RENDERED: OCTOBER 30, 2020; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2019-CA-0088-MR
REBECCA RATLIFF APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT
v. HONORABLE PHILLIP J. SHEPHERD, JUDGE
ACTION NO. 16-CI-00073
KENTUCKY RETIREMENT SYSTEMS APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: JONES, KRAMER, AND TAYLOR, JUDGES.
JONES, JUDGE: The Appellant, Rebecca Ratliff, appeals a decision by the
Franklin Circuit Court affirming a decision by Kentucky Retirement Systems
(“Retirement Systems”) to deny Ratliff’s application for disability retirement
benefits. Having reviewed the record and being otherwise sufficiently advised, we
likewise AFFIRM.
I. BACKGROUND
Ratliff was born on June 8, 1956. She began working for the Pike
County Board of Education as a school bus driver on or about August 9, 1999. She
stopped physically performing her job duties in August of 2013, after she suffered
a broken arm. Her last day of paid employment was January 1, 2014. Ratliff has
166 months of membership time with Retirement Systems.
Following her last day of paid employment, Ratliff applied for
disability retirement benefits pursuant to KRS1 61.600. She alleged incapacity
based on: (1) a broken right arm; (2) diabetes with diabetic retinopathy; (3)
depression and anxiety; (4) heart attack and arrhythmias; and (5) arthritis.
Upon initial review, the Medical Review Board unanimously denied
Ratliff’s application for disability benefits. The Medical Review Board was
comprised of three physicians: Dr. Nancy Mullen, Dr. O. M. Patrick, and Dr.
Michael Growse. Dr. Mullen recommended denial of benefits because Ratliff’s
disabling condition arose from her poor management of her pre-existing diabetes.
Dr. Patrick felt that the sum of Ratliff’s maladies did not rise to the level of a
permanent disabling condition. Dr. Growse stated that Ratliff’s medical records
insufficiently described the extent of her allegedly disabling conditions and were
1
Kentucky Revised Statutes.
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inadequate to establish that she still suffered from anxiety, depression, or a
fractured arm.
On April 29, 2014, Ratliff submitted additional medical records and a
document titled “Certification of Application for Disability Retirement and
Supporting Medical Information” to Retirement Systems. These records contained
a note from Dr. Daniel Stamper, stating that he had treated Ratliff for diabetes
mellitus, diabetic retinopathy, orthostatic hypotension, neurogenic syncope,
hypertension, chronic anxiety, chronic depression, polypectomy, diverticulosis,
cholelithiasis, fractured right humerus, arthritis, hyperlipemia, and cardiac
arrhythmia. Dr. Stamper asserted that based on these conditions, Ratliff was
totally and permanently disabled. However, Dr. Stamper did not provide any other
statement or documentation regarding the list of conditions.
Thereafter, a majority of the Medical Review Board again rejected
Ratliff’s application. Dr. Mullen recommended the denial of benefits based on his
determination that Ratliff’s pre-existing diabetes directly or indirectly caused her
disabling conditions. Dr. Growse also maintained his denial of benefits on the
basis that the newly submitted records did not establish a new, disabling condition.
Dr. Growse reiterated that the only disabling condition supported by the record was
Ratliff’s diagnosis of diabetes, which is a pre-existing condition. Only Dr. Patrick
recommended approval of benefits based on this newly submitted evidence. Dr.
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Patrick believed benefits should be awarded on the basis of Ratliff’s arm fracture
because it prevented her from obtaining a commercial driver’s license (“CDL”),
which her job as a bus driver required. However, he believed that any grant of
benefits should be reviewed in one year and that Ratliff’s other complaints did not
rise to the level of permanent disability.
On December 1, 2014, Ratliff administratively challenged the Medical
Review Board’s denial. Her claim was assigned to a hearing officer. Following an
evidentiary hearing, at which Ratliff was the only witness, the hearing officer
issued a thirty-nine-page findings of fact, conclusions of law, and recommended
order. The hearing officer made specific findings that Ratliff’s diabetes pre-dated
her employment/membership date and that her broken arm was not a permanently
disabling condition. Based on her assessment of the evidence and testimony, the
hearing officer concluded as follows:
1. [Ratliff] has NOT submitted sufficient objective
medical evidence to support her assertion that either
individually or cumulatively her: (1) Broken Right
Arm[;] (2) Diabetes and its complications including
Diabetic Neuropathy and Retinopathy and Syncope[;]
(3) Depression and Anxiety; (4) Heart Attack and
Arrythmias; (5) Arthritis, permanently physically and
mentally incapacitated her on her last day of paid
employment from performing her job as a Bus Driver,
which was best described as sedentary work or job of
similar duties.
...
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2. [Ratliff] has NOT proven by a preponderance of the
evidence that her (1) Diabetes and its complications
including Diabetic Neuropathy and Retinopathy and
Syncope, and (2) Depression and Anxiety, DID NOT
result directly or indirectly from bodily injury, mental
illness, disease, or condition which pre-existed her re-
employment in CERS.
...
3. Claimant has NOT proven that her pre-existing
conditions were substantially aggravated by an injury
or accident arising out or in the course of employment.
These findings are made with the consideration of the
evidence of the entire Administrative Record, [Ratliff’s]
testimony, the KRS and [Ratliff’s] Position Statements
and Reply Briefs and physical exertion requirements of
her last job which was sedentary work, or a job of like
duties.
Record (“R.”) at 101-02 (emphasis in original).
The hearing officer’s recommended order was ultimately adopted
without further comment by the Board of Trustees. Ratliff then filed a petition for
judicial review of the Board of Trustees’ final order with the Franklin Circuit Court
pursuant to KRS 13B.140 and KRS 61.665. On December 11, 2018, the circuit
court entered its opinion and order affirming the hearing officer’s findings and
conclusions as adopted by the Board of Trustees. Specifically, the circuit court
concluded that:
While documentation of [Ratliff’s] Diabetes and related
conditions are clear in the record, it is also undisputed
that her primary disabling conditions (diabetes and
anxiety) are pre-existing conditions. All of the objective
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medical evidence in the record supports a conclusion that
these conditions pre-existed her initial employment. The
Committee relied on substantial evidence in finding that
[Ratliff] was not permanently mentally or physically
disabled as a result of her broken right arm; diabetes and
its complications, including diabetic retinopathy and
diabetic neuropathy; depression and anxiety; heart attack
and arrhythmias; arthritis; or any other condition. The
evidence in [Ratliff’s] favor does not constitute evidence
that is “so compelling that no reasonable person could
have failed to be persuaded by it.” McManus v. Kentucky
Retirement Systems, 124 S.W.3d 454, 458 (Ky. App.
2003).
R. at 166.
This appeal followed.
II. STANDARD OF REVIEW
The administrative review process terminates when the Board of
Trustees issues a final order. The Board of Trustees’ order “shall be based on
substantial evidence appearing in the record as a whole and shall set forth the
decision of the board and the facts and law upon which the decision is based.”
KRS 61.665(3)(d). The McManus2 standard, in conjunction with KRS 13B.150,
provides the proper standard for judicial review of the Board of Trustees’ decision.
Kentucky Retirement Systems v. Ashcraft, 559 S.W.3d 812, 819 (Ky. 2018).
Judicial review begins within the framework of KRS 13B.150(2). It
provides:
2
McManus, 124 S.W.3d at 458.
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(2) 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:
(a) In violation of constitutional or statutory
provisions;
(b) In excess of the statutory authority of the
agency;
(c) Without support of substantial evidence
on the whole record;
(d) Arbitrary, capricious, or characterized by
abuse of discretion;
(e) Based on an ex parte communication
which substantially prejudiced the rights of
any party and likely affected the outcome of
the hearing;
(f) Prejudiced by a failure of the person
conducting a proceeding to be disqualified
pursuant to KRS 13B.040(2); or
(g) Deficient as otherwise provided by law.
Id.
When an appellant alleges that the Board’s decision is not supported
by sufficient evidence, the reviewing court must 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) regardless of who
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bore the burden of proof before the Board. Bradley v. Kentucky Retirement
Systems, 567 S.W.3d 114, 119 (Ky. 2018).
If the reviewing court determines that there is some substantial
evidence to support the decision, it then must apply the McManus standard, which
is predicated on which party bore the burden of proof at the administrative level.
Ashcraft, 559 S.W.3d at 817.
Determination of the burden of proof also impacts the
standard of review on appeal of an agency decision.
When the decision of the fact-finder is in favor of the
party with the burden of proof or persuasion, the issue on
appeal is whether the agency’s decision is supported by
substantial evidence, which is defined as evidence of
substance and consequence when taken alone or in light
of all the evidence that is sufficient to induce conviction
in the minds of reasonable people. See Bourbon County
Bd. Of Adjustment v. Currans, Ky. App., 873 S.W.2d
836, 838 (1994); Transportation Cabinet v. Poe, Ky., 69
S.W.3d 60, 62 (2001) (workers’ compensation case);
Special Fund v. Francis, Ky., 708 S.W.2d 641, 643
(1986). 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. See Currans, supra;
Carnes v. Tremco Mfg. Co., Ky., 30 S.W.3d 172, 176
(2000) (workers’ compensation case); Morgan v. Nat’l
Resources & Environ. Protection Cabinet, Ky. App., 6
S.W.3d 833, 837 (1999).
McManus, 124 S.W.3d at 458.
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As the Bradley Court explained, the distinction McManus accounts for
is the more deferential role that the appellate court should play when reviewing and
assessing the evidence.
Preponderance of the evidence is the applicant’s burden
of proof before the hearing officer and Board, while the
“compelling evidence” standard in McManus is a judicial
standard of review applied by the court after the
administrative process has concluded. As noted
repeatedly, it is a high standard because of the deference
owed the administrative fact-finder. If courts re-applied
the preponderance of the evidence standard, they would
be assessing the evidence and weighing it de novo, in
direct violation of KRS 13B.150(2)’s directive that courts
“shall not” substitute their judgment for the fact-finder on
issues of fact.
Bradley, 567 S.W.3d at 120.
III. ANALYSIS
Ratliff’s application for disability retirement benefits was predicated
on numerous alleged conditions, including her broken arm, arthritis, anxiety,
depression, neurocardiogenic syncope (“syncope”), and, to some degree, her
diabetes. For the purposes of this appeal, Ratliff has abandoned her claim with
respect to all conditions except her alleged syncope. App. Br. at 4. As for her
syncope, Ratliff asserts that it did not arise until she was many years past her initial
membership date, and therefore cannot be considered pre-existing. She also asserts
that her syncope is disabling as a matter of law because it prevents her from
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passing the physical required to obtain her CDL, a prerequisite for her employment
as a bus driver.
Despite Ratliff’s protestations to the contrary, the circuit court did
extensively address syncope as part of its review. In relevant part, the circuit
court’s opinion and order states:
The Disability Appeals Committee determined that
[Ratliff’s] claim ought to be denied, finding that because
Ratliff’s medical records show that she was treated for
diabetes prior to her membership date and that her
diabetic syncope was related to her poorly controlled
diabetes. Accordingly, the Committee found that
benefits should be denied because [Ratliff] failed to meet
her burden of proof to establish by objective medical
evidence that her 1) Diabetes and its complications of . .
. Syncope . . . were not the direct or indirect result of
bodily injury, mental illness, disease, or condition which
pre-existed her membership in CERS.
...
i. Diabetes and its complications including diabetic
Neuropathy and Syncope
[Ratliff] was diagnosed with diabetes before her August
1999 employment, as her history of diabetes was noted
by Dr. Stamper in 1997. [Ratliff’s] 1998 CDL physical
also noted that she suffers from diabetes. [Ratliff]
testified that she was treated for diabetes since she was
thirty-eight (38) years old, whereas she began working as
a bus driver at age forty-three (43). Accordingly, the
Committee found that [Ratliff’s] Diabetes and related
conditions pre-existed her membership date in the
retirement systems. Moreover, regarding [Ratliff’s]
arrhythmia and syncope, Dr. Antimisiaris found that
[Ratliff] was tolerating medical therapy well and that
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these conditions are well controlled with medical
therapy. Finally, at the hearing, [Ratliff] testified that she
has had diabetes for a long time and it is not the reason
she is disabled.
There are also several records that suggest that some of
[Ratliff’s] Diabetes complications and associated
conditions were either caused or exacerbated by her
failure to follow medical advice or take medication
designed to mitigate her symptoms. On May 10, 2012,
Dr. Ashby-Jones stated that [Ratliff] reported being non-
compliant with her Diabetes medication in the past. On
August 27, 2012, Ratliff told Dr. Ashby Jones that she
had continued to not take her diabetes medications; in the
treatment notes Dr. Ashby-Jones recorded “I reinforced
to [Ratliff] that I can not [sic] take care of her if she does
not take her meds.” On September 25, 2012, Dr.
Kheetan reported that [Ratliff] was noncompliant with
her diabetes and hypertension medication, claiming the
medication made her nauseous; Dr. Kheetan diagnosed
[Ratliff] with “[p]ersonal history of noncompliance with
medical treatment presenting hazards to health.” On
February 7, 2013, [Ratliff] presented to her cardiologist
Dr. Antimisiaris with complaints of syncope; Dr.
Antimisiaris recorded the following note in his report:
“Neurocardiogenic syncope: improved orthostatic
hypotension with better diabetic control. Still likely has
some autonomic insufficiency from [diabetes mellitus]
but [symptoms] have improved.” Dr. Kheetan also
counseled [Ratliff] on the importance of medical
compliance.
...
iv. Heart Attack and Arrythmias.
[Ratliff] presented to the emergency room as requested
by Dr. Stamper due to chest pain; she was found to have
atrial tachycardia and was considered high risk because
of her high blood pressure and diabetes. On May 24,
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2013, [Ratliff] was admitted to Pikeville Medical Center
with atrial tachycardia shortness of breath, chest pain,
multiple cardiac risk factors, and minimal troponin
elevation that could be consistent with coronary
syndrome; the assessment revealed “essentially normal
coronary arteries with no significant obstructive coronary
artery disease.” In the notes of an office visit with her
heart doctor, Dr. Antimisiaris on July 31, 2013, [Ratliff]
reported that she “feels great. No further palpitations or
syncope . . . she actually stopped taking her meds 2
weeks ago but has no recurrent episodes.” Dr.
Antimisiaris also noted that [Ratliff’s] blood pressure
was high because she was off her medication and
counseled her about the importance of medication
compliance. Moreover, regarding Ratliff’s arrhythmia
and syncope, Dr. Antimisiaris found that [Ratliff] was
tolerating the medical therapy well and that these
conditions are well controlled with medical therapy.
...
[Ratliff] had passed medical certification for her CDL on
April 23, 2013, but voluntarily surrendered it on June 27,
2014, even though it would not expire until April 2018.
At the hearing, [Ratliff] testified that she cannot pass a
CDL physical because of her heart condition, her arm
injury, and the medicine for the pain in her arm. She also
testified that she surrendered her CDL because “she did
not want to pay for something she could not use.”
...
Because the Court has found the final order to be
supported by substantial evidence, [Ratliff’s] appeal can
only succeed if the record contains evidence in her favor
that is so compelling that no reasonable person could fail
to be persuaded by it. The strongest evidence supporting
[Ratliff] is as follows:
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i. Diabetes and its complications including Diabetic
Neuropathy and Syncope
[Ratliff’s] request for appeal included another letter from
Dr. Stamper, which states: “[Ratliff] has developed
complications from her Diabetes and other problems to
the point that she is now totally and permanently disabled
form any type of gainful employment.” However, as
shown at length above, [Ratliff’s] claim for benefits
cannot arise from diabetes as it pre-exists her
membership in CERS.
...
iv. Heart Attack & Arrythmias
In his letter in support of [Ratliff’s] claim, cardiologist
Dr. Antimisiaris referenced [Ratliff’s] neurogenic
syncope and atrial tachyarrhythmia; the letter then stating
“we have had difficulty controlling her with medications
and I believe it would be very difficult to control her to
an extent that would allow her to be continually
employed in her current occupation.” It is unclear
whether the “difficulty” to control [Ratliff] with
medications is a reference to her failure to take
medications, Dr. Antimisiaris’[s] belief that the heart
condition is too serious to be treated with medication, or
both. In [Ratliff’s] expectations to the final order, she
argues that no one disputed her statement at the hearing
that syncope causes her to have dizzy spells lasting up to
twenty (20) minutes. [Ratliff] argues that the dizziness
also prevents her from driving her own car and caused
her to break her arm. Furthermore, [Ratliff] has argued
that she cannot receive a CDL because such cannot be
issued to someone suffering from “impaired equilibrium
or any neurological condition with potential for sudden
incapacitation.”
While [Ratliff] and [Retirement Systems] argue that the
source of [Ratliff’s] syncope is, respectively, her pre-
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existing diabetes or a heart attack in 2013, neither
submits objective medical evidence exclusively tying
syncope to one or the other. However, [Ratliff’s]
cardiologist, Dr. Antimisiaris, did appear to strongly link
syncope with [Ratliff’s] diabetes. On February 7, 2013,
he wrote a report that stated: “Neurocardiogenic
syncope: improved orthostatic hypotension with better
diabetic control. Still likely has some autonomic
insufficiency from [diabetes mellitus] but [symptoms]
have improved.” Moreover, in light of the heavy burden
placed on [Ratliff] and the lack of objective medical
evidence showing the severity, permanence, and
disabling nature of her syncope, the Court finds that such
does not satisfy the requisite “so compelling” standard.
R. at 170-89 (emphases added) (record citations omitted).
The circuit court applied the correct standard of review and we cannot
find fault with its analysis. It is fairly clear that Ratliff’s syncope symptoms
developed after her membership date. This does not mean, however, that Ratliff is
automatically entitled to benefits if disabled by the syncope, because it is
undisputed that her diabetes predated her membership date by several years.
Pursuant to KRS 61.600(3)(d), benefits are only available if “[t]he incapacity does
not result directly or indirectly from bodily injury, mental illness, disease, or
condition which pre-existed membership in the system or reemployment,
whichever is most recent.” In other words, Ratliff bore the burden of establishing
that her syncope was not the result of her diabetes.
In McManus, 124 S.W.3d at 455, our Court considered a similar case.
After his membership date, McManus, a diabetic since the age of fifteen, began
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suffering from a series of heart related problems and conditions. These conditions
eventually required McManus to stop working. Thereafter, he applied for
disability retirement benefits. His application was denied even though Retirement
Systems stipulated that McManus met all the requirements for retirement disability
under KRS 61.600(1) and (2) because it was determined that his disabling
condition pre-existed his membership date. On appeal, a major issue concerned
who bore the burden of proof with respect to whether McManus’s pre-existing
diabetes was the cause of his heart conditions. We first held that the hearing
officer did not err in assigning McManus the burden of proof on the issue of
causation related to a pre-existing condition. We then determined that while there
was no conclusive evidence introduced either way, there was enough evidence in
the record to support the denial of benefits.
McManus had been coping with his diabetes for over 20
years at the time he became re-employed and his general
condition indicates the multi-faceted and extensive effect
it was having on him. In addition, he failed to present
evidence suggesting other pre-dominant causes. Viewing
the entire record, we believe there is substantial evidence
to support a finding that McManus’s incapacity was at
least indirectly as a result of his pre-existing diabetes
mellitus.
Id. at 459.
The same holds true in this case. As observed by the circuit court,
neither party produced any conclusive medical evidence establishing that Ratliff’s
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diabetes caused her syncope. At best, the evidence was conflicting regarding
whether Ratliff’s diabetes caused her syncope. After weighing that evidence, the
Board determined that Ratliff’s “syncope is at least indirectly related to her poorly
controlled diabetes according to numerous health care providers and, therefore,
cannot be a basis for disability.” Ratliff’s medical records, including those from
Dr. Ashby-Jones, Dr. Antimisiaris, and Pikeville Medical, support this conclusion.
In the end, the Board found these records more persuasive than any evidence
Ratliff presented to the contrary. Having reviewed the record, we agree with the
circuit court that the evidence was not so compelling that no reasonable person
could have failed to be persuaded that Ratliff’s syncope was not caused indirectly
by her pre-existing diabetes.
Ratliff, however, seems to believe that the pre-existing nature of her
diabetes and its causative effect on her syncope is not the determinative issue.
Citing Kentucky Retirement Systems v. Wimberly, 495 S.W.3d 141 (Ky. 2016),
Ratliff argues that her diagnosis entitled her to benefits as a matter of law.
Ratliff’s reliance on Wimberly is misplaced. In denying Wimberly benefits, the
Board of Trustees made two significant findings: “(1) [Wimberly’s] preexisting
abuse of alcohol contributed, at least indirectly, to his cardiac condition; and (2) he
had not met his burden of proving that he is disabled.” Id. at 148. As to the first
issue, the Court noted that although two physicians stated that “Wimberly’s heavy
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drinking occurred in either the past or the remote past, neither of them stated that it
occurred before Wimberly began his covered employment.” Id. at 149.
Ultimately, the Court concluded that no substantial evidence supported the Board’s
conclusion “that pre-existing alcohol abuse indirectly caused Wimberly’s heart
condition.” Id. Only after making that conclusion did the Court move on to
address whether the condition itself was disabling.
In contrast, in the present case, substantial evidence supports the
Board’s conclusion that Ratliff’s pre-existing diabetes indirectly caused her
syncope. As such, unlike the Wimberly Court, we do not advance on to the second
issue, whether the condition had a disabling effect, because even if the condition
was disabling, it is not one for which benefits can be awarded. KRS 61.600(3)(d).
IV. CONCLUSION
For the foregoing reasons, we AFFIRM the December 11, 2018,
opinion and order of the Franklin Circuit Court.
ALL CONCUR.
BRIEF FOR APPELLANT: BRIEF FOR APPELLEE:
Lawrence R. Webster Leigh A. Jordan Davis
Pikeville, Kentucky Frankfort, Kentucky
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