JOAO ROCHA VS. STATE OF NEW JERSEY (L-3348-13, ESSEX COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R.1:36-3.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0166-15T2

CAROL RYLE,

Petitioner-Appellant,

v.

NEW JERSEY DEPARTMENT OF
COMMUNITY AFFAIRS, SANDY RECOVERY
DIVISION,

Respondent-Respondent.
——————————————————————————

Submitted January 10, 2016 – Decided February 13, 2017

Before Judges Yannotti and Gilson.

On appeal from the Department of Community
Affairs, Sandy Recovery Division, Agency Ref.
No. SRP0042732.

Dunn Law, L.L.C., attorneys for appellant
(Christopher S. Dunn, on the briefs).

Christopher S. Porrino, Attorney General,
attorney for respondent (Melissa Dutton
Schaffer, Assistant Attorney General, of
counsel; Cameryn J. Hinton, Deputy Attorney
General, on the brief).

PER CURIAM

Petitioner Carol Ryle appeals from a final agency decision

by the Department of Community Affairs (Department) denying her a
grant from the Landlord Rental Repair Program (LRRP) under the

Sandy Recovery Program. We affirm because the Department's

decision was not arbitrary, capricious, or unreasonable and

because the decision was supported by substantial, credible

evidence developed during a contested hearing at the Office of

Administrative Law (OAL).

I.

Petitioner and her husband own several properties, one of

which they occupy and the others they rent. The home they occupy

and one of their rental properties are located in Manahawkin and

were damaged by Super Storm Sandy on October 29, 2012. The

property at issue on this appeal is the rental property located

in Manahawkin (the Property).

Petitioners represent that at the time Sandy struck, the

Property was rented, albeit on an "informal month-to-month basis."

After the storm, Petitioner and her husband oversaw repairs to the

Property and, in April 2013, the tenant resumed occupancy of the

Property. When the tenant moved back into the Property, however,

petitioner knew that the Property still needed to be elevated.

In response to the damage caused by Sandy, the United States

Department of Housing and Urban Development (HUD) provided funds

to the Department for a variety of programs to assist affected New

Jersey residents. Those funds came through community development

2 A-0166-15T2
block grants. The Department developed LRRP to restore residential

rental properties damaged by Super Storm Sandy.

To be eligible for LRRP funds a number of requirements must

be satisfied. The Department developed and issued a manual and

guidelines that set forth the eligibility requirements and

procedures governing the operation and administration of LRRP.

LRRP Program Guidelines (December 18, 2014),

http://www.renewjerseystronger.org/wp-content/uploads/2014/09/

LRRP-Program-Guidelines-121814.pdf (Guidelines); LRRP Program

Manual (December 18, 2014), http://www.renewjerseystronger.org

/wp-content/uploads/2014/09/LRRP-Program-Manual-section-1-8-

121814.pdf (Manual). For example, LRRP projects are required to

comply with local, state, and federal construction and building

standards. Guidelines, supra, at 14.

LRRP funds can be distributed to reimburse costs already

incurred or for prospective rehabilitation costs to be incurred.

Id. at 7. To be eligible for reimbursement of costs already

incurred, the guidelines provide:

The [l]andlord must provide documentation for
reimbursement: a) proof of the work completed;
and b) retain receipts for the amounts paid.
Proof of the work completed will include:

 Certificat[e] of Occupancy;
 A copy of the construction contract
and/or scope of work; and/or

3 A-0166-15T2
  Invoices from a [g]eneral [c]ontractor or
tradesperson (such as electricians,
painters, etc.) or from materials
suppliers, hardware stores or equipment
rental firms.

[Manual, supra, at 5.]

To be eligible for prospective rehabilitation costs, the LRRP

guidelines state: "Landlords that apply to the LRRP and that have

unit(s) occupied by a tenant with work not complete shall not be

eligible for funding for the applicable unit(s)." Guidelines,

supra, at 12; Manual, supra, at 14.

In August 2013, petitioner applied for funds from LRRP. At

that time, petitioner represented that all storm-damage-repair

work had been completed, the tenant had resumed occupancy, but the

home still needed to be elevated. After submitting the initial

application, petitioner met with representatives of the

Department. The Department also sent a contractor to inspect the

Property. The Department's contractor issued a report that

estimated that just over $37,000 in work had been done at the

Property and that just over $5000 in work remained to be done.

The contractor also estimated that it would cost approximately an

additional $47,000 to elevate the structure on the Property.

Following a long exchange of information and documentation,

the Department sent petitioner a letter in June 2014, denying her

application. In that letter, the Department explained that the

4 A-0166-15T2
application was denied because there was a tenant residing at the

Property at the time of the application and the work was not

complete.

Petitioner administratively appealed that determination. In

November 2014, the Department denied her initial appeal stating

that the application was ineligible because:

Pursuant to Section 1.3.2.4 - Vacancy
Requirement/Partially Occupied Properties -
landlords who apply to LRRP and have damaged
units (defined as work not completed a[t] date
of application submission) that are occupied
by a tenant shall not be eligible for funding.

Petitioner then administratively appealed the November 2014

decision. The matter was transferred to the OAL and the Chief

Administrative Law Judge (ALJ) conducted a hearing. Petitioner

and her husband appeared and presented testimony at the hearing.

They also submitted numerous exhibits, including certifications

from the tenant and a neighbor. The Department appeared and

opposed petitioner's appeal.

After considering the evidence presented, the ALJ affirmed

the Department's denial of petitioner's LRRP application in an

initial decision issued on June 9, 2015. In that decision, the

ALJ made fact-findings and conclusions of law based on the LRRP's

eligibility guidelines and program manual. The ALJ found that

while petitioner had fulfilled "many" of the eligibility factors,

5 A-0166-15T2
her application did not meet all of the necessary eligibility

requirements. Specifically, the ALJ found that petitioner met

"the basic eligibility criteria with regard to ownership, damage,

year-round rental, and willingness to rent to households with low

and moderate income." The ALJ, however, also found that petitioner

had not shown that the repairs to the Property had been completed

before the tenant reoccupied the Property in April 2013. In making

that finding, the ALJ reasoned that although petitioner contested

the completion issue, the LRRP guidelines required a certificate

of occupancy and petitioner had failed to present such a

certificate covering the time that the tenant reoccupied the

Property in April 2013.

In addition, the ALJ found that the repairs to the Property

were not complete because the structure on the Property still

needed to be elevated. The elevation work, however, would require

displacement of the tenant in contravention to the LRRP's

guidelines. See Manual, supra, at 16.

Petitioner submitted exceptions to the initial decision, but

the ALJ's initial decision became final on July 24, 2015, when the

Department did not adopt, modify, or reject the initial decision.

See N.J.S.A. 52:14B-10(c) (providing that if the referring agency

does not adopt, modify, or reject an initial decision issued by

6 A-0166-15T2
an ALJ within forty-five days, then the initial decision shall

become the final decision of the agency).

II.

Petitioner now appeals the final agency decision. On this

appeal, petitioner makes two arguments. First, she contends that

it was an error to reject her application for failure to provide

a certificate of occupancy. Second, she contends that the

temporary relocation of a tenant for elevating a structure is

allowed under the LRRP.

Our role in reviewing an administrative agency's final

decision is limited. Univ. Cottage Club of Princeton N.J. Corp.

v. N.J. Dep't of Envtl. Prot., 191 N.J. 38, 48 (2007). "We will

not reverse an agency's decision unless: (1) it was arbitrary,

capricious, or unreasonable; (2) it violated express or implied

legislative policies; (3) it offended the State or Federal

Constitution; or (4) the findings on which it was based were not

supported by substantial, credible evidence in the record." Ibid.

(citing In re Taylor, 158 N.J. 644, 656 (1999)). We "defer to an

agency's interpretation of . . . [a] regulation, within the sphere

of [its] authority, unless the interpretation is 'plainly

unreasonable.'" U.S. Bank, N.A. v. Hough, 210 N.J. 187, 200 (2012)

(alterations in original) (quoting In re Election Law Enf't Comm'n

Advisory Op. No. 01-2008, 201 N.J. 254, 262 (2010)). An appellate

7 A-0166-15T2
court, however, is "in no way bound by the agency's interpretation

of a statute or its determination of a strictly legal issue." In

re Taylor, supra, 158 N.J. at 658 (quoting Mayflower Sec. Co. v.

Bureau of Sec., 64 N.J. 85, 93 (1973)). Applying this well-

established standard, we discern no basis for disturbing the

Department's final agency decision in this matter.

Petitioner takes issue with the Department's reliance on the

requirement for a certificate of occupancy to establish completion

of repairs. In particular, petitioner argues that the local

municipality did not require a certificate of occupancy for the

tenant to resume use of the Property in April 2013. The ALJ,

however, reasoned that the State Uniform Construction Code

provides: "It shall be unlawful to change the use of any structure

or portion thereof without the prior application for and issuance

of a certificate of occupancy as herein provided." N.J.A.C. 5:23-

2.6(b). The State code also provides that in the event of a

conflict between the local code and the State code, "the more

restrictive requirement of this [State] code . . . shall govern."

N.J.A.C. 5:23-2.2(e). Thus, the ALJ went on to reason that without

a certificate of occupancy, petitioner could not satisfy the

completion requirements called for by the LRRP.

Applying our deferential standard of review, we discern no

basis to disagree with the ALJ's interpretation of the guidelines,

8 A-0166-15T2
as adopted by the Department. Moreover, we note that the question

of whether the repair work had been completed prior to the tenancy

was a disputed issue before the ALJ. The ALJ never found that

petitioner proved that the repair work had been completed and that

the only thing that was missing was the certificate of occupancy.

Next, the petitioner contends that she was eligible for funds

to elevate the structure on the Property even if that elevation

required the temporary relocation of the tenant. The Department

rejected that position reasoning that the LRRP guidelines do not

allow funds if the resulting work will displace existing tenants.

In that regard, the LRRP guidelines state: "Landlords who apply

to the LRRP and have damaged units (defined as work not completed

at the time of the applicable submission) that are occupied by a

tenant shall not be eligible for funding." Manual, supra, at 16.

The Department adopted the ALJ's finding that because the elevation

of the Property would displace the existing tenant, the Property

did not qualify for LRRP funds.

Having considered the fact-findings made by the Department

and applying our limited scope of review, we discern no basis for

disturbing the Department's fact-findings and conclusions related

to the elevation of the Property.

Affirmed.

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