KEVIN LONERGAN VS. TOWNSHIP OF SCOTCH PLAINS (L-3700-16, UNION COUNTY AND STATEWIDE) ( 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NOT FOR PUBLICATION WITHOUT THE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-4531-17T2
KEVIN LONERGAN,
Plaintiff-Appellant,
v.
TOWNSHIP OF SCOTCH PLAINS,
Defendant-Respondent.
_______________________________
Submitted May 15, 2019 – Decided May 29, 2019
Before Judges Currier and Mayer.
On appeal from Superior Court of New Jersey, Law
Division, Union County, Docket No. L-3700-16.
Mandelbaum Salsburg PC, attorneys for appellant
(Steven I. Adler, on the briefs).
Rainone Coughlin Minchello, LLC, attorneys for
respondent (Amanda E. Miller, of counsel and on the
brief; Conor J. Hennessey, on the brief).
PER CURIAM
Plaintiff Kevin Lonergan appeals from an April 25, 2018 order denying
his request for reimbursement from defendant Township of Scotch Plains
(Township) for health insurance premiums. We affirm.
In 2007, after eleven years of service, plaintiff retired from the Township's
police department due to a disability. When plaintiff retired, he asked if the
Township would pay his retiree health insurance premiums in accordance with
the collective bargaining agreement (CBA). The Township advised it would
not.
According to plaintiff, a Township administrator explained he could opt
into the State Health Benefits Plan, but he would have to sign a form, stating he
was ineligible for employer-paid health insurance, in order to enroll in that plan.
Plaintiff signed the form on May 23, 2007, and enrolled in the State Health
Benefits Plan.
Plaintiff remained enrolled in the State Health Benefits Plan from 2007 to
2017. In 2017, the cost for his health insurance increased and he opted out of
the State Health Benefits Plan, purchasing a less expensive health insurance plan
through the private-sector.
On November 16, 2016, plaintiff filed suit against the Township, seeking
reimbursement for the health insurance premiums he paid under the State Health
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Benefits Plan. Relying on Brick Township PBA Local 230 v. Township of
Brick, 446 N.J. Super. 61 (App. Div. 2016), plaintiff argued "a police officer
who retired due to a disability was eligible for health insurance paid for by [the
municipality]." Plaintiff asserted that the Township breached the CBA by not
paying for his health insurance upon retirement.
Article XVIII of the CBA in effect on the date of plaintiff's retirement
explained the payment of medical and health insurance benefits for retiring
police employees as follows:
Effective for each Employee retiring after
January 1, 1987, pursuant to New Jersey Police and
Firemen's Pension System statutes, medical insurance
will be provided for these retired members subject to
the following condition:
(A) If the retiree is covered by any other medical
insurance from any source, then the [T]ownship shall
not have any obligation during such period of this
coverage.
....
(F) Said entitlements to retired members shall be
paid not later than the end of December . . . .
The Township contended health insurance coverage was available only
for retirees who accrued twenty-five years or more of service and excluded
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disability retirees. The Township took this position based on N.J.S.A. 40A:10-
23(a), which provides:
The employer may, in its discretion, assume the entire
cost or a portion of the cost of such coverage and pay
all or a portion of the premiums for employees a. who
have retired on a disability pension, or b. who have
retired after 25 years or more of service credit in a State
or locally administered retirement system and a period
of service of up to 25 years with the employer at the
time of retirement, such period of service to be
determined by the employer and set forth in an
ordinance or resolution as appropriate . . . .
In denying plaintiff's cross-motion for summary judgment and granting
the Township's motion for summary judgment, the judge found plaintiff's claim
was barred by the six-year statute of limitations applicable to contract claims
and that plaintiff's cause of action accrued when he retired in 2007. He also
rejected plaintiff's argument that the CBA constituted an "installment contract ,"
serving to commence the statute of limitations anew when the Township failed
to pay his annual health insurance cost. In addition, the judge rejected plaintiff's
argument that Brick compelled the payment of health insurance benefits for
disabled retirees.
On appeal, plaintiff contends the judge erred in concluding his claim was
barred by the statute of limitations. In addition, plaintiff asserts the statute of
limitations was equitably tolled based on the discovery rule and the Township's
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continuing breach of the CBA each year the Township failed to pay his annual
health insurance benefit.
We review a trial court's summary judgment disposition de novo based
upon an independent review of the motion record, and applying the same
standard as the trial court. Townsend v. Pierre, 221 N.J. 36, 59 (2015). A court
should grant summary judgment if the record establishes there is "no genuine
issue as to any material fact challenged and that the moving party is entitled to
a judgment or order as a matter of law." R. 4:46–2(c). We "review the facts in
the light most favorable to" the non-moving party. DiProspero v. Penn, 183 N.J.
477, 482 (2005) (citing R. 4:46-2(c)).
We first consider whether plaintiff's claims are barred by the six-year
statute of limitations under N.J.S.A. 2A:14-1. Plaintiff contends the CBA was
a continuing contract and a new cause of action arose each year the Township
failed to pay his health insurance costs. He also argues that the statute of
limitations should be equitably tolled under the discovery rule and doctrine of
estoppel.
N.J.S.A. 40A:10-23(a) provides an employer, in its discretion, may
assume the cost of health insurance payments subject to certain pre-conditions,
including twenty-five years or more of service in the State or local retirement
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system. Plaintiff contends the CBA allegedly required the Township's payment
of a retiree's health insurance. Because plaintiff's cause of action is based on a
contract, the CBA, it is subject to a six-year statute of limitations. 1
In accordance with N.J.S.A. 2A:14-1, any action for "recovery upon a
contractual claim or liability, express or implied," must be commenced within
six years. The applicable period of limitations runs when a plaintiff "knows or
should know the facts underlying" the elements of a cause of action, rather than
"when a plaintiff learns the legal effect of those facts." Grunwald v. Bronkesh,
131 N.J. 483, 493 (1993) (citing Burd v. N.J. Tel. Co., 76 N.J. 284, 291–92
(1978)).
Although petitioner failed to argue to the motion judge that the statute of
limitations should have been tolled under the discovery rule and the doctrine of
equitable estoppel, we elect to address the issue. See Nieder v. Royal Indem.
Ins. Co., 62 N.J. 229, 234 (1973).
1
We reject plaintiff's argument that the CBA is an installment contract and each
year that the Township failed to pay his health insurance costs constituted a
continuing breach for calculating accrual of his cause of action. Plaintiff cited
no case law equating a CBA with an installment contract. Moreover, plaintiff
executed a form in 2007, stating he was ineligible for employer-paid health
benefits. Thus, there was no continuing obligation on the part of the Township
to pay plaintiff's health insurance costs after 2007.
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We reject petitioner's discovery rule argument because the Township
advised it would not pay his health insurance in 2007. Petitioner testified at his
deposition that the Township incorrectly interpreted the CBA in 2007 when it
declined to pay his health insurance. Petitioner thus had the essential facts and
knowledge to bring a claim against the Township within the period of limitations
but did not do so because he thought it "would be a waste of breath." See
Grunwald, 131 N.J. at 193 (applying the discovery rule to "those who do not
become aware of their injury until the statute of limitations has expired, and
those who are aware of their injury but do not know that it may be attributable
to the fault of another."). Under these circumstances, petitioner cannot rely on
the discovery rule to toll statute of limitations.
We similarly reject petitioner's argument that the statute of limitation was
tolled based on the doctrine of equitable estoppel. Estoppel may be invoked to
toll the statute of limitations where the defendant misled the plaintiff with
respect to the cause of action, which induced the plaintiff to refrain from filing
a timely claim. See Knorr v. Smeal, 178 N.J. 169, 178 (2003). Here, petitioner
testified that as of 2007 he believed the Township incorrectly interpreted the
CBA. Petitioner cites no conduct on the part of the Township that caused him
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to refrain from filing his action within six years other than his own belief that
such an action would have been a waste of time.
Plaintiff also claims his cause of action did not accrue until 2016 when he
learned of Brick. However, plaintiff's reliance on that case is misplaced because
the payment of health insurance costs in Brick involved a different statute than
the one at issue here. Moreover, the statute challenged in Brick was enacted
four years after plaintiff's retirement and the Brick case was decided nine years
after plaintiff's retirement.
Having reviewed the record, plaintiff's claim accrued upon his retirement
from the police department in 2007. He did not file an action seeking
reimbursement for health insurance costs until November 16, 2016, nearly nine
years after his retirement. Because we agree that plaintiff's contract claims
against the Township are barred by the six-year statute of limitations, we do not
address plaintiff's remaining arguments.
Affirmed.
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