IN THE MATTER OF PROCEEDINGS BY THE COMMISSIONER OF BANKING AND INSURANCE, ETC. (NEW JERSEY DEPARTMENT OF BANKING AND INSURANCE) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2223-17T2
IN THE MATTER OF
PROCEEDINGS BY THE
COMMISSIONER OF BANKING
AND INSURANCE, STATE OF
NEW JERSEY TO FINE CHARLES
BOAS PURSUANT TO THE NEW
JERSEY INSURANCE FRAUD
PREVENTION ACT, N.J.S.A.
17:33A-1 to -30.
______________________________
Submitted January 30, 2019 – Decided February 22, 2019
Before Judges Accurso, Vernoia and Moynihan.
On appeal from the New Jersey Department of Banking
and Insurance.
Brach Eichler LLC, attorneys for appellant Charles
Boas (Keith J. Roberts, of counsel and on the briefs;
Shannon M. Carroll, on the briefs).
Gurbir S. Grewal, Attorney General, attorney for
respondent Commissioner of Banking & Insurance
(Melissa H. Raksa, Assistant Attorney General, of
counsel; Adam B. Masef, Deputy Attorney General, on
the brief).
PER CURIAM
Appellant Charles Boas appeals from New Jersey Department of Banking
and Insurance (Department) orders denying his motion to vacate a final order
directing that he pay $500,000 in civil and administrative penalties for his
submission of 1011 fraudulent insurance claims, a $1000 statutory insurance
fraud surcharge, $53,384.52 in restitution and $3459 in attorneys' fees, and
denying his motion for reconsideration. Based on our review of the record in
light of the applicable law, we are convinced the Department's orders are
supported by substantial credible evidence and are not arbitrary, capricious or
unreasonable, and affirm.
I.
Boas is a licensed chiropractor in the State of New Jersey. In 2012, he
was charged in an indictment with sixty counts of second-degree health care
claims fraud, N.J.S.A. 2C:21-4.3(a), and one count of third-degree theft by
deception, N.J.S.A. 2C:20-4, for allegedly billing Horizon Blue Cross Blue
Shield (Horizon) for services he did not render. In April 2014, Boas pleaded
guilty to third-degree health care claims fraud and was sentenced in July 2014
to a two-year term of probation.
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A. The Order To Show Cause
In September 2014, the Department's Commissioner commenced an
administrative proceeding by filing an order to show cause alleging Boas
violated N.J.S.A. 17:33A-4(a)(1), which in pertinent part provides that a person
violates the New Jersey Insurance Fraud Protection Act (Act)1 by "[p]resent[ing]
or caus[ing] to be presented any written or oral statement as part of, or in support
of . . . a claim for payment or other benefit pursuant to an insurance policy . . .
knowing that the statement contains any false or misleading info rmation
concerning any fact or thing material to the claim."
The order to show cause alleged that from 2003 to 2007 Boas submitted
claims for insurance payments to Horizon for chiropractic services he did not
provide. More particularly, count one of the order to show cause alleged Boas
submitted claims for payment for 498 dates of service for patient A.O. 2 from
2003 through 2007 and received $28,962.40 in payments from Horizon, but A.O.
had only seen Boas a total of seven to fourteen times and had not seen Boas
since 2004. Count two alleged Boas submitted claims to Horizon for 531 dates
of service between June 2003 and January 2007 for patient A.O., Jr., and
1
N.J.S.A. 17:33A-1 to -30.
2
We identify the putative patients by use of initials to protect their privacy.
A-2223-17T2
3
received $16,759 from Horizon, but Boas provided treatment to A.O., Jr., during
only two to three months in 2003. In count three, it was alleged Boas submitted
seventy-two claims to Horizon for dates of service between October 2005 and
July 2006 for E.M. and received $4650 in payments from Horizon, but Boas
only saw E.M. for an initial consultation and never saw E.M. again. Count four
alleged Boas submitted claims for providing services to E.M., Jr., on fifty-eight
separate dates and received $3013.12 from Horizon, but E.M., Jr., "had never
been treated by Boas."
The order to show cause set forth the statutory penalties and surcharge
that could be imposed for the alleged violations, and explained Boas was liable
for the Department's attorneys' fees and restitution of the sums he received from
Horizon for services he did not provide. The order to show cause further
explained that Boas had twenty days from his receipt of the order to show cause
to request a hearing and that, if he failed to do so, his right to a hearing would
be deemed waived and the allegations would be deemed admitted.
The Department served, and Boas received, the order to show cause in
September 2014. 3 The Department again served Boas with the order to show
3
The order was served on Boas by certified mail on September 26, 2014.
A-2223-17T2
4
cause in December 2014, 4 and at that time informed Boas that if he did not
respond within seven days, his right to a hearing would be deemed waived and
the Commissioner would dispose of the matter.
Boas failed to respond to the order to show cause. On November 16, 2015,
the Commissioner rendered a final agency decision, entering a detailed final
order finding Boas violated the Act by submitting at least 1011 fraudulent claims
for payment to Horizon for services he did not provide. The final order also
directed that Boas pay $500,000 in civil and administrative penalties pursuant
to N.J.S.A. 17:33A-5 and N.J.A.C. 11:16-7.6, a $1000 statutory insurance fraud
surcharge in accordance with N.J.S.A. 17:33A-5.1, $3459 in attorneys' fees
pursuant to N.J.S.A. 17:33A-5(c) and N.J.A.C. 11:16-7.9(c), and $53,384.52 in
restitution pursuant to N.J.S.A. 17:33A-5(c) and N.J.A.C. 11:16-7.9(c).
B. Boas's Motion To Vacate The Final Order
Four months later, in March 2016, Boas filed a motion to vacate the final
order. In support of the motion, Boas submitted a certification asserting that
upon his receipt of the order to show cause on September 26, 2014, he called the
attorney who represented him in the criminal proceeding, forwarded the order
to show cause to the attorney by telefax, and was assured by the attorney that he
4
The order was served on Boas by certified mail on December 14, 2014.
A-2223-17T2
5
"would handle the matter." Boas also certified that he received the December
2014 "second notice" concerning the order to show cause and forwarded it by
telefax to the attorney. Boas annexed to his certification telefax transmission
receipts he claimed confirmed that he forwarded the order to show cause to the
attorney in September and December 2014.
Boas also certified that, "[o]ver time, [he] received assurances from [the
attorney] that [the administrative] matter would be handled." He said the
attorney "eventually requested an additional retainer" to represent Boas in the
matter and that he paid the attorney $2000 "to represent [him] on this matter and
a matter before the Board of Chiropractic Examiners." Boas annexed to his
certification a July 6, 2015 check in the amount of $2000 that is payable to the
attorney.
Boas further certified that when he learned of the November 2015 final
order, he "was shocked to learn that the application was unopposed" because he
had the attorney's "assurances that [he] was being represented on this matter."
Boas stated that he "reached out to" the attorney but "did not receive a response."
According to Boas, he then retained different counsel.
Boas's certification offered the conclusory assertion that he "had a clear
defense to this case." He did not identify the putative defense or provide any
A-2223-17T2
6
facts supporting a defense to the allegations contained in the order to show
cause.
The Department opposed Boas's motion, arguing he failed to make any
showing, beyond his bald assertion, that he had a meritorious defense to the
allegations in the order to show cause. The Department also argued Boas did
not demonstrate excusable neglect for his failure to respond to the order to show
cause because the telefax reports he supplied do not identify the documents sent
to the attorney and Boas did not exercise reasonable diligence by following up
with his attorney after service of the order to show cause in September and
December 2014 and prior to entry of the final order in November 2015. The
Department claimed Boas did not provide a retainer agreement showing the
attorney was retained to represent him in the Department's proceeding and there
was no evidence corroborating Boas's claim the $2000 check was for his
retention of the attorney for the Department's proceeding.
In a detailed and comprehensive November 7, 2016 written order, the
Commissioner denied Boas's motion to vacate the final order. The
Commissioner noted that although the New Jersey Court Rules do not govern
administrative agency proceedings, agencies have used the principles in the
Rules as a guide to determine requests for relief from final orders. In his
A-2223-17T2
7
consideration of Boas's motion to vacate the final order, the Commissioner
utilized Rule 4:50-1 as a guide. Indeed, in support of his motion to vacate, Boas
argued he was entitled to relief from the final order under the principles in Rule
4:50-1(a), which allows relief from a final order due to "mistake, inadvertence,
surprise, or excusable neglect." To obtain relief from a default judgment under
Rule 4:50-1(a), a moving party must demonstrate "that the neglect to answer
was excusable under the circumstances and that he [or she] has a meritorious
defense." Bernhardt v. Alden Café, 374 N.J. Super. 271, 277 (App. Div. 2005)
(quoting Mancini v. EDS, 132 N.J. 330, 334 (1993)).
The Commissioner determined that "a default judgment will not be
disturbed unless the failure to answer or otherwise appear and defend was
excusable under the circumstances and unless the defendant has a meritorious
defense[,] either to the cause of action itself, or . . . to the quantum of damages."
The Commissioner noted that in his motion to vacate the final order, Boas did
not challenge the penalties imposed and failed to present any evidence
establishing a meritorious defense to the charges in the order to show cause. The
Commissioner further determined Boas did not establish excusable neglect for
his failure to timely respond to the order to show cause because he did not
indicate when his purported conversations with the attorney occurred or what
A-2223-17T2
8
"assurances" the attorney provided, the $2000 check to the attorney is dated
eight months after Boas received the December 2014 second notice concerning
the order to show cause, and there is no evidence the check was a retainer for
the attorney's services in this matter because Boas did not provide a retainer
agreement. The Commissioner also found Boas did not provide an "adequate
explanation as to what happened during the [fourteen] months or so in between
September 26, 2014, when Boas certifie[d] . . . he first sent the [order to show
cause] to [the attorney], and November[] 2015, when the [f]inal [o]rder was
issued," made no showing he followed up with the attorney or inquired
concerning the status of the matter, and offered no evidence showing he took
any affirmative action to ensure that a defense to the charges in the order to
show cause was timely presented. The Commissioner concluded Boas "fail[ed]
to satisfy the standard" for relief from the final order "set forth in [Rule] 4:50-
1(a)"5 and denied Boas's motion.
C. Boas's Motion For Reconsideration
Boas subsequently filed a motion for reconsideration. In support of the
motion, Boas submitted a certification from counsel he retained following his
5
The Commissioner also found that Boas did not establish an entitlement to
relief under Rule 4:50-1(f). Boas does not argue on appeal that finding was in
error.
A-2223-17T2
9
receipt of the November 2015 final order. Counsel certified that upon his
retention, the motion to vacate the final order was filed "expeditiously" after he
unsuccessfully attempted to obtain the Department's agreement to a consent
order vacating the final order.
Boas also submitted a certification supporting his reconsideration motion.
He asserted for the first time that he had the following meritorious defense to
the charges in the order to show cause: "[he] never intentionally billed for
treatment, which was not rendered," and he did not "wrongfully bill[] for
treatment to" the four individuals identified in the order to show cause. He also
noted that the patients identified in the order to show cause are different from
those patients listed in the charges in the indictment against him.
In his reconsideration motion, Boas also challenged for the first time the
penalties and reimbursement the Department required. Boas further asserted
that he and his wife had already paid Horizon $146,000, 6 and that the civil and
administrative penalties "have no relation to the amount allegedly paid" to him
by Horizon for the services the Department asserts he did not provide.
6
Boas stated he "was audited by Horizon and as a result of irregularities in [his]
notes, [he] . . . return[ed] $82,000 to Horizon." In addition, Boas claimed his
wife "overpaid Horizon $64,000, which was never returned."
A-2223-17T2
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The Commissioner issued a lengthy and detailed order denying Boas's
motion for reconsideration, finding Boas "failed to demonstrate that there is
good cause to reopen or reconsider the default [f]inal [o]rder." The
Commissioner found Boas did "not establish[] the necessary grounds for
reconsideration" and "failed to demonstrate that [the order denying his motion
to vacate the final order] was based upon a palpably incorrect or irrational basis
or that there was a failure to consider, or appreciate the significance of probative,
competent evidence." The Commissioner further observed that "Boas
improperly raise[d] additional arguments that were ascertainable at the time that
Boas originally moved to vacate." The Commissioner found that, although Boas
claimed he "billed in accordance with the treatment provided" and "would never
have intentionally submitted false claims," Boas again offered "no legal or
substantive response, other than this bald refutation without any evidentiary
support" demonstrating a meritorious defense to the charges in the order to show
cause.
Boas argued, for the first time, he could not properly defend himself and
provide a meritorious defense because he could not review the applicable patient
charts and bills. The Commissioner found these arguments "inadequate and
unpersuasive" because "Boas had adequate information and a substantial period
A-2223-17T2
11
of time to attempt to at least formulate a response," and "Boas had control over
the records of the claims that he submitted and could have attempted to answer
based upon the [patient] initials" in the order to show cause. The Commissioner
also found Boas could have "requested further information from [the
Department] at any time, but he did not do so."
The Commissioner determined Boas "failed to demonstrate that he has a
meritorious defense," and rejected his assertion that the Commissioner
improperly relied on his criminal conviction in denying his motion to vacate the
final order. The Commissioner explained that although the order denying the
motion to vacate stated "that Boas pleaded guilty to committing [t]hird[-d]egree
[i]nsurance [f]raud and admitted to engaging in similar conduct as he did in the
underlying allegations [of the order to show cause]," the order also noted that
the factual circumstances alleged in the indictment and the order to show cause
involved different time frames and alleged patients. Thus, the Commissioner
found that the reference to Boas's guilty plea was "afforded no weight" and was
irrelevant to the denial of Boas's motion to vacate the final order.
In support of his reconsideration motion, Boas also argued for the first
time that the Act requires a demonstration of intent, which he claimed was not
proven. The Commissioner found Boas improperly raised the argument for the
A-2223-17T2
12
first time in his reconsideration motion because it could have been asserted in
support of his motion to vacate the final judgment. The Commissioner also
found that the evidence supporting the order to show cause showed Boas sought
payment from Horizon on at least 1011 claims for treatment that was not
rendered, and those circumstances present "objective facts within his
knowledge, and therefore a demonstration of intent need not be demonstr ated."
The Commissioner also noted that Boas argued for the first time on his
reconsideration motion that the $500,000 in civil and administrative penalties
was "inequitable and without basis in the record" because he was paid only a
total of $53,384.52 by Horizon on the 1011 false claims submitted. The
Commissioner explained that Boas "was exposed to a substantially higher fine"
under the statute with a maximum exceeding $15,000,000.
The Commissioner also analyzed the seven factors that must be considered
in determining the reasonableness of civil penalties under the Act pursuant to
Kimmelman v. Henkels & McCoy, Inc., 108 N.J. 123, 137-39 (1987): (1) the
defendant's good or bad faith; (2) defendant's ability to pay; (3) the amount of
profits defendant obtained from the illegal activity; (4) the injury to the public;
(5) duration of the conspiracy; (6) the existence of criminal or treble damages
actions; and (7) past violations. In particular, the Commissioner noted the
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13
severe harm to the public resulting from a medical professional committing
fraud; that Boas acted in bad faith because, with the number of claims submitted,
he could not have reasonably thought his actions were lawful; an inability to pay
can be outweighed by the other factors; the fraudulent conduct spanned a four-
year period and resulted in over $50,000 in payments for false claims; Boas has
a conviction for insurance fraud, though unrelated to this matter; and a $500,000
penalty was well below the maximum potential penalty authorized by the Act.
The Commissioner concluded the civil and administrative penalty imposed "was
reasonable and necessary for Boas'[s] repeated acts of insurance fraud. Such a
significant penalty demonstrates the appropriate level of opprobrium for such
illegal conduct and serves to deter future acts of insurance fraud by Boas and
[the] public at large."
The Commissioner denied the motion for reconsideration, entered an
order and this appeal followed.
II.
Our review of the Commissioner's final agency decision is limited. In re
Herrmann, 192 N.J. 19, 27 (2007). We will not upset an agency's final quasi-
judicial decision absent a "clear showing that it is arbitrary, capricious, or
unreasonable, or that it lacks fair support in the record." Id. at 27-28. This same
A-2223-17T2
14
deferential standard applies to our review of the agency's choice of a disciplinary
sanction. Id. at 28. We "accord substantial deference to an agency head's choice
of remedy or sanction." Id. at 34-35 (quoting Div. of State Police v. Jiras, 305
N.J. Super. 476, 482 (App. Div. 1997)).
We review discipline only to determine whether the "punishment is so
disproportionate to the offense, in the light of all of the circumstances, as to be
shocking to one's sense of fairness." In re Stallworth, 208 N.J. 182, 195 (2011)
(citation omitted). Moreover, as our Supreme Court has "cautioned, courts
should take care not to substitute their own views of whether a particular penalty
is correct for those of the body charged with making that decision." In re Carter,
191 N.J. 474, 486 (2007). Measured against these standards, we find no basis
to reverse the Commissioner's orders denying Boas's motions to vacate the final
order and for reconsideration.
In the first instance, it is necessary to observe that the arguments Boas
presented to the Commissioner in support of his motion to vacate the final order
were limited. He argued only that there was excusable neglect for his failure to
respond to the order to show cause because he spoke to an attorney and received
"assurances" the attorney would "handle" the matter. Boas did not provide any
A-2223-17T2
15
facts supporting a meritorious defense to the allegations in the order to show
cause other than a conclusory assertion that he had a "clear defense."
Since the entry of the Commissioner's order denying his motion to vacate
the final order, Boas has engaged in a consistent and gradual effort to ignore the
record he presented in support of his motion by adding arguments and
contentions in his motion for reconsideration and now on appeal that were
simply never presented to the Commissioner in the first instance. For example,
in support of his reconsideration motion he argued the civil and administrative
penalty imposed was excessive, 7 and that he had a defense to the allegations in
the order to show cause because he did not intend to overbill the patients. But
those arguments were never presented in support of his motion to vacate the
final order. Similarly, on appeal, he adds claims never asserted before the
motion court, including that the final order should have been vacated because
the allegations in the order to show cause were based on a faulty investigation.
Our consideration of the Commissioner's order on Boas's motion to vacate
the final order is, however, limited to the record presented to the Commissioner
when the motion was made and decided. See, e.g., Capital Fin. Co. of Del.
7
In the order denying Boas's motion to vacate the final order, the Commissioner
noted "Boas does not challenge the quantum of the sanctions imposed."
A-2223-17T2
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Valley v. Asterbadi, 398 N.J. Super. 299, 310 (App. Div. 2008) (explaining the
validity of a court or agency's determination on a motion for reconsideration is
limited to the record presented at the time of the initial motion); see also Nieder
v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973) (explaining that reviewing
courts "will decline to consider questions or issues not properly presented
[below] . . . when [the] opportunity for such a presentation is available 'unless
the questions so raised on appeal go to the jurisdiction of the [proceeding] or
concern matters of great public interest'" (quoting Reynolds Offset Co. v.
Summer, 58 N.J. Super. 542, 548 (App. Div. 1959))); In re Stream
Encroachment Permit, Permit No. 0200-04-0002.1 FHA, 402 N.J. Super. 587,
602 (App. Div. 2008) (noting we will not consider issues that were not raised
before an administrative agency unless they are of public importance). Thus, in
our analysis of the Commissioner's order denying Boas's motion to vacate the
final order, we do not consider information or arguments Boas first presented in
support of his reconsideration motion or which he attempts to inject in the record
for the first time on appeal.
Boas argues the Commissioner's denial of his motion to vacate the final
judgment was arbitrary, capricious and unreasonable and lacks support in the
record. Boas asserts he has meritorious defenses to the allegations in the order
A-2223-17T2
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to show cause based on the purported Department errors and miscalculations
and there was otherwise good cause to vacate the final order. As noted, however,
we do not consider his claims there were errors in the Department's investigation
supporting meritorious defenses to the allegations in the order to show cause
because he failed to present those claims to the Commissioner in support of his
motion to vacate the final order and they do not go to the Commissioner 's
jurisdiction or raise issues of public importance. Nieder, 62 N.J. at 234; see also
Abbott v. Burke, 119 N.J. 287, 390 (1990) (finding it "unfair" to consider a claim
on appeal that "was apparently never explicitly advanced as a claim until the
hearing had concluded" before an administrative agency).
Boas does not dispute that the Commissioner properly considered his
motion to vacate the final judgment under the principles governing Rule 4:50-
1(a), but argues the court erred in its application of those principles because he
demonstrated excusable neglect and a meritorious defense. See Marder v.
Realty Constr. Co., 84 N.J. Super. 313, 318 (App. Div. 1964) ("Generally, a
defendant seeking to reopen a default judgment must show that the neglect to
answer was excusable under the circumstances and that he has a meritorious
defense.").
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The decision whether to grant a motion to vacate a default judgment under
Rule 4:50-1 is accorded substantial deference and will not be disturbed absent a
"clear abuse of discretion." Hous. Auth. of Morristown v. Little, 135 N.J. 274,
283 (1994); see also Mancini, 132 N.J. at 334 (finding the decision to vacate a
default judgment is "left to the sound discretion of the trial court, and will not
be disturbed absent an abuse of discretion"). "The rule is designed to reconcile
the strong interests in finality of judgments and judicial efficiency with the
equitable notion that courts should have authority to avoid an unjust result in
any given case." Manning Eng'g, Inc. v. Hudson Cty. Park Comm'n, 74 N.J.
113, 120 (1977). There is an abuse of discretion "when a decision is 'made
without a rational explanation, inexplicably departed from established policies,
or rested on an impermissible basis.'" U.S. Bank Nat'l Ass'n v. Guillaume, 209
N.J. 449, 467-68 (2012) (quoting Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88,
123 (2007)).
Motions to vacate default judgments should be viewed "with great
liberality." Mancini, 132 N.J. at 334 (quoting Marder, 84 N.J. Super. at 319).
"All doubts . . . should be resolved in favor of the parties seeking relief." Ibid.
That is so because of the importance we attach to securing a decision on the
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merits. Davis v. DND/Fidoreo, Inc., 317 N.J. Super. 92, 100-01 (App. Div.
1998).
However, to prevail on a motion to vacate a judgment under Rule 4:50-
1(a), a party is "compelled to prove the existence of a 'meritorious defense,'"
Guillaume, 209 N.J. at 469 (2012) (quoting Little, 135 N.J. 284), because "[i]t
would create a rather anomalous situation if a judgment were to be vacated on
the ground of . . . excusable neglect, only to discover later that the defendant
had no meritorious defense," ibid. (first alteration in original) (quoting Shulwitz
v. Shuster, 27 N.J. Super. 554, 561 (App. Div. 1953)); see also Shulwitz, 27 N.J.
Super. at 561 (requiring the showing of a meritorious defense so "[t]he time of
the courts, counsel and litigants [is] not . . . taken up by . . . a futile
proceeding"). A court is required to "examine defendant's proposed defense to
determine its merit." Bank of N.J. v. Pulini, 194 N.J. Super. 163, 166 (App. Div.
1984).
The record presented to the Commissioner on Boas's motion to vacate the
final order is bereft of any evidence supporting a meritorious defense to the
allegations in the order to show cause. For that reason alone, we are convinced
the Commissioner did not abuse his discretion by finding Boas failed to establish
A-2223-17T2
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an entitlement to relief from the final order and denying his motion to vacate the
order.
Moreover, the Commissioner's finding Boas failed to demonstrate
excusable neglect for his failure to respond to the order to show cause is
supported by the record presented when the motion was decided. Boas contends
he established excusable neglect based on vague references to his attorney's
assurances he would handle the order to show cause. But the Commissioner
aptly found that Boas failed to detail any action he took "to ensure that a defense
against the Department's charges . . . was presented" during the eight months
after he was first served with the order to show cause and before the $2000
payment Boas asserts was a retainer for the attorney's representation. The
Commissioner further found that Boas presented no evidence confirming the
payment was for the attorney's retention to defend Boas in connection with the
order to show cause or establishing he made any effort prior to the entry of the
final order to ensure a response to the allegations was filed or to learn about the
status of the matter.
Indeed, Boas's certification demonstrates his putative attorney's alleged
assurances could not be reasonably relied upon to ensure that a response to the
order to show cause was, or would be, filed. Boas certified that he sent the
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September 2014 order to show cause to the attorney and received assurances the
attorney would "handle" the matter, but in December 2014 Boas was served with
the order to show cause again with a notice that if he did not respond in seven
days, the Commissioner would dispose of the matter. Thus, Boas knew in
December 2014 that his putative attorney's alleged assurances were not true, but
his certification offered no explanation why he thereafter assumed the same
attorney would actually file a response to the order to show cause or why he
took no steps to ensure the attorney did so.
The Commissioner's findings support his determination that Boas failed
to demonstrate excusable neglect for his failure to respond to the order to show
cause. Boas's certification did not demonstrate that his failure to respond to the
order to show cause "was 'attributable to an honest mistake that is compatible
with due diligence.'" Guillaume, 209 N.J. at 468 (quoting Mancini, 132 N.J. at
335). As observed by the Commissioner, "[m]ere carelessness or lack of proper
diligence on the part on an attorney is ordinarily not sufficient to entitle his
clients to relief from an adverse judgment in a civil action." Baumann v.
Marinaro, 95 N.J. 380, 394 (1984) (alteration in original) (quoting In re T., 95
N.J. Super. 228, 235 (App. Div. 1967)).
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We are not persuaded by Boas's reliance on Regional Construction Corp.
v. Ray, 364 N.J. Super. 534 (App. Div. 2003). In Ray, the motion court vacated
a default judgment because the defendant's supporting certification showed he
had other pending litigation involving related claims and parties, forwarded the
new complaint to the attorney handling those matters and assumed the attorney
would interpose a defense. Id. at 538-40. The defendant's supporting
certification also included facts demonstrating meritorious defenses. Id. at 539.
The plaintiffs in Ray did not challenge the motion court's finding that the
defendant demonstrated excusable neglect and a meritorious defense supporting
relief from the default judgment. Id. at 537, 541. The issue on appeal was
whether the motion court properly imposed a condition for granting relief from
the default judgment. Id. at 541. Our finding that "there were sufficient grounds
for the vacating of the default judgment" was based solely on the information
contained in the defendant's supporting certification which "seem[ed]
reasonably sufficient to constitute excusable neglect." Ibid.
Here, Boas's supporting certification did not demonstrate any meritorious
defenses to the order to show cause and, as the Commissioner found, Boas failed
to provide sufficient details concerning his actions, and those of his putative
attorney, to demonstrate a mistake compatible with due diligence. Contrary to
A-2223-17T2
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Boas's contention, in Ray we did not decide that vague assurances from a
putative attorney that are unsupported by other evidence demonstrate excusable
neglect. In addition, in Ray, there was no evidence the defendant had reason to
question his assumption that his attorney would file a response to the complaint.
In contrast, Boas's certification established he had every reason to doubt that his
putative attorney would file a response to the order to show cause. Boas knew
in December 2014 that despite his attorney's alleged assurances, no response
was filed to the order to show cause when it was first served in September.
In sum, Boas fails to demonstrate the Commissioner's findings and
decision denying the motion to vacate were made "without a rational
explanation, inexplicably departed from established policies, or rested on an
impermissible basis." Guillaume, 209 N.J. at 467-68 (quoting Iliadis, 191 N.J.
at 123). To the contrary, the Commissioner's findings are supported by the scant
evidence Boas presented in support of his motion to vacate, are founded on
established principles and do not rest on any impermissible bases. We therefore
affirm the Commissioner's denial of Boas's motion to vacate the final order.
We also affirm the Commissioner's denial of Boas's motion for
reconsideration. We again note that Boas's reconsideration motion was founded
on numerous arguments, including those related to the amount of the penalties
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imposed and purported meritorious defenses, that were simply never presented
to the Commissioner in support of the motion to vacate the default judgment. It
was appropriate for the Commissioner to reject Boas's arguments, asserted for
the first time on his motion for reconsideration. Capital Fin. Co. of Del. Valley,
398 N.J. Super. at 310 (explaining a motion for reconsideration reviews an order
"based on the evidence before the court on the initial motion" and does not
"serve as a vehicle to introduce new evidence in order to cure an inadequacy in
the motion record").
The remaining arguments made in support of the reconsideration motion
constituted a mere rehashing of the limited contentions Boas presented in
support of his motion to vacate the final order. For the reasons already
explained, the Commissioner correctly addressed those arguments in his denial
of the motion to vacate the final judgment. Ibid. ("Reconsideration cannot be
used to . . . reargue a motion.").
We last address Boas's argument that the sanction imposed by the
Commissioner is inequitable. To be sure, the $500,000 penalty imposed by the
final order is substantial. However, the penalty was imposed by the
Commissioner's final order, and Boas did not address the penalty or claim he
had a meritorious defense to the penalty in his motion to vacate the final order.
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Thus, he effectively raises the issue of his purported meritorious defense to the
final order's imposition of the penalty for the first time on appeal. Because the
issue does not pertain to the Commissioner's jurisdiction or any issue of public
importance, we will not address the merits of Boas's claim the penalty is
inequitable. Nieder, 62 N.J. at 234. We add only that, given the substantial
deference we afford an agency's choice of remedy or sanction, Herrmann, 192
N.J. at 34-35, and all of the circumstances found by the Commissioner in the
final order, we do not find the penalty, imposed for Boas's 1011 violations of
the Act occurring over a four-year period, "is so disproportionate to the offense
. . . as to be shocking to one's sense of fairness." Stallworth, 208 N.J. at 195
(citation omitted).
Affirmed.
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