Court Opinion

ID: 4182617
Source: CourtListenerOpinion
Date Created: 2017-06-30 14:12:33.696323+00
Date Added: 2024-06-11T14:38:28.059562
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NOT FOR PUBLICATION WITHOUT THE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-2973-15T3

DARREN M. NANCE,

        Petitioner-Appellant,

v.

STATE OF NEW JERSEY, DEPARTMENT
OF TREASURY, DIVISION OF PENSION
AND BENEFITS,

     Respondent-Respondent.
_______________________________

              Submitted May 25, 2017 – Decided June 30, 2017

              Before Judges O'Connor and Mawla.

              On appeal from the Board of Trustees, Police
              and Firemen's Retirement System, PFRS No.
              56220.

              Darren M. Nance, appellant pro se.

              Christopher S. Porrino, Attorney General,
              attorney for respondent (Melissa H. Raksa,
              Assistant Attorney General, of counsel;
              Danielle P. Schimmel, Deputy Attorney General,
              on the brief).

PER CURIAM

        Appellant    Darren    Nance    appeals    from   a   February    8,   2016

administrative determination by the Board of Trustees, Police and
Firemen's Retirement System (the Board) denying his request to

waive interest payments on loans he took against his pension.

Because we find no merit in appellant's arguments, we affirm the

Board's determination.

      The following facts are taken from the record.          Appellant was

employed as a police officer, first with Essex County and then

with the City of Newark, and enrolled in the Police and Firemen's

Retirement System (PFRS) on February 1, 1986.          Appellant took nine

PFRS loans over the course of his career, which totaled $12,991.32

as   of   September   3,   1996,   the   date   he   was   terminated   from

employment.    Appellant has made no payments on the loans since the

date of his termination.

      On December 18, 1997, appellant filed suit contesting his

termination, asserting violations of the Federal Civil Rights Act,

42 U.S.C.A. § 1983, and the New Jersey Law Against Discrimination,

N.J.S.A. 10:5-1 to -49.       On June 24, 2010, a federal jury found

in favor of appellant, awarding him $350,000 in compensatory and

$250,000 in punitive damages.        Appellant was not reinstated as a

police officer and subsequent appeals from the determination to

not reinstate him were denied by the Civil Service Commission.

Notwithstanding, appellant reached a settlement with the City of

Newark, resulting in the dismissal of all disciplinary charges,

restitution of back pay, and an official designation his employment

                                     2                              A-2973-15T3
concluded    by   his    resignation   rather     than   termination.          All

litigation with the City of Newark concluded as of February 4,

2015.

     On July 17, 2015, appellant applied to the Division of Pension

and Benefits for deferred retirement benefits, which notified him

of his outstanding loan balance and the interest accrued thereon.

Appellant made no loan payments and, instead, applied for a waiver

of the accrued interest on the loans; that application was denied

by   the    Division.      Appellant       appealed   from   the    Division's

determination, but the Board upheld the denial of the waiver.

     Appellant     now    challenges       the   February    8,    2016     Board

determination.      The Board concluded he was not eligible for a

waiver of the interest on the loans because N.J.S.A. 43:16A-16.1,

16.2 and N.J.A.C. 17:4-4.4, which govern the terms of PFRS loans,

mandate the accrual of four percent per annum interest on unpaid

loan balances, and require the satisfaction of loan balances

together with interest upon retirement.           The Board found appellant

agreed to pay the interest, and each loan application he completed

contained a notice interest would accrue on the loans.               The Board

further found a waiver inappropriate because appellant received

the $600,000 jury award and $18,438.46 in back pay from the

settlement of the disciplinary charges.               The Board also noted

appellant enjoyed use of the borrowed funds.

                                       3                                  A-2973-15T3
      On appeal, appellant asserts the Board misapplied the law,

maintaining N.J.S.A. 43:16A-16.1, 16.2 and N.J.A.C. 17:4-4.4 do

not "prohibit" the Board from granting an employee a waiver of

accrued interest if the employee proved the City of Newark violated

his civil rights.     Appellant also argues the lack of minority

representation on the Board "negatively impacted" the outcome.

Lastly, appellant asserts the Board's determination was arbitrary

and capricious because the Board denied him a hearing, and treated

him disparately from another PFRS member appearing before it on

the same day as appellant.

      Our review of agency determinations is limited.               In re

Stallworth, 208 N.J. 182, 194 (2011).        We generally "defer to the

specialized or technical expertise of the agency charged with

administration of a regulatory system."          In re Virtua-W. Jersey

Hosp. Voorhees for a Certificate of Need, 194 N.J. 413, 422 (2008).

We will "not disturb an administrative agency's determinations or

findings unless there is a clear showing that (1) the agency did

not follow the law; (2) the decision was arbitrary, capricious,

or   unreasonable;   or   (3)   the   decision   was   not   supported    by

substantial evidence."     Ibid.      "The burden of demonstrating that

the agency's action was arbitrary, capricious or unreasonable

rests upon the [party] challenging the administrative action."            In

                                      4                            A-2973-15T3
re Arenas, 385 N.J. Super. 440, 443-44 (App. Div.), certif. denied,

188 N.J. 219 (2006).

     We first address appellant's claim the Board erred by relying

on N.J.S.A. 43:16A-16.1, 16.2 and N.J.A.C. 17:4-4.4 when it denied

his request to waive the accrued interest on his PFRS loans.

Appellant asserts these statutes and the regulation do not apply

to him because he applied to "freeze" his PFRS account, when his

civil rights lawsuit commenced.          Appellant asserts he received no

response to his request to freeze this account until he submitted

his retirement application in 2015.             He asserts he "reasonably

believed    that   the   PFRS   Board    had   acted   upon   his   request   to

deactivate his PFRS account."           Thus, appellant argues:

            [t]here is no known case law that the PFRS
            could cite which would prohibit the Board of
            Trustees from granting a waiver on outstanding
            loan interest, particularly where, as in the
            instant matter, the appellant had been the
            proven victim of both Federal and State law
            violations by a law enforcement agency.

     Appellant's claim requires we examine both the statutory and

the regulatory provisions challenged to determine whether the

Board arbitrarily, capriciously or unreasonably applied them.                 "We

interpret a regulation in the same manner we would interpret a

statute."    US BANK, N.A. v. Hough, 210 N.J. 187, 199 (2012).                Our

analysis begins with the plain language of the regulation in

question.     State v. Gelman, 195 N.J. 475, 482 (2008) (citing

                                        5                              A-2973-15T3
DiProspero v. Penn, 183 N.J. 477, 492 (2005)).     "The Legislature's

intent is the paramount goal when interpreting a statute and,

generally, the best indicator of that intent is the statutory

language."   DiProspero, supra, 183 N.J. at 492.    To determine the

intent, we give the words of the regulation their "ordinary and

common significance."   Lane v. Holderman, 23 N.J. 304, 313 (1957).

"Only if the statutory language is susceptible to 'more than one

plausible interpretation' do we turn to such extrinsic aids as

legislative history for help in deciphering what the Legislature

intended."   Gelman, supra, 195 N.J. at 482 (quoting DiProspero,

supra, 183 N.J. at 492-93).

     N.J.S.A. 43:16A-16.1 states:

          Any member who has at least [three] years of
          service to his credit for which he has
          contributed as a member may borrow from the
          retirement system, an amount equal to not more
          than [fifty percent] of the amount of his
          aggregate contributions, but not less than
          [fifty dollars]; provided that the amount so
          borrowed, together with interest thereon, can
          be repaid by additional deductions from
          salary, not in excess of [twenty-five percent]
          of the member’s salary, made at the time the
          salary is paid to the member. The amount so
          borrowed, together with interest on any unpaid
          balance thereof, shall be repaid to the
          retirement system in equal installments by
          deductions from the salary of the member at
          the time the salary is paid or in such lump
          sum amount to repay the balance of the loan
          but such installments shall be at least equal
          to the member's rate of contribution to the
          retirement system and at least sufficient to

                                 6                            A-2973-15T3
    repay the amount borrowed with interest
    thereon.   Not more than two loans may be
    granted to any member in any calendar year.
    Notwithstanding any other law affecting the
    salary or compensation of any person or
    persons to whom this act applies or shall
    apply, the additional deductions required to
    repay the loan shall be made.

    The rate of interest for a loan requested by
    a member prior to the effective date of
    [N.J.S.A. 43:16A-16.1 and 16.2 and N.J.A.C.
    17:4-4.4] shall be [four percent] per annum
    on any unpaid balance thereof. . . .

    Loans shall be made to a member from his
    aggregate contributions. The interest earned
    on such loans shall be treated in the same
    manner as interest earned from investments of
    the retirement system.

N.J.S.A. 43:16A-16.2 provides:

    In the case of any member who retires without
    repaying the full amount so borrowed, the
    Division of Pensions and Benefits shall deduct
    from the retirement benefit payments the same
    monthly amount which was deducted from the
    compensation   of   the   member   immediately
    preceding retirement until the balance of the
    amount borrowed together with the interest is
    repaid. In the case of a pensioner who dies
    before the outstanding balance of the loan and
    interest thereon has been recovered, the
    remaining balance shall be repaid from the
    proceeds of any other benefits payable on the
    account of the pensioner either in the form
    of monthly payments due to his beneficiaries
    or in the form of lump sum payments payable
    for pension or group life insurance.

The applicable regulation, N.J.A.C. 17:4-4.4 also provides:

    Interest will be calculated on a periodic
    basis on the unpaid loan balance.      If

                          7                          A-2973-15T3
          scheduled payments are not paid timely,
          interest will be accrued and added to the
          remaining outstanding loan balance.    If, at
          the end of the loan schedule, there is a
          balance of less than [fifty dollars], it will
          be written off. If the balance is equal to
          or greater than [fifty dollars], the member
          will be assessed.

     Following consideration of appellant's argument in light of

the statutory language, we are not persuaded.    Clearly, there is

no exception to the mandated accrual and payment of interest on

unpaid loans, other than for balances less than fifty dollars.

The plain language of the statutes and regulation supports the

Board's determination; appellant has failed to show the Board

determination was arbitrary, capricious, or unreasonable.

     Likewise, it was not arbitrary, capricious, or unreasonable

for the Board to deny appellant's request for a waiver based on

the commencement of his civil rights suit.    As respondent notes,

the Board was not a party to his suit and the claims therein have

no bearing on his separate obligation to the PFRS to repay the

loans, including any accrued interest.

     Although it is not entirely clear from appellant's brief, he

seemingly argues the Board was estopped from enforcing the interest

accrual because the PFRS handbook mandates loans must be paid

within five years.    He also asserts an estoppel-like argument

because PFRS never declared the loans to be in default as indicated

                                8                           A-2973-15T3
in its handbook.      However, as noted by respondent, appellant's

claim the loans were payable within five years of issuance under

N.J.A.C. 17:4-4.9 ignores the fact the regulation, adopted in

2011, does not apply to appellant, who concluded his employment

in 1996. Also, the regulation contains no language limiting PFRS's

ability to collect loans beyond five years.         In fact, the opposite

is true, as unpaid loans are deemed distributions, which are

reported to the IRS and would subject appellant to further interest

and penalties.    See 26 U.S.C.A. § 72(p).

     Moreover, our Supreme Court has stated the language of a

handbook does not trump statutory authority to the contrary.              See

Golden v. Cty. of Union, 163 N.J. 420, 432 (2000) (holding an

employee   handbook   requiring   a       disciplinary   hearing    did   not

supersede a prosecutor's statutory at will right to retain or

terminate assistant prosecutors serving at the former's pleasure).

Thus, appellant's claim the handbook created rights superior to

the plain language of the statutory and regulatory requirements

governing PFRS loans is misplaced.

     Lastly,     appellant's   claim       the   Board's   racial     makeup

influenced its determination and his suggestion the Board treated

his matter disparate from another PFRS member is unsupported by

any facts in the record before us, and thus, is without sufficient

                                      9                              A-2973-15T3
merit to warrant discussion in a written opinion.   R. 2:11-

3(e)(1)(E).

    Affirmed.

                            10                       A-2973-15T3