BERGEN COUNTY, Petitioner–Appellant, v. BOARD OF TRUSTEES OF THE POLICE AND FIREMEN'S RETIREMENT SYSTEM, Respondent–Respondent.
DOCKET NO. A–5756–11T1
-- October 11, 2013
Eric M. Bernstein & Associates, L.L.C., attorneys for appellant (Eric M. Bernstein, of counsel and on the briefs; Deborah J. Bracaglia, on the briefs).John J. Hoffman, Acting Attorney General, attorney for respondent (Lewis A. Scheindlin, Assistant Attorney General, of counsel; Chris M. Tattory, Deputy Attorney General, on the brief).
Bergen County appeals from a final decision by the Board of Trustees of the Police and Firemen's Retirement System (the “Board” or “PFRS”) concluding that Keith Dyer, a former Bergen County employee, should not forfeit his entire pension. We affirm.
In May 2002, the Bergen County Sheriff's Office employed Dyer as a corrections officer (CO). Thereafter he became a member of PFRS. On April 18, 2009, the police arrested Dyer and charged him with two counts of third-degree possession of a controlled dangerous substance (heroin and crack cocaine), N.J.S.A. 2C:35–10a(1). On April 21, 2009, Bergen County served Dyer with a Preliminary Notice of Disciplinary Action (the “Disciplinary Action”) notifying him that he was suspended without pay pursuant to N.J.A.C. 4A:2—2.3(a)(6) (conduct unbecoming a public employee) and N.J.A.C. 4A:2–2.3(a)(11) (other sufficient cause).1 Two days after he was arrested, Dyer applied to the Board seeking ordinary disability retirement benefits stating that he was incapacitated for “stress related” reasons.
In July 2009, Bergen County and Dyer settled the Disciplinary Action. Dyer agreed to resign as a CO effective April 21, 2009 and forever forfeit employment in law enforcement, and Bergen County agreed not to pursue the disciplinary charges. Dyer then resolved the drug-related offenses and received a probationary sentence and a fine.
As part of Dyer's application for ordinary disability retirement benefits, the New Jersey Division of Pensions and Benefits (the “Division”) requested that Dyer undergo an independent psychiatric examination, which Ravinder N. Bhalla, M.D. conducted in October 2009. Dr. Bhalla stated that Dyer “is permanently and totally disabled to perform his job duties as a correction officer due to ongoing psychiatric symptoms, substance abuse as well as demoralization.” During the examination, Dyer stated to the doctor that Dyer's wife had a still birth in January 2009, Dyer's friend died of a drug overdose, and Dyer “has had a rocky course in his career as a[CO].”
On January 13, 2010, the Board issued a four-page written decision, verifying that it approved Dyer's application for ordinary disability benefits effective May 1, 2009 and applying N.J.S.A. 43:1–3c (requiring the Board to balance eleven factors when determining whether “forfeiture or partial forfeiture of earned service credit or earned pension or retirement benefits is appropriate”). These statutory factors include:
(1) the member's length of service;
(2) the basis for retirement;
(3) the extent to which the member's pension has vested;
(4) the duties of the particular member;
(5) the member's public employment history and record covered under the retirement system;
(6) any other public employment or service;
(7) the nature of the misconduct or crime, including the gravity or substantiality of the offense, whether it was a single or multiple offense and whether it was continuing or isolated;
(8) the relationship between the misconduct and the member's public duties;
(9) the quality of moral turpitude or the degree of guilt or culpability, including the member's motives and reasons, personal gain and similar considerations;
(10) the availability and adequacy of other penal sanctions; and
(11) other personal circumstances relating to the member which bear upon the justness of forfeiture.
[N.J.S.A. 43:1–3c (emphasis added).]
In analyzing these factors, the Board noted that: (1) Dyer's pension was not vested; (2) there was a “[d]irect relationship between the misconduct and ․ Dyer's public duties”; (3) Dyer's actions involved a “high degree of moral turpitude”; (4) Dyer “purchased drugs for personal consumption not resale”; (5) other penal sanctions included supervisory treatment, fines, resignation, and being barred from future employment in any law enforcement agency; and (6) Dyer cited “extenuating circumstances, i.e. his wife lost a baby and a friend passed away a day earlier.” The Board then stated that it
voted to forfeit your PFRS service and salary starting one year prior to the incident on April 18, 2009[,] through the end of your employment with Bergen County. Consequently, the salary and service from May 2008 through April 30, 2009, will not be included in the calculation of your retirement allowance.
In March 2010, Bergen County filed an internal appeal contending that the Board erred by failing to require Dyer to forfeit his entire pension. The matter was referred to the Office of Administrative Law and the parties filed cross-motions for summary judgment. An Administrative Law Judge (ALJ) balanced the eleven factors, issued an eight-page written initial decision dated May 21, 2012, and concluded that
I FIND that the eleven factors, when balanced, support [the Board's] determination that partial forfeiture of Dyer's pension benefits is warranted. I FIND factor number [ten] to be key in supporting the Board's decision. Factor number [ten] states that the Board must take into consideration the availability and adequacy of other penal sanctions. In this instance[,] the criminal charges filed against Dyer were resolved. Dyer successfully completed a six[-]months supervisory treatment program and paid approximately [$783] in fines. [Bergen] County filed inter-departmental disciplinary charges and those charges were also resolved in that Dyer resigned from his position as a[CO] and agreed not to seek any future employment in law enforcement. I FIND the penal consequences imposed and agreed to by Dyer are severe enough so that total pension forfeiture is avoided.
Bergen County appealed to the Board, which issued its final agency decision adopting the ALJ's findings of fact and conclusions of law. This appeal followed.
On appeal, Bergen County argues that the decision to forfeit only a portion of Dyer's pension was arbitrary and unreasonable. We affirm substantially for the reasons expressed by the ALJ in his thorough opinion. We add the following remarks.
We afford agency decisions deference and do not disturb such decisions unless they were “arbitrary, capricious, or unreasonable, ․ lacked fair support in the evidence, or ․ violated legislative policies expressed or implicit in the [enabling statute].” Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963). The party challenging a board's decision has the burden of showing that it was arbitrary, capricious, or unreasonable. Hayes v. Bd. of Trustees of the Police and Firemen's Ret. Sys., 421 N.J.Super. 43, 51 (App.Div.2011); see Gloucester Cnty. Welfare Bd. v. State Civil Serv. Comm'n, 93 N.J. 384, 397 (1983). Moreover, an administrative agency's imposition of sanctions is entitled to deference unless “such punishment is so disproportionate to the offense, in light of all the circumstances, as to be shocking to one's sense of fairness.” In re Zahl, 186 N.J. 341, 354 (2006) (quoting In re Polk License Revocation, 90 N.J. 550, 578 (1982)) (internal quotation marks omitted). Against this standard, we conclude that the Board's decision was not arbitrary.
In Uricoli v. Bd. of Trustees, 91 N.J. 62, 76–77 (1982), the Court considered the legislative intent underlying the pension forfeiture doctrine. The Court noted that forfeiture is a “penalty or a punishment for wrongful conduct.” Id. at 76. As a result, “[a]ll elements of doubt are resolved in favor of the person against whom forfeiture is sought.” Ibid. (alteration in original) (citation and internal quotation marks omitted). The Court also acknowledged that we construe a public pension liberally and in favor of the beneficiary. Ibid. The Court accommodated these two “interpretive predilections” and held that “in all cases, even where there is a relationship between the particular misconduct at issue and the performance of employment duties, a balancing approach is required in order to determine whether forfeiture is justified under all of the circumstances.” Id. at 76–77. Here, the Board adhered to this balancing approach when it adopted the ALJ's findings.
The ALJ considered the eleven statutory factors and found properly that the other penalties imposed on Dyer were sufficient to avoid total forfeiture of his pension. Dyer was fined, agreed to undergo six months of supervisory treatment, and is forever barred from working in any law enforcement agency. Moreover, the Board complied with N.J.S.A. 43:1–3b (permitting “forfeiture of all or part of the earned service credit or pension or retirement benefit”), as well as N.J.S.A. 43:1–3d (allowing “benefits [to] be calculated as if the accrual of pension rights terminated as of ․ a date reasonably calculated to impose a forfeiture that reflects the nature and extent of the misconduct and the years of honorable service” when forfeiture as of the date of misconduct would result in either an excessive pension or an excessive forfeiture).
Based on our review of the record and the controlling legal principles, we conclude that Bergen County's remaining arguments raised on appeal are without sufficient merit to warrant discussion in a written opinion. R. 2:11–3(e)(1)(E).
1. FN1. N.J.A.C. 4A:2–2.3(a)(11) is now codified at N.J.A.C. 4A:2–2.3(a)(12).