On appeal from final decision of the New Jersey State Board of Education.
Pressler, Brody and Havey.
[197 NJSuper Page 241] The issue on this appeal is whether the Commissioner of Education is empowered to award post-judgment interest to a successful claimant who has been awarded a money judgment.
We find that the Commissioner of Education has that power and accordingly reverse that portion of the State Board of Education's determination denying interest. Otherwise we affirm.
In 1971 petitioners Ruth Levitt and Esther E. Sasloe instituted proceedings with the Commissioner of Education (Commissioner) against the respondent Board of Education of the City of Newark (board). Essentially, petitioners argued that their assignment by the board as long-term substitute teachers from 1945 through 1961 improperly prevented them from acquiring tenure protection and also denied them proper placement on the teacher's salary guide, longevity increments, leaves of absence and other fringe benefits which should have accrued to them as regular teaching staff members. They sought compensation for the wages, fringe benefits and credits that they would have received had they been properly assigned. The Commissioner issued his decision on October 5, 1977. He adopted the findings of the hearing examiner, found that petitioners were regular full-time teachers during the years in question and ordered the board to compensate them for the back pay and benefits due to them. Although the board did not appeal from the Commissioner's decision, it failed to make the necessary calculations or to tender payment to petitioners in accordance with the Commissioner's decision. The board's attorney, however, assured petitioners that "payment was in the process," and on September 8, 1978, wrote to petitioners' attorney, advising him that "the sum due your clients respectively is Ruth Levitt $34,186.00 and Esther Sasloe $27,250.00." On April 30, 1979 he sent another letter with computations showing that the board owed $34,186 to Levitt and $26,500 to Sasloe. Despite these statements, the board made no tender of any sum to either petitioner. In view of the board's noncompliance with the Commissioner's order petitioners commenced an action in the Superior Court, Chancery Division to compel compliance. The trial court vacated the Commissioner's decision finding that he had misinterpreted the applicable school laws. Petitioners appealed to this court. We
reversed, holding that the trial judge erred in permitting the collateral attack on the Commissioner's order. We also held that although the Commissioner's order of October 5, 1977 was a final order, it required further implementation since the Commissioner had not computed the sums actually due petitioners. We remanded to the Commissioner to make these findings.
On remand, the administrative law judge to whom the contested case was assigned, recommended the grant of summary judgment in favor of the petitioners in the amount of $34,186 to Levitt and $26,550 to Sasloe. The administrative law judge also recommended the award by the Commissioner of post-judgment interest.*fn1 On February 5, 1983, the Commissioner accepted the findings and determinations of the administrative law judge but reversed the interest award, concluding ". . . that there is no statutory prescription for such awards. . . ." He nevertheless observed that ". . . the Commissioner deplores in the strongest possible terms the cavalier treatment by the board of petitioners' claims and his decision herein not to award interest does not preclude petitioners from seeking such relief in the appropriate forum." The State Board of Education affirmed on the board's appeal. Respondent board appeals from the order granting summary judgment, and petitioners cross-appeal the denial of post-judgment interest.
We are satisfied that the board's contention that summary judgment should not have been granted fixing the amounts due petitioners is without merit. The decision by the State Board of Education affirming the summary judgment entered by the Commissioner is supported by sufficient credible evidence on the record as a whole. R. 2:11-3(e)(1)(D).
Petitioners contend on their cross-appeal that they are entitled to post-judgment interest on their award and that the Commissioner was empowered to allow such interest.
In considering petitioners' contentions, we must address two entirely separate issues. The first is whether and under what circumstances interest is allowable against a public body and the second is whether, to the extent it is allowable, it may be awarded by the Commissioner in the absence of express statutory authority.
In considering the susceptibility of a public body to an award of interest against it, a distinction must first be drawn between pre-judgment interest and post-judgment interest. Where private litigants are involved, the allowance of pre-judgment interest in contract and contract-like actions, even where a claim is liquidated, is not a litigant's right but rests rather in the court's discretion, required to be exercised in accordance with equitable principles and considerations. See Bak-A-Lum Corp. v. Alcoa Building Prod., 69 N.J. 123, 131 (1976). Where the debtor is a governmental agency and interest in the cause is not provided for by statute, particular circumspection in the granting of pre-judgment interest is required and a showing of overriding and compelling equitable reasons must be made in order to justify the award. See Consolidated Police, etc., Pension Fund Commn. v. Passaic, 23 N.J. 645 (1957). See also City of East Orange v. Palmer et al., 52 ...