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State of New Jersey, Department of Community Affairs v. 674 Scotland Road, Inc.

A-5515-97T1 (N.J. Super. App. Div. 2000) (Unpublished)

MULTIPLE DWELLINGS; VIOLATIONS; NOTICE—Mere failure to respond to a notice to attend a settlement conference does not constitute grounds for dismissal of an administrative appeal; lesser sanctions are appropriate.

The owner of a multi-family dwelling was cited for approximately 100 violations of the Hotel and Multiple Dwelling Act. The owner filed an appeal and the Department of Community Affairs (DCA) referred the matter to the Office of Administrative Law (OAL) for a hearing. A settlement conference was scheduled and the OAL claimed that it sent a notice to the owner. The owner, whom both sides agreed had always appeared at OAL proceedings, claimed that it did not appear at the designated time because it never received a notice and was unaware that the conference had been scheduled. Therefore, the owner first became aware of the conference when it received a notice that because of the non-appearance at the settlement conference, the case was “returned to the transmitting agency.” That notice required that any excuse for failure to appear had to be mailed to the transmitting agency within ten days of the notice. When the notice arrived, the owner was away, but a law partner requested an extension. Upon the owner’s return, shortly after the ten day period, it sent a letter to the OAL asserting that the original notice of settlement hearing had never been received. In response, the hearing coordinator wrote to the owner to advise that the file had been returned to the DCA and that the non-appearance, without good cause, was considered by the OAL to be an abandonment of the hearing request. In response, the owner filed a notice of motion with the OAL requesting that the case be restored to the active trial list. The OAL did not respond, but three weeks later the hearing officer wrote, in response to the motion, saying that, “this office is not the proper place for such filing.” A great number of communications then went back and forth, but ultimately the DCA sent a letter denying, “as untimely,” the owner’s request for rescheduling of the initial hearing. That letter noted that it may “be deemed to be the final decision of the Commissioner” and advised the owner that any appeal must be directed to a court. The Court found “[t]he most striking aspect of all the replies of the OAL and the Bureau, and ultimately the ‘final decision of the Commission,’ is that none of them [offered] any reason or justification for the extraordinarily harsh sanction imposed on [the owner].” Even if the original notice had been delivered and then mishandled by the owner, the DCA had no reason to impose such a sanction when the missed hearing was a settlement conference. There was no indication that the DCA or the OAL made any attempt to contact the owner to learn why no appearance had been made. There was no showing why a reasonable sanction would not have been appropriate. “Dismissal of the entire appeal is grossly out of proportion to the assumed offence.” When the DCA argued that the Court should not disturb the action of an administrative agency unless it finds that action to be arbitrary, capricious or unreasonable, the Court agreed that this was a fundamental proposition. Nonetheless, because the agency provided no basis for its actions, under any view, those actions could only be deemed arbitrary, unreasonable, and capricious.


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