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Loigman v. Board of Trustees

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


January 7, 2008

LARRY S. LOIGMAN, ESQ., APPELLANT,
v.
BOARD OF TRUSTEES, POLICE AND FIREMEN'S RETIREMENT SYSTEM, RESPONDENT.

On appeal from Final Agency Decision of the Board of Trustees, Police and Firemen's Retirement System.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued December 5, 2007

Before Judges Parker, R. B. Coleman and Lyons.

Larry S. Loigman (Loigman) appeals from two final administrative agency determinations of the Board of Trustees, Police and Firemen's Retirement System (the Board), dated April 11, 2006, and February 6, 2007, dismissing his complaint. We affirm.

The following factual and procedural history is relevant to our consideration of the issues advanced on appeal. On February 9, 2004, the Board approved an application submitted by A.S. for an accidental disability retirement allowance. Following that decision, Loigman requested various documents relating to A.S.'s application and the Board provided some of them. Loigman then wrote to the Board and argued that A.S. was not entitled to a pension, and the Board determined that plaintiff had no standing to challenge the award. Loigman did not appeal that determination.

Instead, on June 4, 2004, Loigman filed a two-count complaint in lieu of prerogative writs, naming the Division of Pensions and Benefits of the Department of the Treasury, the Board, Frederick H. Weaver (Director of the Division of Pensions and Benefits), Wendy Jamison (Jamison) (Secretary of the Board), and unknown persons as defendants. Loigman claimed an impact on the fiscal integrity of the moneys of the people of New Jersey because defendants failed to discharge their fiduciary responsibilities in a careful, diligent, prudent, and proper fashion and failed to restrict pension benefits to individuals entitled by law to benefits. Loigman also alleged a conspiracy among defendants to conceal records; to improperly investigate applications for disability pensions; to fail to maintain an office for investigation of complaints; and to fail to accept complaints from members of the public regarding disability pensions improperly or illegally secured. Loigman gave as an example the case of "A.S.," stating that "A.S." was not eligible to receive accidental disability retirement benefits and defendants knew this and concealed information from the public.

Defendants sought to dismiss the complaint and the Law Division denied the motion, but transferred the complaint to the Board without any specific instructions.

By letter dated January 13, 2005, Jamison, as Secretary of the Board, addressed Loigman's claims. On behalf of the Board, she dismissed his complaint, and her letter constituted a final administrative agency determination.

Loigman appealed the determination to us, and we heard oral argument on November 30, 2005. On December 12, 2005, we reversed and remanded. We explained:

Here, the Board concluded that appellant had no standing to challenge [A.S.'s] pension award. But, that was not the issue before the Board following the transfer of the complaint by the Law Division. While that complaint used [A.S.'s] application as an example of the Board's mismanagement, the demand for relief broadly challenged the Board's administration of the pension system. It does not appear that the Board even considered those allegations in arriving at its determination.

We added, appellant's "complaint essentially asks the Board for a declaratory ruling with regard to the allegations in the complaint of fraud and mismanagement in the administration of the pension fund. The Board did not address these allegations." Further, "because the Board failed to address any allegations in the complaint that had been transferred to the Board from the Law Division, we vacate the January 13, 2005 determination and remand to the agency for further proceedings consistent with this opinion."

On December 23, 2005, Jamison wrote Loigman, stating that at the meeting on January 9, 2006, the Board would consider a letter Loigman wrote on December 12, 2005, our decision of December 12, 2005, and whether an administrative hearing was warranted. Loigman replied that he was not available on that date, and Jamison wrote that the Board would then consider this matter at its meeting on February 6, 2006.

At the meeting on February 6, 2006, which was not transcribed, Loigman claims that no decision was announced. Later that same day, Loigman wrote to Jamison and complained of due process violations, and again requested an Office of Administrative Law (OAL) hearing.

On April 11, 2006, Jamison wrote a letter to Loigman titled "Final Administrative Determination," setting forth findings of fact and conclusions of law, and stating that he was not entitled to a hearing before the OAL.

On May 25, 2006, Loigman filed a timely notice of appeal. On August 10, 2006, Loigman filed a motion for summary disposition, maintaining that the complaint he filed on June 4, 2004, in the Law Division was "improvidently dismissed." In response to Loigman's summary disposition motion, on October 13, 2006, the Board filed a motion for remand to give Loigman another opportunity to present all of his documentary evidence to support his general allegations of fraud and mismanagement of the pension fund. Additionally, the Board opposed Loigman's motion for summary disposition. On October 30, 2006, Loigman filed an opposition to the Board's motion for remand.

On November 1, 2006, we denied Loigman's motion for summary disposition. On November 14, 2006, we granted the Board's request and remanded the matter to the Board to afford Loigman "an opportunity to present whatever evidence he has to demonstrate a factual dispute regarding his allegations of fraud and mismanagement [of the pension fund] that warrant transmittal of this matter to the OAL."

In a December 5, 2006 letter, the Board secretary notified Loigman of a January 8, 2007, Board meeting in which the matter would be presented to the Board. The Board also requested that Loigman submit by December 29, 2006, any documentation supporting his allegations.

On December 8, 2006, Loigman wrote to the Board secretary requesting copies of various files and the Board's procedure for the issuance and service of subpoenas. In a letter dated December 19, 2006, the Board secretary responded by stating there were no provisions in the Police and Firemen's Retirement System statutes, N.J.S.A. 43:16A-1 to -68, authorizing the issuance of a subpoena. The Board secretary informed Loigman that his request for copies of records should be made through the Division's Records Custodian, but Loigman should be aware that information was limited and could not include private or confidential records protected under the Open Public Records Act, N.J.S.A. 47:1A-1 to -13. Loigman was also informed of the Division's website where certain public information could be obtained.

The Board did not receive any documentation from Loigman by December 29, 2006. Loigman, however, wrote to the Board secretary on December 29, 2006, asking the Board to remand this matter to the Law Division where procedures are in place for discovery of records allowing Loigman to obtain support for his allegations of the Board's mismanagement.

On January 8, 2007, Loigman attended the Board's open public meeting, but left before the Board considered the matter late in the afternoon. During this meeting, the Board voted to deny Loigman's request to transfer the matter to the OAL or to remand to the Law Division. In its final administrative determination issued on February 6, 2007, the Board stated:

Although [appellant] filed [his] complaint over two years ago, to date [appellant has] not provided the Board with a scintilla of evidence to support [his] claims to show that a factual dispute exists. As such, the Board is satisfied that it has provided [appellant] with ample opportunity to set forth documentation which would support [his] claims in any way, and, at its January 8, 2007 meeting, it voted to deny [appellant's] request that this matter be transferred as a "contested case" to the Office of Administrative law or remanded to the Law Division.

The Board determined that the matter was not a contested case because it did not involve the legal rights of specific pensions or parties. The Board also explained that "the OAL is not a forum for the expression of public sentiment or for broad policy issues to be heard." Moreover, the Board indicated that it lacked the power under N.J.A.C. 17:4-1.7 to remand the matter to the Law Division, which had already ruled it did not have jurisdiction over the matter.

On March 7, 2007, Loigman filed an amended notice of appeal, appealing from the Board's final administrative determinations of April 11, 2006, and February 6, 2007.

On appeal, Loigman presents the following argument for our consideration:

POINT I

THE MATTER SHOULD BE REFERRED TO AN APPROPRIATE FORUM, NOT THE BOARD OF TRUSTEES.

We begin by restating applicable legal principles. Our court's capacity to review an administrative agency's final decision is limited. Brady v. Bd. of Review, 152 N.J. 197, 210 (1997); J.D. ex rel. D.D.H. v. N.J. Div. of Developmental Disabilities, 329 N.J. Super. 516, 521 (App. Div. 2000). An appellate court may only reverse if it finds the administrative agency decision is "arbitrary, capricious or unreasonable or it is not supported by substantial credible evidence in the record." Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980). Administrative agency actions are presumed reasonable, and the party challenging the validity of that action has the burden of showing that it was arbitrary, unreasonable, or capricious. Boyle v. Riti, 175 N.J. Super. 158, 166 (App. Div. 1980). Although we are not bound by the administrative agency's interpretation of a statute, due deference is afforded to the "views and regulations of an administrative agency charged with the responsibility of implementing legislative determinations." Barone v. Dep't of Human Servs., Div. of Med. Assistance and Health Servs., 210 N.J. Super. 276, 285 (App. Div. 1986), aff'd, 107 N.J. 355 (1987).

"Administrative agencies are empowered to effectuate their regulatory responsibilities through either rulemaking or adjudication." In re the Appeal of Certain Sections of the Unif. Admin. Procedure Rules, 90 N.J. 85, 92 (1982). Administrative agencies have considerable flexibility and discretion in selecting the form of proceeding best suited for achieving their regulatory goals. Ibid. Under the Administrative Procedure Act (APA), "an agency upon the request of any interested person may in its discretion make a declaratory ruling with respect to the applicability to any person, property or state of facts of any statute or rule enforced or administered by that agency."

N.J.S.A. 52:14B-8.

The Board is vested with the responsibility of administering the Police and Firemen's Retirement System and of ensuring that qualified members receive those benefits to which they are entitled. See N.J.S.A. 43:16A-13. Pursuant to N.J.A.C. 17:1- 1.3, an applicant may request a hearing in the event the applicant disagrees with an agency decision. Upon an appeal of an agency decision, the Board must decide "whether to grant an administrative hearing based upon the standards for a contested case hearing set forth in the [APA], N.J.S.A. 52:14B-1 et seq., and the Uniform Administrative Procedure Rules, N.J.A.C. 1:1-1 et seq." N.J.A.C. 17:4-1.7(d). If the "appeal involves solely a question of law, the Board may retain the matter and issue a final administrative determination which . . . include[s] detailed findings of facts and conclusions of law." N.J.A.C. 17:4-1.7(e). Moreover, "[t]he Board's final determination may be appealed to the Superior Court, Appellate Division." Id. See also R. 2:2-3(a)(2).

Only after an agency head determines the matter to be a contested case does the OAL acquires jurisdiction over the matter. N.J.A.C. 1:1-3.2(a); J.D. ex rel. D.D.H., supra, 329 N.J. Super. at 525. A contested case is a "proceeding . . . in which the legal rights, . . . privileges, benefits or other legal relations of specific parties are required by constitutional right or by statute to be determined by an agency by decisions, determinations, or orders, addressed to them or disposing of their interests, after opportunity for an agency hearing."

N.J.S.A. 52:14B-2(b). In a contested case, all parties shall be afforded an opportunity to respond, appear before an Administrative Law Judge (ALJ) and present evidence and arguments on all issues. N.J.S.A. 52:14B-9(c), -10(c). Contested cases, however, "are not informational nor intended to provide a forum for the expression of public sentiment on proposed agency action or broad policy issues affecting industries or large, undefined classes of people." N.J.A.C. 1:1-2.1.

Not every factual dispute requires referral to OAL as a contested case. J.D. ex rel. D.D.H., supra, 329 N.J. Super. at 525. "'The right to a full trial-type hearing in administrative proceedings is generally limited to the situation where adjudicatory facts . . . are in issue.'" Ibid. (quoting High Horizons Dev. Co. v. Dep't of Transp., 120 N.J. 40, 49 (1990)). "It is the presence of disputed adjudicative facts, not the vital interests at stake, that requires the protection of formal trial procedure." Ibid. Only when material disputed adjudicative facts exist must an agency grant a plenary hearing. Ibid. "Bald allegations or naked conclusions . . . are insufficient to require an agency head to transmit the matter to OAL as a contested case." Ibid.

Loigman argues that the Board "improvidently dismissed" his action alleging fraud and abuse by the Board and Division staff. Loigman contends that the Board's final administrative determinations are "the product of significant procedural and substantive defects." Specifically, Loigman argues that the Board erred by not conducting a plenary hearing, allowing for discovery or referring the case to the OAL. Loigman asks us to "devise an appropriate remedy, perhaps referral to the Superior Court, Law Division, or a special master" because the Board is not the proper forum to determine whether the Board and Division staff have engaged in fraud and abuse. Loigman fails to cite any applicable legal authority to support his claims.

In its determination that there were no disputed questions of fact, the Board noted that Loigman "only raised bald allegations of general mismanagement and fraud of the pension fund and [has] failed to provide the Board with any factual basis to substantiate [his] claims." Loigman argues that the opportunities to present evidence are hollow because he has been unable to obtain either documentary evidence or to compel testimony of witnesses. Loigman's argument is without merit because he has been provided ample opportunity to present evidence to support his claim.

After Loigman filed his June 2004 complaint in the Superior Court, the Board provided Loigman with at least three opportunities to submit to the Board any evidence to support his general allegations of mismanagement and fraud. He was afforded an opportunity to submit evidence at the Board's February 6, 2006, meeting; he was requested to submit any evidentiary materials by December 20, 2006, in anticipation of the January 8, 2007, meeting; and he was invited to attend that meeting. Loigman failed at each opportunity to present any evidence of support. There is no evidence in the record to suggest a contested material issue of fact regarding mismanagement that would require a plenary hearing. Sloan ex rel. Sloan v. Klagholtz, 342 N.J. Super. 385, 392 (App. Div. 2001); J.D. ex rel. D.D.H., supra, 329 N.J. Super. at 525.

Moreover, Loigman argues that "the proper procedure, as explained by the Appellate Division, mandated a plenary hearing, not another dismissal." Loigman misstates our holding in our December 2005 opinion remanding the matter to the Board. In our holding, we stated that "[i]f an administrative agency's decision is not accompanied by the requisite findings of fact and conclusions of law, the usual remedy is to remand to the agency to correct the deficiency." In re A.S., No. A-2813-04T1 (slip op. at 5) (App. Div. Dec. 12, 2005) (citing DiMaria v Bd. of Trs., Public Employees' Ret. Sys., 255 N.J. Super. 341, 347 (App. Div.), certif. denied, 113 N.J. 638 (1988)). We did not mandate a plenary hearing nor did we retain jurisdiction of the matter. Rather, we afforded Loigman an opportunity to present evidence of fraud and corruption which would warrant a referral to the OAL as a contested case. Ibid. This he failed to do.

The Board's decision not to transmit the matter to the OAL as a contested case based solely on the bare allegations and conclusions in Loigman's complaint was reasonable, particularly in light of the fact that he was afforded at least three opportunities to submit additional evidence of Board mismanagement.

Loigman argues that he believes there is fraud and mismanagement with respect to the Police and Firemen's Retirement System administered by the Board. He has not, however, presented any evidence of that. Loigman argues that he requires certain information which he can only obtain by the use of subpoenas. He recognizes, though, that there is no legal authority for him to obtain subpoena power in this situation. He argues, therefore, that we should craft a remedy, which would allow him, as a private citizen, to allege fraud without specific facts, then grant him subpoena power, and then permit him to conduct hearings following his investigation using that subpoena power. In essence, Loigman asks us to designate him a private attorney general and vest him with subpoena powers similar to those granted to a grand jury or prosecutor. We decline to do this.

We recognize the right of taxpayers to maintain civil actions to address government wrongs. However, that right is to be exercised within the statutory and regulatory rules enacted by our Legislature, our courts, and our administrative agencies. We note that the Rules of Court require that pleadings must allege sufficient facts as give rise to a cause of action, and that mere conclusions and an intention to rely on discovery are inadequate. R. 4:5-2; Glass v. Suburban Restoration Co., 317 N.J. Super. 574, 582 (App. Div. 1998). Moreover, when a pleading sets forth allegations of fraud or breach of trust, "particulars of the wrong, with dates and items if necessary, shall be stated insofar as practical." R. 4:5-8(a).

Consequently, after carefully reviewing the Board's final administrative determinations and Loigman's arguments, we are satisfied that the Board's actions were neither arbitrary, capricious, nor unreasonable, and were founded on the appropriate principles of law. For the reasons set forth above, we affirm.

Affirmed.

20080107

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