Monday, October 19, 2015

State fails in its bid to make retiree repay $89K in pension benefits.

Today was a end of a nightmare for William Zagorski, a 75-year old who retired in 2006 after having worked as a faculty member at both Rutgers and Union County Community College from 1972 through 1999.  In 1996, he took on an additional job at Mercer County Community College (MCCC) as an overnight classical radio announcer.  His job at MCCC was a post-retirement job that he held until 2012. New Jersey statutes allow a retired pensioner to work in another pensioned position without penalty as long as he earns less than $15,000 per year.

Zagorski's nightmare began when the Public Employees Retirement System (PERS), the state system that was paying Zagorski's pension, discovered that MCCC had failed to properly enroll Zagorski in the PERS pension system.  This discovery caused Michael A. Czyzyk, a PERS supervisor, to write Zagorski in February 2012 and demand that he reimburse PERS $89,113.68 in pension benefits and other payments that Czyzyk claimed were improperly received.

Even though Czyzyk realized "that MCCC was solely responsible for enrolling Zagorski into PERS, but failed to do so," he believed that the pension statutes imposed "'per se liability,' regardless of anyone's intentions or mistakes."

Zagorski appealed PERS' ruling and the Office of Administrative Law (OAL) judge determined that "it is simply unconscionable to lay the entire liability at the feet of [Zagorski] for the failure of the 'system' to detect, for sixteen years, that he was in a PERS-eligible position but was not enrolled."  He added that "equity and fairness in this matter dictate that [Zagorski] cannot be liable for repayment of substantial retirement benefits that were erroneously paid through no fault of [Zagorski's]." PERS, however, rejected the judge's holding and decided to hold Zagorski liable for the full amount.

The Appellate Division of the Superior Court, however, held in an October 19, 2015 opinion that the PERS' "demand for full reimbursement to be unreasonable and excessive."  The court did, however, permit PERS to make adjustments for years where MCCC paid Zagorski in excess of $15,000.

Saturday, October 3, 2015

Middlesex County Land Use Attorney reprimanded by state disciplinary authorities.

On September 28, 2015, the New Jersey Supreme Court reprimanded a Millstone Township attorney who represents land use boards in four Middlesex County municipalities and who regularly contributes to the campaigns of Democratic Party candidates.

According to his Financial Disclosure Statement, Lawrence B. Sachs serves as both Zoning Board and Planning Board attorney for the Sayreville Borough, the Zoning Board attorney for North Brunswick and Old Bridge Townships and the Planning Board attorney for East Brunswick Township.  According to Election Law Enforcement Commission reports, Sachs is a regular contributor to the Democratic Party or its candidates.  This is not unusual for professionals who are appointees to public office.

In its Order, the Supreme Court adopted the July 28, 2015 decision of its Disciplinary Review Board which found that Sachs grossly neglected his clients' real estate matter and failed to communicate with them or return their phone calls.  The Board also noted that Sachs had been previously reprimanded in 2009 for various recordkeeping rules including commingling funds in his trust account with other funds and failing to promptly deliver funds to which his clients were entitled.

The most recent matter arose out a the sale of a South River property owned by two sisters.  Since judgments constituted liens against the property, the title insurance company, Premier Title and Abstract, required that $9,350--the amount of the judgments with interest--be held in escrow before title could pass.  Sachs reportedly told the sisters that he would negotiate with the judgment creditors to get them to accept lesser amounts.

According to the Board's decision, the two judgments were settled for a total of $7,309.02 and the $2,040.98 balance was retained by Premier "as payment for resolving the . . . two judgments."  The decision states that Sachs did not advise his clients during the period of negotiation.  After the judgments were paid, Sachs claimed that he sent one of the sisters a letter to that effect but, in a June 27, 2013 letter to the Office of Attorney Ethics, the sister claimed to have not received it.  In that letter, the sister said that Sachs had told her that "he could probably settle [the judgments] for a couple thousand dollars and forward the remainder of the balance to [her] within three months."  According to the sister's January 25, 2013 letter to Sachs, she had "called [him] repeatedly over the last five years" but that he would "always reply that [he] will look into it and [she] never hears from [him] again."

According to the Board's decision:
After the judgments were paid, [Sachs] did not follow up with Premier or his clients, about the outstanding balance, until the grievance in this matter was filed. He did not inform [his clients] that Premier had retained, as its fee, the difference between the escrowed amount and the monies paid to satisfy the judgments.