Commonwealth of Kentucky Court of Appeals

Transcription

1 RENDERED: APRIL 13, 2018; 10:00 A.M. NOT TO BE PUBLISHED Commonwealth of Kentucky Court of Appeals NO CA MR KENTUCKY RETIREMENT SYSTEMS APPELLANT APPEAL FROM FRANKLIN CIRCUIT COURT v. HONORABLE THOMAS D. WINGATE, JUDGE ACTION NO. 14-CI THOMAS CRAWLEY APPELLEE OPINION REVERSING AND REMANDING ** ** ** ** ** BEFORE: KRAMER, CHIEF JUDGE; JOHNSON AND NICKELL, JUDGES. NICKELL, JUDGE: Kentucky Retirement Systems ( Systems ) appeals from a Franklin Circuit Court order reversing a decision of the Disabilities Appeals Committee ( Committee ) denying Thomas Crawley s application for enhanced disability retirement benefits pursuant to KRS For reasons set forth 1 Kentucky Revised Statutes.

2 below, we reverse the trial court and remand with instructions to affirm the Committee s final order. Crawley was an employee of the Commonwealth of Kentucky accruing 305 months of membership credit in the Kentucky Employees Retirement System ( KERS ). Crawley s career culminated with appointment as Division Director of the Kentucky International Convention Center in Louisville, Kentucky. Crawley s last day of paid employment was March 31, Crawley applied for early retirement benefits and enhanced disability retirement benefits under KRS due to his back pain and/or heart condition. Crawley was granted early retirement benefits; however, the Systems Medical Review Board denied his application for enhanced disability retirement benefits twice. Crawley s back pain began in March He underwent back surgery, which was unsuccessful in alleviating his pain. In 2007, Crawley was involved in a car accident which exacerbated his condition. Crawley received epidural steroid injections, cord stimulators, facet injections, and radio frequency ablations in attempts to treat his ongoing back pain. In 2008, Crawley had a heart attack requiring insertion of a stent. In 2009, Crawley was diagnosed with severe coronary artery disease. He was last treated for his heart condition before retiring in 2009 and was released as stable and with an ejection fraction within the normal range. Crawley did not treat for his -2-

3 heart condition after retiring until September 15, 2011, for symptoms presenting just a few days prior. Crawley requested and received an administrative hearing to appeal the second denial of enhanced disability retirement benefits. The Hearing Officer found neither Crawley s heart nor his back condition were disabling as of Crawley s last day of paid employment. However, the Hearing Officer recommended his application be approved based on the cumulative effect of the two conditions with virtually no analysis, explanation, or supporting objective medical evidence. Crawley filed no exceptions to the Hearing Officer s Report and Recommended Order. The Systems, however, did file exceptions. 2 The Committee issued a final administrative decision rejecting the Hearing Officer s Report and Recommended Order in accordance with KRS 13B. The Committee denied Crawley s application for disability retirement benefits finding Crawley failed to establish by objective medical evidence he was permanently, physically impaired from his job by the cumulative effect of his two conditions as of his last day of paid employment. Crawley appealed the Committee s decision to the Franklin Circuit Court. The trial court reversed the Committee s decision finding it acted arbitrarily 2 The Systems argue Crawley has no right to judicial review because he failed to file exceptions to the Hearing Officer s recommended order. We agree with the trial court s finding such failure does not preclude review because Crawley appeals issues in the final order differing from the Hearing Officer s recommended order. [W]hen a party fails to file exceptions, the issues the party can raise on judicial review under KRS 13B.140 are limited to those findings and conclusions contained in the agency head s final order that differ from those contained in the hearing officer s recommended order. Rapier v. Philpot, 130 S.W.3d 560, 564 (Ky. 2004). -3-

4 and incorrectly interpreted the cumulative effects law. The trial court further found Crawley s case was so compelling no reasonable person could disagree with his entitlement to disability retirement benefits based on the cumulative disabling effect of his conditions. The Systems now appeals, arguing the trial court s decision to reverse the Committee was the product of legal misinterpretation and impermissible re-weighing of the evidence. We agree. KRS 13B governs administrative hearings before state agencies such as KERS. KRS 13B.110 authorizes a Hearing Officer to draft a Recommended Order containing findings of fact, conclusions of law and a recommended disposition. According to KRS 13B.120(2), the head of an agency (the Committee) is the ultimate fact-finder. The Committee is not bound to accept its Hearing Officer s Recommended Order or otherwise accord it any form of deference; it is merely required to include in its final order its own separate findings of fact and conclusions of law to the extent its decision differs. KRS 13B.120(3). The Committee having done so here, nothing more was required. In administrative proceedings, the claimant bears the burden of proving entitlement to a benefit by a preponderance of the evidence, and likewise carries the risk of non-persuasion. KRS 13B.090(7); Kentucky Retirement Systems v. West, 413 S.W.3d 578, 581 (Ky. 2013). Where the fact-finder denies relief to the party with the burden of proof or persuasion, the issue on appeal is not whether the fact-finder s denial is supported by substantial evidence; rather, the issue on appeal is whether the evidence in that party s favor is so compelling that no -4-

5 reasonable person could have failed to be persuaded by it. McManus v. Kentucky Ret. Sys., 124 S.W.3d 454, 458 (Ky. App. 2003). The Hearing Officer specifically found in his Report and Recommended Order that Crawley was not disabled from either the condition of his back or heart alone as of his last day of paid employment with the state. The Committee made similar findings. Regarding Crawley s back condition, the Committee found physical assessments performed on Crawley in April 2011 showed he was able to perform all his necessary job duties. Crawley exhibited no additional limitations due to his back condition until more than twelve months after his last day of paid employment. Concerning Crawley s heart condition, the Committee found no records or statements from any treatment providers indicating Crawley could not perform his job as of the last day of paid employment. The Committee also found a gap in records from March 2009, when Crawley was reported as stable, through September 2011 almost six months after his last day of paid employment when Crawley complained of chest pain and shortness of breath. The Committee held the objective medical evidence did not support a finding Crawley was permanently disabled from the cumulative effects of his two conditions. The Committee correctly observed, even under a cumulative effects analysis, the claimant still bears the burden of proving his conditions were -5-

6 incapacitating as of the last day of paid employment and for a continuous period of at least twelve months thereafter. The purpose of disability retirement benefits is to provide an eligible employee with enhanced benefits based on a physical or mental incapacity which permanently disables the employee from performing his or her job duties, even with reasonable accommodation. By definition, an incapacity which becomes totally disabling after the employee s last day of paid employment cannot be the reason for the incapacity. Rains v. Kentucky Ret. Sys., No CA MR, 2011 WL , at *2 (Ky. App. July 8, 2011). 3 The trial court erroneously characterized the System s rationale for denying Crawley s cumulative disability as being on the grounds neither of the individual disabilities alone prevented Crawley from doing his job on his last date of employment and thereafter. The Hearing Officer and the Committee specifically found the functional capacity evaluations performed near the time of Crawley s last day of paid employment showed he was not prevented from doing his job by his back condition. Crawley s heart condition was stable on his last day of paid employment; thus, he had no evidence of active cardiac symptoms to add to the cumulative effect analysis. The Committee held, given these facts, Crawley failed to establish either his back, heart, or the cumulative effects of both conditions combined were incapacitating as of Crawley s last day of paid employment. We agree. 3 We find Rains to be persuasive authority in this case and proper to cite as it fulfills the criteria of Civil Rule (CR) 76.28(4). -6-

7 The Committee has sole authority to determine weight, credibility, substance, and inferences to be drawn from the evidence. Paramount Foods, Inc. v. Burkhardt, 695 S.W.2d 418, 419 (Ky. 1985). If there is substantial evidence in the record supporting the agency s decision, the reviewing court must defer to the agency, even if there is conflicting evidence. Kentucky Commission on Human Rights v. Fraser, 625 S.W.2d 852, 856 (Ky. 1981). The test of substantiality of evidence is whether... it has sufficient probative value to induce conviction in the minds of reasonable men. Kentucky State Racing Commission v. Fuller, 481 S.W.2d 298, 308 (Ky. 1972). Here, the trial court has attempted to usurp the Committee s factfinding role. Under the guise of determining the evidence of record compelled a different result, the trial court reinterpreted the evidence in a manner to support its own conclusion. This is impermissible. The evidence of record supports the finding Crawley s back condition did not prohibit him from doing his job as of the last day of paid employment. The evidence of record supports the finding that Crawley s heart condition was asymptomatic on the last day of paid employment and did not independently or cumulatively disable him from doing his job. This substantial evidence supporting the agency s finding naturally precludes the trial court s conclusion that Crawley presented such overwhelming evidence no person could fail to be persuaded by it. McManus, 124 S.W.3d at

8 The Committee specifically stated in its findings of fact that [Crawley] has some limitations and pain from his lumbar spine condition; however, it ultimately found as we do the critical issue was whether Crawley was permanently disabled as of his last day of paid employment and at least twelve months thereafter. The Committee determined objective medical evidence submitted by Crawley failed to demonstrate disability as of his last day of paid employment. The determination was supported by substantial evidence and should not have been disturbed. KRS 13B.120(2) and 18A.095(18) make the Committee the final administrative arbiter. Thus, the Committee was free to alter the recommended order as it saw fit. Moreover, the Committee s final order was based on substantial evidence contained within the record. Accordingly, the Committee s final order was neither arbitrary nor capricious. Am. Beauty Homes Corp. v. Louisville & Jefferson Cty. Planning & Zoning Comm n, 379 S.W.2d 450 (Ky. 1964). For the foregoing reasons, the Order of the Franklin Circuit Court is reversed and remanded with instruction to affirm the System s final order. ALL CONCUR. BRIEFS FOR APPELLANT: Katherine Rupinen Frankfort, Kentucky BRIEF FOR APPELLEE: Micah C. Daniels Louisville, Kentucky -8-