SYLLABUS
This syllabus is not part of the Court’s opinion. It has been prepared by the Office
of the Clerk for the convenience of the reader. It has been neither reviewed nor
approved by the Court and may not summarize all portions of the opinion.
James Meyers v. State Health Benefits Commission (A-27-22) (087633)
(NOTE: The Court did not write a plenary opinion in this case. The Court
affirms the judgment of the Appellate Division substantially for the reasons
expressed in Judge Smith’s opinion, 474 N.J. Super. 1 (App. Div. 2022).)
Argued September 12, 2023 -- Decided December 14, 2023
PER CURIAM
The Court considers petitioner James Meyers’ challenge to the determination
of the State Health Benefits Commission (SHBC) -- affirmed by the Appellate
Division -- that he is not exempt from the health benefits premium-sharing
obligations imposed by the New Jersey State Health Benefits Program Act (the Act).
In 2011, the Legislature added to the Act a new requirement that each public
employee “contribute, through the withholding of the contribution from the monthly
retirement allowance, toward the cost of health care benefits coverage for the
employee in retirement.” N.J.S.A. 52:14-17.28d(b)(1). The Legislature also created
an exemption from those premium-sharing obligations for employees with “20 or
more years of creditable service in one or more State or locally administered
retirement systems on the effective date of [the statutory amendment].” Id. at (b)(3).
In other words, the new obligations were not imposed on employees who had
already accumulated twenty years of service as of June 28, 2011.
On that date, petitioner had 17 years and 9 months of creditable service time
with the State Police. Upon petitioner’s retirement on October 1, 2015, however, the
Division of Pensions and Benefits (the Division) offered him retiree health benefits
at “no premium cost.”
In June 2017, the Division discontinued petitioner’s fully paid health care
insurance coverage, and the State began deducting premium-sharing contributions
from petitioner’s pension payments. 474 N.J. Super. 1, 5-6 (App. Div. 2022).
Petitioner appealed the newly imposed deduction to the SHBC, which referred the
matter to the Office of Administrative Law. Id. at 6. Concluding an injustice had
taken place, the Administrative Law Judge (ALJ) invoked the doctrine of equitable
estoppel and barred the SHBC from deducting contributions to petitioner’s
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retirement health benefits. Id. at 7. The SHBC rejected the ALJ’s initial decision.
Ibid.
Petitioner appealed, contending that the SHBC acted arbitrarily, capriciously,
and unreasonably in reversing the ALJ’s decision. The Appellate Division affirmed
the SHBC’s final agency decision. Id. at 11. The Court granted certification. 252
N.J. 610 (2023).
HELD: The judgment of the Appellate Division is affirmed substantially for the
reasons expressed in Judge Smith’s opinion. The Court agrees with the Appellate
Division’s assessment that petitioner was never eligible for the exemption under
N.J.S.A. 52:14-17.28d(b)(3) and that correcting the erroneous exemption was
therefore proper. Neither petitioner’s subsequent service nor his purchase in 2013 of
four years of military service credit could change the fact that he did not meet the
bright line drawn by the Legislature by June 28, 2011. The Court also agrees with
the Appellate Division’s determination that it was not necessary to reach the issue of
equitable estoppel, and it offers additional comments on that point.
1. On occasion, a court may be called upon to review equitable considerations in the
context of government action, which may lead to the invocation of equitable
estoppel principles. That should be undertaken only after the court has assessed the
nature of the government action and determined that evaluation of the equities is
necessary. A governmental entity cannot be estopped from refusing to take an
action that it was never authorized to take under the law -- even if it had mistakenly
agreed to that action. The law distinguishes between an act utterly beyond the
jurisdiction of a municipal corporation and the irregular exercise of a basic power
under the legislative grant in matters not in themselves jurisdictional. The former
are ultra vires in the primary sense and void; the latter, ultra vires only in a
secondary sense which does not preclude ratification or the application of the
doctrine of estoppel in the interest of equity and essential justice. (pp. 6-8)
2. Here, the SHBC did not offer benefits within its authority and then change its
mind. The SHBC was never authorized to offer petitioner free health care benefits --
an act utterly beyond the jurisdiction of the SHBC and, therefore, ultra vires in the
primary sense. In reaching this conclusion, the Court declines to follow Juliano v.
Borough of Ocean Gate, 214 N.J. Super 503 (Law Div. 1986), to the extent that the
holding of that decision diverges from today’s opinion. (pp. 8-9)
AFFIRMED.
CHIEF JUSTICE RABNER and JUSTICES PATTERSON, SOLOMON,
PIERRE-LOUIS, WAINER APTER, FASCIALE, and NORIEGA join in this
opinion.
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SUPREME COURT OF NEW JERSEY
A-27 September Term 2022
087633
James Meyers,
Petitioner-Appellant,
v.
State Health Benefits Commission,
Defendant-Respondent.
On certification to the Superior Court,
Appellate Division, whose opinion is reported at
474 N.J. Super. 1 (App. Div. 2022).
Argued Decided
September 12, 2023 December 14, 2023
Richard M. Pescatore argued the cause for appellant (The
Law Offices of Richard M. Pescatore, attorneys; Richard
M. Pescatore, on the briefs).
Donna Arons, Assistant Attorney General, argued the
cause for respondent (Matthew J. Platkin, Attorney
General, attorney; Donna Arons and Melissa H. Raksa,
Assistant Attorney General, of counsel, and Alison
Keating, Deputy Attorney General, on the briefs).
Raymond M. Baldino argued the cause for amicus curiae
New Jersey Education Association (Zazzali, Fagella,
Nowak, Kleinbaum & Friedman, attorneys; Raymond M.
Baldino, of counsel and on the brief).
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PER CURIAM
We affirm the Appellate Division’s judgment substantially for the
reasons expressed in Judge Morris Smith’s comprehensive opinion, Meyers v.
State Health Benefits Commission, 474 N.J. Super. 1 (App. Div. 2022).
The New Jersey State Health Benefits Program Act, N.J.S.A. 52:14-
17.25 to -17.46a, (the Act) governs health care benefits for public employees
in New Jersey. In 2011, the Legislature amended the Act through legislation
known as Chapter 78. L. 2011, c. 78. Among the amendments was a new
requirement that each public employee “contribute, through the withholding of
the contribution from the monthly retirement allowance, toward the cost of
health care benefits coverage for the employee in retirement.” N.J.S.A. 52:14-
17.28d(b)(1). Chapter 78 also created an exemption from those premium-
sharing obligations for employees with “20 or more years of creditable service
in one or more State or locally administered retirement systems on the
effective date of [Chapter 78].” Id. at (b)(3). In other words, the new
obligations were not imposed on employees who had already accumulated
twenty years of service as of June 28, 2011.
We agree with the Appellate Division that petitioner James Meyers was
not and could never be a “public worker . . . who ha[d] 20 or more years of
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creditable service in one or more State or locally administered retirement
systems on [June 28, 2011].” -------
See ibid. On that date, petitioner had seventeen
years and nine months of creditable service time with the New Jersey State
Police. No amount of subsequent service could change the fact that petitioner
did not meet the bright line drawn by the Legislature by the requisite date.
Nor could petitioner’s purchase of four years of military service credit
qualify him as a public worker with “20 or more years of creditable service”
within the meaning of N.J.S.A. 52:14-17.28d(b)(3). In a 2013 amendment to
the State Health Benefits Program Act -- L. 2013, c. 87, known as Chapter 87 -
- the Legislature made it possible for public employees who served in the
military to purchase credit for that service. See N.J.S.A. 53:5A-6.1. Petitioner
purchased credit for his service in 2013, as soon as the law made it possible.
He argues that the 2013 statute somehow related back to the enactment of
Chapter 78, such that his purchased credit should count toward his June 28,
2011 total time served. No explicit or implicit reference in N.J.S.A. 53:5A-6.1
supports that interpretation. Chapter 87 did not expand the class of pensioners
exempt from payment for health care benefits.
Thus, although petitioner had twenty-five years and one month of State
Police Retirement Service credit when he retired at age forty-six on October 1,
2015, he was subject to Chapter 78’s health benefits premium-sharing
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obligations. Upon petitioner’s retirement, however, the Division of Pensions
and Benefits (the Division) erroneously offered him retiree health benefits at
“no premium cost.” The mistake was discovered nearly two years later, and
the State began deducting premium-sharing contributions from petitioner’s
pension payments.
This case centers on that decision. We agree with the Appellate
Division’s assessment that petitioner was never eligible for the exemption
under N.J.S.A. 52:14-17.28d(b)(3) and that correcting the erroneous exemption
was therefore proper.
Petitioner contends that the State Health Benefits Commission (the
SHBC) acted arbitrarily, capriciously, and unreasonably in reversing the
Administrative Law Judge’s (ALJ) decision. The ALJ barred the SHBC from
deducting health insurance premiums from petitioner’s retirement payments
based upon the following findings:
Petitioner was “quite clear” that his health benefits
would be free upon his retirement, based on his review
of Division and State Police retirement literature,
Division correspondence, and conversations with State
Police HR and Division staff; that the SHBC
intentionally misinformed petitioner about free health
benefits at “every step of the way during [petitioner’s]
retirement planning”; and that petitioner detrimentally
relied upon the SHBC’s misinformation, without which
he would not have purchased his military service time
at a significant cost, nor applied for early retirement.
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[Meyers, 474 N.J. Super. at 6 (alteration in original).]
In a final administrative determination, the SHBC reversed the ALJ’s
decision, finding that the ALJ’s conclusions overlooked key facts in the
record. The SHBC determined that the record contained evidence that signaled
to petitioner, and others similarly situated, that purchases made after June 28,
2011, were subject to the provisions of Chapter 78. The SHBC concluded that
any oral misrepresentations or erroneous letters by Division staff to petitioner
were mistakes and not intentional misrepresentations, a necessary element to
an equitable estoppel claim. Finally, the SHBC rejected the ALJ’s finding that
petitioner detrimentally relied on the Division’s erroneous written and oral
representation in making his decision to retire early. In so finding, the SHBC
concluded that even if petitioner had worked beyond his retirement date of
October 1, 2015, no amount of creditable service could be gained that would
ever make him eligible for contribution-free health insurance benefits under
Chapter 78.
The Appellate Division upheld the SHBC’s final determination and
found that petitioner was ineligible for “no cost premium” health care benefits
in retirement because he did not meet the statutory requirements. The
Appellate Division reasoned that “[t]he Legislature clearly intended to create a
finite class of public employees, eligible for retirement, that would not have
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health care premium contributions withheld from their monthly retirement
allowance,” and petitioner “was never a part of that class.” Id. at 9. The court
found that equitable estoppel did not apply, given petitioner’s statutory
ineligibility to receive free retirement health insurance benefits as of June 28,
2011.
The Appellate Division correctly determined that it did not need to reach
the issue of equitable estoppel. We offer the following additional comments.
On occasion, a court may be called upon to review equitable
considerations in the context of government action, which may lead to the
invocation of equitable estoppel principles. That should be undertaken only
after the court has assessed the nature of the government action and
determined that evaluation of the equities is necessary. Skulski v. Nolan, 68
N.J. 179, 198 (1975).
As this Court has previously recognized, the doctrine of “[e]quitable
estoppel is ‘rarely invoked against a governmental entity.’” Middletown Twp.
Policemen’s Benevolent Ass’n Local No. 124 v. Township of Middletown, 162
N.J. 361, 367 (2000) (quoting Wood v. Borough of Wildwood Crest, 319 N.J.
Super. 650, 656 (App. Div. 1999)). Although it is “not applied as freely
against the public as in the case of private individuals, the doctrine of estoppel
may be invoked against a municipality to prevent manifest wrong and
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injustice.” Gruber v. Mayor & Twp. Comm. of Raritan Twp., 39 N.J. 1, 14
(1962) (quoting Vogt v. Borough of Belmar, 14 N.J. 195, 205 (1954)).
“Equitable considerations ‘are relevant in assessing governmental conduct’
and impose a duty on the court to invoke estoppel when the occasion arises.”
Middletown, 162 N.J. at 367 (quoting Wood, 319 N.J. Super. at 656). For
instance, in Skulski, this Court found that the doctrine applied when
pensioners detrimentally relied upon an award of disability pension benefits in
deciding not to obtain full-time employment, thereby foreclosing the
opportunity to secure alternate pension benefits. 68 N.J. at 199.
Before considering whether the equities require that a governmental
entity be estopped from changing its position in a particular instance , the court
must examine the precise nature of the governmental actions in question. Id.
at 198. That is because a governmental entity cannot be estopped from
refusing to take an action that it was never authorized to take under the law --
even if it had mistakenly agreed to that action. See ibid. The law
distinguishes between actions otherwise within an entity’s authority but
marked by procedural irregularity and actions that are beyond the entity’s
authority:
There is a distinction between an act utterly beyond the
jurisdiction of a municipal corporation and the irregular
exercise of a basic power under the legislative grant in
matters not in themselves jurisdictional. The former
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are ultra vires in the primary sense and void; the latter,
ultra vires only in a secondary sense which does not
preclude ratification or the application of the doctrine
of estoppel in the interest of equity and essential justice.
[Middletown, 162 N.J. at 368 (quoting Skulski, 68 N.J.
at 198).]
In Gruber, for example, this Court considered a municipality’s adoption
of an ordinance that rezoned a residential district for light industry. 39 N.J. at
8. Prior to adoption of that ordinance, the plaintiffs purchased a 131-acre tract
on which they planned -- and received municipal approval -- to build homes.
Id. at 4-7. The plaintiffs also received a number of approvals and extensions,
on which they relied in planning their project. Ibid. The Court rejected the
Law Division’s conclusion that those approvals and extensions were wholly
ultra vires in the primary sense, noting that the municipality would have had
the capacity to exempt projects underway from subsequent ordinances such as
the one that blocked the plaintiffs’ development. Id. at 17-18. The Court
therefore remanded for further factfinding to determine whether equitable
estoppel applied. Id. at 18-19.
Here, in contrast, the SHBC did not offer benefits within its authority
and then change its mind. Petitioner was never statutorily eligible for the
benefits he was mistakenly awarded because he did not have the requisite
years of creditable service by June 28, 2011. The SHBC was never authorized
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to offer him free health care benefits -- an act utterly beyond the jurisdiction of
the SHBC and, therefore, ultra vires in the primary sense. See id. at 15, 17.
As a result, the relief petitioner seeks in this matter is, quite simply,
unavailable: the SHBC has no ability to make a decision that would be
considered void under the law, and the doctrine of equitable estoppel does not
apply in this matter.
In reaching this conclusion, we decline to follow Juliano v. Borough of
Ocean Gate, 214 N.J. Super 503 (Law Div. 1986), to the extent that the
holding of that decision diverges from today’s opinion.
The judgment of the Appellate Division is affirmed.
CHIEF JUSTICE RABNER and JUSTICES PATTERSON, SOLOMON,
PIERRE-LOUIS, WAINER APTER, FASCIALE, and NORIEGA join in this
opinion.
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