DAVID V. MALLAND, ET AL, Appellants, v. THE DEPARTMENT OF RETIREMENT SYSTEMS, ET AL, Respondents.
No. 50405-9
En Banc.
January 11, 1985.
103 Wn.2d 484
Hans E. Johnsen, for appellant Kuaimoku.
Kenneth O. Eikenberry, Attorney General, and Kathy L. Nolan and Donald F. Cofer, Assistants; Douglas N. Jewett, Seattle City Attorney, Gordon Campbell, Assistant, Linda M. Youngs, Bellevue City Attorney, and Richard L. Kirkby, Assistant, for respondents.
BRACHTENBACH, J.—These consolidated cases involve interpretation of the statutory scheme governing reexaminations of individuals granted disability retirement allowances under the Washington Law Enforcement Officers’ and Fire Fighters’ Retirement System Act (LEOFF). Appellants, a former Seattle police officer and a former Bellevue fire fighter, challenge the cancellations of their disability retirement allowances, arguing that such cancellations are improper absent a showing that the circumstances under which the allowances were originally granted
The facts of each case will be dealt with separately.
Malland
Appellant David Malland commenced employment as a Seattle police officer in March 1966. He was granted disability retirement effective November 1979 due to hearing problems.
Subsequently, a de novo hearing was held before an administrative law judge. At the administrative hearing, two medical doctors and an audiologist testified that Malland‘s condition had not improved since the original grant of disability. The experts, however, reached contrary conclusions on the central issue of whether Malland was still disabled. One doctor concluded Malland remained disabled. A second doctor, Dr. Sennewald, testified that Malland‘s condition did not prevent him from performing most of the functions of a police officer with average efficiency.
The administrative law judge concluded no change in medical condition need be shown to cancel a disability allowance but that Malland was still disabled. The Director agreed no change in condition need be proven, but concluded that Malland was not disabled. The Director therefore ordered cancellation of Malland‘s allowance.
Appellant Patrick Kuaimoku commenced employment as a Bellevue fire fighter in January 1969. Following a job-related back injury, Kuaimoku filed for disability retirement. The application was denied by the Bellevue Disability Board and the denial was affirmed by the State LEOFF Board.1 Kuaimoku appealed. Subsequently, in a March de novo administrative hearing, the hearing examiner concluded Kuaimoku was disabled from working as a fire fighter and granted him a disability allowance. No appeal was taken from this order.
Subsequently, Kuaimoku was reexamined and, in 1979, the Bellevue Disability Board canceled his disability allowance. Kuiamoku appealed and a hearing de novo was conducted pursuant to
At the hearing, two doctors testified that there had been no substantial change in Kuaimoku‘s medical condition. A third doctor would not express an opinion on whether his condition had changed because he had not examined him at the time of the initial disability hearing. The two doctors who testified on behalf of the City of Bellevue concluded that Kuaimoku was not disabled. They based their opinion on the lack of objective signs of back injury. Kuaimoku‘s doctor, who had first examined Kuaimoku in 1975 in conjunction with the initial grant of disability, stated that Kuaimoku was disabled from working as a fire fighter. In his opinion Kuaimoku‘s subjective symptoms had improved somewhat because he had learned to take better care of his back.
The hearing examiner concluded Kuaimoku had failed to show he was still disabled. The trial court reversed and remanded, ruling that the burden of proof had been improperly placed on Kuaimoku.
Kuaimoku again appealed. The trial judge affirmed, ruling that the State Board‘s order was neither “arbitrary and capricious” nor “clearly erroneous“. The judge concluded that no change in medical condition or other circumstances need be shown to justify cancellation of a disability allowance. The judge further stated that even if such a change was required, the record supported the Board‘s finding of improvement in condition.
I
The issue presented in this case is whether a LEOFF Retirement System disability allowance may be canceled absent a showing that the circumstances upon which the original grant of disability was based have changed. The Department of Retirement argues that the issue of a claimant‘s continuing disability is to be determined de novo in a reexamination hearing, without reference to the initial determination of disability. We disagree.
Disability retirement may be granted only upon a finding by a Disability Board that the claimant‘s mental and physical condition disables the claimant from the further performance of his or her duties.
This interpretation of the statutory scheme is consistent with the judicial principles of finality and fairness embodied in the doctrine of collateral estoppel. The doctrine of collateral estoppel, or issue preclusion, seeks to prevent relitigation of previously determined issues between the same parties, to promote judicial economy, and to prevent harassment of and inconvenience to litigants. State v. Dupard, 93 Wn.2d 268, 609 P.2d 961 (1980). Without the requirement that some change in circumstances be shown on reexamination, the Department would be allowed to relitigate the same issues resolved in the initial disability hearing after the time for appeal has elapsed.
The requirements for application of collateral estoppel are: (1) identical issues; (2) a final judgment on the merits; (3) the party against whom the plea is asserted must have been a party to or in privity with a party to the prior adjudication; and (4) application of the doctrine must not work an injustice on the party against whom the doctrine is to be applied. Rains v. State, 100 Wn.2d 660, 674 P.2d 165 (1984).
The Department argues that the doctrine of collateral estoppel should not apply. It reasons that identical issues are not present in both proceedings because the initial disability determination and the reexamination determination involve consideration of the claimant‘s medical condition at different times. We reject this argument. While evidence presented at the reexamination proceeding may
Sometimes, there is a lack of total identity between the matters involved in the two proceedings because the events in suit took place at different times. In some such instances, the overlap is so substantial that preclusion is plainly appropriate. . . . [I]n the absence of a showing of changed circumstances, a determination that, for example, a person was disabled . . . in one year will be conclusive with respect to the next as well.
The remaining requirements for application of collateral estoppel are satisfied. The initial determination of disability is a final judgment, the local disability boards and the Department are parties in both proceedings, and no injustice will result from application of collateral estoppel.
Collateral estoppel may bar relitigation of issues determined by an administrative agency if (1) the agency, acting within its competence, has made a factual decision and (2) application of the doctrine does not contravene public policy. Dupard, at 275. In determining whether an applicant is entitled to a disability allowance, disability boards act in a quasi-judicial capacity to resolve disputed issues of fact. Further, application of collateral estoppel does not contravene the purposes of
The application of the doctrine is limited by the terms of the statute. Collateral estoppel does not apply to the award
We do not require the Department to prove an objective improvement in the claimant‘s medical condition in all cases. Adaptations to physical disabilities, compensation for physical limitations and changes in equipment or job requirements are also changes in circumstances, evidence of which could be presented by the Department to support its position that a claimant is no longer disabled. A claimant‘s current job or other activities may be evidence of an improved medical condition or of adaptation to a medical condition, but the Department must also offer evidence that the ability to participate in such activities demonstrates an ability to perform all necessary job duties.
This decision precludes the Department from canceling a disability allowance on the basis of new expert testimony that the claimant‘s unchanged medical condition does not prevent the claimant from performing unchanged job duties or new medical testimony that the claimant‘s medical condition was incorrectly diagnosed at the time of the initial disability hearing.
II
Having determined that the Department must prove a change in circumstances to cancel a disability allowance, we turn to the cases of Malland and Kuaimoku.
In Malland‘s case, the Department applied the wrong standard in making its determination. In his conclusions of law, the Director stated:
RCW 41.26.140 requires a determination as to whether a retiree is “still unable to perform his duties“. Thus, the employer and state as part of its burden need not show a change of conditions. Rather, the determination is whether the appellant is currently able to perform the duties of police officers with average efficiency.
Even had the Director applied the correct standard, the Department did not present sufficient evidence to carry its burden of proof. It is undisputed that Malland‘s medical condition is unchanged. Our opinion today precludes consideration of Dr. Sennewald‘s testimony that Malland‘s medical condition would not prevent Malland from performing his duties as a police officer. His testimony is merely new expert testimony on an issue previously litigated at the initial hearing. The mere fact of Malland‘s current employment as a safety engineer for an insurance company and of his membership in the Coast Guard Reserve is not evidence of his ability to perform the duties of a police officer absent testimony that those activities demonstrate such an ability. Consequently, we reverse the cancellation of Malland‘s disability retirement allowance.
In Kuaimoku‘s case, the Retirement Board found that “[a]t the time of reexamination, Kuaimoku‘s back injury had improved somewhat from the time he was initially granted a disability retirement allowance.” Judicial review of the administrative agency‘s finding of fact is governed by the clearly erroneous standard of
Although there is some evidence to support the Department‘s finding, having reviewed the record, we are convinced a mistake has been committed. The doctors who examined Kuaimoku testified that his back condition was unchanged. The record reveals that the doctors who testi-
In light of our holding that the doctrine of collateral estoppel applies to reexamination proceedings, we need not address appellants’ arguments concerning the applicability of res judicata, the doctrine of finality, the law of the case, or the definition of disability.
The cancellations of appellants’ disability retirement allowances are reversed.
WILLIAMS, C.J., DOLLIVER and PEARSON, JJ., and CUNNINGHAM, J. Pro Tem., concur.
DIMMICK, J. (dissenting)—I respectfully disagree with the majority‘s analysis and its conclusion that Malland‘s and Kuaimoku‘s disability cancellations should be reversed. The majority‘s requirement of changed circumstances sets an unreasonably high standard for cancellation and is contrary to the intent of
I support the definition of disability the Department has drawn from the statute: claimant is disabled when he is “unable to continue his service . . .”
There are four points where I diverge from the majority opinion: (1) the application of principles of collateral estoppel (effect of prior determination of disability), (2) the evidence necessary to warrant a finding of nondisability, (3) the weight to be afforded administrative decisions, and (4) the necessary level of performance required for a determination of nondisability (a point the majority did not need to reach).
1. Effect of Prior Determination of Disability
Reliance on principles of collateral estoppel is inappropriate under the terms of the statute which specifically permits reconsideration of disability at periodic intervals.
A determination that a claimant is “unable to continue his service . . .” under
In fact, to apply the doctrine of collateral estoppel to disability decisions may work to the disadvantage of the claimant. The Department will be less likely to grant a disability pending future developments if a heavy burden of changed circumstances is required to cancel disability benefits. A better approach and one more consistent with statutory intent would be to adopt the principle that a determination of disability creates a presumption of a continuing disability, with the burden on the Department to come forward with evidence to rebut the presumption. This is one approach used by federal courts in addressing termination of social security disability benefits. See, e.g., Kuzmin v. Schweiker, 714 F.2d 1233 (3d Cir. 1983).
Application of the judicial doctrine of collateral estoppel to administrative decisions is also dependent upon policy
The statute strikes a careful balance between protecting the claimant‘s rights (by assuring a return at the same rank and at the same salary, and providing a full hearing before cancellation) and protecting the fiscal integrity of the retirement system. A disability retirement is not generally permanent,4 being subject to periodic review of the disability. If, after reexamination, the Board determines that the beneficiary “is not so incapacitated. . . he shall be restored to duty . . .”
2. Necessary Evidence
Designation as “a presumption” or as “issue preclusion,” may seem to be a pedantic argument, but it affects the evidentiary burden placed on the Department. The majority requires a showing of a change in circumstances to upset a prior disability determination. Most significantly, the majority would not accept new medical evidence that claimant is now able to perform his duties despite an unchanged condition. Nor would it accept new medical evidence to dispute or modify the initial diagnosis. Majority, at 491. This is an unreasonable exclusion of evidence, and an unwarranted interpretation of statutory intent.
To cancel a disability retirement, there must, of course, be competent evidence that a beneficiary is now capable. It
Surely, this capability can be measured in part by present actions, including the ability to hold another job with similar duties. Malland, for instance, was employed full time at the time of the hearing as a safety engineer for an insurance company, subject to background noise as part of his job. Moreover, he was a member of the Coast Guard Reserve having passed its annual physical examination. He was nonetheless drawing his disability benefits. As to Kuaimoku, the State Board and the trial judge found an improvement in his back condition. Two doctors testified that a deteriorating back condition such as his would result in objective signs, and they found none.
In addition, both Malland‘s and Kuaimoku‘s original disabilities were based in part on subjective evidence of pain or discomfort. Malland was diagnosed as having tinnitus (a ringing in his ears), which results in nervousness and sleeplessness, but is not susceptible to an objective test. There was no evidence that the physical condition had ceased, but the extent of its disabling effect could certainly be reassessed in light of his employment. Kuaimoku complained of persistent back pain, for which there was little objective evidence at the time of his original grant of disability retirement. In the 1976 order on Kuaimoku, the Director noted that “the medical authorities are not in agreement as to the precise nature of the disability.”
Pain and discomfort are subjective conditions, which may or may not have objective medical manifestations. See Miranda v. Secretary of HEW, 514 F.2d 996, 1000 (1st Cir. 1975). In Miranda, involving cancellation of a social secu-
3. Deference to Administrative Decisions
As noted above, the statute vests the power to determine nondisability in the Board.
The policy of the statute is to provide economic security to disabled fire fighters and law enforcement officers. But the policy also protects the fiscal integrity of the system by restoring workers to employment when they are no longer disabled. To this end, the statute permits periodic reexaminations and evaluation of new evidence by the Board.
Evidence was produced at both Malland‘s and Kuaimoku‘s hearings to support a finding that each was able to perform his duties. A review of the record does not leave me with the “definite and firm conviction that a mistake has been committed.” Ancheta v. Daly, 77 Wn.2d 255, 259-60, 461 P.2d 531 (1969). See also Franklin Cy. Sheriff‘s Office v. Sellers, supra.
Because of its conclusion, the majority did not reach the issue of the necessary level of performance which constitutes “average efficiency.” The majority does, however, at page 491, refer to “all necessary job duties,” (italics mine) without elaborating. Appellant Malland asserts that a return to duty requires an ability to perform all ordinary duties. (This is significant in his case because of medical testimony that he should not be exposed to gunfire.) In response, the Department argues that a return to duty requires the ability to perform a reasonable range of duties—in essence an argument for assignment to light duty, at the same rank or grade.
The language of the statute, WAC, and a prior Washington case support the Department‘s position. The statute provides for return to work at the same civil service rank, but protects the claimant from assignment at a reduced rank.
The WAC refers to ability to perform at “average efficiency.” WAC 415-105-060. In addition it provides
That no member shall be entitled to a disability retirement allowance if the appropriate authority advises that there is an available position for which the member is qualified and to which one of such grade or rank is normally assigned and the board determines that the member is capable of discharging, with average efficiency, the duties of the position.
(Italics mine.) WAC 415-105-060(2). An agency‘s regulations are entitled to great weight in construing the statute which confers its authority. Holland v. Boeing Co., 90 Wn.2d 384, 389, 583 P.2d 621 (1978); Hama Hama Co. v. Shorelines Hearings Bd., 85 Wn.2d 441, 448, 536 P.2d 157
In an earlier case, we held that a policeman‘s disability benefit could be canceled on a finding that the claimant could resume some of the positions available in the police department at his former grade. Clark v. Board of Police Pension Fund Comm‘rs, 189 Wash. 555, 66 P.2d 307 (1937). Clark was decided under an earlier pension statute, but there the court was also interpreting conditions or circumstances under which disability ceased.
Decisions from other jurisdictions on this issue are mixed.5 While they may be useful in clarifying the different interests at stake, it should be emphasized that they are interpreting statutory language which differs from Washington‘s. The Clark court did cite a New York case with apparent approval.
[T]he court [in People ex rel. Metcalf v. McAdoo, 184 N.Y. 268 (1906)] . . . did not require the retirement of a policeman unable to perform full police duty or every conceivable duty, but only such as were unable to discharge with average efficiency the duties of their respective grades.
Clark, at 561. The court noted Clark‘s being “reasonably able to perform the ordinary duties of a police officer.” Clark, at 562.
In conclusion, the standard articulated by the Department is a correct one. A determination that a claimant is now able to perform a reasonable range of duties with average efficiency justifies a return to work. The burden is on the Department to prove this ability. Proof will involve new evidence, but not necessarily changed circumstances.
UTTER and DORE, JJ., concur with DIMMICK, J.
Notes
The majority‘s reference at pages 489-90 to claimant‘s loss of appeal applies only to the past determination of disability. A claimant can appeal any cancellation of disability.
I am mystified by the majority‘s reference at page 490 to nonapplication of collateral estoppel to the disability award itself. The disability benefit is contingent upon a determination of disability. It ceases upon a determination of nondisability. The two are inevitably intertwined.
When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.
A determination of disability can scarcely be considered a “valid and final judgment” when the statute authorizes reopening the issue twice yearly, following a new physical examination.