On appeal from a Final Decision of the Board of Trustees, Public Employees' Retirement System, Docket No. 467927.
Before Judges Stern, A.A. Rodríguez and Lefelt.
The opinion of the court was delivered by: Lefelt, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
After Doctor John Cavalieri had accumulated over twenty years of credited service, he requested a retirement estimate from the Board of Trustees of the Public Employees' Retirement System. The Pension Board determined that Cavalieri's retirement pension would be based upon a salary of approximately $50,000, which the Pension Board found was the doctor's annual compensation for three years of full-time employment earned during his years of service as medical director for the Toms River Regional School District. Cavalieri appealed, claiming his yearly compensation during the three-year period was actually $187,200.00. After conducting a hearing, an Administrative Law Judge (ALJ) agreed with Cavalieri. The Pension Board, however, reversed the ALJ, reinstating its original estimate. We conclude that the Pension Board utilized the wrong review standard in assessing the ALJ's factual findings. Consequently, we reverse and remand.
The following facts were either uncontested or not disputed by the Pension Board. Cavalieri has been licensed to practice medicine in New Jersey since 1974. In 1978, he began a part-time relationship with the Toms River Regional School District. While maintaining a private practice, he conducted pre-employment physicals and sports' physicals and provided medical care to the School District's football team.
In 1986, recognizing that the School District had grown significantly, the District engaged Cavalieri as its medical director. As a condition of employment, the doctor discontinued his private medical practice and worked full-time for the District.
As medical director, Cavalieri provided medical care to approximately 16,000 students in the School District's three high schools, two intermediate schools, eleven elementary schools and one alternate school. Cavalieri worked from an office, which was provided by the District, completely paid for, and outfitted with sufficient medical equipment for the doctor to perform his functions. In addition, the School District employed the nurse who had previously worked with the doctor in private practice. All of the doctor's medical services and administrative responsibilities, such as coordinating public health programs, were performed out of the doctor's District office. The School District also paid the doctor's malpractice insurance and provided medical and dental insurance.
During his employment by the District, which was a twelve-month per year position, the doctor did not see any private patients for the entire time he worked as medical director. The doctor's employment by the District was his sole source of income.
He was also a member of the teacher supervisor's union and received all of the customary benefits of a full-time employee of the District. Thus, the District accorded Cavalieri vacation time, sick time, holiday time, and professional time.
The doctor testified that he paid income tax on the $187,200 annually, for each of the years at issue. The School District reported a portion of the doctor's bi-weekly salary as employee income on W-2 tax forms and reported the remainder as non-employee income on 1099-Miscellaneous income forms.
In 1992, the School District advised Cavalieri that his full-time position was no longer required. The doctor continued to work part-time on a per diem basis as school physician and health coordinator, but he reopened his private practice, which he continued to ...