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Bonita M. Lerro, Individually and As Class Representative v. New Jersey Department of Human Services

March 17, 2011

BONITA M. LERRO, INDIVIDUALLY AND AS CLASS REPRESENTATIVE ON BEHALF OF OTHERS SIMILARLY SITUATED, PLAINTIFF-APPELLANT,
v.
NEW JERSEY DEPARTMENT OF HUMAN SERVICES, DIVISION OF FAMILY DEVELOPMENT, OFFICE OF CHILD SUPPORT SERVICES (OCSS), DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Gloucester County, Docket No. L-106-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued January 14, 2011

Before Judges R. B. Coleman and Lihotz.

Plaintiff Bonita M. Lerro appeals from the dismissal of her complaint, with prejudice for failure to state a claim upon which relief can be granted against the New Jersey Department of Human Services (DHS), Division of Family Development, Office of Child Support Services (the Department or OCSS). We affirm.

Plaintiff filed a class action complaint against defendant, OCSS, on behalf of all individuals who have been participants in the child support system serviced by defendant since October 1, 2000, and who did not have interest calculated on their child support arrears. In her complaint, plaintiff asserted defendant violated her civil rights, pursuant to the New Jersey Civil Rights Act, N.J.S.A. 10:6-1, and 42 U.S.C.A. § 1983, because it failed to calculate post-judgment interest charges on outstanding child support arrears, in the records it maintained, as required by federal statutes. As relief, plaintiff sought, among other things, to compel OCSS to calculate interest on child support arrears on a contemporaneous basis and to refund her application and monitoring fees for the years the records were not properly maintained.

Defendant moved to dismiss plaintiff's complaint with prejudice for failure to state a claim upon which relief can be granted, pursuant to Rule 4:6-2(e). Plaintiff opposed the motion and cross-moved to file an amended complaint. In her proposed amended complaint, plaintiff joined the Commissioner of the New Jersey Department of Human Services, the Director of the Division of Family Development, and the Director of OCSS. Plaintiff also proposed two additional causes of action, alleging (1) breach of contract and (2) an action in lieu of prerogative writs. On September 25, 2009, the court granted defendant's motion to dismiss the complaint with prejudice and denied plaintiff's cross-motion to amend the complaint.

It is undisputed that plaintiff is a custodial parent of two children whose support payments are tracked by the State case registry. Plaintiff paid a twenty-five dollar application fee and a twenty-five dollar yearly monitoring fee "to offset the costs of keeping adequate records" of support payments. Payments under the two orders for child support are in arrears; the outstanding obligations are $36,710 and $17,671.

The State case registry was created to comply with the requirements of Title IV-D of the Social Security Act, 42 U.S.C.A. §§ 651 to -669b (the Act). 42 U.S.C.A. § 654a(e). Title IV-D delegates operation of the Child Support Program to designated State agencies. 42 U.S.C.A. § 654a(a); N.J.A.C. 10:110-1.2. In New Jersey, the designated Title IV-D agency is the OCSS. N.J.A.C. 10:110-1.2.

The Act requires that states efficiently collect child support as a condition of receiving federal funding. Pryce v. Scharff, 384 N.J. Super. 197, 202 (App. Div. 2006). To qualify the State must do more than "collect overdue support payments; it must also establish a comprehensive system to establish paternity, locate absent parents, and help families obtain support orders." Blessing v. Freestone, 520 U.S. 329, 334-35, 117 S. Ct. 1353, 1356, 137 L. Ed. 2d 569, 578 (1997) (explaining 42 U.S.C.A. §§ 651, 654). The State Title IV-D agency's composition and its services must comply with federal guidelines. "For example, States must create separate units to administer the plan, [42 U.S.C.A.] § 654(3), and to disburse collected funds, [42 U.S.C.A.] § 654(27)." Blessing, supra, 520 U.S. at 334, 117 S. Ct. at 1356, 137 L. Ed. 2d at 578.

Additionally, each State's Title IV agency is obligated [t]o maintain detailed records of all pending cases, as well as to generate the various reports required by federal authorities, States must set up computer systems that meet numerous federal specifications. Finally, in addition to setting up this administrative framework, each participating State must enact laws designed to streamline paternity and child support actions. . . . If a State does not "substantially comply" with the requirements of Title IV-D, the Secretary is authorized to penalize the State by reducing its AFDC grant by up to five percent. § 609(a)(8). [Blessing, supra, 520 U.S. at 334-35, 117 S. Ct. at 1356-57, 137 L. Ed. 2d at 578-79.]

The State case registry is required to "include a record of . . . the amount of monthly (or other periodic) support owed under the order, and other amounts (including arrearages, interest or late payment penalties, and fees) due or overdue under the order." 42 U.S.C.A. § 654a(e)(4). Further, federal regulations require that the computer records include (1) the amount of support owed under the order and (2) other amounts due or overdue under the order including arrearages, interest or late payment penalties and fees. 45 C.F.R. 307.11(e)(4).

To comply with Title IV-D requirements, New Jersey established its State case registry under N.J.S.A. 2A:17-56.58. Consistent with federal regulations, the statute requires the registry to include information on "the amount and frequency of support owed and other amounts due or overdue under the support order, including arrearages, interest or late payment penalties and fees." N.J.S.A. 2A:17-56.58(a)(1).

A cooperative agreement between DHS and the Administrative Office of the Courts established the Probation Division as the unit responsible for collecting child support. Pryce, supra, 384 N.J. Super. at 203. In Pryce, we reversed the Chancery Division's denial of a motion to assess interest on a father's overdue child support. We held DHS must calculate post-judgment interest at the time of execution or satisfaction of child support judgments. Pryce, supra, 384 N.J. Super. at 215. In response to Pryce, the Administrative Office of the Courts issued Directive No. 16-06 (the Directive). The Directive provided:

When the obligor pays the full arrears, such payment shall be accepted and posted immediately. After receipt of the obligor's full arrears payment and request for a warrant of satisfaction, the warrant of satisfaction shall be provided to the judgment creditor(s) . . . and the judgment creditor shall be informed of the right to post judgment interest. The parties may agree upon an ...


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