WILLIAM F. BRUNT, JR. VS. BOARD OF TRUSTEES, POLICE & FIREMENS'S RETIREMENT SYSTEM (L-1573-16, MONMOUTH COUNTY AND STATEWIDE) (CONSOLIDATED)

• Court: New Jersey Superior Court Appellate Division
• Decided: June 18, 2018
• Docket: A-1406-16T1/A-1457-16T1
• Status: Published

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NOS. A-1406-16T1 A-1457-16T1

WILLIAM F. BRUNT, JR.,

Plaintiff-Respondent,

v. APPROVED FOR PUBLICATION

BOARD OF TRUSTEES, POLICE & June 18, 2018 FIREMEN'S RETIREMENT SYSTEM IN THE DIVISION OF PENSIONS & APPELLATE DIVISION BENEFITS, STATE OF NEW JERSEY; HANK SCHWEDES; CHERYL CHIANESE and BERNARDINE BROZENA,

Defendants-Respondents,

and

THE TOWNSHIP OF MIDDLETOWN IN THE COUNTY OF MONMOUTH; and HELEN ALFANO,

Defendants-Appellants. _______________________________

v.

BOARD OF TRUSTEES, POLICE & FIREMEN'S RETIREMENT SYSTEM IN THE DIVISION OF PENSIONS & BENEFITS, STATE OF NEW JERSEY; HANK SCHWEDES; CHERYL CHIANESE and BERNARDINE BROZENA,

Defendants-Appellants, and

THE TOWNSHIP OF MIDDLETOWN IN THE COUNTY OF MONMOUTH; and HELEN ALFANO,

Defendants-Respondents. ________________________________

Argued April 9, 2018

Before Judges Ostrer and Rose.

Reargued telephonically May 31, 20181 – Decided June 18, 2018

Before Judges Sabatino, Ostrer and Rose.

On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-1573-16.

Michael L. Collins argued the cause for Township of Middletown and Helen Alfano, appellants in A-1406-16 and respondents in A-1457-16 (Archer & Greiner, PC, attorneys; Brian M. Nelson, of counsel; Kira S. Dabby and Michael L. Collins, on the brief).

Jeffrey S. Ignatowitz, Deputy Attorney General, argued the cause for Board of Trustees, Police and Firemen's Retirement System, appellant in 1457-16 and respondent in A-1406-16 (Gurbir S. Grewal, Attorney General, attorney; Daniel F. Thornton, Deputy Attorney General, on the brief).

Larry S. Loigman argued the cause for respondent William F. Brunt., Jr.

1 The appeal was re-argued at the court's request to add Judge Sabatino.

2 A-1406-16T1 The opinion of the court was delivered by

ROSE, J.S.C. (temporarily assigned).

The issue in these back-to-back appeals, which we

consolidate for purposes of this opinion, is whether the trial

court erred in granting counsel fees to plaintiff, William F.

Brunt, Jr., who prevailed in a Law Division action to enforce an

agency decision. Because we adhere to the so-called American

Rule, requiring litigants to bear their own litigation costs

regardless of who prevails, we reverse.

We summarize the facts and procedural history most

pertinent to this appeal. In June 2014, plaintiff retired from

the Township of Middletown ("Middletown") Police Department

while serving as interim deputy chief. When plaintiff's pension

calculation failed to include his increased deputy chief salary,

plaintiff successfully challenged the error before an

administrative law judge ("ALJ"). Middletown was not aware of

the hearing and, as such, did not participate. The Board of

Trustees of the Police and Firemen's Retirement System ("Board")

subsequently adopted the ALJ's decision.

However, by correspondence dated May 2, 2016, Cheryl

Chianese, the Board's Retirement and Beneficiary Services Bureau

Chief, advised plaintiff's counsel that additional adjustments

to plaintiff's final salary required an updated certification

3 A-1406-16T1 from Middletown, so that the Board could process his

recalculated pension benefits. Chianese's letter stated, in

pertinent part:

As I previously advised in 2014, your concerns should have been addressed directly to Middletown Township before filing an appeal with the Board of Trustees. We cannot comment on behalf of [plaintiff's] employer and can only calculate a benefit based on the salary that is remitted to the Division of Pensions and Benefits [("Division")] by the employer.

A review of [plaintiff's] membership file has revealed there have not been additional pension contributions, or salary reported to the Division as of today's date. If you have knowledge that the employer will be remitting retroactive salary information, we will be happy to recalculate the benefit.

Two days later, plaintiff filed an order to show cause and

complaint in lieu of prerogative writs in the Law Division,

naming as defendants the Board and its agents or employees, Hank

Schwedes, Bernardine Brozena, and Chianese ("State Defendants"),

and Middletown and its payroll supervisor, Helen Alfano

("Middletown Defendants"). In essence, plaintiff sought

enforcement of the Board's adoption of the ALJ's initial

decision granting plaintiff's recalculated pension.

Joined by the Middletown Defendants, the State Defendants

moved to dismiss the complaint. Following oral argument on July

20, 2016, the court denied the motion, and granted plaintiff's

4 A-1406-16T1 order to show cause seeking enforcement of the agency decision.

In doing so, the court ordered defendants to include plaintiff's

final paycheck in its recalculation, and provide plaintiff with

an accounting of the recalculation of his benefits within

fifteen days of completion.2 The motion judge also reserved

decision regarding plaintiff's application for counsel fees,

permitting the parties to brief the issue of whether fees were

"awardable in the instant situation."3

On August 8, 2016, Chianese advised plaintiff of the

Board's recalculation of his pension benefits. On August 31,

2016, the trial court entered an order awarding counsel fees to

plaintiff in the amount of $4,492.

2 After plaintiff filed his complaint, and Middletown thus became aware of his claim, Middletown submitted four certifications to the Board, reflecting in its pension calculation plaintiff's position as interim chief. The certifications were revised to correct errors, including pension deductions. See N.J.A.C. 17:2-6.1(e) ("Before an application for retirement may be processed, the Division must receive . . . a completed Certification of Service and Final Salary form from the employer setting forth the employment termination date, and the salaries reported for contributions in the member's final year of employment.") 3 According to his merits brief, "Plaintiff did not seek counsel fees in the underlying controversy, which required appearances before the . . . Board . . . and an appeal to the Office of Administrative Law . . . . Plaintiff believed that his salary in an interim position was pensionable, consistent with the governing regulations, but it may have been a good faith dispute that led [the Board] and [Middletown] to arrive at a different conclusion."

5 A-1406-16T1 In his written statement of reasons, the motion judge cited

plaintiff's unsuccessful "two-year pursuit to correct the

miscalculation of its retirement award[,]" and determined

defendants were uncooperative in recalculating plaintiff's

pension award until he filed the present action. Although the

judge acknowledged the limitations of the American Rule, he

quoted the Court's decision in Masse v. Public Employees

Retirement System, 87 N.J. 252, 259-61 (1981), "liberally

constru[ing]" statutory pension provisions in favor of public

employees. The motion judge concluded "justice would not be

served" if plaintiff were to bear the counsel fees.

Specifically, he said, "A determination to the contrary would

have the effect of discouraging any litigation over the

calculation of retirement benefits."

Following oral argument on November 18, 2016, the judge

denied the Middletown Defendants' motion for reconsideration.

In doing so, he referenced Justice Albin's dissenting opinion in

In the Matter of the Estate of Folcher, 224 N.J. 496, 519-20

(2016), to support his own finding that "it would be inequitable

for plaintiff who had served the municipality with distinction

for decades [to] be burdened with additional legal fees by the

need to bring this action."

6 A-1406-16T1 Defendants appeal the award of counsel fees, arguing there

is no legal basis for the award. Based on the record before us,

we agree.

Our review of a trial court's order on a motion for

reconsideration is limited, but it will be set aside if its

entry is based on a mistaken exercise of discretion. See

Granata v. Broderick, 446 N.J. Super. 449, 468 (App. Div. 2016)

(citing Fusco v. Bd. of Educ. of City of Newark, 349 N.J. Super.

455, 462 (App. Div. 2002)). A court abuses its discretion "when

a decision is 'made without a rational explanation, inexplicably

departed from established policies, or rested on an

impermissible basis.'" Pitney Bowes Bank, Inc. v. ABC Caging

Fulfillment, 440 N.J. Super. 378, 382 (App. Div. 2015) (quoting

Flagg v. Essex Cty. Prosecutor, 171 N.J. 561, 571 (2002)).

Thus, reconsideration should be granted, for example, in those

cases in which the court had based its decision "upon a palpably

incorrect . . . basis." Fusco, 349 N.J. Super. at 462 (quoting

D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990)).

Despite the significant discretion trial courts have in

awarding recoverable attorneys' fees, "such determinations are

not entitled to any special deference if the judge 'misconceives

the applicable law, or misapplies it to the factual complex.'"

Porreca v. City of Millville, 419 N.J. Super. 212, 224 (App.

7 A-1406-16T1 Div. 2011) (quoting Kavanaugh v. Quigley, 63 N.J. Super. 153,

158 (App. Div. 1960)).

Further, "we need not defer to a trial court's

interpretation of the law." In re Estate of F.W. v. State of

N.J., Div. of Youth and Family Servs., 398 N.J. Super. 344, 355

(App. Div. 2008) (citing Manalapan Realty, LP v. Twp. Comm. of

Manalapan, 140 N.J. 366, 378 (1995)). Thus, we undertake a de

novo review when analyzing questions of law raised in an

application to approve a fee request.

Having long-adhered to the American Rule, New Jersey

generally disfavors the shifting of fees where they are not

expressly authorized. See, e.g., Innes v. Marzano-Lesnevich,

224 N.J. 584, 592 (2016) (citing Litton Indus., Inc. v. IMO

Indus., Inc., 200 N.J. 372, 404 (2009)); N. Bergen Rex Transp.,

Inc. v. Trailer Leasing Co., 158 N.J. 561, 569 (1999). As noted

by our Supreme Court, "The purposes behind the American Rule are

threefold: (1) unrestricted access to the courts for all

persons; (2) ensuring equity by not penalizing persons for

exercising their right to litigate a dispute, even if they

should lose; and (3) administrative convenience." Innes, 224

N.J. at 592 (quoting In re Niles Trust, 176 N.J. 282, 294

(2003)). Rather, counsel fees are recoverable "if they are

expressly provided for by statute, court rule, or contract."

8 A-1406-16T1 Packard-Bamberger & Co., Inc. v. Collier, 167 N.J. 427, 440

(2001); see also R. 4:42-9 ("No fee for legal services shall be

allowed" except for the eight actions expressly stated in the

Rule.).

Here, the award of counsel fees for plaintiff's success on

his prerogative writs action was not appropriate pursuant to any

statutory provision, or subsection of Rule 4:42-9. Instead, the

motion judge relied on equitable principles, including those

espoused by Justice Albin in his dissenting opinion in Folcher.

There, the decedent's wife engaged in fraud and forgery,

impacting other beneficiaries of her deceased husband's estate.

Folcher, 224 N.J. at 505. Under such circumstances, Justice

Albin posited that the decedent's wife should have been liable

for attorneys' fees to the prevailing parties for her "egregious

misconduct." Id. at 521. The Court's majority, however, found

the wife's confidential relationship with her husband did not

create a fiduciary relationship between the wife and her

husband's remaining beneficiaries. Id. at 513; see In re Niles

Trust, 176 N.J. at 299 (creating an exception for attorneys'

fees "limited to cases in which an executor's or a trustee's

undue influence results in the development or modification of

estate documents that create or expand the fiduciary's

beneficial interest in the estate").

9 A-1406-16T1 No such fiduciary relationship or fraud is alleged in the

present case. Even assuming defendants were uncooperative in

their efforts to effectuate the ALJ's decision, plaintiff did

not allege fraud in their handling of his pension claim.

Moreover, unlike discrete statutes permitting an award of

counsel fees to successful litigants in certain administrative

matters, the Legislature has not delegated such authority in

pension cases. Compare N.J.S.A. 34:19-5 (allowing counsel fees

under the Conscientious Employee Protection Act, N.J.S.A. 34:19-

1 to -8, from an "employer," defined as including

"municipalities" and "agenc[ies]"; N.J.S.A. 34:11B-12

(permitting fees from an "employer," defined as "the State, any

political subdivision thereof, and all public offices, agencies,

boards or bodies," pursuant to the Family Leave Act, N.J.S.A.

34:11B-1 to -16); N.J.S.A. 10:5-27.1 (permitting the recovery of

"a reasonable attorney's fee as part of the cost" against an

offending employer, including municipalities, under the Law

Against Discrimination, N.J.S.A. 10:5-1 to -42); see also

Balsley v. N. Hunterdon Reg'l Sch. Dist. Bd. of Educ., 117 N.J.

434, 443, 446-47 (1990) (holding the Commissioner of Education

lacked express statutory authority to award counsel fees to a

prevailing party in an education-discrimination matter).

10 A-1406-16T1 We are not persuaded, therefore, that the trial court's

liberal construction of statutory pension provisions applies to

the award of counsel fees here. The judge's reliance on Masse

in this regard is misplaced because that case did not address a

fee-shifting statute.

Because we find no legal basis for the award of counsel

fees, we are constrained to reverse the motion judge's orders

awarding fees and denying the Middletown Defendants' motion for

reconsideration. In light of our decision, we need not reach

defendants' remaining claims.

Reversed.

11 A-1406-16T1