Court Opinion

ID: 4653573
Source: CourtListenerOpinion
Date Created: 2021-01-22 15:06:52.043115+00
Date Added: 2024-06-11T07:52:53.723356
License: Public Domain

RENDERED: JANUARY 15, 2021; 10:00 A.M.
                        NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                          Court of Appeals

                             NO. 2020-CA-0450-MR

KENTUCKY RETIREMENT                                                  APPELLANT
SYSTEMS

                 APPEAL FROM FRANKLIN CIRCUIT COURT
v.               HONORABLE PHILLIP J. SHEPHERD, JUDGE
                         ACTION NO. 17-CI-00646

ROSA STEPHENS                                                          APPELLEE

                                    OPINION
                                   AFFIRMING

                                  ** ** ** ** **

BEFORE: COMBS, LAMBERT, AND K. THOMPSON, JUDGES.

COMBS, JUDGE: Appellant, Kentucky Retirement Systems, appeals from an

opinion and order of the Franklin Circuit Court reversing the denial of an

application for disability retirement benefits by the Appellee, Rosa Stephens

(Stephens). After our review, we affirm.
               Stephens was employed as an Office Support Assistant II for the

Cabinet for Health and Family Services. In her brief, Stephens explained that her

job duties consisted of interaction with clientele in person and by phone, filing,

computer entry, maintaining the pro-card budget, and ordering office supplies.

The exertional requirements of this position were sedentary. Stephens became a

member of the Kentucky Employees Retirement Systems (KERS) on January 1,

1998. The last day that she physically worked was April 30, 2015, and her final

day of paid employment was November 27, 2015. When she left work, Stephens

had accumulated more than seventeen (17) years of service credit.1 On August 6,

2015, Stephens applied for disability retirement benefits based upon severe

depression, high blood pressure, panic attacks, post-traumatic stress disorder

(PTSD), insomnia, and anxiety.2

              The Franklin Circuit Court’s February 28, 2020, opinion and order

provides a concise summary of the background of this case as follows:

              Due to multiple people leaving her office, Petitioner
              contends that she was required to perform the job
              responsibilities of three different positions. Petitioner
              also contends that she was bullied by both her coworkers
              and supervisors. And, Petitioner believes that the tragic
              situations that she had to encounter while working for the

1
 Because Stephens had more than 16 years of service credit, the prohibition against a pre-
existing condition does not apply. Kentucky Revised Statutes (KRS) 61.600(4)(b).
2
 As the Franklin Circuit Court noted, Stephens no longer argues that she is disabled from high
blood pressure or insomnia, and those conditions are not at issue in this case.

                                              -2-
Cabinet for Health and Family Services caused her to be
increasingly stressed. As a result of these factors,
Petitioner states that she began to experience symptoms
of anxiety and depression in July of 2013.

       Petitioner received psychological counseling from
Susan Miller, a Licensed Clinical Social Worker, from
January 30 to August 14, 2014. Ms. Miller diagnosed . . .
PTSD due to her work stress. Petitioner also received
evaluation from Timothy Poynter, an Advanced Practice
Registered Nurse, on January 31, 2014. Mr. Poynter
prescribed Petitioner with Buspirone, Celexa and
Doxepin HCl for her anxiety. . . . [O]n May 1, 2015, . . .
Mr. Poynter instructed Petitioner to remain on medical
leave from work for two weeks.

. . . [O]n May 15, 2015[,] . . . Petitioner told [Mr.
Poynter] that her depression had not resolved. Mr.
Poynter then referred Petitioner to Dr. Zev Zusman, a
psychiatrist . . . later that day with complaints of
decreased energy, decreased concentration, decreased
appetite, weight loss and increased anxiety from
workplace stressors. Dr. Zusman diagnosed Petitioner
with severe major depressive disorder and prescribed her
Doxepin, Celexa, and Buspirone.

. . . Petitioner was on medical leave from work from May
1, 2015 to May 15, 2015, and again from May 15, 2015
to June 14. 2015. Both Ms. Miller and Dr. Zusman
recommended that Petitioner avoid stressful situations in
order to mitigate her symptoms. Ms. Miller
recommended that Petitioner avoid formal employment
until she no longer had panic attacks. Petitioner followed
up with Mr. Poynter on June 11, 2015, who
recommended that Petitioner continue her medication.

      Petitioner reported increased feelings of isolation,
decreased energy levels, and decreased concentration to
Dr. Zusman on July 10, 2015. Petitioner told him that
she was not able to go to Wal-Mart without experiencing

                           -3-
anxiety. Dr. Zusman confirmed Petitioner’s anxiety and
depression and told her to continue both her medication
and her counseling. Petitioner continued to see Dr.
Zusman from May 26, 2015 to December 1, 2015.
Petitioner saw Mr. Poynter again on August 7, 2015. Mr.
Poynter instructed her to stay off work through
September 10, 2015. . . .

       Dr. Zusman filled out a “Medical Assessment of
Ability to do Work Related Activities (Mental)” for
Petitioner on December 1, 2015. Dr. Zusman noted that
Petitioner had a fair ability to follow work rules, relate to
coworkers, use judgment, deal with work stressors,
function independently, and interact with supervisors.
However, he also noted that Petitioner had poor ability to
deal with the public, to maintain attention or
concentration, to behave in an emotionally stable manner,
or to relate predictably in social situations. Petitioner
continued to be treated by Dr. Zusman through early
2016.

       Petitioner saw Ms. Julie Joseph Fox for a
psychological evaluation on December 15, 2015. Ms.
Fox also filled out a Medical Assessment of Abilities to
do Work Related Activities (Mental) for Petitioner on
December 16, 2015. Ms. Fox found that Petitioner had a
poor ability to deal with the public and to deal with work
stressors. Ms. Miller also filled out this assessment for
Petitioner on February 2, 2016. Ms. Miller found that
Petitioner had poor ability to relate to coworkers, to deal
with the public, to interact with supervisors, to deal with
work stresses, and to maintain attention or concentration.
Ms. Miller believed that these problems stemmed from
Petitioner’s PTSD and depression, and recommended that
Petitioner avoid stressful situations.

      Ms. Miller provided . . . further treatment from
July 29, 2015 to March 10, 2016. Petitioner stated that
she experienced a panic attack when returning to work on
September 15, 2015. Ms. Miller noted that Petitioner

                            -4-
was experiencing disturbed sleep, seclusion, panic
attacks, crying, feelings of hopelessness, racing thoughts,
excessive worry, and anger.

       Petitioner underwent an Independent
Psychological Examination by Dr. Paul Ebben on
September 21, 2016. Dr. Ebben found that Petitioner
was under moderate emotional distress and that Petitioner
experienced some tearful episodes. Though Petitioner
could perform all required tasks and answer all questions,
Dr. Ebben noted that Petitioner was somewhat
overwhelmed by the end of the examination. Dr. Ebben
diagnosed her with Generalized Anxiety Disorder,
Moderate Major Depressive Disorder, elements of PTSD,
and Personality Disorder. Dr. Ebben specifically noted
that Petitioner would have trouble returning to her
previous job specifically but could possibly return to a
job of like duties, as her mental health conditions were
caused by encounters with particular people at her work.
Dr. Ebben believed Petitioner’s conditions would last
longer than twelve months.

. . . Petitioner submitted her corrected application for
disability retirement benefits, which was received by the
Retirement Systems on August 6, 2015. As the basis for
her application, Petitioner listed severe depression, high
blood pressure, panic attacks, post-traumatic stress
disorder (“PTSD”), insomnia, and anxiety. Petitioner’s
medical records were reviewed by the Medical Review
Board twice, and each time denial was recommended.

       Petitioner appealed her initial denial and requested
an administrative hearing [which] was held on September
6, 2016. . . . [T]he Hearing Officer found that Petitioner
was permanently incapacitated from her job or jobs
of like duties based on her cited mental health
conditions. . . . The Hearing Officer found that though
circumstances of Petitioner’s previous job exacerbated
her symptoms, her conditions persisted even after the end
of her employment, and that these conditions interfered

                            -5-
             with her ability to perform her work. And, the Hearing
             Officer noted that multiple treating physicians
             recommended that Petitioner be taken off work.

             ...

                    The Board of Trustees of the Retirement Systems
             (the “Board”) rejected the Hearing Officer’s
             recommendations and replaced it with its own Final
             Order. The Board found that Petitioner was not disabled
             from performing jobs of like duties, since Petitioner’s
             mental health conditions were specifically caused and
             exacerbated by her former workplace. To that point, the
             Board cited specifically to Dr. Ebben’s belief that
             Petitioner is not disabled from performing jobs with
             similar work requirements and denied her application for
             disability retirement benefits.

(Emphases added).

             Stephens appealed to the Franklin Circuit Court. She argued that she

was disabled from performing her previous jobs or jobs of like duties and that

although her mental health conditions had been caused by the circumstances at her

former job, those conditions still persisted.

             By opinion and order rendered February 28, 2020, the circuit court

reversed the Board. At pages 7-8, the court discussed the applicable standard of

review on appeal of adverse decisions of KERS, citing McManus v. Kentucky

Retirement Systems, 124 S.W.3d 454, 458 (Ky. App. 2003) (“Where the fact-

finder’s decision is to deny relief to the party with the burden of proof or

persuasion, the issue on appeal is whether the evidence in that party’s favor is so

                                          -6-
compelling that no reasonable person could have failed to be persuaded by it.”).

The court further explained that “when reviewing an administrative decision on

appeal, the Court accepts the Board’s findings of fact as true if substantial

evidence supports them. . . . As long as substantial evidence supports the

agency’s findings, the Court must defer to the agency, even if conflicting evidence

exists.” (Emphasis added.)

             The circuit court concluded that Dr. Ebben’s opinion -- that Stephens

might possibly be able to return to a job of like duties -- was speculative. At pages

10-12 of its opinion and order, the circuit court explained in detail as follows:

             Upon review of the record, there is a difference of
             opinion between the various medical professionals that
             treated Petitioner for her conditions. In his Medical
             Assessment of Petitioner, Dr. Zusman was of the opinion
             that Petitioner had a poor ability to deal with the public,
             to maintain attention, or concentration, to behave in an
             emotionally stable manner, or to predictably relate in
             social situations. In Ms. Fox’s Medical Assessment, she
             found that Petitioner had a poor ability to deal with the
             public and with work stressors. And, in Ms. Miller’s
             [sic] Medical Assessment, she found that Petitioner had a
             poor ability to relate to coworkers, to deal with the
             public, to interact with supervisors, to deal with work
             stresses, and to maintain attention or concentration. Ms.
             Miller recommended that Petitioner avoid stressful or
             unpredictable situations. Mr. Poynter continually
             recommended to Petitioner that she take time away from
             work for weeks – and sometimes months – at a time.
             And, the record makes clear that Petitioner’s mental
             health conditions had persisted with no improvement
             beginning in 2013 and beyond the end of her
             employment.

                                          -7-
       However, the record also states that Petitioner’s
stressors that specifically arose from her former job were
what caused and exacerbated her mental health problems.
This includes workplace harassment and being required
to perform the work of three people due to a staffing
shortage. It is for this reason that Dr. Ebben believed that
Petitioner may possibly be able to return to a job of like
duties, though she would have trouble returning to her
specific former position. Evaluated in context, it is
overwhelming [sic] clear that Dr. Ebben’s observation
on this point is sheer speculation.

       Accordingly, the Court finds that substantial
evidence does not support the position of the
Retirement Systems that Petitioner would be able to
perform a job of like duties. Again the Court is required
to defer to the Retirement Systems findings even if there
is conflicting evidence, but is only required to do so if
substantial evidence supports the Retirement Systems’
findings. Kentucky Comm’n on Human Rights, 625
S.W.2d at 856. And, substantial evidence is that
evidence which is able to induce conviction in the minds
of reasonable men.” Kentucky State Racing Comm’n,
481 S.W.2d at 308.

       In the instant case, Dr. Ebben only spent
approximately three hours with Petitioner in order to
perform his Independent Psychological Examination. As
a result, Dr. Ebben speculated that Petitioner could
possibly perform jobs with duties like those of her
former position. The Court finds that this speculative
opinion does not constitute substantial evidence, and
instead the Court agrees with the Hearing Officer that
Petitioner is disabled from both her former position and
from jobs of like duties. It is clear from the opinions of
several medical professionals and others who treated
Petitioner over the course of several years that she is
unable to perform similar work. The treating physicians
and mental health professionals who examined Petitioner
were unanimous in their conclusion that he she [sic] lacks

                            -8-
             the ability to deal with the public or with high stress
             situations. Simply put, there is no job in the social
             services area that does not require dealing with members
             of the public who are in crisis, and with stress situations.
             No such low stress position of “like duties” which
             Petitioner could allegedly perform with her medical and
             mental health conditions, was ever identified in the
             record.

                    Dr. Zusman was Petitioner’s primary treating
             psychiatrist, and treated Petitioner over the course of
             several years without noting much improvement. He
             found that Petitioner had a poor ability to deal with the
             public, to maintain attention or concentration, to behave
             in an emotionally stable manner, or relate predictably in
             social situations. Dr. Zusman and Ms. Miller found that
             Petitioner could mitigate her symptoms by avoiding
             stressful situations. Further, Mr. Poynter continually
             recommended that Petitioner take leave from work in
             order to treat her symptoms, sometimes for months at a
             time. Ms. Miller who also treated Petitioner for years,
             recommended that she avoid any formal employment
             until her symptoms resolve themselves. Thus, the Court
             finds that the uncontested evidence in record [sic] reflects
             that she was unable to perform either her previous job or
             one of like duties, and thus must be granted disability
             benefits.

(Emphases added). Accordingly, the circuit court reversed the final

order of the Board of Trustees.

             On appeal to this Court, Appellant argues that the circuit court:

applied the incorrect standard in reviewing the Board’s final order and that it

stepped into the role of factfinder by reweighing the evidence. It also argues that

in reweighing the evidence, the circuit court erred by disregarding the substantial

                                          -9-
evidence supporting the Board’s decision and misapplying the law. It claims that

the circuit court did not cite any evidence of record so compelling that no

reasonable person could fail to be persuaded by it; it contends that the court further

erred by improperly shifting the burden of proof to the Board. Since there is both

overlap and redundancy among these issues, we address them together because the

sub-parts essentially constitute a single argument.

             In Kentucky Retirement Systems v. Ashcraft, 559 S.W.3d 812 (Ky.

2018), our Supreme Court addressed the standard governing appellate review of

Board decisions:

                    Judicial review of the KERS disability retirement
             decision is controlled by KRS 13B.150, with subsection
             (2) setting forth the standard of review.

                     The Court shall not substitute its judgment
                     for that of the agency as to the weight of the
                     evidence on questions of fact. The court may
                     affirm the final order or it may reverse the
                     final order, in whole or in part, and remand
                     the case for further proceedings if it finds
                     the agency’s final order is:

                     …

                   (c) Without support of substantial evidence on the
                   whole record;

             …

             Importantly, the first sentence of this subsection
             mandates that the courts not substitute their judgment

                                         -10-
              “for that of the agency,” which in KERS cases is the
              Board.

              [T]his Court has adopted then-Judge, later Justice,
              McAnulty’s statement in McManus as an accurate
              statement of the appropriate standard of review.
              McManus stated:

                    Determination of the burden of proof also
                    impacts the standard of review on appeal of
                    an agency decision. . . . Where the fact-
                    finder’s decision is to deny relief to the party
                    with the burden of proof or persuasion, the
                    issue on appeal is whether the evidence in
                    that party’s favor is so compelling that no
                    reasonable person could have failed to be
                    persuaded by it.
Id. at 817-18) (citation omitted).

              As KERS notes in its brief, Ashcraft outlined a two-step approach for

courts reviewing final Board orders as follows:

              [W]e believe [a] two-step approach . . . is the best
              approach. Even in those cases where the applicant has
              failed to meet his or her burden of proof (the Board’s
              decision is adverse), a reviewing court should first
              consider whether substantial evidence supports the
              Board’s decision. If there is not substantial evidence,
              reversal is appropriate under KRS 13B.150(2)(c). If
              there is substantial evidence, the court must further
              consider whether the applicant’s proof was so compelling
              that no reasonable person could have failed to be
              persuaded.
Id. at 822.

                                         -11-
             In Bradley v. Kentucky Retirement Systems, 567 S.W.3d 114 (Ky.

2018), which was decided the same day as Ashcraft, the Supreme Court reiterated

that:

             [W]here the applicant loses before the Board, it is
             appropriate on judicial review for the courts, at every
             level, to first consider whether the denial is supported by
             substantial evidence. If it is not so supported, the court is
             required to reverse pursuant to KRS 13B.150(2)(c) and
             KRS 61.665(3)(d). However, if there is substantial
             evidence supporting the Board’s decision, the court
             should then consider, as explained in McManus, whether
             the applicant’s evidence was so compelling that no
             reasonable person could fail to be persuaded.

             Although KERS acknowledges that the circuit court correctly

analyzed the standard of review, it contends that the court misapplied it by

stepping in as a new trier of fact and improperly reweighing the evidence. KERS

claims this contention is made evident by the court’s statements at page 10 of its

opinion phrased in terms of the court “finds” or the court “must next determine.”

Appellant also contends that the circuit court’s statement (i.e., “Dr. Ebben’s

observation is sheer speculation”) is another “obvious example of reweighing the

evidence.” Appellant takes issue with the circuit court’s statement that Dr. Ebben

only spent about three hours with Stephens and asserts that the circuit court

improperly gave more weight to treating physicians. Appellant also contends that

the circuit court improperly dismissed Dr. Ebben’s report as “sheer speculation”

without citing to any evidence to support this claim.

                                         -12-
              Our review persuades us that KERS has misconstrued the circuit

court’s opinion. The court did not: misapply the standard of review on appeal,

usurp the role of the fact-finder, give more weight to the treating physicians, or

improperly shift the burden of proof to the Board. Rather, the circuit court

carefully explained its observations, reasonings, and the basis for its opinion that

substantial evidence did not support the Board’s denial.

              At page 1 of its final order, the Board states that it “specifically finds

 that Claimant failed to prove by a preponderance of the objective medical

 evidence that she was permanently physically or mentally incapacitated as of her

 last day of paid employment from performing her sedentary job or jobs of like

 duties as required by KRS 61.600(3)(a).” KRS 61.600(3) provides in relevant

 part that:

               Upon the examination of the objective medical evidence
              by licensed physicians pursuant to KRS 61.665, it shall
              be determined that: (a) The person, since his last day of
              paid employment, has been mentally or physically
              incapacitated to perform the job, or jobs of like duties,
              from which he received his last paid employment. . . .

              Central to the Board’s determination is the opinion of Dr. Ebben, who

performed an Independent Psychological Examination. As set forth at page 21 of

its final order, the Board found that Dr. Ebben opined as follows:

              A. Ms. Stephens suffers from Generalized Anxiety
              Disorder, Major Depression Moderate, she is the victim
              of abuse, and there are elements of Histrionic Personality

                                          -13-
                Disorder that appear to be moderate in severity. As to
                whether her condition is total and incapacitating, it
                would appear that although she would have difficulty
                returning to her old job, because of the specific
                circumstances occurring in that job, it also appears
                quite possible that a job of like duties is possible. . . .
                (Emphasis added)(Exhibit 25).

                B. In terms of whether her condition is considered
                permanent, it does appear as if her condition has lasted
                greater than 12 months and will continue to last greater
                than 12 months past this examination date.

                Dr. Ebben’s opinion regarding Stephens’ returning to a job of like

duties is couched in terms of possibility. As Stephens notes, the Board wholly

disregarded the reports of her physicians (which constituted objective medical

evidence) “with no medical contradiction other than Dr. Ebben’s equivocal report.”

                We concur with the circuit court’s conclusion that Dr. Ebben’s

opinion is speculative and that, therefore, it cannot constitute substantial evidence

to support the Board’s denial. Combs v. Stortz, 276 S.W.3d 282, 296 (Ky. 2009)

(opinions expressed in terms of possibility may be properly excluded as

speculative). Accordingly, pursuant to Ashcraft, reversal is not only appropriate

but required.

                We AFFIRM the opinion and order of the Franklin Circuit Court.

                ALL CONCUR.

                                           -14-
BRIEFS FOR APPELLANT:     BRIEF FOR APPELLEE:

Lori Meister              Stephen C. Sanders
Frankfort, Kentucky       Frankfort, Kentucky

                        -15-