DARREN M. NANCE VS. STATE OF NEW JERSEY, DEPARTMENT OF Â TREASURY, DIVISION OF PENSION AND BENEFITS(BOARD OF TRUSTEES, POLICE AND FIREMEN'S RETIREMENT SYSTEM)

NOT FOR PUBLICATION WITHOUT THE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-2973-15T3
DARREN M. NANCE,
Petitioner-Appellant,
v.
STATE OF NEW JERSEY, DEPARTMENT
OF TREASURY, DIVISION OF PENSION
AND BENEFITS,
Respondent-Respondent.
_______________________________
Submitted May 25, 2017 – Decided June 30, 2017
Before Judges O'Connor and Mawla.
On appeal from the Board of Trustees, Police
and Firemen's Retirement System, PFRS No.
56220.
Darren M. Nance, appellant pro se.
Christopher S. Porrino, Attorney General,
attorney for respondent (Melissa H. Raksa,
Assistant Attorney General, of counsel;
Danielle P. Schimmel, Deputy Attorney General,
on the brief).
PER CURIAM
Appellant Darren Nance appeals from a February 8, 2016
administrative determination by the Board of Trustees, Police and
Firemen's Retirement System (the Board) denying his request to
waive interest payments on loans he took against his pension.
Because we find no merit in appellant's arguments, we affirm the
Board's determination.
The following facts are taken from the record. Appellant was
employed as a police officer, first with Essex County and then
with the City of Newark, and enrolled in the Police and Firemen's
Retirement System (PFRS) on February 1, 1986. Appellant took nine
PFRS loans over the course of his career, which totaled $12,991.32
as of September 3, 1996, the date he was terminated from
employment. Appellant has made no payments on the loans since the
date of his termination.
On December 18, 1997, appellant filed suit contesting his
termination, asserting violations of the Federal Civil Rights Act,
42 U.S.C.A. § 1983, and the New Jersey Law Against Discrimination,
N.J.S.A. 10:5-1 to -49. On June 24, 2010, a federal jury found
in favor of appellant, awarding him $350,000 in compensatory and
$250,000 in punitive damages. Appellant was not reinstated as a
police officer and subsequent appeals from the determination to
not reinstate him were denied by the Civil Service Commission.
Notwithstanding, appellant reached a settlement with the City of
Newark, resulting in the dismissal of all disciplinary charges,
restitution of back pay, and an official designation his employment
2 A-2973-15T3
concluded by his resignation rather than termination. All
litigation with the City of Newark concluded as of February 4,
2015.
On July 17, 2015, appellant applied to the Division of Pension
and Benefits for deferred retirement benefits, which notified him
of his outstanding loan balance and the interest accrued thereon.
Appellant made no loan payments and, instead, applied for a waiver
of the accrued interest on the loans; that application was denied
by the Division. Appellant appealed from the Division's
determination, but the Board upheld the denial of the waiver.
Appellant now challenges the February 8, 2016 Board
determination. The Board concluded he was not eligible for a
waiver of the interest on the loans because N.J.S.A. 43:16A-16.1,
16.2 and N.J.A.C. 17:4-4.4, which govern the terms of PFRS loans,
mandate the accrual of four percent per annum interest on unpaid
loan balances, and require the satisfaction of loan balances
together with interest upon retirement. The Board found appellant
agreed to pay the interest, and each loan application he completed
contained a notice interest would accrue on the loans. The Board
further found a waiver inappropriate because appellant received
the $600,000 jury award and $18,438.46 in back pay from the
settlement of the disciplinary charges. The Board also noted
appellant enjoyed use of the borrowed funds.
3 A-2973-15T3
On appeal, appellant asserts the Board misapplied the law,
maintaining N.J.S.A. 43:16A-16.1, 16.2 and N.J.A.C. 17:4-4.4 do
not "prohibit" the Board from granting an employee a waiver of
accrued interest if the employee proved the City of Newark violated
his civil rights. Appellant also argues the lack of minority
representation on the Board "negatively impacted" the outcome.
Lastly, appellant asserts the Board's determination was arbitrary
and capricious because the Board denied him a hearing, and treated
him disparately from another PFRS member appearing before it on
the same day as appellant.
Our review of agency determinations is limited. In re
Stallworth, 208 N.J. 182, 194 (2011). We generally "defer to the
specialized or technical expertise of the agency charged with
administration of a regulatory system." In re Virtua-W. Jersey
Hosp. Voorhees for a Certificate of Need, 194 N.J. 413, 422 (2008).
We will "not disturb an administrative agency's determinations or
findings unless there is a clear showing that (1) the agency did
not follow the law; (2) the decision was arbitrary, capricious,
or unreasonable; or (3) the decision was not supported by
substantial evidence." Ibid. "The burden of demonstrating that
the agency's action was arbitrary, capricious or unreasonable
rests upon the [party] challenging the administrative action." In
4 A-2973-15T3
re Arenas, 385 N.J. Super. 440, 443-44 (App. Div.), certif. denied,
188 N.J. 219 (2006).
We first address appellant's claim the Board erred by relying
on N.J.S.A. 43:16A-16.1, 16.2 and N.J.A.C. 17:4-4.4 when it denied
his request to waive the accrued interest on his PFRS loans.
Appellant asserts these statutes and the regulation do not apply
to him because he applied to "freeze" his PFRS account, when his
civil rights lawsuit commenced. Appellant asserts he received no
response to his request to freeze this account until he submitted
his retirement application in 2015. He asserts he "reasonably
believed that the PFRS Board had acted upon his request to
deactivate his PFRS account." Thus, appellant argues:
[t]here is no known case law that the PFRS
could cite which would prohibit the Board of
Trustees from granting a waiver on outstanding
loan interest, particularly where, as in the
instant matter, the appellant had been the
proven victim of both Federal and State law
violations by a law enforcement agency.
Appellant's claim requires we examine both the statutory and
the regulatory provisions challenged to determine whether the
Board arbitrarily, capriciously or unreasonably applied them. "We
interpret a regulation in the same manner we would interpret a
statute." US BANK, N.A. v. Hough, 210 N.J. 187, 199 (2012). Our
analysis begins with the plain language of the regulation in
question. State v. Gelman, 195 N.J. 475, 482 (2008) (citing
5 A-2973-15T3
DiProspero v. Penn, 183 N.J. 477, 492 (2005)). "The Legislature's
intent is the paramount goal when interpreting a statute and,
generally, the best indicator of that intent is the statutory
language." DiProspero, supra, 183 N.J. at 492. To determine the
intent, we give the words of the regulation their "ordinary and
common significance." Lane v. Holderman, 23 N.J. 304, 313 (1957).
"Only if the statutory language is susceptible to 'more than one
plausible interpretation' do we turn to such extrinsic aids as
legislative history for help in deciphering what the Legislature
intended." Gelman, supra, 195 N.J. at 482 (quoting DiProspero,
supra, 183 N.J. at 492-93).
N.J.S.A. 43:16A-16.1 states:
Any member who has at least [three] years of
service to his credit for which he has
contributed as a member may borrow from the
retirement system, an amount equal to not more
than [fifty percent] of the amount of his
aggregate contributions, but not less than
[fifty dollars]; provided that the amount so
borrowed, together with interest thereon, can
be repaid by additional deductions from
salary, not in excess of [twenty-five percent]
of the member’s salary, made at the time the
salary is paid to the member. The amount so
borrowed, together with interest on any unpaid
balance thereof, shall be repaid to the
retirement system in equal installments by
deductions from the salary of the member at
the time the salary is paid or in such lump
sum amount to repay the balance of the loan
but such installments shall be at least equal
to the member's rate of contribution to the
retirement system and at least sufficient to
6 A-2973-15T3
repay the amount borrowed with interest
thereon. Not more than two loans may be
granted to any member in any calendar year.
Notwithstanding any other law affecting the
salary or compensation of any person or
persons to whom this act applies or shall
apply, the additional deductions required to
repay the loan shall be made.
The rate of interest for a loan requested by
a member prior to the effective date of
[N.J.S.A. 43:16A-16.1 and 16.2 and N.J.A.C.
17:4-4.4] shall be [four percent] per annum
on any unpaid balance thereof. . . .
Loans shall be made to a member from his
aggregate contributions. The interest earned
on such loans shall be treated in the same
manner as interest earned from investments of
the retirement system.
N.J.S.A. 43:16A-16.2 provides:
In the case of any member who retires without
repaying the full amount so borrowed, the
Division of Pensions and Benefits shall deduct
from the retirement benefit payments the same
monthly amount which was deducted from the
compensation of the member immediately
preceding retirement until the balance of the
amount borrowed together with the interest is
repaid. In the case of a pensioner who dies
before the outstanding balance of the loan and
interest thereon has been recovered, the
remaining balance shall be repaid from the
proceeds of any other benefits payable on the
account of the pensioner either in the form
of monthly payments due to his beneficiaries
or in the form of lump sum payments payable
for pension or group life insurance.
The applicable regulation, N.J.A.C. 17:4-4.4 also provides:
Interest will be calculated on a periodic
basis on the unpaid loan balance. If
7 A-2973-15T3
scheduled payments are not paid timely,
interest will be accrued and added to the
remaining outstanding loan balance. If, at
the end of the loan schedule, there is a
balance of less than [fifty dollars], it will
be written off. If the balance is equal to
or greater than [fifty dollars], the member
will be assessed.
Following consideration of appellant's argument in light of
the statutory language, we are not persuaded. Clearly, there is
no exception to the mandated accrual and payment of interest on
unpaid loans, other than for balances less than fifty dollars.
The plain language of the statutes and regulation supports the
Board's determination; appellant has failed to show the Board
determination was arbitrary, capricious, or unreasonable.
Likewise, it was not arbitrary, capricious, or unreasonable
for the Board to deny appellant's request for a waiver based on
the commencement of his civil rights suit. As respondent notes,
the Board was not a party to his suit and the claims therein have
no bearing on his separate obligation to the PFRS to repay the
loans, including any accrued interest.
Although it is not entirely clear from appellant's brief, he
seemingly argues the Board was estopped from enforcing the interest
accrual because the PFRS handbook mandates loans must be paid
within five years. He also asserts an estoppel-like argument
because PFRS never declared the loans to be in default as indicated
8 A-2973-15T3
in its handbook. However, as noted by respondent, appellant's
claim the loans were payable within five years of issuance under
N.J.A.C. 17:4-4.9 ignores the fact the regulation, adopted in
2011, does not apply to appellant, who concluded his employment
in 1996. Also, the regulation contains no language limiting PFRS's
ability to collect loans beyond five years. In fact, the opposite
is true, as unpaid loans are deemed distributions, which are
reported to the IRS and would subject appellant to further interest
and penalties. See 26 U.S.C.A. § 72(p).
Moreover, our Supreme Court has stated the language of a
handbook does not trump statutory authority to the contrary. See
Golden v. Cty. of Union, 163 N.J. 420, 432 (2000) (holding an
employee handbook requiring a disciplinary hearing did not
supersede a prosecutor's statutory at will right to retain or
terminate assistant prosecutors serving at the former's pleasure).
Thus, appellant's claim the handbook created rights superior to
the plain language of the statutory and regulatory requirements
governing PFRS loans is misplaced.
Lastly, appellant's claim the Board's racial makeup
influenced its determination and his suggestion the Board treated
his matter disparate from another PFRS member is unsupported by
any facts in the record before us, and thus, is without sufficient
9 A-2973-15T3
merit to warrant discussion in a written opinion. R. 2:11-
3(e)(1)(E).
Affirmed.
10 A-2973-15T3