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Melanie Welch v. California State Teachers' Retirement Board

January 31, 2012

MELANIE WELCH, PLAINTIFF AND APPELLANT,
v.
CALIFORNIA STATE TEACHERS' RETIREMENT BOARD, DEFENDANT AND RESPONDENT.



APPEAL from a judgment of the Superior Court of Sacramento County, Patrick Marlette, Judge. Reversed. (Super. Ct. No. 34200800007702CUMGDS)

The opinion of the court was delivered by: Robie , J.

CERTIFIED FOR PUBLICATION

In this case, we chronicle a school teacher's more than decade-long trip through a bureaucratic maze created by the California State Teachers' Retirement Board (CalSTRS), which for years misinformed her and other applicants for disability retirement of the applicable eligibility requirements.

In October 1998, plaintiff Melanie Welch was attacked by a group of students while working as a teacher in Oakland. Following the attack, Welch never worked as a full-time teacher again. Welch, who had less than five years of service credits at the time of the attack, claimed that because of misinformation she received from a telephone representative of defendant CalSTRS in January or February 1999 about the amount of service credits she needed to be eligible for CalSTRS benefits, she did not apply for disability retirement benefits at that time. In 2005, however, after learning she did not need five years of service credits if she was disabled because of the attack, Welch applied for disability retirement benefits from CalSTRS.

Finding no evidence Welch had been misinformed about her ability to apply for disability retirement benefits in 1999, CalSTRS rejected Welch's application because she failed to apply for benefits in a timely manner and did not provide medical records to substantiate that she had been disabled since her last day of work.*fn1 An administrative law judge (ALJ) upheld that decision, concluding Welch's "mistaken belief that she had insufficient service credit to qualify for a disability [retirement] was not due to misinformation provided by CalSTRS in 1999" and "there was no evidence that [Welch] was continuously incapacitated from her last day of actual performance."

In this administrative mandamus proceeding challenging CalSTRS's denial of Welch's application, the trial court concluded a CalSTRS telephone representative did mislead Welch about the eligibility requirements for disability retirement benefits in 1999. Nevertheless, the court determined that to qualify for relief from the late filing of her application, Welch still had to prove she was disabled back in 1999, when she would have filed her application but for the misinformation. The court concluded Welch had not made the required showing. In the court's view, while the weight of the evidence established Welch was disabled by September 2006 at the latest due to posttraumatic stress disorder resulting from the attack, there was no evidence the disability manifested itself and made her unable to work before 2005 at the earliest. According to the court, "although [Welch] evidently suffered from certain symptoms associated with post-traumatic stress disorder after the time of the attack, she was not actually disabled immediately after the attack, and did not become disabled as the result of her psychological condition of post-traumatic stress disorder until, at the earliest, August 26, 2005, and certainly as of September 18, 2006." Thus, the court concluded Welch was "suffer[ing] from a type of condition that either has a latency period between the first cause and the emergence of the effect, or that is not initially disabling, but becomes disabling later (perhaps in conjunction with other factors such as life stresses or illness)." Based on this reasoning, the trial court denied Welch's writ petition.

We conclude the trial court erred. Education Code section 22308 gives CalSTRS the power -- and sometimes the duty -- to correct errors or omissions made by a member of CalSTRS or by CalSTRS itself. Here, the trial court determined that Welch might have been entitled to relief under section 22308 from the late filing of her retirement application, which occurred because of the misinformation Welch received from CalSTRS in 1999, if there was a sufficient basis for determining Welch was disabled as a result of the attack back in 1999, when she would have submitted her application but for the misinformation. As we have noted, the trial court concluded Welch was not disabled back in 1999. In reaching that conclusion, however, the court failed to recognize that the misinformation Welch received from CalSTRS deprived her of a reasonable opportunity to develop contemporaneous evidence of her disability -- an omission the court found significant in determining Welch was not disabled until 2005 at the earliest.

As we will explain, although the evidence before the trial court was sufficient to support a finding that Welch was not disabled in 1999, if Welch had received correct information from CalSTRS in 1999 she might have been able to prove she was disabled at that time, even though she was not able to convince the court of that fact years later because she lacked contemporaneous evidence of her disability. Under these circumstances, CalSTRS had the power -- and perhaps even the duty -- under section 22308 to relieve Welch from the consequences of her lack of proof because that lack of proof was attributable to the misinformation CalSTRS provided her. Because CalSTRS never considered granting Welch relief under section 22308, due to the fact that CalSTRS erroneously determined it had not misled Welch, what the trial court should have done here was reverse the denial of Welch's application and remand the matter to CalSTRS for CalSTRS to decide, in the first instance, whether to exercise its power under section 22308 to relieve Welch from the consequences of her late-filed application, including her inability to prove with contemporaneous medical evidence that she was disabled in 1999. The trial court's action to the contrary was error. Accordingly, we reverse.

FACTUAL AND PROCEDURAL BACKGROUND

Welch became a member of CalSTRS on September 1, 1997, and began teaching in the Oakland Unified School District in September 1998. On October 29, 1998, she was physically attacked by a group of students while working as a teacher at a middle school in Oakland.*fn2

The next day, the school principal asked her to return to work, but she "was still too shaken up," "too upset," so the principal directed her to report to an occupational medicine facility for an evaluation for workers' compensation purposes. A "Work Status Report" prepared as a result of that evaluation, which "focused on [Welch]'s physical condition and made no evaluation of her psychological condition," diagnosed Welch with multiple contusions but noted no permanent disability and released her for regular work effective that day. Welch did not go back to work, however, and on November 2, the school district placed her on administrative leave with pay.

The trial court's decision does not identify the basis for Welch's placement on administrative leave, but another appellate court opinion involving Welch's employment with the school district -- Welch v. Oakland Unified School Dist. (2001) 91 Cal.App.4th 1421 -- does. That opinion states that Welch filed a complaint about school safety on October 30, 1998, and three days later "the District notified Welch that it had placed her on administrative leave with pay effective November 2, 1998." (Id. at p. 1425.) "The letter stated that [the district] was investigating allegations of her erratic behavior, including hitting and kicking children at [the middle school]."*fn3 (Ibid.)

Sometime between January 4, 1999, and early February, Welch called CalSTRS at the suggestion of someone who told her CalSTRS "might be able to help [her] with rehabilitation or something." During that telephone call, a CalSTRS representative misinformed Welch of the eligibility requirements for disability retirement by telling her there were no exceptions to the requirement that the member must have five years of credited service to apply for disability retirement benefits.*fn4 In fact, there was an exception that might have applied to Welch. Specifically, a CalSTRS member who has less than five years of credited service can receive a disability retirement allowance if "(1) [t]he member has at least one year of credited service performed in this state"; "(2) [t]he 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 the member was performing his or her official duties in a position subject to coverage under the Defined Benefit Program"; and "(3) [t]he member provides documentation of the unlawful act in the form of an official police report or official employer incident report."*fn5 (§ 24101, subd. (c).)

On February 2, 1999, the district informed Welch it had decided to release her from her employment contract and would pay her through February 26. Welch filed a petition for writ of mandate in Alameda County Superior Court in August 1999 to challenge her termination.

In November 2000, while her case was still pending, Welch saw Dr. Sally Slome at Kaiser Permanente for a checkup. Dr. Slome noted in the "Patient Progress Record" that Welch had had a severe fall down steps in her home on October 2. The record also noted, "tearful a lot" and "Stress/Depression - encouraged to try Behavioral Medicine."

In January 2001, the superior court entered judgment in Welch's favor in the proceeding challenging the termination of her employment and ordered the district to reinstate her as a probationary employee. The basis of the court's decision was that the district's termination of her employment "on fewer than 30 days' notice and without an opportunity to appeal violated the Education Code." (Welch v. Oakland Unified School Dist., supra, 91 Cal.App.4th at p. 1426.) The court ordered the district to provide Welch all dismissal procedure rights and also ordered backpay and benefits from the date of dismissal. (Ibid.)

In August 2001, the Court of Appeal affirmed the trial court's decision. (Welch v. Oakland Unified School Dist., supra, 91 Cal.App.4th at p. 1432.) By that time, however, the district had terminated Welch's probationary employment effective June 30, 2001, using proper procedures.

In either the 2001-2002 school year or the 2002-2003 school year, Welch worked for an unidentified number of days as a substitute teacher in Sacramento in an effort to "get [her] service credits up to five years," but "didn't handle it very well."

In 2005, Welch learned for the first time of the "unlawful act of bodily injury" exception under section 24101, subdivision (c) to the five-year service credit requirement for disability retirement benefits. As a result, she called CalSTRS on August 22, 2005, and finally received acknowledgement of the exception directly from CalSTRS. Coincidentally, four days later Welch was examined by Dr. John Onate on a mental health referral from Sacramento County, where she was receiving general assistance benefits. Dr. Onate diagnosed her with "[m]ajor [d]epression recurrent severe PTSD [posttraumatic stress disorder]."

In September 2005, Welch filed her application with CalSTRS for disability retirement benefits on the ground she had been disabled by the attack in October 1998. Because she did not have five years of service credits, CalSTRS requested documentation that would establish Welch had been disabled since her last day of work and that her disability was a direct result of the October 1998 attack.*fn6

In February 2006, CalSTRS rejected Welch's application for disability retirement benefits on the ground the medical documentation she provided did not substantiate that she had been disabled since her last day of work.*fn7 The rejection letter noted that Welch had "indicated in several discussions and via e-mail that [she] had inquired about whether or not [she] might have disability [retirement] benefits with CalSTRS as early as January 1999 and w[as] told [she] did not have coverage because of [her] service credit." After noting there was "no evidence that [Welch] w[as] misinformed about [her] ability to apply for disability in January 1999," the rejection letter informed Welch she could submit a written request for an "Executive Review" of her case, which should be accompanied by "all substantiating evidence of facts supporting your belief that an error or omission exists under Education Code section 22308." (Boldface and underlining omitted.)

In April 2006, Welch requested an "Executive Review." In doing so, she admitted she did not have any evidence of the call she made in 1999 other than her own testimony. She did, however, offer tape recordings of telephone calls she made to CalSTRS representatives in October 2005, in which she repeatedly received the same misinformation about the eligibility requirements for disability retirement benefits that she claimed to have received in 1999.

On "Executive Review," CalSTRS again rejected Welch's application. With regard to the misinformation she claimed to have received in 1999, CalSTRS concluded that Welch had "provided no objective documentation to substantiate that any misinformation was provided to [her] regarding the submission of [her] application for disability [retirement] benefits."

In response, Welch requested an administrative hearing. Meanwhile, in September 2006, Welch was examined by Dr. Rosemary Tyl to assist the Social Security Administration in determining whether Welch was disabled for purposes of receiving Supplemental Security Income (SSI) benefits. Dr. Tyl diagnosed Welch with "[m]ajor depressive disorder" and "[p]osttraumatic stress disorder." Dr. Tyl also concluded (among other things) that Welch did "not appear capable of sustained concentration, persistence, and pace needed for work due to depression and anxiety." As a result of Dr. Tyl's evaluation, Welch was found eligible for SSI benefits on the basis that she was unable to perform any substantial gainful activity.

The administrative hearing on CalSTRS's denial of Welch's application was held in September 2007. The ALJ issued a proposed decision in which he concluded "[b]ased on [Welch]'s lack of credibility and the lack of any corroborating evidence . . . that [Welch] was not misinformed by CalSTRS staff in 1999" about the "unlawful act of bodily injury" exception under section 24101, subdivision (c) to the five-year service credit requirement for disability retirement benefits. The ALJ also concluded that "there was no evidence that [Welch] was continuously incapacitated from her last day of actual performance."

CalSTRS adopted the ALJ's decision as its own in February 2008. After CalSTRS denied reconsideration, Welch filed this administrative mandamus proceeding in the superior court.

Exercising its independent judgment, the trial court found (contrary to the ALJ's finding) that Welch was misinformed by the CalSTRS representative in 1999 about the eligibility requirements for disability retirement benefits. Nevertheless, the trial court concluded that to qualify for disability retirement under section 24101, subdivision (c) based on the "unlawful act of bodily injury" exception, Welch still had to prove she had been disabled continuously since her last day of work, or at least that she was disabled in 1999 when she received the misinformation from the CalSTRS representative. Focusing on "the evidence regarding disability, with an emphasis, as required by applicable law, on the medical documentation," the trial court determined that Welch "was disabled within the meaning of Education Code section 22126 as of September 18, 2006, based on Dr. Tyl's evaluation, and possibly as of August 26, 2005, based on Dr. Onate's evaluation" because "[a]t the later time, and possibly at the earlier as well, [Welch] . . . suffered from a medically determinable mental impairment, specifically, post-traumatic stress disorder, that was, at those times, permanent or expected to last continuously for at least 12 months, and that prevented her from performing her usual duties as a teacher for her employer." The trial court also determined, however, that "[t]he weight of the evidence does not establish . . . that [Welch] was actually disabled, in the sense of being unable to function as a teacher, immediately after the October 29, 1998 attack or at any time thereafter until, at the earliest, August 26, 2005, even though she may have manifested symptoms of post traumatic stress disorder during that period." In reaching this conclusion, the trial court considered: (1) "[t]he initial worker's compensation examination"; (2) the lack of any medical records between October 29, 1998 and November 8, 2000; (3) "[t]he Kaiser Permanente record from November 8, 2000"; (4) Welch's service as a substitute teacher during the 2001-2002 or 2002-2003 school year; and (5) the medical records from 2005 and 2006. The court concluded that because Welch was not disabled in the years immediately following the attack, she must suffer "from a type of condition that either has a latency period between the first cause and the emergence of the effect, or that is not initially disabling, but becomes disabling later (perhaps in conjunction with other factors such as life stresses or illness)." But because the Education Code does not authorize disability retirement for "delayed-onset cases of disability . . . caused by conditions such as post-traumatic stress disorder," the court denied Welch's petition.

The court issued its minute order denying Welch's petition on July 17, 2009. Welch filed her notice of appeal that same day. The court entered judgment against Welch on July 30, 2009. Welch's appeal is timely because we treat it as filed immediately after entry of judgment. (Cal. Rules of Court, rule 8.104(d)(1).)

DISCUSSION

I

Applicable Statutes

We begin with the Education Code provisions that govern our inquiry.*fn8

A

Definition Of Disability

The definition of disability for purposes of CalSTRS's disability retirement program is set forth in section 22126, which provides as follows:

"'Disability' or 'disabled' means any medically determinable physical or mental impairment that is permanent or that can be expected to last continuously for at least 12 months, measured from the onset of the disability, but no earlier than the day following the last day of actual performance of service that prevents a member from performing the member's usual duties for the member's employer, the member's usual duties for the member's employer with reasonable modifications, or the duties of a comparable level position for which the member is qualified or can become qualified within a reasonable period of time by education, training, or experience. Any impairment from a willful self-inflicted injury shall not constitute a disability."

Essentially, under section 22126 a person is disabled if the person is unable to perform his or her regular duties or comparable duties without reasonable accommodation and that inability is permanent or expected to last at least a year from the date of onset.

B

Eligibility Requirements

The eligibility requirements for obtaining CalSTRS's disability retirement benefits are set forth in section 24101, which ...


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