Fallon v. Board of Educ. of Scotch Plains-Fanwood School Dist., Union County, PLAINS-FANWOOD

• Decision Date: 06 May 1982
• Docket Number: PLAINS-FANWOOD
• Citation: 447 A.2d 607,185 N.J.Super. 142
• Parties: , 5 Ed. Law Rep. 506 Thomas J. FALLON and Ann Fallon, his wife, Plaintiffs, v. BOARD OF EDUCATION OF the SCOTCHSCHOOL DISTRICT, UNION COUNTY, Defendant.
• Court: New Jersey Superior Court

Page 142

185 N.J.Super. 142

447 A.2d 607, 5 Ed. Law Rep. 506

Thomas J. FALLON and Ann Fallon, his wife, Plaintiffs, v. BOARD OF EDUCATION OF the SCOTCH PLAINS-FANWOOD SCHOOL

DISTRICT, UNION COUNTY, Defendant.

Superior Court of New Jersey, Law Division,

Union County.

Decided May 6, 1982.

Ralph Neibart, West Orange, for plaintiffs.

Casper P. Boehm, Jr., Sayreville, for defendant.

FELLER, J. S. C. (retired and temporarily assigned on recall).

This is an action in lieu of prerogative writs wherein plaintiffs seek to recover interest on payments made for tuition and transportation for their daughter's education. There is no dispute as to any material fact.

Plaintiffs are the parents of Nadine Fallon (hereinafter Nadine) who was born on January 25, 1961. Nadine attended the public schools of defendant school district from September 1966 through February 1976.

On March 1, 1976 plaintiffs placed their daughter Nadine in the Jordan Day School in Carteret, New Jersey, a private day school for neurologically impaired children. The placement followed the refusal of defendant's child study team to change Nadine's classificationn from "multiply handicapped," with her primary handicap being educable mentally retarded, to "neurologically impaired," and defendant's insistence that Nadine attend its class for mentally retarded children wherein she had been placed by defendant since October 1973.

When plaintiffs' request for reimbursement of tuition and transportation expenses for Nadine's attendance at the Jordan Day School was rejected by defendant, a petition seeking reimbursement was submitted to the Commissioner of Education in April 1978. Submission of that petition was deferred until plaintiff Thomas J. Fallon had completed his term as a member of the defendant's board of education so as to avoid any question of conflict of interest.

A hearing pursuant to N.J.A.C. 6:28-1.9(j) was conducted on September 20, 25 and 28, and October 13, 1978, by classification officer Dr. Arthur Shapiro, which concluded that Nadine should be classified as neurologically impaired and placed in a class for neurologically impaired pupils. The opinion of Dr. Shapiro contained findings of fact which indicated numerous incidents of procedural irregularity and lack of responsiveness to Nadine's special education needs on the part of defendant.

The classification then concluded:

Based solely on the evidence submitted and the testimony presented, the classification officer finds that N. F. should be classified as neurologically impaired and placed in a class for neurologically impaired pupils.

The classification officer agrees with petitioners' contention that N. F.'s placement at the day school was not voluntary on their part but forced by respondent's refusal to program N. F. as a neurologically impaired pupil coupled with enforcement of the state attendance laws (R-52).

* * *

The classification officer hereby orders that petitioners be reimbursed for N. F.'s attendance at the day school for the period from March 1976 to June 1978, the amount awarded to be based upon the amount of tuition allowed to the school for pupils classified as neurologically impaired. In addition, transportation costs to petitioners for the actual amount expended by them should be reimbursed by respondent for the same period of time. It is noted that respondent provided N. F.'s transportation for one year as an accommodation to petitioners.

Respondent is also hereby ordered to provide N. F. with an educational program geared to her needs as a pupil classified as neurologically impaired. Respondent's basic child study team is to meet with petitioners to prepare an individualized education program in accordance with the rules now in effect ( N.J.A.C. 6:28-1.8). This program is to be developed within 60 days. N. F.'s placement is to be changed to respondent's class for neurologically impaired pupils in accordance with child study team recommendations, the results of the individualized education program meeting and this decision.

This decision shall be implemented without delay and be binding on all parties.

Subsequently defendant filed a notice of appeal from the decision of the classification officer. Defendant also made application for a stay of that decision which was essentially denied by Dr. Shapiro's decision of April 26, 1979. On appeal from the denial of defendant's motion, the Commissioner of Education stayed the payment of tuition and transportation costs incurred prior to January 5, 1979, the date of the classification officer's decision, but directed defendant to assume all such costs thereafter incurred by plaintiffs.

The Commissioner's decision on the merits of defendant's appeal was rendered on October 22, 1980. The Commissioner denied the petition of appeal and upheld in its entirety the decision of the classification officer. Specifically, the Commissioner ordered that plaintiffs be reimbursed the cost of tuition and transportation required by the classification officer. The Commissioner further ordered that defendant should "continue to pay for appropriate tuition and transportation charges incurred by educating N. F. (Nadine) at the day school involved so long as she is properly assigned there." Scotch Plains-Fanwood Dist. Bd. of Ed. v. A. F. and T. F. (Aug. 22, 1980).

Plaintiffs acknowledge receiving reimbursements from defendant as follows: $3,060 on October 23, 1979 (for tuition costs from January 5 through June 30, 1979); $625 on November 21, 1979 (for transportation costs from January 5 through June 30, 1979); $12,420 and $2,846 in November 1980 (for tuition and transportation costs, respectively, from March 1, 1976 through January 4, 1979). Plaintiffs claim that their acceptance of these monies was without prejudice to their claim for interest from the respective dates that plaintiff advanced these payments to the dates of reimbursement by defendant.

Plaintiffs' complaint in the present action was filed on July 16, 1981. Defendant filed its answer on September 16, 1981 pursuant to a stipulation extending time. The matter was pretried before this court on December 17, 1981. Plaintiffs' motion for summary judgment was made on January 26, 1982 in order to resolve the primarily legal issued presented in this action. Plaintiffs seek to recover interest from the dates they advanced the expenses to the dates of reimbursement by defendants at 12% a year, the rate currently prescribed R. 4:42-11, as well as costs of suit, including reasonable attorney's fees.

Defendant challenges the propriety of plaintiffs maintaining this action for prejudgment interest and asserts that since plaintiffs failed to raise this claim during the prior administrative hearings, this action should be barred by virtue of the entire controversy doctrine embodied in R. 4:27-1(b), and the doctrine of exhaustion of administrative remedies.

I--Exhaustion of Administrative Remedies

Whether defendant's claim is characterized in terms of "failure to exhaust administrative remedies" or in terms of the "entire controversy doctrine" the essence of its challenge is that plaintiffs, having failed to raise their claim for prejudgment interest in the prior administrative actions, may not now assert such claim in the Superior Court.

The Commissioner of Education has consistently held that he lacks the requisite subject matter jurisdiction to award punitive damages, counsel fees and interest, which "may properly be awarded only by the courts absent statutory provision granting such power to an administrative authority." North Bergen Fed. of Teachers, Local 1060 v. North Bergen Bd. of Ed., 75 S.L.D. 461, 467 (1975) ¹; accord Meisenbacher v. Newark Bd. of Ed., 80 S.L.D. --- (1980); Winter v. North Bergen Bd. of Ed., 75 S.L.D. 236 (1975) 1.

The doctrine of exhaustion of administrative remedies is set forth in R. 4:69-5 and is expressly subject to exception "where the interests of justice require otherwise." In Durgin v. Brown, 37 N.J. 189, 180 A.2d 136 (1962), our Supreme Court (at 202-203, 180 A.2d 136) recognized that "the requirement for the exhaustion of the administrative remedy is neither jurisdictional nor absolute in its terms." Rather, the rule vests discretion in the trial court to determine whether the interests of justice require that the process of administrative appeal be bypassed, and no rigid formula can be prescribed for the exercise of that discretion. Id. at 203, 180 A.2d 136. See, also, Atlantic City v. Laezza, 80 N.J. 255, 265, 403 A.2d 465 (1979); Garrow v. Elizabeth Gen'l. Hosp. & Disp., 79 N.J. 549, 561, 401 A.2d 533 (1979); Swede v. Clifton, 22 N.J. 303, 314- 316, 125 A.2d 865 (1956). Where administrative review would be "a futile gesture," it appears that exhaustion of administrative remedies should not be required. Honigfeld v. Byrnes, 14 N.J. 600, 604, 103 A.2d 598 (1954).

In the instant matter plaintiffs' entitlement to interest and costs involve the interpretation of legal questions and the exercise of judicial discretion. The Commissioner of Education is not clothed with the authority to determine plaintiffs' claims presented herein. Therefore, it does not appear that the interests of justice would be served by requiring plaintiffs to raise matters over which the administrative decision maker lacks the power to adjudicate.

II--Interest

The court, in addressing the plaintiff's claim for interest, notes the following general principles concerning such awards:

While interest is not given as damages where it is expressly reserved in the contract, or implied by the nature of a promise, where the right of interest is not established by contract, by statute or by judgment, it ordinarily comes as an allowance in the nature of damages, based on wrongful detention. The purpose of...