Court Opinion

ID: 4430871
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:48:33.249383+00
Date Added: 2024-06-11T14:50:43.151061
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NOT FOR PUBLICATION WITHOUT THE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-1673-16T4

S.L.W.,

        Petitioner-Appellant,

v.

NEW JERSEY DIVISION
OF PENSIONS AND BENEFITS,

        Respondent-Respondent.

              Argued May 14, 2018 – Decided July 17, 2018

              Before Judges Sabatino, Rose and Firko.

              On appeal from the Board of Trustees, Police
              and Firemen's Retirement System, Department of
              the Treasury, Docket No. 3-10-031416.

              John F. Pilles, Jr., argued the cause for
              appellant.

              Jeff S. Ignatowitz, Deputy Attorney General,
              argued the cause for respondent (Gurbir S.
              Grewal, Attorney General, attorney; Melissa H.
              Raksa, Assistant Attorney General, of counsel;
              Jeff S. Ignatowitz, on the brief).

PER CURIAM
       Claimant S.L.W.1 appeals from a November 15, 2016 final

decision of the Board of Trustees ("Board") of the Police and

Firemen's Retirement System ("PFRS"), denying her application for

survivor benefits from her deceased father's pension.                 The Board

adopted    the   recommendations    of    the   Administrative       Law     Judge

("ALJ"), who determined S.L.W. failed to satisfy the definition

of a "child" pursuant to N.J.S.A. 43:16A-1(21), and that she failed

to     provide   sufficient     documentation     supporting     her        claim.

Although we disagree with the Board's initial basis for denying

S.L.W.'s claim, we are satisfied, nonetheless, she failed to

support her claim for dependency.          Accordingly, we affirm.

                                     I.

       We glean the pertinent facts, which are largely undisputed,

from the record before the ALJ.            S.L.W. is the daughter of the

late J.R.W., who retired from public service in 2005, and received

pension retirement benefits under the PFRS.               At the time of her

father's    retirement,   S.L.W.     was     twenty-five     years     old      and

gainfully employed as a police officer with the Delaware River

Port    Authority   ("DRPA").      She     resided   in   her   own    home       in

Sicklerville.

1
  We use initials to protect the confidentiality of the records
submitted by S.L.W.

                                      2                                    A-1673-16T4
      When he retired, J.R.W. continued to reside with his second

wife in Mount Ephraim, having divorced S.L.W.'s mother, C.L.M.,

in 1995.    Pursuant to the judgment of divorce, C.L.M. claimed

S.L.W. and her brother as dependents for income tax purposes.

      In October 2008, S.L.W. was involved in a work-related motor

vehicle accident, rendering her unable to maintain employment.

S.L.W. received interim worker's compensation benefits until her

settlement with the DRPA was finalized.              Although she continued

to live separately from her father in her own home, S.L.W. contends

she   "substantially    depended"      financially    on    J.R.W.    after    her

accident.

      At the time of his death in 2012, J.R.W. was a widower.

Approximately    eighteen     months   later,    S.L.W.     applied   for     PFRS

survivor benefits, claiming she met the definition of "child" set

forth in a PFRS handbook, and Fact Sheet #19 of a Division of

Pensions and Benefits ("Division") publication.                  The Division

denied   her    application,     "interpret[ing]       the     definition       of

'[c]hild' as someone who at the time of emancipation could not be

gainfully employed as a result of a physical or mental disability

[she] incurred prior to [her] emancipation."               (Emphasis added).

      In denying S.L.W.'s claim, the Division noted that if its

"interpretation    of   the   definition    of   '[c]hild'      proves    to    be

incorrect, then [she] would still need to prove dependency under

                                       3                                 A-1673-16T4
[N.J.A.C. 17:4-3.7]."      In particular, the Division advised that

the regulation requires "the filing of an affidavit of dependency,

supported by the deceased and the claimant's income tax returns,

for the period immediately preceding the death [of J.R.W.]"

      In an August 7, 2014 letter to S.L.W., the Board agreed with

the Division.2    Despite its denial, the Board transferred the case

to the Office of Administrative Law for fact-finding "[d]ue to

numerous factual questions that remained unanswered."           (Alteration

in original). Among other things, the Board cited S.L.W.'s failure

to submit "[m]edical proof that she is disabled and no longer

capable of any type of gainful employment," documentary proof of

"[h]er education, employment and marital status[,]" whether she

is   "currently     collecting    [w]orker's   compensation,         [s]ocial

[s]ecurity or other [d]isabilty benefits or eligible to collect

these benefits in the future," and "[p]roof of dependency with the

submission [her father's] of Federal and State income tax returns

for the years 2004-2012."         (First, second, eighth, and ninth

alterations in original).

     S.L.W.   and   the   Board   filed   cross-motions   for    a    summary

decision, pertaining to two substantive issues framed by the ALJ

2
  Although the letter was provided to the ALJ, who referenced it
in his decision, it was not provided to us by the parties to this
appeal.

                                     4                                A-1673-16T4
as: "whether [S.L.W.] is statutorily entitled to survivor benefits

as   a    surviving      'child'   and   whether   the   Board    may    require    a

('child') claimant to establish financial dependence, upon the

retired parent, with income tax returns through N.J.A.C. 17:4-

3.7."      The ALJ considered the parties' submissions, including

documentary evidence, and oral argument.

         While    the    matter    was   pending   before    the    ALJ,     S.L.W.

supplemented her submission with her tax returns for 2009 and 2012

through 2014.           S.L.W. claimed she was not required to file tax

returns in 2010 or 2011 because she earned de minimis income.                      On

her tax returns for 2009 (the year following her accident) and

2012 (the year J.R.W. died), the box "Yourself" under "Exemptions"

is checked, indicating S.L.W. claimed herself as an exemption.

Next to the term, "Yourself" is the statement, "If someone can

claim you as a dependent, do not check [the] box."

         Although S.L.W. did not produce her father's tax returns,3

she submitted correspondence from L.A.G., a tax professional, and

D.L.P.,      an    accountant,      opining    that      J.R.W.    had     provided

"significant financial support" for S.L.W.

3
  According to S.L.W.'s affidavit in support of summary judgment,
a Division representative indicated J.R.W. did not claim her as a
dependent on his Federal or State income tax returns.

                                          5                                 A-1673-16T4
     According to L.A.G., J.R.W. could have claimed S.L.W. as a

dependent on his Federal income tax returns for 20104 and 2011.

L.A.G. opined J.R.W. did not claim S.L.W. on his self-prepared

returns because he "was simply complying with the divorce decree"

and "would not have possessed the detailed knowledge necessary to

determine whether he was entitled to the exemption for his daughter

in her adult years."

     D.L.P.    reviewed    J.R.W.'s       bank   statements   and   S.L.W.'s

finances from September 2009 through January 2011.             D.L.P. could

not "find a direct correlation between checks written directly to

[S.L.W.] from [her] father and deposits [made] into [her] bank

account."     However, D.L.P. identified "substantial checks" from

J.R.W.'s    account   to   S.L.W.'s   account,      and   "substantial    ATM

withdrawals[,]" which S.L.W. indicated were for her benefit. Based

on her analysis, D.L.P. concluded "financial support from an

outside source was clearly evident."

     In his October 7, 2016 written initial decision, the ALJ

determined S.L.W. failed to meet the definition of a "child"

pursuant to N.J.S.A. 43:16A-1(21)(d), which provides in pertinent

part:

            "Child” shall mean a deceased member’s . . .
            unmarried child . . . (d) of any age who, at

4
  The ALJ's decision states "2009" instead of "2010," as set forth
in L.A.G.'s letter.

                                      6                              A-1673-16T4
           the time of the member’s . . . death, is
           disabled because of an intellectual disability
           or physical incapacity, is unable to do any
           substantial, gainful work because of the
           impairment and his impairment has lasted or
           can be expected to last for a continuous
           period of not less than [twelve] months, as
           affirmed by the medical board.

      Although the ALJ found "a literal reading of the definition

of   'child'   under   N.J.S.A.   43:16A-1(21)(d)   seemingly   supports

S.L.W.'s argument that she is eligible for survivor benefits, such

an interpretation appears to run afoul of legislative objectives

and public policy."      The ALJ cited two Supreme Court decisions

referencing those objectives and policy.        Initially, he quoted

Saccone v. Board of Trustees, Police and Firemen's Retirement

System, 219 N.J. 369, 381 (2014), where the Court determined "the

motivating force behind the Legislature's enactment of [the PFRS

survivors' benefits statute]5 appears to have been the financial

well-being of a member's surviving spouse and children."        Further,

5
 N.J.S.A. 43:16A-12.1(a). Pertinent to this appeal, where J.R.W.
was not survived by a wife, that statute provides:

           Upon the death after retirement of any member
           of the retirement system . . . [twenty
           percent] of final compensation will be payable
           to one surviving child, [thirty-five percent]
           of such compensation to two surviving children
           in equal shares and if there be three or more
           children, [fifty percent] of such compensation
           would be payable to such children in equal
           shares.

                                    7                            A-1673-16T4
the ALJ cited Eyers v. State of New Jersey, Board of Trustees

Public Employees' Retirement System, 91 N.J. 51, 57 (1982), where

the Court pronounced that the PFRS survivors' benefits statute

"evinces a strong legislative policy in favor of those most likely

to   be   dependent   upon   a   public   employee."   Relying   on   those

decisions, the ALJ determined "a disabled adult child, in order

to satisfy N.J.S.A. 43:16A-1(21)(d), must have been dependent upon

the deceased member."

      Further, the ALJ found persuasive that a related section of

the Social Security Act, 42 U.S.C.A. § 402(d), and our State's

child support case law interpreting child-support orders, N.J.S.A.

2A:34-23, both require the disability arise before emancipation.

To support his conclusion, the ALJ quoted our decision in Kruvant

v. Kruvant, 100 N.J. Super. 107, 120 (App. Div. 1968), where we

observed "[W]e d[id] not believe that the Legislature in enacting

N.J.S.[A.] 2A:34-23 intended to confer jurisdiction upon the court

to compel a husband or wife to support a child suffering from a

disability which did not exist at the time of his attaining his

majority but came about some time later."

      Secondly, the ALJ determined S.L.W. failed to produce the

requisite tax returns pursuant to N.J.A.C. 17:4-3.7(a).               Under

that regulation, "Proof of dependency shall be established by the

filing of an affidavit of dependency, supported by the deceased

                                      8                           A-1673-16T4
and the claimant's income tax returns, for the period immediately

preceding the death or accident."         In particular, S.L.W. failed

to provide her father's tax returns from 2004 through 2012.

Further, S.L.W.'s tax returns for 2009 and 2012 did not support

dependency because those returns indicated no one could claim her

as a dependent.

     In disqualifying S.L.W. for failing to provide supporting

documentation, the ALJ rejected her contentions that the Board

should be estopped from requiring tax returns pursuant to N.J.A.C.

17:4-3.7, and should address the underlying issue that precluded

her father from claiming her as a dependent, i.e., that her

parents' divorce decree prevented J.R.W. from doing so.         Instead,

the ALJ determined S.L.W. failed to demonstrate that N.J.A.C.

17:4-3.7 is arbitrary, capricious or unreasonable, where, as here,

the regulation "has a presumption of reasonableness."           The ALJ

further found S.L.W. did not demonstrate she "detrimentally relied

upon the Board's rules and regulations so as to justify equitable

estoppel   of    the   application   of   N.J.A.C.   17:4-3.7   and   its

requirement of tax returns to support a claim of dependency."

      Thereafter, the Board adopted the ALJ's recommendations.

This appeal followed.

     On appeal, S.L.W. raises the following arguments for our

consideration:    she meets the statutory requirements for survivor

                                     9                           A-1673-16T4
benefits, including the definition of a "child"; the Division is

equitably   estopped   from    denying    benefits    to   an   emancipated

applicant because the condition is not explicitly required by

statute; the Division is equitably estopped from requiring that

she establish her father claimed her as a dependent on his tax

returns; N.J.A.C. 17:4-3.7 is unenforceable because it is not

authorized by the enabling statute; and the requirement that she

submit tax returns as proof of dependency is unconstitutional as

a violation of the due process clause of the Fourteenth Amendment.

                                  II.

                                   A.

     Our scope of review of an agency decision is limited.            In re

Stallworth, 208 N.J. 182, 194 (2011) (citing Henry v. Rahway State

Prison, 81 N.J. 571, 579 (1980)).               In challenging an agency

conclusion,   the   claimant    carries     a     substantial   burden     of

persuasion, and the determination of the administrative agency

carries a presumption of correctness.       Gloucester Cty. Welfare Bd.

v. N.J. Civil Serv. Comm'n, 93 N.J. 384, 390-91 (1983); McGowan

v. N.J. State Parole Bd., 347 N.J. Super. 544, 563 (App. Div.

2002).

     "Judicial   review   of    agency    regulations      begins   with    a

presumption that the regulations are both 'valid and reasonable.'"

N.J. Ass'n of Sch. Adm'rs v. Schundler, 211 N.J. 535, 548 (2012)

                                   10                               A-1673-16T4
(citation omitted).          We overturn an agency determination only if

it    is   arbitrary,       capricious,      unreasonable,    unsupported      by

substantial credible evidence as a whole, or inconsistent with the

enabling statute or legislative policy.              Brady v. Bd. of Review,

152 N.J. 197, 210-11 (1997); see also Caminiti v. Bd. of Trs.,

Police & Firemen's Ret. Sys., 431 N.J. Super. 1, 14 (App. Div.

2013) (citing Hemsey v. Bd. of Trs., Police & Firemen's Ret. Sys.,

198 N.J. 215, 223-24 (2009)).           "As a result, the party challenging

a regulation has the burden of proving that the agency's action

was 'arbitrary, capricious or unreasonable.'"              Schundler, 211 N.J.

at 548 (citation omitted).

       However,   "we       are   not   bound   by   an    agency's   statutory

interpretation or other legal determinations."               Mattia v. Bd. of

Trs., Police & Firemen's Ret. Sys., ___ N.J. Super. ___, ___ (App.

Div. 2018) (slip op. at 6) (citing Russo v. Bd. of Trs., Police &

Firemen's Ret. Sys., 206 N.J. 14, 27 (2011)).                Further, "we owe

no    deference   to   an    administrative     agency's    interpretation     of

judicial precedent."          Bowser v. Bd. of Trs., Police & Firemen's

Ret. Sys., ___ N.J. Super. ___, ___ (App. Div. 2018) (slip op. at

7).

       We have carefully considered S.L.W.'s arguments in light of

the applicable law, and initially conclude she failed to establish

                                        11                              A-1673-16T4
dependency. We affirm the ALJ's decision, in that specific regard,

substantially for the sound reasons stated in his written opinion

of October 7, 2016.       We add only the following comments.

      S.L.W.'s assertion that her parents' divorce decree prevented

J.R.W. from including her as a dependent on his tax returns is

speculative      and   lacks    corroboration,        notwithstanding     L.A.G.'s

opinion to the contrary.         We agree with the Board that the record

is devoid of any evidence "indicat[ing] why either [J.R.W.] or

[C.L.M.] would have claimed [S.L.W.] as a dependent in 2012 (when

she was [thirty-three] years old) as a result of the 1995 divorce

decree."

      Nor are we persuaded by S.L.W.'s argument that N.J.A.C. 17:4-

3.7(a) is unenforceable because it is not valid under the enabling

statute.    Pursuant to that statute, "The State Treasurer shall,

with the advice of the State Investment Council, the Director of

the   Division    of   Pensions    .   .    .   and   in   accordance     with   the

'Administrative Procedure Act' [("APA")], . . . promulgate any

rules and regulations necessary to accomplish the purposes of this

act."   N.J.S.A. 43:16A-16.16.         Again, "The motivating force behind

the Legislature's enactment of [the survivors' benefits section]

appears to have been the financial well-being of a member's

surviving   spouse     and     children."       Saccone,     219   N.J.   at     381.

Generally, the Board owes a fiduciary duty to its members, and

                                       12                                   A-1673-16T4
that duty would be thwarted if it provided benefits to someone who

is not eligible.      See Mount v. Trs. of Pub. Emps' Ret. Sys., 133

N.J. Super. 72, 86 (App. Div. 1975).

      Accordingly,    the    enabling      statute   clearly    permits     the

Division to promulgate regulations necessary to accomplish the

purpose of the PFRS statute, including the survivor benefits

subsection.    The Division's decision to promulgate N.J.A.C. 17:4-

3.7(a) was a reasonable and prudent act in its role as fiduciary

of   the   pension   plan,   addressing     the   statute's     objective    of

providing for those "most likely to be dependent upon a public

employee."    Eyers, 91 N.J. at 57.

      We agree with the ALJ that S.L.W. has not demonstrated that

the statutory requirement of submitting income tax returns was

arbitrary,    capricious     or   unreasonable.       In     particular,    her

contention that J.R.W. did not claim her as a dependent on his tax

returns after her car accident, when she was in her late-twenties,

because of his divorce decree entered in 1995, when she was in her

teens, is uncorroborated and specious.            Therefore, based on the

enabling act, and the legislative policy underscoring the survivor

benefits   statute,    S.L.W.'s    claim    for   survivor    benefits    fails

because she did not comply with the mandates of N.J.A.C. 17:4-

3.7(a).

                                     13                               A-1673-16T4
                                      B.

       Because we find S.L.W. failed to provide the requisite income

tax returns supporting her claim of dependency, we need not address

her argument that the agency erred in finding she did not meet the

definition of a "child" under N.J.S.A. 43:16A-1(21)(d).               We do so

for the sake of completeness.

       It is well-settled that "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 v. Penn, 183 N.J. 477, 492 (2005) (citation omitted).

Thus, when interpreting a statute, the first step is to look to

the plain meaning of the language.               Bergen Commercial Bank v.

Sisler, 157 N.J. 188, 202 (1999).            In doing so, a court should

"ascribe   to   the    statutory    words    their     ordinary    meaning   and

significance, and read them in context with related provisions so

as to give sense to the legislation as a whole."             DiProspero, 183

N.J. at 492 (internal citations omitted).

       Further, a court should take care not to "disregard plain

statutory language to replace it with an unenacted legislative

intent."    Bd. of Chosen Freeholders of Cty. of Hudson v. Cty.

Exec. of Cty. of Hudson, 357 N.J. Super. 242, 249 (App. Div. 2003)

(citation omitted).        In other words, a court should not "'write

in an additional qualification which the Legislature pointedly

                                      14                                A-1673-16T4
omitted in drafting its own enactment,' Craster v. Board of

Commissioners of Newark, 9 N.J. 225, 230 (1952), or 'engage in

conjecture or surmise which will circumvent the plain meaning of

the act,' In re Closing of Jamesburg High School, 83 N.J. 540, 548

(1980)."   DiProspero, 183 N.J. at 492.          Therefore, "a statute that

is clear and unambiguous on its face, . . . is not open to

construction or interpretation."            Bd. of Chosen Freeholders, 357

N.J. Super. at 249 (citation omitted).

     Here, S.L.W. claims that the emancipation requirement is not

explicitly   stated    in   the   statute,      regulation   or   educational

publications issued by the Division and, as such, N.J.S.A. 43:16A-

1(21)(d) cannot be interpreted to limit survivor benefits to

unemancipated children.       In doing so, she contends the Division

engaged in improper rulemaking, and essentially adopted an invalid

policy ultra vires.

     We have recognized that "The inquiry whether an agency's

actions constitute improper rulemaking is informed by well-settled

principles."   In re N.J.A.C. 7:1B-1.1, 431 N.J. Super. 100, 133

(App. Div. 2013).     The APA defines an administrative rule as "each

agency statement of general applicability and continuing effect

that implements or interprets law or policy, or describes the

organization, procedure or practice requirements of any agency."

N.J.S.A.   52:14B-2.        "If   an   agency    determination     or    action

                                       15                               A-1673-16T4
constitutes an 'administrative rule,' then its validity requires

compliance with the specific procedures of the APA that control

the promulgation of rules."            Airwork Serv. Div. v. Dir., Div. of

Taxation, 97 N.J. 290, 300 (App. Div. 1984) (citation omitted).

"The purpose of the APA rulemaking procedures is 'to give those

affected by the proposed rule an opportunity to participate in the

process, both to ensure fairness and also to inform regulators of

consequences     which   they    may    not   have   anticipated.'"    In    re

Provision of Basic Generation Serv. for Period Beginning June 1[,]

2008, 205 N.J. 339, 349 (2011) (citation omitted).

     In the seminal case, Metromedia, Inc. v. Director, Division

of Taxation, 97 N.J. 313 (1984), our Supreme Court outlined six

factors     to   consider       when     evaluating    whether   an    agency

determination, "to be valid, had to comply with the requirements

governing the promulgation of administrative rules as provided by

the APA."    Id. at 328.        In doing so, the Court highlighted the

policy reasons behind formal rulemaking requirements, including

public notice, public comment, fairness, and predictability.                Id.

at 331.   According to the Court:

            [A]n agency determination must be considered
            an administrative rule when all or most of the
            relevant features of administrative rules are
            present and preponderate in favor of the rule-
            making process.   Such a conclusion would be
            warranted if it appears that the agency
            determination, in many or most of the

                                        16                            A-1673-16T4
           following circumstances, (1) is intended to
           have wide coverage encompassing a large
           segment of the regulated or general public,
           rather than an individual or a narrow select
           group; (2) is intended to be applied generally
           and uniformly to all similarly situated
           persons; (3) is designed to operate only in
           future cases, that is, prospectively; (4)
           prescribes a legal standard or directive that
           is not otherwise expressly provided by or
           clearly and obviously inferable from the
           enabling    statutory    authorization;    (5)
           reflects an administrative policy that (i) was
           not previously expressed in any official and
           explicit agency determination, adjudication
           or rule, or (ii) constitutes a material and
           significant change from a clear, past agency
           position on the identical subject matter; and
           (6) reflects a decision on administrative
           regulatory policy in the nature of the
           interpretation of law or general policy.
           These relevant factors can, either singly or
           in combination, determine in a given case
           whether the essential agency action must be
           rendered through rule-making or adjudication.

           [Id. at 331-32.]

Those criteria "need not be given the same weight, and some factors

will clearly be more relevant in a given situation than others."

Doe v. Poritz, 142 N.J. 1, 97 (1995).

     Here,        factors   (2),    (4),    (5)(i)   and    (6)   compel    our

determination that the Division's attempts to augment the plain

language     of     N.J.S.A.   43:16A-1(21)(d)       with   an    emancipation

requirement "constituted a rule, and that its adoption required

rule-making procedures."           Metromedia, 97 N.J. at 334.       Pursuant

to those factors, the emancipation requirement is generally and

                                       17                              A-1673-16T4
uniformly       applied    to        all   child    claimants     (factor    2);      the

requirement was "not otherwise expressly provided by or clearly

and obviously inferable from the enabling statutory authorization"

(factor 4); it "was not previously expressed in any official and

explicit    agency      determination,           adjudication   or   rule"    (factor

5(i)); and the emancipation requirement reflects the Division's

policy in its interpretation of PFRS law (factor 6).                    Indeed, the

Division's publications that assist retirees in understanding

their benefits are silent as to emancipation in the definition of

a "child."       Thus, the requirement was not predictable or fair,

thereby requiring formal rulemaking procedures and public notice.

Metromedia, 97 N.J. at 331.

     In sum, because the rulemaking procedures did not occur here,

the Board incorrectly upheld the ALJ's determination that S.L.W.'s

emancipation excluded her from the definition of a child pursuant

to N.J.S.A. 43:16A-1(21)(d).                  Nevertheless, as we explained in

Part II, supra, S.L.W. failed to submit the requisite income tax

returns    to    support       her    claim    of   dependency.      Her    remaining

arguments, to the extent we have not addressed them, are without

sufficient      merit     to    warrant       further   discussion.         R.     2:11-

3(e)(1)(D) & (E).

     Affirmed.

                                            18                                   A-1673-16T4