The Plaintiff, with encouragement from municipal officers, accumulated land for purposes of developing a new town center. The proposal for the new town center was met with opposition and a long history of litigation beginning in 2001. In 2004, the town adopted an ordinance for an adult active community as well as a new Master Plan. The Plan was challenged on the grounds that the Mayor had a prohibited conflict of interest. After a plenary hearing, the lower court determined that the mayor’s prior involvement with the plaintiff corporation did not disqualify her from voting on an ordinance affecting plaintiff’s property rights because she had only represented individuals from the corporation in unrelated matters, and not the corporation itself. The Plaintiff appealed this decision, and argued that the issue of conflict of interest must be evaluated through the eyes of the public at the time the municipal action was pending. The Appellate Court agreed and determined that a reasonably informed citizen who knew of the mayor’s involvement with the corporation, might reasonably expect that her objectivity or independence of judgment would be impaired.
Specifically, the court held that the mayor, acting as part of the township committee, had a disqualifying direct financial interest in the creation of the development in question under the Local Government Ethics Law (Ethics Law), N.J.S.A. 40A:9-22.1 to -22.25, as she had issued title policies to two of the development’s principals. As a result, the Mayor was disqualified from introducing, considering and voting on ordinances and a master plan adversely affecting the development even where the municipal official terminated the direct financial involvement after the developer filed an Application for Development Permit. The court noted that the mayor formerly had an interest that was not shared in common with other members of the public and that the interest was not a remote one. The court further noted that proof of actual dishonesty was not required, rather simply the potential for conflict. Although the Mayor terminated her involvement with the developers in 2000, the Court said that this was not so remote in time to permit the Mayor to participate in related municipal actions in 2001 and 2004 free of any conflict of interest whether or not the official voted in favor of the ordinances or master plan. The Court also concluded that additional financial involvement with a member of the developer in 2003 required disqualification from participating in the 2004 ordinances and master plan. As a result of this impermissible conflict, the 2004 Master Plan in question was invalidated, leaving the 1993 Master Plan in effect, and forcing the parties to begin negotiations for the development anew.
Mountain Hill, L.L.C. v. Twp. Comm. of the Twp. of Middletown, 403 N.J.Super. 146, 958 A.2d 1 (N.J. Super. Ct. App. Div. 9/10/2008).
The opinion can be accessed at: http://lawlibrary.rutgers.edu/courts/appellate/a2404-06.opn.html
