October 16, 2013
IN THE MATTER OF THE TENURE HEARING OF FRANCIS LAWRENCE, BROOKDALE COMMUNITY COLLEGE.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued June 11, 2013
On appeal from the Board of Trustees of Brookdale Community College.
Michael T. Barrett argued the cause for appellant Francis Lawrence (Bergman & Barrett, attorneys; Mr. Barrett, of counsel and on the brief).
Matthew J. Giacobbe argued the cause for respondent Brookdale Community College (Cleary, Giacobbe, Alfieri, Jacobs, LLC, attorneys; Mr. Giacobbe and Gina L. Anton, on the brief).
Before Judges Parrillo and Messano.
Appellant Francis Lawrence was employed by Brookdale Community College (BCC) as the tenured Director of Athletics and Recreation, a position he held since 2005. On June 9, 2011, BCC filed tenure charges against Lawrence, alleging "conduct unbecoming . . . and other just cause" and seeking his removal. In particular, the charges alleged six violations of BCC's Code of Ethics (the Code). The matter was forwarded to the Office of Administrative Law for a hearing, and Lawrence was suspended without pay.
Following the hearing, the administrative law judge (ALJ) issued a written decision on April 2, 2012. He concluded that BCC had proven Lawrence violated four provisions of the Code and engaged in unbecoming conduct. After considering mitigating and aggravating factors, the ALJ refused to remove Lawrence, and instead, he ordered a one-year suspension with credit for time already served under suspension.
On May 4, 2012, BCC's Board of Trustees (the Board) approved a resolution that adopted the ALJ's findings and conclusions but rejected the recommended discipline. In a written decision dated May 17, 2012, the Board stated that it no longer had confidence in Lawrence, and he was "unfit to perform the duties of his position" based upon violations of "his fiduciary obligations" and "[BCC's] policies and procedures." The Board concluded that "the facts require[d] removal . . . and the termination of [Lawrence's] employment with [BCC]." This appeal followed.
Before us, Lawrence posits two arguments. He contends the Board did not follow the Administrative Procedure Act, N.J.S.A. 52:14B-1 to -30. He argues that because the Board failed to act within forty-five days of the ALJ's initial decision, it was "deemed adopted as the final decision of the" Board. N.J.S.A. 52:14B-10(c). Lawrence also argues that the Board failed to "review and consider all [the] evidence" adduced at the hearing before rendering its final decision. Although in his original brief, Lawrence urged us to vacate the Board's decision and reinstate him to his position, in his reply brief, Lawrence argues that the ALJ's decision "should be reinstated."
We have considered these arguments in light of the record and applicable legal standards. We conclude that there is no reason to disturb the Board's finding that Lawrence engaged in conduct unbecoming. To the extent Lawrence advances argument to the contrary, we find them to be without sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E). However, regarding the appropriate discipline to be imposed, we reverse and remand the matter to the Board for further proceedings consistent with this opinion.
We briefly recap the factual findings made by the ALJ, recognizing that the Board adopted them with one specific exception, and Lawrence takes no particular exception to them.
The gravamen of the charges centered on Lawrence's conduct during the 2011 Shore Conference Tournament (the Tournament), an annual three-day high school basketball event held each February at BCC's Collins Arena. One of Lawrence's duties as Athletic Director was to oversee the event, which in 2011 generated approximately $35, 000 in revenues. After the tournament, BCC's Vice President of Business and Finance, Maureen Lawrence, and her staff noticed inaccuracies in the accounting Lawrence supplied.
At a subsequent meeting held to discuss the matter, Lawrence admitted using "cash proceeds to pay employees" directly and to pay for hospitality expenses. Lawrence insisted that he had always paid the tournament workers that way. Lawrence also disclosed that he paid himself a small stipend and waived the $8, 800 activity fee that would have been charged for the use of the arena.
Further investigation revealed, and Lawrence admitted, that the Tournament actually lost a small amount of money. Due to shoddy bookkeeping, it was difficult to ascertain exactly how much. Weeks after the Tournament ended, $600 in cash was found in Lawrence's office safe, as well as two envelopes containing small amounts of cash that bore the first names of individuals that worked for the athletic department.
In his written opinion, the ALJ observed that "[m]ost of the facts [we]re not in dispute." He noted that Lawrence "admitted . . . pa[ying] himself and members of his staff cash out of the proceeds of the [Tournament] for working the [Tournament]." The ALJ also found that some workers at the Tournament "were paid more than what was listed, [and] students were listed as being paid and were not, although some were paid by the work study program." The ALJ determined that Lawrence "did not deny that he failed to follow procedures for handling cash and making deposits, " and "[h]e also did not charge a site fee for using the arena."
Applying these facts, the ALJ concluded that Lawrence "did receive . . . minimal" financial gain in violation of Section IV.B.2 of the Code, which prohibited any BCC employee from using his position "to secure financial gain . . . for himself." For the same reason, the ALJ also concluded that Lawrence violated Section IV.B.3 of the Code, that prohibited use of "the resources of [BCC] . . . to secure financial gain for himself."
The ALJ also concluded that Lawrence "did enter into contracts with the Shore Conference and . . . [waived] the site fee without authority and without the approval of [BCC]." This violated Section IV.B.7 of the Code, which prohibited any employee from entering into contracts on behalf of BCC "without the knowledge, approval and authorization of [BCC]." Noting evidence "that the [T]ournament [was] always run this way[, ]" the ALJ determined this was not a defense but was "relevant to the penalty."
The ALJ also concluded that Lawrence's "lackadaisical approach to cash proceeds and to precisely documenting the amount of cash paid to workers" violated Section IV.B.8 of the Code. That provision prohibited any BCC employee from "knowingly" acting in any manner that "might reasonably be expected to create among the public . . . an impression or suspicion that they may be engaged in conduct violating their trust as public officials or employees." Specifically, the ALJ found Lawrence admitted information on the worker sign-in sheets was incorrect, and that he had the workers sign blank sheets that he later completed. The ALJ further found that Lawrence was "unable to explain where . . . money went or who else may have been paid."
Significantly, the ALJ concluded that BCC failed to prove that Lawrence violated Section IV.B.1 of the Code, which prohibited any employee from engaging in any employment or having an interest in any business "which [was] in substantial conflict with" his duties or "might reasonably be expected to impair the objectivity and independence of judgment in the exercise of duties to [BCC]." The ALJ found no evidence of such a conflict, specifically noting that Lawrence "did not favor the Shore Conference for his own benefit. The site fee had been waived long before he became involved in the tournament, and the [athletic director] had always been paid for the hours he worked during the [Tournament]."
The ALJ also found that BCC failed to prove Lawrence violated Section IV.B.9 of the Code, which prohibited outside employment that conflicted with his employment on behalf of BCC. The ALJ specifically noted the testimony of BCC's interim president, Dr. William Toms, stating that Lawrence had not and was not engaged in outside employment.
The ALJ then considered whether the proven conduct amounted to "conduct unbecoming." He found:
It is not in dispute that [Lawrence] did not list the correct amount of compensation workers were paid. He paid himself out of the proceeds when he should not have done so, and listed students as receiving cash when they did not. He also failed to make timely deposits of the cash as evidenced by monies left in the safe.
The ALJ concluded these actions "constitute[d] unbecoming conduct."
Noting the appropriate penalty to be "[t]he more difficult issue, " the ALJ considered "mitigating factors." He noted that BCC was "certainly aware of how the [Tournament] was run for many years, " including the fact that cash payments were made to workers and Lawrence. The ALJ noted that Lawrence "was taught and continued to use an outdated system for running the [Tournament], " and "the record [was] devoid" of evidence that BCC gave "any corrective action plan" to Lawrence. The ALJ further observed that Lawrence "had excellent evaluations" and only one "minor" prior disciplinary matter, a "one-day suspension for using a student in the Federal work study program."
The ALJ noted the "aggravating factors, " which included "the very sloppy way of handling cash, leaving substantial questions as to how all of the cash was dispersed." While "[t]here [was] no allegation [Lawrence] took any of the undocumented cash, . . . such a system can lead to chaos and major problems. [Lawrence] should have known better . . . ." But, the ALJ found that BCC was aware that no site fee was charged for "almost thirty years, " and never directed Lawrence to change this practice. Lawrence's personal gain was limited to $200 "for the hours he worked at the [Tournament]."
The ALJ found "[t]he mitigating factors outweigh[ed] the aggravating factors." The most significant mitigating factors were Lawrence's "lack of intent, the tacit approval by [BCC] of these practices in the past, and the disciplinary record of [Lawrence]." He vacated Lawrence's removal and suspended him for one-year, giving credit for time he had already been suspended.
The Board's written decision set forth in detail the ALJ's findings and the contentions raised in the exceptions filed by Lawrence and BCC. Although it concurred with the ALJ's findings, the Board specifically took exception to the judge's conclusion that Lawrence had been previously the subject of "'one minor disciplinary matter.'" The Board stated that the ALJ "erred in stating the prior disciplinary action was a one-day suspension when it [was] three . . . days." The Board further concluded the prior disciplinary action was "serious" and "similar in kind to the conduct at issue in this proceeding[, ]" i.e., the failure to properly supervise students in the Work Study Program.
The Board found Lawrence's conduct to be "clearly inimical to the professional obligations of the Director of Recreation and Athletics, " which requires "candor and trustworthiness." The Board concluded that Lawrence "violated [BCC] policies regarding deposit and payment of cash to employees[, ]" and "paid cash to himself in violation of [BCC] policies." The Board concluded "the facts require[d] removal of . . . Lawrence from his position . . . ."
Lawrence's argument that the ALJ's initial decision was adopted because the Board failed to comply with N.J.S.A. 52:14B-10(c) is unavailing. In relevant part, that statute provides:
The head of the agency, upon a review of the record submitted by the administrative law judge, shall adopt, reject or modify the recommended report and decision no later than 45 days after receipt of such recommendations. . . . Unless the head of the agency modifies or rejects the report within such period, the decision of the administrative law judge shall be deemed adopted as the final decision of the head of the agency.
See Newman v. Ramapo College of N.J., 349 N.J.Super. 196, 201 (App. Div. 2002) (noting that an administrative agency "is not bound by the initial decision" of an ALJ, as long as it takes action within forty-five days of receiving the decision). The purpose of this provision "is 'to encourage prompt consideration and disposition of contested cases.'" New Jersey Racing Comm'n v. Silverman, 303 N.J.Super. 293, 302 (App. Div. 1997) (quoting King v. New Jersey Racing Comm'n, 103 N.J. 412, 419 (1986)).
However, courts "ha[ve] been hesitant to conclude that an ALJ's initial decision has been automatically approved as a result of an agency's failure to properly discharge its decision-making responsibilities." Ibid. (quotation marks and citations omitted). "[T]he automatic approval mechanism . . . 'should be applied with caution.'" DiMaria v. Bd. of Trustees of Pub. Employees' Retirement Sys., 225 N.J.Super. 341, 347 (App. Div.) (quoting King, supra, 103 N.J. at 422), certif. denied, 113 N.J. 638 (1988).
The ALJ issued his initial decision in writing and mailed it to the parties on April 2. The Board held a special meeting on May 4, 2012, reviewed the initial decision and exceptions filed, and approved a resolution removing Lawrence by a vote of seven to two. On May 17, the Board issued a written opinion reiterating and elaborating on its May 4 decision. Lawrence claims he did not receive a copy of the written decision until July 30, well beyond the forty-five day limit.
N.J.S.A. 52:14B-10(d) explicitly provides that "[a] final decision . . . shall be in writing or stated in the record." (Emphasis added). Thus, the Board clearly complied with the forty-five day time period. Moreover, we have said that "[i]f the agency takes substantive action on the . . . recommended decision, but such action is procedurally flawed, the [automatic approval] provision is generally not applied." Newman, supra, 349 N.J.Super. at 202. We have repeatedly upheld final administrative decisions where the agency issued a decision on the record during the statutory period but failed to render a final written decision until sometime later. See e.g., Steinmann v. Department of Treasury, Div. of Pensions, 235 N.J.Super. 356, 360 (App. Div. 1988), rev'd on other grounds, 116 N.J. 564 (1989); DiMaria, supra, 225 N.J.Super. at 348. In short, we find no reason to reverse the Board's decision on this ground.
Lawrence also argues that the Board failed to review and consider all the ALJ's findings before rendering its decision. In particular, he claims that: the Board failed to consider how the Tournament was conducted during its "forty year" history with BCC; the Board "cherry[-]picked" evidence for inclusion in its decision and ignored competing evidence, including the nature of Lawrence's prior discipline; and, the Board found violations of BCC policies when none existed.
"The scope of [our] review is limited. An administrative agency's final quasi-judicial decision will be sustained unless there is a clear showing that it is arbitrary, capricious, or unreasonable, or that it lacks fair support in the record." In re Herrmann, 192 N.J. 19, 27-28 (2007) (citation omitted). Our review consists of three inquiries:
(1) whether the agency's action violates express or implied legislative policies . . .; (2) whether the record contains substantial evidence to support the findings on which the agency based its action; and (3) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors.
[Id. at 28 (quoting Mazza v. Bd. of Trs., 143 N.J. 22, 25 (1995)).]
We accord the agency's decision "substantial deference . . . even if [we] would have reached a different result in the first instance." Ibid. (citations omitted).
A reviewing court may "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.'" Ibid. (quoting In re Polk, 90 N.J. 550, 578 (1982)). "[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." Id . at 28-29 (quoting Polk, supra, 90 N.J. at 578) (internal quotation marks omitted).
In this case, however, we do not reach the issue of whether the actual discipline imposed by the Board was appropriate, because we are convinced the Board's decision reflects inadequate consideration of the record before the ALJ, and that one critical conclusion by the Board was not supported by substantial evidence in the record.
We have said that "[w]hen the agency head adopts an ALJ's findings, it is not necessary for the agency head to address every aspect of the ALJ's decision." Penpac, Inc. v. Passaic County Utils. Auth., 367 N.J.Super. 487, 505 (App. Div.) (citation omitted), certif. denied, 180 N.J. 457 (2004). However, "an administrative agency must conduct an independent evaluation of all relevant evidence and legal arguments presented in support of and in opposition to proposed administrative agency action." Mainland Manor Nursing & Rehabilitation Ctr. v. N.J. Dep't. of Health & Senior Svcs., 403 N.J.Super. 562, 571 (App. Div. 2008) (citation omitted) (emphasis added). "The failure to do so may make the agency's decision arbitrary and capricious and require a remand for reconsideration." Ibid. (citation omitted).
For example, in In re Virtua-West Jersey Hosp. Voorhees, 194 N.J. 413, 436 (2008), the Court remanded for further consideration the grant of a certificate of need made by the Commissioner of Health and Senior Services to a certain hospital. In particular, the Court noted that "[t]he Commissioner's duty requires that she abide by her statutory and regulatory charges and examine all relevant evidence in each case. That must include the positions espoused by the objectors." Ibid.
In this case, one is struck by the absolute lack of discussion in the Board's decision regarding the uncontroverted evidence that the ALJ found so compelling, particularly as it related to the discipline to be imposed. The ALJ noted that Lawrence was "taught and continued to use an outdated system for running the [Tournament]." He also found that BCC was fully aware of how the Tournament was being run, in particular, that the Shore Conference was not being charged any user fee and cash payments were made to workers, including Lawrence. The ALJ found that Lawrence lacked any "intent" to violate the Code.
Indeed, the evidence from the hearing in this regard was overwhelming and uncontroverted. The ALJ noted that Jack Ryan, the former athletic director at BCC and for whom Lawrence served as assistant until 2005, testified that the Tournament was always run the same way from at least 1997, when Ryan became athletic director. Ryan taught Lawrence how to conduct the Tournament. Ryan claimed that he submitted a request to waive the fee that was approved every year, and no one ever told him he should charge a fee. Ryan also testified that he routinely paid workers in cash, and that people in BCC's finance department were aware of the practice and never objected.
The ALJ also considered the testimony of James Palumbo, who served as BCC's Dean of Enrollment Development and Student Affairs for more than twenty-six years. Palumbo was not aware that the Shore Conference had ever paid a user fee, and he never received any complaints about the lack of a fee being charged. Palumbo never discussed the matter with Lawrence, nor did he give any particular directives about the use of Collins Arena.
The issue of BCC's knowledge of, and acquiescence in, past practices was squarely put before the Board because, in its exceptions to the initial decision, BCC urged the Board to reject the ALJ's finding that the college "knowingly condoned [Lawrence's] actions in the past, " or that Lawrence lacked "intent" because of past practices. Yet, as noted, the Board never referenced the evidence or addressed the issue directly, stating only that, "[w]hether [Lawrence's] inappropriate actions and omission[s] were intentional or negligent, [Lawrence] cannot be trusted to carry out his duties in accordance with Board policies." In short, the Board's decision demonstrates a failure to examine and address highly relevant evidence adduced before the ALJ, particularly as it related to the appropriate discipline to impose.
Furthermore, the Board specifically determined that Lawrence "violated [BCC] policies regarding deposit and payment of cash to employees." However, the ALJ more accurately concluded in this regard that Lawrence "[v]iolated the procedures for handling case and deposits." BCC admits in its brief, and the undisputed evidence at the hearing demonstrated, that BCC had no written policies in place in 2011 regarding the issue.
Linda Zambrano, BCC's coordinator of accounts receivable, testified that she routinely worked at the Tournament selling tickets and was paid cash by Lawrence out of the daily proceeds. Zambrano was unaware of any "college cash policies, " and none were ever produced at the hearing. Maureen Lawrence testified that she advised Lawrence in 2007 that all cash should be deposited within forty-eight hours of receipt. However, that was the only testimony regarding BCC's cash-handling procedures. To the extent the Board determined that Lawrence violated existing policies adopted by BCC regarding the handling of cash, the factual conclusion was not supported by substantial credible evidence in the record.
For the foregoing reasons, we conclude that the matter must be remanded to the Board for further consideration of the appropriate discipline to be imposed upon Lawrence. In this regard, the Board must consider all the evidence adduced before the ALJ, conduct "a full analysis" and render "a complete explanation of [its] decision." Virtua-West Jersey Hosp., supra, 194 N.J. at 436.
Reversed and remanded. We do not retain jurisdiction.