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Piscitelli v. City of Garfield Zoning Board of Adjustment

Supreme Court of New Jersey

March 27, 2019

Vincent Piscitelli and Rose Mary Piscitelli, Plaintiffs-Appellants,
v.
City of Garfield Zoning Board of Adjustment; Arlene Patire; Robert Cochrane; DSJ Family Trust; Daniel P. Conte, III, Stacey A. Conte and Jamie G. Kreshpane, Trustees of the DSJ Family Trust; and Dr. Daniel P. Conte, Jr., Defendants-Respondents.

          Argued November 28, 2018

          On certification to the Superior Court, Appellate Division.

          Anthony J. Sposaro argued the cause for appellants (Anthony J. Sposaro, on the briefs).

          Alyssa A. Cimino argued the cause for respondents City of Garfield Zoning Board of Adjustment, Arlene Patire and Robert Cochrane (Cimino Law, attorneys; Alyssa A. Cimino, on the brief).

          Charles H. Sarlo argued the cause for respondents DSJ Family Trust; Daniel P. Conte, III, Stacey A. Conte and Jamie G. Kreshpane, Trustees of the DSJ Family Trust; and Dr. Daniel P. Conte, Jr. (Charles H. Sarlo, of counsel and on the briefs).

          Robyn K. Lym argued the cause for amicus curiae Libertarians for Transparent Government (Pashman Stein Walder Hayden, attorneys; CJ Griffin, of counsel and on the brief, and Suzanne M. Bradley, Robyn K. Lym, and Yelena Yukhvid, on the brief).

         Planning and zoning board members are barred from hearing cases when a personal interest "might reasonably be expected to impair [their] objectivity or independence of judgment." N.J.S.A. 40A:9-22.5(d); see also N.J.S.A. 40:55D-69; N.J.S.A. 40:55D-23(b). That ethical commandment is at the heart of this appeal, which involves an application filed by members of the Conte family to develop three lots in the City of Garfield. The issue raised is whether any members of the Garfield Zoning Board of Adjustment had a disqualifying conflict of interest because of the involvement of certain Conte family members in the Zoning Board proceedings.

         Two of the three lots to be developed were co-owned by the irrevocable trusts of Dr. Kenneth S. Conte (Dr. Kenneth) and his brother, Dr. Daniel P. Conte, Jr. (Dr. Daniel). Dr. Daniel personally owned the third lot. A trust benefitting Dr. Kenneth's nephew -- Dr. Daniel P. Conte, III (Dr. Daniel III) -- and his two nieces applied for development approvals. All three Contes practiced medicine in the adjacent medical building owned by Dr. Kenneth and Dr. Daniel.

         Dr. Kenneth was a longtime member and the then-president of the Garfield Board of Education, which approves, among other things, school employee appointments, contracts, and salaries. Five Zoning Board members were employed or had immediate family members employed by the Garfield Board of Education. To avoid the appearance of a conflict, the two lots owned by trusts bearing the names of Dr. Kenneth and Dr. Daniel were transferred to the trust benefitting Dr. Kenneth's nieces and nephew. Despite the intra-family transfer of property, Dr. Kenneth made his presence known at the hearing and made clear his position favoring the project.

         The Piscitellis objected to the development project and claimed that a conflict of interest barred Zoning Board members who were employed or had immediate family members employed by the Board of Education from hearing the application. The Piscitellis also contended that any members who were patients or who had immediate family members who were patients of the Contes also had a disqualifying conflict.

         No Zoning Board member disqualified himself or herself on conflict-of-interest grounds. The Board granted site plan approval and the requested variances for the Conte project. The trial court upheld the Zoning Board approvals and denied the Piscitellis' request to inquire whether any Zoning Board members or their family members were patients of Dr. Kenneth, his brother, or his nephew. The Appellate Division affirmed.

         The Court granted the petition "limited to the issues related to the alleged conflicts of interests of some members of the Zoning Board of Adjustment." 235 N.J. 392 (2018).

         HELD: The Court reverses and remands for further proceedings to decide whether any Zoning Board member had a disqualifying conflict of interest in hearing the application for site plan approval and variances in this case. The trial court must assess two separate bases for a potential conflict of interest. First, did Dr. Kenneth -- as president or a member of the Board of Education -- have the authority to vote on significant matters relating to the employment of Zoning Board members or their immediate family members? Second, did any Zoning Board members or an immediate family member have a meaningful patient-physician relationship with any of the three Conte doctors? If the answer to either of those questions is yes, then a conflict of interest mandated disqualification and the decision of the Zoning Board must be vacated. The Court does not possess sufficient information to answer those questions.

         1. The overall objective of conflict of interest laws is to ensure that public officials provide disinterested service to their communities and to promote confidence in the integrity of governmental operations. Whether a disqualifying conflict of interest required the recusal of any member of the Garfield Zoning Board of Adjustment from hearing the development application is governed by three distinct sources of law: the Local Government Ethics Law, N.J.S.A. 40A:9-22.2; the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-69; and the common law, which is now codified in those conflict statutes and still guides us in understanding their meaning, see Grabowsky v. Township of Montclair, 221 N.J. 536, 552 (2015). The overlapping conflict-of-interest codes that apply to this case can be distilled into a few common-sense principles. A citizen's right to a fair and impartial tribunal requires a public official to disqualify himself or herself whenever the official has a conflicting interest that may interfere with the impartial performance of his duties as a member of the public body. The question is not whether a public official has acted dishonestly or has sought to further a personal or financial interest; the decisive factor is whether there is a potential for conflict. A conflict of interest arises whenever a public official faces contradictory desires tugging him or her in opposite directions. It is an objective inquiry. (pp. 19-25)

         2. The overarching issue is whether Dr. Kenneth's association with and interest in the development application before the Garfield Zoning Board of Adjustment had the capacity to tempt certain Zoning Board members to consider their private interests at the expense of their public duties. Concern by a public official that a vote might have a negative impact on the official's employment -- or a family member's employment --might give reason to consult one's private interest. The record establishes Dr. Kenneth's interest in the development project. In assessing an alleged conflict of interest, courts are not required to bow to formalisms concerning title to property when intra-family deals do not obscure a true interest at stake. If any Zoning Board members had reason to believe that voting against the application might be a bad career move for them or their family, a disqualifying conflict of interest would be present under the Local Government Ethics Law and the MLUL as informed by the common law. (pp. 25-30)

         3. In this case, no different from other conflict cases, the determination of whether a Zoning Board member possessed a disqualifying conflict of interest is a factual one. The Court does not have a sufficient record upon which to answer that question and so remands to the trial court. If the court finds that any Zoning Board member participated in the proceedings while impaired by a disqualifying conflict, then it must declare that the Board's actions are a nullity and vacate the resolution granting site plan approval and variance relief to the DSJ Family Trust. In that event, the Zoning Board would be required to conduct new proceedings with conflict-free Board members. (pp. 30-32)

         4. The Court further holds that if a Zoning Board member or his or her immediate family member had a meaningful patient-physician relationship with Dr. Kenneth, Dr. Daniel, or Dr. Daniel III during or before the Board proceedings, that Board member had a disqualifying conflict of interest because of the special nature of the patient-physician relationship. The determination of whether the patient-physician relationship is meaningful will be fact specific in each case. Stressing that the potential disclosure of highly intimate and personal health-care information raises legitimate privacy concerns, the Court provides guidance on the precautions that must be taken to protect against the unnecessary release of a patient's health-care information and remands to the trial court to explore this issue within the constraints set forth in the opinion. (pp. 32-38)

         The judgment of the Appellate Division is REVERSED and the matter is REMANDED to the trial court for further proceedings.

          JUSTICE SOLOMON, dissenting in part, agrees to a remand to permit further, but careful, examination of the nature and extent of the physician-patient relationships at issue but is of the view that Dr. Kenneth's relationship to the DSJ Family Trust's application is too attenuated to qualify as a disqualifying conflict of interest and that a remand to determine his authority by virtue of his position on the Board of Education is therefore unnecessary.

          CHIEF JUSTICE RABNER and JUSTICES PATTERSON and TIMPONE join in JUSTICE ALBIN's opinion. JUSTICE SOLOMON filed an opinion dissenting in part, in which JUSTICES LaVECCHIA and FERNANDEZ-VINA join.

          OPINION

          ALBIN, JUSTICE

         Public confidence in the integrity of our municipal planning and zoning boards requires that board members be free of conflicting interests that have the capacity to compromise their judgments. The maintenance of public trust in municipal government is the focus of statutory ethical codes, guided by common law principles, that bar planning and zoning board members from hearing cases when a personal interest "might reasonably be expected to impair [their] objectivity or independence of judgment." N.J.S.A. 40A:9-22.5(d); see also N.J.S.A. 40:55D-69; N.J.S.A. 40:55D-23(b). That ethical commandment is at the heart of the appeal before us.

         This case involves an application made by members of the Conte family for site plan approval and variances to construct a gas station, car wash, and quick lube on three lots in the City of Garfield. The issue raised is whether any members of the Garfield Zoning Board of Adjustment had a disqualifying conflict of interest because of the involvement of certain Conte family members in the Zoning Board proceedings.

         Two of the three lots to be developed were co-owned by the irrevocable trusts of Dr. Kenneth S. Conte (Dr. Kenneth) and his brother, Dr. Daniel P. Conte, Jr. (Dr. Daniel). Dr. Daniel personally owned the third lot. A trust benefitting Dr. Kenneth's nephew -- Dr. Daniel P. Conte, III (Dr. Daniel III) --and his two nieces applied for development approvals. All three Contes practiced medicine in the adjacent medical building owned by Dr. Kenneth and Dr. Daniel.

         Dr. Kenneth was a longtime member and the then-president of the Garfield Board of Education. The Board of Education approves, among other things, school employee appointments, contracts, and salaries. Five Zoning Board members were employed or had immediate family members employed by the Garfield Board of Education. To avoid the appearance of a conflict, the two lots owned by trusts bearing the names of Dr. Kenneth and his brother Dr. Daniel were transferred to the trust benefitting Dr. Kenneth's nieces and nephew. Despite the intra-family transfer of property, Dr. Kenneth made his presence known at the Zoning Board hearing and made clear his position favoring the project.

         Vincent Piscitelli and his daughter Rose Mary objected to the development project. They claimed that a conflict of interest barred Zoning Board members who were employed or had immediate family members employed by the Board of Education from hearing the application because Dr. Kenneth, as Board of Education president, voted on school-district personnel matters. The Piscitellis also contended that any Zoning Board members who were patients or who had immediate family members who were patients of Dr. Kenneth, Dr. Daniel, or Dr. Daniel III also had a disqualifying conflict of interest.

         No Zoning Board member disqualified himself or herself on conflict-of-interest grounds. The Board granted site plan approval and the requested variances for the Conte project. The Piscitellis filed a complaint in lieu of prerogative writs in Superior Court to vacate the Zoning Board approvals, alleging that the Board members' disqualifying conflicts of interest undermined the legality of the proceedings. The trial court upheld the Zoning Board approvals, finding that no conflicts of interest had impaired the Board members. The court also denied the Piscitellis' request to inquire whether any Zoning Board members or their family members were patients of Dr. Kenneth, his brother, or his nephew.

         The Appellate Division affirmed.

          We reverse and remand for further proceedings to decide whether any Zoning Board member had a disqualifying conflict of interest in hearing the application for site plan approval and variances in this case. The trial court must assess two separate bases for a potential conflict of interest. First, did Dr. Kenneth -- as president or a member of the Board of Education -- have the authority to vote on significant matters relating to the employment of Zoning Board members or their immediate family members? Second, did any Zoning Board members or an immediate family member have a meaningful patient-physician relationship with any of the three Conte doctors? If the answer to either of those questions is yes, then a conflict of interest mandated disqualification and the decision of the Zoning Board must be vacated. We do not possess sufficient information to answer those questions. We therefore reverse the judgment of the Appellate Division and remand to the trial court to determine whether any disqualifying conflicts impaired the Zoning Board proceedings. See N.J.S.A. 40A:9-22.5(d); N.J.S.A. 40:55D-69.

         I.

         A.

         Dr. Kenneth S. Conte is a prominent citizen in the City of Garfield, where he has practiced medicine for many decades.[1] He has served since 1980 as a member of the Garfield Board of Education, including as vice president and president. The Board of Education governs the school district and makes important employment decisions concerning school personnel. Additionally, Dr. Kenneth's brother, Dr. Daniel P. Conte, Jr., served for many years as medical inspector of the school district, including during the Zoning Board hearing. Five members of the Zoning Board were employed or had immediate family members employed by the Board of Education.

         The Kenneth S. Conte Irrevocable Trust II (Dr. Kenneth Trust) and the Dr. Daniel P. Conte, Jr. Irrevocable Trust I (Dr. Daniel Trust) owned two of three lots on Midland Avenue in Garfield, the site of a proposed gas station, car wash, and quick lube. Dr. Daniel owned the third lot personally with his wife, who was then deceased. Immediately adjacent to the proposed construction site is the Ken-Dan Medical Center owned by Dr. Kenneth and Dr. Daniel. There, the two brothers practice medicine along with Dr. Kenneth's nephew, Dr. Daniel P. Conte, III. Also adjacent to the construction site are other lots owned by Conte family members.

         Dr. Kenneth's nephew and two nieces (Dr. Daniel's children) -- Dr. Daniel III, Stacey A. Conte, and Jamie G. Kreshpane -- are the trustees and beneficiaries of the DSJ Family Trust.[2] In March 2014, the DSJ Family Trust applied for site plan and variance approvals with the Garfield Zoning Board to construct a four-bay gas station, car wash, and quick lube on the three lots on Midland Avenue. At the time of the application, the DSJ Family Trust did not have an ownership interest in any of the three lots.[3]

         Vincent and Rose Mary Piscitelli resided within 200 feet of the proposed construction site. They objected to the merits of the development. They also asserted that Zoning Board members who were employed or had immediate family members employed by the Board of Education should disqualify themselves on conflict-of-interest grounds. The Piscitellis argued that Dr. Kenneth, in his capacity as a Board of Education member and president, had the ability to influence the careers of Zoning Board members and their immediate family members employed in the school district.

         In an attempt to eliminate the conflict issue, Dr. Kenneth's nephew and nieces, acting as trustees of their uncle's trust, transferred the Dr. Kenneth Trust's fifty-percent interest in two of the three lots to the DSJ Family Trust for $420, 500. On that same date, Karl Kreshpane, the then-trustee of the Dr. Daniel Trust, transferred for one dollar the remaining interest in those two lots to the DSJ Family Trust.[4] As a result of that transaction, Dr. Daniel and his three children, who controlled the DSJ Family Trust, owned the three lots subject to the development application.

         At the Zoning Board hearing, attorney David Piscitelli represented his father Vincent, who objected on conflict-of-interest grounds, demanding that Zoning Board members disclose their relationship to the school district. Piscitelli was not persuaded that the transfer of property in Dr. Kenneth's trust to his nieces and nephew eliminated the conflict. Piscitelli argued that Dr. Kenneth's interest in the project was still evident from the intra-family property transfer and from Dr. Kenneth's co-ownership of the adjacent medical building with his brother Dr. Daniel, who retained his interest in one of the lots to be developed. The DSJ Family Trust responded that Dr. Kenneth had no remaining financial or beneficial interest in the subject property and therefore no conflict barred a Zoning Board member from hearing the development application, regardless of whether a Board member or a family member was employed by the Board of Education. Piscitelli also objected on conflict grounds to Zoning Board members hearing the application if they or an immediate family member were patients of Dr. Kenneth, Dr. Daniel, or Dr. Daniel III.

         Dr. Kenneth appeared at the first meeting, greeting some in attendance. In brief testimony before the Zoning Board, Dr. Kenneth challenged the Piscitellis' standing to object. Dr. Kenneth testified that Vincent Piscitelli's wife had been his patient for thirty years and that he also had treated her daughters. Dr. Kenneth asserted that David Piscitelli's representation of his father -- and the Piscitellis' role in the proceedings -- "smells of a conflict." Dr. Kenneth and his brother Dr. Daniel attended all of the Zoning Board meetings. Dr. Daniel III sat at the applicants' table, except at one meeting when his father took his place.

         At the second Zoning Board meeting, the Board's chairperson, Arlene Patire, disclosed that she worked for the Board of Education. Nonetheless, neither Patire nor any other Board member with an employment connection with the Board of Education disqualified himself or herself from hearing the development application. The Zoning Board attorney advised Board members that they did not have to disclose whether they had a patient-physician relationship with Dr. Kenneth, Dr. Daniel, or Dr. Daniel III, and none did. The merits of the development application were addressed through the expert testimony of a number of witnesses at the hearing.

         At the third meeting, after the Board heard further expert testimony on the application, the chairperson opened the floor to comments from the public. In all, thirty-one members of the public spoke, twenty-two in favor of and nine opposed to the application. Many who offered comments about the construction of the gas station, car wash, and quick lube perceived the development project to be a Conte family undertaking. Here are some examples:

Antoinette Scaravelloni: "Who are the Contes? They're two very good doctors who have contributed to Garfield all their lives."
Joseph Cala: "[L]et's get to the business at hand. And that's the credibility of the Conte family."
Betty Ann Benigno: "I think it's a great idea that the Contes open up a ...

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