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In the Matter of Suzanne Hess.

August 30, 2011

IN THE MATTER OF SUZANNE HESS.


On appeal from the Board of Trustees of the Public Employees' Retirement System, Department of Treasury, PERS #772634.

The opinion of the court was delivered by: R. B. Coleman, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued December 8, 2010

Before Judges Axelrad, R. B. Coleman and Lihotz.*fn1

The opinion of the court was delivered by R. B. COLEMAN, J.A.D.

Suzanne Hess appeals from the final administrative determination of the Board of Trustees (the Board) of the Public Employees' Retirement System (PERS), which denied her application for deferred retirement benefits. The Board determined it was without authority to grant Hess deferred retirement benefits because she had been involuntarily terminated from her public employment based on her conviction of a third-degree crime. Considering that Hess's conviction was unrelated to her official duties, we conclude the Board's determination is not legally correct. Accordingly, we reverse and remand for further consideration of Hess's eligibility for deferred retirement benefits.

At 11:00 p.m. on October 25, 2005, while traveling in her personal automobile on the wrong side of the road, Hess crashed head-on into an oncoming vehicle, causing serious injuries to the occupants of that vehicle. Hess was unable to pass a field sobriety test, and she was arrested. Her blood alcohol content was .167 percent. As a result of the incident, a Hunterdon County grand jury returned an indictment charging Hess with two counts of second-degree aggravated assault, N.J.S.A. 2C:12-1(b)(1) (counts one and three); and two counts of third-degree assault by auto, N.J.S.A. 2C:12-1(c)(2) (counts two and four). Pursuant to a plea agreement, Hess pled guilty to both counts of third-degree assault by auto and the remaining counts were dismissed. She was sentenced on each count to five years probation, conditioned on her 180 days in county jail on each count, to run concurrently.

Hess had been a member of PERS since 1987 and had been employed as a Geographic Information Specialist with the New Jersey Office of Information Technology (OIT) since 2000. On January 5, 2007, the day of her conviction, OIT sent Hess a letter explaining that "New Jersey statutes provide for immediate suspension of an employee formally charged with a crime of the first, second, or third degree, or a crime of the fourth degree on the job or directly related to the job[.]" Hess, through counsel, waived a Loudermill*fn2 hearing. Thereafter, Hess was served with a Preliminary Notice of Disciplinary Action (PNDA), charging her with (1) failure to perform duties, N.J.A.C. 4A:2-2.3(a)(1); (2) conduct unbecoming of a public employee, N.J.A.C. 4A:2-2.3(a)(6); (3) conviction of a crime of the third degree; and (4) forfeiture of public office at OIT. The PNDA provided for her immediate suspension without pay pending a forfeiture order and judgment of conviction. These preliminary charges were sustained and on February 5, 2007, Hess was served with a Final Notice of Major Disciplinary Action (FNDA) affirming her suspension.

Prior to that disposition, Hess had filed an application for a deferred retirement allowance, to be effective December 1, 2019, the first day of the month after her sixtieth birthday. The application form for deferred retirement specifies that "You must be under age 60 and have a minimum of 10 years of service credit upon termination of employment. A Deferred Retirement becomes effective at age 60 if you have filed an Application for Retirement Allowance prior to that date." It is the Board's eventual denial of that application that is the subject of this appeal.

In addition to denying the application for deferred benefits, the Board filed a verified complaint with an order to show cause dated February 23, 2007, for forfeiture of Hess's employment, pursuant to N.J.S.A. 2C:51-2(a)(1).*fn3 Hess subsequently submitted a letter of resignation; however, OIT responded that her tendered request to resign was denied and that, pursuant to N.J.A.C. 4A:2-2.7, the appointing authority may impose an indefinite suspension to extend beyond six months where an employee is subject to criminal charges. The response letter further notified Hess that she would remain on indefinite suspension until the Office of the Attorney General received a forfeiture order from the court.

On September 11, 2008, the Law Division entered an order that forfeited Hess's employment, but did not bar her from future public employment. A PNDA and FNDA were issued thereafter on March 18, 2009, removing Hess from her public position with OIT, effective September 12, 2008. Hess did not appeal that removal.

Following a hearing on August 19, 2009, the Board denied Hess's application for deferred retirement benefits and informed her by letter dated August 24, 2009. Hess's attorney requested an administrative hearing in the Office of Administrative Law, which the Board denied, based on its conclusion that the issue before it was "a purely legal question." On December 11, 2009, the Board issued its Final Administrative Determination denying Hess's application for deferred retirement benefits pursuant to N.J.S.A. 43:15A-38. The Board found that "[a]t the time of Hess's termination, she was vested with nineteen years and four months of service credit in the PERS and was under the age of sixty; therefore, [the only benefit] she [] qualified for [was] a deferred retirement." In analyzing whether she was entitled to receive a deferred retirement, the Board reasoned that the documentation before it substantiated that Hess's employment was terminated for cause, and that the statute provided for deferred retirement benefits only for an employee who had completed ten years of service and who was separated from service "not by removal for cause on charges of misconduct or delinquency."

The Board relied, in part, on Borrello v. Public Employees' Retirement System, 313 N.J. Super. 75 (App. Div. 1998), in reaching its conclusion that an employee removed involuntarily from his or her position and who was not permitted to resign in good standing should be found to be ineligible to receive deferred retirement benefits under N.J.S.A. 43:15A-38. The claimant in Borrello had been dismissed from his public employment after he was convicted of third-degree misconduct relating to his acceptance of three bribes over a nine-month period. Id. at 76. The Board, relying ...


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