October 23, 2009
DAVID A. HILL, APPELLANT,
BOARD OF TRUSTEES OF THE POLICE AND FIREMEN'S RETIREMENT SYSTEM, RESPONDENT.
On appeal from the Board of Trustees of the Police and Firemen's Retirement System.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 7, 2009
Before Judges Graves, Sabatino, and J.N. Harris.
Former police officer David A. Hill (Hill) applied for an ordinary, and then later an accidental, disability pension from the Police and Firemen's Retirement System (PFRS). The Board of Trustees of the PFRS (Board) decided that Hill was not entitled to collect any type of monthly PFRS benefits because Hill had previously engaged in insurance fraud. Deeming this misconduct serious, the Board held that Hill's entire PFRS service credit, from December 28, 1991 until June 30, 2000, was forfeited. This appeal followed.
Mindful of our constrained scope of appeal, Hemsey v. Bd. of Trustees, Police & Fireman's Ret. Sys., 198 N.J. 215, 223-24 (2009), but sensitive that a complete forfeiture of earned pension rights is a drastic remedy that should be avoided unless clearly intended by the Legislature, Uricoli v. Police & Fire Ret. Sys., 91 N.J. 62, 70-73 (1982), we reverse and remand the decision of the Board.
Hill served as a corrections officer and later on as a policeman from December 23, 1991 until June 10, 2000. Accordingly, he was a member of PFRS and entitled to its benefits and emoluments, including a pension, if he qualified. At the end of his public service career, he was employed by the City of Newark Police Department.
On October 20, 1996, Hill - along with another Newark police officer - was engaged in the apprehension of persons suspected of stealing a Jeep. Because of an alleged act of resisting arrest by one of the participants in the theft, Hill asserts that he suffered a fractured wrist. From this seemingly innocuous, albeit potentially disabling injury, Hill claims that he spiraled into several years of intermittent mental illness. Finding himself initially benched from active street duties because of physical limitations connected with the wrist injury, Hill professes that he grew more depressed and was unable to perform his job as police officer in the way that he formerly enjoyed. Hill claims that he eventually began to hear voices that were intrusive and distracting. He endured irrational fears, including the fear of the number 666,*fn1 which just happened to appear in the license plate - LK666V - of his leased 1993 Lexus SC400.
On February 16, 2000, Hill turned his Lexus over to an individual, Rashid, who was a neighborhood acquaintance. On February 17, 2000, Hill's vehicle was found on Governor Street in Newark, having been destroyed by fire. A report of the Newark Fire Department concluded that the cause of the fire was arson.
On February 18, 2000, Hill reported that his Lexus had been stolen and subsequently completed a Newark Fire Department Vehicle Investigation Report. Hill made an insurance claim for the severely damaged vehicle, which resulted in the insurance company paying the leasing company for the loss. Hill received no direct benefit from the insurance proceeds.
On June 8, 2000, Hill gave a voluntary statement to the Newark Police Department's Arson Squad. Hill stated that he gave the vehicle to Rashid to make it seem as if it had disappeared, because the car required costly repairs. Hill was not delinquent in his payments on the four-year lease of the car; the lease was scheduled to end on February 28, 2000.
In short order, Hill was served with a "Complaint Against Personnel" by Director Joseph Santiago, alleging that Hill had violated several police department rules and regulations. Hill was suspended without pay on June 10, 2000. Hill was separately subjected to additional disciplinary action where he was accused of an inability to perform his duties, based upon a fitness-for-duty psychological evaluation performed by Dr. Irving B. Guller of the Institute for Forensic Psychology. Hill's employment with the City of Newark was terminated, as reflected in its Final Notice of Disciplinary Action, effective on January 16, 2001, based upon Guller's work, not the pending misconduct charges relating to Hill's car.
One year later, on January 25, 2002, Hill appeared in the Criminal Part to respond to an accusation that was lodged against him by the Essex County Prosecutor. Although Hill was initially charged with third degree attempted theft by deception contrary to N.J.S.A. 2C:20-4(a), the terms of a plea bargain reduced the offense to a disorderly persons charge. The allocution that was acceptable to the assistant prosecutor and accepted by the court was the following:
Q: Sir, you're charged in one count of this accusation that on February 16th, 2000, you did attempt to commit a theft by deception.
A: Yes, Your Honor.
Q: What did you do?
MR. ROTELLA: (defense counsel): Should I inquire, Judge, or do you want.
THE COURT: He can tell me what he did wrong. BY THE COURT:
Q: What'd you do that's against the law, Mr. Hill?
A: Yes, Your Honor. I did attempt to have my vehicle destroyed.
Q: A little louder.
A: I did attempt to have my vehicle destroyed for the purpose of obtaining insurance proceeds.
THE COURT: You satisfied with the factual basis, Mr. Carter?
MR. CARTER: (the prosecuting attorney): Yes, I am, Your Honor.
THE COURT: A guilty plea will be entered.
Q: Mr. Hill, you're originally charged in this accusation with an indictable offense. However, you pled to a disorderly persons offense.
A: Yes, Your Honor.
After Hill waived a pre-sentence report, his attorney presented an argument to the court regarding sentencing. Among the statements he made to the sentencing judge was, "[y]our Honor, my client was a member of the Newark Police Department. These incidents... touch on his job directly."
Pursuant to the plea bargain, the court immediately sentenced Hill to one-year probation and a $250 fine, plus statutory costs and penalties. Although the judge made no express findings that there was a connection between Hill's offense and his job as a police officer, an order, consistent with the plea agreement, was entered on January 25, 2002, which provided:
Defendant's employment as a Newark Police Officer is hereby FORFEITED, and defendant shall be forever disqualified from holding any office or position of honor or trust under this State or any of its administrative or political subdivisions.
Hill did not appeal the conviction, sentence or order of public service forfeiture.
Although Hill's employment had already ended on January 16, 2001, due to psychological unfitness for duty, the City of Newark reconfirmed Hill's termination. Now, because of the forfeiture order, Hill's "removal" was treated as retrospectively effective on June 10, 2000.
Hill applied to the Board for an ordinary disability pension on December 11, 2000. He explained the reason for his incapacity: "mental psychological disability due to orthopedic injury to right hand (dominant)." On September 5, 2001, Hill amended his application to seek an accidental disability pension, now linking his incapacitation to:
1. disability due to orthopedic injury to right hand (dominant) in two separate incidents.
2. disability due to psychiatric sequelae caused by assault.
On September 12, 2002, the Board determined that Hill's PFRS service credit was dishonorable for retirement calculation purposes. It treated the application for accidental disability benefits moot. In finding that Hill's service credit was not honorable, the Board held, "[a] review of your case revealed that the criminal offense was directly related to your public employment duties as a Police Officer."
Hill sought review of the decision. The appeal was transmitted to the Office of Administrative Law as a contested case, where an Administrative Law Judge (ALJ) conducted a plenary hearing. Hill defended his position by arguing that the conduct relating to his Lexus was animated by mental illness and not by criminal intent. Hill attempted to disavow several statements he made in 2000 to the Newark police and fire departments. He claimed essentially that the factual basis he gave in 2002 in the Law Division was fabricated and not worthy of consideration because:
I go in there with my attorney and, you know, he - you know, we - we go through this process and I just wanted to go in there and leave as quickly as possible. You know, just I thought it was mostly - also telling him, you know, what they wanted to hear and it - it would, you know, just go smoothly and I would get out of there. That - that was it.
That was the - it was - that's why I said it.
At the plenary hearing, in addition to three fact witnesses, Hill called one expert witness, psychiatrist Julie Low, M.D. Dr. Low testified that it was her opinion that Hill's conduct surrounding the disappearance of his car was motivated by mental illness. She confirmed that Hill was probably suffering from delusions and paranoia at the time and believed that he was being controlled by the devil through his automobile. She further agreed that a person such as Hill "can be controlled by a powerful delusion in one area and yet maintain functioning in another area."
Although relying on hearsay*fn2 by utilizing the reports of Dr. Guller and a Dr. Layman to corroborate Dr. Low's opinions, the ALJ found that Dr. Low's testimony was "compelling, convincing, and unrefuted." The ALJ concluded that Hill's "attempt to dispose of his leased vehicle to relieve himself of the delusions and paranoia from which he was suffering was a manifestation of psychiatric infirmity."
After engaging in an analysis of the eleven factors outlined in Uricoli, supra, 91 N.J. at 77-78 (later codified in N.J.S.A. 43:1-3), the ALJ held that Hill suffered from "a psychological infirmity, which although it may not totally offset his conduct, it certainly does substantially mitigate his actions." Accordingly, the ALJ concluded, "Hill's misconduct of February 2000 was a manifestation of his psychiatric infirmity and should not result in a complete forfeiture of his pension, but rather a forfeiture of only that time period after February 2000 for which Hill might have received pension credit."
Upon final review, the Board "adopted the findings of fact but voted to reject the conclusions of law as outlined in Administrative Law Judge's Initial Decision." The Board held that a finding of psychosis-driven motivation, not criminal intent, for Hill's acts in February 2000 was inconsistent with the previous finding that Hill "was guilty of [a] "criminal offense." The Board determined that it was improper for the ALJ to make a finding of mental capacity of Hill because it would "serve to completely negate his plea agreement, and his actions six years earlier." Due to this perceived error, the Board found incorrect the entire legal conclusions made by the ALJ and rejected them totally, resulting in the Board's determination to order the complete forfeiture of Hill's pension benefits instead of just those accrued after the events of February 16, 2000. This appeal followed.
This court's review of agency decisions is narrow. In re Virtua-W. Jersey Hosp., 194 N.J. 413, 422 (2008). The court "will ordinarily defer to the decision of a State administrative agency unless the appellant establishes that the agency's decision was arbitrary, capricious, or unreasonable, or that it was unsupported by sufficient credible, competent evidence in the record." Green v. State Health and Benefits Comm'n, 373 N.J. Super. 408, 414 (App. Div. 2004) (citing Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963)). While acting in this deferential mode, as long as the record supports the agency's decision, the court should affirm the determination even if it might have reached a different conclusion had it considered the matter de novo. Id. at 414-15.
The relationship between the findings and conclusions leading to an initial decision from an ALJ and the final decision reached by the Board is set forth in the Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to -24, which states in pertinent part:
A recommended report and decision which contains recommended findings of fact and conclusions of law and which shall be based upon sufficient, competent, and credible evidence shall be filed... with the agency in such form that it may be adopted as the decision in the case... The head of the agency, upon a review of the record submitted by the administrative law judge, shall adopt, reject or modify the recommended report and decision... In reviewing the decision of an administrative law judge, the agency head may reject or modify findings of fact, conclusions of law or interpretations of agency policy in the decision, but shall state clearly the reasons for doing so... In rejecting or modifying any findings of fact, the agency head shall state with particularity the reasons for rejecting the findings and shall make new or modified findings supported by sufficient, competent, and credible evidence in the record. [N.J.S.A. 52:14B-10(c).]
At the outset, the Board had accepted the factual findings of the ALJ. This necessarily included his determination of the existence of substantial mental health stressors that affected Hill in February 2000. We are satisfied there is substantial credible evidence in the record to support this finding and discern no basis to conclude otherwise.
What is problematic is the Board's departure from the ALJ's conclusions regarding the mitigating effects of Hill's psychosis. Understandably, the touchstone for both the ALJ and Board was the Supreme Court's Uricoli standard. Nevertheless, the Board ultimately failed to follow that paradigm by its focus on the principle of judicial estoppel. The Board criticized the ALJ for retreating from a finding of criminal intent under the lens of Hill's guilty plea. It accused Hill, in so many words, of "playing fast and loose with the courts," a shorthand reference for judicial estoppel. State v. Jenkins, 178 N.J. 347, 359 (2004) ("The doctrine prevents litigants from 'playing fast and loose' with, or otherwise manipulating, the judicial process."); Bray v. Cape May City Zoning Bd. of Adj., 378 N.J. Super. 160, 166-67 (App. Div. 2005) ("[A] party may not 'play fast and loose' with an administrative agency by asserting a position before the agency that is inconsistent with a position the party has successfully asserted before a court or other administrative tribunal.").
Judicial estoppel, however, is an "extraordinary remedy" that is invoked "only 'when a party's inconsistent behavior will otherwise result in a miscarriage of justice.'" Kimball Int'l, Inc. v. Northfield Metal Prods., 334 N.J. Super. 596, 608 (App. Div. 2000) (quoting Ryan Operations G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355, 365 (3d Cir. 1996)), certif. denied, 167 N.J. 88 (2001). The Board's undue emphasis upon the bona fides of the guilty plea deprived Hill of the benefit of the principle that collateral estoppel and other issue preclusionary doctrines do not generally prevent a person in a civil proceeding from taking a position inconsistent with his guilty plea. State Farm Fire & Cas. Co. v. Connolly, 371 N.J. Super. 119, 125-26 (App. Div. 2004).
Another basic rule that emerges from our case law is that a criminal conviction may be conclusive proof of commission of a crime, but not of the underlying facts. Allstate Ins. Co. v. Schmitt, 238 N.J. Super. 619, 632 (App. Div.), certif. denied, 122 N.J. 395 (1990); Department of Law & Pub. Safety, Div. of Gaming Enforcement v. Gonzalez, 273 N.J. Super. 239, 245 (App. Div. 1994). Under Uricoli, the Board was obligated to parse "the nature of the misconduct or crime, including the gravity or substantiality of the offense, whether it was a single or multiple offense and whether it was continuing or isolated." Uricoli, supra, 91 N.J. at 78.
We agree with Hill's argument that the Board erred by insufficiently considering and applying the equitable factors that 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. Id. at 65. The Court held that the Board was obliged to apply various 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 previously described. The Court held that the Board must consider those factors when determining whether to impose a forfeiture of pension benefits for a person otherwise eligible for an accidental disability retirement from PFRS. Id. at 75.
In addition to underestimating the psychiatric evidence, the Board misapprehended the relationship between the misconduct and Hill's duties, as well as overstated the quality of moral turpitude. This is not a mere difference of opinion with the Board. If that were all that existed, we would readily defer to the Board's value judgment. Instead, the Board's analytical errors go to the heart of its conclusion that Hill's entire service was dishonorable.
The Board found a direct relationship between Hill's employment and the insurance fraud. There was no factual evidence in the record to support this linkage. Additionally, the Board did not directly address the service credits Hill earned as a correction officer. Instead of carefully parsing the two public service jobs worked by Hill, the Board lumped Hill's employment history together.
The Board's finding a connection between being a police officer and committing a crime appears to founded upon strict liability, a philosophy plainly eschewed by Uricoli. The Board argues that Hill placed his fellow police officers at risk when he turned his car over to Rashid; he further endangered the lives of Newark firefighters when someone torched the Lexus. All of that may be true enough, but there is no factual support to link those risks of harm with Hill's status as a police officer in Newark.
As for the moral turpitude quotient, the Board refers to Hill's conviction as both "a third degree offense" and "a disorderly persons charge." The Legislature, through the grading of offenses under the New Jersey Code of Criminal Justice, N.J.S.A. 2C:1-1 to 104-9, determined the relative seriousness of various types of wrongdoing. On the spectrum of severity, Hill was not convicted of a serious crime. In fact, he was not convicted of any crime. Rather, his conviction was for an "offense," N.J.S.A. 2C:1-4(b), placing his conduct in a legally more sympathetic light than if he had been convicted of a third degree crime. N.J.S.A. 2C:1-4(a). The record does not reflect the Board's appreciation for this difference; indeed, it appears that the Board extrapolated a high degree of moral turpitude merely from the original charge in the accusation. This is not what Uricoli had in mind.
In Steinmann v. State, 116 N.J. 564 (1989), a teacher applied for and began receiving an accidental disability pension. At the time of her application, she was unaware that her benefit would be reduced by a workers' compensation award that she was collecting. Nearly three years later, she discovered that, because of the workers' compensation offset, she would have been entitled to a larger benefit had she selected an early-retirement pension. Her petition to convert to that plan was denied, and we affirmed.
The Supreme Court reversed. The Court was guided by the principles that public-employee pension benefits represent deferred compensation, not a gratuity; that pension statutes should be liberally construed in favor of public employees; and that forfeiture of earned pension rights is a drastic remedy that should be avoided unless clearly intended by the Legislature. Id. at 572-73. A similar situation obtains here.
Hill argues that the Board's determination results in a forfeiture of his pension benefits that is excessive and inconsistent with the legislative intent pursuant to N.J.S.A. 43:1-3. In this case, an experienced, albeit psychologically infirm, police officer - whose duty was to enforce the law - committed a disorderly persons offense for personal advantage. As the ALJ found, we see no basis for any argument that forfeiture of more than the pension service accrued after February 16, 2000 is warranted.
The Board's determination of this case is inconsistent with the law, is not supported by substantial credible evidence in the record, and is both arbitrary and capricious. If the correct calculus under Uricoli had been applied by the Board, it would have necessarily reached the same conclusion as the ALJ. The March 25, 2008 decision of the Board is modified. The Initial Decision of the ALJ is reinstated. The matter is remanded to the Board for consideration of Hill's application for accidental disability benefits. By our action, we do not intend to intrude in the Board's determination of that application and we express no opinion as to the outcome. We do not retain jurisdiction.
Reversed and remanded for further proceedings in accordance with this opinion.