Uricoli v. Police & Fire. Retirem. Sys.
Uricoli v. Police & Fire. Retirem. Sys.
Dissenting Opinion
dissenting.
The Court today sets an unfortunate standard for the conduct of public service in New Jersey. It holds that a police chief convicted of official misconduct is nonetheless entitled to be maintained on pension at public expense. For the reasons stated below, I respectfully dissent. »
A more detailed understanding of the facts puts the case in better perspective. Eugene Uricoli had been on the City of
In stating his reasons for suspending custodial sentence, the judge said: “Conviction of a crime as to this defendant in itself is punishment. No rehabilitation is necessary nor any need for deterrence. Custodial treatment is not indicated. His loss of standing in the community and subsequent loss of respect should suffice.” In January 1979, after final appellate review, the prosecutor made a motion to dismiss the remainder of the indictments, stating to the court that the ends of justice had been served by the conviction and sentence and because “more significantly, pursuant to New Jersey law, Eugene Uricoli was removed from office and lost all his pension rights.” The motion was granted and the seven remaining indictments were dismissed on February 1, 1979.
Uricoli filed this application for a disability pension on June 19, 1979. His claim is for a prorated pension based on that portion of his tenure served without misconduct. After a hearing, Uricoli’s application was denied by the Consolidated Police and Firemen’s Pension Fund Commission on the ground that the requirement o£ “honorable service” had not been met.
The section of the retirement act under which Uricoli filed his application does not expressly recite that honorable service is a
Two recent cases, Masse v. Public Employees Retirement System, 87 N.J. 252 (1981), and Procaccino v. Public Employees Retirement System, 87 N.J. 265 (1981), reviewed the history and policy of the honorable service requirement. No further detailed review is needed. In Masse and Procaccino, the Court held that conviction of a crime, even involving moral turpitude, does not result in forfeiture of vested pension rights so long as the misconduct was unrelated to public employment. These cases emphasized that honorable service is the key element in determining pension eligibility.
Uricoli’s unlawful disposal of a traffic summons directly touched upon the administration of his office and struck at the heart of the justice system he was sworn to uphold. That Uricoli neither sought nor received any personal gain from his
Uricoli’s reliance on Makwinski v. State, supra, is misplaced. The Court held there, under a “unique” fact pattern, that a police chiefs official misconduct did not constitute dishonorable service because it was prompted by his concern for the betterment of his community. In that case the police chief had permitted an on-duty officer to do carpentry work on a Knights of Columbus hall which was frequently used for public or governmental functions. No similar concern for the betterment of the community was urged at the pension hearing in this case. There can be no doubt that appellant’s ticket fixing rendered his service dishonorable.
I am not unmindful of the personal suffering that results from a pension forfeiture. Appellant urged the Court to adopt a rule that would treat a public pension simply as a form of deferred compensation and to hold that a public employee does not, after dishonorable service, forfeit a pension once vested. The Court’s opinion stops short of this and adopts a test “which calls for flexibility and the application of equitable considerations.”
In Eyers v. State of New Jersey, Bd. of Trustees Public Employees’ Retirement System, 91 N.J. 51 (1982), also decided today, I stressed in dissent that “[ujnder our pension laws both benefits and loss of benefits must be dispensed with an even hand.” I doubt that there can be equal treatment for all under a discretionary rule of entitlement. I agree with the late Chief Justice Weintraub:
... [TJhere is no profit in dealing in labels such as “gratuity,” “compensation,” “contract,” and “vested rights.” None fits precisely, and it would be a mistake to choose one and be driven by that choice to some inevitable consequence.
Government’s contribution to a pension fund has several facets. [Spina v. Consolidated Police etc. Pension Fund Comm., 41 N.J. 391 at 401 (1964)].
The rationale underlying these decisions is that a retirement pension is an inducement to conscientious and efficient public service which inducement would be immeasurably lessened if the employee could assert an indefeasible claim to the pension simply because the dishonorable conduct occurred after the employee had served the minimum number of years of service. Plunkett, supra, 113 N.J.L. at 232; Ballurio v. Castellini, 29 N.J.Super. 383, 389 (App.Div. 1954). [Makwinski, 76 N.J. at 90].
In Masse v. Public Employees Retirement System, supra, this Court defined that facet of legislative purpose as involving a nexus between the dishonorable conduct and the public employment. Only when that nexus was absent
The Court’s reliance in Masse and Procaccino on the new forfeiture provisions of N.J.S.A. 2C:51-2(a) reinforces my conclusion here. These provisions contain an “expressed legislative policy ... that offenses connected and related to public employment result in a greater sanction than when the offenses are not connected or related.” Masse, 87 N.J. at 262.
Justice Pashman, concurring in Makwinski, emphasized the “paramount importance of public employees acting honestly in accordance with the public trust placed in them,” 76 N.J. at 93, and reaffirmed support for the rule that “dishonorable service requires total forfeiture of pension rights, even one which has ‘vested.’ ” Id. I would adhere to that established law and hold that the pension applicant, having been found guilty of dishonorable service, is not entitled to a prorated pension.
Chief Justice WILENTZ and Justice CLIFFORD join in this opinion.
For reversal and remandment — Justices PASHMAN, SCHREIBER, HANDLER and POLLOCK — 4.
For affirmance — Chief Justice WILENTZ and Justices CLIFFORD and O’HERN — 3.
N.J.S.A. 43:16-2. Retirement for disability
Any member of such police or paid or part-paid fire department who shall have received permanent disability as a direct result of a traumatic event occurring while performing his regular or assigned duties shall be retired upon an accidental disability pension equal to % of his average salary....
A member of any such department who shall have served honorably and who shall have become permanently and totally incapacitated for service for any cause other than as a direct result of a traumatic event occurring during the performance of duty, shall, upon approval of his application, or the application of his employer, be retired on a nonaccident disability pension equal to 'h of his average salary.
In Masse, the misconduct was a sexual offense by a municipal utilities employee; in Procaccino, it was misuse of funds as a part-time constable by a title examiner in the Department of Transportation.
Opinion of the Court
The judgment of the Court was delivered by
Petitioner Eugene J. Uricoli was first employed as a patrolman by the Police Department of the City of Orange in November 1952. He worked his way up through the ranks and was
The conviction was for a single ticket-fixing incident that had occurred during October 1972. The allegation was that Uricoli had illegaly disposed of a careless driving ticket that had been issued to the son of a “near and dear friend.” Uricoli’s assertion that he received no compensation for fixing the ticket was not then, nor has it ever been, challenged by the State.
Uricoli was eventually sentenced to a one-year suspended jail term and to probation for two years unless and until he paid a fine of $1,000. The trial judge who heard Uricoli’s case expressly stated that he decided to suspend the custodial portion of the sentence because “[cjonviction of a crime as to this defendant in itself is punishment. No rehabilitation is necessary nor any need for deterrence . .. His loss of standing in the community and subsequent loss of respect should suffice.” In addition to the punishment meted out by the trial court, Uricoli was also dismissed from the Orange Police Department as a result of the conviction.
In June 1979, at which time Uricoli was 49 years old, he submitted an application to the Police and Firemen’s Retirement System (PFRS) for an accidental disability retirement. He claimed entitlement to accidental disability benefits under N.J. S.A. 43:16A-7 because of various back injuries he had suffered between 1963 and 1972 while doing routine police work. The Board of Trustees of PFRS denied the application, ruling that Uricoli’s conviction for malfeasance in office prevented him from meeting the prerequisite of honorable service for a pension.
Uricoli appealed the Board’s ruling and a hearing was held before an Administrative Law Judge, who recommended denial of the pension. The Board of Trustees adopted the ALJ’s findings, conclusions, and recommendations and reaffirmed its decision to deny Uricoli a pension because of his conviction. The
Uricoli contends that his claim to pension benefits is predicated upon the accidental disability provisions of N.J.S.A. 43:16-2 and 43:16A-7. He argues that because the provisions relating to retirement on account of accidental disability contain no express requirement of honorable service as a prerequisite to obtaining a pension, his failure to have served honorably should not defeat his entitlement to a pension based upon his employment-related disability.
This argument is without merit. This Court has clearly reaffirmed the rule that honorable service is an implicit requirement of every public pension statute, whether or not this conditional term appears in the particular statute. See Masse v. Public Employment Retirem. Sys., 87 N.J. 252, 255-56 (1981); Makwinski v. State, 76 N.J. 87, 90 (1978). Courts in this State have consistently imputed to the Legislature the intent that a public employee’s right to pension benefits be conditioned upon honorable service.
The issue to be addressed in this case is whether only one incident involving an illegal disposition of a traffic ticket, for no personal gain and after 20 years of flawless service, is an infraction of sufficient magnitude to render the employee’s career in the public service dishonorable so as to require the forfeiture of all pension benefits.
Many cases addressing the expressed or implied requirement of honorable service strongly suggest that automatic forfeiture was required whenever the public employee had committed any sort of misconduct in office, regardless of its nature or the degree of culpability. See Plunkett v. Pension Commissioners of Hoboken, 113 N.J.L. 230, 233-34 (Sup.Ct. 1934), aff’d o.b., 114 N.J.L. 273 (E. & A. 1935); Fromm v. Bd. of Directors of Police, etc., Retire. Syst., 81 N.J.Super. 138 (App.Div. 1963). See Masse, 87 N.J. at 264 (characterizing the doctrine historically as a “judicially-created rule that automatically imposes an inflexible, arbitrary forfeiture” upon public employees).
A brief review of the cases, however, demonstrates that the courts were cognizant of the varying, and somewhat conflicting, objectives inherent in the public pension system and the consequent need to weigh the quality of misconduct to determine whether forfeiture of pension benefits was appropriate. The gravity of the misconduct usually was a relevant consideration. Misconduct that resulted in a forfeiture frequently constituted a substantial breach of public employee duties. See, e.g., McFeely v. Board of Pension Com’rs, 1 N.J. 212 (1948) (retired police chief’s pension benefits vacated pending disposition of charges that he had not enforced statutes against gambling and that he, along with seven fellow officers, committed a conspiracy to “oppress” and “persecute” other members of the police force); Plunkett, 113 N.J.L. 230 (fireman’s pension forfeited where he had pled guilty to several charges of misconduct including, among others, embezzlement of funds from the Firemen’s Relief Association); Hozer v. State, etc., Police & Firemen’s Pension
The most recent decisions of this Court expressly embrace a more flexible approach in determining whether the character of misconduct of public employees will justify the deprivation of
In Makwinski, we concentrated upon the nature of the misconduct committed in terms of moral turpitude. There was a direct and actual relationship between the employee’s public duties and the particular act of misconduct. Nevertheless, the absence of serious culpability or substantial gravity overcame any asserted need to impose a forfeiture. We held that the employee’s “motive and intent must be weighed in the balance,” and that where there was a purpose to help others and there was no venality or personal gain from the act, the crime of misconduct in office should not be characterized as one of “moral turpitude,” at least for pension purposes. 76 N.J. at 91-2. Accordingly, we ruled that forfeiture of pension benefits was not required.
The springboard for the courts’ original formulation of the forfeiture rule was its perception of the Legislature’s purpose in providing pensions for public employees. Thus, it was believed that the public pension was integrally related to the public employment and, since public employment encompasses a public
It has also been recognized that one of the “fundamental purposes” underlying the pensioning of civil servants is to “secure good behavior and the maintenance of reasonable standards of discipline during service.” Id. at 233. Ballurio v. Castellini, 29 N.J.Super. at 389; Hozer, 95 N.J.Super. at 199-200; Mount, 133 N.J.Super. at 79-82. Forfeiture in this context has been viewed as within the Legislature’s intendment to establish both a deterrent against committing misdeeds related to employment and as an inducement to continued faithful, diligent and efficient public service. Masse, 87 N.J. at 257.
The notion that the pension scheme can be legitimately used as a punitive tool or incentive in order to ensure good service has as its natural corollary that there could be no contractual entitlement or irrevocable vesting of pension benefits. See, e.g., Ballurio, 29 N.J.Super. at 389. However, the countervailing view that there is a contractual basis to one’s pension has also claimed some adherents and has emerged as a formidable, competitive concept. In this regard, this Court has noted that:
[t]he basic philosophy underlying pensions to public officers fluctuates between the early view that they were mere gratuities bestowed by the sovereign in recognition of meritorious service previously rendered and the more modern concept that they are some form of delayed wages or salary to compensate the employee during his declining years ... for his long and faithful service. [Watt v. Mayor and Council of Borough of Franklin, 21 N.J. 274, 279 (1956)]
Compare Salz v. State House Commission, 18 N.J. 106, 111-12 (1955) (a pension is an allowance or stipend in consideration of past services), with Ballurio, 29 N.J.Super. at 389 (“A pension is a bounty springing from the appreciation and graciousness of the sovereign”).
This Court has refrained from embracing exclusively either major view as to the nature of a public pension. Chief Justice Weintraub, writing for the majority in Spina v. Consolidated
[T]here is no profit in dealing in labels such as “gratuity,” “compensation,” “contract,” and "vested rights.” None fits precisely, and it would be a mistake to choose one and be driven by that choice to some inevitable consequence. Government’s contribution to a pension fund has several facets. In part it compensates for services already rendered ... Yet it can be viewed also as noncompensatory payment to further the public employer’s own interests, i.e., to permit the employer to release an aged servant who cannot decently be let out if he is unable to meet the necessities of life ....
As to the employee’s contribution, it seems to be a sum already earned. Yet it is earned with a string .. . [T]he Legislature need not provide that the contribution must be returned upon cessation of employment .. . Thus the employee’s contribution, even though taken from his pay, is something he never had in hand and could not insist upon receiving.
Consequently, the approach required in ascertaining the pension consequences of misconduct by public employees is one which incorporates and reflects the statutory purposes served by public pensions. In Masse, Justice Schreiber meticulously identified the major elements of legislative policy regarding the State’s public pension systems which are relevant in the determination of legislative intent concerning the forfeiture of pension benefits. He emphasized particularly the compensatory nature of a public pension, the vesting provisions of such pensions and the parallel to be found in private pension plans governed by the Employment Retirement Income Security Act (ERISA), 29 U.S. C.A. § 1053. 87 N.J. 259-60. He also noted the judicial recognition of the compensatory aspects of public pensions as a significant legislative objective sought to be achieved in the administration of the pension systems. Id. at 260-61. It is apparent, then, that there is a current, ongoing evolution away from the concept of a pension simply as a gratuitious benefit and toward an acceptance of it as deferred compensation for public employees upon retirement.
Another relevant legislative policy reflected in the State’s public pension systems is its importance as a term and condition of public employment. Public pensions provide public employees with employment stability and financial security. Public pensions are not subject to change through collective employment negotiations under the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-8.1. It may be inferred that the removal of public pensions from the arena of mandatory negotiations concerning terms and conditions of employment between public employees and the State not only protects the fiscal integrity of the pension systems but assures public employees that their entitlement to pension benefits is secure and should not be threatened by the vagaries of labor negotiations. See Masse, 87 N.J. at 261.
It is also appropriate to consider some of the ways in which the Legislature has seen fit to deal expressly with the subject of pension forfeitures in determining its underlying intent with respect to forfeiture in situations not explicitly provided. The
The existence of statutory sections containing forfeiture provisions is clear evidence that the Legislature was well aware of how to provide for a forfeiture where it intended to do so.
Finally, in attempting to fathom the presumed legislative intent underlying the pension forfeiture doctrine at the present time, we must accommodate two interpretive predelictions, each of which militates strongly against forfeiture. One is that forfeiture — whether of one’s pension or any other property or benefit to which one is otherwise entitled — is a penalty or a punishment for wrongful conduct. Stapleton v. Two Million Four Hundred Thirty-Eight Thousand, One Hundred and Ten Dollars, 454 F.2d 1210, 1216 (3 Cir. 1972) cert. den. sub nom. Stapleton v. United States, 409 U.S. 894, 93 S.Ct. 111, 34 L.Ed.2d 151 (1972) (citing New Jersey law). As such, “[a]ll elements of doubt must be resolved in favor of the person against whom the forfeiture is sought.” State v. LaBella, 88 N.J.Super. 330, 338 (Law Div. 1965). The second factor was emphasized by Justice Schreiber in Masse, 87 N.J. at 259. He stressed that a public pension, though compensatory in nature as well as an incentive for faithful future service, is “remedial in character ... [and] should be liberally construed and administered in favor of the persons intended to be benefitted thereby,” quoting Geller, 53 N.J. at 597-98, and citing In re Application of Smith, 57 N.J. 368, 374 (1971); Smith v. Consolidated Police & Firemen’s Pension, 149 N.J.Super. 229 (App.Div. 1977), certif. den., 75 N.J. 8 (1977), and In re Vaccora, 131 N.J.Super. 264, 268 (App.Div. 1974), aff’d o.b., 66 N.J. 151 (1974).
Our most recent cases demonstrate that the proper approach to the resolution of the problem of what constitutes dishonorable service justifying the forfeiture of earned pension benefits is one which calls for flexibility and the application of equitable considerations. We now hold that in all cases, even where there is a relationship between the particular misconduct at issue and the performance of employment duties, a balancing approach is required in order to determine whether forfeiture is justified under all of the circumstances.
The factors which must be considered and balanced in the application of such a flexible test should include such elements
These factors are illustrative of those which may properly be taken into account in determining the reasonableness of pension forfeiture. They must be balanced and then weighed in terms of the goals to be achieved under the pension laws. The balance to be achieved takes its bearings from the major purposes underlying public pensions — to induce people to enter public employment and continue faithful and diligent employment and to furnish public employees with employment stability and financial security.
In so holding, we recognize that we are striving to effectuate the intention of the Legislature. We emphasize that pension entitlement is in the legislative domain and that the subject is one which can be most appropriately addressed by the Legislature itself. The judicial course in the pension field in terms of the forfeiture doctrine has been long, uneven and somewhat uncertain, reflecting in large measure the vicissitudes of public policy and the shifting goals that are implicated in the pension laws.
In performing the requisite balance in Uricoli’s case, we conclude that total forfeiture is not warranted. We do not
Accordingly, we reverse the judgment of the court below. The case is remanded to the Board of Trustees with directions to process Uricoli’s application for accidental disability pension benefits.
The pension statutes covering policemen and firemen expressly require that service be honorable in order to be creditable for ordinary retirement. N.J.S.A. 43:16A-1 et seq. However, the express inclusion of such a term does not require that it be accorded special interpretative weight. We have held that honorable service is implicit in all pension statutes as a condition precedent to obtaining pension benefits. Masse v. Public Employees Retirem. Sys., 87 N.J. 252, 255-56 (1981). See also Ballurio v. Castellini, 29 N.J.Super. 383, 389 (App.Div. 1954) (though only nine of sixty pension statutes required honorable service, honorable service is implicit in every such pension statute).
This evolving recognition of the new character of public pension benefits is particularly evident in the private sector. In fact, the contrast between the Plunkett rule and provisions governing pensions in the private sector is sharp. See the Internal Revenue Code (26 U.S.C.A. § 411(a)(3)) and the Employee
Of some significance, the statement accompanying L. 1954, c. 84, the source statute of this provision, said of it only that “the bill provides for ... the vesting of the members’ interest in the State’s contributions after 20 years of service.” (The number of years of required service was reduced, by L. 1966, c. 217, § 6, to 15.) Thus, even a provision that is facially proforfeiture has within it the more recent strands of thought regarding pension as deferred compensation and therefore capable of being vested. See Masse, 87 N.J. at 260.
lt is therefore evident, in light of this express provision for forfeiture in the case of an employee who seeks early retirement benefits and who was removed “for cause or charges of misconduct or delinquency,” that Uricoli is ineligible to obtain pension benefits under this provision. This fact does not, of course, preclude his success in obtaining benefits under N.J.S.A. 43:16A-7, the provision dealing with disability benefits.
It is clear that the Legislature may have had rational reasons for singling out early retirement benefits as the only occasion on which to attach a provision for forfeiture. As we recognized in Masse, with respect to miscon
Concurring Opinion
concurring.
I fully concur with the result and the reasoning of the majority opinion. I write merely to clarify my view of the basis for the Court’s decision.
On the other hand, it is unfair to use taxpayer’s money to provide for individuals who have seriously abused their public trust. We sense that such compensation is undeserved. Yet this would be the result if pensions were indefeasibly “vested” after a certain number of years of service.
We have therefore rejected both these extreme positions. Instead we have devised a legal standard that can give some expression to both our conflicting ideas of fairness. As I stated in Makwinski v. State, 76 N.J. 86, 93 (1978) (Pashman, J., concurring):
The paramount importance of public employees acting honestly in accordance with the public trust placed in them is self-evident. I fully support the rule that dishonorable service requires total forfeiture of pension rights, even one which has “vested” after 25 years of honorable service. However, Makwinski’s service was not rendered dishonorable for purposes of this principle by this single, isolated improper act. Yet, plaintiffs misconduct was serious enough to require our strenuous disapproval, and we trust that our terminating plaintiffs accrual of pension rights as of the date of his misconduct some five years before he retired will make that point. In a different factual setting, a public employee should not expect to retain any part of his pension.
The Court’s decision today adopts this fact-oriented approach. I agree that flexibility is the best way to satisfy our conflicting goals. In applying this balance, I agree with the Court’s recognition that we have come to view pensions primarily as deferred
Concurring Opinion
concurring.
I concur. Nothing barred Uricoli’s right to claim accidental disability retirement benefits under N.J.S.A. 43:16A-7 in 1972 because of various back injuries he had incurred while doing routine police work prior to his misconduct. At the time of the traumatic events allegedly causing Uricoli’s disability, all his service was honorable. I would permit that claim to be processed to determine whether Uricoli was eligible for and entitled to an accidental disability retirement allowance under the statutory requirements. I would reverse and remand for that purpose.
It should be noted that at the time of his misconduct Uricoli was not entitled to a pension. He had not attained age 55 and had fewer than 25 years of service. N.J.S.A. 43:16A-5, -11.1. Moreover, he did not qualify under N.J.S.A. 43:16A-11.2, permitting vesting after 15 years of service before age 55, if the employee’s separation from service was not due to charges of misconduct. Therefore his entitlement to a pension is dependent on his disability claim.
Reference
- Full Case Name
- Eugene J. Uricoli, Appellant, v. the Board of Trustees, Police and Firemen’s Retirement System, Respondent
- Cited By
- 79 cases
- Status
- Published