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Kaflowitz v. Board of Trustees


March 17, 2008


On appeal from a final determination of The Board of Trustees, Public Employees' Retirement System #470255.

Per curiam.


Submitted December 17, 2007

Before Judges A. A. Rodríguez and C. S. Fisher.

Steven J. Kaflowitz, an Assistant Union County Prosecutor and a member of the Public Employees' Retirement System (PERS), appeals from the December 21, 2006 final decision of the PERS Board of Trustees (Board) re-affirming its October 19, 2006 decision declining "to provide an advisory opinion." We agree and dismiss the appeal.

Kaflowitz planned to retire on June 1, 2007, as a Union County Prosecutor engaged primarily in appellate work. Upon his retirement, Kaflowitz desired to utilize his appellate advocacy skills as an independent contractor for the Union County Prosecutor's Office.

In July 2006, Union County Prosecutor Theodore J. Romankow requested from PERS a formal opinion that, following Kaflowitz's intended retirement, he could continue to do freelance work for the Prosecutor's Office without affecting his pension benefits. Romankow's letter described a proposed contract formulating the post-retirement arrangement. Romankow explained that he thought the contract would create an independent contractor relationship.

Michael R. Czyzyk, Supervisor, External Audit, Division of Pensions (Division), responded, advising that the Division "feels that the vendor/contractor arrangement you are proposing would violate the enrollment provisions of . . . N.J.S.A. 43:15A-7" as it would constitute an extension of the Assistant Prosecutor's employment. Thus, if Kaflowitz's retirement income for work done as a contractor for the Union County Prosecutor's Office exceeded $15,000 per year, he would be required, by virtue of N.J.S.A. 43:15A-57.2b, "to [re-]enroll in [PERS] as a condition of . . . employment, regardless of age." N.J.S.A. 43:15A-7d. The letter advised that the employee could file an appeal to the PERS Board.

Romankow responded and further explained why he believed that the proposed contract would create a permissible independent contractor relationship. He noted that the proposed contract was entirely consistent with the past practice of his office to retain private attorneys to perform similar work. Specifically, Romankow anticipated hiring Kaflowitz to do surplus appellate work assigned to the Prosecutor's Office by the Attorney General. Under the proposed terms of the contract, Kaflowitz would work from his own workplace; set his own hours; periodically bill the County for hours worked; use all of his own resources, including his own on-line computer research, printer, telephone, fax and other work materials; and is allowed to hire assistants. He or the County may cancel the agreement upon sixty-days notice. Kaflowitz is also free to take other legal employment, avoiding conflicts.

Czyzyk responded indicating that the Division's position was not changed by the additional information. The Division determined that the proposed relationship between the Union County Prosecutor's Office and Kaflowitz "would violate the post-retirement provisions of the PERS pension statutes." Czyzyk further stated that Kaflowitz had forty-five days to file an appeal of this administrative ruling with the Board.

Kaflowitz appealed to the Board and requested a hearing. Subsequently, Romankow and Kaflowitz appeared before the Board. The Board denied the request for approval of the proposed agreement. In an October 19, 2006 letter, the Board's secretary stated:

In making its determination, the Board noted that there is neither an anticipation of a bona fide retirement nor a bona fide independent contractor relationship between you and Union County currently before the Board. Therefore, the Board has denied your request.

Kaflowitz submitted a written statement asking the Board to reconsider its determination. The Board reconsidered Kaflowitz's request and re-affirmed its decision. Once again, the Board declined "to provide an advisory opinion." The decision concluded:

You are advised that if you accept employment after retirement with the State or any of the local participating public employers in a PERS-covered position and your total salary from all public employment exceeds the provisions of N.J.S.A. 43:15A-57.2, you are subject to enrollment in the PERS.

Kaflowitz appeals to us contending that PERS's decision is unreasonable and should be reversed. We disagree.

First, we agree that the issue presented to the Board is hypothetical, and thus, calls for an advisory opinion. Chamber of Commerce v. State, 89 N.J. 131, 141 (1982). The Uniform Declaratory Judgments Act, N.J.S.A. 2A:16-50 to -62, permits the courts to declare "rights, status and other legal relations" so as to afford litigants "relief from uncertainty and insecurity." N.J.S.A. 2A:16-51. However, to maintain a declaratory judgment action, a person must be involved in a "justiciable controversy" between adverse parties. Unsatisfied Claim & Judgment Fund Board v. Concord Ins. Co., 110 N.J. Super. 191, 196 (Law Div. 1970); Trustees of Rutgers College v. Richman, 41 N.J. Super. 259, 286-87 (Ch. Div. 1956); N.J. Tpk. Auth. v. Parsons, 3 N.J. 235, 241 (1949). "It is clear that relief by way of a declaratory judgment should be withheld when the request is in effect an attempt to have the court adjudicate in advance the validity of a possible [claim or] defense in some expected future law suit." Donadio v. Cunningham, 58 N.J. 309, 325 (1971).

Here, Kaflowitz is seeking an advisory opinion. The Board is not obligated to give such an opinion.

Second, the Division has provided as much guidance to Kaflowitz as it can based on the general facts presented. Such guidance provided by the Division seeks to assist members and employers in their understanding of their rights and obligations pursuant to the pension laws. It is provided as a service to members. However, the guidance provided by the Division is not a declaratory ruling pursuant to the Administrative Procedure Act. N.J.S.A. 52:14B-1 to -15. Because the issuance of a declaratory ruling is a discretionary matter, vested exclusively with the agency head, the Board can decline to issue a formal ruling. N.J.S.A. 52:14B-8. Here, the Board expressly declined to issue such an advisory opinion. We perceive no error. Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980). The appeal is dismissed.


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