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Richard Rivera v. the Town of West New York


February 16, 2012


On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-3009-10.

Per curiam.


Argued January 25, 2012

Before Judges Graves and Harris.

Plaintiff Richard Rivera appeals from a final judgment of the Law Division dismissing his complaint. He sought reinstatement as a police officer in defendant Town of West New York almost eight years after agreeing to settle a federal lawsuit, receiving $675,000 in settlement proceeds, and promising West New York that he [would] never reapply for reinstatement to employment with West New York Police Department and [would] never apply for or accept any other employment with the Town of West New York, exclusive of elected and appointed positions.

We affirm.


Rivera was employed as a police officer in West New York from 1990 to 2002. In 1997, he commenced an action in the United States District Court for the District of New Jersey (the District Court) against West New York, its police department, and the Chief of Police (individually and in his official capacity). According to the complaint filed in the Law Division, the federal action alleged "that he was retaliated against in the terms and conditions of his employment and suspended for exposing widespread graft and corruption in the [West New York] Police Department." Because the parties did not include a copy of the federal pleadings in their appendices, except for a twelve-page "Settlement Agreement and Mutual General Release" (the settlement agreement), we are uncertain of Rivera's actual theories of liability and bases for federal jurisdiction.

Nonetheless, Rivera and the federal defendants resolved their dispute and memorialized the disposition in the settlement agreement. Both sides were represented by attorneys. The settlement agreement, in pertinent part, provided for the following: (1) West New York agreed to file "a petition for involuntary ordinary disability pension and may file a petition for accidental disability pension, or both, for Mr. Rivera with the New Jersey Police and Firemen's Retirement System (PFRS)"; (2) Rivera was permitted to file "simultaneous with any PFRS filing by [West New York] . . . a petition with the PFRS, on his own behalf, to obtain an accidental and ordinary disability pension"; (3) once an unappealed accidental or ordinary disability pension became effective, "Mr. Rivera shall retire from the West New York Police Department in accordance with the applicable PFRS rules and regulations," and West New York would pay Rivera $675,000; and (4) Rivera agreed that upon fulfillment of all of the terms of the settlement agreement "he [would] never reapply for reinstatement to employment with West New York Police Department and [would] never apply for or accept any other employment with the Town of West New York, exclusive of elected and appointed positions."

The settlement agreement was performed and fulfilled by the parties. Effective March 1, 2003, Rivera became entitled to ordinary, not accidental, disability retirement pursuant to N.J.S.A. 43:16A-6. The federal action was dismissed with prejudice and Rivera was paid $675,000. Rivera and his employer parted ways.

Almost six years later, believing that his disability had abated, Rivera sought reinstatement from the PFRS as a police officer in West New York pursuant to N.J.S.A. 43:16A-8(2); see also N.J.A.C. 4A:4-7.12.*fn1 On November 9, 2009, the PFRS -- aware of the settlement agreement, and after conducting what it called a "careful review of the medical documentation provided" -- determined the following:

[T]he Board voted to approve Mr. Rivera's request for reinstatement based solely on the medical report of the Independent Medical Examiner and the Medical Review Board that determined that Mr. Rivera is no longer totally and permanently disabled from the performance of his job duties. The Board made no determination regarding the settlement agreement and the legality of compliance as this is a matter between Mr. Rivera and the Town of West New York.

West New York did not appeal the PFRS determination but refused to reinstate Rivera. On May 28, 2010, Rivera commenced the instant action in the Law Division, Hudson Vicinage, seeking summary enforcement of the PFRS determination pursuant to the summary action protocol of Rule 4:67-6(a)(2).

West New York responded to the complaint by filing a Notice of Removal in the District Court. The District Judge, by way of a sua sponte motion, determined that there was no original or ancillary federal jurisdiction and remanded the matter to the Hudson Vicinage.

In short order, West New York moved to dismiss the complaint for failure to state a claim upon which relief can be granted and Rivera cross-moved for summary judgment. After reviewing the action of the PFRS, as well as the conduct of the parties over the span of more than six years, the Law Division concluded that Rivera had, in the settlement agreement, waived the statutory right to reinstatement. Moreover, the court interpreted the PFRS determination as narrow in scope: "[T]he [PFRS] never ordered Mr. Rivera to be reinstated, but rather, [it] found medically that he was eligible for reinstatement." Accordingly, the court granted West New York's motion for dismissal and denied Rivera's cross motion. This appeal ensued.*fn2


Rivera argues that he is entitled to the relief sought in the complaint based upon the plain language of N.J.S.A. 43:16A-8(2) together with decisional law that mandates its application. He makes these arguments largely in a vacuum because, for the most part, he ignores the effect of the settlement agreement and argues that its provision barring reinstatement is contrary to public policy and unenforceable as antithetical to N.J.S.A. 43:16A-8(2). We reject all of Rivera's arguments.

N.J.S.A. 43:16A-8(2) provides as follows:

Any beneficiary under the age of 55 years who has been retired on a disability retirement allowance under this act, on his request shall, or upon the request of the retirement system may, be given a medical examination and he shall submit to any examination by a physician or physicians designated by the medical board once a year for at least a period of 5 years following his retirement in order to determine whether or not the disability which existed at the time he was retired has vanished or has materially diminished. If the report of the medical board shall show that such beneficiary is able to perform either his former duty or any other available duty in the department which his employer is willing to assign to him, the beneficiary shall report for duty; such a beneficiary shall not suffer any loss of benefits while he awaits his restoration to active service.

Pursuant to this legislation, once a person is determined no longer disabled, the appointing authority is required to return the officer to active duty or, in the language of the regulation, to "reinstate" the officer to the same or as near as the same position as he or she previously occupied. The purpose of this legislation is to return the previously disabled employee to work as if the officer had never been disabled and the officer's service had never been interrupted. [In re Terebetski, 338 N.J. Super. 564, 570 (App. Div. 2001).]

See also In re Allen, 262 N.J. Super. 438, 440-41 (App. Div. 1993) (holding that a public employee who returns from a disability retirement because his or her disability ceases should, to the extent possible, be reinstated to his or her former position).

We recognize that one of the many effects of N.J.S.A. 43:16A-8(2) is to relieve the PFRS of paying benefits and to have the recovered employee return to his or her former employment where salary, benefits, and emoluments of office will be paid by the local employer. The preservation of public- employee pension funds is an important focus of our State's public policy. See Commc'ns Workers of Am. v. Rousseau, 417 N.J. Super. 341 (App. Div. 2010). Nevertheless, we are not convinced that the insignificant pension savings derived from Rivera's removal from the PRFS rolls trumps this State's interest in reducing the enormous expenses of a publicly-funded dispute resolution mechanism -- the judicial branch of government -- by encouraging and fostering the settlement of lawsuits.

"Settlement of litigation ranks high in the pantheon of public policy." N.H. v. H.H., 418 N.J. Super. 262, 279 (App. Div. 2011). This principle derives from the sure knowledge that the resources available to resolve disputes are finite, yet the form and manner of consensual settlements are infinite. Moreover, [t]he point of this policy is not the salutary effect of settlements on our overtaxed judicial and administrative calendars (although this is an undeniable benefit) but the notion that the parties to a dispute are in the best position to determine how to resolve a contested matter in a way which is least disadvantageous to everyone. In recognition of this principle, courts will strain to give effect to the terms of a settlement wherever possible. It follows that any action which would have the effect of vitiating the provisions of a particular settlement agreement and the concomitant effect of undermining public confidence in the settlement process in general, should not be countenanced. [Dep't. of Pub. Advocate, Div. of Rate Counsel v. N.J. Bd. of Pub. Utils., 206 N.J. Super. 523, 528 (App. Div. 1985).]

It is to be noted that Rivera's restored ability to work, together with his concomitant agreement not to work for West New York, still leaves him with a myriad of public sector jobs for which he can seek employment. Of the hundreds of police agencies in this State, Rivera is disqualified from only one, a de minimis effect upon him in light of his voluntary acceptance of the settlement agreement and receipt of its benefits over so many years. Moreover, there is no evidence that the PFRS has taken a position contrary to West New York's. In fact, its determination recognizes the possibility that the settlement agreement between Rivera and West New York may obviate its determination that Rivera is, in so many words, fit to perform the duties of a police officer.

We also conclude that the settlement agreement is plain and unambiguous in its terms. "A basic principle of contract interpretation is to read the document as a whole in a fair and common sense manner." Hardy ex. rel. Dowdell v. Abdul-Matin, 198 N.J. 95, 103 (2009). Additionally, "[a]s a general rule, courts should enforce contracts as the parties intended." Pacifico v. Pacifico, 190 N.J. 258, 266 (2007); see also Tessmar v. Grosner, 23 N.J. 193, 201 (1957) (noting that the court's role in interpreting a contract is to enforce the parties' common intent). Moreover, we are required to "consider what is written in the context of the circumstances at the time of drafting and to apply a rational meaning in keeping with the 'expressed general purpose.'" Pacifico, supra, 190 N.J. at 266 (quoting N. Airlines, Inc. v. Schwimmer, 12 N.J. 293, 302 (1953)).

"The polestar of contract construction is to discover the intention of the parties as revealed by the language used by them." Karl's Sales & Serv., Inc., v. Gimbel Bros., Inc., 249 N.J. Super. 487, 492 (App. Div.), certif. denied, 127 N.J. 548 (1991). Accordingly, the court should not re-write a contract or grant a better deal than that for which the parties expressly bargained. Solondz v. Kornmehl, 317 N.J. Super. 16, 21 (App. Div. 1998).

We have no hesitation in determining that Rivera gave up his right to force West New York to take him back as a police officer. That is a plain meaning of the settlement agreement and fully conforms to the logical intention of the parties. The language in the settlement agreement that his retirement would be "in accordance with the applicable PFRS rules and regulations" does not mean that once his disability ended, he could return and work in the same locale, for the same employer, where the parties' mutual disputes arose. Such an interpretation is neither rational nor pragmatic. Both parties thought they were buying perpetual peace, which West New York, in particular, paid dearly for the privilege.

Finally, we reject Rivera's suggestion that enforcement of the settlement agreement will invite other public employers to coerce waivers of N.J.S.A. 43:16A-8(2) from their employees. This entirely conjectural argument ignores the presumption that "those in government generally act within the powers granted to them and do so properly." S. Burlington Cnty. NAACP v. Mt. Laurel, 92 N.J. 158, 305 (1983).

Indeed, the square corners doctrine, see F.M.C. Stores Co. v. Borough of Morris Plains, 100 N.J. 418, 426-27 (1985), is a two-way street, requiring not only government's fair dealing with the public, but also that "[m]en must turn square corners when they deal with the Government." Rock Island, A. & L. R. Co. v. United States, 254 U.S. 141, 143, 41 S. Ct. 55, 56, 65 L. Ed. 188, 189 (1920). Rivera's effort to repudiate the settlement agreement cannot be reconciled with that admonition.


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