NEWARK FIREFIGHTERS UNION, INC. VS. BOARD OF TRUSTEES (POLICE AND FIREMEN'S 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NOT FOR PUBLICATION WITHOUT THE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-1342-17T3
NEWARK FIREFIGHTERS
UNION, INC.,
Petitioner-Appellant,
v.
BOARD OF TRUSTEES, POLICE
AND FIREMEN'S RETIREMENT
SYSTEM,
Respondent-Respondent.
_______________________________
Argued January 22, 2019 – Decided May 6, 2019
Before Judges Haas, Sumners and Mitterhoff.
On appeal from the Board of Trustees of the Police and
Firemen's Retirement System, Department of the
Treasury, Loc No. 3-21101.
Craig S. Gumpel argued the cause for appellant.
Michael A. D'Anton argued the cause for respondent
City of Newark (Chasan Lamparello Mallon &
Cappuzzo, PC, attorneys; Michael A. D'Anton, of
counsel and on the brief).
Robert S. Garrison, Jr., Deputy Attorney General,
argued the cause for respondent Board of Trustees
(Gurbir S. Grewal, Attorney General, attorney; Melissa
H. Raksa, Assistant Attorney General, of counsel;
Robert S. Garrison, Jr., on the brief).
PER CURIAM
The Board of Trustees, Police and Firemen's Retirement System (the
Board) rendered a Final Administrative Determination (Final Decision) that
declined to assess a delinquent enrollment penalty against the City of Newark
(Newark) for forty-nine out of the fifty-seven Police and Firemen's Retirement
System (PFRS) pension enrollment applications by firefighter members of the
petitioner Newark Firefighters Union, Inc. (NFU), which it claimed were
untimely submitted. The Final Decision turned on the Board's refusal to declare
there was an inconsistency between a Board regulation, N.J.A.C. 17:1-3.1(b),
and a statute, N.J.S.A. 43:16A-15.1, which governs the time within which a
PFRS pension enrollment application must be submitted to the Division of
Pension and Benefits (the Division). For the reasons that follow, we affirm for
the reasons set forth in the Final Decision except for one firefighter for whom
we conclude Newark must pay an enrollment penalty under N.J.S.A. 43:16A -
15.1 for the untimely submission of his PFRS pension enrollment application.
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I.
Between October 2011 and November 2013, the City of Newark appointed
four classes of firefighters. On July 2, 2014, NFU's counsel wrote to the
Division's Enrollment Bureau questioning Newark's compliance with the
pension statutes regarding the firefighters' PFRS enrollment, and requested a
meeting to address these concerns. A few weeks later, counsel sent a follow-up
letter to the Enrollment Bureau, concerning the failure to address PFRS
enrollment status of numerous NFU members, and raising additional issues with
respect to enrollment of certain firefighters.
When counsel did not receive any response from the Division, counsel
wrote a letter on July 23 to the Director of the Division reiterating NFU's request
for a meeting to address ongoing enrollment issues in the PFRS, and included
the July 2 and July 23 letters. Neither the Enrollment Bureau nor the Director
responded to the letters or NFU's request for a meeting.
Almost a year later, on May 29, 2015, NFU filed a Superior Court
complaint against Newark and the Division. The complaint sought: 1) the
immediate PFRS enrollment of any unenrolled firefighters; 2) a declaration that
the firefighters' PFRS enrollment was untimely and a delinquent enrollment
penalty should be assessed against Newark; and 3) the declaration that the
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pension regulation, N.J.A.C. 17:1-3.1(b) permitting fourteen months for
enrollment without triggering a delinquency is null and void as contrary to law.
Following motions for summary judgment by both parties, the trial court
dismissed the action for lack of jurisdiction and directed that the Board hear the
matter upon application.
In response, NFU petitioned the Board, arguing that N.J.A.C. 17:1-3.1 is
inconsistent with N.J.S.A. 43:16A-15.1. N.J.S.A. 43:16A-15.1, states, in
relevant part:
a. In the case of any person who (1) was required to
become a member of the retirement system as a
condition of employment, and whose application for
enrollment in the retirement system or whose
application for transfer from one employer to another
within the system was filed beyond the effective date
for his compulsory enrollment in the system or his
transfer within the system or (2) is eligible for
membership on the basis of special legislation, such
person shall be required to purchase membership credit
for his compulsory coverage by paying into the annuity
savings fund the amount required by applying, in
accordance with section 15 of chapter 255 of the laws
of 1944, his full rate of contribution on his current base
salary subject to the retirement system for each year of
previous service during which he was required to have
been a member.
b. If more than 1 year has elapsed from the time that
contributions would have been required from such
person, 1/2 of the employee's cost, established by the
computation provided by subsection a. of this section,
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will be required of his employer and shall be included
in the next budget subsequent to the certification of this
special liability by the retirement system. The amount
certified by the system shall be payable by the employer
to the pension accumulation fund and shall be due and
owing to the system even if the employee is no longer
in the employ of the employer by the date such moneys
are to be paid to the system.
Further N.J.A.C. 17:1-3.1 states, in relevant part:
(a) Employers have a statutory responsibility to enroll
employees on a timely basis. Employers are required
to use the available online enrollment applications
provided through the Employer Pensions and Benefits
Information Connection (EPIC), to enroll newly hired
employees.
....
2. When an employer fails to file an application for
enrollment even though the employee and employer
have been advised of the compulsory nature of
enrollment, the employer shall pay the employee
contributions required as a result of a delayed
enrollment, as required by the governing statute and
pursuant to (b) and (c) below.
....
(b) For the purpose of establishing an employer's
liability for payment of the employee contributions on
delinquently filed enrollment applications, as well as
the member's requirement to prove insurability, one
year shall cover the 12-month period elapsing between
the employee's date of enrollment or transfer and the
date the enrollment application or report of transfer is
received by the Division.
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Specifically, NFU claimed that the employee's date of enrollment or
transfer as used in N.J.A.C. 17:1-3.1 is inconsistent with the requirement in
N.J.S.A. 43:16A-15.1 that employer delinquency is measured from the time that
contributions would have been required. Moreover, NFU argued that N.J.S.A.
43:16A-15.1 requires a delinquent enrollment penalty if pension deductions
were not started within one year from the compulsory date of contribution s,
whereas N.J.A.C. 17:1-3.1(b) only requires the application to be filed.
Prior to the Board's consideration of the matter, the Division reviewed the
circumstances regarding the enrollment of eleven of the fifty-seven firefighters
at issue, and on April 5, 2017, determined that Newark would be assessed a
delinquent enrollment penalty for only eight of the firefighters whose
applications were untimely filed by Newark. NFU challenged the finding that
there was no delinquent enrollment penalty for the other three firefighters –
Courtney Benjamin, Christopher Dugan and Danny Espaillat – claiming their
applications were incomplete when filed and were not completed within one
year thereafter.
On June 19, the Board denied NFU’s request, but noted that it would
consider, aside from the delinquent enrollment issue, equitable arguments
regarding the PFRS enrollment of forty-nine firefighters who had sought to
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apply the delinquent enrollment statute, N.J.S.A. 43:16A-15.1, to their
respective enrollments in the PFRS.
NFU requested a reconsideration of the Board's denial, seeking relief on
equitable grounds, independent of the delinquent enrollment issue. The Board,
however, denied the reconsideration request and issued a Final Administrative
Determination (Final Decision) affirming its June 19 determination that there
should be no enrollment penalty for forty-nine firefighters because N.J.A.C.
17:1-3.1(b) is consistent with N.J.S.A. 43:16A-15.1.
II.
Essentially repeating the arguments it made before the Board – that
N.J.A.C. 17:1-3.1 is inconsistent with N.J.S.A. 43:16A-15.1 and that Newark is
obligated to pay an enrollment penalty for forty-nine firefighters 1 – NFU appeals
arguing:
POINT I
THE BOARD OF TRUSTEES OF THE POLICE AND
FIREMEN’S RETIREMENT SYSTEM’S FINAL
ADMINISTRATIVE DETERMINATION WAS
ARBITRARY, CAPRICIOUS AND
UNREASONABLE BECAUSE IT INCORRECTLY
INTERPRETED THE GOVERNING STATUTE,
1
Initially, the number was fifty-seven firefighters. The Division, as recognized
in the Final Decision, determined that Newark should be assessed the penalty
for eight firefighters.
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[N.J.S.A.] 43:16A-15.1, TO REQUIRE THAT THE
EMPLOYER LIABILITY FOR AN ENROLLMENT
DELINQUENCY BE BASED ON WHETHER THE
APPLICATION FOR ENROLLMENT WAS WITHIN
1 YEAR OF THE COMPULSORY DATE OF
ENROLLMENT INSTEAD OF WHETHER
CONTRIBUTIONS COMMENCED WITHIN 1 YEAR
OF THE PFRS COMPULSORY ENROLLMENT
DATE.
POINT II
THE BOARD OF TRUSTEES OF THE POLICE AND
FIREMEN’S RETIREMENT SYSTEM’S FINAL
ADMINISTRATIVE DETERMINATION IS NOT
ENTITLED TO DEFERENCE BECAUSE THE
BOARD’S INTERPRETATION OF THE
GOVERNING STATUTE, [N.J.S.A.] 43:16A-15.1,
IMPERMISSIBLY ALTERS THE LEGISLATIVE
ENACTMENT AND FRUSTRATES THE POLICY
EMBODIED IN THE STATUTE.
POINT III
THE BOARD OF TRUSTEES OF THE POLICE AND
FIREMEN’S RETIREMENT SYSTEM’S FINAL
ADMINISTRATIVE DETERMINATION WAS
ARBITRARY, CAPRICIOUS AND
UNREASONABLE BECAUSE THE LEGISLATIVE
HISTORY OF THE GOVERNING STATUTE,
[N.J.S.A.] 43:16A-15.1, DOES NOT SUPPORT THE
PFRS BOARD’S DETERMINATION THAT
EMPLOYER LIABILITY FOR AN ENROLLMENT
DELINQUENCY IS BASED ON WHETHER THE
APPLICATION FOR ENROLLMENT WAS FILED
WITHIN 1 YEAR OF THE COMPULSORY DATE OF
ENROLLMENT.
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POINT IV
THE BOARD OF TRUSTEES OF THE POLICE AND
FIREMEN’S RETIREMENT SYSTEM’S FINAL
ADMINISTRATIVE DETERMINATION WAS
ARBITRARY, CAPRICIOUS AND
UNREASONABLE BECAUSE [N.J.A.C.] 17:1-3.1 IS
INCONSISTENT WITH THE GOVERNING
STATUTE, [N.J.S.A.] 43:16A-15.1, AND THE
BOARD RELIED ON [N.J.A.C.] 17:1-3.1 IN
REJECTING THE NFU['S] REQUEST TO ASSESS
THE CITY OF NEWARK A DELINQUENCY FOR
ITS UNTIMELY ENROLLMENT OF CERTAIN
MEMBERS OF THE NFU.
POINT V
ASSUMING, ARGUENDO, THAT THE BOARD'S
INTERPRETATION OF THE STATUTE IS
CORRECT, AND THE DELINQUENCY IS
DETERMINED BASED ON 12 MONTHS BETWEEN
DATE OF COMPULSORY ENROLLMENT AND
DATE APPLICATION IS RECEIVED, THE
DIVISION OF PENSIONS AND BENEFITS MUST
ASSESS THE CITY OF NEWARK FOR THE
DELINQUENT ENROLLMENT OF THREE OR
MORE FIREFIGHTERS IN THE PFRS.
To determine whether the Board correctly decided that Newark was not
obligated to make delinquent enrollment penalties for forty-nine firefighters'
PFRS enrollment contributions because the city did not timely enroll them in
PFRS, requires us to consider the Board's interpretation of N.J.A.C. 17:1-3.1(b)
and N.J.S.A. 43:16A-15.1. In doing so, we must be guided by deferential
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principles of limited appellate review. "'An administrative agency's final quasi-
judicial decision will be sustained unless there is a clear showing that it is
arbitrary, capricious, or unreasonable, or that it lacks fair support in the record.'"
Russo v. Bd. of Trs., Police & Firemen's Ret. Sys., 206 N.J. 14, 27 (2011)
(quoting In re Herrmann, 192 N.J. 19, 27-28 (2007)).
"Generally, courts afford substantial deference to an agency's
interpretation of a statute that the agency is charged with enforcing."
Richardson v. Bd. of Trs., Police & Firemen's Ret. Sys., 192 N.J. 189, 196
(2007). "Such deference has been specifically extended to state agencies that
administer pension statutes[,]" because "'a state agency brings experience and
specialized knowledge to its task of administering and regulating a legislat ive
enactment within its field of expertise.'" Piatt v. Police & Firemen's Ret. Sys.,
443 N.J. Super. 80, 99 (App. Div. 2015) (quoting In re Election Law Enf't
Comm'n Advisory Op. No. 01-2008, 201 N.J. 254, 262 (2010)). We likewise
defer to an agency's interpretation of regulations within its implementing and
enforcing responsibility. See Utley v. Bd. of Review, Dep't of Labor, 194 N.J.
534, 551 (2008) (citations omitted). Nonetheless, we are not bound by an
agency's interpretation of law. Wnuck v. N.J. Div. of Motor Vehicles, 337 N.J.
Super. 52, 56 (App. Div. 2001).
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The primary purpose of "statutory interpretation is to determine and
'effectuate the Legislature's intent.'" State v. Rivastineo, 447 N.J. Super. 526,
529 (App. Div. 2016) (quoting State v. Shelley, 205 N.J. 320, 323 (2011)). We
initially consider "the plain 'language of the statute, giving the terms used
therein their ordinary and accepted meaning.'" Ibid. "We will not presume that
the Legislature intended a result different from what is indicated by the plain
language or add a qualification to a statute that the Legislature chose to omit."
Tumpson v. Farina, 218 N.J. 450, 467-68 (2014) (citing DiProspero v. Penn, 183
N.J. 477, 493 (2005)). When we do not conclude that the "plain reading of the
statutory language is ambiguous, . . . or leads to an absurd result," we refrain
from looking at "extrinsic evidence, such as legislative history, committee
reports, and contemporaneous construction in search of the Legislature's intent."
Id. at 468 (citing DiProspero, 183 N.J. at 492-93).
A.
Applying these principles, we affirm substantially for the reasons stated
by the Board in its Final Decision. The Board reasoned that:
[N.J.S.A.] 43:16A-15.1(a) refers to an individual
"whose application for enrollment in the retirement
system or whose application for transfer from one
employer to another within the system was filed beyond
the effective date for his compulsory enrollment in the
system or his transfer within the system." [N.J.S.A.]
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43:16A-15.1(b) measures the timeframe for delinquent
enrollment as one year "from the time that contributions
would have been required from such person."
[N.J.A.C.] 17:1-3.1(b) measures delinquent enrollment
as one year from "the employee's date of enrollment or
transfer" which is the same language as used in
[N.J.S.A.] 43:16A-15.1(a). Therefore, the statute and
regulation use consistent language. The statute and the
regulation both provide the employer with the same one
year to file an enrollment application to the Division.
Neither the statute nor the regulation requires pension
deductions to be taken within the year. The Board
noted that there were delays in Newark's responses to
the Division's request for additional information during
the enrollment process. However, these delays were
after the completed application was timely filed by
Newark. The information requested by the Division is
not part of the application itself, therefore, the Board
determined that the regulation is valid[,] and the
Division's application of the regulation is consistent
with the statute.
[(emphasis added).]
We discern no basis for disturbing the Board's decision and affirm substantially
for the reasons stated in the Final Decision. We add the following brief remarks.
The Board's decision is supported by a plain reading of the statute and
regulation. Contrary to NFU's contention, neither the statute nor the regulation
requires pension deductions to be taken within the year that the enrollment
application must be filed. The statute merely provides, "[i]f more than [one]
year has elapsed from the time that contributions would have been required . . .
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[,]" the employer must pay "[one-half] of the employee's cost[.]" N.J.S.A.
43:16A-15.1(b). Once the enrollment process is complete, the employee and
employer will receive a notice showing the date that pension deductions will
begin, the rate of contribution, and any back deductions due.
There is no dispute that enrollment contributions are owed starting on the
compulsory date of enrollment. The issue is determining when the clock starts
for the tolling of delinquent contributions. The one-year period referred to in
the statute determines the time that must elapse after pension contributions are
due before the Division may assess an enrollment penalty on the employer. It
has nothing to do with the time period required to file the enrollment application.
On the other hand, the regulation limits the time period to one year from the
compulsory enrollment date for the employer to file the enrollment application.
Simply put, the regulation is aligned with the legislative intent and is meant to
keep employers accountable. Furthermore, we agree with the Board's logic that
it makes sense for enrollment contributions to begin only when a member is
enrolled in PFRS because there are additional requirements such as training and
submitting proper medical certifications, other than the filing of the application
that needs to be fulfilled before an employee may be enrolled in PFRS.
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B.
Having determined the Board's interpretation of N.J.A.C. 17:1-3.1 and
N.J.S.A. 43:16A-15.1 is correct, we turn to NFU's argument that the Board
arbitrarily failed to impose a delinquent enrollment penalty for firefighters
Benjamin, Dugan and Espaillat for submitting their enrollment applications
more than a year after their compulsory enrollment date.
NFU maintains that despite the Division's three written requests to
Newark, advising that the enrollment applications for Benjamin and Dugan
could not be processed due to documents not provided by the city, their
completed applications were not received until December 11, 2014, beyond the
twelve-month period from the compulsory enrollment date of December 1, 2013.
Therefore, NFU contends the Board's failure to assess the city for Benjamin and
Dugan's delinquent filings was arbitrary and should be reversed. We disagree.
Based upon our review of the record, we are satisfied the credible
evidence supports the Board's decision that no enrollment penalty should be
imposed for Benjamin and Dugan because it received their completed
enrollment applications on May 28, 2014, five months after their December 1,
2013 compulsory enrollment date. The Board stresses that the delays occurred
after Newark timely filed the enrollment applications because of a holdup in
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receiving their medical certifications and the Division's request to Newark for
additional information. Given our deference to the Board's decision-making, we
discern no reason to disturb its ruling not to assess an enrollment penalty on
Newark for Benjamin and Dugan's enrollment applications.
With respect to Espaillat, we reach a different result and reverse the
Board's ruling that Newark should not have been penalized for tardy submission
of his enrollment application. NFU contends that a penalty was warranted as
Espaillat's enrollment application was received on May 10, 2015, more than one
year from his compulsory enrollment date of December 1, 2013. The Division
disagrees, contending his application was filed on May 28, 2014, within the one-
year deadline of December 1, 2013.
Based on the record before us, NFU is correct. Espaillat's enrollment
application shows a date stamp of May 10, 2015, not May 28, 2014. The Board
therefore erred in not assessing an enrollment penalty under N.J.S.A. 43:16A-
15.1 on Newark for its submission of Espaillat's application over one year after
his compulsory enrollment date. Accordingly, Newark must pay an enrollment
penalty for its untimely submission of Espaillat's application.
Affirmed in part, and reversed in part.
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