JAMES K. REILLY v. BOARD OF REVIEW DEPARTMENT OF LABOR

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

JAMES K. REILLY,

Appellant,

v.

BOARD OF REVIEW, DEPARTMENT

OF LABOR and PASSAIC VALLEY

SEWERAGE COMMISSIONERS,

Respondents.

_____________________________________________

May 15, 2014

Submitted May 5, 2014 - Decided

Before Judge Kennedy and Guadagno.

On appeal from the Board of Review, Department of Labor, Docket No. 335,326.

James K. Reilly, appellant pro se.

John J. Hoffman, Acting Attorney General, attorney for respondent Board of Review (Melissa H. Raksa, Assistant Attorney General, of counsel; Nicole P. Col n, Deputy Attorney General, on the brief).

Arleo, Donohue & Biancamano, L.L.C., attorneys for respondent Passaic Valley Sewerage Commissioners (Frank P. Arleo and Jo Ann K. Dobransky, on the brief).

PER CURIAM

James K. Reilly appeals from a final determination of the Board of Review (Board), dated September 13, 2012, modifying a decision of an Appeal Tribunal and reducing Reilly's unemployment benefit from $598 to $37 per week. Reilly concedes that the calculation reducing his benefit is correct, but seeks to retain the overpayment, arguing that procedural missteps by his former employer somehow entitle him to a windfall. We reject his arguments and affirm.

Reilly was employed by the Passaic Valley Sewerage Commission (PVSC) from 1981 through February 7, 2011, when he was terminated. During his employment, Reilly and PVSC contributed to his pension. Reilly filed for early retirement and in March 2011 the Division of Pension and Benefits approved his application. Reilly received monthly pension payments of $4,856.03, effective March 1, 2011.

Reilly also filed a claim for unemployment benefits. On April 28, 2011, a deputy director of the Division of Unemployment Insurance sent Reilly a Notice of Determination (NOD) indicating that Reilly's benefits were calculated based on the mistaken assumption that Reilly was the sole contributor to his pension. As a result, no reduction was applied, and Reilly began to receive $598 per week based on his last annual earnings of $131,000.

On May 12, 2011, Harry D. Mayo, III, PVSC Director of Human Resources, sent a letter to the Appeal Tribunal appealing the determination and advising that Reilly participated in the State of New Jersey Public Employees' Retirement System (PERS) and PVSC made pension contributions on Reilly's behalf during his employment.

On July 8, 2011, an Appeal Tribunal sent notice to PVSC that a hearing would be held on July 21, 2011, at 4:30 p.m. Mayo sent a letter to the Appeal Tribunal explaining that PVSC offices close at 4:15 p.m. and requested a hearing during "normal business hours." Without responding to Mayo's request, an Appeal Tribunal mailed a decision on July 22, 2011, dismissing PVSC's appeal for failing to participate in the appeal hearing.

On July 29, 2011, PSVC appealed the dismissal to the Board, who reopened the matter. On October 18, 2011, an Appeal Tribunal conducted a telephonic hearing. The hearing examiner first noted that the original appeal was not timely filed, as the NOD was received by PVSC on May 2, 2011, and Mayo's letter was not received by the Appeal Tribunal until May 12, 2011. Reilly did not dispute Mayo's testimony that PVSC contributed five and one-half percent to Reilly's pension.

On October 19, 2011, the appeals examiner issued a decision, finding that PVSC's appeal was timely filed pursuant to N.J.S.A. 43:21-6(b)(1). Next, the examiner applied the benefit reduction provision of N.J.A.C. 12:17-8.2 and reduced Reilly's weekly benefit of $598 to $38.

Reilly appealed and on March 30, 2012, the Board remanded the matter to the Appeal Tribunal for additional testimony regarding the timeliness of PVSC's appeal, whether Reilly's benefits are subject to a pension reduction, and whether he is liable to refund any benefits overpaid.

On June 14, 2012, a second hearing was held before an appeals examiner. On the timeliness issue, Mayo testified that when the NOD was received by PVSC on May 2, 2011, he was on vacation and did not read it until he returned on May 11, 2011. The following day, Mayo wrote to the Appeal Tribunal notifying it of the mistake in calculation. Mayo provided a copy of the fax cover sheet dated May 12, 2011. On the contribution issue, Mayo testified that PVSC contributed to Reilly's pension through by-weekly payroll deductions from his paycheck. Reilly provided a stamped copy of the NOD indicating it was received by PVSC on April 29, 2011. Counsel for PVSC acknowledged that there were two "original" stamped copies, one indicating receipt on April 29 and a second bearing the May 2 date.

The appeals examiner determined that PVSC's appeal was timely and reduced Reilly's weekly benefit rate from $598 to $37, effective February 6, 2011. Reilly appealed and the Board affirmed. As to timeliness, the Board found that although PVSC's appeal "was outside the statutory period, the delay was due to the person with authority of filing such appeal being on vacation the time the determination was received, which is good cause." On the issue of pension contribution, the Board agreed with the Appeal Tribunal that Reilly's weekly benefit rate is subject to a pension offset but noted that Reilly's pension was effective March 1, 2011, and not February 6, 2011, as the Tribunal concluded. With this slight modification, the Board affirmed.

On appeal, Reilly argues:

claimant was receiving unemployment benefits based upon information provided by the former employer. the employer filed an untimely appeal of the decision of the deputy. a hearing was conducted and the employer failed to participate. as a result, the case was dismissed. the decision should have been considered final since the employer failed to provide an acceptable reason for not participating. subsequent hearings should not have been conducted and, therefore, benefits should not have been reduced.

As Reilly concedes that his weekly benefits are subject to the pension offset provisions of N.J.S.A. 43:21-5a and N.J.A.C. 12:17-8.2, we will address only his claim that PVSC's appeal was untimely.

Our review here is limited. The final decision of an administrative agency may not be disturbed on appeal unless it has been shown to be arbitrary, capricious, or unreasonable. Brady v. Bd. of Review, 152 N.J. 197, 210 (1997). We can only intervene "'in those rare circumstances in which an agency action is clearly inconsistent with its statutory mission or with other State policy.'" Ibid. (quoting George Harms Constr. Co. v. N.J. Tpk. Auth., 137 N.J. 8, 27 (1994)). Therefore, our review of a decision of an administrative agency is limited to the following inquiries:

(1) whether the agency's decision offends the State or Federal Constitution;

(2) whether the agency's action violates express or implied legislative policies;

(3) whether the record contains substantial evidence to support the findings on which the agency based its action; and

(4) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors.

[Id. at 211 (quoting Harms Constr., supra, 137 N.J. at 27).]

Having thoroughly reviewed the record in light of this standard, we conclude that the Board's final decision must be affirmed.

The "good cause" exception to time limitations on appellate filings imposed in unemployment benefit actions is codified at N.J.A.C. 12:20-4.1(h), which provides in pertinent part:

A late appeal shall be considered on its merits if it is determined that the appeal was delayed for good cause. Good cause exists in circumstances where it is shown that:

1. The delay in filing the appeal was due to circumstances beyond the control of the appellant; or

2. The appellant delayed filing the appeal for circumstances which could not have been reasonably foreseen or prevented.

In Rivera v. Bd. of Review, 127 N.J. 578 (1992), the Court recognized that "'state statutes providing for the payment of unemployment compensation benefits create in the claimants for those benefits property interests protected by due process.'" Id. at 584 (quoting Wilkinson v. Abrams, 627 F.2d 650, 664 (3d Cir. 1980)). It recognized further that due process required both adequate notice and an opportunity to be heard. Id. at 583. N.J.S.A. 43:21-16(d) provides that the determination of the Board "shall be final unless the person files an appeal of the determination within seven calendar days after the delivery of the determination, or within 10 calendar days after such notification was mailed to his last-known address[.]" In referring to this ten-day filing requirement, the Rivera Court noted that "strict adherence to limitation periods without regard to their underlying purposes disserves the goals of justice." Id. at 585. In balancing the due process protections to be accorded to both parties, the Rivera Court gave significant weight to an individual's interest in avoiding a wrongful order to repay, whereas it found little to justify the Department of Labor's inflexible application of the ten-day filing requirement. Id. at 589-90.

We find that part of the Rivera holding to have particular relevance here. Reilly concedes that he was significantly overpaid as a result of the deputy's mistake in failing to apply a pension offset to his benefits calculation. He seeks to retain these benefits he was never entitled to, by accusing a representative of PVSC of false statements and the Board and Appeal Tribunal of "gross indifference to the requirements for timeliness." As not a scintilla of support for these accusations exists in the record, we are satisfied that the Board exercised appropriate discretion in applying a good cause exception to PVSC's appeal.