KIMBERLY LANHAM v. KENTUCKY RETIREMENT SYSTEMS
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RENDERED:
AUGUST 25, 2000; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1998-CA-002186-MR
KIMBERLY LANHAM
v.
APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE ROGER J. CRITTENDEN, JUDGE
ACTION NO. 97-CI-01059
KENTUCKY RETIREMENT SYSTEMS
APPELLEE
OPINION
REVERSING AND REMANDING
** ** ** ** **
BEFORE:
JOHNSON, McANULTY AND MILLER, JUDGES.
JOHNSON, JUDGE: Kimberly Lanham appeals from an opinion and order
of the Franklin Circuit Court entered on August 17, 1998, which
denied her petition for judicial review of the denial of her
application for disability retirement benefits by the Kentucky
Retirement Systems.
Having concluded that the Retirement Systems
denial of benefits was contrary to law and not based on
substantial evidence, we reverse and remand.
Lanham, who was born on May 4, 1959, began her
employment with the Marion County Board of Education as a
Volunteer Services Coordinator on September 1, 1989.
According
to the hearing officer’s report and recommended order, Lanham
“indicated that 50% of her job was teaching adults to read and
the other 50% was training other adults to teach and recruit
volunteers for assisting with reading.”
Her duties also
included: (1) “driving to various locations within Marion County
to provide either training or direct services to residents for
the Literacy Program” and (2) “carry[ing] books in her trunk
which required her to take the books from the building and
plac[ing] them in her trunk, and then at her stop tak[ing] the
books out of the trunk.”
Lanham estimated that normally the
books she carried weighed approximately 25 pounds, but on some
occasions they weighed as much as 50 pounds.
Lanham has not
challenged the hearing officer’s finding of fact that under KRS1
61.600 her job was classified as “light work.”2
In February 1996, Lanham began experiencing fatigue,
lack of concentration and memory loss.
On February 13, 1996,
Lanham visited her primary care physician, Dr. Brian F. Scott.
1
Kentucky Revised Statutes.
2
“Light work” is defined as “work that involves lifting no
more than twenty (20) pounds at a time with frequent lifting or
carrying of objects weighing up to ten (10) pounds. A job shall
be in this category if lifting is infrequently required but
walking and standing are frequently required, or if the job
primarily requires sitting with pushing and pulling of arm or leg
controls.”
-2-
Dr. Scott diagnosed Lanham with “[m]yalgias [sic],3 FUO,4
lymphadenopathy5 and RUQ6 tenderness.”7
Based on Dr. Scott’s
advice, she stayed off work beginning on March 11, 1996.8
On April 1, 1996, Lanham presented herself to Dr. Kelly
Cole, a rheumatologist, with complaints of “right pleuritic chest
pain and severe fatigue.”
Dr. Cole determined that Lanham had
“[p]ositive ANA9 with arthralgias [sic]10 and myalgias [sic], as
well as pleurisy,11 adenopathy,12 low-grade fevers and fatigue.”
3
“Myalgia” is defined as “pain in a muscle or in several
muscles.”
4
Fever of undetermined origin.
5
“Lymphadenopathy” is defined as “a disease or abnormality
of the lymph nodes, but usually a simple enlargement due to
absorption of infected material from neighboring sites.”
6
Right upper quadrant.
7
Lanham saw Dr. Scott on three other occasions. Lanham
continued to have a low grade fever and myalgia and Dr. Scott’s
diagnosis remained consistent.
8
Lanham’s last day of paid employment was April 22, 1996.
Lanham asked that she be allowed to work out of her home so she
could eventually return to work full-time, however, as her
fatigue and pain continued to worsen, she had to stop working
completely.
9
Anti-nuclear antibodies.
10
“Arthralgia” is defined as “pain in one or more joints.”
11
“Pleurisy” is defined as “inflamation of the pleuria,
usually with fever, painful and difficult respiration, cough and
exudation of fluid or fibrinous material into the pleural
cavity.”
12
“Adenopathy” is defined as “any disease or enlargement
involving glandular tissue, especially one involving the lymph
nodes.”
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A report from Ms. Lucky Collins, a social worker,
stated that Lanham was depressed due to the stress of her illness
and her change of lifestyle.
She noted that Lanham had a lack of
physical strength and diagnosed her as having an adjustment
disorder with depression.
In June 1996, Lanham was seen by Dr. Robert Fallis, of
the Cardinal Hill Rehabilitation Hospital/Multiple Sclerosis
Clinic, for purposes of testing for multiple sclerosis.
After
reviewing several of the previous tests performed on Lanham by
other doctors, Dr. Fallis concluded that Lanham was suffering
from “chronic fatigue” and “chronic lumbar strain.”
In August 1996, Lanham saw Dr. William D. Kirk, a
primary care physician, who diagnosed her with chronic fatigue,
depression and an “undefined auto immune disorder.”
In his
initial report, Dr. Kirk noted that Lanham was “mentally or
physically incapacitated,” but the incapacity was “expected to
last for less than 12 months.”
However, Dr. Kirk also opined
that her prognosis was “poor.”
In September 1996, prior to the medical review board’s
denial of Lanham’s claim, Dr. Kirk completed a second medical
disability report in which he stated that “since the last day of
paid employment. .. [Lanham] has been: [m]entally or physically
incapacitated to engage in the job which [she] held as of [her]
last day of paid employment, or a job of like duties, and such
incapacity is expected to continue for not less than 12 months
from [her] last day of paid employment, . . .” Dr. Kirk’s
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diagnosis was “chronic fatigue, unspecified inflammatory
disorder;” and his prognosis was “disabled indefinitely.”
Lanham filed her application for disability retirement
benefits on May 14, 1996.13
13
On December 12, 1996, the Retirement
KRS 61.600 reads in pertinent part:
(1) Any person may qualify to retire on
disability, subject to the following
conditions:
. . .
(2) Upon 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 of 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
as provided in 42 U.S.C. sec. 12111(9) and 29
C.F.R. Part 1630 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 preexisted membership in the system or
reemployment, whichever is most recent. For
purposes of this subsection, reemployment
shall not mean a change of employment between
employers participating in the retirement
systems administered by the Kentucky
Retirement Systems with no loss of service
(continued...)
-5-
Systems denied Lanham’s claim for disability retirement benefits
on the grounds that she presented no objective medical evidence14
of an impairment that would prevent her from performing her usual
work activity.
On February 18, 1997, a hearing was held before a
hearing officer for the Retirement Systems.
In his report and
recommended order dated April 21, 1997, the hearing officer’s
conclusions of law stated that Lanham “is not entitled to
disability retirement benefits pursuant to KRS 61.600 since she
has failed to establish by objective medical evidence the
existence of a permanent physical impairment which would prevent
her from performing her former job as a Volunteer Services
Coordinator, or a similar job from which she received her last
paid employment.”
Lanham filed exceptions to the hearing
officer’s report.
The exceptions were denied on June 10, 1997,
13
(...continued)
credit.
14
KRS 61.510(33) provides:
“Objective medical evidence” means medical
histories; reports 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, Xrays, and psychological tests[.]
-6-
when the Disability Appeals Committee of the Board of Trustees,
with one irrelevant amendment, adopted the hearing officer’s
findings of fact, conclusions of law, and recommended order.
On July 10, 1997, Lanham filed a petition for judicial
review in the Franklin Circuit Court.
She claimed the final
order of the Retirement Systems was “not based on substantial
evidence” and “violate[d] statutory provisions, [was] arbitrary,
capricious and/or characterized by an abuse of discretion.”
The
circuit court denied Lanham’s petition and affirmed the denial of
benefits.
In its opinion and order, the circuit court agreed
with Lanham that the evidence she presented to the Retirement
Systems did, in fact, include objective medical evidence:
It is beyond dispute that Lanham
presented the [Retirement Systems] with ample
medical evidence to support the thrust of her
claims. The record contains medical reports
and records from no fewer than four
physicians, and demonstrates a prolonged
period of examination and evaluation by these
physicians.
However, the circuit court concluded that regardless of the
Retirement Systems’ mischaracterization of Lanham’s objective
medical evidence, there was still substantial evidence to support
the denial of benefits:
However, while this information appears to
qualify as the type of ‘objective medical
evidence’ defined by KRS 61.510(33), [Lanham]
has failed to demonstrate that the
[Retirement Systems’] denial of benefits was
not based on substantial evidence.
This appeal followed.
-7-
When a reviewing court examines the decision of an
administrative agency, the court must determine whether the
agency’s decision is arbitrary.15
In determining whether an agency’s
action was arbitrary, the reviewing court
should look at three primary factors. The
court should first determine whether the
agency acted within the constraints of its
statutory powers or whether it exceeded them.
(citation omitted). Second, the court should
examine the agency’s procedures to see if a
party to be affected by an administrative
order was afforded his procedural due
process. The individual must have been given
an opportunity to be heard. Finally, the
reviewing court must determine whether the
agency’s action is supported by substantial
evidence. (citation omitted). If any of
these three tests are failed, the reviewing
court may find that the agency’s action was
arbitrary.16
An applicant for disability retirement benefits has the
burden of proving she satisfies the statutory criteria which
entitles her to those benefits.
An administrative agency is
afforded great latitude in evaluating evidence and determining
the credibility of witnesses, and although a reviewing court
might have come to a different conclusion had it heard the case
de novo, such disagreement does not deprive the agency’s decision
of support by substantial evidence.17
“[T]he possibility of
drawing two inconsistent conclusions from the evidence does not
15
Cornell, supra.
16
Bowling v. Natural Resources & Environmental Protection
Cabinet, Ky.App., 891 S.W.2d 406, 409 (1994)(quoting Cornell,
supra at 594).
17
Bowling, supra at 410.
-8-
prevent an administrative agency’s finding from being supported
by substantial evidence.”18
Indeed, an administrative agency’s
trier of facts may hear all the evidence and choose the evidence
that he believes.19
It is the role of the courts in conducting
judicial review of an administrative action to determine both
“[i]f the findings of fact are supported by substantial evidence
of probative value” and “whether or not the administrative agency
has applied the correct rule of law to the facts so found.”20
Our review of the record and the law convinces us that
both the Retirement Systems and the circuit court have erred as a
matter of law.
The circuit court, in denying Lanham relief from
the Retirement Systems’ decision, appeared to recognize that the
Retirement Systems’ application of KRS 61.510(33), which defined
“objective medical evidence,” was incorrect as a matter of law.
However, the circuit court then erred by ruling that regardless
of the error of law made by the Retirement Systems’ that Lanham
“has failed to demonstrate that the [Retirement Systems’] denial
of benefits was not based on substantial evidence.”
Without
specifically citing the hearing officer’s decision, the circuit
court stated that “[i]t is plain in this case that the hearing
18
Kentucky State Racing Commission v. Fuller, Ky., 481
S.W.2d 298, 307 (1972).
19
Bowling, supra at 410 (citing Commonwealth Transportation
Cabinet v. Cornell, Ky.App., 796 S.W.2d 591, 594 (1990)).
20
Southern Bell Telephone & Telegraph Co. v. Kentucky
Unemployment Insurance Commission, Ky., 437 S.W.2d 775, 778
(1969)(citing Brown Hotel Co v. Edwards, Ky., 365 S.W.2d 299
(1962)).
-9-
officer weighed the evidence, both objective and subjective, and
concluded that Lanham had not proven a disability so as to
qualify her for disability retirement benefits. . . .
Thus, as
there is substantial evidence on the record to support the
[Retirement Systems’] decision, it will not be disturbed.”
We must consider the findings of fact relied upon by
the Retirement Systems in its denial of benefits.
recommended order denying
In his
benefits, the hearing officer
separated his findings of fact into eight numerical paragraphs:
1)
The Claimant meets the employment
service requirements of KRS 61.600 in
that she has at least 72 months of total
service and at least 12 months which are
current service.
2)
The Claimant’s application for
disability retirement benefits was
timely filed on May 14, 1996. Her last
date of paid employment was April 22,
1996.
3)
The Claimant’s employment as a Volunteer
Services Coordinator as set forth on
Exhibits 2 and 3 would fall within the
category of light work. KRS
61.600(4)(c)2. Claimant indicates that
she would lift 25 pounds on a regular
basis, her employer says 20 pounds. She
says she lifts up to 50 pounds maximum.
However, the frequency is somewhat in
question. The amount of lifting would
potentially place the job in medium
work, but it does appear that the
lifting is basically of books which can
be controlled by Claimant, and primarily
there is little other exertional
requirement in the job.
4)
The Claimant has had several diagnoses-one, fibromyalgia; the other, chronic
fatigue syndrome. There is a potential
diagnosis of Lupus. However, the
-10-
diagnoses are not supported by any
objective medical evidence.
Furthermore, the Claimant has failed to
follow through on her physical therapy
due to the pain that it has caused her
[emphasis added].
5)
The Claimant also has seen a social
worker who has diagnosed her condition
as adjustment disorder with depression.
There has been no diagnosis by a
psychiatrist or psychologist. [However,
based on her testimony, it does appear
that the Claimant is obviously having
some psychological or psychiatric
component to her condition, but she is
not receiving treatment for same.]21
6)
There is a question about reasonable
accommodation, which at first blush
would appear to be available, that is to
allow Claimant to work out of her home
as she requested. However, the Claimant
in her testimony indicated that she
could not even do the job now with this
type of accommodation.
7)
The Hearing Officer has no reason to
disbelieve the Claimant’s claim of pain
and fatigue and it is found that she
obviously is enduring some type of
fatigue and pain problem. However,
there has not been a definitive
diagnosis of this condition, nor has
there been a diagnosis and treatment of
her mental condition [emphasis added].
8)
As was indicated initially by Dr. Kirk,
Claimant’s incapacity would not be
expected to last for twelve months. The
Hearing Officer finds that her condition
would appear to be resolved by treatment
and accordingly, she has not shown that
the condition would last for more then
21
The Disability Appeals committee amended the hearing
officer’s findings of fact “to strike sentence 3 of Finding of
Fact number 5.”
-11-
twelve months or persist in incapacity
severity for more than twelve months
[emphasis added].
From these findings of fact, it is clear that the only
findings that were adverse to Lanham’s claim that could possibly
have been used by the hearing officer to support his conclusion
that Lanham “has failed to establish by objective medical
evidence the existence of a permanent physical impairment which
would prevent her from performing her former job as a Volunteer
Services Coordinator,” are found in numerical paragraphs 4, 7 and
8.
Since none of these three critical findings of fact was
supported by substantial evidence, the Retirement Systems’ denial
of benefits must be reversed.
Whether finding no. 4 is viewed from the standpoint
that the hearing officer erred as a matter of law in the
misapplication of the legal definition of “objective medical
evidence” or from the standpoint that this finding of fact
is
not supported by substantial evidence, it is clearly erroneous.
The correct application of the definition of “objective medical
evidence,” as noted by the circuit court, can only lead one to
conclude “that Lanham presented the [Retirement Systems] with
ample medical evidence to support the thrust of her claims.”
As
noted by the circuit court, “Dr. William Kirk [] made [a]
conclusive diagnosis [of] . . . chronic fatigue syndrome . . .
[the] condition upon which Lanham primarily bases her claim for
benefits.”
Thus, the hearing officer’s finding that Lanham’s
diagnosis of chronic fatigue syndrome was not supported by any
-12-
objective medical evidence is clearly erroneous, and the evidence
compels the opposite finding.22
Finding no. 7 is also not supported by substantial
evidence and is clearly erroneous.
The hearing officer
erroneously found that “there has not been a definitive diagnosis
of this condition,” i.e., “some type of fatigue and pain
problem.”
The evidence was to the contrary. As shown above, Dr.
Kirk made a conclusive diagnosis of chronic fatigue syndrome.
Thus, once again the hearing officer’s finding is clearly
erroneous and the evidence compels the opposite finding.
In making finding no. 8, the hearing officer failed to
consider all the evidence of record.
While the hearing officer
was correct that at one time Dr. Kirk did indicate that Lanham’s
incapacity was not expected to last for 12 months, this was not
the complete report by Dr. Kirk.
In his final report, Dr. Kirk
clearly stated that due to her chronic fatigue Lanham’s
“incapacity is expected to continue for not less than 12 months
from [her] last day of paid employment” and that she was
“disabled indefinitely.”
The hearing officer overlooked this
evidence and relied upon incomplete records from Dr. Kirk.
His
finding as to the duration of Lanham’s disability is clearly
erroneous.
Accordingly, we hold that the Retirement Systems as a
matter of law erroneously applied the statute requiring
22
While the hearing officer did not specifically so find,
Dr. Fallis also diagnosed chronic fatigue syndrome.
-13-
“objective medical evidence,” and that the three critical adverse
findings of fact used to deny Lanham’s claim for disability
benefits are not supported by substantial evidence.
The judgment
of the Franklin Circuit Court is reversed and this matter is
remanded for entry of a disability award in favor of Lanham.
McANULTY, JUDGE, CONCURS IN RESULT ONLY.
MILLER, JUDGE, CONCURS IN RESULT ONLY.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Stacey L. Hardin
Lebanon, KY
James P. Dodrill
Frankfort, KY
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