Gehin v. Wisconsin Group Ins. Bd.

• Decision Date: 23 February 2005
• Docket Number: No. 03-0226.,03-0226.
• Citation: 2005 WI 16,278 Wis.2d 111,692 N.W.2d 572
• Parties: Luann GEHIN, Petitioner-Respondent-Petitioner, v. WISCONSIN GROUP INSURANCE BOARD, Respondent-Appellant.
• Court: Wisconsin Supreme Court

278 Wis.2d 111

2005 WI 16

692 N.W.2d 572

Luann GEHIN, Petitioner-Respondent-Petitioner, v. WISCONSIN GROUP INSURANCE BOARD, Respondent-Appellant.

No. 03-0226.

Supreme Court of Wisconsin.

Oral argument September 9, 2004.

Decided February 23, 2005.

For the petitioner-respondent-petitioner there were briefs by Bruce F. Ehlke and Shneidman, Hawks & Ehlke, S.C., Madison, and oral argument by Bruce F. Ehlke.

For the respondent-appellant the cause was argued by Charlotte Gibson, assistant attorney general, with whom on the brief was Peggy A. Lautenschlager, attorney general.

¶ 1. SHIRLEY S. ABRAHAMSON, C.J.

Luann Gehin, the claimant, seeks review of an unpublished decision of the court of appeals reversing an order of the Circuit Court for Dane County, Moria Krueger, Judge.¹ The circuit court had set aside the Wisconsin Group Insurance Board's termination of Luann Gehin's income continuation insurance benefits.

¶ 2. Relying on Richardson v. Perales, 402 U.S. 389 (1971), the court of appeals concluded that although the written medical reports the Group Insurance Board relied on were hearsay, they constituted substantial evidence upon which the Group Insurance Board could base its findings and decision.

¶ 3. The following issue is presented: Does uncorroborated written hearsay evidence alone (that is controverted by in-person testimony) constitute substantial evidence to support the Group Insurance Board's factual findings, which in turn form the basis for its conclusion of law, i.e., that the claimant's benefits should be terminated as of April 30, 1997?

¶ 4. We conclude that the uncorroborated written hearsay medical reports alone (that are controverted by in-person testimony) did not constitute substantial evidence to support the Group Insurance Board's factual findings and decision to terminate the claimant's benefits. Accordingly, we reverse the decision of the court of appeals and affirm the order of the circuit court reversing the decision of the Group Insurance Board.

I

¶ 5. This court reviews the decision of the Group Insurance Board, not the circuit court's order or court of appeals' decision.² We review the decision of the Group Insurance Board to terminate the claimant's benefits pursuant to Wis. Stat. § 40.08(12) (2001-02),³ which provides that decisions of the Wisconsin Group Insurance Board are "reviewable only by an action for certiorari in the circuit court for Dane County."⁴

¶ 6. In this certiorari review, the issue presented requires us to review the sufficiency of the evidence upon which the Group Insurance Board relied in reaching its decision.⁵ The sufficiency of the evidence on certiorari review is identical to the substantial evidence test used for the review of administrative determinations under chapter 227 of the statutes.⁶

¶ 7. Wisconsin Stat. § 227.57(6) provides that "the court shall not substitute its judgment for that of the agency as to the weight of the evidence on any disputed finding of fact. The court shall, however, set aside agency's action or remand the case to the agency if it finds that the agency's action depends on any finding of fact that is not supported by substantial evidence."⁷ This case involves the meaning of the words "substantial evidence," as used in § 227.57(6). ¶ 8. To determine whether substantial evidence supports the Group Insurance Board's factual findings and decision to terminate the claimant's benefits, we shall first examine the Group Insurance Board's findings of fact. We next review the evidence upon which the Group Insurance Board relied in its findings of fact. We then explore the legal basis for the long-standing rule adopted in Folding Furniture Works, Inc. v. Wisconsin Labor Relations Board, 232 Wis. 170, 189, 285 N.W. 851 (1939), that uncorroborated hearsay evidence alone does not constitute substantial evidence. Upon analyzing the hearsay evidence and live testimony, we conclude that we should not deviate in the instant case from the long-standing rule in Wisconsin that uncorroborated hearsay alone does not constitute substantial evidence. Finally, we examine and do not accept the Group Insurance Board's arguments, based on Richardson v. Perales, 402 U.S. 389 (1971), that we should abandon the rule long used in this state that uncorroborated hearsay evidence alone does not constitute substantial evidence.

II

¶ 9. In order to test whether the Group Insurance Board's findings of fact and conclusions of law are supported by the substantial evidence, we first state the Group Insurance Board's "Findings of Fact" set forth in its April 16, 2002, Final Decision and Order. We then examine the record for evidence supporting these findings of fact.

[1]

¶ 10. The critical findings of fact in the present case relate to the nature and extent of the claimant's disability, the claimant's ability to work full time and the claimant's ability to earn at least $979.37 per month.⁸ The nature and extent of disability and the ability to work full time may be the subject of expert opinion.⁹

¶ 11. The Group Insurance Board's findings of fact are as follows.

¶ 12. The claimant began work at University of Wisconsin Hospital in Madison, Wisconsin, in 1986¹⁰ and began regular, full-time employment as a housekeeper in 1991.¹¹ On May 15, 1992, the claimant injured her back at work at the hospital.¹² Due to gradually worsening pain, the claimant went on medical leave 11 days later; her last day of work at the hospital was April 16, 1993.¹³

¶ 13. The claimant filed a claim form to collect long-term income continuation benefits in April 1993.¹⁴ Long-term income continuation insurance benefits are paid after the first year of a claimant's disability.¹⁵ The claimant had income continuation insurance coverage at all times material during her appeal.¹⁶

¶ 14. Claimants may receive benefits "if by reason of any medically determinable physical or mental impairment" they are unable "to engage in any substantial gainful activity for which the employee is reasonably qualified with due regard to the employee's education, training and experience, and prior economic status."¹⁷ An activity is considered a substantial gainful activity if the earnings from the activity would be at least equal to the income continuation benefits at the time those benefits were terminated.¹⁸ (In its Final Decision and Order the Group Insurance Board sometimes refers to satisfying the contractual phrase "inability to engage in a substantial gainful activity" as "totally disabled.")¹⁹

¶ 15. According to the Group Insurance Board's findings, to be considered "gainfully employed" under the contract, the claimant in the instant case "would have to be capable of earning $979.37 per month, or $5.63 per hour in a full-time position."²⁰

¶ 16. The United Wisconsin Group, the company then in charge of administering the income continuation insurance program, determined that the claimant's disability began on May 3, 1993, and approved her for income continuation insurance benefits in June 1993.²¹

¶ 17. In late September 1993, Dr. John Whiffen performed spinal fusion surgery on the claimant's back.²² From the following September through spring 1997, the claimant was "involved in a job retraining program through the State of Wisconsin Division of Vocational Rehabilitation."²³ Vocational Rehabilitation assigned the claimant, on an unpaid basis, to the Mendota Mental Health Institute in Madison, where, according to a letter from the Institute, her duties included "typing on both a typewriter and a computer, filing, answering the telephone and other clerical duties."²⁴ Due to pain and fatigue, the claimant fell short of the scheduled 40 hours per week, and according to the Group Insurance Board's finding, "generally worked between 24 and 30 hours per week . . . ."²⁵ Nevertheless, the claimant received a positive job performance assessment.²⁶ In referring to this report, the Group Insurance Board accepted that in her only job experience since being injured, she was not able to work full time. ¶ 18. At the request of United Wisconsin Group, Dr. Whiffen provided a written update of the claimant's condition as of January 30, 1997.²⁷ Dr. Whiffen's February 7, 1997, written update concluded that the claimant "could work up to full-time with restrictions, including a need to change position every 45-60 minutes for five minutes."²⁸ Then on March 11, 1997, Dr. Whiffen stated that the claimant could return to her former job, with restrictions.²⁹ It is not clear from the record whether the "former job" was the claimant's job training program at Mendota Mental Health Institute or her work as a housekeeper at the University.

¶ 19. In early May 1997, United Wisconsin Group determined that the claimant no longer met the criteria for benefits under the applicable section of the contract.³⁰ Specifically, United Wisconsin Group wrote to the claimant, "The medical documentation that we have obtained does not support that you are incapable of engaging in any gainful occupation. Information from DVR [Division of Vocational Rehabilitation] indicates that you have been performing in a full time position at Mendota Health Institute. Therefore, benefits beyond April 30, 1997 are not payable."³¹ (This statement is not correct. According to the Finding of Fact #7 and the Mendota Mental Health Institute, the claimant was not performing in a full-time position at the Institute.)

¶ 20. In mid-August 1997 the claimant saw Meriter Hospital physical therapist Michael Miller.³² Mr. Miller conducted a functional capacity evaluation and "concluded that `[b]ased on the client's lack of ability to squat, lift, stand, walk and carry anything but negligible loads, she does not appear employable in her current condition.'"³³ The Group Insurance Board discounted and disparaged Mr. Miller's evaluation, stating that "it does not appear from the record that Mr. Miller had the benefit of the contract definition."³⁴ The following month,...