NEW JERSEY DEPARTMENT OF COMMUNITY AFFAIRS VS. JOSEPH MAIONE (DEPARTMENT OF COMMUNITY AFFAIRS)

192 A.3d 37, 456 N.J. Super. 146

• Court: New Jersey Superior Court Appellate Division
• Decided: August 23, 2018
• Docket: A-0712-15T4
• Status: Published

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-0712-15T4

NEW JERSEY DEPARTMENT OF COMMUNITY AFFAIRS, SANDY RECOVERY DIVISION, APPROVED FOR PUBLICATION

Petitioner-Respondent, August 23, 2018

APPELLATE DIVISION v.

JOSEPH MAIONE,

Respondent-Appellant. _____________________________

Argued March 14, 2018 – Decided August 23, 2018

Before Judges Fuentes, Koblitz and Manahan.

On appeal from the Department of Community Affairs, Sandy Recovery Division, Agency Docket No. RSP0001747.

John A. Conte, Jr., argued the cause for appellant (Rubenstein, Meyerson, Fox, Mancinelli, Conte & Bern, PA, attorneys; John A. Conte, Jr. and James de Stefano, on the brief).

Valentina M. DiPippo, Deputy Attorney General, argued the cause for respondent (Gurbir S. Grewal, Attorney General, attorney; Melissa D. Schaffer, Assistant Attorney General, of counsel; Valentina M. DiPippo, on the brief).

The opinion of the court was delivered by

FUENTES, P.J.A.D. Joseph Maione appeals from the final decision of the

Department of Community Affairs (DCA) that found him ineligible

to receive two Superstorm Sandy recovery grants: the

Rehabilitation, Reconstruction, Elevation and Mitigation (RREM)

grant in the amount of $75,000; and the Resettlement Program grant

(RSP), in the amount of $10,000. The DCA awarded these grants to

assist homeowners remain in the County after the storm damaged

their primary residence or to help them rebuild or repair their

damaged primary residence.1 The DCA Sandy Recovery Division

published the eligibility criteria for these grants on its website.

Both grants expressly condition eligibility to receive these funds

on the damaged house being the applicant's primary residence at

the time the storm hit on October 29, 2012.

Appellant was awarded these two grants based on his

representation on the grant applications that his primary

residence was a property he owned in Toms River. However, the DCA

thereafter found documentary evidence showing appellant's primary

residence at the time of the storm was an apartment located on

Adams Street in Hoboken that he shared with his mother. Based on

1 The devastation Superstorm Sandy caused to our shore communities is well-documented. See Estate of Doerfler v. Fed. Ins. Co., 454 N.J. Super. 298, 299 n.1 (App. Div. 2018).

2 A-0712-15T4 this determination, the DCA demanded that appellant refund the

$85,000 he received through these grants.

Appellant contested the DCA's decision and requested a

hearing to present evidence in support of his claim. The matter

was transferred to the Office of Administrative Law for a plenary

hearing before an Administrative Law Judge (ALJ). After

considering the testimonial and documentary evidence presented,

the ALJ issued an Initial Decision finding appellant did not

satisfy the criteria for eligibility with respect to these two

grants and concluded he was obligated to return the $85,000 grant

funds. The DCA Commissioner adopted the ALJ's Initial Decision

as his Final Decision.

Appellant now argues before this court that the

Commissioner's decision, finding his primary residence at the time

of the storm was in Hoboken, is arbitrary and capricious because

it was not based on the common law concept of "domicile." We

reject this argument. The DCA conditioned the award of these

grants on the applicant meeting the criteria for eligibility

published on its website. The threshold criterion for eligibility

is that the property damaged by the storm was the applicant's

primary residence.

3 A-0712-15T4 The ALJ found that appellant's Toms River property was not

his primary residence at the time of the storm. As the ALJ

explained in her Initial Decision:

[T]he documentation pointing to Toms River is extraordinarily thin – essentially just a Homestead Rebate and a statement to FEMA. And more important, in March 2012 [appellant] made a declaration of primary residence to the federal government and took a 2011 tax credit based on that declaration, which stated that the Adams Street property was his primary home. No documentation supports any substantial change between 2011 and 2012.

The ALJ's findings are amply supported by the record developed by

the parties at the administrative hearing. We therefore affirm

the decision of the DCA Commissioner. The following facts inform

our analysis.

On May 24, 2013, appellant applied for a grant under the RSP.

The RSP eligibility criteria describes in plain language what the

applicant needs to establish to receive this financial assistance.

Section 4 is titled "Occupancy as Primary Residence." Section 4.1

states: "Applicants must have occupied the property as their

primary residence on the date of the storm[, October 29, 2012].

Second homes, vacation homes and rental properties do not qualify

an applicant for a Resettlement Grant."

On June 5, 2013, appellant also applied for a grant under the

RREM program. The RREM program also has a plainly worded

4 A-0712-15T4 eligibility criteria. Section 3.4 is titled "Primary Residence"

and states: "Applicants must have occupied the property as their

primary residence on the date of the storm (October 29, 2012).

Second homes, vacation homes, and rental properties are not

eligible for a RREM grant award."

Appellant executed a grant agreement for the RSP on July 23,

2013, and executed a grant agreement for the RREM program on

January 13, 2014. The DCA awarded appellant a $10,000 grant under

the RSP program, and a $75,000 grant under the RREM. On March 12,

2015, the DCA informed appellant that it had determined he was not

eligible to receive these funds under the RSP and RREM programs

because the damaged property listed on his applications was not

his primary residence at the time of the storm. The DCA demanded

that appellant void the two checks totaling $85,000 or return the

grant funds directly to the State Treasurer.

By letter dated March 19, 2015, appellant contested the DCA's

determination and demand for the return of the grant funds, and

requested a hearing before an ALJ. The hearing before the ALJ

began on June 16, 2015. The DCA presented the testimony of

Nicholas Smith-Herman, project assistant in the Office of

Compliance and Monitoring. According to Smith-Herman, in the

course of conducting a "checks and balances" review of grant

applications, he discovered that appellant's RSP and RREM

5 A-0712-15T4 applications lacked "primary residence support." At that point,

appellant was in the "constructive phase" of his restoration

project. This meant he had received part of the funds and had

started to reconstruct the property.

Smith-Herman explained that to be eligible for RSP and RREM

grants, an applicant must have owned or occupied the damaged

property at the time of the storm, and sustained at least $8000

of storm-related property damage or had evidence that at least one

foot of flood-water had penetrated the first floor of the property.

Furthermore, to qualify for a RREM grant, an applicant cannot earn

more than $250,000 a year and must register the damaged property

as their primary residence with the Federal Emergency Management

Agency (FEMA). The applicant is required to establish that the

damaged property was his or her primary residence at the time of

storm.

To satisfy this "primary residence" requirement, the DCA

requires three types of documentary evidence: a "2012 tax return,

voter registration[,] and a New Jersey driver's license." If an

applicant does not have these three documents as proof, the DCA

may accept alternative forms of documentation, on a case-by-case

basis. For example, Smith-Herman testified that the DCA has

accepted a form 1099R from the New Jersey Division of Pension and

Benefits for the year 2012.

6 A-0712-15T4 Here, Smith-Herman testified that the DCA found appellant's

Toms River house was not his primary residence during Sandy based

on the following evidence: (1) appellant listed an apartment

located on Adams Street in Hoboken as his address on his New Jersey

driver's license; (2) his tax returns for the years 2010 through

2013 listed the Hoboken address as his primary residence; and (3)

appellant is registered to vote in Hoboken. Furthermore, appellant

has changed the address on his New Jersey driver's license twice:

the first time was in February 2014, when he changed it from the

Hoboken address to a Tinton Falls address; the second time was in

December 2014, when he changed it from the Tinton Falls address

back to the Hoboken address.

Finally, to qualify for a Residential Energy Credit,

appellant identified the Hoboken apartment as his "main home" on

his 2011 federal-tax return, a document he signed under oath and

submitted to the Internal Revenue Service. Smith-Herman also

testified that appellant listed the Hoboken address on his form

1099R for the New Jersey Division of Pension Benefits. Although

appellant received a Homestead Property Tax rebate for the Toms

River address in 2011, Smith-Herman explained that this is not the

type of documentation the DCA considers as proof of primary

residence, especially in a case such as this, where there is strong

countervailing evidence establishing otherwise.

7 A-0712-15T4 The record before the ALJ also contains proof that appellant's

property tax bills for the Toms River property were sent to him

at the Hoboken address. Considering the amount of competent

evidence establishing that appellant's primary residence on

October 29, 2012 was in Hoboken, balanced against appellant's

failure to produce acceptable documentation to prove that his

primary residence was his house in Toms River, the DCA determined

that appellant was not eligible for either the RREM or RSP grant

programs.

Appellant testified that he and his former wife purchased the

Toms River property on August 18, 2004, to use as a second house

during the summer months. In June 2005, appellant suffered a

"double stroke" that left him temporarily unable to speak, walk,

eat, or even drink. Thereafter, he moved into his mother's

apartment in Hoboken so she could be his primary caregiver. During

this period of recovery from the strokes, he relied on his mother

"and several close friends in Hoboken." When asked how long he

relied on his "mother's assistance," appellant responded: "[T]wo

to three years." Appellant was employed as a police officer in

Hoboken during a significant part of the time he alleged he was

residing with his mother to recover from the "double stroke." As

he explained:

8 A-0712-15T4 Q. What happened after your illness with your career?

A. Well, I was out on sick leave for a year after the stroke, but since there were no major improvements with my balance and my vision I was forced to retire early from the police . . . force.

He eventually retired from the Hoboken Police Department.

Approximately four years after his stroke, appellant became the

sole owner of the Toms River house. This came about through a

Property Settlement Agreement (PSA) appellant and his former wife

negotiated and signed to equitably distribute the marital estate.

The PSA was part of the Final Judgment of Divorce dated February

25, 2009.

Appellant also called as witnesses Dennis Whalen, who owns a

house in Toms River near appellant's property, Betsy Rivera, who

testified she was appellant's girlfriend, and his mother Patricia

Maione. These three witnesses supported appellant's claim that

his primary residence when Sandy struck the Jersey shore was the

Toms River property. Whalen testified that he saw appellant on a

regular basis for at least five years; he remembered seeing him

"[a]ll the time" the month before Sandy. Rivera testified that

when she met appellant in 2009, his primary residence was the Toms

River house. Appellant's mother testified that by 2009, appellant

had begun his transition to live in Toms River. She claimed that

9 A-0712-15T4 appellant chose not to change many of the billing addresses from

the Hoboken address to the Toms River address because he still had

stroke-related mobility problems and was concerned about walking

to the mailbox in Toms River during inclement weather. She also

testified he was no longer receiving mail in Hoboken around the

time Sandy struck because he was not living with her. Appellant

also presented a series of documents addressed to him at the Toms

River address around the time of the storm.

In her Initial Decision issued on August 31, 2015, the ALJ

found the DCA established that appellant did not qualify for the

RREM and RSP grant programs because the Toms River house was not

his primary residence during the storm. Although she was inclined

to believe the testimony that appellant resided at the Toms River

house full-time at the time of the storm, "the documentation

supporting that claim [came] down to a statement to FEMA and a

Homestead Rebate." By contrast, the ALJ particularly noted that

appellant's 2011 income tax return, "which was filed on March 22,

2012, claimed a Nonbusiness Energy Property Credit for

improvements he made to his 'main home' at . . . Adams Street" in

Hoboken.

After considering all of the evidence presented by the

parties, the ALJ concluded:

10 A-0712-15T4 [Appellant]'s situation is sympathetic, and there is an argument that he is a disabled person who got in the habit of relying on his mother after his strokes, such that all the documentation pointing to [the Hoboken address] should be discounted. But the documentation pointing to Toms River is extraordinarily thin[,] essentially just a Homestead Rebate and a statement to FEMA. Even the homeowner insurance policy in 2012 did not require primary residence. And more important, in March 2012 he made a declaration of primary residence to the federal government and took a 2011 tax credit based on that declaration, which stated that the [Hoboken address] was his primary home. No documentation supports any substantial change between 2011 and 2012. Therefore, based on the documentation, I conclude that the [DCA] has met its burden in demonstrating that [appellant] did not qualify for the Resettlement Program grant, such that it must be returned. Additionally, I conclude that [appellant] has not proved eligibility for the RREM Program.

[(Emphasis added).]

On October 15, 2015, DCA Commissioner Charles A. Richman adopted

the ALJ's Initial Decision as his Final Decision.

Commissioner's decision, accepting without modification the ALJ's

finding that the Toms River house was not his primary residence,

was arbitrary and capricious. Appellant argues the Commissioner

should have considered and applied the common law concept of

domicile in making this determination. Appellant claims that he

11 A-0712-15T4 established that the Toms River house was his domicile, thus

proving that the Toms River address was his primary residence.

Our standard of review of final decisions of State

administrative agencies is well-settled. The "final determination

of an administrative agency . . . is entitled to substantial

deference." In re Eastwick Coll. LPN-to RN Bridge Program,

225 N.J. 533, 541 (2016). An appellate court may only reverse if

the decision of the administrative agency is "'arbitrary,

capricious, or unreasonable,' the determination 'violate[s]

express or implied legislative policies,' the agency's action

offends the United States Constitution or the State Constitution,

or 'the findings on which [the decision] was based were not

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

(alterations in original) (quoting Univ. Cottage Club of Princeton

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

"The burden of demonstrating that the agency's action was

arbitrary, capricious, or unreasonable rests upon the person

challenging the administrative action." In re Arenas, 385 N.J.

Super. 440, 443-44 (App. Div.), certif. denied, 188 N.J. 219

(2006).

Moreover, this court will "defer to an agency's

interpretation of . . . [a] regulation, within the sphere of [its]

authority, unless the interpretation is 'plainly unreasonable.'"

12 A-0712-15T4 U.S. Bank, N.A. v. Hough, 210 N.J. 187, 200 (2012) (alterations

in original) (quoting In re Election Law Enforcement Comm'n

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

appellate court is not "relegated to a mere rubberstamp of agency

action," but rather must "engage in a 'careful and principled

consideration of the agency record and findings.'" Williams v.

Dep't of Corr., 330 N.J. Super. 197, 204 (App. Div. 2000)

(citations omitted).

We reject appellant's arguments and affirm substantially for

the reasons expressed by the ALJ, as adopted by the Commissioner

of Department of Community Affairs as his Final Decision in this

case. R. 2:11-3(e)(1)(D). We add only the following brief

comments. Appellant's argument attacking the approach employed

by the ALJ and adopted by the Commissioner in determining what

constitutes "primary residence" for determining who is eligible

to receive a grant under RREM and RSP is not only without merit,

it would lead to needless uncertainty and undermine the sound

administration of these relief programs.

The Sandy-related grants at issue here were created to assist

a class of property owners whose "primary residence" was damaged

or destroyed by this "superstorm." The grant applications

contained a list of specific documents that the DCA uses to make

these critical eligibility determinations. The public policy

13 A-0712-15T4 underpinning these relief programs is to provide financial

assistance to a particular class of homeowners in a straightforward

manner.

Appellant urges us to reject this straightforward approach

established by the DCA and rely instead on the common law concept

of "domicile." In our view, this would seriously compromise the

essential purpose of these relief programs. It would require

applicants to retain lawyers to research how the common law concept

of "domicile" can be applied in this context. In response, the

DCA would need to assign an equal number of lawyers to review each

application to ensure it conforms to this legal standard. Such

an approach would sink these salutary programs in a quagmire of

ambiguity and divert public resources to pay lawyers, instead of

carpenters, masons, and plumbers.

Affirmed.

14 A-0712-15T4