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Garden State Check Cashing Service, Inc. v. State of New Jersey Department of Banking and Insurance

Supreme Court of New Jersey

May 1, 2019

Garden State Check Cashing Service, Inc., Appellant-Respondent,
v.
State of New Jersey Department of Banking and Insurance, Respondent-Respondent. License Applications of New Loan Co. WM. S. Rich & Sons, Inc., License Application Nos. 15015599 X08, 1501600 X08, 1501601 X08, 1501605, Intervenor-Appellant.

          Argued February 25, 2019

          On certification to the Superior Court, Appellate Division.

          Laurence B. Orloff argued the cause for appellant (Orloff, Lowenbach, Stifelman & Siegel, attorneys; Laurence B. Orloff, of counsel and on the briefs, David Gorvitz, on the briefs).

          Garen Gazaryan, Deputy Attorney General, argued the cause for respondent New Jersey Department of Banking and Insurance (Gurbir S. Grewal, Attorney General, attorney; Melissa Dutton Schaffer, Assistant Attorney General, of counsel, and Garen Gazaryan, on the briefs).

          Gregg S. Sodini argued the cause for respondent Garden State Check Cashing Service, Inc. (Cutolo Barros, attorneys; Gregg S. Sodini, on the brief).

          TIMPONE, J., writing for the Court.

         The New Jersey Check Cashers Regulatory Act of 1993 (Act) generally prohibits the licensure of check cashing businesses within 2500 feet of existing check cashing businesses, N.J.S.A. 17:15A-41(e), unless the business was already in operation when the Act was passed, N.J.S.A. 17:15A-50(a) (Grandfather Clause). A 1998 amendment to the Act permitted a business to sell its assets without losing its grandfathered status. L. 1998, c. 104, § 1 (codified at N.J.S.A. 17:15A-32.1) (Amendment). In this case, the Court considers whether the Amendment's language limiting its application to "[a] person who is conducting business as a check casher" requires the seller to be actively engaged in continuous business operation at the time of a sale. N.J.S.A. 17:15A-32.1(a).

         The seller in question here, Domenick Pucillo, ceased business operations of his three check cashing businesses in October 2014 before selling his assets in March 2015 to New Loan Co. Wm. S. Rich & Sons, Inc. (New Loan). After New Loan applied to the Department of Banking and Insurance (DOBI) for a license, Garden State Check Cashing Service, Inc. (Garden State) -- which operated a check cashing business located within 2500 feet of the business located in Irvington -- objected to the license application. It argued the business's grandfathered status was extinguished because Pucillo was not conducting business as a check casher at the time of the asset sale.

         DOBI granted the license as to all locations, and Garden State appealed. The Appellate Division reversed DOBI's decision as to the Irvington location. The panel found that, because Pucillo had not been conducting business as a check casher at the time of the asset sale, he was unable to transfer his grandfathered status to New Loan under the Amendment, and New Loan was bound by the 2500-foot restriction. The Court granted New Loan's petition for certification. 235 N.J. 122 (2018).

         HELD: The only requirements for an asset sale are that a seller is conducting business by holding a valid license and is not subject to an action by the Commissioner. As such, the asset sale was valid, the Irvington location retained its grandfathered status, and DOBI's decision to grant the license to New Loan was appropriate.

         1. The Court reviews the licensing requirements of the Act, the 2500-foot restriction, and the Grandfather Clause's exception to that restriction. Through the 1998 Amendment, a grandfathered check cashing business may sell its assets: "A person who is conducting business as a check casher pursuant to [the Act], whose license was continued . . ., and who is not the subject of any action by the commissioner . . ., shall be permitted to sell the assets of the business of cashing checks." N.J.S.A. 17:15A-32.1(a). The purchaser of a check cashing business's assets may continue the business unrestricted by the distance requirement, as long as the purchaser qualifies for a license under the Act and remains at the same location as listed on the seller's license. Id. § 32.1(b). The Amendment further provides for subsequent sales of check cashing businesses. Id. § 32.1(c). And the Act allows DOBI to revoke, subject to certain conditions, the license of a licensee who "has not provided check cashing services . . . at the location specified in the license for a period of 180 consecutive days or more." Id. § 40(d). (pp. 9-11)

         2. The inquiry here is whether the phrase "[a] person who is conducting business as a check casher" in the Amendment limits the sale of assets to those sold by a seller who is actively and currently engaged in the business of check cashing. N.J.S.A. 17:15A-32.1(a). DOBI rationally read the Amendment language as merely referring to a person who has a valid and active license under the Act to operate a check cashing business at a specific location. The Court declines to disturb that interpretation by reading an operational requirement into the statute's language. Essentially, the grandfathered distance-requirement exemption runs with the licensed location; it does not depend on the individual running the business to be actively engaged in check cashing activity daily. The only requirements for an asset sale are that a seller is conducting business by holding a valid license and is not subject to an action by the Commissioner. Plainly, the Commissioner may opt to revoke a check cashing business's license where the owner does not engage in check cashing services for 180 consecutive days. See N.J.S.A. 17:15A-40(d). But where, as here, the Commissioner does not do so, the fact that a seller has not been actively conducting business in check cashing does not preclude an asset sale. (pp. 11-13)

         The judgment of the Appellate Division is REVERSED and the agency decision is REINSTATED.

          CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON, FERNANDEZ-VINA, and SOLOMON join in JUSTICE TIMPONE'S opinion.

          OPINION

          TIMPONE JUSTICE.

         The New Jersey Check Cashers Regulatory Act of 1993, N.J.S.A. 17:15A-30 to -52 (Act), generally prohibits the licensure of check cashing businesses within 2500 feet of existing check cashing businesses, N.J.S.A. 17:15A-41(e), unless the business was already in operation when the Act was passed, N.J.S.A. 17:15A-50(a) (Grandfather Clause). A 1998 amendment to the Act permitted a business to sell its assets without losing its grandfathered status. L. 1998, c. 104, § 1 (codified at N.J.S.A. 17:15A-32.1) (Amendment).

         In this case, we are called upon to clarify whether the Amendment's language limiting its application to "[a] person who is conducting business as a check casher" requires the seller to be actively engaged in continuous business operation at the time of a sale. N.J.S.A. 17:15A-32.1(a). The seller in question here, Domenick Pucillo, ceased business operations of his three check cashing businesses in October 2014 before selling his assets in March 2015 to New Loan Co. Wm. S. Rich & Sons, Inc. (New Loan). After New Loan applied to the Department of Banking and Insurance (DOBI) for a license, Garden State Check Cashing Service, Inc. (Garden State) -- which operated a check cashing business located within 2500 feet of one of the check cashing businesses -- objected to the license application. It argued the business's grandfathered status was extinguished because Pucillo was not conducting business as a check casher at the time of the asset sale. DOBI nevertheless granted the license and Garden State appealed. The Appellate Division reversed DOBI's decision, finding because Pucillo had not been conducting business as a check casher at the time of the asset sale, DOBI could not issue a license to the check cashing business located within 2500 feet of Garden State's business.

         We reverse the Appellate Division's judgment. We defer to DOBI's interpretation of the Act, under which it found an asset sale permissible so long as the seller holds a valid license and is not ...


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