RECORD IMPOUNDED
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-0752-17T3
STATE OF NEW JERSEY, APPROVED FOR PUBLICATION Plaintiff-Appellant, August 28, 2018
v. APPELLATE DIVISION
RICHARD W. BERNARDI, SR. and STRATEGIC ENVIRONMENTAL PARTNERS, LLC,
Defendants-Respondents. ________________________________
Argued April 16, 2018 – Decided August 28, 2018
Before Judges Messano, O'Connor and Vernoia.
On appeal from Superior Court of New Jersey, Law Division, Morris County, Indictment No. 16-02-0014.
Thomas R. Clark, Deputy Attorney General, argued the cause for appellant (Gurbir S. Grewal, Attorney General, attorney; Thomas R. Clark, of counsel and on the briefs).
John A. Azzarello argued the cause for respondents (Whipple Azzarello, LLC, attorneys; John A. Azzarello, of counsel on the briefs; William J. Munoz, on the briefs).
The opinion of the court was delivered by
VERNOIA, J.A.D. By leave granted, the State appeals from an order
dismissing the first four counts of a six-count indictment
against defendants Strategic Environmental Partners, LLC (SEP)
and its director and managing member, Richard W. Bernardi, Sr.
Having considered the record and the parties' arguments in light
of the applicable law, we reverse the court's dismissal of
counts one, two and three, and affirm the dismissal of count
four.
I.
The record1 before the motion court showed that in 2011 SEP
purchased property in Roxbury from Sussex & Warren Holding Corp.
(Sussex) that included a sanitary landfill, known as the
Fenimore Landfill, which ceased operations thirty years earlier.
The landfill has numerous environmental issues, has never been
formally closed or declared environmentally safe by the New
Jersey Department of Environmental Protection (NJDEP), and is in
need of environmental remediation.
In as early as 2006, defendants had discussions with the
NJDEP about a proposal to purchase and develop the property.
1 Because we consider the State's appeal from the dismissal of four counts of the indictment, our statement of facts is based on the evidence presented to the grand jury, as described in the briefs and supported by the appendices of the parties. We have not been provided with transcripts of the grand jury proceedings.
2 A-0752-17T3 During 2010 and 2011, defendants proposed to the NJDEP a plan to
remediate the site and place solar power generation equipment on
it. During negotiations over the proposal, the NJDEP had
concerns about defendants' financial ability to complete the
required remediation.
The NJDEP twice requested that defendants provide a
performance bond securing their performance of the proposed
remediation, but defendants were unable to do so. In lieu of a
performance bond, defendants agreed to deposit portions of
"tipping fees" earned from its acceptance of materials at the
landfill, and revenues from solar power generated at the site,
into an escrow account from which the NJDEP would approve
payments to third parties for the required remediation.
Defendants represented they would deposit $2,300,000 in the
escrow account during 2011 through 2013 from a solar power
developer. Defendants further represented they would provide
the NJDEP with a signed contract from the developer within sixty
days of the parties' entry into an Administrative Consent Order
(ACO).
On October 6, 2011, defendants and the NJDEP entered into
an ACO "to effectuate the necessary closure of the landfill."
The ACO states the NJDEP agreed to its terms based on its
analysis of the facts relevant to the landfill and "its review
3 A-0752-17T3 of financial information presented by SEP." The ACO expressly
provides the NJDEP and defendants "AGREED" to its terms,
including defendants' obligations to deposit funds in the escrow
account. The ACO also states that it "represents the complete
and integrated agreement" of the NJDEP and defendants.
Defendants and the NJDEP "warrant[ed] that they are authorized
to sign [the] ACO and bind themselves . . . to comply with [the]
terms and provisions of [the] ACO." The ACO was executed by
Bernardi and on behalf of SEP and the NJDEP.
The State alleges that following the execution of the ACO,
Bernardi disclosed for the first time that SEP had outstanding
debt in excess of $2,500,000 when the ACO was executed.
Defendants' debts included an undisclosed $950,000 mortgage loan
to Sussex that was executed eight months before the ACO.
Following execution of the ACO, Bernardi claimed SEP could
not honor the ACO's escrow requirements because of defendants'
obligations to their creditors. By July 2013, defendants earned
$5,500,000 in revenue from their operation of the landfill, but
deposited no more than $250 into the escrow account. The
evidence presented to the grand jury showed $1,500,000 of the
revenue was paid to Bernardi family members and one of their
attorneys between 2013 and 2014.
4 A-0752-17T3 The evidence before the grand jury also showed that
following execution of the ACO, defendants' engineering firm
requested that defendants be released from their obligation to
provide a signed contract from a solar power developer. The
letter revealed that defendants never had an agreement with a
solar power developer, and the State alleged that defendants'
representations prior to the ACO that they had an agreement with
a solar power developer and would deposit $2,300,000 from the
developer in the escrow account were false.
The evidence presented to the grand jury also showed that
when defendants purchased the property in 2011, they represented
they would construct a solar power generation facility on the
property, thereby providing a source of revenue for payment of
the $950,000 loan from Sussex that was secured by a mortgage.
The evidence further showed defendants' presentation supporting
the issuance of the loan and mortgage was false because
defendants did not have a contract with a solar power provider,
and did not yet have permission from Roxbury or the NJDEP to
install solar power panels on the property. The State alleged
defendants misrepresented that solar power generation revenues
would provide the monies necessary to repay the loan amount
secured by the mortgage.
5 A-0752-17T3 Defendants were charged in an indictment with: second-
degree false representations for a government contract, N.J.S.A.
2C:21-34(b) (count one); second-degree theft by deception from
the NJDEP, N.J.S.A. 2C:20-4(a) (count two); first-degree
financial facilitation of criminal activity, N.J.S.A. 2C:21-
25(b)(2)(a) (count three); second-degree theft by deception from
Sussex,2 N.J.S.A. 2C:20-4(a) (count four); and second-degree
theft of services, N.J.S.A. 2C:20-8(a) and N.J.S.A. 2C:20-
2(b)(1)(a) (count five).3 Bernardi was also charged with second-
degree misconduct by a corporate official, N.J.S.A. 2C:21-9(c)
and N.J.S.A. 2C:2-6 (count six).
Defendants moved to dismiss the indictment. Following
argument, the court dismissed counts one through four.4 In its
oral decision, the court determined that count one, which
2 Count four alleges theft by deception from the "seller" of the property, which the record shows is Sussex & Warren Holding Corp. 3 Defendants were also charged in counts one through five pursuant to N.J.S.A. 2C:2-6 and N.J.S.A. 2C:2-7. 4 The court denied the motion to dismiss counts five and six, but ordered that count six "was restricted in scope based on the dismissal of counts one, two, three and four." Defendants did not cross-move for leave to appeal the court's denial of their motion to dismiss count five, and we therefore do not address the court's ruling on that count. Because we reverse the court's order dismissing counts one, two and three, we also reverse the court's order restricting the scope of the allegations in count six.
6 A-0752-17T3 alleged defendants made false representations to the NJDEP in
connection with the negotiation and entry into the ACO, could
not be sustained as a matter of law because the ACO did not
constitute a "government contract" within the meaning of
N.J.S.A. 2C:21-34(b). Although the court found that "certainly
the ACO is an agreement between the parties," and "has many
features of events that lined up . . . in contracts," it
reasoned that because N.J.S.A. 2C:21-34(b) provided for grading
of the offense based on the contract amount, a "government
contract" under the statute is limited to "a contract for a
private person or corporation to provide goods or services to a
government entity and to be paid for the same." The court found
the ACO was not a contract requiring the NJDEP to pay defendants
"in return for goods and services," and therefore defendants'
alleged false misrepresentations in negotiating and entering
into the ACO could not constitute a violation of N.J.S.A. 2C:21-
34(b).
The court also dismissed count two, which alleged
defendants committed a theft in violation of N.J.S.A. 2C:20-4(a)
by using deception to obtain the ACO. The court determined the
ACO did not have a value for purposes of grading the offense,
and therefore it did "not fit" that the theft of the ACO could
support the charged theft by deception offense.
7 A-0752-17T3 The court dismissed count four, which alleged defendants
committed theft by deception in their procurement of the
$950,000 mortgage from Sussex. The court reasoned that count
four charged theft of a mortgage, an instrument creating a lien,
and theft of a lien on property defendants owned did not
constitute theft of the property of another.
Last, the court dismissed count three, alleging financial
facilitation of the criminal activity alleged in counts one and
two. The court determined that because it dismissed counts one
and two, there was no criminal activity supporting the financial
facilitation alleged in count three.
We granted the State's motion for leave to appeal the
court's dismissal of counts one through four. The State
presents the following arguments for our consideration:
POINT I
THE ADMINISTRATIVE CONSENT ORDER WAS A GOVERNMENT CONTRACT THAT PROPERLY SERVED AS THE BASIS FOR PROSECUTION UNDER N.J.S.A. [2C:21-34(b)].
A. THE TRIAL COURT CORRECTLY HELD THE ACO IS A CONTRACT.
B. THE ACO SATISFIED THE TRIAL COURT'S CRAMPED CONSTRUCTION OF THE STATUTE.
C. THE TRIAL COURT ERRED BY LIMITING THE TERM "GOVERNMENT CONTRACT" TO CONTRACTS OBLIGATING A GOVERNMENT ENTITY TO PAY A VENDOR.
8 A-0752-17T3 1. Many Government Contracts Would Be Excluded By the Trial Court's Construction Limiting the Statute's Reach.
2. The Trial Court Erred in Trying to Divine the "Purpose and Thrust" of N.J.S.A. [2C:21-34(b)].
D. THERE IS NO BASIS TO APPLY THE RULE OF LENITY.
POINT II
THE ACO WAS A CONTRACT INVOLVING PROPERTY OF NJDEP THAT WAS OBTAINED BY DECEPTION.
POINT III
THEFT OF THE MORTGAGE BY DECEPTION WAS COMPLETE WHEN THE DEFENDANTS OBTAINED, BY DECEPTION, THE MORTGAGEE'S CONSENT TO MAKE THE MORTGAGE.
POINT IV
IF EITHER COUNT ONE OR COUNT TWO IS REINSTATED THEN COUNT THREE SHOULD BE REINSTATED.
II.
We review the "trial court's decision to dismiss [the
counts of the] indictment de novo because it [does] not involve
'a challenge to fact-finding on the part of the trial court,'"
State v. S.B., 230 N.J. 62, 67 (2017) (quoting State v. Cagno,
211 N.J. 488, 505 (2012)), but instead was based on the court's
interpretation of the statutes pursuant to which defendant was
charged. "Questions of statutory interpretation are legal ones"
that we review "de novo, 'unconstrained by deference to the
9 A-0752-17T3 decisions of the trial court . . . .'" Ibid. (quoting State v.
Grate, 220 N.J. 317, 329 (2015)). A trial court's
"interpretation of the law and the legal consequences that flow
from established facts are not entitled to any special
deference." State v. Pomianek, 221 N.J. 66, 80 (2015). We
apply these standards here.
A.
Count one charges a violation of N.J.S.A. 2C:21-34(b),
which provides:
A person commits a crime if the person knowingly makes a material representation that is false in connection with the negotiation, award or performance of a government contract. If the contract amount is for $25,000.00 or above, the offender is guilty of a crime of the second degree. If the contract amount exceeds $2,500.00, but is less than $25,000.00, the offender is guilty of a crime of the third degree. If the contract amount is for $2,500.00 or less, the offender is guilty of a crime of the fourth degree.
Count one alleges defendants violated N.J.S.A. 2C:21:34(b) by
knowingly making false representations concerning their
financial condition and ability to generate revenue through
solar power generation equipment in connection with the
negotiation and award of the ACO.
The State contends the court erred by finding the ACO was
not a "government contract" within the meaning of N.J.S.A.
10 A-0752-17T3 2C:21-34(b). The State argues the court correctly found the ACO
was an enforceable agreement between defendants and the NJDEP,
but erroneously concluded the ACO was not a "government
contract" covered by N.J.S.A. 2C:21-34(b) because the ACO did
not provide for the NJDEP's purchase of goods and services from
a vendor. We agree and reverse the court's dismissal of count
one.
In our consideration of the court's interpretation of
N.J.S.A. 2C:21-34(b), we apply well-established principles of
statutory construction. "The overriding goal of all statutory
interpretation 'is to determine as best we can the intent of the
Legislature, and to give effect to that intent.'" S.B., 230
N.J. at 67 (quoting State v. Robinson, 217 N.J. 594, 604
(2014)). "In most instances, the best indicator of that intent
is the plain language chosen by the Legislature." State v.
Gandhi, 201 N.J. 161, 176 (2010) (citation omitted); accord
State v. Hudson, 209 N.J. 513, 529 (2012). We therefore are
required to begin "with the language of the statute, and the
words chosen by the Legislature should be accorded their
ordinary and accustomed meaning." Hudson, 209 N.J. at 529.
"If the language leads to a clearly understood result, the
judicial inquiry ends without any need to resort to extrinsic
sources." Ibid.; accord S.B., 230 N.J. at 68 (quoting State v.
11 A-0752-17T3 Hupka, 203 N.J. 222, 232 (2010)) ("If the Legislature's intent
is clear on the face of the statute, then the 'interpretative
process is over.'"). "When such [extrinsic] evidence is needed,
we look to a variety of sources. Central among them is a
statute's legislative history." Richardson v. Bd. of Trs.,
Police & Firemen's Ret. Sys., 192 N.J. 189, 196 (2007).
"When the Legislature sets out to define a specific term,
'the courts are bound by that definition.'" S.B., 230 N.J. at
68 (quoting Febbi v. Bd. of Review, 35 N.J. 601, 606 (1961)).
Otherwise, words in a statue must "be given their generally
accepted meaning, according to the approved usage of the
language." N.J.S.A. 1:1-1. "In determining the common meaning
of words, it is appropriate to look to dictionary definitions."
Macysyn v. Hensler, 329 N.J. Super. 476, 485 (App. Div. 2000).
The term "government contract" is not defined in N.J.S.A.
2C:21-34(b) or otherwise in the Code of Criminal Justice,
N.J.S.A. 2C:1-1 to 104-9. In N.J.S.A. 2C:20-1, however, the
Legislature defined the term "Government" for purposes of
"chapters 20 and 21" of the Code, including N.J.S.A. 2C:21-
34(b). "'Government' means the United States, any state,
county, municipality, or other political unit, or any
department, agency or subdivision of any of the foregoing, or
any corporation or other association carrying out the functions
12 A-0752-17T3 of government." N.J.S.A. 2C:20-1(d). We apply that statutory
definition to our interpretation of the term "government" in
N.J.S.A. 2C:21-34(b). See S.B., 230 N.J. at 68.
The NJDEP is an agency of the State of New Jersey, N.J.S.A.
13:1D-1; N.J. Tpk. Auth. v. Twp. of Monroe, 28 N.J. Tax 158, 163
(Tax 2014) ("The NJDEP is . . . [a] State agency") and thus
falls within the definition of "Government" under N.J.S.A.
2C:20-1(d). Application of N.J.S.A. 2C:20-1(d)'s definition of
"Government" to the term "government contract" in N.J.S.A.
2C:21-34(b), requires the conclusion that any "contract" covered
by N.J.S.A. 2C:21-34(b) to which the NJDEP is a party is a
"government contract" under N.J.S.A. 2C:21-34(b). See S.B., 230
N.J. at 68 (allowing statutory interpretation based on
inferences drawn from a "statute's overall structure and
composition"). Defendant does not contend otherwise. It is
therefore necessary to determine if the ACO to which the NJDEP
and defendants were a party is a "contract" under N.J.S.A.
2C:21-34(b).
"In determining the common meaning of words, it is
appropriate to look to dictionary definitions." Macysyn, 329
N.J. Super. at 485. A contract has long been defined as "[a]n
agreement between two or more parties creating obligations that
are enforceable or otherwise recognizable at law" and a "writing
13 A-0752-17T3 that sets forth such an agreement." Black's Law Dictionary 389
(10th ed. 2014); Black's Law Dictionary 318 (7th ed. 1999); see
also Webster's II New College Dictionary 250 (3d ed. 2005)
(defining contract as "[a] legally enforceable agreement between
two or more parties," and "[t]he writing or document containing
such an agreement").
By its express terms, the ACO provides that the parties
agree to its terms and warrant that they "bind themselves . . .
to comply with" its terms. The "ACO represents the complete and
integrated agreement of, and shall be binding upon, and/or inure
to the benefit of, the State of New Jersey, [and] the NJDEP[.]"
As the court correctly found, the ACO is an agreement
between defendants and the NJDEP which, by its express terms,
may be enforced by the parties. In other words, under the
common meaning of the term, the ACO is a contract as a matter of
fact. Further, it is a "government contract" under the plain
language of N.J.S.A. 2C:21-34(b), because it is a contract
between the NJDEP and defendants. See N.J. Dep't of Envtl.
Prot. v. Bayshore Reg'l Sewerage Auth., 340 N.J. Super. 166,
172-73 (App. Div. 2001) (finding a party "bound itself
contractually to the terms of" an ACO); E.I. Du Pont de Nemours
& Co. v. State, Dep't of Envtl. Prot. & Energy, 283 N.J. Super.
331, 349-52 (App. Div. 1995) (affirming the NJDEP's authority to
14 A-0752-17T3 enter into an ACO and observing that if a private party "chooses
not to enter into such an agreement, it may do so").
The fact that the ACO also constitutes an order does not
alter its status as an enforceable contract. Our Supreme Court
has recognized that a consent judgment is "an agreement of the
parties under the sanction of the court . . . ." Cmty. Realty
Mgmt., Inc. v. Harris, 155 N.J. 212, 226 (1998) (citation
omitted). The ACO is no different than a consent order in that
it incorporates the contractual agreement of the parties and
also constitutes an order, enforceable by both parties,
requiring compliance with its terms. See ibid. The inclusion
of the parties' agreement into a binding order does not render
the ACO something other than a contract. To the contrary, the
ACO constitutes a contract which includes an agreed-upon method
to ensure compliance with its terms – enforcement of the order.
We are not persuaded by defendants' contention, which was
accepted by the court, that a "government contract" under
N.J.S.A. 2C:21-34(b), is limited to those providing for the
procurement of goods and services from vendors. In the first
instance, and for the reasons noted, the plain language of the
statute does not permit or require such an interpretation. The
Legislature chose to prohibit "knowingly mak[ing] a material
representation that is false in connection with the negotiation,
15 A-0752-17T3 award or performance of a government contract," N.J.S.A. 2C:21-
34(b), but did not limit the statute's application to government
procurement contracts or government contracts with vendors for
the purchase of goods or services. We cannot add to a statute
that which the Legislature opted not to include or require, see
Haines v. Taft, 450 N.J. Super. 295, 309 (quoting DiNapoli v.
Bd. of Educ. of Twp. of Verona, 434 N.J. Super. 233, 238 (App.
Div. 2014)) ("Courts should be extremely reluctant to add terms
to a statute, lest they usurp the Legislature's authority."),
certif. granted, 231 N.J. 155 (2017), and there is nothing in
the statute's plain language supporting the court's
determination that N.J.S.A. 2C:21-34(b) applies only to
government contracts for purchases of goods and services, see
DiNapoli, 434 N.J. Super. at 238 (quoting O'Connell v. State,
171 N.J. 484, 488 (2002)) (finding courts shall not "rewrite a
plainly-written enactment of the Legislature [or] presume that
the Legislature intended something other than that expressed by
way of the plain language").
Moreover, if the Legislature intended to limit the meaning
of the term "contract" to agreements for the procurement of
goods and services from a vendor, it would have defined the term
contract in the same manner it chose to define various other
terms found in chapters 20 and 21 of the Code. See N.J.S.A.
16 A-0752-17T3 2C:20-1. But the Legislature chose not to define the term
contract, and is fully aware that where the definition of a
statutory term is not provided, we are required to apply the
term's ordinary meaning. See N.J.S.A. 1:1-1; see also Berg v.
Christie, 225 N.J. 245, 284 (2016) (alteration in original)
(quoting Mahwah Twp. v. Bergen Cty. Bd. of Taxation, 98 N.J.
268, 279 (1985)) ("The Legislature is presumed to have been
aware of existing legislation[.]"). The ordinary meaning of the
term "contract" is not limited to agreements to purchase goods
and services from vendors.
N.J.S.A. 2C:21-34(b) was enacted as part of legislation
modifying contracting requirements under the Local Public
Contracts Law, N.J.S.A. 40A:11-1 to -51, L. 1999, c. 1 to 43,
the Public Schools Contracts Law, N.J.S.A. 18A:18A-1 to -59, L.
1999, c. 44 to 82, "and the laws governing State procurement." 5
See Sponsor's Statement to Assembly No. 3519 104 (Nov. 15,
5 The legislation, L. 1999, c. 1 to 107, made revisions to contracting requirements and procedures of the Local Public Contracts Law, N.J.S.A. 40A:11-1 to -51, L. 1999, c. 1 to 43, the Public Schools Contracts Law, N.J.S.A. 18A:18A-1 to -59, L. 1999, c. 44 to 82, the New Jersey Sports and Exposition Authority Law, N.J.S.A. 5:10-1 to -38, L. 1999, c. 83, the Hackensack Meadowlands Reclamation and Development Act, N.J.S.A. 13:17-1 to -86, L. 1999, c. 84, the New Jersey Highway Authority Act, N.J.S.A. 27:12B-1 to -35 (2000), L. 1999, c. 85 to 87, and the New Jersey Water Supply Authority Act, N.J.S.A. 58:1B-1 to - 25, L. 1999, c. 88, and by the New Jersey Division of Purchase and Property, N.J.S.A. 52:27B-53 to -68.2, L. 1999, c. 89 to 96.
17 A-0752-17T3 1999). The legislation addressed contracting standards and
procedures in varying contexts for different governmental
entities, but did not include a definition of the term
"contract" applicable to all of its provisions. Cf. N.J.S.A.
2C:20-1 (providing definitions for the use of various terms
under chapters 20 and 21 of Code).
For example, the Legislature adopted the same definition of
the term "contract" for use under the Local Public Contracts
Law, N.J.S.A. 40A:11-2(21), L. 1999, c. 6, and the Public
Schools Contracts Law, N.J.S.A. 18A:18A-2(n), L. 1999, c. 50:
"Contract” means any agreement, including but not limited to a purchase order or a formal agreement, which is a legally binding relationship enforceable by law, between a vendor who agrees to provide or perform goods or services and a [contracting unit or board of education] which agrees to compensate a vendor, as defined by and subject to the terms and conditions of the agreement. A contract also may include an arrangement whereby a vendor compensates a [contracting unit or board of education] for the vendor’s right to perform a service, such as, but not limited to, operating a concession.
The Legislature, however, did not similarly adopt a definition
of the term "contract" for application to the other governmental
entities that were the subject of the legislation. Thus, the
Legislature demonstrated it would expressly provide a definition
of the term where it intended for it to apply, and otherwise
18 A-0752-17T3 relied upon the ordinary usage of the term under N.J.S.A. 1:1-1,
where reliance on a specific definition was not intended. See
State v. Lenihan, 427 N.J. Super. 499, 510 (App. Div. 2012)
(finding the Legislature provides definitions when it intends
application of a particular definition of a term).
The Legislature did not define the term "contract" in
N.J.S.A. 2C:21-34(b). Although the Legislature adopted specific
definitions of the term elsewhere in the statue, it elected not
to provide a definition of the term in N.J.S.A. 2C:21-34(b). If
the Legislature intended to limit the meaning of the term
contract in N.J.S.A. 2C:21-34(b) to only procurement contracts
for the sale of goods and services to vendors, it would have
done so as it did under the Local Public Contracts Law and
Public Schools Contracts Law. "When the Legislature expressly
includes a requirement in one section and excludes that same
requirement in other subsections of the same general statute, we
need not strain to import that requirement where it is not." In
re Freshwater Wetlands Prot. Act Rules, 180 N.J. 478, 492
(2004). We therefore conclude the Legislature did not intend to
incorporate into N.J.S.A. 2C:21-34(b) the definition of contract
it expressly adopted for the Local Public Contracts Law and
Public Schools Contracts Law, or apply any meaning to the term
contract other than that of its ordinary usage. See N.J.S.A.
19 A-0752-17T3 1:1-1. When we apply the ordinary usage of the term, we are
satisfied the ACO is a government contract under N.J.S.A. 2C:21-
We also reject the contention and court's conclusion that
the contracts covered by N.J.S.A. 2C:21-34 must be procurement
contracts for goods and services from a vendor because the
grading of the offense under the statute is dependent upon the
"contract amount." Although not a typical procurement contract
where a direct purchase of goods and services is made by a
governmental entity, it is error to conclude the ACO did not
include a contract amount. Under the terms of the ACO,
defendants agreed to remediate the Fenimore Landfill in exchange
for NJDEP approvals and permission for defendants to operate and
generate revenue at the site. In addition, the ACO included a
contract amount – the millions of dollars defendants agreed to
deposit in an escrow account to be used for the required
remediation of the property. To suggest or conclude otherwise
is to ignore the contractual arrangement set forth in the ACO.
Thus, the ACO included a contract amount, and N.J.S.A. 2C:21-
34(b)'s grading provisions are not inconsistent with the
conclusion that the ACO is a "government contract" under the
statute. The court erred in finding otherwise.
20 A-0752-17T3 We reverse the dismissal of count one. We also reverse the
dismissal of count three because its dismissal was based in part
on the dismissal of count one.
B.
We next consider the State's challenge to the court's
dismissal of count two, which charged second-degree theft by
deception, N.J.S.A. 2C:20-4(a). The indictment alleges
defendants committed a theft of the contract, the ACO, by
deceiving the NJDEP as to SEP's financial condition and ability
to generate revenue through solar power generation. The court
dismissed count two, finding that theft of a contract was
inconsistent with the grading of theft offenses and therefore a
charge of theft of the ACO by deception "does not fit."
Defendants are charged in count two under N.J.S.A. 2C:20-
4(a), which provides
A person is guilty of theft if he purposely obtains property of another by deception. A person deceives if he purposely:
a. Creates or reinforces a false impression, including false impressions as to law, value, intention or other state of mind . . . but deception as to a person's intention to perform a promise shall not be inferred from the fact alone that he did not subsequently perform the promise;
"A person cannot be convicted of theft by deception unless
he has obtained the property of another by purposely creating a
21 A-0752-17T3 false impression." State v. Diorio, 216 N.J. 598, 619 (2014).
In pertinent part, "[p]roperty" is defined as "anything of
value, including . . . contract rights . . . ." N.J.S.A. 2C:20-
1(g). The "'[p]roperty of another' includes property in which
any person other than the actor has an interest which the actor
is not privileged to infringe . . . ." N.J.S.A. 2C:20-1(h).
"Obtain" means "in relation to property, to bring about a
transfer or purported transfer of a legal interest in the
property, whether to the obtainer or another . . . ." N.J.S.A.
2C:20-1(f)(1).
Applying these definitions, to establish a violation of
N.J.S.A. 2C:20-4(a) based on the theft of the ACO alleged in
count one, the State was required to show that the NJDEP had a
"legal interest" in contract rights that it transferred to
defendants in the ACO, N.J.S.A. 2C:20-1(h), and that the
contract rights had value, N.J.S.A. 2C:20-1(g). "[T]he
[NJ]DEP's general enabling statute, N.J.S.A. 13:1D-1 to -137,
grants the agency vast authority to set policy and promulgate
regulations 'for the conservation of the natural resources of
the State, the promotion of environmental protection and the
prevention of pollution of the environment of the State.'" In
re Adoption of N.J.A.C. 7:15-5.24(b) & N.J.A.C. 7:15-5.25(e),
420 N.J. Super. 552, 572 (App. Div. 2011) (quoting N.J.S.A.
22 A-0752-17T3 13:1D-9). To achieve those purposes, the NJDEP is vested with
the authority to "[c]ontract with any other public agency or
corporation incorporated under the laws of this or any other
state for the performance of any function" authorized by the
NJDEP's enabling statute. N.J.S.A. 13:1D-9(q). Thus, the
NJDEP has a direct and exclusive interest, as vested by its
enabling statute, in granting contract rights necessary to
achieve its purpose of conserving natural resources, promoting
environmental protection and preventing environmental pollution.
In the ACO, defendants obtained contract rights in which
the NJDEP had an interest as the State agency vested with the
responsibility to direct the State's environmental policies, in
which defendants were "not privileged to infringe." See
N.J.S.A. 2C:20-1(h) (defining "[p]roperty of another"). The
contract rights were also of value because they permitted
defendants to operate the landfill, accept solid waste and
collect tipping fees, and develop a solar power generation
operation. See N.J.S.A. 2C:20-1(g) (defining "[p]roperty" under
Titles 20 and 21 as "anything of value"). The ACO granted
defendants the contract right to collect the agreed upon
millions of dollars in tipping fees which, as shown by the
evidence presented to the grand jury, were stolen by defendants.
The evidence further showed the NJDEP granted the contract
23 A-0752-17T3 rights in the ACO based on defendants' deceptions. See Diorio,
216 N.J. at 619; N.J.S.A. 2C:20-4(a); see also State v. Krueger,
241 N.J. Super. 244, 249 (App. Div. 1990) (quoting State v.
Talley, 184 N.J. Super. 167, 169 (App. Div. 1982), rev'd on
other grounds, 94 N.J. 385, 388 (1983)) ("Theft by deception
'occurs where one obtains the property of another by purposely
creating a false impression.'").
We are therefore convinced the court erred by dismissing
count two. The evidence showed defendants obtained the NJDEP's
property by deception in violation of N.J.S.A. 2C:20-4(a)
because it transferred something of value, contract rights over
which the NJDEP had an interest, in response to defendants'
false statements about their financial condition and alleged
contract with a solar power developer. See N.J.S.A. 2C:20-1(f),
(g) and (h); see also N.J.S.A. 2C:20-4(a). We also reverse the
dismissal of count three to the extent it alleges financial
facilitation based on the criminal activity alleged in count
two.
We affirm the court's dismissal of count four which charged
defendants with theft by deception in violation of N.J.S.A.
2C:20-4(a) by obtaining a $950,000 mortgage from Sussex in
connection with SEP's purchase of the property. The State
claims defendants obtained the mortgage based on their
24 A-0752-17T3 misrepresentations concerning their ability to generate revenue
from the generation of solar power on the property.
The indictment, and the State's argument, misconstrue the
nature of the mortgage and its obligations. Defendants did not
"obtain" a mortgage from Sussex, and the mortgage was not
executed on Sussex's behalf. Instead, SEP, as the mortgagor,
granted the mortgage to Sussex, and Sussex obtained a lien on
the property as a result. "[A] mortgage is simply a form of
'security for the payment of a debt' . . . ." Brunswick Bank &
Tr. v. Affiliated Bldg. Corp., 440 N.J. Super. 118, 125 (App.
Div. 2015) (quoting J.W. Pierson Co. v. Freeman, 113 N.J. Eq.
268, 271 (E. & A. 1933)). The mortgage, which count four
alleges defendants obtained by deception, did not transfer any
property to defendants in which Sussex had an interest. 6 See
Diorio, 216 N.J. at 619 (explaining theft by deception is
committed when a person purposely obtains the property of
another by creating a false impression); see also N.J.S.A.
2C:20-4(a). Therefore, there was insufficient evidence
6 The indictment does not allege that defendants obtained a loan based on their alleged misrepresentations. See State v. Rodgers, 230 N.J. Super. 593, 601 (App. Div. 1989) (finding the defendant committed theft by deception in violation of N.J.S.A. 2C:20-4(a) by obtaining a loan based on misrepresentations and false documents).
25 A-0752-17T3 supporting the theft by deception offense under N.J.S.A. 2C:20-
4(a) charged in count four.7
Reversed as to the dismissal of counts one, two and three. 8
Affirmed as to the dismissal of count four. Remanded for
further proceedings in accordance with this opinion. We do not
retain jurisdiction.
7 We reject the State's contention that this court should direct the trial court to amend count four "to add any necessary clarification." The State did not seek leave to amend the indictment before the motion court, count four is deficient as a matter of law and it is not this court's role to provide the State refuge from a defective indictment. 8 As noted in footnote 4, supra, our reversal of the court's dismissal of counts one, two and three also requires reversal of the court's order restricting the scope of the allegations in count six. The scope of the allegations in count six shall include the conduct alleged in counts one, two and three.
26 A-0752-17T3