From Casetext: Smarter Legal Research

Harting v. Public Employees Retirement Assoc

Minnesota Court of Appeals
Dec 9, 2003
No. A03-451 (Minn. Ct. App. Dec. 9, 2003)

Opinion

No. A03-451.

Filed December 9, 2003.

Appeal from the Public Employees Retirement Association of Minnesota, File No. 409062.

Debra M. Corhouse, (for relator).

Mike Hatch, Attorney General, Rory H. Foley, Assistant Attorney General, (for respondent).

Considered and decided by Schumacher, Presiding Judge; Lansing, Judge; and Poritsky, Judge.


This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).


UNPUBLISHED OPINION


Respondent Public Employees Retirement Association (PERA) terminated disability benefits of relator Paula Harting. On review, relator challenges PERA's decision that she was engaged in substantial gainful activity and therefore ineligible for disability benefits. She asks us to conclude that PERA erred as a matter of law and, based on that conclusion, to direct PERA to reinstate her benefits. Because we conclude that the procedures followed by PERA were not erroneous, we affirm.

FACTS

Relator Paula Harting is 50 years old and has worked as an educational assistant in the Brainerd School District since 1987. In April 2000, relator developed vertigo, dizziness, extreme headaches, nausea, neck and shoulder pain, a tingling weakness on the left side of the body, weight loss, fatigue, and confusion. Because of these ailments, relator was unable to continue working and took a medical leave of absence.

Relator was a member of PERA, and in May 2001 she applied to PERA for total and permanent disability benefits. She submitted statements from two physicians in support of her claim. After PERA's medical consultant reviewed relator's records, PERA approved relator's application for benefits in July 2001, effective March 2, 2001.

Later, in July 2001, relator's treating physician released relator to return to work for three hours per day with restrictions. The following month, PERA requested relator submit a medical disability report to document her continuing disability. In September 2001, relator submitted an application for the continuation of her benefits, indicating that because her health had improved, she had returned to work that month and was able to work three hours per day. In January 2002, relator's physician determined relator could work an additional two hours every other day. Relator began working every day for four-and-one-half hours.

PERA forwarded the report of relator's physician to its medical consultant for review. PERA's consultant determined that based on the number of hours realtor was working, she no longer qualified for total and permanent disability benefits and recommended that PERA deny relator's application for continued benefits. PERA notified relator that the consultant recommended discontinuing her benefits. PERA advised relator that an informal fact-finding session, at which she would have the right to present evidence in support of her claim, would be scheduled before an administrative law judge (ALJ). At PERA's request, relator underwent an employability evaluation by a qualified rehabilitation consultant (QRC). The QRC concluded relator was not permanently and totally disabled because, in addition to working at her predisability position on more than a half-time basis, she was capable of performing other work in the labor market. PERA also requested that relator's physician complete a supplementary statement. The statement asked: "Is patient now totally disabled (unable to work)?" Relator's physician checked the "no" box.

The fact-finding conference was held in December 2002. The ALJ recommended the PERA Board of Trustees approve relator's application for continuation of benefits because PERA had not established that relator was capable of substantial gainful activity. The PERA board heard oral arguments and reviewed the ALJ's recommendation in March 2003. The board rejected the ALJ's recommendation and concluded relator was not entitled to total and permanent disability benefits because she had resumed substantial gainful activity. On appeal, relator asks that this court reverse PERA's decision and rule as a matter of law that she is eligible for benefits.

DECISION

The Public Employees Retirement Association (PERA) is a public pension fund governed by Minn. Stat. ch. 353 (2002). A public retirement fund board is analogous to an administrative agency. Axelson v. Minneapolis Teachers' Ret. Fund Ass'n, 544 N.W.2d 297, 299 (Minn. 1996). This court accords "a presumption of correctness" to decisions of a public retirement fund board and deference to the board in its area of expertise. Rosinski v. Teachers Ret. Ass'n Bd. of Trs., 495 N.W.2d 14, 16 (Minn. App. 1993) (quoting Reserve Mining Co. v. Herbst, 256 N.W.2d 808, 824 (Minn. 1977)). But when reviewing questions of law, we review claims of error de novo, and we are not bound by an agency's decision and need not defer to the agency's expertise. St. Otto's Home v. Minn. Dep't of Human Servs., 437 N.W.2d 35, 39-40 (Minn. 1989). Nonetheless, although we are not bound by an agency's statutory construction, we have said, in affirming a decision by PERA, "[w]hen the meaning of a statute is doubtful, courts should give great weight to a construction placed upon it by the department charged with its administration." Goodnature v. Mower County, 558 N.W.2d 19, 20 (Minn. App. 1997) (quoting Krumm v. R.A. Nadeau Co., 276 N.W.2d 641, 644 (Minn. 1979)) (holding that payments made by county to sheriff for providing meals to prisoners were not salary subject to PERA deductions). In In re Hillman, No. C9-99-60, 1999 WL 672819 (Minn. App. Aug. 31, 1999), cited here by both parties, we applied Goodnature to a case involving the continuation of benefits to a disabled member. Finally, decisions made by an agency will be reversed if they are fraudulent, arbitrary, unsupported by substantial evidence, not within its jurisdiction, or based on an error of law. Axelson, 544 N.W.2d at 299.

Members of PERA who have at least three years of service are entitled to disability benefits if they become totally and permanently disabled. Minn. Stat. § 353.33, subd. 1 (2002). Minn. Stat. § 353.01, subd. 19 defines total and permanent disability as "the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to be of long-continued and indefinite duration." Long-continued and indefinite duration means the disability has existed or is expected to exist for at least one year. Id. Once approved for disability benefits, a member must periodically demonstrate continued eligibility for benefits. Minn. Stat. § 353.33, subd. 6. Minnesota law also provides in relevant part:

If, following a work or non-work-related injury or illness, a disabled person resumes a gainful occupation from which earnings are less than the salary at the date of disability or the salary currently paid for similar positions, the board shall continue the disability benefit . . .

Minn. Stat. § 353.33, subd. 7.

This court has previously concluded that when Minn. Stat. §§ 353.01, subd. 19 and 353.33, subd. 7, are read together, an ambiguity results, and therefore, PERA's construction and application of these statutes is entitled to deference. See Hillman, 1999 WL 672819, at *3 (affirming PERA's decision that former school groundskeeper who worked full-time as hall greeter was engaged in a substantial gainful activity, and therefore, not totally and permanently disabled). Although Hillman is unpublished, we find it instructive.

Even though relator acknowledges she is engaged in a gainful occupation, she argues that PERA erred in determining that she was engaged in a substantial gainful activity and therefore ineligible for disability benefits under Minn. Stat. § 353.33, subd. 7. Although she makes a number of arguments, her central argument is that PERA should have considered her post-disability earnings in determining whether she was engaged in a substantial gainful activity. Specifically, she compares her earnings to the Social Security earnings limit for partial re-employment benefits. Because her earnings are less than that limit, she argues, we should conclude that she is not engaged in a substantial gainful activity. But she cites no caselaw supporting her position that PERA should have found her eligible for benefits because she earned less than the limits set by Social Security.

Relator applied for, but was denied, Social Security disability benefits.

PERA's central position is that the question of whether or not relator is engaged in a substantial gainful activity is primarily a medical matter, and not, as relator argues, a matter of earnings. This position is supported by Minn. Stat. § 353.33, subd. 6, which mandates that PERA determine eligibility for continuing benefits by requiring members who are receiving benefits to undergo periodic examinations and evaluations. The statute goes on to say that PERA is to require disabled members to release medical information relating to an application for continuing benefits. Id. Subdivision 6a of the same statute states that PERA may contract with a licensed physician or a physician on the staff of the state Health Department to act as a medical advisor to PERA, and subdivision 6b says that physicians are "to examine applicants for disability benefits and review the medical reports based upon those examinations to determine whether an applicant is totally and permanently disabled as defined in section 353.01 . . . or eligible for continuation of disability benefits under subdivision 6." Id., subds. 6a, 6b.

Relator does not cite any statutory provision that requires PERA to consider post-disability income in any respect when determining a member's disability status. Further, while PERA acknowledges that it engages in a case-by-case and totality-of-circumstances analysis, including a consideration of the member's post-disability income, it has consistently refused to consider such income as the sole determinative factor. Based on the statutory language quoted above, we conclude that PERA's position — that the determination of whether a member is eligible for continuation of disability benefits is primarily a medical question — is correct.

Relator further argues that, in order to give meaning to both Minn. Stat. §§ 353.01, subd. 19 (which defines total and permanent disability) and 353.33, subd. 7 (which allows continued benefits when a member resumes a gainful occupation), this court must agree with her position and grant her benefits. We presume that the legislature intends an entire statute to be effective and certain. Minn. Stat. § 645.17(2) (2002). As this court recognized and approved of in Hillman, PERA has given effect to both statutes by defining "gainful occupation" to mean activity less significant than "substantial gainful activity." Hillman, 1999 WL 672819, at *3. The phrases are not defined by statute or rule, and prior to PERA's interpretation, it was not readily apparent whether the terms had a single meaning or different meanings. In re Hillman, 1999 WL 672819, at *3. Ultimately, the Hillman court concluded that because the meanings of the phrases were doubtful and PERA's interpretation permitted the statutes to be read consistently with each other, PERA's interpretation of the phrases deserved deference. Id. Here, PERA agrees that there are members who may be engaged in a gainful occupation but not in a substantial gainful activity; it argues relator is not one of them. Contrary to relator's argument, PERA has consistently taken the position that a gainful occupation is of a lower order than a substantial gainful activity. We conclude that PERA's statutory construction gives effect to both statutes.

Relator also argues that she is entitled to disability benefits because PERA's procedures for determining disability status are flawed. Specifically, she claims that PERA erred by asking her physician a legally incorrect question. In its decision, PERA adopted the findings of its staff, and in those findings, PERA details the procedures it follows in determining whether a member is entitled to a continuation of disability benefits. As we have noted, PERA's position is that the test to determine if a member is eligible is primarily a medical test. Thus, if a member's physician states that a member remains totally and permanently disabled, PERA will approve an application for continuation of benefits even if the member is working part-time, unless the member's post-disability earnings are more than the member's pre-disability earnings or the earnings limit set for Social Security disability benefit recipients, whichever is less. But if the physician states that a member is not disabled, that is not the end of the matter, as PERA then makes an independent determination whether the member is capable of substantial gainful activity. PERA considers the member's post-disability income, the amount of time the member is employed (i.e., half-time, full-time, etc.), whether the employment is regular, and whether or not the member is employed in his or her pre-disability position.

Here, PERA asked relator's treating physician the following question on a supplementary statement: "Is patient now totally disabled (unable to work)?" Relator's physician checked the "no" box. Relator claims that the question was legally incorrect because an individual could be able to work and still be totally and permanently disabled under the statute. Although the question does not track the statutory language, we find that the use of that question does not render PERA's procedure erroneous. The question is appropriate as part of an initial inquiry. Even if a doctor responds that a member is not disabled, as did relator's physician, PERA may nonetheless grant benefits after an investigation. We conclude that PERA's procedures were not erroneous.

Relator also argues that PERA's decision is arbitrary and capricious. An agency's decision is arbitrary or capricious when it represents an agency's will rather than its judgment. Mammenga v. State Dep't of Human Servs., 442 N.W.2d 786, 789 (Minn. 1989). As previously stated, PERA concluded relator was engaged in substantial gainful activity, and therefore ineligible for PERA disability benefits, because relator worked at her pre-disability position on a regular and consistent basis. PERA has consistently considered many factors when determining whether a member is engaged in substantial gainful activity, including number of hours worked and regularity of employment. Further, PERA has consistently refused to base its decision on the difference between a member's pre-disability and post-disability income. See In re Hillman, 1999 WL 672819. Given PERA's consistent interpretation and application of the phrases "gainful occupation" and "substantial gainful activity," we conclude PERA did not act arbitrarily or capriciously.

Lastly, relator argues PERA's decision is not supported by substantial evidence. Substantial evidence means: "(1) such relevant evidence as a reasonable mind might accept as adequate to support a conclusion; (2) more than a scintilla of evidence; (3) more than `some evidence'; (4) `more than any evidence'; and (5) evidence considered in its entirety." Reserve Mining Co. v. Herbst, 256 N.W.2d 808, 825 (Minn. 1977). Relator argues that PERA's decision is not supported by substantial evidence since PERA's medical consultant and the QRC did not consider relator's earnings. But as previously stated, PERA is not required to consider a member's earnings when determining whether the member is engaged in substantial gainful activity. In fact, PERA has consistently refused to base its decision solely on a member's earnings. Relator's argument in this respect fails.

We conclude that PERA's position is supported by law and that relator's arguments to the contrary are unpersuasive. We further conclude that the procedures followed by PERA are appropriate and, accordingly, we affirm.

Affirmed.


Summaries of

Harting v. Public Employees Retirement Assoc

Minnesota Court of Appeals
Dec 9, 2003
No. A03-451 (Minn. Ct. App. Dec. 9, 2003)
Case details for

Harting v. Public Employees Retirement Assoc

Case Details

Full title:Paula Harting, Relator, v. Public Employees Retirement Association of…

Court:Minnesota Court of Appeals

Date published: Dec 9, 2003

Citations

No. A03-451 (Minn. Ct. App. Dec. 9, 2003)