Court Opinion

ID: 4459534
Source: CourtListenerOpinion
Date Created: 2019-11-27 15:06:36.854379+00
Date Added: 2024-06-11T14:24:17.170672
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-5213-17T4

JOHN A. SMITH, III,

          Petitioner-Appellant,

v.

BOARD OF TRUSTEES,
TEACHERS' PENSION
AND ANNUITY FUND,

     Respondent-Respondent.
____________________________

                    Argued October 10, 2019 – Decided November 27, 2019

                    Before Judges Koblitz, Whipple and Gooden Brown.

                    On appeal from the Board of Trustees of the Teachers'
                    Pension and Annuity Fund, Department of the Treasury,
                    PERS No. 2-454896.

                    Daniel W. Sexton argued the cause for appellant.

                    Amy Chung, Deputy Attorney General, argued the
                    cause for respondent (Gurbir S. Grewal, Attorney
                    General, attorney; Melissa H. Raksa, Assistant
                    Attorney General, of counsel; Austin J. Edwards,
                    Deputy Attorney General, on the brief).
PER CURIAM

       Petitioner John Smith appeals from the May 3, 2018 final decision of the

Board of Trustees of the Teacher's Pension and Annuity Fund (Board). We

affirm.

       Our review of the record reveals that effective September 1, 1968, Smith

was enrolled in the Teacher's Pension and Annuity Fund (TPAF) as a teacher

with the Jersey City Board of Education. In April 1977, after nine years of

teaching, briefly interrupted by a term of military service, Smith took an

approved leave of absence from teaching and became an Assistant Court

Administrator in Hudson County. In the court system, Smith enrolled in the

Public Employee Retirement System (PERS). On Smith's PERS enrollment

application, he advised he was a member of "New Jersey Teachers' Pension

Annuity (frozen)" and did "not wish to transfer accumulated [illegible] to this

[illegible] at this time." 1

       On May 22, 1981, Smith requested an additional one-year continuation of

his leave of absence from teaching.          Smith's previously-approved leave of

absence was scheduled to end September 1, 1981. While Smith never received

1
  Due to the quality of the record supplied, it is difficult to see what is actually
written on the application. At present, Smith does not argue that he meant to
transfer his service from TPAF to PERS at the time of his 1977 application.
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notification confirming or denying his extended leave of absence, he simply

assumed he was granted an indefinite leave of absence.

      In 1991, Smith began teaching at Hudson County Community College

(HCCC). There, Smith was eligible for enrollment in an Alternative Benefit

Program (APB), but waived his right to join and instead continued his

enrollment in PERS.

      In 2003, Smith inquired about the status of his TPAF account, and was

informed by the Division of Pensions and Benefits (Division) that "consistent

with state statute and regulations, pension contributions associated with

[Smith's] inactive membership account have been transferred to the Department

of the Treasury-Unclaimed Properties [(Unclaimed Properties)]."

      Nine years later, in August 2012, in reference to his December 2011

Personal Benefits Statement, Smith inquired as to why the statement had not

credited his PERS pension with his years of teaching service in Jersey City. In

response, the Division advised Smith they were aware of his roughly nine years

of service as a teacher, but reminded him that, as they informed him back in

2003, the account was escheated to Unclaimed Properties.        The Division's

correspondence explained how Smith could purchase his TPAF services in his

PERS account.

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                                      3
        Five years later, in February 2017, Smith sought "a copy of any notice of

cessation of [his] membership in [TPAF] as [he] never withdrew from the

[p]ension."     A March 20, 2017, reply again notified Smith his former

membership was transferred to Unclaimed Properties. A week later, Smith

contacted the Division and requested they accept his Application for Interfund

Transfer. In his letter, Smith stated he never received notice of termination of

his TPAF pension and his ultimate goal was to have his years of service as a

teacher be credited toward his PERS pension.

        In June 2017, the Division informed Smith he was not eligible for an

interfund transfer from TPAF to PERS because his right to transfer expired

September 30, 1980, two years after his last contribution to the account. 2 Two

weeks later, Smith sent the Division another letter accompanied by

documentation to support his eligibility to transfer his TPAF service to PERS. 3

In response, the Division advised Smith he was ineligible to transfer his service

because Smith was not granted an indefinite leave of absence from teaching,

2
  This appears to be an error on the part of the Division. Smith's right to transfer
his account would have ended in 1983, two years after his leave of absence
expired, not in 1980.
3
    Smith's letter was not included as part of the appellate record.
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                                          4
therefore his account expired two years after the end of his leave of absence.

Smith appealed the Division's determination to the Board.

      In January 2018, the Board upheld the Division's administrative

determination denying Smith's request pursuant to N.J.S.A. 18A:66-7(a). In

February 2018, Smith asked the Board to reconsider its denial or grant a hearing

with the Office of Administrative Law.

      By letter dated May 4, 2018, the Board denied the request for an

administrative hearing and on June 8, 2018, the Board issued a Final

Administrative Determination. This appeal followed.

      "An administrative agency's interpretation of statutes and regulations

within its implementing and enforcing responsibility is ordinarily entitled to our

deference." E.S. v. Div. of Med. Assistance & Health Servs., 412 N.J. Super.

340, 355 (App. Div. 2010) (alteration omitted) (quoting Wnuck v. N.J. Div. of

Motor Vehicles, 337 N.J. Super. 52, 56 (App. Div. 2001)). However, we are "in

no way bound by [the Board's] interpretation of a statute or its determination of

a strictly legal issue." Russo v. Bd. of Trs., Police & Firemen's Ret. Sys., 206

N.J. 14, 27 (2011) (quoting 37 Steven L. Lefelt et al., New Jersey Practice:

Administrative Law Practice, § 7.19 (2d ed. 2000)). Thus, we review issues of

statutory interpretation de novo. McGovern v. Rutgers, 211 N.J. 94, 108 (2012).

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                                        5
      On appeal, Smith argues the Board did not comply with N.J.S.A. 18A:66-

7, which requires notice to a member's last employer sixty days prior to

membership expiration. Smith asserts the plain meaning of the statute requires

written notice of the expiration of the account, and the Board's failure to provide

such notice to his last employer violated his due process rights. Smith further

argues that while the modern TPAF statute mandates notice to the last employer,

the predecessor statute, N.J.S.A. 18:13-112.9, and the TPAF handbook provide

for additional notice to a member's home address.

      N.J.S.A. 18A:66-7 governs cessation of membership in TPAF.

            Membership of any person shall cease:
            (a) if, except as provided in section 18A:66-8, he shall
            discontinue his service for more than two consecutive
            years;
            (b) upon the withdrawal by a member of his
            accumulated deductions as provided in this article;
            (c) upon resignation and election to receive, in lieu of
            the return of his accumulated deductions, the benefits
            provided in section 18A:66-36 and 18A:66-37;
            (d) upon retirement;
            (e) at death;

            but not otherwise except as provided in this article.

            The pension fund shall send written notice in care of
            the last employer of a member at least [sixty] days in
            advance of the date on which his inactive membership
            shall expire as provided in subsection (a) of this
            section.

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                                        6
            [(emphasis added).]

Smith argues the Division never complied with the statute's written notice of

membership expiration requirement.

      We begin by considering when Smith's TPAF membership actually

expired. In May 1981, Smith was notified that his previous leave of absence

was set to expire, so he asked to extend the leave of absence "until Sept[ember]

1982 due to personal business reasons and other government service." Smith

asserts he never received a response regarding his request to extend his leave of

absence to September 1982, yet Smith argued to the Division that "my

employment status was an indefinite leave of absence." Nothing in the record

supports this contention that Smith was granted an indefinite leave of absence.

      Continuation of membership after a leave of absence is governed by

N.J.S.A. 18A:66-8. In relevant part, the statute states:

            If a teacher: . . . discontinued from service without
            personal fault or through leave of absence granted by
            an employer or permitted by any law of this State; and
            . . . has not withdrawn the accumulated member’s
            contributions from the retirement system, the teacher’s
            membership may continue, notwithstanding any
            provisions of this article, if the member returns to
            service within a period of [ten] years from the date of
            discontinuance from service.

            [N.J.S.A. 18A:66-8(a)(1)-(2).]

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                                        7
      Smith provided no documentation to demonstrate he was granted an

indefinite leave of absence. It defies logic to assume that where Smith only

requested a one-year extension, a lack of response meant he was granted an

indefinite leave of absence. More significantly, although Smith never resigned,

he abandoned his position as a teacher.

      We have said "abandonment of employment by a public employee . . .

must be total and absolute, and that temporary nonuser or neglect of duty is not

ordinarily sufficient to sustain an inference of abandonment." McAleer v. Jersey

City Incinerator Auth., 79 N.J. Super. 142, 147 (App. Div. 1963). After his 1981

request for an additional year's leave of absence, Smith never returned to his

teaching position with the Jersey City Board of Education. Even if his leave

was approved, extending his leave until September 1982, Smith's failure to

return to teaching within ten years after his leave of absence indicates he

abandoned his position.

      Smith argues he returned to work as a teacher in 1991 at HCCC in a

position that could have been covered by TPAF.            N.J.S.A. 18A:64A-13

(allowing all teaching staff at county colleges to have the rights and privileges

of teachers employed by local boards of education). Smith argues he should

now be allowed to purchase his TPAF at the rate in effect in 1991. However,

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                                          8
Smith declined enrollment in HCCC's ABP and instead chose to continue

making contributions to PERS; he made no contributions to his TPAF during

this time, hence, we find no basis to conclude Smith should be allowed to

purchase his service at the 1991 rate.

      Smith frames the case as similar to Zigmont v. Board of Trustees, 91 N.J.

580 (1983), but his reliance on Zigmont is misplaced. Zigmont, a teacher, was

erroneously informed she could not purchase the retirement credit from a period

of maternity leave. Id. at 581. Roughly two and a half years after Zigmont

returned from her leave, she learned she would have been able to purchase the

retirement credit within one year of the end of her leave. Ibid. The Court

remanded the case to the Board to consider whether the petitioner was entitled

to a waiver, directing the Board to consider the fiscal effect on the fund and

practices in other school districts. Id. at 584.

      Zigmont is different from this case, as Zigmont returned from her leave

of absence and resumed teaching at the school, where Smith did not. Further,

Zigmont was acting on misinformation from a school district employee

associated with TPAF, where Smith has alleged no misrepresentation that

caused him not to transfer his TPAF service credits. And where Zigmont took

prompt action when she learned she was misinformed, Smith should have known

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                                         9
that his TPAF service credit would expire two years after the end of his leave of

absence, yet took no steps to reconcile his accounts even in 2003 when he

learned his account had been transferred to Unclaimed Properties. His next

contact with the Division was not until nine years later in August 2012, when he

inquired about his December 2011 PERS account.

      Smith also argues his matter is similar to Bernstein v. Board of Trustees,

151 N.J. Super. 71 (App. Div. 1977). It is not similar. There, we determined a

teacher should be allowed to receive ordinary disability retirement benefits

when she filed an application twenty-six days late. Id. at 72, 79. In reaching

our determination, we could "discern no basis to find the Fund prejudiced by the

failure of petitioner to comply with the letter of the law." Id. at 78.

      Unlike Zigmont and Bernstein, this case presents a substantial lapse in

time. Smith cannot argue the fund would not be prejudiced by his service credit

transfer when he has asked for either the ability to purchase his credit at a three -

decade-old rate, or alternatively, the fee-free transfer of his TPAF credit to

PERS.

      Smith also argues he was denied due process because the Division did not

produce proof it sent notice of Smith's TPAF account expiration to the school,

his last employer. The TPAF statute provides that the Board "shall send written

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                                        10
notice in care of the last employer of a member at least [sixty] days in advance

of the date on which his inactive membership shall expire." N.J.S.A. 18A:66-7.

However, this does not rise to the level of a due process claim.

      "The Fourteenth Amendment's procedural protection of property is a

safeguard of the security of [property] interests that a person has already

acquired in specific benefits." Bd. of Regents of State Colls. v. Roth, 408 U.S.

564, 576 (1972). However, no lack of due process denied Smith a benefit to

which he would ordinarily be entitled. To the contrary, the service credit from

Smith's TPAF credit was sent to Unclaimed Properties, and he can still claim it.

Further, a June 2017 letter informed Smith he could purchase his TPAF credit

through his PERS account.        Smith asserts purchase now is prohibitively

expensive. That may be true, but it does not mean Smith was summarily denied

the right to his property. Rather, his TPAF service credit could have been

claimed in other forms – just not via fee-free interfund transfer to his PERS

account for years after Smith sat on his rights.

      Smith had notice and contact with the Division regarding his TPAF

account in 2003 when he was informed his account had been sent to Unclaimed

Properties. He did not follow up with the Division until 2012, when he was

again informed his service credit had expired.           Even after this 2012

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                                       11
correspondence, Smith did not contact the Division to resolve the matter until

February of 2017.

      Smith's other arguments are without sufficient merit to warrant discussion

in a written opinion. R. 2:11-3(e)(1)(E).

      Affirmed.

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