ORDERS:
FINAL ORDER AND DECISION
STATEMENT
OF THE CASE
The
above-captioned case is before this Court pursuant to a request for a contested
case filed by Petitioner Gary Lawson under the South Carolina Retirement
Systems Claims Procedures Act, S.C. Code Ann. §§ 9-21-10 to 9-21-70 (Supp. 2005).
Petitioner seeks review of a Final Agency Determination issued by Respondent
South Carolina Budget and Control Board, South Carolina Retirement Systems
(SCRS), in which SCRS found that his request for reconsideration of the
termination of his disability retirement benefits was untimely. Petitioner
contends that his request for reconsideration should be considered timely
because a number of extenuating circumstances, including his incarceration with
the South Carolina Department of Corrections, prevented him from filing his
request within thirty days of the initial decision discontinuing his benefits.
FINDINGS
OF FACT
Having
carefully considered all testimony, exhibits, and arguments presented at the
hearing of this matter, and taking into account the credibility and accuracy of
the evidence, I make the following Findings of Fact by a preponderance of the
evidence:
1. Petitioner
retired from employment as a carpenter for Spartanburg Regional Hospital under
disability retirement in December 1992 due to a chronic, degenerative back
condition. In approving Petitioner’s claim for disability retirement benefits,
SCRS informed Petitioner that his condition would be periodically reviewed in
order to determine whether he remained disabled. SCRS conducted periodic
reviews of Petitioner’s condition in 1999 and 2001. During each review,
Petitioner was required to, and did, timely submit a Continuing Disability
Review Report (CDR) to SCRS; and, in each instance, Petitioner’s disability
benefits were continued. In addition to filing the CDRs, Petitioner was in
frequent contact with SCRS regarding his disability benefits during the years
prior to 2002. While most of this contact was by telephone, Petitioner did
correspond with SCRS in writing, including several letters he mailed to SCRS to
notify it of changes in his address.
2. In
July 2004, SCRS initiated its third review of Petitioner’s eligibility for
disability retirement benefits. As part of the review, SCRS mailed notice of
the review to Petitioner along with another Continuing Disability Review Report
for him to fill out. These forms were sent to Petitioner’s mother’s house,
which he has used as his mailing address since 2002, and were received by his
adopted sister. When the CDR was not returned within thirty days, SCRS sent
another request for a CDR to Petitioner at his mailing address in August 2004.
As a result of this second request, a CDR for Petitioner was sent to SCRS on
August 12, 2004. In this third review of Petitioner’s disability, SCRS found
that Petitioner no longer had a disabling back condition and decided to
terminate his disability retirement benefits. By a letter dated September 28,
2004, SCRS notified Petitioner of its decision to discontinue his disability
benefits and informed him of his right to request reconsideration of its
decision within thirty days after his receipt of the letter. This letter was
mailed to Petitioner at his mother’s house and was received by his mother on
October 20, 2004. Petitioner did not file a request for reconsideration of the
termination of his benefits within thirty days of his mother’s receipt of the
decision letter from SCRS. Therefore, by a letter dated November 23, 2004,
SCRS informed Petitioner that its decision to discontinue his benefits was
final and that his claim for disability retirement benefits had been closed.
3. During
the period in which SCRS conducted its third review of Petitioner’s disability,
Petitioner was incarcerated with the South Carolina Department of Corrections.
Petitioner was incarcerated with the South Carolina Department of Corrections
and with Spartanburg County authorities between June 2003 and July 2005 for
drug-related crimes. These crimes stemmed from a serious addiction to
prescription painkillers that Petitioner had developed in the early 2000s and
that ultimately caused him to fall out of contact with his family. Because of
this rift with his family, Petitioner had no contact with his family while he
was in prison, but for a few letters he received from his sister and brother
near the end of his sentence. Further, while he was incarcerated, his adopted
sister was collecting his disability retirement checks and using them for her
own purposes. Upon his release from jail in July 2005, Petitioner discovered
that his disability benefits had been discontinued and he wrote a letter to
SCRS seeking to have his benefits restored. By a letter dated August 11, 2005,
SCRS denied Petitioner’s request to reinstate his benefits as an untimely
request for reconsideration of the September 2004 disability determination. Petitioner
timely appealed that denial to the Director of SCRS, and timely a requested a
contested case hearing before this Court to challenge the Director’s Final
Agency Determination sustaining the denial of his request as untimely.
CONCLUSIONS
OF LAW
Based
upon the foregoing Findings of Fact, I conclude the following as a matter of
law:
The
basic question presented by this case is whether Petitioner should be excused
from his failure to exhaust his administrative remedies with SCRS and allowed
to proceed with a challenge to the merits of the decision to discontinue his
disability retirement benefits before SCRS. I find that Petitioner has
presented good cause for his failure to exhaust his administrative remedies
with SCRS and, therefore, that this matter should be remanded to SCRS for it to
process Petitioner’s request for a reconsideration of the termination of his
disability retirement benefits on its merits.
Under
the South Carolina Retirement Systems Claims Procedures Act, a claimant must
exhaust his “agency remedy” with SCRS prior to filing a request for a contested
case hearing on his claim with this Court. See S.C. Code Ann. § 9-21-60
(Supp. 2005). This exhaustion of agency remedies requirement is analogous to
the judicial doctrine of exhaustion of administrative remedies, which generally
requires a person seeking relief from the action of an administrative agency to
pursue all available administrative remedies with the agency prior to seeking
such relief from the courts. See, e.g., Pullman Co. v. Pub. Serv.
Comm’n, 234 S.C. 365, 108 S.E.2d 571 (1959); see generally Richard
H. Seamon, Administrative Agencies—General Concepts and Principles, in South Carolina Administrative Practice and Procedure 1, 83-96 (Randolph
R. Lowell & Stephen P. Bates eds. 2004). This exhaustion doctrine is not
an inflexible, jurisdictional rule, but is “discretionary in nature,” such that
“situations can exist where failure to exhaust administrative remedies may be
excused.” Andrews Bearing Corp. v. Brady, 261 S.C. 533, 536, 201 S.E.2d
241, 243 (1973) (quoting Ex parte Allstate Ins. Co., 248 S.C. 550, 567,
151 S.E.2d 849, 855 (1966)); see also S.C. Code Ann. § 12-60-510(A)(2)
(Supp. 2005) (authorizing the Administrative Law Court, in a contested case
brought under the Revenue Procedures Act by a taxpayer who has failed to
exhaust his agency remedies, to remand the case to the Department of Revenue if
the taxpayer can demonstrate “good cause” for the failure to exhaust his agency
remedies with the Department).
In
the case at hand, Petitioner failed to exhaust his agency remedies with SCRS because
he did not timely request reconsideration of its September 28, 2004 decision to
discontinue his disability retirement benefits. See S.C. Code
Ann. § 9-21-20(5)(a)-(c) (Supp. 2005) (defining “exhaustion of agency remedies”
for the purposes of the Retirement Systems Claims Procedures Act). However, I
further find that Petitioner has presented good cause for his failure to
exhaust his agency remedies. In particular, I find that Petitioner’s inability
to adequately handle his affairs in 2004 caused by the combined effect of his
incarceration, drug problem, and family difficulties make this a situation in
which his failure to exhaust his remedies with SCRS may be excused.
ORDER
Therefore,
for the reasons stated above,
IT
IS HEREBY ORDERED that the above-captioned matter is REMANDED to
SCRS for it to consider Petitioner’s request for reconsideration of the
discontinuation of his disability retirement benefits on the merits, as if the
request were timely filed. Pursuant to this remand, this matter is DISMISSED without prejudice.
AND
IT IS SO ORDERED.
______________________________
JOHN D.
GEATHERS
Administrative
Law Judge
1205 Pendleton
Street, Suite 224
Columbia, South
Carolina 29201-3731
April 11, 2006
Columbia, South Carolina
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