Title: Luann Gehin v. Wisconsin Group Insurance Board
Citation: 2005 WI 16
Docket Number: 2003AP000226
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: February 23, 2005

2005 WI 16 
 
 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
03-0226 
COMPLETE TITLE: 
 
 
Luann Gehin, 
          Petitioner-Respondent-Petitioner, 
 
     v. 
 
Wisconsin Group Insurance Board,  
          Respondent-Appellant. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
Reported at:  268 Wis. 2d 295, 671 N.W.2d 865 
(Ct. App. 2003-Unpublished) 
 
 
OPINION FILED: 
February 23, 2005   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
September 9, 2004   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Dane   
 
JUDGE: 
Moria Krueger   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
BUTLER, J., concurs (opinion filed).   
 
DISSENTED: 
WILCOX, J., dissents (opinion filed). 
PROSSER, J., joins. 
PROSSER, J., dissents (opinion filed). 
WILCOX, J., joins. 
ROGGENSACK, dissents (opinion filed). 
WILCOX and PROSSER, J.J., join.   
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
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. 
 
 
 
 
2005 WI 16 
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  03-0226 
(L.C. No. 
02 CV 2056) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Luann Gehin,  
 
          Petitioner-Respondent- 
          Petitioner, 
 
     v. 
 
Wisconsin Group Insurance Board,  
 
          Respondent-Appellant. 
 
FILED 
 
FEB 23, 2005 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed.   
 
¶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claimant, seeks review of an unpublished decision of the court 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 
                                                 
1 Gehin v. Wis. Group Ins. Bd., No. 03-0226, unpublished 
slip op. (Wis. Ct. App. Oct. 2, 2003). 
No.  03-0226 
 
 
2
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. 
                                                 
2 This court "[does] not deal directly with the correctness 
of the court of appeals decision brought to us on review, nor do 
we owe that decision any deference."  West Bend Co. v. Labor & 
Indus. Review Comm'n, 149 Wis. 2d 110, 117, 438 N.W.2d 823 
(1989); City of Oak Creek v. DNR, 185 Wis. 2d 424, 446, 518 
N.W.2d 276 (Ct. App. 1994). 
No.  03-0226 
 
 
3
§ 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 
                                                 
3 All references to the Wisconsin Statutes are to the 2001-
02 version unless otherwise noted. 
4 Wisconsin Stat. § 40.08(12) provides as follows:  
Notwithstanding s. 227.52, any action, decision or 
determination of the board, the Wisconsin retirement 
board, the teachers 
retirement board, 
the 
group 
insurance board or the deferred compensation board in 
an administrative proceeding shall be reviewable only 
by an action for certiorari in the circuit court for 
Dane County that is commenced by any party to the 
administrative proceeding, including the department, 
within 30 days after the date on which notice of the 
action, decision or determination is mailed to that 
party, and any party to the certiorari proceedings may 
appeal the decision of that court. 
5 In a certiorari review, the scope of review is generally 
limited to whether the agency (1) kept within its jurisdiction; 
(2) proceeded on the correct theory of law; (3) was arbitrary, 
oppressive, or unreasonable and represented its will and not its 
judgment; or (4) might reasonably have made the order or finding 
based on the evidence.  Kraus v. City of Waukesha Police & Fire 
Comm'n, 2003 WI 51, ¶10, 261 Wis. 2d 485, 662 N.W.2d 294; 
Schmidt v. Wis. Employe Trust Funds Bd., 153 Wis. 2d 35, 40, 449 
N.W.2d 268 (1990). 
The issue of the sufficiency of the evidence falls within 
the third and fourth standards.  State ex rel. Harris v. Annuity 
& Pension Bd., 87 Wis. 2d 646, 652, 275 N.W.2d 668 (1979).  
No.  03-0226 
 
 
4
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).     
                                                 
6 Harris, 87 Wis. 2d at 652; Stacy v. Ashland County Dep't 
of Pub. Welfare, 39 Wis. 2d 595, 602, 159 N.W.2d 630 (1969); 
Teriaca v. Milwaukee Employees' Ret. Sys./Annuity & Pension Bd., 
2003 WI App 145, ¶30, 265 Wis. 2d 829, 667 N.W.2d 791. 
7 Wisconsin Stat. § 227.57(6) reads as follows:  
If the agency's action depends on any fact found by 
the agency in a contested case proceeding, 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 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 support by substantial 
evidence in the record. 
Wisconsin Stat. § 227.57(5) provides:  
The court shall set aside or modify the agency action 
if 
it 
finds 
that 
the 
agency 
has 
erroneously 
interpreted 
a 
provision 
of 
law 
and 
a 
correct 
interpretation compels a particular action, or it 
shall remand the case to the agency for further action 
under a correct interpretation of the provision of 
law. 
No.  03-0226 
 
 
5
¶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.   
¶10 The critical findings of fact in the present case 
relate to the nature and extent of the claimant's disability, 
No.  03-0226 
 
 
6
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 
                                                 
8 Finding of Fact #15 calculates what the claimant would 
have had to earn in this case: "The record appears to indicate 
that Ms. Gehin's gross ICI benefits at the time those benefits 
were terminated were $979.37 per month.  Therefore, in order to 
be considered gainfully employed for purposes of section 5.14 – 
4.b. of the ICI contract, she would have to be capable of 
earning $979.37 per month, or $5.63 per hour in a full-time 
position."  
9 Giant Grip Mfg. Co. v. Indus. Comm'n, 271 Wis. 583, 585, 
74 N.W.2d 182 (1956). 
10 Finding of Fact #4. 
11 Id. 
12 Finding of Fact #5. 
13 Id. 
No.  03-0226 
 
 
7
¶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 
                                                 
14 Finding of Fact #6. 
15 Finding of Fact #14. 
16 Finding of Fact #6. 
17 Finding of Fact #14. 
18 The claimant must meet the contractual definition of 
"substantial gainful activity" provided in Section 5.14-4.b of 
the contract, which states as follows: 
 
After the first 12 months, the EMPLOYE's complete 
inability by reason of any medically determinable, 
physical or mental impairment, to engage in any 
substantial gainful activity for which the EMPLOYE is 
reasonably qualified with due regard to the EMPLOYE's 
education, training, experience, and prior economic 
status.  An activity is considered a substantial 
gainful activity if the earnings from that activity 
would 
be 
at 
least 
equal 
to 
the 
gross 
Income 
Continuation benefit for the same period of time.   
No.  03-0226 
 
 
8
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 
                                                                                                                                                             
Finding of Fact #14.  
19 See, e.g., Conclusion of Law #16. 
20 Finding of Fact #15. 
21 Finding of Fact #6. 
22 Finding of Fact #5. 
23 Finding of Fact #7. 
No.  03-0226 
 
 
9
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 
                                                 
24 Finding of Fact #7. 
25 Id. 
26 Id. 
27 Finding of Fact #10. 
28 Id. 
29 Id. 
No.  03-0226 
 
 
10
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 
                                                 
30 Finding of Fact #8. 
31 Id. 
32 Finding of Fact #12. 
33 Id. 
No.  03-0226 
 
 
11
that "it does not appear from the record that Mr. Miller had the 
benefit of the contract definition."34  The following month, 
United Wisconsin Group asked Dr. Kenneth Redlin to review the 
claimant's files, including Miller's report.35  
¶21 The 
claimant 
asked 
United 
Wisconsin 
Group 
to 
reconsider its termination decision,36 and on December 3, 1997, 
Dr. Richard Lemon saw the claimant.37  Unlike Mr. Miller, Dr. 
Lemon had available, according to the Group Insurance Board, the 
contractual language defining "substantial gainful activity."  
The Group Insurance Board concluded that "Dr. Lemon concluded 
that [the claimant] did not meet the contractual long-term 
benefit definition," quoting Dr. Lemon's report as follows: 
Because of [low back pain] symptoms I believe that Ms. 
Gehin needs to be under permanent work restrictions.  
I believe that she is capable of working 8 hours a day 
where she can alternate between sitting and standing 
every 30 minutes.  I believe that she needs to be 
lifting no more than 5 pounds.  She also needs to 
avoid any stooping, bending or twisting.  I believe 
that Ms. Gehin could easily be employed in a position 
such as a receptionist where she is able to stand or 
sit using a telephone headset for comfort.  Certainly, 
Ms. Gehin could also do some light paperwork or 
computer work.  I find it hard to believe that Ms. 
Gehin 
at 
only 
53 
years 
of 
age 
is 
totally 
unemployable.38 
                                                 
34 Id. 
35 Id. 
36 Finding of Fact #8. 
37 Finding of Fact #11. 
38 Id. 
No.  03-0226 
 
 
12
¶22 In quoting Dr. Lemon's report the Wisconsin Group 
Insurance Board obviously accepted Dr. Lemon's expert medical 
opinion that the claimant was permanently disabled and that she 
could work full time with permanent work restrictions, namely 
that she must alternate between sitting and standing every 30 
minutes; that she may lift no more than 5 pounds; that she must 
avoid stooping, bending or twisting; that that she was capable 
of grasping, fine manipulation, firm grasping and use of her 
feet for intermittent repetitive movements.  
¶23 On January 6, 1998, United Wisconsin Group upheld its 
termination of the claimant's benefits.39    
¶24 A month later, the claimant asked the Department of 
Employee Trust Funds to review the termination of her benefits.40  
On July 9, 1998, the Department affirmed the termination of 
benefits, and the claimant timely appealed.  
¶25 According to the Group Insurance Board's Findings of 
Fact, both the United Wisconsin Group and the Department's 
determinations "relied substantially on the medical opinions and 
evaluations of Ms. Gehin's condition by Dr. John Whiffen, Ms. 
                                                 
39 Finding of Fact #8.  
The Department of Employee Trust Funds and the Wisconsin 
Group Insurance Board (which is attached to the Department of 
Employee Trust Funds) are charged with administering the income 
continuation insurance 
plan. 
 Wis. 
Stat. 
§§ 40.03(2)(ig), 
40.03(6)(a)1, 40.62(1).  See also State – Income Continuation 
Insurance 
Fact 
Sheet 
2004 
(available 
online 
at 
http://etf.wi.gov/publications/et8918.pdf). 
40 Finding of Fact #9. 
No.  03-0226 
 
 
13
Gehin's 
treating 
physician, 
and 
Dr. 
Richard 
Lemon, 
an 
independent medical consultant retained by UWG [United Wisconsin 
Group]."41  The Group Insurance Board found that Drs. Lemon and 
Redlin 
both 
"believed 
the 
functional 
capacity 
evaluation 
conducted by Mr. Miller may have been incomplete or invalid."42   
¶26 The Group Insurance Board conducted an evidentiary 
hearing on October 2, 2001, before Examiner Barry Stern.43  
According to the Pre-Hearing Conference Memorandum, the sole 
issue on appeal was: "Did the [Department of Employee Trust 
Funds] 
err 
in 
its . . . determination 
to 
terminate 
the 
[claimant's long-term income continuation insurance benefits] 
beyond April 30, 1997, under Section 5.14 – 4.b. of the contract 
effective January 1, 1995, between United Wisconsin Group (UWG) 
and the [Group Insurance] Board?"44   
¶27 The claimant retained Dr. William Shannon to testify 
at the hearing.  He had examined the claimant in 1999 and had 
also reviewed her medical records, including the reports by the 
United Wisconsin Group doctors and consultants.  Dr. Shannon 
gave his expert opinion that the claimant met the definition of 
not being able to engage in substantial gainful activity under 
                                                 
41 Finding of Fact #10. 
42 Finding of Fact #12. 
43 Finding of Fact #2. 
44 Finding of Fact #3. 
No.  03-0226 
 
 
14
the contract, that is, that she was "totally disabled" as 
defined by the contract.45 
¶28 In the "Conclusions of Law" section of its Final 
Decision and Order, the Group Insurance Board pointed out that 
the claimant had the burden of satisfying the definition of 
"'totally disabled'" under the contract.46  The Group Insurance 
Board concluded that in determining "that the claimant was not 
disabled within the meaning of the contract, [United Wisconsin 
Group] and the [Department of Employee Trust Funds] reasonably 
accepted the opinions of [the claimant's] treating physician 
[Dr. Whiffen] and of [United Wisconsin Group's] expert over that 
of [Mr. Miller], who did not have the benefit of the contractual 
definition, and of a non-contemporaneous opinion by [the 
claimant's] expert [Dr. Shannon]."47 
III 
¶29 We next turn to an examination of the evidence upon 
which the Group Insurance Board relied in its Findings of Fact.  
As is evident from the Findings of Fact and the references to 
the record in the Findings, the Group Insurance Board based its 
Findings of Facts on the written medical reports submitted by 
three doctors.  The Group Insurance Board apparently relied on 
the doctors' reports to provide expert medical opinions about 
the claimant's physical work restrictions, her ability to work 
                                                 
45 Finding of Fact #13. 
46 Conclusion of Law #16. 
47 Conclusion of Law #17. 
No.  03-0226 
 
 
15
full time, and the type of work she could do. No evidence is in 
the record about the claimant's earning ability in either a full 
or part time job that would meet the physical restrictions 
imposed on the claimant in the hearsay medical reports.     
¶30 The parties agree, and so do we, that the three 
written medical reports that formed the basis of the Group 
Insurance Board Findings of Fact were hearsay.48  None of the 
three doctors testified at the hearing.       
¶31 Three witnesses testified at the hearing:  Dr. 
Shannon, the claimant's expert witness, the claimant, and Diane 
Bass, a staff person employed by the Department of Employee 
Trust Funds.  
¶32 In their oral testimony at the hearing, Dr. Shannon 
and the claimant consistently disagreed with the written hearsay 
reports of Dr. Whiffen, Dr. Lemon, and Dr. Redlin that had been 
submitted by the Department of Employee Trust Funds about the 
claimant's physical abilities.  
¶33 Dr. Shannon testified that the claimant's pain and 
dysfunction prevented her from engaging in "any kind of gainful 
employment," either in 1997 or 1999.  Although Dr. Shannon did 
not have the contractual definition of "totally disabled" (that 
is, the inability to engage in substantial gainful activity) at 
his 1999 examination of the claimant, when he was shown the 
                                                 
48 Hearsay is a "statement, other than one made by the 
declarant while testifying at the trial or hearing, offered in 
evidence to prove the truth of the matter asserted."  Wis. Stat. 
§ 908.01(3).  "A 'statement' is (a) an oral or written 
assertion . . . ."  Wis. Stat. § 908.01(1). 
No.  03-0226 
 
 
16
contractual definition during his testimony at the hearing he 
opined that she certainly fit the definition, an opinion 
consistent with Mr. Miller's report. 
¶34 Dr. 
Shannon also 
examined 
a functional capacity 
evaluation of the claimant and concluded that there had been no 
change since Mr. Miller's 1997 written evaluation.  Dr. 
Shannon's oral testimony at the hearing corroborated Mr. 
Miller's written hearsay report, as well as Mr. Miller's 
conclusion about the claimant's disability. 
¶35 The Group Insurance Board disregarded Dr. Shannon's 
expert opinion testimony, stating that Dr. Shannon did not treat 
or examine the claimant in 1997, the relevant time period.49  
Similarly the Group Insurance Board disregarded the hearsay 
written evaluation report of Mr. Miller.50 
¶36 The claimant's testimony disagreed with Dr. Whiffen's 
and Dr. Lemon's reports about the amount of rest she needed and 
her ability to work full-time.  The Group Insurance Board for 
all intents and purposes ignored the claimant's own testimony 
about her physical ability.    
¶37 Although "Dr. Whiffen opined on February 7, 1997, that 
[the claimant] could work up to full-time with restrictions, 
including a need to change position every 45-60 minutes for five 
minutes," the claimant claimed she was incapable of sitting for 
more than 30 minutes at a time and that her rests often needed 
                                                 
49 Finding of Fact #13. 
50 Finding of Fact #12. 
No.  03-0226 
 
 
17
to be more than an hour——far longer than the five minutes 
suggested in Dr. Whiffen's written report.  The claimant also 
disagreed with Dr. Lemon's assessment of her physical condition.  
¶38 With regard to her unpaid vocational rehabilitation 
program at Mendota Mental Health Institute (described in a 
hearsay letter from that program), the claimant testified that 
she performed the described clerical tasks while taking rests. 
She testified that she had pain throughout this program, and the 
Group Insurance Board found as a fact that due to pain and 
fatigue, the claimant fell short of the scheduled 40 hours per 
week, 
"generally 
working 
between 
24 
and 
30 
hours 
per 
week . . . ."51   
¶39 The 
claimant 
expressly 
corroborated 
the 
letter's 
description of the clerical types of tasks she performed in the 
job-training program.  Neither party has controverted the 
matters stated in the letter by live testimony or otherwise. The 
letter described the claimant's clerical tasks as "low level."  
The letter explains that the claimant must "test up" to be 
considered for a clerical job within the state system;52 "[a]ny 
clerical position, within the state system, is at a higher 
'range' than that of the typical DVR on-the-job re-training 
                                                 
51 Finding of Fact #7.  The letter describing the program 
stated that sometimes the claimant worked less than 24 hours a 
week and equated the total time worked out of three years to be 
no more than half that because of her limited ability to work 
due to pain and a variety of medical leaves not necessarily 
connected with her injury. 
52 Exh. 22. 
No.  03-0226 
 
 
18
candidate.  [The claimant](and all past DVR placements), must 
'test' up to be considered for a clerical job within the state 
system.  The entire process can take considerable time and be 
problematic in its self [sic]."53  Thus the claimant's clerical 
tasks at the job training program did not qualify the claimant 
for a clerical position in state employment. 
¶40 The claimant reported that she was unable to complete 
the program because of her pain and was unable to complete 
courses 
at 
the 
technical 
college 
because 
they 
were 
too 
difficult.  She testified that her supervisor in the program 
advised her that given the level of pain, it was best if the 
claimant stopped participation in the program.  The claimant 
thus corroborated the letter that she was not able to be at the 
job training program more than 24 to 30 hours a week (sometimes 
less), that she was in pain, and that she was unable to remain 
in one position (standing or sitting) for any length of time.        
¶41 Nothing in the letter about the claimant's unpaid job 
training 
at 
Mendota 
Mental 
Health 
Institute 
reaches 
any 
conclusion 
about 
whether 
the 
claimant 
could 
engage 
in 
substantial gainful activity under the contract.  Nothing in the 
letter describes what kind of jobs the claimant was able to work 
and what sums of money the claimant was able to earn in 1997 had 
she been able to work 24 hours a week.  Assuming the claimant 
was able to work 24-30 hours per week, we calculate on the basis 
of the record that she would have had to earn between $8-$10 per 
                                                 
53 Id. 
No.  03-0226 
 
 
19
hour at 1997 salary rates to earn $979.37 per month.  The 
federal minimum wage in the spring of 1997 was $4.75 per hour.      
¶42 The Department of Employee Trust Funds failed to 
present a single live witness to corroborate the contents of the 
written medical reports about the claimant's ability to work 
full time and their version of her physical work restrictions.  
The Group Insurance Board relied solely on these medical reports 
in its Conclusions of Law that the claimant could work full time 
with permanent work restrictions.  
¶43 Although the Group Insurance Board calculated the 
minimum amount the claimant would have had to earn in the spring 
of 1997 to be engaging in substantial gainful activity, none of 
its findings (and none of the evidence) states that a job was 
available which fit the claimant's permanent work restrictions 
and would enable her to earn $979.37 per month on either a full 
or part time basis.  The Group Insurance Board merely quoted as 
a finding of fact Dr. Lemon's hearsay medical report stating 
that the claimant "could easily be employed as a receptionist 
where she is able to stand or sit using a telephone headset for 
comfort . . . [or] could do some light paperwork or computer 
work.  I find it hard to believe that Ms. Gehin at only 53 years 
of age is totally unemployable."54 
¶44 Bass's testimony, the only live testimony presented by 
the Department of Employee Trust Funds, was primarily about the 
                                                 
54 Finding of Fact #11. 
No.  03-0226 
 
 
20
terms of the income continuation insurance contract and the 
steps in the administrative proceedings.   
¶45 An examination of the Board's Final Decision and Order 
and the record reveals that a number of the underlying facts 
(such as the events leading up to the back injury, the surgery, 
the insurance contract, and a history of the administrative 
procedure) 
were 
either 
undisputed 
or 
supported 
by 
live 
testimony.  At best, the hearsay medical reports declared that 
the claimant is able to work full time with restrictions, namely 
a job in which she could alternate between sitting and standing, 
in which she need not lift more than 5 pounds, in which she need 
not do any carrying, and in which she must avoid stooping, 
bending or twisting. The written hearsay medical reports about 
the claimant's physical restrictions or ability to work full 
time, upon which the Group Insurance Board based its Findings of 
Fact and its decision to terminate the claimant's benefits, are 
uncorroborated and in fact were contradicted by live testimony. 
¶46 The claimant's testimony and witnesses presented a 
prima facie case that she was not able to engage in substantial 
gainful activity under the terms of the contract.  She could not 
work full time, if at all.  She could not stand or sit for any 
length of time and needed long rest periods.  When the claimant 
was injured she was a housekeeper who bent, twisted and lifted. 
The claimant had limited education (10th grade), and her job 
experience before her injury was housekeeping.  Her unpaid job 
training program at Mendota Mental Health Institute trained her 
for tasks that were below the standard for state clerical jobs, 
No.  03-0226 
 
 
21
and she was at the job training program a maximum of 24-30 hours 
a week.  She was not able to continue at the Institute because 
of her pain.     
¶47 Therefore, 
if 
the 
uncorroborated 
written 
hearsay 
medical reports are eliminated from consideration, no evidence 
exists in the record to support the findings that the claimant 
was able to work full time with the permanent physical work 
restrictions described by the doctors or the Board's conclusion 
of law 
that 
the 
claimant 
did not 
meet 
the 
contractual 
requirements. 
IV 
¶48 We next examine whether uncorroborated hearsay medical 
reports constitute "substantial evidence" as that phrase is used 
in both certiorari and Wis. Stat. § 227.57(6).55  Substantial 
evidence has been defined in the case law as "that quantity and 
quality of evidence which a reasonable man could accept as 
adequate 
to 
support 
a 
conclusion."56 
 
Cases 
state 
that 
                                                 
55 For a discussion of the history of the concept of 
substantial evidence in American administrative law, see E. 
Blythe Stason, "Substantial Evidence" in Administrative Law, 89 
U. Pa. L. Rev. 1026 (1940-41).  
56 DeGayner 
& 
Co. v. 
DNR, 70 
Wis. 2d 936, 
940, 236 
N.W.2d 217 (1975).  See also Village of Menomonee Falls v. DNR, 
140 Wis. 2d 579, 594, 412 N.W.2d 505 (1987); Gilbert v. State 
Med. Examining Bd., 119 Wis. 2d 168, 195, 349 N.W.2d 86 (1984);  
Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938). 
No.  03-0226 
 
 
22
substantial evidence is more than "a mere scintilla" of 
evidence57 and more than "conjecture and speculation."58      
¶49 As to admissibility of evidence, an agency or hearing 
examiner is not ordinarily bound by common law or statutory 
rules of evidence.  The statute governing admission of evidence 
in 
contested 
cases 
before 
administrative 
agencies, 
Wis. Stat. § 227.45(1), explicitly states, 
[A]n agency or hearing examiner shall not be bound by 
common law or statutory rules of evidence.  The agency 
or hearing examiner shall admit all testimony having 
reasonable 
probative 
value, 
but 
shall 
exclude 
immaterial, 
irrelevant 
or 
unduly 
repetitive 
testimony . . . .  Basic principles of relevancy, 
materiality and probative force shall govern the proof 
of all questions of fact.   
¶50 Accordingly, 
written 
hearsay 
medical 
reports 
are 
admissible as evidence in proceedings before the Group Insurance 
Board and such reports were properly admitted in the present 
case. 
¶51 Although the admission of hearsay evidence makes 
administrative agency procedures simpler for both the litigants 
(who are frequently unrepresented) and the agency personnel, the 
relaxed 
evidentiary 
standard 
is 
not 
meant 
to 
allow 
the 
proceedings to degenerate to the point where an administrative 
                                                 
57 Folding Furniture Works, Inc. v. Wis. Labor Relations 
Bd., 232 Wis. 170, 189, 285 N.W. 851 (1939) (quoting Consol. 
Edison, 305 U.S. at 229). 
58 Princess House, Inc. v. DILHR, 111 Wis. 2d 46, 53-54, 330 
N.W.2d 169 (1983) (interpreting "substantial evidence" in the 
worker's compensation statute). 
No.  03-0226 
 
 
23
agency relies only on unreliable evidence.  The courts are 
required, under Wis. Stat. § 227.57(6), to "set aside agency 
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."59 
¶52 Properly 
admitted 
evidence 
may 
not 
necessarily 
constitute substantial evidence.  
¶53 In defining substantial evidence more than 65 years 
ago, the Wisconsin Supreme Court declared in Folding Furniture 
Works, Inc. v. Wisconsin Labor Relations Board that "[m]ere 
uncorroborated hearsay . . . does not constitute substantial 
evidence."60  
                                                 
59 Wisconsin Stat. § 227.57(6) reads:  
If the agency's action depends on any fact found by 
the agency in a contested case proceeding, 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 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 in the record. 
60 Folding Furniture, 232 Wis. at 189 (quoting Consol. 
Edison, 305 U.S. at 235).  
Indeed, it appears that the concept that hearsay, standing 
alone, cannot support a factual finding in an administrative 
setting has even earlier roots in Wisconsin.  See A. Breslauer 
Co. v. Indus. Comm'n, 167 Wis. 202, 204 (1918).  
This rule can be traced to the New York case, Carrol v. 
Knickerbocker Ice Co., 113 N.E. 507 (1916). 
No.  03-0226 
 
 
24
¶54 The Folding Furniture court declared that the purpose 
of allowing the admission of hearsay evidence is to free 
administrative agencies from technical evidentiary rules, but at 
the same time this flexibility does not go so far as to justify 
administrative findings that are not based on evidence having 
rational probative force.61  Thus the Folding Furniture court 
adopted 
the 
language 
from 
the 
U.S. 
Supreme 
Court 
case 
Consolidated Edison Co. v. NLRB, 305 U.S. 197 (1938), that mere 
uncorroborated hearsay or rumor does not constitute substantial 
evidence.62  
                                                 
61 Folding Furniture, 232 Wis. at 189 (quoting Consol. 
Edison, 305 U.S. at 229).  The U.S. Supreme Court stated: 
The obvious purpose of this and similar provisions is 
to free administrative boards from the compulsion of 
technical rules so that the mere admission of matter 
which 
would 
be 
deemed 
incompetent 
in 
judicial 
proceedings would not invalidate the administrative 
order.   But this assurance of a desirable flexibility 
in administrative procedure does not go so far as to 
justify orders without a basis in evidence having 
rational probative force.  Mere uncorroborated hearsay 
or 
rumor 
does 
not 
constitute 
substantial 
evidence. . . . Substantial evidence is more than a 
mere scintilla.  It means such relevant evidence as a 
reasonable mind might accept as adequate to support a 
conclusion (citations omitted). 
Consol. Edison, 305 U.S. at 229. 
62 Folding Furniture, 232 Wis. at 189. 
No.  03-0226 
 
 
25
¶55 This or similar language can be found in other 
Wisconsin cases.63  In Village of Menomonee Falls, for example, 
the court reiterated that "administrative bodies should never 
ground administrative findings upon uncorroborated hearsay."64    
¶56 The rule that uncorroborated hearsay alone does not 
constitute substantial evidence allows an agency to utilize 
hearsay evidence while not nullifying the relaxed rules of 
evidence in administrative hearings.  The rule prohibits an 
                                                 
63 See, e.g., Outagamie County v. Town of Brooklyn, 18 
Wis. 2d 303, 313, 118 N.W.2d 201 (1962); Wis. Tel. Co. v. Indus. 
Comm'n, 263 Wis. 380, 387, 57 N.W.2d 334 (1953); A. Breslauer 
Co., 167 Wis. at 204. 
See also Ralph M. Hoyt, The Wisconsin Administrative 
Procedure Act, 1944 Wis. L. Rev. 214 ("[C]ourts have never 
permitted these [administrative] bodies to ground their findings 
upon 
testimony which violate[s] fundamental 
principles of 
probative force—for instance, upon uncorroborated hearsay or 
rumor."). 
The legislature has placed limits on the weight hearsay may 
be 
given 
in 
small 
claims 
proceedings. 
 
Wisconsin 
Stat. 
§ 799.209(2) provides: "The proceedings shall not be governed by 
the common law or statutory rules of evidence except those 
relating to privileges under ch. 905 [e.g., lawyer-client, 
physician-patient, spousal] or to admissibility under s. 901.05 
[HIV tests].  The court or circuit court commissioner shall 
admit all other evidence having reasonable probative value, but 
may exclude irrelevant or repetitious evidence or arguments.  An 
essential finding of fact may not be based solely on a 
declarant's oral hearsay statement unless it would be admissible 
under the rules of evidence" (emphasis added).  At least one 
published decision in Wisconsin has read this statute to require 
corroborative evidence of an oral hearsay statement in order to 
form the basis of an essential finding.  Scholten Pattern Works, 
Inc. v. Roadway Express, Inc., 152 Wis. 2d 253, 257, 448 
N.W.2d 670 (Ct. App. 1989). 
64 Village of Menomonee Falls, 140 Wis. 2d at 610. 
No.  03-0226 
 
 
26
administrative agency from relying solely on uncorroborated 
hearsay 
in 
reaching 
its 
decision. 
 
This 
rule 
defining 
substantial evidence has been followed in Wisconsin since 
Folding Furniture was decided in 1939.  There has been no 
suggestion that this rule has hindered the operation of state 
administrative agencies.  
¶57 The rules governing proceedings before the Group 
Insurance Board apparently define substantial evidence as non-
hearsay evidence.  The rule states that "[n]o finding of fact 
may be based on hearsay."65  The Group Insurance Board is exempt 
from having to publish or retain permanently its own decisions.66  
                                                 
65 Wis. Admin. Code § ETF 11.12(2)(b) (Jan. 2004).  
Other administrative agencies have rules governing the 
admissibility and weight of hearsay evidence.  See, e.g., Wis. 
Admin. Code § INS 5.39(5)(a)1 (Feb. 1999)  ("The administrative 
law judge may admit hearsay evidence and shall accord it as much 
weight as the administrative law judge considers warranted by 
the circumstances."); Wis. Admin. Code § PC 5.03(5) (Jan. 2003) 
("Hearsay evidence may be admitted into the record at the 
discretion of the hearing examiner or commission and accorded 
such weight as the hearing examiner or commission deems 
warranted by the circumstances."); Wis. Admin. Code § TCS 
12.10(4)(e) (July 2002) ("Unless objected to by the board, any 
summary of testimony of a witness for the person who requested 
the hearing shall be made part of the record in lieu of the 
testimony of that witness as an exception to the hearsay rule 
and shall be considered by the board for whatever probative 
value that testimony has in making its decision."); Wis. Admin. 
Code 
§ DWD 
140.16(1) 
(Sept. 
2000) 
("Hearsay 
evidence 
is 
admissible if it has reasonable probative value but no issue may 
be decided solely on hearsay evidence unless the hearsay 
evidence 
is 
admissible 
under 
ch. 
908, 
Stats. 
[rules 
of 
evidence]"). 
66 Wis. Stat. § 40.07; Wis. Admin. Code § ETF 11.13(2) (Jan. 
2004). 
No.  03-0226 
 
 
27
We therefore do not know how the Group Insurance Board has 
interpreted the ETF rule that no finding of fact may be based on 
hearsay.  Nothing in the record explains why the Group Insurance 
Board deviated from this rule and case law defining substantial 
evidence to prohibit reliance solely on hearsay.   
¶58 The 
substantial 
evidence 
rule 
proscribing 
an 
administrative agency's relying solely on uncorroborated hearsay 
is sometimes called the legal residuum rule.67  This rule is 
based in part on the reasoning that "since hearsay, due to its 
second hand nature, is inherently suspect, a determination based 
solely on hearsay can never be more than conjecture."68   
¶59 The legal residuum rule is supported by the notion 
that the courts should act as a check on the agencies by 
                                                 
67 Whether called the residuum rule or the substantial 
evidence test, in Wisconsin the substantial evidence rule has 
functionally operated like the residuum rule.  See John Wigmore, 
1 Wigmore on Evidence § 4b at 122-24 (Tillers Rev. 1983) ("The 
residuum rule generally has been abandoned.  It has been 
replaced by the 'substantial evidence' standard. . . . Some 
courts, however, have effectively subverted the original purpose 
of the substantial evidence standard by holding that hearsay 
evidence in and of itself cannot constitute 'substantial 
evidence.'") (footnotes omitted). 
68 Leonard M. Simon, The Weight To Be Given Hearsay Evidence 
By Administrative Agencies: The "Legal Residuum" Rule, 26 Brook. 
L. Rev. 265, 267 (1959-60).   
No.  03-0226 
 
 
28
reviewing the decisions for fundamental fairness.69  The rule 
"gives to the reviewing court as the natural guardian of the 
public's legal rights, an additional device to retain control 
over 
administrative 
determinations, 
which 
due 
to 
the 
informalities of proceeding may easily go astray."70     
¶60 The legal residuum rule has been criticized by 
commentators because the rule produces "a hybrid situation in 
which commissioners could freely hear all the incompetent 
evidence they pleased, but could make no legal use of it."71  
                                                 
69 See, e.g., Daniel R. Schuckers, The "Legal Residuum Rule" 
Should Be Abolished in Pennsylvania, 75 Pa. Bar Ass'n Q. 1, 3 
(Jan. 2004), John L. Gedid, The "Legal Residuum" Rule Should Be 
Retained in Pennsylvania Because of Its Function To Insure 
Fundamental Fairness and Due Process, 75 Pa. Bar Ass'n Q. 7 
(Jan. 2004); E. Blythe Stason, "Substantial Evidence" in 
Administrative Law, 89 U. Pa. L. Rev. 1026, 1029 (1940-41); 
Bernard Schwartz, Administrative Law § 7.4 at 376 (3d ed. 1991). 
70 Simon, supra note 68, at 268. 
71 Schwartz, supra note 69, § 7.4 at 376 (quoting 2 Arthur 
Larson, The Law of Workmen's Compensation § 79.30 (1981)); 7 
Larson's Workers' Compensation Law § 127.02 (2004) (discussing 
the use of the legal residuum rule in the workers' compensation 
setting as follows: "[T]he 'residuum rule' has been followed in 
the majority of jurisdictions, although it has been under 
constant attack ever since it was announced.") 
No.  03-0226 
 
 
29
Professor Davis argues that an alternative to the legal residuum 
rule is not to allow administrative agencies to use unreliable 
evidence, but to grant them discretion to determine what 
evidence is reliable and then if circumstances warrant, to allow 
the agency to rely on it.72  The basic criticism of the  legal 
residuum rule is that it ignores the reliability of evidence 
incompetent under the hearsay rule.  
                                                                                                                                                             
See Kenneth Culp Davis, Hearsay in Administrative Hearings, 
32 Geo. Wash. L. Rev. 689, 697 (1964) (criticizing the rule); 
Ernest Gellhorn, Rules of Evidence and Official Notice in Formal 
Administrative Hearings, 1971 Duke L.J. 1, 24 ("[I]t has been 
severely criticized by scholars, and its application has 
strained judicial reasoning."); Wigmore, supra note 67, § 4b 
("The residuum rule generally has been abandoned [citing 
federal, Kansas and New York cases for this proposition, but 
then citing California and New Mexico cases for the contrary 
position].  It has been replaced by the substantial evidence 
standard. . . . Some courts, however, have effectively subverted 
the original purpose of the substantial evidence standard by 
holding that hearsay evidence in and of itself cannot constitute 
substantial evidence [citing federal, New Mexico and New York 
cases] (internal quotations and footnotes omitted).). 
But see 1 Cooper, State Administrative Law 410-412 (1965):  
On the other hand, it is urged that the existence of 
the rule has accomplished considerable good, because 
the fear that it may be invoked has led agencies to 
insist 
on 
careful 
presentation 
and 
detailed 
examination of the evidence offered in contested 
cases; and because it has had the effect of inducing 
agencies to apply the rules of evidence in much the 
same fashion as they are applied by judges sitting in 
non-jury trial civil cases. 
72 Davis, supra note 71, at 697; Kenneth Culp Davis, The 
Residuum Rule in Administrative Law, 28 Rocky Mt. L. Rev. 1, 4-6 
(1955).  
No.  03-0226 
 
 
30
¶61 Departure from the legal residuum rule has also been 
criticized.  In 1981 in Unemployment Compensation Board of 
Review v. Ceja, 427 A.2d 631 (Pa. 1981), in a single justice's 
opinion not joined by any other member of the court,73 the 
Pennsylvania Supreme Court appeared to reject the legal residuum 
rule in favor of a reliability of the hearsay evidence rule.  
Several members of the court wrote separately, concluding that 
the new guidelines the single justice's opinion set forth on the 
reliability 
of 
the 
hearsay 
escape 
comprehension, 
invited 
confusion, 
and 
lacked 
uniformity 
in 
the 
conduct 
of 
administrative hearings.74  In 1985 the Pennsylvania Supreme 
Court explicitly stated that the Ceja case does not represent 
the law of Pennsylvania.75 
¶62 While Perales may have affected the legal residuum 
rule in federal social security cases, many states continue to 
operate under rules that function like the legal residuum rule.76 
                                                 
73 Ford v. Unemployment Comp. Bd. of Review, 498 A.2d 449, 
451 (Pa. 1985). 
74 Unemployment Comp. Bd. of Review v. Ceja, 427 A.2d 631, 
645 (Pa. 1981). 
75 Ford, 498 A.2d at 451.  See also Ridley School Dist. v. 
Unemployment Comp. Bd. of Review, 637 A.2d 749, 752 (1994)(a 
finding of fact based solely on hearsay cannot stand). 
76 See Schwartz, supra note 69, § 7.4 at 377. 
No.  03-0226 
 
 
31
                                                                                                                                                             
Many states apply some form of the legal residuum rule.  
See, e.g., Ala. Admin. Code r. 482-1-065-.04(9)(b) (2004) 
(hearsay is "not sufficient to prove any material fact" unless 
that hearsay would be admissible under a court-recognized 
exception); Libby, McNeill & Libby v. Alaska Indus. Bd., 12 
Alaska 584, 588 (1950) ("Undoubtedly an award based solely on 
hearsay cannot stand . . . ."); Black Mountain Spruce, Inc. v. 
Johnson, 670 P.2d 1241, 1243 (Colo. App. 1983) ("[I]t is not 
error for an administrative agency to admit hearsay evidence, as 
long 
as 
it 
is 
not 
the 
sole 
support 
for 
the 
agency's 
findings . . . ."); Application of Citizens Utils. Co., 351 P.2d 
487, 490 (Idaho 1960) ("[The agency] cannot make a finding based 
upon hearsay."); 11 Ky. Admin. Regs. 3:100, Section 3(4)(a)(3) 
(2004) ("The hearing officer may receive evidence deemed 
reliable 
and 
relevant, 
including 
evidence 
that 
would 
be 
considered hearsay if presented in court, except that hearsay 
evidence shall not be sufficient in itself to support the 
hearing officer's decision."); Credit v. Whitfield, 488 So. 2d 
1064, 1066 (La. 1986) ("The jurisprudence firmly establishes 
that the [agency] may not base its decision solely on hearsay.  
Reliance on hearsay and nothing more shatters the competence and 
sufficiency of the evidence and undermines the employer's burden 
of proof. . . . [W]e reiterate 
the 
jurisprudence 
that the 
employer may not base its entire case on hearsay when the 
claimant offers direct, contradictory evidence." (citations 
omitted)); Minnesota Rules, part 5601.3145, subp. 3 (2003) 
("Hearsay evidence may be used for the purpose of supplementing 
or explaining any direct evidence but is not sufficient in 
itself to support a finding unless it would be admissible over 
objection in civil actions"); Code Miss. R. 06 000 038, Section 
7(c) (2004) ("However, hearsay evidence (if presented) shall not 
be the sole basis for the determination of facts by the review 
officer"); Mont. Admin. R. 24.9.312 (2004) ("Hearsay evidence 
may be received and considered to supplement other evidence, but 
such hearsay evidence may not be considered to support a finding 
unless it would otherwise be admissible over objection in civil 
actions or under the Montana Rules of Evidence."); In re Toth, 
418 A.2d 272, 277 (N.J. Super. Ct. App. Div. 1980) "[T]he rule 
in this State is that a factfinding or legal determination 
cannot be based on hearsay alone.  Hearsay may be employed to 
corroborate competent proof, or competent proof may be supported 
or given added probative force by hearsay testimony."); Trujillo 
v. Employment Sec. Comm'n, 610 P.2d 747, 748 (N.M. 1980) 
("[U]nemployment compensation [is] a substantial right as a 
matter of public policy.  The benefits in this case may not be 
denied on the basis of controverted hearsay alone.  Controverted 
No.  03-0226 
 
 
32
¶63 The court of appeals concluded in the instant case 
that it should follow Richardson v. Perales, 402 U.S. 389 
(1971), rather than Folding Furniture.  In Perales, the United 
States 
Supreme 
Court 
concluded 
that 
hearsay 
evidence 
is 
substantial evidence under the social security statute and that 
the agency's reliance on hearsay evidence to support its legal 
conclusion did not violate due process.  The social security 
statute in issue in Perales stated: "The findings of the 
Secretary as to any fact, if supported by substantial evidence, 
shall be conclusive."77  
¶64 Perales casts doubt on the continued viability of 
Consolidated Edison, upon which Folding Furniture relied.78  The 
Perales court explained away the Consolidated Edison language 
                                                                                                                                                             
hearsay under these facts does not qualify as substantial 
evidence."); Bermudez v. Blum, 423 N.Y.S.2d 11, 12 (App. Div. 
1979) ("While 
an 
administrative determination, 
after 
fair 
hearing, may be supported by hearsay, it may not be based 
entirely thereon."); Utah Admin. R. 51-2-12 C. ("Hearsay 
evidence may be used for the purpose of supplementing or 
explaining other evidence, but it shall not be sufficient in 
itself to support a finding unless it would be admissible in a 
judicial proceeding."); Wis. Admin. Code §  DWD 140.16 ("Hearsay 
evidence is admissible if it has reasonable probative value but 
no issue may be decided solely on hearsay evidence unless the 
hearsay evidence is admissible under ch. 908, Stats.").  See 
also Ernest H. Schopler, Comment Note——Hearsay Evidence in 
Proceedings Before State Administrative Agencies, 36 A.L.R.3d 12 
(2004) (including a number of the cases listed above). 
77 Perales, 402 U.S. at 390. 
78 See Kenneth Culp Davis, Administrative Law Text 282 (3d 
ed. 1972); Kenneth Culp Davis, Administrative Law of the 
Seventies § 14.11 at 339-42 (1976). 
No.  03-0226 
 
 
33
that "mere uncorroborated hearsay" is not substantial evidence 
as follows: 
Although the reports are hearsay in the technical 
sense, because their content is not produced live 
before the hearing examiner, we feel that the claimant 
and the Court of Appeals read too much into the single 
sentence from Consolidated Edison.  The contrast the 
Chief Justice was drawing, at the very page cited, was 
not with material that would be deemed formally 
inadmissible in judicial proceedings but with material 
"without a basis in evidence having rational probative 
force."  This was not a blanket rejection by the Court 
of administrative reliance on hearsay irrespective of 
reliability and probative value.  The opposite was the 
case.79 
¶65 One commentator has written that Perales has not been 
interpreted as "a blanket rejection of the residuum rule.  The 
rule 
bars 
not 
'administrative 
reliance 
on 
hearsay,' 
but 
administrative reliance on hearsay alone."80  Another commentator 
has concluded that "it is doubtful that Perales can be viewed as 
having discarded the Hearsay Rule in agency adjudications.  In 
effect, medical reports constitute a class exception, at least 
in Social Security disability cases."81  
¶66 Perales must be examined in context and is not 
applicable to the present case.  The Perales discussion must be 
understood against the backdrop that an applicant was denied 
social 
security 
benefits 
(rather 
than 
having 
benefits 
                                                 
79 Perales, 402 U.S. at 402-03. 
80 Schwartz, supra note 69, § 7.6 at 381. 
81 James L. Rose, Hearsay in Administrative Adjudications, 6 
Admin. L. J. Am. U. 459, 475 (1992). 
No.  03-0226 
 
 
34
terminated); that the Social Security Administration considers 
more than one million disability applications a year;82 that most 
claimants are not represented by counsel; and that procedures 
must be kept as simple and inexpensive as possible for the 
system to work.   
¶67 Furthermore, in Perales the doctors' written reports 
were corroborated by in-person testimony.  The evidence in 
Perales consisted of written medical reports harmful to Perales' 
claim, two witnesses' testimony that controverted the written 
reports, 
and 
a 
government-paid 
doctor's 
testimony 
that 
corroborated the substance of the written hearsay reports.83  
¶68 Courts that follow Perales conclude that hearsay can 
be substantial evidence if the evidence has sufficient probative 
force for a reasonable person to accept it as adequate support 
of the agency's conclusion.84   
¶69 Medical reports arguably have indicia of reliability 
and therefore seem to have probative force; they are furnished 
by independent, impartial experts and are arguably admissible as 
exceptions to the hearsay rule.     
¶70 Nevertheless, the reliability and probative force of 
the written medical reports in the present case are suspect.  As 
                                                 
82 Rose, supra note 81, at 475.  
83 Perales, 402 U.S. at 395-96.  See State v. Watson, 227 
Wis. 2d 167, 172, 191, 595 N.W.2d 403 (1999) (holding that the 
testimony of an expert witnesses who relies on inadmissible 
hearsay is itself admissible in evidence). 
84 Schwartz, supra note 69, § 7.6 at 382. 
No.  03-0226 
 
 
35
noted by the Supreme Court of Mississippi in examining hearsay 
medical reports in the workmen's compensation context,  
It is quite likely that the bench and bar would be 
scandalized if this Court should approve the receiving 
in evidence of ex parte, unsworn statements of persons 
other than doctors, even in Workmen's Compensation 
cases. 
While doctors occupy an important role in our scheme 
of things, they are, after all, merely human, and may 
not be considered wholly free from the frailties that 
beset the rest of us.  There is nothing, therefore, in 
the fact that a witness may be a member of the medical 
profession that reasonably may be said to justify his 
exemption from the requirements and restriction which 
would apply to others giving testimony in an adversary 
proceeding.  The admission of the reports constitutes 
reversible error.85  
¶71 One report was written by Dr. Lemon who was retained 
by United Wisconsin Group specifically to evaluate the claimant 
in connection with her claim.  Although Dr. Lemon was provided 
with 
the 
contractual 
definition 
of 
"substantial 
gainful 
activity" and the $979.37 per month earnings figure, the form he 
was asked to complete did not ask for his opinion whether the 
claimant fit the contract definition.   
¶72 Dr. Lemon never rendered an opinion whether the 
claimant was able to engage in substantial gainful activity 
under the contract.  Dr. Lemon remarked that he could not 
believe she was "totally unemployable." This remark is not 
responsive or relevant to the issue of substantial gainful 
activity under the contract; under the contract a person may be 
                                                 
85 Georgia-Pacific Corp. v. McLaurin, 370 So. 2d 1359, 1362 
(Miss. 1979). 
No.  03-0226 
 
 
36
employable but the earning capacity is less than that specified 
under the contractual definition. 
¶73 Dr. Lemon's remark about his disbelief that the 
claimant is "totally unemployable," which the Group Insurance 
Board incorporated in its Findings of Fact, is inconsistent with 
the Group Insurance Board's finding of fact that "Dr. Lemon 
concluded that Gehin did not meet the contractual long-term 
benefit definition."86   
¶74 Dr. Whiffen completed a form dated November 27, 1996, 
asking whether the patient is totally disabled.  His markings on 
the form are internally inconsistent. In response to the 
question on the printed form whether patient is now totally 
disabled from the patient's job, Dr. Whiffen checked the "Yes" 
box clearly.  (Although another of his responses might be 
interpreted that the claimant could return to her former job). 
He also checked the "No" box, but somewhat less clearly. He 
checked another box "No" in response to the question of whether 
the claimant was totally disabled for any other work.  Dr. 
Whiffen's opinion about whether the claimant was totally 
disabled for any other work consisted of check marks in boxes on 
a printed form presented to him.   
¶75 Nothing 
in 
the 
form 
refers 
to 
the 
contractual 
definition of "totally disabled," that is that the claimant 
cannot engage in substantial gainful activity.  Therefore we do 
                                                 
86 Finding of Fact #11. 
No.  03-0226 
 
 
37
not know what definition of totally disabled Dr. Whiffen was 
using.      
¶76 In response to the question what duties the claimant 
is incapable of performing the doctor wrote "bending twisting 
heavy lifting." Checking the boxes, Dr. Whiffen restricted 
lifting to 11-24 pounds and restricted bending to a "maximum of 
0-2 times per hour."     
¶77 In January 1997, after completing the 1996 form, Dr. 
Whiffen was advised of the contract definition of substantial 
gainful activity but was not advised that the claimant would be 
disqualified only if she were able to earn at least $979.37 per 
month.  In the form presented in January 1997, Dr. Whiffen was 
never asked and never answered whether the claimant was totally 
disabled under the contract and never gave an opinion on that 
matter. Dr. Whiffen wrote that the claimant could work up to 
full time, was experiencing pain after prolonged sitting, and 
"must be able to change position every 45-60 min for 5 min."   
¶78 In May 1997 Dr. Whiffen appears to have had second 
thoughts about the claimant's ability and the record shows he 
called for a functional capacity evaluation. Dr. Whiffen retired 
soon thereafter. 
¶79 Without Dr. Whiffen's and Dr. Lemon's testimony about 
what they meant by their responses, their reports are not 
reliable as a basis for the Group Insurance Board's findings of 
fact about her permanent physical work restrictions and her 
ability to work full-time or the Board's conclusions of law that 
the claimant was not totally disabled under the contract.   
No.  03-0226 
 
 
38
¶80 Weighing the nature of the doctors' responses, the 
importance of the facts sought to be proved by the hearsay 
medical 
reports 
to 
the 
outcome 
of 
the 
proceedings 
and 
considerations of economy; the evidence opposing the hearsay 
reports; the lack of any corroborative evidence supporting the 
hearsay reports; the failure of the Department of Employee Trust 
Funds to call the doctors to testify; and the outcome for each 
party, our conclusion that the Group Insurance Board should not 
have relied solely on the hearsay evidence is appropriate in the 
instant case, even under Perales.87   
¶81 We see no reason to deviate in the instant case from 
the long-standing rule in Wisconsin as announced in Folding 
Furniture and consistently followed for 65 years in subsequent  
cases that uncorroborated hearsay alone does not constitute 
substantial evidence in 
administrative 
hearings. 
The 
rule 
balances competing concerns about administrative expediency and 
fundamental fairness.     
¶82 Fairness requires that in the face of contrary in-
person testimony, if the Group Insurance Board seeks to 
terminate a claimant's benefits, it should be required to 
corroborate hearsay evidence if that evidence is to form the 
sole basis for its decision.  The harm to claimants in having 
their income continuation insurance benefits terminated on the 
basis of controverted written hearsay medical reports, without 
                                                 
87 For a discussion of these factors by a court that 
rejected the legal residuum rule, see Reguero v. Teacher 
Standards & Practices Comm'n, 822 P.2d 1171 (Or. 1991).  
No.  03-0226 
 
 
39
an opportunity to cross-examine the authors of the reports, 
exceeds the burden on the Group Insurance Board to call a 
witness 
to 
corroborate 
those 
hearsay 
medical 
reports.  
Accordingly we do not adopt the Perales rule in the present 
case.   
V 
¶83 The court of appeals offered three reasons why the 
Perales reasoning should be adopted and why the legal residuum 
rule should not be applied in the present case.  We are not 
convinced by any of them.      
¶84 First, the court of appeals concluded that the legal 
residuum rule should not apply when the opposing party could 
have subpoenaed the author of a hearsay report to controvert or 
challenge the written report.  Thus the court of appeals placed 
the onus on the claimant to subpoena the Group Insurance Board's 
expert witnesses.  The claimant's ability to subpoena expert 
witnesses may be "more theoretical than real."88  We are 
                                                 
88 In analyzing Perales, Professor Bernard Schwartz notes:  
In addition, the right of the claimant to subpoena 
examining physicians is more theoretical than real in 
the vast majority of . . . cases where claimants are 
unrepresented by counsel.  Even when there is counsel, 
the right to subpoena is one that is almost never 
exercised.  The realities of law practice and fee 
limits . . . normally mean that the lawyer for the 
claimant is not able to give the time needed to 
examine the agency file until the hearing.  Asking for 
subpoenas at that time means a continuance, with the 
need for the lawyer to give up the time needed to 
appear for the hearing a second time.   
Schwartz, supra note 69, § 7.6 at 382. 
No.  03-0226 
 
 
40
therefore not persuaded that the burden should be placed on a 
claimant to furnish witnesses who will correct the deficiencies 
in the evidence produced by the Department of Employee Trust 
Funds.   
¶85 Second, the court of appeals concluded that the legal 
residuum rule does not apply when the hearsay is a document 
admissible as an exception to the hearsay rule. The legal 
residuum rule, asserts the courts of appeals, is based on the 
notion that hearsay evidence is unreliable only when it does not 
fall within a hearsay exception.  The court of appeals' position 
that hearsay evidence that is admissible as an exception to the 
rule does not fall within the legal residuum rule has been 
adopted in some cases and recommended by some commentators.89  
¶86 The parties agree, as do we, that the medical records 
were properly admitted under the relaxed evidentiary rules 
                                                                                                                                                             
For discussions of subpoenas of experts, see Glenn v. 
Plante, 2004 WI 24, ¶2, 269 Wis. 2d 575, 676 N.W.2d 413; In re 
Imposition of Sanctions in Alt v. Cline, 224 Wis. 2d 72, 86, 589 
N.W.2d 21 (1999). 
89 See, e.g., Bransford v. State Taxation & Revenue Dep't, 
960 P.2d 827, 832 (N.M. App. 1998) (admissible hearsay may 
satisfy the legal residuum rule); Morgenstern v. Dep't of Motor 
Vehicles, 111 Cal. App. 4th 366, 372 (4th Dist. 2003) (officer's 
report was admissible under the employee business records 
exception to the hearsay rule and will support the department's 
findings); Elliot B. Glicksman, The Modern Hearsay Rule Should 
Find Administrative Law Application, 78 Neb. L. Rev. 135, 140 
(1999) ("The residuum rule is not a satisfactory substitute for 
the exclusion of all hearsay proofs.  Instead, a liberal reading 
of the modern hearsay rule and its defined exceptions and 
exclusions 
would better 
satisfy credibility 
critics 
while 
preserving and promoting the idealism behind the administrative 
law process."). 
No.  03-0226 
 
 
41
applicable to administrative hearings.  The parties dispute 
whether the evidence is admissible as an exception to hearsay 
under either Wis. Stat. § 908.03(6), as documents made in the 
course 
of 
regularly 
conducted 
business,90 
or 
Wis. 
Stat. 
§ 908.03(6m), as health care provider records.91  Dr. Lemon did 
not provide health care; he examined the claimant to render an 
opinion for purposes of this dispute about coverage.  
¶87 The admissibility of these reports as exceptions to 
the hearsay rule is not clear-cut. Before a record is admissible 
under Wis. Stat. § 908.03(6), a custodian or qualified witness 
must testify.  No such testimony was presented here.  Before a 
record is admissible under Wis. Stat. § 908.03 (6m), a qualified 
witness need not testify but the party offering health care 
provider records must serve or give notice to the other party.  
¶88 Moreover, the admission of the doctors' reports as an 
exception 
to 
hearsay 
is 
not 
automatic; 
admission 
is 
a 
discretionary 
decision. 
 
"A 
medical 
record 
containing 
a 
diagnosis or opinion . . . may be excluded in the trial judge's 
discretion if the entry requires explanation or a detailed 
statement of the judgmental factors upon which the diagnosis or 
opinion is based."92  This exercise of discretion especially 
                                                 
90 See Daniel D. Blinka, 7 Wisconsin Practice: Wisconsin 
Evidence 620-29 (2d ed. 2001).  
91 Blinka, supra note 90, at 630-33. 
92 Noland v. Mut. of Omaha Ins. Co., 57 Wis. 2d 633, 641-42, 
205 N.W.2d 388 (1973); Pophal v. Siverhus, 168 Wis. 2d 533, 560, 
484 N.W.2d 555 (Ct App. 1992).  See also Blinka, supra note 90, 
at 632.  
No.  03-0226 
 
 
42
comes into play with documents that have been prepared in 
anticipation of litigation.93  The record does not show that 
anyone admitted the reports as exceptions to the hearsay rule or 
exercised any discretion in concluding that the hearsay reports 
should be admitted as exceptions to the hearsay rule.  We have 
previously addressed the reliability of the reports.  
¶89 Without deciding whether all or any parts of the 
written medical reports in the present case are admissible under 
a hearsay exception, we conclude that the court of appeals' 
reasoning that hearsay evidence is unreliable only when it does 
not fall within a hearsay exception confuses the admissibility 
of hearsay with the issue of the probative force to be accorded 
the hearsay evidence by an administrative agency decision-maker.  
Hearsay that is subject to an exception is still hearsay, and 
therefore the substantial evidence rule applies even to evidence 
admitted as an exception to the hearsay rule. 
¶90 The dilemma, however, is that if hearsay is admissible 
in court as an exception to the hearsay rule and a fact-finder 
in a judicial proceeding may base its decision on admissible 
hearsay, why then apply what appears to be a more restrictive 
rule barring an administrative agency from basing its decision 
on uncorroborated hearsay that falls within a hearsay exception?   
The primary reason is that in administrative hearings the 
claimants are often not represented by counsel and decision-
makers are often not attorneys.  Requiring decision-makers to 
                                                 
93 Blinka, supra note 90, at 627-28. 
No.  03-0226 
 
 
43
determine whether hearsay evidence falls within a hearsay 
exception defeats the reasons for relaxed standards for the 
admissibility of evidence in administrative agencies.  The 
protection for the parties lies in the requirement that hearsay 
evidence must be corroborated if an agency is to rely on it as 
the sole evidence. 
¶91 The Group Insurance Board is in effect arguing that 
the legal residuum rule is not needed in the present case 
because medical reports are reliable evidence.  Even though 
medical reports generally may be viewed as reliable, our review 
of the record raises significant questions about the reliability 
of 
these 
controverted 
reports 
and 
about 
the 
need 
for 
clarification of the reports by live testimony.  Therefore, 
without 
corroboration 
they 
alone 
would 
not 
satisfy 
the 
requirements of the substantial evidence standard as probative, 
reliable evidence. 
¶92  Third, the court of appeals concluded that when more 
than one written hearsay report contains essentially the same 
information, each hearsay report is corroborated by the other.  
If the agency is permitted to bootstrap uncorroborated hearsay 
with other uncorroborated hearsay, the result would be the 
evisceration of the requirement that there be corroboration of 
hearsay in order for the hearsay evidence to form the basis of 
an agency's findings of fact.  Requiring corroboration of 
hearsay by non-hearsay evidence ensures that the evidence is 
properly tested, thereby ensuring the fundamental fairness of 
administrative proceedings.  We therefore conclude that in the 
No.  03-0226 
 
 
44
present 
case 
hearsay 
evidence 
cannot 
corroborate 
hearsay 
evidence.   
¶93 The interpretation of the corroboration requirement in 
the present case should be compared with the interpretation of 
the corroboration requirement in other circumstances.  
¶94 For example, Wis. Stat. § (Rule) 908.045, a rule 
governing admission of evidence (rather than governing the 
probative force of admitted evidence) requires corroboration of 
certain 
hearsay 
evidence. 
 
Section 
908.045 
provides: 
"A 
statement tending to expose the declarant to criminal liability 
and offered to exculpate the accused is not admissible unless 
corroborated."  
¶95 The supreme court interpreted corroboration in Wis. 
Stat. § 908.045 to mean the presentation of other evidence 
"sufficient to permit a reasonable person to conclude, in light 
of all the facts and circumstances, that the statements could be 
true . . . ."94 
 
The 
court 
then 
allowed 
multiple 
hearsay 
statements that were against the declarant's penal interest and 
were offered to exculpate the accused to corroborate each other 
when the statements were identical in nature and had been made 
to multiple third parties.95  Thus, the court interpreted 
multiple 
hearsay 
statements 
against 
penal 
interest 
as 
corroborating each other.  
                                                 
94 State v. Anderson, 141 Wis. 2d 653, 662, 416 N.W.2d 276 
(1987). 
95 See State v. Guerard, 2004 WI 85, ¶5, 273 Wis. 2d 250, 
682 N.W.2d 12; Anderson, 141 Wis. 2d at 668. 
No.  03-0226 
 
 
45
¶96 The cases interpreting the corroboration requirement 
in Wis. Stat. § (Rule) 908.045 are based on the legal system's 
special concerns about wrongful convictions and a defendant's 
constitutional right to present a defense: "The critical need 
for hearsay evidence, in particular statements against penal 
interests, is especially apparent in criminal trials where the 
exclusion 
of 
a 
statement 
[against 
the 
declarant's 
penal 
interest] exculpating an accused could result in an erroneous 
conviction."96   
¶97 These constitutional considerations about an accused's 
right to present a defense are not applicable in the instant 
case.  Several records containing similar medical opinions from 
different 
doctors 
do 
not 
raise 
the 
same 
evidentiary 
or 
constitutional considerations as a declarant's oft-repeated 
statements that tend to expose that individual to criminal 
prosecution and thereby exculpate an accused. 
¶98 The 
requirement 
of 
corroboration 
has 
also 
been 
interpreted in the context of newly discovered recantation 
evidence. The court has required that when newly discovered 
evidence is a witness's recantation, the recantation must be 
corroborated by other newly discovered evidence.97  Corroboration 
is required because recantation is inherently unreliable; the 
                                                 
96 Anderson, 141 Wis. 2d at 662 (citing Chambers v. 
Mississippi, 410 U.S. 284 (1973), for the proposition that 
"[f]ew rights are more fundamental than that of an accused to 
present witnesses in his own defense."). 
97 State v. McCallum, 208 Wis. 2d 463, 473-74, 476, 561 
N.W.2d 707 (1997). 
No.  03-0226 
 
 
46
recanting witness is admitting he or she lied under oath. Either 
the original testimony or the recantation is false.   
¶99 The court recognized that "requiring a defendant to 
redress 
a 
false 
allegation 
with 
significant 
independent 
corroboration of the falsity would place an impossible burden 
upon a wrongly accused defendant."98  The court concluded that 
the degree and extent of corroboration required in recantation 
circumstances varies from case to case.  In one case the court 
held that corroboration may be achieved when a feasible motive 
for the initial false statement exists and circumstantial 
guarantees of trustworthiness of the recantation exist.99  
¶100 The present case differs from recantation cases.  
Requiring the Department of Employee Trust Funds to produce a 
doctor who examined the claimant or her records can hardly be 
said to present the same burden as requiring independent 
corroboration of the falsity of an original statement in 
recantation cases.  
¶101 The 
present 
case 
is 
thus 
not 
governed 
by 
the 
corroboration 
requirements 
set 
forth 
in 
cases 
involving 
recantation or a statement against penal interest. 
VI 
¶102 The Group Insurance Board raises two arguments in 
support of the decision of the court of appeals.  First, it 
argues that if this court adopts the claimant's position, 
                                                 
98 Id. at 477. 
99 Id. at 478. 
No.  03-0226 
 
 
47
claimants who may not be able to afford expert witnesses to 
corroborate medical reports are placed at a serious disadvantage 
in proceedings such as this one.  Yet in the present case, it 
was the Group Insurance Board, not the claimant, that introduced 
the hearsay evidence. 
¶103 We recognize the importance of allowing claimants to 
present their position as simply and inexpensively as possible, 
including by means of written medical reports without having to 
present the testimony of the author of the reports.  This 
decision should not be read to require corroboration by non-
hearsay evidence in all instances.  
¶104 Corroboration of hearsay is not always required in 
administrative proceedings.  For example, the parties may 
stipulate to some or all of the facts or to the submission of 
and reliance upon the contents of written hearsay reports.  The 
parties may also agree that the agency may base its findings of 
fact solely on uncorroborated hearsay.  As the circuit court 
pointed out in the present case, the legal residuum rule does 
not prevent parties from stipulating to factual findings.   
¶105 Requiring 
corroboration 
of 
controverted 
hearsay 
evidence upon which the Group Insurance Board bases its findings 
of fact is not as burdensome as the Group Insurance Board 
suggests.  Apparently numerous administrative agencies conduct 
their business adhering to the rule that findings of fact cannot 
be based solely on uncorroborated hearsay evidence.  For 
example, the Labor and Industry Review Commission routinely 
No.  03-0226 
 
 
48
cites and adheres to the rule that uncorroborated hearsay may 
not form the sole basis for resolution of an issue.100   
¶106 Second, the Group Insurance Board argues that the 
claimant and her attorney failed to object to the admission and 
use of the uncorroborated hearsay reports and therefore waived 
the right to challenge the Board's reliance on the reports when 
offered, or on appeal.   
¶107 When the medical reports were admitted, the claimant's 
objection to admissibility on the ground of hearsay would have 
been futile.  Arguably the claimant had an opportunity to object 
to the Findings of Fact being based on uncorroborated hearsay 
evidence when the Proposed Findings of Fact and Conclusions of 
Law were released.  The circuit court ruled that the claimant 
was not required to object and that the claimant therefore did 
not waive her objections.101  
                                                 
100 Merta 
v. 
Johnson 
Controls, 
Inc., 
ERD 
Case 
No. 
CR200000928 (LIRC Oct. 30, 2003) (crucial finding of fact may 
not be based solely on uncorroborated hearsay evidence relying 
on Village of Menomonee Falls, 140 Wis. 2d 579)); T-N-T Express 
LLC v. TNT Express Delivery, UI Dec. Hearing No. S9700385 (LIRC 
Feb. 22, 2000) (citing Wis. Admin. Code § DWD 140.16 that 
subject to some exceptions, uncorroborated testimony is not a 
sufficient basis upon which to decide an issue); Loberger v. 
Alex Logan Wholesale Flooring, UI Dec. Hearing No. S9800050MD 
(LIRC June 30, 1999) (same).  These decisions are available 
online in searchable format at http://www.dwd.state.wi.us/lirc. 
101 The circuit court relied on Wis. Admin. Code § ETF 
11.09(3), which provides as follows: 
(3)  OBJECTIONS.  Any party aggrieved by the proposed 
decision may file a written objection to the proposed 
decision within 20 days of the date of the notice of 
the proposed decision.  The aggrieved party shall 
specify, in detail, the following: 
No.  03-0226 
 
 
49
¶108 "[W]hether [this court] should review an issue raised 
here for the first time depends upon the facts and circumstances 
disclosed by the particular record.  The question is one of 
administration, not power."102  The general rule is that an 
appellate court will not "consider issues beyond those properly 
raised before the administrative agency, and a failure to raise 
an issue generally constitutes a waiver of the right to raise 
the issue before a reviewing court."103  As with most rules, 
however, there are exceptions.104   
¶109 We need not decide whether the claimant waived her 
right in the present case to challenge the bases of the Findings 
                                                                                                                                                             
(a) 
Each provision of the proposed decision to which 
the 
party 
objects 
and 
the 
basis 
for 
each 
objection. 
(b) 
Each change the party requests the board to make 
in the proposed decision and the legal grounds 
for the change.  If minor, the requested change 
may be described as a specific edit to the 
proposed decision.  If extensive or major changes 
are requested, the party may attach a draft 
proposed decision, clearly marked as that party's 
draft, to that party's objections (emphasis 
added).    
102 State ex rel. Gen. Motors Corp. v. City of Oak Creek, 49 
Wis. 2d 299, 319, 182 N.W.2d 481 (1971). 
103 State v. Outagamie County Bd. of Adjustment, 2001 WI 78, 
¶55, 244 Wis. 2d 613, 628 N.W.2d 376. 
104 One exception is that "if all the facts are of record 
and the issue is a legal one of great importance" we will 
overlook any waiver issues.  Outagamie County, 244 Wis. 2d 613, 
¶56; State ex rel. Gen. Motors Corp. v. City of Oak Creek, 49 
Wis. 2d 299, 319-20, 182 N.W.2d 481 (1971); Bunker v. LIRC, 2002 
WI App 216, ¶¶15-16, 257 Wis. 2d 255, 650 N.W.2d 864. 
No.  03-0226 
 
 
50
of Fact.  We address the issue presented here because the 
parties have had an opportunity to brief the substantial 
evidence issue and because the application of the legal rule 
announced in Folding Furniture presents an issue of importance.  
Additionally, unpublished decisions of the court of appeals take 
different views of the applicability of Folding Furniture and 
Perales.105  
 
¶110 For 
the 
reasons 
stated, 
we 
conclude 
that 
the 
uncorroborated written hearsay medical reports alone that were 
controverted 
by 
in-person 
testimony 
did 
not 
constitute 
substantial evidence to support the Group Insurance Board's 
Findings of Fact and decision to terminate the claimant's 
benefits.  As correctly pointed out by the circuit court in the 
present 
case, 
because 
most 
of 
the 
medical 
testimony 
is 
uncorroborated hearsay evidence, the Group Insurance Board's 
Conclusions of Law #17 and #18 that the claimant was not 
"totally disabled" within the contract are without support.106  
                                                 
105 See, e.g., Delgado v. Milwaukee Employees' Ret. Sys., 
No. 03-0758, unpublished slip op. (Wis. Ct. App. Nov. 18, 2003) 
(adopting Perales); Local 1901-F v. Wis. Employment Relations 
Comm'n, No. 01-1360, unpublished slip op. (Wis. Ct. App. Jan. 
29, 2002) (adopting Folding Furniture); Kennow v. Racine County, 
No. 89-2220, unpublished slip op. (Wis. Ct. App. Oct. 17, 1990) 
(adopting Folding Furniture). 
106 Conclusion of Law #17:  
[United Wisconsin 
Group] 
and the 
[Department of 
Employee 
Trust 
Funds] 
correctly 
applied 
the 
requirements of the ICI contract to the documented 
facts pertinent to the appellant's ICI claim.  In 
determining that the appellant was not disabled within 
the meaning of the contract, UWG and the DETF 
No.  03-0226 
 
 
51
                                                                                                                                                             
reasonably 
accepted 
the 
opinions 
of 
appellant's 
treating physician and of UWG's expert over that of 
the physical therapist, who did not have the benefit 
of 
the 
contractual 
definition, 
and 
of 
non-
contemporaneous opinion by appellant's expert.  The 
Board concludes that the appellant was not disabled 
within the requirements of the ICI contract after 
April 30, 1997. 
Conclusion of Law #18:  
In accordance with the above Findings of Fact and 
Conclusions of Law, the Board concludes that the DETF 
did not err in its July 9, 1998, determination to 
terminate 
the 
appellant's 
[income 
continuation 
insurance] benefits beyond April 30, 1997, under 
Section 5.14 – 4.b. of the contract effective January 
1, 1995, between UWG and the Board. 
 
 
No.  03-0226 
 
 
52
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. 
 
By the Court.—The decision of the court of appeals is 
reversed.
No.  03-0226.lbb 
 
1 
 
¶111 LOUIS B. BUTLER, JR., J.   (concurring).  I join the 
decision and mandate in this matter. I write separately to 
address the concerns raised by my colleagues, Justice Wilcox and 
Justice Prosser, about the impact that this decision will have 
on administrative hearings and on unrepresented claimants in 
those hearings.  
¶112 Justice Wilcox writes that the residuum rule makes it 
more difficult for parties, particularly plaintiffs, to prove 
their 
case 
before 
an 
administrative 
body. 
Wilcox, 
J., 
dissenting, ¶145. He is concerned that many claimants will not 
be able to afford expert witnesses, id, and that as a result, 
the 
residuum 
rule 
is 
inherently 
unfair 
to 
unrepresented 
claimants. Id., ¶149. Justice Prosser similarly writes that our 
decision will force financially struggling claimants to pay the 
bills for expert testimony. Id. ¶196. He is also concerned about 
the unrepresented claimant. Id., ¶198. 
¶113 These are legitimate concerns. I believe, however, 
that these concerns are overstated. I disagree with Justice 
Prosser's conclusion that in the future, "participants in 
administrative hearings will be required to provide live, in-
person testimony to corroborate reliable hearsay evidence". 
Prosser, J., dissenting, ¶201. As Justice Roggensack's dissent 
points out, corroboration can be introduced in a number of ways. 
Claimants who have a medical condition can testify as to that 
condition. Other witnesses can be called as well. Testimonial 
evidence would provide the corroboration necessary to allow a 
hearing examiner to consider hearsay medical reports concerning 
No.  03-0226.lbb 
 
2 
 
the condition. Corroboration of hearsay does not have to come 
from experts, but hearsay must be corroborated to constitute 
"substantial evidence." That is precisely what is lacking in 
this case. 
¶114 I agree with Justice Roggensack that the court can 
look 
at 
the 
remainder 
of 
the 
evidence 
to 
see 
whether 
corroboration exists that would allow a hearing examiner to 
consider hearsay medical reports. I disagree with her conclusion 
that such corroboration exists in this case. Absent the hearsay 
medical reports, there is simply no evidence in the record that 
would corroborate a conclusion that Gehin was not disabled 
within the meaning of the contract.  
¶115 For the foregoing reasons, I respectfully concur. 
 
 
 
No.  03-0226.jpw 
 
 
1
¶116 JON P. WILCOX, J.   (dissenting).  I do not join the 
majority opinion because I disagree that the residuum rule is 
applicable to this case.  The majority's application of the 
residuum rule is erroneous for several reasons.  First, under 
the clear holding of Richardson v. Perales, 402 U.S. 389 (1971), 
the residuum rule——which posits that an administrative agency 
cannot base factual findings on uncorroborated hearsay——does not 
apply to reliable, probative, documentary evidence (particularly 
standard 
medical 
reports) 
in 
administrative 
proceedings.  
Further, applying the residuum rule to prohibit agencies from 
considering uncorroborated documentary evidence regardless of 
its reliability and probative value conflicts with the relaxed 
evidentiary standards in administrative proceedings and this 
court's deferential standard of review.  Finally, applying the 
residuum rule in such a fashion will be harmful to claimants in 
future 
cases 
and 
is 
inconsistent 
with 
the 
reality 
of 
administrative proceedings.   
¶117 The pertinent question before the court is whether 
uncorroborated hearsay in the form of medical reports that are 
contradicted by live testimony at an administrative hearing can 
ever constitute substantial evidence supporting an agency's 
factual findings.  The substantial evidence rule is set forth in 
Wis. Stat. § 227.57(6)(2001-02),107 which prescribes the standard 
to be used when reviewing agency decisions:  "The court shall 
                                                 
107 All references to the Wisconsin Statutes are to the 
2001-02 version unless otherwise noted.   
No.  03-0226.jpw 
 
 
2
 . . . set aside agency action or remand the case to the agency 
if it finds that the agency's action depends upon any finding of 
fact that is not supported by substantial evidence."   
¶118 Our case law has defined substantial evidence as "such 
relevant evidence as a reasonable mind would accept as adequate 
to support a conclusion."  Sea View Estates Beach Club, Inc. v. 
DOR, 223 Wis. 2d 138, 148, 588 N.W.2d 667 (Ct. App. 1998) 
(citing 
Sterlingworth 
Condo. 
Ass'n, 
Inc. 
v. 
DNR, 
205 
Wis. 2d 710, 727, 556 N.W.2d 791 (Ct. App. 1996)).108  This 
definition of substantial evidence is consistent with that 
employed in Perales:  "Substantial evidence" is "'more than a 
mere scintilla.  It means such relevant evidence as a reasonable 
mind might accept as adequate to support a conclusion.'"  
Perales, 402 U.S. at 401 (quoting Consol. Edison Co. v. NLRB, 
305 U.S. 197, 229 (1938)).109  It is noteworthy that the 
definition of substantial evidence focuses on the relevancy of 
the evidence and how a reasonable mind might view its probative 
value.   
¶119 The majority unnecessarily adds to this definition, 
applying the legal residuum rule that was set forth by this 
                                                 
108 See also ABKA Ltd. P'ship v. DNR, 2001 WI App 223, ¶18, 
247 Wis. 2d 793, 635 N.W.2d 168 (accord). 
109 See also American Grain Trimmers, Inc. v. Office of 
Workers' Comp., 181 F.3d 810, 817 (7th Cir. 1999); Leitman v. 
McAusland, 934 F.2d 46, 51 (4th Cir. 1991); Johnson v. United 
States, 628 F.2d 187, 189 (D.C. Cir. 1980). 
 
No.  03-0226.jpw 
 
 
3
court in Folding Furniture Works, Inc. v. Wisconsin Labor 
Relations Bd., 232 Wis. 170, 188-89, 285 N.W. 851 (1939).  
Majority op., ¶¶53-54, 81.  As the majority correctly notes, 
id., ¶54, the court in Folding Furniture, 232 Wis. at 189, 
adopted 
the 
legal 
residuum 
rule, 
which 
provides 
that 
uncorroborated hearsay cannot constitute substantial evidence, 
from the United States Supreme Court's decision in Consolidated 
Edison, 305 U.S. at 235.   
¶120 However, the United States Supreme Court subsequently 
repudiated 
this 
interpretation 
of 
Consolidated 
Edison 
in 
Perales, concluding: 
The contrast the Chief Justice was drawing [in 
Consolidated Edison], at the very page cited, was not 
with 
material 
that 
would 
be 
deemed 
formally 
inadmissible in judicial proceedings but with material 
"without a basis in evidence having rational probative 
force."  This was not a blanket rejection by the Court 
of administrative reliance on hearsay irrespective of 
reliability and probative value.  The opposite was the 
case. 
Perales, 402 U.S. at 407-08 (emphasis added).  Thus, Perales 
held that uncorroborated hearsay could constitute substantial 
evidence in administrative proceedings if the evidence possessed 
sufficient indicia of reliability and probative value.  Id. at 
402.  "The Supreme Court has explained that hearsay has not been 
rejected for consideration at administrative hearings, but only 
hearsay without a basis in evidence having rational probative 
value."  Leitman v. McAusland, 934 F.2d 46, 51 (4th Cir. 1991).   
¶121 Yet, the majority misconstrues Perales, arguing that 
the holding in Perales was unique to the context of the Social 
No.  03-0226.jpw 
 
 
4
Security Administration, majority op., ¶¶62, 65-66, and that 
Perales is distinguishable from the present case because there 
supposedly was an expert that corroborated the medical reports 
at issue in Perales.  Id., ¶67.  The majority is simply wrong on 
both counts. 
¶122 The issue in Perales was "whether physicians' written 
reports of medical examinations they have made of a disability 
claimant may constitute 'substantial evidence' supportive of a 
finding of nondisability . . . when the claimant objects to the 
admissibility of those reports and when the only live testimony 
is presented by his side and is contrary to the reports."  
Perales, 402 U.S. at 390 (emphasis added).  As the Perales court 
stated:  "The issue revolves, however, around a system which 
produces a mass of medical evidence in report form.  May 
material of that kind ever be 'substantial evidence' when it 
stands alone and is opposed by live medical evidence and the 
client's own contrary personal testimony."  Id. at 399 (emphasis 
added). 
¶123 While the hearing examiner in Perales, 402 U.S. at 396 
did call an independent medical advisor as a witness, this 
witness merely reviewed the medical reports at issue and 
summarized their contents, testifying that "the consensus of the 
various medical reports was that Perales had a mild low-back 
syndrome of musculo-ligamentous origin."  There is nothing in 
the Perales opinion to suggest, as the majority does, that the 
independent medical advisor rendered a separate opinion agreeing 
with the substance of the medical reports.  Quite the contrary, 
No.  03-0226.jpw 
 
 
5
the Court twice referred to the medical reports as standing 
alone and being contradicted by the live testimony.  Id. at 390, 
399.  Indeed, the precise holding of Perales was as follows: 
[A] written report by a licensed physician who has 
examined the claimant and who sets forth in his report 
his medical findings in his areas of competence may be 
received as evidence in a disability hearing and, 
despite its hearsay character and an absence of cross-
examination, and despite the presence of opposing 
direct medical testimony and testimony by the claimant 
himself, 
may 
constitute 
substantial 
evidence 
supportive of a finding by the hearing examiner 
adverse to the claimant, when the claimant has not 
exercised 
his 
right 
to 
subpoena 
the 
reporting 
physician 
and 
thereby 
provide 
himself 
with 
the 
opportunity for cross-examination of the physician.   
Id. at 402.   
¶124 In addition, contrary to the majority's argument, the 
rationale of Perales focused on the fact that the medical 
reports at issue were reliable and probative because they were 
standard reports that were routinely utilized in administrative 
proceedings and the physicians who authored the reports had 
personally examined the claimant.  Id. at 402-06.  Therefore, 
the express language of Perales and its rationale refute the 
majority's attempts to sidestep the importance of that decision.   
¶125 Rather than being a decision peculiar to the social 
security context, Perales has been recognized by other courts as 
"the 
leading 
recent 
case 
dealing 
with 
the 
question 
of 
'substantial 
evidence' 
in 
administrative 
decisionmaking[.]"  
Unemployment Comp. Bd. of Review v. Ceja, 427 A.2d 631, 639 (Pa. 
No.  03-0226.jpw 
 
 
6
1981)(emphasis added).110  Numerous other courts have applied the 
Perales holding beyond the context of social security hearings 
to an assortment of administrative proceedings.  See, e.g., 
Leitman, 934 F.2d at 48, 51 (decision of Defense Logistics 
Agency that debarred plaintiff from 
purchasing 
government 
property 
under 
the 
Federal 
Acquisition 
Regulations); 
Bell 
Helicopter Int'l, Inc. v. Jacobs, 746 F.2d 1342, 1343-44 (8th 
Cir. 
1984)(decision 
of 
Benefits 
Review 
Board 
under 
the 
Longshoremen's and Harbor Workers' Compensation Act); Calhoun v. 
Bailar, 626 F.2d 145, 146-47, 149 (9th Cir. 1980)(discharge of 
postal employee); Johnson v. United States, 628 F.2d 187, 188, 
190 (D.C. Cir. 1980)(decision of the United States Civil Service 
Commission removing plaintiff from his position as a special 
agent in the Bureau of Alcohol, Tobacco, and Firearms); Sch. Bd. 
of Broward Co. v. Dep't of Health, Educ. and Welfare, 525 F.2d 
900, 903-04, 906 (5th Cir. 1976)(decision of Commissioner of 
Education that school board was not eligible for federal aid). 
¶126 These decisions appropriately recognize that in the 
Perales decision: 
the Supreme Court . . . sanctioned the use of written 
reports 
of 
licensed 
physicians 
in 
administrative 
hearings, despite the hearsay character of the reports 
and 
the 
absence 
of 
opportunity 
for 
cross-
examination. . . . Such hearsay evidence alone may 
therefore support an agency determination.   
                                                 
110 The lead opinion in Unemployment Comp. Bd. of Review v. 
Ceja, 427 A.2d 631 (Pa. 1981), is cited throughout this dissent 
for the persuasiveness of its analysis of the residuum rule, not 
the weight of its authority.   
No.  03-0226.jpw 
 
 
7
Bell Helicopter, 746 F.2d at 1344 (citations omitted).  Thus, 
properly interpreted, Perales represents a landmark decision 
that altered the standards as to what constitutes substantial 
evidence in administrative proceedings: 
It is undisputed that an adjudicative official at an 
administrative hearing can consider hearsay.  It is 
also clear that hearsay alone may not be sufficient as 
a substantial basis for a decision.  The Supreme Court 
has explained that hearsay has not been rejected for 
consideration at administrative hearings, but only 
hearsay without a basis in evidence having rational 
probative value.  
Leitman, 934 F.2d at 51 (citations omitted).   
¶127 Therefore, the significance of Perales lies not in 
anything unique to the Social Security Administration, but 
rather in its recognition that "it is not the hearsay nature per 
se of the proffered evidence that is significant, it is its 
probative value, reliability and the fairness of its use that 
are determinative."  Calhoun, 626 F.2d at 148.  In other words, 
Perales "rejected a rigid rule and held that the proffered 
hearsay evidence could constitute substantial evidence.  In 
doing so, the Court explained that there could be no blanket 
rejection 
of 
administrative 
reliance 
on 
hearsay 
evidence 
irrespective of reliability and probative value."  Id. at 149.  
In essence, Perales appropriately recognized that reasonable 
fact-finders could rely on uncorroborated hearsay that is 
sufficiently 
reliable 
and 
probative 
when 
making 
factual 
findings.   
No.  03-0226.jpw 
 
 
8
¶128 As 
such, 
contrary 
to 
the 
majority's 
assertion, 
majority op., ¶64, Perales did more than simply cast doubt on 
the legitimacy of the residuum rule.  Courts applying the 
substantial evidence rule in light of Perales have recognized 
that "[a] residuum of corroborating evidence of the type 
admissible in a jury trial is no longer required."  Bell 
Helicopter, 746 F.2d at 1344.  In the aftermath of Perales, 
"[the residuum] rule no longer controls.  We have rejected a per 
se approach that brands evidence as insubstantial solely because 
it bears the hearsay label."  Johnson, 628 F.2d at 190.   
¶129 In light of the explicit language of Perales and its 
subsequent application by other courts, I would conclude that 
the holding of Perales is applicable to the case at bar.111  The 
holding of Perales, which focuses on the reliability and 
probative force of hearsay evidence, is much more congruent with 
Wisconsin's statutory framework for administrative proceedings 
than the residuum rule that the majority applies.   
¶130 Wisconsin Stat. § 227.45(1), governing administrative 
procedure, provides:   
Except as provided in ss. 19.52(3) and 901.05, an 
agency or hearing examiner shall not be bound by 
                                                 
111 Other state courts follow a similar rule, focusing on 
the reliability and probative value of the evidence, rather than 
whether it falls under the technical definition of hearsay.  
See, e.g., Covell v. Dep't Soc. Servs., 791 N.E.2d 877, 892 
(Mass. 2003)("Substantial evidence may be based on hearsay alone 
if that hearsay has 'indicia of reliability'")(quoted source 
omitted).  Gray v. Adduci, 532 N.E.2d 1268, 1269 (N.Y. 
1988)(hearsay can support an administrative determination if it 
possesses sufficient reliability and probative value). 
No.  03-0226.jpw 
 
 
9
common law or statutory rules of evidence.  The agency 
or hearing examiner shall admit all testimony having 
reasonable 
probative 
value, 
but 
shall 
exclude 
immaterial, irrelevant or unduly repetitious testimony 
or 
evidence 
that 
is 
admissible 
under 
s. 
901.05. . . . Basic 
principles 
of 
relevancy, 
materiality and probative force shall govern the proof 
of all questions of fact. 
(Emphasis added). 
¶131 Importantly, the statute provides that an agency shall 
not be bound by formal rules of evidence and that the proof of 
facts is governed by basic principles of relevancy and probative 
force.  This statute represents a legislative determination to 
relax the rules of evidence in administrative proceedings.  Wal-
Mart Stores, Inc. v. LIRC, 2000 WI App 272, ¶20 n.8, 240 
Wis. 2d 209, 621 N.W.2d 633; Pieper Elec., Inc. v. LIRC, 118 
Wis. 2d 92, 97, 346 N.W.2d 464 (Ct. App. 1984).  In addition, 
Wis. Admin. Code § ETF 11.06(1)(Jan., 2004), which sets forth 
the evidentiary rules to be used at administrative hearings, 
provides:  "Rules of privilege recognized by law shall be given 
effect.  However, common law or statutory rules of evidence do 
not apply.  The hearing examiner shall admit all testimony 
having a reasonable probative value.  The hearing examiner shall 
exclude from the record irrelevant, immaterial, or unduly 
repetitious testimony."  Contrary to the residuum rule, Perales 
is consistent with Wis. Stat. § 227.45(1) and Wis. Admin. Code 
§ ETF 11.06(1) because it recognizes that reliable and probative 
uncorroborated 
hearsay 
may 
constitute 
substantial 
evidence 
supporting an agency's factual finding.  
No.  03-0226.jpw 
 
 
10
¶132 The residuum rule is incongruent with § 227.45(1) for 
several 
reasons. 
 
First, 
by 
prohibiting 
an 
agency 
from 
considering uncorroborated hearsay, the residuum rule forces an 
agency to follow formal rules of evidence.  An administrative 
agency 
operating 
under 
the 
residuum 
rule 
must 
make 
two 
determinations:  1) whether the evidence is hearsay and 2) 
whether the evidence is corroborated.  The first of these 
inquiries is very problematic in light of the statutory 
framework.  "Hearsay" is defined by the rules of evidence as "a 
statement, other than one made by the declarant while testifying 
at the trial or hearing, offered in evidence to prove the truth 
of the matter asserted."  Wis. Stat. § 908.01(3).   
¶133 Thus, at the outset, when operating under the residuum 
rule, it is necessary to turn to the rules of evidence to 
determine whether a particular piece of evidence constitutes 
hearsay.  "Evidence is 'hearsay' only if all elements of the 
definition are satisfied."  7 Daniel D. Blinka, Wisconsin 
Practice: 
 
Wisconsin 
Evidence 
§ 801.1, 
at 
521 
(2d 
ed. 
2001)(emphasis added).  That is, to constitute hearsay under the 
statutory definition, there must be:  1) a declarant; 2) who 
offers a statement; 3) that is made out of court; and 4) is 
offered for the truth of the matter asserted.  If a piece of 
evidence fails to meet any one element, then it is not hearsay.  
Id., § 801.1, at 522.  Specifically, "[o]ut of court statements 
may be offered to prove innumerable relevant propositions apart 
from the truth of the matter (explicitly) asserted."  Id., 
§ 801.3, at 536.  This recognition is extremely important 
No.  03-0226.jpw 
 
 
11
because "[i]f the statement is being offered to prove anything 
other than the truth of the matter asserted, it is not 
'hearsay.'"  Id., § 801.3, at 534.  
¶134 In addition to having to consider this technical 
definition of hearsay, an agency operating under the residuum 
rule 
will 
have 
to 
contend 
with 
the 
fact 
that 
Wis. Stat. § 908.01(4) sets forth two categorical exemptions 
from the hearsay rule.  Section 908.01(4) provides that prior 
statements of witnesses and admissions by party opponents are 
not hearsay.  Each of these exemptions, in turn, has numerous 
technical elements that must be satisfied.112  Therefore, an 
agency operating under the residuum rule must necessarily 
violate both the express language of § 227.45(1) and the spirit 
of relaxed evidentiary standards in administrative proceedings 
because it must make technical evidentiary determinations in 
order to decide whether an item of evidence is hearsay.  
                                                 
112 Several published administrative decisions indicate that 
administrative 
agencies must 
routinely 
grapple 
with 
these 
technical 
evidentiary distinctions 
in 
proceedings that by 
statute are supposedly subject to relaxed evidentiary standards.  
See, e.g., Wicke v. Merrill Area Pub. Sch., No. 2002-014249 (May 
7, 
2004)(available 
at 
http://www.dwd.state.wi.us/lirc/wcdecsns/812.htm)(applying party 
opponent and prior inconsistent statement hearsay exemptions); 
Hunter v. Racine Unified Sch. Dist., No. 01605072RC (Oct. 3, 
2001)(available 
at 
http://www.dwd.state.wi.us/lirc/ucdecsns/1204.htm)(applying 
hearsay definition and business records exception to hearsay 
rule); Albrecht v. Life Style Staffing of Appleton, No. 
98401933AP 
(Oct. 
5, 
1998)(available 
at 
http://www.dwd.state.wi.us/lirc/ucdecsns/811.htm) 
(applying 
hearsay definition and determining whether evidence at issue 
fell within business records exception to hearsay rule).   
No.  03-0226.jpw 
 
 
12
¶135 Furthermore, the residuum rule is inconsistent with 
that part of § 227.45(1) which provides that "[b]asic principles 
of relevancy, materiality and probative force shall govern the 
proof of all questions of fact" because it fails to take into 
account that some uncorroborated hearsay is relevant and 
probative.  The residuum rule represents a classic case of 
evaluating form over substance.  The residuum rule fallaciously 
assumes that all hearsay, including all documentary evidence, is 
inherently unreliable and applies a categorical bar to the 
consideration of uncorroborated hearsay, rather than allowing 
for a case-by-case analysis of the actual reliability and 
probative value of individual pieces of evidence.  The residuum 
rule fails to recognize that corroboration does not equal 
reliability and that some forms of hearsay may be reliable and 
probative despite their lack of corroboration.   
¶136 In sum, the inherent problem with the residuum rule is 
as follows: 
[It] 
fails 
to 
distinguish 
between 
reliable 
and 
unreliable hearsay, thus hampering the administrative 
decisionmaking process; while it equally fails to 
thoroughly 
protect 
due 
process 
rights, 
because 
unobjected to hearsay, no matter how unreliable, if 
corroborated, no matter how slight the legal evidence, 
may provide the substantial evidence needed to support 
an administrative finding.  Corroboration in and of 
itself is not dispositive of the issue of reliability.  
If available, corroboration may be a factor in 
determining reliability, but corroboration or the lack 
thereof neither ensures nor precludes reliability.  
The standard is, therefore, at the same time too rigid 
and too indefinite. 
Ceja, 427 A.2d at 638.   
No.  03-0226.jpw 
 
 
13
¶137 It is simply inconsistent with § 227.45(1) to argue 
that all uncorroborated hearsay, no matter what its relevance or 
probative value, is categorically insufficient to allow a 
reasonable mind to base a factual conclusion upon it.  "Any 
evidence, whether corroborated or not, if relevant and reliable, 
should be capable of supporting a factual finding."  Ceja, 427 
A.2d at 643.113   
                                                 
113 Likewise, I would conclude that Wis. Admin. Code § ETF 
11.12(2)(a)(Jan., 2004) is invalid because it conflicts with 
Wis. Stat. § 227.45(1).  Section ETF 11.12(2) sets forth the 
standards an agency must utilize when drafting final decisions.  
Regarding findings of fact, § ETF 11.12(2)(b) provides, in 
pertinent part:  "No finding of fact may be based upon hearsay."  
Generally, an administrative rule that conflicts with an 
unambiguous statute is invalid.  Wis. Citizens Concerned for 
Cranes and Doves v. DNR, 2004 WI 40, ¶14, 270 Wis. 2d 318, 677 
N.W.2d 612.  "In those cases in which a conflict arises between 
a statute and an administrative rule, the statute prevails."  
Seider v. O'Connell, 2000 WI 76, ¶72, 236 Wis. 2d 211, 612 
N.W.2d 659.   
The administrative rule conflicts with the statute in two 
ways.  First, as described above, it requires the agency to 
resort to the rules of evidence in order to determine whether an 
item of evidence is hearsay, contrary to the statement in 
§ 227.45(1) that an administrative agency is not bound by the 
formal rules of evidence.  Second, the rule on its face 
prohibits reliance on all hearsay, not simply uncorroborated 
hearsay.  Because the rule fails to account for the fact that 
some hearsay, especially hearsay that is corroborated or that 
falls within a recognized exception, may be relevant and 
probative, it is inconsistent with that part of § 227.45(1) 
which 
provides 
that 
"[b]asic 
principles 
of 
relevancy, 
materiality and probative force shall govern the proof of all 
questions of fact."  Wis. Stat. § 227.45(1).   
No.  03-0226.jpw 
 
 
14
¶138 The Perales decision allows uncorroborated hearsay to 
constitute substantial evidence if it bears sufficient indicia 
to 
"assure 
underlying 
reliability 
and 
probative 
value."  
Perales, 402 U.S. at 402.  This standard for substantial 
evidence, contrary to the residuum rule, comports with the 
prescription 
in 
§ 227.45(1) 
that 
"[b]asic 
principles 
of 
relevancy, materiality and probative force shall govern the 
proof of all questions of fact" in administrative proceedings.   
¶139 While the majority argues that without corroboration, 
hearsay is categorically not probative, majority op., ¶¶89-91, 
it also recognizes that hearsay is admissible in administrative 
proceedings.  Id., ¶¶49-51, 86.  These two conclusions represent 
a misunderstanding of the requirements of admissibility in 
Wisconsin 
and 
the 
relation 
between 
probative 
value 
and 
relevance. 
 
Wisconsin Stat. § 904.02 
provides 
that 
"[a]ll 
relevant evidence is admissible . . . . Evidence which is not 
relevant is not admissible."  Wisconsin Stat. § 904.01, in turn, 
defines "relevant evidence" as "evidence having any tendency to 
make the existence of any fact that is of consequence to the 
determination of the action more probable or less probable than 
it would be without the evidence."  "Relevance under the 
                                                                                                                                                             
Notably, the majority fails to discuss this rule at length, 
despite the fact that on its face, it is broader than the 
residuum rule.  The residuum rule prohibits factual findings 
based on uncorroborated hearsay.  Section ETF 11.12(2)(b) goes 
one step further by requiring that "[n]o finding of fact may be 
based upon hearsay."   
 
No.  03-0226.jpw 
 
 
15
Wisconsin rules, then, conflates the probative value of the 
evidence (the link between the evidence and the proposition to 
be proven) and the question whether the substantive law regards 
this proposition as one "of consequence[.]"  7 Daniel D. Blinka, 
Wisconsin Practice:  Wisconsin Evidence § 401.1, at 81 (2d ed. 
2001).114  "Only where the evidence lacks any probative value 
should it be excluded as 'irrelevant.'"  Id., § 401.102, at 87.  
"[T]he probative value of the evidence . . . is a function of 
its 
relevance 
under 
§ 904.01." 
 
Id., 
§ 403.1, 
at 
113.  
"Probative value, then, is the product of relevance and an 
assessment of what the evidence adds to the case."  Id., 
§ 403.1, at 114.   
¶140 As such, evidence must have some probative value to be 
admitted in the first instance.  This is explicitly recognized 
in § 227.45(1), which provides that "[t]he agency or hearing 
examiner shall admit all testimony having reasonable probative 
value . . . ." 
 
Once 
evidence 
is 
properly 
admitted, 
it 
necessarily contains some probative value.  Thus, it is entirely 
incorrect to posit that uncorroborated hearsay, as a category, 
lacks any probative value once properly admitted.   
¶141 However, this does not mean that simply because 
evidence has sufficient probative value to be admitted, it 
automatically constitutes "substantial evidence."  See Calhoun, 
626 F.2d at 150 ("[H]earsay admitted without objection is 
                                                 
114 Thus, evidence is probative if it "tends to prove or 
disprove a point in issue."  Black's Law Dictionary 579 (7th ed. 
1999).  
No.  03-0226.jpw 
 
 
16
ordinarily given its normal probative effect.").  Rather, the 
definition of substantial evidence requires an evaluation of how 
much probative value a given piece of evidence possesses.  See 
Johnson, 628 F.2d at 190-91 (noting that the Perales rule calls 
for an evaluation of "the weight each item of hearsay should 
receive according to the item's truthfulness, reasonableness, 
and credibility").  In other words, a given piece of evidence 
constitutes substantial evidence if it possesses a degree of 
probative value sufficient to allow "a reasonable mind [to] 
accept [it] as adequate to support a conclusion."  Sea View 
Estates Beach Club, 223 Wis. 2d at 148.  See also Gray v. 
Adduci, 532 N.E.2d 1268, 1269 (N.Y. 1988)("The quantum of 
evidence before the Administrative Law Judge was substantial 
since a reasonable mind could accept the report as 'adequate to 
support 
a 
conclusion 
or 
ultimate 
fact.'")(quoted 
source 
omitted); Black's Law Dictionary 1442 (7th ed. 1999)(The 
"substantial-evidence rule" is "[t]he principle that a reviewing 
court should uphold an administrative body's ruling if it is 
supported by evidence on which the administrative body could 
reasonably base its decision.").  Under the residuum rule, an 
agency is never allowed to consider and weigh the probative 
value or reliability of a given piece of uncorroborated hearsay.   
¶142 In addition, the notion that all forms of hearsay are 
intrinsically unreliable is flawed because it fails to account 
for the fact that hearsay subject to a recognized exception is 
inherently reliable.  While the majority states that "[h]earsay 
that is subject to an exception is still hearsay," majority op., 
No.  03-0226.jpw 
 
 
17
¶89, this observation misses the point.  Each hearsay exception 
under the rules of evidence "represents a determination of 
categorical reliability; that is, hearsay falling within any one 
of the rules carries with it guarantees of trustworthiness and 
reliability comparable to in-court testimony."  7 Daniel D. 
Blinka, Wisconsin Practice:  Wisconsin Evidence § 801.1, at 523 
(2d ed. 2001).  See also Ceja, 427 A.2d at 640-41 ("Once 
evidence is admitted under a recognized exception . . . the 
evidence is given full probative weight.").  By placing an 
absolute bar on the consideration of uncorroborated hearsay, the 
majority ignores the fact that certain types of hearsay are 
categorically considered reliable and trustworthy, despite lack 
of corroboration.   
¶143 In 
addition, 
the 
Perales 
rule, 
"which 
requires 
administrative consideration of probative value and reliability 
in the first instance comports with . . . the limited review of 
administrative 
actions." 
 
Calhoun, 
626 
F.2d 
at 
149-50.  
Regarding agency factual findings, the legislature has provided 
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."  Wis. Stat. § 227.57(6).  By focusing on 
whether an item of evidence is sufficiently reliable and 
probative for a reasonable fact-finder to form a conclusion 
based on the evidence, the Perales decision is in harmony with 
this deferential standard of review for factual findings that 
No.  03-0226.jpw 
 
 
18
the legislature has provided.115  In contrast, the majority has 
essentially substituted its judgment for all agencies by 
concluding that uncorroborated hearsay, no matter how reliable 
or probative, can never support a factual finding.   
¶144 In addition to being inconsistent with the statutory 
framework 
for 
administrative 
hearings, 
application of the 
residuum rule to reliable, probative, documentary evidence is 
substantially unfair to claimants in administrative proceedings.  
Because the residuum rule requires corroboration of hearsay in 
all cases, regardless of the probative value or reliability of a 
given piece of evidence, "the effect of the residuum rule is to 
create an evidentiary standard actually stricter than that 
adhered to in jury trials."  Ceja, 427 A.2d at 636.  In 
contrast, the Perales decision allows for "the full development 
of the record."  Calhoun, 626 F.2d at 150.   
¶145 As the residuum rule imposes an evidentiary standard 
stricter than in jury trials, it does not afford "protection for 
the 
parties[,]" 
majority 
op., 
¶90, 
in 
administrative 
proceedings.  Quite the contrary, the residuum rule makes it 
more difficult for parties, particularly claimants, to prove 
their case before an administrative body.  The majority 
                                                 
115 The majority states that the "legal residuum rule is 
supported by the notion that courts should act as a check on the 
agencies by reviewing the decisions for fundamental fairness."  
Majority op., ¶59.  However, under the standard of review 
prescribed by the legislature, a court may review an agency 
decision for fairness only in relation to the procedures 
utilized by the agency.  Wis. Stat. § 227.57(4).   
No.  03-0226.jpw 
 
 
19
recognizes that many claimants in administrative proceedings are 
unrepresented.  Majority op., ¶51.  Yet, by subjecting these 
unrepresented claimants to the requirements of the residuum 
rule, the majority forces them to operate under the intricacies 
of the hearsay rule and its exemptions.  The majority also 
recognizes that many claimants cannot afford expert witnesses 
and need to be able to present their position as simply and 
inexpensively as possible at a hearing.  Majority op., ¶¶102-03.  
However, it fails to recognize that the residuum rule cuts both 
ways and applies to all parties in administrative proceedings.   
¶146 The majority implies that the residuum rule may not be 
applicable 
if 
harmful 
to 
a 
claimant 
by 
stating 
that 
"[c]orroboration 
of 
hearsay 
is 
not 
always 
required 
in 
administrative proceedings."  Majority op., ¶104.  However, the 
majority offers absolutely no authority for this inexplicable 
conclusion, which flies in the face of the remainder of the 
opinion.  The majority theorizes that parties may stipulate to 
the facts or agree that an agency may base its findings of fact 
on uncorroborated hearsay.  Id.  One has to wonder why a 
defendant in an administrative proceeding, which usually will 
possess greater resources and the ability to call experts, would 
ever stipulate to facts if the claimant is unable to produce 
live testimony.   
¶147 In addition, the 
majority's 
suggestion 
that the 
parties can somehow agree that an agency can base its findings 
on hearsay runs contrary to the agency's own rule, which 
purportedly prohibits the agency from basing factual findings 
No.  03-0226.jpw 
 
 
20
upon hearsay.  Wis. Stat. § ETF 11.12(2)(b)(Jan., 2004).  The 
majority has cited no case or principle of law that stands for 
the proposition that parties can agree to have an agency violate 
its own rules in rendering decisions.  In sum, while the 
majority's comments in ¶¶103-04 imply that the residuum rule 
does not apply when its operation would be adverse to claimants, 
the reality is that no case stands for this proposition and that 
the residuum rule will apply equally to all claimants and 
defendants.   
¶148 Furthermore, the rule the majority applies today 
extends well beyond claims for income continuation insurance 
benefits and imposes an artificially high evidentiary bar in a 
variety of administrative proceedings.  While the result of the 
majority's decision may be beneficial to the claimant in the 
present case, the rule the majority adopts will harm countless 
claimants in this and other contexts because it imposes an 
evidentiary standard stricter than that in jury trials.  To add 
insult 
to 
injury, 
the 
majority 
imposes 
a 
standard 
of 
corroboration that is stricter than that which is required 
during criminal trials.  Id., ¶¶92-101.   
¶149 If the majority were truly concerned with "fairness," 
id., ¶82, it would recognize that the residuum rule, which 
requires an understanding of the technicalities and nuances of 
evidence law, is inherently unfair to unrepresented claimants.  
In contrast, the Perales decision, which allows parties to 
submit all of the evidence they consider relevant to the fact-
finder for consideration, and then requires the fact-finder to 
No.  03-0226.jpw 
 
 
21
evaluate each piece of evidence individually for reliability and 
probative value, is both consistent with principles of equity 
and the relaxed evidentiary standards that are, by statute, 
supposed to govern administrative proceedings.    
¶150 Finally, the majority's application of the residuum 
rule to standard medical reports ignores the reality of 
administrative proceedings.  The majority implies that medical 
reports prepared in connection with potential litigation are 
unreliable.  Majority op., ¶¶69-71, 86.  However, the reports at 
issue in Perales, 402 U.S. at 402-04, were also prepared by 
experts 
retained 
by 
the 
government 
in 
connection 
with 
litigation.  In determining that the medical reports before it 
constituted substantial evidence, the Supreme Court in Perales 
examined numerous factors, 402 U.S. at 402-06, several of which 
are applicable in the present case, stressing that "[t]hese are 
routine, standard, and unbiased medical reports by physician 
specialists concerning a subject whom they had seen."  Perales, 
402 U.S at 404.  Thus, Perales "laid great stress on the fact 
that the reports were independent medical reports routinely 
prepared and submitted in disability cases."  Calhoun, 626 F.2d 
at 149.  
¶151 As 
such, 
Perales 
recognized 
the 
reality 
that 
administrative agencies routinely rely on reports prepared by 
experts who have examined claimants, and that such reports are 
probative and reliable.  The Perales court "specially noted, 
first, that the fact 
that 
the government 
calls in and 
remunerates consultative physicians does not undermine the 
No.  03-0226.jpw 
 
 
22
independence of those physicians' opinions or indicate bias in 
favor of the [agency] . . . ."  Allen v. Heckler, 749 F.2d 577, 
580 (9th Cir. 1984).   
¶152 Perales 
correctly 
recognized 
that 
documentary 
evidence, especially medical reports, are routinely utilized in 
administrative proceedings.  Indeed, the Wisconsin Legislature 
has acknowledged the importance of such evidence in the context 
of the Workers' Compensation Law by providing that certified 
reports of medical institutions and practitioners who have 
examined a patient constitute prima facie evidence as to the 
matters contained in the reports.  Wis. Stat. § 102.17(1)(d).  
Administrative proceedings are designed to allow for the 
efficient and fair resolution of claims without the formalities 
and intricate rules of a full judicial proceeding before a 
court.  By requiring live testimony in every case and preventing 
agencies from considering evidence that is commonly utilized by 
parties, the majority ignores this reality and frustrates the 
purpose of administrative hearings. 
¶153 For 
the 
aforementioned 
reasons, 
I 
respectfully 
dissent.  
¶154 I am authorized to state that Justice DAVID T. 
PROSSER, JR. joins this opinion.   
 
No.  03-0226.dtp 
 
1 
 
¶155 DAVID T. PROSSER, J.   (dissenting).  Luann Gehin is a 
sympathetic figure, but her victory in this court comes at a 
heavy cost.  My purpose in this dissent is to illuminate that 
cost. 
¶156 The dissent is divided into three parts.  Section I 
laments the majority's decision to take Wisconsin out of the 
mainstream of administrative law and predicts some of the 
consequences that will flow from the decision.  Section II 
challenges the majority's interpretation of a key piece of 
evidence in the record.  Section III outlines the majority's 
disturbing disregard of the waiver issue and the standard 
procedures of the Wisconsin Group Insurance Board. 
I 
¶157 In Richardson v. Perales, 402 U.S. 389 (1971), the 
Supreme Court held that written reports prepared by physicians 
who have examined a claimant for disability insurance benefits 
under the Social Security Act constitute "substantial evidence" 
supporting a finding of non-disability, notwithstanding the 
hearsay character of the reports, the absence of cross-
examination (through the claimant's failure to exercise subpoena 
rights), and directly opposing testimony by the claimant and the 
claimant's medical witness.  This landmark decision validated 
reliance 
on 
some 
uncorroborated 
hearsay 
evidence 
in 
administrative proceedings by taking into account the nature of 
the proceedings, "the reliability and probative worth of written 
medical reports," and the claimant's unutilized opportunity for 
No.  03-0226.dtp 
 
2 
 
cross-examination.  The decision seriously undercut the validity 
and scope of the so-called legal "residuum rule."   
¶158 The majority opinion in this case represents a frontal 
assault on the holding in Perales.  The opinion adheres to the 
precepts of the residuum rule despite a growing body of contrary 
decisions and the modern trend in scholarship advocating the 
rule's abolition. 
¶159 The 
residuum 
rule 
provides, 
in 
essence, 
that 
"uncorroborated hearsay alone does not constitute substantial 
evidence [in administrative proceedings]."  Majority op., ¶56.  
In other words, there must be some "residuum" of non-hearsay 
evidence upon which an agency bases its factual findings.   
¶160  The better rule, as many courts and scholars now 
recognize, is that hearsay evidence may constitute substantial 
evidence in administrative proceedings if the hearsay evidence 
bears inherent guarantees of reliability and trustworthiness. 
¶161 Wigmore's treatise on evidence asserts that: "The 
residuum rule . . . is decidedly not the wise and satisfactory 
rule for general adoption."  John Wigmore, 1 Wigmore on Evidence 
§ 4b at 122 (Tillers rev. 1983) (hereinafter Wigmore).  The 
majority admits that the residuum rule "has been criticized by 
commentators" because it "ignores the reliability of evidence 
incompetent under the hearsay rule."  Majority op., ¶60.  The 
wisdom behind these criticisms is manifest.  As the Wigmore 
treatise summarizes: 
Plausible as the residuum rule seems from the liberal 
point of view, it is not acceptable. . . .  [T]he 
No.  03-0226.dtp 
 
3 
 
residuum 
rule 
rests 
logically 
on 
[a] 
fallac[y] . . . that 
this 
"residuum 
of 
legal 
evidence," which is to be indispensable, will have 
some necessary relation to the truth of the finding.  
But the "legal" rules have no such necessary relation.  
In the mass, they do tend to secure a reliable body of 
evidence; but, taking each rule individually, it is 
obviously fallacious to assume that one or more pieces 
of "legal" evidence are per se a sufficient guarantee 
of truth. 
Wigmore, supra, at 120-21. 
¶162 To illustrate this point, consider two potential 
pieces of evidence.  First, consider the medical reports by Dr. 
Whiffen and Dr. Lemon in this case, recalling that Dr. Whiffen 
was Gehin's treating physician.  Second, consider oral testimony 
from someone like a claimant's spouse that the claimant is 
"totally disabled."  The majority opinion concludes that because 
the latter evidence is "legal," it may serve as substantial 
evidence, but because the medical reports are technically 
"hearsay," they may not.  Does this make sense?  As Wigmore's 
treatise points out,  
[B]oth may be true, or both may be false; truth or 
falsity depends on the circumstances in each case.  
But truth or falsity does not depend on the one type 
of 
evidence 
being 
"legal" 
and 
the 
other 
being 
"illegal"  . . . .  Yet the rule for a "residuum of 
legal evidence" rests on the assumption that the 
"legal" evidence is always credible and sufficient but 
the 
"illegal" 
evidence 
is 
never 
credible 
or 
sufficient. 
Wigmore, supra, at 122.   
¶163 In 1971 the Supreme Court decided that the residuum 
rule does not apply to social security disability proceedings in 
which the agency relies on medical records.  The Court said: 
No.  03-0226.dtp 
 
4 
 
We conclude that a written report by a licensed 
physician who has examined the claimant and who sets 
forth in his report his medical findings in his area 
of competence may be received as evidence in a 
disability hearing and, despite its hearsay character 
and an absence of cross-examination, and despite the 
presence of opposing direct medical testimony and 
testimony by the claimant himself, may constitute 
substantial evidence supportive of a finding by the 
hearing examiner adverse to the claimant, when the 
claimant has not exercised his right to subpoena the 
reporting physician and thereby provide himself with 
the 
opportunity 
for 
cross-examination 
of 
the 
physician. 
Perales, 402 U.S. at 402 (emphasis added). 
 
¶164 As 
courts 
fell 
into 
line 
behind 
the 
Perales 
approach,116 
Wigmore's 
treatise 
noted: 
"The 
residuum 
rule 
generally has been abandoned."  Wigmore, supra, at 122.  The 
National Judicial College predicted that even in jurisdictions 
still favoring the residuum rule, "any evidence that an 
Administrative Law Judge finds to be trustworthy and reliable 
should meet the exception to the hearsay rule and thus satisfy 
                                                 
116 See, e.g., Compton v. D.C. Bd. of Psychology, 858 A.2d 
470, 476 (D.C. 2004) (hearsay alone can be substantial evidence 
if reliable); Cole v. Driver and Motor Vehicle Servs. Branch, 87 
P.3d 1120, 1123 (Or. 2004) (Oregon has "expressly rejected" the 
residuum rule, and "hearsay evidence alone, even if inadmissible 
in a civil or criminal trial, is not incapable of being 
'substantial evidence'"); 49th Street Mgmt. Co. v. N.Y.C. Taxi & 
Limousine Comm'n, 716 N.Y.S.2d 391, 394 (App. Div. 2000) 
(Hearsay "may constitute substantial evidence where it is 
sufficiently relevant and probative."). 
The Florida court of appeals, although noting that "in 
Florida, the residuum rule is statutory," admitted that the rule 
"has now been rejected in most jurisdictions and most scholars 
are highly critical of it."  Bellsouth Advertising & Pub. Corp. 
v. Unemployment Appeals Comm'n, 654 So. 2d 292, 295 (Fla. Dist. 
Ct. App. 1995). 
No.  03-0226.dtp 
 
5 
 
the legal residuum rule in those jurisdictions that apply the 
rule."  Melvin Goldberg, Goldberg's Deskbook on Evidence for 
Administrative 
Law 
Judges, 
IV-16 
(1993) 
(published 
in 
cooperation with the National Judicial College).117  The majority 
opinion bludgeons this prediction. 
¶165 Wigmore's treatise further notes that the residuum 
rule has been replaced by the "substantial evidence" standard.  
Wigmore, supra, at 122-23.  In Wisconsin, the "substantial 
evidence" test is statutory.  Wis. Stat. § 227.57(6) ("The court 
shall, however, set aside agency 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 in 
the record.").  Wisconsin courts evaluate whether "reasonable 
minds could arrive at the same conclusion as the agency."  
Kitten v. DWD, 2002 WI 54, ¶5, 252 Wis. 2d 561, 644 N.W.2d 649.  
"Many courts and almost all scholars agree that hearsay and 
other 
'incompetent' 
evidence 
may 
constitute 
'substantial 
evidence.'"  Wigmore, supra, at 123-24. 
¶166 Despite the modern trend against the residuum rule, 
Wigmore's 
treatise 
admits 
that 
"[s]ome 
courts . . . have 
effectively subverted the original purpose of the substantial 
evidence standard by holding that hearsay evidence in and of 
                                                 
117 This standard parallels the court of appeals' approach: 
that the hearing examiner may rely on any evidence admissible 
under a hearsay exception, such as Wis. Stat. § 908.03(6m).  
Gehin v. Group Ins. Bd., No. 03-0226, unpublished slip op., ¶14 
(Wis. Ct. App. Oct. 2, 2003). 
No.  03-0226.dtp 
 
6 
 
itself cannot constitute 'substantial evidence.'"  Wigmore, 
supra, at 124-25.   
¶167 The approach advocated by Wigmore's treatise and 
approved by the Supreme Court in Perales could hardly be more 
apposite to this case.  In fact, the Perales Court resolved 
exactly the same issue we face today——namely, whether written 
medical 
reports 
by 
licensed 
physicians 
may 
constitute 
substantial evidence in administrative proceedings.  The Supreme 
Court held that medical reports do constitute substantial 
evidence.  Today the majority holds that they do not.  I would 
follow Perales, not because we are bound to do so, but because 
the reasoning behind the Supreme Court's decision, coupled with 
the modern trend of authority and scholarship, convinces me that 
we should do so. 
¶168 The Perales Court cited nine factors it believed 
established the inherent reliability of the medical records in 
that case.  Most, if not all, are present in this case as well. 
¶169 First, the Court noted that each hearsay medical 
report was prepared by a practicing physician who had examined 
the claimant.  Perales, 402 U.S. at 402.  The Court refused to 
"ascribe bias" to any of these doctors.  Id. at 403.  In the 
present case, the medical reports relied on by the Board——that 
is, the Whiffen and Lemon reports——were prepared by medical 
doctors who examined Gehin at the time of the disability 
determination.  Some reports were prepared by Gehin's own 
physician (Whiffen).  By contrast, Dr. Shannon's examination of 
the claimant came two years after the determination at issue.  
No.  03-0226.dtp 
 
7 
 
Ironically, the relevance of Dr. Shannon's testimony, which was 
contested at the hearing, depended in large part upon the 
written "hearsay" reports of others.  There is no reason for 
this court to ascribe bias to the medical reports relied on by 
the Board. 
¶170 Second, the Perales court cited the impartiality of 
the administrative agency evaluating the claim.  Id. at 403.  
Similarly, in this case, there is nothing in the record to cause 
this court to believe that the Wisconsin Group Insurance Board 
(the Board), which employed a hearing examiner to conduct a 
hearing and review evidence, was biased. 
¶171 Third, the Court hailed the process by which medical 
reports are generated.   
One familiar with medical reports and the routine of 
the medical examination, general or specific, will 
recognize their elements of detail and of value.  The 
particular reports of the physicians who examined [the 
claimant] were based on personal consultation and 
personal examination and rested on accepted medical 
procedures and tests. 
Id.  In the present case, the majority has not suggested that 
the character of medical reports is today less reliable than it 
was at the time the Supreme Court decided Perales.  Accordingly, 
that factor is also present here.   
¶172 Fourth, the Court cited the range of examinations to 
which the claimant submitted.  Id. at 404.  In this case, 
Gehin's examinations were relatively similar, with each designed 
to determine whether Gehin was "totally disabled" within the 
No.  03-0226.dtp 
 
8 
 
meaning of the ICI policy.  Concededly, the fourth Perales 
justification is not present in this case. 
¶173 Fifth, the Court noted the consistency among all the 
medical reports.  Id.  In this case, the majority goes to some 
lengths to show that hearsay cannot be corroborated by other 
hearsay, majority op., ¶¶92-101, thus rejecting consistency 
between independent medical reports as evidence showing the 
reliability of such reports.  This conclusion is hard to defend. 
¶174 Sixth, the Court noted that the claimant had the 
opportunity to cross-examine the doctors by requesting subpoenas 
for them, but did not do so.  Perales, 402 U.S. at 404-05.  
Gehin had the same opportunity.  The majority cites a treatise 
by Professor Bernard Schwarz stating that claimants rarely 
subpoena physicians due to the expense.  Majority op., ¶84 n.88.  
But that is exactly what the majority's opinion will force 
claimants to do.  Claimants will have to foot the bill for their 
own experts to appear in person, if the opposing party makes an 
expected objection to "hearsay" medical reports.   
¶175 Seventh, the Court noted that even in formal trials 
before competent courts, medical records are admitted and 
considered despite their hearsay character, as an exception to 
the hearsay rule.  Id. at 405.  The same is true in Wisconsin.  
See Wis. Stat. § 908.03(6m).   
¶176 Eighth, the Court noted that prior decisions have 
recognized the "reliability and probative value" of medical 
reports.  Perales, 405 U.S. at 405.  The Court found that these 
decisions "demonstrate traditional and ready acceptance of the 
No.  03-0226.dtp 
 
9 
 
written medical report in social security disability cases."  
Id. at 406.  Although the Court referenced social security 
disability cases, the character of the medical report does not 
change based on the type of administrative proceeding in which 
it is used.  Rather, the character of the report is grounded in 
the process used to generate the report.  See id. at 403-04. 
¶177 Ninth, the Court recognized the sheer magnitude of the 
administrative 
process, 
and 
reasoned 
that 
requiring 
live 
testimony by doctors would "be a substantial drain" both 
financially and on the energy of physicians.  Id. at 406.  Both 
reasons apply here as well. 
¶178 Commentators in the wake of the Perales decision 
approved the Court's change in focus from a per se rule that 
hearsay cannot be substantial evidence to an evaluation of the 
reliability of the hearsay evidence.  "Such a direct look at the 
reliability of the evidence makes far more sense than a per se 
rule that hearsay cannot be substantial evidence."  The Supreme 
Court, 1970 Term, 85 Harv. L. Rev. 38, 328 (1971-72) (citing 2 
K. Davis, Administrative Law, §§ 14.10, 14.11 (1958); I J. 
Wigmore, Evidence § 4(b)(3d ed. 1940)).   
¶179 Hearsay rules originally developed as protections in 
the jury trial context to preclude laypersons from placing too 
much evidence on arguably unreliable hearsay evidence.  Id. at 
329 (citing Thayer, Preliminary Treatise on Evidence at the 
Common Law 180, 181 (1896); I J. Wigmore, Evidence § 4(b) (3d 
ed. 1940)).  That concern is not present in administrative 
hearings.  "[W]here the jury is supplanted by a trained hearing 
No.  03-0226.dtp 
 
10 
 
examiner118 or administrative board, often with expertise in 
evaluating evidence, the rationale for the use of hearsay 
standards disappears."  Id. 
¶180 The Court decided Perales 33 years ago.  Since then, 
many courts have relied on its reasoning.  Today this court 
becomes one of the few, if not the only, court to disagree 
substantively with the rationale and rule of law announced in 
Perales.   
¶181 The 
majority 
provides 
several 
reasons 
for 
distinguishing Perales, majority op., ¶66, none of which 
withstands close examination.  First, the majority distinguishes 
Perales based on the vast scope of the Social Security 
Administration (SSA).  Majority op., ¶66.  The majority cites a 
1992 law review article which stated that the SSA considers more 
than one million disability applications a year.  Majority op., 
¶66.  However, this figure of "one million . . . applications" 
is irrelevant.  The relevant consideration is the number of 
cases involving a contested hearing.  At the time of the Supreme 
Court's decision, the SSA conducted only 20,000 claim hearings 
annually——a number one-fiftieth the size of the amount the 
majority uses as justification.  Perales, 402 U.S. at 406.  Our 
record does not reveal how many cases the Wisconsin Group 
                                                 
 
118 The hearing examiner is required to "perform all 
functions in an impartial manner.  An examiner shall disqualify 
himself 
or 
herself 
with 
respect 
to 
a 
particular 
appeal 
if . . . he or she is unable to act fairly or impartially."  
Wis. Admin. Code § ETF 11.04(3). 
 
No.  03-0226.dtp 
 
11 
 
Insurance Board considers each year, so that there is no way to 
compare the scope of the two programs.   
¶182 In any event, although the Supreme Court noted the 
scope of the SSA as one of the nine reasons supporting its 
holding, id., this scope was not the principal reason for its 
decision.  As the Court put it:  
The 
matter 
comes 
down 
to 
the 
question 
of 
the 
procedure's integrity and fundamental fairness.  We 
see nothing that works in derogation of that integrity 
and of that fairness in the admission of consultants' 
[medical] reports, subject as they are to being 
material and to the use of the subpoena and consequent 
cross-examination. 
Id. at 410. 
¶183 The Court was ultimately persuaded by the "underlying 
reliability and probative value" of the medical reports, not by 
the sheer scope of the SSA.  This makes sense, because if the 
only goal were to make it easy to process an immense number of 
claims quickly, the practical approach would be to give the 
decision-maker broad autonomy to dispose of claims quickly.  
Instead, the Court wisely promulgated a rule based on the 
underlying reliability and probative value of the medical 
reports. 
¶184 Second, the majority distinguishes Perales because in 
claim hearings before the SSA (at issue in Perales), "most 
claimants are not represented by counsel."  Majority op., ¶66.  
Later in the opinion, the majority poses an excellent question:  
[I]f hearsay is admissible in court as an exception to 
the hearsay rule and a fact-finder in a judicial 
proceeding 
may 
base 
its 
decision 
on 
admissible 
No.  03-0226.dtp 
 
12 
 
hearsay, why then apply what appears to be a more 
restrictive rule barring an administrative agency from 
basing its decision on uncorroborated hearsay that 
falls within a hearsay exception? 
Majority op., ¶90.119 
¶185 The majority answers its own question by stating that 
the "primary reason" for imposing stricter evidentiary standards 
on administrative agencies than on criminal courts is that "in 
administrative hearings the claimants are often not represented 
by counsel . . . ."  Id.  In this case, however, Gehin was 
represented by counsel, the hearing examiner was an attorney, 
and the Group Insurance Board collectively had substantial 
                                                 
119 The 
majority's 
question 
is 
well 
taken 
because 
Wis. Stat. § 227.45(1) 
provides 
in 
part 
that 
in 
agency 
proceedings, "Basic principles of relevancy, materiality and 
probative force shall govern the proof of all questions of 
fact."  Generally, § 227.45 relaxes evidentiary standards in 
administrative proceedings.  Accord Wal-Mart Stores, Inc. v. 
LIRC, 2000 WI App 272, ¶20 n.8, 240 Wis. 2d 209, 621 N.W.2d 633.  
The majority's decision today increases the standards for 
reliance on hearsay in administrative proceedings beyond even 
the standard employed in criminal cases, as the majority admits.  
See majority op., ¶90.   
The 
majority 
steadfastly 
contends 
that 
"the 
relaxed 
evidentiary standard is not meant to allow the proceedings to 
degenerate to the point where an administrative agency relies 
only on unreliable evidence."  Majority op., ¶51.  Apparently, 
the majority 
characterizes 
medical 
records 
as 
"unreliable 
evidence."  This is odd, given this court's adoption of an 
evidentiary rule expressly providing for the admission of health 
care 
provider 
records 
despite 
their 
hearsay 
character, 
Wis. Stat. § 908.03(6m), 
the 
Supreme 
Court's 
holding 
and 
accompanying reasoning in Perales, and the holding of this court 
in Hagenkord v. State, 100 Wis. 2d 452, 469-71, 302 N.W.2d 421 
(1981) extolling the reliability of medical records.  Yielding 
slightly, the majority later admits that "Medical reports 
arguably have indicia of reliability . . . they are furnished by 
independent, impartial experts. . . ."  Majority op., ¶69.   
No.  03-0226.dtp 
 
13 
 
experience and expertise.  Thus the facts were similar to the 
facts in Perales.  Imposing an evidentiary standard for 
administrative hearings higher than the standard applied in 
courts does not assist a person who is not represented by 
counsel. 
¶186 Third, the majority distinguishes Perales because 
"procedures must be kept as simple and inexpensive as possible 
for the system to work."  Majority op., ¶66.  This is really 
just 
a 
restatement 
of 
the 
majority's 
first 
ground 
for 
distinguishing Perales——the scope of the SSA.  As already 
discussed, that was not the impetus behind the Supreme Court's 
holding.  The majority provides no reason that proceedings 
before the Group Insurance Board should not also be simple and 
inexpensive. 
¶187 The majority also distinguishes Perales on factual 
grounds because in that case "the doctors' written reports were 
corroborated by in-person testimony.  The evidence in Perales 
consisted of [the written medical reports, oral testimony for 
the claimant, and] a government-paid doctor's testimony that 
corroborated the substance of the written hearsay reports."  
Majority op., ¶67.  This summarization overstates what the 
"government-paid doctor" actually did.  The government-paid 
doctor never examined the claimant.  Perales, 402 U.S. at 396.  
He simply summarized the hearsay medical reports, and provided 
the hearing examiner with a "consensus" of the medical reports.  
Id.  In effect, he explained to the examiner what the medical 
reports said. 
No.  03-0226.dtp 
 
14 
 
¶188 In the case at bar, the Group Insurance Board examiner 
had the benefit of the detailed forms completed by the doctors.  
The examining doctors had to answer a simple question: Is Luann 
Gehin "totally disabled" within the meaning of the ICI policy?  
The doctors simply checked "yes" or "no" after providing their 
findings and reasoning.  The examiner did not need another 
medical doctor to provide the "consensus" of these reports.  The 
examiner could simply count how many doctors answered "yes" and 
how many answered "no."   
¶189 Instead of relying on Perales, a Supreme Court case 
directly on point, the majority chooses to rely on Folding 
Furniture Works, Inc. v. Wisconsin Labor Relations Board, 232 
Wis. 170, 285 N.W. 851, 286 N.W. 875 (1939).  It thereby 
disregards the remarkable similarity of the factual situation in 
Perales and turns to the fundamentally different factual 
situation in Folding Furniture. 
¶190 Folding Furniture is a case about unfair labor 
practices in the context of collective bargaining between a 
labor union and an employer.  232 Wis. at 178-79.  The employer 
in Folding Furniture objected to the Wisconsin Labor Relations 
Board's admission of and reliance on employee testimony about 
what the owner's motivation was in certain statements he made 
and actions he took and what the owner's sons' opinion was about 
wage increases.  Id. at 188.  Statements such as these fall 
within 
the 
heart 
of 
the 
prohibition 
on 
hearsay. 
 
See 
Wis. Stat. §§ 908.01(3) (definition of hearsay), 908.02 (hearsay 
inadmissible unless otherwise excepted from the general rule).  
No.  03-0226.dtp 
 
15 
 
In the instant case, the evidence at issue is not oral 
statements by laypersons of "mere opinion," but medical reports 
prepared by doctors after personal examinations.  This court has 
already ratified the trustworthiness inherent in medical reports 
by expressly exempting "Health Care Provider Records" from the 
operation 
of 
the 
general 
rule 
prohibiting 
hearsay.  
Wis. Stat. § 908.03 preamble and (6m).120 
¶191 Despite the factual differences, the majority cites 
Folding Furniture because it quotes the United States Supreme 
Court opinion in Consolidated Edison Co. v. National Labor 
Relations Board, 305 U.S. 197 (1938), which stated "Mere 
uncorroborated hearsay or rumor does not constitute substantial 
evidence."  Id. at 230.  In Folding Furniture, this court did 
not analyze the statement from Consolidated Edison, but merely 
quoted it.  See Folding Furniture, 232 Wis. at 189. 
¶192 Had 
Perales 
not 
addressed 
this 
language 
from 
Consolidated Edison, this court might have reason to struggle 
with the two cases.  But it need not do so because the Perales 
Court expressly clarified and distinguished the quoted statement 
from Consolidated Edison:  
                                                 
120 The majority contends that medical reports "arguably 
have indicia of reliability and therefore seem to have probative 
force," majority op., ¶69, but refuses to decide whether the 
reports are actually admissible.  Majority op., ¶89.  The plain 
language of § 908.03(6m) provides that "records" prepared by a 
"health care provider" are admissible.  It is difficult to 
imagine how the medical reports in this case would not fall 
within the scope of that rule.  See generally Hagenkord, 100 
Wis. 2d at 469-71.  
No.  03-0226.dtp 
 
16 
 
The contrast the Chief Justice was drawing, at the 
very page cited, was not with material that would be 
deemed formally inadmissible in judicial proceedings 
but with material "without a basis in evidence having 
rational probative force."  This was not a blanket 
rejection by the Court of administrative reliance on 
hearsay irrespective of reliability and probative 
value.  The opposite was the case. 
Perales, 402 U.S. at 407-08 (emphasis added).  The Court makes 
plain that its paradigm for evaluating hearsay evidence is not 
based on its hearsay nature, but rather on the inherent 
reliability of the hearsay evidence.121 
¶193 Unable to ignore this express language in Perales, the 
majority is forced to admit that "Perales casts doubt on the 
continued viability of Consolidated Edison."  Majority op., ¶64.  
Yet the majority persists that "many states continue to operate 
under rules that function like the legal residuum rule."  
Majority op., ¶62.  The majority punctuates its analysis with a 
                                                 
121 Even the Folding Furniture court made clear that it was 
not relying on a single sentence in Consolidated Edison Co. v. 
National Labor Relations Board, 305 U.S. 197 (1938).  The court 
stated: 
Hearsay may doubtless be received, if corroborative of 
other evidence or otherwise of such nature as to have 
some reasonable bearing on a fact for determination.  
Letters and documents from a party may be received 
without authentication such as is necessary in courts.  
But nonlegal evidence to be admissible must have some 
substantial probative force and not be a mere opinion 
except in fields where the opinion of experts is 
proper for consideration and the person giving it is 
shown 
to 
have some 
special 
knowledge 
reasonably 
entitling his opinion to some weight. 
Folding Furniture Works, Inc. v. Wisconsin Labor Relations Bd., 
232 Wis. 170, 188, 285 N.W. 851 (1939) (emphasis added). 
No.  03-0226.dtp 
 
17 
 
substantial footnote purporting to show the vast number of 
jurisdictions that do not follow Perales.  Majority op., ¶62 
n.76.  Close inspection of the material therein reveals that 
much of it does not support the majority's conclusion.122  The 
                                                 
122 For 
example, 
the 
majority 
cites 
an 
Alabama 
Administrative Code provision: "Hearsay is not sufficient to 
prove any material fact" unless that hearsay would be admissible 
under a court-recognized exception.  Ala. Admin. Code r. 482-1-
065-.04(9)(b) (2004) (emphasis added).  The medical reports at 
issue here are admissible under a court recognized exception.  
See 
Wis. Stat. § 908.03(6m). 
 
Therefore, 
the 
Alabama 
Administrative Code provision cited by the majority actually 
contradicts its conclusion.  The same analysis applies to the 
Minnesota rule cited by the majority: "Hearsay evidence may be 
used for the purpose of supplementing or explaining any direct 
evidence but is not sufficient in itself to support a finding 
unless it would be admissible over objection in civil actions."  
Minn. R. 5601.3145(3) (2003) (emphasis added).  Medical records 
that comply with Wis. Stat. § 908.03(6m) are "admissible" over 
objection in civil actions.  The Montana Rule provides that 
"Hearsay evidence may be received and considered to supplement 
other evidence, but such hearsay evidence may not be considered 
to support a finding unless it would otherwise be admissible 
over objection in civil actions or under the Montana Rules of 
Evidence."  Mont. Admin. R. 2-4-604(4) (2004) (emphasis added).  
Likewise, the Utah rule provides that "Hearsay evidence may be 
used for the purpose of supplementing or explaining other 
evidence, but it shall not be sufficient in itself to support a 
finding unless it would be admissible in a judicial proceeding."  
Utah Admin. Code 51-2-12(C) (emphasis added).  Finally, the 
majority cites the Wisconsin Administrative Code: "Hearsay 
evidence is admissible if it has reasonable probative value but 
no issue may be decided solely on hearsay evidence unless the 
hearsay evidence is admissible under ch. 908, Stats."  Wis. 
Admin. Code § DWD 140.16 (emphasis added).  In all of these 
states, medical records are admissible under the hearsay rules.  
See Ex Parte American Color Graphics, Inc., 838 So. 2d 385, 388 
(Ala. 2002) (Ala. R. Evid. § 803(6) allows admission of hearsay 
medical records unless prepared exclusively in anticipation of 
litigation); State v. Dick, 419 N.W.2d 828, 831 (Minn. Ct. App. 
1988) 
(Medical 
records 
are 
considered 
reliable 
and 
are 
specifically excluded from the hearsay rule by Minn. R. Evid. 
§ 803(4)); Mason v. Ditzel, 842 P.2d 707, 713 (Mont. 1992) 
No.  03-0226.dtp 
 
18 
 
majority 
later 
admits 
that 
"some 
cases 
and . . . some 
commentators" support the opposing position as advanced by the 
court of appeals.  Majority op., ¶85.  Notably, most of the 
authority that favors the court of appeals' Perales-based result 
is more recently minted than the authority favoring the 
majority's approach.  Compare majority op., ¶85 n.89 (all cases 
cited are 1998 or newer) with majority op., ¶62 n.76 (all cases 
cited are 1986 or older).   
¶194 Even the majority's preferred Consolidated Edison test 
only restricts reliance on "uncorroborated hearsay."  Here, 
there is evidence in the record to corroborate the medical 
reports.  The Board's "Finding of Fact #7" states that Gehin 
participated in a job-retraining program through the State of 
Wisconsin Division of Vocational Rehabilitation.  Her duties 
                                                                                                                                                             
(Medical records made by examining physician are excepted from 
the hearsay rule by Mont. R. Evid. § 803(4)); Utah R. Evid. 
803(4); Wis. Stat. § 908.03(6m). 
The majority believes that the admissibility of the 
evidence under the evidentiary code "confuses" the issue.  
Majority op., ¶89.  Yet that is exactly the standard espoused in 
many of the codes the majority cites in support of its view. 
As for the cases the majority cites in footnote 76, only 
one of them——Libby, McNeill & Libby v. Alaska Industrial Board, 
12 Alaska 584 (1950)——concerns medical records.  The Alaska 
court in that case did not have the benefit of the Supreme 
Court's reasoning in Perales because Libby was decided in 1950——
more than 20 years before Perales.   
In summary, little of the authority in footnote 76 
controverts the fundamental premise of Perales——that hearsay 
medical reports, because of their inherently reliable nature, 
may 
constitute 
substantial 
evidence 
in 
administrative 
proceedings.  
No.  03-0226.dtp 
 
19 
 
included "typing on both a typewriter and a computer, filing, 
answering the telephone, and other clerical duties."   
¶195 Gehin's 
participation 
within 
the 
job 
retraining 
program shows that she was not "totally disabled" within the 
meaning of the ICI contract, thereby corroborating the hearsay 
medical records.  The majority has recited that definition in 
full, majority op., ¶14 n.18, including the language "complete 
inability by reason of any medically determinable, physical or 
mental 
impairment, 
to 
engage 
in 
any 
substantial 
gainful 
activity" (emphasis added).  Suffice to say that Gehin was not 
"totally disabled" within the meaning of the ICI contract if she 
was capable of earning an amount at least equal to her ICI 
benefit.  Id.  Gehin's monthly ICI benefit was $979.37.  Id.  
If, as the Board found, Gehin was capable of working a minimum 
of 24 hours per week for four weeks each month, she could work a 
minimum of approximately 96 hours each month.  The Wisconsin 
Department of Workforce Development maintains average salary 
statistics for a myriad of professions in Wisconsin, broken down 
by job title and by locality.123  In Madison, "secretaries" now 
earn an average of $14.17 per hour.124  If Gehin had worked 96 
hours at $3.50 per hour less than that rate, she would have 
earned in excess of her monthly ICI benefit of $979.37.  This 
factual finding by the Board corroborates the conclusion that 
                                                 
123 See 
Wisconsin 
Department 
of 
Workforce 
Development 
Occupational 
Employment 
Statistics 
Survey, 
available 
at 
www.dwd.state.wi.us/oea/wages.htm (Nov. 2003).   
124 Id. 
No.  03-0226.dtp 
 
20 
 
Gehin was not totally disabled as expressed in the medical 
reports.  The majority disregards this evidence, instead finding 
that "if the uncorroborated written hearsay medical reports are 
eliminated from consideration, no evidence exists in the record 
to support the [Board's] findings" about the claimant's physical 
condition.  Majority op., ¶47 (emphasis added). 
¶196 The majority's opinion helps the claimant in this 
case.  But in many future cases, the shoe will be on the other 
foot.  The court's decision will force financially struggling 
claimants to pay the bills for expert testimony.  The majority 
recognizes this concern.  Majority op., ¶¶102-03.  The majority 
claims that its decision should not be read to require 
corroboration 
by 
non-hearsay 
evidence 
in 
all 
instances.  
Majority op., ¶103; but see majority op., ¶81 ("[U]ncorroborated 
hearsay alone does not constitute substantial evidence in 
administrative hearings.").  The majority suggests that the 
parties may stipulate to some or all of the facts or to the 
submission of and reliance upon the contents of written hearsay 
reports.  Majority op., ¶104.  The majority also suggests that 
the parties may stipulate that the agency may base its findings 
of fact on uncorroborated hearsay.  Id.   
¶197 It should be obvious that when a claimant decides 
against appealing a decision based on adverse medical reports, 
the claimant willingly or unwillingly accepts the judgment in 
the reports.  The issue at hand arises when a claimant does not 
accept the judgment in one or more medical reports, or when a 
No.  03-0226.dtp 
 
21 
 
respondent party does not accept the conclusion in a claimant's 
medical reports. 
¶198 As 
the 
majority 
recognizes, 
many 
claimants 
in 
proceedings before the Board are not attorneys.  See majority 
op., ¶90.  Non-attorneys might understandably be suspicious of 
their 
adversaries 
in 
such 
administrative 
proceedings 
and 
probably would not be willing to stipulate.  When claimants are 
represented by attorneys, the point is more pronounced: what 
attorney worth her salt will stipulate to a fact against the 
interest of her client?  Thus, both parties and attorneys will 
likely press the other side to bring in the doctors for 
presentation of live testimony, as this court in essence 
requires today.   
¶199 The court's decision may even lead to the perverse 
result that a government agency might refuse to quickly dispose 
of a claim in which it knows the claimant's position has merit.  
For instance, the Department of Employee Trust Funds could 
decide to force the claimant to provide live testimony to 
corroborate her doctor's records when it knows that the 
claimant's financial resources are thin.  Conversely, claimants 
in similar positions might decide not to contest termination of 
benefits because they know they cannot afford the live expert 
testimony that the majority today demands.   
¶200 The Perales case does not authorize administrative 
agencies to make factual findings based solely on hearsay 
irrespective of the nature or reliability or probative value of 
the 
hearsay. 
 
The 
Perales 
case 
recognizes 
that 
some 
No.  03-0226.dtp 
 
22 
 
uncorroborated hearsay constitutes substantial evidence in an 
administrative 
proceeding 
because 
of 
its 
reliability 
and 
probative worth and because of the opportunity a party has to 
subpoena a witness for cross-examination.  Medical records are 
widely 
regarded 
as 
reliable, 
probative, 
and 
worthy 
of 
acceptance.  If uncorroborated medical records do not constitute 
substantial evidence, then, arguably, no uncorroborated hearsay 
records or statements constitute substantial evidence.  This is 
the staggering consequence of the majority's decision. 
¶201 In the future, participants in administrative hearings 
will be required to provide live, in-person testimony to 
corroborate 
reliable 
hearsay 
evidence. 
 
Wisconsin 
Stat. § 908.03(24) 
allows 
the 
admission 
of 
all 
hearsay 
statements 
having 
"comparable 
circumstantial 
guarantees 
of 
trustworthiness."  "Comparable" presumably means "comparable" to 
the other 23 exceptions enumerated in Wis. Stat. § 908.03.  Yet 
under the majority's rule, none of these trustworthy pieces of 
evidence may serve as the basis for an administrative agency's 
finding 
without 
corroboration. 
 
Business 
records, 
birth 
certificates, property deeds——none of these commonly-relied upon 
documents constitutes substantial evidence under the majority's 
approach without sufficient corroborating non-hearsay evidence. 
¶202 Wisconsin Stat. § 908.03(6m)(b) specifically provides 
that in the case of medical records, an authentication witness 
is unnecessary as long as copies of the records have been served 
upon opposing parties at least 40 days before trial.  This is 
another indication of our common-sense conviction of the 
No.  03-0226.dtp 
 
23 
 
inherent trustworthiness and integrity of medical records.  The 
majority opinion is inconsistent with this conviction. 
II 
¶203 The 
majority 
admits 
that 
medical 
reports 
are 
"generally" reliable, but discounts the reliability of Dr. 
Whiffen's 
evaluation 
without 
explicitly 
explaining 
why.  
Majority op., ¶91.  Presumably, the majority is referring to Dr. 
Whiffen's "Attending Physician's Statement" on which Dr. Whiffen 
initially checked both "yes" and "no" in response to Question 
5(a) on the form, which inquires whether the patient is "totally 
disabled."  See majority op., ¶74.  The majority fails to note 
that question 5(a) is actually divided into two parts: first, 
inquiring whether the patient is totally disabled as that 
definition 
applies 
to 
the 
"Patient's 
Job," 
and, 
second, 
inquiring whether the patient is totally disabled as to "Any 
Other Work."  Even if Dr. Whiffen's answer to the first part of 
the question is debatable, his response to the second part is 
not.  Dr. Whiffen clearly checked the "no" box, indicating that 
in his professional opinion, Gehin was not "totally disabled" 
such that she could not undertake "Any Other Work."  The clarity 
of Dr. Whiffen's response to the second part of the question 
undercuts 
the 
majority's 
conclusion 
that 
the 
allegedly 
questionable marking renders his report "not reliable as a basis 
for the [Board's] findings of fact . . . [or] conclusions of 
law."  Majority op., ¶79. 
 
 
No.  03-0226.dtp 
 
24 
 
III 
¶204 The 
majority 
opinion 
disregards 
the 
established 
procedures of the Group Insurance Board.  Gehin's case was 
reviewed first by the United Wisconsin Group, then by the 
Department of Employee Trust Funds.  Gehin appealed to the Group 
Insurance Board, making the Department the opposing party.125  In 
that appeal, Gehin had the burden of proof to show that she was 
entitled to the previously denied benefit.  Wis. Admin. Code 
§ ETF 11.03(8).  On appeal, Gehin did not object to the 
admission of the medical reports126 or to the Department's 
reliance on the reports.  Before the Board issued its final 
decision, it issued a proposed decision, as it is required to do 
by rule.  Wis. Admin. Code § ETF 11.09(1).   
¶205 The majority admits that "Arguably the claimant had an 
opportunity to object to the Findings of Fact being based on 
uncorroborated hearsay evidence when the Proposed Findings of 
Fact and Conclusions of Law were released."  Majority op., ¶107.  
Actually, Gehin's chance to object was more than "arguable."  By 
                                                 
125 See Wis. Admin. Code § ETF 11.02(3) ("'Appeal' means the 
review of a determination made by the department . . . under s. 
40.03(1)(j), (6)(i), (7)(f), or (8)(f), Stats."  This appeal was 
pursuant to Wis. Stat. § 40.03(6)(i) ("[The Board] may accept 
timely 
appeals 
of 
determinations 
made 
by 
the 
department 
affecting any right or benefit under any group insurance plan 
provided for under this chapter.")); see also Wis. Admin. Code 
§ ETF 11.03(7)(a) ("The department shall be a party to each 
appeal of a determination made by the department."). 
126 Wis. Admin. Code § ETF 11.06(2) provides that "Failure 
of a party to object on the record to admission of any evidence 
shall be deemed a waiver of that objection." 
No.  03-0226.dtp 
 
25 
 
rule, when the Board issues its proposed decision, the losing 
party (Gehin) has 20 days to file an objection to the proposed 
decision.  Wis. Admin. Code § ETF 11.09(3).  Gehin, represented 
by counsel, filed a 23-page written objection to the Board's 
proposed decision.  However, Gehin's objection was not to the 
Board's reliance on the medical reports.  On the contrary, Gehin 
relied on the reports to attempt to show that the Board's 
Proposed Decision that she was not "totally disabled" was 
factually incorrect.  Gehin failed to object to the Board's 
reliance on the reports despite the ETF code provision that "The 
aggrieved party shall specify, in detail . . . each provision of 
the proposed decision to which the party objects and the basis 
for each objection . . . [including] each change the party 
requests the board to make in the proposed decision and the 
legal grounds for the change."  Wis. Admin. Code § ETF 
11.09(3)(a)-(b). 
¶206 The majority skates over the Board's argument that 
Gehin waived any right to challenge the Board's reliance on the 
medical reports because she raised no objections on those 
grounds despite the noted multiple opportunities to do so.  
Perplexingly, the majority relies on the circuit court's ruling 
that Gehin "was not required to object and that the claimant 
therefore did not waive her objections," majority op., ¶107, 
despite its earlier correct statement that "This court reviews 
the decision of the Group Insurance Board, not the circuit 
court's order or court of appeals' decision."  Majority op., ¶5.  
The majority concludes that it "need not decide whether the 
No.  03-0226.dtp 
 
26 
 
claimant waived her right in the present case to challenge the 
bases of the Findings of Fact."  Majority op., ¶109.  The 
majority cites no authority that allows it to completely fail to 
address the Board's argument.  In fact, the majority provides no 
reason at all why Gehin has not waived her arguments as to the 
Board's reliance on the medical reports. 
¶207 Instead, the majority simply asserts that the Board's 
Perales-based argument would constitute "abandon[ing] the rule 
long used in this state that uncorroborated hearsay evidence 
alone does not constitute substantial evidence."  Majority op., 
¶8.  The majority terms its rule "long used," yet United 
Wisconsin Group, the Department of Employee Trust Funds, the 
Group Insurance Board, and the court of appeals all operated 
under the impression that the applicable "rules" allowed the 
Board to rely on the medical reports.127  It is the majority that 
is changing the rules.  At a minimum, the majority should remand 
this case to the Board to allow it to reconsider the case in 
light of the "residuum rule" standard the majority resurrects.   
CONCLUSION 
¶208 Professor Kenneth Davis has written that the reasons 
supporting abandonment of the residuum rule are "overwhelming——
so overwhelming as to give rise to the question whether courts 
that have given lip service to the residuum rule have done so on 
                                                 
127 Wis. Admin. Code § 11.12(2) sets out the "Standards" the 
Board uses to make findings.  Section (2)(a) allows the Board to 
base its findings on "evidence in the record which proves the 
findings to a reasonable certainty by the greater weight of the 
credible evidence."  Hearsay is not excluded. 
No.  03-0226.dtp 
 
27 
 
the basis of misunderstanding instead of through an exercise of 
informed judgment."  Kenneth Davis, 3 Administrative Law 
Treatise, § 16.6 at 239 (2d ed. 1980).  Apparently the majority 
is not "overwhelmed" by the courts' and scholars' criticisms of 
the residuum rule.  I am persuaded and would affirm the decision 
of the court of appeals relying on the reasoning of Perales.  I 
would adopt the rule that hearsay evidence may constitute 
substantial evidence in 
administrative 
proceedings if the 
hearsay evidence bears inherent guarantees of reliability and 
trustworthiness and the opposing party has full notice of the 
evidence and the opportunity to challenge it by subpoenaing a 
witness.  In addition, I believe this court should be more 
attentive to the waiver issue and the procedures employed by 
administrative agencies in general, and the Board in particular.  
For the foregoing reasons, I respectfully dissent. 
¶209 I am authorized to state that Justice JON P. WILCOX 
joins this dissent. 
 
 
 
 
 
 
No.  03-0226.pdr 
 
1 
 
¶210 PATIENCE 
DRAKE 
ROGGENSACK, 
J. 
(dissenting).   The 
court reviews whether the Wisconsin Group Insurance Board 
(Board) erred in making a decision that was dependent on a 
finding of fact supported by written hearsay evidence, namely, 
reports made by medical doctors.  My colleagues' majority and 
dissenting 
opinions 
debate 
whether 
such 
hearsay, 
if 
uncorroborated, constitutes "substantial evidence" under Wis. 
Stat. § 227.57(6).  I write separately in dissent because I 
would not reach the question of whether uncorroborated hearsay 
constitutes substantial evidence as the hearsay evidence here 
was corroborated and constituted "substantial evidence" under 
§ 227.57(6).  Accordingly, I would affirm the court of appeals.   
I.  BACKGROUND 
¶211 On May 15, 1992, LuAnn Gehin (Gehin) injured her back 
while working for the University of Wisconsin Hospital. She 
qualified for Income Continuation Insurance (ICI) benefits, 
effective June 2, 1993.  In a letter dated May 5, 1997, United 
Wisconsin Group (UWG) informed Gehin that she was not eligible 
for benefits beyond April 30, 1997 because she no longer met the 
criteria 
for 
"Totally 
Disabled" 
under 
the 
ICI 
contract.  
Pursuant to 5.15-4.b. of the ICI contract, "Totally Disabled" 
means: 
After the first 12 months, the EMPLOYE's complete 
inability by reason of any medically determinable, 
physical or mental impairment, to engage in any 
substantial gainful activity for which the EMPLOYE is 
reasonably qualified with due regard to the EMPLOYE's 
education, training, experience, and prior economic 
status.  An activity is considered a substantial 
gainful activity if the earnings from that activity 
No.  03-0226.pdr 
 
2 
 
would 
be 
at 
least 
equal 
to 
the 
gross 
Income 
Continuation benefit for the same period of time. 
At the time her benefits were terminated, Gehin was receiving 
$979.34 per month in gross ICI benefits.   
¶212 Upon Gehin's request, UWG reconsidered and upheld its 
determination, and then the Department of Employee Trust Funds 
(DETF) reviewed and affirmed UWG.  Gehin subsequently appealed 
to the Board. 
¶213 The Board held an evidentiary hearing on October 2, 
2001.  Gehin, a physician expert retained by Gehin, and a DETF 
employee gave testimony.  Gehin testified that she was not able 
to work due to pain.  She also testified about her participation 
in a job-training program through the Department of Health and 
Family Services that included unpaid, on-the-job work experience 
at Mendota Mental Health Institute (MMHI) from the fall of 1994 
until the spring of 1997. 
¶214 The 
hearing 
officer 
also 
admitted 
a 
number 
of 
exhibits, 
including 
documents 
created 
by 
health 
care 
professionals who did not testify at the hearing, some of which 
were favorable to Gehin's position and others which were 
favorable to UWG's determination.  Among these exhibits were 
medical opinions and evaluations prepared by Dr. John Whiffen, 
Gehin's treating physician, and by Dr. Richard Lemon, an 
independent medical consultant retained by UWG, neither of whom 
testified at the hearing. 
¶215 On April 16, 2002, the Board issued its final decision 
and order, concluding, "[T]he appellant was not disabled within 
the requirements of the ICI contract after April 30, 1997."  In 
No.  03-0226.pdr 
 
3 
 
its Findings of Fact, the Board included statements made by Dr. 
Whiffen and Dr. Lemon that concluded that Gehin could work with 
restrictions.  The Board relied on these written medical 
opinions in reaching its conclusion.  The Board explained that 
"UWG 
and 
the 
DETF 
reasonably 
accepted 
the 
opinions 
of 
appellant's treating physician and of UWG's expert" over 
evidence presented that was favorable to Gehin.  
II.  CORROBORATION OF HEARSAY EVIDENCE 
¶216 Pursuant to Wis. Stat. § 227.57(6), which governs the 
scope of review of this agency decision, a court "shall . . . 
set aside agency 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 in the record."128  
Section 227.57(6) (emphasis added).  "The test for substantial 
evidence is whether reasonable minds could reach the same 
conclusion as the agency, given the evidence in the record."  
Hutchinson Tech., Inc. v. LIRC, 2004 WI 90, ¶21, 273 Wis. 2d 
394, 682 N.W.2d 343. 
                                                 
128 Wisconsin Stat. § 227.57(6) states: 
If the agency's action depends on any fact found 
by the agency in a contested case proceeding, 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 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 in the record. 
No.  03-0226.pdr 
 
4 
 
¶217 Some of our cases have called into question whether 
hearsay evidence129 that is uncorroborated may, by itself, 
constitute "substantial evidence" under Wis. Stat. § 227.57(6).  
See Folding Furniture Works, Inc. v. WLRB, 232 Wis. 170, 189, 
285 N.W. 851 (1939); Village of Menomonee Falls v. DNR, 140 
Wis. 2d 579, 610, 412 N.W.2d 505 (Ct. App. 1987); see also Wis. 
Admin. Code § ETF 11.12(2)(b) (providing that in a final 
decision of the Board, "No finding of fact may be based upon 
hearsay.")130 
 
As 
a 
general 
matter, 
hearsay 
evidence 
is 
considered suspect because of concern regarding its reliability.  
See 29 Am. Jur. 2d Evidence § 658.  As the very definition of 
hearsay makes clear, the problem with relying on a hearsay 
statement is that the hearsay statement may not be true.  See 
Wis. Stat. § 908.01(3)(defining hearsay as "a statement, other 
than one made by the declarant while testifying at the trial or 
hearing, offered in evidence to prove the truth of the matter 
asserted").   
¶218 The 
use 
of 
hearsay 
evidence 
often 
requires 
corroboration to insure its reliability.  See Florida v. J.L., 
529 U.S. 266, 270 (2000).  In determining how much and what type 
of evidence is sufficient for corroboration, we have held 
                                                 
129 Hearsay 
evidence 
is 
admissible. 
 
See 
Wis. 
Stat. 
§ 227.45(1) (providing that "an agency or hearing examiner shall 
not be bound by common law or statutory rules of evidence").  
The issue here is what role hearsay evidence can play in 
establishing substantial evidence.   
130 The majority opinion interprets this rule as proscribing 
only hearsay that is not corroborated, and it uses Mr. Miller's 
hearsay report in its opinion after asserting that it is 
corroborated.  Majority op., ¶34. 
No.  03-0226.pdr 
 
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evidence is sufficient to corroborate if it "permit[s] a 
reasonable person to conclude, in light of all the facts and 
circumstances, that the statement could be true."   State v. 
Guerard, 2004 WI 85, ¶5, 273 Wis. 2d 250, 682 N.W.2d 12 
(citation omitted).131  This is the appropriate corroboration 
standard to apply here because if the hearsay statement could be 
true, reasonable minds could rely on it as substantial evidence.  
See Hutchinson Tech., 273 Wis. 2d 394, ¶21.   
¶219 This test for corroboration is flexible, as it 
"neither prescribes nor limits the type or source of acceptable 
corroboration." 
 
See 
Guerard, 
273 
Wis. 2d 
250, 
¶32.  
Corroboration is sufficient if it makes a fact reasonably 
"debatable."  See id., ¶33.  Additionally, there may be a 
"conflict between two distinct points of view" or the relevant 
evidence may "point[] in different directions," neither of which 
defeats corroboration.  See id.  And finally, corroboration does 
not have to be made by an independent source.  See id., ¶34.  
Certain evidence can be self-corroborating.132  See id.   
                                                 
131 State v. Guerard, 2004 WI 85, 273 Wis. 2d 250, 682 
N.W.2d 12, is based on an interpretation of Wis. Stat. 
§ 908.045(4) and the types of corroboration sufficient to permit 
the admission of hearsay statements under that section of the 
statutes, in the face of in-court testimony by the victim.  See 
also Schipper v. Schipper, 46 Wis. 2d 303, 174 N.W.2d 474 (1970) 
(discussing the corroboration that was once required in order to 
find grounds for divorce), overruled in part on other grounds by 
O’Connor v. O’Connor, 48 Wis. 2d 535, 180 N.W.2d 735 (1970). 
132 In Guerard, it was explained that when facts are 
repeated in substantially the same form, self-corroboration may 
occur.  Guerard, 273 Wis. 2d 250, ¶34. 
No.  03-0226.pdr 
 
6 
 
¶220 In the present case, the majority asserts that the 
written report of Dr. Whiffen, who has treated Gehin since 1993, 
and the written report of an independent medical evaluation 
performed by Dr. Lemon in 1997 are uncorroborated hearsay 
statements.  Statements from these reports, which the Board 
relied upon in reaching its conclusion, were included in the 
Board’s Findings of Fact: 
10. . . . .  On January 30, 1997, UWG asked Dr. 
Whiffen to provide an update as to Gehin's condition.  
Dr. Whiffen opined on February 7, 1997, that Gehin 
could 
work 
up 
to 
full-time 
with 
restrictions, 
including a need to change position every 45-60 
minutes for five minutes.  On March 11, 1997, Dr. 
Whiffen stated that Gehin could return to her former 
job, with restrictions. 
11. Dr. Lemon examined Gehin on December 3, 
1997. 
 
UWG 
provided 
him 
with 
the 
contractual 
definition 
for 
long-term 
benefits. 
 
Dr. 
Lemon 
concluded that Gehin did not meet the contractual 
long-term benefit definition stating: 
Because of [low back pain] symptoms I believe 
that Ms. Gehin needs to be under permanent work 
restrictions.  I believe that she is capable of 
working 8 hours a day where she can alternate between 
sitting and standing every 30 minutes.  I believe that 
she needs to be lifting no more than 5 pounds.  She 
also needs to avoid any stooping, bending or twisting.  
I believe that Ms. Gehin could easily be employed in a 
position such as a receptionist where she is able to 
stand or sit using a telephone headset for comfort.  
Certainly, 
Ms. 
Gehin 
could 
also 
do 
some 
light 
paperwork or computer work.  I find it hard to believe 
that Ms. Gehin at only 53 years of age is totally 
unemployable. 
¶221 While both doctors' reports are hearsay, they are not 
uncorroborated. First, Dr. Whiffen had reported that Gehin was 
able to work prior to the January 30, 1997 and February 7, 1997 
reports relied upon by the Board.  In a report dated December 9, 
No.  03-0226.pdr 
 
7 
 
1994, Dr. Whiffen first opined that Gehin was able to return to 
work as of "3/24/94," with no hourly restrictions but with 
weight, lifting and bending restrictions.  He repeated that 
opinion in a report dated November 27, 1996.   
 
¶222 Further, the record is replete with medical records in 
addition to the reports of Drs. Whiffen and Lemon.  One such 
report is that of Dr. Kenneth Redlin, dated September 17, 1997.  
Dr. Redlin related that an August 12, 1997 Functional Capacity 
Evaluation (FCE) indicated Gehin has an "inability to squat, 
lift, stand, walk or carry anything but negligible loads," but 
he noted that Gehin had just returned from a camping trip where 
she traveled by camper.  He opined that the FCE's "spinal 
evaluation was NOT VALID."  (Emphasis in original.)  He further 
noted that an independent medical exam done in 1994 did not 
indicate employment limitations.  From this, he concluded that 
the FCE done on August 12, 1997 may not be reliable, and he 
recommended a new independent medical examination.  
 
¶223 The reports of Dr. Whiffen, Dr. Lemon and Dr. Redlin 
corroborate one another under the standards we set in Guerard 
because they show that the opinions in each report "could be 
true."  Guerard, 273 Wis. 2d 250, ¶5.  First, the records from 
Dr. Whiffen date back to 1992; he was her treating physician.  
Second, all three doctors focus on Gehin's complaints about back 
pain and conclude that she could work, notwithstanding her 
complaints.  Third, Dr. Lemon's report is written in response to 
a request that he render his opinion of Gehin's condition in 
light of the definition of "totally disabled" in the ICI 
No.  03-0226.pdr 
 
8 
 
contract, which definition is given to him and forms the 
framework for his opinion.  And fourth, the reports of Drs. 
Whiffen 
and 
Lemon 
are 
self-corroborating, 
as 
well 
as 
corroborating each other.  They were prepared independently, but 
they repeat the same medical facts and draw the same conclusion 
about Gehin's claimed total disability.  See id., ¶34. 
¶224 Furthermore, Gehin, herself, testified sufficient to 
show that the opinions of Drs. Whiffen and Lemon could be true, 
in that she testified about her on-the-job training program at 
MMHI.  She said that she was able to perform clerical tasks, 
such as typing, working on a computer, sorting mail, filing, and 
running errands, as well as receptionist duties, using a headset 
that allowed to her stand and walk while she answered the phone.  
She testified that she regularly took rests while doing these 
tasks.   
¶225 Gehin explained that she missed a certain number of 
days of this on-the-job training or left early, in part due to 
pain, but also because she was attending classes at a local 
technical college, had foot surgery and a hysterectomy, and had 
"allergenic" episodes.  A letter from Gehin's supervisor stated 
that she generally worked 24-30 hours a week.  However, the 
record also includes a handwritten statement signed by Gehin 
relating that she "leave[s] for on the job training at 7:15 a.m. 
till 4:30 Monday thru Friday at MMHI rest when I get home."  
That is a full-time work schedule. 
¶226 The majority opinion does not evaluate the facts of 
record in regard to the question of corroboration, nor does it 
No.  03-0226.pdr 
 
9 
 
apply any standard for determining whether the reports that the 
Board relied on were corroborated.  It simply ducks the issue by 
assuming that the reports were uncorroborated.  Majority op., 
¶3.133  It also makes multiple conclusory statements that the 
reports of Drs. Whiffen and Lemon were not corroborated.  See 
e.g., majority op., ¶¶8, 45, 47, 48.  However, a lack of 
corroboration cannot be assumed because corroboration is an 
issue in this case.   
¶227 Additionally, the reports at issue are opinions of 
expert witnesses, which we have recognized as being different 
from other types of hearsay, in regard to their reliability.  As 
we explained in Folding Furniture,  
Hearsay may doubtless be received, if corroborative of 
other evidence or otherwise of such nature as to have 
some reasonable bearing on a fact for determination. . 
. . [N]on-legal evidence to be admissible must have 
some substantial probative force and not be a mere 
opinion except in fields where the opinion of experts 
is proper for consideration and the person giving it 
is shown to have some special knowledge reasonably 
entitling his opinion to some weight. 
Folding 
Furniture, 
232 
Wis. 
at 
188 
(emphasis 
added).  
Accordingly, for the reasons I have set out above, I conclude 
that reasonable minds could reach the conclusion that Gehin was 
not "totally disabled" as defined in the ICI contract in 
reliance on the opinions and evaluations of Dr. Whiffen and Dr. 
                                                 
133 The majority opinion states, "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?" 
No.  03-0226.pdr 
 
10 
 
Lemon.  In my view, those opinions and evaluations constitute 
"substantial evidence" under Wis. Stat. § 227.57(6) because they 
are corroborated and are reliable evidence in their own right. 
III.  CONCLUSION 
¶228 In sum, I would not reach the question of whether 
uncorroborated hearsay constitutes substantial evidence because 
the hearsay evidence here was corroborated and constituted 
"substantial evidence" under Wis. Stat. § 227.57(6).   
¶229 Therefore, I would affirm the court of appeals, and I 
respectfully dissent from the majority opinion. 
¶230 I am authorized to state that Justices JON P. WILCOX 
and DAVID T. PROSSER join this dissent. 
 
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