Case Title: Makaneole v. Gampon

Citation: 777 P.2d 1183

Docket Number: 12049, 12218

State: hawaii

Court: Hawaii Supreme Court

Date: 1989-07-24T00:00:00Z

Document:
777 P.2d 1183 (1989) George MAKANEOLE, Petitioner-Respondent, v. Drake GAMPON, Respondent-Appellee, and Kauai Development Corp. dba Ohbayashi-Gumi, Ltd., Petitioner-Respondent, and Norman's Construction, Inc.; N. Murakami, Inc.; Norbub, Inc.; Sheraton Corporation; and John Does 1-50, Defendants, and Dillingham Construction Corporation, dba Hawaiian Dredging & Construction Company, Ltd., Respondent-Intervenor-Appellant. Nos. 12049, 12218. Supreme Court of Hawaii. July 24, 1989. Herbert R. Takahashi, Stanford, H. Masui and Danny J. Vasconcellos, Honolulu, for George Makaneole, petitioner-respondent. Kenneth S. Robbins, Philip S. Nerney and Wayne P. Doane, Honolulu, for Kauai Development Corp., petitioner-respondent. Before LUM, C.J., and PADGETT, HAYASHI, WAKATSUKI, JJ., and WILFRED K. WATANABE, Circuit Judge, in place of NAKAMURA, J., Recused. PADGETT, Justice. The Circuit Court of the Fifth Circuit entered an order in these cases granting directed verdicts in favor of Kauai Development Corporation (KDC) and Drake Gampon (Gampon). The Intermediate Court of Appeals (ICA) reversed the directed verdicts. 776 P.2d 402 (Haw. App. 1989). KDC *1184 and appellant George Makaneole (Makaneole) filed applications for writs of certiorari which we granted. We now affirm the ICA's reversal of the directed verdicts but reverse the ICA's holding in section IIIC of its opinion. The evidence, as stated by the ICA, was as follows: Section 416 of 2 RESTATEMENT (SECOND) OF TORTS (1965) at page 395, reads as follows: Section 427 of the same work, provides: Id. at page 415. The ICA, quoting from Jones v. Chevron USA, Inc., 718 P.2d 890 (Wyo. 1986), declined to apply the principles stated in the two sections just quoted. The ICA, in this connection, quoted from Jones as follows: As can be seen from the above quoted language the rationale of Jones, and of the ICA, in refusing to apply §§ 416 and 427 of the 2 RESTATEMENT (SECOND) OF TORTS was based upon the effect of the workers' compensation statutes, and particularly upon the effect of what in our statutes is HRS § 386-5, which makes compensation under the workers' compensation statute the exclusive remedy which appellant *1186 Makaneole would have against his employer. The reasoning is that since the employer is not liable for his negligence there can be no liability on the part of the owner for the employer's negligence despite the dangerous situation which ordinarily would make the owner liable to the person injured when the independent contractor is negligent. The parties, in their briefs, and the ICA have, however, ignored the evolution of the workers' compensation statutes in Hawaii on this point. The history of that evolutionary development compels a different result. Prior to the 1963 revision of our workers' compensation statutes, the definition of "employer" for the purposes of the worker's compensation law included an owner, or lessee, of premises or other person, who is virtually the proprietor or operator of the business there carried on. Thus in Re Ichijiro Ikoma, 23 Haw. 291 (1916), Oahu Sugar Company was held liable under the workers' compensation law for the injury to an employee of an independent contractor engaged to construct a railroad for the sugar company. In Wright Minors v. City & County of Honolulu, 41 Haw. 603 (1957), the legal relationship of the parties was very similar to our case. In Wright Minors, the survivors of a worker who was employed by the general contractor for the Wilson Tunnel, E.E. Black, Limited, and who was killed in the construction of that tunnel, brought a suit, in negligence, for damages against the City and County of Honolulu, the owner of the premises where the tunnel was being constructed. This court held that, under the then statutory definition, the owner of the premises was an employer for purposes of the Workmen's Compensation Act and therefore the survivors' only remedy was for compensation under that Act. In 1963, there was a major revision of the Hawaii workers' compensation statutes and the language making the owner of premises the statutory employer was, in the end, deleted from the statute. The story is somewhat complicated. The revision, as proposed, was to move the language, with respect to the owner being the statutory employer, from the definition of the employer, to the definition of the employee, and to amend it so that it would read: S. Riesenfeld, Study of the Workmen's Compensation Law in Hawaii, (Rep. No. 1, 1963) at 121. The explanation for this change was as follows: Id. at 99-100 (underscoring supplied). In Fonseca v. Pacific Construction Co., 54 Haw. 578, 513 P.2d 156 (1973), this court held that a general contractor was not immune from suit, for the injuries sustained by a subcontractor's employee, resulting from the general contractor's negligence. Justice Marumoto, who wrote the opinion in Wright Minors, supra, dissented. In the course of that dissent he traced the history of the 1963 statutory overhaul, and noted at 54 Haw. at 592-93, 513 P.2d 156: As Justice Marumoto went on to note, however, the draft language was not the language as passed. The sentence above quoted was deleted and the following sentence substituted therefor: Act 116, 1963 Haw. Sess. Laws at 103. The effect of the amendment, and the deletion was that the owner of the premises was no longer a statutory employer exempted from suits for negligence under § 386-5. As stated by Justice Marumoto in Fonseca: 54 Haw. at 593-94, 513 P.2d 156. Since the owner of the premises is not an employer, the owner does not fall within the provisions of HRS § 386-5 which exempts employers from liability to employees. Accordingly, contrary to the result in Jones, supra, the workers' compensation statutes in the State of Hawaii provide no basis for disregarding the legal principles laid down in §§ 416 and 427 of 2 RESTATEMENT (SECOND) OF TORTS. Therefore, section IIIC of the opinion of the ICA is reversed. The judgment of the ICA reversing the judgments below and the directed verdicts is affirmed and the case is remanded to the circuit court for further proceedings in accordance with the opinion of this court and those portions of the opinion of the ICA not reversed by this opinion.