IN THE MATTER OF LAWRENCE J. CERES, JR

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3034-09T3

IN THE MATTER OF

LAWRENCE J. CERES, JR.

_______________________________

May 11, 2011

Submitted February 9, 2011 - Decided

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

On appeal from the Board of Trustees, Police and Firemen's Retirement System, Department of the Treasury, PFRS No. 3-10-23469.

Thomas C. Haynes, attorney for appellant Lawrence J. Ceres, Jr.

Paula T. Dow, Attorney General, attorney for respondent Board of Trustees, Police and Firemen's Retirement System (Lewis A. Scheindlin, Assistant Attorney General, of counsel; Robert E. Kelly, Deputy Attorney General, on the brief).

PER CURIAM

Appellant, Lawrence J. Ceres, Jr., appeals from a January 12, 2010 final decision of the Board of Trustees, Police and Firemen's Retirement System (the Board) denying his request that monthly pension benefits continue to be paid to his wife, Lisa Ceres, during his incarceration. The Board denied the request concluding appellant's wife did not rely on the pension payments for her maintenance, as required by N.J.S.A. 43:1-2. The Board found the couple did not marry until after appellant was incarcerated and Lisa's financial position remained unchanged from that which she experienced prior to her marriage. We affirm.

These facts are taken from the administrative hearing record. In 1999, appellant retired, after working for twenty-five years on the police force and achieving the rank of captain. Appellant applied for his pension provided through the Police and Firemen's Retirement System. He received a payment of approximately $3700 per month.

It is undisputed that in 2001 appellant was arrested for an unspecified "crime of moral turpitude." After being released on his own recognizance, but before trial, appellant left New Jersey for Florida. There he entered a seventy-five day, in-patient alcohol rehabilitation program. While in Florida, appellant met Lisa Adkins. The couple began residing together in February 2002 and were engaged in November 2004. Wedding plans were delayed when appellant was arrested in February 2005 on a fugitive warrant in Florida and extradited to New Jersey for trial. Appellant was convicted and sentenced on October 12, 2005 to a five-year period of incarceration.

The Board suspended appellant's pension benefits once he was incarcerated. When the payments ceased, Lisa vacated the parties' former Florida residence and moved into her friend's two-bedroom apartment. Lisa was not working and borrowed money to provide for her living expenses. Appellant submitted a written request to the Board seeking the continuation of his pension payments for the benefit of his fiancée. The Board denied the request, relying on N.J.S.A. 43:1-2, which permits continuation of retirement benefits for the sole benefit of a dependent parent, spouse, or minor child for whom "such pension is necessary for their maintenance[.]" Ibid. The Board's correspondence advised appellant that "[i]f you and Ms. Adkins become married between now and your release from prison, you may request reconsideration of this matter[.]"

The couple married on January 11, 2008. Appellant submitted a second request for resumption of his pension payments for the benefit of his wife. He attached his marriage license and a statement of Lisa's monthly living expenses totaling $3,228.93. The request was denied.

Appellant was released from prison in September 2008. His pension payments resumed the following month. N.J.S.A. 43:16A-6. Appellant appealed the Board's decision and the matter was transferred to the Office of Administrative Law as a contested case.

In the evidentiary hearing, appellant and Lisa testified. Appellant explained that in addition to his pension, he was the recipient of a trust fund, which paid him $755.38 quarterly; he was too young to collect social security; and he had dissipated his assets to pay for his criminal defense.

Lisa related that she had lost her job in New York City after the September 11, 2001 terrorist attacks. She moved to Florida and was employed as a commissioned furniture sales representative. The couple began sharing living expenses in February 2002. When appellant was incarcerated, Lisa had a different commissioned sales position, which she lost when her car was repossessed after she failed to make the payments. In 2008, Lisa's total income was $945, she was unemployed, had no assets and had accumulated some debt, although she had repaid most of her outstanding obligations by the date of the hearing.

The Administrative Law Judge (ALJ) found the continuation of appellant's pension was "necessary for [Lisa's] maintenance." The ALJ stated Lisa would have been destitute but for "the kindness of others" and recommended appellant's request be granted.

The Board filed exceptions to the ALJ's Initial Decision. On December 14, 2009, the Board rejected the ALJ's recommendation. After a review of the record, on January 12, 2010, the Board issued its own findings and conclusions, limiting the facts to the available resources at the time of the couple's marriage. The Board declined to adopt the ALJ's determination because it "was based, at least in part, on irrelevant facts, including factual findings pertaining to the alleged expenses and resources of [appellant] at a time when he was not married."

The Board determined that prior to her marriage, Lisa was living with a friend "and clearly was not relying on spousal support. Even if she had benefited from [appellant's] support during a previous period of cohabitation, [appellant's] pension benefits had been suspended months before the marriage; [appellant] never 'maintained' [Lisa] as his spouse until after he was released from incarceration." The Board concluded appellant failed to demonstrate his entitlement to benefits, as his contribution to his wife's maintenance remained unchanged from the date of their marriage, which never included the pension benefits. Accordingly, the Board denied appellant's request to pay dependency benefits for the period of February 2008 to September 2008. Appellant appealed from the Board's Final Decision.

Judicial review of an administrative agency's determination is limited. See Caminiti v. Bd. of Trs., Police & Firemen's Ret. Sys., 394 N.J. Super. 478, 480 (App. Div. 2007). An "appellate court ordinarily should not disturb an administrative agency's . . . findings unless there is a clear showing that (1) the agency did not follow the law; (2) the decision was arbitrary, capricious, or unreasonable; or (3) the decision was not supported by substantial evidence." In re Virtua-West Jersey Hosp., 194 N.J. 413, 422 (2008). We may not "engage in an independent assessment of the evidence[,]" State v. Locurto, 157 N.J. 463, 471 (1999), and must accord a strong presumption of reasonableness to the decision of the administrative agency. Smith v. Ricci, 89 N.J. 514, 525 (1982). Moreover, we determine "'whether the findings made could reasonably have been reached on sufficient credible evidence present in the record' considering 'the proofs as a whole'" and "[']with due regard to the opportunity of the one who heard the witnesses to judge of their credibility.'" In re Taylor, 158 N.J. 644, 656 (1999) (quoting Close v. Kordulak Bros., 44 N.J. 589, 599 (1965)). "Where there is substantial evidence in the record to support more than one regulatory conclusion, 'it is the agency's choice which governs.'" In re Vineland Chem. Co., 243 N.J. Super. 285, 307 (App. Div.) (quoting De Vitis v. N.J. Racing Comm'n, 202 N.J. Super. 484, 49l (App. Div.), certif. denied, l 02 N.J. 337 (l985)), certif. denied, 127 N.J. 323 (1990). In such a situation, we "cannot substitute our judgment for that of the agency, even if we would have decided the case differently had we heard the evidence." Murray v. State Health Benefits Comm'n, 337 N.J. Super. 435, 443 (App. Div. 2001).

Appellant argues the Board's denial of his request to resume pension benefits for the maintenance of his spouse was arbitrary and capricious, contrary to the statute and not supported by substantial credible evidence in the record. Appellant has the burden of proof on all issues. Bueno v. Bd. of Trs., Teachers Pension & Annuity Fund, 404 N.J. Super. 119, 125 (App. Div. 2008) (citing McGowan v. N.J. State Parole Bd., 347 N.J. Super. 544, 563 (App. Div. 2002)), certif. denied, 199 N.J. 540 (2009).

Appellant asserts the Board erred in concluding that because he did not support Lisa until he was released, she had no need for his support prior to that time. Appellant argues the determination was unreasonable because Lisa was forced to live with and borrow money from a friend because the pension payments stopped.

The determination of the issue presented centers on statutory review. "The primary goal in any matter requiring interpretation of a statute is to discern and implement legislative intent." In re Military Serv. Credit For State Teachers, 378 N.J. Super. 277, 281 (App. Div. 2005) (citing State v. Reiner, 180 N.J. 307, 311 (2004)). We begin such an analysis by considering "the statutory language because the clearest indication of a statute's meaning is its plain language." Ibid. "Legislative intent is to be gleaned from the entire statute, . . . read so that each provision aligns with the intent of the entire act." Boardwalk Regency Corp. v. N.J. Casino Control Comm'n, 352 N.J. Super. 285, 300 (App. Div.), certif. denied, 174 N.J. 366 (2002). "If the meaning of the text is clear and unambiguous on its face, we enforce that meaning." Reiner, supra, 180 N.J. at 311.

The forfeiture provisions of N.J.S.A. 43:1-2 state, in pertinent part:

No pension . . . shall be paid by this State . . . to any person for the period during which he is confined in a penal institution as a result of conviction of a crime involving moral turpitude, and such person shall lose all right to so much pension or subsidy as he would receive or be entitled to receive had he not been so confined; provided, that nothing herein contained shall prevent the payment of the pension for the sole benefit of the mother, father, wife or minor children of the person so confined in a penal institution if the board or commission administering the pension fund shall determine that such pension is necessary for their maintenance[.]

The Legislative purpose of the provision is to deny double payment to an incarcerated State retiree, who is being sustained at State expense in prison. Eyers v. State, Bd. of Tr., 91 N.J. 51, 60 (1982) (O'Hern, J. dissenting).

The parties are at odds over the temporal condition of an award continuing benefits. Their arguments differ as to the point in time necessity is measured. The Board asserts the statute examines the maintenance needs of a spouse "against the [pensioner's] previous financial contribution to [the spouse]" because "the statute is not intended to provide prospective relief to individuals who did not previously rely on the now-forfeited benefits of an incarcerated retiree." Therefore, the Board suggests any individual not shown to be dependent prior to the pensioner's incarceration cannot rely on the pension benefits for his or her maintenance.

Appellant refutes this interpretation, referring to our comments in T.J.M. v. Board of Trustees of Police & Firemen's Retirement System, 218 N.J. Super. 274 (App. Div. 1987), regarding the interpretation of the phrase "necessary for their maintenance" as used in N.J.S.A. 43:1-2. Noting no case interpreting the phrase "necessary for their maintenance" under N.J.S.A. 43:1-2 had been decided, we held "this phrase may not be interpreted to mean that the pension will only be paid if the pensioner's family would be destitute without such payments." Id. at 283.

We determine T.J.M. is inapposite. That case concerned the propriety of the continuation of an incarcerated employee's pension for the benefit of his minor children, when the children's mother had an income. 218 N.J. Super. at 283. We suggested that each parent's legal obligation to support his or her children is independent of the other parent's similar duty. Ibid. In contrast, the facts at hand require a determination of whether the non-incarcerated spouse is dependent on the pensioner-spouse such that the otherwise forfeitable pension payments should continue to assure necessary maintenance. Virtually no guidance on this issue exists.

In a different context involving a different pension statute, the Supreme Court reviewed a widow's right to receive statutory pension survivor benefits when her errant public- employee husband's pension benefits were forfeited following his conviction for misconduct while in office. Eyers, supra, 91 N.J. at 56. The employee died prior to final disposition of the application for forfeiture. Id. at 53.

In its analysis, the Court distinguished the widow's application for survivor benefits from her late husband's pension claims, and "refuse[d] to adopt a strict rule that automatically mandates that the survivor's benefits are directly derivative from and dependent upon the pensioner's and are, therefore, no greater than his pension rights." Id. at 56. Identifying various statutes governing dependent benefits of a public employee, the Court discerned that "[t]he Legislature has thus made specific provisions for the financial protection of family members of public employees under certain circumstances." Id. at 57. Specifically commenting on the statute at issue in this case, the Court stated:

Other provisions demonstrate a particular solicitude to the needs of dependents of an employee. For example, while N.J.S.A. 43:1-2 expressly provides that pension payments to public employees convicted of crimes involving moral turpitude shall be suspended during the period of confinement, it also nevertheless permits payments to continue where necessary for the maintenance of the individual's spouse, minor children or parents.

[Ibid.]

While appellant correctly points out that pension statutes are "remedial in character" and "liberally construed and administered in favor of the persons intended to be benefited" by their provisions, Geller v. Dep't of Treas., 53 N.J. 591, 598 (1969), we reject his contention suggesting this mandates eligibility because Lisa once shared the benefit of appellant's pension payments. The argument fails because at the time Lisa was aided by appellant's pension income, she was not his legal dependent. Lisa's subsequent change in legal status to his wife occurred when no benefits were received or relied upon for support.

The Legislature did not ignore benevolent policy objectives for an incarcerated pensioner's dependents. In fact, the statutory terms mandating suspension of benefits pending incarceration are particularly tempered to account for that event. Eligibility must be proven by evidence showing not only a dependency based on marital status, but also prior economic reliance on the payments for maintenance. See Smith v. Dep't. of Treas., 390 N.J. Super. 209, 213 (App. Div. 2007) (stating "an employee is entitled to the liberality spoken of in Geller when eligible for benefits, but eligibility is not to be liberally permitted").

In our view, N.J.S.A. 43:1-2 is intended to ameliorate the loss of prior financial support relied upon by dependents of an errant pensioner who loses his benefits because of incarceration for a crime of moral turpitude. There is no legislative intention to enhance a party's financial position. Instead, the statute continues the income stream for the defined dependents who had previously relied on the funds for support.

Lisa was not appellant's legal dependent when she enjoyed the receipt of his pension benefits or when the payments were suspended upon appellant's incarceration. When Lisa became appellant's wife, she could not have relied on the pension receipts because they had been suspended for over two years. Based on the plain reading of the statute, we find the Board's conclusion that appellant failed to demonstrate a need for his wife's continued maintenance at the time of his incarceration is supported by the credible evidence of record. Moreover, its decision to deny eligibility is in accordance with its duty to implement the statutory objectives, and keeps a mindful eye toward its fiduciary obligation to protect pension funds on behalf of all members. See Krayniak v. Bd. of Trs., 412 N.J. Super. 232, 242 (App. Div. 2010) (stating guidelines for determining pension eligibility "must be carefully interpreted so as not to obscure or override considerations of . . . a potential adverse impact on the financial integrity of the [f]und") (internal citations and quotations omitted).