JUDGE DENIES LAKEWOOD ZONING BOARD'S FILING REGARDING MORDY GROSS'S POSSIBLE CONFLICT OF INTEREST WITH LAKE TERRACE


There were lots of losers in Court on Wednesday.


Ocean County Superior Court Judge Robert Brenner denied the Lakewood Zoning Board's Summary Motion for declatory judgement that Board Member Mordy Gross does not have a conflict of interest with Lake Terrace's Use Variance appeal.


Judge Brenner also denied 1650 Oak Street LLC's Motion to stay the Board from hearing Lake Terrace's application until the Court makes a final determination as to whether or not Mordy Gross and Moshe Gleiberman have conflicts of interest.


Finally, Judge Brenner denied Lake Terrace's motion to have this matter transferred over to Judge Hodgson who previously granted them a stay on the enforcement of their interim Court Orders.



At the Board's initial hearing on Lake Terrace's application, Attorney Rob Shea Esq. representing 1650 Oak Street LLC, requested that any Board member who has a conflict with Lake Terrace recuse themselves from the application. At that point, Meir Gelley and Moish Lankry recused themselves.


Following the meeting, Mr. Shea wrote a letter to the Board advising that Moshe Gleiberman who sat in on the application, and Mordy Gross who was not present, also need to recuse themselves.


Mordy Gross represented Table Linen in 1650 Oak Street LLC's contentious litigation against Bnos Brocha. That litigation included numerous site plan violations including the illegal use of a banquet hall. As Bnos Brocha's property is part of the Lake Terrace application, and both matters involve the illegal use of a banquet hall, Mr. Gross should now recuse himself.


Moshe Gleiberman is the Vice President of Administration of Beth Medrash Govoha, and he has been quoted in the Asbury Park Press making public statements regarding BMG's planned purchase of a portion of GCU as well as BMG's planned campus expansion on that land purchase.


The APP article indicates that "Mr. Gleiberman spoke as to the uses... and failed to address whether or not it would be used as a banquet hall." The article indicates that he spoke as to the uses of the basement of the new child care center and specifically failed to address whether or not it would be used as a banquet hall. This is significant as the architectural plans for the building do contain 3 large banquet halls, and the Environmental Impact Study submitted with their application expressly states that the project will include a 530 person catering/banquet hall. This is an important point because the student housing campus will be located in a residential zone and it is questionable whether or not a banquet hall is even a permitted use in the zone.


Scott Kennel and Brian Flannery both testified on behalf of BMG's campus expansion application. As Mr. Gleiberman holds a prominent position in BMG and earns most of his money from that job, Mr. Kennel and Mr. Flannery were in essence working for him. As such, Mr. Gleiberman cannot now, such a short while later be expected to be unbiased in the face of two of his own experts now testifying before him.


Mr. Gross has not recused himself, however, especially as he is an attorney, he is hesitant as to whether or not to recuse himself.


In response, as 'tis sure is the season for lawsuits - all funded by the Lakewood taxpayers, of course - as first reported here on FAA News, on June 9, Zoning Board Conflict Attorney John Jackson Esq. filed a Verified Complaint on Summary Action seeking an order declaring that there is no conflict of interest with respect to Board member Mordy Gross to Lake Terrace's Use Variance appeal.


Mr. Jackson wrote to the Court:


Counsel for the Board has provided an opinion that there is no conflict of interest with respect to this Board member.


The Board member in question is an attorney at law and does not want to take a risk that a legal body may make a determination that he sat on a case wherein there was a conflict of interest.


This application is made to request that the court declare, pursuant to NJS 2A:16-52, that there is no conflict of interest.


The alleged conflict of interest arises because the Board member in question served as legal counsel to Table Linen, Inc., the defendant in an action also involving the Defendant, 1650 Oak Street, LLC, captioned “1650 Corporate Road West, LLC v. the Township Committee of the Township of Lakewood, et als.,” bearing Docket Number OCN-L-74-21. The matter has been resolved as between Defendant and Table Linen.


The Board member’s client was one of approximately eight defendants and the issue with respect to the Board member’s client was whether his client, a tenant of the Applicant’s neighbor, KBS Mt. Prospect, LLC Bnos Brocha, was properly occupying the space within the building in question and whether his client had the proper permits to operate its business. The Board member’s involvement in this litigation should have no bearing on his ability to hear the Application, which is unrelated to the subject of the litigation. 


New Jersey Municipal Land Use Law provides that: “No member of the board of adjustment shall be permitted to act on any manner in which he has, either directly or indirectly, any personal or financial interest.”


The Local Government Ethics Law creates a statutory code of ethics that governs when a disqualifying conflict of interest arises for a local government official. The Ethics Law and the common law guide courts in evaluating when conflicts arise. "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.' " 


The Ethics Law provides:

[n]o local government officer or employee shall act in his [or her] official capacity in any matter where he [or she], a member of his [or her] immediate family, or a business organization in which he [or she] has an interest, has a direct or indirect financial or personal involvement that might reasonably be expected to impair his [or her] objectivity or independence of judgment.


Counsel for the Board has opined that there is no conflict of interest for the following reasons: (1) the Board member has no direct financial interest in the outcome of the application, (2) the Board member has no direct personal interest in the outcome of the application, (3) the Board member has no indirect financial interest in the outcome of the application or in the applicant, (4) the Board member has no indirect personal interest in this matter, and (5) the Board member has confirmed that his objectivity and/or independence of judgment with respect to the Application would not be impaired as a result of his involvement in the litigation involving Defendant. 


Notwithstanding this advice to the Board, Mr. Shea continues to allege a conflict of interest with respect to Mordy Gross, which decreases the number of eligible members that may hear and vote on the Application.


Due to the fact that a conflict has been formally alleged, and because the Board member does not wish to risk being involved in a conflict of interest, the Board asks that the Court make a declaration that there is no conflict of interest.


Several Board members have stepped down from this application and the Board needs all eligible members to participate in order to have the ability to provide the Applicant with a full Board. 


The matter before the Board is a use variance, which requires five affirmative votes. If the Board is unable to provide the Applicant with all seven members, then the Applicant is put at a disadvantage because it must achieve a higher percentage of positive votes than would otherwise be required under the law. For example, if only five members hear the case, then the Applicant must obtain five affirmative votes, which means it would need 100% of the voting members to vote positively. In contrast, five out of seven members would require only 71% of the voting members to vote positively.


The Board does not want one of its members to step down if there is not actually a conflict of interest and seeks the Court’s determination.


Not one to miss an opportunity to be involved in litigation when it relates to Lake Terrace, as previously reported here on FAA News, Mr. Shea shot right back on the bandwagon, writing to Judge Brenner that while he disagrees with the Board's position that Mordy Gross does not have any conflict, he so agrees with the Board that this issue of conflict is so important to be figured out, that he is seeking for a stay on the Board from continuing hearing Lake Terrace's Use Variance appeal until the conflict is worked out!


Under the 1982 case known as Crowe v. DeGioia, the New Jersey Supreme Court articulated the following four standards in which a Motion for Emergency Relief can be granted:


1. The moving party will suffer irreparable harm if the requested relief is not granted;

2. The legal right underlying the moving party’s claim is settled;

3. The moving party has a likelihood of prevailing on the merits of the underlying claim; and

4. When the equities and interests of the parties are balanced, the moving party will suffer greater harm than the respondent will suffer if the requested relief is not granted.


Mr. Shea wrote a detailed brief in support of why his client's motion to stay the Board from continuing hearing Lake Terrace's Use Variance appeal until the conflict is worked out is in compliance with Crowe.


Point I - My client and the public interest will suffer irreparable harm if the application is not stayed 


The instant case is a rather unusual situation because no matter who wins, the parties seem to agree on the emergent nature of this case.


Firstly, there is a clear issue of whether or not the public officials charged with the duty to hear Lake Terrace's application even have the ability to do so.


My client feels, and has presented evidence to the Board that Gross and Gleiberman have an obvious conflict of interest which prevents them from sitting on this application. Evidently, the Board, though they believe the inverse, also feels that this issue is imperative to deal with before the application is even heard.


The Board is correct.


To go forward with the application before this issue has been vetted out would be prejudicial to my client as an objector, and to Lake Terrace as an applicant. Furthermore, the taxpayers of Lakewood must, in the absence of a stay, shoulder the burden of having their public officials and experts potentially re-do the entire hearing. That is not a loss that the general public can recoup, nor is it a necessary one for them to incur, given the readily available alternative of a stay. If the Board is wrong in their assessment that Gross may sit on the application, then the parties need to know before a vote takes place. 


Furthermore, if my client is correct about Gleiberman's conflict, then the application has already been tainted, and must be re-heard. A re-hearing at this early stage would be far easier, and less burdensome on the applicant, objector, and taxpayers than a re-hearing would be if the application progresses further.


The Board specifically filed this action against my client, though it is unclear why, to obtain the determination that they feel is necessary for them to move forward and included their own, un-briefed, Order to Show Cause. The Board clearly recognizes the harm that will befall every party involved in this action, if the Court does not make a decision before a conflicted member votes.


In fact, according to the Board's own Complaint, the Board Member in question, in this case, Mr. Gross, is unwilling to risk being involved in a potential conflict of interest. Furthermore, on June 12, 2023 (the day of the recent public hearing), the Board, via email, indicated that that were not inclined to even hear the application until the Court makes a ruling on Mr. Gross' conflict. The obvious choice is for Mr. Gross to recuse himself. Presumably, if Mr. Gross truly had no conflict, the Board would not resort to seeking advisory opinions from the Court and would simply seat Mr. Gross as a member. Based on the fact that they have gone to such lengths, it is obvious that the matter is of great public importance and runs the risk of inflicting grievous harm to the public good if not dealt with expeditiously. As such, this is an issue which needs to be vetted out by the Court before the application goes any further. Conclusively, a stay is warranted to prevent harm to the interests of my client, Lake Terrace, the Board, and the public's interest in knowing that their officials are free of conflict before they vote on matters of public import.


Point II - The defendant is likely to succeed on the merits of a well-settled claim


Determining whether a conflict of interest is a fact-sensitive, totality of the circumstances analysis. As one legal commentator phrased it, would an impartial and concerned citizen, intelligent and apprised of all the facts in the situation, feel that there was the potential for non-objectivity on the part of the officeholder making a decision?


In the instant case, both Gross and Gleiberman meet the criteria as set forth due to their involvement with the Bnos Brocha litigation and BMG's banquet hall application.


Point III - The balancing of the hardship favors a stay of the application while this litigation is pending


This case is again, a-typical, as the equities of all parties will be served via a stay of the application pending the outcome of this litigation.


The Board has already expressed its desire to deal with the issue of the potential conflict before they proceed with the application. Both my client and Lake Terrace, who the Board should have joined to this litigation, are clearly interested in having this application heard without procedural deficiencies that will result in more needless litigation. In fact, my client has gone well out of their way to bring every procedural deficiency to the Board's attention so that both client and Lake Terrace may debate the merits of the matter, without jurisdictional and procedural matters interfering and simply prolonging the matter.


As a result, the Court should stay the application until this litigation has concluded. Allowing the application to continue with a potentially conflicted member seated on it, and another member electing to remain in limbo until the Court makes a decision is in the interests of no one. On the other hand, a stay will allow the application to advance once this issue of conflict has been resolved.


Jumping into the matter, on Tuesday, Lake Terrace, represented by Attorney Matthew Fiorovanti Esq. filed a Motion to Intervene.


Mr. Fiorovanti argued that this matter, which was assigned to Judge Brenner, should be consolidated with the main banquet hall litigation pending before Judge Hodgson, and the requested stay of the Zoning Board's hearing of the application should be put forward before Judge Hodgson.


If that request is denied, Mr. Fiorovanti sought for Judge Brenner to deny Sudler's requested stay of the Zoning Board proceeding.


Mr. Fiorovanti wrote:


KBS takes no position with regard to whether any individual Board member has a conflict of interest that precludes him from hearing the application.


However, because KBS's interest in having the Board continue to conduct a public meeting on their application is directly impacted by Sudler's application for a stay of that very public meeting, KBS should be granted leave to intervene.


Desperate to delay, frustrate, and impede the ability of KBS to obtain confirmation from the Zoning Board that they are permitted to use their venue as a banquet and concert hall, Sudler has burdened the Court with a meritless application to stay the continuation of the public meeting until such unknown time in the distant future.


Not only is their application contrary to well-settled New Jersey law that requires an objector to exhaust its administrative remedies before the applicable land use board before seeking relief in Court, it is also contrary to several Court Orders issued by Judge Ford and Judge Hodgson in the banquet hall litigation.


Significantly, first Judge Ford, and then Judge Hodgson, entered orders which stayed the litigation pending the outcome of KBS's Zoning Board application. Those judges realized that the litigation would be rendered moot once the Board either granted or denied the application, at which time the losing party could file a Prerogative Writs in court.


Judge Hodgson went even further, finding that KBS had been diligently attempting to have the Board schedule a public hearing for over a year, only to be delayed by Sudler's constant, meritless objections.


On March 17, Judge Hodgson entered an order which stayed any enforcement proceedings in the banquet hall litigation "until the Board has an opportunity to pass upon the matter."


Now, Sudler has come before a new judge, without naming KBS or even providing it notice of its application, and without disclosing the existence of the banquet hall litigation, and seeks the exact opposite relief as issued by Judge Ford and Judge Hodgson. Rather than a stay of the litigation pending the outcome of the Board hearing - as ordered by Judge Ford and Judge Hodgson - Sudler seeks a stay of the Board hearing pending the outcome of more litigation!


If the Court grants Sudler's application, KBS's rights are directly impacted as they will not be able to obtain the long sought approval from the Board.


The Court should not consider Sudler's application, as it should consolidate the instant matter with the banquet hall litigation and refer all proceedings to Judge Hodgson for consideration. This matter represents yet another battle in the long war involving KBS's attempts to formally obtain land use approvals. This action involves common questions of law and fact with those which have been aggressively litigated in the banquet hall litigation. It would be a gross misuse of judicial resources and economy to require this Court to utilize its scarce time towards learning the background of this lengthy, contentious litigation.


Moreover, this Court's ruling may conflict with rulings already made by Judge Hodgson regarding KBS's right to have its application be heard in a timely fashion, as Statutorily required. In the event that this Court grants Sudler's application - which is the exact opposite of what Judge Hodgson has ruled in the banquet hall litigation - KBS would be compelled to file an action in the banquet hall litigation to compel the Board to hear their application without delay.


If Sudler disagrees with Judge Hodgson's rulings, its recourse is to the Appellate Division, and not to forum shop for a more favorable judge in the same county.


Yet, in the event that this Court does retain jurisdiction over Sudler's meritless application, the Court should deny such application in its entirety. It is telling that Sudler has not cited a single case in which a court has stayed a pending land use application in order to resolve an issue regarding a potential conflict of interest or other legal issue. Such failure is understandable: it is simply contrary to New Jersey law.


Parties must first exhaust all administrative remedies - once the Board either granted or denied the application, the losing party could file a Prerogative Writs in court. If Sudler loses at the public hearing, they can file a Prerogative Writs in court, which can include the same arguments regarding a perceived conflicts of interest. Yet, it cannot raise those arguments before the Board actually decides the application.


To allow Sudler to challenge an interlocutory decision by the Board would invite piecemeal litigation that would wreak havoc on the land use process. If an objector wished to frustrate an application, he could run to Court to file an application seeking a declatory judgement that the notice was insufficient; that an expert witness was not qualified; that plans were not provided to the public with adequate notice; that an objector was not granted permission to cross-examine witnesses; or, as here, that any Board member had a conflict of interest. Land use applications would be delayed indefinitely, and be at the whim of Court decisions regarding issues that are squarely within the purview of the Board under the MLUL. Indeed, it is the Board - not the Court - which is Statutorily authorized to grant a variance.


For the same reasons, Sudler will not be harmed - and definitely not irreparably - if their motion is denied and the public hearing is held - as all that will happen as a result is that they will need to wait to potentially make those arguments after the Board decides on the application.


KBS's application is simply one of many applications that are considered by the Board during its monthly regular meeting; if KBS's application is stayed, the Board and its professionals will still have to show up and conduct the public meeting to address other business. There is no "harm to taxpayers" in any way, shape or form.


Sudler speculates that the Board may have to re-hear the application if their appeal is successful. However, fulfilling its statutory obligations under the MLUL does not equate to irreparable harm.


The Zoning Board attorney submitted a letter to the Court joining in the legal arguments made by Mr. Fiorovanti in opposition to Sudler's Order to Show Cause seeking the stay of Lake Terrace's Zoning Board application.


Mr. Shea responded with a supplemental filing which clarifies that while case law has indeed established that appeals from local land use board decisions are typically filed as a Complaint in Lieu of Prerogative Writs within 45 after the Board's decision is released, this is different as it's not an appeal from the Board's determination, but rather a Declaratory Judgement proceeding which seeks a declaration of the parties' rights.


"Put simply, there is no municipal action to finalize in this case. Gross and Gleiberman either have a conflict under the MLUL and Local Government Ethics Law, or they do not. The outcome of the hearing and determination that the Board will make will not change that fact no matter which way the Board rules on the Application. As such, any argument that Defendant's action is somehow barred until the Board fully hears the application is misplaced and inapplicable."


Mr. Shea is also opposing the Board's filing for a Summary Proceeding, arguing instead that he needs a brief discovery period to do depositions of Gross and Gleiberman.


As the Zoning Board is scheduled to hold their next public hearing next Monday, July 10, Judge Brenner deemed the matter emergent and cleared his schedule so he could hear the arguments on the merits.


Despite all of Mr. Fiorovanti's arguments that the matter should be transferred to Judge Hodgson to be consolidated with the main banquet hall litigation as Judge Hodgson already ruled that they are "exempt from litigation until the outcome of the Zoning Board application," Judge Brenner was undeterred and denied this request.


Turning to the Board's initial filling in this instant action, Judge Brenner said that he understands Mordy Gross's common sense argument regarding him being extra concerned due to his attorney license, however, this concern is unnecessary as he is not serving as an attorney to the Board.


Additionally, he said that he agrees with Mr. Shea's argument that determining whether there is a conflict on interest requires personal testimony which would require a period of time for discovery, and therefore declatory judgement can't be sought under a summary action. Therefore, the Board's Summary Action was denied and tossed out.


Mr. Jackson responded, "judge, if you don't make a decision now, Mr. Gross will not sit on the Board as he is scared that later on there will be a determination that he does have a conflict."


Judge Brenner was not deterred, saying, "that is his decision."


Mr. Fiorovanti stated that at the public hearing, Mr. Shea "intimidated" the Board members by warning them that if he finds out later that they had a conflict with the application, he can get the approval tossed out. He added that the Open Public Meetings Act provides that certain penalties can be assessed against individual Board members.


Judge Brenner was unfazed, only saying, "whether or not Mr. Shea was intimidating is irrelevant. The important part is that the issue was raised."


Mr. Fiorovanti further argued that Mr. Shea is dragging the matter to court even before the Board has a chance to vote on the application, and typically all challenges to a land use board approval needs to be done as a Complaint in Lieu of Prerogative Writs after the Board votes.


Mr. Shea responded that this challenge is not a Complaint in Lieu of Prerogative Writs, but rather he is seeking declaratory judgement as to whether or not these members can sit on next week's application.


Judge Brenner ruled that whether or not this is a valid argument is irrelevant, as the filing is for an Order To Show Cause which requires a showing of "irreparable harm," and there is no "irreparable harm" here as all allegations of conflicts can be equally raised in a future Prerogative Writs.


Mr. Shea stated that in the absence of a stay, the taxpayers of Lakewood will shoulder the burden of having the Board potentially re-do the entire hearing.


Mr. Fiorovanti argued back that the Board is required under its statutory obligations to hear applications as they come forward. Fulfilling this obligation, even if it's for a re-hearing, does not equate to irreparable harm.


Judge Brenner agreed with Mr. Fiorovanti, saying "there is no concern to taxpayers. The Board is obligated to hold hearings and act. If the Board needs to re-hear an application, that will still not be an irreparable harm."


Judge Brenner also noted that Mr. Shea only filed his Order To Show Cause after the Board already held two hearings on the application, so apparently no emergent relief is so very necessary.


Judge Brenner also agreed with Mr. Fiorovanti that permitting to entertain these arguments now, before the Board even gets a chance to vote on the application, would invite piecemeal litigation in the future as well.


At the same time, because the Board and Lake Terrace are not willing to address the conflict concerns now, they can not later argue that these arguments are barred, Judge Brenner added.


Ultimately, Mr. Shea's motion was denied completely as well.


All parties sought their legal fees. Judge Brenner denied all of these motions.

Alongside this new litigation, as previously reported here on FAA News, citing violations of their court orders, Mr. Shea has also filed a Motion in court which seeks an immediate shutdown of Lake Terrace until such time as it receives all requisite, non-appealable approvals. Judge Hodgson has scheduled oral arguments on that motion for this Friday, June 30.


Additionally, as previously reported here on FAA News, Mr. Shea has filed a Motion in court against Bnos Brocha, alleging that their agreement to allow Lake Terrace to use their parking lot for overflow parking is a violation of their Consent Order with Mr. Shea which restricts the use of their property specifically for a school. Lake Terrace has filed a Motion to Intervene in that matter. Judge Hodgson has scheduled oral arguments on both of these motions together for this Friday, June 30.


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1 comment:

Anonymous said...

I don’t see what the big deal is for the zoning board? All they need to do is bring over a few members from the planning board. It’s really very simple. There was no reason to spend money to go to court for a member, which hasn’t even participated in the public hearings for over a year.