Opinion
DOCKET NO. A-5014-13T2
04-27-2016
GEORGE ELLIOT, Petitioner-Appellant, v. BOARD OF TRUSTEES, PUBLIC EMPLOYEES' RETIREMENT SYSTEM, Respondent-Respondent.
Edward A. Cridge argued the cause for appellant (Mellk O'Neill, attorneys; Arnold M. Mellk, of counsel; Mr. Cridge, on the brief). Eileen Den-Bleyker, Senior Deputy Attorney General, argued the cause for respondent (John J. Hoffman, Acting Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Christin E. Deacon, Deputy Attorney General, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Messano, Carroll and Sumners. On appeal from the Board of Trustees, Public Employees' Retirement System, Docket No. 6-13. Edward A. Cridge argued the cause for appellant (Mellk O'Neill, attorneys; Arnold M. Mellk, of counsel; Mr. Cridge, on the brief). Eileen Den-Bleyker, Senior Deputy Attorney General, argued the cause for respondent (John J. Hoffman, Acting Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Christin E. Deacon, Deputy Attorney General, on the brief). PER CURIAM
George Elliot appeals from the June 18, 2014 final decision of the Board of Trustees (the Board), Public Employment Retirement System (PERS), that denied him deferred retirement benefits. The facts are undisputed.
Elliot was hired by the South Brunswick Board of Education (the School Board) and established membership in PERS in 1992. In January 2012, he was the head custodian at an elementary school. The record reveals that the School Board notified Elliot by memo dated March 5, 2012, of its February 27, 2012 decision terminating him, effective January 18, 2012. The record is silent as to whether the School Board complied with the provisions of Title 18A regarding the termination of tenured employees, but we assume for purposes of this opinion that it did not. It is undisputed that Elliot never challenged his termination or submitted his resignation prior to the School Board's decision.
Elliot applied for accidental disability retirement benefits, see N.J.S.A. 43:15A-43, in January 2013, based upon an incident reported to have occurred at work in 2007. The Board determined that Elliot was "not totally and permanently disabled from the performance of his regular and assigned job duties." Ibid. Based on Elliot's age and years of service, the Board determined he was only eligible for "Deferred Retirement," N.J.S.A. 43:15A-38; however, Elliot had been "dismissed from employment for cause." Elliot was notified that the Board would consider his application for accidental disability benefits and "the matter of his honorable service and its impact on his application for retirement benefits" at its March 2014 meeting.
The record before the Board revealed that Elliot was charged on March 8, 2011 with second-degree computer theft and third-degree theft for events that occurred between June 2008 and March 2011. Elliot sold a computer stolen from the school where he worked on EBay, and another stolen computer was found in his home when police executed a search warrant. On January 19, 2012, Elliot waived indictment, an accusation charging him with third-degree theft was filed and he entered the Pre-Trial Intervention program (PTI), conditioned upon the payment of more than $4000 in restitution to the School Board and the agreement to forfeit public employment for life. Consent orders were entered in the Law Division reflecting Elliot's consent to these conditions.
Based upon this record, the Board determined that because of his "termination of employment . . . due to criminal charges," Elliot was ineligible to receive a retirement allowance and was eligible only to withdraw his accumulated contributions to PERS. Elliot requested a hearing in the Office of Administrative Law, limited solely to the denial of his deferred retirement benefits. The Board subsequently denied that request because there was no factual dispute and "the issue before the Board [was] a purely legal question."
In its final decision, the Board concluded Elliot was not eligible for deferred retirement benefits because "he was removed for cause as a consequence of being criminally charged." Further, "[t]he charges that led to [] Elliot's dismissal touched upon and were directly related to his employment with [the School Board], thereby making him ineligible" for deferred retirement benefits.
The Board rejected Elliot's arguments that his entry into PTI was not an admission of guilt; and therefore, absent a criminal conviction, the Board could not conclude he was dismissed for cause. The Board, instead, noted the consent judgments requiring Elliot to "indemnify" the School Board for the costs of stolen computers and forfeiting public employment for life. The Board also rejected Elliot's claim that his separation from employment was voluntary and occasioned by his acceptance of the conditions of PTI. It noted that Elliot had already been terminated by the School Board prior to his admission into PTI. The Board denied Elliot's application and this appeal followed.
Elliot argues that the Board misapplied the provisions of N.J.S.A. 43:15A-38 to his separation from public employment, because he was not convicted of, nor did he admit to, criminal wrongdoing. He further contends that the Board's interpretation of the statute as applied to the facts at hand violates public policy. We disagree and affirm.
"The judicial role in reviewing decisions of administrative agencies is 'to determine whether the administrative action was arbitrary, capricious or unreasonable.'" In re Hess, 422 N.J. Super. 27, 33-34 (App. Div. 2011) (quoting Burris v. Police Dep't, Twp. of W. Orange, 338 N.J. Super. 493, 496 (App. Div. 2001)). "Although appellate courts must give deference to an administrative agency charged with interpretation of the law, the courts are not bound by the agency's legal opinions." Id. at 34. Therefore, we apply "de novo review to an agency's interpretation of a statute or case law." Russo v. Bd. of Trs., Police and Firemen's Ret. Sys., 206 N.J. 14, 27 (2011).
N.J.S.A. 43:15A-38 (the statute) provides in pertinent part:
Should a member of [PERS], after having completed [ten] years of service, be separated voluntarily or involuntarily from the service, before reaching service retirement age, and not by removal for cause on charges of misconduct or delinquency, such person may elect to receive . . . [a] deferred retirement allowance, beginning at the retirement age . . . .Like other pension provisions, we must liberally construe the statute's provisions because these benefits reflect deferred compensation due to public workers, while at the same time we must strictly construe those provisions resulting in a forfeiture of those benefits. Hess, supra, 422 N.J. Super. at 35.
Pursuant to N.J.S.A. 43:1-3(a), "[t]he receipt of a public pension or retirement benefit is [] expressly conditioned upon the rendering of honorable service by a public officer or employee." Although N.J.S.A. 43:1-3(c) provides a list of factors the Board is required to consider before effectuating a forfeiture of benefits, that list does not apply when a specific provision of law, like N.J.S.A. 43:15A-38, results in the automatic forfeiture of benefits under certain conditions. Borrello v. Bd. of Trs., Pub. Emps. Ret. Sys., 313 N.J. Super. 75, 77-78 (App. Div. 1998).
Essentially, Elliot argues that only a job-related criminal conviction, or disciplinary action resulting in removal based on "charges of misconduct or delinquency," permit the Board to effectuate a forfeiture of deferred compensation benefits. We acknowledge that our reported decisions interpreting the statute have arisen in such factual settings.
In Borello, supra, 313 N.J. Super. at 76, the applicant was convicted of accepting numerous bribes during his tenure as a public employee and removed from office. We rejected the applicant's claim that the statute had been implicitly repealed by the later passage of N.J.S.A. 43:1 to -3, concluding instead that "Borrello was involuntarily removed from office by reason of his conviction and was not permitted to resign in good standing." Id. at 78.
In Hess, we limited the scope of the statute's forfeiture provisions to job-related misconduct. There, the applicant pled guilty to criminal charges stemming from her off-duty operation of a motor vehicle while intoxicated, and the resulting accident that seriously injured others. Hess, supra, 422 N.J. Super. at 30. The applicant's public employer filed disciplinary charges against her, even though the criminal convictions resulted in the forfeiture of her office as a matter of law. Id. at 30-31. Prior to the disposition of those disciplinary charges but after her conviction, the applicant filed for deferred retirement benefits and tendered a letter of resignation, which her employer rejected. Id. at 31-32. Ultimately, the Law Division ordered the forfeiture of the applicant's office, and a final notice of disciplinary action issued by the employer terminated her from her position. Id. at 32. The applicant never appealed from the termination. Hess, supra, 422 N.J. Super. at 32. The Board denied Hess's application for deferred retirement benefits, concluding the applicant had been terminated for cause. Ibid.
We reversed, holding that forfeiture of benefits under the statute was "conditioned on an involuntary removal due to misconduct related to employment." Id. at 37 (emphasis added). We rejected the Board's assertion that the misconduct was "work-related" because the applicant failed to appeal from the final disciplinary action of the employer. Id. at 36-37. Instead, we accepted the applicant's argument that appealing the disciplinary action was futile, since forfeiture was required as a matter of law. Id. at 37.
In this case, Elliot argues there was no adjudicatory finding that led to his "removal for cause on charges of misconduct or delinquency." See N.J.S.A. 43:15A-38. He argues correctly that admission into PTI cannot be conditioned upon an admission of guilt. See N.J.S.A. 2C:43-12(g)(2) (providing that with certain exceptions, PTI "shall be available to a defendant irrespective of whether the defendant contests his guilt of the charge or charges against him"); see also R. 3:28 Guideline 4 ("Enrollment in PTI programs should be conditioned upon neither informal admission nor entry of a plea of guilty. Enrollment of defendants who maintain their innocence should be permitted unless the defendant's attitude would render pretrial intervention ineffective."). Further, in this case, Elliot never admitted guilt of the theft charges.
However, we disagree with Elliot's premise that an extra-agency adjudication of misconduct or delinquency is a sine qua non for forfeiture under the statute. As we see it, the Board is free to assess the evidence before it and determine whether the applicant is eligible for deferred retirement or not.
As already noted, "honorable service is an implicit requirement of every public pension statute, whether or not this conditional term appears in the particular statute." Uricoli v. Bd. of Trs., Police and Firemen's Ret. Sys., 91 N.J. 62, 66 (1982); see also Corvelli v. Bd. of Trs., 130 N.J. 539, 550 (1992) (citing Uricoli, supra, 91 N.J. at 66) ("All public pension statutes in this State carry an implicit condition precedent of honorable service to an award of pension benefits, and forfeiture can be ordered for failure of that condition."). Despite the liberality we apply to pension statutes in general, "an employee is entitled to the liberality . . . when eligible for benefits, but eligibility is not to be liberally permitted." Smith v. State, Dep't. of Treasury, Div. of Pensions & Benefits, 390 N.J. Super. 209, 213 (App. Div. 2007) (emphasis added). "Instead, in determining a person's eligibility to a pension, the applicable guidelines must be carefully interpreted so as not to 'obscure or override considerations of . . . a potential adverse impact on the financial integrity of the [pension] [f]und.'" Ibid. (second alteration in original) (quoting Chaleff v. Teachers' Pension & Annuity Fund Trs., 188 N.J. Super. 194, 197 (App. Div.), certif. denied, 94 N.J. 573 (1983)).
Therefore, before the Board, Elliot was required to demonstrate that he was eligible for deferred retirement benefits. Obviously, he was "a member of [PERS]" who, "after having completed [ten] years of service," was "separated voluntarily or involuntarily from the service, before reaching service retirement age." N.J.S.A. 43:15A-38. But, Elliot was also required to demonstrate that his "removal [was not] for cause on charges of misconduct or delinquency." Ibid.
Elliot never proffered a contemporaneous voluntary resignation, or asserted any other facts that contradicted the involuntary removal reflected by the School Board's March 2012 termination memorandum. We note that in counsel's April 2014 letter to the Board objecting to the denial of benefits and requesting a hearing, Elliot claimed that his "separation" was not "involuntary," but rather a condition of PTI which Elliot voluntarily accepted. The Board, of course, noted that Elliot's entry into PTI and entry of the consent order by which Elliot agreed to a lifetime disqualification from public office or employment occurred after the School Board had already terminated him.
The situation, therefore, was entirely unlike that we discussed in Widdis v. Public Employee Retirement System, 238 N.J. Super. 70, 76 (App. Div. 1990). In Widdis, the applicant held a number of public positions in various municipalities and had resigned from his position in one of the towns, Howell Township, in August 1981, prior to the first of three indictments being returned charging him with official misconduct during the years 1977 to 1981. Id. at 72-74. He pled guilty and was convicted in January 7, 1983, prior to applying for deferred retirement benefits that included his service in Howell Township. Id. at 73-74. The Board denied the application, reasoning that the statute was intended to deny benefits to someone who committed job-related misconduct prior to resignation. Id. at 76. In reversing, we reasoned:
The forfeiture provisions of N.J.S.A. 43:15A-38 are invoked when a member is separated "involuntarily" from service after he has been convicted of a crime or pled guilty to a crime. By a proper reading of the statute, and applying strict construction because forfeiture is involved, the exception clause is limited to
involuntary separation. It reads "and not by removal for cause on charges of misconduct or delinquency . . ." This clause of necessity only modifies the phrase "involuntarily from the service" because a person separated voluntarily has obviously not been removed and has not been separated "by removal for cause on charges of misconduct or delinquency." To "be separated voluntarily or involuntarily" presents the alternative situations where on the one hand a member voluntarily retires or quits, or on the other hand is fired, suspended or forced to resign. Involuntary termination means just that, that the member had been fired or forced to resign. The phrase "not by removal for cause on charges of misconduct or delinquency" then obviously refers solely to removal from office involuntarily, and not because a person resigns or quits beforehand.
[Id. at 80.]
In short, the Board's conclusion that Elliot's separation from his position at the School Board was "involuntary," and that it was occasioned by job-related "misconduct or delinquency" finds fair support in the record. Russo, supra, 206 N.J. at 27 (citing In re Herrmann, 192 N.J. 19, 27 (2007)). Under the terms of N.J.S.A. 43:15A-38, the Board correctly decided that Elliot was barred from receiving deferred retirement benefits.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION