Opinion
NO. 2016-CA-000550-MR
02-17-2017
KENTUCKY RETIREMENT SYSTEMS APPELLANT v. VERONICA BRADLEY APPELLEE
BRIEFS FOR APPELLANT: Katherine Rupinen Frankfort, Kentucky BRIEF FOR APPELLEE: Roy Gray Frankfort, Kentucky
NOT TO BE PUBLISHED APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE THOMAS D. WINGATE, JUDGE
ACTION NO. 15-CI-00430 OPINION
REVERSING AND REMANDING
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BEFORE: COMBS, MAZE AND STUMBO, JUDGES. STUMBO, JUDGE: Kentucky Retirement Systems appeals from an Opinion and Order of the Franklin Circuit Court reversing a Final Order of the Kentucky Retirement Systems, remanding the matter and ordering the commencement of retirement benefits to Veronica Bradley, Petitioner and Appellee herein. Kentucky Retirement Systems ("Retirement Systems") argues that the Franklin Circuit Court misapplied the law governing judicial review of administrative decisions by improperly reweighing the evidence and making numerous erroneous factual findings. The Retirement Systems also contends that the court erred by re-establishing the treating physician rule and improperly prohibiting the fact finder from analyzing the medical evidence. For the reasons stated below, we REVERSE the Opinion and Order on appeal and REMAND.
Veronica Bradley became a member of the Kentucky Employees Retirement Systems ("KERS") in June, 1999, as part of her employment as Public Accountants Auditor V-IT by the Commonwealth of Kentucky, Auditor of Public Accounts. Bradley's job duties included the supervision of junior audit staff, audit testing, analyzing data and training others. Her last day of employment was December 31, 2010.
On May 23, 2010, Bradley filed a claim seeking standard disability retirement benefits. In support of the claim, she alleged that she suffered a disability resulting from chronic disseminated Lyme disease, fibromyalgia, fatigue and anxiety. Bradley's application was reviewed and denied on two occasions by the Medical Review Board. Thereafter, Bradley received an administrative hearing conducted by a Hearing Officer on July 20, 2012.
On October 23, 2012, the Hearing Officer rendered Findings of Fact, Conclusions of Law and Recommended Order approving the application as to Lyme disease, fatigue and major depressive disorder, and denying as to anxiety and fibromyalgia. The Retirement Systems appealed to the Disability Appeals Committee, which remanded the matter back to the Hearing Officer for additional findings as to the claim of Lyme disease. The Committee also ordered Bradley to undergo diagnostic testing for Lyme disease at the office of her treating physician.
Following the required blood testing and neuropsychological results, the Hearing Officer conducted a supplemental hearing. On December 14, 2014, he rendered an Amended Recommended Order which again recommended approval of disability as to Lyme disease, fatigue and major depressive disorder, and denying it as to fibromyalgia and anxiety. The Retirement Systems again filed exceptions, and the matter went before the Board of Trustees ("the Board") on January 27, 2015. On March 31, 2015, the Board issued a Final Order which reversed the Hearing Officer's Recommended Order and denied Bradley's application for disability retirement benefits. As a basis for the Final Order, the Board found that Bradley did not prove by objective medical evidence that she is permanently functionally incapacitated by chronic disseminated Lyme disease, fibromyalgia, generalized anxiety disorder or fatigue. Additionally, the Board opined that Bradley did not prove by objective medical evidence that her generalized anxiety disorder did not pre-exist her membership date.
Bradley appealed to the Franklin Circuit Court, which characterized the issue as whether the Board's Final Order - which concluded that Bradley failed to prove by objective medical evidence that she suffers from Lyme disease - was supported by substantial evidence. Bradley argued that the Board overstepped its bounds by improperly acting as fact-finder on a question which fell squarely within the province of medical experts. In support of her argument, she directed the court's attention to case law holding that a medical expert's conclusions may not be disregarded by a fact finder unless the conclusion is rebutted. The substance of Bradley's appeal was her claim that the Board improperly stepped into the shoes of Bradley's doctors and re-evaluated the medical evidence without the proper expertise to do so. In response, the Retirement Systems maintained that the court should defer to the agency's role as fact-finder.
After considering the matter, the court rendered an Opinion and Order reversing the Retirement Systems' Final Order, and directing the Retirement Systems to commence payment of retirement benefits to Bradley. The court determined that contrary to the Board's conclusion, Bradley did present evidence of a positive blood test for Lyme disease. It went on to conclude that while the Board correctly determined that Bradley's generalized anxiety disorder pre-dated her employment, and that Bradley had withdrawn her claim of fibromyalgia, the Board's conclusion that Bradley failed to meet her burden of proving permanent incapacity pursuant to Kentucky Revised Statute (KRS) 61.600 was not supported by substantial evidence. Ultimately, it found that,
The record, taken as a whole, clearly establishes Bradley's diagnosis of Lyme disease, and the recommendations, restrictions and prognoses provided by her doctors prove that she is permanently and functionally in capacitated [sic] from her job or a job like the one she last occupied on the basis of Lyme disease and fatigue. To conclude otherwise is arbitrary, as the record does not support that result.This appeal followed.
The Retirement Systems now argues that the Franklin Circuit Court erred in concluding that the Board's Final Order was not supported by substantial evidence. It contends that the circuit court improperly reweighed the evidence and prohibited the fact finder from analyzing that evidence. The Retirement Systems directs our attention to case law standing for the proposition that where an administrative agency's findings are supported by substantial evidence, those findings must be accepted by the reviewing court. It also notes that it is the exclusive province of the administrative trier of fact to pass upon the credibility of witnesses and the weight of the evidence.
The focus of the Retirement Systems' claim of error is its contention that the Franklin Circuit Court failed to apply the correct standard in reviewing the Board's Final Order. Citing McManus v. Kentucky Retirement Systems, 124 S.W.3d 454, 458 (Ky. App. 2003), the Retirement Systems argues that on appeal, Bradley had to prove by such overwhelming evidence that no person could fail to conclude that not only did she have Lyme disease, but that she was permanently functionally incapacitated from a sedentary job by the disease. In contrast, the Retirement Systems contends that the circuit court, while acknowledging the McManus standard, did not apply the standard. Rather, the Retirement Systems argues that the court merely concluded that Bradley produced objective medical evidence in support of her claim and was thus entitled to disability retirement benefits. The corpus of the Retirement Systems' argument is that producing objective medical evidence is not the same as producing such overwhelming evidence that no reasonable person could fail to be persuaded by it. Additionally, it argues that there were significant factual errors in the court's characterization of the objective medical evidence. In sum, the Retirement Systems argues that the Franklin Circuit Court improperly failed to apply the correct standard of review and erred in reversing the determination of the Retirement Systems.
The issue before us centers on the application of McManus, supra. In McManus, the petitioner, Bruce McManus, like Bradley herein, filed a notification of retirement with the Kentucky Retirement Systems seeking retirement disability benefits pursuant to KRS 61.600. McManus suffered from a litany of serious, debilitating medical conditions, including hypertension, end stage coronary artery disease, renal disease and severe diabetes. McManus had also suffered three heart attacks. The Hearing Officer determined that McManus' diabetes, which pre-dated his employment, was the direct or indirect cause of his other disabling conditions. Those findings were accepted by the Board and McManus appealed to the Franklin Circuit Court. The court upheld the Board's decision to deny McManus' application for disability retirement benefits by finding that the decision was supported by substantial evidence.
The circuit court's Order in McManus was appealed to a panel of this Court, with the issue centering on the burden of proof. The panel held in relevant part that in an administrative proceeding "[w]here 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." McManus, 124 S.W.3d at 458. It went on to hold that 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.
As in McManus, the Board herein ruled against Bradley, i.e., the party with the burden of proof. The question for our consideration, then, is whether the Franklin Circuit Court properly applied the McManus standard to the facts before it. That is to say, did the circuit court determine whether the evidence in Bradley's favor was so compelling that no reasonable person could have failed to be persuaded by it? We must answer this question in the negative. After correctly reciting the McManus standard of review, the Franklin Circuit Court went on to state that the "issue on appeal is whether the Board's Final Order, which concluded that Bradley failed to prove that by objective medical evidence that she in fact suffers from Lyme disease, is supported by substantial evidence." Based on McManus, we must conclude that standard of review is not whether the Board's Final Order was supported by substantial evidence, but rather whether the "evidence in [Bradley's] favor is so compelling that no reasonable person could have failed to be persuaded by it." McManus, 124 S.W.3d at 458.
"'In its role as a finder of fact, an administrative agency is afforded great latitude[.]'" Id., quoting Aubrey v . Office of Attorney Gen., 994 S.W.2d 516, 519 (Ky. App. 1998). In examining the administrative record, it becomes apparent that the evidence in Bradley's favor was not so compelling that all reasonable persons must find it persuasive. The medical evidence is conflicting. Bradley presented medical evidence, for example, that she registered a 1.09 on the "Lyme IGM" scale, which the report indicated was "equivocal to positive" for the presence of the Lyme virus. Bradley was referred to Dr. Gregory Hoffman, who confirmed Lyme disease and depression. Bradley was later referred to Dr. Christopher Allen who, as noted by the circuit court, found that "Bradley's deviations were not completely debilitating[.]" As found by the circuit court, Dr. Lacy Price "reported that Bradley's neurocognitive test results were largely within normal limits, and Bradley did not exhibit any indication of any neurological decline in her neurological testing." The court also noted that "Bradley's diagnostic testing did not reveal Lyme disease positives in Bradley's blood test results", though Dr. Lentz stated that the medical community recognizes that "the absence of Lyme disease positives in blood test results does not rule out the possibility of the patient having Lyme disease."
At best, the medical evidence is properly characterized as conflicting as to whether Bradley suffers from Lyme disease and its depressive emotional and physical effects, and whether such condition is debilitating. Under McManus, the dispositive inquiry on appeal to the circuit court was whether the evidence in Bradley's "favor is so compelling that no reasonable person could have failed to be persuaded by it." McManus, 124 S.W.3d at 458. As the Lyme IGM test showed "equivocal" results and as at least some objective medical evidence revealed that "Bradley's neurocognitive test results were largely within normal limits", it cannot reasonably be said that the application of the McManus standard on review compels a result in Bradley's favor. Ultimately, the record contains objective medical evidence sufficient to support both the conclusion that Bradley suffers from Lyme disease and the conclusion that she does not. With the Board determining that the medical evidence did not support a finding of disability for purposes of applying KRS 61.600, and because the evidence in Bradley's favor is not so overwhelming as to persuade all reasonable persons, we conclude that the Franklin Circuit Court erred in reversing the Board's Final Order. We hold as moot the Retirement Systems' related argument as to whether the circuit court erred in its review of the pre-existing condition analysis.
For the foregoing reasons, we REVERSE the Opinion and Order of the Franklin Circuit Court and REMAND.
MAZE, JUDGE, CONCURS.
COMBS, JUDGE, DISSENTS AND FILES SEPARATE OPINION.
COMBS, JUDGE, DISSENTING: I respectfully dissent. McManus is an opinion of this Court - one which I believe we should abandon. It essentially emasculates the ability of a reviewing court to conduct a meaningful review of an administrative action. I believe that the Franklin Circuit Court conducted a proper review, and I would affirm its judgment. BRIEFS FOR APPELLANT: Katherine Rupinen
Frankfort, Kentucky BRIEF FOR APPELLEE: Roy Gray
Frankfort, Kentucky