Ky. Ret. Sys. v. Walling

• Decision Date: 12 October 2018
• Docket Number: NO. 2017-CA-001028-MR,2017-CA-001028-MR
• Parties: KENTUCKY RETIREMENT SYSTEMS APPELLANT v. ROY WALLING APPELLEE
• Court: Kentucky Court of Appeals

KENTUCKY RETIREMENT SYSTEMSAPPELLANT v. ROY WALLINGAPPELLEE

NO. 2017-CA-001028-MR

Commonwealth of Kentucky Court of Appeals

OCTOBER 12, 2018

NOT TO BE PUBLISHED

APPEAL FROM FRANKLIN CIRCUIT COURT

HONORABLE PHILLIP SHEPHERD, JUDGE

ACTIONNO. 16-CI-00188

OPINION

REVERSING

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BEFORE: DIXON, NICKELL, AND THOMPSON, JUDGES.

NICKELL, JUDGE:

Kentucky Retirement Systems (Agency) appeals from a Franklin Circuit Court order reversing the final order of its Board of Trustees denying Roy Walling's application for disability retirement benefits.Upon review, we reverse.

The hearing officer's findings of fact, fonclusions of law and recommended order was issued on November 25, 2015.Walling filed exceptions to the hearing officer's recommended order.After reviewing the evidence, the Board issued a final order adopting the hearing officer's recommended order.In its final order, issued January 25, 2016, the Board adopted the hearing officer's recommended order in its entirety, and summarized the central issues, facts, and procedural history relative to the present appeal.

FINDINGS OF FACT

1.[Walling] timely applied for disability retirement benefits in an application dated August 13, 2013.

2.[Walling's] membership date in the KERS¹ was October 15, 2006, and his last date of paid employment was November 12, 2014.[Walling] has 98 months of service credit with the KERS, at least twelve months of which was current service credit.

3.[Walling] has less than sixteen years of service credit with the KERS.

4.[Walling] was employed by the Department of Military Affairs as a Military Material Handler Sr. [Walling's] job duties fell into the category of medium work duty.

5.[Walling] filed for disability benefits pursuant to KRS² 61.600 based on diabetes and resulting problems including diabetic retinopathy, diabetic neuropathy in his lower extremities, and diabetic nephropathy.

6.Reasonable job duty accommodations were requested, and [Walling] had worked with job duty accommodations for one year prior to his last day of paid employment.

7.Kentucky Retirement Systems challenged [Walling's] application on the grounds that [Walling's] condition was not permanently disabling, and that the condition of diabetes predated his membership in KERS.

8.The final review by the Medical Review Board recommended denial of [Walling's] application due to a lack of objective medical evidence of a permanent disability that was expected to last at least twelve months after [Walling's] last day of paid employment, and that diabetes was a preexisting condition.

9.[Walling] was a reliable witness as to the symptoms of his medical conditions.

10.[Walling] timely filed a request for an Administrative Hearing in a letter received by Kentucky Retirement Systems on August 18, 2014.

11.The objective medical evidence submitted demonstrates that [Walling] suffers vision limitation due to diabetic retinopathy and diabetic macular edema.Had [Walling] been required to perform his unaccommodated job duties on his last day of paid employment, the objective medical evidence supports a finding that [Walling] would be disabled.However, [Walling] had been accommodated by his employer in such a way that he was able to function at work with his vision limitations.And while [Walling] testified that he didn't think his employer would continue his accommodations, there was no such indication from [Walling's] employer in any of the three Form 8030 Employer Job Description documents submitted in the evidence.In each Form 8030, [Walling's] employer stated very clearly that [Walling's] job duties were the accommodated job duties.As to the alleged of lower extremity peripheralneuropathy, there is neither nerve conduction study nor functional capacity evaluation submitted to assess [Walling's] physical limitations based on neuropathy; nor is there any indication from the records that [Walling] could not perform his job as accommodated because of lower extremity peripheral neuropathy.There [is] no objective evidence indicating that kidney problems or renal failure were disabling [Walling] from performing his accommodated job duties as of his last day of paid employment.Therefore, it is the finding of this Hearing Officer that [Walling] has failed to meet his burden of proof that he was permanently disabled from his job as accommodated due to diabetes and resulting problems including diabetic retinopathy, diabetic neuropathy in his lower extremities, and diabetic nephropathy as of his last day of paid employment and for at least twelve months thereafter.

12.[Walling] failed to submit any medical records dated prior to his membership in the KERS.The Medical Review Board repeatedly stated that [Walling's] diabetes likely developed over a period of many years and they therefore requested the older medical records.Walling failed to supply such records.Once the Medical Review Board had raised the issue of preexisting condition, the burden of proof shifted to [Walling] to show that his incapacity does not result directly or indirectly from a condition which predated [sic] his membership.[Walling] failed to submit any records from prior to his membership date, and he therefore has failed to meet his burden of proof that diabetes was not a preexisting condition.KRS 61.600(3);Kentucky Retirement Systems v. Brown, 336 S.W.3d 8(Ky.2011).

CONCLUSIONS OF LAW

1.Pursuant to KRS 13B.090(7), [Walling] has the burden of proving, by a preponderance of the evidence, that he is entitled to disability benefits under KRS 61.600.[Walling] bears the burden of proof on all issuesraised in this case.Dawson v. Driver, 420 S.W.2d 553(Ky.1967).Kentucky Retirement Systems is not required to prove that [Walling] is able to perform his duties as of his date of last paid employment.Personnel Board v. Heck, 725 S.W.2d 13, 17(Ky. App.1987).

2.[Walling] has failed to prove by a preponderance of the evidence that he suffers from a permanent mental or physical impairment as defined in KRS 61.600(5)(a)(1) that would prevent [him] from performing the accommodated job duties as a Military Material Handler Sr. or job similar to that as of his last date of paid employment.

3.[Walling] has failed to prove by a preponderance of the evidence that the condition of diabetes did not result directly or indirectly from bodily injury, mental illness, disease, or condition which predated his reenrollment with the KERS. KRS 61.600(3)(d).

Based on the foregoing, it is hereby recommended that [Walling's] application for disability benefits be denied.

Walling filed an original action in Franklin Circuit Court appealing the Board's decision.The circuit court reversed, reasoning: (1) the Board's determination Walling was not incapacitated to perform his job duties as of his last date of employment was unsupported by substantial evidence;³(2) as a pro se litigant, Walling was severely disadvantaged in interpreting the consequences of failing to provide medical records predating his membership in KERS; and (3)Kentucky's longstanding policy of leniency toward pro se litigants warranted remand of Walling's claim and required the Board to issue another notice explicitly informing Walling failing to produce medical records proving his condition did not predate his membership in KERS will not only result in "his claim's review being based solely on the information currently contained in the record, but would be fatal to his disability claim."The Agency now appeals, arguing reversal of its decision resulted from legal misinterpretation and impermissible reweighing of the evidence.We agree.

In administrative proceedings, the claimant bears the burden of proving entitlement to a benefit by a preponderance of the evidence, and the claimant likewise carries the risk of non-persuasion.KRS 13B.090(7).Where the fact-finder denies relief to the party with the burden of proof or persuasion, the issue on appeal is not whether the denial is supported by substantial evidence; rather, "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 v. Kentucky Ret. Sys., 124 S.W.3d 454, 458(Ky. App.2003).

Walling initiated administrative proceedings to secure benefits under KRS 61.600.He bore the burden of proving and persuading the Agency he had a disabling condition and his disabling condition did not exist at the time he became a member of KERS.The Agency had no reciprocal obligation to disprove either ofthose points, present any evidence in rebuttal, or otherwise challenge evidence Walling presented which it deemed unconvincing.Kentucky Ret. Sys. v. West, 413 S.W.3d 578, 581(Ky.2013).

The circuit court reversed the Board, finding diabetes and related medical conditions prevented Walling from performing even his accommodated job duties.In so finding, the circuit court improperly relied on a series of Form 8030's Walling's former employer had completed in response to his disability applications.Those forms are of no probative value in ascertaining whether Walling had a disability qualifying him for benefits under KRS 61.600, as they do not constitute "objective medical evidence"⁴ necessary to support a determination of disability.

Although the Board relied on medical source statements of Drs. Andrew Pearson and Thomas Abell in denying Walling's disability application, based on its interpretation of these statements, the circuit court found:

at a maximum, Walling could perform near acuity tasks for only sixty-six percent of his work day.Both documents state Walling cannot work with small objects.Even Walling's accommodated job duty of reading, understanding and placing packing slips would fall under a "near acuity task" and are "small objects" that his physicians claim he cannot work with without "great difficulty."

The circuit court concluded the statements supported a finding of disability, contradicting the conclusion drawn by...