A New Jersey town agreed to pay $5.5 million to a real estate developer which claimed its prospective tenant backed out of signing a lease in a proposed office and retail project after the mayor indicated he didn’t support the project.
Morristown reached the settlement April 10, when it was in the middle of a trial before Superior Court Judge Noah Franzblau in Morris County Superior Court.
The settlement is a victory for The Silverman Group of Basking Ridge, which sought to construct a new regional headquarters building on South Street in Morristown for accounting firm Deloitte. The suit claims Deloitte withdrew interest in the project based on Mayor Timothy Dougherty’s statements disparaging The Silverman Group and saying the project would not go forward. The suit claimed Dougherty usurped the roles of the planning board and the Morristown Parking Authority in deciding whether the project could proceed.
“At the outset of the trial, the town announced that there would be no settlement, calling it a ‘no pay’ case. However, after 9 days of testimony, 11 witnesses, and overwhelming evidence that Morristown and its highest officials, including Mayor Tim Dougherty and Business Administrator Jillian Barrick, interfered with Deloitte’s decision to move its corporate Headquarters to the Silverman Group’s site on South Street in Morristown, the town reversed their position,” Joseph Fiorenzo of Sills Cummis & Gross, attorney for The Silverman Group, said in an email.
“We hope this case will send a message to public officials everywhere that this type of interference is wrong and that there are real consequence to this behavior,” he said in the statement.
Deloitte expressed interest in the South Street location after another development site on Speedwell Avenue in Morristown did not offer enough parking spaces for its employees, the suit stated. But when Deloitte announced in July 2018 that it had selected the South Street site at a meeting with Dougherty, he “responded with profanity and shouting, directing Deloitte’s representatives that he would block them from successfully developing at Silverman’s site,” the complaint said.
Dougherty also denigrated Silverman’s experience and capabilities as a developer at the meeting, and he later sought to disrupt Silverman’s agreement with the Morristown Parking Authority to provide parking, in an effort to render the Silverman property unusable, the complaint said.
Soon after Dougherty made clear that he intended to block the project, Deloitte halted negotiations with Silverman and renewed its existing lease in Parsippany, the complaint said.
The Silverman suit named Dougherty and Morristown as defendants and accused them of tortious interference with the plaintiff’s prospective economic advantage. A plaintiff’s expert said the loss of Deloitte’s business cost Silverman $40 million and a defense expert put damages at zero, Fiorenzo said.
During trial, Dougherty admitted under cross-examination that the owner of the Speedwell Avenue property, the Scotto family, gave to his campaign and that an officer in SJP, the developer of that property, contributed to the campaign of his wife, Mary Dougherty, for Morris County freeholder.
Lawyers for Dougherty and Morristown decided to settle after Jillian Barrick, the business administrator for Morristown, gave trial testimony that contradicted her earlier statements, Fiorenzo said.
“There have to be at least 12 blatant inconsistencies. And one of the things that she attempted to walk away from was her sworn statement, prior to trial, in answers to interrogatories, in which she said that on July 10, 2018, [the mayor] told the Silverman group that the town would not permit Deloitte to go to their site. And then she goes to trial, and she changed her tune completely,” he said.
Ronald Israel of Chiesa, Shahinian & Giantomasi in Roseland represented Morristown and Dougherty. He did not respond to a request for comment. A message left at the mayor’s office seeking comment was not returned.
