Court Opinion

ID: 4430954
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:49:51.242953+00
Date Added: 2024-06-11T14:51:00.454495
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NOT FOR PUBLICATION WITHOUT THE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-4234-16T4

PAUL BARILA, WILLIAM J.
LUDWIG, CANDACE R. KANTOR, and
DENNIS ENRICO,

        Plaintiffs-Respondents,

v.

BOARD OF EDUCATION OF CLIFFSIDE PARK,
BERGEN COUNTY,

     Defendant-Appellant.
______________________________________

        Argued June 5, 2018 – Decided July 10, 2018

        Before Judges Reisner, Mayer, and Mitterhoff

        On appeal from Superior Court of New Jersey,
        Chancery Division, Bergen County, Docket No.
        C-000161-16.

        Robert D. Lorfink argued the case for appellant
        (Fogarty & Hara, attorneys; Stephen R. Fogarty,
        of counsel and on the briefs; Robert D. Lorfink,
        on the briefs).

        Richard A. Friedman argued the cause for
        respondent (Zazzali, Fagella, Nowak, Kleinbaum &
        Friedman, PC, attorneys; Richard A. Friedman and
        Genevieve M. Murphy-Bradacs, of counsel and on
        the brief).
 PER CURIAM

       Defendant           Board    of     Education         of    Cliffside         Park   (Board)

appeals     from       a    September       19,       2016    order     denying       defendant's

motion to dismiss and May 16, 2017 orders denying defendant's

motion for summary judgment and granting summary judgment in

favor of plaintiffs Paul Barila, William J. Ludwig, Candice R.

Kantor      and    Dennis          Enrico's       (plaintiffs)          as    to     Count     I    of

plaintiffs' Amended Complaint.                     We affirm.

       This matter arises from a collective bargaining agreement

negotiated        by       the     Board    and       the     Cliffside        Park     Education

Association        (Association)             for        all       teaching      staff       members

employed by the District.                  The parties stipulate to the facts as

follows.      Plaintiffs are current and former teachers employed by

the Board.        Plaintiffs were employed by the Board prior to July

1, 2015, and each had worked for the Board for at least ten

years as of July 1, 2015.                  Plaintiffs are in the bargaining unit

and are also members of the Association, which is the exclusive

collective        bargaining         representative               for   all    teaching        staff

members employed by the District.

       Plaintiffs, the Board, and the Association were all parties

to a collective bargaining agreement that was in effect from

July   1,    2012,         through       June     30,    2015       (the      2012    Agreement).

Article VIII of the 2012 Agreement, which addressed sick leave,

                                                  2                                         A-4234-16T4
provided:         "In   accordance        with    the   provisions       of    N.J.S.A.

18A:30-2, each Teacher shall be entitled to ten (10) sick leave

days with full pay in each school year.                     Unused sick leave days

shall, in accordance with the provisions of N.J.S.A. 18A:30-3,

be   accumulated        from    year   to       year   with    no    maximum     limit."

Article VIII of the 2012 Agreement provided further:

            Any teacher, who, as of the end of any
            school year beginning with 09-10, has either
            served the District at least ten (10) years
            and has retired under the Teachers' Pension
            and Annuity Fund upon such retirement or has
            served the District at least twenty-five
            (25) years and leaves the employ of the
            Board   for  any   reason,  shall   be  paid
            according to the table:

                    Formula for unused sick leave:
                         First 100 days x $125.00/day
                         Second 100 days x $0.00/day
                         Up to next 72 days x $1.75/day
                         Maximum is $25,000.00

      Accordingly, any teacher who had either been employed by

the Board for at least ten years and retired under the Teachers'

Pension and Annuity Fund, or who had been employed by the Board

for twenty-five years and left the employ of the Board for any

reason,     was    entitled      to    compensation,          as    calculated    by    a

specific formula, for accumulated but unused sick leave, up to a

maximum     amount      of     $25,000.          Although     the     2012    Agreement

specified that compensation for accumulated unused sick leave

was to begin with the 2009-2010 school year, the parties agree

                                            3                                  A-4234-16T4
that an identical provision has appeared in previous collective

negotiations agreements for the past twenty years.

    As the 2012 Agreement expired at the end of June 2015, the

Association    and   the   Board      negotiated      a   successor    collective

negotiations agreement, which became effective on July 1, 2015

(the 2015 Agreement).         The 2015 Agreement modified Article VIII

in two significant ways.         First, the 2015 Agreement changed the

formula for unused sick leave by providing for up to a maximum

of 100 days at the rate of $150/day.                 Consequently, the maximum

amount   of    compensation     that       a   teacher      could   receive    for

accumulated    but   unused    sick    leave    upon      retirement   under   the

Teachers' Pension and Annuity Fund, or after twenty-five years

of employment, was $15,000.             Accordingly, the 2015 Agreement

decreased the maximum amount of compensation from $25,000 to

$15,000, decreased the maximum number of days of accumulated,

but unused, sick days for which teachers could be compensated to

100 days, but increased the rate per day for these 100 days from

$125 to $150.

    The parties agree that the Association knowingly bargained

for the modified accumulated sick leave provision in the 2015

Agreement.     The parties also agree that the Association did not

seek or secure plaintiffs' permission prior to negotiating the

modification    to    Article      VIII.        To    the    contrary,   several

                                       4                                 A-4234-16T4
teachers, including plaintiffs, objected to the modifications

upon learning of the changes to Article VIII. Notwithstanding

these objections, the Association ratified the 2015 Agreement by

adopting a resolution approving it on April 27, 2016.                     None of

the   plaintiffs      voted   to    ratify   the   2015   Agreement      and    they

continued to object to the new Article VIII.

      Additionally, the parties stipulate as to the particular

impact of Article VIII of the 2015 Agreement on each of the

plaintiffs.    Prior to July 1, 2015, plaintiff Kantor had accrued

233   sick    days,     which      equated   to    $18,275       under   the    2012

Agreement.     Plaintiff Barila had accrued 308.5 sick days, which

equated to $25,000 under the 2012 Agreement. Plaintiff Enrico

had accumulated 282.5 sick days, which equated to $25,000 under

the 2012 Agreement. Likewise, plaintiff Ludwig accumulated 263

sick days, which equated to $25,000 under the 2012 Agreement.

Since this litigation commenced, plaintiffs Kantor and Barila

have retired and were paid for their unused, accumulated sick

leave pursuant to the formula set forth in Article VIII of the

2015 Agreement.         The Board has taken the position that when

plaintiffs     Enrico     and      Ludwig    retire,      they     too   will     be

compensated for their unused, accumulated sick leave pursuant to

the formula set forth in Article VIII of the 2015 Agreement.

                                        5                                 A-4234-16T4
    On June 9, 2016, plaintiffs filed a complaint challenging

the retroactive divestiture of their accumulated but unpaid sick

leave.    On July 26, 2016, defendant filed a motion to dismiss in

lieu of an answer.        Plaintiffs then filed a cross-motion to file

a supplemental pleading on September 8, 2016.                       By order dated

September 19, 2016, the trial judge denied the motion to dismiss

and granted the motion to amend the pleading.

    Plaintiffs filed a motion for summary judgment on March 21,

2017.     The   Board     filed    a       cross-motion     for   summary    judgment

seeking   to    dismiss    Count       I    of    plaintiffs'     amended   complaint

alleging breach of contract.                The Board alleged that the trial

court had no jurisdiction to decide the case as N.J.S.A. 34:13A-

5.4(d) of the New Jersey Employer-Employee Relations Act confers

exclusive      jurisdiction       on       the    Public    Employment      Relations

Commission (PERC) to decide scope of negotiations issues.                            In

addition, the Board argued that it had the right to negotiate

away plaintiffs' right to accumulated sick leave, even if those

rights had vested.

    In    an    extremely     detailed           and   thorough   thirty-nine     page

opinion, Judge Robert P. Contillo rejected defendant's argument

that plaintiffs' claims involved a scope of negotiation issue.

As a result, the judge found that he had jurisdiction to hear

and decide the merits of the case.                      On the merits, the judge

                                            6                                A-4234-16T4
concluded         that   compensation        for    accumulated       but       unpaid    sick

leave was a form of deferred compensation that, once earned,

could       not     be    divested      retroactively           through          negotiated

collective bargaining agreements.

       On appeal, defendant challenges the trial court's decision

that     plaintiffs'          claims    did        not     implicate        a     scope     of

negotiations         issue.     Defendant         also     contends    that       Count     I,

although phrased as a violation of contractually vested rights,

is actually a challenge to the ability of the Board and the

Association to negotiate changes to the accumulated sick leave

provisions. We affirm substantially for the reasons articulated

in the judge's opinion, adding the following comments.

       In    reviewing     orders      for       summary    judgment,       an    appellate

court uses the same standard as the trial court.                                Globe Motor

Co. v. Igdalev, 225 N.J. 469, 479 (2016); Prudential Prop. &

Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.

1998).      We decide first whether there was any genuine issue of

material fact.           If there was not, we then decide whether the

trial court's ruling on the law was correct.                           Walker v. Atl.

Chrysler Plymouth, 216 N.J. Super. 255, 258 (App. Div. 1987).

Because the facts in this case are stipulated, the issues on

appeal are purely legal in nature. Accordingly, our review of

the trial court's rulings are de novo.                         Estate of Hanges v.

                                             7                                      A-4234-16T4
Metro. Prop. & Cas. Ins. Co. 202 N.J. 369, 382-83 (2010); see

also Manalapan Realty LP v. Twp. Comm. of Manalapan, 140 N.J.

366, 378 (1995) ("A trial court's interpretation of the law and

the legal consequences that flow from established facts are not

entitled to any special deference.").

       I.    Subject matter jurisdiction.

       Subject matter jurisdiction is the power of the court to

hear and determine "cases of the class to which the proceeding

in question belongs.           It rests solely upon the court's having

been    granted      such    power     by       the    Constitution       or     by    valid

legislation . . . ."          State v. Osborn, 32 N.J. 117, 122 (1960).

While state courts are generally granted "expansive authority"

to   resolve    a    wide    range     of       disputes,    Thompson       v.    City     of

Atlantic     City,    190    N.J.     359,      378-79     (2007),       subject       matter

jurisdiction is not without limits.                      See, e.g. Bd. of Educ. of

Plainfield v. Plainfield Educ. Ass'n, 144 N.J. Super. 521, 525

(App. Div. 1976).

       Our    Supreme       Court     has       held     that     PERC     has        primary

jurisdiction        over    scope     of     negotiations         issues:         "[U]nder

N.J.S.A.      34:13A-5.4(d)         PERC    is     the    forum     for     the       initial

determination of whether a matter in dispute is within the scope

of collective negotiations.                PERC's jurisdiction in this area is

primary."      State v. State Supervisory Emps. Ass'n, 78 N.J. 54,

                                            8                                      A-4234-16T4
83 (1978) (citations omitted).              "[W]orking hours, compensation,

physical    arrangement        and    facilities      and        customary     fringe

benefits [are considered] the essential components of terms and

conditions of employment." Id. at 67 (citing Bd. of Educ. v.

Englewood     Teachers     Ass'n.,     64    N.J.     1     (1973)).         When     a

controversy "concerns the propriety of the parties negotiating

and agreeing on the item in dispute, [the trial judge] should

refrain from passing on the merits of the issue," because "PERC

has   primary   jurisdiction."          Ridgefield        Park    Educ.     Ass'n    v.

Ridgefield Park Bd. of Educ., 78 N.J. 144, 153-54 (1978).

      As the trial court correctly noted, however, the question

of who may initiate such an inquiry is not entirely clear.                           In

Loigman v. Township Committee of the Township of Middletown, 297

N.J. Super. 287, 303 (App. Div. 1997), we found that N.J.S.A.

34:13A-5.4(d)        "allows   only    public       employers        and     majority

representatives       to   request     scope-of-negotiations           decisions."

See also Petersen v. Township of Raritan, 418 N.J. Super. 125

(App. Div. 2011) (holding an individual plaintiff could sue his

employer, the defendant township, alleging that the defendant's

elimination     of    traditional     health   care       benefits     to    retirees

violated 1997-1999 collective negotiations agreement).

                                       9                                     A-4234-16T4
      Notwithstanding this ambiguity, as the trial court found,

it is clear that plaintiffs could not file an action with PERC.

Tellingly, neither defendant nor the Association expressed an

interest in obtaining a scope of negotiations determination from

PERC.   The judge noted that, "the Association has expressed no

interest in initiating such a process.                      Nor has it sought to

intervene    in    this      case."       That    neither     the   Board    nor    the

Association sought a determination from PERC, knowing there were

dissenting employees at the time of the negotiations, undercuts

their argument that the trial court was not empowered to resolve

the dispute.

      The    trial     judge       also     correctly        rejected    defendant's

argument that Count I alleges a scope of negotiations issue.                           We

observe, as did the trial judge, that plaintiffs do not dispute

that the Board and the Association are empowered to negotiate

changes to the accumulated sick leave provisions. See Maywood

Educ. Ass'n v. Maywood Bd. Of Educ., 131 N.J. Super. 551 (Ch.

Div. 1974).       The question in Count I was not whether the Board

and   the   Association        could      include    sick     pay   benefits      as   a

negotiable     item     in     their      collective       bargaining,      but    more

narrowly     whether         the    Board      and     the     Association        could

retroactively divest plaintiff of their vested right to deferred

compensation      in   an    amount    that      exceeds     $15,000.     Given     the

                                          10                                 A-4234-16T4
inability      of         plaintiffs        to       pursue     a    PERC        determination,

defendant's apparent disinterest in filing a PERC claim, and the

narrow    issue       under       review,       the    trial    court       did      not    err      in

determining         that        it    had       subject       matter       jurisdiction              to

adjudicate plaintiffs' breach of contract claim.

       II.    The negotiability of vested sick leave time.

       We have recognized that payment for accumulated sick leave,

as a form of deferred compensation, is to be protected.                                              In

Matter of Morris School District Board of Education, 310 N.J.

Super. 332 (App. Div. 1998), we held that although the parties

collectively agreed to be bound by a fact finder's determination

in     advance,       a     retroactive          cap     on     vested          or    accumulated

compensation         could        not      be    upheld        absent       a        knowing        and

intentional waiver by the persons adversely affected.                                    The court

in Morris was "satisfied that the Commission's policy barring

divestment absent a knowing waiver was reasonable and within its

statutory powers."                Id. at 343.          In so holding, we noted that

"our     Supreme          Court      has    protected          similar          rights     against

invasion."        Ibid. (citing Gauer v Essex Cty. Div. of Welfare,

108    N.J.    140,       144     (1987)).           Furthermore,         the    Supreme       Court

opined in Owens v. Press Publishing Co., 20 N.J. 537 (1956) that

the    right    to        severance        pay       survived       the    expiration          of     a

                                                11                                         A-4234-16T4
collective bargaining agreement.             As we recognized in Morris

School Distict, Owens held:

          deferred compensation 'was not conditioned
          upon the employee's discharge from service
          within the term of the collective bargaining
          agreement.'   The Court reasoned that 'once
          the right came into being it . . .
          survive[d]    the     termination    of     the
          agreement.'       In   contrast,   the    Court
          concluded that the plaintiffs' claims for
          severance   pay   allegedly   earned   in   the
          intervening period between expiration of the
          collective bargaining agreement and their
          respective discharge was 'ill-founded.'

          [Morris School Dist., 310 N.J. Super. at 344
          (quoting    Owens,    20   N.J.   at    348-
          49)(alterations in original)].

    In   the    instant     matter,    the   trial   court   applied   similar

reasoning in its opinion noting that the

          [B]oard was authorized to negotiate over the
          accumulated     sick     leave     provisions
          prospectively,   or   going  forward.      In
          contrast, a board of education is generally
          not permitted to divest teachers of their
          vested rights earned under prior collective
          negotiation agreements.

    As did the trial judge, we agree that Morris and Owens

stand for the proposition that compensation for accumulated sick

leave is "earned" during the service performed by the teachers

during   the    term   of    any      particular     collective   negotiation

agreement.     Once vested, the right to compensation is a form of

deferred compensation that cannot retroactively be negotiated

                                      12                               A-4234-16T4
away.     Morris School Dist., 310 N.J. Super. at 347-48. In that

regard, New Jersey courts have consistently protected various

forms     of    deferred      compensation      from   retroactive   divestment

through collective bargaining negotiations absent consent of the

affected employees.           See e.g. State Troopers Fraternal Assoc. v.

State, 149 N.J. 38 (1997) (retroactive pay adjustments); Gauer,

108 N.J. at 144 (reimbursement of health insurance and Medicare

premiums); Owens, 20 N.J. at 442 (severance pay).

    In this case, plaintiffs did not consent to the retroactive

divestment of their vested rights.               Accordingly, the trial court

correctly       held   that     the   Board   and   Association   impermissibly

applied the 2015 Agreement to retroactively divest plaintiffs'

right to earned compensation.                There was no error in the trial

court's        decision    to    deny    defendant's     motion   for   summary

judgment.

    We affirm the orders on appeal.

                                        13                              A-4234-16T4