NJ Court Rules Application Mistake Can Justify Denial of Professional License

Professionals who apply for licenses in New Jersey may want to triple check their applications.

The Appellate Division recently held that even an unintentional mistake could constitute misrepresentation in violation of the Uniform Enforcement Act (UAE) and justify denial of the application. The case, In the Matter of the Application of Y.L., involved a massage therapist who failed to list a prostitution arrest on her application. However, the statute also applies to hairstylists, accountants, architects, pharmacists, electricians, dentists, plumbers, real estate appraisers, veterinarians and a number of other professions that require a professional license.

The Facts of the Case

In 2013, the Board of Massage and Bodywork Therapy (“Board”) issued a Final Order of Denial of Certification/License with regard to a massage therapy license application filed by plaintiff Y.L. The Board found that Y.L. engaged in misrepresentation on her sworn application, in violation of the UAE. The statute allows professional licensing boards to deny the license of an applicant who has “engaged in the use or employment of dishonesty, fraud, deception, misrepresentation, false promise or false pretense.”

In both the application and the accompanying authorization for a background check submitted in 2012, Y.L. swore that she had never been arrested for any crime or offense. She signed an affidavit stating: “[a]ll information provided in connection with this application is true to the best of my knowledge and belief. I understand that any omissions, inaccuracies or failure to make full disclosure may be deemed sufficient to deny licensure[.]”

The Board discovered that Y.L. had been arrested for prostitution in a massage therapy establishment in 2004, although the charge was later dismissed. Y.L. wrote the Board a letter explaining that she had not read the application questions carefully and mistakenly neglected to acknowledge the arrest. She indicated that “English is not my primary language,” denied having engaged in prostitution, and claimed that she had no intent to deceive the Board.

The Board nonetheless failed to approve her application. In her subsequent appeal, Y.L. argued that because the word “misrepresentation” is surrounded by words that require an intent to deceive, such as “dishonesty, fraud [and] deception[,]” similar intent should be required for any misrepresentation.

The Court’s Decision

The appeals court rejected Y.L.’s argument that the Board must find she had the intent to deceive, and affirmed the Board’s denial, which required Y.L. to wait two years before reapplying for a license. As highlighted in the opinion, New Jersey courts have traditionally held that misrepresentation, in the form of “[a]n incorrect statement, negligently made and justifiably relied upon,” can be the basis for recovery of damages for economic loss or injury sustained as a consequence of that reliance.

In reaching its decision, the Appellate Division further noted that it previously found that the Director of the New Jersey Division of Medical Assistance and Health Services did not err in denying a pharmacy’s application to participate in the State’s Medicaid program due to its unintentional failure to disclose the criminal record of one of its employees in Twp. Pharmacy v. Div. of Med. Assistance & Health Servs., 432 N.J. Super. 273, 274-75 (2013).

Ruling otherwise, the panel held, would also lead to an unworkable situation. “[A] testimonial hearing would likely be required in every instance where the applicant alleged the failure was not intentional,” the court stated.

If you have questions about this case or would like to discuss licensing issues impacting your business, please contact me or the Scarinci Hollenbeck attorney with whom you work. 

Check out our previous posts on some of the decisions regarding decisions made by the Appellate Division:

• Businesses Should Review Arbitration Clauses in Light of Recent NJ Supreme Court Decision
• Appellate Division Rules BPU Did Not Have Exclusive Primary Jurisdiction Over Negligence Claims
• Appellate Division Issues Key NJ Unemployment Law Decision
• NJ Appellate Court Rules Parties May Use Imprecise Wording To Exercise A Right Under An Insurance Policy To Reject An Arbitration Award