STEPHEN STANZIANO v. BOARD OF TRUSTEES, ETC. (PUBLIC EMPLOYEES' RETIREMENT SYSTEM) ( 2022 )

NOT FOR PUBLICATION WITHOUT THE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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