Court Opinion

ID: 6496464
Source: CourtListenerOpinion
Date Created: 2022-06-29 20:09:44.773722+00
Date Added: 2024-06-11T08:48:37.249366
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NOT FOR PUBLICATION WITHOUT THE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-3439-20

DENISE COLE,

          Petitioner-Appellant,

v.

BOARD OF TRUSTEES,
PUBLIC EMPLOYEES'
RETIREMENT SYSTEM,

     Respondent-Respondent.
__________________________

                   Argued June 8, 2022 – Decided June 28, 2022

                   Before Judge Hoffman, Whipple and Geiger.

                   On appeal from the Board of Trustees of the Public
                   Employees' Retirement System, Department of the
                   Treasury, PERS No. xx-4940.

                   Justin Schwam argued the cause for appellant
                   (Weissman & Mintz, LLC, attorneys; Justin Schwam,
                   of counsel and on the briefs).

                   Matthew Melton, Deputy Attorney General, argued the
                   cause for respondent (Matthew J. Platkin, Acting
                   Attorney General, attorney; Sookie Bae-Park, Assistant
            Attorney General, of counsel; Matthew Melton, on the
            brief).

PER CURIAM

      Petitioner Denise Cole appeals from the June 17, 2021 final agency

decision of the Board of Trustees (the Board) of the Public Employees'

Retirement System (PERS), denying her application for accidental disability

retirement benefits. We affirm.

                                        I.

      In early 2000, Cole began working for the Office of the Public Defender

(OPD) as an investigator. On August 27, 2004, Cole sustained injuries in an on-

the-job car accident, causing her to undergo several surgeries. As a result of the

accident and her injuries, Cole's State-appointed psychologist diagnosed her

with major depressive disorder and anxiety.

      While working for the OPD, Cole faced discipline for her behavior on

numerous occasions, beginning in 2005. On February 4, 2005, the OPD issued

Cole a Preliminary Notice of Disciplinary Action (PNDA) for a one-day

suspension, charging her with insubordination and conduct unbecoming of a

public employee. Cole v. N.J. Off. of the Pub. Def., No. A-4451-10, (App. Div.

Sept. 11, 2013) (slip op. at 3-4). On June 27, 2005, a departmental hearing

examiner issued a written determination finding the proposed one-day

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                                        2
suspension of Cole was an appropriate sanction. Id. at 4. On June 30, 2005,

the OPD issued a Final Notice of Minor Disciplinary Action, suspending Cole

for one day. Ibid.

      On June 21, 2006, the OPD issued Cole a PNDA for a five-day suspension,

charging her with insubordination and conduct unbecoming of a public

employee. Id. at 5. On September 22, 2007, Cole received a Final Notice of

Disciplinary Action sustaining the five-day suspension. Id. at 6.1

      Cole had an altercation with a co-worker on October 5, 2006, approaching

her co-worker with an escalating voice while nearing the colleague, ultimately

screaming within inches of her co-worker's face. Cole was placed out of work

by a State doctor on October 31, 2006, due to mental health issues. On February

26, 2007, Cole returned to work; however, her behavioral problems persisted.

In February 2007, and October 25, 2007, Cole sent emails containing

1
  In 2005 and 2006, Cole's union filed unfair labor practice charges against the
OPD relating to Cole's one-day and five-day suspensions, alleging that Cole was
improperly disciplined for her activities as a union shop steward. Ibid. After a
ten-day hearing, the hearing examiner issued an extensive report recommending
dismissal of the complaint. Ibid. On March 31, 2011, PERC issued its written
decision, adopting the findings of the hearing examiner and dismissing the
complaint. Ibid. Cole appealed that decision and we affirmed. Ibid.

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                                       3
confidential client names to her union, notwithstanding repeated warnings to

refrain from doing so. 2

       On September 28, 2007, the OPD issued Cole two PNDAs, one for a

twenty-day suspension and one for a thirty-day suspension, charging Cole with

multiple disciplinary infractions, including    conduct unbecoming a public

employee, creating a hostile work environment, disruption of the workplace,

impeding the effective delivery of services, and violation of the workplace

violence policy. Cole and her union appealed both suspensions to arbitration.3

       On December 7, 2007, before the September 2007 suspensions proceeded

to arbitration, the OPD issued Cole a PNDA for removal, charging her with

insubordination, conduct unbecoming a public employee, and neglect of duty.

The PNDA set forth detailed facts concerning instances of misconduct by Cole

which constituted     breach of confidentiality, disruption of the workplace,

impeding the effective delivery of services, improper disclosure of confidential

2
    In July 2005, Cole allegedly engaged in this same misconduct.
3
  Cole's appeal of the twenty-day suspension was not arbitrated until September
27, 2011. Her appeal of the thirty-day suspension was not arbitrated until May
8, 2017. According to Cole, her thirty-day suspension "was upheld." The record
does not indicate the outcome of the twenty-day suspension.

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                                        4
information, providing false and/or misleading information in an official

investigation, and violation of the public trust.

      Cole requested a hearing, which occurred on March 24 and April 4, 2008.

The OPD issued a Final Notice of Major Disciplinary Action on April 22, 2008,

sustaining the charges against Cole and formalizing her removal.

      On September 5, 2018, over ten years after her removal, Cole filed for

accidental disability retirement benefits, alleging that her 2004 on-the-job car

accident caused orthopedic injuries, major depression, and related anxiety, and

that those conditions rendered her disabled.        Before Cole received a final

determination regarding her application of accidental disability retirement

benefits, on April 22, 2020, Cole executed a settlement agreement with the OPD.

Pursuant to this agreement, the OPD agreed to abandon the removal action

against Cole, "given the employee's wish to resign in lieu of removal." By

entering into this settlement agreement, the OPD and Cole avoided arbitration

related to the removal action. The OPD recorded the settlement agreement as a

"General Resignation," effective April 22, 2008.

      Five months later, on September 21, 2020, the Division of Pensions and

Benefits (the Division) informed Cole that she was ineligible to file for

accidental disability benefits because, under N.J.A.C. 17:1-6.4(b), a disability

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                                         5
applicant "must prove that the retirement is due to a total and permanent

disability and that the disability is the reason the member left employment." The

Division noted Cole's voluntary resignation and that her settlement agreement

provided "that she shall at no point in the future seek employment with the

[OPD]."

      Cole appealed this decision on October 20, 2020, arguing that her work-

related "[d]isability was the [r]eason [s]he [l]eft OPD [e]mployment." She

emphasized that, under her settlement agreement, the OPD agreed to abandon

the removal action against her.     Thus, she maintained that nothing in the

agreement precluded her receiving accidental disability benefits.

      On May 19, 2021, the Board reviewed and denied Cole's request for

reconsideration of its previous decision, finding Cole ineligible to apply for

accidental disability benefits because her disciplinary record precipitated her

departure from the OPD.        Further, the Board found that the settlement

agreement's provision that Cole refrain from seeking future employment with

the OPD was inconsistent with Cole's contention that she resigned due to a

disability. The Board also denied Cole's request for an administrative hearing.

      On June 17, 2021, the Board issued its final administrative determination.

The Board found Cole ineligible to receive accidental disability retirement

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                                       6
benefits, pursuant to N.J.A.C. 17:1-6.4 and N.J.A.C. 17:2-6.15, because her

disciplinary record triggered her departure, not her mental health issues. The

Board rejected Cole's claim that her separation was the result of her disability.

The Board found no genuine issue of material fact in dispute and thus denied

Cole's request for an administrative hearing.

        This appeal followed, with Cole raising the following arguments:

              POINT I

              THE BOARD'S JUNE 17, 2021 DETERMINATION
              THAT APPELLANT WAS NOT ELIGIBLE TO FILE
              FOR [DRB]4 BASED ON ITS CONCLUSION THAT
              APPELLANT'S EMPLOYMENT DID NOT END DUE
              TO HER DISABILITIES WAS ARBITRARY,
              CAPRICIOUS, AND UNREASONABLE.

                        A. N.J.A.C. 17:1-6.4 Does Not Bar
                           Appellant's Application Because She Left
                           Employment Because of Her Disability.

                        B. The Board's Determination Was Based on
                           an Erroneous Interpretation of the Record.

                        C. The Board's Interpretation of N.J.A.C.
                           17:2-6.15    as affecting   Appellant's
                           Eligibility to File for [DRB] was
                           Erroneous.

                        D. The Settlement Agreement Was Not
                           Engineered to Advantage Appellant Due to
                           Her Age.

4
    Disability Retirement Benefits.
                                                                           A-3439-20
                                         7
            POINT II

            TO     THE    EXTENT    THE   BOARD'S
            DETERMINATION WAS PREMISED ON N.J.S.A.
            43:15A-44(A)   RENDERED     APPELLANT
            INELIGIBLE, THAT DETERMINATION WAS
            CONTRARY TO LAW BECAUSE THE STATUTE
            DID NOT APPLY TO APPELLANT.

                      A. The Board's Determination Abandoned
                         Reliance on N.J.S.A. 43:15A-44(a).

                      B. N.J.S.A. 43:15A-44(a) Does Not Affect
                         Appellant's Eligibility for [DRB].

            POINT III

            THE BOARD'S DETERMINATION THAT NO
            GENUINE ISSUE OF MATERIAL FACT EXISTED
            TO WARRANT A FACT-FINDING HEARING WAS
            CONTRARY TO ESTABLISHED LAW.

                                        II.

    Appellate "review of administrative agency action is limited." Russo v. Bd.

of Trs., Police & Firemen's Ret. Sys., 206 N.J. 14, 27 (2011) (citing In re

Herrmann, 192 N.J. 19, 27 (2007)). The agency's decision should be upheld

"unless there is a clear showing that it is arbitrary, capricious, or unreasonable,

or that it lacks fair support in the record." Ibid. (quoting Herrmann, 192 N.J. at

27-28). "The burden of demonstrating that the agency's action was arbitrary,

capricious or unreasonable rests upon the [party] challenging the administrative

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                                        8
action." In re Arenas, 385 N.J. Super. 440, 443-44 (App. Div. 2006) (citations

omitted).

    This court defers to the Board's interpretation of the statutes it is charged

with enforcing. Thompson v. Bd. of Trs., Tchrs' Pension & Annuity Fund, 449

N.J. Super. 478, 483 (App. Div. 2017) (quoting Richardson, 192 N.J. at 196),

aff'd o.b., 233 N.J. 232 (2018). "'Such deference has been specifically extended

to state agencies that administer pension statutes,' because 'a state agency brings

experience and specialized knowledge to its task of administering and regulating

a legislative enactment within its field of expertise.'" Id. at 483 (quoting Piatt

v. Bd. of Trs., Police & Firemen's Ret. Sys., 443 N.J. Super. 80, 99 (App. Div.

2015)).

      "A reviewing court 'may not substitute its own judgment for the agency's,

even though the court might have reached a different result.'" In re Stallworth,

208 N.J. 182, 194 (2011) (quoting In re Carter, 191 N.J. 474, 483 (2007)). "This

is particularly true when the issue under review is directed to the agency's

special 'expertise and superior knowledge of a particular field.'" Id. at 195

(quoting Herrmann, 192 N.J. at 28). When controlling facts are disputed, we

accord deference to the Board's factual findings. Oceanside Charter Sch., 418

N.J. Super. at 9.

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                                        9
      Like all public retirement systems, PERS provides for both ordinary and

accidental disability retirement benefits.      N.J.S.A. 43:15A-42, -43.       The

principal difference between ordinary and accidental disability retirement "is

that ordinary disability retirement need not have a work connection." Patterson

v. Bd. of Trs., State Police Ret. Sys., 194 N.J. 29, 42 (2008). A public employee

member may be retired on an accidental disability pension if the employee is

"permanently and totally disabled as a direct result of a traumatic event

occurring during and as a result of the performance of his regular or assigned

duties . . . ." N.J.S.A. 18A:66-39(c); accord Kasper v. Bd. of Trs., Tchrs' Pension

& Annuity Fund, 164 N.J. 564, 572-73 (2000). A claimant must demonstrate

the accident "constitutes the essential significant or the substantial contributing

cause of the ultimate disability." Gerba v. Bd. of Trs., Pub. Emps.' Ret. Sys., 83

N.J. 174, 188 (1980). Accidental disability retirement benefits are greater than

ordinary disability retirement benefits. Patterson, 194 N.J. at 43.

      N.J.A.C. 17.1-6.4 further provides that, to be eligible to apply for

accidental disability benefits, a claimant must demonstrate:

                a) Each disability retirement applicant must prove
                   that his or her retirement is due to a total and
                   permanent disability that renders the applicant
                   physically or mentally incapacitated from
                   performing normal or assigned job duties at the
                   time the member left employment; the disability

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                                       10
                  must be the        reason    the   member       left
                  employment.

               b) Members who have involuntarily or voluntarily
                  terminated service for any of the reasons listed
                  below will not be permitted to apply for a
                  disability retirement:

                        . . .

                        2. Settlement agreements reached due to
                           pending administrative or criminal
                          charges, unless the underlying
                          charges relate to the disability.

                  [N.J.A.C. 17:1-6.4(a), (b) (emphasis added).]

      In addition, if a claimant is eligible to apply for accidental disability

benefits, N.J.A.C. 17:2-6.15 requires that

            [f]ollowing the filing of a disability retirement
            application, a vested member, who has not withdrawn
            contributions from the PERS, and has not discontinued
            service for more than two consecutive years, and who
            was otherwise eligible for a disability retirement at the
            time service was discontinued, shall be approved to
            receive disability retirement benefits by the board, if:

                  ...

                  2. The applicant factually demonstrates to the
                     satisfaction of the Board that service was
                     discontinued because of the disability or
                     disabilities.

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                                      11
      Recently, we held that when a public employee resigns from service

pursuant to a negotiated settlement agreement designed to resolve pending

disciplinary charges, the employee is ineligible for accidental disability

retirement benefits. Rooth v. Bd. of Trs., Pub. Emps.' Ret. Sys., ___ N.J. Super.

___, ___ (App. Div. 2022)("[W]hen a PERS member . . . irrevocably resigns

from active service based upon a negotiated settlement agreement resolving a

pending grievance concerning disciplinary charges that do not "relate to" a

disability, such a separation from employment renders the member ineligible for

ordinary or accidental disability retirement benefits.").

      Cole contends the Board arbitrarily, capriciously, and unreasonably

denied her application for DRBs by finding N.J.A.C. 17:1-6.4 barred her

application. We disagree.

      N.J.A.C. 17:1-6.4 makes clear that a claimant's disability must cause him

or her to leave employment to qualify for accidental disability benefits. N.J.A.C.

17:1-6.4(a). The statute further provides that employees who leave employment

due to pending criminal or administrative charges are not eligible for accidental

disability benefits, unless those charges "relate to the disability." N.J.A.C. 17:1 -

6.4(b)(2). Cole argues the 2004 car accident, which caused her to suffer anxiety

and depression, was the reason for her workplace behavior that resulted in her

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                                        12
extensive disciplinary record, and therefore, she urges this court to find that her

pending administrative charges "relate to [her] disability," entitling her to

accidental disability benefits.

      Cole's settlement agreement with the OPD banned her from future

employment with the OPD.          If Cole's disability was "the reason" for her

departure from the OPD, there would be no reason for such a clause in the

settlement agreement. See N.J.A.C. 17:1-6.4(a). This indicates that Cole left

her employment with the OPD because of her disciplinary record, not her

disability.

      Moreover, Cole's assertion focuses solely on her charges related to

behavioral issues concerning her misconduct toward her co-workers and ignores

the very serious charges that on three separate dates – in July 2005, February

2007, and October 25, 2007 – Cole sent emails containing confidential client

names to her union, notwithstanding repeated warnings to refrain from doing so.

These repeated instances of misconduct support the charges of improper

disclosure of confidential information and violation of the public trust, serious

ethical misconduct unrelated to Coles' claims of depression and anxiety.

Accordingly, we are satisfied that Cole did not demonstrate that her disciplinary

record "relate[s] to [her] disability." N.J.A.C. 17:1-6.4(b)(2).

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                                       13
    Cole also avers the Board arbitrarily, capriciously, and unreasonably denied

her application for accidental disability retirement benefits because it

erroneously interpreted N.J.A.C. 17:2-6.15 to bar her application.             For

substantially the same reasons Cole does not satisfy the requirements of

N.J.A.C. 17:1-6.4, she does not satisfy N.J.A.C. 17:2-6.15. Both provisions

require that Cole demonstrate she left her employment because of her disability.

Indeed, N.J.A.C. 17:2-6.15 provides that an eligible employee "shall be

approved to receive disability retirement benefits by the board, if . . . [t]he

applicant factually demonstrates to the satisfaction of the Board that service was

discontinued because of the disability or disabilities." N.J.A.C. 17:2 -6.15(2).

Cole did not establish that she left her employment with the OPD because of her

disability.   The record, and Cole's settlement agreement with the OPD,

demonstrate that Cole left the OPD because of her disciplinary record, not

because of her disability. Accordingly, Cole does not satisfy the requirements

of N.J.A.C. 17:2-6.15(2).

    Cole also asserts the Board erroneously interpreted the record before it by

considering her disciplinary record that was dismissed pursuant to the settlement

agreement. Cole urges this court to find that, upon execution of the settlement

agreement, the Board could not properly consider the disciplinary act ions

                                                                            A-3439-20
                                       14
against Cole that precipitated the settlement agreement in evaluating her claim

for accidental disability benefits. We disagree.

      The Board was tasked with determining whether Cole satisfied the

requirements of N.J.A.C. 17:1-6.4 and N.J.A.C. 17:2-6.15(2). The record before

the Board included Cole's disciplinary record and the settlement agreement.

After hearing argument and examining the record before it, the Board found

Cole left her employment with the OPD due to her disciplinary record, not due

to her disability. Given Cole's disciplinary history with the OPD and the terms

of the settlement agreement, there was "fair support in the record" to support the

Board's findings. Russo, 206 N.J. at 27 (citing Herrmann, 192 N.J. at 27).

      Lastly, Cole contends the Board's denial of her request for a fact-finding

hearing was erroneous.     "[A]n agency must grant a fact-finding hearing if

material facts remain[] in dispute when the final agency decision is made."

Frank v. Ivy Club, 120 N.J. 73, 98 (1990). Cole contends that, at the time of the

Board's final agency decision, there was a genuine factual dispute as to whether

Cole's evidence showed she resigned from the OPD because of her disability.

Cole baldly asserts that the existence of a dispute as to whether she left her

employment with OPD for disability or disciplinary reasons is a per se factual

dispute. As noted, Cole's assertion focuses solely on her charges related to

                                                                            A-3439-20
                                       15
behavioral issues concerning her misconduct toward her co-workers and ignores

the very serious charges that, on multiple occasions, she sent emails containing

confidential client names to her union, notwithstanding repeated warnings to

refrain from doing so. Coles provides no credible argument that connects these

repeated instances of serious ethical misconduct to her previously diagnosed

depression and anxiety. In sum, Cole did not demonstrate there was a genuine

dispute regarding any material facts when the Board made its final agency

decision. Frank, 120 N.J. at 98.

      Any arguments not addressed lack sufficient merit to warrant discussion

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

      Affirmed.

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