MICHAEL NAPPE v. BOARD OF TRUSTEES, TEACHERS' PENSION AND ANNUITY FUND

 SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0828-22
MICHAEL NAPPE,
Petitioner-Appellant,
v.
BOARD OF TRUSTEES,
TEACHERS' PENSION AND
ANNUITY FUND,
Respondent-Respondent.
____________________________
Argued October 3, 2023 – Decided October 23, 2023
Before Judges Whipple, Mayer and Paganelli.
On appeal from the Board of Trustees of the Teachers'
Pension and Annuity Fund, Department of the
Treasury.
Samuel Wenocur argued the cause for appellant
(Oxfeld Cohen, PC, attorney; Samuel Wenocur, of
counsel and on the briefs).
Matthew Melton, Deputy Attorney General, argued the
cause for respondent (Matthew J. Platkin, Attorney
General, attorney; Janet Greenberg Cohen, Assistant
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.
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Attorney General, of counsel; Matthew Melton, on the
brief).
Zazzali, PC, attorneys for amicus curiae New Jersey
Education Association (Jason E. Sokolowski, of
counsel and on the brief).

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
PER CURIAM
In this matter, we previously vacated the dismissal of the petitioner
Michael Nappe's accidental disability (AD) claim under N.J.S.A. 18A:66-40(a)
and remanded the issue under N.J.A.C. 17:1-6.4 to the Office of
Administrative Law for a hearing to resolve the limited factual dispute of
whether petitioner "resigned because of his mental disability." Nappe v. Bd.
of Trs., Tchrs.' Pension & Annuity Fund, No. A-1173-18 (App. Div. Dec. 31,
2019) (slip op. at 13). The Administrative Law Judge (ALJ) decided for
petitioner; however, the Teachers' Pension and Annuity Fund (TPAF) issued a
Final Agency Decision (FAD), rejecting the ALJ's determinations and ruled
petitioner was ineligible for AD because he left employment due to impending
disciplinary actions.
This appeal followed. We reverse.
I.
Petitioner was a teacher with the Linden Board of Education (Linden)
from October 1, 2012, until his separation date on June 30, 2018. He began to
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have conflicts over his assigned work with his supervisor, Michael Walters, in
2012. In November 2015, petitioner filed a complaint with the Division of
Civil Rights (DCR) asserting disparate treatment and retaliation by Walters as
well as discrimination due to his diabetes and Crohn's Disease. He alleged that
Lanschool — a remote-control computer software used to track students'
work—was removed in violation of his accommodation as he lacked mobility
in the classroom.
In January 2016, the Linden Schools Superintendent, Danny Robertozzi,
sent petitioner a letter reporting that based on the review of the emails and
documentation, the discrimination and retaliation claims were unfounded,
since the computer software was not part of petitioner's accommodations.
Instead, Lanschool was a teaching tool rather than an accommodation "in the
first instance." The letter went on to state petitioner and Walters had a
personality conflict due to their disagreement over how Walters managed
petitioner and the department. In March 2017, petitioner had an altercation
with Walters, wherein petitioner alleges Walters flung a chair at petitioner and
began to point his finger in petitioner's face. Petitioner filed a criminal
complaint against Walters.
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In August 2017, petitioner and Linden entered into a
Settlement/Separation Agreement and General Release agreeing Linden would
not institute any formal disciplinary action against petitioner; petitioner would
withdraw any actions against Linden; and petitioner would receive a one-year
paid leave of absence. The agreement stipulated that petitioner "shall provide
a medical note to support the need for a leave." In September 2017, petitioner
withdrew the DCR complaint. As part of the agreement, petitioner also
submitted an irrevocable letter of resignation effective June 30, 2018.
Petitioner applied for AD benefits in February of 2018, asserting the
March 2017 altercation with Walters was a traumatic event in the classroom
entitling him to AD benefits.1
TPAF denied the application asserting that under the new section of
N.J.A.C. 17:1-6.4, disability applicants are required to prove: (1) the
retirement was due to a total and permanent disability, and (2) the disability
was the reason the member left employment and petitioner was deemed to
have resigned voluntarily. Members are not permitted to apply if they have
involuntarily or voluntarily terminated employment due to settlement
agreements pursuant to pending administrative or criminal charges. Members
1 We offer no opinion as to this assertion by petitioner and whether it entitles
him to AD. The question before us is whether he is eligible to apply.
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are also not permitted to apply if they have voluntarily separated for reasons
other than a disability. As stated above, petitioner appealed, and we remanded.
In addition, with leave granted, New Jersey Education Association appeared as
amicus.
The ALJ conducted hearings to determine whether the petitioner left his
employment due to a disability or because of impending discipline. During the
hearing, the ALJ heard testimony from Nappe himself, his wife Janice Nappe,
as well as Emmanuel Hriso, M.D., his psychiatrist, and his therapist Richard
Rapkin. Superintendent Robertozzi testified for Linden. The ALJ concluded
petitioner's application should be considered and accepted because the
separation from employment in August 2017 was a result of his mental health
issues and not the threat of discipline or some other reason. After observing
the witnesses, the ALJ determined petitioner's testimony about his mental
health issues and work-related stress was credible, so too the testimony of his
therapist and his psychiatrist. The ALJ rejected Robertozzi's testimony that
there would be disciplinary charges against petitioner, finding the testimony
not credible or supported by any documentary evidence or any other witness.
The ALJ found no discipline or tenure charges against the petitioner and based
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on her findings cleared the way for petitioner to apply for AD with the initial
decision issued July 21, 2022.
On October 7, 2022, expressing little more than its disagreement with
the ALJ's findings, TPAF ruled petitioner was ineligible for AD because he
left employment due to impending disciplinary actions. TPAF asserted the
ALJ overlooked relevant parts of N.J.A.C. 17:1-6.4, which state that the
disability must be the reason the member left the employment and those who
voluntarily separated from service for reasons other than disability would not
be permitted to apply for the disability retirement.
Additionally, TPAF asserted the ALJ diminished evidence that petitioner
"was forced to resign, and that he would face disciplinary action had he chosen
not to enter into the Agreement." TPAF chose instead to elevate Robertozzi's
testimony based on his knowledge of petitioner's performance and his
testimony that Linden was ready to pursue several disciplinary actions against
petitioner.
TPAF noted petitioner "express[ed] grief [to his psychiatrist] over his
'forced retirement' and being 'literally forced to accept the leave'", thus
demonstrating the end of his employment was not due to disability. TPAF
asserts Linden was unaware of petitioner's mental disability, as petitioner
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never requested accommodations in relation to a mental condition, but only
with regard to his physical health issues as outlined in his DCR complaint.
II.
Our review of administrative agency action is limited. Russo v. Bd. of
Trs., Police & Firemen's Ret. Sys., 206 N.J. 14, 27 (2011). An agency's
decision will be reversed if we find the decision to be "arbitrary, capricious, or
unreasonable, or [] not supported by substantial credible evidence in the record
as a whole." In re Stallworth, 208 N.J. 182, 194 (2011) (alteration in original)
(citing Henry v. Rahway State Prison, 81 N.J. 571, 579 (1980)). In reviewing
administrative agency decisions, we are limited 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., 143 N.J. 22, 25 (1995).]
Furthermore, our review of an agency's legal determination is de novo.
SSI Med. Serv. v. HHS, Div. of Med. Assistance & Health Servs., 146 N.J.
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614, 621 (1996). The court is not bound by an agency's interpretation of a
"strictly legal issue." Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 93
(1973).
We recognize TPAF also has the authority to "adopt, reject[,] or modify"
the ALJ's findings. N.J. Dept of Pub. Advoc. v. N.J. Bd. of Pub. Utils., 189
N.J. Super 491, 507 (App. Div. 1983). However, TPAF is required to provide
clear reasons for rejecting the ALJ's findings. N.J.S.A. 52:14B-10(c). Even if
the ALJ's findings were arbitrary, capricious, or unreasonable, TPAF must
defer to the ALJ on the credibility findings for lay witnesses. In re Adoption
of Amends. to Ne., Water Quality Mgmt. Plan, Raritan, Sussex Cnty., 435 N.J.
Super. 571, 584 (App. Div. 2014).
The issue before the ALJ was whether there was sufficient evidence to
establish petitioner resigned to avoid future disciplinary action. TPAF argues
it was appropriate to conclude that petitioner's mental disability was not the
reason he left, but instead it was because he was facing discipline and potential
charges. Robertozzi's testimony, along with the notes from petitioner's treating
physicians show petitioner thought there was a potential for discipline.
Additionally, the agreement stated "[Linden] agrees that it will not seek to
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institute any formal disciplinary actions" against petitioner, meaning that any
potential action would be dropped.
However, there is no record of Linden formally instituting discipline or
filing charges against petitioner. Robertozzi's testimony mentioned he wanted
to file charges, but his plans were not pursued. Without question, Linden was
unhappy with petitioner's poor performance and Robertozzi was planning to
recommend an increment withhold of petitioner's annual raise and to pursue
tenure charges for the 2016-2017 year, but no discipline was ever forthcoming.
Indeed, both of petitioner's treating physicians included in their notes
that petitioner was "worried the superintendent was trying to suspend him
without pay" and "[he] ruminates about being literally forced to accept the
leave after being harassed and humiliated at workplace for two years." But
again, no charges were filed, or disciplinary actions taken.
Linden agreed not to bring any formal disciplinary action against
petitioner based upon any allegations or claims which Linden knew about or
should have known about prior to the execution of the agreement. But it also
agreed that in consideration of the covenants in the agreement, petitioner "shall
provide a medical note to support the need for a leave."
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Thus, TPAF's findings are not sufficiently supported by the evidence
that petitioner left his employment to evade disciplinary action. Moreover,
TPAF's interpretation of N.J.A.C. 17:1-6.4 is flawed.
To apply for disability retirement, applicants must prove their disability
is the reason the individual left employment. In re Adoption of N.J.A.C. 17:1-
6.4, 17:1-7.5 & 17:1-7.10, 454 N.J. Super. 386, 397 (App. Div. 2018). The
statutory language pertinent to this case states:
(a) Each disability retirement applicant must prove
that his or her retirement is due to a total and
permanent disability that renders the applicant
physically or mentally incapacitated from performing
normal or assigned job duties at the time the member
left employment; the disability must be the reason the
member left employment.
(b) Members who have involuntarily or voluntarily
terminated service for any of the reasons listed below
will not be permitted to apply for a disability
retirement:
1. Removal for cause or total forfeiture of public
service;
2. Settlement agreements reached due to
pending administrative or criminal charges,
unless the underlying charges relate to the
disability;
3. Loss of licensure or certification required for
the performance of the member's specific job
duties;
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4. Voluntary separation from service for reasons
other than a disability[.]
[N.J.A.C. 17:1-6.4.]
We look at statutory language as the best indicator of legislative intent.
In re Adoption of N.J.C.A. 17:1-6.5, 454 N.J. Super. at 396. TPAF asserts
"voluntary separation from service for reasons other than a disability,"
includes a future potential threat of discipline as a reason to deny petitioner
application for disability benefits even when there is no actual pending
discipline. TPAF's expanded interpretation is unsupported by any reasonable
interpretation of N.J.A.C. 17:1-6.4(b)(4).
We reject the argument N.J.C.A. 17:1-6.4(b)(4) is meant to include
threatened uncharged disciplinary action as a "reason other than a disability."
TPAF relied upon N.J.A.C. 17:1-6.4(a) that the disability must be the reason
the member left employment and N.J.A.C. 17:1-6.4(b)(4), the catch-all
provision that "voluntary separation from service for reasons other than a
disability" prevented petitioner from applying for a disability retirement.
Without evidence of any potential disciplinary action, TPAF concluded
petitioner was forced to resign and that he would have faced disciplinary
action had he chosen not to enter into an agreement with Linden. TPAF
disregarded N.J.A.C. 17:1-6.4(b)(2), which bars members from applying for
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disability retirement benefits if they terminated service as a result of a
"settlement agreement[] reached due to pending administrative or criminal
charges." TPAF tacitly acknowledged there was no pending disciplinary
action whatsoever against petitioner at the time of his resignation. Instead,
TPAF relied upon the general catch-all provision of N.J.A.C. 17:1-6.4(b)(4)
which does not specify any "reason" for a voluntary separation of service other
than it is a reason not due to disability to prohibit a member from applying for
disability. TPAF concluded a potential threat of discipline as opposed to
actual discipline served as a reason to bar petitioner from applying for
disability retirement, wrongfully expanding the regulation. We discern no
basis to conclude some potential future disciplinary action would apply to the
catch-all provision to limit a member from applying for AD. Moreover,
TPAF's decision is at odds with (b)(2) of the Rule which would only bar
petitioner from applying for disability benefits if his agreement was reached
due to "pending" disciplinary action.
Reversed and remanded. Petitioner's application shall be accepted. We
do not retain jurisdiction.