Traci Willis v. Board of Review ( 2024 )

NOT FOR PUBLICATION WITHOUT THE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-3065-21
TRACI WILLIS,
Appellant,
v.
BOARD OF REVIEW,
DEPARTMENT OF LABOR,
and HOUSING AUTHORITY
OF THE CITY OF CAMDEN,
Respondents.
___________________________
Submitted September 26, 2023 – Decided November 19, 2024
Before Judges DeAlmeida and Berdote Byrne.
On appeal from the Board of Review, Department of
Labor, Docket No. 179492.
Goldberg, Miller & Rubin, PC, attorneys for appellant
(Robert P. Stein, on the briefs).
Matthew J. Platkin, Attorney General, attorney for
respondent Board of Review (Sookie Bae-Park,
Assistant Attorney General, of counsel; Kevin K.O.
Sangster, Deputy Attorney General, on the brief).
Brown & Connery, LLP, attorneys for respondent
Housing Authority of the City of Camden (Michael J.
DiPiero, on the brief).
The opinion of the court was delivered by
DeALMEIDA, J.A.D.
Appellant Traci Willis appeals from an April 8, 2022 final agency decision
of the Board of Review (Board) disqualifying her from receiving unemployment
compensation benefits for gross misconduct connected with her work pursuant
to N.J.S.A. 43:21-5(b). We affirm.
I.
Appellant was employed by respondent Housing Authority of the City of
Camden (HACC) in various positions beginning on April 3, 2000. On
September 21, 2009, she was appointed Director of HACC's Housing Choice
Voucher (HCV) program, commonly known as Section 8. On October 18, 2017,
appellant married Mark Willis, a landlord who participated in the HCV
program.1
On December 21, 2018, HACC placed appellant on paid administrative
leave while it conducted an internal investigation into alleged conflicts of
1
Because appellant and Mark Willis share a surname, we refer to Mark Willis
by his full name to avoid confusion.
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interest. The investigation was prompted by HACC's receipt of a letter from
Mark Willis's former spouse. She reported that while appellant was the Director
of the HCV program, she was also a principal of MTW Investment Group, LLC
(MTW), which received rent subsidy payments from HACC through the HCV
program. The tipster also reported that after Mark Willis married appellant he
continued to receive rent subsidy payments from HACC through the HCV
program for various properties.
The investigation revealed that appellant created MTW in May 2015.
MTW began receiving rent subsidy payments from HACC through the HCV
program in July 2015. Those payments continued until appellant's suspension.
While appellant claimed to have transferred her interest in MTW to a third party
on December 16, 2016, state records listed appellant as having an interest in
MTW as late as March 2019. HACC also produced evidence that appellant was
listed as the party to receive local property tax bills for a parcel owned by MTW
in 2019.
On March 27, 2019, at the conclusion of the investigation, HACC
terminated appellant. HACC determined appellant engaged in intentional
wrongdoing. Addressing appellant, HACC found that
by making MTW a landlord under the HCV [p]rogram
. . . which you directed, you created a substantial
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conflict with the proper discharge of your duties by
eradicating all notions of impartiality when granting
MTW subsidies over other landlords who were in direct
competition for the same subsidies [in violation of the
HACC human resources policy manual (Manual)].
Such activities also rise to the definition of [f]raud
under [the Manual].
[(citations omitted).]
HACC concluded that the "blatant conflict of interest . . . could only have been
waived by" the Department of Housing and Urban Development (HUD) prior to
its occurrence. See 24 C.F.R. § 982.161.
With respect to her marriage to Mark Willis, the HACC found
as the Director of the HACC HCV [p]rogram, your
marriage to a landlord receiving subsidies under
HACC's HCV [p]rogram is in violation of [the Local
Government Ethics Law,] N.J.S.A. 40A:9-22.5[,] as no
member of your immediate family shall have an interest
in a business organization or engage in any business
transaction which is in substantial conflict with the
proper discharge of your duties.
HACC rejected appellant's claim that Mark Willis transferred the properties
receiving the HCV subsidies to his former spouse in March 2016 as part of a
divorce settlement. HACC noted that a November 13, 2018 court order states
that Mark Willis must make monthly payments to his former spouse until he
transfers the properties to her, establishing that he owned the properties until at
least that time.
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On March 31, 2019, appellant filed a claim for unemployment benefits.
A Deputy Director later determined appellant was disqualified from receiving
benefits based on her termination for gross misconduct.
Appellant filed an appeal in the Appeal Tribunal, which held a hearing on
August 22, 2019. At the hearing, appellant claimed that in April 2015, she
discussed the formation of MTW with Maria Marquez, who was then the HACC
Executive Director. She also claimed she attended a meeting on October 29,
2015, with Marquez and HACC's acting general counsel Kenneth Mann, who
determined appellant could address the conflict of interest created by her
ownership of MTW by recusing herself from matters involving MTW. She
testified that she followed Mann's direction and had her subordinates handle all
subsidy payments to MTW. Appellant produced no documentary evidence that
the meeting took place or memorializing Mann's purported resolution of the
conflict of interest.
Appellant also testified she disclosed her relationship with Mark Willis,
who she was then dating, to Marquez in 2014. She testified Marquez told her to
address the conflict by having all matters concerning Mark Willis handled by
staff members who reported directly to Marquez. In addition, appellant testified
she disclosed her marriage to Mark Willis at the time it happened to Victor
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Figueroa, who was then HACC Executive Director. According to appellant,
Figueroa did not instruct her to take any steps beyond continuing her existing
recusal from all matters relating to Mark Willis.
Figueroa agreed he became aware of appellant's marriage to Mark Willis
at the time the marriage took place. He stated he was aware Mark Willis owned
properties receiving subsidies from HACC through the HCV program and
informed appellant the marriage created a conflict of interest. According to
Figueroa, he instructed appellant to provide him with a recommendation on how
to address the conflict, but she did not comply with that directive. Figueroa did
not follow up with appellant until HACC received the letter from Mark Willis's
former spouse.
On August 28, 2019, the Appeal Tribunal reversed the decision of the
Deputy Director. The Tribunal found:
While the employer was within its rights in discharging
[appellant], this right does not necessarily establish . . .
that the discharge was due to misconduct connected
with the work within the meaning of the law.
[Appellant] has shown the employer was fully aware of
her company interest and company recusal years before
the employer received a complaint from [appellant's]
husband['s] ex-wife. If [appellant] was in a conflict of
interest she should have been terminated in 04/2015
when the company was formed or 10/2015 when
[appellant] again informed the former executive
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director and general counsel of her company interest.
The employer has not met the burden of proof her
actions were dishonest or intentional. Therefore, no
disqualification arises under N.J.S.A. 43:21-5(b), as
[appellant] was not discharged for misconduct
connected with the work.
HACC appealed to the Board, which remanded the matter to the Appeal
Tribunal. The Board determined: (1) more information was needed with respect
to appellant's ownership interest in MTW, the entity's business, and appellant's
purported transfer of her interest in MTW in 2016; (2) the Appeal Tribunal failed
to make findings of fact with respect to whether appellant divested herself of
her interest in MTW and whether and when Mark Willis transferred his
properties to his former spouse; and (3) it was necessary for HACC to produce
the letter from Mark Willis's former spouse that sparked the investigation.
On remand, the Appeal Tribunal held a hearing on May 5, 2020. Figueroa
testified that appellant was given an opportunity to produce documentary proof
she was advised by HACC that the conflicts of interest posed by her ownership
of MTW and marriage to Mark Willis could be resolved through her recusal
from matters concerning MTW and Mark Willis. Appellant failed to produce
any such evidence. Figueroa also testified the investigation revealed HCV
payments from HACC to MTW were being sent monthly by check to appellant's
home address. He also testified that any delegation of authority by appellant to
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subordinates would not address the conflicts of interest because waiver of
conflicts must be made in writing by HUD. Figueroa stated the evidence
uncovered during the investigation was referred to the United States Attorney's
Office and the Inspector General of HUD for further investigation.
On May 14, 2020, the Appeal Tribunal again reversed the Deputy
Director, applying the same reasoning expressed in its August 28, 2019 decision.
On September 4, 2020, the Board affirmed the Appeal Tribunal's decision.
HACC appealed the Board's September 4, 2020 decision to this court. The
Board thereafter moved for a remand "to further consider the testimony and
evidence presented to the [Appeal] Tribunal, as well as issues not addressed by
the Tribunal after the" Board's remand. We granted the Board's motion.
On April 8, 2022, the Board on remand issued a decision reversing the
Appeal Tribunal. The Board noted appellant produced no evidence establishing
she disclosed her interest in MTW to HACC. In addition, the Board found
appellant retained her interest in MTW, which the Board concluded was formed
for the purpose of receiving Section 8 payments, until at least 2019. The Board
also found that Mark Willis continued to receive payments from HACC through
the HCV program after he married appellant and did not divest himself of the
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properties for which those payments were made at least through the date
appellant was placed on administrative leave.
Based on those findings, the Board concluded appellant's conduct
amounted to an act punishable as a crime of the fourth degree under N.J.S.A.
2C:27-9, unlawful official business transaction, as well as gross misconduct,
warranting her disqualification for unemployment benefits.
This appeal followed. Appellant argues the Board exceeded its authority
by rejecting the Appeal Tribunal's credibility determinations and erred in its
conclusion she committed a criminal act or gross misconduct disqualifying her
from unemployment benefits.
After the parties submitted their briefs, the Attorney General informed this
court that on September 18, 2023, appellant pled guilty to third-degree
conspiracy to tamper with public records for the purpose to defraud, N.J.S.A.
2C:5-2(a); N.J.S.A. 2C:28-7(a). The conviction arose from the conduct that
resulted in appellant's termination by HACC. In addition to imposing a
suspended jail sentence and a three-year term of probation, the court forfeited
appellant's employment at HACC and permanently disqualified her from
holding any office or position with the State or any of its administrative or
political subdivisions.
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II.
Our review of an administrative agency decision is limited. Brady v. Bd.
of Review, 152 N.J. 197, 210 (1997). "'[I]n reviewing the factual findings made
in an unemployment compensation proceeding, the test is not whether [we]
would come to the same conclusion if the original determination was [ours] to
make, but rather whether the factfinder could reasonably so conclude upon the
proofs.'" Ibid. (quoting Charatan v. Bd. of Review, 200 N.J. Super. 74, 79 (App.
Div. 1985)). "If the Board's factual findings are supported 'by sufficient credible
evidence, [we] are obliged to accept them.'" Ibid. (quoting Self v. Bd. of
Review, 91 N.J. 453, 459 (1982)). We also give due regard to the agency's
credibility findings. Logan v. Bd. of Review, 299 N.J. Super. 346, 348 (App.
Div. 1997). "Unless . . . the agency's action was arbitrary, capricious, or
unreasonable, the agency's ruling should not be disturbed." Brady, 152 N.J. at
210.
"The underlying purpose of the Unemployment Compensation Law 'is to
provide some income for the worker earning nothing because he is out of work
through no fault or act of his own.'" Futterman v. Bd. of Review, 421 N.J. Super.
281, 288 (App. Div. 2011) (emphasis omitted) (quoting Brady, 152 N.J. at 212)
(internal quotation marks omitted). Thus, a person is disqualified for benefits
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"[f]or the week in which the individual has been suspended or discharged for
misconduct connected with the work, and for the five weeks which immediately
follow that week, as determined in each case." N.J.S.A. 43:21-5(b).
"Misconduct" means conduct which is improper,
intentional, connected with the individual's work,
within the individual's control, not a good faith error of
judgment or discretion, and is either a deliberate
refusal, without good cause, to comply with the
employer's lawful and reasonable rules made known to
the employee or a deliberate disregard of standards of
behavior the employer has a reasonable right to expect
....
[Ibid.]
Additionally,
[i]f the discharge was for gross misconduct connected
with the work because of the commission of an act
punishable as a crime of the first, second, third or fourth
degree under [Title 2C], the individual shall be
disqualified . . . and no benefit rights shall accrue to any
individual based upon wages from that employer for
services rendered prior to the day upon which the
individual was discharged.
....
To sustain disqualification from benefits because of
misconduct under this subsection (b), the burden of
proof is upon the employer, who shall, prior to a
determination by the department of misconduct,
provide written documentation demonstrating that the
employee's actions constitute misconduct or gross
misconduct.
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[Ibid.]
We have carefully reviewed the record and find no basis on which to
reverse the Board's decision. The record contains sufficient credible evidence
supporting the determination that appellant is disqualified from receiving
unemployment benefits. It is undisputed that appellant and her spouse were the
recipients of public funds, the distribution of which were under appellant's direct
or indirect control by virtue of her public employment. Appellant does not
dispute that her ownership of MTW and marriage to Mark Willis created
conflicts of interest with her duties as Director of the HCV program. She claims,
however, that she disclosed those conflicts and was told by her supervisors at
HACC that she could address the conflicts by having her subordinates handle
all matters concerning MTW and Mark Willis. As the Board found, apart from
her self-serving testimony, appellant produced no evidence that she made the
disclosures or received advice addressing the conflicts of interest from her
supervisors at HACC. We share the Board's incredulity that the disclosure and
resolution of conflicts of interest of such magnitude would not have been
memorialized in writing.
The improper nature of appellant's self-dealing with public funds is self-
evident. 24 C.F.R. § 982.161(a)(2) provides no entity that administers an HCV
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program, such as HACC, may enter into a contract relating to HCV funds with
an employee who has a direct or indirect interest in the contract if that employee
formulates policy or influences decisions with respect to the program. In
addition, where a conflict arises as the result of such a contract, the employee
must disclose the conflict to HUD, which has the sole authority to waive the
conflict in writing. 24 C.F.R. § 982.161(b) and (c). Even if one were to believe
appellant's testimony, she concedes she did not raise her conflicts of interest
with HUD and that HUD did not waive those conflicts in writing.
In addition, the Manual states the misuse of federal funds is grounds for
disciplinary action, up to and including termination. It also prohibits employees
from having any direct or indirect interest in substantial conflict with the proper
discharge of their duties in the public interest, and from acting in any matter
where a personal interest can reasonably be expected to impair their objectivity
and independence of judgment. Similar prohibitions are included in the Local
Government Ethics Law, N.J.S.A. 40A:9-22.5; 40A:9-22.2(c)-(d). There is
ample support in the record for the Board's determination that appellant's
personal interest in her and her husband's receipt of public funds, the distribution
of which was discretionary and competitive, was in conflict with her obligations
as Director of the HCV program and constituted gross misconduct.
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We are not persuaded by appellant's argument the Board lacked the
authority to reject the credibility determinations of the Appeal Tribunal. To the
contrary, N.J.A.C. 1:1-18.6 authorizes the Board to reject or modify credibility
findings upon a determination, based on a review of the record, that those
findings are arbitrary, capricious, or unreasonable. This is precisely the basis
on which the Board determined appellant's testimony lacked credibility.
As the Board explained, appellant's credibility was called into question
when: (1) her claim to have transferred her interest in MTW was contradicted
by evidence of her continued interest in that entity until at least 2019; (2) her
testimony that Mark Willis transferred his properties to his former spouse was
contradicted by a court order that indicated he continued to own the properties
after his marriage to appellant; and (3) she failed to produce any documentary
evidence supporting her claimed disclosures and the advice she purportedly
received from HACC officials. In addition, appellant's conviction for tampering
with public records for the purpose to defraud, although arising after the Board's
decision, is based on the conduct that resulted in her termination and
corroborates the Board's decision.
Affirmed.
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