FUENTES, J.A.D.
Rutgers — The State University of New Jersey ("Rutgers") charges its undergraduate students a lower tuition if they are "domiciled" in New Jersey. Plaintiff Ezrina Shim appeals from Rutgers' determination that she is not domiciled in this State, because she is financially dependent on her parents who reside in Korea. Rutgers reached this conclusion despite the fact that plaintiff: (1) is over the age of eighteen; (2) has resided in this State since 1999; (3) has a license to drive from this State; (4) is registered to vote in this State; (5) has worked and paid taxes in this State; and (6) has attended all four years of high school in this State. With these stipulated facts as the backdrop, the narrow issue to be decided is whether Rutgers' determination, denying plaintiff domiciliary status for tuition purposes, was arbitrary, capricious or unreasonable. Lipman v. Rutgers — The State Univ. of N.J., 329 N.J.Super. 433 , 437, 443-44, 748 A.2d 142 (App.Div. 2000). This question was presented to the Law Division in the context of a declaratory judgment action filed by plaintiff.
Because neither party has raised this issue, we do not address whether this matter should have originated in the Appellate Division, as a direct appeal from a final decision of a State agency. R. 2:2-3(a)(2); Lipman, supra, 329 N.J.Super. at 446, 748 A.2d 142 .
We now hold that Rutgers' decision to deny plaintiff in-state tuition treatment was arbitrary, capricious and unreasonable. Rutgers' decision was driven by an erroneous application of the relevant regulatory standard promulgated by the Commission of Higher Education. Under this standard, Rutgers was required to review the documentary evidence presented by plaintiff, to determine whether she successfully rebutted the presumption created by her financial dependence on her out-of-state parents; to wit, that her physical presence in New Jersey was for the temporary purpose of attending an institution of higher education. We thus remand this matter for Rutgers to make this determination.
I
At the time this controversy arose, plaintiff was a nineteen-year-old undergraduate student at Rutgers. Although she was born in the United States, she resided with her parents in Korea for at least four years prior to starting high school. In the summer of 1999, when she was fifteen years old, plaintiff returned to the United States to live with her aunt and uncle in the Township of Mount Laurel. As a resident of Mount Laurel, plaintiff attended and graduated from Lenape High School located in Medford Township. She has visited her parents in Korea two times since 1999.
In support of her application to Rutgers for in-state tuition treatment, plaintiff submitted a detailed certification describing her activities in and contacts with the State. She also attached supporting documentation, including:
(1) New Jersey driver's license;
(2) New Jersey automobile registration;
(3) Voter registration identification card issued by Burlington County;
(4) Letter from the Marlton branch of Commerce Bank attesting that she has a checking account at this financial institution;
(5) Federal and New Jersey personal income tax returns for 2002;
(6) Records showing payroll tax deductions in connection with employment at a retail store in Cherry Hill;
(7) Records showing payroll tax deductions in connection with employment at the Mount Laurel Township Board of Education in 2003;
(8) Employment records in connection with a second Cherry Hill job in 2003.
All of the records that were provided reflected that plaintiff resided in Mount Laurel.
It is undisputed that plaintiff receives financial support from her parents for educational expenses incurred in connection with her attending Rutgers. This support includes, but is not limited to, the cost of tuition. Plaintiff is thus a dependant student within the meaning of N.J.A.C. 9A:9-2.6. Furthermore, plaintiff does not claim that her aunt and uncle are now, or have ever been, her legal guardians.
After reviewing the documents and information provided, Rutgers rejected plaintiff's request. The reasons for the rejection were succinctly expressed in a letter authored by the University's Associate Vice President for Enrollment Management:
Nor do I see the statute and the regulation as being in conflict. The regulation's rule of imputed domicile for dependent students makes perfect sense. The Commission, in a reasonable exercise of administrative discretion, recognized that most undergraduate students are financially dependent on their parents. Furthermore, the parents are the parties who pay taxes that fund state universities.
Thus, pursuant to the applicable regulations, the residence of the parents of an undergraduate student dictates the tuition status, not the residence of the student. If this rule did not apply, the funding for the state universities would be at risk, because students would be able to pay in-state tuitions while their parents do not pay taxes in New Jersey. This would create an incentive for out-of-state applicants to establish an address in New Jersey solely to obtain in-state tuition status while their parents avoid paying the New Jersey taxes that support the university.
Moreover, a student who remains financially dependent upon his or her parents has not truly severed the bonds which connect that student to the parents' home, and if these bonds continue to exist the student cannot establish a domicile in New Jersey.
The presumption that a dependent student's residency status derives from her parents may be overcome if the student has special and unusual family circumstances that have resulted in a condition of financial independence. Despite prompting, you have neither provided the required disclosure regarding parental financial assistance nor sought to declare yourself independent. This leads me to believe that you would be unable to declare yourself independent. In your appeal,
you essentially suggest that the documentary evidence of your residence in New Jersey establishes your domicile. However, since you have not requested and received approval for independent status, it is my conclusion that your residency is derived from your parents and they have not established a domicile in this State.
[Emphasis added.]
It is well-settled that an administrative agency's "interpretation of the operative law is entitled to prevail, so long as it is not plainly unreasonable." Metromedia, Inc. v. Director, Div. of Taxation, 97 N.J. 313 , 327, 478 A.2d 742 (1984). Our traditional deference to an administrative agency's decision is not applicable, however, "[w]hen an agency's decision is manifestly mistaken." L.M. v. Div. of Med. Assistance Health Servs., 140 N.J. 480 , 490, 659 A.2d 450 (1995) (quoting P.F. v. New Jersey Div. of Developmental Disabilities, 139 N.J. 522 , 530, 656 A.2d 1 (1994)). Our dissenting colleague would affirm Rutgers' decision largely on the basis of plaintiff's failure to provide timely information in support of her application, and the conclusion that Rutgers' decision therefore cannot be said to have been arbitrary, capricious, or unreasonable. We view the issue instead as Rutgers' misapplication of the controlling statute and regulations, and therefore decline to apply the deferential standard of review.
II
Pursuant to N.J.S.A. 18A:62-4, a person is presumed to be domiciled in this State for purposes of being eligible for in-state tuition treatment, if he/she has "been [a] resident within this State for a period of 12 months." Under this statute, however, a person is not considered to be domiciled in this State, if residence was established for the sole purpose of attending a particular educational institution. Ibid. If the educational institution challenges the student's domiciliary status, he/she may "demonstrate" domiciliary status in accordance with regulations promulgated by the Commission on Higher Education. Ibid.
In Lipman, we examined the question of a law student's domicile, in the context of his request for in-state tuition treatment, despite the fact that he had relocated to Pennsylvania. The plaintiff in Lipman argued that he should have been considered to be domiciled in New Jersey, because he was financially dependent on his parents, who were residents of this State. Lipman, supra, 329 N.J.Super. at 438, 748 A.2d 142 . In the process of analyzing the issue, we reaffirmed that, under the common law:
A person's domicile is a permanent home from which he or she does not intend to move. Three elements may be considered when determining whether a change of domicile has occurred: (1) whether there has been an actual and physical establishment of an abode in a particular state; (2) whether the subject intends to make a home permanently or at least indefinitely in that state; and (3) whether the subject intends to abandon his or her previous domicile. Once established, a person's domicile continues until superseded by a new domicile. Furthermore, "[t]he intention to make a new home must be unqualified [and] not conditioned on the happening of a future event."
[
Id. at 444,
748 A.2d 142 (citations omitted).]
In this context, we affirmed Rutgers' decision to deny Lipman's application for in-state tuition treatment because, as a graduate student subject to the provisions of N.J.A.C. 9A:9-2.6(a)1, -(b)3 Rutgers was required to determine his domicile "unburdened by any imputation from his parents." Ibid.
We are confronted here with an inverse Lipman scenario. Pursuant to N.J.A.C. 9A:5-1.1(f), undergraduate students who are financially dependent on their parents:
are presumed to be domiciled in the state in which their parent(s) or legal guardian(s) is domiciled. Dependent students whose parent(s) or legal guardian(s) is not domiciled in New Jersey are presumed to be in the State for the temporary purpose of obtaining an education and presumed not to be domiciled in New Jersey.
This regulation expands upon the language in N.J.S.A. 18A:62-4, (considering an individual who establishes a residence in this State for the sole purpose of attending a particular institution not to be domiciled in this State), by creating a presumption that a financially dependent student, whose parents reside outside of this State, is here "for the temporary purpose of obtaining an education."
A student subject to this presumption may "demonstrate," under N.J.A.C. 9A:5-1.1(d), that he/she is domiciled in this State by presenting the following documentary evidence:
[P]rimary evidence of being domiciled in New Jersey [consists of]:
1. Copies of the student's New Jersey income tax return or evidence of withholding of New Jersey income tax, and/or copies of the parent's(s') or legal guardian's(s') income tax return or evidence of withholding of income tax.
2. Evidence of ownership of or a long-term lease on a permanent residence in this State by the student or the student's parent(s) or legal guardian(s).
[
N.J.A.C. 9A:5-1.2(a).]
The regulation also provides for the submission of "supplementary evidence," in the form of:
1. A New Jersey driver's license;
2. A New Jersey motor vehicle registration;
3. A New Jersey voter registration card;
4. A sworn, notarized statement from the student and/or his or her parent(s) or legal guardian(s) declaring domicile in New Jersey;
5. Any other supplementary evidence that the institution deems necessary to support the student's claim of domicile in New Jersey, including, but not limited to, evidence regarding the domicile of a student's parent(s) or legal guardian(s) for students whose domicile is determined by the institution to be with their parent(s) or legal guardian(s).
[
N.J.A.C. 9A:5-1.2(b).]
The record here clearly shows that Rutgers did not evaluate this evidence to determine whether plaintiff successfully demonstrated that her decision to relocate from Korea to New Jersey in 1999 was not for the sole purpose of attending Rutgers. Instead, Rutgers' determination that plaintiff was not domiciled in this State was exclusively based on the erroneous legal conclusion that the only way for plaintiff to establish domiciliary status for in-state tuition treatment, was to prove that she was financially independent from her parents.
Under these circumstances, we are compelled to reverse the judgment of the Law Division, and remand this matter to Rutgers to reevaluate its decision denying plaintiff's request for in-state tuition, in light of the regulatory standards outlined in N.J.A.C. 9A:5-1.1(d) and N.J.A.C. 9A:5-1.2(a) and (b). That is, Rutgers must review plaintiff's primary evidence of her domiciliary status in this State, in the form of her personal New Jersey income tax returns, and secondary evidence, in the form of numerous documents attesting to her significant and long-standing ties with New Jersey, to determine whether she has successfully rebutted the presumption of non-domiciliary status created by her financial dependency on her out-of-state parents.
In going about this analysis, Rutgers should also be guided by the common law principles we discussed in Lipman. That is, Rutgers should consider whether plaintiff, by relocating from Korea to New Jersey: (1) established an abode in this State; (2) intended to make a home permanently or at least indefinitely in this State; (3) intended to abandon her previous domicile; and (4) intended to make New Jersey her new home, without any qualification and unconditioned on the happening of a future event.
Reversed and remanded. We do not retain jurisdiction.