Case Title: Kapuwai v. City and County of Honolulu, Department of Parks and Recreation. Concurring Opinion by J. Acoba, with whom J. Duffy joins [pdf]. Dissenting Opinion by J. Nakayama [pdf]. ICA Opinion, filed 11/12/2008 [pdf], 119 Haw. 304. ICA Order of Correction, filed 12/08/2008 [pdf]. Application for Writ of Certiorari, filed 01/23/2009. S.Ct. Order Accepting Application for Writ of Certiorari, filed 03/03/2009 [pdf].

Citation: 121 Haw. 33

Docket Number: 

State: hawaii

Court: Hawaii Supreme Court

Date: 2009-07-16T00:00:00Z

Document:
LAW LIBRARY

* FOR PUBLICATION ***
in West’s Hawai'i Reports and the Pacific Reporter

 
 

 

IN THE SUPREME COURT OF THE STATE OF HAWAT'T

=== 00 ---

 

DARRELL N. KAPUVAT, Respondent /Claimant-Appellant,

CITY AND COUNTY OF HONOLULU, DEPARTMENT OF PARKS AND
RECREATION, Petitioner/imployer-Appellee, Self-Insured.

 

wo, 27915

 

“le
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CASE NO, AB 2004-328 (2-01-13437)) =

      

JULY 16, 2009 |

al

21-OkY 91 Tar cooe

MOON, C.d., AND CIRCUIT JUDGE KIM, ASSIGNED BY REASON
‘OF VACANCY; ACOBA, J., CONCURRING SEPARATELY, WITH
WHOM DUFFY, J. JOINS; AND NAKAYAMA, J., DISSENTING

OPINION BY MOON, C.J., ANNOUNCING THE
DECISION OF THE COURT

on March 3, 2009, this court accepted a tinely

application for a writ of certiorari, filed by
petitioner /enployer-appellee City and County of Honolulu,
Department of Parks and Recreation (the City) on January 23,
2009, requesting that this court review the Intermediate Court of
Appeals’ (ICA) Decenber 8, 2008 judgment on appeal, entered
pursuant to its November 12, 2008 published opinion in Kapuwai vw.

City & County of Honolulu, 119 Hawai'i 304, 196 P.34 306 (App

2008). Therein, the ICA vacated the February 6, 2006 decision

 
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and order of the Labor and Industrial Relations Appeals Board

 

(EIRAB), which, in turn, had modified the decision of the
director of the Department of Labor and Industrial Relations
(director).

Briefly stated, respondent /employee-appellant Darrell
N. Kapuwai -- who was employed by the City as a mason
-+ sustained a work-related injury to his right great toe. The
City eventually accepted liability for Kapuwai’s injury, and
the director awarded Kapuwai, inter alia, benefits for 96
percent permanent partial disability (PPD) of his right great
toe. The City appealed to the LIRAB, and the LIRAB modified
the director’s decision, concluding that Kapuwai was entitled
to 4 percent PPD on the whole person. Additionally, the LIRAB
denied Kapuwai's request for attorney’s fees and costs, made
pursuant to Hawai'i Revised Statues (HRS) § 386-93(b) (1993),
quoted infra. Kapuwai appealed the LIRAB’s decision to the
ICK, arguing that the LIRAB should have converted the "whole
person’ rating to a PPD rating of the great toe, pursuant to
HRS § 386-32(a) (Supp. 2001), quoted infra, and should have
granted his request for attorney's fees and costs. 0n appeal,
the ICA held that Kepuwai was entitled to a PPD award based on
the impairment of his great toe as opposed to a whole person
rating if the award for the former exceeded the award for the
latter; thus, the ICA remanded the case to the LIRAS for such

determination. Based upon its remand of the case to the LIRAB,

 
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the ICA recognized that it could not decide the attorney's fees
issue but, nevertheless, provided ‘guidance" to the LIRAB
regarding the application of HRS § 386-93(b) on remand

on application, the City essentially contends that
the ICA erred: (1) by renanding Kapuwai's case to the LIRAB
for a ‘determination of a [PPD] award based on an impairment of
(Kapuwai's) great toe"; and (2) in its interpretation of HRS

§ 386-93(b). We agree with the ICA's rationale and ultimate

 

@isposition remanding the case to the LIRAB for a determination
of a PPD award based on the impairment of Kapuwai’s great toe
and, therefore, affirm that portion of the ICA’s opinion.
However, as discussed more fully infxa, we hold that the ICA
erred in delving into the interpretation of HRS § 386-93 (b)
because, based on the ICA‘s remand of the case to the LIRAB,
the issue of attorney's fees and costs was not ripe for
decision. Accordingly, we vacate section II of the ICA's
opinion relating to attorney's fees and costs.
1. BACKGROUND

A. Factual Backaround and Procedural History

As aptly summarized by the ICA:

Kapuwai was eqployed by (ene city) as a
mason. He developed a bunion and calluses on hia right
Great toe which were aggravated by wearing steel-toed
Shoes at work. On Noverber 23, 2001, Rapuvai underwent
Surgery on Ala right foot that consisted of metatarsal
osteotemy and distal phalangeal excstectony. The surgery
Was pot successful in alleviating the pain and
Sensitivity Kapuvai experienced in his right great toe.
Kapuwai walked with a mild limp, had difficulty going up
and down stairs, and had probleas with balance. ‘Ne gave
Up ariving because he experienced twitching under his toe

 

 
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when stepping on the accelerator. The surgery left a
Scar anda flexion deformity of hie right great toe.

‘The Cley accepted Iiability for Kapuwai's injury on
october 28, 2002, and on December 1, 2002, the [dl irector

‘ordered the City to pay for Kapuwai's necessary,
hhodial expenses as well as $5,421.25 in temporary cotal
Gisability benetite.

 

Zn Decenber 2003, Kapuvai was evaluated by [Wayne
K. Madanoto, M.D. (Dr. Ntadanote) } for permanent
[npairment.” Dr. Nadanoto used the Fifth Edition of the
Anerican Medical Association Guides to the Evaluation of
Permanent Impairment (ANA Guides) in rating Fapuwai's
impairment.” Dr. Nadaroto applied the gait-derangement
method rather that the range-of-notion method for
Sesessing inpatrment under the Fifth Edition of the AMA
Guides.{'] Based on the gait-derangenent method, Or
Nadanoto rated Rapuwai's inpairsent as a 7 percent PPD of
the whole person

A hearing was held before the (d)ixector on the
isoues of permanent disability and disfigurement. The
[alirector credited Dr. Nadanoto's evaluation that
Kapuwai suffered a 7 percent whole person disability
‘The [d)irector found that *(eJhis percentage should
properly be converted co an award for the great toe only
That vas the site of the injury." The (4]ivector used
the Third Edition (Revised) of the AMA Guides to conver=
Dr. Nadanoto's 7 percent whole person disability rating
to\a.96 percent PPD of the right great toe, resulting in
Pep award of $19,954.56. The (d)irector also ordered
the city to pay Kapuwai $600.00 for disfigurement, to pay
adaitional temporary total disability benefits, and to
Feimburse Yapuwai for the cost of Dr. Nadanote’s
evaluation’

 

 

‘The City appealed the [d]irector’s decision to the
LIRAB on July 13, 2004. The LIRAB isaved a pretrial
order identifying the issues on appeal

 

2. what ia the extent of permanent
Gisability resulting from [Rapuwai's) work
injury. 7 (andl

2. What ig the extent of disfigurement
resulting from (Kapuwai's) work injury.

At the Clty's request, [8.Y. Tan, M.D. (Dr. Tan) }
conducted an independent medical aamination of Kepuwal,
Br. Tan prepared a report and testified at the (hearing)

 

 

+ specifically, Dr. radanoto determined that Rapuvai could not *be
rated under the range of motion impairment value since (Kapuvai'a injury was]
not a degenerative condition and definitely caused a gait abnormality waich
(aia) not sericely fall under Table 17-5 of he AKA Ouide to Evaluation of
Permanent Inpairent Sth Edition since there [was] no document (ed) moderste-
advanced arthritie changes to the hip, knee, or ankle.”

 

 

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held before the LIRA on the City's appeal. Dr. Tan
Aleagreed with Dr, Nadaoto’s use of the gait-derangement
fethod of assessing Kapuvai's inpairment because

Kapiwai'a condition did not fit the criteria for using
that method under the Fifth Rdition of che AMA Guides.

Dr. Tan concluded that the range-of-notion sethod, which
was based on meaduring the range of motion of the great
foe, waa the appropriace method to use./'] Applying the
Fangesof-notion sethod, Dr. Tan determined chat kapuval
had sustained a mild toe ixpairent equivalent toa t
percent PPO of the whole person.

 

 

 

on February 6, 2006, the LIRAB entered a decision
what modified the [director's PPD award and affirmed the
[@lirector’s disfigurement award. The LIRAB credited Dr
Tan's opinion in finding [(11) that Kapawai should be
fated under the vange-of-notion method and [()2) chat [,
under the Pifth Baition Co the AYA Guides, Rapuvai’s
Tenge of notion measurenents corresponded to a 1 percent
[npairment of the whole person. The LIRAB also credited
Kapuvai’s testinony on "how his toe condition has
interfered with his activities of dally living, such as
walking, golng up and down stairs, driving, and
standing.”

‘The LIRAB concluded:

Based on the foregoing, including Dr. Tan‘s
impairment rating and [Kapuwal’s) testimony
regarding his pain symptons and bow his toe
condition has interfered with his activities of
Gally 1iving, we conclude that [Kapuwal) te
featitied co benefits for ¢ (percent) permanent
partial disability of the whole person

 

* speciticatiy, Dr. Tan stated in his report:

With all due respect, 2 believe Dr. Nakamoto [sic] is
{ncovrect in his analysis, Piretly, [riange of [mlotion
{mpalraent’ (which incorporates pain) should be the logical
choice in this case, and this is specifically covered under
Section 17.2 on page 533. The section makes no mention
whatsoever regarding the requirenent of a ‘degenerative
Condition* as stated by Dr. Nakanoto [sic]. secondly, che
Use of Table 17-5 to caleuiate impairment in this cage
violates the expressed conditions precedent. Section 17.2¢
(Gale Derangement) on page 529 specifically notes that

wo." the percentages given in Table 17-5 are for full-time
gain derangements of persons who aze dependent on assistive
@evices (bold font in text). Furthermore, the relevant
paragraph (niid severity under a) is applicable only to
Patients with documented moderate to advanced arthritic
Changes of hip, knee{,) or ankie. Table 17-5 is
Gnapplicable to the claimant’... Rapuval because he
neither uses assistance devices, nor does he have arthritic
Changes tn the hip, knee, oF elbow.

 

 

 

 

 

 

(Gephasie in original.)

 
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‘The LIRAB’s decision did not separately determine
what, Kapuwai's PPD avard would have been if based solely
Oa the inpairment to his right great toe. The LIRAS
Agreed with the (d)irector’s $600 disfigurement award

 

 

{On February 16, 2006,] Kapuwai moved for
reconsideration of the ground that the LIRAB failed to
convert its award of 4 percent PPD of the whole person to
‘an award based on the impairment of his right great toe,
a specific body part covered by the schedule of awards,
for PFD under HRS § 386-32 (a) (°). ‘The LIRAB denied
Kapuwai’s motion fer reconsideration on March 29, 2006

 

 

° HRS § 386-32(a) provides in relevant part that:

mere a work injury causes permanent partial
Aisability, the emplover shal.

‘sospensaticn {nan anount detersined by pultiniving the
Stiective saxinan weekly Denefit race prescribed ia-sertion
iii by the number of weeks specified for the disability

ae follows

 

of use, Permanent lose of the use of a hand,
farm, foot, ieg, thumb, finger, toe, or phalanx shall be
‘equal to and compensated as the loss of a hand, arm, foot,
Teg, thumb, finger, toe, or phalanx:

Partial lose or loss of use of senber naned in
Schedule. Where a work injury causes permanent partial
Gisability resulting from partial loss of use of a rember
haned in this schedsle, and where the disability is not
Stherwise compensated in this schedule, compensation shall
be paid for a period that stands in the same proportion to
the period specified for the total lose or loss of use of
the menber as the partial loss or loss of use of that menber
stands to the total loss or loss of use thereof;

 

 

     

Other cases, In all other cases of permanent partial
disability resulting from the loss or lose of use of @ part
of the body or from the inpairnent of any physical function,
weekly benefits shail be paid at the rate and subject to the
Tinieactons specified In this subsection for a period that
bears the sane relation to a period named in the schedule as
the disability sustained beare toa comparable disability
Samed in the schedule. mm cages in whlch tb
Partial disability mst be rated as a percer
Eotal loss or inpairment of a physical or mestal function of
the whole person, the maximin compensation shall be computed
on the basis of the corresponding percentage of the product
of three hundred twelve times the effective maximum weekly
Benefit rate prescribed in section 386-3

   

(Emphases added.)

 
 

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Kapuwa{ algo subeitted a request to the LIRAB thi
the city be Fequired to pay $2,535, (pursuant to HRS

§ 386-93 (b),*) which represented one-half of the
Attorney's fees and cost (s) incurred by Kapuvai in the
City's appeal RAB. In support of his request,
Kapiwai argued that the City raised two issues in the
appeal (the extent of the PFD award and the extent of the
Gistigurenent ward); that xapuvai was the prevailing
party on the Jeaue of disfigurement; and that the LINAB
Gia noe reverse but only modified the (d)irector’s
Gecision on the teeve of PFD. The LIRAB effectively
denied Rapuvai's request by not assessing the City with
50 percent of Kapuwai's attorney's fees and costs, Sut
Snatead making Rapovai's attorney's feea and costs a lien
lupon the compensation payable by the City to Kapuwal

Kapuwai, 119 Hawai'i at 307-08, 196 P.3d at 309-10. On April

    

 

 

 

 

    

 

28, 2006, Kapuwai filed a timely notice of appeal from the
LIRAB‘s (1) February 6, 2006 decision and order and (2) March
29, 2006 order denying Kapuwai’s motion for reconsideration.
B. Appeal Before the ICA

on direct appeal, Kapuwai contended that the LIRAB
erred ‘as a matter of law" when it “failed to ‘convert’ its
award of 4 [percent] PPD of the ‘whole person’ to an award of
the right great toe under the ‘schedule’ of injuries pursuant

to [HRS] § 386-32(a).* Specifically, Kapuwai argued that:

 

+ tn 2001 -- the date that Kapuwai becane permanently disabled -~ HRs
386-93(b) provided in relevant part that:

anomplover anpeals a decision of the director or

amellate board, the costs of the proceedings of the
Sppeliate board of the supreno court of the state, Logether
with reasonable attorneys fees shall be asseseed aoainst
the cunlover, 4 the employer loses: provided that if an
Geployer or an insurance carrier, ocher than the employer
Who appealed, is held Liable for compensation, the costs of
the proceedings of the appellate board or the suprese court

tate together with reasonable attorney's fees shall
fed against the party held liable for the
compensation.

 

 

   

(Emphases added.)

 
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lihere an injured worker suffers a work injury which
Casee permanent partial disability to Ma/her great toe
(HRS § 386-32(a)] mandates that *. . an exployer shall
pay the scheduled amount determined by sulesplying the
Etfective maximum weekly benefit rate prescribes in

| MRS by "38 weeks" as identified in the
fo." By the use of the word "shall," it ia clear
that the Havai'i Legislature determined that the paysent
of [PPD] benefits pursuant co the *acheduied"
anoint are mandatory in hature requiring that certain
“Compulsory action’ be taken. The ‘compulsory action”
required by the LIRAB was to "convert the *4” [percent)
PPD of the whole person" toa PPD award of the scheduled
injury, that being “great toe."

   

 

 

(Bold emphasis in original.) (Internal citations omitted.)
Moreover, Kapuwai asserted that the AMA Guides, Third Edition,
should be used in converting the PPD award from 4 percent whole
person permanent partial impairment to a percentage of an
impairment of the right great toe. According to Kapuwai, under
the AMA Guides, the 4 percent whole person award would be
converted to a °73 [percent] permanent partial impairment
through 90 [percent] permanent partial impairment] for a PPD
award within the range of $15,173.78 through $18,707.40.°
Kapuwai further argued that, *[wlhere two remedies are
available (i.¢., lower percentage within the range of 73
[percent] to 90 [percent]), . . . Kapuwai should receive the
benefit of the most favorable remedy (ive,, 90 [percent] PPD of
the right great toe)." He contended that this "most favorable
remedy" approach was “consistent with the benevolent purpose
and scope of Hawaii’s workers’ compensation law.*

Kapuwai additionally contended that the LIRAB erred

in denying his request for attorney's fees and costs

 
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specifically, Kapuwai argued that the LIRAB should have ordered
the City to pay his costs and 50 percent of his attorney's fees
because HRS § 386-93(b) reflects the legislature’s intention to

relieve « claimant of the burden of paying attorney*s
Tees and coste where an enployer appeals and the non
Appealing enployer or insurance carrier i held Liable
fer compensation due to the claimant, Moreover, the
legislative history clearly indicates that the appealing
employer should pay for costs and foes seven where he
Goes not loge the appeal." This ‘may happen when an
employer appeais on the grounds that the anount of
Conpensation i excesnive and succeeds in having the
amount reduced." Under this bill, "the appealing
Employer would be required to pay such conta and feea,*
piovenne (ijegislature|'s) reference to the appealing
Gmployer to be (sicl "required to pay such costs and
fees" could only refer to the situation now at hand.

 

 

‘he City responded that the LIRAB correctly awarded
Kapuwai 4 percent PPD of the whole person inasmuch as it ‘was
not compelled or obligated to convert its award of 4 (percent)
PPD of the whole person to that of the right great toe because
use of . . . [the HRS §] 386-32 . . . schedule is not exclusive
when an injury is not clean cut and there are complications to
other parts of the body,” that is, Kapuawai’s injury caused him
to have an unsteady gait and permanent limp and interfered with
his daily living activities. As such, the City maintained that
the LIRAB correctly awarded Kapuwai PPD based on his whole
person, Additionally, the City contended that the LIRAB did
not abuse its discretion in failing to order it to pay
Kapuwai's attorney's fees and costs because *[the City]
prevailed on the crucial issue of PPD on appeal and [was] the

prevailing party under (HRS 5] 386-93(b).*

 
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on Novenber 12, 2008, the ICA issued ite opinion,
concluding that Kapuwai was entitled to a PPD award based on

the impairment of his great toe if that award is determined to
exceed an award based on the impairment of his whole person.

Kanuaai, 119 Hawai'i at 306-07, 196 P.34 at 308-09. In
reaching such conclusion, the ICA relied on this court
decision in Respicio v, Waialua Sugar Co., 67 Haw. 16, 675 P.2a

770 (1984), wherein we adopted the trend of “departing from the

 

8 of scheduled allowances" and held that, under HRS

 

exclusive:

 

§ 386-32 (a), *[blenefits will be limited to schedule amounts if
the loss is ‘clean cut,’ ive., where there are no complications
to other parts of the body" but *(1Joss of a smaller member may

be treated as a percentage loss of a larger member if the

 

effects of the loss extend to other parts of the body." 67
Haw. at 18, 675 P.24 at 772 (citation omitted). The ICA
determined that Respicio applied to the case at bar and
concluded that, inasmuch as “[tJhere was evidence in the record
that the effects of Kapuwai’s great toe injury extended to and
interfered with the efficiency of other parts of the body and
his whole person[,] . . . the LIRAB was not limited to basing
its PPD award on the impairment of Kapuwai’s great toe, but
could determine the extent to which the effects of Kapuwai’s
great toe injury resulted in the impairment of his whole

person.” Kapuwai, 119 Hawai'l at 211, 196 P.3d at 313.

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However, the ICA ultimately concluded that HRS
§ 385-32 (a) entitled Kapuwai ‘to a PPD award based on the
impairment of his creat toe if that taward] exceeds the LIRAB’s
current award based on the impairment of his whole person.”
Id. (emphasis added). Inasmuch as *(tJhe LIRAB did not
determine what Kapuwai's PPD award would have been if based on
the impairment of his great toe under the HRS § 386-32(a)
schedule,” the ICA could not itself “tell if an award based on
the impairment of Kapuwai’s great toe would exceed the anount
‘awarded by the LIRAB based on the PPD of Kapuwai's whole
person." 1d, Accordingly, the ICA vacated the LIRAB‘s
decision and remanded the case to the LIRAS for a determination
of a PPD award based on the impairment of Kapuwai’s great toe
as requested by him.’ 1d, at 306-07, 196 P.3d at 308-09.

Based upon its decision to remand the case to the
LIRAB for further proceedings, the ICA recognized that it could
not “decide" Kapuwai’s remaining contention regarding the
LIRAB‘s denial of his requested attorney's fees and costs
because *[t]he determination of whether the City is the loser
of its appeal to the LIRAB under HRS § 386-93(b) must be based
on the final decision of the LIRAB.* Id, at 313, 196 P.3d at

315 (citation omitted). Inasmuch as the ICA vacated the

 

5 However, che ICA declared that it aia
‘contention thar,

{npalreent, the rating physician and the LISAB must select the highest
percentage in the range." 3d, at 312, 196 P.3d at 214.

   

 

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LIRAB‘s decision and order, there was no final decision upon
which the award of attorney's fees and costs could be based.
Despite the ICA’s recognition that it could not “decide” the
issue of attorney's fees, it, nevertheless, opined on the
application of HRS § 386-93(b) to "provide guidance . . . to
assist the LIRAB on remand.” Id, at 306, 196 P.34 at 308.
Specifically, the Ick, after conducting a review of

the legislative history of HRS § 386-93(b), stated:

We conclude that {,] when an employer does not dispute the
Conpensability of the exployee's injury and only appeals
fon the ground that a PPD award is excessive, it should be
Fogarded as the loser under HRS § 386°93(b) if ie falls
fo abtain a substantial reduction in the compensation
avard. in our view, this test is faithful co both the
USnguage of HRS § 386-93 (b). which only permite the
sessment of attorney's fees and costs against an
jppealing employer “if the employer loses," and the
Tegisiative purpose to discourage unnecessary appeals and
aveld unfairly burdening an enployee with the costs of
Gefending against an appeal. The test was derived by
ruing the language of HRs § 366-93 (b) within the
Context and spirit of che workers’ compensation law.

 

  

 

 

 

 

 

‘The crucial isgue in the type of case presented
hhere is the amount of compensation the employer is
Fequired to pay. The employer does not prevail on this
isgue if it Only obtains a sinor or insubstantial
reduction in the award. in determining whether the
employer has achieved 2 substantial reduction in the
award, the LIRAB should consider both the relative and
absolute amount of the reduction. For example, if the
‘onployer appeals only a small compensation award, a
percentage reduction in the award may not be sufficient
fo avoid the assessment of the employee's attorney's fees
and costa, Aa noted, we do not agree with Rapuwal'e
Contention chat the employer should automatically be
Fegarded as the loser cn appeal if ie fails to obtain the
full reduction it requested. In construing a different,
attorney's fees statute, the Hawai'i Supreme Court has
held that “where a party prevails on the disputed main
issue, even though not to the extent of hie original
contention, he will be deened to be the successful party
for the pulpose of taxing costs and attorney's fees.”
=
Haw. 608, 620,575 P20 869, 679 (1978). However, we
believe the LIRAB may consider the position taken’ by the
employer on appeal as a factor in its determination of

 

 

 

 

 

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whether the exployer 1 the loser and has achieved a
Gubstantial reduction in the award

 

Id, at 318-19, 196 P.3d at 320-21
‘The ICA entered its judgment on appeal on Decesber 8,
2008. On January 23, 2009, Kapuwai timely filed his

application for a writ of certiorari. The City filed a

 

response on February 6, 2009. This court accepted Kapuwai's
application on March 3, 2009.
TI. STANDARDS OF REVIEW

A. Agency Decisions

   

Appellate review of the LIRAB's decision
governed by HRS § S1-14(g) (1993), which provides:

Upon review of the record{,] the court
nay affirm the decision of the agency of
Femand the case with instructions for further
proceedings; or it may reverse or modify 0
Secision and order if the substantial rights
of the petitioners may have been prejudiced
Because the administrative findings,
conclusions, decisions, or orders are

   

(1) tm violation of constitutional or statutory
provisions; or

(2) Envexcess of the statutory authority or
jurisdiction of the agency: oF

(3) made upon unlaweul procedures oF

(a) Affected by other error of las

(5) Clearly erroneous in view of
probative, and substantial evidence on the
Whole record; oF

(6) Arbitrary or capricious, oF
Characterized by abuse of discretion or
Clearly unwarranted exercise of
Siscretion

 

   

 

 

 

Under HRS § 91-14(g), conclusions of law (Cots) are
reviewable under subsections (1), (2), and (4); questions
Fegarding procedural defects are’ reviewable under
Subsection (3)

A.CoL is not binding on an appellate court and is freely
Feviewable for correctness. Thus, the court reviews Cols
de nove, under the right /wrong standard.

  

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Tam_v. Kaiser Permanente, 94 Hawai'i 487, 494, 17 P.34 219, 226
(2001) (citations, original brackets, and ellipsis omitted)
(format altered) .
B.  Rineness

It is axiomatic that ripeness is an issue of subject
matter jurisdiction. ‘whether a court possesses subject matter
jurisdiction is a question of law reviewable de novo.”
Kaho'chanchano v. Dep't of Human Serve,, 117 Hawai'i 262, 281,
178 P.3d 538, 557 (2008) (citation omitted).

III. Iscusston

As previously indicated, the City contends on
application that the ICA erred in: (1) ruling "that it was
necessary to remand this case for the [LIRAB’s] determination
of a [PPD] award based on an impairment of [Kapuwai‘s) great
toe’ and (2) concluding that “an employer is regarded as the
loser on appeal if it fails to obtain a substantial reduction
of the compensation award.” At the outset, we hold that the
City’s contention regarding remand to the LIRAB is without
merit inasmuch as we agree with the ICA’s rationale supporting
its ultimate conclusion that (1) Kapuwai’s case should be
remanded to the LIRAB for a determination of a PPD award based
on the impairment of Kapuwai’s great toe and that, (2) as
between the awards for the great toe and the whole person,
Kapuwai is entitled to the greater. Kapuwai, 119 Hawai'i at
311, 196 P.3d at 313. However, we are concerned about the

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liberty taken by the ICA to provide guidance with respect to
HRS § 386-93(b) (dealing with liability for attorney's fees and
costs) in light of its decision to remand the case to the LIRAS
for further proceedings.

As indicated above, the ICA stated that it would not
‘decide’ the issue whether Kapuwai was entitled to attorney's
fees and costs because "(t]he determination of whether the city
is the loser of its appeal to the LIRAB under HRS § 386-93(b)
must be based on the final decision of the LIRAB,* which
decision will presumably be issued after remand. Kapuwai, 119
Hawai'i at 313, 196 P.3d at 315 (citation omitted)

Nevertheless, the ICA, in its opinion, set forth *guidance on

 

how to interpret HRS § 386-93(b)," id., which, in our view,
renders that portion of the opinion advisory because the issue
of attorney’s fees and costs was not ripe for decision.

preliminarily, we acknowledge that neither party has
challenged the advisory nature of the ICA’s opinion, ive., that
the issue of attorney's fees and costs was not ripe for
decision. However, we are equally cognizant that this court
has previously stated that,

(uIbile the courts of the state of Hawai't are not
bound by a "case of controversy" requirement, we
Ronetheless recognize that the “‘prudential rules’ of
judicial self-governance ‘founded in concern about the
Proper -- and properly Iinived =~ role of courts ina
Senoeratic society" are alvays of relevant concern.
‘Life of the Land v. Land Use Comission, 63 aw. 166,
172, 625 Pid 431, 438 (1981) (citations omitted). For

even in She absence of constitutional resscictions,
courte must stil) carefully weigh the wisdom, efficacy

 

 

 

  

   

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State v. Fields, 67 Haw, 268, 274, 686 P.24 1379, 1385 (1984)
(emphasis added) (footnote and brackets omitted)
Additionally, we have previously indicated that, in ‘the
absence of ripeness,” appellate courts are ‘without
jurisdiction to consider (the) appeal.’ State v, Moniz, 69
Haw. 370, 373, 742 P.24 373, 376 (1987) (holding that
‘appellate courts are under an obligation to insure that they
have jurisdiction to hear and determine each case” and,
“because of the absence of ripeness and standing, (this court
was] without jurisdiction to consider [an] appeal") .*
Moreover, it is well-settled in this jurisdiction that, *[ilf
the parties do not raise the issue [of a lack of subject matter
jurisdiction), a court sua sponte will.* Tamashiro v, Dep’t of
Hunan Servs., State of Hawai'i, 112 Hawai'i 388, 398, 146 P.34
103,113 (2006) (emphasis added) (citations omitted). “when
reviewing . . . whether the lower court has jurisdiction, four
appellate courts] retain jurisdiction, not on the merits, but
only for the purpose of correcting the error in jurisdiction.”
+ tn the federal court systen (which -- unlike the ICA and this

court -- is bound by the federal constitution’s article IIT cage and
Controversy requiresent), if i# well-established that

 

 

Ripeness is nore than a nere procedural question: it is
determinative of jurisdiction: ff a claim is unripe,
federal courta lack subject matter jurisdiction and the
complaint must be dismissed. This deficiency nay be raised
‘Ha sponte if not raised by the parties:

‘Souther Pec. Transp. Co. v. City of os Anaeles, 922 F.2d 498, S02 (9th cir.
1990), cart. denied. 5020.5, 943 (1991) (citation omitted)

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Ad, (citation, internal quotation marks, and original backets
omitted). Thus, we may properly raise the issue of ripeness
sua sponte and, additionally, retain jurisdiction for the
limited purpose of correcting the ICA‘s error in jurisdiction.
In Light of the ICA’s remand, the LIRAB has yet to
make a final decision on the underlying worker's compensation
claim. As such, any determination whether the employer loses"
and, thus, is required to pay attorney’s fees and costs is
premature, iie., not ripe. Accordingly, we conclude that,

inasmuch as there is no current “controversy” over attorney's

 

 

fees and costs, the ICA’s issuance of an advisory opinion on an
unripe issue implicates concerns “about the proper -- and
properly limited -- role of courts in a democratic society" and

contravenes the “prudential rules of judicial self-governance."
Fields, 67 Haw. at 274, 686 P.2d at 1385. The dissent,
however, disagrees with our conclusion inasmuch as it believes
that ‘this court has also issued advisory opinions in the past*
and that the majority in this case has not *explain[ed] why we
may issue advisory opinions and the ICA. . . cannot.*
Dissenting op. at 1, 3. In support of its argument, the

diss

 

points to a number of cases wherein this court has
provided guidance to the trial courts on renand.

Although the dissent is correct, it overlooks an
important distinction between the cases it cites and the case
at bar. Specifically, in the cases cited by the dissent, this

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court provided guidance to another court, ive, an entity
within the same branch of government; whereas, in the instant
case, the ICA provided guidance to the LIRAB, an administrative
agency within the coequal executive branch of governnent,
which, as discussed more fully infra, raises serious concerns
regarding separation of powers, judicial interference, and
prenature adjudication.

In the context of the premature review of
administrative decisions, we have atated that:

and the
traditional reluctance of courts to apply injunctive and
Geclaratory renedies to administrative determinations ip

Eo prevent courts, through avoidance of premature

inlatrative boll
‘Protect the agencies from judicial interference until an
administrative decision has been formalized and its
‘chal
‘Thus, prudential rutes of judicial self-governance
founded in concern about the proper =~ and properly
Limited ~~ role of courts in a democratic socket
considerations floving from our coequal and coexistent
system of government, ictate that we accord these
Charged with drafting and adsiniatering our laws a
reasonable opportunity to craft and enforce then in a
manner that produces @ lawful result

Save_Sunset Beach Coal, v, City & County of Honolulu, 102
Hawai'i 465, 483, 78 P.3d 1, 19 (2003) (emphases added) (format

 

 

   

 

 

altered) (citations, internal quotation marks, and original
brackets omitted). In our view, the foregoing rationale

clearly recognizes the separation of powers doctrine as it

 

relates to the adjudication of matters reserved for
administrative agencies in the other branches of government

In other words, the administrative agency of a separate,

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coequal branch of government should be accorded the opportunity
to first decide and enforce its own decisions without the
premature interference by the judiciary.

None of the cases cited by the dissent involve this
court's issuance of an advisory opinion providing guidance to
an administrative agency or entity within the executive or
Legislative branches or within county government, In fact,
this court, in Save Sunset Beach, declined to issue an opinion
regarding challenges to a proposed use of the county zoning
istrict because the issue was not ripe. 102 Hawai" at 482-
83, 78 P.3d at 18-19, Likewise, the ICA, in Bremer v, city &
County of Honolulu, 96 Hawai'i 134, 28 P.34 350 (App. 2001),
refused to decide a constitutional challenge to a county zoning
ordinance because the ordinance had not yet been implemented,
and the issue was, therefore, again not ripe for adjudication.
Id, at 143-44, 28 P.34 359-60. tmplicit in these cases is the
demonstration of the appellate courts exercising restraint and
jot prematurely delving into areas committed to the other
branches of government -- a principle recognized by this court
in Fields.

In Fields, this court was faced with the issue
whether a condition of probation contravened the defendant's
constitutional right to be free of unreasonable searches and
seizures. 67 Haw. at 271-73, 686 P.2d at 1384-85.
Specifically, the probation condition imposed upon the

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defendant made her ‘subject at all times during the period of
her probation to a warrantless search of her person, property
and place of residence for illicit drugs and substances by any
law enforcement officer including her probation officer." Id.
at 273, 686 P.2d at 1364, The Fields court recognized that,
inasmuch as the government had not yet made an effort to
enforce the particular condition of probation, the ripeness
doctrine, if strictly applied to the situation at bar, would
“preclude an adjudication of the issue raised on appeal.” Id.

at 275, 686 P.2d at 1386, Nevertheless, this court determined

 

that *[oJther important considerations” led it ‘to believe [it

 

was] confronted with the exceptional case demanding attention
in advance of an actual attempt by the government to enforce

the condition." Id, Specifically, this court declined to

 

apply the ripeness doctrine inasmuch ae: (1) “the deprivation
of a fundamental right may not be lightly regarded, even when
exacted as part of the price of conditional release"; and
(2) the probationary condition at issue was a creature of

judicial ingenuity and that, therefore, its "inquiry would

focus ical acti n rt
not_be venturing ‘into areas committed to other branches of

government.‘ Id, at 275-76, 686 P.2d at 1386 (citation
omitted). Based on the foregoing, the Fields court concluded

that it was appropriate “to act before there [was] an attempt

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to enforce the sentencing court’s order, since [its] bounden

che prevention of i 2 mi: in
situations where resort to appeal may be otherwise foreclosed."
Ia.

Indeed, the guidance provided by this court in nine
of the eleven cases cited by the dissent focused on the
propriety of judicial action or the deprivation of
constitutional rights, and none ventured into areas committed
to other branches of government. see, e.g., State v. Nichols,
111 Hawai'i 327, 340, 141 P.3d 974, 987 (2006) (providing
guidance to the circuit court on remand regarding jury
Anstructions); Courbat v, Dahana Ranch, Inc., 111 Hawai'i 254,
141 P.34 427 (2006) (providing guidance to the circuit court
regarding the correct application of a statute on remand); KG
Corp. v. Kim, 107 Hawai": 73, 110 P.3d 397 (2005) (providing
guidance to the circuit court on remand that statute did not
violate the due process or equal protection clause); Gap v.

Puna Geothermal Venture, 106 Hawai'i 325, 104 P.34 912 (2004)

 

(providing guidance to the circuit court on remand with regard
to setting of appropriate sanctions pursuant to Hawai'i Rules
Procedure Ri 16, which rules are promulgated
by the suprese court); Ditto v. McCurdy, 102 Hawai'i 518, 78
P.3d 331 (2003) (providing guidance regarding writs of
execution and the applicability of the district court rules,
which are also promulgated by the supreme court); state vw.

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Wakicaka, 102 Hawai'i 504, 78 P.34 317 (2003) (providing
guidance to the circuit court regarding evidentiary matters,
iie., the exclusion of an expert witness); state v, Culkin, 97
Hawai'i 206, 35 P.34 233 (2001) (addressing evidentiary matters
co provide guidance to the circuit court on renand); state v
Mahoe, 89 Hawai'i 284, 972 P.24 287 (1998) (providing guidance
to the circuit court on remand regarding a jury instruction!
Skate v. Kauhi, 86 Hawai'i 195, 948 p.24 1036 (1997)
(addressing unripe evidentiary and constitutional issues).
wien rn

 

ject to the two remaining ci

 

8 cited by the

 

@issent, to wit: Bil Lounge Operation Co., Inc, v. Liguor
Commission of City & County of Honolulu, 118 Hawai'i 320, 350,
189 P.34 432, 462 (2008), and In ce Water Use Permit
Applications, 105 Hawai'i 1, 12, 93 P.34 643, 654 (2004), we
fail to see how those cases constitute advisory opinions on
unripe issues. In both cases, this court decided issues
squarely presented and necessary for a full and complete
@iscussion of its ultimate holding in each case. It did not
address any unripe issues or provide guidance to a separate
government agency

Based on the foregoing, we believe the dissent’s
citations to the above cases as support for its position that
the ICA's advisory opinion in this case should be allowed to
stand because this court has also issued advisory opinions in
the past is unavailing. This court's issuance of previous

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advisory opinions, as cited by the dissent, is consistent with
this court’s prior case law and practice of limiting its
guidance to entities within the judicial branch while
refraining from doing so in cases involving a separate
governmental entity.

We agree, however, with the dissent that the
determination whether it is the LIRAB or the appellate courts
that’ awards attorney’s fees and costs depends on when the
appeal is *final.* Dissenting op. at 4-5 (citing Lindinha, 104
Hawai'i at 171, 86 P.3d at 980 (stating “we read [HRS

§ 386-93(b)] as assessing fees and costs against an employer if

 

the employer loses the final appeal- (emphasis added))). In
other words, "the statute plainly authorizes assessment of
attorney's fees and costs against the employer if it loses,
Whether the case ends in the LIRAB or this court." Id.
(emphasis added). By providing that “the costs of proceedings
of the appellate board or the supreme court of the state,
together with reasonable attorney's fees shall be assessed
against the employer, if the employer loses," HRS § 396-93 (b)
(emphasis added), the legislature clearly contemplated that
proceedings could end and be final at the LIRAB-level, thereby
empowering the LIRAB to make an award of attorney’s fees and
costs "if the employer loses.”

We disagree, however, with the dissent’s position
that it was permissible for the ICA to provide guidance to the

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LIRAB because “the plain language of HRS § 386-93(b) applies to
the judicial branch of the government in the same manner as the
executive branch." Dissenting op. at 5. The fact that the
statute applies to both the judicial and executive branches
does not render it permissible for the judicial branch to
interfere with the decision-making process of an executive
branch agency simply because the statute bestows the same
decision-making authority upon the judicial branch. Because an
appeal from a decision of the director can, depending on the
circumstances, becone *final* at the LIRAB-level or the
appellate-level, the statute mist necessarily contemplate those
circumstances.

In the present case, the appeal at the LIRAB-level
was not final because Kapuwai appealed to the ICA and the city
further appealed to this court. Likewise, the appeal at the
ICA and this court was also not ‘final* for purposes of
attorney’s fees and costs in light of the remand to the LIRAB
for further proceedings regarding Kapuwai’s PPD award. once
the LIRAB makes such determination and, if no further appeal is
taken, then, the "final appeal’ would have occurred at the
LIRAB-level, empowering it to make the requisite determination
and award of fees and costs. By opining on the application of
the subject statute, the ICA invaded the province of the LIRAB
to make its own independent assessment as to whether the City,
under HRS § 386-93(b), is the “lose[r]” for purposes of an

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award of attorney's fees and costs. As such, the ICA
impermissibly ventured into an area legislatively committed to
the LIRAB and, thus, implicates separation-of-powers concerns
that were not present in the decisions cited by the dissent.

Finally, the dissent also maintains that, if ‘the ICA
lacked jurisdiction because the attorney's fees and costs issue
is unripe, then it logically follows that we too lacked
jurisdiction to issue the advisory opinions that we did.*
Dissenting op, at 4 (citation omitted). However, as discussed
fupra, the guidance provided by this court in the cases cited
by the dissent (1) focused on the propriety of judicial action
or the deprivation of constitutional rights, (2) aid not
venture into areas committed to other branches of government,
thereby obviating any separation-of-power concerns, and (3)
were consistent with its ‘bounden duty* to prevent judicial
mistakes or the reoccurrence of a judicial mistake on remand.
Eields, 67 Haw. at 276, 686 P.2d at 1386.

In sum, we conclude that the ICA’s opinion regarding
the issue of attorney's fees and costs was not ripe for
decision and constitutes an advisory opinion aki to the
issuance of an opinion where there is no subject matter
jurisdiction. voniz, 69 Haw. at 373, 742 P.2d at 376. more
importantly, the advisory portion of the ICA’s opinion
constitutes inappropriate judicial interference with an
administrative decision of an entity within a separate, coequal

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branch of government that has not been formalized and has not
yet affected the challenging parties in a concrete way, Save
Sunset Beach, 102 Hawai'i at 483, 78 P.3d at 19, thereby

implicating separation-of-powers concerns. Consequently, we

  

hold that the ICA's exercise of appellate power in this case
constitutes error that must be corrected by this court by
vacating the advisory section of the ICA’s opinion,
IV. CONCLUSION
Based on the foregoing, we vacate the part of the
ICA's opinion, specifically section IT, that deals with the

issue of attorney's fees and costs.

Paul K. Hoshino, Deputy
Corporation Counsel, for
petitioner/employer-appellee, .

self-insured fon v.2—_

Herbert R. Takahashi and
Danny J. Vasconcellos (of
‘Takahashi Vasconcellos &
Covert), for respondent/
claimant-appellant

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