Pennington Borough sues former longtime clerk

The suit maintains that "through … unauthorized and unlawful payments, Sharon Reed misappropriated and knowingly converted Pennington funds to her own use."

By John Tredrea
   Former Pennington Borough Clerk Sharon Szalontay Reed has been sued by the borough.
   In a civil lawsuit filed March 20, the borough alleges that Ms. Reed, who retired three years ago after working for the borough for 30 years, illegally paid herself $33,552 in unused vacation time between 1991 and 1999.
   In a second count, the lawsuit alleges that Ms. Reed, who was borough registrar in addition to borough clerk, "caused herself to be paid compensation for registrar services outside of payroll. Without Pennington’s knowledge or consent, Ms. Reed billed Pennington for registrar services at a rate twice the amount permitted by statute and received payment for registrar fees in excess of the amount permitted by statute."
   The suit maintains that "through these unauthorized and unlawful payments, Sharon Reed misappropriated and knowingly converted Pennington funds to her own use."
   The suit, filed by Borough Attorney Walter Bliss at the direction of the Borough Council, does not put a dollar amount on the money allegedly taken illegally by Ms. Reed in her capacity as registrar.
   In a third count, the lawsuit alleges that "during the fiscal year 1999, Sharon Reed failed to exercise her position as borough clerk and financial officer with requisite care and skill. In her management of the finances of Pennington, she caused the overstatement of receivables and funds on hand." She also caused, the lawsuit goes on to say, "expenditures in excess of Pennington’s 1999 municipal budget and overexpenditures in Pennington’s 1999 water and sewer utility budget, all as reported by borough auditor Robert S. Morrison to borough administrator Karen Waldron in his report dated February 16, 2000."
   Reached at her home in West Virginia Monday morning, Ms. Reed declined to comment on the lawsuit.
   In its lawsuit, the borough is seeking restitution of the money allegedly taken illegally by Ms. Reed, plus compensatory and punitive damages and legal costs.
   "This is an action we took on the advice of our attorney," borough Mayor Jim Loper said somberly Monday evening.
   The borough’s suit against Ms. Reed, who also was a Pennington First Aid Squad volunteer for many years, was filed in state Superior Court in Morris County because the suit is intertwined with a legal battle between the borough and its former auditor John Ezyske, a CPA based in Chester (Morris County) who was replaced by Mr. Morrison three years ago.
   Last July, Mr. Ezyske sued the borough for $15,685 he said the borough owed him for auditing work.
   "He didn’t do his job. That’s why he didn’t get paid," Mr. Loper said.
   A March 20 countersuit filed by the borough against Mr. Ezyske and attached to the third-party suit against Ms. Reed, summarized above, maintains that his failure to report to the Borough Council Ms. Reed’s alleged unlawful payments to herself constituted negligence on his part. The countersuit makes numerous other allegations against Mr. Ezyske, many of them pertaining to his 1998 audit report. Among other alleged infractions, the countersuit states that the payroll fund was completely omitted from that report and that the current fund revenues and year-ending balance were overstated by more than $220,000.
   The $15,685 at dispute was the amount of the last payment Mr. Ezyske was to receive from the Pennington, borough Administrator Karen Waldon said Monday.
   The borough’s countersuit against its former auditor also alleges that, after he had had been replaced as borough auditor by Mr. Morrison, Mr. Ezyske refused to cooperate with an inquiry into the borough’s myriad financial problems. The countersuit states that, when Mr. Morrison "attempted repeatedly" to contact Mr. Ezyske, the latter "did not respond, causing needless expenditures of professional time to take corrective action. As a result of the aforesaid conduct, the borough needless incurred additional professional fees."
   Contacted Monday afternoon at his Morristown office, Mr. Ezyske’s attorney, John J. Mills III, would not comment on the countersuit filed against his client by the borough. "I haven’t sat down to discuss this with Mr. Ezyske yet, so it wouldn’t be appropriate for me to comment," Mr. Mills said.
   The Reed case has been under investigation by the Mercer County prosecutor’s office for over two years, since the prosecutor received, from Mr. Morrison, documentation on the borough’s financial problems pertaining to Ms. Reed and Mr. Ezyske. When the existence of the county investigation became public knowledge via extensive press coverage last fall, the prosecutor’s office said the Reed investigation was expected to be done by the end of 2002. However, other cases forced a delay in dealing with the Reed case, the prosecutor’s office subsequently said.
   Contacted two weeks ago, Casey DiBlasio, spokeswoman for the Mercer County prosecutor’s office, said the Reed investigation still was not complete and that it was not possible to predict when it might be finished. A message requesting an update on the status of the Reed case was left on Ms. DiBlasio’s answering machine Monday. The call was not returned before press time.
   On Jan. 14, because of the ongoing investigation of the Reed case by Mercer County, the Superior Court in Morris County gave Pennington until March 20 to file a countersuit against Mr. Ezyske.
   As March 20 drew near with no date set for trial or arbitration of the Reed case, Pennington decided to file the countersuit against Mr. Ezyske and the attached third-party suit against Ms. Reed, Borough Attorney Bliss said.
   The alternatives to filing those suits would have been violating the court-imposed March 20 deadline or paying Mr. Ezyske, as Mayor Loper noted.
   "And you don’t get paid by the borough if you don’t do your job," the mayor declared.
   In discussing the Reed case recently, borough officials, including Councilmen David Garber and Robert Di Falco and Ms. Waldron, have expressed concern at how long Mercer County investigation has taken while stressing that it is vital to make sure that Pennington recovers any money taken from the borough illegally.
   Now that the Mercer County investigation has lasted beyond the deadline set by the Morris County Court, the borough has taken into its own hands the effort to recoup monies allegedly taken illegally from the mile-square town by a woman who doubtless is one of the best-known individuals ever to have lived there.