CHRISTINE FARRINGTON v. STATE OF NEW JERSEY DEPARTMENT OF THE TREASURY DIVISION OF PENSIONS AND BENEFITS

NOT FOR PUBLICATION WITHOUT THE
                      APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court."
      Although it is posted on the internet, this opinion is binding only on the
        parties in the case and its use in other cases is limited. R. 1:36-3.




                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-4099-15T2

CHRISTINE FARRINGTON,

        Appellant,

v.

STATE OF NEW JERSEY,
DEPARTMENT OF THE TREASURY,
DIVISION OF PENSIONS AND
BENEFITS,

        Respondent.

________________________________

              Submitted October 18, 2017 – Decided January 26, 2018

              Before Judges Nugent, Currier and Geiger.

              On appeal from the State of New Jersey,
              Department of the Treasury, Division of
              Pensions and Benefits.

              Galantucci, Patuto, De Vencentes, Potter &
              Doyle, LLC, attorneys for appellant (Philip
              De Vencentes, on the brief).

              Christopher S. Porrino, Attorney General,
              attorney for respondent (Melissa H. Raksa,
              Assistant Attorney General, of counsel;
              Danielle P. Schimmel, Deputy Attorney General,
              on the brief).

PER CURIAM
     This    appeal   involves   the       interplay   between    the    Public

Employees' Retirement System (PERS) and the Judicial Retirement

System (JRS).      According to the notice of appeal, appellant

Christine    Farrington   is   challenging      the    final   administrative

determinations of the PERS Board of Trustees (the Board or PERS

Board).     In her appellate brief, however, she seeks review of a

JRS employee's decision that she does not meet the eligibility

requirements for retirement under a JRS statute.               This issue is

pending final administrative action by the State House Commission

(SHC) on appellant's administrative appeal.1            We thus address only

the Board's determinations.       Finding these determinations to be

neither arbitrary nor capricious, we affirm them.                 We dismiss

appellant's appeal of the JRS issue as she has not exhausted her

administrative remedies.

     This action's factual background and procedural history are

mostly undisputed.    Between July 1, 1986 and June 30, 2007, as the

result of her employment in the public sector with participating

employers, appellant's PERS account was credited with twenty-two



1
  According to respondent Department of the Treasury, Division of
Pensions and Benefits' brief, the issues decided by the Board in
its Final Administrative Determination "must be answered with
finality before the [SHC] can consider [appellant's] JRS
retirement options."



                                       2                                A-4099-15T2
years and nine months of service credit.               From July 22, 2002,

through July 5, 2011, appellant held the position of Deputy General

Counsel for the Port Authority of New York and New Jersey.                   The

Port Authority was not a participating PERS employer. 2                 On June

21, 2011, nearly four years after she earned her last service

credit for PERS on June 30, 2007, appellant was appointed a Judge

of the Superior Court and was enrolled in JRS.

     Between   March   2009   —   three      months    before   the   two-year

anniversary of appellant's last PERS service credit — and August

2014, the Department of the Treasury, Division of Pensions and

Benefits (the Division), wrote to appellant concerning options she

could   exercise   with   respect       to    her     PERS   account.        The

correspondence included a letter sent to appellant within a month

of her 2011 appointment as a Superior Court Judge, which, among

other matters, informed appellant that because her PERS account

had been inactive for more than two years, she could not inter-

fund transfer that service into her JRS account.

     In 2015, appellant began considering retirement options.                  In

response to an inquiry made on her behalf, a JRS employee wrote

to appellant and informed her she was ineligible to inter-fund



2
    Following her acceptance of the position with the Port
Authority, appellant earned PERS service credits until 2007 as the
result of a position she held as an adjunct professor.

                                    3                                   A-4099-15T2
transfer service credits she had accumulated in PERS to her JRS

account, because her PERS membership had become inactive before

she became a judge.    The JRS employee also explained appellant's

pre-judicial employment at the Port Authority of New York and New

Jersey did not qualify for PERS service credits because the Port

Authority was not a participating PERS employer.           Last, the JRS

employee   informed   appellant   she   did     not   qualify    for     early

retirement under the JRS statute referenced in the inquiries

because she could not meet one of its requirements.

     The   letter   informed   appellant   of   her   right     to   file     an

administrative appeal of the first two determinations to the PERS

Board and the third determination to the SHC.3        Appellant did both.

She pursued her administrative appeals to the PERS Board, which

rendered a final administration determination on March 17, 2016.

She also filed an administrative appeal to the SHC, which, as

previously noted, has yet to render a final determination.

     In its final administrative determination, the Board denied

appellant's "request to inter-fund transfer [her] inactive PERS

into [her] active membership account in the [JRS]."           In doing so,

the Board decided two issues.      First, the Board found appellant



3
   The SHC has jurisdiction over matters of the JRS, as "[t]he
Commission acts as the Board of Trustees for the Judicial
Retirement System." N.J.A.C. 17:10-1.1.

                                   4                                   A-4099-15T2
was   not   eligible   to    inter-fund     transfer   her    inactive     PERS

membership   into   her     current   JRS   membership,      which   had   been

established June 21, 2011.       The Board cited 
N.J.S.A. 43:15A-7(e),

which   expressly   states,    "[m]embership     of    any   person   in    the

retirement system shall cease if he shall discontinue his service

for more than two consecutive years."           The Board explained that

appellant's enrollment in JRS

            occurred almost four years after the last date
            of contribution in [her] PERS account, and
            nearly two years after [her] PERS membership
            was inactive.      As 
N.J.S.A. 43:15A-7(e),
            stipulates membership in the retirement system
            shall "cease" after more than two years of
            inactivity, [she] no longer had the option to
            resume contributions to [her] inactive PERS
            membership or inter-fund the account into a
            different   state   administered    retirement
            system.

      The second issue the Board decided was whether appellant's

"employment with the Port Authority . . . from July 22, 2002

through July 5, 2011 is eligible for participation or continued

employment in the PERS."         The Board cited 
N.J.S.A. 43:15A-73,

which states in pertinent part:

                 In addition to those agencies named in
            paragraph (1) of this subsection, [PERS] is
            hereby authorized and directed to enroll an
            eligible . . . employee . . . of a bi-state
            or multi-state agency established pursuant to
            an interstate compact to which this State is
            a party, if the . . . employee is a resident
            of this State at the time of appointment or
            employment with the agency and the governing

                                      5                                A-4099-15T2
           body of the agency has adopted a resolution,
           and filed a certified copy of the resolution
           with the board of the retirement system, that
           permits such . . . employee to enroll.

           [N.J.S.A. 43:15A-73(a)(2).]

     The   Port    Authority's      Board    had   neither   adopted    such    a

resolution nor made contributions to PERS on appellant's behalf. 4

Accordingly, the PERS Board concluded appellant was "not entitled

to PERS pension credit for any part of the period between July 22,

2002 and July 5, 2011."

     Significantly, the PERS Board did not interpret any statutes

concerning JRS.       Nor did the PERS Board address appellant's

retirement eligibility or ineligibility under JRS.

     Appellant      filed    an     appeal     from    the    Board's     final

administrative determinations.         On appeal, she first argues "the

final administrative decision below which interpreted [N.J.S.A.

43:6A-9(b)]"      violated   the    statute's      plain   language    and   was

arbitrary and capricious.          This statute concerns eligibility for

retirement in the JRS.       The PERS Board did not address this issue.

The JRS employee who initially determined appellant was ineligible


4
   In another case we noted, "[t]he Port Authority has elected to
be part of the New York State pension system rather than New
Jersey's PERS 'as a matter of convenience.'" Francois v. Bd. of
Trs., Pub. Emps.' Ret. Sys., 
415 N.J. Super. 335, 350 (App. Div.
2010) (quoting Bunk v. Port Auth. of N.Y. & N.J., 
144 N.J. 176,
189 (1996)).


                                       6                                A-4099-15T2
to retire under the JRS statute informed appellant of her right

to appeal the determination to the SHC, which appellant did. 5

Appellant filed the appeal, which, we are told, is pending.              We

decline to consider the issue before the SHC renders a final

administrative determination.

     In her second and final argument, appellant contends the PERS

Board "erred in its interpretation of the provisions of PERS

statutes relating to PERS 'members' membership status and in

applying   these   statutes   to   'members'   of   the   JRS,   and   its

application to appellant's matter was arbitrary, capricious and

unreasonable."     Appellant appears to again fault the PERS Board

for its erroneous interpretation of JRS statutes.         Yet, she does

not appear to be seeking an inter-fund transfer of her PERS credits

to her JRS account.     She asserts in the concluding paragraph of

her brief:

           In short, [a]ppellant was not seeking to have
           her PERS account transferred to the JRS. She
           was seeking simply to have her many years of
           pre-judicial public service, as set forth in
           N.J.S.A. 43:6A-9(b)[,] to be counted toward
           her eligibility to retire from the judiciary,
           should she choose to do so.



5
  The JRS employee actually made her determination in response to
appellant's inquiry of eligibility for retirement under 
N.J.S.A.
43:6A-10, not 
N.J.S.A. 43:6A-9(b) as appellant now argues.
Appellant appears to have clarified this discrepancy in her
administrative appeal to the SHC.

                                    7                             A-4099-15T2
     It is now clear the PERS Board did not, as appellant suggests,

interpret, let alone misinterpret, a JRS statute.                To the extent

appellant    contends   the    Board       erred   in   either    of    the     two

determinations it did make, we disagree.

     Our scope of review of an administrative agency's final

determination is limited.      In re Carter, 
191 N.J. 474, 482 (2007).

We accord a "strong presumption of reasonableness" to the agency's

exercise of its statutorily delegated responsibilities.                  City of

Newark v. Nat. Res. Council, 
82 N.J. 530, 539 (1980).                   Further,

"[i]t is settled that '[a]n administrative agency's interpretation

of statutes and regulations within its implementing and enforcing

responsibility is ordinarily entitled to our deference.'"                     Wnuck

v. N.J. Div. of Motor Vehicles, 
337 N.J. Super. 52, 56 (App. Div.

2001)   (second   alteration   original)       (quoting    In    re    Appeal    by

Progressive Cas. Ins. Co., 
307 N.J. Super. 93, 102 (App. Div.

1997)).   Absent arbitrary, unreasonable, or capricious action, or

a lack of support in the record, "[a]n administrative agency's

final quasi-judicial decision will be sustained."               In re Herrmann,


192 N.J. 19, 27-28 (2007).        The burden of showing the agency's

action was arbitrary, unreasonable, or capricious rests upon the

appellant.   Barone v. Dep't of Human Servs., 
210 N.J. Super. 276,

285 (App. Div. 1986).



                                       8                                  A-4099-15T2
     Here,   appellant   has   failed     to    demonstrate   the   Board's

determinations were arbitrary, capricious, or unreasonable.               The

plain meaning of relevant statutes supported both the Board's

determinations that: (1) appellant's PERS membership had become

inactive   and   therefore   ineligible    for    transfer,   and   (2)   her

employment with the Port Authority was ineligible for PERS service

credits. The Board's determination that appellant could not inter-

fund transfer her inactive PERS membership into her active JRS

account is entitled to the deference we give to an administrative

agency's interpretation of statutes and regulations within its

implementing responsibility.     Wnuck, 
337 N.J. Super. at 56.            This

is particularly so in the absence of any showing by appellant that

the Board has ever rendered an inconsistent or contrary decision,

or otherwise acted in an arbitrary, capricious, or unreasonable

manner.

     We have considered appellant's remaining arguments and found

them to be without sufficient merit to warrant discussion in a

written opinion.    R. 2:11-3(e)(1)(E).        We add only this.    
N.J.S.A.

43:6A-9(b) permits a judge to retire if the judge:

           shall have served at least [five] years
           successively as such judge and shall have
           attained the age of [sixty] years or more
           while serving in such office and shall have
           served at least [twenty] years in the
           aggregate, including such service as a judge,
           or in office, position, or employment of this

                                   9                                 A-4099-15T2
          State or of a county, municipality, board of
          education or public agency . . . .

Appellant's argument, distilled to its essence, is that the phrase

"service . . . in office, position, or employment of this State

or of a county, municipality, board of education or public agency

of this State" means public employment regardless of whether such

employment qualifies for service credits in JRS.            Whether or not

this assertion is indicative of a misunderstanding of the State's

retirement   systems   is    a   question   the   administrative   agencies

responsible for the regulatory and financial administration of the

retirement systems should answer in the first instance.

     For the foregoing reasons, we affirm the PERS Board's final

administrative determination and remand to the SHC to conclude

appellant's administrative appeal concerning her eligibility for

retirement under the JRS.

     Affirmed   in   part,   remanded     in   part.   We   do   not    retain

jurisdiction.




                                     10                                A-4099-15T2