DEPARTMENT OF COMMUNITY AFFAIRS, SANDY RECOVERY DIVISION VS. ROBERT RUGGIERO (DEPARTMENT OF COMMUNITY AFFAIRS) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE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-3604-15T1
DEPARTMENT OF COMMUNITY
AFFAIRS, SANDY RECOVERY
DIVISION,
Petitioner-Respondent,
v.
ROBERT RUGGIERO,
Respondent-Appellant.
____________________________
Argued July 11, 2017 – Decided November 8, 2017
Before Judges Nugent and Accurso.
On appeal from the Department of Community
Affairs, Docket Nos. RSP0015504 and
RRE0015496.
Michael Confusione argued the cause for
appellant (Hegge & Confusione, LLC,
attorneys; Mr. Confusione, of counsel and on
the brief).
Cameryn J. Hinton, Deputy Attorney General,
argued the cause for respondent (Christopher
S. Porrino, Attorney General, attorney;
Melissa Dutton Schaffer, Assistant Attorney
General, of counsel; Ms. Hinton, on the
brief).
PER CURIAM
Robert Ruggiero appeals from a final agency decision of the
Department of Community Affairs (DCA or Department) to recoup
previously-allocated grant funds from two Sandy-related
programs: the Homeowner Resettlement Program and the Renovation,
Reconstruction, Elevation and Mitigation Program. Because we
agree with the DCA that Ruggiero did not meet the eligibility
requirements for either program, we affirm.
Following Superstorm Sandy, the United States Department of
Housing and Urban Development allocated Community Block Grant
Disaster Recovery funds to assist property owners who sustained
damage from the storm. Allocations, Common Application,
Waivers, and Alternative Requirements for Grantees Receiving
Community Development Block Grant (CDBG) Disaster Recovery Funds
in Response to Hurricane Sandy, 78 Fed. Reg. 14329, 14329-31
(March 5, 2013). The DCA administers the program in New Jersey.
Through the Homeowner Resettlement Program, the government
offered grants to affected homeowners for "any non-construction
purpose that assists the homeowner to remain in the county in
which they lived at the time of the storm." Department of
Community Affairs, Sandy Recovery Division, Resettlement Program
Policy, No. 2.10.35, at 3 (August 2015),
http://www.renewjerseystronger.org/wp-
content/uploads/2014/09/Resettlement-Program-Policies-and-
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Procedures.pdf. In order to receive a grant of up to $10,000, an
applicant was required to demonstrate:
1. The damaged residence must be located in
one of nine most impacted counties:
Atlantic, Bergen, Cape May, Essex, Hudson,
Middlesex, Monmouth, Ocean, or Union.
2. At the time of the storm (October 29,
2012), the damaged residence must have been
owned and occupied by the applicant as the
applicant’s primary residence.
3. The applicant must have registered for
FEMA assistance.
4. The residence must have sustained
damage, as a result of Superstorm Sandy, a
Full Verified Loss (FVL) of at least $8,000
or one foot or more of water on the first
floor (as determined by FEMA, its sub-
agencies or affiliates).
[Ibid.]
The Renovation, Reconstruction, Elevation and Mitigation
Program's purpose was to assist qualified homeowners to
"complete the necessary work to make their homes livable and
compliant with flood plain, environmental, and other State and
local requirements." Department of Community Affairs, Sandy
Recovery Division, Reconstruction, Rehabilitation, Elevation and
Mitigation Program (RREM): Policies and Procedures, No. 2.10.36,
at 26 (April 2017), http://www.renewjerseystronger.org/wp-
content/uploads/2017/04/Reconstruction-Rehabilitation-Elevation-
and-Mitigation-RREM-Program-Policies-Procedures.pdf. The
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qualifications for this program are nearly identical to those of
the Resettlement Program, with the added requirement that a
recipient have an adjusted household gross annual income of less
than $250,000. Id. at 28.
Ruggiero applied for grants from both programs in June
2013, representing the home he owned in Manahawkin was his
primary residence at the time of the storm. Based on his
representations, he was awarded a $10,000 Resettlement grant in
August 2013 and a $75,000 Reconstruction grant in June 2014.
Ruggiero executed a Promissory Note and a Homeowner's Grant
Agreement for each grant before the funds were disbursed to him.
In March 2015, the DCA advised Ruggiero that a review of his
applications revealed the Manahawkin home was not his primary
residence at the time of the storm, making him ineligible for
the grant funds he had received. The DCA asked Ruggiero to void
the checks or return the funds.
Ruggiero timely appealed the DCA's ineligibility
determination, and it was transmitted to the Office of
Administrative Law (OAL) to be heard as a contested case. At
the hearing before the Administrative Law Judge (ALJ), a
representative of the Department testified that Ruggiero
appeared initially to meet the eligibility criteria for the
grant programs. But because Ruggiero had correspondence with
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the Department sent to an address in Wayne, the Department
undertook a review to verify his primary address.
In the course of that investigation, the Department's
witness learned that at the time of the storm, Ruggiero's
driver's license listed his address in Wayne, not Manahawkin.
Ruggiero's 2012 through 2014 federal tax returns also reflected
the Wayne address, as did Ruggiero's 2012 boat registration. He
was registered to vote in Essex County. The tax bill for the
Manahawkin property was sent to the Wayne address. Information
from Ruggiero's property insurer revealed that the Manahawkin
property was insured as a primary residence, as did a home
equity loan, although no information was provided as to when
that loan was made. Ruggiero also received a Homestead Tax
Benefit for 2012 for his Manahawkin home, notwithstanding his
address of record reflected the Wayne address.
After reviewing that evidence, the Department concluded the
Manahawkin address was not Ruggiero's primary residence as of
the time of the storm. The witness testified the most
significant of the proofs, the driver's license and voter
registration, did not reflect the Manahawkin address at the time
of the storm. The bank loan was not specific as to time, and
the Homestead Benefit account was not enough to outweigh other
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evidence that Ruggiero's primary residence was in Wayne at the
time of the storm.
Ruggiero testified that he and his wife purchased the
Manahawkin house in 1999 to use as their shore house. When his
wife retired in 2007, she began residing there for 185 days a
year, from April through November when they closed the house for
the winter. Ruggiero continued to work in Lyndhurst and live in
the couple's mobile home on a leased plot in Wayne during the
week. During the months the shore house was open, he would come
down on Friday night and return to Wayne on Sunday evening. The
couple lived in Wayne from December through April.
Ruggiero testified he used H&R Block software to prepare
his taxes and understood from the instructions that he could
declare the Manahawkin house his primary residence so long as
either he or his wife lived there for the majority of the year.
He explained he did all his paperwork and paid all his bills
from Wayne because that was where his computer was located.
Although admitting the facts testified to by the DCA
witness were correct, Ruggiero testified that he and his wife
intended to make the Manahawkin home their primary address since
2007, and believed they had done so. He testified he was
unaware of the requirement to change the address on his driver's
license, and that he and his wife only did so in 2013 when
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someone from the Department suggested it. Mrs. Ruggiero
testified the couple was always clear that their mailing address
was in Wayne, and would have done things differently had the
State told them in the beginning they did not qualify for the
grant money.
After hearing the testimony and reviewing the documents
submitted by the parties, ALJ Susan Scarola concluded the DCA
proved by a preponderance of the credible evidence and in
accordance with the Program Guidelines that Ruggiero's primary
residence was not in Manahawkin. She found Ruggiero and his
wife credible witnesses, and accepted their testimony that he
lived in Wayne during the week and spent weekends with her in
Manahawkin during the months the house was open.
The ALJ also accepted the DCA's position that the issue
before her was not whether Ruggiero had tried to defraud the
Program but whether he was eligible for the grants under the
Program Guidelines. She acknowledged the Promissory Notes
Ruggiero executed provided his representations as to his primary
residence were material, had been relied on by the State in
determining his eligibility to receive the grant funds, and if
intentionally or willfully false or fraudulent would allow the
State to declare a default and file an action in the Superior
Court to recover the payments, as well as attorney's fees and
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costs. She also noted the Promissory Notes further provided
that the agreement was governed by New Jersey law, and that any
lawsuits of any nature pertaining to the agreements were to be
brought in the Superior Court in Mercer County.
The ALJ noted, however, that the DCA did not contend
Ruggiero intentionally or willfully made false representations
as to his primary residence. Instead, the Department contended
Ruggiero would not be eligible for the Program if his primary
residence were in Passaic rather than Ocean County. The
Department asserted its power to make an administrative
determination as to Ruggiero's eligibility, which he could have
reviewed in the OAL. The ALJ agreed that eligibility
determinations were properly in the agency and "where it is
alleged that an unintentional misrepresentation led to a grant
payment by mistake," review in the OAL was appropriate.
Reviewing the Guidelines for eligibility under the
Resettlement Program, that ALJ noted that as to primary
residence, the Guidelines provide:
4. Occupancy as Primary Residence.
4.1. Applicants must have occupied the
property as their primary residence on the
date of the storm. Second homes, vacation
homes and rental properties do not qualify
an applicant for a Resettlement Grant.
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4.2. Verification of Primary Residence is
determined through evaluation of multiple
data sources and documents. The preferred
verification requires all three of the
following:
Ownership of the property must be
verified as described in Section 3.4.
FEMA records must show that the
applicant reported to FEMA that the
property was the applicant’s primary
residence at the time of the storm.
The applicant must present a New Jersey
driver’s license or New Jersey non-
driver identification card that shows
the damaged residence as the address.
4.3. Alternative documentation will be
considered if primary residence cannot be
confirmed as described in 4.2. Proof of
ownership is required. If an applicant is
unable to provide a New Jersey driver’s
license or non-driver identification card or
FEMA records do not confirm primary
residence, the applicant must present two of
the following documents
Government issued document sent to the
damaged residence
Voter Registration Card
Insurance documentation indicating that
the damaged address is the applicant’s
primary residence.
Other documentation offered by the applicant
may be considered on a case-by-case basis.
[No. 2.10.35, supra, at 6.]
9 A-3604-15T1
The Guidelines for determining primary-residence
eligibility for the Renovation, Reconstruction, Elevation and
Mitigation Program are similar and provide as follows:
3.4 Primary Residence
Applicants must have occupied the property
as their primary residence on the date of
the storm (October 29, 2012). Second homes,
vacation homes, and rental properties are
not eligible for a RREM grant award.
Verification of primary residence is
determined through evaluation of multiple
data sources and documents. The preferred
verification requires all three of the
following:
Ownership of the property must be
confirmed as described in Section 3.3.
FEMA records must show that the
applicant reported to FEMA that the
property was the applicant's primary
residence at the time of the storm.
The applicant must present a New Jersey
driver's license or New Jersey non-
driver identification card dated prior
to the date of the storm which shows
the damaged residence as the
applicant's address.
Alternative documentation will be considered
if primary residence cannot be confirmed as
above. If an applicant is unable to provide
New Jersey identification (driver's license
or non-driver identification card) or if
FEMA records do not confirm primary
residence, the applicant must present the
following documents as verification of proof
of primary residence:
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Federal tax return document indicating
damaged residence is primary residence,
and Voter registration card showing the
damaged residence.
[No. 2.10.36, supra, at 63.]
Applying the Program Guidelines to the undisputed facts,
the ALJ found it clear Ruggiero could not establish his
Manahawkin home was his primary residence on the date of the
storm. As of October 29, 2012, Ruggiero's driver's license
listed his Wayne address; he was registered to vote in Essex
County; tax bills for the Manahawkin property were sent to
Wayne; and the couple's federal returns carried their Wayne
address. Although the ALJ noted Ruggiero's homeowner's carrier
insured the Manahawkin property as his primary residence, she
noted it is the only real property Ruggiero owned, and thus
could not be considered dispositive under the Guidelines.
The ALJ noted that unlike domicile, which "requires
presence, intention to remain and abandonment of previous
domicile," see In re Settlement of Accounts of Unanue, 255 N.J.
Super. 362, 376 (Law Div. 1991), aff'd, 311 N.J. Super. 589(App. Div.), certif. denied, 157 N.J. 541 (1998), cert. denied
sub. nom., Unanue-Casal v. Goya Foods, Inc., 526 U.S. 1051, 119
S. Ct. 1357, 143 L. Ed. 2d 518 (1999), the Sandy Program
Guidelines rely on a definition of primary residence that
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requires "documentary proof, preferably from a government
agency, to prove 'primary residence.'" She noted that "nowhere
is intention listed as a factor for proving primary residency,"
and surmised that this is presumably "so that assistance can be
provided to those whose primary residency is supported by
physical presence on the date of the storm supported by official
documentation and other objective evidence, and not only by a
subjective intention." The ALJ concluded that "[t]he
Resettlement and [Renovation, Reconstruction, Elevation and
Mitigation] programs require more than time and intention to
prove primary residence; they require documentation, which is
absent in this matter." The DCA issued a final decision
adopting ALJ Scarola's decision in its entirety.
Ruggiero appeals, arguing the DCA's decision contravenes
New Jersey law and lacks fair support in the record, that the
OAL did not have jurisdiction to hear the case, the ALJ
misapplied the test for primary residency, the grant agreements
do not provide for the remedy granted to the DCA and the ALJ did
not apply New Jersey law as to when a mistake can provide relief
to one party to a contract. We reject those arguments.
We agree with the ALJ that the question presented was one
of initial eligibility for receipt of the grant funds in
accordance with the terms of the Programs and not breach of the
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grant agreements, making jurisdiction in the agency, and not the
Superior Court, appropriate. There is no dispute that Ruggiero
had no intent to defraud the Programs by asserting that his
Manahawkin shore house was his primary residence. The ALJ found
Ruggiero and his wife sincere and credible witnesses, who had no
intent to take grant funds to which they were not entitled.
The DCA did not contend Ruggiero breached the grant
agreements by making intentional or willful misrepresentations
or misapplying the funds. It maintained the agreements were
void ab initio because Ruggiero could not qualify for the grants
based on the Programs' definition of primary residence. But the
fact that Ruggiero's representations were not willfully or
intentionally false does not deprive the DCA of the ability to
recoup the grant funds.1 The DCA has an appeals process
governing eligibility determinations under both the Homeowner
Resettlement and the Renovation, Reconstruction, Elevation and
Mitigation Programs. See Department of Community Affairs, DCA
1
It does, however, deprive the Department from recovering its
fees and costs for the effort. The remedy of fees and costs is
provided only in the grant agreements, which we agree with the
DCA were void ab initio on the facts presented. See Department
of Community Affairs, Grant Reconciliation Policy, No. 2.10.90,
at 3 (April 2016) (providing that "[n]o interest, fees, or charges
will be assessed" for any recapture agreement payment plan).
Accordingly, we disagree with the ALJ to the extent her opinion
could be read to suggest the Department could recover its fees
and costs in recouping the funds based on the grant agreements.
13 A-3604-15T1
Appeals Process, No. 2.10.7, (March 2015),
http://www.renewjerseystronger.org/wp-content/uploads/2014/09/2-
10-7-DCA-Appeal-Process-Revised-March-2015.pdf. Given that
Ruggiero availed himself of the DCA's established appeals
process and does not claim he was deprived of any due process
right, we reject his challenge to the agency's jurisdiction to
determine and resolve eligibility disputes under the Sandy grant
programs pursuant to the Administrative Procedure Act, N.J.S.A.
52:14B-1 to -31.
We likewise reject Ruggiero's arguments the ALJ misapplied
the test for primary residency and that her decision lacks fair
support in the record. Ruggiero's argument that the ALJ should
have applied general New Jersey law as to the meaning of
"primary residence" as opposed to the Program Policies and
Procedures governing the Grant Programs is without merit.
Ruggiero applied for federal grant funds made available only on
proof of eligibility in accordance with the terms of the
Programs. He cannot substitute another definition of primary
residence for the one included in the Programs for which he
applied. As the record establishes that Ruggiero lacked a
driver's license, voter registration card or a federal tax
return document listing the Manahawkin property as his home
address as of October 29, 2012, he could not establish that he
14 A-3604-15T1
occupied the property as his primary residence on the date of
the storm in accordance with the Program Guidelines.
Finally, we reject Ruggiero's argument that a mistake by
the DCA in determining his eligibility and disbursing the grant
funds does not entitle the DCA to recoup the money. The
Programs' "Recapture – Write Off Policy" plainly permits
recovery of funds incorrectly awarded to an applicant later
determined to be ineligible. See Department of Community
Affairs, Recapture – Write off Policy, No. 2.10.43, at 1
(September 13, 2013).
We agree with the ALJ that the Resettlement and Renovation,
Reconstruction, Elevation and Mitigation Programs "were
established by the State under federal guidelines and were
designed to efficiently and expeditiously provide financial
assistance to those seriously affected by Superstorm Sandy."
The obvious need for the Department to provide qualified
applicants with the funds they needed to resettle and rebuild
their damaged homes as expeditiously as possible would almost
certainly result in some mistakes as to an applicant's
eligibility for the funds. A more rigorous and searching
initial application process would as certainly have delayed
necessary funds to deserving applicants. The Programs'
"Recapture – Write Off Policy" was designed to recover funds
15 A-3604-15T1
mistakenly "paid out to applicants who are later determined to
be ineligible." Ibid. Nothing in the Sandy Policies or New
Jersey law generally prohibits the recovery of federal grant
funds from Ruggiero under the circumstances presented.
Because the record is clear Ruggiero did not meet the
eligibility requirements for the Resettlement and Renovation,
Reconstruction, Elevation and Mitigation Programs, we affirm,
essentially for the reasons expressed in ALJ Scarola's thorough
and thoughtful initial decision subsequently adopted by the
Commissioner of the DCA.
Affirmed.
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