NEW JERSEY DEPARTMENT OF HUMAN SERVICES v. LOVE CENTER DAY CARE

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3246-04T13246-04T1

NEW JERSEY DEPARTMENT

OF HUMAN SERVICES,

Petitioner-Respondent,

v.

LOVE CENTER DAY CARE,

Respondent-Appellant.

____________________________________________

 

Argued March 1, 2006 - Decided March 17, 2006

Before Judges Conley and Weissbard.

On appeal from the New Jersey Department of Human Services.

William McDonnell argued the cause for appellant (Mr. McDonnell, attorney; Philip Nettl, on the brief).

Lori J. DeCarlo, Deputy Attorney General, argued the cause for respondent (Zulima V. Farber, Attorney General, attorney; Andrea M. Silkowitz, Assistant Attorney General, of counsel; Ms. DeCarlo, on the brief).

PER CURIAM

Love Center Day Care (Center) appeals a final administrative agency decision by the Department of Human Services (DHS) to revoke its child care center license without a hearing. We reverse.

Pursuant to the Child Care Center Licensing Act, N.J.S.A. 30:5B-1 to -15, the DHS has been delegated the responsibility and authority to license and inspect child care centers, to promulgate rules and regulations establishing standards governing these facilities, and to deny, suspend, refuse to renew or revoke child care center licenses. N.J.S.A. 30:5B-5; N.J.S.A. 30:5B-9.

The Center's child care facility, operated by the Refuge Tabernacle Baptist Church, is located in Newark and receives funding from the Newark Public School system. Its license from DHS allows maximum capacity per session at thirty-three children. An inspection on January 23, 2004, revealed, among other things, that the Center was using an unlicensed trailer as a classroom for eight children. It was instructed to move the children out of the trailer and a reinspection was scheduled for thirty days later.

However, on February 2, 2004, DHS received "information" that the Center had submitted "a falsified license and measurement sheet to the Newark Public Schools as part of the Abbott contract packet. The falsified license and document indicated a licensed capacity of 108 children while the actual capacity is 33 children."

Based on this "information," DHS performed a surprise re-inspection on February 11, 2004. The inspector discovered that children had re-occupied the trailer three days after the prior inspection. There were now 11 children in the trailer.

On March 16, 2004, DHS issued a notice of revocation. The notice was based on two findings. It alleged that "in an attempt to secure Abbott funding for your center, you submitted a fraudulent child care license and a Child Care Inspection/Measurement Report purportedly issued by [this] Office to the Newark Board of Education" and that "you resumed the use of an unapproved trailer as a classroom in violation of State building codes and fire codes after you had vacated the trailer at the direction of this Office, creating a serious hazard to the health, safety and well-being of the children." The notice stated:

Specifically, in an attempt to secure Abbott funding for your center, you submitted a fraudulent child care license and a Child Care Inspection/Measurement Report purportedly issued by this Office to the Newark Board of Education. Additionally, you resumed the use of an unapproved trailer as a classroom in violation of State building codes and fire codes after you had vacated the trailer at the direction of this Office, creating a serious hazard to the health, safety and well-being of the children. Based on these results and pursuant to N.J.S.A. 30:5B-9, the Office of Licensing is hereby notifying you that it is revoking the license of the above center.

The notice informed the Center that it had a right to a hearing.

Robert Farrell, the Center's executive director, submitted a timely request for a hearing utilizing an Office of Administrative Law form. In part, the form asks: "Are there specific facts, statements of events in the notification letter or attachments with which you disagree?" Farrell checked off "yes" and attached the following:

The Notice of Revocation letter that the Love Center Day Care received stated that we submitted a fraudulent child care license and a Child Care Inspection/Measurement Report purportedly issued by the NJ Office of Licensing to the Newark Board of Education in an attempt to secure Abbott funding for our center. I disagree with the reason stated for the submission of the inappropriate documents. In addition, the letter states that the trailer classroom was in violation of State building codes and fire codes, and that by having some of our children in said trailer classroom created a serious hazard to their health, safety and well-being. I also disagree with this statement.

The Love Center Day Care did not submit fraudulent documents in order to secure Abbott funding for our center. We already had an ongoing Contract with the Newark Board of Education, and had been receiving funding throughout March of 2004. To offer an explanation, we submitted the inappropriate documents to the Newark Board of Education with full knowledge that all the requirements [for expansion] were going to be satisfied forthwith. We felt that we were under a severe time constraint as the Newark Board of Education had given us only two days notice. After the submission of the aforesaid documents, all inspections were performed and approvals received. We will submit said approvals upon request. We fully acknowledge our mistake in sending in fraudulent documentation. We respectfully request that leniency be given to our daycare facility and say that we only wanted to continue to provide childcare services to our many parents in the community. We knew that the proper documentation would be received late, so we committed a grave error in judgment.

In addition, although some of our children were being housed in the trailer classroom when inspected, the trailer in itself was not in violation of any building or fire codes. We were waiting for our architect to submit his paperwork to the Newark Department of Engineering for the Certificate of Occupancy. Once the paperwork had been submitted, the Certificate of Occupancy was issued. We will submit said Certificate of Occupancy upon request. We feel that at no time was the health, safety and well-being of our children at risk in the trailer classroom.

The Newark Board of Education and the Love Center Day Care had a successful collaboration for the 2002/2003 school year. The Newark Board of Education then received a letter of support from the parents of the Love Center Day Care requesting that we be allowed to expand our program. We were in agreement and anxious to provide that needed source to the community of additional Abbott slots for the children. We were looking forward to and working toward expansion for the 2003/2004 school year. After numerous meetings and telephone conferences, the Love Center Day Care received verbal approval from the Newark Board of Education officially stating that we have been approved for expansion. This verbal approval was given on Friday, August 29, 2003. I remember the date because the following Monday was the Labor Day Holiday. Due to the time constraints imposed by the Newark Board of Education, we assumed that all requirements would be met in a timely fashion. However, when the notice came from the Newark Board of Education requiring our child care license and Child Care Inspection/Measurement Report and we did not have same, we felt compelled to take necessary steps to insure our facility would continue to provide childcare services in our community with the hope that when the official documents were received they would be accepted in lieu of the prior ones submitted. Again, we understand that we made a grave error in judgment.

You have stated in your letter of Revocation that the Love Center Day Care would be permitted to continue operation pending the outcome of the Hearing and final disposition of the Hearing decision. It will be close to impossible for us to do so if we are not granted a temporary license during the Appeal process. The Love Center Day Care has served the community for over fourteen years without any interruption in our childcare services. The majority of our staff are people from the community, who had no formal education in childcare prior to coming to our facility. However, since joining our Love Center family, they have been encouraged to return to school. They have earned their Associates, Bachelors and even Masters degrees in Early Childhood Education; all of which was made possible through the doors of Love Center Day Care being opened for them and their loved ones. Most of the Love Center employees have been with us for more than ten years. It would be a travesty for these committed individuals to be laid off because our center does not have the support to keep them gainfully employed.

I respectfully request that you reconsider your decision to not grant the Love Center Day Care a temporary license to operate during the Appeals process. Our parents and staff will otherwise suffer great set backs [sic] from this decision.

In addition, if the NJ Office of Licensing suspends our license, we respectfully request that the suspension be pursuant to [N.J.S.A.] Subchapter 10:122-24C which would allow us to have the license reinstated upon compliance with all applicable provisions of the Manual of Requirements for Child Care Centers. We have served our community for more than fourteen years and have transformed the lives of many students and parents. It has not been the policy of the Love Center Day Care to operate our facility in a manner that was unsafe or jeopardize the healthy environment of our children. Nor has it been our policy to undermine the integrity of the NJ Office of Licensing in granting us the privilege of operating our school in a manner that complies with all of the requirements of the manual. We acknowledge our mistakes and ask to be forgiven. We also ask that the Revocation of our license be overturned and/or changed and the Love Center Day Care be allowed to continue operation.

On July 7, 2004, DHS notified the Center that a review of the case had revealed no material issues in dispute. Therefore, DHS did not intend to transfer the Center's case to the OAL. After the Attorney General filed a motion for summary disposition with the Commissioner, the Commissioner determined that no material facts were in dispute, denied the Center's request for an administrative hearing before the OAL, and summarily upheld the revocation of the Center's license.

As we have said, DHS may deny, suspend, revoke or refuse to renew a child care license for good cause. N.J.S.A. 30:5B-9. DHS identifies the following subsections as the statutes violated by the Center:

a. Failure of a child care center or its sponsor to comply with the provisions of this act;

b. Violation of the terms and conditions of a license by a child care center or its sponsor;

c. Use of fraud or misrepresentation by a child care center or its sponsor in obtaining a license or in the subsequent operation of the center;

. . . .

f. Any conduct, engaged in or permitted, which adversely affects or presents a serious hazard to the education, health, safety and general well-being and physical and intellectual development of a child attending the child care center, or which otherwise demonstrates unfitness to operate a child care center;

. . . .

[N.J.S.A. 30:5B-9a, b, c and f.]

But the statute provides for notice and a hearing before DHS can take action under N.J.S.A. 30:5B-9:

The department, before denying, suspending, revoking or refusing to renew a license, shall give notice to the sponsor personally, or by certified or registered mail to the last known address of the sponsor with return receipt requested. The notice shall afford the sponsor with an opportunity to be heard. The hearing shall take place within 60 days from the issuance or mailing of the notice and shall be conducted in accordance with the "Administrative Procedure Act," P.L. 1968, c. 410 (C. 52:14B-1 et seq.).

[N.J.S.A. 30:5B-10a.]

Administrative regulations parallel this statutory right to a hearing. N.J.A.C. 10:122-2.5(a).

Both the statute and the regulation cross-reference the Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to -25, and implementing regulations promulgated by the OAL. In this respect, N.J.S.A. 52:14B-11 also provides for a hearing. It states in pertinent part: "No agency shall revoke or refuse to renew any license unless it has first afforded the licensee an opportunity for hearing in conformity with the provisions of this act applicable to contested cases." There are four exceptions to the right to a hearing: 1) where there is no statutory right to a hearing; 2) where the agency is required by law to revoke a license without exercising any discretion; (3) where the suspension or refusal is premised upon failure of the licensee to maintain required insurance coverage; or (4) where a suspension or refusal to renew a motor vehicle registration is based upon noncompliance with statutory inspection requirements. N.J.S.A. 52:14B-11. None of these exceptions are present here.

Nonetheless, pointing to N.J.A.C. 1:1-12.5, DHS contends if there are no material facts in dispute, the agency may summarily dispose of an appeal, as it did here. In re License of Fanelli, 174 N.J. 165 (2002), suggests to the contrary. There, the Court held that a physician had a statutory right to a hearing prior to the revocation of his license even though he had pleaded guilty to a federal criminal statute prohibiting the unlawful disposition of funds in an employee benefit plan. The New Jersey State Board of Medical Examiners had revoked his license based on the plea and denied him the right to a hearing because the conviction could not be disputed. Fanelli, however, disputed the Board's characterization of his admitted criminal conduct as involving moral turpitude and relating adversely to his profession. Focusing upon N.J.S.A. 52:14B-11, the Court concluded he was statutorily entitled to a hearing before the Board. Id. at 173. "Because Fanelli's license is subject to revocation, N.J.S.A. 52:14B-11 states that he must be afforded the opportunity to have a hearing conducted pursuant to the procedures for contested cases. Thus, he may 'respond, appear and present evidence and argument on all issues involved.'" Id. at 173-74 (quoting N.J.S.A. 52:14B-9). Among other things, "the Board should be informed of, and reconcile if necessary, the underlying facts that resulted in" the disqualifying conduct as they relate not only to the basis for revocation, but the proper sanction. Id. at 174.

DHS relies on Contini v. Bd. of Educ. of Newark, 286 N.J. Super. 106, 120 (App. Div. 1995), certif. denied, 145 N.J. 372 (1996), for the proposition that an evidentiary hearing is not necessary if there is no dispute as to any material fact. However, Contini was not a license revocation proceeding and, therefore, did not involve N.J.S.A. 52:14B-11. Furthermore, we distinguished Contini in Christ Hosp. v. Dep't of Health & Senior Servs. 330 N.J. Super. 55, 64-65 (App. Div. 2000), where we found genuine issues relating to the reasonableness of the agency's revocation determination and a statutory right to a hearing. Id. at 61, 64-65.

Here, the Center has an express statutory right to a hearing pursuant to N.J.S.A. 30:5B-10 and N.J.S.A. 52:14B-11. Moreover, it presents disputes as to what actually occurred and the extent of the seriousness of the misconduct. Some of the relevant disputes include the extent to which the use of the trailer endangered the safety of the children and the circumstances which induced the Center to inform the Newark Board of Education that its licensed capacity was 108 children, and not 33. Further, we are convinced the Center raises legitimate questions as to whether the submission of inaccurate information to the Newark Board of Education constituted "fraud" or "misrepresentation" in the "subsequent operation of the Center" as prohibited by N.J.S.A. 30:5B-9c.

 
Accordingly, we reverse the summary decision and remand the matter to the OAL to proceed as a contested case.

"Abbott funding" refers to formulaic-determined state monies available to enumerated low-income school districts for the purpose of providing early childhood education. N.J.S.A. 18A:7F-16.

N.J.A.C. 1:1-12.5 provides in part that "[a]t any time after a case is determined to be contested, a party may move for summary decision" which "may be rendered if . . . there is no genuine issue as to any material fact challenged and . . . the moving party is entitled to prevail as a matter of law. . . . " N.J.A.C. 1:1-12.5(a), (b).

In Christ Hosp., the Department of Health and Senior Services summarily refused to renew a hospital's license to perform low-risk cardiac catherization procedures. DHSS took the position that a hearing was not required because the license had automatically expired at the end of its thirty-month term. Id. at 61-62.

(continued)

(continued)

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A-3246-04T1

March 17, 2006