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Hale-Rice v. State Retirement
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MAINE SUPREME JUDICIAL COURT		Reporter of Decisions
Decision:  1997 ME 64
Docket:  YOR-96-353
Submitted on briefs January 10, 1997
Decided April 4, 1997

Panel:  WATHEN, C.J.,  ROBERTS, GLASSMAN, CLIFFORD, RUDMAN, DANA, and LIPEZ, JJ.




Susan HALE-RICE v. MAINE STATE RETIREMENT SYSTEM


WATHEN, C.J.


	[¶1]  Plaintiff, Susan Hale-Rice, appeals from the judgment entered in
the Superior Court (York County, Fritzsche, J.) affirming the decision of the
Board of Trustees (Board) of the Maine State Retirement System (MSRS)
denying her application for disability retirement benefits.  She argues on
appeal that the Board's decision reveals constitutional errors and other
errors of law, is not supported by substantial evidence on the record, and is
arbitrary and capricious.  Finding no error, we affirm the judgment.
	[¶2]  The facts presented to the hearing officer may be summarized as
follows:  In 1989, plaintiff slipped and injured her left shoulder and neck
while she was working for the State of Maine as an income maintenance
specialist with the Department of Human Services (DHS).  Her duties at DHS
included interviewing applicants for food stamps, AFDC, and Medicaid, and
later verifying their income and assets by checking records and calling
banks or creditors.  The only physical labor required of plaintiff involved the
lifting of a ten to twenty pound policy manual throughout the day.  She
unsuccessfully attempted to return to her job on several occasions after her
injury.  During this period, she received worker's compensation.  She was
terminated from her position with DHS in 1991.  She did return to
transitional employment with DHS in 1992, but this return was short-lived. 
Her worker's compensation claim was settled in 1993. 
	[¶3] Plaintiff then applied for disability benefits pursuant to 5 M.R.S.A.
§§ 17921-17934 (Supp. 1996).  Her claim is based on her left shoulder and
neck injury and various emotional problems.  She contends that the pain,
depression, and stress caused by her physical injuries have rendered her
unable to perform her job.  The Executive Director of the MSRS denied her
request for benefits. She appealed the Executive Director's decision to the
Board pursuant to 5 M.R.S.A. § 17451 (1989).  
	[¶4]  In preparation for the appeal, a hearing officer, appointed by the
Board, held a pre-hearing conference as permitted by MSRS regulations. 
M.S.R.S. Reg. 702-7(C)(3) (June 30, 1992).  At this conference, various
documents, including those contained in a jointly prepared "pre-hearing
conference packet," were admitted in evidence.  Plaintiff also clarified her
position, noting that she was suffering from chronic pain and myofacial pain
syndromes in addition to the problems alleged in her application.  The
hearing officer accepted new documentary evidence of these conditions at
the pre-hearing conference and submitted it to the MSRS Medical Board for
review.   A schedule for the appeal was then set.  Any further medical
evidence was to be submitted by November 21, 1994.  The parties were
instructed that they were to submit their final witness lists and any other
documents they wished to offer as exhibits on or before January 10, 1995. 
The deadlines were incorporated in a pre-hearing memorandum and order. 
The order notified plaintiff that she could file comments or objections to the
order within seven days of receiving it.  The record reveals no objections.  
	[¶5]  On January 17, 1995, the parties appeared before the hearing
officer.  At this hearing, plaintiff requested that the hearing officer leave the
record open so that she could submit the results of a new, independent
medical examination that was to be performed a week after the hearing. 
The hearing officer denied this request, noting that the purpose of the pre-
hearing conference had been to identify any needed information at the
beginning of the appeal process, when the schedule was being established.  
The hearing officer told plaintiff that she would have an opportunity to argue
to the Board, at its meeting, that the absence of the evidence was
prejudicial.  Plaintiff then testified, her counsel made brief closing remarks,
and the hearing was concluded.  In her recommended decision, the hearing
officer suggested that the Board affirm the Executive Director's denial of
benefits.  Forty days later, plaintiff submitted to the Board the report of
Peter Esponnette, M.D. The report summarizes the results of his
independent medical examination conducted one week after the hearing.
	[¶6]    In May, the Board convened and adopted the hearing officer's
proposed decision with minor changes.  The Board made extensive findings
of fact and concluded that plaintiff failed to prove that she qualified for
disability benefits.  It noted that her physical condition, although
permanent, did not make it impossible for her to perform the duties of her
employment position.  Furthermore, the Board concluded that her
emotional problems did not result in permanent incapacities.  The Board
also concluded that there was insufficient evidence to demonstrate that
plaintiff's emotional problems made it impossible for her to perform her
duties as an income maintenance specialist.  The Board explicitly stated that
it was not considering Dr. Esponette's report because of its untimely
submission.
	[¶7] Plaintiff sought judicial review of the Board's decision pursuant to
M.R. Civ. P. 80C and 5 M.R.S.A. § 17451(2).  She also sought, pursuant to
M.R. Civ. P. 80C(e), consideration by the court of Dr. Esponnette's report
and the report of a psychological evaluation performed more than seven
months after the hearing.  The court denied the motion for the taking of
additional evidence and affirmed the decision of the Board.  Plaintiff now
appeals these rulings.  
I. Standard of Review
	[¶8]  We review administrative decisions directly,  Maine Bankers
Ass'n v. Bureau of Banking, 684 A.2d 1304, 1305-1306 (Me. 1996), and will
reverse or modify the decision only if the administrative findings,
inferences, or conclusions are:  "(1) In violation of constitutional or statutory
provisions; (2) In excess of the statutory authority of the agency; (3) Made
upon unlawful procedure; (4) Affected by bias or error of law; (5)
Unsupported by substantial evidence on the whole record; or (6) Arbitrary
or capricious or characterized by abuse of discretion."   5 M.R.S.A. §
11007(4)(C) (1989); see Maine Bankers Ass'n, 684 A.2d at 1305-1306 (Law
Court reviews administrative decision for abuse of discretion, errors of law,
or findings not supported by the evidence).  
II. The Board's Interpretation of 5 M.R.S.A. § 17921
	[¶9]  An MSRS member, if disabled while in service, may qualify for
disability retirement benefits.  5 M.R.S.A. § 17924.  "Disabled" means that a
member is "mentally or physically incapacitated" under the following
conditions:

A.  The incapacity is expected to be permanent;

B.  That it is impossible to perform the duties of the member's
employment position;{1}

C.  After the incapacity has continued for 2 years, the incapacity must
render the member unable to engage in any substantially gainful
activity for which the member is qualified by training, education or
experience; and

D.  The incapacity may be revealed by examinations or tests conducted
in accordance with section 17926.

5 M.R.S.A. 17921(1).  
	[¶10] Plaintiff argues that the Board erroneously analyzed the physical
and mental elements of her condition separately in determining whether
she is "disabled."  She contends that the Board did not consider the
combined effect of her physical and emotional problems.  She argues that
the statute should be interpreted to include incapacities resulting from the
combined effects of physical and emotional problems, given the reality that
the interrelationship of such problems often results in a permanent inability
to work.{2} 
	[¶11]  We agree with plaintiff's interpretation of the statute, but we are
not persuaded that the Board deviated from that interpretation.  The Board
explicitly acknowledged plaintiff's argument that, due to the combination of
her emotional and physical problems, "she is disabled from engaging in any
gainful activity."  The Board noted the opinion of one medical expert that
plaintiff was "caught in a vicious cycle triggered by her injury, which caused
her to be unable to work, resulting in her loss of self-esteem and
depression."  Nonetheless, the Board made a general finding that plaintiff
"failed to meet her burden of proving that she qualifies for disability
benefits."  Implicitly, the Board rejected plaintiff's factual contention that
the combined effects of her problems rendered her disabled.  Cf. Forester v.
City of Westbrook, 604 A.2d 31, 33 (Me. 1992) (result reached by zoning
board will be deemed supported by implicit findings if there is sufficient
evidence on the record to support those findings).  The record
demonstrates no error of law.
III. The Board's Refusal to Consider the Untimely Medical Evaluation of Dr. Esponnette
	[¶12]  Plaintiff argues that Dr. Esponnette's report, the most recent
medical evaluation of her condition, should have been considered by the
Board given its policy of providing a fair hearing for all parties and given the
liberal evidentiary rules adopted by the Board.  Dr. Esponnette's report was
prepared a week after the MSRS hearing and over two months after the
deadline for submission of new medical evidence set out in the pre-hearing
order.  The Board concluded that, given the administrative rules governing
appeals from the Executive Director and plaintiff's failure to comply with
those rules, it was not required to consider Dr. Esponnette's report. 
Administrative appeals are not within the original jurisdiction of the courts
and are subject only to judicial review.  We grant deference to an agency's
interpretation of its own internal rules and procedures.  AFSCME Council 93
v. Maine Labor Rel. Bd., 678 A.2d 591, 593 (Me. 1996).  Deference is
withheld only when the rule or regulation plainly compels a contrary result. 
Atlantic Salmon v. Bd. of Environ. Protect., 662 A.2d 206, 209-210 (Me.
1995).  
	[¶13]  The rules promulgated by MSRS governing the appeal process
were intended to "provide a process which is fair to all parties."  M.S.R.S.
Reg. 702-1 (June 30, 1992).  The rules favor the liberal admission of all
relevant evidence.  See, M.S.R.S. Reg. 702-10(A) (evidence is to be admitted
if it is "the kind of evidence upon which reasonable persons are accustomed
to rely in the conduct of serious affairs."); see also 5 M.R.S.A. § 9057(2). 
They provide for a hearing officer who is to "ensure that all parties have a
full opportunity to present their claims orally or in writing and to secure
witnesses and evidence to establish their claims."  M.S.R.S. Reg. 702-
7(C)(10).  The appeals process created by the rules is also intended to be
"efficient and effective."  M.S.R.S. Reg. 702-1.  This latter goal implements 
the statutory requirement that the "board shall complete the appeal
proceeding within 90 days of receiving the written application for appeal." 
5 M.R.S.A. § 17451(1)(D).  
	[¶14]  In furtherance of the above goals, MSRS has developed pre-
hearing procedures.  The rules provide that the hearing officer may hold a
pre-hearing conference to identify and resolve disputes regarding the
production and admissibility of evidence and to ensure a fair, efficient, and
effective appeal process.  M.S.R.S. Reg. 702-7(C)(3)(e), (f).   The hearing
officer is given the power, inter alia, to set deadlines for filings, to order any
needed independent medical evaluations, to refer the case to the agency's
medical board for evaluation in light of any new evidence, and generally to
oversee the evidentiary issues in the case.  The pre-hearing conference and
the deadlines established during that conference are designed to secure a
fair, efficient, and orderly final resolution for all parties.  The procedural
requirements, fairly imposed, are not to be ignored during the hearing
process, nor will they be lightly circumvented on appeal.  The Board did not
err or abuse its discretion in refusing to consider the untimely medical
evaluation submitted by plaintiff.
IV. The Superior Court's Denial of the Motion for Additional Evidence
	[¶15]  A party seeking judicial review pursuant to M.R. Civ. P. 80C may
file a motion requesting "that the reviewing court take additional evidence
or order the taking of additional evidence before an agency as provided by 5
M.R.S.A. § 11006(1)."  M.R. Civ. P. 80C(e). The statute provides:

1. Review.  Judicial review shall be confined to the record upon which
the agency decision was based, except ...
...
B.  The reviewing court may order the taking of additional evidence
before the agency if it finds that the additional evidence ... is necessary
to deciding the petition for review; or if the application is made to the
reviewing court for leave to present additional evidence, and it is
shown that the additional evidence is material to the issues presented
in the review, and could not have been presented or was erroneously
disallowed in proceedings before the agency.

5 M.R.S.A. § 11006(1)(B)(1989).  
	[¶16]  The Superior Court denied plaintiff's motion for additional
evidence in the present case because:  (1) Dr. Esponnette's report had not
been erroneously disallowed before the Board; and (2) the psychological
evaluation was prepared three months after the petition for judicial review
was filed.  We review this ruling for an abuse of discretion,  Spear v. Maine
Unemployment Ins. Comm'n, 505 A.2d 82, 85 (Me. 1986), and find none.
	[¶17]  The burden before the Board rests with the applicant.  Plaintiff
had the burden of persuading the Board, by a preponderance of the
evidence, that she is disabled.  Douglas v. Board of Trustees, 669 A.2d 177,
179 (Me. 1996).  "When an agency concludes that the party with the burden
of proof failed to meet that burden, we will reverse that determination only
if the record compels a contrary conclusion to the exclusion of any other
inference."  Id.
	[¶18]    With regard to her physical injuries, the record contains the
report of an independent medical examination that concludes:  "[f]rom a
purely objective standpoint, there is no basis on which to impose any
restrictions ... she perceives herself as having substantial disability; however,
to accept her opinions in the context of marked symptom magnification
behavior would be inappropriate."  The doctor noted that plaintiff has at
least a light work capacity and can work full time with certain restrictions
not incompatible with her former position as an income maintenance
specialist.  That conclusion is supported by other medical evidence in the
record, including a functional capacity evaluation that concluded that her
former job was "likely to be within Ms. Hale-Rice's capability in regard to
forces required.  Frequency, duration, and repetition may be problematic." 
Given this evidence, the record does not compel the conclusion that
plaintiff's physical injuries render it impossible for her to perform the duties
of her employment position.  
	[¶19]  With regard to her emotional problems, the record includes a
psychiatric evaluation suggesting no psychiatric disorder or disability.  The
examining psychiatrist found that plaintiff was "heavily focused upon
obtaining her disability benefits" and he did not "detect significant
motivation to return to competitive employment."  He felt that this was the
"major obs