[144 NJSuper Page 547] This matter is before the court on a motion to dismiss the consolidated complaints filed herein for failure to state a cause of action. A review of the undisputed facts is necessary for a full understanding of the issue raised by this motion.
Plaintiff Helen Hyjack (Hyjack) was employed as a clerk by the Bureau of Elections of Hudson County. After 13 1/2 years of service plaintiff became unable to continue to perform the duties of that position by virtue of a medical disability. She made application to retire to defendant Hudson County Employees Pension Commission (Commission) in a good faith belief that she was entitled to said retirement. Hyjack complied with the requirements of the Commission and submitted to an examination by its physician, who recommended approval of her application. The Commission thereupon granted her a disability pension effective May 1, 1966 in the amount of $2,400 a year. Upon receiving notice from the Commission that her pension was granted, she surrendered her position of employment in reliance thereon and has not worked since her retirement.*fn1
Following a grand jury investigation in 1971 into the operation of the Commission, defendant Joseph M. Nolan was appointed receiver by order dated March 1, 1972 and was vested with all powers, functions and duties of the Commission. Following his appointment Nolan commenced an extensive review of the propriety of the pensions previously granted by the Commission and thereafter suspended the disability pensions of the plaintiffs.*fn2 As a result, Hyjack's pension payments were stopped as of March 1, 1972.
After an administrative hearing Nolan notified Hyjack in September 1972 that he was permanently terminating her pension, and as a result thereof the Commission has refused to continue her pension. Similarly, the disability pensions of the other plaintiffs were terminated by the receiver.
Hyjack and the others received with the notice of termination of their pensions a further notice that they could appeal the decision to terminate their pension to the Superior Court of New Jersey within 45 days, pursuant to R. 4:69-6. Hyjack and many other pensioners did not appeal as suggested by the notice. However, some pensioners did elect to appeal. The history of that appellate litigation is set forth in Skulski v. Nolan , 68 N.J. 179 (1975); Ruvoldt v. Nolan , 63 N.J. 171 (1973).
It appears from the record that Nolan, in terminating the various disability pensions, did not consider himself limited by the principles of equitable estoppel, nor did he give any presumption of validity to the pension grants made by the Commission. In Skulski our Supreme Court, in setting down certain guidelines, said:
Accordingly, we have concluded that the interests of justice will best be served in these cases by employing a two step approach. The first phase of the inquiry concerns the threshold question of the propriety of reexamining the merits of a prior pension grant. Except to the extent noted below, the merits of the arguments for or against entitlement itself are not pertinent to this phase of the proceedings. With respect to this aspect of the inquiry, the pensioner will have the burden of coming forward with evidence of such facts and circumstances as will justify the conclusion that the merits of his entitlement to pension benefits should not be reexamined. This determination will be based on proofs by pensioner which may include the following:
(1) the applicant's subjective good faith belief that he was entitled to benefits;
(2) the extent of the applicant's change of position in reliance on the initial pension grant; and
(3) the extent to which the applicant's reliance has foreclosed alternate opportunities for pension benefits.
We deem it appropriate to place the burden of coming forward with evidence on these matters upon the pensioner since he is in a better position than the receiver to produce such evidence. With respect to the time period between the initial grant and the receiver's reconsideration, the receiver will have the burden of both coming forward and burden of proof (persuasion) that action was taken within a ...