MICHAEL NAPPE VS. BOARD OF TRUSTEES (TEACHERS' PENSION AND ANNUITY FUND) ( 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NOT FOR PUBLICATION WITHOUT THE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-1173-18T3
MICHAEL NAPPE,
Petitioner-Appellant,
v.
BOARD OF TRUSTEES OF
THE TEACHERS' PENSION
AND ANNUITY FUND,
Respondent-Respondent.
__________________________
Argued November 18, 2019 – Decided December 31, 2019
Before Judges Fasciale, Rothstadt and Mitterhoff.
On appeal from the Board of Trustees of the Teachers'
Pension and Annuity Fund, Department of the
Treasury, TPAF No. 1-593161.
Samuel Benjamin Wenocur argued the cause for
appellant (Oxfeld Cohen, PC, attorneys; Samuel
Benjamin Wenocur, of counsel and on the briefs).
Juliana C. DeAngelis, Deputy Attorney General, argued
the cause for respondent (Gurbir S. Grewal, Attorney
General, attorney; Melissa H. Raksa, Assistant
Attorney General, of counsel; Juliana C. DeAngelis, on
the brief).
PER CURIAM
Michael Nappe appeals from an October 10, 2018 final administrative
determination of the Board of Trustees of the Teachers' Pension and Annuity
Fund (TPAF Board) denying his request to apply for accidental disability
retirement benefits. Before applying for these benefits, Nappe irrevocably
resigned from his employment with the Board of Education of the City of Linden
(Linden Board), pursuant to a settlement agreement. The Division of Pension
and Benefits (DPB) closed Nappe's benefits application, reasoning that his
irrevocable resignation prevented him from complying with N.J.S.A. 18A:66 -
40(a), which permits the retirement system to compel a beneficiary under sixty
years of age to undergo a medical examination to determine whether the
beneficiary remains disabled. The DPB also cited to N.J.A.C. 17:1-6.4, which
requires an applicant to prove that their employment ended "due to a total and
permanent disability." The TPAF Board affirmed the DPB's decision.
On appeals, Nappe argues that N.J.S.A. 18A:66-40(a) does not apply to
him because he was sixty-six years old when he applied for disability retirement
benefits. He further argues that the TPAF Board erred in its application of
N.J.A.C. 17:1-6.4 because it failed to determine whether the settlement
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agreement ending Nappe's employment was due to his disability. Having
reviewed the record, and in light of the applicable law, we vacate the denial of
Nappe's request to apply for accidental disability retirement benefits and remand
for further proceedings.
In October 2014, while teaching in the Linden School District (District),
Nappe requested accommodations under the Americans with Disabilities Act
(ADA), 42 U.S.C. §§ 12101 to 12213, due to his physical disability of diabetes.
One of his requests was for remote control software. Three years earlier, the
District had provided Nappe with a software program called LanSchool, which
served as a reasonable accommodation for this request. At a later time, the
District removed LanSchool from its classrooms and "offered alternate
accommodations to assist [Nappe] in monitoring [his] students[.]" Nappe was
unhappy with this change. Thereafter, he complained that the change violated
his right to accommodations under the ADA.
In September 2015, Nappe emailed his supervisor Michael Walters,
accusing him of discrimination and alleging that another employee
discriminated against him during a performance review by including a comment
about a teaching deficiency, which was caused by his physical disability. The
District's affirmative action officer began to investigate. Thereafter, Nappe filed
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a complaint with the Division of Civil Rights (DCR), alleging discrimination
and retaliation based on his physical disability. After the District completed its
investigation, the superintendent sent a letter to Nappe to inform him that his
discrimination claims lacked merit.
During the following months, the professional relationship between
Nappe and Walters deteriorated, and on March 8, 2017, an altercation occurred.
Walters was angry with Nappe because Nappe was behind on a project, and
another employee was asked to help out while Nappe was in a meeting. After
Nappe's meeting concluded, he ran into Walters, and the two got into a heated
argument. Walters "[stood] directly in front of him, entering his personal space,
while he engaged in a verbal altercation." Minutes later, Walters grabbed a chair
and shoved it into a table in Nappe's direction. Other employees were present,
but none reacted. Nappe and Walters left the room separately, without further
argument. Later that day, Nappe emailed the superintendent to report the
incident and explained that he felt threatened and harassed. Nappe also
instructed his attorney to update the DCR complaint with details of the incident.
Soon after, Nappe began seeing a psychiatrist, with whom he discussed the
Walters incident. 1
1
Nappe was also being treated by a psychologist, beginning in December 2016.
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In August 2017, Nappe and the Linden Board entered into an agreement
to "settl[e] all outstanding controversies between [them]." The parties agreed
that Nappe would
immediately withdraw any and all pending
administrative, contractual, and civil actions that he has
filed or has caused or anticipates to be filed against the
[Linden] Board or any of its current or former
employees arising out of his claims that he was
subjected to unlawful discrimination, harassment or
retaliation . . . including but not limited to the . . .
complaint filed with DCR[.]
He was also required to execute an irrevocable letter of resignation, effective
June 30, 2018. The parties further agreed that the Linden Board "[would] not
seek to institute any formal disciplinary action against Nappe based upon any
allegations or claims which the [Linden] Board knew about or should have
known about prior to the execution of the [a]greement." The Linden Board was
also required to place Nappe on a paid leave of absence for the 2017-2018 school
year due to his medical needs, and it agreed to assist Nappe in applying for
retirement benefits:
The [Linden] Board shall provide Nappe with
reasonable assistance in forwarding documents to the
[DPB] to facilitate Nappe's retirement[.] The [Linden]
Board shall complete the forms needed for Nappe to
seek a retirement; however, Nappe acknowledges and
understands that the [Linden] Board will take no further
action with regard to Nappe's retirement unless
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required by law. Nappe expressly agrees and
understands that his resignation is final and irrevocable
no matter what and regardless of whether or not his
application for retirement is successful.
On August 17, 2017, Nappe sent the superintendent his irrevocable letter of
resignation, which included a statement of his intent to seek retirement benefits
from the TPAF.
Nappe applied for accidental disability retirement benefits at the age of
sixty-six. In his application, he stated that he suffered from "continued
disability" due to a "traumatic event in [the] classroom [involving] threatening
and intimidating physical harm by [a] former supervisor." He submitted medical
examination forms prepared by his psychiatrist and psychologist. Both had
diagnosed Nappe with post-traumatic stress disorder and opined that he was
permanently disabled and unable to perform his assigned duties as a direct result
of the District's work environment. A few months later, the DPB notified Nappe
that it had closed his application, citing to N.J.A.C. 17:1-6.4 and N.J.S.A.
18A:66-40(a). The DPB explained that Nappe could not comply with the statute
because he had irrevocably resigned from his employment.
Nappe appealed the DPB's decision to the TPAF Board, claiming that he
had complied with N.J.A.C. 17:1-6.4 because his disability was the reason he
resigned. He also confirmed, by way of a letter from the Linden Board's
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attorney, that there were no pending disciplinary charges against him when he
resigned and that if he recovered from his disability, the Linden Board had not
barred him from applying for future employment with the District. Nappe also
argued that N.J.S.A. 18A:66-40(a) was inapplicable because it only applied to
beneficiaries under the age of sixty. Upon review of Nappe's appeal, the TPAF
Board affirmed the DPB's decision.
Nappe appealed again, largely relying on the same arguments and adding
that the TPAF Board failed to address the factual issues concerning the reason
that he resigned. The TPAF Board denied his request for an administrative
hearing and affirmed its previous decision. It then issued a final administrative
determination on October 10, 2018, relying on N.J.S.A. 18A:66-40(a) and
N.J.A.C. 17:1-6.4. The TPAF Board reiterated that "Nappe did not leave
employment due to a disabling condition." Rather, he left pursuant to a
settlement agreement. Consequently, he could not comply with N.J.A.C. 17:1-
6.4(b)(2) and (4). It then explained that "[i]f [his] application for disability
retirement was approved and his alleged disability diminished to the point that
he could return to employment," he would be unable to comply with N.J.S.A.
18A:66-40(a). Citing to In re Adoption of N.J.A.C. 17:1-6.4, 454 N.J. Super.
386, 402 (App. Div. 2018), the TPAF Board explained that the statute
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contemplates that "the only obstacle to a disability retiree's reemployment is the
disability itself." This appeal ensued.
On appeal, Nappe argues that the TPAF Board erred in relying on N.J.S.A.
18A:66-40(a) and N.J.A.C. 17:1-6.4. He raises substantially the same
arguments as he did before the TPAF Board, contending that N.J.S.A. 18A:66-
40(a) does not apply and that the TPAF Board erred in its application of N.J.A.C.
17:1-6.4 because it only relied on the fact that he irrevocably resigned from his
employment pursuant to a settlement agreement. He further contends that the
TPAF Board should have ordered an administrative hearing to determine
whether he and the Linden Board considered his mental disability in negotiating
the terms of the settlement agreement. He asserts that the evidence he has
presented shows that the parties to the agreement considered his mental
disability. Consequently, the TPAF Board would have been compelled to
conclude that he complied with N.J.A.C. 17:1-6.4.
We will reverse an administrative agency's decision only if it was
arbitrary, capricious, or unreasonable. Henry v. Rahway State Prison, 81 N.J.
571, 579-80 (1980) (citing Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562
(1963)). Our role is limited to considering whether the agency complied with
legislative policies, whether the record contains substantial evidence to support
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the agency's decision, and whether the agency reached a reasonable conclusion.
In re Carter, 191 N.J. 474, 482-83 (2007) (citing Mazza v. Bd. of Trs., 143 N.J.
22, 25 (1995)). We "defer to an agency's expertise and superior knowledge of a
particular field," so we will "not substitute [our] own judgment for the agency's
even though [we] might have reached a different result." Id. at 483 (quoting
Greenwood v. State Police Training Ctr., 127 N.J. 500, 513 (1992)). However,
we are not bound by an agency's statutory interpretation. Ibid. (quoting
Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 93 (1973)).
An applicant for disability retirement benefits must show that he or she
retired "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." N.J.A.C. 17:1-6.4(a); see also
In re Adoption of N.J.A.C. 17:1-6.4, 454 N.J. Super. at 397 (quoting N.J.A.C.
17:1-6.4(a)). A member cannot apply if their employment ended pursuant to a
"[s]ettlement agreement[] reached due to pending administrative or criminal
charges, unless the underlying charges relate to the disability." N.J.A.C. 17:1 -
6.4(b)(2). Likewise, a member who "voluntar[ily] separat[ed] from service for
reasons other than a disability" cannot apply. N.J.A.C. 17:1-6.4(b)(4).
"[D]isability retirement benefits are intended for members who become disabled
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while in active service and can no longer work[.]" In re Adoption of N.J.A.C.
17:1-6.4, 454 N.J. Super. at 398 (quoting 48 N.J.R. 1306(a) (June 20, 2016)).
The TPAF Board is responsible for administering disability retirement
benefits distributed from the TPAF. See N.J.S.A. 18A:66-56(a)(1). When a
retiree is approved for such benefits, the TPAF Board monitors certain retirees
to ensure they receive benefits only as long as they remain disabled:
Once each year the retirement system may . . . require
any disability beneficiary who is under the age of
[sixty] years to undergo medical examination by a
physician or physicians designated by the system for 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 other comparable duty which his former
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.
[N.J.S.A. 18A:66-40(a).]
If a TPAF member disagrees with a TPAF Board determination, he or she
may submit a written appeal. N.J.A.C. 17:3-1.7(a)(1). "[T]he [TPAF] Board
shall determine whether to grant an administrative hearing based upon the
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standards for a contested case hearing set forth in the Administrative Procedure
Act, N.J.S.A. 52:14B-1 [to -31], and 52:14F-1 [to -23], and the Uniform
Administrative Procedure Rules, N.J.A.C. 1:1." N.J.A.C. 17:3-1.7(a)(2). A case
is contested when it involves "a proceeding . . . in which the legal rights, duties,
obligations, privileges, benefits or other legal relations of specific parties are
required by constitutional right or by statute to be determined by an agency by
decisions, determinations, or orders . . . after opportunity for an agency hearing."
N.J.S.A. 52:14B-2. If the case "involves a question of facts, the [TPAF] Board
shall submit the matter to the Office of Administrative Law." N.J.A.C. 17:3 -
1.7(a)(5).
We conclude that the TPAF Board erred in relying on N.J.S.A. 18A:66-
40(a). We have limited "the [TPAF] Board to a five-year window to assess the
totality and the permanency of the disability of retirees under sixty years of age."
N.J. Educ. Ass'n v. Bd. of Trs., Pub. Emps.' Ret. Sys., 327 N.J. Super. 326, 333
(App. Div. 2000) (emphasis added). Nappe was sixty-six years old when he
applied, so if he were to receive disability retirement benefits, this statute would
not apply to him. The TPAF Board could not compel him to undergo a medical
examination to determine whether he remained disabled. The fact that Nappe
irrevocably resigned from his employment is irrelevant in this regard because,
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due to his age, he would never be in a position where he was required to return
to active service. Accordingly, the TPAF Board erred in concluding that the
DPB properly closed Nappe's application on the basis that he could never
comply with N.J.S.A. 18A:66-40(a).
In addition, we conclude that the TPAF Board erred in its application of
N.J.A.C. 17:1-6.4. A member who resigned from a job for a reason unrelated to
a disability cannot apply for disability retirement benefits. N.J.A.C. 17:1-
6.4(b)(2) and (4). Through Nappe's efforts to reverse the closing of his
application, he provided evidence suggesting that he resigned because of a
mental disability. The early issues between Nappe and the Linden Board were
certainly related to Nappe's physical disability. However, those issues led to
further conflicts in the workplace, specifically the Walters incident, causing
Nappe to experience mental distress. While the record is silent as to precisely
when Nappe's mental disability arose, the evidence he has provided suggests
that it was caused by events occurring before the execution of the settlement
agreement. Nappe's psychiatrist and psychologist both opined that his work
environment, including the incident with Walters, was detrimental to his health.
They further opined that he was "no longer able to perform his . . . assigned job
duties." Therefore, it would be reasonable to find that Nappe and the Linden
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Board had contemplated Nappe's mental disability when negotiating the terms
of the settlement agreement. The language in the agreement certainly indicates
that Nappe's leave of absence was for medical reasons and explicitly states that
the Linden Board intended to assist Nappe in applying for retirement benefits.
The TPAF Board did not address any of these factual assertions in its legal
analysis. Instead, it determined that there were no disputed issues of fact, after
deciding that Nappe's resignation pursuant to a settlement agreement completely
barred him from applying for disability retirement benefits. However, the
evidence that Nappe presented shows that there was a factual dispute as to
whether he resigned because of his mental disability. Accordingly, the TPAF
Board should have transmitted the case to the Office of Administrative Law for
a hearing to resolve this factual dispute.
To the extent we have not specifically addressed any remaining arguments
raised by the parties, we conclude they lack sufficient merit to warrant
discussion in a written opinion. R. 2:11-3(e)(1)(E).
Vacated and remanded. We do not retain jurisdiction.
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