Opinion
DOCKET NO. A-0463-11T2
01-30-2013
BUREAU OF HOUSING INSPECTION, Petitioner-Respondent, v. HIGH PARK GARDENS COOPERATIVE CORPORATION, Respondent-Appellant.
Tony LaRocca argued the cause for appellant (Caruso Smith Edell Picini, attorneys; Steven J. Kaflowitz, of counsel and on the brief). Debra A. Allen, Deputy Attorney General, argued the cause for respondent (Jeffrey S. Chiesa, Attorney General, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel and on the brief; Jason P. Capizzi, Deputy Attorney General, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Reisner and Hoffman.
On appeal from the State of New Jersey Department of Community Affairs, Bureau of Housing Inspection, Docket No. BHI-433-08/0714-21904-C.
Tony LaRocca argued the cause for appellant (Caruso Smith Edell Picini, attorneys; Steven J. Kaflowitz, of counsel and on the brief).
Debra A. Allen, Deputy Attorney General, argued the cause for respondent (Jeffrey S. Chiesa, Attorney General, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel and on the brief; Jason P. Capizzi, Deputy Attorney General, on the brief). PER CURIAM
High Park Gardens Cooperative Corporation (High Park) appeals from an August 12, 2011 final decision of the Acting Commissioner of the Department of Community Affairs (the Department or the agency), finding that High Park's buildings are subject to the emergency lighting requirements of N.J.A.C. 5:70-4.11(j) and that no exceptions apply. For the reasons that follow, we affirm.
I
Before discussing the evidence, we briefly summarize the applicable regulations. N.J.A.C. 5:70-4.11 requires that exits from a building be illuminated and that the lighting have a reliable backup power source, so that residents can find their way out of the building in an emergency:
(i) All means of egress shall be provided with artificial illumination as follows:
1. All means of egress . . . shall be equipped with artificial lighting facilities to provide the intensity of illumination herein prescribed continuously during the time that conditions of occupancy of the building require that the exits be available. Lighting shall also be provided to illuminate the exit discharge in all buildings . . . .
(j) Means of egress lighting shall be connected to an emergency electrical system conforming to NFiPA 70 (National Electrical Code) to assure continued illumination for a duration of not less than one hour in case
of primary power loss in all buildings, rooms, or spaces required to have more than one exit or exit access.
[N.J.A.C. 5:70-4.11(i), -4.11(j).]
The Department's regulations contain a grandfathering provision for buildings that were constructed after the Uniform Construction Code (UCC) was first adopted and that conformed to the version of the UCC in effect at the time of construction. The grandfathering regulation provides, in pertinent part:
A building in full compliance with the subcodes adopted pursuant to the Uniform Construction Code Act and regulations in force at the time of its construction and possessing a valid certificate of occupancy shall not be required to conform to the more restrictive requirements established by this subchapter . . . .
[N.J.A.C. 5:70-4.3(a) (emphasis added).]
The following facts are drawn from the parties' motions for summary disposition and from testimony presented at a later evidentiary hearing. High Park, a non-profit entity, operates a cooperative apartment complex in Newark. It is primarily occupied by low income residents. The common areas in each building are maintained partly by the members' monthly carrying charges and partly by federal grant money.
The complex was built in 1965 and has undergone no major remodeling since then. Its construction predated the 1977 adoption of the UCC. The complex consists of sixteen large three-story buildings. Each building is divided into several smaller sections or entryways, consisting of six apartments. Each entryway has a single interior staircase. However, the firewalls that divide the buildings into the smaller sections do not extend all the way up to the roof. There are seventy-seven separate entryways in the complex, which has a total of about 620 residents. Each apartment above the first floor has a fire escape.
Counsel confirmed this information at oral argument.
In 2006, the Department's Bureau of Housing Inspection (Bureau) determined that, pursuant to N.J.A.C. 5:70-4.11(j), each landing in each common stairwell in each entryway of the complex needed emergency egress lighting tied to an emergency electrical system. The new lighting would cost about $170,000. High Park challenged that determination, and the matter was transmitted to the Office of Administrative Law for hearing. Both sides filed motions for summary decision, and the assigned Administrative Law Judge (ALJ) issued an initial decision on January 14, 2010. The ALJ considered that both sides agreed the regulation did not apply to "a building with a design occupancy load of fifty or fewer occupants." She then reasoned that each entryway was a separate building, and since each building thus defined had fewer than fifty occupants, the regulation did not apply to any of them.
On February 25, 2010, Acting Commissioner Lori Grifa disagreed with the ALJ's legal and factual analysis. She reasoned that "[u]nder the State Uniform Construction Code, sections of a structure are only deemed to be separate buildings if they are completely separated by fire walls or fire separation walls." She further found that because the buildings were constructed prior to 1977, "they could not have been built in accordance with the State Uniform Construction Code," and the record contained no proof that the buildings ever fully complied with the UCC's fire safety requirements. She found that "[High Park's] own expert witness testified that the buildings did not meet the requirement of the [UCC]."
The Acting Commissioner also determined, as a matter of law, that the exception for buildings with an occupant load under fifty persons did not apply to buildings over two stories high. Hence, it could not apply to High Park's three-story buildings. However, the Acting Commissioner remanded the matter to the ALJ to determine whether High Park was entitled to a hardship exception under N.J.S.A. 55:13A-11, and whether a penalty was appropriately imposed for past non-compliance.
In pertinent part, the statute allows an exception under these circumstances:
(a) Upon the application of the owner of any . . . multiple dwelling, . . . the commissioner may grant exceptions from the literal requirements of any regulation issued pursuant to sections 7 and 8 of this act. No such exceptions shall be granted in any particular case unless the commissioner shall find: (1) that strict compliance with any such regulation, if required, would result in undue hardship to such owner; and (2) that the exception, if granted, will not unreasonably jeopardize the health, safety and welfare of intended occupants and the public generally.
(b) An application for an exception . . . shall set forth specifically: (1) a statement of the requirements of the regulation from which an exception is sought; (2) a statement of the manner by which strict compliance with said regulation would result in undue hardship; (3) a statement of the nature and extent of such undue hardship; and (4) a statement of feasible alternatives to the requirements of the regulation which would adequately protect the health, safety and welfare of the occupants or intended occupants and the public generally.
[N.J.S.A. 55:13A-11(a), -11(b).]
Following the remand order, the ALJ conducted an evidentiary hearing on December 8, 2010. At the beginning of the hearing, the Deputy Attorney General stated his understanding that the hearing would not address whether, at some future point, High Park could install additional fire walls between the units in order to avoid the need to comply with the regulations, an option previously suggested by High Park's expert witness, Samuel Maglione. The ALJ noted that High Park had not installed such fire walls, and confirmed that "prospective cures or remedies or improvements [are] not relevant to the issue of whether or not they were entitled to an exemption." High Park's counsel did not object or disagree.
High Park presented testimony from its housing manager, Mary Rice, explaining why a penalty should not be imposed and why High Park's hearing request should be considered timely. She also testified to the total number of residents in the complex and the number of residents using each interior exit staircase.
Charon J. Motayne, a financial consultant to High Park's Board of Directors, testified on the financial status of High Park. She testified that High Park refinanced its mortgage in 2005. She confirmed that High Park obtained estimates for the emergency egress lighting ranging from $175,000 to $190,000. According to Motayne, 80 percent of the 452 families that live in the complex are low income. Most of the complex's revenue comes from the residents, although in prior years the complex had received grant revenue for special projects such as increased security. However, currently, the complex is not receiving any grant money.
Motayne opined that the residents could not afford to pay for either emergency lighting or fire separation walls. Motayne admitted that High Park had not explored the possibility of financing the lighting project, nor had the management searched for grant money. She estimated that if High Park spent $180,000 on lighting, it would result in a $380 one-time charge per resident, or a $20-per-month additional charge if the work could be financed through a five-year loan. At the time of the hearing, the average existing assessment was $650 per month. Motayne testified that even a $10 per month increase would represent a hardship for the residents.
High Park also presented testimony from a building expert, Samuel Maglione. He agreed that, as a matter of law, N.J.A.C. 5:70-4.11(j) applied to High Park's buildings because they were multiple dwellings required to have two means of egress. However, he opined that the buildings were constructed with enough fire safety precautions that the emergency lighting was unnecessary and therefore High Park should receive a waiver from the regulation. He conceded that the application of subsection 70-4.11(j) did not depend on the number of residents using the exit stairs, although a prior regulation used that criterion.
Maglione testified that, because the stairway lighting was connected to the electrical line outside the building, instead of the line inside the building, the emergency lights would only lose power if there were a power failure in the entire neighborhood. In that case, a generator would be needed to provide power to the emergency lights. He opined that the incremental safety benefit of installing a "redundant" system did not justify the additional cost.
Housing inspector Peter Tsairis confirmed that the regulation applied no matter how many residents would be using an exit stair in case of a fire. He explained that the purpose of emergency egress lighting was to provide lighting for the tenants to safely exit the building in case there is fire and smoke, and "a power source goes out in the building." He explained that battery-powered back-up lights were insufficient, because management would be required to replace the batteries on a regular basis.
The State next presented testimony from Fayez Fanik, a professional engineer employed as the Bureau's Supervisor of Enforcement. Referring to one of High Park's sixteen buildings as an example, he explained that "without a true fire wall this is all one building." He explained that a true fire wall had to extend all the way to the roof and be at least four feet thick, or it had to extend thirty inches beyond the roof line. High Park presented no proof that the buildings had true fire walls between the units. However, Fanik also explained that, as a general rule, multiple dwellings over two stories in height require two exits, regardless of the number of occupants, and therefore even if the buildings had true fire walls, they would require emergency lighting in the stair wells.
Fanik testified that if the building had a sprinkler system, it would not need two means of egress; the fire escapes would suffice. However, it did not have a sprinkler system.
Fanik further testified to the importance of having a lighted path down stairs, and the danger of descending stairs in the dark in an emergency:
[T]he logic behind it is stairs are not straight downward . . . There's landings, you don't know how many steps, you don't know if you are at the last step or two steps away from it. You might think you are at the level and you try to walk straight and . . . here there are two more steps and you're going to fall and the people behind you if they can't see you they're going to tumble over you and really could cause injury and maybe death to somebody. . . . [W]e hear about people being stampeded and killed by these actions.According to Fanik, economic hardship alone would not justify granting a waiver, and the fact that there had never been a fire in the buildings likewise would not justify a waiver.
In her July 1, 2011 initial decision on remand, the ALJ incorporated the undisputed factual findings from her prior decision as well as additional findings based on the hearing. The ALJ credited Fanik's testimony that, for "obvious" reasons, the number of occupants in a multiple dwelling was irrelevant to the need for fire safety measures, as was the absence of prior fires in the building:
Emergency management is intended to function in the worst case scenario - not just a fire - in order to illuminate the means or egress all the way to the public sidewalk. While such a worst case might be rare, that is the definition of emergency protection. If rarity could form the basis of an exemption, then the exceptions would swallow the rule in most fire safety requirements.
The ALJ analyzed the history of the regulation, and found that when the Department initially adopted Fire Safety Code regulations in 1987, "it was the number of persons using a means of egress" that determined whether emergency lighting was required. See 19 N.J.R. 1087-88. However, in 1995, the regulations were amended to eliminate the number of persons using the means of egress as a factor, and extended the emergency lighting requirement to all buildings needing a second means of egress. She concluded that the 1995 regulation applied to High Park.
The ALJ also analyzed the potential financial impact of the improvements. Citing Renan Realty Corp. v. Dep't of Community Affairs, 182 N.J. Super. 415, 420-21 (App. Div. 1981), she reasoned that the cost of compliance "cannot be a basis for exempting a multi-family dwelling from this fire and safety regulation." However, the ALJ also found the economic impact would be minimal and temporary, and would be offset by the improvement to life safety. For example, she found that a five-year loan of $180,000, at 4% interest, would result in a $7 per month increase for each unit. The ALJ recommended that the Department waive the $8000 penalty previously imposed on High Park, because that money would be better spent on making the necessary improvements. The Commissioner adopted the ALJ's decision and gave High Park until October 15, 2011 to install the lighting.
The Acting Commissioner denied High Park's application for a stay. This court and the Supreme Court likewise denied the stay application. Nonetheless, in response to our inquiry at oral argument, High Park's counsel indicated that the emergency lighting still has not been installed.
II
On this appeal, we will not disturb the Department's decision so long as it is supported by sufficient credible evidence, is consistent with applicable law, and is not otherwise arbitrary or capricious. Renan Realty, supra, 182 N.J. Super. at 419.
[T]he scope of judicial review of an agency's action is restricted to four inquiries:
(1) whether the agency's decision offends the State or Federal Constitution;[Brady v. Board of Review, 152 N.J. 197, 211 (1997) (quoting George Harms Constr. v. Turnpike Auth., 137 N.J. 8, 27 (1994)).]
(2) whether the agency's action violates express or implied legislative policies;
(3) whether the record contains substantial evidence to support the findings on which the agency based its action; and
(4) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors.
We review an agency's legal interpretations de novo. Mayflower Securities Co. v. Bureau of Securities, 64 N.J. 85, 93 (1973). But we owe deference to the agency's technical expertise in building construction and fire safety. Renan Realty, supra, 182 N.J. Super. at 419; see also Riverside General v. N.J. Hosp. Rate Setting Comm'n, 98 N.J. 458, 469 (1985). Having reviewed the record in light of those principles, we find no basis to overturn the agency's decision.
High Park argues that it is not subject to current Fire Code requirements because its apartment complex was constructed in 1965 and complied with all applicable construction codes when it was built. We cannot agree. The regulation on which High Park relies, N.J.A.C. 5:70-4.3(a), would grandfather a building constructed "in full compliance with the sub codes adopted pursuant to the Uniform Construction Code Act and regulations in force at the time of its construction." Plainly, the regulation was only intended to apply to buildings that were built after the 1977 adoption of the UCC Act and that conformed to the UCC. Because its housing complex was built more than a decade earlier, High Park is not grandfathered under the regulation.
This interpretation is consistent with the agency's longstanding construction of the regulation. See Iadapoli v. N.J. Dep't. of Community Affairs, 96 N.J.A.R. 2d (CAF) 115 (1996). We will defer to an agency's reasonable interpretation of its own regulations. In re Petition of Adamar of New Jersey Inc., 222 N.J. Super. 464, 469 (App. Div. 1988).
Next, High Park argues that even if it is not grandfathered, it is entitled to a hardship exception to the egress lighting requirement. As High Park concedes, financial hardship alone is insufficient to justify an exception to a safety regulation under the UCC. N.J.S.A. 55:13A-11(a). An applicant must also demonstrate that granting the exception will not "unreasonably jeopardize" the health and safety of the residents. N.J.S.A. 55:13A-11(a)(2); Renan Realty, supra, 182 N.J. Super. at 420-21.
High Park contends that the cost of installing the lighting will be "a potentially insurmountable financial burden." Further, it argues that "the [Bureau] never gave due consideration to the alternative of allowing High Park Gardens to construct fire-separation walls in lieu of installing the emergency-egress lighting." We are not persuaded.
Prior to the issuance of the ALJ's first initial decision, High Park presented an expert report, recommending the installation of fire walls which would purportedly divide the six apartments per unit into three apartments on either side of the fire wall. But High Park did not pursue the issue at the remand hearing, nor did its counsel object when the ALJ stated that the issue was not being raised. High Park presented no expert testimony about installing fire walls, either as to the cost or the impact on fire safety. The only testimony on the issue was Motayne's general statement that High Park could not afford to install fire separation walls or egress lighting.
Moreover, Fanik, the Bureau's expert witness, gave detailed testimony explaining the need for the emergency lighting, regardless of the number of apartments or residents in each three-story unit. We find nothing arbitrary in the agency's decision to credit Fanik's testimony instead of the testimony of High Park's expert, Maglione. "[T]he choice of accepting or rejecting the testimony of witnesses rests with the administrative agency, and where such choice is reasonably made, it is conclusive on appeal." Id. at 421.
We also find no basis to disturb the ALJ's finding, which the Acting Commissioner adopted, that High Park failed to prove that the cost of installing the lighting would be insurmountable. The ALJ found that the cost per apartment would be relatively small. Although it claims the cost would be borne entirely by its residents, High Park presented no testimony regarding its efforts, if any, to identify and obtain grants or low-interest loans to help offset the cost.
High Park's remaining argument, concerning a possible ambiguity in the regulation, was not raised before the ALJ or the Acting Commissioner, and is without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
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While we understand the importance of providing affordable housing to High Park's residents, on this record we cannot second-guess the Department's decision to enforce its fire safety regulations.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION