HUGH BERGKNOFF et al. v. RENT LEVELING BOARD OF THE BOROUGH OF HIGHLAND PARK, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4456-04T14456-04T1

HUGH BERGKNOFF and

ESTHER BERGKNOFF,

Plaintiffs-Appellants,

v.

RENT LEVELING BOARD OF THE

BOROUGH OF HIGHLAND PARK, and

GEORGE CHRISTIAN,

Defendants-Respondents.

________________________________

 

Argued September 19, 2006 - Decided October 18, 2006

Before Judges Coburn, Axelrad and Gilroy.

On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-5885-04.

Hugh Bergknoff and Esther Bergknoff, appellants, argued the cause pro se.

Melissa A. Peters argued the cause for respondent Highland Park Rent Leveling Board (Rogut McCarthy Troy, attorneys; Ms. Peters and Diane Dabulas, on the brief).

George Christian, respondent, argued the cause pro se.

PER CURIAM

Plaintiffs, Hugh Bergknoff and Esther Bergknoff, his wife, appeal from the order of the Law Division entered on March 21, 2005, upholding a decision of the defendant, Rent Leveling Board of the Borough of Highland Park (Board), granting a rental increase of $151.93 per month for the rent-controlled apartment in their four-unit apartment building. Plaintiffs contend that the amount of rent increase is inadequate because it neither covers operating expenses, nor allows a sufficient rate of return on their investment. Specifically, plaintiffs argue:

POINT I.

IF ALL OF THE APARTMENTS IN THE SUBJECT PROPERTY WERE RENT CONTROLLED, THEIR RENTS WOULD BE $952 PER APARTMENT. HAD THE TRIAL JUDGE FOLLOWED WELL SETTLED NEW JERSEY LAW, HE WOULD HAVE SET THE RENT FOR THE RENT CONTROLLED APARTMENT AT THIS RENT.

POINT II.

THE TRIAL JUDGE ERRED BY UPHOLDING A DECISION WHICH VIOLATED THE VERY LEGISLATIVE POLICY WHICH CREATED AND EMPOWERS RENT CONTROL BOARDS IN THE FIRST PLACE.

POINT III.

THE TRIAL JUDGE ERRED BY UPHOLDING A RULING OF A RENT LEVELING BOARD WHICH WAS CONTRARY TO ESTABLISHED NEW JERSEY LAW. HE UPHELD A DECISION OF A RENT LEVELING BOARD WHICH UNCONSTITUTIONALLY SOUGHT TO FORCE ONE CLASS OF TENANTS TO SUBSIDIZE THE RENTS OF ANOTHER CLASS OF TENANTS.

POINT IV.

THE TRIAL JUDGE ERRED BY UPHOLDING A RULING OF A RENT LEVELING BOARD WHICH WAS CONFISCATORY BY THE VERY STANDARDS OF THE ORDINANCE GOVERNING THE BOARD.

POINT V.

THE TRIAL JUDGE ERRED BY UPHOLDING A RULING OF A RENT LEVELING BOARD WHICH WAS CAPRICIOUS AND ARBITRARY.

POINT VI.

THE TRIAL JUDGE CONTINUED AN UNCONSCIONABLE SITUATION.

POINT VII.

THE TRIAL JUDGE ERRED BY FAILING TO PROPERLY APPLY THE LAW TO THE FACTS AND BY FAILING TO ASSESS THE PROPER LEGAL SIGNIFICANCE OF THE FACTS ON THE RECORD.

POINT VIII.

UNDER NEW JERSEY LAW, THE RENT ASSIGNED A RENT CONTROLLED UNIT MUST COVER THE REASONABLE OPERATING EXPENSES OF THAT UNIT AS WELL AS THE ORDINANCE MANDATED RETURN DUE THE LANDLORD FROM THAT UNIT. THIS IS SOUND PUBLIC POLICY.

In April 2002, plaintiffs purchased property at 301 North Third Avenue, Highland Park, upon which an apartment building containing four identical two-bedroom apartments is located. At the time of purchase, one unit, occupied by defendant, George Christian (Christian's unit), was subject to rent control with rent set at $519.16 per month, while the rent for the other three non-rent-controlled units ranged from $700 to $750 per month. In 2003, plaintiffs filed a hardship application with the Board seeking to increase the monthly rent for Christian's unit. On August 11, 2003, the Board denied plaintiffs' application determining they had not owned the property for two years as required by ordinance. Also in August 2003, plaintiffs raised the rent for the non-rent-controlled units to $950 per unit.

On or about March 9, 2004, plaintiffs filed another hardship application with the Board, seeking to increase the monthly rent for Christian's unit to $1,165.76 per month. The Board granted plaintiffs' application to increase the monthly rent, but only by the amount of $151.93, raising the rent on Christian's unit to $671.09 per month. The Board determined that plaintiffs' application for a larger rent increase was self-induced, by charging below market rate for the other three apartments: "If they had increased the apartment rents to market value, they would have received a fair rate of return for the past two years."

On August 10, 2004, plaintiffs filed a complaint in lieu of prerogative writs, seeking to reverse the Board's decision. On March 11, 2005, Judge Ciuffani rendered an oral decision dismissing the complaint and confirming the rent increase of $151.93 a month, concluding that plaintiffs had failed to prove that the decision of the Board was "arbitrary or capricious." A confirming order was entered on March 21, 2005.

A trial court's review of a determination by a local rent control board is limited to an examination of the record below. Green Acres of Verona, Inc. v. Boro. of Verona, 146 N.J. Super. 468, 470 (App. Div. 1977). "This process is analogous to that applied in variance applications before a Board of Adjustment." Ibid. (citing Kramer v. Sea Girt Bd. of Adj., 45 N.J. 268, 289 (1965)). The determination of the Board is presumptively valid, and the burden is on the party challenging the Board's action to prove otherwise. Brandt v. Mt. Holly Bd. of Adj., 16 N.J. Super. 113, 117 (App. Div. 1951). A determination of a rent control board "will be set aside only when it is arbitrary, capricious, or unreasonable." Kramer, supra, 45 N.J. at 296. "Even when doubt is entertained as to the wisdom of the action, or as to some part of it, there can be no judicial declaration of invalidity in the absence of clear abuse of discretion by the public agenc[y] involved." Id. at 296-97. Accordingly, in reviewing a decision of a rent control board, the court should not substitute its discretion for that of the board. Id. at 296. However, the same deference does not apply to a board's interpretation of an ordinance. Schulmann Realty v. Hazlet Twp. Rent Control Board, 290 N.J. Super. 176, 184 (App. Div. 1996). "[T]he interpretation of an ordinance constitutes a purely legal matter for which an administrative agency has no particular skills superior to a trial court." Id. at 184.

We have considered each argument of plaintiffs in light of the record and applicable law, and are satisfied that none of them is of sufficient merit to warrant discussion in a written opinion. Accordingly, we affirm substantially for the reasons expressed by Judge Ciuffani in his oral decision of March 11, 2005. R. 2:11-3(e)(1)(A) and (E).

 
Affirmed.

(continued)

(continued)

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A-4456-04T1

October 18, 2006