By Sherry conohan
Staff Writer
SEA BRIGHT — Claiming the Planning/Zoning Board’s denial of his application to open a Stewart’s on Ocean Avenue was "rooted in widespread corruption," Garret Shalley has served notice on the borough of his intent to sue for "at least $12 million in damages."
The tort claims notice, sent to the borough by Michael S. Kasanoff, the Red Bank lawyer representing Shalley and Stewart’s of Sea Bright, LLC, the company name he sought to open the business under, said the forthcoming lawsuit would claim "tortious" — wrongful or abusive — interference with contractual relations, tortious interference with prospective economic advantage, conspiracy and disparagement.
"Although not specifically subject to the Tort Claims Act, claimants intend to submit additional claims under federal RICO … state RICO … the Sherman Act … and the New Jersey Antitrust Act," the notice advised the borough.
RICO is the Racketeer Influenced Corrupt Organization Act. It can be invoked in either civil or criminal cases.
The notice said the defendants are expected to be the borough of Sea Bright, the Sea Bright Planning/Zoning Board, individual members of the Planning/Zoning Board, Mayor Gregory Harquail, Councilman Andrew Mencinsky, and "John Does A-Z, which, subject to further investigation and discovery, may include other individuals within the Sea Bright government, as well as private individuals/entities outside the Sea Bright government."
The borough has a combined Planning/Zoning Board which, on Aug. 13, turned down Shalley’s request to locate a Stewart’s restaurant in the Gulf station by the Sea Bright bridge that leads to Rumson.
Harquail, who sits on the Planning/Zoning Board but recused himself from hearing the Stewart’s case, said the allegations of corruption made in the notice are "totally unfounded."
"I think the gentleman making these allegations is opening himself to a libel suit," he added.
Harquail also called the amount of money being sought "totally unfounded" and said it was a "frivolous" request.
"That was just a notice of intent," he noted. "It’s not an actual suit."
Harquail said he stepped down from hearing the Stewart’s case because it was a type where if there was an appeal, one option was to bring that appeal before the council and that would put him in a conflict.
Borough Attorney Scott C. Arnette said he was forwarding the tort claim notice and all the other information he had on the matter to the borough’s insurance company, the Middlesex Joint Insurance Fund, which will investigate the case and defend Sea Bright against any suit that may be filed.
Kasanoff said he planned to file the suit in federal court. He said while the borough has six months to investigate and respond to the notice under the tort claim act before a suit can be filed, under the Civil Rights Act and RICO he can file right way.
"I can’t give you a timetable," he said as to when he would file, "because I’m not going to put my name on an action like this until all the i’s are dotted and the t’s are crossed."
"We may file it sooner than six months or wait six months," he added.
In response to a question, he said he could also choose not to file.
But, he asserted, "At this point, I think there definitely is a good case." Asked for an example of the kind of corruption being alleged in the planned lawsuit, Kasanoff said he didn’t want to speak publicly about the details until the complaint is filed.
"In a nutshell, my client — let’s just say his application to develop the property there was interfered with for wrongful reasons beyond a legitimate zoning purpose," he said.
The notice of the intent to file a lawsuit said Stewart’s and Shalley contend the denial for the restaurant by the Planning/Zoning Board "is/was totally arbitrary and capricious, rooted in widespread corruption, animus, and bias, in clear violation of (their) rights."
The damage the plaintiffs suffered, it said, were lost use of property, lost revenue, lost profits, future earnings and destruction of the claimant’s business/franchise.
It asked for punitive damages and statutory treble damages.
The notice said the $12 million was being sought, "and perhaps substantially more," based on the claimants’ lost franchise.
"This estimate is based upon the long-term total sales and profits which would have been generated by the Stewart’s restaurant situated in such a prime location in Sea Bright," the notice said.
"Further, the Sea Bright location was going to be the flagship springboard of claimants’ franchise expansion plans throughout the region."
Shalley, in a telephone interview from his lawyer’s office, said he had calculated the $12 million figure based on a projection of gross sales of $1 million a year in Sea Bright, which he said was "a million-dollar franchise location," with a profit margin of 25 percent figures out to $250,000 a year, over 30 years, with a 3 percent cost-of-living adjustment.
"That comes out to $12 million over the years," he said.
"If they pay treble damages, it will be much higher than $12 million."
Kasanoff said that was from "scratch work" by Shalley.
He said after the suit is filed and starts through the discovery process, he would bring forth a forensic accountant as an expert witness to get those figures "down pat."
"We’re at the embryonic stage of the lawsuit now," he observed.
Shalley said he had been in the restaurant business for about 10 years.
He said he was opening a Stewart’s in Ocean Grove in three weeks. He previously owned the Windmill in Red Bank, but sold it.
Kasanoff said Shalley no longer is seeking to open the Stewart’s in Sea Bright.
"He feels if he opens a restaurant there in this atmosphere … he would be subject to harassment," he said.
"So at this point it’s a damages situation.
"This claim is for damages," he emphasized.
Shalley said, "I found so much corruption in Sea Bright that I knew I couldn’t do any business in that town," out of the fear of reprisals.
He said he had turned over the evidence of what he believed to have been corruption in the borough to the Monmouth County Prosecutor’s Office.
The Monmouth County Prosecutor’s Office could not be reached for comment before press time.
"Certain people in town get favorable treatment and others are denied the opportunity to do business," Shalley said of the alleged corruption.
"Actually, it’s not about money," he added with reference to the planned lawsuit.
"It’s about cleaning up corruption in Sea Bright. This has been going on for 20 years now.
"What was done to me was wrong and I’m not going to rest until I see the political structure overturned."