June 25, 2012
NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, COASTAL AND LAND USE COMPLIANCE AND ENFORCEMENT, PETITIONER-RESPONDENT,
ASDAL BUILDERS, LLC, AND WILLIAM C. ASDAL, INDIVIDUALLY, RESPONDENTS-APPELLANTS.
On appeal from the New Jersey Department of Environmental Protection, Agency Docket No. PEA070002-1427-02-0004.1.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued May 2, 2012
Before Judges Lihotz and Waugh.
Asdal Builders, LLC, and William C. Asdal (collectively Asdal) appeal from the final administrative decision of the New Jersey Department of Environmental Protection (DEP) imposing a $45,000 penalty for failing to satisfy a condition of the wetland area waiver (waiver) that DEP issued to Asdal with respect to a property located in Mount Olive Township. We affirm.
We discern the following facts and procedural history from the record on appeal.
In January 2002, Asdal entered into a contract to sell a sixteen-acre tract of land located in Mount Olive to John and Linda Walsh. Asdal was also to build the Walshes' new home. The parties subsequently amended the contract to require Asdal to obtain a waiver from DEP so that the Walshes' home could be built on a specific location on the property.
In March, Asdal applied to DEP's Division of Land Use Regulation for the waiver, a letter of interpretation (LOI), and a Freshwater Wetland Statewide General Permit Number 11 (permit). In the application, he designated David Kruger as his agent for the application. Asdal conveyed the property to the Walshes in May.
DEP issued the waiver, LOI, and permit in June 2003.*fn1
The LOI described the location and extent of the portions of
the property containing wetlands and transition areas, and concluded
that the wetlands had exceptional resource value. It called for a
"transition area or buffer required adjacent to the wetlands [of]
The waiver contained several conditions. Condition four provided:
The applicant shall sign a Department approved conservation restriction for the modified transition area on the subject parcel in accordance with N.J.A.C. 7:7A-6.1(h). The conservation restriction shall address the entire modified transition area, including both the remaining reduced area and the compensation area. The restriction shall be included on the deed, and recorded in the office of the County Clerk (the REGISTRAR OF DEEDS AND MORTGAGES), in the county wherein the lands included in the waiver are located. The restriction shall run with the land and be binding upon all successive owners. All individual lot surveys shall show the approved wetlands and transition area boundaries. Any regulated activities undertaken on the site before a copy of the recorded restriction is submitted to the Department will be considered in violation of the Freshwater Wetlands Protection Act. The conservation restriction should conform to the format and content of the attached model Declaration of Restriction for Modified Transition Area.
Please submit a copy of the draft restriction . . . for review prior to filing. Send a copy of the recorded conservation before beginning regulated activities.
DEP's cover letter to Kruger, Asdal's agent, contained the following provision:
Prior to site preparation, the permittee shall submit a draft copy of the required conservation restriction for review and written approval of the Program. Upon written approval of the draft a final conservation restriction shall be recorded with the property deed in the office of the County Clerk and proof of recordation shall be submitted to the Program. No site preparation or construction authorized by this Transition Area Waiver shall commence until the approved conservation restriction is recorded with the property deed in the office of the County Clerk. See condition number 4 below.
After he received the approvals, Kruger faxed the DEP documents to the engineering firm retained by the Walshes to finalize the plot plan for their home. The cover page noted that the "deed restriction must be filed prior to construction." It did not, however, indicate who would attend to the preparation and filing of the deed.
In or shortly after June 2006, Mount Olive notified DEP that, prior to construction of the Walshes' home, vegetation on the property had been cleared and the soil had been graded. In January 2007, DEP conducted a compliance inspection and observed that the clearing of vegetation and the grading of soil had extended beyond the area approved in the waiver and permit.
DEP issued a notice of violation (NOV) to Asdal and the Walshes in March. In the NOV, DEP requested proof that the required conservation restriction had been properly recorded. The Walshes remedied the violation and recorded the conservation restriction prior to August 1. On August 6, DEP issued an administrative order and notice of civil administrative penalty assessment (penalty notice) to Asdal only, in the amount of $45,000. The penalty notice was issued for Asdal's failure to record the conservation restriction prior to engaging in regulated activities on the property, as required by condition four of the waiver. On August 12, Asdal requested an administrative hearing, in response to which DEP transmitted the matter to the Office of Administrative Law (OAL).
DEP filed a motion for summary decision in December 2009, which Asdal opposed in May 2010. On December 17, 2010, the administrative law judge (ALJ) issued an initial decision in which he granted summary decision to DEP and upheld the penalty assessed. Despite Asdal's argument that he did not knowingly violate the terms of the waiver, the ALJ found that Asdal knowingly violated the waiver's fourth condition because he knew the conservation restriction needed to be recorded prior to conducting any regulated activities and he knew he was engaging in regulated activities.
Both parties filed exceptions and Asdal filed a motion to re-open the record, which was denied.*fn2 In April 2011, the DEP Commissioner issued a final decision adopting the ALJ's initial decision. This appeal followed.
On appeal, Asdal argues (1) that the Commissioner erred in upholding the ALJ's decision without requiring a plenary hearing and (2) that the quantum of the penalty assessed was excessive under the circumstances.
An ALJ may grant summary decision if "the pleadings, discovery and affidavits 'show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to prevail as a matter of law.'" E.S. v. Div of Med. Assistance & Health Servs., 412 N.J. Super. 340, 350 (App. Div. 2010) (quoting N.J.A.C. 1:1-12.5(b)). A dispute regarding a "material fact exists when the competent evidential materials . . . are sufficient to permit a rational fact[-]finder to resolve the alleged disputed issue in favor of the non-moving party." Ibid. (alterations in original) (citations and internal quotation marks omitted); see also Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523, (1995); R. 4:46-2(c). The dispute is considered "'genuine only if, considering the burden of persuasion at trial, the evidence submitted by the parties on the motion, together with all legitimate inferences therefrom favoring the non-moving party, would require submission of the issue to the trier of fact.'" E.S., supra, 412 N.J. Super. at 350 (quoting Piccone v. Stiles, 329 N.J. Super. 191, 195 (App. Div. 2000)).
An ALJ's factual findings and legal conclusions are not "binding upon [an] agency head, unless otherwise provided by statute." N.J.A.C. 1:1-18.1(c). Accordingly, an agency head reviews an ALJ's decision "de novo . . . based on the record" before the ALJ. See In re Parlow, 192 N.J. Super. 247, 248 (App. Div. 1983).
Our scope of review of an administrative agency's final determination is limited. In re Carter, 191 N.J. 474, 482 (2007). We accord to the agency's exercise of its statutorily delegated responsibilities a strong presumption of reasonableness. City of Newark v. Natural Res. Council, 82 N.J. 530, 539, cert. denied, 449 U.S. 983, 101 S. Ct. 400, 66 L. Ed. 2d 245 (1980). The burden of showing the agency's action was arbitrary, unreasonable, or capricious rests upon the appellant. See Barone v. Dep't of Human Servs., Div. of Med. Assistance & Health Servs., 210 N.J. Super. 276, 285 (App. Div. 1986), aff'd, 107 N.J. 355 (1987).
The reviewing court "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 Application of Virtua-West Jersey Hosp. Voorhees for a Certificate of Need, 194 N.J. 413, 422 (2008); see also Circus Liquors, Inc. v. Governing Body of Middletown Twp., 199 N.J. 1, 9-10 (2009). 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 Sec. Co. v. Bureau of Sec., 64 N.J. 85, 93 (1973).
Absent arbitrary, unreasonable, or capricious action, or a lack of support in the record, "[a]n administrative agency's final quasi-judicial decision will be sustained." In re Herrmann, 192 N.J. 19, 27-28 (2007) (citing Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963)). The court "may not vacate an agency determination because of doubts as to its wisdom or because the record may support more than one result," but is "obliged to give due deference to the view of those charged with the responsibility of implementing legislative programs." In re N.J. Pinelands Comm'n Resolution PC4-00-89, 356 N.J. Super. 363, 372 (App. Div.) (citing Brady v. Bd. of Review, 152 N.J. 197, 210 (1997)), certif. denied, 176 N.J. 281 (2003).
In reviewing administrative adjudications, an appellate court must undertake a "careful and principled consideration of the agency record and findings." Riverside Gen. Hosp. v. N.J. Hosp. Rate Setting Comm'n, 98 N.J. 458, 468 (1985) (citing Mayflower, supra, 64 N.J. at 93). "If the Appellate Division is satisfied after its review that the evidence and the inferences to be drawn therefrom support the agency head's decision, then it must affirm even if the court feels that it would have reached a different result itself." Clowes v. Terminix Int'l, Inc., 109 N.J. 575, 588 (1988). If, however, our review of the record leads us to conclude that the agency's finding is clearly mistaken or erroneous, the decision is not entitled to judicial deference and must be set aside. L.M. v. Div. of Med. Assistance & Health Servs., 140 N.J. 480, 490 (1995). We may not simply rubber-stamp an agency's decision. In re Taylor, 158 N.J. 644, 657 (1999).
Although Asdal argues that there were genuine issues of material fact precluding summary disposition, he fails to identify those facts with specificity. He also fails to explain why any such facts are material. In addition, he never submitted a certification in the OAL setting forth and supporting those purported facts. Asdal's argument that he had no obligation to do so is incorrect as a matter of law. Polzo v. County of Essex, 196 N.J. 569, 586 (2008) ("When . . . a motion for summary judgment is made, the party opposing that motion bears the affirmative burden of responding. That burden is not optional and it cannot be satisfied by the presentation of incompetent or incomplete proofs.").
The essence of Asdal's argument appears to be that several years intervened between his application for the waiver, DEP's issuance of the waiver, the work done on the site, and DEP's issuance of the NOV, during which time he transferred ownership of the property to the Walshes. While that is true, it is simply not determinative. As the Commissioner found, Asdal remained the permittee after the sale and he remained involved with the project because he was the Walshes' builder.
It is undisputed that Asdal applied for and received the waiver. The application designated Kruger as his agent for "all matters pertaining to [his] application." Condition four of the waiver clearly required the filing of the deed restriction prior to the performance of any work on the site. Although the property itself was transferred to the Walshes, Asdal remained responsible for making sure that there had been compliance with the waiver's conditions prior to the beginning of the work authorized by the waiver. While there may have been some confusion between Asdal and the Walshes as to which of them would attend to the preparation and filing of the deed restriction, the fact remains that Asdal knew that the work authorized by the waiver could not begin until the deed has been filed. He never ascertained whether the deed had been filed prior to the commencement of the work. As a result, his "conduct" was "knowing" within the meaning of N.J.A.C. 7:7A-16.8(c)(1)(i), which defines "major" conduct.
Consequently, we find no error in the Commissioner's decision to adjudicate this matter in a summary manner.
Asdal also argues that the amount of the penalty was excessive.
DEP followed the applicable code provision in assessing the penalty at issue. Pursuant to N.J.A.C. 7:7A-16.8(c)(1) and (2), DEP assesses penalties by assigning points for (1) the nature of the violator's "conduct," (2) the "acreage of wetlands and/or transition areas impacted," and (3) the "resource value classification" of the impacted land. The code includes a table which establishes the required daily monetary penalty, which is based on the total of the violator's points. Ibid.
As noted above, DEP properly determined that the nature of Asdal's conduct was "major," which determination resulted in three points. The acreage of wetlands impacted was less than one acre, and was assigned one point. The impacted property was determined to be of "exceptional resource value," which Asdal does not dispute. That determination was assigned three points. The total sum of points equaled seven points, which exacted a $7500 daily penalty.
DEP determined that Asdal was in violation of the permit condition from June 15, 2006, when Mount Olive discovered that the property had been cleared and graded, to August 6, 2007, when the penalty was issued, which is a span of approximately thirteen months. Believing that assessing a daily penalty of $7500 for a thirteen month span of non-compliance was "unreasonable," DEP exercised its discretion to assess a significantly lower penalty. See N.J.A.C. 7:7A-16.1(d)-(e).
DEP assessed the penalty, in part, to deter Asdal, an experienced builder, from failing to ensure that waiver conditions are satisfied prior to conducting regulated activities. See N.J. Dep't of Envtl. Prot. v. Lewis, 215 N.J. Super. 564, 576 (App. Div. 1987) (discussing the role DEP-imposed penalties play in deterring individuals from violating environmental laws). DEP also emphasized the importance of properly recording conservation restrictions, which, according to DEP's penalty notice, are necessary to "notify future land owners, government regulators, or other interested parties in perpetuity of the location of and prohibition against development occurring in [Wetlands] areas," so such parties are less likely to "negatively impact and encroach upon" these areas.
The question before us is not whether we would assess the same penalty in the first instance, but whether the penalty assessed by DEP was arbitrary, capricious, or unreasonable. Herrmann, supra, 192 N.J. at 27-29.
[W]hen reviewing administrative sanctions, the test . . . is 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. The threshold of "shocking" the court's sense of fairness is a difficult one, not met whenever the court would have reached a different result. [Id. at 28-29 (citations and internal quotation marks omitted).]
Our review of the record reveals no basis to overturn the penalty imposed by DEP under our standard of review.