DEPARTMENT OF COMMUNITY AFFAIRS BUREAU OF ROOMING AND BOARDING HOUSE STANDARDS v. DANIEL MORRISON (2010)

Appellant, Daniel Morrison, appeals from the September 14, 2006 Final Decision of the Commissioner (Commissioner), Department of Community Affairs (Department), adopting, with modification, the Initial Decision of the Administrative Law Judge (ALJ), who found that appellant violated the Rooming and Boarding House Act of 1979(Act), N.J.S.A. 55:13B-1 to -21, and the regulations promulgated thereunder, N.J.A.C. 5:27-1.1 to -14.1, and recommended the imposition of $20,000 in civil penalties.   We affirm.

Morrison is the registered owner of property located at 845 North 32nd Street in Camden.   After an investigation revealed that Morrison was operating the premises as a rooming house, the Department assessed civil penalties against him totaling $20,000 for failure to obtain the necessary owner's license in accordance with N.J.S.A. 55:13B-7(a), operating a rooming house without proof of zoning approval as required under N.J.A.C. 5:27-1.6(m), failure to provide an on-site licensed operator in accordance with N.J.S.A. 55:13B-8, and failure to provide an R-2 Use Group Certificate of Occupancy as required by N.J.A.C. 5:27-1.5(b).

Morrison appealed to the Department and requested a hearing.   The matters were transferred to the Office of Administrative Law as contested cases pursuant to N.J.S.A. 52:14B-1 to -15 and N.J.S.A. 52:14F-1 to 13.   The hearing was scheduled for March 3, 2006, at which time the judge consolidated the matters for disposition.   The hearing was then adjourned for seven weeks to afford Morrison an opportunity to retain counsel.   When the hearing continued on April 25, Morrison advised the judge that he intended to represent himself.

Angelo Mureo (Mureo), an investigator with the Bureau of Rooming and Boarding House Standards (Bureau) testified at the hearing that on June 17, 2005, he visited the subject property but did not gain access.   At that time, he left his business card and a five-day notice of inspection letter on the door.   Morrison never responded to the notice.   On June 28, he gained access to the property through a tenant, David Pyner, who advised that he shared the premises with five other unrelated individuals and that he paid Morrison $125 per week.   Mureo observed that the first floor of the premises consisted of a kitchen, bathroom, hallways and five rooms with locks on each door to the room.   He left another business card and five-day inspection notice.   Once again, Morrison did not respond.   The next month, he returned to the property.   This time, he returned with John Jaremback, the Bureau's Chief Physical Evaluator, who also testified.   They inspected the second floor, where they observed a similar layout, except that there were only three locked rooms in addition to the kitchen, bathroom, and hallway.   They also spoke to residents from the second floor units, who told them that they each paid Morrison $115 per week for rent.

Both Mureo and Jaremback testified that based upon their many years of experience, the layout of 845 North 32nd Street was consistent with the characteristics of a rooming house.   They particularly noted the keyed and deadbolt locking systems for the individual rooms on each floor, together with hallways and common bathroom and kitchen facilities.

Morrison, appearing pro se, challenged the validity of the inspections, objected to the documentary evidence and testimony presented on the grounds of hearsay, and argued that he rented the property to two individuals, who in turn were in charge of the property.   Morrison also presented the testimony of one of his tenants, Terry Francis, who testified that he occupied the second floor of the property and had two roommates who each paid him $250 as their share of the $750 monthly rent.   Keith Seder, another tenant, testified that he, his son, and occasionally his daughter had been living at the property for the last six months.   Finally, Seder's son testified, confirming that he lived at the property with his father.   He also testified that he paid his father $400 in monthly rent.

The ALJ found that the investigators were admitted to the premises by the tenants, that the tenants testified credibly as to the nature of their tenancy, and that Mureo and Jaremback were also credible in their testimony regarding their inspection of the premises and conclusion that the layout was consistent with a rooming house.   The ALJ determined that even Morrison's witnesses' testimony that Pyner was in charge of the tenants was “consistent with the operation of the premises as a rooming house.”   The ALJ concluded that the Department had met its burden in proving that Morrison was operating the property as a rooming house without the requisite licenses.

While the ALJ was satisfied that the Department had proved the violations, she concluded that “[g]iven Morrison's age, medical conditions, and financial circumstances, the maximum [$20,000] penalty is not appropriate.”   She explained:

In reaching such a conclusion, I also note that there was no evidence of prior infractions on his part and the Department did not present evidence to rebut his assertions regarding his medical and financial circumstances.   In these matters, I find that a $1,000 penalty for the August 9, 2005, Notice and Order for failure to obtain a license, and a penalty of $250 for each of the remaining ancillary violations cited in the October 7, 2005, Notices and Orders should be assessed.

The Commissioner issued her decision on September 14, 2006, upholding the ALJ's findings that Morrison violated “the Rooming and Boarding House Act and rules adopted pursuant thereto.”   The Commissioner did not adopt the ALJ's recommended penalties, reasoning:

The only appropriate basis for reduction of a valid penalty is an agreement on the part of the person against whom the penalty is imposed to promptly comply with the law, and any such reduction must be further conditioned upon his or her doing so.   If the respondent would declare to the Bureau his intention to promptly comply with the law, the Bureau would be authorized to make such reduction in the amount of the penalty as it might deem appropriate under the circumstances.   Absent any such declaration of intention to comply, there is no justification for any such reduction.

On appeal, Morrison contends the court erred in “grant[ing] relief to the Bureau when [he] was denied counsel and the penalty was excessive and against the weight of the evidence.”   We disagree and affirm, substantially for the reasons set forth in the Commissioner's September 14, 2006 written opinion upholding the findings of the ALJ except as to the penalty reduction.   Likewise, we are satisfied the Commissioner's determination not to reduce the penalty is amply supported by the record.   We add the following comments limited to the Commissioner's decision to reinstate the penalty originally assessed against Morrison.

The Act is “remedial legislation ․ necessary to provide for the health, safety and welfare of all those who reside in rooming and boarding houses in this State[.]”  N.J.S.A. 55:13B-2.   Regulations promulgated under the Act ensure “the protection and care of the residents of rooming houses, boarding houses and residential health care facilities[.]”  Ibid. To that end, the imposition of penalties where there have been violations of the Act are intended to deter conduct that threatens the health, safety and welfare of those who reside in rooming houses.

An agency has “broad discretion in determining the sanctions to be imposed for a violation of the legislation it is charged with administering.”  In re Scioscia, 216 N.J.Super. 644, 660, (App.Div.), certif. denied, 107 N.J. 652 (1987).   We will ordinarily defer to the Commissioner's expertise and uphold her determination so long as it is supported by substantial credible evidence and is not erroneous as a matter of law.   See Allstate Ins. Co. v. Fortunato, 502 U.S. 1121, 112 S.Ct. 1244, 117 L. Ed.2d 476 (1992);  Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980);  In re Aetna Cas. & Sur. Co., 248 N.J.Super. 367, 376 (App.Div.), certif. denied, 126 N.J. 385 (1991), cert. denied, 502 U.S. 1121, 112 S.Ct. 1244, 117 L. Ed.2d 476 (1992).   This is especially true with respect to an agency's choice of sanction, to which we “generally afford substantial deference.”  In re Zahl, 186 N.J. 341, 353-54 (2006).   Thus, we will modify a sanction

only when necessary to bring the agency's action into conformity with its delegated authority.   The Court has no power to act independently as an administrative tribunal or to substitute its judgment for that of the agency.   It can interpose its views only where it is satisfied that the agency has mistakenly exercised its discretion or misperceived its own statutory authority.

[Zahl, supra, 186 N.J. at 354 (quoting In re Polk, 90 N.J. 550, 578 (1982)).]

Here, the Commissioner determined that reduction of the penalty would only be appropriate if Morrison would agree to promptly comply with the law, which Morrison had not done.   Since the Commissioner left open the possibility of a reduction upon compliance, and Morrison has neither expressed his intention to comply nor complied, we do not conclude that the Commissioner's rejection of the recommended reduction in penalty because of Morrison's personal and financial situation to be “so disproportionate to the offense[s], in light of all the circumstances, as to be shocking to one's sense of fairness.”  In re Polk, supra, 90 N.J. at 578 (quoting In re Pell v. Board of Educ., 356 N.Y.S.2d 833, 844 (1974)).

Affirmed.

PER CURIAM