Opinion
NO. 2011-CA-000043-MR
01-04-2013
BOARD OF TRUSTEES OF THE KENTUCKY RETIREMENT SYSTEMS APPELLANT v. JIMMIE STEWART APPELLEE
Brian C. Thomas Frankfort, Kentucky James P. Benassi Henderson, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE PHILLIP J. SHEPHERD, JUDGE
ACTION NO. 08-CI-00908
OPINION
AFFIRMING IN PART AND REMANDING
BEFORE: ACREE, CHIEF JUDGE; CAPERTON AND VANMETER, JUDGES. ACREE, CHIEF JUDGE: The Board of Trustees of the Kentucky Retirement Systems appeals the Franklin Circuit Court's reversal of the Board's ruling that Jimmie Stewart was not entitled to disability retirement benefits. Finding the agency misclassified Stewart's job duties, we affirm in part and remand to the Franklin Circuit Court for entry of an order consistent with this opinion.
I. Facts and procedure
Jimmie Stewart began employment with the Central Kentucky Youth Development Center as a Youth Worker on February 16, 1989. As such, he was a participant in the Kentucky Employees' Retirement System (KERS). Stewart's last day of paid employment was July 4, 2005.
Because he had been a member of KERS for at least sixteen years, Stewart was required to demonstrate only that he was permanently disabled on his last day of employment; he was not required to show that his disabilities did not pre-exist his employment with a KERS-participating employer. KRS 61.600(4)(b).
Stewart's job duties consisted primarily of supervising juveniles who had been committed to the Department of Juvenile Justice (DJJ). In that capacity, Stewart was required to be prepared to restrain any juveniles who became unruly or physically violent. Some of the juveniles weighed two hundred pounds or more. His job duties also included various recordkeeping tasks.
Stewart worked for the DJJ for more than sixteen years before his health concerns led him to conclude he could no longer do so.
After experiencing heart trouble and other medical issues, Stewart decided to follow his doctors' advice and undergo surgery to install a pacemaker. His last day on the job was approximately one week prior to his March 30, 2005 pacemaker surgery, though he used leave time to cover his absences until his official last day of paid employment, July 4, 2005. Stewart was required to undergo an additional procedure on June 15, 2005, to adjust his pacemaker.
At the time of his last day of paid employment and prior to that date, Stewart's doctors had been treating him for conditions in addition to that which led to his two pacemaker surgeries. Those included Type II diabetes and hypertension.
Stewart suffered an aneurysm on October 28, 2005, several months after his last day of paid employment. While Stewart did largely recover from the aneurysm, he was left with "third nerve palsy," which resulted in problems opening his right eye and difficulty walking.
Stewart filed an application for disability retirement benefits in December 2005. The basis of his application was "third nerve palsy, right." The application was denied, and Stewart invoked his right to proceed to a hearing pursuant to Kentucky Revised Statutes (KRS) Chapter 13B. Prior to the hearing Stewart's attorney added his October 2005 aneurysm, hypertension, pacemaker, and diabetes as grounds for the disability petition.
Stewart also filed an unsuccessful application for disability retirement benefits in 2000, but that application is not at issue here.
The hearing officer was not persuaded that Stewart was entitled to disability retirement benefits, and her recommended order reflected as much. More specifically, the hearing officer found there was no objective evidence to support Stewart's claim that hypertension, diabetes, or his pacemaker prevented him from fulfilling his work duties, which she classified as "light work." She further concluded that Stewart's aneurysm and associated palsy occurred after his last date of paid employment, which disqualified them from consideration for disability retirement benefits. The Board adopted the recommended order in its entirety.
On appeal, the circuit court reversed. The court found first that the Board erred by failing to consider the cumulative disabling effect of Stewart's medical conditions, viewing each of them only in isolation. The circuit court also concluded the classification of Stewart's job duties as "light work" was not based upon substantial evidence; all the evidence showed, to the contrary, that his job duties should be classified as "heavy work or possibly very heavy work." With respect to the aneurysm, the circuit court made no specific ruling that it entitled Stewart to disability retirement benefits, but in concluding the cumulative effect of his other disabilities was so severe as to be disabling, the court observed, "It is no surprise [Stewart] had an aneurysm shortly after his last day of paid employment."
The Board appeals, claiming the circuit court erroneously determined its findings of fact were not based upon substantial evidence.
II. Discussion
A. Failure to name necessary parties
Before proceeding to the Board's arguments, we must address Stewart's contention that the appeal must be denied because the appellant failed to name an indispensable party. More precisely, Stewart contends the appeal cannot proceed because the Board named only itself and not KERS, which is the retirement program in which Stewart participated. The Board denies it was necessary to name KERS.
If Stewart is correct, then we are required to dismiss the appeal. "[F]ailure to name an indispensable party in the notice of appeal is a jurisdictional defect that cannot be remedied." Nelson County Bd. of Education v. Forte, 337 S.W.3d 617, 626 (Ky. 2011)(citation and quotation marks omitted). To determine whether a party is indispensable on appeal, the Court must determine whether that party's appearance is necessary to the appellant's arguments; in other words, "[t]he question ... is who is necessary to pursue the claim and who has a right to the proceeds." Id. In the spirit of that rule, it is permissible for a defendant who was unsuccessful at the circuit court to decline to name his co-defendants on appeal, so long as his interest is severable from the interests of his co-defendants. Riley v. Commonwealth, Department of Highways, 375 S.W.2d 245, 247 (Ky. 1963). The test for severability is whether "no useful purpose would [be] served by [the co-defendants'] being drawn [into the appeal]." Id. If no such purpose would be served, then the interests are severable, and the co-defendant is not necessary to the appeal.
Before we can conclude a party is necessary to this appeal, however, we must find his participation was necessary at the circuit court. If KERS' participation was not necessary at the circuit court, then it could not be necessary here. KRS Chapter 13B governs appeals from administrative rulings, and KRS 13B.140 specifies proper procedures for appeals to the circuit court: "Copies of the petition shall be served by the petitioner upon the agency and all parties of record. The petition shall include the names and addresses of all parties to the proceeding and the agency involved, and a statement of the grounds on which the review is requested." KRS 13B.140(1).
The only parties identified in the administrative record are Stewart and the Board. KERS is not identified separately, and indeed was identified as a party for the first time in the petition Stewart filed in the Franklin Circuit Court.
To be precise, "Kentucky Retirement Systems" is identified as a party; the Board is not specifically identified as a party, but because the Board is the governing body of the Kentucky Retirement Systems, we see no meaningful distinction between the two.
We can identify no statutory authority which required KERS to be a party to the circuit court action. In the past, Kentucky's appellate courts have found the failure to name certain parties to an appeal to the circuit court fatal to an appeal, but only when those parties were required by statute to be so named. See, e.g., Kentucky Unemployment Insurance Commission v. Carter, 689 S.W.2d 360 (Ky. 1985). Neither KRS Chapter 13B nor the Kentucky Retirement Systems' organic statutes require that KERS participate in an appeal to the circuit court; we therefore do not believe KERS' participation is required before us.
A recent Supreme Court opinion, Forte, supra, is also instructive in this matter. In that case, the husband of a deceased elementary school teacher appealed from a circuit court's dismissal of his wrongful death claim on the basis of governmental immunity. The appellant named only the Nelson County School District and not the Nelson County Board of Education in his appeal. The Supreme Court dismissed his appeal for failure to name an indispensible party, ruling that the board of education, "as the administrative and quasi-legislative entity created specifically to run the school district and to sue and be sued, is the proper entity to sue." Id. at 626.
Unlike the school district, KERS does have the power to act alone. KRS 61.515(1) creates KERS, "a retirement system for employees ... by and in which name it shall, pursuant to the provisions of KRS 61.510 to 61.705, transact all its business and shall have the powers and privileges of a corporation[.]"
Nevertheless, we believe the Board is the proper party to an appeal to this Court because, like the board of education in Forte, the Board's purpose is to administer KERS and to sue and be sued on its behalf. KRS 61.645(2) provides:
The board is hereby granted the powers and privileges of a corporation, including but not limited to the following powers:KRS 61.645(2). KERS' grant of authority is much narrower; it is empowered merely to "transact all its business and ... have the powers and privileges of a corporation." It appears, then, that it was the intent of the General Assembly that the Board would conduct litigation on behalf of KERS. KERS' participation in this appeal is therefore not necessary.
(a) To sue and be sued in its corporate name;
(b) To make bylaws not inconsistent with the law;
(c) To conduct the business and promote the purposes for which it was formed;
(d) To contract for investment counseling, actuarial, auditing, medical, and other professional or technical services as required to carry out the obligations of the board without limitation, notwithstanding the provisions of KRS Chapters 45, 45A, 56, and 57;
(e) To purchase fiduciary liability insurance;
(f) To acquire, hold, sell, dispose of, pledge, lease, or mortgage, the goods or property necessary to exercise the board's powers and perform the board's duties without limitation, notwithstanding the limitations of KRS Chapters 45, 45A, and 56; and
(g) The board shall reimburse any trustee, officer, or employee for any legal expense resulting from a civil action arising out of the performance of his official duties.
We are convinced this is the correct outcome for another reason. In recent years, it has been common for the Board to name only itself when it appeals to this Court or the Supreme Court from an adverse ruling of the circuit court, and to not include the underlying retirement system in which the claimant participated. Board of Trustees of Kentucky Retirement Systems v. Haywood, 2010-CA-001204-MR, 2011 WL 2935403 (Ky. App. 2011); Kentucky Retirement Systems v. Lowe, 343 S.W.3d 642 (Ky. App. 2011); Kentucky Retirement Systems v. Brown, 336 S.W.3d 8 (Ky. 2011); Kentucky Retirement Systems v. Halfhill, 172 S.W.3d 384 (Ky. 2005); Kentucky Retirement Systems v. Lewis, 163 S.W.3d 1 (Ky. 2005). Likewise, claimants who were unsuccessful at the circuit court frequently decline to make the underlying system a party to subsequent appeals. West v. Kentucky Retirement Systems, 2009-CA-001176-MR, 2011 WL 2731844 (Ky. App. 2011); Metzinger v. Kentucky Retirement Systems, 299 S.W.3d 541 (Ky. 2009); Lindall v. Kentucky Retirement Systems, 112 S.W.3d 391 (Ky. App. 2003). Were we to conclude that these appeals have been jurisdictionally deficient, the opinions which sprang from them would be void. We do not believe that this Court and the Supreme Court have overlooked a jurisdictional deficiency with such regularity and for such a significant duration.
We acknowledge that some of the opinions cited in this paragraph are not yet final and are therefore ordinarily not properly cited for purposes of a legal analysis. Our citation to these non-final cases is limited to the topic of this discussion and not the legal principles discussed therein.
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Finding we have jurisdiction, we turn now to the merits.
B. Classification of work
The Board contends the circuit court erred when it determined the agency's classification of Stewart's job duties was improper. We disagree.
Findings of fact such as this may not be disturbed so long as they are not clearly erroneous. "[A]n administrative agency's findings of fact are reviewed for clear error[.]" Hutchison v. Kentucky Unemployment Insurance Commission, 329 S.W.3d 353, 356 (Ky. App. 2010). There is no clear error provided substantial evidence supports the factual findings. CertainTeed Corp. v. Dexter, 330 S.W.3d 64, 72 (Ky. 2010) (citation omitted). "'[S]ubstantial evidence' is '[e]vidence that a reasonable mind would accept as adequate to support a conclusion' and evidence that, when 'taken alone or in the light of all the evidence, . . . has sufficient probative value to induce conviction in the minds of reasonable men.'" Moore v. Asente, 110 S.W.3d 336, 354 (Ky. 2003) (citations and footnotes omitted).
The classification of state employees' job duties for purposes of disability retirement benefits is governed by KRS 61.600:
The person's physical exertion requirements shall be determined based on the following standards:KRS 61.600(5)(c).
1. Sedentary work shall be work that involves lifting no more than ten (10) pounds at a time and occasionally
lifting or carrying articles such as large files, ledgers, and small tools. Although a sedentary job primarily involves sitting, occasional walking and standing may also be required in the performance of duties.
2. Light work shall be work that involves lifting no more than twenty (20) pounds at a time with frequent lifting or carrying of objects weighing up to ten (10) pounds. A job shall be in this category if lifting is infrequently required but walking and standing are frequently required, or if the job primarily requires sitting with pushing and pulling of arm or leg controls. If the person has the ability to perform substantially all of these activities, the person shall be deemed capable of light work. A person deemed capable of light work shall be deemed capable of sedentary work unless the person has additional limitations such as the loss of fine dexterity or inability to sit for long periods.
3. Medium work shall be work that involves lifting no more than fifty (50) pounds at a time with frequent lifting or carrying of objects weighing up to twenty-five (25) pounds. If the person is deemed capable of medium work, the person shall be deemed capable of light and sedentary work.
4. Heavy work shall be work that involves lifting no more than one hundred (100) pounds at a time with frequent lifting or carrying of objects weighing up to fifty (50) pounds. If the person is deemed capable of heavy work, the person shall also be deemed capable of medium, light, and sedentary work.
5. Very heavy work shall be work that involves lifting objects weighing more than one hundred (100) pounds at a time with frequent lifting or carrying of objects weighing fifty (50) or more pounds. If the person is deemed capable of very heavy work, the person shall be deemed capable of heavy, medium, light, and sedentary work.
To be classified as light work, then, Stewart's job could require him to lift no more than twenty pounds at any time. KRS 61.600(5)(c)2. It is of no consequence that the majority of his job duties required him to walk or stand, supervise, and complete paperwork; the statutory language is clear: if an employee is ever required to lift more than twenty pounds, the job may not be labeled "light work."
The uncontroverted evidence before the hearing officer was that Stewart would be required to lift over one hundred pounds, albeit seldom, in the event a juvenile in the DJJ facility became unruly. The "Employer Job Description" completed by Stewart's supervisor reflects as much, as does the description Stewart completed himself. Stewart's hearing testimony supports the documentary evidence, as well. There is absolutely nothing in the record to support the conclusion that Stewart would never be required to lift more than twenty pounds, and so the classification of his job description as "light work" was patently against the evidence. The Franklin Circuit Court properly reversed this finding and determined the evidence supported the conclusion that Stewart's work was "very heavy." KRS 61.600(5)(c)5. We affirm on this matter.
C. Disability from the last date of paid employment
The Board argues the circuit court erroneously reversed its finding that Stewart was not disabled as of his last day of paid employment. Given the Board's assessment of Stewart's abilities only in the context of "light work," we believe the fact finder must reconsider whether Stewart was disabled from performing "very heavy work," as this opinion reflects. Accordingly, we will not consider this argument, but remand the matter to the circuit court for entry of an order remanding the case to the Kentucky Retirement Systems for entry of additional findings of fact.
III. Conclusions
KERS was not a necessary party to this appeal, and so the Board's failure to name KERS does not deprive us of jurisdiction. We affirm the Franklin Circuit Court's reversal of the Board's finding that Stewart's job duties required that he perform only "light work," as defined by KRS 61.600(5)(c)2.; the circuit court was correct that Stewart was required to perform "very heavy work," as defined in KRS 61.600(5)(c)5. Finally, we do not address whether the circuit court erroneously reversed the Board's conclusion that Stewart was not disabled as of his last day of paid employment. We remand the matter for reconsideration in light of the classification of his job duties as "very heavy work."
ALL CONCUR. BRIEFS FOR APPELLANT: Brian C. Thomas
Frankfort, Kentucky
BRIEF FOR APPELLEE: James P. Benassi
Henderson, Kentucky