Opinion
No. 106,395.
2012-06-1
William A. SHELDON, Appellant, v. KANSAS PUBLIC EMPLOYEES RETIREMENT SYSTEM, Appellee.
Appeal from Shawnee District Court; Charles E. Andrews, Jr., Judge. James S. Oswalt, of Hutchinson, for appellant. J. Phillip Gragson, of Henson, Clark, Hutton, Mudrick & Gragson, LLP, of Topeka, for appellee.
Appeal from Shawnee District Court; Charles E. Andrews, Jr., Judge.
James S. Oswalt, of Hutchinson, for appellant. J. Phillip Gragson, of Henson, Clark, Hutton, Mudrick & Gragson, LLP, of Topeka, for appellee.
Before GREENE, C.J., LEBEN and STANDRIDGE, JJ.
MEMORANDUM OPINION
LEBEN, J.
A school teacher, William Sheldon, applied for disability benefits from the Kansas Public Employees Retirement System (KPERS) 2 years after he was laid off from his teaching job due to his school district's declining enrollment. KPERS denied the claim, concluding that he wasn't totally disabled when he left the school district's employment, and Sheldon has appealed.
But we must uphold KPERS' determination if it is supported by substantial evidence, and that's the case here. Although Sheldon has provided medical testimony to support his claim, there is also substantial evidence supporting the KPERS decision: Sheldon continued to work as a teacher for 2 summers after he left his original school district's employment; and he continued to consider himself able to work and looked for teaching jobs for the next 2 years. We therefore affirm the district court's judgment, which separately considered and denied Sheldon's appeal of the KPERS decision.
Factual and Procedural Background
William Sheldon worked as a coach and teacher for Unified School District No. 502 in Lewis from 1988 to 2002. Sheldon began having back problems and had back surgeries in 1999 and 2000, but the surgeries didn't resolve his back pain. Still, Sheldon continued to teach.
The school district laid Sheldon off in 2002, citing declining enrollment and the need for budget cuts. The district eliminated Sheldon's position but retained another teacher with only 3 years of experience. Sheldon's last day teaching with the district was May 24, 2002, and his last day on the payroll was August 31, 2002.
When the district laid Sheldon off, its superintendent, Virgil Ritchie, encouraged Sheldon to apply for disability benefits from KPERS, but he didn't apply. Sheldon did apply for Social Security disability; he was approved with a designated “onset date” for his disability of August 2002.
After finishing the spring semester in the Lewis school district, Sheldon taught driver's education in the Larned schools during the summers of 2002 and 2003. Each summer, that job required Sheldon to work 6–hour days over a period of 15 days per session for two sessions. Beyond that, Sheldon didn't teach again—he applied for nearly 100 different teaching jobs but never received a job offer.
Sheldon continued to perform various activities like hunting, mowing lawns, working around the house, helping his wife run a day-care business, and helping to raise foster children. Sheldon said that his physical limitations hindered him from doing much activity for an extended time period but that he tried to do what he could. Sheldon said that, in his own mind, he didn't consider himself disabled.
But Sheldon eventually sought KPERS disability benefits based on a claim that he was disabled as of May 2002. Sheldon first called KPERS to ask about disability benefits around November 2003. In July 2004, Dr. Kris Lewonowski, an orthopedic surgeon who had performed Sheldon's back surgeries, diagnosed Sheldon with chronic failed-back syndrome. Sheldon formally applied for KPERS disability benefits in October 2004. In support, Dr. Pedro Murati, who specializes in independent medical evaluations, examined Sheldon and determined that Sheldon had permanent job restrictions. And in December 2004, Dr. Lewonowski and Dr. Larry Ensz, a family practitioner, filled out KPERS disability claim forms indicating that Sheldon was totally disabled. But Sheldon's claim was denied.
Sheldon appealed and offered Dr. Murati's opinion that Sheldon was completely disabled as of May 24, 2002, his last day of employment for the Lewis school district. In addition, Dr. Lewonowski provided his opinion that even before May 24, 2002, Sheldon was permanently disabled and not able to perform his work duties. And later, Jerry Hardin, a human-resources consultant, said that Sheldon had become realistically unemployable as of May 24, 2002; Hardin said that Sheldon was unable to perform substantial gainful employment as of that date.
Sheldon's claim was initially denied on the basis that it wasn't filed soon enough after the claimed disability. But our court sent the matter back to KPERS for further proceedings, finding that KPERS must show prejudice to avoid coverage for a late-filed disability claim. Sheldon v. KPERS, 40 Kan.App.2d 75, 90–92, 189 P.3d 554 (2008).
KPERS then denied Sheldon's claim on its merits. A hearing officer focused on the definition of “total disability” in the KPERS disability-insurance contract:
“ ‘[T]otal disability’ means disability which commences while this Plan is in force as to the Member whose disability is the basis of claim and is caused by sickness or injury which prevents the Member from performing each and every duty of any and all occupations for which he is reasonably qualified by education, training or experience and in any case disability that requires the regular and continuous care of a physician unless such care would serve no helpful purpose.” (Emphasis added.)
The hearing officer found that Sheldon wasn't totally disabled because (1) he didn't leave his job for health reasons; (2) he didn't apply for disability until 2 years after he left; (3) no doctor determined that Sheldon was disabled until after he had left his job; (4) the 2005 doctor's opinion that Sheldon was totally disabled as of May 24, 2002, was “transparently flawed” because it wasn't given until 3 years later; and (5) Sheldon continued to conduct certain activities around the house that were “not the actions of a disabled person.”
The hearing officer also denied the claim based on a provision in the contract requiring at least 180 days of continuous total disability:
“If a Member, while covered for benefits under this Plan, becomes totally disabled, the Plan will pay, commencing after the later of 180 days of continuous total disability or the first day upon which the Member ceases to draw compensation from the employer, the Monthly Disability Income Benefit.... In no event will any Benefit be paid for (1) the first 180 days of continuous total disability, (2) or while the Member continues to draw compensation from the employer or (3) any period beyond the date the Member withdraws his contributions to [KPERS].”
The hearing officer concluded that under this provision, a 180–day waiting period began on May 25, 2002, the day after Sheldon's last day at work. Because Sheldon had further employment during that 180–day period, the hearing officer determined that the 180–day waiting period had not been satisfied and Sheldon couldn't receive disability benefits from the Lewis school district.
The KPERS Board affirmed the hearing officer's denial of Sheldon's claim. Sheldon appealed to the district court, which affirmed the denial of disability benefits, concluding that substantial evidence supported the KPERS finding that Sheldon wasn't totally disabled. The district court did not address the issue of the 180–day waiting period since it had already determined that Sheldon's disability claim had been properly denied based on the evidence related to his physical condition.
Sheldon has now appealed to this court.
Analysis
We review the actions of an administrative body like KPERS under the Kansas Judicial Review Act, K.S.A.2011 Supp. 77–601 et seq. See Sheldon, 40 Kan.App.2d at 79. The party challenging the administrative agency's ruling bears the burden to show the agency's action was wrong, but courts may grant relief if the agency has made an error in interpreting or applying the law. K.S.A.2011 Supp. 77–621(a)(1), (c)(4). We review the matter independently, without any required deference to the district court's conclusion. Kansas Dept. of Revenue v. Powell, 290 Kan. 564, 567, 232 P.3d 856 (2010).
Whether Sheldon is disabled involves interpretation of the KPERS disability-insurance contract, which presents an issue of law for our determination. Connor v. Occidental Fire & Cas. Co., 281 Kan. 875, 881, 135 P.3d 1230 (2006). In addition, where the terms of a contract are governed by statute, as is the case with KPERS, courts interpret the contract to carry out legislative intent. Sheldon, 40 Kan.App.2d at 82. We interpret insurance policies liberally in favor of the insured, but unless the contract is ambiguous we simply enforce it according to its contact terms and their plain and ordinary meanings. 40 Kan.App.2d at 82.
In this appeal, we first must define what constitutes a total disability under the KPERS disability-insurance contract in effect when Sheldon quit work in 2002. We then must determine whether there is substantial evidence—using that definition—to support KPERS' conclusion that Sheldon wasn't totally disabled. Definition of “Total Disability”
The disability-insurance contract provides that a total disability requires that the employee be unable to perform “each and every duty of any and all occupations for which he is reasonably qualified.” Sheldon has made no argument in this appeal that this contractual definition has been modified or superseded by statute, so this provision is the starting point for our review.
Sheldon interprets this provision as requiring that he be considered totally disabled if he is unable to perform any of the duties of a teacher—or, as Sheldon's appellate brief argues, “he would be disabled if he was not capable of performing all of the duties of any of the jobs held or [for which he] was reasonably qualified to perform.” Sheldon's argument goes against both common sense and the contractual definition's language.
From a common-sense standpoint, we wouldn't refer to someone as “totally disabled” if he or she was unable to do one duty of one job that person was capable of doing but was still capable of doing every duty of another job that person was qualified for. Such a person could well find employment and work full-time, every day. No one would suggest such a person was totally disabled.
Nor does Sheldon's understanding comport with the contractual definition's language. The contract defines a total disability as one that “prevents the Member from performing each and every duty of any and all occupations for which he is reasonably qualified,” not as one that “prevents the member from performing any duty of any and all occupations for which he is qualified.” (Emphasis added.)
Under the plan definition, then, Sheldon would not be totally disabled unless he is prevented from performing every duty of every job for which he is reasonably qualified. Nothing in that definition seems ambiguous. If there were some ambiguity that could be construed in Sheldon's favor, though, at most we would read the provision to apply only to the material duties of the jobs Sheldon is capable of doing.
Our analysis takes a bit of a turn, though, because of an argument KPERS made on appeal. Even though Sheldon argued that the contractual definition applied to him and made no argument that it was contradicted or superseded by statute, KPERS has argued on appeal that Sheldon's claim should have been governed by the 2002 definition of “total disability” contained in K.S.A. 74–4902(32): “ ‘[T]otal disability’ means a physical or mental disability which prevents the member from engaging, for remuneration or profit, in any occupation for which the member is reasonably suited by education, training or experience.” That definition is more favorable to Sheldon that the contractual one. Under this statutory definition, argued by KPERS, Sheldon would be totally disabled if he is unable to continue working as a teacher (or, arguably, in any other job for which he is suited).
For the purposes of deciding Sheldon's appeal, we have concluded that we need not sort out which of these competing total-disability definitions should be applied. Whether we apply the contractual provision literally, apply it with an amendment to consider only material job duties, or apply the statutory definition urged on appeal by KPERS, substantial evidence supports the agency's determination that Sheldon wasn't totally disabled. Whether Substantial Evidence Supports KPERS' Decision
Both parties agree that because KPERS' final decision in Sheldon's case came in 2010, we apply the KJRA's substantial-evidence test as it was revised in 2009. See K.S.A.2011 Supp. 77–621(d); Redd v. Kansas Truck Center, 291 Kan. 176, 183, 239 P.3d 66 (2010). Under that test, we must carefully review all the evidence, including evidence contrary to the KPERS decision, to determine whether substantial evidence supports that decision. To be substantial, the evidence in support of the decision must be such that a reasonable person could accept it as being sufficient to support the conclusion reached. See In re Protests of Oakhill Land Co., 46 Kan.App.2d 1105, 1113–14, 269 P.3d 876 (2012).
Our review is hampered a bit because neither the hearing officer nor KPERS provided any explicit analysis of what job duties were a necessary part of Sheldon's teaching position. We would have thought such an analysis would be the starting point for applying the contractual total-disability provision, which specifically references the job duties of any job for which the employee is qualified. The hearing officer appears to have accepted the testimony of a KPERS witness, Renae Forque, who said that KPERS didn't need to determine what Sheldon's specific job duties were to decide that he wasn't disabled since he had continued to work as a driver's-education instructor in the summers of 2002 and 2003.
Even without a full analysis of what tasks a teacher must be able to perform, we conclude that a reasonable person could conclude from the evidence that Sheldon wasn't totally disabled by August 31, 2002, the last date on which he was covered by the KPERS disability-insurance provision. We recognize that this was a contested factual question, and one on which there was strong evidence in support of Sheldon's claim. Still, the following facts support KPERS's decision, and we find that they are sufficient to support its conclusion even though there is strong contrary evidence:
• Sheldon testified that he didn't consider himself disabled in 2002 and that he would have continued to do his job at the Lewis school district until he retired had he not been laid off that year.
• Sheldon worked as a teacher for 6 weeks during the summers of both 2002 and 2003.
• Sheldon continued to perform routine household chores, including mowing the lawn, vacuuming, and doing yard work. He also painted the kitchen and bathroom of his home (in late 2004), went hunting, and cared for six dogs.
• Sheldon helped his wife both in caring for foster children and in providing day care as part of an in-home day-care business.
• No doctor told Sheldon in 2002 that he needed to stop working.
• Sheldon continued trying to find a teaching job well beyond August 31, 2002, and he didn't apply for KPERS disability benefits until 2004, after his efforts to secure another teaching job had failed.
As we have already said, there is strong evidence in support of Sheldon's position as well, including more than one physician's opinion. But the hearing officer and KPERS could discount their opinions somewhat based upon the timing of when they were given. For example, although Dr. Lewonowski said that Sheldon was totally disabled as of May 2002, Dr. Lewonowski had released Sheldon from his care in 2001, after recovery from the second back surgery, and Sheldon had resumed his job duties. The hearing officer found that the medical opinions were rendered well after the end of Sheldon's coverage under KPERS' disability insurance and that the opinions were contradicted by Sheldon's actions in 2002, 2003, and 2004.
This is a case in which the fact-finder could have gone either way, based on the evidence. But the hearing officer and the KPERS Board concluded that Sheldon wasn't totally disabled while he was covered by this disability-insurance policy, and there is sufficient evidence supporting that conclusion that a reasonable person could come to that conclusion. We do not reweigh the evidence or make our own credibility determinations. See K.S.A.2011 Supp. 77–621(d); Herrera–Gallegos v. H & H Delivery Service, Inc., 42 Kan.App.2d 360, 363, 212 P.3d 239 (2009). Under any definition of total disability that could potentially apply, Sheldon wasn't totally disabled: he continued to work as a teacher during the summers of 2002 and 2003, and he continued to consider himself able to work as a teacher while he sought additional teaching jobs until sometime in 2004.
Like the district court, we need not address whether Sheldon was subject to a 180–day waiting period before he could claim disability benefits; we have already determined that the Board's finding that Sheldon wasn't totally disabled under the contract must be upheld. Thus, whether or not there was a waiting period, he didn't qualify for KPERS disability benefits.
The judgment of the district court affirming the decision of the KPERS Board is therefore affirmed.