Houman v. Mayor and Council of Borough of Pompton Lakes

Decision Date12 September 1977
Citation155 N.J.Super. 129,382 A.2d 413
PartiesGarret C. HOUMAN; Lockwood Brothers, a partnership; Pompton Hills, a partnership; and Nathan Bernstein, Plaintiffs, v. MAYOR AND COUNCIL OF the BOROUGH OF POMPTON LAKES; Jon Spinnager, Mayor of the Borough of Pompton Lakes; Eugene Dockery, Clerk of the Borough of Pompton Lakes; William F. Schneider, Treasurer of the Borough of Pompton Lakes; and Herman W. Steinberg, Esq., Defendants and Third-Party Plaintiffs, v. Arthur T. RIEDEL and Lawrence T. Isenberg, Third-Party Defendants.
CourtNew Jersey Superior Court

Jerome A. Vogel, Paterson, for plaintiffs (Jeffer, Walter, Tierney, Hopkinson & Vogel, Paterson, attorneys).

Herman W. Steinburg, Paterson, for defendants and third-party plaintiffs.

Samuel S. Nochimson, Pompton Plains, for third-party defendant Riedel.

Frank Scangarella, Pompton Plains, for third-party defendant Isenberg (Scangarella & Feeney, Pompton Plains, attorneys).

MARTIN, J. S. C.

In order to resolve the numerous issues presented by this case, a rather detailed summary of its factual background is necessary. 1

Plaintiffs are taxpayers and owners of certain real property in the Borough of Pompton Lakes. Sometime in the spring or early summer of 1976 plaintiffs, having received their tax bills and assessments for the year 1976, filed appeals from these assessments with the Passaic County Board of Taxation.

On August 24 the mayor and council received notice of the pending appeals from John Steinhauser, secretary of the board of assessors for the borough. It was common procedure for the borough attorney, Lawrence Isenberg, and the president of the board of assessors, Arthur Riedel, to represent the borough on property tax appeals to the county board of taxation.

Isenberg and Riedel, in their affidavits and testimony, assert that on September 2, 1976 they met with Steinhauser and local board member James McGrath for the purpose of discussing the pending tax appeals. Allegedly, it was agreed that due to various conflicts of interest, Isenberg would withdraw from the Lockwood appeal, leaving Riedel alone to represent the borough on this matter, and Riedel would withdraw from the Bernstein and Houman appeals, leaving Isenberg as the sole representative of the borough in these two cases. It was also allegedly agreed that since the Bernstein appeal would have to be taken to the State Division of Tax Appeals, the borough would only make a pro forma presentation at the county level, purely for the purpose of protecting its right to appeal to the State. McGrath and Steinhauser deny that this meeting took place, that such an agreement was reached concerning representation for the borough, and that it was agreed the county appeal would not be fully and vigorously litigated in the Bernstein case.

Hearings before the Passaic County Board of Taxation were held on plaintiffs' appeals on October 1, 1976, at which time judgments were rendered in favor of plaintiffs reducing their assessments. At that hearing Riedel alleged that he withdrew from the Bernstein and Houman appeals, while Isenberg allegedly withdrew from the Lockwood appeal. Immediately following the hearings a report, which contained a description of the properties and the results of the county board's decisions to reduce the assessments, was forwarded by Isenberg to the borough board of assessors.

As a matter of routine, the borough clerk's office, on November 15, 1976, sent vouchers to those taxpayers whose assessments had been reduced in order to facilitate their requests for tax rebates.

On November 22, 1976 Isenberg forwarded a letter to the board of assessors recommending that of the three cases only the Bernstein case, where the county board had reduced the assessments by $81,000, should be appealed to the State Division of Tax Appeals. No appeal of the other reductions was recommended, even though the Lockwood assessment was reduced by about $63,000. The letter also requested, for the Bernstein appeal, information regarding the assessments for all other apartments in the borough, this information apparently not having been requested for the county hearing. The board's advice and recommendations concerning appeals to the State was sought. Apparently, Isenberg never received a response to this letter.

Steinhauser received a complaint on or about November 20, 1976 concerning the manner in which the borough had been represented at the October 1 tax appeal hearing. The matter was brought to the attention of the mayor, who requested a written report from Steinhauser. In a letter dated December 2, 1976 Steinhauser described the alleged conduct of Isenberg and Riedel at the October 1 hearing and advised that the matter be investigated.

Mayor Spinnanger discussed the problem with Municipal Clerk Eugene Dockery and stated that he would recommend to the council the hiring of an outside attorney, Herman Steinberg, to represent the borough for the appeals. Between December 2 and December 8 Dockery discussed the matter with Steinberg, who recommended appeals to the State on all three cases and agreed to handle the matter, conditioned on the council's approval of his appointment.

At a regularly scheduled public meeting, held on December 8, 1976, council member Palatucci moved the following resolution, which had previously been included in the agenda posted in the municipal building several days prior to the meeting:

Be it resolved, pursuant to N.J.S.A. 10:4-13 and 10:4-12, that the Mayor and Council of the Borough of Pompton Lakes hold a closed session regarding personnel matters, and negotiations, following the public meeting on December 8, 1976. It is expected that the discussions undertaken in closed session will be made public at the next regular meeting, and at a public meeting early in 1977.

The resolution was adopted and the clerk read it to the public.

In the executive session Mayor Spinnanger announced that the three tax appeals, involving refunds of $8,700, would be taken; that Isenberg could not represent the borough on these appeals because of the conflict of interest involved, and therefore Steinberg would represent the borough in these matters the clerk to notify him in the morning. No formal resolution was adopted at this time, but it was stated that a resolution confirming the retention of Steinberg would be adopted upon receipt of a written opinion from Steinberg as to what action he recommended.

On December 9 the borough clerk revoked the rebate vouchers that had been returned by the three plaintiffs and instructed Steinberg to prepare and file the appeals. They were filed on December 14, the deadline being December 15.

On December 22, 1976 plaintiffs filed the present suit seeking, among other things, to have the appeals of the borough set aside, the appointment of Steinberg declared invalid, and payment by the borough of the amounts due plaintiffs as a result of the decisions by the county board of taxation.

The Mayor and council received the opinion prepared by attorney Steinberg on December 27, 1976. On the same day a special meeting of the council was announced for the purpose of adopting a formal resolution appointing Steinberg and authorizing the appeals to the State Division of Tax Appeals. Borough Clerk Dockery, in his affidavit and testimony, stated that on December 27 a notice of the special meeting was delivered to the mayor and members of the council by officers of the Pompton Lakes Police Department, and that at the outset of the meeting Mayor Spinnanger stated its purpose and that notice had been given to the public and others in accordance with the Sunshine Law. Myra Nell Cohen, a clerk in the office of the borough clerk, stated in her affidavit that more than 48 hours before the December 29 meeting she informed five newspapers, including the Pompton Bulletin, of the purpose of the special meeting, and posted a public notice to the same effect in the municipal building.

At the December 29 special meeting Mayor Spinnanger stated the purpose of the special meeting was to consider adoption of a resolution naming an attorney to represent the borough in six tax appeals to the State Division of Tax Appeals, to defend the borough and its officials in any civil court action instituted against the borough or any of its officers concerning assessments or assessment appeals, and to represent the borough in a counterclaim and third-party complaint against the county board of taxation and to represent the borough in certain other legal matters.

The following resolution was adopted at the meeting:

Now, be it resolved by the Mayor and Council of the Borough of Pompton Lakes, in the County of Passaic, a Municipal Corporation of the State of New Jersey, that the appointment of Herman W. Steinberg to represent the Borough in the aforementioned appeals, and to file a written opinion with recommendations, is hereby confirmed and made a matter of public record as required by N.J.S.A. 10:4-12, 10:4-13, and 40A:11-5, and

Be it further resolved that Herman W. Steinberg be and is hereby authorized and directed to defend the Mayor and Council of the Borough of Pompton Lakes, the Mayor, the Clerk, the Treasurer and himself in a civil action filed on December 22, 1976, by Nathan Bernstein on behalf of Garret C. Houman, Lockwood Brothers, Pompton Hills and Nathan Bernstein, and to perform such incidental legal work as may be required in connection with the foregoing, and

Be it further resolved that the Mayor and Clerk be and are hereby authorized and directed to sign an agreement with Herman W. Steinberg covering the aforementioned assignments; and

Be it further resolved that his contract is awarded without competitive bidding in accordance with N.J.S.A. 40A:11-5, and

Be it further resolved that a copy of this resolution be published in the Bulletin, issue of December 30, 1976.

At the June 15, 1977 special meeting of the council the following...

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