Law & Justice

Matheny Case: Will a Settlement Settle the Matter?


PEAPACK AND GLADSTONE NJ - The signs are pointing to possible progress in settling the ongoing legal battle between the Matheny School and Hospital and the Borough of Peapack and Gladstone.  One thing is clear:  Even if Matheny and the borough agree on terms, their settlement might not settle the dispute.

When a municipality is involved in litigation, it is very difficult for the public and the press to follow developments.  Municipalities are entitled to discuss litigation and litigation strategy in executive session.  Put another way, a borough council is not required to advertise its litigation strategy by discussing its plans in an open session.  

Matheny is the plaintiff in two lawsuits against the Borough of Peapack and Gladstone.  Matheny brought one lawsuit in federal court, and another in state court.  Procedural information is available through court websites, but substantive information is available only when a court publishes a decision and an opinion.  Observers have had to "read the tea leaves" to figure out what is happening.

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In the state court action, the court issued a game-changing decision on January 24.  The Appellate Division of the Superior Court handed the borough a victory when it handed down a 38-page opinion upholding the Land Use Board's denial of Matheny's variance application, and the trial court's dismissal of the discrimination claims filed by Matheny against the borough.

The Appellate Division decision prompted Highland Avenue resident Ruth Williams to send a letter to the Mayor and Borough Council (published in its entirety by TAPinto Somerset Hills) urging them to direct the borough's litigation attorney to file a motion to dismiss the pending discrimination case in federal court.  In her letter, Williams observed:

"Without equivocation the Court affirmed that the PG Land Use Board, prior to denying a use variance to Matheny for further expansion: (i) appropriately examined all of the facts, (ii) weighed the credibility of all witnesses, (iii) considered the competing interests of all parties, and (iv) evaluated the feasibility and enforceability of all proposed solutions.   Importantly, the Court also affirmed the summary judgment dismissal of Matheny’s discrimination claims under both the relevant State and Federal statutes."

Williams concluded:

"Any further decision by the Federal Court regarding the baseless Federal discrimination charges hurled at our town by Matheny’s management risks an inconsistent decision on the exact same issues which have already been litigated and decided by the State Courts."

Matheny's options on the state court appeal are either to seek certification to the New Jersey Supreme Court, or to allow the litigation to die a natural death.  Both Matheny and the borough are in no-comment mode right now; however, the sands are quickly running through the hour glass.  Matheny's strategic decision will be known soon.

Regardless of whether Matheny takes the state litigation to the next level, the federal court case is still pending.  Federal procedure provides that a civil case will be managed by a United States Magistrate Judge during the initial discovery phase of the case.  During the initial phase, the magistrate actively encourages settlement discussions.  There is no reason to expect that this case is any different.

The minutes of the January 3, 2017 meeting of the borough council contains the following notation:  "Councilman Suriano wished to comment on the Matheny matter proposed settlement agreement. January 18 joint with LUB Notice to be posted, start Executive Session meeting commencing at 7:30."

In addition to the January 18 meeting, the agenda of the February 1 Land Use Board meeting included the a notation that may or may not involve the case:  "The Special Joint Meeting with Borough Council involving settlement negotiations and pending litigation."

While neither party has made public any details, or has even acknowledged that the parties are close, one or two joint meetings of the borough council and the Land Use Board strongly suggest that the dispute may be close to a settlement.  

Even if the borough and Matheny agree to terms, they may yet have to reckon with Ruth Williams and the local citizens who opposed the variance application and intervened in the state court lawsuit.

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