S.L.W. v. N.J. Div. of Pensions & Benefits

• Decision Date: 24 June 2019
• Docket Number: A-32 September Term 2018,081723
• Citation: 238 N.J. 385,210 A.3d 898
• Parties: S.L.W., Petitioner-Appellant, v. NEW JERSEY DIVISION OF PENSIONS AND BENEFITS, Respondent-Respondent.
• Court: New Jersey Supreme Court

238 N.J. 385

210 A.3d 898

S.L.W., Petitioner-Appellant,

v.NEW JERSEY DIVISION OF PENSIONS AND BENEFITS, Respondent-Respondent.

A-32 September Term 2018

081723

Supreme Court of New Jersey.

Argued April 24, 2019

Decided June 24, 2019

John F. Pilles, Jr., Mount Holly, argued the cause for appellant (John F. Pilles, Jr., on the brief).

Amy Chung, Trenton, Deputy Attorney General, argued the cause for respondent (Gurbir S. Grewal, Attorney General, attorney; Juliana C. DeAngelis, Trenton, Deputy Attorney General, on the brief).

JUSTICE TIMPONE delivered the opinion of the Court.

When members of the Police and Firemen's Retirement System (PFRS) die after retirement, their children and widowed spouses are eligible to receive survivor benefits under N.J.S.A. 43:16A-12.1. S.L.W., an adult woman with disabilities, sought survivor benefits after her father, a longtime member of the New Jersey law enforcement community, passed in 2012. The Division of Pensions and Benefits (Division) maintains S.L.W. is ineligible. It argues that to receive survivor benefits she must prove that she was dependent on her father before his death, citing N.J.A.C. 17:4-3.7.

The statutory definition of "child" within the PFRS framework, N.J.S.A. 43:16A-1(21), provides:

"Child" shall mean a deceased member's or retirant's unmarried child (a) under the age of 18, or (b) 18 years of age or older and enrolled in a secondary school, or (c) under the age of 24 and enrolled in a degree program in an institution of higher education for at least 12 credit hours in each semester, provided that the member died in active service as a result of an accident met in the actual performance of duty at some definite time and place, and the death was not the result of the member's willful misconduct, or (d) of any age who, at the time of the member's or retirant's death, is disabled because of an intellectual disability or physical incapacity, is unable to do any substantial, gainful work because of the impairment and his impairment has lasted or can be expected to last for a continuous period of not less than 12 months, as affirmed by the medical board.

Upon review of the PFRS statute's plain language and history, we find that the Legislature did not intend for children of PFRS members to meet a dependency requirement to receive survivor benefits. This finding is consistent with the PFRS's underlying policy goal of financially protecting the family members of deceased PFRS members.

I.

A.

We elicit the facts from the record.

J.R.W. and C.L.M. married and had two children, including S.L.W. The parents divorced; J.R.W. later remarried. J.R.W. retired on January 1, 2005, after a long career in law enforcement. Shortly thereafter, he began receiving pension retirement benefits from PFRS.

S.L.W. was twenty-five years old at the time of J.R.W.'s retirement. S.L.W. had followed her father into law enforcement, serving as an officer for the Delaware River Port Authority. What follows are S.L.W.'s representations of the pertinent facts of her case.

Tragedy struck in late 2008 when a drunk driver plowed into S.L.W.'s patrol car while she was on duty. Her injuries led to her physical disability and, concurrently, her inability to work. At the time of the accident, S.L.W. was twenty-eight years old, had never married, and lived independently.

S.L.W. further states that, in striving for a modicum of independence and to respect her father's privacy, she did not move in with him after her accident. Still, she asserts that she depended almost entirely on him financially going forward. J.R.W. directly paid S.L.W.'s creditors and gave her money, in cash, to cover her living expenses. Despite relying on her father for upwards of 90% of her living expenses, S.L.W. indicated on her income taxes that no one could claim her as a dependent.

Although her father's tax returns are not part of the record, the parties apparently agree that J.R.W. likely never claimed S.L.W. as a dependent on his income taxes after the accident.

J.R.W. died in June 2012. His second wife predeceased him in 2008. About a year and a half after J.R.W.'s death, S.L.W. notes that she attempted to submit an application for survivor benefits under J.R.W.'s pension plan to the Division of Pension and Benefits. S.L.W. reviewed Fact Sheet No. 19 from the Division. It stated a retired member's "child(ren)" may be entitled to survivor benefits. The fact sheet's definition of "child" included a retirant's child who is unmarried, of "any age," and "who, at the time of [the member's or retirant's] death is disabled because of mental or physical incapacity and is incapable of substantial employment because of the impairment," if the incapacity is expected to last at least twelve continuous months. That definition of "child" was repeated in the PFRS Handbook.

S.L.W. asserts that a Division representative did not allow her to submit an application, informing her she did not qualify for survivor benefits because J.R.W. had not claimed her as a dependent on his income taxes and she had not lived with her father before or at the time of his death.

S.L.W. hired a lawyer. S.L.W. chronicled her lawyer's efforts on her behalf. Her lawyer wrote to the Division outlining S.L.W.'s claim for benefits. Nearly a month later, the Division responded with a call to S.L.W.'s lawyer in which the representative parroted the explanation S.L.W. had already received of why she was ineligible for survivor benefits.

Litigation ensued. On April 14, 2014, S.L.W. filed a claim against the Division in Camden County's Law Division, seeking an order awarding S.L.W. survivor benefits under her father's retirement plan and directing the Division to provide those survivor benefits, fees and costs. Around the same time, S.L.W. states she received a letter dated April 11, 2014 from a Pensions Benefit Specialist at the Division stating S.L.W.'s application was effectively time-barred because her father's retirement predated S.L.W.'s disability.

In late June 2014, Michael Weik, Division Manager of Operations, wrote to S.L.W. outlining the Division's interpretation of the term "child" as "someone who at the time of emancipation could not be gainfully employed as a result of a physical or mental disability

they incurred prior to their emancipation." The letter reasoned because S.L.W. had been emancipated and employed, she did not meet that definition of "child." Notably, the letter concluded that even if the Division's interpretation of "child" was incorrect, S.L.W. was still bound to prove dependency under N.J.A.C. 17:4-3.7 and advised S.L.W. she could appeal the finding to the PFRS Board of Trustees (Board).

In July 2014, S.L.W. filed a letter-appeal disputing the Division's explanation that she must provide tax returns showing J.R.W. had claimed her as a dependent and stressing the Division's failure to provide her and her father notice of the requirement.

S.L.W. requested the matter be referred to the Office of Administrative Law (OAL) to establish a record.

The Board held a hearing on the matter in early August 2014 and decided S.L.W. did not qualify for survivor benefits. The Board found S.L.W. did not meet the definition of "child," that is, "someone [who] at the time of emancipation ... could not be gainfully employed as a result of a physical or mental disability

they incurred prior to their emancipation." The Board also noted the lack of income tax forms showing any legal dependency on J.R.W. Nevertheless, the Board referred the matter to the OAL for an evidentiary hearing.

B.

After the matter was assigned to an Administrative Law Judge (ALJ), S.L.W. and the Division cross-moved for summary judgment. The ALJ heard oral argument and then issued a written decision on October 7, 2016. The ALJ acknowledged that the "literal reading" of N.J.S.A. 43:16A-1(21)(d)'s definition of "child" supports S.L.W.'s argument, but found, without more, the literal interpretation "appears to run afoul of legislative objectives and public policy."

In considering whether the PFRS statute has a dependency requirement, the ALJ drew support from divergent statutes, both of which require a showing of dependency for adult children with disabilities -- the Federal Social Security Act, 42 U.S.C. § 402(d), and N.J.S.A. 2A:34-23, which governs child-support orders. Although the ALJ reviewed statutes concerning adult children, he ultimately determined N.J.S.A. 43:16A-1(21)(d)'s definition of child should be limited to children whose disabilities predate their emancipation.

Rejecting S.L.W.'s argument that the Division should be estopped from enforcing N.J.A.C. 17:4-3.7's tax return proof requirement, the ALJ found the regulation was not arbitrary, capricious, or unreasonable in nature. The ALJ concluded S.L.W. did not qualify as a "child" under N.J.S.A. 43:16A-1(21)(d) because she was emancipated before she became disabled and could not show financial dependency on J.R.W.

The ALJ granted the Division's motion for summary judgment, denied S.L.W.'s motion for summary judgment, and dismissed S.L.W.'s appeal.

In November 2016, the Board adopted the recommendations of the ALJ, affirming S.L.W.'s ineligibility for survivor benefits.

C.

S.L.W. appealed the Board's decision. The Appellate Division affirmed in part in an unpublished per curiam opinion.

The Appellate Division agreed with the ALJ's determination that S.L.W. did not properly establish dependency. The Appellate Division rejected S.L.W.'s argument about N.J.A.C. 17:4-3.7(a), finding the Division's enactment of the regulation requiring the submission of income tax returns was valid under the enabling statute. It was not arbitrary, capricious, or unreasonable because it augments the legislative policy of the PFRS statute. Consequently, the Appellate Division concluded S.L.W.'s claim should fail due to her inability to comply with N.J.A.C. 17:4-3.7(a).

Also, for the sake of completeness, the Appellate Division addressed the issue of whether S.L.W. qualified as a "...