Legal conflict in Cranford proves to be unfounded

CRANFORD — A possible conflict of interest on the part of the attorney representing the township in the Birchwood Development litigation has hung heavily in the air for months, but a report commissioned by the governing body found no such conflict.

Although controversy has surrounded the complex and litigious issue of the Birchwood development project for several years, a report issued on Tuesday, June 11, by Seton Hall Law School professor Michael Ambrosio attempted to clear the air of any possible legal misconceptions brought to the township’s attention in March.

The Township Committee hired Ambrosio, who also teaches legal ethics at Seton Hall, to put to rest accusations that Phil Morin, a former mayor and township attorney, had a conflict of interest when his firm represented Cranford in the Birchwood lawsuit.

The lawsuit, which the township has been embroiled in for several years, involves a proposed development on Birchwood Avenue for 360 apartments, 60 of which will be affordable housing units.

Residents living in the quiet neighborhood of single-family homes adjacent to the 15.8-acre property have continued to fight the project, with the township spending almost $1 million in legal bills waging that battle.

In March, resident Liz Sweeney, a member of the Concerned Citizens of Cranford, told the Township Committee she discovered what appeared to be a conflict of interest on the part of Morin, a partner at the firm of Florio Perrucci Steinhardt & Fader. She claimed Morin, representing the township in the lawsuit to stop the Birchwood development project, had a potential conflict of interest because of the connection his law firm had in opposing legal matters with Cranford.

She pointed out that, because Michael Perrucci was a developer with Woodmont, there was a direct conflict of interest. Woodmont, she added, was directly related to another builder’s remedy lawsuit brought against the township at 555 South Ave. by Lehigh Associates. Given these latest developments, Sweeney, along with others, including former Mayor Mark Smith, felt the township had to look into the matter because of the connection the two had in relation to the Birchwood development.

In the past, Woodmont Properties filed a lawsuit against Lehigh, alleging it had a joint venture in the development of the South Avenue property. Woodmont also noted in this lawsuit that it provided “substantial assistance” in pursuing the builder’s remedy lawsuit against Cranford.

At the time Morin’s firm was representing Cranford in the Birchwood lawsuit, Woodmont Properties was listed as a client on the law firm’s website and Perrucci was a minority partner with Woodmont in two real estate development projects. The projects included a 25 percent interest in a Pennsylvania project and a 12.5 percent interest in a South Amboy development.

When this information surfaced, the Township Committee allocated $5,000 to hire Ambrosio to explore all the facts and provide his opinion on whether there were ethics violations involved.

Ambrosio’s nine-page opinion noted from the start that conflict-of-interest issues are “fact sensitive” and can only be resolved by painstaking analysis of the facts and circumstances surrounding the representation of a client.

He pointed out that, although Morin’s law firm provided 52 hours of representation while his firm was also representing Cranford, following the builder’s remedy lawsuit brought by Lehigh, his firm did not represent all of Woodmont Industries partners and never represented Woodmont’s interests in 555 South Ave. He also found Morin’s firm did not represent Woodmont when it filed action against Lehigh. It actually was represented by Greenbaum Rowe.

Ambrosio said, since Morin’s firm did not represent Woodmont, there was no basis to conclude that Florio Perrucci Steinhardt & Fader “had anymore than a potential conflict of interest arising out of other unrelated matters.” However, the Seton Hall law professor did conclude the firm’s potential conflict became an actual conflict when Woodmont acquired title to the 555 South Ave. property on March 25, 2013.
This conflict, he said, only related to Morin’s firm representing the township in legal matters relating to the property on South Avenue, not the Birchwood Avenue builder’s remedy lawsuit.

Ambrosio also pointed out that Morin’s firm withdrew as counsel on the Lehigh matter after they became aware of the closing of title and the public was advised of this on April 22, during the public portion of a workshop session of the Township Committee. He also cleared up another legal misconception brought up by residents against the Birchwood project, who said Morin should have advised the township of his clients possible conflict.

“A lawyer or law firm is not required to monitor the activities of its clients to ascertain whether those activities relate a conflict of interest that prevents the firm from representing other parties,” Ambrosio said in his report. “However, after a lawyer or law firm acquires actual knowledge that the interest of a former or current client differs from another client, creating an actual conflict, then withdrawal from representation is required.”

Finally, Ambrosio said any potential conflict of interest was resolved by Morin’s firm withdrawing from representation, so the firm could legally represent Cranford in its litigation in the Birchwood matter.

Morin said he was pleased about the report, noting, “While I was confident professor Ambrosio would not find a conflict of interest, it feels good to be vindicated by one of the most well-respected ethics professors in the state of New Jersey.” Nevertheless, the former mayor felt the entire issue could have been avoided.

“The same residents who were unsuccessful in proving our firm had a conflict at the Lehigh site plan hearings have concocted a new theory that is equally meritless,” Morin said, adding the Lehigh 555 South Ave. legal matter was “severed from case and dismissed with prejudice as a result of the 2010 settlement by court order March 22.”

“As a lifelong resident, I am proud to be a part of Cranford’s legal team fighting this project, and I have advised the Township Committee that I will assist our appellate counsel in anyway necessary,” Morin said in a statement to LocalSource on Tuesday.

The township, though, while not commenting publicly on the report, did explain what would happen from this point on.

“The Township Committee has moved on and has hired two other attorneys to handle Birchwood from this point on,” said Mayor Tom Hannen on Monday, June 24. The attorneys, Jeffrey Surenian and Robert Podvey, he said, came highly recommended. He did not, however, have any comment about the fact that Podvey was the attorney used by the Concerned Citizens of Cranford in their fight against Birchwood. But regarding the hiring of the two new attorneys, the mayor explained why the township decided to go this route.

“We lost all motions to reconsider the Birchwood case up until this point, so this will provide a new set of eyes,” Hannen said, adding he believed there was enough reason to challenge the appellate court before the New Jersey Department of Environmental Protection.

Hannen explained that Morin would continue to represent the township in certain Birchwood matters.

“Phil is finishing up on issues that Judge (Lisa) Chrystal said we had to do,” the mayor said, referring to a judgment that came down in the spring, paving the way for the Birchwood project to proceed to the construction phase.


One Response to "Legal conflict in Cranford proves to be unfounded"

  1. Liz Sweeney   June 27, 2013 at 6:31 pm

    In his report, Ambrosio writes, “Once Woodmont acquired title to the Cranford property (555 South Ave. East) on March 25, 2013, what may have been only a potential conflict of interest arising from FPSF’s (Florio Perrucci law firm) unrelated representation of Woodmont became an actual conflict that would prevent FPSF’s continued representation of Cranford in the builder’s remedy litigation with respect to the property at 555 South Avenue.”