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Uricoli v. Board of Trustees

Decided: August 5, 1982.

EUGENE J. URICOLI, APPELLANT,
v.
THE BOARD OF TRUSTEES, POLICE AND FIREMEN'S RETIREMENT SYSTEM, RESPONDENT



On certification to the Superior Court, Appellate Division.

For reversal and remandment -- Justices Pashman, Schreiber, Handler and Pollock. For affirmance -- Chief Justice Wilentz and Justices Clifford and O'Hern. The judgment of the Court was delivered by Handler, J. Pashman, J., concurring. Schreiber, J., concurring. O'Hern, J., dissenting. Chief Justice Wilentz and Justice Clifford join in this opinion. Pashman and Schreiber, JJ., concurring in the result.

Handler

[91 NJ Page 64] Petitioner Eugene J. Uricoli was first employed as a patrolman by the Police Department of the City of Orange in November 1952. He worked his way up through the ranks and was

appointed Police Chief in 1970. On April 9, 1976, after over 23 years of otherwise honorable service with the police force, Uricoli was found guilty of one count of malfeasance in office.

The conviction was for a single ticket-fixing incident that had occurred during October 1972. The allegation was that Uricoli had illegally disposed of a careless driving ticket that had been issued to the son of a "near and dear friend." Uricoli's assertion that he received no compensation for fixing the ticket was not then, nor has it ever been, challenged by the State.

Uricoli was eventually sentenced to a one-year suspended jail term and to probation for two years unless and until he paid a fine of $1,000. The trial judge who heard Uricoli's case expressly stated that he decided to suspend the custodial portion of the sentence because "[c]onviction of a crime as to this defendant in itself is punishment. No rehabilitation is necessary nor any need for deterrence . . . His loss of standing in the community and subsequent loss of respect should suffice." In addition to the punishment meted out by the trial court, Uricoli was also dismissed from the Orange Police Department as a result of the conviction.

In June 1979, at which time Uricoli was 49 years old, he submitted an application to the Police and Firemen's Retirement System (PFRS) for an accidental disability retirement. He claimed entitlement to accidental disability benefits under N.J.S.A. 43:16A-7 because of various back injuries he had suffered between 1963 and 1972 while doing routine police work. The Board of Trustees of PFRS denied the application, ruling that Uricoli's conviction for malfeasance in office prevented him from meeting the prerequisite of honorable service for a pension.

Uricoli appealed the Board's ruling and a hearing was held before an Administrative Law Judge, who recommended denial of the pension. The Board of Trustees adopted the ALJ's findings, conclusions, and recommendations and reaffirmed its decision to deny Uricoli a pension because of his conviction. The

Appellate Division affirmed. We granted Uricoli's petition for certification. 87 N.J. 404 (1981).

Uricoli contends that his claim to pension benefits is predicated upon the accidental disability provisions of N.J.S.A. 43:16-2 and 43:16A-7. He argues that because the provisions relating to retirement on account of accidental disability contain no express requirement of honorable service as a prerequisite to obtaining a pension, his failure to have served honorably should not defeat his entitlement to a pension based upon his employment-related disability.

This argument is without merit. This Court has clearly reaffirmed the rule that honorable service is an implicit requirement of every public pension statute, whether or not this conditional term appears in the particular statute. See Masse v. Public Employment Retirem. Sys., 87 N.J. 252, 255-56 (1981); Makwinski v. State, 76 N.J. 87, 90 (1978). Courts in this State have consistently imputed to the Legislature the intent that a public employee's right to pension benefits be conditioned upon honorable service.*fn1 The condition of honorable service is applicable without regard to whether retirement is based on disability, age or length of service.

The issue to be addressed in this case is whether only one incident involving an illegal disposition of a traffic ticket, for no personal gain and after 20 years of flawless service, is an infraction of sufficient magnitude to render the employee's career in the public service dishonorable so as to require the forfeiture of all pension benefits.

The interpretation and application of the forfeiture doctrine as a substantive component of the State's public pension systems has been evolutionary in character. For the most part, the impetus has been judicial. In this process the courts have sought to effectuate the underlying intention of the Legislature. Understandably, the judicial development of the forfeiture doctrine has reflected in some measure the courts' perceptions of legislative policy regarding pensions and related subjects.

Many cases addressing the expressed or implied requirement of honorable service strongly suggest that automatic forfeiture was required whenever the public employee had committed any sort of misconduct in office, regardless of its nature or the degree of culpability. See Plunkett v. Pension Commissioners of Hoboken, 113 N.J.L. 230, 233-34 (Sup.Ct.1934), aff'd o.b., 114 N.J.L. 273 (E. & A. 1935); Fromm v. Bd. of Directors of Police, etc., Retire. Syst., 81 N.J. Super. 138 (App.Div.1963). See Masse, 87 N.J. at 264 (characterizing the doctrine historically as a "judicially-created rule that automatically imposes an inflexible, arbitrary forfeiture" upon public employees).

A brief review of the cases, however, demonstrates that the courts were cognizant of the varying, and somewhat conflicting, objectives inherent in the public pension system and the consequent need to weigh the quality of misconduct to determine whether forfeiture of pension benefits was appropriate. The gravity of the misconduct usually was a relevant consideration. Misconduct that resulted in a forfeiture frequently constituted a substantial breach of public employee duties. See, e.g., McFeely v. Board of Pension Com'rs, 1 N.J. 212 (1948) (retired police chief's pension benefits vacated pending disposition of charges that he had not enforced statutes against gambling and that he, along with seven fellow officers, committed a conspiracy to "oppress" and "persecute" other members of the police force); Plunkett, 113 N.J.L. 230 (fireman's pension forfeited where he had pled guilty to several charges of misconduct including, among others, embezzlement of funds from the Firemen's Relief Association); Hozer v. State, etc., Police & Firemen's Pension

Fund, 95 N.J. Super. 196 (App.Div.1967), certif. den., 50 N.J. 285 (1967) (policeman's pension application denied where he had been convicted of nonfeasance in office that had extended over a five-year period and consisted of the knowing nonperformance of his duties regarding two premises on which bookmaking was being conducted and allowing the persons responsible therefor to escape apprehension and punishment); Pfitzinger v. Bd. of Trustees, etc., Retirement System, 62 N.J. Super. 589 (Law Div.1960) (highway department inspector's pension application denied upon conviction of at least 26 charges of misconduct in office extending over more than a five-year period and including such offenses as falsifying work reports, drinking during work hours and committing certain acts that would constitute the crime of extortion); Mount v. Trustees of Pub. Emp. Retirement Syst., 133 N.J. Super. 72 (App.Div.1975) (county engineer's pension properly suspended pending disposition of indictments for extorting money from a contractor during his employment). See Pangburn v. Ocean City Police, etc., Commission, 136 N.J.L. 501, 502 (Sup.Ct.1948) (policy of legislature is manifest that conduct of a member of the police department in violation of departmental rules is not to be considered as amounting to dishonorable conduct so as to deprive such member of his pension privileges). But see Fromm, 81 N.J. Super. 138 (although policeman was originally charged with 25 counts of altering and downgrading traffic tickets, his pension was nonetheless forfeited despite the fact that he was ultimately convicted only of two counts). The cases focused generally on two dimensions of employment conduct that can result in forfeiture, namely, the degree to which the misconduct "touches the administration of the public employee's office or position" and the degree of culpability or "moral turpitude" evident in the misconduct. Gauli v. Trustees Police & Firemen's Ret. Syst., 143 N.J. Super. 480, 482 (App.Div.1976).

The most recent decisions of this Court expressly embrace a more flexible approach in determining whether the character of misconduct of public employees will justify the deprivation of

pension benefits. In Masse, for example, the Court concluded that unless the criminal misconduct was in fact directly related to the employment duties of the public employee, there should be no forfeiture of accumulated pension benefits. We found "nothing implicit in the nature of a public pension or a prerequisite of honorable service that mandates disqualifying service upon conviction of a crime involving moral turpitude unrelated to the public employment." 87 N.J. at 261-2. This point was given added emphasis in the companion decision of Procaccino v. Public Employees' Retirem. Sys., 87 N.J. 265 (1981). There the crime committed by the public employee was not directly related to his actual employment duties, although the quality of his misconduct -- misappropriating public funds in an unrelated job -- was highly relevant to his general qualifications or fitness to hold public office. Nevertheless, the absence of a direct and actual relationship between the misconduct and the performance of the employee's specific public duties did not warrant the forfeiture of pension benefits. Id. at 268.

In Makwinski, we concentrated upon the nature of the misconduct committed in terms of moral turpitude. There was a direct and actual relationship between the employee's public duties and the particular act of misconduct. Nevertheless, the absence of serious culpability or substantial gravity overcame any asserted need to impose a forfeiture. We held that the employee's "motive and intent must be weighed in the balance," and that where there was a purpose to help others and there was no venality or personal gain from the act, the crime of misconduct in office should not be characterized as one of "moral turpitude," at least for pension purposes. 76 N.J. at 91-2. Accordingly, we ruled that forfeiture of pension benefits was not required.

The springboard for the courts' original formulation of the forfeiture rule was its perception of the Legislature's purpose in providing pensions for public employees. Thus, it was believed that the public pension was integrally related to the public employment and, since public employment encompasses a public

trust, there is a fiduciary relationship between the public and the employee. Implicit in this trust relationship is honorable service. If the employee is guilty of dishonorable service, it follows under this view that he breaches the public trust and forfeits his entitlement to a pension. Plunkett, 113 N.J.L. at 233-34.

It has also been recognized that one of the "fundamental purposes" underlying the pensioning of civil servants is to "secure good behavior and the maintenance of reasonable standards of discipline during service." Id. at 233. Ballurio v. Castellini, 29 N.J. Super. at 389; Hozer, 95 N.J. Super. at 199-200; Mount, 133 N.J. Super. at 79-82. Forfeiture in this context has been viewed as within the Legislature's intendment to establish both a deterrent against committing misdeeds related to employment and as an inducement to continued faithful, diligent and efficient public service. Masse, 87 N.J. at 257.

The notion that the pension scheme can be legitimately used as a punitive tool or incentive in order to ensure good service has as its natural corollary that there could be no contractual entitlement or irrevocable vesting of pension benefits. See, e.g., Ballurio, 29 N.J. Super. at 389. However, the countervailing view that there is a contractual basis to one's pension has also claimed some ...


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