. § 1983; (3) violation of the Racketeer Influence and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1962(c) and (d); (4) violation of New Jersey RICO; (5) intentional interference with a contractual relationship; (6) intentional interference with prospective economic advantage; and (7) intentional infliction of emotional distress.

         Background

         Plaintiffs Timothy and Matthew Harmon (“The Harmons”) own and operate restaurants and bars in the Borough of Belmar, New Jersey. The Harmons currently operate the Boathouse Bar and Grill. (FAC ¶¶ 2-3). In January 2014, the Borough entered into a Redevelopment Agreement with real estate developer, Loko, LLC. (Id. at ¶ 10). The plan included the construction and operation of an outdoor café and bar, located at the northern boundary of the Borough, by the Shark River Inlet (“the Loko property”). (Id. at ¶¶ 10, 13). Thereafter, Plaintiffs entered into an agreement with Loko to construct the outdoor café and bar, and to operate the facility for a three-year period (“Agreement”). (Id. at ¶ 13). As part of the Agreement, Plaintiffs were to transfer the alcoholic beverage license from another restaurant, “507 Main, ” to the Loko property to operate a facility to be known as “Salt” (hereinafter, “Salt Facility”). (Id. at ¶ 15).

         By way of background, Plaintiffs ceased operation of “507 Main” and, on April 24, 2015, applied to the Borough for the transfer of the alcoholic beverage license at “507 Main” to the Loko property. (Id. at ¶ 16). During this same period, Loko demolished the existing structure on its property, in preparation for the construction of the Salt facility and other improvements. (Id.). Thereafter, Plaintiffs claim to have “engaged contractors, expended substantial funds, obtained construction and other permits from the Borough and began the process of constructing the Salt facility.” (Id. at ¶ 17).

         According to Plaintiffs, over the next year, Defendants conspired in various manners to interfere with their current operations at the Boathouse restaurant; their liquor license applications; and their construction of the Salt facility. The Complaint alleges that, contrary to the “normal policies and procedures” of the Belmar Police Department, Defendant Palmisano assigned Plaintiffs' application to Defendant Huisman, who did not ordinarily investigate alcoholic beverage licenses. (Id. at ¶ 19).

         In April 2015, [1] Plaintiffs claim, “Defendants Doherty and Connolly began a concerted effort to prevent the Plaintiffs from constructing and opening the Salt facility.” (Id. at ¶ 22). Doherty allegedly told individuals “that the Plaintiffs ‘would never open a business' in that location.” (Id.). Defendants Doherty and Connolly allegedly directed Defendant Bianchi and the Construction Department to delay issuing permits for Plaintiffs' construction, despite already having Borough approval, to which Bianchi complied. (Id. at ¶ 23). In another episode, Defendants Doherty and Connolly allegedly discussed and negotiated with individuals to develop a different, larger, project on the already approved Loko property. (Id. at ¶ 24). Specifically, “Defendant Doherty advised Defendant Magovern and other members of the Borough Council that this alternative proposal was ‘better for the Borough' and ‘would be lost' if the Salt facility were allowed to open.” (Id.). Doherty also allegedly attempted to coerce the Loko LLC to terminate its agreement with Plaintiffs and to agree to a new Redevelopment plan. (Id.).

         At an April 2015 meeting, Doherty also allegedly made the following statements: (1) “The Borough will approve D'Jais or Ollie Klein at that location, but not the Harmon brothers”; (2) “The Harmons' application is going to get lost at police headquarters and it's going to take forever to come to the Council”; (3) “When the Harmons' application comes before the Council, we will deny the liquor license and force them to go to the ABC”; and, (4) “We know people there (at the ABC) and if by chance they approve the transfer, we will appeal. They will never open.” (Id. at ¶ 26).

         That summer, the Borough, Police Department, and Construction Department allegedly harassed the Harmon Brothers' interests. (Id. at ¶ 27). Specifically, Defendants Connolly and Huisman filed a false CAFRA claim to the New Jersey Department of Environmental Protection, “in an effort to stop the project.” (Id. at ¶ 29). Huisman also allegedly advised members of the Police Department to harass Plaintiffs and “arbitrarily denied Plaintiffs' applications for permits for the St. Patrick's Day Parade.” (Id. at ¶ 30). The Complaint also claims Huisman told other Borough officials to be “team players” and to shut down the Salt project. (Id.). That fall, Huisman appeared before the Belmar Planning Board, to object to the site plan for the Salt facility. (Id. at ¶ 31). Despite no electrical engineering or lighting experience, Huisman testified that the facility's lighting was inadequate, which purportedly contradicted a report prepared by the Board's licensed engineer. (Id.).

         The Complaint also alleged “Defendants Huisman, Doherty, Connolly, Nicolay, Keown-Blackburn, Brennan and Magovern conspired to impose a permit parking zone in the area of the Boathouse Bar and Grill, the only licensed premises in the Borough so targeted.” (Id. at ¶ 32). Defendants Doherty and Connolly also directed a Stop Work Order on the project, which Defendant Bianchi issued. (Id. at ¶ 33).

         In late May or early June 2016, over a year after Plaintiffs filed their application, the Belmar Police Department finally issued a report to Mayor and Council. (Id. at ¶ 36). Despite oral and written requests for a copy of the investigation report, the Police Department never provided Plaintiffs with a copy. (Id.).

         The “person to person and place-to-place” transfer application was heard on June 8, 2016, before councilmen Brennan and Magovern, and councilwomen Keown-Blackburn and Nicolay. (Id. ¶ 37, 41-44). Prior to the hearing, Defendants Doherty and Connolly allegedly urged Belmar residents and business owners to appear at the meeting and oppose Plaintiffs' license transfer. (Id. at ¶ 38). At the hearing, Brennan recused himself from deliberations, due to a potential conflict of interest, since his band plays at many local establishments. (Id. at ¶ 42). During the public deliberation, Keown-Blackburn stated that she did not believe the license transfer was in the best interests of the Borough and voted against the transfer. (Id. at ¶ 43); (Claudio Decl., Exh. D at 2). Similarly, Nicolay expressed concern about the potential “security, parking, and noise” issues, and voted against the transfer as well. (Claudio Decl., Exh. D at 3). Magovern disagreed, noting that the impact of the transfer would be no different than similar establishments; he also acknowledged that he knew the Harmons and “fe[lt] they would do a good job.” (Id.). Therefore, he voted in support of the application; however, since there was only one vote in favor of the application, it did not pass.

         Plaintiffs Dockside Dining and DCJ Belmar, interests controlled by the Harmon Brothers, appealed the denial a week later to the Division of Alcoholic Beverage Control (ABC), within the Department of Law and Public Safety. (Claudio Decl., Exh. E.). The Director of ABC referred the matter to the Office of Administrative Law for a factual hearing and a recommendation on a cause of action. The ABC application remains pending. (Claudio Decl., Exh. F.).

         Thereafter, Plaintiffs Dockside Dining and the Harmon Brothers filed a Tort Claim Form against the Borough. (Claudio Decl., Exh. G). Named defendants included Doherty, Connolly, Huisman, and Palmisano. (Id.) The claim alleged, “[t]he Borough and its police department have negligently or intentionally failed to investigate and otherwise process Claimants' application for alcoholic beverage license transfer.” (Id.) The notice form was amended two more times. The First Amended Tort Claim Form identified Nicolay, Brennan, Connolly, and Keown-Blackburn as defendants. (Claudio Decl., Exh. H). In describing the “wrongful acts” the claim added, “Maliciously, intentionally or in a grossly negligent manner denied the ...


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