LARRY S.

LOIGMAN
110 State Highway 35
P.O. Box 97
Middletown, New Jersey 07748
(732) 842-9292
015611977
Attorney for Plaintiffs

LAKEWOOD CITIZENS FOR SUPERIOR COURT OF NEW JERSEY

FISCAL INTEGRITY; and LARRY S. LAW DIVISION
LOIGMAN, Esq., OCEAN COUNTY
Plaintiffs,

D O C KET N O .
v. }
CIVIL ACTION
TOWNSHIP OF LAKEWOOD in
the COUNTY OF OCEAN, NEW JER- VERIFIED COMPLAINT
SEY; RAYMOND COLES; and THOMAS IN LIEU OF PREROGATIVE WRITS
L. HENSHAW,
Defendants

Plaintiffs, Lakewood Citizens for Fiscal Integrity, and Larry S. Loigman, Esq., by
way of Verified Complaint against Defendants, say:
INTRODUCTION
(Applicable to All Counts)

1. Plaintiff Lakewood Citizens is an unincorporated association of residents, citizens

and taxpayers in the Township of Lakewood, New Jersey, the members of which are
concerned about the public fisc and other issues affecting the public good.
2. Plaintiff Larry S. Loigman, Esq., is a member of Plaintiff Lakewood Citizens, and
a resident, citizen and taxpayer of the Township of Lakewood, New Jersey.
3. Defendant Township of Lakewood is a municipal corporation, established by the
Legislature in “An Act to create a new township in the county of Ocean, to be called the
township of Lakewood” (L. 1892, c. 121, March 23, 1892).
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4. Said Township is obligated to conduct its affairs in a proper and lawful manner,
in conformance with applicable law, and for the benefit of the taxpayers of the
municipality.
5. Defendant Coles is a member of the Township Committee, the governing body
of Defendant Township, currently serving as its mayor.
6. Defendant Henshaw was the appointed manager of Defendant Township.

FIRST COUNT

1. At a meeting of the Township Committee of Defendant Township on February

19, 2015, it adopted Resolution #2015-127, “Appointing Thomas Henshaw as the
Municipal Manager of the Township of Lakewood.” The resolution stated that it was
authorized by Township Ordinance 2-10.2.
2. Section 2-10.2(b) of the Township Code provides,
Removal. The Township Committee may remove the Manager at any
time by a two-thirds vote of its members. The resolution of removal shall become
effective three (3) months after its adoption by the Township Committee unless
the resolution provides that it shall have immediate effect. If it is to have
immediate effect, the Township Committee shall cause to be paid to the
Municipal Manager any unpaid balance of his salary to the date of termination
of employment and in addition his salary for the next three (3) calendar months
following the adoption of the resolution. This three-month provision shall not
apply in the event the Municipal Manager voluntarily terminates employment by
resigning the office or position. In such event the Manager shall be paid only to
the date of actual termination of duties. The Manager shall give three-months
notice to terminate prior to voluntary resignation from office.

3. Section 2-10.2(c) of the Township Code provides, “Pursuant to N.J.S.A.

40A:63-7, the Municipal Manager shall be responsible to the Township Committee for
the proper administration of all affairs to [sic] the Township.”
4. N.J.S.A. 40A:63-7 states that the municipal administrator (not manager) shall be
appointed pursuant to N.J.S.A. 40A:9-136.
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5. N.J.S.A. 40A:9-138 provides,

The municipal administrator may be removed by a 2/3 vote of the
governing body. The resolution of removal shall become effective 3 months after
its adoption by the governing body. The governing body may provide that the
resolution shall have immediate effect; provided, however, that the governing
body shall cause to be paid to the administrator forthwith any unpaid balance
of his salary and his salary for the next 3 calendar months following adoption of
the resolution.

6. On or about October 28, 2015, Defendants Township and Henshaw entered into
a certain “Employment Agreement between the Township of Lakewood in Ocean
County, State of New Jersey and Thomas L. Henshaw.”
7. The employment agreement stated that it was authorized by township ordinances
and by “N.J.S.A. 40:69A-91 to 40:69-98 [sic].”
8. N.J.S.A. 40:69A-91 through 40:69A-98 are applicable only to municipalities
which have adopted the council-manager plan (Plan A), N.J.S.A. 40:69A-81 et seq.
Lakewood has not adopted the council-manager plan, and the repeated references in the
employment agreement to the township “council” are inaccurate.
9. Section 11 of the employment agreement provides, in pertinent part,
Henshaw may be removed from his position during the term of this
agreement in accordance with the Ordinances of the Township of Lakewood and
N.J.S.A. 40A:9-138; specifically, by two thirds (2/3) vote of the full five (5)
members of the Governing Body. Said Resolution of the Governing Body for the
removal of Henshaw shall become effective six months after adoption by the
Governing Body. The Governing Body may provide that the Resolution shall
have immediate effect provided, however, that the governing Body shall be cause
[sic] to be paid to Henshaw his salary for the next six (6) calendar months
following adoption of the said Resolution with health benefits included in
Henshaw is using Township health benefits. Said salary shall be paid to Henshaw
during said six (6) month period in the same installments and at the same
intervals as other Township employees, unless other arrangements are made and
agreed upon by both parties.

* * *
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The Manager may submit a resignation to the Township Council [sic] no

less than two (2) weeks in advance or no more than thirty (30) days at length
[sic] of the effective date of the resignation unless agreed upon by the Mayor and
Committee.

10. No resignation was submitted by Defendant Henshaw to the Township

Committee.
11. On or about September 5, 2018, Defendants Coles and Henshaw signed a
“Separation Agreement and General Release” (the “Agreement”).
12. Such Agreement purports to obligate Defendant Township to pay substantial
sums of money to, and to confer other benefits on, Defendant Henshaw, during calendar
years 2018 and 2019.
13. The Agreement fails to require that Defendant Henshaw vacate the position of
township manager, thereby making it impossible for the Township to engage the services
of a manager, resulting in a loss of effective management of township employees and
deleteriously impacting the delivery of municipal services to the taxpayers.
14. Defendant Township nonetheless has appointed, or may appoint, a municipal
manager, even though there is no vacant position to which he may lawfully be
appointed.
15. Although Coles allegedly signed the Agreement on behalf of the municipal
corporation, he was not authorized by the municipal corporation to do so.
16. No ordinance or resolution was adopted by the Township Committee authorizing
Coles to enter into the Agreement.
17. The purported “Agreement” could not legally obligate the municipality, because,
among other grounds: it was entered into without the approval of the governing body;
it provides compensation without the receipt of services or any other consideration by
the municipality; it violates the statutes and ordinances cited herein; it is contrary to the
Township’s salary ordinance, the resolutions adopted pursuant thereto, the employment
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agreement, and N.J.S.A. 40A:9-165; and it violates public policy.

18. In attempting to obligate the municipality through the purported “Agreement,”
Defendants Coles and Henshaw demonstrated wilful and intentional misconduct.
19. The misconduct described herein was intended to, and did, cause grave harm and
detriment to the public interest, and to the interests of Plaintiffs.
WHEREFORE, Plaintiffs demand judgment:
A. Ordering, declaring and adjudging that the Agreement is void, invalid and of no
effect;
B. Ordering, declaring and adjudging that the Agreement does not bind Defendant
Township to pay any money to, or confer any benefit on, Defendant Henshaw;
C. Enjoining and restraining Defendant Township from paying any public monies
to or for the use of Defendant Henshaw, and from conferring any other benefits on him;
D. Ordering, declaring and adjudging that Defendant Henshaw’s misconduct has
resulted in the forfeiture of his public position;
E. Enjoining and restraining Defendant Township from appointing a successor
municipal manager until Defendant Henshaw’s position has been vacated, or, if one has
been putatively appointed, declaring said appointment void;
F. Ordering, declaring and adjudging that Defendant Coles’ misconduct has resulted
in the forfeiture of his public position;
G. Ordering, declaring and adjudging that Defendant Coles is personally obligated
to pay any sums of money for which Defendant Township might otherwise by liable
under the Agreement;
H. For damages;
I. For costs and fees, including attorney's fees;
J. For such other and further relief as the Court may deem just and equitable.
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SECOND COUNT

1. Plaintiffs repeat the allegations of the First Count hereof as if set forth at length
at this point.
2. Defendants engaged in a conspiracy, and did combine, conspire and confederate
together, one defendant with another, and with each of them and with all of them, and
with others now unknown:
(a) Unlawfully to obligate, or to purport to obligate, the public funds and credit of
the Township of Lakewood for the benefit of Defendant Henshaw;
(b) Unlawfully to cheat, defraud and deprive the taxpayers of the Township of
Lakewood of their monies, collected by taxation;
(c) Unlawfully to divert or convert the public funds, resources, and offices of the
Township from their lawful public purpose to the personal and private benefit of
Defendant Henshaw;
(d) Unlawfully to expend public funds, incur a liability, or enter into a contract, for
which no appropriation had been made, contrary to N.J.S.A. 40A:4-57; State v. Boncelet,
107 N.J.Super. 444 (App.Div., 1969);
(e) Unlawfully to violate the public trust, and the inherent covenants of honest and
faithful service and fair dealing, implicit in the responsibilities of every public official or
employee.
3. Defendants committed the following overt acts; and it was a part of the
conspiracy and in furtherance thereof that:
(a) According to an article in the Asbury Park Press on September 7, 2018, “‘I really
enjoyed working with him over the last few years,’ Coles said, adding that he considered
Henshaw a friend.”
(b) Henshaw and Coles negotiated the putative Agreement in a transaction that was
not at “arm’s-length,” and without the authority of the Township Committee.
(c) The putative Agreement states, in pertinent part (¶9), that Henshaw “further
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acknowledges that the consideration he is receiving from the Township through this
Agreement is greater than any amount he would otherwise be entitled to from the
Township.”
(d) Such extraordinary payment was intended as “hush money” to buy Defendant
Henshaw’s silence as to municipal affairs.
(e) Henshaw and Coles agreed that the putative Agreement would not appear on a
Township Committee agenda; that no ordinance or resolution would be adopted in
connection with it, to preclude the possibility of public comment or objection, and to
avoid compliance with the Open Public Meetings Act, N.J.S.A. 10:4-6 et seq.
(f) The published agenda for the Township Committee meeting of September 6,
2018, contained no reference to the termination of Henshaw’s employment or the
putative Agreement.
(g) Henshaw and Coles agreed to continue Henshaw’s purported employment
through December 31, 2019, while reporting to the New Jersey Civil Service Commis-
sion that there had been a “Discontinuation of Unclassified Appointment” with an
effective date of “09/05/2018.”
The statements contained herein which do not specifically set forth acts which
were part of the conspiracy are included to provide context for, and to characterize the
acts which were part of the conspiracy.
4. The conspiracy was intended to, and did, cause grave harm and detriment to the
public interest, and to the interests of Plaintiffs.
WHEREFORE, Plaintiffs demand judgment:
A. Ordering, declaring and adjudging that the Agreement is void, invalid and of no
effect;
B. Ordering, declaring and adjudging that the Agreement does not bind Defendant
Township to pay any money to, or confer any benefit on, Defendant Henshaw;
C. Enjoining and restraining Defendant Township from paying any public monies
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to or for the use of Defendant Henshaw, and from conferring any other benefits on him;
D. Ordering, declaring and adjudging that Defendant Henshaw’s misconduct has
resulted in the forfeiture of his public position;
E. Enjoining and restraining Defendant Township from appointing a successor
municipal manager until Defendant Henshaw's position has been vacated, or, if one has
been putatively appointed, declaring said appointment void;
F. Ordering, declaring and adjudging that Defendant Coles' misconduct has resulted
in the forfeiture of his public position;
G. Ordering, declaring and adjudging that Defendant Coles is personally obligated
to pay any sums of money for which Defendant Township might otherwise by liable
under the Agreement;
H. For damages;
I. For costs and fees, including attorney's fees;
J. For such other and further relief as the Court may deem just and equitable.

ANSW ER TO COUNTERCLAIM S

Plaintiffs deny all allegations which support any cause of action, and assert all
defenses, as to any Counterclaim which has been or may be filed; and reserve the right
to supplement or amend this Answer to Counterclaims when or if same are filed by any
defendant.

DEM AND FOR PRESERVATION OF EVIDENCE

Plaintiffs demand that Defendants take all steps necessary to preserve all
evidence, including, without limitation, all documents, electronic records, images,
recordings, logs, and other records, which are or may be relevant to the matters set forth
herein, whether in the possession of a named defendant or any member, officer, agent,
servant or employee of a named defendant.
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CERTIFICATION

The matter in controversy is not the subject of any other pending or contemplated
action, and there are no other parties who should be joined in this action, R. 4:5-1. No
municipal proceedings were conducted below, and accordingly no transcripts are
required, R. 4:69-4.
I do hereby certify that the statements made in the foregoing Complaint are true.
In the case of statements not made of my own personal knowledge, the same are based
on municipal records provided under the Open Public Records Act. I am aware that if
any of the foregoing statements made by me are wilfully false, I am subject to
punishment.

Larry S. Loigman
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LARRY S. LOIGMAN, Esq.
Attorney for Plaintiffs
October 14, 2018