Bueno v. Bd. of Trustees

• Decision Date: 29 September 2011
• Citation: 27 A.3d 1237,271 Ed. Law Rep. 1030,422 N.J.Super. 227
• Parties: Bertha BUENO, Appellant,v.BOARD OF TRUSTEES, Teachers' Pension and Annuity Fund, Division of Pension and Benefits, Respondent.
• Court: New Jersey Superior Court

422 N.J.Super. 227

27 A.3d 1237

271 Ed. Law Rep. 1030

Bertha BUENO, Appellant,

v.BOARD OF TRUSTEES, Teachers' Pension and Annuity Fund, Division of Pension and Benefits, Respondent.

Superior Court of New Jersey, Appellate Division.

Argued March 14, 2011.Decided Sept. 29, 2011.

Samuel J. Halpern, West Orange, argued the cause for appellant.Jeff S. Ignatowitz, Deputy Attorney General, argued the cause for respondent (Paula T. Dow, Attorney General, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel; Mr. Ignatowitz, on the brief).Before Judges A.A. RODRIGUEZ, C.L. MINIMAN and LeWINN.

The opinion of the court was delivered by

C.L. MINIMAN, J.A.D.

Bertha Bueno appeals from final agency action of the Board of Trustees (the Board) of the Teachers' Pension and Annuity Fund, Division of Pensions and Benefits (the Division) denying her application for retroactive service retirement benefits as untimely because it was filed more than thirty days after the Board denied her application for ordinary disability retirement benefits. We now reverse.

The facts relevant to Bueno's application for ordinary disability retirement benefits and the issues surrounding the Board's denial of those benefits are described in our earlier decision respecting same. Bueno v. Bd. of Trs., Teachers' Pension & Annuity Fund, 404 N.J.Super. 119, 960 A.2d 787 (App.Div.2008), certif. denied, 199 N.J. 540, 973 A.2d 944 (2009). We need not recount them here.

However, we add the following facts. In denying ordinary disability retirement benefits on November 2, 2006, the Board advised Bueno as follows:

However, with your age or years of service you do qualify for a [s]ervice retirement benefit ... effective July 1, 2006, provided you file the enclosed application within 30 days from the date of this Board decision or effective date of retirement, whichever is later. The acceptance by you of a [s]ervice retirement will not prejudice an appeal of the Board's denial of [o]rdinary [d]isability retirement benefits.

After reviewing our decision but before the Supreme Court denied certification, Bueno applied on February 5, 2009, for service retirement benefits effective March 1, 2009. After the Supreme Court denied certification, Bueno wrote to the Board on June 17, 2009, requesting that her service retirement benefits be paid retroactive to the date of her application for ordinary disability retirement benefits, i.e., as of July 1, 2006. She advised the Board that she had been told her paperwork was in order in May 2006, that the only issue at that time was the amount of pension to be paid, and that her service retirement date would thus be July 1, 2006.

Shortly thereafter, Bueno's counsel wrote to the Division on June 22, 2009, advocating on her behalf and asserting that she had been distraught over the denial of ordinary disability retirement benefits and firmly convinced that she would prevail on appeal, leading to her failure to file within thirty days of the initial denial of benefits. He also pointed out that the language requiring such an application within thirty days was not “underlined, capitalized or in bold[,] which would in no uncertain terms have made clear her obligation to affirmatively file a service retirement application.”

On July 10, 2009, the Division rejected Bueno's position relying on the Board's November 2006 letter requiring an application within thirty days. The Division noted that Bueno's application for service retirement benefits had not been filed until February 5, 2009. “In accordance with our rules and regulations, an application must be on file prior to the effective date of retirement. Therefore, the earliest possible retirement date available is March 1, 2009.”

On July 17, 2009, Bueno appealed the Division's determination to the Board, asserting that

the stress of leaving my job and the legal situation really left me quite shaken and unnerved and I neglected to handle this element. I always thought that my pension would be my pension and that my rights were reserved because I was contesting the denial of the disability claim. I was distraught and very overwhelmed by the possibility of a lengthy legal case and the possibility of not being able to return to my beloved teaching career.

The Board rendered an initial decision on August 6, 2009, denying Bueno's appeal based on N.J.A.C. 17:3–6.2(a), which provides that a retirement allowance is not due and payable until thirty days after the later of the date of approval or effective date of retirement, and N.J.A.C. 17:3–6.3(a), providing that “a member shall have the right to withdraw, cancel or change an application for retirement at any time before the member's retirement allowance becomes due and payable.” Relying on its November 2, 2006, letter, the Board reasoned that Bueno's application to change her retirement type should have been received no later than December 2, 2006. The Board found that Bueno's reasons for a late application to change were insufficient to cure the late application, adding that it had “no authority to approve [her] request for a retroactive retirement date change from March 1, 2009 to July 1, 2006.”

Bueno's counsel wrote to the Board on September 15, 2009, disagreeing with its decision. He pointed out that the thirty-day conversion requirement did not appear in any statute or regulation and asserted that the Board's practice was arbitrary, capricious, and inconsistent with Fiola v. State, Dep't of Treasury, 193 N.J.Super. 340, 474 A.2d 23 (App.Div.1984). He did not request a hearing as the facts were undisputed.

The Board issued its final administrative decision on October 30, 2009. First, the Board found that no hearing was required as only questions of law were presented. Secondly, the Board concluded that it could not grant retroactive service retirement benefits based on the provisions of N.J.S.A. 18A:66–43 and N.J.A.C. 17:3–6.1, –6.2(a), and –6.3(a). It noted that it had twice advised Bueno that she had to file an application for such benefits by December 2, 2006, in order to have them retroactive to July 1, 2006, yet she failed to comply with that requirement. As such, her application for a retirement date prior to March 1, 2009, was again denied. This appeal followed.

Bueno argues “that the Board acted arbitrarily and capriciously by refusing to authorize a service retirement pension retroactive to the date of [her] disability retirement claim.” Further, the Board's decision was “contrary to the legislative intent” because “[n]either the controlling statute ... nor the implementing regulations restrict a member's conversion privileges to 30 days or less.” Additionally, even if the practice is valid, she was unable to make an informed choice about her pension options at the time in question.

The Board responds that it properly denied Bueno's request for retroactive service retirement benefits beginning as of the date she filed her application for disability retirement benefits. It urges that “[t]he statutes and regulations do not allow for a member to receive a retirement benefit until [an] application is filed, and do not allow for retroactive benefits.” Further, Bueno “was informed of her eligibility for a [s]ervice retirement ... on the date she was denied her [o]rdinary [d]isability retirement” but did not file an application until February 2009.

In reply, Bueno argues that “the issue in this case is not whether a member is entitled to retroactive pension benefits” but rather “whether the Board has arbitrarily restricted the time within which a member whose application for a disability retirement has been denied to exercise his or her conversion privilege to a service retirement.” The Board's “informal practice of limiting the conversion period to 30 days” is not supported by governing statutes, regulations, or case law. Because she had filed an appeal from an adverse decision concerning her disability retirement, “her right to convert to a service retirement pension utilizing the original retirement date should ... remain intact during the pendency of the appeal....”

The judicial role in reviewing decisions of administrative agencies is restricted to the following four inquiries:

(1) whether the agency's decision offends the State or Federal Constitution; (2) whether the agency's action violates express or implied legislative policies; (3) whether the record contains substantial evidence to support the findings on which the agency based its action; and (4) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors.

[ George Harms Constr. Co. v. N.J. Tpk. Auth., 137 N.J. 8, 27, 644 A.2d 76 (1994).]

Accordingly, “[o]ur function is to determine whether the administrative action was arbitrary, capricious or unreasonable.” Burris v. Police Dep't, W. Orange, 338 N.J.Super. 493, 496, 769 A.2d 1112 (App.Div.2001); see also Henry v. Rahway State Prison, 81 N.J. 571, 580, 410 A.2d 686 (1980). The burden of proof is upon Bueno. McGowan v. N.J. State Parole Bd., 347 N.J.Super. 544, 563, 790 A.2d 974 (App.Div.2002); Barone v. Dep't of Human Servs., Div. of Med. Assistance & Health Servs., 210 N.J.Super. 276, 285, 509 A.2d 786 (App.Div.1986), aff'd, 107 N.J. 355, 526 A.2d 1055 (1987).

“Absent arbitrary, unreasonable or capricious action, the agency's determination must be affirmed.” Wnuck v. N.J. Div. of Motor Vehicles, 337 N.J.Super. 52, 56, 766 A.2d 312 (App.Div.2001). Additionally, “[i]t is settled that ‘[a]n administrative agency's interpretation of statutes and regulations within its implementing and enforcing responsibility is ordinarily entitled to our deference.’ ” Ibid. (quoting In re Appeal by Progressive Cas. Ins. Co., 307 N.J.Super. 93, 102, 704 A.2d 562 (App.Div.1997)). “Although we recognize that deference is generally given to an administrative agency charged...