CLEARY T. REED v. ATLANTIC CITY ELECTRIC COMPANY

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0875-12T4

CLEARY T. REED AND ELINOR T. REED,

Petitioners-Appellants,

v.

ATLANTIC CITY ELECTRIC COMPANY,

Respondent-Respondent.

________________________________________________

June 20, 2014

Submitted April 8, 2014 Decided

Before Judges Hayden and Rothstadt.

On appeal from New Jersey Board of Public Utilities, Docket No. EC09090737U.

Cleary T. Reed and Elinor T. Reed, appellants pro se.

John J. Hoffman, Acting Attorney General, attorney for respondent New Jersey Board of Public Utilities (Andrea M. Silkowitz, Assistant Attorney General, of counsel; T. David Wand, Deputy Attorney General, on the brief).

Youngblood Lafferty & Sampoli, attorneys for respondent Atlantic City Electric Company (L. Patricia Sampoli, of counsel and on the brief).

PER CURIAM

This appeal arises from a billing dispute between petitioners, Cleary T. and Elinor T. Reed, and respondent, Atlantic City Electric Company (ACE). The Reeds challenge the August 15, 2012 final order of the New Jersey Board of Public Utilities (the Board), adopting the decision of an administrative law judge (ALJ), which found that a diversion of service1 had occurred at the Reeds' apartment, ordered ACE to make billing adjustments to the Reeds' electric service account, and dismissed the Reeds' petition. After reviewing the record in light of the arguments advanced on appeal, we affirm.

We derive the following facts and procedural history from the record. In August 2003, the Reeds took over the ACE electric service account for their apartment from their landlord. In September 2007, the Reeds filed a consumer complaint with the Board alleging overcharges on their electric bill. As a result, in October 2007, Shelly Paolino, an ACE employee, performed an inspection of the meter designated for the Reeds' apartment, which showed that some hallway lights, other apartments, and an office in the building were connected to the Reeds' meter, thus demonstrating a diversion of service.

ACE directed the property manager to rewire the building to correct any comingling of electricity, and placed the Reeds' account on hold to prevent it from being transferred to collections. In May 2008, the landlord informed ACE that the rewiring was complete, and in December 2008, the municipality confirmed that the repairs met code requirements.

In April 2009, Judith Rogozinski, a senior analyst at ACE, was tasked with reconstructing the Reeds' electric bills to account for the diversion retroactively to September 2003. She used a proprietary ACE software program designed to recalculate electricity usage based upon a recent billing period where the Reeds' meter was properly wired. The recalculation resulted in a $3861.19 credit to the Reeds' account.

On September 3, 2009, the Reeds filed a petition with the Board for a formal hearing, arguing that their complaint was not resolved and their electricity was wrongly being shut off. They also asserted various other claims including fraud, racketeering in violation of federal law, violations of the New Jersey Uniform Commercial Code (UCC), violations of tariff regulations, and constitutional violations. The Reeds contended that all of their ACE bills from September 2003 to April 2009 should be voided as they were a result of "felony fraud" perpetrated by their landlord with the knowledge and acquiescence of ACE.

As a result, Paolino re-inspected the Reeds' meter and determined the issue was corrected. ACE filed an answer with the Board, denied any wrongdoing, acknowledged that a diversion had occurred, and claimed it was corrected and the customers appropriately credited. The matter was transmitted to the Office of Administrative Law (OAL) for a formal hearing.

On January 17, 2012, ALJ W. Todd Miller held a hearing on the petition, at which he heard testimony from the Reeds, Paolino, and Rogozinski, and reviewed extensive documentary evidence. The ALJ determined that ACE's 2009 meter inspection may have been inadequate, and ordered ACE to conduct a more thorough test.

On March 28, 2012, ACE conducted a new inspection, which was attended by the ALJ, the Reeds, the landlord, and local code inspectors. The new inspection confirmed that the Reeds' electricity was not being diverted. Thereafter, ACE again recalculated the Reeds' bills using the January 2011 to December 2011 billing period for comparison, which resulted in an additional credit of $2999.73 for a total credit of $7360.92.

On May 10, 2012, the ALJ issued his initial decision concluding that a diversion of service had occurred, that the internal wiring problems were not the fault of ACE or the Reeds, and that the billing adjustments made by ACE were reasonable and consistent with N.J.A.C. 14:3-7.8(g). The ALJ dismissed the Reeds' petition and declined to address the remainder of their claims because they were beyond the OAL's jurisdiction.

On August 15, 2012, the Board issued a final decision adopting the ALJ's findings of facts and conclusions of law, thereby approving the billing adjustments and dismissing the Reeds' petition. The Board also noted that the Reeds raised numerous issues outside of the Board's jurisdiction, including the fraud and UCC claims. Nevertheless, the Board determined the Reeds were afforded due process protections with "ample opportunity to be heard," that ACE's billing adjustments were reasonable and appropriate under N.J.A.C. 14:3-7.8(g), and that the Reeds "offered no competent evidence that they were still being improperly charged for electric service consumed by other tenants." This appeal followed.

On appeal, the Reeds challenge the Board's final decision, arguing, among other things, violation of their due process rights, failure of ACE to comply with tariff regulations, violation of their right to confront their accusers, lack of standing, breach of contract or void contract due to fraud and sham real estate deeds, and lack of jurisdiction by the Board.

Our review of an administrative agency's determination is limited. In re Stallworth, 208 N.J. 182, 194 (2011) (citing Henry v. Rahway State Prison, 81 N.J. 571, 579 (1980)). "An administrative agency's final quasi-judicial decision will be sustained [on appeal] unless there is a clear showing that it is arbitrary, capricious, or unreasonable, or that it lacks fair support in the record." In re Herrmann, 192 N.J. 19, 27-28 (2007) (citing Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963)). We will intervene only where the agency action violates legislative policies, where there is no substantial evidence to support the agency's findings, or where the agency reached "'a conclusion that could not reasonably have been made on a showing of the relevant factors.'" Stallworth, supra, 208 N.J. at 194 (quoting In re Carter, 191 N.J. 474, 482-83 (2007)).

Upon review of the factual findings of an administrative agency, "our function is not to substitute our judgment for that of the agency, particularly when that judgment reflects agency expertise." In re Pub. Serv. Elec. & Gas Co.'s Rate Unbundling, 167 N.J. 377, 384 (citations omitted), cert. denied, 534 U.S. 813, 122 S. Ct. 37, 151 L. Ed. 2d 11 (2001). Accordingly, "the Board's rulings are entitled to presumptive validity and will not be disturbed unless we find a lack of reasonable support in the evidence." Id. at 385 (internal quotation marks and citation omitted); see also N.J.S.A. 48:2-46 (stating that the appellate division may set aside the Board's order only "when it clearly appears that there was no evidence before the [B]oard to support the same reasonably or that the same was without the jurisdiction of the [B]oard").

Applying this limited scope of review, after carefully considering the record in light of the arguments advanced by the parties, we conclude that the findings by the Board are supported by the record and the issues presented by the Reeds are without sufficient merit to warrant extended discussion in this opinion. R. 2:11-3(e)(1)(D), (E). We affirm substantially for the reasons expressed by the Board in its order of August 15, 2012. We add only the following comments.

The Reeds' claim that they do not have to pay for electricity at all during the period where a diversion was occurring is without merit. The administrative code provides a remedy for such diversions in the form of a retroactive bill adjustment. N.J.A.C. 14:3-7.8(g). Indeed, ALJ Miller went to great lengths to ensure the accuracy of the Reeds' bills retroactively to September 2003. Thus, we are satisfied that the Board's decision to adopt the ALJ's initial decision was appropriate. See N.J.S.A. 52:14B-10(c); N.J.A.C. 1:1-18.6(a).

We also agree with the Board that the Reeds improperly raised issues outside the subject matter jurisdiction of the Board. The Board has general authority and jurisdiction over all services necessary for the transmission and distribution of electricity and billing. N.J.S.A. 48:2-13(d). However, the Reeds sought to raise numerous irrelevant and tangential claims that were not part of the Board's jurisdiction and, if appropriate, would be better suited for the criminal authorities and the civil courts. Accordingly, wedecline tointerfere withthe Board's final decision as the findings and conclusions therein are neither arbitrary, capricious, nor unreasonable, and are amply supported by the record. See Herrmann, supra, 192 N.J. at 27-28.

We also reject the Reeds' claim that they were deprived of their due process rights. "The basic indicia of due process are adequate notice and a meaningful opportunity to be heard." N.J. Div. of Youth & Family Servs. v. A.R.G., 179 N.J. 264, 286 (2004). The record clearly shows that the Reeds were afforded two hearings before the ALJ, with the opportunity to testify, present witnesses and other evidence, cross-examine witnesses, and submit written exceptions to the Board. We are satisfied that the proceedings in this case furnished sufficient procedural due process to the Reeds to address the claims that were appropriately before the Board.

Affirmed.

1 A diversion is defined as "an unauthorized connection to pipes and/or wiring by which utility service registers on the tenant customer's meter although such service is being used by other than the tenant-customer of record without his or her knowledge or cooperation. The unauthorized connection must not be apparent from the premises." N.J.A.C. 14:3-7.8(a).