ROBERT PETRY v. BOARD OF TRUSTEES POLICE & FIREMEN'S RETIREMENT SYSTEM

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

A-1145-13T2

ROBERT PETRY,

Petitioner-Appellant,

v.

BOARD OF TRUSTEES, POLICE &

FIREMEN'S RETIREMENT SYSTEM,

Respondent-Respondent.

___________________________________

IN THE MATTER OF ROBERT PETRY,

CITY OF HACKENSACK

FIRE DEPARTMENT

___________________________________

December 29, 2015

Submitted August 26, 2015 Decided

Before Judges Ostrer and Carroll.

On appeal from the Board of Trustees of the Police and Firemen's Retirement System, Department of the Treasury, PERS #2-1327429, and the Civil Service Commission, CSC Docket No. 2013-506.

Cohen, Leder, Montalbano & Grossman, attorneys for appellant Robert Petry (Bruce D. Leder, on the brief).

John J. Hoffman, Acting Attorney General, attorney for respondent Board of Trustees, Police & Firemen's Retirement System (Melissa H. Raksa, Assistant Attorney General, of counsel; Melissa A. Haas and Robert E. Kelly, Deputy Attorneys General, on the brief).

Wiss & Bouregy, P.C., attorneys for respondent City of Hackensack (Raymond R. Wiss, of counsel and on the brief; Timothy J. Wiss, on the brief).

PER CURIAM

These consolidated appeals involve the statutory requirements that no person may be hired as a full-time firefighter if he is over thirty-five years of age, N.J.S.A. 40A:14-12; all firefighters must be members of the Police and Firemen's Retirement System (PFRS), N.J.S.A. 43:16A-3; and eligibility for PFRS is subject to the same thirty-five year age restriction. Ibid. Although the age requirement is subject to certain adjustments, petitioner Robert Petry did not qualify for them, and was over thirty-five when the City of Hackensack (City) hired him as a full-time firefighter. Several months after Petry quit his previous job and began work as a firefighter, the Division of Pensions and Benefits (Division) discovered that he was ineligible for PFRS membership and notified the City he could not be enrolled. The Board of Trustees of PFRS (Board) subsequently confirmed that decision, and the City terminated Petry from employment.

Petry does not contest that he was ineligible for appointment pursuant to the statutory age requirements. However, he contends that equitable principles articulated in Sellers v. Board of Trustees of the Police & Firemen's Retirement System, 399 N.J. Super. 51 (App. Div. 2008), should bar termination of his employment and removal from PFRS. In A-0357-13, Petry appeals the Board's decision declining to enroll him in PFRS. In A-1145-13, he appeals the Civil Service Commission's decision upholding his termination. Having reviewed Petry's arguments in light of the record and applicable principles of law, we affirm.

I.

Before reviewing the relevant facts of Petry's appointment, we review the statutes governing enrollment in PFRS and hiring of firefighters.

New Jersey law "prohibits the appointment of a full-time firefighter whose age exceeds thirty-five years." Sellers, supra, 399 N.J. Super. at 53 (citing N.J.S.A. 40A:14-12). In a civil service municipality, an applicant's age is calculated from "the announced closing date of a civil service examination for the position" provided he meets the age requirement "while the civil service list promulgated as a result of that examination is in effect." N.J.S.A. 40A:14-12.

Full-time firefighters are required to enroll in PFRS as a condition of employment. N.J.S.A. 43:16A-3; N.J.A.C. 17:4-2.2; Piatt v. Police & Firemen's Retirement Sys., ___ N.J. Super. ___, ___ (App. Div. 2015) (slip op. at 6). The same age requirement governs enrollment in PFRS. N.J.S.A. 43:16A-3. To enroll, a firefighter may not be "over 35 years" old at the time of enrollment. Ibid. For enrollment purposes, a candidate's age is calculated on "the announced closing date of the examination," but candidates will be considered to have met the age requirement only "for the duration of the list promulgated as a result of such examination." N.J.A.C. 17:4-2.5(b); see also Sellers, supra, 399 N.J. Super. at 53.

The age restriction "serves the Legislature's goals of using PFRS's heightened benefits to encourage persons to become [police officers and firefighters] while young and relatively fit, and to retire at a relatively early age." Piatt, supra, ___ N.J. Super. at ___ (slip op. at 2). "The underlying idea was to facilitate early retirement and turnover within the system by giv[ing] better benefits." Id. at 12 (internal quotation marks and citations omitted) (alterations in original).

The age calculation is adjusted for persons with certain prior military or law enforcement service. For example, candidates for municipal police officer positions can reduce their age to account for previous service as a police officer. N.J.S.A. 40A:14-127.1; N.J.A.C. 17:4-2.5(f). However, no age reduction for prior police service exists for firefighter candidates. Sellers, supra, 399 N.J. Super. at 54. Veterans applying for police or firefighter positions also receive an age reduction for military service during "time of war." N.J.S.A. 43:1-1.1; N.J.A.C. 17:4-2.5(c) (e); see also Sellers, supra, 399 N.J. Super. at 54-55; Bashwiner v. Police & Firemen's Ret. Sys., 68 N.J. Super. 1, 7-11 (App. Div. 1961) (interpreting "time of war" to mean "period of actual hostilities").

II.

We discern the following facts from the record of the hearing before the Administrative Law Judge. The ALJ heard testimony from Petry; Art Koster, the City's Personnel Director and Executive Assistant to the City Manager; and City Fire Chief Thomas J. Freeman, who approved Petry's hire.

In 2006, Petry took the civil service examination for firefighters. On the closing date for the exam, August 31, 2006, he was over seventy-five days past his thirty-fifth birthday. N.J.S.A. 40A:14-12. Petry knew about the thirty-five-year age restriction. He admitted that he reviewed the test announcement, which stated, "Applicants must be at least 18 but not over 35 (one is over 35 on the day after his or her 35th birthday)," subject to exceptions discussed elsewhere in the announcement.1

Notwithstanding the announcement, Petry testified he believed his age would be reduced by the fourteen months he worked as a corrections officer for the Juvenile Justice Commission in 2004 and 2005. He was enrolled in PFRS during that time, and did not withdraw his contributions. Petry was terminated for cause, but his appeal was then pending.2 Petry did not attempt to verify his belief that he satisfied the age requirement on the basis of his prior service.

Petry passed the exam and his name was included on a list of eligibles.3 The list of eligibles was apparently extended, such that it remained effective when the City sought a new firefighter in early 2011.

Petry was listed second on an April 2011 certification containing the names of "eligibles," requested by the City. See N.J.A.C. 4A:4-4.2.4 Koster and Freeman both testified they believed that inclusion of a name on the
certification of eligibles meant a determination had been made that the candidate satisfied any eligibility requirements. Further, Freeman was unaware of the statutory age requirement for firefighters. As far as he was concerned, the only significant age issue was whether a new hire was forty or under, so he or she could serve twenty-five years before mandatory retirement, thereby earning the most generous pension benefits. The Fire Department was solely responsible for confirming that an applicant was eligible for hire, and Freeman did not consult with Koster or any other official regarding Petry's age.

Petry had been working in a civilian position with the Bergen County Police Department since February 2007. In May 2011, Petry completed a written application for the City firefighter position. Freeman interviewed Petry shortly thereafter. In the interview, Petry disclosed that he was over thirty-five when he took the exam. Freeman replied that his age was not a concern, since his name was on the certification of eligibles. Based on Freeman's assurance, Petry believed the age cutoff "was not going to be a problem." Petry was offered the position.5 He subsequently resigned from his Bergen County Police position to accept the firefighter job. He began his employment with the City on June 13, 2011.

By letter dated January 17, 2012, the Division informed the City that Petry could not be enrolled in PFRS, because he was "overage for PFRS." The Board upheld that determination on May 16, 2012. Because all full-time firefighters must be enrolled in PFRS as a condition of employment, N.J.S.A. 43:16A-3, the City terminated Petry's employment in June 2012.

Petry appealed the decision of the Board, which referred the matter to the Office of Administrative Law. In her initial decision denying Petry's appeal, the ALJ noted that the maximum age for enrollment is thirty-five, N.J.S.A. 43:16A-3, and that a firefighter's age may be reduced only for "active military service" during "a time of war." N.J.A.C. 17:4-2.5. The ALJ also discussed our decision in Sellers, supra, in which we held that the Board has authority to relax the statutory age requirement "when justice so demands, provided the power is used rarely and sparingly, and does no harm to the overall pension scheme." 399 N.J. Super. at 62. The ALJ decided that equity did not require relaxation of the age requirement. The Board summarily adopted the ALJ's decision on August 5, 2013.

Petry also appealed his termination to the Civil Service Commission, which affirmed Petry's termination on September 18, 2013, on the basis of his inability to enroll in PFRS.

On appeal, Petry raises the following points for our consideration

PFRS' FINAL DECISION MISINTERPRETS SELLERS AND DIRECTLY AFFECTS THE OUTCOME IN THIS CASE; CONSEQUENTLY, THE DECISION IS ARBITRARY, CAPRICIOUS AND UNREASONABLE AND SHOULD BE REVERSED.

A. The Final Decision is patently unreasonable because it distorts this Court's ruling in Sellers and excuses PFRS' duty to establish a protocol for ensuring that Firefighter applicants are age-eligible.

B. The Final Decision arbitrarily rejects Sellers' ruling that PFRS may consider applicants' circumstances on a case-by-case basis and, when appropriate, waive the age requirement.

THE FINAL DECISION LACKS SUBSTANTIAL CREDIBLE EVIDENCE IN THE RECORD BECAUSE IT RESTS ENTIRELY ON INADMISSIBLE HEARSAY WITHOUT A RESIDUUM OF COMPETENT EVIDENCE.

Petry did not file a separate brief in A-1145-13, the termination appeal. However, the parties agree that our disposition in A-0357-13 is controlling of the termination appeal.

III.

Our review of an agency's quasi-judicial action is limited. Hemsey v. Bd. of Trs., Police & Firemen's Ret. Sys., 198 N.J. 215, 223-24 (2009). The agency's decision "'will be sustained unless there is a clear showing that it is arbitrary, capricious, or unreasonable, or that it lacks fair support in the record.'" Ibid. (quoting In re Herrmann, 192 N.J. 19, 27-28 (2007)). Our appellate role is restricted to three inquiries

(1) whether the agency's action violates express or implied legislative policies, that is, did the agency follow the law; (2) whether the record contains substantial evidence to support the findings on which the agency based its action; and (3) 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.

[Mazza v. Bd. of Trs., Police & Firemen's Ret. Sys., 143 N.J. 22, 25 (1995).]

Deference is also owed to an agency's exercise of equitable authority. Bd. of Educ. v. Bd. of Educ., 173 N.J. Super. 268, 274 (App. Div. 1980). An agency's "equitable determinations" are "entitled to a presumption of correctness and will not be upset unless there is an affirmative showing that the decision was arbitrary, capricious, or unreasonable." Ibid.; see also East Orange Bd. of Educ. v. N.J. Sch. Const. Corp., 405 N.J. Super. 132, 145-46 (App. Div.) (reviewing agency discretionary decision under "arbitrary, capricious, or unreasonable" standard), certif. denied, 199 N.J. 540 (2009). "Deference controls even if the court would have reached a different result in the first instance." Herrmann, supra, 192 N.J. at 28.

Petry argues the Board erred in failing to grant him equitable relief from the age requirement. He contends that the facts in this case are indistinguishable from Sellers, supra, and therefore the Board was required to apply the equitable principles discussed in that case and waive the age requirement. We are unpersuaded.

In Sellers, supra, a municipal fire department hired Sellers, who was over the age of thirty-five, as a firefighter. 399 N.J. Super. at 53. Both Sellers and the town believed his age would be reduced because of his prior police and military service, bringing him under age thirty-five. Id. at 54. We found that, under the applicable statutory provisions, Sellers was entitled to some age reduction, but not enough to bring him under thirty-five. Ibid. We noted that Sellers's and the town's belief was based on a mistaken reading of the statute, and that the Board itself had initially approved Sellers's enrollment, also believing "he met the age criteria." Id. at 54, 61-62. Only after further review did the Board determine that application of the deductions did not bring Sellers under age thirty-five. Id. at 62. The Board therefore denied Sellers enrollment in PFRS, after he had been working as a firefighter for over a year. Id. at 52-53.

On appeal, Sellers argued that the Board had equitable authority to waive the age requirement and enroll him in PFRS, while the Board maintained it had no such equitable power. Ibid. We held that "the Board does have the authority to apply equitable principles to provide a remedy when justice so demands, provided the power is used rarely and sparingly, and does no harm to the overall pension scheme." Id. at 62.

We remanded to the Board to determine "whether the facts warrant application of equitable principles here." Id. at 63. We took care to define the "relevant public and private interests" in that case that would inform the Board's analysis

[The Board] should look at the equities from Sellers' point of view, considering whether the government failed to "turn square corners" with him, whether he acted in good faith and reasonably, the degree of harm he will sustain if the age requirement is strictly enforced, and other factors that go to the fairness of applying the age restriction to him after he was hired and left a previous job to take the position. The Board must then consider the purposes of the age restrictions from the perspective of the municipal firefighter position and the pension system and determine whether or to what extent those purposes will be thwarted if relief is provided to Mr. Sellers, taking into account the extent to which he fails to meet the age criteria and the overall pension scheme.

[Id.at 62-63.]

Despite our careful instruction, we did not compel the Board to conclude that Sellers was entitled to equitable relief. Nor did we hold that the Board is required to undertake this balancing analysis in every case where a municipality hires a police officer or firefighter whose age exceeds the statutory maximum.

We stressed that the Board's equitable power is to be used "rarely and sparingly." Id. at 62. We acknowledged that granting equitable relief in such cases did not follow neatly from application of principles of equitable estoppel, because Sellers was "seeking to bind the Board, a State entity, for action taken by a municipality." Id. at 59; see also Bridgewater-Raritan Educ. Ass'n v. Bd. of Educ. of Bridgewater-Raritan Sch. Dist., 221 N.J. 349, 364-65 (2015) (refusing to bind school board to superintendent's representations regarding tenure eligibility, stating, "[i]n an application of estoppel the focus must be on the conduct of the person or entity who had the authority to act," which was the school board) (internal quotation marks and citation omitted).

We need not decide whether the Board was obligated to perform the Sellers analysis in this case. Our review of the ALJ's opinion, which the Board adopted, convinces us that the Board applied the equitable factors discussed in Sellers, supra. The ALJ analyzed, by comparison to Sellers, whether Petry had a reasonable belief that his age would be reduced for his employment as a corrections officer

Not only would time employed as a correctional officer not have counted to reduce the fire fighter age requirement, but petitioner was fired for good cause. Sellers, by contrast, did not just rely upon a prior law enforcement position. He had military service and some of it was even during "time of war" but it was not of sufficient amount to reduce his age enough to get him under thirty-five years of age.

The ALJ also discussed whether Freeman had a reasonable mistaken belief about how the age criteria applied to Petry

[I]n the present matter the Hackensack Fire Chief was not confused about the statutory veteran's credits that might reduce petitioner's age but rather operated under a different mistaken belief, namely, that the only age that mattered for fire fighters was forty years. That belief stems from the desire of most fire fighters to earn twenty-five years of credit in PFRS before they mandatorily retire at age sixty-five in order to get the better pension and health benefit package. And yet Chief Freeman did not care apparently that [Petry] was over the age of forty by the time he was actually hired by the city.

The ALJ also noted that Petry made no effort to ascertain whether he was entitled to an age reduction

During the fairly extended period of time when petitioner was waiting for a fire fighter spot to open in Hackensack, his appeal on his prior termination wound its way through the administrative process and he received notice of the termination of his PFRS account. In light of those facts, and having sat for the fire fighter exam during or even prior to his OAL appeal at a point when he was already over the age of thirty-five, it would have been prudent for him to have made some independent inquiries as to his eligibility to ever become a fire fighter and enroll in PFRS. [Petry] had five years in which to get some questions answered. Instead . . . he relied on "wishful thinking."

Finally, the ALJ suggested the City had not taken adequate steps to ensure "enforcement of the thirty-five year maximum age provision." The ALJ concluded that no exception to the age restriction applied and "none should be inferred . . . on equitable grounds."

In light of the ALJ's analysis, we cannot conclude the Board exercised its limited equitable power in an "arbitrary, capricious, or unreasonable" manner. Hemsey, supra, 198 N.J. at 223-24. Though the ALJ purported to reject a "case-by-case consideration of the equities in their individual circumstances," her analysis was just that. The ALJ discussed whether Petry "acted in good faith and reasonably" and considered other facts that "go to the fairness of applying the age restriction to [Petry]." Sellers, supra, 399 N.J. Super. at 62. The ALJ's findings were based on competent record evidence, namely, the testimony of Petry and Freeman.6 We defer to the Board's judgment that, based on those findings, Petry was not entitled to an equitable waiver of the statutory age requirement.

Finally, we briefly address Petry's argument that Sellers, supra, required PFRS to create a process in which an applicant is pre-certified by PFRS as eligible before being hired. Petry misreads Sellers. We recognized in Sellers, and do so here, the significant personal impact on employees like Petry who give up their current jobs to accept a firefighter position, "only to find out later that they do not meet the age requirements for the positions." Id. at 62. We recognized in Sellers that the problem could be reduced, if not avoided, by better coordination among appointing authorities and the Board. Id. at 61. We suggested a possible solution to the "overlapping responsibility" between municipalities and the Board to determine eligibility

The problem is most easily resolved by setting up an administrative process whereby a prospective employee is approved as eligible for enrollment in PFRS before being permanently hired and leaving their prior position to commence working in the PFRS-covered position.

[Id. at 60-61.]

However, we did not claim to mandate such an action, but merely explained that such a process would be consistent with the PFRS statute and implementing regulations. Id. at 61. Better training of persons with hiring authority, such as fire chiefs, would also help. However, the solution ultimately lies with the policymakers in the executive and legislative branches.

In sum, the Board declined to relax the age requirement under the circumstances of this case, after weighing equitable considerations. Given our deferential standard of review, we are constrained to affirm the Board's decision to deny Petry enrollment in PFRS.

In light of the Board's decision, Petry was not eligible for employment as a firefighter. Consequently, we discern no error in the Commission's decision affirming the City's termination of his employment.

Affirmed.

1 The section of the announcement referring to exceptions is not included in the record.

2 The Civil Service Commission ultimately affirmed his termination.

3 An "eligible list" is a "roster compiled or approved by the Civil Service Commission of persons who are qualified for employment or reemployment." N.J.A.C. 4A:1-1.3; see also In re Foglio, 207 N.J. 38, 44 (2011).

4 A "certification" means "a list of names presented to an appointing authority for regular appointment." N.J.A.C. 4A:1-1.3; Foglia, supra, 207 N.J. at 44.

5 The first-ranked person was not selected for reasons Freeman could not recall.

6 Petry argues the ALJ, and Board, erred in relying on several written communications from the State to the City, which placed it on notice of the statutory age restriction. A letter dated January 17, 2012 was addressed to the City, with a purported copy to Petry himself, advising that he did not meet the age requirement. Petry and the City witnesses denied receiving the communications. The Board presented no witnesses to discuss the circumstances surrounding the sending of the letters. We conclude the issue is not dispositive. The Board was not required to prove the City officials' subjective knowledge of the statutory maximum age requirement, as "[e]very person is presumed to know the law." State v. Moran, 202 N.J. 311, 320 (2010) (internal citation omitted).