CalSTRS Complied With The Law When It Denied a Disability Retirement Application After the Applicant Failed to Submit to a Medical Examination

Category: Client Update
Date: Jan 23, 2015 01:19 PM

Jose Duarte began contributing to the California State Teachers' Retirement System (CalSTRS) when he began teaching in the Stockton Unified School District (SUSD) in 1993.  Duarte taught in Stockton through June 1995.  Thereafter, the District authorized Duarte to take unpaid personal leave for the 1995-1996 school year, and unpaid educational leave for the 1996-1997 and 1997-1998 school years.  In 2003, Duarte began teaching in the Oakland Unified School District (OUSD).  On his second day, he was assaulted and threatened by two students and sustained a shoulder injury.  He has not returned to teaching since that incident. 

Duarte filed a workers' compensation claim in March 2004.  He was evaluated by four different doctors while his claim was being processed.  One doctor opined that Duarte's post traumatic stress disorder (PTSD) symptoms had "resolved for the most part," while another concluded that Duarte was psychiatrically totally and temporarily disabled from the date of the assault until the date of his evaluation.  Ultimately, Duarte settled his workers' compensation claims.  The settlement documents indicated a "serious dispute" regarding the scope of Duarte's disability. 

In October 2006, Duarte applied for social security benefits.  The California Department of Social Services (CalDSS) sent Duarte for examinations by an orthopedist and a psychologist.  The CalDSS ultimately determined that Duarte was disabled from the date of the 2003 incident, and he became eligible for monthly disability benefits as of December 2005.  The CalDSS did not state its reasons for approving Duarte's claim.  Duarte also applied to have two of his University of California (UC) student loans forgiven on the basis of total and permanent disability.  UC and the U.S. Department of Education forgave the loans, though it was never established what standard they applied to do so. 

Duarte applied for disability retirement benefits through CalSTRS in February 2008.  Over the course of the next six months, CalSTRS repeatedly asked Duarte to submit various medical records and other documents that it needed in order to consider his claim. In response, Duarte supplied some, but not all, of the requested materials.  For instance, in June 2008, CalSTRS asked for the police report and principal report regarding the 2003 incident.  Duarte partially complied.  Each time CalSTRS requested documents from Duarte, it warned that Duarte's application was in danger of being rejected for failure to supply all of the requested materials within 45 days.  In August 2008, Duarte sent CalSTRS a letter in which he stated that he would submit his outstanding Kaiser medical records only "upon [CalSTRS's] commitment that it will pay my benefits if those records do not show a diagnosis of Post Traumatic Stress Disorder prior to December 4, 2003."  In response, CalSTRS stated that it was still waiting for Duarte's records, and that it would not commit to approve his application in advance of receiving all necessary documentation.  CalSTRS also informed Duarte that it was exercising its right to order him to attend an independent medical evaluation (IME) before it determined his disability claim.  IMEs were scheduled with a neuropsychiatrist, an orthopedic surgeon, and a neuropsychologist.  Duarte attended one, but declined to attend the remaining two IMEs.  Duarte asserted that CalDSS and the Social Security Administration's decisions that he was disabled were binding on CalSTRS, and requested a hearing on the issue.  CalSTRS informed Duarte that the decisions of other agencies were not binding on CalSTRS.  In December 2008, CalSTRS denied Duarte's application for disability retirement benefits due to his failure to attend or reschedule the IMEs. 

Because Duarte disagreed with CalSTRS's decision, it was forwarded to the Executive Review Committee (ERC) for review.  The ERC concluded that CalSTRS was statutorily precluded from approving Duarte's application because he refused to attend the IMEs.  The matter was then set for hearing in front an administrative law judge (ALJ).  The ALJ issued a proposed decision upholding CalSTRS's denial of Duarte's application for disability benefits.  The Appeals Committee of the Teacher's Retirement Board (CalSTRS Board) adopted the decision.  Duarte filed various petitions for writ of mandate, which the trial court denied.  He filed a motion for new trial to challenge the denial, but the trial court denied that as well.  Duarte appealed, and the Court of Appeal affirmed the trial court's decisions. 

The Teacher's Retirement Law contains numerous eligibility requirements for obtaining disability retirement benefits.  The applicant must be disabled, i.e., unable to perform his or her duties or comparable duties with reasonable accommodation.  The inability to perform duties must be permanent or expected to last at least a year from the date of onset.  The application cannot be based on a preexisting condition.  While the member generally must have five or more years of credited service, a member with less than five years of service may still be eligible if (1) the member has at least one year of credited service performed in the state; (2) the disability is a direct result of an unlawful act of bodily injury that was perpetrated on his or her person by another human being while performing his or her official duties in a position subject to coverage under the Defined Benefit Program; and (3) the member provides documentation of the unlawful act in the form of an official police report or official employer incident report.  Duarte was also required to show that he was continuously disabled from the 2003 incident until he filed his application for benefits in February 2008. 

Finally, in order to establish eligibility, a member must comply with the documentation requirements set forth in the Education Code.  The member must provide medical documentation substantiating the impairment that qualifies the member for a disability retirement.  CalSTRS may order a medical examination in order to determine whether the member is incapacitated. If the member refuses to submit to the examination, "the application for disability retirement shall be rejected…."  Thus, CalSTRS has discretion to order an IME, but must reject an application if the member refuses to submit to an IME request. 

The trial court concluded that CalSTRS acted within its discretion when it ordered Duarte to submit to an IME, and the Court of Appeal agreed.  Despite repeated requests, CalSTRS had not received all of the documentation it had requested from Duarte, and some of the submitted documents were incomplete.  Further, some of the documents raised the issue of a preexisting injury.  Finally, because Duarte did not submit his application for so many years following his injury, he was required to prove that he was incapacitated from 2003 until 2008.  Thus, there was sufficient evidence in support of CalSTRS's decision to require an IME.  The trial court also concluded that CalSTRS properly rejected Duarte's application because he failed to appear for the medical examinations, and the Court of Appeal agreed. 

Finally, the Court rejected Duarte's argument that CalSTRS was bound to follow the decisions of CalDSS and UC regarding Duarte's disability.  CalSTRS never reached the issue of Duarte's disability; it rejected his application on procedural grounds. 

On those bases, the Court of Appeal affirmed the trial court's denial of Duarte's petitions for writ of mandate.  It stated that Duarte is free to file a new application with CalSTRS, submit to the agency's process, and receive a decision on the merits of his disability claim. 

Note:

The Board of the California Public Employees' Retirement System (CalPERS), like the STRS Board, has the authority to order non-safety members who have applied for a disability retirement to undergo a medical examination to determine whether the member is incapacitated for the performance of duty.  With local safety members, PERS requires the governing body of the agency to make the determination as to whether the member is incapacitated, and it is presumed that the agency can require a medical examination to make that determination.  

Unlike the Teacher's Retirement Law, the Public Employees' Retirement Law does not explicitly state that a disability retirement application must be denied if the applicant refuses to attend the required medical examination.  However, the applicant has the burden of proof regarding his application, and a medical examination is generally ordered when the medical documentation is inconclusive.  If the applicant refuses to attend the examination, it will be difficult for him to prove that he is incapacitated. 

Duarte v. California State Teachers' Retirement System (2014) 232 Cal.App.4th 370.

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