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County of Camden v. Board of Trustees of the Public Employees Retirement System

February 20, 2002


The opinion of the court was delivered by: LaVECCHIA, J.

Argued November 5, 2001

On certification to the Superior Court, Appellate Division, whose opinion is reported at 334 N.J. Super. 624 (2000).

This appeal arose from an administrative proceeding before the Board of Trustees of the Public Employees Retirement System (PERS Board), in which the County of Camden sought to contest the award of ordinary disability benefits to respondent William J. Simon, the former Camden County Sheriff. Simon applied for disability benefits immediately after failing in his bid for re-election to office in 1994 notwithstanding that he had been serving as Sheriff for the prior fifteen years.

The County claimed standing based on its financial obligation to pay a portion of the cost of health benefits for each of its disabled employees. Alternatively, the County asserted its public interest in preventing the fraudulent procurement of pension benefits. An administrative law judge and the PERS Board each concluded that the statutory scheme governing entitlement to an ordinary disability pension did not authorize a public employer to be a party in a hearing on an employee's application for such benefits. The Appellate Division affirmed, In Re Camden County, 334 N.J. Super. 624 (2000), and we granted the County's petition for certification, 167 N.J. 636 (2001), to review whether the County should have been granted standing to contest the disability pension award.


The relevant facts are not in dispute. In 1979, Simon was elected to his first of several terms as Sheriff of Camden County. The public office of county sheriff carries a three-year term. N.J.S.A. 40A:9-100. In December 1984, Simon's foot was partially amputated. He underwent transmetatarsal amputation, a procedure in which the front portion of the foot, usually starting from the base of the toes, is removed. Notwithstanding his condition, Simon was able to perform his job until he lost his bid for re-election in 1994. There is no evidence in the record that his physical condition worsened after his surgery, or that there was any aggravation to his condition during his period in office.

Simon was reelected as Sheriff three times after his foot surgery, serving for a total of fifteen consecutive years. In November 1994, however, he lost his bid for re-election. Almost immediately thereafter he applied to the Division of Pensions, Department of the Treasury, for ordinary disability retirement benefits to be effective January 1, 1995, the day his term as Sheriff would expire. Along with his application, Simon submitted medical reports from treating physicians. On January 5, 1995, the Medical Review Board for the PERS Board, acting pursuant to N.J.S.A. 43:15A-17, and N.J.A.C. 17:1-4.37(b), concluded that Simon was totally and permanently disabled from performing his job as Sheriff due to the partial amputation of his foot, rendering him "unable to stand for a prolonged period of time." Thirteen days later, the PERS Board granted Simon's application for ordinary disability retirement benefits, effective January 1, 1995.

Pursuant to N.J.S.A. 40A:10-23, local governmental employers are authorized to assume the cost of health care premiums for employees who retire on disability pension. Exercising that authority, the County provides such benefits through its collective bargaining agreement with the representative of its public employees. The County also provides its management employees, including sheriffs, with benefits identical to those provided through its agreement with Camden County Council #10, the primary union representative of county employees. Thus, the PERS Board's determination that held Simon eligible for an ordinary disability pension obligated the County to pay ninety percent of the former Sheriff's medical insurance premiums and, in addition, provide prescription drug benefits. The record discloses that the undisputed average cost to the County for those health premiums is $226.16 per month.

The County requested that the PERS Board reconsider Simon's eligibility for a disability pension. Reconsideration resulted in reaffirmation of the Board's original decision.

The County appealed, but before the Appellate Division addressed the merits, it granted the PERS Board's motion for a remand to permit that Board to consider a pending independent medical examination of Simon. See N.J.A.C. 17:1-4.37(c). Dr. Gary Goldstein performed the examination. His report detailed Simon's description of the pain and swelling he typically experienced during a work day. The Goldstein report concluded that Simon could perform the administrative tasks associated with the position of sheriff unless the pain became so unbearable as to require medication. Significantly, Dr. Goldstein opined that Simon was capable of

performing any of the administrative duties required of him in the job description of sheriff. I feel that way because they could be done even by someone with a more proximal amputation or even someone who is wheelchair bound. The only time this would not be the case is if the patient was in such chronic pain that he required medication on an ongoing basis that would potentially cloud his judgment and this patient is not taking any medication, even six weeks postoperatively.

On the other hand, Dr. Goldstein noted that Simon was not capable of running or personally performing the physical apprehension of criminals, but left to the PERS Board the question of whether such activities were required duties of the sheriff.

After reviewing Dr. Goldstein's report and a State Department of Personnel job description outlining the breadth of responsibilities allotted to the public office of sheriff, the PERS Board reaffirmed its determination that Simon was entitled to an ordinary disability pension. The County then requested and was granted a contested case hearing to challenge that determination. The Board referred the matter to the Office of Administrative Law. In an Initial Decision, the Administrative Law Judge (ALJ) assigned to the matter determined that the County did not have standing to request a hearing, stating:

There is no reason for the Board to grant Camden County an administrative hearing and thereby to require the expenditure of both scarce State resources and Mr. Simon's own financial resources to litigate a matter which is not in dispute between the real parties in interest, Mr. Simon and the Board of Trustees.

The ALJ held that the PERS Board, not the employer, was statutorily charged with protecting the fiscal integrity of the pension fund, and that although Simon was entitled to a hearing regarding his eligibility for disability benefits, no statutory or constitutional authority entitled the County to demand a hearing.

The Board adopted the Initial Decision of the ALJ and the County again appealed. For a second time, the Appellate Division ...

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