Opinion
No. 2006-CA-002037-MR.
February 1, 2008.
Appeal from Franklin Circuit Court, Honorable Thomas D. Wingate, Judge, Action No. 03-Ci-00988.
James P. Benassi, Henderson, Kentucky, Brief for Appellant.
Brown Sharp II, Frankfort, Kentucky, Brief for Appellee.
OPINION
Patti Jean Claxon ("Claxon") appeals the August 15, 2006, Order of the Franklin Circuit Court. That order denied her motion to alter, amend or vacate the Franklin Circuit Court's July 18, 2006, Opinion and Order affirming the decision of the Kentucky Retirement System to deny Claxon disability retirement benefits. We reverse and remand.
Claxon was employed as a cook/baker with the Greenup County School System. She became a member of the County Employees Retirement System on March 1, 1988. Her last day of claimed employment was August 18, 2000. She had accumulated 116 months of service credit. On May 11, 2001, Claxon applied for disability retirement benefits, citing pain in her hands, wrist, arms and elbows due to carpal tunnel syndrome; severe neck and back pain due to bulged disks and spurs; and pain in her knees due to osteoarthritis.
Claxon's application was denied on initial consideration and reconsideration by the Medical Review Board physicians of Kentucky Retirement Systems. A hearing was requested and was held on November 5, 2002. During her testimony, Claxon indicated that she suffered from carpal tunnel, a bulging disc in her back, fibromyalgia, osteoarthritis of the knees, migraine headaches and rheumatoid arthritis.
On May 19, 2003, the Hearing Officer ("HO"), Paul Fauri, submitted his Report and Recommended Order. In this report, the HO recommended that Claxon's application for disability retirement benefits should be denied. In support of his recommendation, the HO concluded that Claxon had failed to establish by objective medical evidence the existence of a mental or physical impairment which would prevent her from performing her former job or a similar job from which she received her last paid employment.
On July 10, 2003, Disability Appeals Committee Chairman, Susan Horne, submitted a Final Order adopting the recommendations of the HO as the final order of the Kentucky Retirement Systems. This final order denied Claxon's claim for benefits. On August 11, 2003, Claxon filed a Complaint and Petition for Judicial Review with the Franklin Circuit Court. After Kentucky Retirement Systems filed an answer, each party was ordered to file a brief with the circuit court. On July 18, 2006, the circuit court entered an Opinion and Order denying Claxon's petition for review and affirming the decision of the Kentucky Retirement Systems. This appeal followed.
Claxon makes the the following arguments on appeal: 1) the administrator did not consider the entire record or give any reason for rejecting treating physicians Dr. Bansal and Dr. Kleykamp; 2) the statements of one time examining worker's compensation defense evaluation physicians Dr. Burgess and Dr. Shraberg are not admissible; 3) and Dr. Burgess and Dr. Shraeberg claim the claimant's injuries are not work related but do not establish she is not suffering any pain.
The issue of disability retirement is governed by KRS 61.600. The burden of proof in administrative hearings is set forth in KRS 13B.090(7). It has been held, by a panel of this court, that KRS 61.600 and KRS 13B.090 should be read in conjunction with one another. McManus v. Kentucky Retirement Systems, 124 S.W.3d 454, 457-458 (Ky.App. 2003). Therefore, Claxon had the burden of proof during her disability hearing.
Where the fact-finder's decision is to deny relief to the party with the burden of proof or persuasion, the issue on appeal is whether the evidence in that party's favor is so compelling that no reasonable person could have failed to be persuaded by it.
Id. at 458. "In its role as the finder of fact, an administrative agency is afforded great latitude in its evaluation of the evidence heard and the credibility of witnesses, including its findings and conclusions of fact." Id. (internal citations omitted). "A reviewing court is not free to substitute its judgment for that of an agency on a factual issue unless the agency's decision is arbitrary and capricious." Id. at 458-59.
When determining whether an agency's action was arbitrary, we must determine: 1) whether the agency acted within the constraints of its statutory powers; 2) whether any party to be affected by the action was afforded his or her procedural due process; and 3) whether the agency's action is supported by substantial evidence. Failure to comply with any of these three tests can result in the reviewing court's finding that the agency's action was arbitrary. Bowling v. Natural Res. and Envtl. Prot. Cabinet, 891 S.W.2d 406, 409 (Ky.App.1994). "`[S]ubstantial evidence' means evidence of substance and relevant consequence having the fitness to induce conviction in the minds of reasonable men." Owens-Corning Fiberglas Corp. v. Golightly, 976 S.W.2d 409, 414 (Ky. 1998).
KRS 13B. 150(2) provides additional circumstances in which a final order of an administrative agency may be reversed. It states:
The court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the final order or it may reverse the final order, in whole or in part, and remand the case for further proceedings if it finds the agency's final order is:
(a) In violation of constitutional or statutory provisions;
(b) In excess of the statutory authority of the agency;
(c) Without support of substantial evidence on the whole record;
(d) Arbitrary, capricious, or characterized by abuse of discretion;
(e) Based on an ex parte communication which substantially prejudiced the rights of any party and likely affected the outcome of the hearing;
(f) Prejudiced by a failure of the person conducting a proceeding to be disqualified pursuant to KRS 13B.040(2); or
(g) Deficient as otherwise provided by law.
Conclusions of law are reviewed de novo. Aubrey v. Office of Attorney Gen., 994 S.W.2d 516, 519 (Ky.App.1998).
Claxon argues that the written statements of Dr. Burgess and Dr. Shraberg are inadmissible. "Any part of the evidence may be received in written form if doing so will expedite the hearing without substantial prejudice to the interests of any party." KRS 13B.090(2). We do not see that these two statements were substantially prejudicial to Claxon by being submitted in written form.
Claxon also argues that the statements are inadmissible because they were submitted after the hearing.
Any party shall have the right to inspect, at least five (5) days prior to the hearing, a list of all witnesses every other party expects to call at the hearing, and the available documentary or tangible evidence relating to an administrative hearing either in person or by counsel.
KRS 13B.090(3). It is unclear from the record, when exactly the statements of Dr. Burgess and Dr. Shraberg were submitted and whether or not Claxon was given adequate time to inspect these documents or respond to them. The circuit court states in its July 18, 2006, Opinion and Order that "although there may be some merit to that claim, and the Court takes no position on that issue, the Court finds that to be harmless error." We do not agree. It is the role of the circuit court to make a finding as to whether or not these statements were properly admitted and whether or not Claxon was given her statutory right to inspect and respond to them. This is especially important in the case at hand, when the HO's decision was so greatly influenced by the questionable evidence.
Claxon's next argument is that the administrator did not consider the entire record or give any reason for rejecting the opinions submitted by treating physicians Dr. Bansal and Dr. Kleykam.
The HO's Report and Recommended Order referenced numerous medical opinions that had been submitted in regards to Claxon's claim. They were in the form of medical forms, office notes, laboratory reports, medical evaluations and the like. Information and opinions regarding Claxon's health came from Doctors Kleykamp, Feinburg, Kassan, Bansal, Powell, Shraberg, Burgess and Goodwin.
In the HO's final report, he listed extensively the evidence as stated by each doctor. However, in his findings of fact, he failed to state why he chose the opinions of some doctors and not others. There is no case on point in Kentucky. However, the opinion of a treating physician, if based on sufficient medical data, has been given greater weight than that of a government physician in disability cases. Houston v. Secretary of Health Human Servs., 736 F.2d 365, 367 (6th Cir. 1984). We see no reason why the same practice should not be followed in retirement disability cases, particularly when the government physicians were non-treating physicians. In the present case, Claxon was not treated by the government physicians, but was examined by them. Additionally, the HO failed to indicate in his findings why he chose to side with the government physicians and not Claxon's treating physicians. This, taken in conjunction with the possibility that the statements of the government's physicians were improperly admitted, is sufficient for us to reverse and remand.
However, we note that a panel of this court states, in Bowens v. Kentucky Retirement Systems, 2007 WL 1302634 (Motion for Discretionary Review pending), that the opinions of treating physicians are to be given greater weight than the opinions of non-examining physicians.
Claxon's final argument, that Dr. Burgess and Dr. Shraberg fail to establish she is not suffering any pain after claiming her injuries are not work related, is irrelevant and has no legal basis. Incapacity sufficient to warrant disability retirement benefits is to be based on objective medical evidence. KRS 61.600(3).
"Objective medical evidence" means reports of examinations or treatments; medical signs which are anatomical, physiological, or psychological abnormalities that can be observed; psychiatric signs which are medically demonstrable phenomena indicating specific abnormalities of behavior, affect, thought, memory, orientation, or contact with reality; or laboratory findings which are anatomical, physiological, or psychological phenomena that can be shown by medically acceptable laboratory diagnostic techniques, including but not limited to chemical tests, electrocardiograms, electroencephalograms, X-rays, and psychological tests[.]
KRS 61.510(33). Pain is subjective. Therefore, any failure of Dr. Burgess or Dr. Shraberg to comment on Claxon's pain is harmless to her claim.
For the foregoing reasons, we reverse and remand the July 18, 2006, and August 15, 2006, judgments of the Franklin Circuit Court.
ALL CONCUR.