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In re Payton


December 31, 2009


On appeal from a Final Decision of the Merit System Board, DOP Docket No. 2008-4036.

Per curiam.


Submitted October 1, 2009

Before Judges Sapp-Peterson and Espinosa.

Petitioner Deborah Payton was employed in the Jersey City Tax Assessor's Office and charged with the responsibility of receiving money collected from members of the public and remitting such funds to the Treasury Department. In March 2005, another Jersey City employee, Lucien Taduran, received five one-dollar bills, photocopied the bills and handed them along with a receipt to Payton for disposition. Although she received the money during regular business hours, she took the money home rather than remit the funds to Treasury. Her employment was suspended on the following day when she was confronted by her supervisor and did not have either the cash or the receipt with her.

Payton's employment was terminated after a departmental hearing in which charges of conduct unbecoming a public employee, N.J.A.C. 4A:2-2.3(a)(6), and neglect of duty, N.J.A.C. 4A:2-2.3(a)(7) were sustained. She appealed the matter to the Merit System Board (the Board) which, in turn, referred the matter to the Office of Administrative Law as a contested case. After conducting a hearing, the Administrative Law Judge (ALJ) found that the appointing authority had sustained the charges by the preponderance of evidence and ordered the dismissal of Payton's appeal with prejudice.

The Board issued a final decision in February 2007. Although the decision indicated that the Board was adopting the ALJ's findings of fact, the Board concluded that the facts did not support the charge of conduct unbecoming a public employee or the sanction of removal. The Board reduced the penalty from termination to a five-day suspension and further directed that Payton be awarded counsel fees. The appointing authority appealed and, in an unpublished opinion, we reversed the finding that the charge of conduct unbecoming a public employee was not sustained. In re Payton, No. A-3571-06T2 (App. Div. Apr. 22, 2008). In addition, we remanded the matter to the Board for reconsideration of the penalty. Ibid.

Upon remand, the Board again reduced the penalty from termination, this time to a thirty-day suspension. The appointing authority appealed, arguing that the Board was arbitrary, capricious and unreasonable in failing to sustain Payton's termination. We reverse again and reinstate the sanction of termination.

Our role in reviewing the decision of the Board is limited. In the absence of a "a clear showing that it is arbitrary, capricious, unreasonable or not supported by credible evidence in the record as a whole[,]" the decision will be sustained. Klusaritz v. Cape May County, 387 N.J. Super. 305, 313 (App. Div. 2006); Brady v. Bd. of Review, 152 N.J. 197, 210-11 (1997); Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980); However, our constitutional authority "cannot be relegated to a mere rubber-stamp of agency action." Klusaritz, supra, 387 N.J. Super. at 315. We are bound to defer to the Board's findings of fact "when they could reasonably be made considering the proofs as a whole and with due regard to the opportunity of the one who heard the testimony to assess credibility." Ibid. (emphasis added). In this case, it was the ALJ, and not the Board, who had the opportunity to hear testimony and assess credibility. Therefore, the Board was "bound by the credibility determinations of the ALJ unless arbitrary, capricious or unreasonable." Ibid. (citing Cavalieri v. Bd. of Trs., 368 N.J. Super. 527, 533-34 (App. Div. 2004)). Significantly, the Board has not identified any credibility determinations or findings of fact of the ALJ as arbitrary, capricious or unreasonable.

It was undisputed that Payton received cash during the course of the day that should have been remitted to the Treasury and that she took it home rather than disposing of it properly. Payton claimed that she had simply forgotten she had the cash in her possession. In other words, her position was that she was only guilty of an act of negligence rather than intentional misconduct. Therefore, her intent was the crucial issue to be resolved in determining what sanction, if any, was warranted here.

As the ALJ observed, the determination of this issue turned on the credibility of the witnesses. The ALJ provided background for how her assessment of credibility affected her conclusions, noting that a fact finder is free to . . . reject the testimony of a witness . . . when it is contrary to circumstances given in evidence or contains inherent improbabilities or contradictions which alone or in connection with other circumstances in evidence excite suspicion as to its truth. . . . and may also reject testimony when 'it is inconsistent with other testimony or with common experience' or 'overborne' by the testimony of other witnesses. [Citations omitted.]

Finding Taduran's testimony credible, the ALJ accepted that the photocopies preserved by him accurately reflected the serial numbers of the bills he gave to Payton. The ALJ noted, "When the cash was initially given to petitioner, she claimed to have folded it along with the receipt and placed it in her back pocket." The ALJ reasonably inferred that if, as Payton claimed, she had simply "forgotten that the folded receipt and cash were in her back pocket, she would have returned the precise bills entrusted to her . . . ." This was, in fact, what Payton testified had occurred. She stated that she had retained the receipt and the five bills intact and that at the March 3, 2005 hearing she delivered the same five one-dollar bills folded in the receipt that she had received from Taduran. This was an apparent attempt to bolster her claim of forgetfulness by representing that the cash and receipt were being returned, untouched. Her attempt failed, however, since a comparison of the serial numbers showed that this was not the case. Payton did not rebut this evidence.

The evidence therefore fully supported the ALJ's determination that Payton's taking of the cash was not an accidental and innocent act of forgetfulness:

While it may have been plausible that petitioner had forgotten about the cash as she claimed, it became no longer plausible when the cash she presented lacked the same serial numbers. This was extremely compelling.

The ALJ's conclusion that the appointing authority had met its burden of proof in establishing the charges therefore rested explicitly upon the ALJ's credibility determination that Payton's conduct was intentional rather than an oversight.

On remand, the Board noted the ALJ's findings and our prior opinion regarding the intentional nature of Payton's misconduct. Despite this acknowledgment, the concerns expressed by the Board reveal that it held an abiding perception of the taking as a mere oversight by Payton. The Board stated that it was "still troubled" that Payton was not permitted to retrieve the money when she asked to do so and that there was "no policy in place" regarding the handling of funds received after Treasury picked up deposits for the day. We note that no formal policy is required to inform an employee charged with the handling of public funds that she is not permitted to divert such funds for personal use. Moreover, as we noted in our prior opinion, there is no evidence that Payton was given the money after the deposits had been made so it was irrelevant whether there was a policy on how to handle funds received after the deposits were made. These concerns about policy and an apparent perception that Payton was treated unfairly in not being permitted to return home to retrieve the money run counter to the credibility determination that was the keystone of the ALJ's decision.

In addition, because Payton turned over five dollars, albeit not the precise bills received, the Board concluded that the appointing authority was "not harmed." This conclusion fails to recognize the serious affront to public integrity presented by the intentional taking of even a small sum of public funds by an employee charged with the responsibility of receiving and properly remitting funds. In Henry, supra, the Court concluded that the Civil Service Commission acted arbitrarily in reducing the penalty from removal to a ninety-day suspension for a corrections officer who had falsified a single report. 81 N.J. at 580. Even though the officer claimed to be motivated by good intentions, the Court found the deliberate falsification of a single report had the potential to "disrupt and destroy order and discipline in a prison." Ibid. See also In re Hall, 335 N.J. Super. 45 (App. Div. 2000), certif. denied, 167 N.J. 629 (2001) (Board's reduction of a penalty from dismissal to suspension for a police officer's attempted theft was arbitrary, capricious and unreasonable.). In Caldwell v. New Jersey Department of Corrections, 250 N.J. Super. 592 (App. Div. 1991), corrections officers refused to provide a urine sample for drug testing pursuant to Department of Corrections procedures. We agreed that because the officers occupied a "position of trust," their refusal warranted dismissal, despite their good records, and observed that a contrary result "would undermine the underlying purpose of testing" and "should not be countenanced." Id. at 613 (emphasis added). As an employee of the Tax Assessor's office entrusted with the proper disposition of cash, Payton also held a position of trust that was breached by her intentional conduct.

Nonetheless, the Board was unpersuaded that termination was appropriate and favored the use of progressive discipline here. It is true that Payton had no prior disciplinary action in her short term of employment prior to this incident. However, even on remand, she continued to minimize her conduct by characterizing her taking the money as inadvertent and even "excusable" because "she brought the money home with the intention to return it the next day." However, the ALJ had rejected these contentions as not plausible.

In reviewing factors applicable to the use of progressive discipline, the Board echoed Payton's arguments, stating its continuing concerns that she had not been permitted to return home to retrieve the money and that the Tax Assessor's Office lacked a policy. The Board's conclusion that the appointing authority suffered no harm reveals a failure to recognize the seriousness of this abuse of her position of public trust. Again, the Board's analysis and conclusion are consistent with an acceptance of Payton's position that her action was merely negligent rather than the intentional misconduct found by the ALJ. Although the acceptance of Payton's position required the rejection of the ALJ's credibility determination, the Board has not identified any credibility determinations or findings of fact of the ALJ as arbitrary, capricious or unreasonable. Because the Board failed to set forth any evidence that could reasonably support its implicit rejection of the ALJ's credibility determination, it was the Board's action that was arbitrary, capricious and unreasonable. See Klusaritz, supra, 387 N.J. Super. at 313.

Having determined that the Board acted arbitrarily, we "may either finally determine the matter by fixing the appropriate penalty or remand it . . . for redetermination." Henry, supra, 81 N.J. at 580. We choose to finally determine the matter and, therefore, reverse the penalty imposed by the Board and reinstate the penalty imposed by the ALJ.



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