NOT FOR PUBLICATION WITHOUT THE 

APPROVAL OF THE APPELLATE DIVISION 

 SUPERIOR COURT OF NEW JERSEY 

 APPELLATE DIVISION 

 DOCKET NO. A-3422-21 

 A-3664-21

JUSTIN ZIMMERMAN, 

ACTING COMMISSIONER, 

NEW JERSEY DEPARTMENT 

OF BANKING AND INSURANCE,1

 Petitioner-Respondent, 

v.

MICHAEL PATRICK DIVINEY 

and PROPERTY DAMAGE 

ADJUSTERS, INC., 

 Respondents-Appellants. 

______________________________ 

 

JUSTIN ZIMMERMAN, 

ACTING COMMISSIONER, 

NEW JERSEY DEPARTMENT 

OF BANKING AND INSURANCE, 

 Petitioner-Respondent, 

v.

DIVERSIFIED PUBLIC 

ADJUSTERS, LLC and 

1

 The caption has been updated in accordance with Rule 4:34-4 to reflect the 

current commissioner of the New Jersey Department of Banking and 

Insurance. 

APPROVED FOR PUBLICATION 

September 26, 2023 

APPELLATE DIVISION 
A-3422-21 2 

JOSEPH VULPIS, 

 Respondents-Appellants. 

______________________________

Argued September 11, 2023 — Decided September 26, 2023 

Before Judges Mawla, Marczyk, and Chase. 

On appeal from the New Jersey Department of 

Banking and Insurance. 

Thomas E. Maloney, Jr., argued the cause for 

appellants. 

Nicholas Kant, Deputy Attorney General, argued the 

cause for respondent (Matthew J. Platkin, Attorney 

General, attorney; Donna Arons, Assistant Attorney 

General, of counsel; Nicholas Kant, and Dakar Ross,

Deputy Attorney General, on the briefs). 

Dennis Patterson, attorney for amicus curiae American 

Association of Public Insurance Adjusters in Docket

No. A-3422-21.

 

The opinion of the court was delivered by 

MAWLA, J.A.D. 

 In A-3422-21, defendants Michael Patrick Diviney and Property Damage 

Adjusters, Inc. (PDA) appeal from a June 8, 2022 final agency decision by the 

New Jersey Department of Banking and Insurance (DOBI), finding defendants 

violated the New Jersey Public Adjuster's Licensing Act (PALA), N.J.S.A. 

17:22B-1 to -20. In A-3664-21, defendants Joseph Vulpis and Diversified 

Public Adjusters LLC (DPA) appeal from a June 20, 2022 final decision by 
A-3422-21 3 

DOBI, finding defendants in violation of PALA. The two appeals raise 

overlapping issues and therefore were argued together. We affirm in part, and 

reverse and remand in part for the reasons expressed in this opinion. 

I.

 The Legislature passed PALA to regulate public adjusters, or "any 

individual, firm, association or corporation who, or which, for money . . . aids 

in any manner on behalf of an insured in negotiating for . . . the settlement of 

claims for loss of damage . . . ." N.J.S.A. 17:22B-2. Licenses are granted to 

those who are "trustworthy and competent to act as an adjuster in a manner as 

to safeguard the interests of the people . . . ." N.J.S.A. 17:22B-5.

 PALA proscribes the conduct of licensees as follows: 

No individual, firm, association or corporation 

licensed under this act shall: 

 a. solicit the adjustment of a loss or damage 

 occurring in this State from an insured . . . 

 between the hours of six p.m. and eight a.m. 

 during the [twenty-four] hours after the loss has 

 occurred; 

b. enter into any agreement, oral or written, 

with an insured to negotiate or settle claims for 

loss or damage occurring in this State 

between the hours of six p.m. and eight 

a.m. during the [twenty- four] hours after the 

loss has occurred; 

 c. have any right to compensation from any 

 insured for or on account of services rendered to 
A-3422-21 4 

 an insured as a public adjuster unless the right to 

 compensation is based upon a written 

 memorandum, signed by the party to be charged 

 and by the adjuster, and specifying or clearly 

 defining the services to be rendered and the 

 amount or extent of the compensation on a form 

 and with such language as the [DOBI] 

 commissioner may prescribe . . . . 

[N.J.S.A. 17:22B-13.] 

 N.J.S.A. 17:22B-20 authorizes the commissioner to "promulgate any 

rules and regulations as may be necessary to effectuate the purposes of 

[PALA] pursuant to the 'Administrative Procedure Act[ (APA), N.J.S.A. 

52:14B-1 to -15] . . . .'" Pursuant to this authority, the commissioner enacted 

N.J.A.C. 11:1-37.1 to -37.19 to "establish procedures for the examination, 

licensing, continuing education, and conduct of persons acting as public 

adjusters in this State." N.J.A.C. 11:1-37.1. 

 The regulations delineate the required content of public adjuster 

contracts. N.J.A.C. 11:1-37.13. Pertaining to these appeals, the regulations 

state each contract: 

3. Shall contain the following: 

i. The signatures of the insured and the public 

adjuster; 

ii. A list of services to be rendered and the 

maximum fees to be charged, which fees shall 

be reasonably related to services rendered; and 
A-3422-21 5 

iii. The time and date of execution of the 

contract (day, month, year) by each party; 

. . . . 

5. Shall prominently include a section which 

specifies: 

i. The procedures to be followed by the insured 

if [they] seek[] to cancel the contract, including 

any requirement for a written notice; 

ii. The rights and obligations of the parties if 

the contract is cancelled at any time; and 

iii. The costs to the insured or the formula for 

the calculation of costs to the insured for 

services rendered in whole or in part. 

[N.J.A.C. 11:1-37.13(b)(3), (5).] 

 

N.J.A.C. 11:1-37.14 governs violations and penalties and states: 

(a) The Commissioner may deny, suspend, revoke, or

refuse to renew a public adjuster's license based on 

any violation of [PALA] or this subchapter, or for the 

commission or omission of any act by a public 

adjuster which demonstrates that the applicant or 

licensee is not competent or trustworthy to act as a 

public adjuster, or where the person has: 

1. Violated any provision of this State's 

insurance laws, including any rules promulgated 

thereunder; 

 . . . . 

4. Demonstrated the applicant's or licensee's 

lack of integrity, incompetency, bad faith, 
A-3422-21 6 

dishonesty, financial irresponsibility, or 

untrustworthiness to act as a public adjuster; 

 . . . . 

(b) Any person which violates any provision of this 

subchapter shall, in addition to any other penalties 

provided by law, be liable for a civil penalty of not 

more than $2,500 for a first offense and not more than 

$5,000 for the second and each subsequent offense. 

Each transaction or statutory violation shall constitute 

a separate offense. 

[N.J.A.C. 11:1-37.14(a) to (b).] 

II. 

 Diviney has been a licensed public adjuster since 2011. He is the sole 

owner, officer, and public adjuster for PDA, which was licensed as a business 

entity public adjuster in 2013. 

 In 2017, DOBI opened an investigation of Diviney and PDA in response 

to a complaint and requested "all of the public adjusting contracts [Diviney] 

had from the start of [his] business until the date of [the] request." Diviney 

complied and provided DOBI eighty identical contracts he entered with clients. 

The contracts contained the following language: 

 [PDA], or their representative is hereby retained 

to advise and assist in the adjustment of the insurance 

claim arising from loss by [CAUSE] which occurred 

on [DATE] . . . . The insured agrees to pay [PDA] for 

such services a contingent fee of [X]% of the amount 

paid by the insurance companies in settlement of this 

loss or a contingent fee of $[X] hereby assigning to 
A-3422-21 7 

the Public Adjuster all monies due or to become due

from the insurance companies. The fee shall be due

after proofs of loss are sworn to and/or first proceeds 

issued. The fee of [PDA] shall be due after each draft 

collected and in the percentage listed in the contract. 

 . . . . 

Notice of Right to Cancel 

 You, the insured, may cancel this contract at any 

time prior to midnight on the fourth calendar day after 

the execution date of this contract. If you exercise 

your right to cancel this contract, you will be liable to 

[PDA] for reasonable and necessary emergency outof-pocket expenses or services which were paid for or

incurred by [PDA] to protect the interests of the 

insured during the preceding cancellation. 

 If you cancel this contract, anything of value 

given by you under the contract will be returned to

you within [fifteen] business days following the 

receipt by [PDA] of your cancellation notice, and any 

security interest arising out of the contract will be 

cancelled. 

 To cancel this contract, mail, fax or deliver in 

person, a signed and dated copy of this notice or any 

other written notice indicating your intent to cancel 

and date thereof to [PDA] . . . not later than midnight 

of [DATE]. 

 I hereby cancel this contract. 

 DOBI filed an order to show cause against Diviney and PDA, alleging 

violations of PALA and its related regulations. Count one alleged Diviney 

"entered into at least [eighty] . . . contracts . . . that did not specifically or 
A-3422-21 8 

clearly define the services to be rendered and did not indicate the time the 

contracts were executed," violating N.J.S.A. 17:22B-13(c) and N.J.A.C. 11:1-

37.13(b)(3)(ii) and (iii). Count two alleged the contracts did not 

specif[y] the procedures to be followed by the 

insureds if they sought to cancel the contract, 

including any requirement for a written notice and the 

rights and obligations of the parties if the contract 

were cancelled at any time, and the costs to the 

insured or the formula for the calculation of the costs 

of the insured for services rendered in whole or in

part, in violation of [N.J.S.A. 17:22B-14(a)(1) and (4), 

N.J.A.C. 11:1-37.13(b)(5)(i), (ii), and (iii), and 

N.J.A.C. 11:1-37.14(a)(1) and (4)] . . . . 

Count three alleged Diviney entered fifteen contracts with insureds "in which 

the maximum fees to be charged were not reasonably related to the services 

rendered," in violation of N.J.S.A. 17:22B-14(a)(1) and (4), N.J.A.C. 11:1-

37.13(b)(3)(ii), and N.J.A.C. 11:1-37.14(a)(1) and (4). 

 The matter was transferred to the Office of Administrative Law (OAL) 

for a hearing before an administrative law judge (ALJ). DOBI moved for 

summary decision on counts one and two, indicating it would dismiss count 

three if its motion was granted. Diviney filed a cross-motion for summary 

decision to dismiss all three counts. The ALJ granted DOBI's motion and 

denied Diviney's. 

 Under count one, the ALJ found Diviney violated N.J.S.A. 17:22B-13(c) 

and N.J.A.C. 11:1-37.13(b)(3)(ii) because Diviney and PDA entered eighty 
A-3422-21 9 

contracts, "which failed to provide language related to services rendered 

beyond 'advise and assist in the adjustment of the insurance claim.'" Diviney 

also failed to include the time and date of the execution of the contracts in 

violation of N.J.A.C. 11:1-37.13(b)(3)(iii). 

 The ALJ found DOBI proved count two because the contracts failed to 

include the cancellation language required by N.J.A.C. 11:1-37.13(b)(5)(i), 

(ii), and (iii). The lack of cancellation language also violated N.J.S.A. 17:22B14(a)(1) and (4) and N.J.A.C. 11:1-37.14(a)(1) and (4). 

 The ALJ reviewed the factors under Kimmelman v. Henkels & McCoy, 

Inc., 108 N.J. 123, 137-39 (1987), and recommended Diviney and PDA be held 

jointly and severally liable for $80,000 ($1,000 for each contract) and 

$1,237.50 for investigation costs. 

 Diviney filed exceptions arguing: (1) the technical deficiency in the 

contract language did not cause "any injury to any insured"; (2) the ALJ erred 

in not relying on unpublished precedent from this court; (3) the contracts 

adequately described the services and "were not required to provide a detailed 

list of some or all of the services to be provided"; (4) the failure to note the 

time of day each contract was signed was "irrelevant because [DOBI] did not 

prove that any contract was signed between the hours of 6:00 p.m. to 8:00 a.m. 

during the [twenty-four] hours following the loss"; (5) DOBI did not prove the 
A-3422-21 10

Legislature required public adjuster contracts be cancellable at any time; (6) 

there was no evidence an insured attempted to cancel a contract or suffered any 

damage from the inability to cancel a contract after the rescission period; (7) 

there was no evidence of harm to a consumer by the absence of a cost 

calculation formula in the contracts; (8) Diviney acted competently and in 

good faith; and (9) because DOBI did not prove a violation, no penalty could 

be assessed. 

 The commissioner upheld the ALJ's initial decision. She found "the 

'advise and assist' language in the contracts [was] insufficient to comply with 

the statute and regulation" because N.J.A.C. 11:1-37.13(b)(3)(ii) "requires that 

a contract . . . contain '[a] list of services to be rendered . . . ." Diviney's 

contracts were "too vague to comply with th[e] regulation." 

The commissioner found DOBI did "not have to show that [Diviney and 

PDA] entered into a contract . . . between 6:00 p.m. and 8:00 a.m. following a 

loss to prove a violation of N.J.A.C. 11:1-37.13(b)(3)(iii)" because they were 

not charged with soliciting under N.J.A.C. 11:1-37.13(c). DOBI did not have 

to show a harm to consumers because the deficient contracts were "enough to 

constitute a violation." 

 The commissioner found the eighty contracts violated N.J.A.C. 11:1-

37.13(b)(5)(i), (ii), and (iii) for not containing cancellation provisions despite 
A-3422-21 11

the lack of a statutory provision requiring it. She reasoned the regulations 

were a part of the authority granted by the Legislature to the commissioner "to 

promulgate any regulations that may have been necessary to effectuate the 

purposes of [PALA], which undoubtedly includes the protections of consumers 

from unfair practices by public adjusters. See N.J.S.A. 17:22B-20, . . . B-3, 

. . . B-12, and . . . B-13." 

 The commissioner adopted the fines and investigation expenses imposed 

by the ALJ. Applying the Kimmelman factors, she found: (1) Diviney "acted 

in bad faith in failing to provide the insureds with their 'mandated rights and 

disclosures' including the right to cancel the contract at any time"; (2) Diviney 

offered no evidence of an inability to pay the penalty; (3) the third factor was 

neutral because DOBI did not present evidence of how much Diviney or PDA 

profited from the eighty contracts; (4) Diviney's "conduct harmed the public by 

disregarding important safeguards and protections for consumers"; (5) the 

period of illegal activity was significant; (6) no criminal charges were brought 

against Diviney, so a greater civil penalty2 was warranted; and (7) there was no 

evidence of prior violations. 

III. 

2

 Kimmelman, 108 N.J. at 139. 
A-3422-21 12

 Vulpis and DPA were licensed in 2017 and 2018, respectively. In 2018, 

a DOBI investigator received a complaint stating, "unlicensed representatives 

[were] solicit[ing] business for [DPA] . . . us[ing] prefilled contracts [bearing 

Vulpis's] signature . . . ." Defense counsel disproved the complaint, providing 

DOBI with seven contracts showing Vulpis's wet signatures. The contracts 

were identical one-page documents, which contained the following language: 

I/We hereby retain [DPA] . . . to advise and assist in 

the adjustment of a . . . loss which occurred on or

about [DATE] at [ADDRESS]. I/We agree to pay 

DPA for such services a fee of [X]% of the total 

insurance proceeds payable and do hereby assign to 

DPA said percentage of the insurance recovery. In 

consideration of the fee, DPA will undertake all 

actions necessary to secure payment of the insurance 

proceeds, including, as required, review of the 

insurance coverage, assistance in complying with 

policy terms and conditions, preparation and 

submission of claim documents, negotiation with 

insurance company representatives, preparation and 

submission of any documents required to obtain 

payment. . . . . 

If you cancel this contract within the three[-]day 

rescission period, you will be responsible to reimburse 

DPA for all out-of-pocket costs incurred or paid on 

your behalf. Thereafter[,] if you cancel this contract 

and DPA has undertaken any services on your behalf,

you are responsible to pay DPA the percentage of 

recovery set forth above, unless otherwise agreed. 

NOTICE OF RIGHT TO CANCEL 

YOU HAVE THE RIGHT TO CANCEL THIS 

CONTRACT AND ASSIGNMENT AT ANY TIME 
A-3422-21 13

BEFORE MIDNIGHT OF THE THIRD BUSINESS

DAY AFTER RECEIVING A COPY OF THIS 

CONTRACT. IF YOU WISH TO CANCEL THIS 

CONTRACT, YOU MUST EITHER (1) SEND A 

SIGNED AND DATED WRITTEN NOTICE OF 

CANCELLATION BY MAIL OR FAX OR (2) 

PERSONALLY DELIVER A SIGNED AND DATED 

WRITTEN NOTICE OF CANCELLATION TO DPA 

AT THE ADDRESS STATED ABOVE. IF YOU 

CANCEL THIS CONTRACT, ANYTHING OF 

VALUE THAT YOU HAVE GIVEN TO DPA WILL 

BE RETURNED TO YOU OR MADE AVAILABLE 

TO YOU WITHIN TEN BUSINESS DAYS 

FOLLOWING RECEIPT OF YOUR NOTICE OF 

CANCELLATION. 

THIS RIGHT TO CANCEL TERMINATES AT 

MIDNIGHT ON __/__/__ 

DOBI filed an order to show cause alleging the contracts 

failed to include: (i) the procedures to be followed by 

the insured if [they] seek[] to cancel the contract, 

including any requirement for a written notice; (ii) the 

rights and obligations of the parties if the contract is 

cancelled at any time; and (iii) the costs to the insured 

or the formula for the calculation of costs to the 

insured for services rendered in whole or in part, as 

required by N.J.A.C. 11:1-37.13(b)(5)(i) to (iii) . . . . 

 The matter was transferred to the OAL and each party moved for 

summary decision. The ALJ granted DOBI's motion, denied Vulpis's motion, 

and concluded Vulpis and DPA violated N.J.A.C. 11:1-37.13(b)(5)(i), (ii), and 

(iii). The ALJ ordered Vulpis to reimburse DOBI $1,025 for investigation 

costs and ordered a hearing to address the penalties. Following the hearing, 
A-3422-21 14

the ALJ ordered Vulpis to pay a civil penalty of $1,000 for each of the six3

contracts presented by DOBI. 

Vulpis filed exceptions and argued: (1) the ALJ erred in finding a 

violation of N.J.A.C. 11:1-37.13(b)(5)(i) because the regulation does not 

specify that contracts contain a time period for cancellation; (2) the rights and 

obligations upon termination were featured prominently in the contract and 

there was no required format to prominently display this language; (3) the ALJ 

mistakenly concluded there must be different fees depending on the work 

performed by the adjuster and these fees were not explained in the contract; (4) 

he should not be responsible for DOBI's investigative costs because it did not 

relate to the contracts at issue; (5) DOBI offered no evidence of excess profits 

generated by Vulpis, which would give weight to the third Kimmelman factor; 

and (6) the seventh Kimmelman factor favored Vulpis. 

The commissioner adopted the ALJ's findings regarding the violations. 

She agreed the contracts violated N.J.A.C. 11:1-37.13(b)(5)(i), (ii), and (iii) 

because they did not: provide procedures for cancellation at any time; 

prominently display the rights and obligations of rescission after the rescission 

period; and provide the formula for costs rendered in whole or in part. The 

3

 The ALJ declined to consider the seventh contract because it was terminated 

within the three-day rescission period. 
A-3422-21 15

commissioner modified the initial decision to include violations of N.J.S.A. 

17:22B-14(a)(1) and N.J.A.C. 11:1-37.14(a)(1) (violating any provision of 

insurance laws, including any rules promulgated thereunder); and N.J.S.A. 

17:22B-14(a)(4) and N.J.A.C. 11:1-37.14(a)(4) (conduct demonstrating 

incompetency). 

The commissioner adopted the fines and costs imposed by the ALJ on 

Vulpis but modified the ALJ's finding regarding the seventh contract because 

whether the contract was cancelled did "not change the fact that [it] was 

deficient." Therefore, the commissioner imposed an additional $1,000 penalty. 

The commissioner analyzed the Kimmelman factors and found they 

favored the imposition of the fines and penalties. She concluded: (1) there 

was no bad faith by Vulpis or DPA; (2) there was no evidence of an inability 

to pay the imposed fine; (3) Vulpis realized profits from this illegal conduct; 

(4) Vulpis "undermined the public's confidence in the [insurance] industry 

. . . , causing harm to the public"; (5) the time period of the illegal activity was 

relatively short; (6) the lack of a criminal liability for these violations favored 

imposition of a monetary penalty; and (7) there was a prior violation by Vulpis 

and DPA. 
A-3422-21 16

IV. 

 In A-3422-21, Diviney argues his contracts complied with N.J.A.C. 

11:1-37.13(b)(3)(ii) and described the services to be rendered. He challenges 

the finding that he violated N.J.A.C. 11:1-37.13(b)(3)(iii) by not including the 

time each contract was signed on grounds the regulation is overly broad and 

ultra vires. He claims N.J.A.C. 11:1-37.13(b)(5)(i), (ii), and (iii) are ultra vires 

and violate due process because the Legislature never intended to mandate that 

public adjuster contracts be cancelable at any time. 

Vulpis raises in A-3664-21 the same challenges to N.J.A.C. 11:1-

37.13(b)(5)(i), (ii), and (iii) as Diviney. He asserts the commissioner should 

be estopped from finding any violation of these regulations because DOBI 

failed to promulgate form contracts as required by PALA. 

 Appellate review of an administrative agency's decision is limited. 

Circus Liquors, Inc. v. Governing Body of Middletown Twp., 199 N.J. 1, 9 

(2009). "Ordinarily, an appellate court will reverse the decision of the 

administrative agency only if it is arbitrary, capricious or unreasonable or it is 

not supported by substantial credible evidence in the record as a whole." 

Mejia v. N.J. Dep't of Corr., 446 N.J. Super. 369, 376 (App. Div. 2016) 

(quoting Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980)). We 

"do[] not substitute [our] judgment of the facts for that of an administrative 
A-3422-21 17

agency." Campbell v. N.J. Racing Comm'n, 169 N.J. 579, 587 (2001) (citation 

omitted). We "defer to matters that lie within the special competence" of the 

administrative agency. Balagun v. N.J. Dep't of Corr., 361 N.J. Super. 199, 

202 (App. Div. 2003). Our task is limited to deciding: 

(1) whether the agency's decision offends the State or 

Federal Constitution; (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. 

[A.B. v. Div. of Med. Assistance & Health Servs., 407 

N.J. Super. 330, 339 (App. Div. 2009) (quoting 

George Harms Constr. Co. v. N.J. Tpk. Auth., 137 

N.J. 8, 27 (1994)).] 

"However, a reviewing court is 'in no way bound by [an] agency's 

interpretation of a statute or its determination of a strictly legal issue.'" 

Allstars Auto Grp., Inc. v. N.J. Motor Vehicle Comm'n, 234 N.J. 150, 158 

(2018) (alteration in original) (quoting Dep't of Child. & Fams., Div. of Youth 

& Fam. Servs. v. T.B., 207 N.J. 294, 302 (2011)). "[If] an agency's 

determination . . . is a legal determination, our review is de novo." L.A. v. Bd. 

of Educ. of Trenton, Mercer Cty., 221 N.J. 192, 204 (2015) (citation omitted). 

 When an agency interprets its own regulation, we give substantial 

deference to the agency unless its interpretation is inconsistent with the 
A-3422-21 18

governing legislation. DiMaria v. Bd. of Trs. of Pub. Emps.' Ret. Sys., 225 

N.J. Super. 341, 351 (App. Div. 1988); see also In re Freshwater Wetlands 

Prot. Act Rules, 180 N.J. 415, 441 (2004) (stating an "agency's interpretation 

of the operative law is entitled to prevail, so long as it is not plainly 

unreasonable" (quoting Metromedia, Inc. v. Dir., Div. of Tax'n, 97 N.J. 313, 

327 (1984))). This is because regulations are presumed "both valid and 

reasonable[.]" G.C. v. Div. of Med. Assistance & Health Servs., 463 N.J. 

Super. 79, 93 (App. Div. 2020) (alteration in original) (quoting Hackensack 

Riverkeeper, Inc. v. N.J. Dep't of Envtl. Prot., 443 N.J. Super. 293, 302 (App. 

Div. 2015)). As such, our courts disfavor a finding that "an agency acted in an 

ultra vires fashion in adopting regulations . . . ." In re Adoption of 2003 Low 

Income Hous. Tax Credit Qualified Allocation Plan, 369 N.J. Super. 2, 18 

(App. Div. 2004) (quoting N.J. Coal. of Health Care Pros., Inc. v. N.J. Dep't of 

Banking & Ins., Div. of Ins., 323 N.J. Super. 207, 229 (App. Div. 1999)). 

A.

 With these principles in mind, we address Diviney and Vulpis's 

challenges to the commissioner's findings their contracts violated PALA. 

PALA's provisions, namely: licensing, N.J.S.A. 17:22B-3, and bonding, 

N.J.S.A. 17:22B-12, requirements; and the statute's description of prohibited 

practices, N.J.S.A. 17:22B-13, are clearly designed to protect the consumer 
A-3422-21 19

from unfair practices. N.J.S.A. 17:22B-13(c) requires licensed public adjusters 

to enter into "a written memorandum" with an insured, which "specif[ies] or 

clearly defin[es] the services to be rendered and the amount or extent of the 

compensation on a form and with such language as the [C]ommissioner may 

prescribe . . . ." Further, the Legislature expressly authorized the 

commissioner to "promulgate any rules and regulations as may be necessary to 

effectuate the purposes of [the] act pursuant to the [APA] . . . ." N.J.S.A. 

17:22B-20. 

"[A]n administrative agency only has the powers that have been 

'expressly granted' by the Legislature and such 'incidental powers [as] are 

reasonably necessary or appropriate to effectuate' those expressly granted 

powers." In re Centex Homes, LLC, 411 N.J. Super. 244, 251 (App. Div. 

2009) (second alteration in original) (quoting Avalon v. N.J. Dep't of Envtl. 

Prot., 403 N.J. Super. 590, 607 (App. Div. 2008)). Pursuant to this authority, 

the commissioner promulgated N.J.A.C. 11:1-37.13(b)(3)(ii) to address the 

requirements of N.J.S.A. 17:22B-13(c). The regulation requires every written 

memorandum between an adjuster and an insured to contain "[a] list of 

services to be rendered and the maximum fees to be charged, which fees shall 

be reasonably related to services rendered . . . ." N.J.A.C. 11:1-37.13(b)(3)(ii). 
A-3422-21 20

 During the rulemaking process, DOBI received comments on the rule's 

requirement that contracts include a list of services. 26 N.J.R. 1711, 1711 

(Apr. 18, 1994). One commenter "suggested that N.J.A.C. 11:1-

37.13(b)[(3)(ii)] should be revised to eliminate the requirement that public 

adjusters provide, in the contract, a list of the services to be rendered and the 

maximum fees to be charged for those services." Id. at 1713. The commenter 

instead "suggested that an explanation of the services to be rendered should be 

provided, for example 'advise and assist in the preparation and presentation of 

a claim of insurance.'" Ibid. DOBI responded the "advise and assist" language 

does not contain a list of services and fees. Rather, it 

contains a broad statement that the public adjuster will 

"advise and assist in the adjustment of the claim." As 

is evident from the language in the commenter's 

contract, an insured cannot ascertain which services 

will actually be performed. An insured has the right 

to be informed, in advance of the services to be 

performed by the public adjuster and the charges for 

those services. Notwithstanding that an insured may 

agree to a contingency fee or percentage fee 

arrangement, the fees must be reasonably related to

the services performed. An insured cannot evaluate

whether the terms of the contract are fair or reasonable 

unless [they] know[] exactly which services will be

performed by the adjuster and what will be charged 

for those services. 

[Ibid.] 

 N.J.A.C. 11:1-37.13(b)(3)(ii)'s mandate that all contracts contain a list of 

services to be rendered was deliberated by DOBI prior to adoption. Requiring 
A-3422-21 21

a list is protective of consumers and consistent with PALA. The regulation 

represents a proper exercise of the legislative mandate to inform consumers of 

the services provided by a public adjuster. Therefore, the finding that 

Diviney's contracts violated the regulation was neither arbitrary nor capricious 

and was not reversible error. 

B.

 We reach the same conclusion regarding Diviney's challenge to the 

finding of a violation for not including the time a contract was signed. PALA 

prohibits public adjusters from "solicit[ing] . . . between the hours of six p.m. 

and eight a.m. during the [twenty-four] hours after the loss has occurred"; and 

"enter[ing] into any agreement . . . with an insured to negotiate or settle claims 

for loss or damage occurring in this State" during the quiet period. N.J.S.A. 

17:22B-13(a) and (b). Therefore, N.J.A.C. 11:1-37.13(b)(3)(iii)'s requirement 

that each insurance adjustment contract contain "[t]he time and date of 

execution of the contract (day, month, year) by each party" is neither contrary 

to nor an unreasonable interpretation of the statute's purpose. Indeed, the time 

requirement appropriately forces adjusters to show proof of compliance with 

the prohibition on solicitation contained in the statute. 
A-3422-21 22

C.

 PALA states a public adjuster's right to compensation under a contract is 

contingent on "specifying or clearly defining the services to be rendered and 

the amount or extent of the compensation on a form and with such language as 

the commissioner may prescribe[.]" N.J.S.A. 17:22B-13(c). Pursuant to the 

statute, the commissioner adopted rules requiring each contract include: 

(i) [t]he procedures to be followed by the insured if 

[they] seek[] to cancel the contract, including any

requirement for a written notice; 

(ii) [t]he rights and obligations of the parties if the 

contract is cancelled at any time; and 

(iii) [t]he costs to the insured or the formula for the 

calculation of costs to the insured for services 

rendered in whole or in part. 

[N.J.A.C. 11:1-37.13(b)(5).] 

 "It has been a longstanding principle that 'the grant of authority to an 

administrative agency is to be liberally construed . . . to enable the agency to 

accomplish its statutory responsibilities.'" In re Adoption of N.J.A.C. 17:1-

6.4, 17:1-7.5 & 17:1-7.10, 454 N.J. Super. 386, 395 (App. Div. 2018) (quoting 

N.J. Guild of Hearing Aid Dispensers v. Long, 75 N.J. 544, 562 (1978)). "[A] 

challenger must 'demonstrat[e] an inconsistency between the regulation and the 

statute it implements, a violation of policy expressed or implied by the 

Legislature, an extension of the statute beyond what the Legislature intended, 
A-3422-21 23

or a conflict between the enabling act and other statutory law that cannot be 

harmonized.'" G.C., 463 N.J. Super. at 94 (alterations in original) (quoting 

Hackensack Riverkeeper, 443 N.J. Super. at 302). 

 "[A]ny regulation exceeding the agency's grant of authority from the 

Legislature is considered ultra vires, [but] such a finding 'is strongly 

disfavored, and is made only in exceptional circumstances.'" Gonzalez v. N.J. 

Prop. Liab. Ins. Guar. Ass'n, 412 N.J. Super. 406, 417 (App. Div. 2010) 

(quoting In re Route 206 at New Amwell Rd., 322 N.J. Super. 345, 352 (App. 

Div. 1999)). Although such findings are disfavored, the court's "role is to 

enforce the will of the Legislature because [s]tatutes cannot be amended by 

administrative fiat." G.C., 463 N.J. Super. at 94 (internal quotations omitted) 

(alteration in original). 

 PALA's legislative history does not convince us the Legislature intended 

public adjuster contracts must contain provisions for cancellation at any time. 

Indeed, the legislative history shows the Legislature deleted a provision 

permitting insureds to unilaterally cancel a contract with a public adjuster 

within three days of entering the contract. A. 1548 (1992) (third reprint) 

(deleting previously proposed § 14). However, there is no evidence this 

translated into legislative authorization for promulgation of a regulation 

permitting cancellation at any time. 
A-3422-21 24

The plain language of N.J.A.C. 11:1-37.13(b)(5)(i) and (ii) requires 

public adjuster contracts set forth the procedures to be followed in the event of 

a cancellation and advise the consumer of their rights in the event of 

cancellation, respectively. The regulations do not codify a right of the 

consumer to cancel a contract with a public adjuster at any time. 

The commissioner misinterpreted N.J.A.C. 11:1-37.13(b)(5)(ii) when she 

found in Diviney's case that DOBI "was well within its authority under 

[PALA] to promulgate regulations that require that insureds be permitted to 

cancel their contracts at any time." Likewise, she misinterpreted N.J.A.C. 

11:1-37.13(b)(5)(i) in Vulpis's case when she concluded that regulation 

contemplates the ability to cancel a contract with a public adjuster at any time. 

These findings were ultra vires of the commissioner's authority and can be 

found nowhere in PALA or its legislative record. For these reasons, we 

reverse the findings Diviney's contracts violated N.J.A.C. 11:1-37.13(b)(5)(ii) 

and Vulpis's violated N.J.A.C. 11:1-37.13(b)(5)(i). 

D.

The remaining arguments raised on appeal regarding the violations, 

which we have not addressed, including the estoppel argument and due process 

challenges to the regulations, lack sufficient merit to warrant discussion in a 

written opinion. R. 2:11-3(e)(1)(E). Except for the commissioner's 
A-3422-21 25

misinterpretation of N.J.A.C. 11:1-37.13(b)(5)(i) and (ii), DOBI's regulations 

at issue here regarding public adjuster contracts otherwise flow logically from 

the legislative authority granted to the commissioner to protect consumers. 

V.

Finally, Diviney argues the penalties and costs were arbitrary and 

capricious because the commissioner misinterpreted the Kimmelman factors, 

ignored the fact the DOBI investigation found no violation of any statute or 

regulation, and no consumer was harmed. Vulpis raises similar challenges to 

penalties and costs imposed by the commissioner. 

An appellate court "owes substantial deference to [an] agency's expertise 

and superior knowledge of a particular field." In re Herrmann, 192 N.J. 19, 28 

(2007). "That deferential standard applies to the review of disciplinary 

sanctions as well." Ibid. (citing Knoble v. Waterfront Comm'n of N.Y. Harbor, 

67 N.J. 427, 431-32 (1975)). Accordingly, we undertake a limited "review of 

an agency's choice of sanction." In re License Issued to Zahl, 186 N.J. 341, 

353 (2006). 

"Courts generally afford substantial deference to the actions of 

administrative agencies . . . because of the expertise and superior knowledge of 

agencies in their specialized fields, and because agencies are executive 

actors[.]" Div. of Alcoholic Beverage Control v. Maynards, Inc., 192 N.J. 158, 
A-3422-21 26

183 (second alteration in original) (quoting Zahl, 186 N.J. at 353). Thus, an 

agency decision will be upheld so long as it is supported by substantial 

credible evidence and is not erroneous as a matter of law. See Henry, 81 N.J. 

at 579-80; In re Aetna Cas. & Sur. Co., 248 N.J. Super. 367, 376 (App. Div. 

1991). Regarding the 

authority to alter a sanction imposed by an 

administrative agency, [an appellate c]ourt can do so 

only when necessary to bring the agency's action into 

conformity with its delegated authority. [A c]ourt has 

no power to act independently as an administrative 

tribunal or to substitute its judgment for that of the 

agency. It can interpose its views only where it is 

satisfied that the agency has mistakenly exercised its 

discretion or misperceived its own statutory authority. 

[In re Polk, 90 N.J. 550, 578 (1982).] 

"[T]he test in reviewing administrative sanctions is whether such punishment 

is so disproportionate to the offense, in the light of all the circumstances, as to 

be shocking to one's sense of fairness." Ibid. (internal quotations and citations 

omitted). 

 Having thoroughly reviewed the record and the commissioner's detailed 

findings in both matters, we decline to second-guess the fines and penalties 

justifiably imposed in either matter. However, because we have reversed the 

findings related to the violation of N.J.A.C. 11:1-37.13(b)(5)(i) and (ii), we 

remand both cases for a reassessment of the Kimmelman factors, and 
A-3422-21 27

recalculation of the resulting penalties and costs imposed on Diviney and 

Vulpis.

Affirmed in part, and reversed and remanded in part in A-3422-21 and 

A-3664-21. We do not retain jurisdiction.