Virginia Retirement System v. Cirillo, Record No. 2119-08-1.
| Decision Date | 19 May 2009 |
| Docket Number | Record No. 2119-08-1. |
| Citation | 676 S.E.2d 368,54 Va. App. 193 |
| Court | Virginia Court of Appeals |
| Parties | VIRGINIA RETIREMENT SYSTEM v. Susan E. CIRILLO. |
Brian J. Goodman, Legal Affairs & Compliance Coordinator (Robert F. McDonnell, Attorney General, on brief), for appellant.
Arnold H. Abrons (Abrons, Fasanaro & Sceviour, P.L.L.C., on brief), Norfolk, for appellee.
Present: ELDER, FRANK and HALEY, JJ.
The Virginia Retirement System (VRS) maintains: (1) the trial court erred in concluding that the administrative decision denying benefits to Susan E. Cirillo (Cirillo) did not comply with Code § 2.2-4019(A)(v) of the Virginia Administrative Process Act (VAPA) requiring Cirillo be informed "briefly and in writing, of the factual or procedural basis" of that decision; (2) even assuming the trial court was correct as to its initial decision, authorized by Code § 2.2-4027 of the VAPA, that court, nonetheless, exceeded its remedial authority under Code § 2.2-4029 in directing the VRS to make disability payments to Cirillo; and (3) the trial court erred in reversing the administrative decision by employing an erroneous standard of review.
We affirm in part and reverse in part.
Structurally, a Board of Trustees administers the VRS.Code § 51.1-124.22. The Board of Trustees may create Medical Boards. Code § 51.1-124.23(A). Medical Boards review medical reports, examinations, claimant statements, etc., with respect to claims for disability retirement and submit to the Board of Trustees "a written report as to its conclusions and recommendations." Code § 51.1-124.23(B). A Medical Board is "a neutral evaluatory mechanism for the Retirement System to gather and analyze medical opinions and reports." Johnson v. Virginia Retirement Sys., 30 Va.App. 104, 112, 515 S.E.2d 784, 788 (1999). These Medical Board reports, and the material upon which they are based, are sent to the Director of the VRS, appointed by the Board of Trustees, for consideration in his final administrative decision. See Code § 51.1-124.22(A)(1).
We only recite those facts necessary for determination of the issues raised.
Cirillo moved from California in August 2002, began work that month in the Chesapeake Public Schools System, and ceased working in December 2003.
On March 24, 2004, Cirillo filed for disability benefits pursuant to the provisions of Code § 51.1-156(E). Succinctly stated, this code section recites two substantive requirements to justify disability payments: (1) that claimant is mentally or physically incapacitated for the further performance of duty; and (2) that incapacity is likely to be permanent. However, an award under this section is subject to the following exception: "A member shall not be retired for disability for any condition which existed at the time of becoming a member unless medical evidence, convincing to the Board, supports the fact that the pre-existing condition has worsened substantially." Code § 51.1-156(E).
On April 7, 2004, a Medical Review Board denied Cirillo's application for disability benefits. Upon receipt of this denial, Cirillo filed additional information for review. On May 12, 2004, the Board again denied the application. Cirillo filed further information. She followed this procedure after denials dated August 11, 2004, November 10, 2004, May 10, 2006, June 7, 2006, and February 21, 2007. Following a May 15, 2006 informal fact-finding proceeding pursuant to Code § 2.2-4019, the fact finder recommended that Cirillo's application be granted.
On March 9, 2007, VRS issued a final case decision. The basis, or rationale, of that decision was contained in one paragraph:
Based on the VRS review and contrary to the recommendation of the independent fact-finder, regular disability retirement benefits are denied. The medical evidence has not satisfied each element of § 51.1-156(E) of the Code of Virginia. This was evidenced by the conclusion of the Medical Review Board on seven occasions. It is the applicant's burden to prove every element required by § 51.1-156(E) to sustain an approval for disability retirement benefits.
Cirillo appealed to the circuit court, pursuant to the provisions of the VAPA, Code § 2.2-4000 et seq.
By order entered August 8, 2008, the trial court found: (1) that VRS had committed an error of law in that the language of the final case decision of March 9, 2007, quoted above, violated VAPA because it did not "set forth the basis upon which it purports to rest with such clarity as to be understandable," citing Harrison v. Ocean View Fishing Pier L.L.C., 50 Va.App. 556, 651 S.E.2d 421 (2007); and (2) that VRS "has not in fact met its legal burden to present evidence ... in the record ... that is legally sufficient to support its denial, and that in fact the record in great part supports the Petitioner's application."
With these findings, the trial court reversed the decision of the VRS and "awarded Cirillo all regular disability retirement benefits in accordance with her original application ...."
On October 2, 2008, the trial court signed a statement of facts, endorsed by counsel. Therein it is recited that the hearing in this cause was an informal hearing pursuant to Code § 2.2-4019, not a formal hearing pursuant to Code § 2.2-4020.1
III.
Issues of law for court review of administrative action, pursuant to Code § 2.2-4027 include "(ii) compliance with statutory authority ... [and] ... (iii) observance of required procedure where any failure therein is not merely harmless error." (Emphasis supplied).
Code § 2.2-4019(A)(v), dealing with informal administrative decisions, requires that a party "be informed, briefly and generally in writing, of the factual basis for an adverse decision. ..."
As noted above, the trial court relied upon Harrison as a basis for its decision. There the ABC Board had placed time restrictions upon a permit for restaurant operations. Based upon Code § 2.2-4027 and Code § 2.2-4020, we reversed the agency decision, and remanded the cause to the circuit court, with directions to remand to the agency, because the ABC Board failed to "make findings of fact to support the restrictions" imposed in the permit as required by Code § 2.2-4020. 50 Va.App. at 576, 651 S.E.2d at 431.
Likewise, in NRV v. Virginia Department of Health, 51 Va.App. 514, 535, 659 S.E.2d 527, 537 (2008), we reversed and remanded with directions to remand to the agency for the agency to comply with Code § 2.2-4020 by explaining the reasons for its departure from its prior precedents. See also Goodyear Tire & Rubber Co. v. Pierce, 5 Va.App. 374, 384, 363 S.E.2d 433, 438 (1987).
The statutory requirement for agency explanation of agency decisions was set forth by the United States Supreme Court in SEC v. Chenery Corp., 332 U.S. 194, 196-97, 67 S.Ct. 1575, 91 L.Ed. 1995 (1947):
If the administrative action is to be tested upon the basis upon which it purports to rest, that basis must be set forth with such clarity as to be understandable. It will not do for a court to be compelled to guess at the theory underlying the agency's action; nor can it be expected to chisel that which must be precise from what the agency has left vague and indecisive.
See also Massachusetts v. EPA, 549 U.S. 497, 534, 127 S.Ct. 1438, 1463, 167 L.Ed.2d 248
(2007) ( the EPA acted arbitrarily and capriciously when it "offered no reasonable explanation for its refusal to decide whether greenhouse gases cause or contribute to climate change"); Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 48, 103 S.Ct. 2856, 2869, 77 L.Ed.2d 443 (1983) ().
The basis of a decision is the rationale, or ratio decidendi, of that decision. Black's Law Dictionary 1262 (6th ed.1990), defines ratio decidendi as "the ground or reason of the decision." This Court has defined ratio decidendi as "[t]he essential rationale in the case that determines the judgment." Clinchfield Coal Co. v. Reed, 40 Va.App. 69, 73-74, 577 S.E.2d 538, 540 (2003). See also Vienna Council v. Kohler, 218 Va. 966, 972, 244 S.E.2d 542, 545 (1978) (); Virginia Electric, Power Co. v. Dungee, 258 Va. 235, 251, 520 S.E.2d 164, 173 (1999) (); City of Virginia Beach v. Harris, 259 Va. 220, 231, 523 S.E.2d 239, 245 (2000) (). In Giannoukos v. Virginia Bd. of Medicine, 44 Va.App. 694, 699, 607 S.E.2d 136, 138 (2005), referring to the phrase "case decision" as set forth in Code § 2.2-4001, we wrote
There were three rationales by which VRS could deny Cirillo's application pursuant to Code § 51.1-156(E): They could determine Cirillo was not incapacitated. They could determine Cirillo was incapacitated, but that incapacity was not "likely to be permanent." They could apply the exception, that is, a pre-existing condition has not "worsened substantially." Had VRS chosen to explain the basis for its decision, citing one or more of the rationales above, perhaps with short references to specifics in the record, as required by Code § 2.2-4019, Cirillo, and a reviewing court, would have been "[i]nformed, briefly and generally in writing, of the factual or procedural basis for an adverse decision. ..." Neither she nor the trial court was so informed. For example, and by contrast, in Johnson, 30 Va.App. 104, 515 S.E.2d 784, this Court affirmed a trial court's decision affirming...
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