Court Opinion

ID: 6800739
Source: CourtListenerOpinion
Date Created: 2022-07-22 14:07:37.597913+00
Date Added: 2024-06-11T16:03:12.911001
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NOT FOR PUBLICATION WITHOUT THE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-1352-20

STEPHEN STANZIANO,

          Petitioner-Appellant,

v.

BOARD OF TRUSTEES,
PUBLIC EMPLOYEES'
RETIREMENT SYSTEM,

     Respondent-Respondent.
_________________________

                   Argued July 11, 2022 – Decided July 22, 2022

                   Before Judges Fasciale and Enright.

                   On appeal from the Board of Trustees of the Public
                   Employees' Retirement System, Department of
                   Treasury, PERS No. x-xxx441.

                   Daniel J. Zirrith argued the cause for appellant (Law
                   Offices of Daniel J. Zirrith, LLC, attorneys; Daniel J.
                   Zirrith, of counsel and on the briefs; Edward H. Kerwin,
                   on the briefs).

                   Yi Zhu, Deputy Attorney General, argued the cause for
                   respondent (Matthew J. Platkin, Acting Attorney
                   General, attorney; Donna Arons, Assistant Attorney
            General, of counsel; Christopher Meyer, Deputy
            Attorney General, on the brief).

PER CURIAM

      Stephen Stanziano appeals from a December 10, 2020 final agency

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

System (PERS) denying his application for deferred retirement benefits. In

doing so, the Board reaffirmed its previous determination denying Stanzi ano's

application and denied his request for a hearing in the Office of Administrative

Law (OAL), finding no genuine issue of material fact in dispute. We conclude

the Board's decision to deny the application was supported by sufficient credible

evidence. We therefore affirm.

      Stanziano worked as a Certified Public Works Manager and served the

Township of Manchester (Township) as Director of the Public Works and the

Director of Utilities from 1995 to 2013. Stanziano has been a PERS member

since 1995. Prior to the removal of his Township employment, Stanziano was

administratively charged on May 10, 2013, for allegations of misconduct related

to his employment. The charges included engaging in retaliatory conduct,

unlawfully considering race in a personnel matter, failing to care for

departmental equipment, attempting to engage in a conspiracy to falsify federal

funding, engaging in personal business while on duty, failing to cooperate with

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purchasing procedures, unnecessarily delaying the repair of police vehicles, and

making false and misleading statements to employees regarding the Township's

"open door policy." The Township immediately suspended him without pay and

sought his removal. He was charged with additional violations on July 10,

2013.1

      Stanziano challenged the administrative charges. Following two hearings

in July and August 2013, a hearing officer (HO) sustained most of the charges

and recommended Stanziano's termination. 2 Stanziano received notice that he

was terminated from his position effective September 17, 2013. He moved for

de novo review of the HO's decision in the Law Division. This motion was made

in Stanziano's pending lawsuit against the Township, the Township's Mayor, and

the Township's Business Administrator. The Law Division judge denied review

on the grounds that Stanziano failed to file an action in lieu of prerogative writs

pursuant to Rule 4:69-1. Stanziano appealed to this court, and we affirmed the

1
  Those charges include insubordination for failure to answer written questions
as ordered, neglect of duty, false and misleading assertions to media regarding
suspensions, and false and misleading correspondence to the New Jersey
Department of Environmental Protection (DEP).
2
  The charges for false and misleading statements to employees regarding the
Township's "open door policy," false and misleading correspondence to the
DEP, and neglect of duty to manage overtime were not sustained.
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termination for failure to timely file an appeal of the HO's decision, among other

things, in April 2018.    The Supreme Court denied Stanziano's petition for

certification. Stanziano v. Manchester Twp., 235 N.J. 192 (2018).

      On October 30, 2018, Stanziano filed an application for deferred

retirement benefits. The Board denied the application and found that he was

removed for cause directly related to his employment, thus he is ineligible for a

deferred retirement pursuant to N.J.S.A. 43:15A-38. At the time of his last

pension contribution in September 2013, Stanziano was fifty-seven years old

and had eighteen years and three months of PERS service credit. Therefore, he

was only eligible for a deferred retirement.

      Stanziano requested reconsideration of the Board's decision as well as an

OAL hearing to establish if his termination was politically motivated. At its

November 18, 2020 meeting, the Board once again found that because Stanziano

was removed for cause directly related to his employment, he was not eligible

for deferred retirement. The Board denied Stanziano's request for a hearing

because there were no genuine issues of material fact in dispute.

      On appeal, Stanziano raises the following point for our consideration:

            POINT I

            THE BOARD'S DECISION IS ARBITRARY,
            CAPRICIOUS, AND UNREASONABLE BASED ON

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            THE TOTALITY OF THE CREDIBLE EVIDENCE
            SUPPORTING           THE        FINDING
            THAT . . . STANZIANO  IS ELIGIBLE   FOR
            DEFERRED RETIREMENT BENEFITS.

      Stanziano argues that he is entitled to an OAL hearing to properly

establish the facts. He maintains that his former counsel failed to preserve his

rights to have an impartial hearing and enforce his rights pursuant to court rules,

thus any determination regarding alleged misconduct relating to his job

performance has not been adjudicated through a full and fair hearing.

      We have recognized "[j]udicial review of an administrative agency action

is limited because respect is due to the expertise and superior knowledge of an

agency in its specialized field." Francois v. Bd. of Trs., Pub. Emps.' Ret. Sys.,

415 N.J. Super. 335, 347 (App. Div. 2010) (internal quotations omitted)

(quoting Hemsey v. Bd. of Trs., Police & Firemen's Ret. Sys., 198 N.J. 215, 223

(2009)). We will only reverse an agency's decision if it is "arbitrary, capricious

or unreasonable or it is not supported by substantial credible evidence in the

record as a whole." Stevens v. Bd. of Trs., Pub. Emps.' Ret. Sys., 294 N.J.

Super. 643, 651 (App. Div. 1996) (emphasis omitted) (quoting Henry v. Rahway

State Prison, 81 N.J. 571, 579-80 (1980)).           The party challenging the

administrative action bears the burden of making that showing. Lavezzi v. State,

219 N.J. 163, 171 (2014).

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      N.J.S.A. 43:15A-38 provides that:

              Should a member of the Public Employees' Retirement
              System, after having completed [ten] years of service,
              be separated voluntarily or involuntarily from the
              service, before reaching service retirement age, and not
              by removal for cause on charges of misconduct or
              delinquency, such person may elect to receive:

              (a) The payments provided for in section 41b. of this
              act, if he so qualifies under said section, or;

              (b) A deferred retirement allowance, beginning at the
              retirement age . . . .

We have previously held that "forfeiture of deferred retirement benefits pursuant

to N.J.S.A. 43:15A-38 is conditioned on an involuntary removal due to

misconduct related to employment." In re Hess, 422 N.J. Super. 27, 37 (App.

Div. 2011).     This is because "pension forfeiture operates as a 'penalty or

punishment for wrongful conduct.'" Corvelli v. Bd. of Trs., Police & Firemen's

Ret. Sys., 130 N.J. 539, 550 (1992) (quoting Uricoli v. Bd. of Trs., Police &

Firemen's Ret. Sys., 91 N.J. 62, 76 (1982)); see also N.J.S.A. 43:1-3(a)

(establishing that a public pension or retirement benefit is "expressly

conditioned upon the rendering of honorable service").           Total or partial

forfeiture may be ordered "for misconduct occurring during the member's public

service which renders the member's service or part thereof dishonorable."

N.J.S.A. 43:1-3(b). While we have recognized that strict construction of the

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pension statute is necessary when considering forfeiture provisions, Widdis v.

Bd. of Trs., Pub. Emps.' Ret. Sys., 238 N.J. Super. 70, 78 (App. Div. 1990), the

plain language of N.J.S.A. 43:15A-38 makes clear that a member separated from

service "by removal for cause on charges of misconduct or delinquency" is

ineligible to receive deferred retirement benefits.

      Even if the conduct is not an official duty of the position, a link between

the position and the misconduct has been found when conduct touches or relates

to the position. See Debell v. Bd. of Trs., Pub. Emps.' Ret. Sys., 357 N.J. Super.

461, 464 (App. Div. 2003) (finding forfeiture appropriate when a registered

nurse engaged in health insurance fraud against the State Health Benefits

Program); see also State v. Pavlik, 363 N.J. Super. 307, 312 (App. Div. 2003)

(finding an insufficient nexus where a Department of Public Works laborer

committed acts of domestic violence against his grandfather). In Hess, we held

that the employee's criminal conviction for driving while intoxicated had an

insufficient nexus to her employment as a Geographic Information Specialist to

warrant forfeiture of her deferred retirement benefits. 422 N.J. Super. at 37.

      Here, Stanziano is not entitled to deferred retirement benefits because

twelve disciplinary charges—all related to his employment—were sustained,

resulting in his termination for cause.       Those charges sustained against

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Stanziano included insubordination, neglect of duty, failing to care for

departmental equipment, and attempting to engage in a conspiracy to falsify

federal funding.     The twelve charges sustained against Stanziano are

distinguishable from Hess as they directly relate to his duties as the Township's

Director of Public Works.        Thus, the Board's decision to deny deferred

retirement benefits in accordance with N.J.S.A. 43:15A-38 is supported by

sufficient credible evidence and was neither arbitrary nor capricious.

      We also reject Stanziano's contentions that he is entitled to an OAL

hearing because he did not receive a full and fair hearing on the alleged

misconduct that led to his termination. Stanziano claims that based on the advice

of his former attorney, he did not have representation nor did he appear at the

hearings before the HO to determine whether the charges should be sustained.

He argues that the charges were based on testimony from individuals who were

not subject to cross-examination and that his former attorney failed to file a

timely appeal of the decision.

      The record demonstrates Stanziano received a full and fair hearing.

Stanziano had notice of the administrative charges against him and the

opportunity to present evidence at the hearings before the HO.           Stanziano

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followed the recommendation of his former attorney and chose not to attend.

Nine witnesses testified and numerous exhibits were presented at the hearings.

The HO concluded the Township met its burden by a preponderance of credible

evidence and recommended Stanziano's termination. There is no evidence in

the record to conclude that Stanziano did not voluntarily waive his right to a full

hearing. He received notice of the charges against him, elected not to participate

in the hearings, and now fails to show how that choice was involuntary.

      Furthermore, we are precluded from reviewing the HO's decision by the

doctrine of collateral estoppel. "Generally speaking, a party is precluded by

collateral estoppel from relitigating claims or issues which the party actually

litigated, were determined in a prior action, and were directly in between the

parties." Ensslin v. Twp. of N. Bergen, 275 N.J. Super. 352, 369 (App. Div.

1994).    "'[A]dministrative tribunals can and do provide a full and fair

opportunity for litigation of an issue,' and their judgments on identical issues

may form the basis for application of collateral estoppel so long as they are

'rendered in proceedings which merit such deference.'" Winters v. N. Hudson

Reg'l Fire & Rescue, 212 N.J. 67, 87 (2012) (alteration in original) (internal

citation omitted) (first quoting Hennessey v. Winslow Twp., 183 N.J. 593, 600

(2005); and then quoting Ensslin, 257 N.J. Super. at 369).

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      The HO sustained twelve of the charges against Stanziano following a full

hearing with witnesses and exhibits. On August 26, 2013, the Township's Mayor

informed Stanziano that he was accepting the HO's recommendation and that

Stanziano was terminated from his position, effective September 17, 2013.

Stanziano was required to seek judicial review of the Township's decision to

terminate him within forty-five days after the decision was made under Rule

4:69-6(a). He did not do so. He waited until October 31, 2013, to write a letter

to the Law Division judge that he was seeking a de novo review of the

termination. The Law Division judge determined he was not entitled to a de

novo review of the decision and we affirmed. Thus, the criteria for collateral

estoppel have been met. As Stanziano had the full and fair opportunity to contest

the administrative charges, we find no reason to disturb the Board's decision.

      Affirmed.

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