Opinion
DOCKET NO. A-3991-12T2
06-19-2014
IRVINGTON POLICE BENEVOLENCE ASSOCIATION, LOCAL 29, IRVINGTON SUPERIOR OFFICERS ASSOCIATION, LOCAL 29A, RAYMOND HOFFMAN, CLINTON FRANKS, DOUGLAS POLK, MONIQUE SMITH, DAVID DUNDAS, and MARIO CLARKE, Plaintiffs-Respondents/Cross-Appellants, v. TOWNSHIP OF IRVINGTON, MAYOR WAYNE SMITH, BUSINESS ADMINISTRATOR WAYNE BRADLEY, Defendants-Appellants/Cross-Respondents.
Ramon E. Rivera argued the cause for appellants/cross-respondents (Scarinci & Hollenbeck, LLC, attorneys; Mr. Rivera, Laura M. Miller, and Christina M. Michelson, on the briefs). James T. Prusinowski argued the cause for respondents/cross-appellants (Trimboli & Prusinowski, LLC, attorneys; Mr. Prusinowski, of counsel and on the briefs; Marissa Becker Ruggiero, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Ashrafi, St. John, and Manahan.
On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-1715-11.
Ramon E. Rivera argued the cause for appellants/cross-respondents (Scarinci & Hollenbeck, LLC, attorneys; Mr. Rivera, Laura M. Miller, and Christina M. Michelson, on the briefs).
James T. Prusinowski argued the cause for respondents/cross-appellants (Trimboli & Prusinowski, LLC, attorneys; Mr. Prusinowski, of counsel and on the briefs; Marissa Becker Ruggiero, on the brief). PER CURIAM
Defendant Township of Irvington ("Township") and plaintiff Irvington Police Benevolence Association Locals 29 and 29A (collectively "PBA") appeal and cross-appeal the orders dated March 15, 2013 and April 15, 2013, pertaining to recovery by the Township of overpaid salaries to police officers. The trial court granted the Township's motion for summary judgment and denied the PBA's motion for summary judgment. The trial court additionally imposed a four-year limitation on recovery based on the doctrine of laches. We affirm in part, reverse in part, and remand.
The Township is a Civil Service municipality. Sgt. Raymond Hoffman, Sgt. Monique Smith, Sgt. Clinton Franks, Officer Douglas Polk, Officer David Dundas, and Officer Mario Clarke were deployed to the United States Military at various times between 2002 and 2013.
N.J.S.A. 38A:4-4(a) entitles deployed public employees to:
(a) . . . leave of absence from [their] respective duties without loss of pay or time on all days during which [they are] engaged in any period of State or Federal active duty; provided however that the leaves of absence for Federal active duty or
active duty for training shall not exceed 90 work days in the aggregate in any calendar year. Any leave of absence for such duty in excess of 90 days shall be without pay but without loss of time.
[N.J.S.A. 38A:4-4(a).]
Irvington Township Municipal Ordinance § 44-6 ("ordinance") controls the issue of additional payment. The Ordinance provides in pertinent part:
A. All officers and employees of this municipality who are members of the National Guard, Military Reserve or other form of organized militia ordered into active duty by the President or other authorized representative of the United States Government shall be entitled to a leave of absence from their respective duties without loss of pay or time or other benefits on all days during which they shall be engaged in active duty, active duty for training or other duty ordered by the President or other authorized official; provided, however, that compensation while on such military leave shall be calculated as the difference between the salary to which an official or employee shall be entitled in the course of his or her employment by the Township of Irvington and the amount provided to the official or employee out of federal funds.
B. Leave of absence for such military duty shall be in addition to the regular vacation allowed such officers and employees by municipal ordinance, resolution or regulation.
Pursuant to N.J.S.A. 38A:4-4(a) and the ordinance, the officers were entitled to full payment for ninety work days during their deployment. After those ninety days, the Township would compensate the officers for the difference between their municipal pay and their military pay. Notwithstanding, the officers received their full municipal wages for the entirety of their respective deployments.
On February 13, 2003, Sgt. Hoffman faxed a letter to the Township advising it that he was to be provided with ninety working days of full pay, and then the difference between his military pay and municipal pay.
On April 3, 2003, Officer Polk sent a letter to Mayor Wayne Smith, then-Director Damiano, Acting Chief Michael Chase, and Deputy Chief Steven Palamara. Officer Polk requested that the officials revisit the practice of providing ninety full days and subsequent differential pay to those deployed due to the hardships it imposes.
Also in 2003, Sgt. Franks spoke with Chief Chase regarding officers being paid their full salary while deployed, and provided Chief Chase with information on a law that allows the employer the option of paying deployed officers their full salary. No further action was taken by the Township.
There is no citation by plaintiffs to any authority which permits an employer the option of full payment.
The Township did not discover this overpayment until January 2011. In letters dated January 28, 2011 addressed to each affected officer, the Township gave notice that the officer was required to repay the Township the overpayment of wages past the ninety-day period. The letter noted, "[E]ffective immediately ten percent (10%) of your bi weekly [sic] gross pay will be deducted as partial payments on the outstanding balance owed listed above."
On February 28, 2011, the PBA filed a Verified Complaint and Order to Show Cause with temporary restraints against defendants alleging improper deductions from the officer's paychecks, breach of contract, violation of due process, and equitable estoppel. The trial court entered an order temporarily enjoining the wage garnishment.
In February 2012, Officer Dundas retired as an Irvington Police Officer after a job-related injury. Officer Dundas alleges that the Township refused to provide his terminal leave pay in accordance with the collective negotiations agreement. He filed a motion to enforce litigant's rights. On April 27, 2012, the court entered an order compelling defense counsel to hold in escrow the disputed amount until resolution of the dispute.
On February 25, 2013, after oral argument on the Township's motion for summary judgment and the PBA's cross-motion for summary judgment, the court concluded that restitution was warranted. The court noted that its decision was a balance of the equities, weighing concern for the utilization of public funds and the ability for repayment by the officers, especially in some cases with the passage of time. The court granted summary judgment to the Township, but imposed a four-year limitation on recovery.
In a subsequent decision, the trial court rejected the PBA's argument that the officers were entitled to an additional thirty-nine days of full salary beyond the ninety days of full pay under Section 9.9.1 of the Township Police Department Manual Rules and Regulations.
On March 15, 2013, an order was entered partially granting the Township's motion for summary judgment and denying the PBA's cross-motion for summary judgment. The reasons were placed on the record. The order provided that a four-year limitation on recovery of payments would be imposed, and that the officers' entitlement was limited to ninety days of full pay. The order directed that the "parties will calculate amount owed and submit amended order" with the amount at a later date.
Following the court's decision, the Township and the PBA could not reach an accord on the definition of "work day" under N.J.S.A. 38A:4-4(a). On April 8, 2013, the trial court conducted an in-chambers conference which addressed this issue.
The court entered an order dated April 15, 2013, which provided that restitution was to be calculated based on a nine-hour, five-day week, and the funds held in escrow for Officer Dundas were to be released. The Township was also required to reimburse the officers whose deployments fell outside the four-year limitation. Those officers whose deployments were within the four-year period would be required to reimburse the Township based upon a court-determined calculation.
On April 29, 2013, the Township filed a Notice of Appeal. On May 9, 2013, plaintiffs filed a Notice of Cross-Appeal.
On June 4, 2013, a revised order was issued to clarify that Officer Clarke's repayment was due within thirty days of completion of his current deployment.
On July 3, 2013, the Township submitted $9,638.82 to plaintiffs' counsel. On July 5, 2013, the Township submitted $17,374.10 to plaintiffs' counsel from the escrow account maintained for Officer Dundas.
The Township argues on appeal that the trial court was correct in granting summary judgment but erred in imposing a four-year limitation and by calculating the statutory "work day" as nine hours instead of the "standard" eight-hour work day. The PBA argues that the trial court erred in denying summary judgment to the PBA based on equitable principles and, in the alternative, that a two-year statute of limitations was applicable. The PBA further argues that an 11.25-hour work day is the correct measure for calculation of reimbursement.
When reviewing a summary judgment order, an appellate court uses the same standard as the trial court. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). Summary judgment must be granted if "the pleadings, depositions, answer to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2. The court must not decide issues of fact, only whether there are any such issues. Brill v. Guardian Life Ins. Co., 142 N.J. 520, 530 (1995) (citing Judson v. Peoples Bank & Trust Co. of Westfield, 17 N.J. 67, 75 (1954)). The submissions are to be viewed in the light most favorable to the non-moving party. Id. at 540.
Preliminarily, the meaning and application of N.J.S.A. 38A:4-4(a) and the ordinance present a purely legal interpretation that is suitable for decision on a motion for summary judgment. Cf. Spaulding Composites Co., Inc. v. Liberty Mut. Ins. Co., 346 N.J. Super. 167, 173 (App. Div. 2001). On appeal, neither party argues that N.J.S.A. 38A:4-4(a) and the ordinance should be afforded other than their plain meaning. Rather, the parties argue either for strict enforcement or for equitable relief precluding enforcement. In view of the unambiguous language of N.J.S.A. 38A:4-4(a) and the ordinance, we conclude, as the trial court did in granting summary judgment, that the Township was entitled to restitution as a matter of law.
Since the Township did not enact any ordinance authorizing full pay to the officers, the overpayment was ultra vires. The Township lacked the authority to provide the officers with full pay for the duration of their deployments. The officers were aware that they received their full salary during each of their deployments. The trial court in granting summary judgment on behalf of the Township appropriately found that the Township was entitled to repayment of the excess wages. Absent a cognizable defense in law or equity, the Township is entitled to restitution. Having determined that the Township was entitled to restitution, we consider the Township's assertion that its recovery should not be limited.
The Township argues that the doctrine of unclean hands bars any limit on restitution. A suitor will be denied equitable relief when his or her own conduct forms the basis for the claim. Rolnick v. Rolnick, 262 N.J. Super. 343, 361 (App. Div. 1993) (internal citations omitted); Borough of Princeton v. Bd. of Chosen Freeholders, Cnty. Of Mercer, 169 N.J. 135, 158 (2001); Feldman v. Urban Commercial, Inc., 78 N.J. Super. 520, 533 (Ch. Div. 1963), aff'd, 87 N.J. Super. 391 (App. Div. 1965). Unclean hands, like estoppel, is flexible in its application and largely based on the circumstances in a case. Untermann v. Untermann, 19 N.J. 507, 517 (1955). Application may also depend on the innocence or culpability of the parties, as the law tends to aid the innocent. Laurino v. Laurino, 28 N.J. Super. 119, 124 (App. Div. 1953).
The maxim of unclean hands is that the court should not allow itself to become the vehicle of injustice. Associated East Mortg. Co. v. Young, 163 N.J. Super. 315, 330 (Ch. Div. 1978). Where the petitioner engages in bad faith, fraud, or unconscionable acts that serve as the basis for the suit, a court of equity must deny him remedy. Goodwin Motor Corp. v. Mercedes Benz of N.A., Inc., 172 N.J. Super. 263, 271 (App. Div. 1980); Sheridan v. Sheridan, 247 N.J. Super. 552, 556 (Ch. Div. 1990). The application of unclean hands is within the court's discretion. Borough of Princeton, supra, 169 N.J. at 158; Untermann, supra, 19 N.J. at 518 (citing White v. White, 16 N.J. 458, 464 (1954)).
There is no evidence within the record to conclude that the officers, even if aware that they were being overpaid, engaged in bad faith, fraud, or unconscionable acts. Two officers, aware of the laws, sought clarification from the Township to no avail. Similarly, the record does not provide the requisite basis to sustain a finding that those officers who did not seek clarification engaged in the type or manner of conduct that would constitute unclean hands. We find no mistake in discretion by the trial court's finding that the doctrine of "unclean hands" is not applicable.
We next address the PBA's argument that any restitution should be precluded by the doctrine of equitable estoppel. Equitable estoppel is defined in Eagle Fire Prot. Corp. v. First Indem. of Am. Ins. Co., 280 N.J. Super. 430, 441 (App. Div. 1995), rev'd on other grounds, 145 N.J. 345 (1996), as:
[T]he effect of the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed . . . as against another person, who has in good faith relied upon such conduct, and has been led thereby to change his position for the worse . . .
Conduct amounting to a misrepresentation or concealment of material facts, known to the party allegedly estopped and unknown to the party claiming estoppel, done with the intention or expectation that it will be acted upon by the other party and on which the other party does in fact rely in such a
manner as to change his position for the worse gives rise to an equitable estoppel.
[Citations omitted.]
Estoppel is a flexible doctrine. Untermann, supra, 19 N.J. at 517. However, "[e]quitable estoppel is rarely invoked against a governmental entity, . . . particularly when estoppel would 'interfere with essential governmental functions.'" O'Malley v. Dep't of Energy and Dep't of Civil Serv., 109 N.J. 309, 316 (1987) (internal citations omitted). Equitable estoppel "may be invoked against a municipality 'where interests of justice, morality and common fairness clearly dictate that course.'" Middletown Twp. Policemen's Benevolent Ass'n v. Twp. of Middletown, 162 N.J. 361, 367 (2000) (quoting Gruber v. Mayor and Twp. Comm. of Twp. of Raritan, 39 N.J. 1, 13 (1962)).
In Middletown, supra, 162 N.J. at 361, the Court was guided by Skulski v. Nolan, 68 N.J. 179, 198 (1975), which held that before equitable estoppel may be invoked, a court must examine the "nature of the governmental action." Middletown, supra, 162 N.J. at 368 (citing Skulski, supra, 68 N.J. at 198). If the conduct is ultra vires, then the court must consider whether that conduct is ultra vires in the "primary sense" or ultra vires in the "secondary sense." Ibid. The former is a void act in which the municipality completely exceeds its jurisdiction. Ibid. The latter is an "irregular exercise of a basic power under the legislative grant in matters not in themselves jurisdictional." Ibid. (citing Skulski, supra, 69 N.J. at 198).
It is only actions that are ultra vires in the secondary sense that will permit the application of estoppel. Skulski, supra, 69 N.J. at 198; see also Wood v. Borough of Wildwood Crest, 319 N.J. Super. 650, 657 (App. Div. 1999). As noted, the Township acted outside its authority in payment of the officers' full salaries beyond the proscribed time period. Payment of the full salary was within the authority of the Township but was limited to the timeframe set forth in N.J.S.A. 38A:4-4(a) and the ordinance. The repayment of the full salary beyond that timeframe was not "utterly beyond the jurisdiction" of the Township, but was erroneous. Wood, supra, 319 N.J. Super. at 657 (internal citation omitted). This conduct was an "irregular exercise" under the legislative grant as to constitute an ultra vires act in the secondary sense. Therefore, the application of estoppel is permissible.
In Middletown, supra, 162 N.J. at 364, the township was equitably estopped from discontinuing the plaintiff's post-retirement benefits after ten years of receipt. Township officials had assured plaintiff that he and his family would receive these benefits even after retirement. Ibid. The collective bargaining agreement provided for free health benefits "to all employees who have retired." Ibid. However, N.J.S.A. 40A:10-23 provided that retirees must pay for their own coverage, but the employer, "in its discretion," may pay for the coverage if the employee retired after at least twenty-five years of service. Id. at 365. The plaintiff had worked twenty-two-and-a-half years of service. Id. at 372.
The Court found that the township was equitably estopped from denying the plaintiff his benefits. Id. at 371-72. The plaintiff relied on the assurances made by the township and on the provision in the collective bargaining agreement. Ibid. Similarly, the township acted accordingly in granting him ten years of benefits in good faith. Id. at 372. The township also approved the plaintiff's retirement package. Id. at 373.
By contrast, the officers here received no assurances from the Township or its officials that overpayment would continue. Critical to our analysis is that there is no evidence that the officers reasonably relied on the overpayment, or that, but for the overpayment, they would have conducted themselves differently. The Middletown Court specifically noted that it weighed the "reliance factor," and "but for" the township's representations to the plaintiff that he would continue receiving benefits after retirement, he could have worked another "mere" two-and-a-half years in order to obtain those benefits. 162 N.J. at 372.
The record before us does not support a finding of detrimental reliance by the officers, except, arguably, by Officer Hoffman and Officer Polk, who attempted to contact the Township nearly a decade ago but never received a response. Even if these officers were found to have relied upon the Township to continue with its overpayment, they have not demonstrated "detrimental" reliance and that "but for" the payments, they would have conducted themselves differently to their "detriment." Unlike Middletown, these officers were "benefitted" by the overpayment.
The PBA contends that recovery should not be permitted since the officers relied on the Township's "reasonable" interpretation of the ordinance. The PBA maintains that a court should defer to an administrative body's interpretation of an ambiguous measure if it is a "permissible" or "reasonable" interpretation. See, e.g., P.R. Mar. Shipping Auth. v. Valley Freight Sys., 856 F.2d 546, 552 (3d Cir. 1988). The PBA cites Executive Orders 133 and 50 issued by Governors DiFrancesco and McGreevey in 2001 and 2003 as supporting "reasonable interpretation" of overpayment.
This argument is unavailing. The Township is not an administrative agency, and, as we noted, there is no ambiguity in either the ordinance or the Executive Orders. The ordinance states, "[C]ompensation while on such military leave shall be calculated as the difference between the salary to which an official or employee shall be entitled in the course of his or her employment by the Township of Irvington and the amount provided to the official or employee out of federal funds." The Executive Orders state that the deployed State employees are to receive the differential between their state and military pay. See N.J. Exec. Order No. 50 (2003); N.J. Exec. Order No. 133 (2001). The language of the ordinance and the Executive Orders is clear, unambiguous, and susceptible to only one interpretation. These resources should be applied as written without resort to interpretation. See Bergen Commercial Bank v. Sisler, 157 N.J. 188, 202 (1999). We conclude that the trial court did not err in denying this equitable defense as a bar to the Township's recovery.
The parties agree that there is no controlling statute of limitations. In the absence thereof, the trial court employed the doctrine of laches to limit the Township's recovery to a four-year period. The court noted:
[T]he doctrine of laches should apply in this case. The plaintiffs have argued that
if I find that the defendants are entitled to restitution that it should be a two-year statute of limitation. That I do not believe it is fair, so I am going to order that it is a four-year statute of limitation.
The doctrine of laches is an equitable defense which may be interposed in the absence of the statute of limitations. Lavin, supra, 90 N.J. at 151. Laches "precludes relief when there is an unexplainable and inexcusable delay in exercising a right, which results in prejudice to another party." Fox v. Millan, 210 N.J. 401, 418 (2012). "The time constraints of laches, unlike the periods prescribed by the statute of limitations, are not fixed but are characteristically flexible." 90 N.J. at 151. The doctrine is described as:
[N]ot an arbitrary or technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay are most material.
[Id. at 152 (quoting Hall v. Otterson, 52 N.J. Eq. 522, 535 (Ch. 1894)).]
The length of and reasons for the delay, and changing conditions of either party, are the most important factors. Id. at 152 (citing Pavlicka v. Pavlicka, 84 N.J. Super. 357, 368-69 (App. Div. 1964)). "The length of the delay alone or in conjunction with the other elements may result in laches." Ibid. (citing Obert v. Obert, 12 N.J. Eq. 423, 428-30 (E. & A. 1858)).
Typically, the application of laches against a public entity is disfavored. Cnty. of Morris v. Fauver, 296 N.J. Super. 26, 41 (App. Div. 1996), rev'd on other grounds, 153 N.J. 80 (1998). However, "[w]hether laches should be applied depends upon the facts of the particular case and is a matter within the sound discretion of the trial court." Mancini v. Twp. of Teaneck, 179 N.J. 425, 436 (2004) (quoting Garrett v. Gen. Motors Corp., 844 F.2d 559, 562 (8th Cir.), cert. denied, 488 U.S. 908, 109 S. Ct. 259, 102 L. Ed. 2d 248 (1988)).
The Township relies on Winslow, Cohu & Stetson, Inc. v. Skowronek, 136 N.J. Super. 97 (Law Div. 1975), and PaineWebber, Inc. v. Levy, 293 N.J. Super. 325 (Law Div. 1995), to support its contention that the doctrine of laches does not apply in this instance because the officers were not "prejudiced."
Winslow, supra, 136 N.J. Super. at 97, involved a claim for restitution on the basis of mistakenly issued stock to the defendant, who sold the stock five years before the plaintiff discovered the mistake. Id. at 100-01.
It is a general rule that a payment of money under a mistake of fact may be recovered, provided that such recovery will not prejudice the payee . . . It is considered
unjust enrichment to permit a recipient to retain money paid because of a mistake, unless the circumstances are such that it would be inequitable to require its return.
[Id. at 104.]
The defendant in Winslow raised the equitable defense of laches. Id. at 104-05. However, the court specifically noted that the "lapse of time, in and of itself, will not give rise to laches unless the failure to assert one's rights within a reasonable period of time results in prejudice to the defending party." Id. at 105 (citing Kohler v. Barnes, 123 N.J. Super. 69 (App. Div. 1973)). The court found no prejudice to the defendant, and therefore was unconcerned with the issue of the statute of limitations. "Inasmuch as we consider that the disposition of this case is governed by the equitable principles of unjust enrichment and restitution, we need not be concerned with the issue of the statute of limitations. However, if applicable, we do not consider that the limitation set forth in N.J.S.A. 12A:2-725 is controlling." Ibid.
In PaineWebber, supra, 293 N.J. Super. at 327, the defendant sold shares and gained $25,635.07, between January 1994 and April 1994. He was notified of the mistake in April 1994, and claimed he had already spent the money on, inter alia, a new computer and college tuition for his daughter. Ibid.
It is considered unjust enrichment to permit the recipient of money paid under mistake of fact to keep it, unless the circumstances are such that it would be inequitable to require its return. Great American Ins. Co. v. Yellen, 58 N.J. Super. 240, 246. One who has paid money under a mistake of fact may have restitution from the payee, notwithstanding that the mistake was unilateral and a consequence of the payor's negligence, unless such restitution will prejudice the payee. Ibid.
[PaineWebber, supra, 293 N.J. Super. at 327-28.]
"Prejudice" does not occur "when the payee has used the money to cover ordinary living expenses or to pay preexisting debt." Id. at 328 (internal citation omitted). The mere lack of retention of the value is not sufficient for the payee to be "prejudiced." Id. at 329. Instead, the payee must be able to demonstrate that he incurred additional costs or liabilities as a result of the overpayment. Ibid. (internal citation omitted). The court seeks evidence of detrimental reliance in the form of additional responsibilities or liabilities based on the overpayment. Ibid. The court denied the motion for summary judgment, citing genuine issues of material fact as to which portions of overpayment were detrimentally relied upon. Id. at 330.
Here, the trial court found that the officers spent the money as they would any other money and did not "sustain prejudice in the true legal sense of the word," but "from a practical point of view they were prejudiced merely by the length of time that this went on." The Township argues this was an incorrect application of the "prejudice" standard dictated in PaineWebber, supra, 293 N.J. Super. at 328. We disagree.
We find the trial court's determination to be grounded in the exercise of discretion. The abuse of discretion standard looks to whether the "decision [was] made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis." United States v. Scurry, 193 N.J. 492, 504 (2008) (citing Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002)). Although the trial court's interpretation of "prejudice" is expansive, in our view the interpretation is neither strained nor without basis. The court was grappling with the erroneous expenditure of public funds, and the ability of the officers to reimburse those funds received in error after a significant passage of time. In the absence of limitations on recovery, the officers would be required to repay monies mistakenly received in some instances as early as 2002. The court found that the timing of the payments was a critical factor in determining "prejudice." As noted by counsel on appeal during oral argument, the officers paid income taxes proportionate to income, and likely made lifestyle adjustments based upon the additional income. Given the standard of review of discretionary decisions, we find there was a "rational explanation" provided by the court that did not "depart from established policies" or rest on an "impermissible basis."
We next address the Township's argument that if a period of limitations is to be applied, the four-year limitation applied by the court was in error. The Township avers that any limitation should be six years, as this is a non-personal injury action involving monetary damages under N.J.S.A. 2A:14-1 and that it is apposite to a quasi-contract or quantum meruit claim. The Township reasserts the argument advanced in the trial court that "a claim for restitution or unjust enrichment that is remedied by a personal money judgment . . . usually finds its antecedents in one of the legal actions of quasi-contract." Restatement (Third) of Restitution and Unjust Enrichment, § 70 comment c (2011).
In Lavin, supra, 90 N.J. 145, the plaintiff sued the Board of Education of Hackensack for failure to provide her with an employment credit for her previous military service under N.J.S.A. 18A:29-11. That statute provides, in pertinent part, that any teacher who served in the military during time of war is entitled to "receive equivalent years of employment credit for such service as if he had been employed for the same period of time in some publicly owned and operated . . . school or institution of learning[.]" N.J.S.A. 18A:29-11. The "core of the issue" was whether the credit for military service was an "essential term of the petitioner's employment contract or whether it represents a statutory entitlement granted by the State in return for military service in time of war." Lavin, supra, 90 N.J. at 149. The Court held:
Whether the benefit flowing from a statute is to be considered a statutory entitlement or a term of the public employee's contract of employment depends upon the nature of the benefit and the relationship to the employment . . . Where the benefit is not directly related to the employment service, but is being awarded for a totally unrelated reason, the recipient is truly the beneficiary of a statutory entitlement quite apart from the employment as such.
[Id. at 150.]
The Court found that the statute and employment contract were not so intertwined as to allow for a six-year statute of limitations in accordance with a breach of contract claim. Ibid.; N.J.S.A. 2A:14-1. Instead, the Court determined that the statute was created as a reward for military service. Lavin, supra, 90 N.J. at 151. The Court affirmed the Appellate Division's decision that laches barred the plaintiff's recovery. Id. at 155.
N.J.S.A. 38A:4-4(a) and the ordinance both provide for a benefit which is not "directly related" to the employment service but is awarded due to the military service. Lavin, supra, 90 N.J. at 145, is instructive as the Court distinguished between a benefit arising from "employment service" and a benefit arising from "statutory entitlement."
One could articulate the legal theory that every statutory provision having some effect on the employee has been impliedly integrated into the contract, so that failure to comply with that provision constitutes a breach of the employment agreement. Yet when viewed realistically the emolument bears no relationship to the services to be rendered as an employee.
[Id. at 150.]
Here, the "emolument" is for services rendered or to be rendered "as a reward or bonus," not for performance as a law enforcement officer. See id. at 151. N.J.S.A. 38A:4-4(a) does not apply only to law enforcement, but to "[a] permanent or full-time temporary officer or employee of the State or of a board, commission, authority, or other instrumentality of the State of a county, school district or municipality who is a member of the organized militia." N.J.S.A. 38A:4-4(a).
Similarly, the ordinance provides an entitlement through continuous compensation for those deployed in the military service. The entitlement is not directly related to the "employment service." Although the municipality arguably received the benefit of the officers' additional training and experience during their deployments, this would not support a finding that the benefit was directly related to the officers' employment as police officers. When payment is determined to be a statutory entitlement rather than an element of the employment contract, the statute of limitations is inapplicable. Lavin, supra, 90 N.J. at 151.
The PBA argues that a two-year limitation, if any, should be imposed. The PBA analogizes the instant matter to a claim under the Fair Labor Standards Act ("FLSA"), which provides for a two-year statute of limitations for an employee to recover unpaid wages. 29 U.S.C.A. § 255(a). We reject the proffered analogy for the same reasons noted in our analysis of the Township's proposed six-year limitation.
In the absence of an applicable statute of limitations, we defer to the equitable principles which guide a court's decision. "Equitable remedies are distinguished for their flexibility, their unlimited variety, their adaptability to circumstances, and the natural rules which govern their use." Roach v. Margulies, 42 N.J. Super. 243, 246 (App. Div. 1956) (quoting Sears, Roebuck & Co. v. Camp, 124 N.J. Eq. 403, 411 (E. & A. 1938)). The application of such remedies are left to the court's judgment.
The trial court noted:
You're right in the fact that you have sympathetic plaintiffs. The problem is, you have very, very sympathetic defendants. And I don't mean the Township of Irvington, I mean the tax payers of Irvington. That's who would be paying this; not the Township or not the Chief of Police . . . And that is a lot to ask out of your Irvington tax payers...
We are not persuaded that the court's finding of a four-year limitation was "arbitrary." The trial court provided its basis for a "fair" four-year limitation. The trial court noted both concern for the payment of public funds, and concern for the hardships faced by the officers in repaying these sums; in some cases nine years after their mistaken receipt. The trial court found, "[N]ine years is a long time to sit on your rights," and that it might not be "fair to them to go back the entire nine years in just a purely fairness point of view." The court found that in order to balance the equities between the PBA and the Township, the four-year limitation on recovery should be imposed.
Although it is not desirable to limit the recovery of the Township, the trial court made a conscious effort to explore the private and governmental interests at issue, and to resolve the issue as best it could within the limitations imposed by relevant law. In consideration of that effort and the discretion afforded to the court, we will not disturb its findings.
The final issue on appeal is the calculation of overpayment. The trial court determined that a "work week" contained nine hours per day, five days per week. This calculation resulted in 810 hours of pay due, totaling eighteen weeks to be applied against a military pay schedule of a month which was calculated at 4.3 weeks.
Both parties urge that this was an erroneous calculation. The PBA contends that under its Collective Negotiations Agreement, a "work week" consists of four 11.25-hour work days. The Township claims a "work week" is a standard eight-hour day, five days per week. It is unclear how the trial court arrived at its calculation since the reasons were not placed on the record. The lack of record requires a remand to the trial court to make findings of record. Upon remand, the trial court's calculations should contemplate the plain language of N.J.S.A. 38A:4-4(a) that the loss of pay "shall not exceed ninety work days." N.J.S.A. 38A:4-4(a) (emphasis added). We direct the trial court's attention to Section 3(1)(c) of the Collective Negotiations Agreement, a portion of which is in the record before us. This section seems to provide a conversion for hours into days. This provision may aid the trial court in its decision.
Affirmed in part, reversed and remanded in part. We do not retain jurisdiction. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION