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Manzella v. Township of Rochelle Park


May 7, 2008


On appeal from the Board of Trustees of the Public Employees' Retirement System, Department of the Treasury, Division of Pensions and Benefits, Docket No. 739634.

Per curiam.


Argued April 28, 2008

Before Judges Parrillo, Gilroy and Baxter.

Joseph Manzella appeals from the March 22, 2007 final decision of the Board of Trustees (Board) of the Public Employees' Retirement System (PERS), which denied his application for deferred retirement. The Board determined that he was disqualified from eligibility for deferred retirement because he had been removed for cause from his positions as Tax Collector, Finance Officer and Town Administrator with the Township of Rochelle Park (Township). We affirm.


On January 1, 1987, Manzella established membership in PERS and continued as a member of PERS until he was involuntarily terminated from his employment with the Township on October 19, 2005. Specifically, on May 20, 2005, Manzella was charged by the Bergen County Prosecutor's Office with theft by deception after he submitted a fraudulent financial voucher to the Township for attending a seminar that he did not attend. On October 19, 2005, Manzella pled guilty to theft by deception as a disorderly persons offense.*fn1 That same day, the Township adopted Resolution No. 2005-106, which converted Manzella's suspension into a formal termination of his employment. The resolution specifically provided that the termination was "in accordance with the provisions of N.J.S.A. 2C:51-2, which requires the forfeiture of public office for any person convicted of a criminal offense involving or touching said public office." The resolution was effective immediately.

On January 20, 2006, Manzella was sentenced to a one-year term of probation. In accordance with the provisions of N.J.S.A. 2C:51-2, which required him to forfeit public office because his conviction for theft by deception touched upon his public position, Manzella executed a consent order to forfeit public office. He signed that consent order on July 3, 2006.

After he was sentenced on March 13, 2006, Manzella filed an application for a deferred retirement allowance*fn2 with PERS to be effective July 1, 2007. On December 20, 2006, the PERS Board determined that because Manzella had been removed for cause, the provisions of N.J.S.A. 43:15A-38 barred him from receiving the benefit of a deferred retirement. The Board did, however, permit Manzella to withdraw the contributory share of his accumulated pension contributions. Manzella filed an appeal from the Board's December 20, 2006 determination and requested a hearing before the Office of Administrative Law (OAL). On February 21, 2007, the Board denied Manzella's request for an OAL hearing, determining that there were no issues of material fact that required a hearing. The Board also reiterated its earlier conclusion that N.J.S.A. 43:15A-38 was clear and unambiguous, and precluded granting Manzella the deferred retirement that he sought.

On appeal, Manzella contends that: 1) a recent amendment to N.J.S.A. 43:1-3, which limits forfeiture of retirement benefits only to those instances where the amount of the theft exceeds $10,000, must be applied retroactively; 2) the provisions of N.J.S.A. 43:15A-38 must be read in pari materia with other pension legislation; 3) the Board erred by failing to apply the criteria articulated in Uricoli v. Board of Trustees, Police & Firemen's Retirement System, 91 N.J. 62 (1982); 4) the Board was prohibited from denying his deferred retirement application because he was convicted of "a mere disorderly persons offense"; and 5) he was not removed for cause.


We review Manzella's contentions in accordance with our scope of review. An appellate court will not upset the ultimate determination of an administrative agency unless the agency's determination was arbitrary, capricious or unreasonable, or the agency's decision violates express or implied legislative policies. Campbell v. Dep't. of Civil Serv., 39 N.J. 556, 562 (1963).

We are satisfied that the Board correctly determined that Manzella's application for deferred retirement was barred by N.J.S.A. 43:15A-38. That statute provides in pertinent part:

Should a member of the Public Employees' Retirement System, after having completed 10 years of service, be separated voluntarily or involuntarily from the service, before reaching service retirement age, and not by removal for cause on charges of misconduct or delinquency, such person may elect to receive:

(b) A deferred retirement allowance, beginning at the retirement age . . . .

[N.J.S.A. 43:15A-38 (emphasis added).]

The forfeiture provisions of N.J.S.A. 43:15A-38 are invoked whenever a public employee has been removed for cause on charges of misconduct that are related to his official duties. Borrello v. Bd. of Trs., Pub. Employees' Ret. Sys., 313 N.J. Super. 75, 78 (App. Div. 1998).

Here, we are satisfied, contrary to Manzella's claim to the contrary, that he was removed for cause. Township Resolution No. 2005-106 specifically and unambiguously observed that Manzella's termination resulted from his conviction of a criminal offense that "involv[ed] or touch[ed] said public office."

Moreover, we reject Manzella's argument that because he was convicted of a "mere disorderly persons offense," and not an indictable crime, the Board was precluded from relying upon the provisions of N.J.S.A. 43:15A-38. The statute does not require conviction of an indictable offense. Instead, it requires only a showing that a member of PERS was removed for cause on a "charge[] of misconduct." N.J.S.A. 43:15A-38. Unquestionably, theft by deception is "'an offense involving dishonesty.'" State v. Lee, 258 N.J. Super. 313, 316 (App. Div. 1992)(quoting N.J.S.A. 2C:51-2(2)(1)).

N.J.S.A. 43:15A-38 does not require conviction of an indictable offense nor does it require any form of conviction. So long as the employee is "removed for cause on [a] charge[] of misconduct," the statutory bar is satisfied. Resolution No. 2005-106 amply satisfies that requirement. Accordingly, we are satisfied that the Board correctly determined that Manzella was removed for cause on a charge of misconduct and was thereby barred from receiving the benefit of a deferred retirement allowance.


We likewise reject Manzella's argument that the Board erred by failing to consider and apply the equitable factors the Court identified in Uricoli. Uricoli involved a police chief who was found guilty of malfeasance in office based upon a single instance of ticket-fixing. Uricoli, supra, 91 N.J. at 65. The Court held that the trustees of the Police and Firemen's Retirement System (PFRS) were obliged to apply equitable factors in determining whether Uricoli's conduct barred him from receiving accidental disability benefits. Id. at 77-78.*fn3 The Court observed that the applicable PFRS accidental disability retirement statutes, N.J.S.A. 43:16-2 and N.J.S.A. 43:16A-7, did not require automatic forfeiture of pension benefits when a PFRS member engaged in misconduct that was related to his office. Id. at 66. Accordingly, the Court adopted the eleven equitable factors that we have described. The Court held that the PFRS Board must consider those factors when determining whether to impose forfeiture of pension benefits for a person otherwise eligible for an accidental disability retirement from PFRS. Uricoli, Id. at 75.

As we held in Borrello, the Uricoli factors are not applicable to members of PERS who are subject to the automatic forfeiture provisions of N.J.S.A. 43:15A-38. Borrello, supra, 313 N.J. Super. at 77-78. Borrello argued on appeal that the Board erred in not applying the Uricoli balancing factors. Ibid. We affirmed the denial of benefits and rejected his claim that the Uricoli factors should have been applied. Ibid. We held that those equitable factors did not apply because Borrello's right to obtain deferred retirement benefits from PFRS was "automatically forfeited by the express language of N.J.S.A. 43:15A-38," ibid., which is the same statute at issue here. Accordingly, we reject Manzella's contention that the Uricoli factors should apply.

We likewise reject his argument that Borrello was wrongly decided and we should not follow it. We are satisfied, as was the panel in Borrello, that if the Legislature intended the Uricoli factors, now codified as N.J.S.A. 43:1-3, to apply to all pension forfeiture statutes, even those that explicitly require automatic forfeiture, the result would be an implied repealer of N.J.S.A. 43:15A-38. We concluded that "[h]ad the Legislature intended [such a result], it would have said so." Ibid. For the same reason, we are satisfied that if the Court had intended its Uricoli factors to apply across the board to all pension legislation, its holding would have resulted in the nullification of N.J.S.A. 43:15A-38. We deem it highly unlikely that the Court intended such a result. Accordingly, we reject Manzella's contention that we should disregard Borrello.


We also reject Manzella's contention that the 2007 amendment to N.J.S.A. 43:1-3 applies retroactively and thus protects him from forfeiture of his pension because his theft by deception conviction did not involve an amount in excess of $10,000. In the amendment to N.J.S.A. 43:1-3, effective April 14, 2007, the Legislature specified that only those persons who are convicted of theft by deception in an amount exceeding $10,000 are subject to automatic forfeiture of their pension benefits:

A person who . . . has held any public office . . . who is convicted of any crime set forth in subsection b. of this section . . . shall forfeit all of the . . . retirement benefit earned as a member of any State or locally-administered . . . retirement system in which he participated at the time of the commission of the offense and which covered the office . . . involved in the offense. . . .

b. Subsection a. of this section applies to a conviction of any of the following crimes:

(2) N.J.S.2C:20-4, theft by deception, if the amount involved exceeds $10,000. . . .

[L. 2007, c. 49, § (2)(a).]

That amendment is, however, prospective, rather than retrospective, in its application. The statute provides:

The provisions of section 2 of P.L.2007, c.49 (C.43:1-3.1) concerning the forfeiture of all of the pension or retirement benefit for a member of any State or locally-administered pension fund or retirement system shall be prospective in application for any crime or offense committed after the effective date of P.L.2007, c.49 (C.43:1-3.1 et al.). [Ibid. (emphasis added).]

Accordingly, as is evident from the express language of the statute, the amendment concerning amounts in excess of $10,000 applies prospectively only. Manzella's forfeiture of office became effective on July 3, 2006, long before the $10,000 threshold in the amendment to N.J.S.A. 43:1-3 became effective on April 14, 2007.

Manzella concedes that the language of N.J.S.A. 43:1-3 specifies that its provisions shall apply prospectively, effective April 14, 2007. Manzella nonetheless argues that the Legislature intended the $10,000 threshold as a "curative" enactment. He maintains that the sanction of automatic forfeiture shall apply to public employees who commit work-related thefts after the effective date of the Act, but only if the amount in question exceeds $10,000, whereas those whose thefts involve less than $10,000 are immune from the automatic forfeiture provisions of N.J.S.A. 43:1-3, regardless of whether their criminal conduct occurred before or after the Act's effective date.

Manzella relies on Sarasota-Coolidge Equities II, LLC v. S. Rotondi & Sons, Inc., 339 N.J. Super. 105, 114-15 (App. Div. 2001), in support of his argument that a "curative amendment" to a statute is one that brings "the law into harmony with what the Legislature originally intended," in that such amendment is meant "only to clarify what was originally intended." He cites 2nd Roc-Jersey Assocs. v. Morristown, 158 N.J. 581, 604 (1999) in support of his contention that a "curative" amendment to legislation may be applied retroactively even if the legislation in question specifies that its application is to be prospective. The Court made it clear in 2nd Roc, however, that curative statutes should be applied retroactively, "'where there is no clear expression of intent by the Legislature that the statute is to be applied prospectively only.'" Ibid. (quoting Gibbons v. Gibbons, 86 N.J. 515 (1991)). Here, the statute in question, N.J.S.A. 43:1-3, contains a clear and explicit expression of intent to apply the statute prospectively only. Accordingly, we are not called upon to decide if the $10,000 threshold of N.J.S.A. 43:1-3 is "curative" legislation that should be applied retroactively.

Moreover, were we to accept Manzella's argument that the $10,000 threshold of N.J.S.A. 43:1-3 controls, and overrides the automatic forfeiture provisions of N.J.S.A. 43:15A-38, we would have no choice but to find an implied repealer. As we observed in Borrello, every reasonable construction should be applied to avoid such a result. Id. at 78. Thus, we conclude that the $10,000 theft by deception threshold contained in N.J.S.A. 43:1-3 has no bearing on Manzella who, as a member of PERS, is subject to the automatic forfeiture provisions of N.J.S.A. 43:15A-38. Consequently, we need not resolve the retroactive/prospective dichotomy arising under N.J.S.A. 43:1-3.


Finally, we reject Manzella's contention that the two statutes, N.J.S.A. 43:15A-38 and N.J.S.A. 43:1-3, should be construed in pari materia. In pari materia is a canon of statutory construction that requires a court to construe two statutes in a similar fashion if they both address the same subject matter or have the same purpose or objective. Richard's Auto City, Inc. v. Dir., Div. of Taxation, 140 N.J. 523, 540 (1995). Contrary to Manzella's contention, the two statutes do not address similar subjects. As we held in Borrello, N.J.S.A. 43:1-3 is not applicable to PERS members because it applies "only to those claims for benefits where the specific statute is silent respecting the effect of a conviction for a crime relating to the applicant's public office." Borrello, supra, 313 N.J. Super. at 77. Here, each of the two statutes addresses different subject matter. One, N.J.S.A. 43:1-3, applies only in instances where a statute is silent as to pension forfeitures. The other, N.J.S.A. 43:15A-38, applies specifically to PERS members and requires automatic forfeiture. Thus, the doctrine of in pari materia does not apply because the two statutes do not address the same subject matter.

As we observed in Borrello, the two statutory provisions "may reasonably stand together, each in its own particular sphere of action" because they "deal[] . . . with two separate classes of pension statutes." Id. at 78. Accordingly, they should not be read in pari materia. See Richard's Auto, supra, 140 N.J. at 540.


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