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Matturi v. Board of Trustees of the Judicial Retirement System

July 24, 2002

DOROTHY MATTURI, PHYLLIS HEALY AND THE SURVIVING CHILDREN OF THE HONORABLE JOSEPH HEALY, AND THE RETIRED JUDGES ASSOCIATION OF NEW JERSEY, PETITIONERS-APPELLANTS,
v.
BOARD OF TRUSTEES OF THE JUDICIAL RETIREMENT SYSTEM, RESPONDENT-RESPONDENT.



On certification to the State House Commission.

SYLLABUS BY THE COURT

This appeal presents the question of whether survivorship benefits under the Judicial Retirement System Act (N.J.S.A. 43:6A-1 to -47) are calculated once at the time a member of the retirement system dies or, rather, are adjusted periodically after a member's death to reflect subsequent increases in judges' salaries.

Appellants are Dorothy Matturi, widow of Superior Court Judge Alexander Matturi, Phyllis Healy, widow of Superior Court Judge Joseph Healy, and her minor children, and the Retired Judges Association of New Jersey (RJANJ). Judges Matturi and Healy were members of the Judicial Retirement System (JRS) and their survivors are entitled to benefits under the Act. RJANJ is a non-profit organization that represents the interests of JRS members. Here, it represents the surviving spouses and children of judges who have passed away.

Judge Healy died in 1995 while in active service. His widow receives a 25% survivor's benefit under the Act. It is based on Judge Healy's salary at the time of his death, which was $100,000. Judge Matturi retired from the Superior Court in 1983. From his retirement until his death in 1990, he received a pension of $52,500, which constituted 75% of his salary at the time of his retirement. Judge Matturi's widow receives a 25% survivor's benefit, which is 25% of $100,000, the salary that was in effect at the time of the Judge's death. Both widows and Judge Healy's minor children receive cost-of-living adjustments pursuant to the Pension Adjustment Act (N.J.S.A. 43:3B-1 to -10).

The Division of Pensions and Benefits calculates benefits for a judge's survivors based on the salaries for judges that were "current" at the time of the judge's death, and then fixes benefit payments in accordance with that calculation. Appellants argue that the survivorship benefits should be adjusted whenever salaries for active judges are increased by the Legislature because the Act directs the Division to base such benefits on the "current" salaries for sitting judges.

In separate letters dated January 29, 1999, the State House Commission, which sits as the Board of Trustees of the JRS, denied requests by the Matturi and Healy families for recalculation of their survivors' benefits. The Commission then transferred the families' appeals to the Office of Administrative Law for a hearing as a "contested action." The matter was assigned to ALJ Ken R. Springer, who issued his Initial Decision on July 14, 2000. ALJ Springer concluded that the Commission's actions were erroneous and that the Matturi and Healy families were entitled to a recalculation of their benefits. In his view, the Act's use of "current salary" clearly and unambiguously conveyed a legislative directive to increase survivors' benefits as judicial salaries changed.

The Division received ALJ Springer's decision on July 18, 2000. It was referred to the Commission's liaison within the Division. Pursuant to N.J.S.A. 52:14B-10(c), the Commission had forty-five days within which to modify or reject the decision. The Attorney General, acting on behalf of the Division, applied to the Commission on August 1, 2000, and August 18, 2000, for an extension of time within which to file exceptions. The Commission did not respond, but the Attorney General nonetheless filed exceptions on September 7, 2000.

The JRS Trustees assert that the first time the Commission saw the ALJ's decision was on September 18, 2000, when it received the decision from its liaison within the Division of Pensions and Benefits. That same day, the Commission sought an extension of time from the Office of Administrative Law. ALJ Beatrice Tylutki, in the absence of Chief Administrative Law Judge Jeffrey Masin, granted the Commission's application for additional time to file a Final Decision. Six days later, ALJ Masin denied appellants' motion for reconsideration.

The Commission convened on October 5, 2000, to consider ALJ Springer's Initial Decision. On October 13, 2000, the Commission issued its Final Decision, which held that survivorship benefits under the Act are not required to be recalculated whenever salaries for active judges are increased. In the Commission's view, the phrase "current salary" was clear in the sense of setting a fixed, benchmark salary to be used in calculating survivorship benefits.

The Court certified appellants' appeal on its own motion.

HELD: In light of the unique nature of the State House Commission and the absence of bad faith or gross indifference, the Office of Administrative Law properly extended the time for the Commission to issue its Final Decision. Survivorship benefits under the Judicial Pension System (N.J.S.A. 43:6A-17 and -18) are properly calculated at the time of the death of the JRS member based on the salary for the judicial position at that time.

1. The State House Commission -- which consists of the Governor, the State Treasurer, the Director of the Division of Budget and Accounting or their designees, and two members from each house of the Legislature appointed by the President of the Senate and the Speaker of the Assembly, respectively -- is a unique operation that is required to meet only once every three months. Its inaction regarding ALJ Springer's Initial Decision cannot be considered gross indifference or bad faith. The Commission took immediate action on learning of the ALJ's decision, two-and-a-half weeks after the expiration of the forty-five day period. It would make little sense to apply the automatic-approval provision of N.J.S.A. 52:14B-10(c) on these facts simply for the sake of agency efficiency. (pp. 11-16)

2. Since the Act was amended in 1982, the Division of Pensions and Benefits has interpreted it to require a one-time calculation of a survivor's benefits on the death of a sitting or retired judge. The long-standing practice has been to base a survivor's benefit calculation on the judicial salary that was "current" at the time of death and to fix payments on that calculation. Substantial deference to the Division's construction of the Act is particularly appropriate considering the Legislature's longstanding acceptance of that interpretation. That apparent acquiescence must be granted great weight as evidence of the Division's conformance with legislative intent. (pp. 16-19)

3. A plain reading of the Act supports the Divis ion's approach. The phrase "current salary" as used in Sections 17 and 18 of the Act is ambiguous. It is therefore appropriate to examine those sections for the context in which the definition of "final salary" appears in order to discern the meaning of "current" within the Act. The statutory language as a whole supports the Commission's ruling that survivorship benefits should be calculated once and fixed at that calculation. (pp. 19-22)

4. The Court also finds it significant that there is no language in the Act or in any available legislative history indicating that the Legislature intended any subsequent recalculation of survivorship benefits. (pp. 22-23)

COLEMAN, J., dissenting, is of the view that in the absence of a statutory exception to the forty-five day requirement for the State House Commission to act on the Initial Decision of ALJ Springer, that Decision should have been deemed adopted. On the merits of the appeal, he would reverse the decision of the State House Commission. Justice Coleman agrees with the analysis and reasoning expressed by ALJ Springer in his Initial Decision, in which he concluded that the plain language of the Act contemplates an escalator clause, thereby requiring recalculation of survivorship benefits to reflect increases in judicial salaries after a judge dies.

The final decision of the State House Commission is AFFIRMED.

JUSTICES STEIN, LONG, VERNIERO, and ZAZZALI join in CHIEF JUSTICE PORITZ's opinion. JUSTICE COLEMAN has filed a separate dissenting opinion. JUSTICE LaVECCHIA did not participate.

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

Argued September 24, 2001

This appeal raises an issue of statutory construction affecting survivorship benefits under the Judicial Retirement System Act, N.J.S.A. 43:6A-1 to -47 (JRSA or Act). More specifically, the Court must decide whether such benefits are calculated once at the time a member of the retirement system dies, or rather, are adjusted periodically after a member's death to reflect increases in judges' salaries that occur later.

I.

Appellants are Dorothy Matturi, (widow of the late Judge Alexander Matturi), Phyllis Healy and her minor children (the widow and children of the late Judge Joseph Healy), and the Retired Judges Association of New Jersey (RJANJ or Association). Judge Matturi and Judge Healy were members of the Judicial Retirement System (JRS) established by the JRSA, and their surviving spouses and children are entitled to receive benefits pursuant to that Act. RJANJ is an unincorporated nonprofit organization that represents the interests of JRS members who will likely leave spouses and/or children, and that here represents the surviving spouses and children of judges that have passed away.

The facts in this matter are uncontested. Judge Healy died in 1995 while in active service. His surviving spouse receives an annual survivor's benefit, pursuant to N.J.S.A. 43:6A-17, that is paid monthly and calculated at twenty-five percent of $100,000, Judge Healy's salary at the time of his death. Although the record does not so state, we note that Judge Healy's two surviving minor children receive annual benefits of fifteen percent of his final salary under N.J.S.A. 43:6A-17.

Judge Matturi retired from the Superior Court in 1983. From his retirement until his death in 1990 he received a pension of $52,500 per year, constituting three-fourths of his salary at the time of his retirement. See id. at -8e. Pursuant to N.J.S.A. 43:6A-18, Judge Matturi's surviving spouse, like Judge Healy's spouse, receives an annual survivor's benefit in the amount of twenty-five percent of $100,000 ($100,000 having been the salary for a sitting judge in 1990, the time of Judge Matturi's death). We also note that the survivorship benefits received by Mrs. Matturi, Mrs. Healy, and the Healy children are subject to cost-of-living adjustments pursuant to the Pension Adjustment Act, N.J.S.A. 43:3B-1 to -10, as was the pension Judge Matturi received.

The Division of Pensions and Benefits (Division) calculates benefits for a judge's survivors based on the salaries for judges that were "current" at the time of that judge's death, and then fixes benefit payments in accordance with that calculation. Appellants argue that survivorship benefits should be adjusted whenever salaries for active judges are increased by the Legislature because N.J.S.A. 43:6A-17 and -18 direct the Division to base such benefit payments on the "current" salaries for sitting judges. N.J.S.A. 43:6A-17, which grants benefit payments to the survivors of judges who pass away while in active service, provides:

a. Upon the receipt of proper proofs of the death in active service of a member of the retirement system, there shall be paid to his widow[ *fn1 ] a survivor's benefit of 25% of final salary for the use of herself, to continue during her widowhood, plus 10% of final salary payable to one surviving child or plus 15% of final salary to two or more surviving children; if there is no surviving widow or in case the widow dies or remarries, 15% of final salary will be payable to one surviving child, 20% of final salary to two surviving children in equal shares and if there be three or more children, 30% of final salary will be payable to such children in equal shares. If there is no surviving widow or child, 20% of final salary will be payable to one surviving parent or 30% of final salary will be payable to two surviving parents in equal shares. b. In addition to the foregoing benefits payable under subsection a., there shall also be paid in one sum to the member's ...


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