KENTUCKY RETIREMENT SYSTEMS v. JANICE T. VERNON
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RENDERED: May 27, 2005; 10:00 a.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2004-CA-001693-MR
KENTUCKY RETIREMENT SYSTEMS
APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE ROGER L. CRITTENDEN, JUDGE
ACTION NO. 03-CI-00321
v.
JANICE T. VERNON
APPELLEE
OPINION
REVERSING
** ** ** ** **
BEFORE:
JUDGE.1
COMBS, CHIEF JUDGE; GUIDUGLI, JUDGE; AND MILLER, SENIOR
GUIDUGLI, JUDGE:
Kentucky Retirement Systems has appealed from
a decision of the Franklin Circuit Court reversing the denial of
Janet T. Vernon’s request for disability benefits by its Board
of Trustees.
Having determined that the substantial evidence of
record does not compel a decision in Vernon’s favor, we reverse.
1
Senior Judge John D. Miller, sitting as Special Judge by assignment of the
Chief Justice pursuant to Section 100(5)(b) of the Kentucky Constitution and
KRS 21.580.
Vernon, a resident of Princeton, Kentucky, began her
work as a school bus driver for Caldwell County Board of
Education in 1982.
Her last date of employment was February 5,
2001, when she retired.
Vernon filed her application for
disability retirement benefits one month later, citing
significant pain in her back, neck and shoulders, which would
increase when she was driving the school bus.
After the medical
review physicians denied her application, Vernon retained
counsel and requested a full hearing.
Hearing Officer Paul
Fauri conducted the hearing on November 9, 2001, and reviewed
the various medical records before entering a recommended order
that Vernon’s application be approved.
Kentucky Retirement
Systems filed exceptions to the Hearing Officer’s recommended
order.
In its final order entered February 21, 2003, the
Board of Trustees rejected the Hearing Officer’s recommended
order, opting instead to issue its own findings of fact and deny
Vernon’s application.
The findings of fact were as follows:
1) Claimant meets the employment
service requirements of KRS 61.600 in that
she has 169 months of total service and at
least 12 months which are current service.
2) Claimant’s application for
disability retirement benefits was timely
filed on March 5, 2001, her last date of
paid employment was February 5, 2001.
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3) Claimant’s position as a School Bus
Driver for the Caldwell County Board of
Education is sedentary to light work.
Claimant drove a school bus for 6-8 hours a
day. On occasion, Claimant would help young
children into their seats. Claimant was
required to operate hand and foot controls
when driving the bus. During the last two
years of driving, Claimant had a snub-nose
bus and did not have to lift the hood, and
she also had an automatic door opener and an
automatic transmission.
4) Claimant specifically set forth in
her application that she was unable to
perform her duties as a bus driver because
of pain in her back, neck and shoulders.
5) Dr. [David] French diagnosed
Claimant with cervical lumbar pain with
radiculopathy, mainly upper and lower
extremity numbness weakness. Dr. French in
March, 2002 placed severe restrictions on
Claimant’s activities. Dr. French’s
functional limitations appear to be based
mainly upon Claimant’s subjective
complaints. The restrictions imposed on
Claimant by Dr. French are incongruous with
the objective medical evidence of record.
6) Dr. [Bill] Bailey in January, 2001
gave Claimant a diagnosis of generalized
osteoarthritis based upon her complaints of
joint pain, and ruled out rheumatoid
arthritis. Dr. Bailey recommended physical
therapy for overall range of motion and
conditioning exercises.
7) Dr. [Vaughan A.] Allen in February,
1999 found on physical examination that
Claimant had intact reflex, motor, and
sensory functions of the upper extremities.
On lower extremities, Dr. Allen found some
loss of range of motion, and positive
straight leg raising. The rest of Dr.
Allen’s examination was normal. On follow
up MRI of the lumbar spine, Dr. Allen noted
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only “mild central stenosis at 4/5, moderate
foraminal stenosis at 3/4 but not anything
very major. At this point, would like to
treat her with Celebrex, physical therapy
and symptomatic treatment.” An MRI of the
cervical spine was negative.
8) Dr. [Robert P.] Meriwether treated
Claimant for her complaints of back, neck,
and shoulders. A September, 1999 cervical
lumber myelogram followed by CT scan found
minimal degenerative changes without
evidence of spinal stenosis or cord
impingement. A February, 2002 MRI of the
lumbar and cervical spine found minimal
degenerative changes with only disc bulging.
The myelogram followed by CT scan and MRI
found only minimal degenerative changes with
no evidence of any mechanical instability or
neurological involvement of the cervical or
lumbar spine. In March, 2002, Dr.
Meriwether indicated Claimant was not a
surgical candidate. Dr. Meriwether
recommended a conservative course of
treatment that included physical therapy, a
TENS unit, and a muscle relaxant.
9) Dr. [James A.] Metcalf diagnosed
Claimant with bilateral carpal tunnel
syndrome on nerve conduction testing in
September, 2001. Dr. Metcalf also diagnosed
neuropathy of the lower extremities, which
he described as not severe, and prescribed
medication. A total body scan was normal.
An x-ray report of the left shoulder and
left knee indicated no significant
degenerative changes present.
10) Dr. Meriwether performed left
carpal tunnel release on Claimant in
October, 2001 without any complications.
Claimant’s major complaints concerning her
carpal tunnel came about 8-9 months after
her last day of paid employment, which was
February, 2001. Claimant, at the time of
the hearing, indicated she was planning on
having right carpal tunnel release, however,
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there is no evidence that the surgery was
performed. Claimant’s major complaints
concerning carpal tunnel came about after
her last day of paid employment and appear
amenable to surgical treatment.
11) Claimant’s application for
disability benefits based upon subjective
complaints of pain is not supported by the
objective medical evidence of record.
Absent significant objective findings,
Claimant’s subjective complaints of pain in
the back, neck and shoulders are not
credible. Claimant’s doctors have
recommended Claimant be treated
symptomatically with a conservative course
of treatment that includes medication and
physical therapy to improve range of motion
and conditioning exercises.
12) Dr. [Owen T.] Nichols, Psy.D.,
performed a mental status examination of
Claimant in January, 2002 and gave a
diagnosis of Major Depression, Single
Episode, Moderate. Dr. Nichols noted
Claimant had been experiencing a major
depressive episode for approximately one
year. Dr. Nichols noted Claimant was taking
an anti-depressant and he recommended
supportive counseling. Dr. Nichols noted
Claimant’s insight and judgment were good,
and that she appeared to be capable of
comprehending, recalling, and following some
detailed directions. Claimant’s depression
is being treated with medication and further
conjunctive counseling was recommended.
Claimant retains good insight and judgment,
and intact ability to comprehend and follow
directions.
Based upon its findings, the Board of Trustees concluded that
Vernon was not entitled to disability retirement benefits, and
therefore denied her application.
-5-
Vernon filed a Petition with the Franklin Circuit
Court, arguing that the Board of Trustees ignored substantial
evidence in the record and that its conclusions were largely
based upon the opinions of the non-examining state physicians.
Kentucky Retirement Systems maintained that the substantial
evidence of record did not compel a finding of disability due to
a lack of objective medical evidence.
In an Opinion and Order
entered July 26, 2004, the circuit court reversed the Final
Order of the Board of Trustees and granted Vernon’s petition,
holding that the decision below was arbitrary in light of the
substantial evidence to the contrary.
This appeal followed.
On appeal, Kentucky Retirement Systems argues that the
denial of Vernon’s application was supported by substantial
evidence, that the circuit court erred in substituting its
judgment for that of the fact-finder, and that the circuit court
made several errors of fact and law that affected its decision.
On the other hand, Vernon continues to argue that she
demonstrated by objective medical evidence that she is disabled
and is entitled to retirement disability benefits, that the
Board of Trustees’ denial of her application is not supported by
substantial evidence, and that the Board of Trustees applied
improper legal standards in evaluating her application.
-6-
KRS 61.600 provides for disability retirement, and the
version in effect when Jones made her application reads, in
pertinent part, as follows:
(1)
Any person may qualify to retire on
disability, subject to the following
conditions:
. . . .
(2)
Upon the examination of the objective
medical evidence by licensed physicians
pursuant to KRS 61.665, it shall be
determined that:
(a)
The person, since his last day of
paid employment, has been mentally
or physically incapacitated to
perform the job, or jobs of like
duties, from which he received his
last paid employment. In
determining whether the person may
return to a job of like duties,
any reasonable accommodation by
the employer shall be considered:
(b)
The incapacity is a result of
bodily injury, mental illness, or
disease. For purposes of this
section, “injury” means any
physical harm or damage to the
human organism other than disease
or mental illness;
(c)
The incapacity is deemed to be
permanent; and
(d)
The incapacity does not result
directly or indirectly from bodily
injury, mental illness, disease,
or condition which pre-existed
membership in the system or
reemployment, whichever is most
recent.
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KRS 61.510(33) defines “objective medical evidence” as:
[R]eports 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.
Our standard of review in this case “is limited to
determining whether the decision was erroneous as a matter of
law.”2
It has long been settled in this Commonwealth that
“judicial review of administrative action is concerned with the
question of arbitrariness. . . .
Unless action taken by an
administrative agency is supported by substantial evidence it is
arbitrary.”3
Substantial evidence is defined as “that which,
when taken alone or in light of all the evidence, has sufficient
probative value to induce conviction in the mind of a reasonable
person.”4
2
In weighing the evidence, “the trier of facts is
McNutt Construction v. Scott, 40 S.W.3d 854, 861 (Ky. 2001).
3
American Beauty Homes Corp. v. Louisville and Jefferson County Planning and
Zoning Commission, 379 S.W.2d 450, 456 (Ky. 1964)(emphasis in original).
4
Bowling v. Natural Resources and Environmental Protection Cabinet, 891
S.W.2d 406, 409 (Ky.App. 1994). See also Kentucky State Racing Commission v.
Fuller, 481 S.W.2d 298 (Ky. 1972).
-8-
afforded great latitude in its evaluation of the evidence heard
and the credibility of witnesses appearing before it.”5
A
reviewing court may not substitute its own judgment on a factual
issue “unless the agency’s decision is arbitrary and
capricious.”6
As in this case, “[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.”7
The failure to grant relief
would be arbitrary “if the record compels a contrary decision in
light of substantial evidence therein.”8
Once a reviewing court
has determined that the agency’s decision is supported by
substantial evidence, the court must determine the correct rule
of law was applied to those facts by the agency in making its
determination.
If so, the final order of the agency has to be
upheld.9
5
Bowling, 891 S.W.2d at 409-10. See also McManus v. Kentucky Retirement
Systems, 124 S.W.3d 454 (Ky.App. 2003).
6
McManus, 124 S.W.3d at 458.
7
Id. See also Bourbon County Board of Adjustment v. Currans, 873 S.W.2d 836
(Ky.App. 1994).
8
Currans, 872 S.W.2d at 838.
9
Bowling, 891 S.W.2d at 410.
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In the present matter, we must determine whether there
is substantial evidence of record that would compel a decision
in Vernon’s favor, as she was unsuccessful before the factfinding Board of Trustees.
In that same vein, we must also
determine whether the circuit court erred in reversing the Board
of Trustee’s decision.
First, we must agree with Kentucky Retirement Systems
that the circuit court applied an incorrect standard of review
in making its decision and misstated a portion of the medical
evidence introduced.
Addressing the factual misstatement first,
we note that the circuit court on page 5 of its Opinion and
Order incorrectly attributed to Dr. Meriwether the statement
that “due to Vernon’s pain associated with her back and the
unsuccessful left carpal tunnel release, the right carpal tunnel
release would have to be postponed to a later date.”
Later, on
page 6, the circuit court again referenced that the left carpal
tunnel release “did not provide the results expected.”
These
poor assessments of the left carpal tunnel release do not appear
in any of the medical records, but only appear in a letter from
Vernon’s counsel to counsel for Kentucky Retirement Systems.
We shall now turn our attention to the standard of
review issue.
As set forth above as well as in the beginning of
the circuit court’s Opinion and Order, a reviewing court may
overturn a decision of the fact-finding Board of Trustees not in
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favor of the party with the burden of proof only if the
substantial evidence of record compels a contrary result.10
Based upon this standard, it is not enough to establish that
there is substantial evidence of record to support a decision in
favor of the claimant; the substantial evidence must compel such
a result.
In this case, it is at least arguable that the
objective medical evidence could be interpreted to support a
finding of disability.
Even if this were so, the evidence
cannot be said to compel such a finding.
Although the medical
tests established bulging, stenosis, and degenerative changes in
her back, these conditions were generally described as minimal,
mild, or not severe, and it appears that the diagnoses of and
restrictions imposed by the various physicians were based more
upon Vernon’s subjective complaints of pain.
The exception to
this would be her diagnosis of bilateral carpal tunnel syndrome,
which was not diagnosed until several months after she had
retired.
Furthermore, at least the left side had been
successfully treated surgically, according to Dr. Meriwether.
We agree with Kentucky Retirement Systems’ statement that
although Vernon had been diagnosed with several conditions,
these conditions were not of sufficient severity to render her
10
Bourbon County Board of Adjustment v. Currans, 873 S.W.2d 836 (Ky.App.
1994).
-11-
incapacitated to the extent that she could be deemed permanently
and totally disabled.
Because the Board of Trustees’ findings
of fact were based upon substantial evidence of record, those
findings are not arbitrary, and a contrary result is not
compelled by that evidence.
Therefore, the circuit court erred
in reversing the decision below.
Finally, we agree with Kentucky Retirement Systems
that the circuit court appears to have impermissibly substituted
its judgment for that of the trier of fact.
The circuit court
reinterpreted the medical evidence, which is a function of the
trier of fact, not a court of review.
For the foregoing reasons, the judgment of the
Franklin Circuit Court is reversed, and the order of the Board
of Trustees is reinstated.
MILLER, SENIOR JUDGE, CONCURS.
COMBS, CHIEF JUDGE, DISSENTS AND FILES SEPARATE
OPINION.
COMBS, CHIEF JUDGE, DISSENTING:
I dissent.
The
Franklin Circuit Court undertook a meticulous review in this
case and determined that substantial evidence existed to support
an award and that denial of those benefits indeed constituted
arbitrariness on the part of the Board.
Even though the
findings of the Board were internally contradictory, they
nonetheless substantiated the existence of numerous degenerative
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physical and mental changes:
a bulging disc, stenosis,
neuropathy of the lower extremities, carpal tunnel syndrome, a
major depressive disorder.
At finding #11, the Board made a
sweeping conclusion that Ms. Vernon’s complaints were all
subjective and unsupported by objective medical evidence and
that they were, therefore, not credible.
Claimant’s application for disability
benefits based upon subjective complaints of
pain is not supported by the objective
medical evidence of record. Absent
significant objective findings, Claimant’s
subjective complaints of pain the back, neck
and shoulders are not credible.
It is apparent that the Board simply dismissed
compelling medical evidence and mis-characterized Vernon’s
ailments as figments of her imagination.
It elected to
disregard the significant objective evidence of disability.
Additionally, the Board necessarily ignored the fact that Vernon
was required to implement hand and foot controls in the
operation of a school bus –- feats which could not have been
performed with the numbness that afflicted her extremities.
KRS
61.600(2)(a) clearly provides the legal test against which these
disabilities are to be assessed in order to determine
eligibility for benefits:
The person, since his last day of paid
employment, has been mentally or physically
incapacitated to perform the job, or jobs of
like duties, from which he received his last
paid employment.
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It is incomprehensible to imagine that Vernon could return to a
similar job in light of her impairments –- surely not if the
safety of children were to receive any consideration.
The Franklin Circuit Court did not substitute its
judgment for that of the Board.
Instead, it gave proper
credence to the compelling evidence disregarded by the Board.
would, therefore, affirm the Franklin Circuit Court in its
reversal of the Board.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Katherine Rupinen
Frankfort, KY
Robert E. Francis
Cadiz, KY
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