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Nostrame v. Department of Community Affairs

May 30, 2007


On appeal from the New Jersey Department of Community Affairs.

Per curiam.


Argued January 23, 2007

Before Judges Lisa, Holston, Jr. and Grall.

Petitioner Frank J. Nostrame appeals from a final decision of the Commissioner of the Department of Community Affairs (Department). The Commissioner determined that Nostrame "failed to abate various continuous violations" of the Hotel and Multiple Dwelling Law (the Act), N.J.S.A. 55:13A-1 to -28, and the regulations promulgated pursuant to that Act, N.J.A.C. 5:10-1.1 to -28.1. The Commissioner assessed penalties for these violations in the amount of $31,125 and inspection fees in the amount of $1196. Because the Commissioner erred in allocating the burden of proof, assessed penalties not authorized by law and failed to provide sufficiently specific factual findings to enable the court to determine if the evidence supports the order, we vacate the final order and remand.

Nostrame owns a nineteen-unit apartment building in Jersey City. On March 9, 2001, pursuant to N.J.S.A. 55:13A-13, an inspector employed by the Department inspected Nostrame's building. More than three months later, on June 28, 2001, the Commissioner issued a report citing 173 violations of the regulations and directing Nostrame to correct the deficiencies by August 27, 2001. The twelve-page inspection report and order identifies each of the 173 violations by location -- exterior areas, common areas (basement, vestibule, stairways) or individual apartment -- and citation to the regulation violated.

Nostrame requested additional time to comply with the order and was given an extension until November 9, 2001. The Commissioner's inspection report and order invites such requests for extensions and advises that an extension request is the equivalent of a concession of liability for the violations and a waiver of the right to a hearing.

The inspector returned to re-inspect Nostrame's property on January 2, 2002. According to the re-inspection report, fifty-nine of the violations had been abated and thirty-nine remained open. Because the inspector could not gain access to all areas of the building, he did not report on the status of the remaining seventy-five violations.

On April 3, 2002, the Commissioner issued a notice of violation and order to pay a penalty. The notice charged Nostrame with a violation of N.J.S.A. 55:13A-19(a)(4) "FOR [HIS] FAILURE TO COMPLY WITH PREVIOUS ORDER DATED 06/28/2001." The total penalty assessed was $2125. The notice explained that N.J.S.A. 55:13A-19(b) authorizes a penalty of "not less than $50.00 nor more than $500.00 [for each failure to comply], and a penalty of not less than $500.00 nor more than $5,000.00 for each continuing violation." N.J.S.A. 55:13A-19(b).

A penalty assessment form that provides additional but limited information about the violations upon which the penalty was based also was completed.*fn1 The penalty assessment form includes blank lines in which the number of violations and penalty amount can be handwritten. The form is divided into three sections based on the site of the violation -- "Exterior," "Common Areas" and "Units." Printed on the form are standard penalty amounts, per violation, in each of the three sites. The amount of the penalty varies depending on whether the violation implicates life or safety, "L/S," or does not, "N/L/S." The penalties for "L/S" violations are higher than those for "N/L/S" violations.*fn2

The penalty assessment form does not identify the specific violations listed in the June 28, 2001 "Inspection Report and Orders of the Commissioner" that led the Commissioner to assess penalties. Nostrame was assessed penalties as follows. One "N/L/S" penalty in the amount of $125 related to an unspecified violation in the "Exterior" area. (The inspection report for January 2002 on which the penalty is based reflects six open violations related to the exterior.) He was assessed one "L/S" penalty related to "Common Areas" in the amount of $500. (There were five open violations for "Common Areas" reflected on the January 2002 inspection report.) He was assessed eight penalties related to unidentified "Units," four of which were for "L/S" violations in the amount of $250 each and four of which were for "N/L/S" violations in the amount of $125 each. (The January 2002 inspection report reflects twenty-eight open violations in seven different "Units.")

Upon receipt of the order imposing penalty, Nostrame filed timely objections. On July 10, 2002, the Commissioner transferred the contested case to the Office of Administrative Law. See N.J.S.A. 52:14b-1 to -15.

On November 7, 2002, Nostrame's property was re-inspected. The inspector gained access to areas not available to him in January 2002. Of the initial 173 violations, this report indicated that forty-five remained open and ninety-two had been abated. Because the inspector was not given access to all apartments, the report reflected no change in the status of the remaining thirty-six violations.

Based on the November 2002 inspection, on January 2, 2003, the Commissioner issued a "notice of continuing unabated violations and orders to abate violations and to pay penalty." The Commissioner alleged a "continuing violation" by failure to abate. N.J.S.A. 55:13A-19(a)(4),(b). As recited in that notice and order, N.J.S.A. ...

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