NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-3346-23
SUSAN OCHS, COMMISSIONER, NEW JERSEY DEPARTMENT OF BANKING AND INSURANCE,
Petitioner-Respondent,
v.
ROBERT W. MANIA,
Respondent-Appellant,
and
HEIDI ANN MANIA, and RHM BENEFITS, INC.,
Respondents. ______________________________
Argued March 16, 2026 – Decided April 15, 2026
Before Judges Sabatino and Walcott-Henderson.
On appeal from the New Jersey Department of Banking and Insurance. James A. Plaisted argued the cause for appellant (Pashman Stein Walder Hayden, PC, attorneys; James A. Plaisted, on the briefs).
Chandra M. Arkema, Deputy Attorney General, argued the cause for respondent (Jennifer Davenport, Attorney General, attorney; Sookie Bae-Park, Assistant Attorney General, of counsel; Chandra M. Arkema, Deputy Attorney General, on the brief).
PER CURIAM
Defendant Robert W. Mania appeals from specific sections of a May 22,
2024 final agency decision of the Commissioner of the Department of Banking
and Insurance ("DOBI"), revoking his insurance license and levying a financial
penalty of $16,012.50 against him for violations of the Insurance Producer
Licensing Act ("IPLA"), N.J.S.A. 17:22A-40(a). Defendant argues the
Commissioner erred in declining to dismiss certain counts in the administrative
order to show cause ("OTSC") filed by the State on the grounds that they were
barred by: (1) the expiration of the statute of limitations; (2) the doctrine of
laches; and (3) the entire controversy doctrine. Defendant further argues the
Commissioner misapplied the penalty framework set forth in Kimmelman v.
Henckel & McCoy, 108 N.J. 123, 132 (1987), and that a proper application of
those factors would have warranted substantially less draconian sanctions than
those imposed on him. He also argues the Commissioner failed to properly
A-3346-23 2 apply the Rehabilitated Convicted Offenders Act ("RCOA"), N.J.S.A. 2A:168A-
1 to -16. Finally, defendant asserts that the imposition of a seven-year term of
license revocation is arbitrary, capricious, or unreasonable. Because we
conclude the Commissioner's decision was amply supported by credible
evidence in the record, we affirm.
I.
Robert was a licensed insurance producer in New Jersey operating through
RHM Benefits, Inc. ("RHM"), an entity which he co-owned with his wife, Heidi
Ann Mania.1 Robert held a fifty-one percent ownership interest, served as
principal and CEO, and oversaw the company's insurance brokerage operations,
while Heidi, who owned the remaining forty-nine percent interest, provided
administrative support to the company. During the relevant time period,
defendants were designated responsible licensed producers ("DRLPs") for
RHM. Robert separately served as an elected member of the Mount Olive
Township School District Board of Education ("MOBOE").
Between 2007 and 2009, Robert and his former employer, Frank
Cotroneo, participated in a scheme to increase the brokerage commission rate
1 For ease of reference and intending no disrespect, we refer to the parties by their first name where appropriate, given that they share the same last name.
A-3346-23 3 on the MOBOE's health insurance policy, specifically by surreptitiously
diverting a portion of the commission rate to Robert to reimburse him for a debt
Cotroneo owed Robert. The scheme involved diverting 1% in commissions
through RHM's bank account. Pursuant to this scheme, Robert received
approximately twenty-one checks totaling $141,527 through RHM, which he
concealed from the MOBOE by using his official position to avoid disclosure
by directing the funds to his personal post office box rather than to the MOBOE.
The scheme eventually came to the attention of the United States Attorney
("U.S. Attorney") for the District of New Jersey. On July 2, 2012, Robert
entered into a plea and cooperation agreement with the U.S. Attorney, under
which he agreed to plead guilty to one count of mail fraud in violation of 18
U.S.C. §§ 1341 and 1342. Consistent with the cooperation agreement, Robert
resigned from all positions with RHM effective June 30, 2012, and subsequently
transferred his ownership interest in the company to Heidi, making her the sole
owner.
Robert notified DOBI of Heidi's 100% ownership in RHM through
licensing and regulatory filings, although he did not disclose the circumstances
underlying that transfer, including his involvement in the MOBOE scheme, the
pending federal charges, or the existence of the plea and cooperation agreement.
A-3346-23 4 The plea agreement provided, in pertinent part:
[The U.S. Attorney for the District of New Jersey] will accept a guilty plea from [Robert] to a one-count information . . . which charges [Robert] with, from in or about 2007 to in or about 2009, participating in a scheme to defraud the Mount Olive Township School District . . . in violation of 18 U.S.C. § 1341 and § 2 [sic]. ....
However, in the event that a guilty plea in this matter is not entered for any reason or the judgment of conviction entered as a result of this guilty plea does not remain in full force and effect, [Robert] agrees that any dismissed charges and any other charges that are not time-barred . . . may be commenced against him.
....
This agreement is limited to [the U.S. Attorney's Office] and cannot bind other federal, state, or local authorities. However, this [o]ffice will bring this agreement to the attention of other prosecuting offices, if requested to do so. . . .
Despite Robert's agreement with the U.S. Attorney's Office, both Robert
and Heidi completed various renewal applications for RHM between 2012 and
2016.2 In 2012, Robert applied for renewal of his license and that of RHM and
2 The parties completed forms entitled License Background Question History, which listed as its first question: "Has the business entity or any owner, partner, officer or director of the business entity, or member or manager of a limited liability company, been convicted of, or is currently charged with, committing
A-3346-23 5 in each instance, he responded "No" to questions concerning whether he or any
of RHM's officers had been charged with a crime. Similarly, between 2012 and
2017, defendants denied that RHM or any of its officers was charged with a
crime. In each instance, DOBI renewed RHM's application for licensure.
Criminal Proceedings and Related State Action
On April 21, 2016, Robert pleaded guilty to mail fraud in violation of 18
U.S.C. §§ 1341 and 1342 related to the MOBOE scheme. A week later, Robert
formally notified DOBI of the criminal charges and his guilty plea pursuant to
N.J.S.A. 17:22A-40(a)(18) and N.J.S.A. 17:22A-47(b).3 Approximately one
year later, on April 25, 2017, Robert was federally sentenced to three months'
incarceration, three years' supervised release, and ordered to pay a $3,000 fine,
a crime, had a judgment withheld or deferred, which has not been previously reported to this state?" 3 Under N.J.S.A. 17:22A-40(a)(18), "[t]he commissioner may place on probation, suspend, revoke or refuse to issue or renew an insurance producer 's license or may levy a civil penalty . . . for . . . [f]ailing to notify the commissioner within 30 days of his conviction of any crime, indictment or the filing of any formal criminal charges, or the suspension or revocation of any insurance license or authority by a state." Additionally, N.J.S.A. 17:22A-47(b) requires that "[w]ithin 30 days of the initial pretrial hearing date, an insurance producer shall report to the commissioner any criminal prosecution of the producer taken in any jurisdiction." A-3346-23 6 a $100 special assessment, and $403,912 in restitution to the MOBOE and the
Office of Morris County Counsel.
On May 10, 2017, the New Jersey Office of the Attorney General,
Division of Criminal Justice, filed an OTSC and complaint in the trial court,
seeking forfeiture of Robert's public office, permanent disqualification from
future public employment, and forfeiture of his pension and retirement benefits
on the ground that his mail fraud conviction related to his position on the
MOBOE.
During the pendency of the OTSC, Robert again sought to renew his
insurance producer license. DOBI denied the application on October 18, 2017,
citing his conviction and the need for a federal waiver under 18 U.S.C. § 1033,
and notified Robert of his right to request a hearing to contest its decision. No
hearing was ever requested.
Administrative Enforcement and Agency Adjudication
On April 7, 2022, DOBI filed an OTSC against Robert, Heidi, and RHM,
seeking to revoke Robert's insurance producer license, impose civil penalties,
and recover investigative and prosecution costs related to his alleged violations
of IPLA arising from his criminal conduct as noted in the federal conviction.
The OTSC included the following claims:
A-3346-23 7 Count One: [Robert] failed to notify the Commissioner of the criminal prosecutions against him within thirty (30) days, in violation of N.J.S.A. 17:22A-40(a)(18) and N.J.S.A. 17:22A-47; Count Two: [Robert] pleaded guilty to and was convicted of Mail Fraud, 1:1 felony, and failed to notify the Commissioner within thirty (30) days of the conviction of Mail Fraud, in violation of N.J.S.A. 17:22A-40(a)(2), (6), (7), (8), and (16), and further, following his conviction of a felony in the fourth degree or higher, failed to obtain a waiver from the Commissioner to be employed in the business of insurance in this State as required by N.J.A.C. 11:17E- 1.3 and 18 U.S.C. § 1033(e)(2);
Count Three: By engaging in and admitting to the scheme to defraud the Mount Olive Township School District, for which [Robert pleaded] guilty and was convicted of Mail Fraud, a class 3 felony, and which scheme was conducted through RHM, [Robert] and RHM violated N.J.S.A. 17:22A- 40(a)(2), (4), (6), (7), (8), and (16); and during the timeframe [Robert] and RHM engaged in the aforementioned scheme, Heidi was an active officer and a [DRLP] of RHM, and therefore individually responsible for the insurance- related conduct of RHM, pursuant to N.J.A.C. 11: 1- 12.2, and therefore additionally liable for the violations of N.J.S.A. 17:22A-40(a)(2), (4), (6), (7), (8), and (16); and
Count Four: By failing to report [Robert]'s criminal prosecution on RHM's April 25, 2016 application to renew its producer license, [defendants] violated N.J.S.A. 17:22A-40(a)(l), (2), (4), (8), and (16) and N.J.S.A. 17:22A-47(b).
A-3346-23 8 Following defendants' denial of all the allegations and request for a
hearing, the matter was transmitted to the Office of Administrative Law
("OAL") as a contested case, pursuant to N.J.S.A. 52:14B-1 to -15 and N.J.S.A.
52:14F-1 to -13.
On May 10, 2023, DOBI moved for summary decision in the OAL,
arguing no genuine issues of material fact existed as to Robert's federal
conviction, the underlying scheme, and the licensing violations. Defendants
opposed DOBI's motion and crossed-moved for summary decision in their favor,
which DOBI opposed. Neither party requested an evidentiary hearing.
Accordingly, no live testimony was presented.
The ALJ's Decision
On January 8, 2024, following oral argument, an administrative law judge
("ALJ") issued an initial decision granting summary decision in DOBI's favor
on all four counts of the OTSC. The ALJ first concluded that Robert's reporting
obligation was triggered upon his awareness of the impending charges, requiring
notice within thirty days of executing the plea agreement, not the filing of formal
charges, and determined that DOBI proved the violation by a preponderance of
the credible evidence.
A-3346-23 9 The ALJ next found that Robert's undisputed mail fraud conviction
established a crime involving dishonesty, supporting discipline under N.J.S.A.
17:22A-40(a)(2), (6), and (7), and determined that his failure to obtain a waiver
and continued licensure warranted a finding that DOBI proved the violation by
a preponderance of the credible evidence.
As to count three, the ALJ determined that the undisputed evidence
established Robert's participation in a commission-inflation and concealment
scheme and rejected defendants' characterization of his role as minimal,
concluding that DOBI proved violations of N.J.S.A. 17:22A-40(a)(2), (4), (6),
(7), (8), and (16), and that Heidi was individually liable for RHM's conduct
based on her ownership interest and role under the applicable regulations.
As to count four, the ALJ determined that defendants' repeated denials on
renewal applications constituted a violation of N.J.S.A. 17:22A-40(a)(1) with
respect to the April 25, 2016 application submitted after Robert was formally
charged.
After addressing liability under each count, the ALJ rejected defendants'
affirmative defenses and denied their cross-motion for summary decision. The
ALJ next evaluated the appropriate penalty under the factors set forth in
A-3346-23 10 Kimmelman.4 Applying those factors, the ALJ recommended revocation of the
insurance producer licenses of Robert, Heidi, and RHM. In particular, the ALJ
held:
[DOBI] has shown by a preponderance of credible evidence the failure of respondents to comply with the laws established to protect the public. [Robert] participated in a scheme to overcharge commissions and prevent disclosure of such commissions to his client, and all three respondents benefited from that scheme. [DOBI] is well within his statutory authority to demand the revocation of respondents' licenses.
The Commissioner may levy penalties against any person violating any provision of [IPLA] not exceeding $5,000 for the first offense and not exceeding $10,000 for each subsequent offense and may order reimbursement of the costs of investigation and prosecution. N.J.S.A. 17:22A-45(c).
The ALJ recommended a total civil penalty of $20,000, assessed jointly
and severally, pursuant to N.J.S.A. 17:22A-45(c). Finally, the ALJ
recommended defendants reimburse DOBI's investigative costs in the amount of
$1,612.50. Defendants appealed and both parties filed timely exceptions to the
ALJ's initial decision.
4 The specific factors outlined in Kimmelman will be discussed in greater detail in this opinion, infra. A-3346-23 11 Following a review of the ALJ's initial decision, and after considering the
parties' exceptions and replies, the DOBI Commissioner issued a thorough and
well-reasoned sixty-page final agency decision and order, adopting most of the
findings and determinations set forth in the ALJ's initial decision, except as
noted. More particularly, the Commissioner rejected the liability under count
one (failure to notify), expanded liability under count two (mail fraud conviction
and failure to timely report that conviction) to include subsections (8) and (16)
of N.J.S.A. 17:22A-40(a) (engaging in dishonest practices and committing
fraudulent acts), and rejected the ALJ's determination that DOBI proved Robert
also violated N.J.A.C. 11:17E-1.3 and 18 U.S.C. § 1033(e)(2) (failure to obtain
a waiver to engage in the business of insurance following a criminal conviction).
The Commissioner substantially adopted the ALJ's findings as to count
three (engaging in fraud and misrepresentation, sharing commissions with an
unlicensed person, conviction of a crime involving dishonesty, dishonest
practices, and committing fraudulent acts in connection with the insurance
commission scheme). The Commissioner, however, rejected the ALJ's findings
of liability as to count four (making materially false or misleading statements in
a license application), concluding no disclosure obligation or statutory violation
A-3346-23 12 had been established as to Heidi and RHM, pursuant to N.J.S.A. 17:22A-
40(a)(2), (4), (8), and (16), or N.J.S.A. 17:22A-47(b).
The Commissioner revoked Robert's insurance producer license after
considering the factors outlined in N.J.S.A. 45:1-21.5,5 including "the nature
and seriousness of the crime," "the relationship of the crime or offense to the
purposes of regulating the profession," evidence of rehabilitation, and the
relationship of the offense to Robert's fitness "required to perform the duties and
discharge the responsibilities of the profession or occupation regulated by the
entity." Although the Commissioner acknowledged some evidence of
rehabilitation, he concluded that Robert's participation in the commission-
inflation scheme "casts doubt upon his ability to meet the high standards that
insurance producers are expected to meet," thus warranting revocation.
5 N.J.S.A. 45:1-21.5 provides in pertinent part:
[A]n entity shall not disqualify a person from obtaining or holding any certificate, registration or license issued by an entity solely because the person has been convicted of or engaged in acts constituting any crime or offense, unless the crime or offense has a direct or substantial relationship to the activity regulated by the entity or is of a nature such that . . . licensure of the person would be inconsistent with the public's health, safety, or welfare. A-3346-23 13 As for Heidi and RHM, rather than revocation, the Commissioner imposed
a six-month license suspension based on his determination that Heidi "was a
passive actor, and played no part in Robert's fraud." Additional penalties
included a $10,000 civil penalty jointly and severally against Robert, Heidi, and
RHM. The Commissioner explained that these penalties were appropriate
because the respondents "benefited financially from the scheme" and the
sanctions "demonstrate the appropriate level of opprobrium for such
misconduct, and will serve to deter future misconduct by [defendants] and the
industry as a whole." The Commissioner also ordered defendants to be jointly
and severally liable for $1,612.50 in investigative costs.
Defendants appealed, challenging the licensing revocation and penalties
imposed under counts two and three of the OTSC, raising the following points
for our consideration:
POINT I
THE STATUTE OF LIMITATIONS BARS COUNT III OF THE [ORDER TO SHOW CAUSE].
POINT II
LACHES SHOULD BAR BOTH COUNTS II AND III.
A-3346-23 14 POINT III
THE ENTIRE CONTROVERSY DOCTRINE SHOULD BAR COUNTS II AND III Of THE [ORDER TO SHOW CAUSE].
POINT IV
THE [KIMMELMAN] DOCTRINE WARRANTS [JUDGMENT] FOR [MANIA] AND A REVERSAL OF THE REVOCATION ORDER.
POINT V
THE [RCOA] WARRANTS AT LEAST A REMAND FOR TRIAL IF NOT SUMMARY JUDGMENT FOR [MANIA] BECAUSE THE DIVISION PROVIDED NO EVIDENCE TO REBUT THE EVIDENCE OF MANIA'S REHABILITATION.
POINT VI
SUMMARY [JUDGMENT] ON THE MERITS AS TO COUNTS II AND III OF THE [ORDER TO SHOW CAUSE] AS TO MR. MANIA IS APPROPRIATE ON ALL AFFIRMATIVE DEFENSES.
POINT VII
ISSUES ON APPEAL.
II.
We generally review final agency decisions, not administrative law
judges' initial decisions, on a limited basis. See DiBlasi v. Bd. of Trs., 315 N.J.
Super. 298, 301 (App. Div. 1998); In re Dennis, 385 N.J. Super. 369, 375 (App.
A-3346-23 15 Div. 2006). When an agency's final determination is based on the ALJ's findings
of fact and credibility, we customarily defer to those determinations. See
Burlington Bd. of Soc. v. G.W., 425 N.J. Super. 42, 47 (App. Div. 2012).
We generally "recognize that agencies have 'expertise and superior
knowledge . . . in their specialized fields.'" Hemsey v. Bd. of Trs., Police &
Firemen's Ret. Sys., 198 N.J. 215, 223 (2009) (quoting In re License Issued to
Zahl, 186 N.J. 341, 353 (2006)). We will sustain a board's decision "unless there
is a clear showing that it is arbitrary, capricious, or unreasonable, or that it lacks
fair support in the record." McKnight, 476 N.J. Super. at 162 (quoting In re
Herrmann, 192 N.J. 19, 27-28 (2007)). An agency decision is arbitrary and
capricious if it is unconstitutional, violates legislative policies, is unsupported
by substantial evidence in the record, or could not reasonably have been made
on a showing of the relevant factors. A.B. v. Div. of Med. Assistance & Health
Servs., 407 N.J. Super. 330, 339 (App. Div. 2009).
A reviewing "court ordinarily should not disturb an administrative
agency's determinations or findings unless there is a clear showing that (1) the
agency did not follow the law; (2) the decision was arbitrary, capricious, or
unreasonable; or (3) the decision was not supported by substantial evidence." In
re Virtua-West Jersey Hosp. Voorhees for a Certificate of Need, 194 N.J. 413,
A-3346-23 16 422 (2008). "Substantial credible evidence" is "such evidence as a reasonable
mind might accept as adequate to support a conclusion." In re Application of
Howard Sav. Inst., 32 N.J. 29, 52 (1960). On matters of fact, the court gives
"due regard to the opportunity of the one who heard the witnesses to judge of
their credibility." Close v. Kordulak Bros., 44 N.J. 589, 599 (1965).
"[A]ppellate review of an agency's choice of sanction is limited." Zahl,
186 N.J. at 353. Although appellate courts must give "substantial deference" to
an agency's fact-finding and expert judgment, Russo v. Bd. of Trs., Police and
Firemen's Ret. Sys., 206 N.J. 14, 27 (2011), they are not bound by an agency's
interpretation of law, including its interpretation of statutes or prior judicial
decisions. Hemsey, 198 N.J. at 223; see also Mayflower Sec. Co. v. Bureau of
Sec., 64 N.J. 85, 93 (1973). Moreover, as our Supreme Court stated in a recent
opinion, although we have "not always been consistent about what standard of
review applies to an agency's interpretation of a statute it is charged with
enforcing," we "do not attempt to reconcile our conflicting case law, . . . [when]
our decision . . . would be the same regardless of whether we deferred to [an
agency's] interpretation of [a statute] or reviewed the statute de novo." In re
P.T. Jibsail Fam. L.P. Tidelands License No. 1515-06-0012.1 Tdi 190001, ___
N.J. ___, ___ (2026).
A-3346-23 17 Accordingly, "[a] reviewing court should alter a sanction imposed by an
administrative agency 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.'" Herrmann, 192 N.J. at 28 (quoting In re Polk, 90 N.J. 550, 578
(1982)). Because appellate courts defer to the agency's decisions, reviewing
courts should consider "whether such punishment is 'so disproportionate to the
offense, in light of all the circumstances, as to be shocking to one 's sense of
fairness.'" Polk, 90 N.J. at 578 (quoting Pell v. Bd. of Educ., Etc., 34 N.Y.2d
222, 233 (1974)).
III.
Applying that standard, we conclude the Commissioner's decision to
revoke Robert's license and impose penalties and sanctions is supported by
substantial credible evidence in the record. We thus affirm the Commissioner's
decision, which appropriately modified certain portions of the ALJ's initial
decision, substantially for the reasons expressed in the Commissioner's
comprehensive and well-reasoned written opinion. We amplify our opinion to
address the key issues raised by defendants and to further explain the basis for
our decision.
A-3346-23 18 Defendants primarily challenge the grant of summary decision on counts
two and three of the OTSC, which concerned Robert's failure to comply with
statutory reporting deadlines and licensing requirements following his federal
mail fraud conviction. They argue that summary decision was improper because
count three is barred by the statute of limitations as DOBI did not initiate
enforcement until April 2022, even though it became aware of Robert's criminal
conduct years earlier. Further, they maintain the discovery rule did not toll the
limitations period because DOBI "sat on [its] rights" before issuing the OTSC,
and therefore contend the action is barred by laches and the entire controversy
doctrine.
Defendants further contend that summary decision on count two was
improper because Robert notified DOBI of his federal conviction and complied
with the law by refraining from engaging in the insurance industry following his
conviction and sentence.
In addressing these arguments, the Commissioner correctly noted that
"[f]ormal charges were not filed against Robert until April 21, 2016 when the
U.S. [A]ttorney filed the Criminal information." The Commissioner thus
rejected the ALJ's determination that Robert violated N.J.S.A. 17:22A-40(a)(18)
(failing to notify of conviction, indictment, filing of formal charges, suspension
A-3346-23 19 or revocation of license in another state), and N.J.S.A. 17:22A-47(b), which
obligates licensed producers to report any criminal prosecution of the producer
to the Commissioner within thirty days on the initial hearing date.
Here, there is no dispute as to when the formal charges against Robert
were filed and that Robert made his report regarding those charges within the
thirty-day timeframe. We therefore have no quarrel with the Commissioner's
proper exercise of his authority to reject the ALJ's determination and his ultimate
conclusion based on the plain language of N.J.S.A. 17:22A-40(a)(18) and
N.J.S.A. 17:22A-47(b). This statute permits the Commissioner to "place on
probation, suspend, revoke or refuse to issue or renew an insurance producer’s
license" for "[f]ailing to notify the [C]ommissioner within 30 days of his
conviction of any crime . . . ." N.J.S.A. 17:22A-40(a)(18).
Similarly, we defer to the Commissioner's modification of the ALJ's
determination as to count two (mail fraud conviction). Relying on Robert's
allocution, the Commissioner found that Robert participated in the insurance
commission inflation scheme and used his position on the MOBOE to conceal
disclosures that would have revealed the inflated five-percent commissions. On
this basis, the Commissioner upheld violations of N.J.S.A. 17:22A-40(a)(2)
(violating any insurance law or regulation), (6) (convicted of a felony or crime
A-3346-23 20 of the fourth degree or higher), and (7) (committing any insurance unfair trade
practice or fraud). However, the Commissioner further modified the ALJ's
decision to conclude that Robert also violated subsection (8) (using fraudulent,
coercive, or dishonest practices, or demonstrating incompetence,
untrustworthiness, or financial irresponsibility) and (16) (any fraudulent act)
because his concealment of the annual disclosures through his office at the
MOBOE "demonstrates unworthiness and was a dishonest practice." As to
subsections (8) and (16), we are persuaded the Commissioner's modifications
and additional findings are wholly supported by the record and the applicable
law.
Additionally, we have no quarrel with the Commissioner's unapplied
findings that Robert did not violate N.J.A.C. 11:17E-1.1 to -1.7 ("waiver rule") 6,
because there was no evidence that he engaged in the business of insurance after
his conviction and therefore no need for him to obtain the Commissioner's
written consent before resuming such activity. The Commissioner found
persuasive that the waiver rule did not require Robert to relinquish his license
6 "No person having been convicted of a felony involving breach of trust or dishonesty or having been convicted under 18 U.S.C. § 1033 shall be employed in the business of insurance in this State in any capacity without having first obtained a waiver from the Commissioner or his or her designee" N.J.A.C. 11:17E-1.4(a). A-3346-23 21 following his conviction, but only to obtain a waiver before engaging in the
business of insurance. We also note that the record shows that Robert was not
engaged in the business of insurance following his April 2017 sentence and
resulting three-month term of incarceration. Accordingly, we are satisfied that
the Commissioner's rejection of the ALJ's determination that Robert violated the
waiver rule was neither arbitrary, capricious, nor unreasonable.
A.
The Commissioner found count three timely because, under the discovery
rule, the cause of action did not accrue until 2016. See N.J.S.A. 2A:14-1.2(a)
("any civil action commenced by the State shall be commenced within ten years
next after the cause of action shall have accrued"). The statute measures the
limitations period from the accrual of the cause of action rather than from the
date of the underlying misconduct. Ibid. Under the appropriate circumstances,
the discovery rule may delay accrual until the injured party discovers, or
reasonably should have discovered, the facts giving rise to the claim. Lopez v.
Swyer, 62 N.J. 267, 272 (1973).
The discovery rule provides that a cause of action does not accrue "until
the injured party discovers, or by an exercise of reasonable diligence and
intelligence should have discovered that he may have a basis for an actionable
A-3346-23 22 claim." Id. at 272. In applying the rule, the relevant inquiry is whether a party
learns or reasonably should learn "the existence of that state of facts which may
equate in law with a cause of action." Burd v. N.J. Tel. Co., 76 N.J. 284, 291
(1978). The doctrine is rooted in equity and is designed "to avoid harsh results
that otherwise would flow from mechanical application of a statute of
limitations." Catena v. Raytheon Co., 447 N.J. Super. 43, 53 (App. Div. 2016)
(quoting Vispisiano v. Ashland Chem. Co., 107 N.J. 416, 426 (1987)). The party
invoking the discovery rule bears the burden of establishing the equitable basis
for its application. Vispisiano, 107 N.J. at 426.
Defendants argue the claims are time-barred because the conduct occurred
between 2007 and 2009 and DOBI knew of it by 2016, making the 2022 action
untimely. That argument misapprehends the discovery rule, which concerns
when the cause of action accrued under N.J.S.A. 2A:14-1.2(a), not whether
DOBI later had sufficient time to sue after learning of the underlying facts.
The Commissioner found that DOBI first became aware of Robert's
conduct in April 2016, when an investigator first learned of the federal criminal
proceedings from reading news articles, which the Commissioner determined
caused the claim to accrue at that time. DOBI issued the OTSC in April 2022,
which the Commissioner correctly determined fell within the ten-year
A-3346-23 23 limitations period. Under these circumstances, applying the discovery rule was
consistent with its equitable purpose of preventing a wrongdoer from benefitting
from concealed misconduct. See Lopez, 62 N.J. at 273-74.
The Commissioner rejected defendants' argument that DOBI forfeited its
claim by waiting until 2022 to file the enforcement action after learning of the
conduct in 2016, explaining we have not extended the "reasonable time"
limitation from Burd to regulatory enforcement proceedings of this type,
particularly where the delay caused no prejudice or evidentiary disadvantage.
Moreover, the party asserting a statute of limitations defense bears the burden
of showing the limitations period has expired, which defendants failed to
establish here given the undisputed discovery and filing dates. See Presslaff v.
Robins, 168 N.J. Super. 543, 546 (App. Div. 1979).
Accordingly, the Commissioner's finding that DOBI timely commenced
the enforcement action within the ten-year limitations period, N.J.S.A. 2A:14-
1.2(a), is supported by sufficient credible evidence and consistent with the law.
B.
The Commissioner further concluded that laches did not bar counts two
and three because the enforcement action was filed within the applicable ten-
A-3346-23 24 year statute of limitations and defendants failed to demonstrate actual prejudice
resulting from any delay.
Laches arises from "the neglect, for an unreasonable and unexplained
length of time . . . to do what in law should have been done." Lavin v.
Hackensack Bd. of Educ., 90 N.J. 145, 151 (1982) (quoting Atl. City v. Civil
Serv. Comm'n, 3 N.J. Super. 57, 60 (App. Div. 1949)). The doctrine bars relief
when the delaying party had ample opportunity to bring a claim, and the party
invoking the doctrine was acting in good faith in believing that the delaying
party had given up on its claim. Knorr v. Smeal, 178 N.J. 169, 181 (2003);
Lavin, 90 N.J. at 152. Laches therefore applies when a party unreasonably
delays in asserting its rights, and the opposing party relies in good faith in
believing that the right has been abandoned. See Dorchester Manor v. Borough
of New Milford, 287 N.J. Super. 163, 171-72 (Law Div. 1994), aff'd, 287 N.J.
Super. 114 (App. Div. 1996). "The core equitable concern in applying laches is
whether [the opposing] party has been [unfairly] harmed by the delay. " Knorr,
178 N.J. at 181 (citing Lavin, 90 N.J. at 152-53).
Robert argued that the matter should be dismissed on the basis of laches
because of loss of income and the prejudice he suffered due to DOBI's "long
inexplicable delay." However, the Commissioner determined that the alleged
A-3346-23 25 delay did not hinder the availability of evidence and witnesses and therefore did
not establish the type of prejudicial delay required to invoke laches, particularly
where both parties sought summary decision based on an undisputed factual
record. We agree with the Commissioner that the doctrine did not warrant
dismissal of counts two and three.
C.
Similarly, the Commissioner found that the entire controversy doctrine,
R. 4:30A, did not bar DOBI's enforcement action because the administrative
proceeding was distinct from the prior Law Division matter arising from
Robert's criminal conviction. The Commissioner reiterated the point made by
the ALJ, namely that "the adjudication of a legal controversy should occur in
one litigation in only one court."
The entire controversy doctrine generally requires the parties to an action
to raise all transactionally related claims in that action. It is an equitable
preclusion doctrine that "seeks to assure that all aspects of a legal dispute occur
in a single lawsuit." Olds v. Donnelly, 150 N.J. 424, 431 (1997). As our
Supreme Court explained, "[t]he entire controversy doctrine 'seeks to impel
litigants to consolidate their claims arising from a single controversy whenever
possible.'" Dimitrakopoulos v. Borrus, Goldin, Foley, Vignuolo, Hyman &
A-3346-23 26 Stahl, P.C., 237 N.J. 91, 98 (2019) (quoting Thornton v. Potamkin Chevrolet, 94
N.J. 1, 5 (1983)). The doctrine generally disfavors successive suits regarding
the same controversy. See DiTrolio v. Antiles, 142 N.J. 253, 267 (1995).
Application of the entire controversy doctrine "is left to judicial discretion
based on the factual circumstances of individual cases." Highland Lakes
Country Club & Cmty. Ass'n v. Nicastro, 201 N.J. 123, 125 (2009) (quoting
Oliver v. Ambrose, 152 N.J. 383, 395 (1998)). As such, "the polestar for the
application" of the doctrine is "judicial fairness," Dimitrakopoulos, 237 N.J. at
114 (quoting K-Land Corp. No. 28 v. Landis Sewerage Auth., 173 N.J. 59, 74
(2002)), and "a court must apply the doctrine in accordance with equitable
principles, with careful attention to the facts of a given case." Ibid.
The doctrine should not be applied "where to do so would be unfair in the
totality of the circumstances and would not promote any of its objectives,
namely, the promotion of conclusive determinations, party fairness, and judicial
economy and efficiency." Ibid. (quoting K-Land, 173 N.J. at 70). When
analyzing fairness, "courts should consider fairness to the court system as a
whole, as well as to all parties." Id. at 115 (quoting Wadeer v. N.J. Mfrs. Ins.
Co., 220 N.J. 591, 605 (2015)).
A-3346-23 27 Defendants argue that both the administrative and Law Division
proceedings arose from the same transaction surrounding Robert's federal
conviction, and that DOBI should have pursued relief in a single action. They
further assert the ALJ failed to adequately distinguish the circumstances of this
matter from the facts presented in other cases, such as Hackensack v. Winner,
82 N.J. 1 (1980), which recognized the doctrine's application in administrative
proceedings.
The Commissioner justifiably declined to apply the entire controversy
doctrine because the prior Law Division action and this administrative
proceeding involved different statutory schemes and distinct authority. The Law
Division action sought forfeiture of Robert's public office and related penalties
under N.J.S.A. 2C:51-2, whereas this matter concerns DOBI's exclusive
authority to regulate and discipline insurance producers. As the Commissioner
noted, DOBI "has the power to suspend or revoke insurance producer licenses,
not the Superior Court." N.J.A.C. 17:22A-40(a).
He also rejected reliance on Winner, which involved overlapping
administrative jurisdiction, emphasizing that no such overlap exists here and
that the doctrine must be applied cautiously in administrative settings. Because
the proceedings arise from distinct statutory frameworks and fairness did not
A-3346-23 28 require joinder, the doctrine does not bar DOBI's action. We decline to disturb
these findings and affirm for the reasons expressed in the Commissioner 's
opinion. R. 2:11-3(e)(1)(D).
IV.
Defendants argue the penalties imposed on them were excessive and the
license revocation was unwarranted. They assert the Commissioner misapplied
the Kimmelman7 factors because Robert "was prosecuted, convicted, and
sentenced based on the same facts set forth by the Division," paid "$403,000 in
forfeitures and restitution and $3,000 more in fines," and "was imprisoned for
three months," which they contend already prevented him from "practic[ing] his
profession and earn[ing] a living with his insurance license from April 2016
forward." They further argue that DOBI effectively imposed an additional
punishment when it "made the practical suspension more permanent by denying
him the right to even apply for a renewal of his license."
The Commissioner assessed each Kimmelman factor. Pursuant to his
finding that DOBI proved counts two and three, he concluded that Robert acted
7 Kimmelman established that an agency assessing civil penalties should consider the following seven factors: good faith or bad faith; the ability to pay; the amount of profits obtained from the illegal activity; injury to the public; duration of the illegal activity or conspiracy; existence of criminal actions; and past violations. 108 N.J. at 137-39. A-3346-23 29 in bad faith by increasing commissions and using his official position with the
MOBOE "to intercept and conceal disclosures which would have alerted the
[Mount Olive Township School District] that it was paying a higher commission
rate." The Commissioner did not overlook Robert's ability to pay, but assigned
neutral weight to that factor given the lack of affirmative evidence
demonstrating the inability to satisfy the outstanding penalties.
The Commissioner further found that Robert benefitted financially from
the scheme because RHM received twenty-one commission checks totaling
$141,527, even though the precise amount retained by Robert was unclear, and
thus the third factor supported a higher penalty. While the total commissions
received by RHM provided some indication of financial gain, the absence of
specific findings regarding how much of those funds Robert personally retained
limits the weight that the third factor originally possessed. Regardless, when
viewed in the context of all of the remaining factors, we are unconvinced that
the Commissioner's consideration of this factor produced a disproportionate or
unjust result warranting our intervention. R. 2:10-2.
In addition, the Commissioner reasonably agreed with the ALJ and
maintained that Robert "took advantage of his position to enrich himself and his
company," and that maintaining "public faith in insurance producers" required
A-3346-23 30 levying these sanctions. The Commissioner found DOBI proved the
approximately two-year scheme constituted an injury to the public and
warranted a higher penalty. A greater civil penalty was also warranted for
Robert and RHM because they were subject to a prior regulatory consent order,
but the factor did not apply to Heidi as she was not party to that order. In
mitigation, the Commissioner considered that Robert had already been
criminally prosecuted and punished. He concluded this favored a lesser penalty.
Although the sixth factor mitigated in Robert's favor, the Commissioner was not
required to treat the prior criminal sanctions as dispositive, but rather
permissibly weigh them against the remaining factors.
The Kimmelman factors supported the license revocation and fines
imposed here. The Commissioner aptly noted his decision was driven by the
"duty to protect the public welfare and to instill public confidence in both
insurance producers and the industry as a whole." Thus, we discern no error
warranting reversal.
Defendants next argue the RCOA should protect Robert from losing his
professional license following his criminal conviction because, as he puts it, his
"rehabilitation warrants summary judgment." However, the Commissioner
A-3346-23 31 correctly concluded that the RCOA is inapplicable here, stating that it "applies
to an application for a license, not the revocation of an existing license."
Under N.J.S.A. 45:1-21.5, a licensing authority may not deny an
application based solely on a criminal conviction unless the offense bears a
direct or substantial relationship to the regulated profession or licensure would
be inconsistent with the public health, safety, or welfare. In making that
determination, the licensing authority must consider: (1) "the nature and
seriousness of the crime" and the time elapsed since its commission; (2) "the
relationship of the crime . . . to the purposes of regulating the profession or
occupation regulated by the entity"; (3) "any evidence of rehabilitation of the
person" since the conviction; and (4) "the relationship of the crime . . . to the
ability, capacity, and fitness required to perform the duties and discharge the
responsibilities of the profession or occupation regulated by the entity. "
N.J.S.A. 45:1-21.5(a). The RCOA, which applies more generally to all "State,
county or municipal department[s], board[s], officer[s] or agenc[ies]," largely
tracks the requirements of this provision. N.J.S.A. 2A:168A-2.
Applying the above standards, we discern no basis to disturb the
Commissioner's conclusion that RCOA does not shield Robert from the
sanctions imposed against him. The administrative proceeding was not based
A-3346-23 32 on Robert's existing criminal conviction alone, but rather on the underlying
scheme and violations of IPLA, all of which demonstrated his unfitness to
continue practicing in the insurance industry. Even if rehabilitation evidence
were considered, the Commissioner still found that Robert's underlying conduct
bore a direct relationship to the honesty, trustworthiness, and fitness required of
an insurance producer. We therefore conclude that the RCOA did not preclude
revocation of Robert's insurance producer license.
In sum, we are satisfied that the Commissioner's final agency decision is
based on substantial credible evidence in the record, conforms with the
applicable law, and is thus not arbitrary, capricious, or unreasonable. R. 2:11-
3(e)(1)(D). To the extent we have not addressed an issue raised by defendant,
it is because it lacks sufficient merit to warrant discussion in a written opinion.
R. 2:11-3(e)(1)(E).
Affirmed.
A-3346-23 33