Masse v. Board of Trustees, Public Emp. Retirement System

• Decision Date: 04 August 1980
• Citation: 175 N.J.Super. 325,418 A.2d 1282
• Parties: Victor J. MASSE, Appellant, v. BOARD OF TRUSTEES, PUBLIC EMPLOYEES' RETIREMENT SYSTEM, Respondent.
• Court: New Jersey Superior Court — Appellate Division

Page 325

175 N.J.Super. 325

418 A.2d 1282

Victor J. MASSE, Appellant, v. BOARD OF TRUSTEES, PUBLIC EMPLOYEES' RETIREMENT SYSTEM, Respondent.

Superior Court of New Jersey, Appellate Division.

Argued Feb. 4, 1980.

Decided Aug. 4, 1980.

Robert A. Coogan, Brielle, for appellant.

Prudence H. Bisbee, Deputy Atty. Gen., for respondent (John J. Degnan, Atty. Gen., attorney; Erminie L. Conley, Asst. Atty. Gen., of counsel).

Before Judges BISCHOFF, BOTTER and MORTON I. GREENBERG.

The opinion of the court was delivered by

BOTTER, J. A. D.

Based on his conviction for crimes of moral turpitude the Board of Trustees of the Public Employees' Retirement System (hereafter PERS) declared appellant's service as a public employee prior to January 31, 1977 "dishonorable" for the purpose of computing pension credit, thus disallowing the credit he had earned for service before that date. The PERS board considered it immaterial that the crimes in question, impairing the morals of a minor, were unrelated to appellant's public employment as assistant superintendent (foreman) of the Water and Sewer Department of the Borough of Highlands and that appellant was continued in that position after his conviction. The board's decision is in keeping with case law previously established by this court. Nevertheless, finding that we are not bound by prior decisions of our Supreme Court on this precise issue, we have reexamined the underlying principles and reach a different conclusion. Appellant began working for the Borough of Highlands in 1947 and was enrolled in PERS as of January 1, 1955. As a veteran he received 61/2 years of credit for employment with the borough prior to 1955. In March 1976 appellant was indicted for acts of debauching or impairing the morals of a child under 16 (N.J.S.A. 2A:96-3) and contributing to the delinquency of a child (N.J.S.A. 2A:96-4) on several dates in March and April 1975. Pursuant to a plea agreement, on January 31, 1977 appellant entered guilty pleas to two counts of impairing the morals of a minor. He was given a suspended sentence. Although he was permitted to continue working for the borough, the PERS board annulled his pension rights earned before January 31, 1977 on the ground that his prior service was rendered "dishonorable" by the commission of crimes of moral turpitude. The board ruled however, that his public service rendered thereafter would be deemed "honorable." ¹ In effect, appellant's prior membership was to be terminated accompanied by a refund of his own pension contributions, and a new membership was to be commenced.

The board's determination followed its administrative practice of long standing. It was derived from the principle expressed in Plunkett v. Hoboken Bd. of Pension Comm'rs, 113 N.J.L. 230, 232, 173 A. 923 (Sup.Ct.1934), aff'd on opinion below, 114 N.J.L. 273, 176 A. 341 (E. &amp A.1935), namely, that honorable service is the sine qua non for a public pension. Accordingly, the board holds that a public employee forfeits his pension rights by committing a crime of moral turpitude even if the crime is unrelated to his public employment. Gauli v. Police and Firemen's Retirem. Sys. Bd. of Trustees, 143 N.J.Super. 480, 482, 363 A.2d 911 (App.Div.1976). The general rule was stated by our Supreme Court in Makwinski v. State, 76 N.J. 87, 90, 385 A.2d 1227 (1978), in the following terms: pension rights are forfeited (a) for criminal conduct touching the administration of the public employee's office or position, and (b) for criminal conduct involving moral turpitude though unrelated to the public employment. When a member of PERS is convicted of a crime and continues or is reemployed in public employment, PERS board's practice has been to determine whether the crime involves moral turpitude. If it does, all service performed prior to the date of conviction is deemed tainted and disqualified for pension purposes. However, as the decision below stated, employment after the conviction "is deemed honorable" and is credited towards a pension.

Our Supreme Court has not squarely decided the issue presented in this case. Although the general rule was acknowledged without comment by the Supreme Court in Makwinski v. State, supra, the statement in Makwinski was dictum to the extent that it applied to crimes unrelated to public employment. In Makwinski the police chief's conviction for misconduct in office constituted wrongdoing related to his public employment, and the rule requiring forfeiture of pension rights for a crime of moral turpitude unrelated to one's employment was not involved.

The rule in question was first formulated in Ballurio v. Castellini, 29 N.J.Super. 383, 102 A.2d 662 (App.Div.1954), and was accepted by this court in Gauli, supra. In Ballurio, a street department foreman was suspended from employment because he had been charged with committing an illegal abortion. Prior to the hearing of his removal from employment he filed an application for retirement, but it was not processed. After he was convicted his dismissal from employment was made final. Holding that "honorable" service is "implicit" in every public pension statute, the court said:

A pension is a bounty springing from the appreciation and graciousness of the sovereign; it is an inducement to conscientious, efficient and honorable service. And its utility would be destroyed if a person who is properly subject to discharge because of guilt of a crime involving moral turpitude can be said to have an indefeasible claim to a pension simply because he has served the required length of time and reached the necessary age and happens to win a headlong race to file his application for retirement before the public authorities can try him on the charges pending against him arising from such crime. (At 389, 102 A.2d at 666.)

The court then reasoned that Ballurio was deprived of the privilege of obtaining a pension from the time his employment was suspended until the criminal proceedings terminated and his dismissal became final. Since he was properly removed from office before his pension was granted, the court held he was not entitled to the pension. In Gauli, supra, this court cited Ballurio for the principle that the commission of a crime of moral turpitude unrelated to public employment forfeits one's pension rights, but the case was remanded to determine whether unlawful possession of a weapon constituted such a crime.

The cases which served as the apparent source of the rule and introduced the concept of moral turpitude as a disqualifying factor, Plunkett v. Hoboken Bd. of Pension Comm'rs, supra, 113 N.J.L. at 233, 173 A. 923 and McFeely v. Hoboken Bd. of Pension Comm'rs, 1 N.J. 212, 218, 62 A.2d 686 (1948), both involved crimes related to the pensioner's public employment. In Plunkett the crime was embezzlement of money from the Hoboken Firemen's Relief Association by a fire department employee, constituting "misconduct, in violation of departmental rules and regulations." 113 N.J.L. at 231, 173 A. at 923. McFeely involved a chief of police who was indicted for nonenforcement of gambling laws and conspiracy to "oppress" and "persecute" other members of the police force. 1 N.J. at 217, 62 A.2d 686. Plunkett held that pension rights do not become "vested" merely by the passage of years of service. 113 N.J.L. at 233, 173 A. 923. The court reasoned that the rule was needed to prevent misconduct after an employee had attained the requisite minimum credits for a pension. The McFeely court held that there was an implied power to suspend action on a pension claim pending the outcome of criminal proceedings which it found consistent with R.S. 2:160-9, now, N.J.S.A. 2A:135-9. This statute provides for forfeiture of an elective or appointive office or position upon conviction of a crime "touching the administration" of (one's) office or position, or which involves moral turpitude, . . . ."

An employee may be subject to discharge for conduct unbecoming a public employee, such as in Ballurio v. Castellini, supra, even if the wrongful conduct does not touch upon the duties of the public office or position involved. See N.J.S.A. 2A:135-9. Confidence in government could be shaken if a public employee in a sensitive position is continued in office after being convicted of a crime of moral turpitude simply because the crime was unrelated to public employment. The question here is whether a crime of moral turpitude should work a forfeiture of pension rights acquired through years of faithful and honorable service. In Ballurio the court found that the employee's discharge from employment took effect before the pension had been granted. But Mount v. Pub. Employees' Retirem. Sys. Trustees, 133 N.J.Super. 72, 335 A.2d 559 (App.Div.1975), held that a pension that had been granted could be suspended upon the discovery of criminal activity related to and committed in the course of the pensioner's prior public employment. We agree that the issue should not turn on the timing of the pension application. However, in our view a public employee who has earned pension rights through years of faithful public service should receive those rights even if he has been derelict in his private life. Here punishment for the crime has been determined by standards of criminal justice. To require the forfeiture of pension rights in addition to the criminal sanction is a harsh and arbitrary penalty ² where the offense was unrelated to public employment and, in that sense, did not constitute dishonorable service and a betrayal of public trust.

Here, appellant, born in 1925, had been employed by the Borough of Highlands since 1947 and had almost 30 years of pension credit when he entered guilty pleas in 1977 to two crimes of impairing the morals of a minor contrary to N.J.S.A. 2A:96-3. Appellant had been suspended temporarily for three weeks in 1975 after the charges were filed, but he was reinstated and has continued in employment. ³ The...