MICHAEL NAPPE VS. BOARD OF TRUSTEES (TEACHERS' PENSION AND ANNUITY FUND)

NOT FOR PUBLICATION WITHOUT THE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-1173-18T3

MICHAEL NAPPE,

Petitioner-Appellant,

v.

BOARD OF TRUSTEES OF
THE TEACHERS' PENSION
AND ANNUITY FUND,

Respondent-Respondent.
__________________________

Argued November 18, 2019 – Decided December 31, 2019

Before Judges Fasciale, Rothstadt and Mitterhoff.

On appeal from the Board of Trustees of the Teachers'
Pension and Annuity Fund, Department of the
Treasury, TPAF No. 1-593161.

Samuel Benjamin Wenocur argued the cause for
appellant (Oxfeld Cohen, PC, attorneys; Samuel
Benjamin Wenocur, of counsel and on the briefs).

Juliana C. DeAngelis, Deputy Attorney General, argued
the cause for respondent (Gurbir S. Grewal, Attorney
General, attorney; Melissa H. Raksa, Assistant
 Attorney General, of counsel; Juliana C. DeAngelis, on
the brief).

PER CURIAM

Michael Nappe appeals from an October 10, 2018 final administrative

determination of the Board of Trustees of the Teachers' Pension and Annuity

Fund (TPAF Board) denying his request to apply for accidental disability

retirement benefits. Before applying for these benefits, Nappe irrevocably

resigned from his employment with the Board of Education of the City of Linden

(Linden Board), pursuant to a settlement agreement. The Division of Pension

and Benefits (DPB) closed Nappe's benefits application, reasoning that his

irrevocable resignation prevented him from complying with N.J.S.A. 18A:66 -

40(a), which permits the retirement system to compel a beneficiary under sixty

years of age to undergo a medical examination to determine whether the

beneficiary remains disabled. The DPB also cited to N.J.A.C. 17:1-6.4, which

requires an applicant to prove that their employment ended "due to a total and

permanent disability." The TPAF Board affirmed the DPB's decision.

On appeals, Nappe argues that N.J.S.A. 18A:66-40(a) does not apply to

him because he was sixty-six years old when he applied for disability retirement

benefits. He further argues that the TPAF Board erred in its application of

N.J.A.C. 17:1-6.4 because it failed to determine whether the settlement

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agreement ending Nappe's employment was due to his disability. Having

reviewed the record, and in light of the applicable law, we vacate the denial of

Nappe's request to apply for accidental disability retirement benefits and remand

for further proceedings.

In October 2014, while teaching in the Linden School District (District),

Nappe requested accommodations under the Americans with Disabilities Act

(ADA), 42 U.S.C. §§ 12101 to 12213, due to his physical disability of diabetes.

One of his requests was for remote control software. Three years earlier, the

District had provided Nappe with a software program called LanSchool, which

served as a reasonable accommodation for this request. At a later time, the

District removed LanSchool from its classrooms and "offered alternate

accommodations to assist [Nappe] in monitoring [his] students[.]" Nappe was

unhappy with this change. Thereafter, he complained that the change violated

his right to accommodations under the ADA.

In September 2015, Nappe emailed his supervisor Michael Walters,

accusing him of discrimination and alleging that another employee

discriminated against him during a performance review by including a comment

about a teaching deficiency, which was caused by his physical disability. The

District's affirmative action officer began to investigate. Thereafter, Nappe filed

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a complaint with the Division of Civil Rights (DCR), alleging discrimination

and retaliation based on his physical disability. After the District completed its

investigation, the superintendent sent a letter to Nappe to inform him that his

discrimination claims lacked merit.

During the following months, the professional relationship between

Nappe and Walters deteriorated, and on March 8, 2017, an altercation occurred.

Walters was angry with Nappe because Nappe was behind on a project, and

another employee was asked to help out while Nappe was in a meeting. After

Nappe's meeting concluded, he ran into Walters, and the two got into a heated

argument. Walters "[stood] directly in front of him, entering his personal space,

while he engaged in a verbal altercation." Minutes later, Walters grabbed a chair

and shoved it into a table in Nappe's direction. Other employees were present,

but none reacted. Nappe and Walters left the room separately, without further

argument. Later that day, Nappe emailed the superintendent to report the

incident and explained that he felt threatened and harassed. Nappe also

instructed his attorney to update the DCR complaint with details of the incident.

Soon after, Nappe began seeing a psychiatrist, with whom he discussed the

Walters incident. 1

1
Nappe was also being treated by a psychologist, beginning in December 2016.
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 In August 2017, Nappe and the Linden Board entered into an agreement

to "settl[e] all outstanding controversies between [them]." The parties agreed

that Nappe would

immediately withdraw any and all pending
administrative, contractual, and civil actions that he has
filed or has caused or anticipates to be filed against the
[Linden] Board or any of its current or former
employees arising out of his claims that he was
subjected to unlawful discrimination, harassment or
retaliation . . . including but not limited to the . . .
complaint filed with DCR[.]

He was also required to execute an irrevocable letter of resignation, effective

June 30, 2018. The parties further agreed that the Linden Board "[would] not

seek to institute any formal disciplinary action against Nappe based upon any

allegations or claims which the [Linden] Board knew about or should have

known about prior to the execution of the [a]greement." The Linden Board was

also required to place Nappe on a paid leave of absence for the 2017-2018 school

year due to his medical needs, and it agreed to assist Nappe in applying for

retirement benefits:

The [Linden] Board shall provide Nappe with
reasonable assistance in forwarding documents to the
[DPB] to facilitate Nappe's retirement[.] The [Linden]
Board shall complete the forms needed for Nappe to
seek a retirement; however, Nappe acknowledges and
understands that the [Linden] Board will take no further
action with regard to Nappe's retirement unless

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 required by law. Nappe expressly agrees and
understands that his resignation is final and irrevocable
no matter what and regardless of whether or not his
application for retirement is successful.

On August 17, 2017, Nappe sent the superintendent his irrevocable letter of

resignation, which included a statement of his intent to seek retirement benefits

from the TPAF.

Nappe applied for accidental disability retirement benefits at the age of

sixty-six. In his application, he stated that he suffered from "continued

disability" due to a "traumatic event in [the] classroom [involving] threatening

and intimidating physical harm by [a] former supervisor." He submitted medical

examination forms prepared by his psychiatrist and psychologist. Both had

diagnosed Nappe with post-traumatic stress disorder and opined that he was

permanently disabled and unable to perform his assigned duties as a direct result

of the District's work environment. A few months later, the DPB notified Nappe

that it had closed his application, citing to N.J.A.C. 17:1-6.4 and N.J.S.A.

18A:66-40(a). The DPB explained that Nappe could not comply with the statute

because he had irrevocably resigned from his employment.

Nappe appealed the DPB's decision to the TPAF Board, claiming that he

had complied with N.J.A.C. 17:1-6.4 because his disability was the reason he

resigned. He also confirmed, by way of a letter from the Linden Board's

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attorney, that there were no pending disciplinary charges against him when he

resigned and that if he recovered from his disability, the Linden Board had not

barred him from applying for future employment with the District. Nappe also

argued that N.J.S.A. 18A:66-40(a) was inapplicable because it only applied to

beneficiaries under the age of sixty. Upon review of Nappe's appeal, the TPAF

Board affirmed the DPB's decision.

Nappe appealed again, largely relying on the same arguments and adding

that the TPAF Board failed to address the factual issues concerning the reason

that he resigned. The TPAF Board denied his request for an administrative

hearing and affirmed its previous decision. It then issued a final administrative

determination on October 10, 2018, relying on N.J.S.A. 18A:66-40(a) and

N.J.A.C. 17:1-6.4. The TPAF Board reiterated that "Nappe did not leave

employment due to a disabling condition." Rather, he left pursuant to a

settlement agreement. Consequently, he could not comply with N.J.A.C. 17:1-

6.4(b)(2) and (4). It then explained that "[i]f [his] application for disability

retirement was approved and his alleged disability diminished to the point that

he could return to employment," he would be unable to comply with N.J.S.A.

18A:66-40(a). Citing to In re Adoption of N.J.A.C. 17:1-6.4, 454 N.J. Super.

386, 402 (App. Div. 2018), the TPAF Board explained that the statute

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contemplates that "the only obstacle to a disability retiree's reemployment is the

disability itself." This appeal ensued.

On appeal, Nappe argues that the TPAF Board erred in relying on N.J.S.A.

18A:66-40(a) and N.J.A.C. 17:1-6.4. He raises substantially the same

arguments as he did before the TPAF Board, contending that N.J.S.A. 18A:66-

40(a) does not apply and that the TPAF Board erred in its application of N.J.A.C.

17:1-6.4 because it only relied on the fact that he irrevocably resigned from his

employment pursuant to a settlement agreement. He further contends that the

TPAF Board should have ordered an administrative hearing to determine

whether he and the Linden Board considered his mental disability in negotiating

the terms of the settlement agreement. He asserts that the evidence he has

presented shows that the parties to the agreement considered his mental

disability. Consequently, the TPAF Board would have been compelled to

conclude that he complied with N.J.A.C. 17:1-6.4.

We will reverse an administrative agency's decision only if it was

arbitrary, capricious, or unreasonable. Henry v. Rahway State Prison, 81 N.J.

571, 579-80 (1980) (citing Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562

(1963)). Our role is limited to considering whether the agency complied with

legislative policies, whether the record contains substantial evidence to support

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the agency's decision, and whether the agency reached a reasonable conclusion.

In re Carter, 191 N.J. 474, 482-83 (2007) (citing Mazza v. Bd. of Trs., 143 N.J.

22, 25 (1995)). We "defer to an agency's expertise and superior knowledge of a

particular field," so we will "not substitute [our] own judgment for the agency's

even though [we] might have reached a different result." Id. at 483 (quoting

Greenwood v. State Police Training Ctr., 127 N.J. 500, 513 (1992)). However,

we are not bound by an agency's statutory interpretation. Ibid. (quoting

Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 93 (1973)).

An applicant for disability retirement benefits must show that he or she

retired "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." N.J.A.C. 17:1-6.4(a); see also

In re Adoption of N.J.A.C. 17:1-6.4, 454 N.J. Super. at 397 (quoting N.J.A.C.

17:1-6.4(a)). A member cannot apply if their employment ended pursuant to a

"[s]ettlement agreement[] reached due to pending administrative or criminal

charges, unless the underlying charges relate to the disability." N.J.A.C. 17:1 -

6.4(b)(2). Likewise, a member who "voluntar[ily] separat[ed] from service for

reasons other than a disability" cannot apply. N.J.A.C. 17:1-6.4(b)(4).

"[D]isability retirement benefits are intended for members who become disabled

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while in active service and can no longer work[.]" In re Adoption of N.J.A.C.

17:1-6.4, 454 N.J. Super. at 398 (quoting 48 N.J.R. 1306(a) (June 20, 2016)).

The TPAF Board is responsible for administering disability retirement

benefits distributed from the TPAF. See N.J.S.A. 18A:66-56(a)(1). When a

retiree is approved for such benefits, the TPAF Board monitors certain retirees

to ensure they receive benefits only as long as they remain disabled:

Once each year the retirement system may . . . require
any disability beneficiary who is under the age of
[sixty] years to undergo medical examination by a
physician or physicians designated by the system for a
period of [five] years following his retirement in order
to determine whether or not the disability which existed
at the time he was retired has vanished or has materially
diminished.

....

. . . If the report of the medical board shall show that
such beneficiary is able to perform either his former
duty or other comparable duty which his former
employer is willing to assign to him, the beneficiary
shall report for duty; such a beneficiary shall not suffer
any loss of benefits while he awaits his restoration to
active service.

[N.J.S.A. 18A:66-40(a).]

If a TPAF member disagrees with a TPAF Board determination, he or she

may submit a written appeal. N.J.A.C. 17:3-1.7(a)(1). "[T]he [TPAF] Board

shall determine whether to grant an administrative hearing based upon the

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standards for a contested case hearing set forth in the Administrative Procedure

Act, N.J.S.A. 52:14B-1 [to -31], and 52:14F-1 [to -23], and the Uniform

Administrative Procedure Rules, N.J.A.C. 1:1." N.J.A.C. 17:3-1.7(a)(2). A case

is contested when it involves "a proceeding . . . in which the legal rights, duties,

obligations, privileges, benefits or other legal relations of specific parties are

required by constitutional right or by statute to be determined by an agency by

decisions, determinations, or orders . . . after opportunity for an agency hearing."

N.J.S.A. 52:14B-2. If the case "involves a question of facts, the [TPAF] Board

shall submit the matter to the Office of Administrative Law." N.J.A.C. 17:3 -

1.7(a)(5).

We conclude that the TPAF Board erred in relying on N.J.S.A. 18A:66-

40(a). We have limited "the [TPAF] Board to a five-year window to assess the

totality and the permanency of the disability of retirees under sixty years of age."

N.J. Educ. Ass'n v. Bd. of Trs., Pub. Emps.' Ret. Sys., 327 N.J. Super. 326, 333

(App. Div. 2000) (emphasis added). Nappe was sixty-six years old when he

applied, so if he were to receive disability retirement benefits, this statute would

not apply to him. The TPAF Board could not compel him to undergo a medical

examination to determine whether he remained disabled. The fact that Nappe

irrevocably resigned from his employment is irrelevant in this regard because,

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due to his age, he would never be in a position where he was required to return

to active service. Accordingly, the TPAF Board erred in concluding that the

DPB properly closed Nappe's application on the basis that he could never

comply with N.J.S.A. 18A:66-40(a).

In addition, we conclude that the TPAF Board erred in its application of

N.J.A.C. 17:1-6.4. A member who resigned from a job for a reason unrelated to

a disability cannot apply for disability retirement benefits. N.J.A.C. 17:1-

6.4(b)(2) and (4). Through Nappe's efforts to reverse the closing of his

application, he provided evidence suggesting that he resigned because of a

mental disability. The early issues between Nappe and the Linden Board were

certainly related to Nappe's physical disability. However, those issues led to

further conflicts in the workplace, specifically the Walters incident, causing

Nappe to experience mental distress. While the record is silent as to precisely

when Nappe's mental disability arose, the evidence he has provided suggests

that it was caused by events occurring before the execution of the settlement

agreement. Nappe's psychiatrist and psychologist both opined that his work

environment, including the incident with Walters, was detrimental to his health.

They further opined that he was "no longer able to perform his . . . assigned job

duties." Therefore, it would be reasonable to find that Nappe and the Linden

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Board had contemplated Nappe's mental disability when negotiating the terms

of the settlement agreement. The language in the agreement certainly indicates

that Nappe's leave of absence was for medical reasons and explicitly states that

the Linden Board intended to assist Nappe in applying for retirement benefits.

The TPAF Board did not address any of these factual assertions in its legal

analysis. Instead, it determined that there were no disputed issues of fact, after

deciding that Nappe's resignation pursuant to a settlement agreement completely

barred him from applying for disability retirement benefits. However, the

evidence that Nappe presented shows that there was a factual dispute as to

whether he resigned because of his mental disability. Accordingly, the TPAF

Board should have transmitted the case to the Office of Administrative Law for

a hearing to resolve this factual dispute.

To the extent we have not specifically addressed any remaining arguments

raised by the parties, we conclude they lack sufficient merit to warrant

discussion in a written opinion. R. 2:11-3(e)(1)(E).

Vacated and remanded. We do not retain jurisdiction.

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