Case Name: In the Matter of Tuxedo Conservation and Taxpayers Association et al., Respondents, v. Town Board of Town of Tuxedo et al., Respondents, and Neal Martineau et al., Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1979-07-02
Citations: 69 A.D.2d 320
Docket Number: 
Parties: In the Matter of Tuxedo Conservation and Taxpayers Association et al., Respondents, v Town Board of Town of Tuxedo et al., Respondents, and Neal Martineau et al., Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 69
Pages: 320–342

Head Matter:
In the Matter of Tuxedo Conservation and Taxpayers Association et al., Respondents, v Town Board of Town of Tuxedo et al., Respondents, and Neal Martineau et al., Appellants.
Second Department,
July 2, 1979
APPEARANCES OF COUNSEL
Rathkopf & Rathkopf (Arden H. Rathkopf and Daren A. Rathkopf of counsel; Richard F. Babcock, R. Marlin Smith and Ross, Hardies, O’Keefe, Babcock & Parsons on the brief), for Sterling Forest Development Corp. and another, appellants.
Doig, Cornell & Mandel (Myron Mandel of counsel), for Neal Martineau, appellant.
Morgan Finnegan Pine Foley & Lee (Alfred P. Ewert of counsel), for Tuxedo Conservation and Taxpayers Association and others, respondents.
Cline, MacVean, Lewis & Sherwin, P. C, for Town Board of Town of Tuxedo and others, respondents.
Louis J. Lefkowitz, Attorney-General (John G. Proudñt, John F. Shea, III, Joseph J. Zedrosser and Samuel A. Hirshowitz of counsel), for the State of New York, amicus curiae.

Opinion:
OPINION OF THE COURT
COHALAN, J.
The Town of Tuxedo, in Orange County, had a population in 1970 (Federal decennial census), of 2,967 persons.
In 1974 Sterling Forest Development Corp. (Sterling) and U.I.D.C. of New York, Inc., filed an application to build a 3,900 residential unit, "Planned Integrated Development", at the rate of not more than 300 units per year, on a plot of about 1,500 acres within the town. The estimated cost of the project was 200 million dollars. The application was denied in 1975 and again in 1976.
In March, 1977 the town board delegated to the planning board the authority to hold environmental impact hearings. In mid-1977, the planning board issued a notice of hearing as to Sterling One. The notice indicated that the town board was the "lead" agency.
There was considerable public opposition to the project because when completed it would—at the average rate of 3 to 3V2 persons per unit—quadruple the local population and would strain the available municipal facilities to the breaking point.
On the town board itself there was division. Three were for the projéct, two against. On Election Day in November of 1977, the complexion of the town board—effective January 1, 1978—changed. The 3 to 2 vote in favor of the application appeared to become 3 to 2 against it.
Although the planning board had been proceeding at its normal tempo, it apparently was not working swiftly enough to satisfy the "lame duck" town board. Hence the latter swung into action with what seemed to be kaleidoscopic rapidity. By a local law passed in late December, 1977 it relieved the planning board of its authority vis-á-vis the environmental aspects of the project and took over the reins.
Despite a request from the Department of Environmental Conservation (D.E.C.) and the State Attorney-General for more time to file written statements on the subject of environmental impact, which request had been acceded to by the planning board, the town board proceeded to grant the necessary preliminary approval to Sterling. It did this on December 28, 1977, realizing that the then town board would be functus officio four days later.
In fairness to the town board it should be noted that its members had tried to keep abreast of current developments. Whether they had a full opportunity to make an "informed" decision is a pertinent question (see Matter of Weekes v O'Connell, 304 NY 259, 265). We think they did not.
The vote was 3 to 2. The controlling vote in favor was cast by one Martineau, an appellant herein, who, in addition to being a town board member, was and is a vice-president of an advertising agency which numbers City Investing Corp. among its corporate clients.
Sterling is a wholly owned subsidiary of City Investing Corp. It requires no feat of mental gymnastics to infer that if the application is approved, the agency will be a strong contender to obtain all the advertising contracts in the 200 million dollar project.
However, Martineau refused to disqualify himself and instead cast the decisive vote. He did this with a realization of the possible conflict of interest involved. In fact, he went so far as to submit the question of conflict to the local ethics committee, which unfortunately, never responded to his inquiry, probably because of the impending litigation.
The end result, as we know, is that litigation resulted. This CPLR article 78 proceeding was instituted against the town board in its administrative capacity, and against Sterling and U.I.D.C. of New York.
On the threshold question of lack of standing to sue, Special Term held—and we agree—that under the liberalizing principles enunciated in Matter of Douglaston Civic Assn. v Calvin (36 NY2d 1), the taxpayers association and the corporate petitioners have standing to sue. In addition, we are of the opinion that the individual petitioners in a community as small as Tuxedo also have the required standing. The aggrieved persons live within a radius of 100 to 1,500 feet from the subject area. We base this holding on the theory that all the petitioners may be adversely affected, inter alia, in such matters as noise, water and air pollution and traffic density; and the project will wreak havoc on the Comprehensive Master Plan of 1972, if the decision of the town board is permitted to stand undisturbed.
Reverting now to the December 28, 1977 meeting of the town board, we deplore Mr. Martineau's participation in the vote. Not because of the result, but that he voted at all, even though it may have meant putting the matter over until the advent of the new year. We direct his attention to the soaring rhetoric of Chief Judge Cardozo in his opinion in Meinhard v Salmon (249 NY 458, 464): "A trustee is held to something stricter than the morals of the market place. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior." This statement was written with reference to a fiduciary, but it should apply as well to public servants.
On behalf of Martineau it is asserted that he did not violate section 809 of the General Municipal Law, which forbids certain specified conflicts of interest. Be that as it may, while the anathema of the letter of the law may not apply to his action, the spirit of the law was definitely violated. And since his vote decided the issue we deem it egregious error.
Thus the question reduces itself into one of interest. Was Martineau's vote prompted by the "jingling of the guinea" or did he vote his conscience as a member of the town board? In view of the factual circumstances involved, the latter possibility strains credulity. For, like Caesar's wife, a public official must be above suspicion.
There is a paucity of cases in this jurisdiction of the precise nature of the case at bar. Baker v Marley (8 NY2d 365) is authority for the postulate that public policy forbids an action by a municipality (condemnation proceeding) founded on a vote of a village official who benefited directly and individu ally. That case involved a statute, section 332 of the former Village Law, since repealed and re-enacted in diluted fashion by section 802 of the General Municipal Law. The cases that cited Baker before the repeal are not of much assistance in our case. (On the general question see Landau v Percacciolo, 66 AD2d 80.)
The Annotation at 10 ALR3d 694 covers a number of actions and proceedings in several of our sister States. An amalgam of those cases indicates that the test to be applied is not whether there is a conflict, but whether there might be. Thus, in Mills v Town Planning & Zoning Comm. of Town of Windsor (144 Conn 493, 498), the court said: "It is the policy of the law to keep the official so far from temptation as to ensure his unselfish devotion to the public interest."
Pursuing the subject in our own jurisdiction, we can, by analogy, demonstrate instances of conflict of interest involving attorneys. One of the most recent is that of Cardinale v Golinello (43 NY2d 288). There it was noted (supra, p 296): "The standards of the profession exist for the protection and assurance of the clients and are demanding; an attorney must avoid not only the fact, but even the appearance of representing conflicting interests". And in Edelman v Levy (42 AD2d 758) the court held that defendant was entitled to have plaintiffs attorney disqualified from acting in the case on the ground that there was an appearance of a conflict of interest. The court's memorandum noted that: "An attorney must avoid not only the fact, but even the appearance, of representing conflicting interests". We think the case of the Town of North Hempstead v Village of North Hills (38 NY2d 334), cited by the appellants, is readily distinguishable with respect to conflict of interest. The happenstance that there four of the five members of the village board owned real estate which met the four-acre requirement, and might, therefore, be reclassified at a later date, is pure speculation, as the court observed (supra, p 344): "Nor do we find any merit to petitioners' contention that the individual members of the board acted in an apparent conflict of interest in approving the ordinance and the amendment. None of the members owns any interest in the Gut parcel which was reclassified. Rather, the basis for this claim is that several of the members own parcels of real estate which meet the four-acre requirement and might, therefore, be reclassified R-CL at some future date. This claim is at best speculative."
In contrast, the circumstance that Martineau was voting for his own interests goes far beyond speculation. The probability of his firm getting the advertising contract if the project eventuates is a real one, with the percentage greatly in his and its favor.
Further, as in the North Hills case (supra), the general rule is expressed in Ann., 133 ALR 1257, 1261-1262 is:
" 'The interest which disqualifies a member of councils to vote is a personal or private one, not such an interest as he has in common with all other citizens or owners of property'.
" 'To say in general terms that a member of a city council cannot vote on the passage of an ordinance providing for the construction of some important public improvement, because he owns real property in the city, when the improvement is a general one, is at once to disqualify every property owner in the city from belonging to the city council, and committing all the material interest of the city to a class of persons who have no property rights to protect.' "
Turning now to the actions of the town board in late December of 1977, we voice our strong disapproval, also, of the unseemly haste by which Martineau and two of his colleagues rammed the resolution through the town board at the time when the planning board was making definite progress towards its goal. Although the latter could not have made the December 31, 1977 deadline, it could have presented its final report and recommendation sometime in January of the new year. This would not per se have resulted in the scuttling of the project because of the change in the membership of the town board, for we must bear in mind that all the old town board had done was preliminary in nature. The hoped for issuance of building permits was still well in the future.
Two hundred million dollar projects are not every day occurrences in a town of the size of Tuxedo. That the planning board moved slowly is a tribute to the caution of its members, and that they gave—or tried to give—additional time to the D.E.C. and to the Attorney-General was an indication of their thorough preparation.
Both D.E.C. and the Attorney-General were concerned with the impact the development would have on the environment. Thus, pursuant to the Environmental Conservation Law, they were quite within their rights in requesting additional time to file their observations and objections, if any. In overriding the extension granted by the planning board, the town board ignored the time provisions of the Environmental Conservation Law and proceeded to grant the application subject, as above noted, to a list of prerequisites—23 in number—to be met by the applicant before building permits could issue.
We have considered the other arguments raised by the appellants and have found them to be without merit. For the reasons noted, the judgment should be affirmed.