January 12, 2011
ROBERT C. THOMPSON, PETITIONER-APPELLANT,
NEW JERSEY DEPARTMENT OF COMMUNITY AFFAIRS, BUREAU OF ROOMING AND BOARDING HOUSE STANDARDS, RESPONDENT-RESPONDENT.
On appeal from the New Jersey Department of Community Affairs, Bureau of Rooming and Boarding House Standards, Agency Docket No. RBHS-018-09/0601-0058.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted December 7, 2010
Before Judges Payne, Baxter & Koblitz.
Petitioner Robert C. Thompson appeals from a September 2, 2009 Final Agency Decision of the Department of Community
Affairs, Bureau of Rooming and Boarding House Standards (DCA), in which DCA adopted the decision of an administrative law judge (ALJ) that Thompson was operating an unlicensed rooming house. DCA adopted the ALJ's determination of five separate violations, all pertaining to the same property located at 231 Cohansey Street (the property) in the City of Bridgeton (City). The ALJ imposed a $5,000 penalty for each of the five violations; however, during the pendency of this appeal, DCA rescinded the four ancillary notices of violation and the four accompanying penalties, which resulted in a modified penalty of $5,000.
We reject Thompson's argument that the evidence presented by DCA was insufficient to support a finding that he operated an unlicensed rooming house, thereby violating the Rooming and Boarding House Act of 1979, N.J.S.A. 55:13B-1 to -21. We likewise reject his contention that because any conversion of the premises from a single-family home to a rooming house was done by the tenant, in violation of her lease, and without Thompson's knowledge, DCA lacked authority to sanction him for the violation. Last, we reject Thompson's claim that the search of the premises by DCA and by officials of the City was unlawful and the ALJ and DCA wrongly denied his motion to suppress the fruits of that search. We affirm.
On December 1, 2008, police officer Luis Santiago of the Bridgeton Police Department was on routine patrol when he observed handwritten signs, written in Spanish, posted in the windows of three stores. Each sign advertised rooms for rent at 231 Cohansey Street, Bridgeton: "For rent, two rooms on 231 Cohansey Street. Good conditions. For more information call (856) 392-2075." Believing that such rentals were likely in violation of the City's certificate of occupancy requirements, Santiago photographed the signs and forwarded them to Melanie A. Walters, the City's Code Enforcement Supervisor.
Walters, in turn, forwarded the photographs and accompanying police report to Michael Briant, Bureau Chief for the Bureau of Rooming and Boarding House Standards at DCA. Briant assigned Angelo Mureo, one of his employees, to review the materials submitted by Walters. On February 4, 2009, Mureo went to the property, accompanied by Walters and by Maria Lopez, a bilingual code enforcement officer employed by the City.
In response to Mureo's knock on the front door, Jeremias Osorio came to the door, at which time Mureo identified himself as a field enforcement supervisor from DCA. Mureo told Osorio that he, Walters and Lopez were there to conduct a site inspection as a result of a complaint that had been forwarded to Trenton. He assured Osorio that neither he, Walters or Lopez "was from Immigration." Mureo testified that "Osorio was very cooperative with the investigation. He let me in, no problem." Mureo had previously obtained a copy of the certificate of occupancy (CO) and believed that Osorio was listed as a tenant; however, to be certain, Mureo asked Osorio to produce a copy of his lease, which he did. Mureo added that Alida Velasco, another tenant, also came to the door, and also told the three they could enter.
As a result of his inspection, and from information elicited from Osorio and from the other residents who were present, Mureo determined that the property was an unlicensed rooming house consisting of six dwelling units and twelve occupants. He prepared a Jurisdictional Status Form (JSF) so indicating. The JSF was accompanied by a detailed floor plan that Mureo prepared showing a kitchen, dining room and living room on the first floor, which were used by the occupants of all six bedrooms. Mureo's interview of the residents who were home at the time revealed that the occupants of all six bedrooms also shared the same bathroom on the second floor.
Based on Mureo's findings, DCA charged Thompson with operating an unlicensed rooming house and with the four ancillary violations that DCA subsequently rescinded. Thompson requested a hearing before an ALJ. The hearing consumed two days in June 2009. According to both Mureo and Briant, shared access to a communal bathroom, kitchen, living room and dining room signifies that the property is a rooming house.
In addition to the shared sanitary facilities and kitchen, Mureo testified that several other factors provided proof that the property was being operated as a rooming house: the presence of padlocks or deadbolt locks on some of the bedrooms, different dates of original occupancy by several of the tenants, several occupants not being listed on the original lease signed by Osorio and Thompson Realty, and the fact that the tenants each paid Osorio their rent, and he, in turn, tendered a single check to Thompson. Walters and Lopez each provided testimony consistent with Mureo's.
Thompson testified, asserting that he owns more than 300 rental properties in the City and manages another seventy to eighty properties for family members. He estimated that a total of 2,400 people reside in the units he manages. In addition to five employees who work in the office of Thompson Realty, which Thompson owns, Thompson typically employs between twenty-eight and thirty-four employees who are responsible for repairing and renovating the rental properties. Those additional employees were electricians, carpenters, plumbers, roofers "and everything in between." Thompson explained that his workmen were "trained [and] instructed to look for signs" of illegal occupancy such as tenants living in the basement, padlocks attached to the bedroom doors, or bedding*fn1 in excess of the number of occupants permitted by the lease.
Thompson insisted that whenever any of his workmen advised him of a possible infraction, he immediately visited the premises to demand that the tenant cease the illegal subletting. He also explained that each lease contains a provision imposing a $500 fine if any tenant is found to be permitting others to live in the basement because basement occupancy "is illegal." Additionally, according to Thompson, each of his residential leases prohibits tenants from installing locks on bedroom doors. He maintained that if he catches a tenant reinstalling a bedroom lock after he has instructed the tenant to remove it, it is his practice to begin eviction proceedings.
Thompson maintained that on only one occasion had he operated a rooming house. The property was set up as a rooming house "when [he] bought it," but he found "the business of running a rooming house" to be "very distasteful" because the applicable rules and regulations were "overbearing [sic]."
Last, Thompson explained that when he rented 231 Cohansey Street to Osorio, he expected only Orsorio and his immediate family to be living there and "trusted them with [the] property" pursuant to the written lease, which prohibited them from "changing the occupancy" or "putting locks on the door." Thompson insisted he had no indication that the property was being operated in the fashion that DCA discovered during its February 4, 2009 inspection until he received the complaint from DCA charging him with operating an unlicensed rooming house. In particular, he asserted he had no reason to anticipate that the tenants would permit other tenants to move in, that any of them would install padlocks or deadbolts on their bedroom doors, or that they would put up advertisements in store windows seeking additional tenants.
After he received the complaint from DCA, Thompson went to the property and confronted one of the tenants about why she had installed a lock on her bedroom door. According to Thompson, "she told me that she did it for safety reasons [because] [s]he had a lot of legal papers and things and did it for the safety of not losing the papers, because there [were] young children living there and she didn't want them meddling into her paperwork."
Thompson also presented the testimony of Velasco. Thompson acknowledged having paid Velasco to compensate her for the wages she lost while testifying on his behalf before the ALJ. Velasco testified that the DCA inspectors were already in the house when her brother Daniel told her they were there, so she instructed Daniel "to show them around the house." When presented with a list of the twelve adults living at the property, Velasco asserted that each one was related either to her or to her husband.
Velasco insisted that it was she who had put the advertisements in the windows of various stores in town seeking additional tenants to help her pay the rent. She maintained that Thompson did not ask her to place the signs in the store windows and that he knew nothing about the signs.
At the conclusion of the testimony, Thompson moved for dismissal of all of the charges against him, asserting that Mureo, Walters and Lopez had entered the premises illegally and therefore all evidence discovered during the inspection should be suppressed. The ALJ denied Thompson's motion, reasoning that "there was sufficient evidence of voluntariness to overcome the motion." At the close of the testimony, the ALJ afforded each side the opportunity to submit written closing arguments. On August 3, 2009, the ALJ rendered a written decision in which she credited Mureo's testimony that the property contained six units of dwelling space that lacked the sanitary and kitchen facilities necessary for independent living. She therefore concluded that the property was being operated as an unlicensed rooming house.
In reaching that conclusion, the ALJ noted that Thompson had "essentially conceded" the existence of "the common kitchen and bathroom, and the varying dates of entry for the occupants." Consequently, according to the ALJ, the factual disputes were limited to "whether the various tenants . . . were related to each other, who put the various locks in and when, whether Thompson knew or should have known about the presence of more than nine people in the house, [and] the effect of the lease."
Ultimately, the ALJ resolved the inconsistencies in DCA's favor. She concluded that Velasco's testimony that everyone living at the property was related either to her or to her husband was not credible. The ALJ focused on Mureo's testimony, in which, based on Mureo's conversation with the residents, Mureo "stressed the point that [Rita] Osorio was not related to Jeremias Osorio, which would seem to indicate that the question was thoroughly explored" by Mureo. The ALJ also pointed to Velasco's testimony that Rita Osorio was Jeremias's cousin, but Velasco "wrote in February that [Rita] was an aunt." Consequently, the ALJ found as a fact that many of the nine adults occupying the property were unrelated to each other, which, when combined with the various move-in dates, led her to conclude that the property was being operated as a rooming house.
On the other hand, the ALJ found that Thompson "did not know about the additional tenants and had not granted permission." She likewise found that Velasco "was responsible" for posting the "for-rent" signs and had done so without Thompson's knowledge. The ALJ found Thompson had "no knowledge" that the occupancy exceeded the CO application for six adults and three children. She nonetheless found that although "it may not have been Thompson's intention" to operate the property as a rooming house, he "also took no active steps to ensure compliance with the certificate of occupancy and [the] lease," and was therefore liable for any violations occurring at the property.
Ultimately, the ALJ sustained five charges brought by DCA:
1) owning and operating an unlicensed rooming house; 2) operating a rooming house without a licensed operator being present on the premises; 3) failing to secure an appropriate group certificate of occupancy; 4) failing to provide proof of zoning approval; and 5) failing to secure a Uniform Fire Code Inspection Certificate.
On September 2, 2009, after having reviewed Thompson's written exceptions to the ALJ's decision, DCA adopted the ALJ's decision.
On appeal, Thompson maintains: 1) because the search of the premises was unconstitutional, all evidence flowing from the search should have been suppressed; 2) the ALJ's finding that Thompson took no active steps to ensure compliance with the CO and the lease is not supported by credible evidence in the record; 3) it is "totally unjust, unfair, inequitable" and a "violat[ion] of substantive due process" to hold a landlord responsible for "a tenant's conversion of a dwelling into a rooming house against the express terms of the lease" when the landlord is neither aware nor "conscious[ly] ignoran[t]" of the tenant's actions; 4) the fines imposed were excessive; 5) the statutory and regulatory violations found by the ALJ lack support in the record; and 6) "Thompson cannot be required to do that which cannot be done in law or fact."
The scope of our review of a final determination of an administrative agency is very limited. We will not interfere unless there is a clear showing that the decision is "arbitrary, capricious or unreasonable, or that it lacked fair support in the evidence." Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963). Our review is restricted to "'whether the findings made could reasonably have been reached on sufficient credible evidence present in the record,' considering 'the proofs as a whole,' with due regard . . . to the agency's expertise where such expertise is a pertinent factor." Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 92-93 (1973) (quoting Close v. Kordulak Bros., 44 N.J. 589, 599 (1965)). The burden of showing that an agency's decision was arbitrary, capricious, or unreasonable lies with the appellant. Barone v. Dep't of Human Servs., 210 N.J. Super. 276, 285 (App. Div. 1986), aff'd, 107 N.J. 355 (1987).
Moreover, the deference we owe to agency factfinding controls even if we would have decided the case differently. In re Taylor, 158 N.J. 644, 657 (1999). However, an appellate court is "in no way bound by the agency's interpretation of a statute or its determination of a strictly legal issue." Mayflower, supra, 64 N.J. at 93.
We turn to point one, in which Thompson maintains that the search of the property was illegal, and all evidence derived from that search should have been suppressed. "A warrantless search of a home is presumptively unreasonable and illegal, and will be justified only if it falls within one of the exceptions to the warrant requirement." State v. Farmer, 366 N.J. Super. 307, 312 (App. Div.), certif. denied, 180 N.J. 456 (2004). Consent of a resident to search the premises is a well-recognized exception to the warrant requirement. Id. at 313.
A consent to search is effective, however, only if such consent is voluntarily given. State v. Douglas, 204 N.J. Super. 265, 277 (App. Div.), certif. denied, 102 N.J. 378 (1985). Before the State or any of its agencies can rely on consent as an exception to the warrant requirement, the State must prove that the person giving consent knew that he or she "had a choice in the matter" and could withhold permission to enter the premises. State v. Koedatich, 112 N.J. 225, 262-64 (1988), cert. denied, 488 U.S. 1017, 109 S. Ct. 813, 102 L. Ed. 2d 803 (1989). The person being asked to consent to a search need not be specifically advised of his or her right to refuse so long as the surrounding circumstances establish that the person giving the consent was aware he was not obliged to do so. State v. Brown, 282 N.J. Super. 538, 548 (App. Div.), certif. denied, 143 N.J. 322 (1995).
As we have noted, Mureo testified that Jeremias Osorio "was very cooperative with the investigation. He let me in, no problem." Having carefully reviewed the record, we are satisfied the record amply supports DCA's conclusion that Osorio voluntarily consented to DCA's February 4, 2009 inspection. Not only did Osorio afford Mureo, Walters and Lopez access to the property, but Velasco did likewise when she told her brother Daniel to "show them around." Nothing in the record causes us to question the ALJ's conclusion that both Osorio and Velasco voluntarily gave their consent to a search of the premises.
Thompson also maintains that because there was a sign posted on the outside of the property stating that entry to the house without a search warrant was prohibited, Mureo, Walters and Lopez should have realized that Osorio was not authorized to invite them inside. The Notice read as follows:
Entry to this house without a search warrant by City or other Official [sic] for non-emergencies is Strictly Prohibited unless accompanied by the owner/manager, Robert C.
Thompson or his representative. Please call Thompson Realty 856-455-1211 for access. (Phones are answered 24 hrs. a day).
Thompson testified that he prepared the Notice in response to complaints from the tenants at a different property that they were being harassed by repeated and unnecessary inspections by the City and DCA. Thompson testified that copies of the Notice were available to tenants at his rental office and the tenants were free to post the Notice at the respective properties if they chose to do so. According to Thompson, Velasco voluntarily took one of the Notices and posted it at the property.
We reject Thompson's argument that the Notice should have been interpreted as a warning to Mureo, Walters and Lopez that entrance to the property was prohibited. First, as Thompson's own testimony demonstrates, placement of the sign on the property was entirely optional depending upon the whim of the tenants. That being so, the Notice loses any binding effect that it might otherwise have had. Second, Thompson has cited no authority to support his contention that he possesses the unbridled right to prevent his tenants from authorizing regulatory officials to enter and inspect the premises. For all of these reason, we reject the claim Thompson advances in point one.
In point two, Thompson maintains that the record is devoid of evidence to support the ALJ's determination that Thompson "took no active steps to ensure compliance with the certificate of occupancy and lease." He maintains that the uncontroverted testimony established that his twenty-eight person staff "is trained and instructed to look for signs of improper occupancy including indications of rooming houses, such as separately locked bedroom doors, or changes in occupancy." He maintains that "short of taking up residence inside the tenant's house there is nothing any landlord anywhere can do to prevent a tenant from breaching the lease in this manner."
In point three, Thompson maintains that his right to substantive due process was violated by the finding that he was liable for administrative and statutory violations even though he had no knowledge of any such violations, nor was there any proof he was deliberately indifferent to the existence of those violations. In support of his argument, Thompson points to the ALJ's finding that he did not know about the additional tenants and had not granted permission for them to live there. We consider points two and three jointly.
As DCA correctly argues, the Rooming and Board House Act of 1979 is remedial legislation designed to protect elderly, disabled, and low-income residents of rooming and boarding houses by establishing a comprehensive licensing scheme. N.J.S.A. 55:13B-2. The Act protects such persons from the hazards and dangers that unregulated, unlicensed rooming houses present. Ibid. In particular, the Legislature has declared that residents of such unlicensed facilities are particularly vulnerable and are unable to protect themselves against the danger of fatal fires in unregulated facilities. Market St. Mission v. Borough of Rooming and Board House Standards, 110 N.J. 335, 341 (observing that the primary impetus for the Act was a series of fatal fires occurring in previously unregulated facilities), appeal dismissed, 488 U.S. 882, 109 S. Ct. 209, 102 L. Ed. 2d 201 (1988). Notably, nothing in the Act requires DCA, which is the agency charged with enforcement, to demonstrate that a landlord or owner deliberately or knowingly violated the provisions of the Act.
The Act defines a rooming house, in pertinent part, as "any building . . . which contains two or more units of dwelling space arranged or intended for single room occupancy." N.J.S.A. 55:13B-3(a). Single room occupancy, in turn, is defined as "an arrangement of dwelling space which does not provide a private, secure dwelling space arranged for independent living." N.J.S.A. 55:13B-3(i).
Thompson does not dispute DCA's contention that the following factors are an indication that a property is being used as a rooming house: communal bathrooms and kitchens, security locks on dwelling unit entry doors, individual dwelling units being paid for separately rather than the property as a whole being leased or rented by the tenants jointly, and the residents having different occupancy dates. No person owning or operating a rooming or boarding house is permitted to lease rooms to tenants unless he has obtained a license from DCA to operate the premises as a rooming house. N.J.S.A. 55:13B-7(a)(1).
As is evident from the language of N.J.S.A. 55:13B-7(a), the Act does not require DCA to establish that the owner knew the property was being operated as a rooming house:
No person shall own or operate a rooming or boarding house, hold out a building as available for rooming or boarding house occupancy, or apply for any necessary construction or planning approvals related to the establishment of a rooming or boarding house without a valid license to own or operate such a facility, issued by the Commissioner [of DCA]. [N.J.S.A. 55:13B-7(a)(1).]
Thus, operating an unlicensed rooming house is a strict liability offense.
As we noted in State v. Kiejdan, 181 N.J. Super. 254, 258 (App. Div. 1981), strict liability is "an unexceptionable and appropriate legislative option where employed to implement a regulatory scheme designed to deal with a serious social problem." That requirement is satisfied here because the Legislature concluded, when it passed the Act, that unlicensed rooming houses present a serious social problem. N.J.S.A. 55:13B-2. Where a statute establishes strict liability for the commission of an offense, the regulatory agency need do no more than establish the "doing of the proscribed act." No further showing is necessary. Dep't of Health v. Concrete Specialties, Inc., 112 N.J. Super. 407, 411 (App. Div. 1970).
Therefore, DCA was required to establish only that the property had become a rooming house on February 4, 2009, that Thompson was the owner of the property at that time, and that he did not possess a license to operate the property as a rooming house. N.J.S.A. 55:13B-7(a)(1). DCA proved all of those elements. In light of the explicit wording of N.J.S.A. 55:13B-7(a)(1), we do not accept Thompson's argument that the regulatory violations must be set aside because DCA failed to prove he had knowledge that the property was being operated as a rooming house. We thus reject the claims Thompson advances in points two and three.
In point four, Thompson maintains that an aggregate penalty of $25,000 was excessive. As we have already noted, the fine was reduced by DCA to $5,000 after Thompson's brief was filed. Our review of an administrative agency's choice of sanction is limited. Zahl, supra, 186 N.J. at 353. An agency's choice of sanction is entitled to "substantial deference . . . especially where considerations of public policy are implicated," Div. of State Police v. Jiras, 305 N.J. Super. 476, 482 (App. Div. 1997), certif. denied, 153 N.J. 52 (1998), and will be disturbed only where the penalty imposed is "so disproportionate to the offense, in light of all the circumstances, as to be shocking to one's sense of fairness," In re Polk License Revocation, 90 N.J. 550, 578 (1982).
N.J.S.A. 55:13B-7(a)(3) authorizes DCA to impose a monetary sanction of up to $5,000 for each property found to be in violation of the Act. The $5,000 civil penalty DCA issued to Thompson for operating an unlicensed rooming house is at the top of that statutory range, but we agree with DCA's argument that operating an unlicensed rooming house is a serious substantive violation, one which offends the very purposes for which the Act was established. Consequently, we will not interfere with the agency's discretion in the choice of sanction. Ibid. We thus reject the claim Thompson advances in point four.
In point five, Thompson argues he is entitled to a reversal of the final agency action because DCA's findings are unsupported by the record. To the contrary, the record amply supports the decisions of the ALJ and DCA that the property was being operated as a rooming house. The undisputed evidence in the record establishes that: the property contained communal bathrooms and kitchens; one of the first-four dwelling units had a security lock on its entry door; several of the residents had different dates of original occupancy; the residents of each dwelling unit paid a separate portion of the rent; several residents named on the lease and on the City's rental registration statement no longer resided at the property; tenants not listed on the lease or on the rental registration statement were residing at, or had recently resided at, the property; and not all of the residents of the property were related to each other. That evidence was more than sufficient to demonstrate that the property was being operated as a rooming house.
DCA's findings are supported by substantial evidence in the record. Therefore, we will not disturb the agency's final determination, Close, supra, 44 N.J. at 599, and we affirm DCA's conclusion that Thompson was operating an unlicensed rooming house.
In the balance of point five, Thompson maintains that the four remaining regulatory violations are unsupported by the record. We need not consider this claim because, as we have already noted, DCA has chosen to rescind the notices of statutory violation and the accompanying monetary sanctions for the four remaining violations.
Last, we turn to point six, in which Thompson maintains that because the lease did not permit him to enter the premises without the consent of the tenant, in essence, nothing short of being able to peer through the walls of the property, or moving into the property, would have enabled him to know it was being operated as a rooming house. The argument Thompson advances in point six is virtually identical to the argument advanced in point three, which we have already considered and rejected. Thus, we need not discuss the argument presented in point six.