Tuesday, July 19, 2016

Sussex/Warren Land Use attorney faces ethics charges.


On April 28, 2016, the Office of Attorney Ethics filed a formal ethics complaint against a local land use attorney alleging that his conduct related to a White Township subdivision constituted a "knowing misappropriation of client funds and/or escrow funds" and "dishonesty, fraud, deceit or misrepresentation."

The ethics complaint charges Lyn P. Aaroe, who serves as attorney for both the Green Township (Sussex County) Land Use Board and the Hardwick Township (Warren County) Zoning Board of Adjustment, mainly concerns representations that Aaroe allegedly made to the purchaser of a lot in the Castle Ridge development in White Township regarding an encumbrance resulting from a debt the Castle Ridge Development Corporation owed to the Brian Plushanski Construction Company. 

According to the complaint, the development corporation, which was started by Aaroe and his wife Barbara Aaroe and transferred in 1995 to Robert Godusch, settled the construction company's lawsuit by agreeing to encumber seven lots of lands with a $390,000 mortgage.  The mortgage, however, was not filed with the Warren County Clerk when the development corporation sold a building lot to Andrew and Valarie Discafani.  The complaint alleges that Aaroe misled the title company and the Discafanis' lawyer, Michael Discafani, by not informing them of the unfiled mortgage and by mischaracterizing a notice of lis pendens that the construction company had filed against the lot.

In his June 27, 2016 response, Aaroe denies any wrongdoing and claimed that John R. Lanza, the construction company's lawyer, was supposed to have recorded the mortgage and that Lanza's decision to "sit" on the unfiled mortgage for more than a year enabled the development company to exercise a "creditor preference." 

According to the complaint, out of the closing proceeds, Aaroe paid himself $15,000 as a legal fee, paid Godusch $49,938.74 and used another $85,067.96 to pay off a tax sale lien that Washington Township held against his and Barbara's residence.  Aaroe said that the $85,067.96 and $15,000 were just compensation for his legal services and the excavating work that Aaroe said he personally did to improve the lots' value.

In a second count of the complaint, ethics authorities claim that the Castle Ridge Development Corporation failed to pay management consultant Barry Bourquin and in 2009 transferred a Vermont property it owned to a corporation Barbara owned for well under market price in order to hamper Bourquin from collecting a nearly $200,000 arbitration award he later won against Castle Ridge.  Aaroe countered in his answer that he had no interest in Castle Rock at the time of the transfer, that the $100,000 price was fair because the property was subject to a 10 year time share agreement and that "it is the absolute right of any property owner at any time and on any terms and conditions he, she or it deems appropriate to sell and convey real estate."

None of the allegations against Aaroe have been proven. The charges will be tried before an ethics panel the burden is on the ethics authorities to prove their allegations.  The above is a summary of the complaint and answer and readers who want more information are directed to the filed documents which are on-line here.