Board of Educ. of City of Newark, Essex County v. Levitt

• Decision Date: 29 November 1984
• Citation: 197 N.J.Super. 239,484 A.2d 723
• Parties: , 21 Ed. Law Rep. 875 BOARD OF EDUCATION OF the CITY OF NEWARK, ESSEX COUNTY, Respondent-Appellant and Cross-Respondent, v. Ruth LEVITT and Esther E. Sasloe, Petitioners-Respondents and Cross-Appellants.
• Court: New Jersey Superior Court — Appellate Division

Page 239

197 N.J.Super. 239

484 A.2d 723, 21 Ed. Law Rep. 875

BOARD OF EDUCATION OF the CITY OF NEWARK, ESSEX COUNTY Respondent-Appellant and Cross-Respondent, v. Ruth LEVITT and Esther E. Sasloe, Petitioners-Respondents and Cross-Appellants.

Superior Court of New Jersey Appellate Division.

Submitted Sept. 18, 1984.

Decided Nov. 29, 1984.

Louis C. Rosen, Newark, for respondent-appellant and cross-respondent (Dwayne C. Vaughn, Newark, on the brief).

Giblin & Giblin, Hackensack, for petitioners-respondents and cross-appellants (Michael P. Kemezis and Kenneth M. Bushell, Hackensack, on the brief).

Irwin I. Kimmelman, Atty. Gen., filed a Statement in Lieu of Brief on behalf of New Jersey State Board of Education (Regina A. Murray, Deputy Atty. Gen., on statement).

Before Judges PRESSLER, BRODY and HAVEY.

PER CURIAM.

The issue on this appeal is whether the Commissioner of Education is empowered to award post-judgment interest to a successful claimant who has been awarded a money judgment. We find that the Commissioner of Education has that power and accordingly reverse that portion of the State Board of Education's determination denying interest. Otherwise we affirm.

In 1971 petitioners Ruth Levitt and Esther E. Sasloe instituted proceedings with the Commissioner of Education (Commissioner) against the respondent Board of Education of the City of Newark (board). Essentially, petitioners argued that their assignment by the board as long-term substitute teachers from 1945 through 1961 improperly prevented them from acquiring tenure protection and also denied them proper placement on the teacher's salary guide, longevity increments, leaves of absence and other fringe benefits which should have accrued to them as regular teaching staff members. They sought compensation for the wages, fringe benefits and credits that they would have received had they been properly assigned. The Commissioner issued his decision on October 5, 1977. He adopted the findings of the hearing examiner, found that petitioners were regular full-time teachers during the years in question and ordered the board to compensate them for the back pay and benefits due to them. Although the board did not appeal from the Commissioner's decision, it failed to make the necessary calculations or to tender payment to petitioners in accordance with the Commissioner's decision. The board's attorney, however, assured petitioners that "payment was in the process," and on September 8, 1978, wrote to petitioners' attorney, advising him that "the sum due your clients respectively is Ruth Levitt $34,186.00 and Esther Sasloe $27,250.00." On April 30, 1979 he sent another letter with computations showing that the board owed $34,186 to Levitt and $26,500 to Sasloe. Despite these statements, the board made no tender of any sum to either petitioner. In view of the board's noncompliance with the Commissioner's order petitioners commenced an action in the Superior Court, Chancery Division to compel compliance. The trial court vacated the Commissioner's decision finding that he had misinterpreted the applicable school laws. Petitioners appealed to this court. We reversed, holding that the trial judge erred in permitting the collateral attack on the Commissioner's order. We also held that although the Commissioner's order of October 5, 1977 was a final order, it required further implementation since the Commissioner had not computed the sums actually due petitioners. We remanded to the Commissioner to make these findings.

On remand, the administrative law judge to whom the contested case was assigned, recommended the grant of summary judgment in favor of the petitioners in the amount of $34,186 to Levitt and $26,550 to Sasloe. The administrative law judge also recommended the award by the Commissioner of post-judgment interest. ¹ On February 5, 1983, the Commissioner accepted the findings and determinations of the administrative law judge but reversed the interest award, concluding "... that there is no statutory prescription for such awards...." He nevertheless observed that "... the Commissioner deplores in the strongest possible terms the cavalier treatment by the board of petitioners' claims and his decision herein not to award interest does not preclude petitioners from seeking such relief in the appropriate forum." The State Board of Education affirmed on the board's appeal. Respondent board appeals from the order granting summary judgment, and petitioners cross-appeal the denial of post-judgment interest.

We are satisfied that the board's contention that summary judgment should not have been granted fixing the amounts due petitioners is without merit. The decision by the State Board of Education affirming the summary judgment entered by the Commissioner is supported by sufficient credible evidence on the record as a whole. R. 2:11-3(e)(1)(D).

Petitioners contend on their cross-appeal that they are entitled to post-judgment interest on their award and that the Commissioner was empowered to allow such interest.

In considering petitioners' contentions, we must address two entirely separate issues. The first is whether and under what circumstances interest is allowable against a public body and the second is whether, to the extent it is allowable, it may be awarded by the Commissioner in the absence of express statutory authority.

In considering the susceptibility of a public body to an award of interest against it, a distinction must first be drawn between pre-judgment interest and post-judgment interest. Where private litigants are involved, the allowance of pre-judgment interest in contract and contract-like actions, even where a claim is liquidated, is not a litigant's right but rests rather in the court's discretion, required to be exercised in accordance with equitable principles and considerations. See Bak-A-Lum Corp. v. Alcoa Building Prod., 69 N.J. 123, 131, 351 A.2d 349 (1976). Where the debtor is a governmental agency and interest in the cause is not provided for by statute, particular circumspection in the granting of pre-judgment interest is required and a showing of overriding and compelling equitable reasons must be made in order to justify the award. See Consolidated Police, etc., Pension Fund Commn. v. Passaic, 23 N.J. 645, 130 A.2d 377 (1957). See also City of East Orange v. Palmer et al., 52 N.J. 329, 245 A.2d 327 (1968); Fasolo v. Div. of Pensions, 190 N.J.Super. 573, 464 A.2d 1180 (App.Div.1983); Youth & Family Serv. Div. v. Middlesex Cty., 188 N.J.Super. 1, 455 A.2d 1119 (App.Div.1982); East Orange v. Bd. of Chosen Freeholders, Essex Cty., 89 N.J.Super. 493, 215 A.2d 566 (App.Div.1965).

An adjudicated liability, however, obviously stands on a completely different footing from an unadjudicated claim of liability. Thus, in the case of private litigants, the grant of post-judgment interest is ordinarily not an equitable matter within the court's discretion but is, as a matter of long-standing practice, routinely allowed. See, e.g., Erie Railway Co. v. Ackerson, 33 N.J.L. 33 (Sup.Ct.1868); Simon v. N.J. Asphalt & Paving Co., 123 N.J.L. 232, 8 A.2d 256 (Sup.Ct.1939). This practice has been codified by court rule. See R. 4:42-11(a), providing for post-judgment interest on all judgments, awards and orders for the payment of money "except as otherwise ordered by the court and except as otherwise may be provided by law." The rule, by its own terms, applies to all money judgments irrespective of the identity and status of the judgment debtor. Nor is there any general statute prohibiting post-judgment interest against public bodies. They are, as a matter of customary practice, subject to post-judgment interest unless the court for good cause otherwise orders. Thus, it is clear that in a contract or contract-like action the court may, in appropriate circumstances, award pre-judgment interest against a public body and will ordinarily award post-judgment interest against a public agency absent a showing of good cause to the contrary.

The question then is whether in awarding money damages to a petitioner, the Commissioner has the same power with respect to both pre-judgment interest and post-judgment interest as the court has in entering a money judgment. We conclude that although this power has not been expressly accorded to the Commissioner by statute, it is nevertheless an ancillary power which he must be deemed to have in order fully to execute his statutory responsibility to hear and determine all controversies and disputes arising out of the school laws. See N.J.S.A. 18A:6-9.

It is a well-settled principle of administrative law that the statutory powers accorded an agency "should be liberally construed to permit the agency to achieve the task assigned to it, and that such administrative agency has such implied incidental powers as may reasonably be adapted to that end." In re Suspension of Heller, 73 N.J. 292, 303, 374 A.2d 1191 (1977), quoting In re Com'r of Bank. v. Parkwood Co., 98 N.J.Super. 263, 271-272, 237 A.2d 265 (App.Div.1967). These incidental powers have been extended to the fashioning of remedies, including the award of specific items of compensatory damages not expressly enumerated by statute. See Zahorian v. Russell Fitt Real Estate Agency, 62 N.J. 399, 301 A.2d 754 (1973); Jackson v. Concord Company, 54 N.J. 113, 253 A.2d 793 (1969). Applying this principle here, we are satisfied that N.J.S.A. 18A:16-9 vests jurisdiction in the Commissioner to award post-judgment interest as incidental to his power to fix money judgments.

The Supreme Court has repeatedly "reaffirmed the great breadth of the Commissioner's powers," recognizing that he has "fundamental and indispensable jurisdiction over all disputes and controversies arising under the school laws. N.J.S.A. 18A:6-9." Hinfey v. Matawan Regional Board of Education, 77 N.J. 514, 525, 391 A.2d 899 (1978). His jurisdiction...