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RIZZO v. VIRGINIA RETIREMENT SYSTEM, ET AL. (59961)


RIZZO v. VIRGINIA
RETIREMENT SYSTEM, ET AL.


February 27, 1998
Record No. 970596

ANTHONY M. RIZZO, JR.

v.

VIRGINIA RETIREMENT SYSTEM, ET AL.

OPINION BY JUSTICE CYNTHIA D. KINSER
FROM THE COURT OF APPEALS OF VIRGINIA

PRESENT: All the Justices


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
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
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.

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.

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 . . . [to] decide cases . . . ." [4] 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 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-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 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
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 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 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.

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 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 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.

 

 

 

 

FOOTNOTES:

[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 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.

[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).

[7] At oral argument, VRS argued
that the ninety days did not begin to run until it received the
agency representative’s recommended decision.

[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.

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