We refe r to sever al entities t hroug hout this appeal. The “ Boa rd” r efe rs to the ag ency ’s 1 b o ar d o f t rustees, w hich hea rs appe als of conte sted ca ses. See T e x. G o v ’ t C o d e A n n . § 8 15.511 (West 2004). The “ Medica l Boa rd” r efe rs to th e agency ’s medica l board, whic h cer tifies occupational disa

bility retire ment claimants as disable d. See id. § 814.203 (West 2004). “ERS staff” ref e r s to th e a g e n c y ’ s r e p r e s e n tati v e s a t t h e a d mi n is tr a ti v e h e ar in g b e f o r e th e St a te O f

f ic e of Ad min istrativ e He ari ng s. 

### TEXA S C OU R T OF A PPEAL S, THIR D DIST R ICT , AT AU STIN

NO. 03-0 7 -00 170 -CV

Ca r l M . P at to n , A ppe lla nt

v. Em ployees Ret irem ent System of T exas , Appellee

F ROM THE DISTRICT CO URT OF TRAVIS COUNTY , 53RD JUDICIAL DISTRICT NO. D-1- GN-06- 0026 35 , HO NORAB LE SCO TT H. JENK INS , JUDGE PRESIDI NG

M E M O R

A N D U M O P I N I O N Appellant Carl M. Patton appea ls the district c ourt’s order aff irming a final orde r by the B oard of Trustee s for the Employ ees Retire ment Sy stem of Texas terminating his occupational dis a bil ity re tir e me nt b e ne fi ts. I n three issues, Patton urge s that the di strict court erre d in affir ming 1 the B oa rd ’s de c isi on . B e c a

us e we c on c lud e the B oa rd a c te d a rb itr ari ly and c apri ciou sly , th a t it abused its discre tion in terminating Patton’s bene fits, and that Patto n’s substantial rig hts were prejudice d, we r ever se the judg ment of the district cour t with inst ructions that the ca use be r emande d to the Boa

rd for further proce eding s consistent with this opi nion.ERS pr ov ide s f our t y pes of ben efits f

or e lig ibl e state e mpl oy e e s: s e rv ic e re tir e me nt, 2 occupational disability

retire ment, nonoccupational disabilit y retire ment, and death benef its. See Tex. Gov’t Code Ann. § 814.001 (West 2004). 2

F ACTUAL AND P ROCEDURAL BACK GR OUND Carl Patton wor

ked for the Lufkin State School in 1990 as a supe rvisor in the paint depa rtm e n t. Wh il e a t w o r

k o nA u g u s t 2 8 , 1 9 9 0 , Patt o ns u f f e r e d a b a c k in ju r y . Patt o nth e r e a fter applied to ERS, was ce rtified disabled, a nd beg an re ceivingoccupational disabilit y re t i reme nt benef its in 1992. See Tex. Gov’t Code Ann. §§ 814.201, .203 (West 2004). 2 As part of an interna l audit proce ss, ERS in 2004 reque sted medical a nd employ

ment information fr o m P att on. I n response , Patton provided information on his medical c ondition and h i s empl oy

ment at a private hospital in Lufkin, including his e arning s for the y ear s 2002 t h ro u gh 20 04 . T he ho sp ita l emp loy e d Patt on fr om 199 6 to 2000 a s a shuttle bu s d ri ve r a nd the re a ft e r a s a

secur ity g uard. Ba s ed o n the information provide d, ERS dis continued Patton’s bene fits effe ctive April 1, 2005. I n th e no tif ic a tio n le tte r t o Patto n, ERS ’s e xec uti ve dir e c tor qu ote d th e a

pp lic a ble statut e and

ru le and e xpla ine d th e re a so nin g be hin d th e de c isi on to d isc on tin

ue Pa tto n’ s b e ne fi ts:

Th e re c or ds ERS ha s r e c e ive d re fl e c t tha t as of the date of y our d isa bil ity re tir e me nt, y our annua l salary

was $17,628. That salary has bee n adjusted upwa

rd to $21,806 t o r e f l e c t e x p e c t e d

i n c r e a s e s i nc o mp e n s a t i o nh a d y o ur e m a i n e d

i ny o u r s t a t e j o b

. In y our position as a sec urity g uard w ith [ the hospi t al ] , y o ur annua l salary was $ 1 8 , 2 9 1

. 1 5 , an d

$ 1 8 , 5 5 5

. 6 0 f

o r c a l e n d e r ye ar s 2 0 0 2 an d

2 0 0 4 r e s p e c t i v e l y. The ERS Medical B oard ha s declined to c ertify that y ou continue to be mentally or phy sically

incapa citated f

or the fur ther pe rfor

mance of duty , as require d by the Texas Gover nment Code and rule s ections cited above in orde r for y ou to qualify

for co n ti n u a ti o no f

o c c u p a ti o n a l d is a

b il it y r e ti r e me n t b e n e f

it s . A f te r r e v ie w in g y o ur3

medical r ecor ds and evide nce co ncer ning your employ

ment by [t he hospital], the Medica l Boa

rd conc luded that y ou are no l o n ger incapac itated for the further perf ormanc e of duty , that any incapa city y ou may have is not likely

to be per manent and that y ou should not be retire d. For these re asons, I

am unable to a

pprove c on tin uatio n o f your o c c up a tio na l di sa bil ity re tir e me nt b e ne fi ts. Patton appeale d the termination of his bene fits to the Boa rd, and a hear ing w as held be fore an

a dmi nis tr a tiv e law j ud g e wi th t he State Of

fi c e of Ad min ist rativ e He ari ng s. The he aringoccur

red in July

2005. Patton was not repr esente d by counsel. Patton and h i s two sisters, Delois Patton and Dorothy Patton, were the only

witnesses to testify

at the hear ing. T hey

testified conc erningPatton’s education, employ ment , m edica l condition, and disability . Also, in an attempt to provide evide nce that Patton was unable to obta in a state job and that there wer e no ava ilable state jobs that he could perf orm, Delois Patton testified that she worke d at th e Lu f k in St a te Sc h o o l an d th a t s h e h a d c h e c k e d jo b p o s ti n g s thr e e o r f o u r ti me s a month for the past three or four

y ear s for Patton without success. The Boa rd did not object to this testim ony

or pr ov ide c on tr a

ry e vid e nc e . E RS pr e se nte d r e c or ds that in c lud e d Patto n’s ear nin g state me nts for 2002 throug h 2004, his medical hi story , aff idavits from ERS staff, a

nd the deposition transcr ipt of Ed d T e rr ill , I I I , Patto n’ s su pe rv iso r a

t th e ho sp ita l. T e rr ill state d th a t Patto n w or ke d f ull tim e

and wa s a g oo d emp loy e e . T he re wa s n o e vid e nc e of pa rt ic ula r s ta te job s th a t Patto n w a s c a pa ble

o f h o l d i n g. The AL J issued a proposa l for dec ision recomme n ding that ERS reinstate Patton’s benef its. ERS staff f

iled exceptions, and the B oard r ejec ted the AL J ’s proposal f or decision and ado p t ed E R S s t af

f’s a lternative f

indings of f

act a nd conclusions of lawon May 24, 2006. The Boa rd’s finding s of fa ct included:4

1. Carl Patton appea led the decision of the Ex ecutive Direc tor of the Employ ees Re tir e me nt S y ste m ( ERS ) t o d isc on tin ue his oc c up a tio na l di sa bil ity re tir e me nt b e ne fi ts. * * * 4. Mr. Patton worked f or the L ufkin State School in L ufki n, Texas, as the supervisor of the paint depar tment. H is job classification w as M aint enanc e Mecha nic I I I . His duties require d him to li ft g allons of paint, shee t rock, a nd h ea v y s ca ff o l d i n g. 5. On Aug u s t 2 8 , 1990, Mr. Patton suffer ed a ba ck injury when he slipped on the floor while c leaningpaint brushes . . . . 6. Effe ctive Nove mber 30, 1992, Mr. Patton wa s approve d for oc cup ati onal dis a bil ity re tir e me nt be ne fi ts af te r ERS fo un d him to be p hy sic a lly un a ble to continue performing his work and to be ca pable of perf orming only

sedenta ry work. 7. I n 1996, Mr. Patton beg an wor king a s a sec urity

g uard at a hos p ital in the private se ctor, Memor ial Hea lth Sy stem of East Texas, in L ufkin. His duties included patr olling the buildings and g rounds, observing video surveillanc e mon ito rs , a

nd e sc or tin g vis ito rs to t

he ir ve hic le s. 8. Fr om 2002 throug h 2004, Mr. Patton rec eived a n annuity of $7,632.00 per y e ar i n o c c up a tio na l di sa

bil ity be ne fi ts. 9. Mr . Patto n’ s so cia l se c ur ity wa g e s f ro m th e Ho sp ita l w e re $1 8, 29 1. 15 in 2002 and $18,555.60 in 2004. 10. The Executive Dire ctor of E RS t ermin ated Mr. Patton’s oc cupational disability retir em en t benef

its as of April 1, 2005, bec ause Mr . Patton’s employ ment information and the E RS Medical Boa rd’ s c e r ti f ic a tion reflec ted t h a th e w a s n o l o n g e r

i n c a p a c i t a t e d f o r t h e f u rt h e r p e r f o r m an c e o f d u t y. 11. Mr. Patton’s final annua l state salar y was $17,664. 12

. Mr . Patto n’ s a dju ste d f ina l annua l st a te sa lary

is $ 21 ,9 63 , w hic h r e fl e c ts le g isl a tiv e inc re a se s in his c omp e ns a tio n ha d M r. Pa tto n r e ma ine d in his state job.5

13

. Annu a l pay re c e ive d by Mr . Patto n th a t is e qu a l to or g re a te r t ha n 8 0% of his adjusted final a

nnual state salary ($17,570.40) is c ompara ble to his adjusted final annua l state pay

of $21,963. 14. I n 2002 and 2004, Mr. Patton rec eived pay compar able to that which he was re c e ivi ngwh e n h e re tir e d w ithoc c up a tio na l r e tir e me nt b e ne fi ts. 15

. Mr . Patto n’ s p hy sic a l c on dit ion ha s im pro ved si nce he re tir e d, bu t he is unable to per form the wor k of his former

state job. 16

. Mr . Patto n f

a ile d to me e t hi s b ur de n o f p ro of to s ho w that the re are no state jobs available f

or which he is qualified by training , education and experience offe ring wag es compa

rable to th e p ay h e was re ceivingwhen he left the Luf kin State Sc ho ol.

The B oard’ s conclusions of law inc luded: 4. Ba sed upon the a

bove F indings of F act, Mr. Patton fa iled to meet his burden o f p ro o f t o s h o w t h at h e i s p h y s i ca l l y an d m en t al l y i n cap ab l e o f h o l d i n g a position with the State offe ring pay compar able to that of the state job for which he r etired a s require d by 34 TEX. ADMI

N. CODE § 73.17. 5. Mr. Patton failed to meet his burden of proof to show that he is mentally and ph y sic a lly

inc a pa c itate d f

ro m th e fu

rt he r p e rf or manc e of duty purs ua nt t o TEX. GOV ’T CODE AN N. §§ 814.208 and 814.210. 6. Ba sed on t he above Findings of Fa ct and Conclusions of L aw, Mr. Patton’s appea l in this matter should be de nied. Patton appeale d the B oard’ s order to the district court, which a ffirme d the dec ision of the Boa rd. See Tex. Gov’t Code Ann. § 815.511(f) (West 2004). This appea l followed.

AN AL YSI S Patton c ontends in three issues that the district c ourt err ed in af firming the B oard’ s decision to discontinue Patton’s occupa tional disabilit y

retire ment benef

its. P atton contends that6

( i) th e B o ar d b a s e d it s d e c is io n to te r mi n a te b e n e f

it s o n in c o r

r e c t s ta n d ar d s an d im

p r operly used t es t i m o n y , (i i ) t h e B o ar d

i mp ro p e r l y

s t ru ckt es t i m o n y

an d t h e a d m i n i s t ra t i v e l aw j u d ge’ s fi n d i n gs of fa c t, a nd (i ii) the B oa

rd imp ro pe rl y

a pp lie d a ru le c ha ng e re tr oa c tiv e ly . The centr al issue is the Boa rd’s c onstruction and application of an admini strative rule . For the re asons that follow, we sustain Patton’s issues one and three , rende ring it unnecessa ry to rea ch the mer its of Patton’s

rema ining issue. See Tex. R. App. P . 47.1.

Stan dard of Revie w

Our re view of this appea l is under the substantial evidence rule. See Tex. Gov’t Code Ann . § § 81 5. 51 1( f) , 20 01 .1 74 (We st 20 00 ). “ B ro a dly sp e a kin g , the su bs tanti a l e vid e nc e ru le is a court re view devic e to kee p the cour ts out o f the business of administrating regulatory statutes

enac ted by

the L eg islature; but it remains the business of the c ourts to see that justice is administered to competing parties by

g overnme ntal ag encie s.” Lewis v. Metro. Sav. &Loan Ass’n , 550 S.W .2d 11 , 1 3 ( Te x. 19 77 ). Whe n a c ourt is a pp lyingthe su

bs tanti a l e vid e nc e sta

nd ard of re vie w t o an ag ency

decision, the issue fo r the re viewing court is not whether the ag ency ’s dec ision was

corr ect, but whe ther the r ecor d demonstrates some r easona ble basis for t h e age n cy ’s ac tion. See Central Power & Light Co. v. Publi c Util. Comm’n , 36 S.W .3d 547, 561 (Tex. App.—Austin 2000, pet. denied) . A cour

t shall rever se and r em an d fo r fu rther pr ocee dings if substantial r ights of the appellant have bee n prejudice d beca use the de cision is arbitrar y or ca pricious or c hara cteri z ed by abuse of discretion. See Te x. Go v’ t Co de Ann. § 2 00 1. 17 4( 2) (F ); Re lia nt E ne rg y , I nc . v . P ub lic Ut il. Comm’n , 153 S.W .3d 174, 184 (Tex. App.—Austin 2004, pet. denied).7 An a g e nc y ’s int e rp re ta tio n of its ow n re g ulatio ns is e nti tle d to de fe re nc e by the c ourt s as l ong as i t is not clea

rly err oneous or inconsistent with t he rule or statute. See P ublic Util. Comm’n v. Gulf States Utils. Co. , 809 S.W .2d 201, 207 (Tex. 1991). I f t he age ncy fails t o follow the cle ar, unambig uous lang uag e of its own reg ulations, howeve r, i ts actions are arbitrary and ca pricious. Id .; Power Res. Group, I

nc. v. P ublic Util. Comm’n , 73 S.W .3d 354, 358 (Tex. App

. — Austin 2002, pe t. de nie d)

. Court s c on str ue a dmi nis tr a tiv e ru le s, wh ic h have the same fo rc e a s statut e s, in the same

manner as statutes. Lewis v. Jack sonville Bldg. & Loan Ass’n , 540 S.W .2d 307, 310 (Tex. 1976). St a tuto r y c o n s tr u c ti o nis a

qu e s ti o no f

la w , w h ic h w e r e view de novo

. Bragg v. Edwards Aquifer Au th ., 71 S.W .3d 729, 734 (Tex. 2002). Unless the rule is ambiguous, we fol low the rule’ s clea r lang uag e. See R epublicbank D allas, N.A. v. Interkal, Inc ., 691 S.W .2d 605, 607 (Tex. 1985).

This Court rec og nizes that an administrative ag ency is not ne cessa rily subject to the

same pr oc e dura l r

ule s and re str ic tio ns a s a

c ourt of law, bu t an a g e nc y mus t r e sp e c t th e du e pr oc e ss rig hts of those persons who appea r before it in contested c ases. Se e Fl or es v . E mp loy e es R e t. S

y s. , 7 4 S

. W

. 3 d

5 3 2 , 5 3 9 (T ex . Ap p . —

Au s t i n2 0 0 2 , p et
. d en i ed ) (c i t i n g Texas State Bd. of Pharmacy

v . S e e ly , 7 64 S.W. 2d

80 6, 81 5 ( Te x. Ap p. —A us tin 19 88 , w ri t de nie d) ; Ma d den v. Texas Bd. of C h i r o p r a c t i c E x a m’ rs , 6 6 3 S

. W.2d 622, 625-27 (Tex. App.—Austin 1983, writ ref’d n.r .e.)) . A person be fore an ag ency in a conteste d case hear ing is e ntitled to me aningful notice, be fore the hea ring , of the leg al standar ds that apply

. See Se e ly , 7 64 S.W. 2d a t 81 5; Madden , 663 S.W .2d at 625-27.I n 1992, the text of the rule re ad: 3 Di sa bil ity Re tir e me nt—

El igi bil ity

. I nc a

pa c ity fr om the fu

rt he r p e rf or manc e of du ty means that the member is phy sically or mentally unable to c ontinue t o h o l d t he position occupied or to hold a position with the state offe ring compar able pa y . The 8 “Com parable Pay” As pa rt of his fi rs t is su e , Patto n c on te nd s th e B oa rd ba se d it s d e c isi on

to t e rm inate his benefits on incorre ct standar ds. Specifica lly , Patton urg es that the B oard imprope rly terminated his benefits base d on the Boa rd’s compar ison of 80 perc ent of his adjusted final annua l state salar y with his wag es fr om his employ ment at the hospital. I n h i s t h i rd i ssue, Patton contends that the Bo ar d i mp ro p er l y

ap p l i ed a ru l e ch an ge re t ro ac t i v el y t o t er m i n at e hi s b en ef i t s . Bo t h i s s u es ch al l en ge the B oard’ s application of its newly adopted thre shold standard of “c o m p ara ble pay” under

the rele vant rule, Rule 73.17. See 3 4 T ex . Admin. Code § 73.17, 6 Tex. R eg . 3427, 3432 (1981) (Employ ees Retire ment Sy stem of Texas).

Rule 73.17 construes se ction 814.208(d) of th e go v ernme nt code, the statute that allows ERS to t erminate a re tiree’ s occupational disabilit y retire ment benef

i ts. Id. Pur su a nt t o statut e , E RS is a

uth or ize d to dis c on tin

ue be ne fi ts if the re tir e e is “ no lon g e r m e nta lly or ph y sic a lly incapa citated f

or the pe rfor

mance of duty .” See Tex. Gov’t Code Ann. § 814.208(d) (West 2004). Th e statut e do e s n ot d e fi ne “ inc a pa c itate d for th e pe rf

or manc e of du ty .” ERS , h ow e ve r, in R ule 73.17 as it exi sted in 1992, defined “ incapa city from the furthe r per formanc e of duty” to mean “ that the member

is phy sically

or mentally

unable to continue to hold the pos ition occupie d or t o hold a position wit h the state off eringcompar able pa

y .” See 3 4 T ex . Ad m i n . C o d e § 73

. 1 7 ; 6 T e x . R eg. at 3432. The pa

rties ag ree that Rule 73.17 as it exi sted when Patton re tired in 1992 is the ver sion 3education, training, a nd experience of the e mploy ee ar e to be considered w hen making this determination. 34 Tex. Admin. C ode § 73.17, 6 Te x . Reg . 3427, 3432 (1981) ( eff ective Septe mber 21, 1981). After the 2001 amendme nt, the text of the rule rea d: 4 Di sa bil ity Re tir e me nt—

El igi bil ity

. I ncapa city

fro m t he fur

ther pe rfor

mance of duty

means that the me mber ha s de mon str a

bly so ug ht a nd be e n d e nie d w or

kp la c e a c c omm od a tio n o f t he dis a bil ity in a c c or da nc e wi th a pp lic a ble law, and

that the me mbe r is phy sic a lly or me nta lly un a ble to cont in u e to h o ld

th e p o s it io no c c u

p ie d an d to h o ld an y o th e r p o s it io no ffe ring compar able pa

y . The education, t raining , and ex perie nce of the employ ee are to be considere d when makingthis determination. 34 Tex. Admin. C ode § 73.17, 26 Te x . Reg . 5368 (2001), adopted 2 6 Tex. Reg. 6953 ( 2001) (ef fec tive September 13, 2001)

. 9 of t he rule that applies to Patton. See Pantera Energy Co. v. Railroad Comm’n of Texas , 150 S.W .3d 466, 472-74 (Te x . App.—Austin 2004, no pet.) (substantive a mendments to rule g en erally do not apply retroa ctively

). The pa rties also ag ree that Patton’s medical condition continues to pre vent him from holding the p o s ition at the state that he oc cupied whe n he re tired. The dispute be tween the p arti e s th e n is w h e th e r Patt o n is c u r r e n tl y a b le “ to h o ld a p o s it io n w it h th e s ta te offe ring compar able pa

y .” As it ex isted in 1 9 9 2 , R u le 73.17 did not define “ compar able pa y .” See 3 4 T e x. Admin. Code § 73.17; 6 Tex. R eg . at 3432. The c urre nt version of Rule 73.17, howe ver, defines “compa rable pay ” and no longe r conta ins the limi ting r efe renc e to “a position wit h the state.” The

ru le wa s ame nd e d in 2001 by de le tin g the ph ra se “ wi th the state ” to al low ERS to c on sid e r p ri vate

as we ll as public sector wag es i n its “compara ble pay” ana ly sis. See 34 Tex. Admin. C ode § 73.17, 26 Tex. Reg. 5368 ( 2001), adopted 26 Tex. Reg. 6953 (2001). Th e ru le wa s f ur the r a me nd e d in 4Af te r t he 20 06 a me ndme nt, the te xt of the ru le re a ds : 5 Di sa bil ity Re tir e me nt—

El igi bil ity

. (a) I ncapa city

from the f

urther pe rfor

mance of duty

means that the member has de mon str a

bly so ug ht a nd be e n d e nie d w or

kp la c e a c c omm od a tio n o f t he dis a bil ity in a c c or da nc e wi th a pp lic a ble law, and

that the me mbe r is phy sic a lly or me nta lly un a ble to continue to hold the position occupied and to hold any o t h er p o s i tion offer ing compar able pa

y . The e ducation, tra ining, a nd experience of the employ ee are to be considere d when making this de termination. “Compara ble pay” mea

ns eig hty (80) perc ent or more of the membe rs final state ba se pay prior to de ductions for taxes or de fe rr e d c omp e ns a tio n a s p rovi de d o r a llo we d b y state and

fe de ra l la

w; and it inc lu d e s lo n g e v it

y an d h a zar d o u s d

u ty p ay . Co mp ar a

b le p ay ma

y b e a d justed by retire ment sy stem staff to ac count for rea liz ed state pay rate chang es over

time. The te rm e xclu de s th e mon e tary

va lue of ins ur anc e and

re tir e me nt b e ne fi ts. (b) In addition to the periodic medic al exami n at i ons provided for in Texas Gover nment Code § 814.208(a) , the executive dire ctor may direc t a disability retire e to underg o additional medical e x aminations an d to provide additional information s at i s fac tory

to the retire ment sy stem releva nt to determining whether or not the retire e re mains incapa citated for t he further performa nce of duty . Absent a showing of g oo d c a us e , a dis a bil ity re tir e e who fai ls t o r e sp on d to the re qu e st i n a tim e ly mann e r m a

y have his or

he r di sabilit

y re tir e me nt b e ne fi ts a

nd a sso c ia te d h e a lth ins ur anc e be ne fi ts s us pen de d unti l th e re tir e e ha s f ull y c omp lie d w iththe re qu e st. I f the re tiree f

ails to compl y

with the reque st for one y ear from the date the information was f

i rs tre qu es t edb y

t h e r et i re m en ts y s t em , t h en al l d i s ab i l i t y re t i re ment benef its shall be terminated.

34 Tex. Admin. C ode § 73.17, 31 Te x . Reg . 1612 (2006), adopted 3 1 Tex. Reg. 3588 ( 2006) (ef fec tive May

3, 2006). 10 May 2006, a few weeks bef

ore the Boa

rd’s de cision to terminate Patton’s bene fits and almost a y ear afte r Patton’s hea

ring , to define “ compar able pa y ” to mean “ ei g hty

(80) pe rce nt or more of the member ’s final state ba se pay prior to deductions for taxes or def err ed compe nsation as provided or allowe d by

state and f

eder al law; a n d i t i n cludes long evity and hazar dous duty

pay .” See 34 Tex. Admin. Code § 73.17, 31 Tex. Reg. 1612 ( 2006), adopted 31 Tex. Reg. 3588 ( 2006). The 511

curr ent rule a lso allows ERS to adjust compar able pay “to acc ount f or rea liz ed state pay rate chang es over time.” Id. ERS contends that the Boa rd applied Rule 73.17 a s it ex isted in 1992 to P atton, utiliz ing a

n “i n t er nal interpre tive g uideline” to construe “compa rable pay ” and that the 2006 amendments to Rule 73.17 subsequently incorporated the existi ng g uideline. The B oard’ s g uideline is identical to the 2006 amendme nt to the rule. ERS arg ues t h at t h i s C ourt should defe r to the Boa rd’s interpr etation bec ause the g uideline is co nsistent with the plain and ordinary meaningof compar able, “ simil ar to but not exactly the same as the thing be ing c ompare d.” See B roadhurst v. Employe es Ret. S

y s., 83 S.W .3d 320, 323 (Tex. App.—Austin 2002, pet. denied) (ag ency int e rp re ta tio n e nti tle d to de fe re nc e ). ERS a lso c on te nd s th a t be c a us e “ c omp ara

ble pa y ” is “ argua

bly ambig uous,” the B oard pr operly relied on extrinsi c aids at t he hearing , including a survey perf ormed by ERS st aff

that revie wed other

pub l i c re tirement sy stems around the c ountry to construe “compa rable ” and that this Court should de fer to the Boa rd’s interpr etation. See State v . Shumake , 199 S.W .3d 279, 284 (Tex. 2006) (extrinsic a ids ma y be resor ted to when statute a

mbiguous). By aff idav it , th e D ir e c to r

o f I n te r n a l Au d it in g f

o r E RS p r o v id e d

th e r e s u lt s o f

th e s u r v e y an d s tated, based on the survey ’s results, “ERS staff has construed [compar able pa y ] as used in Rule 73.17 as ref err ing to pa

y th at i s eq u al to or in excess of 80 per cent of a disability

retire e’s [adjusted final

annua l sta te sa lary ].” ERS a sse rt s tha t the pla in m e anin g of c omp ara ble pa y and the surv e y

c ou ld have suppor

ted a “ finding of compa

rability for e arning s as low as 50 per cent.” ERS chara cter izes the 80 per cent thre shold standard a s rea sonable a nd applied in a manner t h at s u p p o sedly ease d Patton’s burden to show that he r emained inc apac itated.12 Although E RS assails P atton and his sister’s attempt s to disprove the existence of available state jobs with compara ble pay , they

had no mea

ningf ul notice re g ardingt he standa rd ag ainst which their e vidence wo u l d be mea sured. Due proce ss and fundamental principa ls of fairne ss dictate that the B oard should hav e provided meaning ful notice to Patton befor e apply ing its 80 perce nt threshold standard to his post disability ear nings to ter

minate his benef

its. See Se e ly , 76 4 S. W.2 d at 81 5; Madden , 6 63 S.W. 2d a t 62 6- 27 ; see also Tex. Gov’t Code Ann. §§ 2001.004, .005 (West 2000). E R S urg es that it provided notice to Patton at the he aringand in the executive direc tor’s letter in 2005 a dvising Patton that his benef its were te rminated. B eing advised of the survey results and the Boa rd’s construction of “compa rable pay ” to inc lude i t s 8 0 p erc ent threshold standard at the hear ing was not suf ficient notice to satisfy

due proc ess conc erns. See Se e ly , 76 4 S. W.2 d at 81 5; Madden , 6 63 S.W. 2d a t 626- 27

. Th e 20 05 le tte r ad vis ingPa tto n th a t hi s b e ne fi ts had bee n terminated similarly was not suffic ient. E R S co n t ends that the letter “implicated the 80 perc ent g u id e li n e ” a n d Patt o nr e c e iv e d

“ c o n s tr u c ti v e n o ti c e ” th a t w a g e s b e lo w h is a d ju s te d final annua l state salar

y wer e comparable

. The letter, howeve r, does not addre ss ERS’s 80 perce nt thr e sh old sta nd ard that su pp or te d te rm inatin g be ne fi ts o r t he B oa rd ’s c on str

uc tio n o f “ c omp a ra

ble pay .” Pa tto n te sti fi e d at th e he ari ngthat b efor e he a c c e pte d e mpl oy me nt at th e pr ivate ho sp ita l job , he c on ta c te d E RS be c a us e he did no t w ant t o d o a

ny thi ngto “ je op ard ize ” his dis a

bil ity

re tir e me nt b e ne fi ts. He te sti fi e d tha t he spo ke wi th Janic e Watt, a dis a bil ity be ne fi ts c ouns e lor

wi th ERS , an d tha t she tol d him that he co uld a c c e pt oth e r em plo y me nt as lon g a s it wa s not s imi lar t o the maintenanc e wor

k that he was perf

orming when he was injured. Dorothy Patton a lso testifiedERS do e s no t c on te nd that Pa tto n’ s job a t the ho sp ita l ha s “ su bs tanti a lly

sim ila r d uti e s” to 6 his prior state job. 13 that it was her unde rstanding from conve rsations with ERS st aff that “[Patton] could work a s long

as he was not pe rfor

ming the same duties.” Patton’s te stimony is consistent with the only evidenc e the B oa rd pr ov ide d o n th is i ssu e —Watt’ s a ff ida vit . Watt s ta te d in he r af

fi davit that sh e did

no t r e c a ll speaking wi th Patt o n b u t th a t p art o f h e r d u ti e s in c lu d e d c o u n s e li n g d is a b il it y r e ti r e e s a

b o u t the

on g oin g re -e va luatio n o f t he ir dis a bil ity . Sh e state d th a t it

wa s her “ c on sis te nt p ra c tic e to a dv ise dis a bil ity re tir e e s tha t wor

kin g a t a job tha t wa s subs tanti a lly sim ila r t o th e ir state job c ou ld c a

us e them to lose their d i s abil ity retire ment benef

its.” She expl ained the r eason f or the wa rning , that “per forming such subs tantially simil ar duties indicates an a bility to perfor m the duties of the re tiree’ s prior state job.” Watt also stated that it wa s her “ consistent prac tice to advise disability retire es that 6 they could work in the pr ivate sec tor at a diff ere nt job offer ing a

l ower rate of pay

(e.g ., working part-time or

in a more se dentar

y position t hat offe red le ss pay than their state job) .” Patton’s employ

ment at t h e h o s p ital at a rate of pa y lower tha

n his adjusted final

annua l st a te sa lary

wa s c on sis te nt wi th Watt’ s st ate d a dv ic e and pa ra me te rs to r e tir e e s. Pr ior

to h is hear ing, Patton did not have meaning ful notice that ear ning 80 perc ent of his adjusted final annua l

s tate s a la r y c o u ld c a

u s e h is b e n e f

it s to b e te r

mina ted. See Se e ly , 7 64 S.W. 2d a t 81 5; Madden , 663 S.W .2d at 626-27.

ERS argue s th a t, i n a

ny e ve nt, the B oa

rd ’s a pp lic a tio n o f t

he 80 pe rc e nt thr e sh old

to Patt o n ’ s p o s t- d is a

b il it y w a g e s a t t

h e h e aring w a s n o n d is p o s it iv e an d n o t h ar mf u l t o Patt o n . We disag ree . The Boa

rd specific ally found in f

indings of fac t 11, 12, and 13 that Patton’s final salar yPatton’s wag es we re a pproxi mately

$750 above the 80 perc ent t hreshold in 2002, below 7 the threshold in 2003, and a pproxi mately

$1,000 above the threshold in 2004. Another issue at the hear ing w as which me asure of wa g es wa s the corr ect mea sure f or dete rmining c ompara

ble pay

. 14 in his state positi on was $17,664, his adjusted fina l a nnual state sala

ry was $21,963, a

nd 80 perc ent of h i s a d j u s t e d f i n a l s a l ar y i n h i s s t a t e p o s i t i o n w a s $ 1 7 , 5 7 0

. 4 0

. T h e B o ar d t h e n r e lie d o n it s

c omp ar i s o n o f 8 0 p e r c e n t o f h i s a d j u s t e d f i n a l an nu a l s t a t e s a l ar

y an d h i s p r i v a t e s e c t o r w a g e s in 2002 and 2004 to r eac h its conclusions of law 4, 5, and 6 that Patton was no longe r inca pacitate d and that his appea l should be denied. As ERS states i n its brief to this Court, “As [P atton] had rece ived

annua l pa y fr om h is j ob a t th e Ho sp ita l th a t w a s g re a te r t ha n 8 0 p ercen t of

his a dju ste d f

ina l st a te salary , his pay

for those y ear s was found to be comparable .” Patton’s annual wa g es fr om the hospital

wer e at al l times less than his adjusted final annual state salary , so it is onl y when the 80 pe rce nt thr e sh old is a pp lie d to Patt on ’s po st- dis a bil ity wa g e s th a t hi s w a g e s f or 20 02 and 20 04 fa ll w ith in ERS ’s c on str

uc tio n o f “ c omp ara

ble pa y ” to s up po rt

the B oa rd ’s te rm inatio n o f b e ne fi ts. 7 We conclude that the Boa rd abuse d its discret i o n an d acted arbitra rily and capr iciously

in apply ing the 80 perc ent threshold standa rd to P at ton and that Patton’s substantial rig hts were prejudice d. See Tex

. Go v ’t C ode Ann. § 2001.174( 2)(F ). We also addr ess Patton’s subissue under his first issue, the B oard’ s use of his private sector w ag es in applying the 80 perc ent threshold standar d. Private Sector Pay

Even if the B oard properly applied it s 80 perc ent t hreshold standa rd to Patton, Patton contends that the Boa

rd failed to f

ollow the plain lang uag e of Rule 73.17 as it ex isted in 1992. SeeAs pr e vio us ly dis c us se d, th e analy sis un de r t he c ur re nt r ule is n o lo ng e r l imi te d to state 8 jobs. See 34 Tex. Admin. C ode § 73.17, 26 Te x . Reg . 6953 (2001). 15 34 Tex. Admin. Code § 72.17 , 6 T ex . R eg. at 3432. We ag ree . By using Patton’s private sec tor 8 wag es to rea ch its determination that Patton’s wag es in 2002 and 2004 we re “ compar able,” the B oard did no t f oll owthe pla in l angua g e of its ow n r ule e xpre ssl y

lim iti ngthe ana ly sis to s ta te po sit ion s. See M id-Century Ins. Co. v. Ade maj , No. 05-0016, 2007 Tex. L EXI S 1031, at *13 (Te x . Nov. 30, 20 07 ); City of M

ar sh all v . City of U

nc e rta in , 206 S.W .3d 97, 105 (Tex. 2006). “I t is an elementa ry rule of c onstruction that, when possible to do so, eff ect must be g iven to ever

y sentenc e, cla

use, and word of a statute so that no part there of be re ndere d superf luous.” City

of M ar sh all , 206 S.W .3d at 1 0 5 (c i t i n g City of San Antonio v. City of Boerne , 11 1 S. W.3 d 2 2, 29 (T e x. 20 03 )) . “ Com pa ra ble pa y ” in t he ru le do e s n ot s tand

a lon e ; it is l imi te d to a

“ po sit ion wi th the state of

fe ri ngc omp a ra

ble pay .” 34 Te x . Admin. Code § 73

. 1 7 , 6 Tex. Reg. at 3432. By the plain lang uag e of Rule 73.17, Pa tto n’ s p ri vate se c tor

pay was no t th e a

pp lic a ble me a sure , a

nd ERS ’s a pp lic a tio n o f i ts r

ule rende red the stated par ameter of a “ position wit h the state” without effe ct. Se e id

. ERS urges th a t th e B oa

rd pr op e rl y c on sid e re d Patto n’ s p ri vate se c tor job be c a us e Rule 73.17 directs the Boar d to consider Patton’s educ ation, training , and experienc e. See id. ERS contends that the B oard r elied on P at t o n ’s private se ctor e mploy ment as proof

of his “fitness a

nd

a bil ity to e arn c omp ara ble pay at ano the r s ta te po sit ion .” I n it s b ri e fi ngon a pp e a l, E RS st a te s, “[Patton] ’s ability

to work at the H ospital as a drive r and se cu ri ty g uard a nd to ear n 80 perc ent of his adjusted final state sa lary provides substantial evidenc e of his capa bility to ear n compar able pa

y in a state job.” This evidenc e falls short of supporting such an infe renc e, howe ver, a bout proof of ide nti fi a ble state po sit ion s to wh ic h h is s kil ls a nd a bil iti e s w e re tr ans fe ra

ble and the pa y he wo uld16

e arn . Wh ile we may

de fe r t o a g e nc y

e xpe rtise in s ome sit

uatio ns , a n a g e nc y ’s e xpe rt ise is n ot a substitut e for

evidenc e. See R ailroad Comm’n v. Lone Star Gas Co. , 618 S.W .2d 121, 124-25 (Tex. A pp.—Austin 1981, no writ). Our revie w of the rec ord reve als no testimony or other e vidence that could have enable d the B oard to de termine that state jobs w ith c ompara ble pay wer e conside red in assessing Patton’s “inca pacity for the further perf

ormanc e of duty .” See P ark Hav en, Inc . v. Texas De p’ t of Hu ma n S e rv s. , 80 S.W .3d 211, 215 (Tex. App.—Austin 2002, no pet.). We conclude the Boa

rd abuse d its discretion, acte d arbitra rily and ca priciously , and th a t P a tt o n ’ s s u

b s ta n ti a l r ig h ts w e r e p r e

ju d ic e d w h e nth e B o ar d

c o mp ar e d

an d r e li e d o nPatt on’s private se ctor wa g es to terminate his be nefits. See Tex. Gov’t Code Ann. § 2001.174(2)( F)

. CO NC LU SION B e c a us e we c on c lud e the B oa

rd a c te d a rb itr ari ly and c a pr ic iou sly , tha t it ab us e d it s discretion in terminating P at t o n’s occ upational disability retire ment benef

its, and that Patton’s substantial righ t s we re pr ejudiced, w e re verse the district court judg ment upholding the B oard’ s order and re mand to the district court with instructions that the cause be rema nded to t he B oard f

or further proce eding s consistent with this opi nion.

__________________________________________ J an P. Patterson, J ustice Be fore J ustices Patterson, Pury ear and Pember

ton Reverse d and Remande d Filed: De cembe r 19, 2007