Kari Wynn Phillips v. Public Employees Retirement System of Mississippi ( 2019 )

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2018-SA-01062-COA
SALLIE RICHARDSON, MOTHER AND APPELLANT
NAMED BENEFICIARY OF DISABILITY
RETIREMENT BENEFITS OF KARI WYNN
PHILLIPS
v.
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM APPELLEE
OF MISSISSIPPI
DATE OF JUDGMENT: 06/20/2018
TRIAL JUDGE: HON. JEFF WEILL, SR.
COURT FROM WHICH APPEALED: HINDS COUNTY CIRCUIT COURT,
FIRST JUDICIAL DISTRICT
ATTORNEY FOR APPELLANT: GEORGE S. LUTER
ATTORNEY FOR APPELLEE: SAMUEL MARTIN MILLETTE
NATURE OF THE CASE: CIVIL - STATE BOARDS AND AGENCIES
DISPOSITION: AFFIRMED - 09/17/2019
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
BEFORE BARNES, C.J., McDONALD AND C. WILSON, JJ.
C. WILSON, J., FOR THE COURT:
¶1. Sallie Richardson filed this appeal on behalf of her daughter, Kari Wynn Phillips
(“Phillips”), seeking review of the Public Employees’ Retirement System of Mississippi
(“PERS”) Board of Trustees’ (the “PERS Board”) August 24, 2010 decision to deny her
request for non-duty-related disability benefits.1 The PERS Medical Board (“Medical
Board”) reviewed Phillips’s application and supporting documentation and subsequently
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Phillips died on May 26, 2016. Sallie Richardson is the mother and named
beneficiary of Phillips’s disability retirement benefits.
denied her claim. Phillips appealed the Medical Board’s decision and was granted a hearing
before the PERS Disability Appeals Committee (the “Appeals Committee”), which took
place April 9, 2010. The Appeals Committee, after considering the testimony and evidence,
presented its recommendation to the PERS Board. The PERS Board adopted the “Proposed
Statement of Facts, Conclusions of Law, and Recommendation” of the Appeals Committee
to deny Phillips’s request for payment of non-duty-related disability benefits. Phillips
appealed the PERS Board’s decision to the Circuit Court of the First Judicial District of
Hinds County, Mississippi. The circuit court upheld the PERS Board’s order, and Phillips
appealed.
¶2. On appeal, Phillips raises the following issues: (1) whether the PERS Board’s
decision to deny Phillips disability benefits under Mississippi Code Annotated section 25-11-
113 (Supp. 2008) is not supported by substantial evidence and, therefore, arbitrary and
capricious; and (2) whether the PERS Board violated Phillips’s due process rights to a fair
hearing by not obtaining additional medical records. After a thorough review of the record,
we affirm the PERS Board’s decision to deny Phillips non-duty-related disability benefits.
FACTS
¶3. Phillips worked as a Family Protection Specialist-Advanced for the Mississippi
Department of Human Services. She was terminated from her job on October 24, 2008, after
23.75 years of service. On February 17, 2009, Phillips applied for non-duty-related disability
benefits pursuant to section 25-11-113(1)(a), alleging disability due to depression, anxiety,
nerves, attention deficit/hyperactivity disorder (ADHD), and migraines.
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¶4. After conducting an independent medical evaluation, the Medical Board reviewed
Phillips’s application and supporting documentation and subsequently denied Phillips’s
claim. Phillips appealed the Medical Board’s decision to the PERS Board, which granted a
hearing before the Appeals Committee on April 9, 2010. The Appeals Committee, after
considering the testimony and reviewing the medical records and other documentary
evidence, recommended that the PERS Board deny Phillips’s claim. In its “Proposed
Statement of Facts, Conclusions of Law, and Recommendation,” the Appeals Committee
“found the evidence before it sufficient to make an informed and knowledgeable decision”
and set out the evidence supporting its denial as follows:
The PERS statute requires that the medical disability must be the reason for the
termination of employment. This is clearly a problem for Ms. Phillips’ case.
According to Ms. Phillips, she was terminated for reasons unknown to her.
She hired counsel according to the medical records to defend her in her
termination hearing, lending the appearance that she believed she was able to
perform her job at that time. In fact, Ms. Phillips was apparently doing the
tasks of her employment until March 21, 2008, when she was suspended and
placed on leave after being accused of stealing narcotics and other medications
from her clients and their families. She told this Committee that up until she
was suspended, she was able to do her job. After the employee appeals board
determined that her termination was for cause, Ms. Phillips did not appeal that
decision. There is ample evidence that Ms. Phillips was terminated for reasons
other than an alleged disability. She was terminated for misconduct. After
termination, Ms. Phillips did apply for Social Security benefits and was
approved for those around the time of her termination. This Committee is
aware that it has the option of considering a disability determination from
Social Security as the basis for a decision, but in this case, the Committee
chooses to make a determination based on the evidence before us today and the
PERS statute which has different requirements from that of the Social Security
Administration.
With regard to the medical psychiatric condition Ms. Phillips alleges to be
disabling for her, it is true that she has had some anxiety and depression over
the years that seems to exacerbate with situations with her ex-husband,
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boyfriend, son, and father. Dr. Montgomery demonstrated that with his outline
of Ms. Phillips’ medical history. The record shows no psychiatric complaints
between February of 2006 and July of 2007. Then, in July of 2007, Ms.
Phillips tested positive for polysubstances, including marijuana and after that,
she complained of severe headache pain and used Lortab for the pain but
complained over and over that the Lortab was not providing relief. There were
some concerns by doctors about prescriptions for Lortab, and Ms. Phillips’
requests for more after losing a prescription, etc. Then, by March of 2008, Ms.
Phillips was suspended after being accused of taking medications from her
clients and their families. It was when she was accused of stealing drugs that
her stress increased.
There is insufficient evidence to prove that Ms. Phillips is disabled. We noted
the opinion from Dr. Middleton that Ms. Phillips is disabled, but she was not
psychologically or medically disabled until after she was fired. She worked
for 23.75 years with her underlying psychiatric pathology. She did not allege
disability until after she lost her employee appeals hearing. Then, she applied
for Social Security, and Dr. Whelan was the psychologist for them. Dr.
Montgomery, on the other hand, is a board certified psychiatrist, and he tested
Ms. Phillips using psychological testing specifically designed to identify
malingering or feigning. Dr. Montgomery established through his objective
testing that Ms. Phillips had a high probability of malingering or feigning. He
also noted the discrepancies and problems with the diagnoses and prognoses
of Dr. Middleton who had treated Ms. Phillips over time but not on a
consistent basis. He noted that while Ms. Phillips did have pathology, that she
had more of a depressive, mood etiology and that Dr. Middleton had written
that Ms. Phillips was improving on Seroquel, but then Dr. Middleton
concluded subsequently that Ms. Phillips was bipolar based on her actions and
descriptions of problems. Dr. Montgomery properly and correctly noted that
Ms. Phillips appeared more depressed, and it seemed to be situational and that
one could not be manic and at the same time be in bed for long periods of time.
The symptomatology and diagnosis by Dr. Middleton do not correspond or
match.
Ms. Phillips probably has some situational depression and anxiety but her
termination was not based on a medical or psychiatric condition for two
reasons. The first reason was that she was terminated for reasons other than
a medical or psychiatric problem. The second reason is that her psychiatric
problems are not to the level of being disabling. That being the case, this
Committee cannot recommend that Ms. Phillips be approved for non-duty
related disability . . . .
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¶5. The PERS Board concurred with the Appeals Committee’s recommendation to deny
Phillips non-duty-related disability benefits and adopted the Appeals Committee’s
recommendation as its final decision. Phillips appealed the PERS Board’s determination,
which the circuit court affirmed. Phillips now appeals the Board’s decision to this Court.
STANDARD OF REVIEW
¶6. The standard of review on appeal from an administrative decision of the PERS Board
of Trustees is limited to a determination of whether the PERS Board’s decision (1) was
supported by substantial evidence; (2) was arbitrary or capricious; (3) was beyond the
authority of the Board to make; or (4) violated a statutory or constitutional right of the
claimant. Thomas v. Pub. Emps.’ Ret. Sys., 995 So. 2d 115, 118 (¶14) (Miss. 2008);
Laughlin v. Pub. Emps.’ Ret. Sys., 11 So. 3d 154, 158 (¶17) (Miss. Ct. App. 2009); Pub.
Emps.’ Ret. Sys. v. Dozier, 995 So. 2d 136, 138 (¶7) (Miss. Ct. App. 2008).
¶7. Because the administrative agency sits as the finder of fact, a reviewing court is
obligated to show “substantial deference” to any determination of credibility or
trustworthiness of witness testimony. Pub. Emps.’ Ret. Sys. v. Cobb, 839 So. 2d 605, 609
(¶12) (Miss. Ct. App. 2003). “There is a rebuttable presumption in favor of a PERS ruling.
Neither the appellate court nor the circuit court is entitled to substitute its own judgment for
that of PERS, and it is impermissible for a reviewing court to re-weigh the facts of the case.”
Pub. Emps.’ Ret. Sys. v. Card, 994 So. 2d 239, 242 (¶15) (Miss. Ct. App. 2008) (quoting
Pub. Emps.’ Ret. Sys. v. Dishmon, 797 So. 2d 888, 891 (¶9) (Miss. 2001)). Thus, even if we
would have reached a different conclusion had we been sitting as the finder of fact, we may
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not reweigh the evidence and substitute our own opinion for that of the PERS Board. Bynum
v. Miss. Dep’t of Educ., 906 So. 2d 81, 91 (¶17) (Miss. Ct. App. 2004).
ANALYSIS
I. Whether the PERS Board’s decision to deny Phillips disability
benefits under section 25-11-113 is not supported by substantial
evidence and, therefore, arbitrary and capricious.
¶8. Phillips asserts that PERS’s decision to deny her request for non-duty-related
disability benefits is arbitrary and capricious and not supported by substantial evidence.
Because Phillips was an inactive member of PERS at the time she applied for disability
benefits, the PERS Medical Board, Disability Appeals Committee, and Board of Trustees
were tasked with determining whether Phillips became permanently disabled within six
months of her October 24, 2008 termination and, if so, whether she provided “satisfactory
proof . . . that [her] disability was the direct cause of withdrawal from state service.” Miss.
Code Ann. § 25-11-113(1)(c).
¶9. Mississippi Code Annotated section 25-11-113(1)(a) (Supp. 2008), as it read at the
time Phillips’s application was filed, sets forth the criteria for PERS disability benefits as
follows:
[I]n no event shall the disability retirement allowance begin before termination
of state service, provided that the [M]edical [B]oard, after an evaluation of
medical evidence that may or may not include an actual physical examination
by the [M]edical [B]oard, certifies that the member is mentally or physically
incapacitated for the further performance of duty, that the incapacity is likely
to be permanent, and that the member should be retired; however, the [B]oard
of [T]rustees may accept a disability medical determination from the Social
Security Administration in lieu of a certification from the [M]edical
[B]oard. . . . For the purposes of disability determination, the [M]edical
[B]oard shall apply the following definition of disability: the inability to
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perform the usual duties of employment or the incapacity to perform such
lesser duties, if any, as the employer, in its discretion, may assign without
material reduction in compensation, or the incapacity to perform the duties of
any employment covered by the Public Employees’ Retirement System
(Section 25-11-101 et seq.) that is actually offered and is within the same
general territorial work area, without material reduction in compensation.
(Emphasis added).
¶10. Further, section 25-11-113(1)(c) provides that the disability must be the direct cause
of the applicant’s withdrawal from state service:
Any inactive member who became a member of the system before July 1,
2007, with four (4) or more years of membership service credit, . . . who has
withdrawn from active state service, is not eligible for a disability retirement
allowance unless the disability occurs within six (6) months of the termination
of active service and unless satisfactory proof is presented to the [B]oard of
[T]rustees that the disability was the direct cause of withdrawal from state
service.
(Emphasis added).
¶11. Thus, in order to approve a claim for disability benefits, PERS must find sufficient
medical evidence of a physical or mental condition that is likely to be permanent and that
renders the applicant incapable of performing his or her job or another job offered by the
employer within the same geographic area and with no material reduction in pay. See Miss.
Code Ann. § 25-11-113(1)(a); see also Pub. Emps.’ Ret. Sys. v. Worlow, 172 So. 3d 745, 747
(¶14) (Miss. Ct. App. 2011) (stating that applicant for disability benefits carries initial burden
of proving disability “through objective medical evidence”). PERS must also find that the
disability occurred within six months of termination and was the direct cause of withdrawal
from state service. Miss. Code Ann. § 25-11-113(1)(c).
¶12. The question before this Court is not whether there is evidence to support a finding
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that Phillips is disabled, but rather whether there is evidence in the record to support the
PERS Board’s decision to deny disability benefits. Dishmon, 797 So. 2d at 892 (¶12). “On
appeal, we must determine whether there was substantial credible evidence to support the
[PERS] Board’s decision . . . , not whether we might reach a different conclusion had we
been sitting on the [PERS Board].” Thomas, 995 So. 2d at 119-20 (¶20). “Substantial
evidence has been defined by this Court as such relevant evidence as reasonable minds might
accept as adequate to support a conclusion.” Davidson v. Pub. Emps.’ Ret. Sys., 219 So. 3d
577, 581 (¶15) (Miss. Ct. App. 2017) (quoting Knight v. Pub. Emps.’ Ret. Sys., 108 So. 3d
912, 915 (¶13) (Miss. 2012)) (internal quotation marks omitted). “If an administrative
agency’s decision is not based on substantial evidence, it necessarily follows that the decision
is arbitrary and capricious.” Pub. Emps.’ Ret. Sys. v. Howard, 905 So. 2d 1279, 1284 (¶14)
(Miss. 2005) (quoting Pub. Emps.’ Ret. Sys. v. Marquez, 774 So. 2d 421, 430 (¶35) (Miss.
2000)). “An administrative agency’s decision is arbitrary when it is not done according to
reason and judgment, but depending on the will alone.” Howard, 905 So. 2d at 1285 (¶16)
(quoting Miss. State Dep’t of Health v. Natchez Cmty. Hosp., 743 So. 2d 973, 977 (¶13)
(Miss. 1999)). And “[a]n action is capricious if done without reason, in a whimsical manner,
implying either a lack of understanding of or disregard for the surrounding facts and settled
controlling principles.” Id.
¶13. Here, the PERS Board’s denial of disability benefits is supported by substantial
evidence that Phillips’s medical condition was not the direct cause of her termination from
state service. The record evidence demonstrates that Phillips’s employment with the
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Department of Human Services was terminated due to misconduct—specifically, allegations
that she stole and/or solicited medications from her clients and their families. Phillips’s
Employer Certification form indicates that Phillips was terminated due to issues other than
“poor performance related to medical condition,” and on her PERS “Medical Information
Form,” Phillips wrote that she stopped working because she was accused of and terminated
due to “misconduct.” Phillips even reported the allegations of misconduct against her and
her resulting suspension and termination to several of her medical providers.
¶14. Accordingly, the Appeals Committee’s finding—adopted by the PERS Board—that
Phillips’s alleged disability was not the direct cause of her withdrawal from state service and
the PERS Board’s subsequent denial of non-duty-related disability benefits are supported by
substantial evidence and are neither arbitrary nor capricious. Therefore, we find this
assignment of error to be without merit.
II. Whether the PERS Board violated Phillips’s due process rights to
a fair hearing by not obtaining additional medical records.
¶15. Phillips asserts that PERS violated her due process rights when it did not obtain
additional medical records for review, and that PERS’s failure to defer her case after
acknowledging it did not have all of her medical records was arbitrary and capricious.2 We
find this issue is moot, as the PERS Board’s decision to deny Phillips disability benefits is
supported by substantial evidence that Phillips was terminated for reasons unrelated to a
mental or physical incapacity or disability. Regardless, we also find this assignment of error
2
Regarding PERS’s claim that Phillips is barred from raising this issue for the first
time on appeal, we find that claim to be without merit. Phillips properly preserved her due
process argument at the circuit court level.
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to be without merit.
¶16. Mississippi Code Annotated section 25-11-120(1) (Rev. 2006) gives PERS the
“authority to defer a decision in order to request a medical evaluation or test or additional
existing medical records not previously furnished by the claimant.” But the authority to
request “additional existing medical records not previously furnished by the claimant” does
not require PERS to defer a case to obtain or review every possible record. The statute
merely confers upon PERS “the authority to order additional medical records.” Stevison v.
Pub. Emps.’ Ret. Sys., 966 So. 2d 874, 882 (Miss. Ct. App. 2007). Conversely, while a
claimant is “not statutorily required to produce all of her medical records, but only to produce
sufficient evidence to support the claim of inability to perform the usual duties of her
employment,” id., the burden of proof falls on the claimant. Stevison, on which Phillips
relies for support, is distinguishable from this case, because PERS here relied not on
unsupported assumptions that “the missing information contained opinions of no disability,”
id., but on the substantial evidence in the record before it. Phillips thus cannot claim her due
process rights were violated by her own failure to present a full set of medical records to the
Appeals Committee.
¶17. In its “Proposed Statement of Facts, Conclusions of Law, and Recommendation,” the
Appeals Committee “found the evidence before it sufficient to make an informed and
knowledgeable decision based on the records already presented by Ms. Phillips along with
her testimony and that of her family.” Thus, the Appeals Committee—and subsequently the
PERS Board—determined that sufficient evidence had been presented and that no additional
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evidence was needed to reach its decision to deny Phillips disability benefits. As such, we
affirm.
¶18. AFFIRMED.
BARNES, C.J., CARLTON AND J. WILSON, P.JJ., GREENLEE,
WESTBROOKS, TINDELL, McDONALD, LAWRENCE AND McCARTY, JJ.,
CONCUR.
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