ISAIAH CARDINALE VS. BOARD OF TRUSTEES, POLICE AND FIREMEN'S RETIREMENT SYSTEM (POLICE AND FIREMEN'S RETIREMENT SYSTEM) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1997-17T1
ISAIAH CARDINALE,
Petitioner-Appellant, APPROVED FOR PUBLICATION
March 1, 2019
v.
APPELLATE DIVISION
BOARD OF TRUSTEES,
POLICE AND FIREMEN'S
RETIREMENT SYSTEM,
Respondent-Respondent.
____________________________
Argued February 4, 2019 – Decided March 1, 2019
Before Judges Messano, Fasciale and Gooden Brown.
On appeal from the Board of Trustees, Police and
Firemen's Retirement System, PFRS No. 3-98613.
Steven J. Kossup argued the cause for appellant
(Feeley & LaRocca, LLC, and Steven J. Kossup,
attorneys; John D. Feeley, of counsel and on the
brief).
Robert E. Kelly, Deputy Attorney General, argued the
cause for respondent (Gurbir S. Grewal, Attorney
General, attorney; Melissa Dutton Schaffer, Assistant
Attorney General, of counsel; Robert E. Kelly, on the
brief).
The opinion of the court was delivered by
FASCIALE, J.A.D.
This appeal requires us to decide whether, as a matter of law, a police
officer is ineligible for ordinary disability benefits as a member of the Police
& Firemen's Retirement System (PFRS) if the officer separates from service by
irrevocably resigning from employment to resolve pending drug-related
disciplinary charges. We answer this question recognizing that N.J.S.A.
43:16A-8(2) requires disability retirees to return to duty once their disability
has "vanished or has materially diminished." Of course, permanently resigning
from employment makes returning to duty impossible.
Isaiah Cardinale (Cardinale) – the officer who resigned from the police
department (the Police Department) – argues that the Board of Trustees (the
Board) of PFRS acted arbitrarily by refusing to process his application seeking
ordinary disability benefits. He maintains that the Board's declaration that he
was ineligible misapplies N.J.S.A. 43:16A-8(2), and its refusal to consider his
application amounts to a failure to turn square corners. Cardinale urges us to
direct the Board to consider his application on the merits.
We hold that when a PFRS member – here a police officer – voluntarily
irrevocably resigns from active service, such a separation from employment
automatically renders the individual ineligible for ordinary disability benefits.
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Generally, for individuals whose disability has vanished or materially
diminished, benefits cease when the retiree refuses to return to duty after the
Board has so ordered. In this sense, disability retirees are unique. But here,
Cardinale can never return to duty solely because of his final resignation,
rather than his refusal to do so upon disability rehabilitation. Under the
governing legislative framework, the inability to return to duty – due solely to
an irrevocable resignation – prevents the Board from statutorily terminating
any granted benefits, a result which would contravene important public policy
underlying disability retirement benefits.
We therefore affirm.
I.
In August 2004, Cardinale began working as a police officer. On
December 16, 2013, he submitted to a random drug test. Two days later,
Cardinale admitted to using cocaine. The Police Department immediately
suspended him pending the results of the test, and Cardinale successfully
completed drug and alcohol treatment in Florida. In February 2014, the
toxicology report demonstrated that he had tested positive for cocaine.
On February 21, 2014, the Police Department issued a Preliminary
Notice of Disciplinary Action (PNDA). Before that, Cardinale had performed
his job without any documented problems. The PNDA charged him with
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violating the following sections of N.J.A.C. 4A:2-2.3(a) and the Police
Department's rules and regulations:
N.J.A.C. 4A:2-2.3(a):
1. Incompetency, inefficiency or failure to perform
duties;
3. Inability to perform duties;
6. Conduct unbecoming a public employee;
7. Neglect of duty; [and]
1[2]. Other sufficient [c]ause.
. . . Department Rules & Regulations:
Oath of Office;
1:5 Code of Ethics;
2:24 Employee Drug Testing;
3:1.1 Standards of Conduct;
3:1.11 Obedience to Laws and Regulations;
3:2.2 Alcoholic Beverages and Drugs; [and]
5:1.1 Disciplinary Action.
Eleven days later, on March 4, 2014, while on suspension, Cardinale
applied for ordinary disability benefits. In August 2014 – after a hearing
officer conducted a disciplinary hearing – the Police Department issued its
Final Notice of Disciplinary Action (FNDA) and removed him as a police
officer effective February 21, 2014. Cardinale appealed the FNDA (the
disciplinary action) to the Civil Service Commission (the Commission), which
transmitted the matter to the Office of Administrative Law (OAL) as a
contested case.
In February 2015, Cardinale and the Police Department settled the
disciplinary action and entered into a settlement agreement. The Police
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Department withdrew the FNDA's recommended termination, Cardinale
withdrew his appeal from the FNDA, and Cardinale signed a letter irrevocably
resigning from the Police Department. The letter stated, "Effective June 15,
2015, I am voluntarily separating from my employment as a [p]olice [o]fficer
with the [Police Department and] I understand that this letter of separation
from employment is not revocable." In the settlement agreement, Cardinale
acknowledged that he would proceed with his application for ordinary
disability benefits at his "sole risk," and that the outcome of the application
would not affect his resignation. In March 2015, the disciplinary action was
terminated.
In November 2015, the Board declined to process Cardinale's
application. The Board explained that the only obstacle to his reemployment
was not the purported disability, but rather, his irrevocable resignation. The
Board therefore concluded – assuming Cardinale was disabled but later
became rehabilitated – that it would have no statutory authority to stop paying
benefits. In February 2016, Cardinale administratively appealed the Board's
refusal to process his application, and the OAL listed the matter as a contested
case (the benefits action).
In March 2017, an administrative law judge (ALJ) conducted a hearing
in the benefits action. Cardinale, the only witness who appeared at the
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hearing, testified that performing his job as a police officer caused post-
traumatic stress disorder (PTSD). He alleged that the PTSD led him to drink
alcohol and use cocaine. Notwithstanding that allegation, the record reflects
no prior disciplinary problems or disruptions in his ability to do his job before
he tested positive for cocaine.
At the hearing, Cardinale conceded that he was recovering and no longer
disabled. Indeed, in his application for ordinary disability benefits, which he
had filed three years before the hearing, Cardinale admitted that he was
"sober" and that his main concern was that due to his duties as a police officer,
he would "again become depressed to the point of using alcohol and/or drugs."
On direct examination, he gave the following testimony:
Q: And what was the reason for your leaving the
[Police] [D]epartment?
A: My disability.
Q: [W]hat was your disability?
A: PTSD. . . .
Q: And . . . did you have a substance abuse problem?
A: Yes.
Q: And did that include alcohol?
A: Yes.
Q: And you still have that disability?
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A: No.
Cardinale added that he was not drinking alcohol "right now," and that he was
in recovery and taking medication.
The ALJ determined that the settlement agreement did not bind the
Board. He found "Cardinale's separation from the . . . Police Department was
due solely to the exchange of the parties' respective rights arising out of [the]
disciplinary charges." That said, the ALJ concluded that there was no
disability issue for the Board to consider. The ALJ noted that Cardinale
agreed to proceed with his application for ordinary disability benefits at his
sole risk. The ALJ stated further that the Board, which was not a party to the
settlement agreement, was under no obligation to process the application,
especially because in the ALJ's opinion, the Board was not legally required to
do so.
The ALJ explained that N.J.S.A. 43:16A-8(2) requires an employer to
reinstate a member who returns from disability status, but that here,
Cardinale's execution of his irrevocable letter of resignation made any such
return impossible. He elaborated further that because Cardinale could not
return to work at the Police Department, the Board would statutorily be unable
to stop paying benefits, assuming such benefits were appropriate in the first
place. He said:
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The PFRS Board was of the opinion that . . . it should
not put itself into a position where, by considering and
perhaps granting disability benefits, it would run the
risk of never being able to stop the payment of said
benefits . . . when Cardinale['s] . . . disability vanishes
or materially diminishes . . . . [T]he Board may
properly decline to process an application on the
grounds that the cessation of employment arose solely
out of disciplinary charges and was not based on an
issue of disability.
In the final agency decision under review, the Board adopted the ALJ's
findings and conclusions.
On appeal, Cardinale contends that the Board's refusal to process his
application for ordinary disability benefits deprived him of the opportunity to
show he suffered from a disability. He argues therefore that the Board acted
arbitrarily and failed to turn square corners. Emphasizing the remedial nature
of pension statutes, which he maintains the Board must liberally construe,
Cardinale asserts that the Board misinterpreted N.J.S.A. 43:16A-8(2). He
argues essentially that the statute gives the Board discretion to discontinue any
payment of disability benefits, even if his irrevocable resignation solely
prevents him from returning to duty.
II.
Pertinent to our standard of review, it is undisputed that Cardinale
signed the settlement agreement to resolve the disciplinary action. The
agreement does not mention Cardinale's alleged PTSD-addiction disability,
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which has since vanished or materially diminished. Rather, the Police
Department dropped the disciplinary charges in exchange for Cardinale
irrevocably resigning, and for no other reason.
Our review of the Board's decision is very limited. Caminiti v. Bd. of
Trs., Police & Firemen's Ret. Sys., 394 N.J. Super. 478, 480 (App. Div. 2007).
Generally, we may overturn the decision if it is unsupported by sufficient
credible evidence in the record, but such an inquiry is unnecessary because the
facts are undisputed. We focus instead on the legal question of whether
Cardinale is ineligible to seek ordinary disability benefits as a matter of law
due to his irrevocable resignation.
We are not bound by an agency's interpretation of a statute or its
determination of a strictly legal issue. We review such questions de novo. See
Ardan v. Bd. of Review, 231 N.J. 589, 604 (2018); see also Mount v. Bd. of
Trs., 233 N.J. 402, 418-19 (2018). In arriving at its decision not to process the
application for ordinary disability benefits, the Board interpreted N.J.S.A.
43:16A-8(2). Ordinarily, we defer to an agency's interpretation of a statute
unless it is "plainly unreasonable," contrary to the statutory language, or
"subversive of the Legislature's intent." N.J. Tpk. Auth. v. AFSCME, Council
73, 150 N.J. 331, 352 (1997); see also Klumb v. Bd. of Educ. of Manalapan-
Englishtown Reg'l High Sch. Dist., 199 N.J. 14, 24 (2009) (stating that
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"interpretations of the statute and cognate enactments by agencies empowered
to enforce them are given substantial deference in the context of statutory
interpretation").
III.
For purposes of our analysis, we assume Cardinale suffered from PTSD,
which allegedly resulted in a substance abuse problem. We further accept, as
we analyze the issues presented, that he would have satisfied the requirements
of N.J.S.A. 43:16A-6(1), which provides in pertinent part that a member may
retire on ordinary disability benefits provided
that the medical board, after a medical examination of
such member, shall certify that such member is
mentally or physically incapacitated for the
performance of his usual duty and of any other
available duty in the department which his employer is
willing to assign to him and that such incapacity is
likely to be permanent and to such an extent that he
should be retired.
Of course, we make these assumptions fully understanding that they are
completely unsupported in the record by any medical or other credible
evidence whatsoever.
Nevertheless, we assume the disability existed because it is irrelevant to
our holding that his irrevocable resignation made him ineligible for benefits in
the first place. We acknowledge the longstanding principle that "eligibility for
disability retirement benefits requires members to make a prima facie showing
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that they cannot work due to a disability." In re Adoption of N.J.A.C. 17:1-
6.4, 454 N.J. Super. 386, 394 (App. Div. 2018) (addressing the 2016 re-
adoption of amended regulations after Cardinale's application, but
acknowledging the principle that eligibility for benefits depends on a prima
facie showing of an inability to work due to a disability). But even if he was
disabled – as a matter of law – the consequence of his irrevocable resignation
is determinative.
That brings us to the heart of the case. The premise of our assumption –
that Cardinale would have preliminarily qualified for ordinary disability
benefits because he suffered from his alleged PTSD-addiction disability – begs
the question of whether his irrevocable resignation from active service as a
police officer to settle his drug-related disciplinary charges nevertheless made
him legally ineligible. For decades, PFRS disabled retirees were uniquely
required to return to active service when their disability had abated. Id. at
400-01.
If the retired employee regains the ability to perform
his or her duties, the Legislature mandated that he or
she be returned to the former position. The
Legislature clearly recognized that individuals
returning from a disability retirement are in a unique
situation, plainly different from all other employees
returning to active service. Their separation from
employment is unlike the voluntary separation of other
civil servants whose seniority is not aggregated. In
our view, N.J.S.A. 43:16A-8(2) contemplates that a
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restoration to employment return the formerly
disabled individual as nearly as possible to the status
held at the time he or she was pensioned. The
aggregation of seniority complies with the legislative
mandate that disabled employees return to their former
position upon cessation of their disability.
[In re Allen, 262 N.J. Super. 438, 444 (App. Div.
1993) (emphasis added).]
Although members are eligible for benefits if they can show they left
work because of a disability, N.J.A.C., 454 N.J. Super. at 398-402, the
Legislature clearly understood the importance of restoring formerly disabled
retirees to work when it passed N.J.S.A. 43:16A-8(2), which in pertinent part
unambiguously states that
Any beneficiary under the age of [fifty-five]
years who has been retired on a disability retirement
allowance under this act, on his request shall, or upon
the request of the retirement system may, be given a
medical examination and he shall submit to any
examination by a physician or physicians designated
by the medical board once a year for at least a period
of five years following his retirement in order to
determine whether or not the disability which existed
at the time he was retired has vanished or has
materially diminished. If the report of the medical
board shall show that such beneficiary is able to
perform either his former duty or any other available
duty in the department which his employer is willing
to assign to him, the beneficiary shall report for duty;
such a beneficiary shall not suffer any loss of benefits
while he awaits his restoration to active service. . . .
[(Emphasis added).]
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Assuming he satisfies the requirements of this statute, Cardinale must return to
duty. Along those lines, and certainly at the time of the hearing before the
ALJ, Cardinale testified that he is no longer disabled, he stopped drinking
alcohol, was in recovery, and was on medication. Hence, a strong case can be
made that he would inevitably be required to return to duty. See N.J.A.C., 454
N.J. Super. at 400-02 (reiterating that rehabilitation statutes – like N.J.S.A.
43:16A-8(2) – expressly condition reinstatement for disability retirees upon
disability rehabilitation, and that under such statutes, "the only obstacle to . . .
reemployment is the disability itself"). The obstacle for Cardinale is not his
disability, but rather, his irrevocable resignation.
Cardinale's permanent inability to return to duty is fatal. The purpose of
N.J.S.A. 43:16A-8(2) is to return the previously disabled retiree to work as if
that individual had never suffered a disability or interruption of service. In re
Terebetski, 338 N.J. Super. 564, 570 (App. Div. 2001). The statute is not
simply an anti-fraud measure. It provides for a system of taxpayer-funded
relief by allowing disability benefits but requiring retirees to return to duty
upon disability rehabilitation. The Legislature obviously did not devise a
disability retirement system that, on the one hand, would grant ordinary
disability benefits to PFRS members who could never return to active service,
and on the other hand, require that other PFRS members return to duty when
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their purported disability vanishes or materially diminishes. That would be
absurd. Instead, N.J.S.A. 43:16A-8(2) balances a worker's interest with those
of an employer and the public by requiring PFRS workers – upon rehabilitation
– to forgo the benefits and return to work. See Klumb, 199 N.J. at 34-35(reaching the same conclusion by applying a similar rehabilitation statute).
Importantly, a member's irrevocable resignation presents a practical
problem that strains the workability of the system. N.J.S.A. 43:16A-8(2)
envisions only one circumstance when disability benefits may cease. That
situation, which does not apply to members who irrevocably resign from work,
arises when the Board grants retirement benefits to a PFRS retiree, that
retiree's disability vanishes or materially diminishes, and then that retiree fails
to return to duty after the Board orders the retiree to do so. N.J.S.A. 43:16A-
8(2) addresses this scenario by stating:
If the beneficiary fails to submit to any such medical
examination or fails to return to duty within [ten] days
after being ordered so to do, or within such further
time as may be allowed by the [B]oard of [T]rustees
for valid reason, as the case may be, the pension shall
be discontinued during such default.
[(Emphasis added).]
Thus, the statute authorizes the Board to discontinue disability benefits only
under this explicit sequence of events.
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Nevertheless, Cardinale argues that his benefits could cease within ten
days after he recovers from his disability. N.J.S.A. 43:16A-8(2) does not
permit that result. To hold otherwise would require us to re-write the text,
which would change not only the meaning of the statute, but also, the policy
implications associated with the unique status disabled retirees enjoy. And
such a result would contravene the purpose for limiting the only circumstance
under which benefits cease.
The Legislative purpose for granting limited authority to stop payment
of benefits is such
that persons on disability retirement who are no longer
disabled, i.e., no longer entitled to disability
retirement, and who are under the age of fifty-five, be
returned to either their prior positions or any available
duty that their employers are willing to assign to them.
In other words, the employee should be returned to his
or her position as if the employee's service was never
interrupted and as if the disability retirement had
never occurred.
[Terebetski, 338 N.J. Super. at 568-69 (footnote
omitted).]
We have explained that "[t]he purpose of this legislation is to return the
previously disabled employee to work as if the officer had never been disabled
and the officer's service had never been interrupted." Id. at 570.
Cardinale's interpretation of the statute would be repugnant to the entire
legislative framework. "Our task is to give that language a fair and practical
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interpretation with reference to the purposes of the retirement act." Hillman v.
Bd. of Trs., Pub. Emps.' Ret. Sys., 109 N.J. Super. 449, 455 (App. Div. 1970).
We have explained that "the Legislature granted the Division discretion to
decide the circumstances in which it will order a medical examination of a
disability retiree to determine if he or she is fit for employment in any capacity
with the former employer." N.J.A.C., 454 N.J. Super. at 416. This is
indicative of the legislative goal of returning employees to work when ever
possible.
We acknowledge that, "pension statutes are 'remedial in character' and
'should be liberally construed and administered in favor of the persons
intended to be benefited thereby.'" Klumb, 199 N.J. at 34 (quoting Geller v.
N.J. Dep't of Treasury, Div. of Pensions & Annuity Fund, 53 N.J. 591, 597-98
(1969)). But, "eligibility is not to be liberally permitted." Smith v. Dep't of
Treasury, Div. of Pensions & Benefits, 390 N.J. Super. 209, 213 (App. Div.
2007). Moreover, "[i]n spite of liberal construction, an employee has only
such rights and benefits as are based upon and within the scope of the
provisions of the statute." Francois v. Bd. of Trs., Pub. Emps.' Ret. Sys., 415
N.J. Super. 335, 349 (App. Div. 2010) (alteration in original). "An
inappropriate allowance of benefits tends 'to place a greater strain on the
financial integrity of the fund in question and its future availability for those
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persons who are truly eligible for such benefits.'" Id. at 350 (quoting Smith,
390 N.J. Super. at 215). A PFRS member irrevocably resigning from work is
not within the scope of the provisions of N.J.S.A. 43:16A-8(2). In other
words, a PFRS member, like Cardinale, who irrevocably resigned from work is
not of a class "intended to be benefited" by the statute. Geller, 53 N.J. at 597-
98 (applying remedial statutes only in favor of the persons "intended to be
benefited").
Thus, from a practical standpoint, the Board cannot statutorily cease
paying any approved disability benefits, once they have begun, for an
individual who voluntarily resigns from duty to settle disciplinary charges and
agrees never to return. Allowing ongoing benefits under these circumstances
unquestionably places a strain on the financial integrity of the fund and its
future availability for those persons who are truly eligible for such benefits.
Doing so would drain, weaken, and overburden the disability retirement
system available to PFRS members. Entertaining an ordinary disability
retirement application – as the Board recognized – for members who
irrevocably resign from service to settle disciplinary charges flowing from
illegal use of drugs would violate public policy, contravene the rehabilitation
statute, and encourage abuse of the disability retirement system.
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We therefore conclude that when a PFRS member separates from
employment by deliberately and irrevocably resigning from active duty to
settle pending disciplinary charges – like Cardinale – that person is ineligible
for ordinary disability benefits because he or she can never return to work as
contemplated by the unique disability retirement statutory framework.
IV.
We flatly reject Cardinale's contention that the Board failed to turn
square corners. "When dealing with the public, 'government must "turn square
corners" rather than exploit litigational or bargaining advantages that might
otherwise be available to private citizens.'" Rudbart v. N. Jersey Dist. Water
Supply Comm'n, 127 N.J. 344, 378 (1992) (quoting W.V. Pangborne & Co. v.
N.J. Dep't of Transp., 116 N.J. 543, 561 (1989)). "The government must act
fairly and 'with compunction and integrity.'" Id. at 379 (quoting W.V.
Pangborne, 116 N.J. at 562). The doctrine is "always subject to the guiding
principles of fundamental fairness." Milligan v. Dir., Div. of Taxation, 29 N.J.
Tax 381, 399 (Tax 2016). There is no such equitable failure here.
There is no evidence that anyone at the Police Department made any
statements on which Cardinale reasonably could have detrimentally relied
when negotiating the settlement agreement. The settlement reflected
Cardinale's decision to proceed with his application. But the settlement
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agreement does not represent – nor could it have – that the Board would
process the application. Cardinale understood that by executing the settlement
agreement, he would proceed with his application at his "sole risk," and the
outcome of the application would not affect the enforceability of the
settlement. Instead of permanently resigning, he could have fought the
disciplinary action and run the risk of the Police Department terminating him
for cause for his illegal use of drugs. But he knowingly chose not to do that.
Affirmed.
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