BONNIE MURPHY VS. BOARD OF TRUSTEES (PUBLIC EMPLOYEES' RETIREMENT SYSTEM) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE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-4998-16T1
BONNIE MURPHY,
Petitioner-Appellant,
v.
BOARD OF TRUSTEES,
PUBLIC EMPLOYEES'
RETIREMENT SYSTEM,
Respondent-Respondent.
______________________________
Argued July 10, 2018 – Decided April 15, 2019
Before Judges O'Connor and Moynihan.
On appeal from the Board of Trustees of the Public
Employees' Retirement System, Department of the
Treasury, PERS No. 1073479.
Flavio L. Komuves argued the cause for appellant
(Zazzali, Fagella, Nowak, Kleinbaum & Friedman,
attorneys; Richard A. Friedman, of counsel and on the
briefs; Kaitlyn E. Dunphy, on the briefs).
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).
The opinion of the court was delivered by
O'Connor, J.A.D.
Petitioner Bonnie Murphy appeals from a final determination of the
Board of Trustees of the Public Employees' Retirement System (PERS), which
found she was not entitled to ordinary disability retirement benefits (ODRB).
After reviewing the record and applicable legal principles, we affirm. 1
I
The salient facts are undisputed. In 1999, petitioner commenced
employment as a computer technician with the Wall Township Board of
Education (BOE). In 2006, the BOE terminated petitioner. In response, the
Wall Township Information Technology Association filed an unfair labor
practice charge on petitioner's behalf with the Public Employment Relations
Commission (PERC).
In 2009, PERC found in petitioner's favor and ordered she be reinstated
to her position, and that the BOE compensate her for lost salary, interest and
benefits, retroactive to August 18, 2006, the day she was terminated. The BOE
1
We note petitioner's motion to permit the filing of a supplemental briefing
was granted and both parties' briefs were reviewed.
A-4998-16T1
2
filed but PERC denied its motion for reconsideration, a decision we affirmed.
See Wall Twp. Bd. of Educ. v. Wall Twp. Info. Tech. Ass'n, No. A-3764-09
(App. Div. Jan. 26, 2011). In 2012, petitioner and the BOE entered into a
settlement agreement that disposed of all pending claims between them. In
pertinent part, the agreement provided that, in consideration for $485,000,
petitioner agreed to resign from the BOE effective June 30, 2012, and to not
seek any position with the BOE after her resignation.
Petitioner obtained a job in the private sector. Thereafter, she became
totally and permanently disabled as of October 2013. On April 10, 2014,
petitioner submitted an application to PERS for ODRB pursuant to N.J.S.A.
43:15A-42. On December 10, 2014, the Board of Trustees (Board) of PERS
denied her application and petitioner appealed. The Board deemed the matter
a contested case and transferred it to the Office of Administrative Law for a
hearing.
When before the Administrative Law Judge (ALJ), the parties stipulated
to the facts. Petitioner contended that, as a matter of law, she was entitled to
ODRB pursuant to N.J.S.A. 43:15A-42. In pertinent part, such statute states:
A member [of PERS], under 60 years of age, who has
10 or more years of credit for New Jersey service,
shall, . . . upon his own application . . . be retired for
ordinary disability by the board of trustees. The
A-4998-16T1
3
physician or physicians designated by the board shall
have first made a medical examination of him . . . and
shall have certified to the board that the member is
physically or mentally incapacitated for the
performance of duty and should be retired.
[(emphasis added).]
Petitioner claimed that because it was not disputed she was still a
member of PERS,2 under sixty years of age, had provided over ten years of
service for the State, and was totally and permanently disabled when she
applied for ODRB benefits, she was entitled to ODRB pursuant to N.J.S.A.
43:15A-42. The Board argued she was not entitled to these benefits because,
when she voluntarily resigned from public employment on June 30, 2012, she
did not have the disability that caused her to subsequently submit an
application for ODRB in December 2014. It was stipulated petitioner became
totally and permanently disabled as of October 2013.
In his initial decision, the ALJ framed the issue as whether "N.J.S.A.
43:15A-42 require[s] a member to prove the disability existed when she
separated from service and that the disability was the reason she separated
from service[.]" The ALJ determined a member need not prove these factors
2
N.J.S.A. 43:15A-7(e) provides that "[m]embership of any person in the
retirement system shall cease if he shall discontinue his service for more than
two consecutive years."
A-4998-16T1
4
and reversed the Board's decision. The ALJ's principal reason was the
language of the statute provides that a member of PERS qualifies for ODRB as
long as the applicant was "physically or mentally incapacitated for the
performance of duty and should be retired[,]" and that the applicant was a
member of PERS when the application for benefits is made. Thus, the ALJ
reasoned, petitioner was entitled to ODRB because she was still a member of
PERS when she applied for benefits and it was undisputed she became
disabled while a member.
The Board appealed and reversed the ALJ's initial decision. In its final
decision, the Board observed that, "the only issue in this case is whether a
PERS member is eligible for ordinary disability retirement benefits if she
separates from service because of a voluntary resignation . . . rather than a
disability."
The Board acknowledged a member's PERS account remains active for
two years after separating from public service employment. See N.J.S.A.
43:15A-7(e). However, the Board determined that a member may not
voluntarily resign, become disabled after separating from service, and then
receive an ordinary disability retirement benefit for a disability that manifests
after the separation. The Board's reason for this determination was "[t]his
A-4998-16T1
5
simply could not have been what the Legislature intended." The Board
focused upon the following language of N.J.S.A. 43:15A-42 to conclude a
member must be in public service employment to be eligible for ODRB:
The physician or physicians designated by the board
shall have first made a medical examination of [the
member] . . . and shall have certified to the board that
the member is physically or mentally incapacitated for
the performance of duty and should be retired.
[(emphasis added).]
In the Board's view, this language revealed the Legislature contemplated
that a member seeking ODRB must be holding a position of public
employment when he becomes disabled. The Board noted such language
indicates the member was performing duties for a public entity for which he or
she became too incapacitated to perform, necessitating that such member
retire. Here, the Board reasoned, because petitioner voluntarily resigned from
the BOE before she became disabled, she could not be retired from such
position.
Citing Sussex Commons Associates, LLC v. Rutgers, 210 N.J. 531, 540-
41 (2012), the Board also noted that a statute should not be interpreted in a
way that produces "a manifestly absurd result." The Board found it would be
"egregious" to interpret N.J.S.A. 43:15A-42 to mean that a PERS member who
A-4998-16T1
6
voluntarily resigns from public employment and subsequently becomes
disabled while working for a private employer is eligible to collect ODRB.
The Board stated, "[c]learly the Legislature could not have intended to provide
. . . disability coverage for injuries or conditions which were not present when
the member separated from service and was no longer contributing to PERS."
II
On appeal, petitioner contends the "plain, unambiguous language" of
N.J.S.A. 43:15A-42 does not require a PERS member to become disabled
before separation from public service in order to be eligible for ODRB. Thus,
because she became totally and permanently disabled while a PERS member,
she claims she is entitled to ODRB. Petitioner further contends the Board 's
decision is not supported by its long-standing interpretation of N.J.S.A.
43:15A-42 but, even if it were, its interpretation is contrary to statutory law.
Generally, final decisions of state administrative agencies are entitled to
considerable deference, and an agency's interpretation of statutes "within its
implementing and enforcing responsibility is ordinarily entitled to our
deference." Wnuck v. N.J. Div. of Motor Vehicles, 337 N.J. Super. 52, 56
(App. Div. 2001) (quoting In re Appeal by Progressive Cas. Ins. Co., 307 N.J.
Super. 93, 102 (App. Div. 1997)). In other words, "[w]e give substantial
A-4998-16T1
7
deference to the interpretation of the agency charged with enforcing an act."
Merin v. Maglaki, 126 N.J. 430, 436-37 (1992). "Absent arbitrary,
unreasonable or capricious action, the agency's determination must be
affirmed." Wnuck, 337 N.J. Super. at 56 (citing R & R Mktg., LLC v. Brown-
Forman Corp., 158 N.J. 170, 175 (1999)). "An appellate tribunal is, however,
in no way bound by the agency's interpretation of a statute or its determination
of a strictly legal issue." Mayflower Secs., Co. v. Bureau of Secs. in Div. of
Consumer Affairs, 64 N.J. 85, 93 (1973).
A court's obligation when interpreting a law is to determine and carry
out the Legislature's intent. Allen v. V & A Bros., Inc., 208 N.J. 114, 127
(2011). To do so, courts first look at the plain language of the statute.
DiProspero v. Penn, 183 N.J. 477, 492-93 (2005). However, if "the statute
contains some ambiguity . . . it is permissible to turn to extrinsic evidence for
aid in interpreting [it]." State v. Smith, 197 N.J. 325, 333 (2009). Courts may
also look to extrinsic evidence "if a plain reading of the statute leads to an
absurd result . . . ." DiProspero, 183 N.J. at 493. In our view, N.J.S.A.
43:15A-42 is sufficiently ambiguous to require that we resort to extrinsic
evidence to divine the Legislature's intent when it enacted this statute.
A-4998-16T1
8
In In re Adoption of N.J.A.C. 17:1-6.4, 454 N.J. Super. 386 (App. Div.),
certif. denied, 236 N.J. 38 (2018), we noted, "[v]oluntary or involuntary
termination of employment, for non-disability reasons, generally deems a
member ineligible for disability benefits. Such a holding comports with the
existing overall framework of the enabling, eligibility, and rehabilitation
statutes, and policies applicable to the various State public retirement
systems." Id. at 394-95.
The statutes that permit ODRB for members of PERS are found in
N.J.S.A. 43:15A-42 to -46.2; the enabling statutes undergirding PERS are
N.J.S.A. 43:15A-1 to -161. In N.J.A.C., we noted that none of the enabling
statutes for any of the State-administered retirement systems "explicitly say
that a disability retirement applicant must have left public service due to a
disability." 454 N.J. Super. at 399. However, we found that there is no
"explicit text in the enabling statutes because it is common sense that disability
retirees leave their jobs due to a purported disability. After all, the employee
seeks disability retirement benefits." Ibid. In addition, we noted eligibility
statutes require a finding the applicant is "incapacitated for the performance of
duty[,]" and, therefore, it is "unlikely that the Legislature intended membership
A-4998-16T1
9
[in a retirement system] to be the sole qualification for disability retirement
benefits." Id. at 400.
In our view, N.J.S.A. 43:15A-42, an eligibility statute, is no exception.
This statute requires that before a member can be found eligible for ODRB, a
physician or physicians must certify the member is incapacitated "for the
performance of duty" and "should be retired." Such language reveals the
Legislature contemplated that when a member seeks ODRB, he or she is
performing duties for a public entity, but a physician has determined such
member must retire.
Rehabilitation statutes also reflect the Legislature's intention that, to
qualify for ODRB, a member must be working in public service when he or
she seeks such benefits, because such statutes require a disability retiree whose
disability has abated to return to active service. See Id. at 400-01; Klumb v.
Bd. of Educ. of Manalapan-Englishtown Reg'l High Sch. Dist., 199 N.J. 14,
33-35 (2009). The rehabilitation statute for PERS is N.J.S.A. 43:15A-44(a).
In N.J.A.C., we commented:
Returning to active service presumes that, at the time
the beneficiary left public service, he or she actually
had a duty. And so, a beneficiary who previously left
public service for some reason other than a disability
. . . would have no employment or work duty from
which to return. . . . The statutory language expressly
A-4998-16T1
10
conditions reinstatement for disability retirees upon
disability rehabilitation. It logically follows then that
disability retirees must have left public service
because of the disability in the first instance; unlike
someone who has been terminated for cause.
If . . . any member could receive disability
retirement benefits even after leaving public
employment for an independent reason, a member
removed for cause could arguably receive disability
retirement benefits, and then argue for reinstatement
by operation of . . . the rehabilitation statutes,
following rehabilitation from the purported disability.
There is no evidence that the Legislature intended, and
nothing in the text of the applicable statutes supports,
such an absurd result.
[454 N.J. Super. at 401-02.]
To the extent we have not expressly addressed any arguments advanced
by petitioner, it is because we concluded they are without sufficient merit to
warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
A-4998-16T1
11