Rizzo v. Virginia Retirement System

PRESENT: All the Justices
ANTHONY M. RIZZO, JR.
OPINION BY
v. Record No. 970596 JUSTICE CYNTHIA D. KINSER
February 27, 1998
VIRGINIA RETIREMENT SYSTEM, ET AL.
FROM THE COURT OF APPEALS OF VIRGINIA
In this appeal, we determine when the ninety-day limitation
in Code § 9-6.14:11(D), during which an agency is required to
render a case decision, begins to run. Because we find that the
ninety days must be counted from the date that the agency
representative held a fact-finding conference, we will reverse
the judgment of the Court of Appeals.
I.
This case involves the claim of Anthony M. Rizzo, Jr., for
disability retirement benefits under the Virginia Retirement
System (VRS). As a VRS member, Rizzo applied for disability
retirement benefits on November 14, 1988. Following an initial
denial of his claim and subsequent judicial appeals that
resulted in a remand to VRS, 1 a VRS agency representative
1
After denial of his claim in a final case decision by VRS
dated September 19, 1991, Rizzo appealed to the Circuit Court of
Orange County. In an order dated April 29, 1993, the court set
aside the denial and remanded the case to VRS for further
proceedings to include a new hearing. VRS then appealed to the
Court of Appeals, which, in an unpublished memorandum opinion
dated July 12, 1994, affirmed, insofar as is pertinent here, the
circuit court’s judgment. In accordance with the judgment of
conducted an informal fact-finding proceeding pursuant to Code §
9-6.14.11(D) on April 25, 1995. 2 At this proceeding, Rizzo
incorporated all the evidence from the previous administrative
hearing and introduced additional psychiatric evidence from Dr.
Robert Stanley Brown, Jr.
Over Rizzo’s objection, the agency representative sent the
transcript of the hearing to VRS on May 24, 1995, and asked VRS
to forward the transcript to the Medical Board 3 since it
contained Dr. Brown’s testimony regarding Rizzo’s condition. On
June 19, 1995, VRS transmitted Dr. Brown’s testimony to the
_______________
the Court of Appeals, the circuit court then remanded Rizzo’s
claim to VRS.
2
VRS requested the agency representative “to conduct a
fact-finding hearing” in a letter dated December 29, 1994. The
agency representative also referred to the proceeding as a
“hearing” but conducted it as an informal fact-finding
proceeding rather than a formal hearing as defined in Code § 9-
6.14:4(E).
3
The Board of Trustees of VRS employs the Medical Board
pursuant to Va. Code § 51.1-124.23. The Medical Board reviews
reports of medical examinations, investigates health and medical
statements submitted in connection with disability retirement,
and reports its conclusions and recommendations to VRS. Code §
51.1-124.23(B). The Medical Board also has certain additional
responsibilities in regard to disability retirement. Code §
51.1-156(E).
Title 51 of the Code, “Pensions and Retirement,” was
repealed effective July 1, 1990, but was replaced by Title 51.1,
“Pensions, Benefits and Retirement,” on that date. Even though
Rizzo applied for disability retirement benefits in November
1988, the differences in the recodification are not material for
purposes of the present opinion. Hence, the current version
will be cited.
2
Medical Board and asked it to examine the new evidence, review
for the second time the previous medical evidence, and comment
on all of it. Then on June 28, 1995, the Medical Board decided
that Dr. Merritt W. Foster, Jr., a consulting psychiatrist,
should review the evidence. Almost a month later, VRS directed
the Medical Board to proceed with Dr. Foster’s analysis. On
September 27, 1995, the Medical Board forwarded Dr. Foster’s
report to VRS, and VRS sent the report to the agency
representative on October 4, 1995.
Before the Medical Board received Dr. Foster’s report,
Rizzo notified VRS on August 11, 1995, more than ninety days
after the April informal fact-finding proceeding, that a
decision was due. In response, VRS informed Rizzo that it would
endeavor to have the Medical Board “move forward.” On September
27, 1995, Rizzo again notified VRS that a decision was due.
Finally, on October 6, 1995, Rizzo informed the agency
representative and VRS that, pursuant to Code § 9-6.14:11(D),
there was a decision now “‘deemed to be in his favor’” for the
following reasons:
(1) more than 90 days elapsed since the date of the
informal fact-finding proceeding on remand . . . (2)
after the lapse of such period and by at least 21
August 1995 . . . the VRS received our notice that “a
decision is due”, notwithstanding which (3) no final
decision of the System, from its board of trustees,
was made within a further 30 days from the System’s
receipt of our notice.
3
Therefore, Rizzo requested VRS to calculate and pay him the
benefits he sought. VRS responded on October 22, 1995, by
stating that, under Code § 9-6.14:11(D), the “proceeding”
envisioned was not concluded until VRS received the Medical
Board’s report.
On November 6, 1995, the agency representative submitted a
recommendation to VRS that Rizzo be awarded disability
retirement benefits. On the same day, however, VRS issued its
final case decision denying Rizzo benefits. This case decision
came 195 days after the agency representative had conducted the
informal hearing.
Rizzo then appealed again to the Circuit Court of Orange
County and filed a motion for summary judgment. In his motion,
Rizzo argued, inter alia, that VRS failed to render a decision
within the prescribed time limits and, therefore, in accord with
Code § 9-6.14:11(D), a decision had been “deemed” in his favor.
After hearing argument by both parties, the circuit court stated
the following reasons for granting Rizzo’s motion:
[T]he General Assembly, by using the phrase “from the date
of the informal fact-finding proceeding” in the statute
intended that the 90 day period begin to run in a case such
as the case at bar when the agency representative holds the
fact-finding hearing. Otherwise, the agency representative
and the agency’s medical board would wholly control the
time of decision and the limitation in the statute would be
practically meaningless.
4
VRS appealed, and the Court of Appeals reversed.
Distinguishing between the responsibility of VRS to gather facts
and its responsibility to render a decision, the Court of
Appeals concluded that the “legislature intended [the time
limitations of Code § 9-6.14:11(D)] to begin running at the
close of the fact-gathering stage of the adjudication process,”
in this case, when VRS received the Medical Board’s report.
Virginia Retirement System v. Rizzo, 23 Va. App. 698, 705, 479
S.E.2d 535, 538 (1997).
The Court of Appeals denied Rizzo’s subsequent petition for
a rehearing en banc. We awarded Rizzo an appeal.
II.
VRS is established pursuant to Chapter 1 of Title 51.1 of
the Virginia Code and is administered by a Board of Trustees.
Code § 51.1-124.22. Part of the responsibilities and duties of
VRS is to determine entitlement to retirement benefits,
including disability retirement. See Code § 51.1-156.
As an agency empowered to make regulations and decide
cases, VRS is subject to the Administrative Process Act (APA),
Code §§ 9-6.14:1 to .14:25. The purpose of the APA is to
“supplement . . . basic laws conferring authority on agencies .
5
4
. . [to] decide cases . . . .” Code § 9-6.14:3. It does not
“supersede or repeal additional procedural requirements in such
basic laws.” Id.
The APA establishes two procedures that an agency can
utilize to render a “case decision” 5 - an informal procedure and
a formal or trial-like procedure. VRS utilized the informal
procedure to decide Rizzo’s claim. 6 The informal procedure
requires agencies to “ascertain the fact basis for their
decisions of cases through informal conference or consultation
proceedings.” Code § 9-6.14:11(A). During such “conference-
consultation procedures,” the parties have the right to notice
thereof, to appear in person or by a representative for the
“informal presentation of factual data, argument, or proof,” to
have notice of any contrary fact basis or information, to
4
Basic law “means provisions of the Constitution and
statutes of the Commonwealth of Virginia authorizing an agency
to make regulations or decide cases or containing procedural
requirements therefor.” Code § 9-6.14:4(C).
5
The APA defines “case decision,” in pertinent part, as
“any agency proceeding or determination that, under laws or
regulations at the time, a named party as a matter of past or
present fact, . . . [is] in compliance with any existing
requirement for obtaining or retaining a license or other right
or benefit.” Code § 9-6.14:4(D).
6
An agency is required to use the formal procedure when its
“basic laws provide expressly for decisions upon or after
hearing.” Code § 9-6.14:12(A).
6
receive a prompt decision, and to be advised, generally in
writing, of the basis for an adverse decision. Id.
At issue in this appeal is the time frame in which VRS was
required to render a decision in Rizzo’s case under the informal
procedure. The relevant subsection states the following:
In any informal fact-finding proceeding in which a
hearing officer, as described in § 9-6.14:14.1, is not used
or is not empowered to recommend a finding, the board,
commission, or agency personnel responsible for rendering a
decision shall render that decision within ninety days from
the date of the informal fact-finding proceeding or from a
later date agreed to by the named party and the agency. If
the agency does not render a decision within ninety days,
the named party to the case decision may provide written
notice to the agency that a decision is due. If no
decision is made within thirty days from agency receipt of
the notice, the decision is deemed to be in favor of the
named party.
Code § 9-6.14:11(D).
Rizzo argues that the ninety days in this subsection
commenced when the agency representative conducted the fact-
finding proceeding on April 25, 1995. VRS contends that the
ninety days did not start to run until it received the Medical
Board’s report. 7 According to VRS, the term “fact-finding
proceeding” used in subsection D is more expansive than the term
“conference or consultation proceedings” found in subsection A.
Thus, argues VRS, the General Assembly used the term “fact-
7
At oral argument, VRS argued that the ninety days did not
begin to run until it received the agency representative’s
recommended decision.
7
finding proceeding” in conjunction with the time limitations
because the basic laws of some agencies may require other fact-
finding steps after the informal conference or consultation has
taken place. In the present case, VRS maintains that its basic
law requires the Medical Board’s review of evidence and
therefore, the ninety days could not commence until VRS received
that report.
The argument by VRS that the ninety days did not begin to
run on April 25, 1995, is not in accord with the overall
framework of the APA. In Code § 9-6.14:11, agencies are
directed to use informal conference or consultation proceedings
to determine the fact basis for their decisions. We find
nothing in Code § 9-6.14:11 to suggest that the General
Assembly, by using the term “fact-finding proceeding” in
subsection D as opposed to the phrase “conference or
consultation” in subsection A, thereby intended to create a
separate fact-gathering stage. To determine otherwise and to
accept the position of VRS would result in a fact-gathering
stage subject to no time constraints.
The term “fact-finding proceeding” is not defined in the
APA; thus, it must be “given its ordinary meaning, given the
context in which it is used.” Commonwealth of Virginia, Dept.
of Taxation v. Orange-Madison Coop. Farm Serv., 220 Va. 655,
658, 261 S.E.2d 532, 533-34 (1980). “The context may be
8
examined by considering the other language used in the statute.”
City of Virginia Beach v. Board of Supervisors of Mecklenburg
Co., 246 Va. 233, 236-37, 435 S.E.2d 382, 384 (1993).
Accordingly, we conclude that the phrase “any informal fact-
finding proceeding” in subsection D refers to the “conference or
consultation proceedings” first mentioned in subsection A of the
same section. In this case, that proceeding was the informal
conference that the agency representative held on April 25,
1995.
Furthermore, Code § 9-6.14:11(D) says that the agency shall
render a decision “within ninety days from the date of the
informal fact-finding proceeding.” (Emphasis added). The term
“date” indicates that the ninety-day limitation begins to run
from a given, ascertainable time, not ninety days after the end
of an indeterminate fact-gathering or fact-finding process.
Moreover, we believe that if VRS and its Medical Board were
allowed to control the commencement of the ninety-day decision
period through a fact-gathering stage that has no boundaries as
to time, the APA and its carefully designed parallel time
limitations would be meaningless. The time limitations
established in the APA are contingent on whether a hearing
officer is utilized. When a “hearing officer, as described in §
9-6.14:14.1, is not used or is not empowered to recommend a
9
finding,” 8 the agency must render a decision within ninety days
from either “the date of the informal fact-finding proceeding,”
Code § 9-6.14:11(D), or the “date of the formal proceeding.”
Code § 9-6.14:12(G). However, when a hearing officer is used in
either the formal or informal procedure and makes the initial
decision in the form of a recommendation to the agency, the
hearing officer, not the agency, gets ninety days “from the date
of the case decision proceeding” in which to render a decision.
Code § 9-6.14:14.1(D). The agency must then render its decision
“within thirty days from the date that the agency receives the
hearing officer’s recommendation.” Code §§ 9-6.14:11(E) and 9-
6.14:12(H). This thirty-day limitation applies whether the
procedure used is informal or formal.
The larger block of time granted the initial decision-
maker, whether the agency or its representative as in this case,
or a hearing officer, is indicative of the General Assembly’s
recognition that the initial decision-maker will necessarily
need more time to perform such tasks as hearing oral testimony
and reviewing documents. If a hearing officer is used and
recommends a decision, an agency then will need less time to
8
Under Code § 9-6.14:14.1(A), a hearing officer must meet
certain standards, and the Executive Secretary of this Court
prepares and maintains a list of such individuals. The parties
in this appeal agree that the agency representative utilized by
VRS was not a hearing officer.
10
render a final case decision. The intention of the General
Assembly to afford the initial decision-maker more time is
further evidenced by the provisions that restart the running of
the ninety days if the board members or agency personnel cannot
carry out their official duties. Code §§ 9-6.14:11(F) and 9-
6.14:12(I).
Thus, the General Assembly clearly specified when an agency
has thirty days or ninety days to render a final case decision.
To permit VRS to control the time within which it will render a
decision by allowing it to deem fact-gathering to be ongoing
ignores both the structure and the intended purpose of the
multiple time limitation provisions in the cited sections of the
APA.
The one overriding objective of the General Assembly
evident in the structure of the APA is that an agency not
operate free of time constraints when making a case decision.
The General Assembly sought to avoid precisely what happened in
this case, a claimant waiting 195 days after the informal
conference for a decision. The time limitations in the APA,
regardless of the procedure used, reflect the General Assembly’s
desire that agencies make timely decisions. We believe that our
decision is in accord with that objective. See Dowdy v.
Franklin, 203 Va. 7, 10, 121 S.E.2d 817, 819 (1961) (“[W]e give
weight to the object of the statute and the purpose to be
11
accomplished thereby.”). Our decision also provides claimants
with an ascertainable date from which to calculate the ninety
days.
Furthermore, counting the ninety days from the date of the
informal conference or consultation, or the formal hearing, does
not, as VRS insisted, conflict with the basic laws of VRS.
Although the Medical Board is required to review all medical
reports and statements and to report its findings and
recommendations to VRS, the Medical Board is subject to control
by VRS. Thus, VRS can require the Board to perform its work
within the ninety days when, as in this case, it needs an
additional review of medical evidence. Thus, neither the
Medical Board’s work nor any other provision in the basic laws
of VRS conflicts with the time constraints of the APA.
Finally, VRS argued that the doctrine of sovereign immunity
requires that Code § 9-6.14.11(D) be interpreted in favor of the
sovereign. VRS claims that the default provision mandating a
decision in favor of the claimant when the agency fails to make
a timely decision, even though the merits of the claim have not
been adjudicated, adversely affects the sovereign’s pecuniary
interests. We find nothing in the doctrine of sovereign
immunity that requires a departure from the recognized
principles of statutory construction.
12
Therefore, we conclude that the ninety-day period
prescribed by Code § 9-6.14.11(D) commenced to run in the
present case on April 25, 1995. Since VRS did not render a case
decision within ninety days or within the thirty days after
Rizzo advised VRS that a decision was due, a decision “is deemed
to be in favor of” Rizzo. Code § 9-6.14:11(D). Accordingly, we
will reverse the judgment of the Court of Appeals and enter
final judgment here reinstating the judgment of the circuit
court.
Reversed and final judgment.
CHIEF JUSTICE CARRICO, with whom JUSTICE COMPTON and JUSTICE
HASSELL join, dissenting.
I disagree with the majority’s holding that the date from
which the ninety-day limitation began to run in this case was
the commencement of the informal fact-finding proceeding. I can
find nothing in Code § 9-6.14:11 that mandates this holding,
and, moreover, I think it would be more consistent with the
applicable statutory provisions to hold that the limitation
began to run from the end of the informal fact-finding
proceeding, rather than its beginning.
The apparent basis for the majority’s holding is that there
is no difference between the term “informal conference or
consultation proceedings,” as used in subsection A of Code § 9-
6.14:11, and the term “informal fact-finding proceeding,” as
13
used in subsection D. Disavowing any difference, the majority
says that the term “’fact-finding proceeding’ . . . must be
‘given its ordinary meaning, given the context in which it is
used.’” The majority then concludes that the term “informal
fact-finding proceeding” in subsection D means the same thing as
“conference or consultation proceedings” mentioned in subsection
A and, in this case, “that proceeding was the informal
conference that the agency representative held on April 25,
1995.”
However, “’[w]hen the General Assembly uses two different
terms in the same act, it is presumed to mean two different
things.’” Klarfeld v. Salsbury, 233 Va. 277, 284-85, 355 S.E.2d
319, 323 (1987) (quoting Forst v. Rockingham Poultry Mktg.
Coop., Inc., 222 Va. 270, 278, 279 S.E.2d 400, 404 (1981)). I
would conclude, therefore, that, in the context in which the two
terms are used in the Administrative Process Act, an informal
fact-finding proceeding, while it may include an informal
conference or consultation proceeding, is intended to mean the
whole fact-finding process involved in a particular case. And,
in the particular case now before us, the process included
receipt by VRS of the report of the Medical Board pursuant to
Code §§ 51.1-124.23 and –156. Until receipt of that report, the
fact-finding process was not complete and the VRS could not
14
render a decision on Rizzo’s application for disability
retirement.
Since VRS is not free to render a decision in a disability
retirement case like the present one until the fact-finding
process ends upon receipt of the Medical Board’s report, it is
only logical, in my opinion, to have the ninety-day limitation
begin to run from the end of the fact-finding process, rather
than its beginning. I do not share the majority’s fear that,
unless the limitation is made to run from the commencement of
the fact-finding process, the VRS and the Medical Board would
manipulate the process and render meaningless the time
limitations established in the APA. It is presumed that public
officials will discharge their functions correctly, Hladys v.
Commonwealth, 235 Va. 145, 148, 366 S.E.2d 98, 100 (1988), and I
am willing to accord VRS and the Medical Board that presumption.
Accordingly, I would affirm the judgment of the Court of
Appeals.
15