ROSEMARY LEDET, Judge.
This is a City of New Orleans code enforcement proceeding. The City commenced this proceeding against DMK Acquisitions & Properties, L.L.C. ("DMK") as the owner of commercial property located at 1532 Robert E. Lee Boulevard in New Orleans (the "Property"). The City alleged that DMK was in violation of its municipal ordinances prohibiting public nuisance and blighted property. The City's administrative hearing officer
As a result of Hurricane Katrina, which made landfall in the New Orleans area on August 29, 2005, the Property, which was the former location of the Lake Terrace Shopping Center (a strip mall), sustained extensive damage. On April 24, 2007, DMK purchased the Property for $1.35 million. At the time of the purchase, the hurricane damage to the Property had not been repaired. In January 2009, the City awarded DMK an Economic Development Fund grant totaling $250,000, which was intended to help bring the Property back into commerce. As of the date of the administrative hearing (June 7, 2012), the City had paid DMK $225,000 of the grant money; nonetheless, the Property remained unoccupied and in a state of disrepair.
On October 13, 2011, the City's inspector conducted an initial inspection of the Property. According to the inspector's initial report, the alleged violation was that the Property was unoccupied. The scheduling comments and complaint description read: "vacant lot, high grass and weeds covering the sidewalk, rodents." The report indicated that the Property failed the inspection because the siding was missing and the structure was deteriorated. The Property additionally was cited for no work in progress.
On May 3, 2012, a notice of hearing was issued to DMK as owner of the Property. The notice informed DMK of the alleged violations of the municipal code ordinances prohibiting public nuisance and blighted property — Section 28-37 public nuisance and Section 28-38 blighted property — and of the hearing scheduled for June 7, 2012, to determine whether it was guilty of violating the cited ordinances.
On the day of the hearing, the City inspector returned to the Property and conducted a re-inspection before the hearing commenced. In the re-inspection report, the inspector indicated that the Property failed the re-inspection for multiple reasons, which were listed as follows: (i) fascia boards and soffit were deteriorated, loose, and missing; (ii) the roof and the structure itself were deteriorated; and (iii) the studs were deteriorated and exposed. The report also indicated that since the initial inspection the building on the Property had been fenced off. The Property again was cited for having no work in progress.
At the June 7, 2012 administrative hearing, DMK was represented by two attorneys and its director, Kenneth Charity. The City was represented at the hearing by Jeremy Stevens, a non-attorney, who introduced himself at the hearing as a representative of the City's Code Enforcement Department. Mr. Stevens requested to introduce into the record the City's entire file on this matter, including the photographs attached to each of the inspector's reports. DMK's sole objection to the introduction of the file was that one of the photographs should be excluded because it showed debris outside the fence that surrounded the Property. With the exception of that photograph, the HO allowed
Several members of the community appeared at the hearing to voice their concerns regarding the condition of the Property. Six individuals, who each were required by the HO to identify themselves by name and position, spoke in opposition to DMK at the hearing. Briefly, the testimony of those six individuals is summarized below:
The HO also allowed the members of the community to introduce two written statements into the record at the hearing. First, the HO allowed Ms. Parsons to read into the record a written statement by GiGi Burk, the chair of the Lake Area Realtors United, which stated:
Second, the HO read a written statement into the record signed by approximately twenty-two people of the lake area and the Gentilly neighborhood surrounding the Property, which stated:
The HO asked whether there was any objection by the defense; DMK's counsel replied: "Not as to form."
In support of its position that the Property was neither blighted nor a public nuisance, DMK was allowed to introduce photographs
Finally, DMK presented the testimony of its representative, Mr. Charity.
Before rendering a judgment, the HO made the following comment:
Ultimately, the HO concluded that the Property was blighted and a public nuisance. In so doing, the HO took judicial notice of the state of the Property, stating:
On June 20, 2012, the HO rendered judgment against DMK finding it in violation of the municipal ordinances prohibiting public nuisance and blighted property. The HO imposed on DMK a fine of $575; recordation fees of $30; notarial fees of $20; and a daily fine of $500 for thirty days or until the violations are corrected, whichever occurs first.
On December 11, 2012, the CDC held a hearing on DMK's petition to appeal the HO's judgment and took the matter under advisement. On December 18, 2012, the CDC rendered judgment finding that the HO "acted reasonably and within the authority lawfully granted to him; and his decision was not arbitrary or capricious." The CDC thus affirmed the HO's judgment. This appeal followed.
The enabling statute for the City's Code Enforcement Bureau is La. R.S. 13:2575, which provides a right of appeal to any person found in violation of the pertinent code provisions. La. R.S. 13:2575(H). The enabling statute, however, is silent on
Id.
Defining the scope and standards for judicial review of agency decisions, La. RS. 49:964(G) provides:
La. R.S. 49:964(G).
"Judicial review of an agency's decision is a multifaceted function involving several categories [including] procedural
DMK's arguments on appeal, as the City points out, are directed primarily to procedural, statutory, and constitutional issues. Particularly, DMK argues that while administrative hearings lack some of the formalities of judicial proceedings, due process and the APA require that such hearings provide basic protections. Continuing, DMK argues, as it did in the CDC, that it was not afforded these basic protections at the administrative hearing. DMK contends that judicial review under the APA is limited to the record and that a review of the transcript of the administrative hearing reveals that the hearing was deficient in the following respects:
For purposes of analyzing DMK's procedural, statutory, and constitutional contentions, we group these alleged deficiencies into two categories: (i) witnesses not being required to testify under oath at the administrative hearing, and (ii) hearsay evidence being accepted and the inability to cross-examine witnesses. We separately address each category.
Three of DMK's arguments fall under this category: (1) that none of the witnesses who testified against it were sworn and that their testimony therefore should not have been considered; (2) that numerous unidentified persons were allowed to speak and to present evidence; and (3) that Mr. Stevens, who was neither an attorney nor a sworn witness, was allowed to represent the City as prosecutor and to give testimony at the hearing.
The City counters that DMK cites no authority for its contention that witnesses
Our research reveals that the enabling statute, La. R.S. 13:2575, requires that "[t]estimony by any person [at any administrative adjudication hearing under this Chapter] shall be taken under oath." La. R.S. 13:2475(E).
In this case, the record reflects that the only witness the HO required to testify under oath was DMK's representative, Mr. Charity. Although the HO did not require the six community witnesses who testified to testify under oath, the HO required each of those witnesses to state their names and positions for the record. DMK failed to object to these witnesses testifying without being sworn in at the administrative hearing. Given DMK's failure to object at the hearing, we find, as the City contends, DMK waived its objection to this error.
DMK's final argument under this category is that the City's prosecutor, Mr. Stevens, who was neither an attorney nor a sworn witness, was allowed to represent the City as prosecutor and to give testimony as a witness at the hearing. According to DMK, the non-attorney prosecutor held himself out to be an attorney and thus was never sworn in as a witness. This argument lacks support, factually and legally. Legally, as discussed above, any error in failing to swear in Mr. Stevens as a witness was waived. Factually, the sole reference to Mr. Stevens as an attorney was on the cover page of the transcript of the administrative hearing. On the cover page of the transcript, Mr. Stevens is identified as "Attorney for the City of New Orleans Code Enforcement." In contrast, at the beginning of the hearing, Mr. Stevens introduced himself as a representative of Code Enforcement. Nowhere in the transcript of the administrative hearing does Mr. Stevens hold himself out to be an attorney. As the City points out, the transcript was not prepared until months after the hearing. DMK's argument thus is based solely on the after-the-fact clerical error of the court reporter. This argument is unpersuasive.
DMK also contends that Mr. Stevens was improperly allowed to testify that the Property was previously found blighted in another proceeding, a fact which he was unable to produce any evidence at the hearing to support. The record reflects that one of the community witnesses, Mr. Wheaton, testified that the blight proceeding regarding the Property dated back to 2010, the year of the prior violation proceeding mentioned by Mr. Stevens. Likewise, DMK's own attorney acknowledged that the blight proceeding may have dated back to 2010. This argument is thus unpersuasive.
The enabling act expressly provides that "[a]ny administrative adjudication hearing held under the provisions of this Chapter shall be conducted in accordance with the rules of evidence of the Administrative Procedure Act." La. R.S. 13:2575(E). The APA provides that "[a]gencies may admit and give probative effect to evidence which possesses probative value commonly accepted by reasonably prudent men in the conduct of their affairs." La. R.S. 49:956.
Acknowledging that under the APA hearsay evidence is admissible in administrative proceedings, DMK nonetheless contends the hearsay evidence relied upon in this case — primarily the City's inspector's reports — should not have been considered competent evidence by the trial court in sustaining the HO's judgment. DMK further contends that the inspector's reports are not only hearsay, but also that the introduction of the reports precluded it from cross-examining the inspector at the hearing. In rejecting this argument, the CDC found that the inspector's reports were admissible and "would be good and credible evidence." In so finding, the CDC relied on the statement cited by the City in Wilzcewski v. Brookshire Grocery Co., 10-1148, pp. 12-13 (La.App. 3 Cir. 3/16/11), 59 So.3d 530, 539, that "`the hearing officer has the discretion to admit evidence that would otherwise be inadmissible under the Louisiana Code of Evidence.'" Id. (quoting Chaisson, 97-1225 at pp. 9-10, 708 So.2d at 381). The CDC also reasoned that even without the inspector's
On appeal, DMK raises the same arguments regarding the inspector's reports. In support, it cites Williams v. Louisiana Tax Comm'n, 611 So.2d 724 (La.App. 4th Cir.1992), for the proposition that such hearsay evidence although admissible is not competent evidence and thus cannot be used to determine whether the administrative body's factual findings are valid. In further support, it also cites Bourque v. Louisiana State Racing Comm'n, 611 So.2d 742, 743-44 (La.App. 4th Cir.1992), for the proposition that the right to cross-examine witnesses is a due process requirement that it was not afforded.
The City counters that the CDC correctly found that the inspector's reports were admissible and competent evidence. The City further counters that DMK's reliance on Williams, supra, is misplaced because that case is no longer good law given the Louisiana Supreme Court's more recent holding in Chaisson, supra. The City points out that under Chaisson, supra, hearsay evidence can be competent evidence provided it has some degree of reliability and trustworthiness. The City contends that the inspection reports, which were prepared on the standard "Housing Code Enforcement Uninhabitable/Public Nuisance Violation List" form, satisfy that criteria. The City still further counters that DMK was not entitled to cross-examine the preparer of the inspection reports. As to cross-examination of the other witnesses, the City contends that the record reflects DMK was not prevented from questioning other witnesses, presenting evidence, or objecting to the submission of evidence.
As to cross-examination in general, we note, as the City contends, that the record reflects DMK was not denied the right to cross-examine the witnesses who testified against it. Nor does DMK contend that it was denied that right as to the witnesses who testified at the hearing. Rather, DMK's argument pertains to the deprival of its right to cross examination inherent in the admission at the hearing of documentary hearsay evidence — primarily the inspector's reports. As explained below, the basis of DMK's argument — albeit not identified by name — is the residuum rule.
The residuum rule provides that "`hearsay evidence, at least when not objected to, may be used in administrative proceedings for limited purposes such as corroboration, but that such evidence cannot form the sole basis of the decision.'" Clark, 12-1049 at p. 17, 104 So.3d at 831 (quoting Rothbard v. Gerace, 354 So.2d 225, 226 (La.App. 4th Cir.1978)). Under the residuum rule, "`a court determining sufficiency of evidence (which is a question of law) must find some competent evidence to support an administrative decision and cannot affirm the decision solely on hearsay evidence.'" Id.; Bernard Schwartz, A Decade of Administrative Law: 1987-1996, 32 Tulsa L.J. 493, 536 (1997) (distinguishing between admitting incompetent evidence and relying on such evidence in reaching a decision and noting that this is the basis for the residuum rule.) Because we find — as the CDC suggests — that this is not a case in which the sole evidence relied upon by the HO was documentary hearsay, we find it unnecessary to address the issue of the continued applicability of the residuum rule in administrative proceedings.
Applying these principles, we find that the City's inspector's reports fall within that category. As the City points out, the inspection reports were prepared on the standard "Housing Code Enforcement Uninhabitable/Public Nuisance Violation List" form. We thus find the inspector's reports were competent evidence. See LaFrance v. Weiser Security Service, Inc., 01-1578, pp. 13-14 (La.App. 4 Cir. 3/27/02), 815 So.2d 339, 348-49 (finding elevator repair records fell within this category). As we noted in LaFrance, supra, these reports are "the exact type of documentary evidence for which the pragmatic rule allowing relaxation of technical evidentiary rules in administrative hearings ... was adopted." Id.
In sum, we find, for the reasons outlined above, that DMK's procedural, statutory, and constitutional contentions are unpersuasive. We now turn to the substantive review of the record.
The definitions of blight and public nuisance are set forth in the governing municipal ordinances, which provide as follows:
The record reflects, as the City contends, that the City as well as members of the community presented substantial evidence at the administrative hearing establishing the Property was chronically vacant, not adequately maintained, and causing an adverse effect on nearby properties. In addition, the HO, who lived nearby the Property, took judicial notice of the condition of the Property.
"Chronic vacancy," within the meaning of the municipal ordinance, was established by the undisputed fact that the Property has been vacant and unoccupied for almost five years — from the date DMK purchased it (April 2007) through the date of the administrative hearing (June 2012). Moreover, DMK has not begun work to repair the structure on the Property so that a tenant can inhabit it.
Lack of adequate maintenance was established by the inspection reports and photographs the City and members of the community introduced and by the testimony of members of the community. DMK's defense at the hearing was that it had cut the grass inside the boundaries of the Property. DMK's only other response was to seek to reconvene the hearing in three months to give it additional time to take action. Noting the community's opposition to this request, the HO denied this request.
The adverse effect on the neighboring properties was established by the testimony of the members of the community and by the letter from the Lake Area Realtors United characterizing the Property as a "toxic concern for realtors in the area."
Finally, the HO — noting that he lived in the neighborhood and that he was personally familiar with the status of the Property — took judicial notice of the blighted state of the Property. As the City points out, La. R.S. 49:956(3) authorized the HO to do so; it provides "[n]otice may be taken of judicially cognizable facts." Id.
DMK also suggests that the HO erred in finding the Property blighted given it established, through the report of its expert engineer, that the Property is structurally sound. We disagree. As the City points out, "a building does not have to be in imminent danger of collapse to be deemed a public nuisance." DMK's engineer's report does not address whether the Property was maintained.
To conclude, the HO made factual findings based on the record and took judicial notice of the blighted state of the Property. Based on our review of the record, we find, as did the CDC, that the HO's findings were not arbitrary or capricious.
For the forgoing reasons, the judgment of the Hearing Officer is affirmed.
TOBIAS, J., CONCURS.
I write separately to address with particularity two points.
Second, La. R.S. 13:2575 E states:
I find it was legal error for the hearing officer to receive any testimony from any unsworn witness. But from my review of the transcript and the exhibits offered at the administrative hearing (without objection from DMK) combined with the actual sworn testimony, the evidence was sufficient to support the hearing officer's conclusions. The trial court did not err in affirming the hearing officer's decision.
Accordingly, I respectfully concur.
Brandee Ketchum, Andrew Olsan, Louisiana Administrative Law: A Practitioner's Primer, 68 La. L.Rev. 1313, 1342 (2008).