Case Title: Haole v. State.

Citation: 111 Haw. 144

Docket Number: 

State: hawaii

Court: Hawaii Supreme Court

Date: 2006-08-07T00:00:00Z

Document:
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IN THE SUPREME COURT OF THE STATE OF HAWAI'I

 

000

WILLIAM HAOLE, IV, Plaintiff-Appellee,

 

STATE OF HAWAI'I, Defendant Appellee,

and
INC., Defendant -Appelli

aa

MATSON TERMINALS,

TE-OrWY L- ony sanz

 

and

JOHN DORS 1-20, Defendants.

 

STATE OF HAWAI'I, Third-Party Plaintiff-Appellee,

 

ERIC RAPOZA and MCCABE HAMILTON & RENNY CO.
‘Third-Party Defendants-Appellants.

No. 27010
APPEAL FROM THE FIRST CIRCUIT COURT
(CIV. NO. 03-1-0876)

AUGUST 7, 2006

MOON, C.J., LEVINSON, NAKAYAMA, ACOBA, AND DUFFY, JJ.

OPINION OF THE COURT BY MOON, C.J.

‘The dispute in the instant appeal centers around the
validity and enforceability of Hawai'i Administrative Rule (HAR)
§ 19-41-7 (2005), quoted infra, that imposes a duty upon, inter
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alia, owners and operators conducting unloading activities on

state piers to defend and indemnify the state of Hawai'i (the
state) against any and all claims arising from such activities,
except where the State is proven to be solely and legally
negligent. In this case, plaintiff-appellee William Hacle, IV,
an employee of third-party defendant -appellant McCabe Hamilton
Renny & Co., Inc. (McCabe), was injured while riding as a
passenger in an autonobile being unloaded at the Honolulu Harbor.
the vehicle was being driven by third-party defendant -appellant
Eric Rapoza, who was also employed by McCabe. As a result of the
accident, Haole brought a personal injury action against
defendant -appellant Matson Terminals, Inc. (Matson), which had
subcontracted with McCabe to conduct cargo loading and unloading

activities, and defendant/third-party plaintiff-appellee

 

Department of Transportation of the State of Hawai'i
thereinafter, the DOT or the State], which owns and manages the
Honolulu Harbor, The State, in turn, cross-claimed against

Mateon and filed a third-party complaint against Rapoza and

 

McCabe, essentially seeking to enforce HAR § 19-41-7's alleged
duty to defend and indemnity provisions

on October 5, 2004, the Circuit Court of the First
circuit, the Honorable Karen §. Ahn presiding, entered its order
granting partial summary judgment in favor of the State. The
circuit court concluded that Rapoza and McCabe [hereinafter, the

McCabe parties], as well as Matson [hereinafter, Mateon and the

 
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McCabe parties are collectively r

 

ered to as the appellants],
owed a duty to defend the State in the action brought by Haole.

the order was certified and entered as a final judgment, pursuant

 

to Hawai'i Rules of Civil Procedure (HRCP) Rule 54(b) (2004)," on
December 16, 2004.

on appeal, the appellants essentially contend that the
circuit court erred in (1) concluding that the appellants are
required to defend the State pursuant to HAR § 19-41-7 because
(a) the DOT did not have authority to promulgate and enforce HAR
§ 19-41-7 and (b) the regulation violates public policy. Matson
additionally contends that the circuit court erred in (1) failing
to address whether, under HAR § 19-41-7, the State was “solely
and legally" negligent and (2) ruling that the State's claims are
not barred by the Longshore and Harbor Workers’ Compensation Act
(uHwca), 33 U.S.C. § 905(a) (1984).? For the reasons discussed

+ yacp Rule $4(b) provides in pertinent part:

Judgment upon mltiple cleins or involving mu
partis. "When more than one claim for relief is pr
Tranaction, whether as a claim, counterclain, crot
of thirdeparty claim, or when multiple parties are involved,
the court may direct the entry of a final judgnent as to one
Sr'nore but fewer than all of the elaine or parties only
Sponvan express determination that there is no just reason
Yor delay and upon an express direction for the entry of
judgrent (.1

in original.)

    

 

 

 

    

 

 

2 33 U.8.C. § 905, entitled *Exclusivenes
pertinent part:

 

of lability,” provides in
(a) Beployer Liability; failure of employer to secure
payment of compensation,

(continued.

 

 

 
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below, we conclude that the DOT did not have authority to

efore, the regulation is not valid

 

promulgate HAR § 19-41-7; th
nor enforceable. Accordingly, inasmuch as HAR § 19-41-7 does not
impose upon the appellants a duty to defend or indemnify the
State against Haole’s claims, we hold that the circuit court
erred in granting summary judguent in favor of the state.
Consequently, we vacate the December 16, 2004 final judgment and
remand this case to the circuit court for further proceedings.
1. BACKGROUND

A. Factual Backcround

Sometime prior to December 2002, Matson hired McCabe to
perform stevedoring work, including the loading and unloading of
barges at Honolulu Harbor. Matson was a paying “tenant” and was
assigned a storage epace near Piers 25 and 26 by Harold Watanabe,

a marine cargo specialist for the DOT’s Harbors Division. In

 

*(.scontinued)
Lisbility-of euch eablover to the enploves, nis legal

 

Feprecentative, husband of wife, parents, dependents,
of kin, and anyone otherwise entities to recover damages
from euch employer at law or in admiralty on account of such
injusy oF death, except that if an employer fails to secure
payment of compensation as required by this chapter, an
Tnjured employee. . my elect to claim compensation under
the chapter, or to saintain an action at law or in admiralty
for damages cn account of such injury or death. in euch
action the defendant may not plead ag a defense that the
injury was caused by the negligence of a fellow servant, or
that the enployee ascuned the risk of hie employment, of
that the injury wae due to the contributory negligence of
the employee. Por purposes of this subsection, « contractor
shall be dened the exployer of 2 subcontractor’s employees
caly if the subcontractor fails to secure the payzent of
Compensation aa required by section so of this title.

 

 

 

 

 

 

 

(Bnphasis added.)

 
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iigning the storage area, Watanabe was aware that Matson would

 

be using the area to load and off-load vehicles. Matson did not
sign a contract for the use of the storage area, nor did it enter
into any formal agreement with Watanabe at that time.

on December 16, 2002, Rapoza (Hacle’s supervisor) and

 

Haole were off-loading vehicles from the barge Waialeale, docke:
at Pier 29. While doing 20, Rapoza allegedly offered Haole a
ride in one of the vehicles, despite Matson’s safety policy
prohibiting passengers riding in vehicles being off-losded. on
the way to the storage/pick up area, the vehicle collided with a
steel pipe that was apparently protruding approximately ten
inches above the pier’s flooring. Hacle, who admittedly was not
wearing a seatbelt, sustained unspecified injuries as a result of
the collision.

The accident occurred near Piers 25 and 26 in the
vicinity of Mateon's storage/pickup area. At all relevant times
herein, Piers 25 and 26 were owned, managed, and maintained by
the state. Carter Luke, the maintenance engineer for the DOT’s
Harbors Division, testified at his deposition that the protruding
pipe was probably part of an old "vapor recovery systent that had
been used previously at the pier. According to Luke, the pipe
should have been removed pursuant to a State demolition plan,
which called for the removal of "everything above ground” along

the piers. luke stated that he had seen the protruding pipe

 

several months before the accident and that, although there was
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vegetation around it, the pipe was vieible during the day from at
least one hundred feet away.
B ura:

fon June 6, 2003, Haole filed an amended complaint
against both Mateon and the State, alleging that their negligence
in failing to renove the steel pipe caused his injuries.
Subsequent to the filing of responsive pleadings by the state and
the appellants, as well as the State's third-party complaint
against the McCabe parties, the State tendered its defense to the
appellants, pursuant to HAR § 19-41-7. The McCabe parties and
Matson each rejected the State's tender in August 2003 and March
2004, respectively.

on May 27, 2004, the State moved for partial sumary
judgment against the appellants based upon the appellants’
purported duty to defend the state against Heole’s clains,
pursuant to HAR § 19-41-7. The State maintained that the DoT’s
Harbors Division is statutorily authorized to promulgate HAR
§ 19-41-7 and that the rule was validly adopted. Relying on the
plain language of the DOT's statutory rule-making authority, the

commercial harbors are

 

State argued that all users of the state’
bound by ite terms, Because the State believed it was not likely
that it was "solely and legally negligent,” it requested the
circuit court to rule that the appellants were obligated, under

HAR § 19-41-7, to defend the State in the Hacle lawsuit.

 
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The McCabe parties countered that HAR § 19-41-7 is

 

(a) not authorized by the DOT's governing statutes; (2) void
against public policy; and (3) unconstitutional. Matson made
similar argunents and also contended that, even if HAR § 19-41-7
was enforceable, it did not apply because (1) the State was
solely and legally negligent" for the accident and (2) the State

was barred from bringing its claim against Matson by the LHWCA,

 

quoted supra at note 2. On July 13, 2004, Matson algo filed a
cross-motion for summary judgment against the State, asserting
that it was not required to defend and indemnify the State. on
the came day, Matson moved for sunmary judgment against Haole on
the ground that his clains are barred by the exclusivity
provision of the LHWCA. Thereafter, on August 5, 2004, the
parties stipulated to a voluntary dismissal of Haole’s clains
against Matson, but agreed that the dismissal would not affect
the existing crose-claime and cross-actions between the parties.’
on October 5, 2004, the circuit court ruled that the

promigation of HAR § 19-41-7 was a proper exercise of the DOT's

 

delegated authority and made the following relevant finding

1. The parti
Resolution of the £
law.

do not dispute the salient facts.
owing dssues involves questions of

   

2. In [awai's Revised statutes (HRS) § 266-2 (2993),
quoted infra], the state legislature delegates to (the DoT),
Tiivehe powere  . . which may lawfully be exercised by oF
Under the state relative to the control and managesent of
Eomerciat harbors, - docks, ... piers,

 

+ tn anticipation of the Avgu
elaine againet Nateon, Matson withdrew ite motion for summary 3udgrent against
Baole on August 3, 2004

  

 

 
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= = belonging to or controlled by the state, and all the
Shipping using the sane.

3. [HRS § 266-2) further gives the DOT authority to
sregulate the use of comercial docks, piers, and landing
ro adopt rules pursuant to (HRS chapter Si]; and to have ali
powers necessary to fully carry out” (HRS chapter 266)

‘40° [ims § 266-3 (1993), quoted infra.) empowers the
Director of [the DOT] to adopt rules necessary for ‘the
proper regulation and control of all shipping in the
Somercisl harbore'. . , and for the regulation and control
of ail other matters and things connected with such
Shipping. These rules have the force and effect of law.
twas § 366-3)

5S. Under [HRS § 266-4 (1953), quoted intr:
Limitations upon the jurisdiction ahd powers. conferrs
the DoD are “as may be inposed by the statutes of the

. ‘Thus, the (legislature delegated broad authority
to [the] vor.

7, Purauant to these delegated powers, DOT's director
promulgated 1AR 29-43-71, quoted intra] and/HAR 29-43-51,

fee infra note 12] (hereinafter
TIRES the duty to defend to claine incident to or reeulting
from operations on DOT property and use of ite facilities a#
by be involved in loading or Unloading, and ia excepted
from circunstances in which the [statel ie proven to be
solely and legally negligent. There has been no contention
hat, proceduraiiy, ‘these ruies were improperly estebisehed.

¢ an administrative agency ie charged with the
Feaponaibility of carrying ost the mandate of a statute,
Shieh contains words of broad and indefinite meaning, courte
accord persuasive weight to administrative construction and
follow the sane, unless the construction is palpably
erroneous. Watt Corp. v. Monolulu Ligver comission, 69
Haw. 238, 738 P-2a 1208, 1208) (1987)

ion, the State [Iegislacure hae chosen to
speak directly te the deove of private entities holding
completely harmless the state of Havai'i as a condition of
Seer See’ (MRE SE 142-61 and 440G-8-2]. The parties have
not contended that guch statutory provisions represent an
Unlawful exercise of legislative discretion.

3. “This [eleure cannot find that, in promileating HAR
19-41-7 and HAR 19°42-5, [the] DOT exceeded the broad
statutory authority delegated by the state (legislature or
Entepreted the relevant statutes impermissibly or in
contravention to the Legislature's manifest purpose, or that
the DOT's construction of (HRS chapter 266], was paipsbly

erroneous. see [ivatt, supra
fae. 32 P-34 433 (Sem Cir. 1994) Inasmuch

Under (HRS'§§ 266-2 and -3], the state (Le
Parposefully delegates all lavful powers to (the] DOF fo
Fanage, control snd regulate shipping and the harbors, the
Yules appear to be reasonably related to carrying into
effect the purposes and provisions of the legislature.

6 Haw, App. 360, 267{, 725 P.2d 633, 819)

 

 

 

 

 

 

 

    

  

 

 

  

 

   

 

(see)
io. state of Alaska v. Alveska Pipeline service
Company, 725.20 76 ((Aleska] 1966), and State of Arizona

voce Natiomvide, Inc,, 676 P.24 1199 (Ariz. Ct. App-]

 
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194), are distinguishable because the delegations of power
ie 'tncee two cases were narrower than the broeé delegation
involved in thie ca

32, "under these circumstance
fa matter of public policy.

a "at che cine of the events at issue, under the

rules, imateon and the Necabe parties] each was an

core unloading cargo at a state wharf with
Gone" on DOr property and vaich was engaged in the
‘of Dor facilities and was @ “user” of such
facilities

2 the relevant pleadings and other, filings
establish «sufficient possibility of the applicability of
She"puies cov ithe appellante), and that the (State) will not
be’ aetermined to be solely legally negligent

Ten imme appeliante)’ duties to defend sre based upon
tne rules herein Giacussed, and not on account of
plaintiff's alleged injuries. Therefore, although
Plaintiff's “employer” for purposes of the (LHWCA], Matson
BUtninale le sot foreclosed by that act from providing a
Gefense for the [state]. See wz =a
fieamship Cou, 206 2.5.24 290 Gey. App. Div. 1998).

 

 

the rules are not void

 

 

 

   

 

 

 

   

 

 

 

 

Based on its findings, the circuit court granted the Stat!
motion for partial sunmary judgment and denied appellants’

motions.

 

on October 13, 2004, the McCabe parties moved for
certification of the judgnent as final and separate, pursuant to
uRcP Rule 54(b), and for a etay of proceedings pending appeal.

Matson filed a similar motion on October 15, 2004 and

 

subsequently joined in the McCabe parties’ motion on October 21
2004.

on Decenber 16, 2004, the circuit court entered its
order granting the motions for certification and for a stay of
proceedings. On the sane day, the circuit court entered its
judgment certifying its October 5, 2004 order granting partial
eunmary judgment in favor of the State, ruling that appellants

have a duty to defend the State against Haole’s claims.

 
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on December 20, 2004, the McCabe parties filed a timely
notice of appeal, amending it on December 29, 2004 and again on
January 11, 2005. On January 11, 2005, Matson also filed a

timely notice of appeal.
IT. STANDARDS OF REVIEW

A. Summary Judament

This court reviews a circuit court’s grant or denial of
summary judgment de nove under the same standard applied by the

circuit court. Hawai'i Cnty, Fed, Credit Union v. Keka, 94

Hawai'i 213, 221, 11 P.3d 1, 9 (2000) (citation omitted).

B. Stati 2

‘The interpretation of a statute is # question of lew
that 1 reviewed de nove

‘when construing a statute, our forenost
obligation ie co ascertain and give effect to the
Gneention of the legislature, waich is to be obtained
prinarily from the language contained in the statute
Teeclf. And we must read statutory language in the
context of the entire statute and construe it ina
manner consistent with ite purpos

‘when there is doubt, Goubleness of meaning, or
indiatinctiveness or uncertainty of an expression used
ina statute, an ambiguity exists(.]

Ta construing an ambiguous statute, the meaning
of the ambiguous words may Be scught by examining the
Context with which the ambiguous words, phrases, and
Sentences nay be compared, in order to ascertain their
tre meaning, Moreover, the courts may resort to
extrinsic aide in determining legislative intent. one
Svenue is the use of legislative history as an
interpretive tool.

‘Tale coure may also consider the reason and
spirit of the law, and the cause which induced the
[egilature to enact it [] to discover ite true
meaning. Lawe in pari materia, or upon the

mubject matter, shell be construed with re!

sp other. What is clear in one statute may be

‘ied upon in aid to explain what is doubtful in
another.

 

 

   

 

 

   

 

 

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a
y. Planning Dep't, Ci o! Si, 104 Hawai'i 173,
179-60, 86 P.34 962, 988-89 (2004) (citations and internal

quotation marks omitted).

(ilhere an administrative agency is charged with the
Meapensibitity of carrying out the mandate of a statute
sereereettaing worde cf broad and indefinite weaning, courte
Ph Certuasive weight to adsinistrative construction and
25ifo0 Phe same, unlese the construction is palpably

dd, at 180, 86 P.3d at 989 (citing Ka Pa‘akai O Ka “Aina v. Land

vee Comm'n, State of Hawai'i, 94 Hawai'i 31, 41, 7 P.3d 1068, 1078
(2000)). Stated differently:

 

 

mere an agency is statutorily responsible for
carrying out the sandate of @ statute which containe broad
E'Maigvous language, that agency's interpretation ang
Siplication of the statute 1a generally accorded judicial
GRerence on appellate review. Vail v. Buplovecs”
fiatizenent avarem, 75 Haw. 42, 59, 056 P.2d 1227, 2237
besseiittbowerer, an interpretation by ah agency’ of a
RSE it'sasinistere ie not entitled to deference if the
{Nlerpretacion te plainly erroneous and Inconsistent with
AEERERe'ieteer end incent of the statotory mandate, Kahane

o rege Hawas's 66, 72, 947 P.2d
Ste, 384 (2997)

iG Ins. Co. vs Keuhane, 101 Hawai'i 311, 322, 67 P.3d 610, 820
(app. 2003) (brackets and internal quotation marke omitted)

 

III. DISCUSSION
HAR § 19-41-7 provides:

Liability. Agencies, masters, omere, operators, of
charterers loading oF
wate havlleas he separtne!

Beguade and suite for damages att 1
SEluns, “see Teclucing cosce and attorneys’ fees, incident to

Tithe use of ite facilities except where the
GRLESTSRE hes been proven to be solely and legally
negligent

 

(anphases added.) The aforementioned rule not only imposes upon
private parties a duty to defend the State, but also shifts

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Liability fron the State to such private parties, except in
circumstances where the State is proven to be “solely and legally
negligent." Although Hawaii's appellate courte have not had
occasion to address the validity and enforceability of a
regulatory duty to defend, the Intermediate Court of Appeals’
(Ica) decision in Pancakes of Hawai'i v, Pomare Properties Com.
85 Hawai'i 286, 291, 944 P.2d 63, 88 (App. 1997), provides sone
preliminary guidance. In that case, which involved a contractual
duty to defend in @ non-ineurance context, the ICA stated:

Im our opinion, the procedure used to deternine the
duty to defend besed on indemnity contracts can follow the
fame procedure used in the insurance context. Ifa

 

hen according to the complaint
alleaation rie, che duty to defend beaing. This ie
Separate and diatinet fron the duty to indemnify. Once the
trier of fact makes a determination on the claine in che
Jaweutt, the duty to indemiify will either arise or lie
dormant. Claims falling within the indemnity provision will
trigger the duty to indemnify, while clains failing outside
the provielon will relieve the indemitor of his of her osty
to indemnify. “in our view, thie is the only equitable
Interpretation that gives iife to non-insurance indemnity
Clauses and prevente indemitore from beronbing the duty to
Sefend until after a case has been litigated.

Recordingly, we hold that the duty to defend
bated on'a’ contractual indemnity clause mst be detersined
at the onset of Litigation using the complaint allegation rule.

 

 

 

Id, at 291-92, 944 P.2d at 88-89 (emphases added). In other
words, under the “complaint allegation rule," if there is no
potential for indemnification, then no duty to defend will arise.
Accordingly, even though the State sought and obtained summary
judgment based upon only the appellants’ duty to defend, we focus
our analysis upon the duty to indemnify and whether a valid duty

to indemnify exists under HAR § 19-41-7.

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to Indemnity and the Validity of 243-74

 

pursuant to the State Tort Liability Act, the State,
generally, is liable for actual damages caused by the negligence
of ite employees “in the same manner and to the same extent as a
private individual under like circumstances." HRS § 662-2

(1993) 4 In addition, where a government entity is determined to

 

be a joint tortfeasor along with a private party, the government

entity ie “liable for no more than that percentage share of the
Ganages attributable to the government entity." HRS § 663-10.5
(supp. 2002)." ‘This court has consistently held that private
parties may contract to indemify the indemnitee for the

indemnitee’s own negligence but there mst be a “clear and
«RS § 662-2 provides in relevant part:

waiver end Liability of state. The State hereby
waives ite immunity for liability for the torte of ite
Welspecs"and shall be Liable inthe sane manner and to the
ithe extent ae a private individual under like
$ffeuSoeances, but euall not be liable for inter
Sadgnent or for punitive damages

 

st prior to

(noid emphasis in original.)
+ was § 663-10.5 provides in pertinent part:

Iz)n any case where a government entity Je determined to be
JPL Mkasor slong with one or more other tortfeasors, the

jent entity shall be Li am
ergencane- nage ok the Sanaa ——

en Sibotes of this section, “government entity”
meane any init of government in this State, including the
EERIE 223 any county or combination of counties,
Stéafenene or other establishment owned, Operated, or
Gthaged by Gr'on behalf of this State or any county:

For purpowes of this section, the Liability of =
goverment’ shell include ite vicarious Liability for the
Sete or eniseione of its officers and employ

 

 

 

(empnaeis added.)
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unequivocal’ assumption of liability by one party for the other
party's negligence. Kamali v. Hawaiian Elec. Co., 54 Haw. 153,
162, 504 P.24 861, 866 (1972); Keawe v. Hawaiian Elec. Co., Inc.,
65 Maw. 232, 237, 649 P.2d 1149, 1153 (1962); Bepaniola v.
Cawdrey Mars Joint Venture, 62 Haw. 171, 178, 707 P.2d 365, 369
cases).

Here, the parties agree that the DOT “could require by
contract what it does here by regulation." However, absent their
clear and unequivocal assumption of the State's liebility, the

appellants contend that the duty to indemnify cannot be imposed

 

pon them via the HAR. Specifically, the appellants argue that:
(2) the Dor’s governing statutes do not explicitly authorize the
DOT to issue administrative rules exonerating the State from the
negligence of its employees, nor do they explicitly allow the DOT
to require private entities to defend and indemnify the state for

(2) the regulation does not bear

 

the negligence of ite employee:

a reasonable relationship to the DOT’s statutory mandate; and

 

(3) the legielature’s imposition of a statutory duty to defend
and/or indemnify on other occasions demonstrates the
legislature's clear intent to reserve to itself the power to
impose upon others a duty to defend and indemify the state and

does not consider euch authority to be implicitly afforded to

 

State agencie:
The State, on the other hand, maintains that, although

the governing statutes do not explicitly authorize the DoT to

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impose a duty to defend or indemnify, the regulation wa
nevertheless within the DOT's powers to promulgate. The State
argues that: (1) no “magic words" are required to support the
regulation; (2) the existence of unrelated statutory duties to

indemnify does not limit the DOT's delegated authority: and

 

(3) other Hawai'i agencies have enacted rules requiring
indemnification or a defense, using similar statutory
delegations. In analyzing the parties’ contentions, we first
examine the DOT's rule-making authority.
1, por’e Rule-making Authority
We begin with the proposition that

[a) public administrative agency possesses
rele-naking authority ae is delegated to it by the
Jegiclature and may only exercise this pover within ©
fsanework of the statute under which itis conferred
Clive rule and regulations waich exceed the scope
factment they vere devised to inplenent

   

   

  

stop H-3 Ase‘n v. State Dept. of Tranep., 68 Haw. 154, 161, 706
P.2d 446, 451 (1985) (internal citations omitted); see also Puana
v. Sunn, 69 Haw. 167, 189, 737 P.24 867, 870 (1987) (an agency's
authority “is limited to enacting rules which carry out and
further the purposes of the legislation and do not enlarge,

alter, or restrict the provisions of the act being
administered"). In other words,

an administrative agency can only wield powers
iy oF implicitly granted to it by statute. However,
Yo °Ceeablished thet an adsinistrative agency's
authority includes those implied povers that are reasonably
on ou roe i nthe
Bigecn for inplied powere ie that, as a practical matter,
Eke legislature canner foresee ali the problens incidental

 

 

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to carrying out the duties and responsibilities of the
agency,

Morgan, 104 Hawai'i at 184, 86 P.3d at 993 (internal quotation
marks, brackets, citations, and ellipses omitted) (emphasis
added) .

The DOT's authority to regulate and control the State's
harbors is found in three statutes: (1) HRS § 26-19 (1993),
which states in pertinent part that “[t]he [DOT] shall establish.
maintain, and operate transportation facilities of the state,
including . . . harbore(] and such other transportation
facilities and activities as may be authorized by law" (emphasis
added); (2) HRS § 266-2 (1993), which describes the powers and
duties of the department;* and (3) HRS § 266-3 (1993), which

specifically defines the DOT's rule-making authority.”

 

© ane § 266-2 provides in relevant part:
(a) the department of trangportation shall:

() Have and exercise all the powrs and shal
perform all the duties which may lawfully be

suercised by or under the state relative to the
‘control and sanacement of comercial,

barbers, . - docks, wharves, piers, .. . and
Tandinge belonging to or controlled by the state
and the shipping using the same;

Have the authority to use and permit and

Keaulate the use of the comercial docks,

Shares, piers and landings belongina to

Se-contiolled by the state for... loading and

‘Ianding mexchandiee(a1

(6) " Adopt rules pursuant to [C]hapter 91 and not
Gnconeietent with laws and

(7) Generally have o11 powers necessary to fully

sarry out this chapter.

 

(emphases added.)
1) uRS § 266-3 provides in relevant part:

(continued,

 

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a
‘the authority to promulgate rules, however, is not without
restrictions. gee HRS § 266-4 (1993) (providing that “(t]he
jurisdiction and powers conferred on the [DOT] are subject to

such restrictions as may be imposed by the statutes of the State,

and shall be exercised in accordance with the provisions
thereof"). We, therefore, examine whether the DOT's governing
etatutes authorize the promulgation of HAR § 19-41-7.
2. Whether the DOT’s Governing Statutes
huthorize Promulgation of HAR § 19-41-7

the State acknowledges that the DOT's governing
statutes do not “specifically mention a duty to defend [or

indemnify)"; however, it argues that the absence of such

"(,.eomeinued)
“a, the aizector of transportation may adopt rules as
necessary to:
is)” Refining the duties and powers of carriers.
Biliters and conelanees respec oat
Eesishegonse—enees, tnd aetchan hia the
Wehereial harcore, ports, and roadsteads of the

acy of the docks Hs

(emphases added.)
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specificity “is not dispositive." In the State’s view, the

appellants “misunderstand the nature of statutory delegation" and
the fact that "(t]he statute's exact words are not controlling.”
(Bnphasis in original.) The State argues that “(t]he legislature
never intended to meticulously delineate each of the agency's
specific powers" and that, *[als long as the rule is consistent
with the grant of statutozy authority, it is valid.

‘The relevant governing statutes grant to the DOT “all
powers necessary" for it to regulate and control the state's

However, the grant of the Dot's

 

harbors. HRS § 266:
rule-making authority to carry out its function is specifically
Gefined. First, the power to "define the duties" of “carriers,
shippers, and consignees" under HRS § 266-3(a) (5) refers to
duties “xespecting passengers, freight, coods, wares, and
mexchandise in and upon the docke.* (Emphasis added.) Nowhere

in the governing statutes is there a specific delegation of power

to the DOT te define the duties owed by such “carriers, shippers

 

and consignees" to the State as the indemnitee. See Kamali, 54
Haw, at 159, 504 P.2d at 865 (*[a] third party claim for
indemnity ie . . . for reimbursement based upon contract or sone
other independent duty exieting between indemnitor and

Second, although the State argues that the power

 

indemnitee.

ry" and without which the

 

As that which is "reasonably nect
“por would not be able to fully manage the State harbors,” the

and, as previously mentioned, all the parties

 

State admits

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a

agree -- that the DOT “could require by contract what it does
here by regulation.” We note that there is no evidence in the
record to suggest that the DOT's state harbor operations would be
significantly hampered were it required to contract with harbor
veers for indemnification. Third, even though HRS § 266-3(a) (5)
also authorizes the DOT to enact regulations for the safety of

and the State does not even

 

the docks, there is no evidence

allege -- that imposing liability for the state

 

negligence upon
harbor users contributes to increased safety. Finally, under HRS
§ 266-3 (b) (2), the only other general rule-making provision in
that section, the DOT may enact rules necessary to regulate and
control “all shipping" and “all other matters and things
connected with such shipping.” Although broad in scope, the
above provision -- ike the remaining provisions of the relevant
governing statutes -- does not explicitly state that the DOT's
qule-making authority includes the power to impose a duty of
indemnification.

b. implied authority

the State maintains that the challenged-regulation is
reasonably necessary and reasonably related to carrying out the
pot’s statutory mandate. Specifically, the State argues that the

enactment of HAR § 19-41-7

was “reasonably necessary to carry out" [the) DOT's express
Gna Brose grant of autnority. Wit

‘seate.”

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(Brackets in original.) (El1ipses points and citation omitted.)
‘The Mccabe parties argue that, although HRS § 266-2 grants the
oT "tall the powere’ which may lawfully be exercised by or under
the State ‘relative to the control or management’ of commercial
harbore, . . . [t]he language ‘control and management’ does not
automatically confer the authority to require indemni fication*
and that, therefore, the authority to require indemnification
cannct be implied from the governing statutes. Matson agrees and
additionally argues that the regulation at issue is not
reasonably related to the “administration for which the rules and
regulations were authorized to accomplish.

Here, the circuit court concluded that, in promilgating
HAR § 19-41-7, the DOT did not exceed the “broad statutory

authority” delegated by the legislature, citing Hyatt Corporation

¥. Honolulu Liguor Commission, 69 Haw. 238, 738 P.2d 1205,
reconsideration denied, 69 Haw. 674, 738 P.2d 1205 (1987), and

Orca Bay Seafoods v, Northwest Trucking Sales, Inc., 32 F.3d 433

(sth Cir. 1994), In the former case, Hyatt sought to enjoin the
Honolulu Liquor Commission (Commission) from enforcing HAR
§ 7-21, which prohibited liguor licensees from engaging in
discriminatory practices. Hyatt Corp,. 69 Haw. at 239, 738 P.2d

at 1205. In determining the extent of the Commission's

 

authority, this court recognized that

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‘the problems associated with intoxicating liquor have
been a matter of concern for legislative bodies in this
peShery for over three centuries. See 45 Am. Jur. 26,

seoxieat s 136s).
THERicecor the nature of intoxicating liquor and the
Ghormcus probleme developed by the traffic in then,
ee in thi of 6

a fconsistentiy with any
sci tianpects of constitutional limitations, £0 Be

 

 

soveresanty
, 297 2.24

BOR Rech Nappeal disaiased. (for want of « substantial
federal question) 411 U.S. 926, 93 S. Ck. 952, 35 L. BA. 2d

 

 

2es (3978). See Crane v_ Campbell, 245 U.8. 304, 307, 38 6
Ce. 98, 99, 62 b. Ba. 24 304, 309 (2917)

Bghiusions . <7, H- wattel & P. Putnam,

fgucr Levs in'vavaii and the D eae dana (ueg. Ree

Bureau Rep. No. 2, 1969).
Id, at 241, 738 P.2d at 1207 (emphases added). HRS § 261-17

enabling statute, provided in pertinent

 

(1985), the Commission’

part:

Surisdiction ané powers. The Liguor comission,
within ite own coumty, shall have the sole iuriadiction

© es
‘shaper:

(2) Te grant, refuse, suspend, and revoke any
TSednses for the manufacture, importation, and
gale of liquors;

(2) Te control, supervise and regulate the
Ganufacture, importation, and sale of liquors by
Taventigation, enforcement, and
education ne

(3) From tine to time

ih rules, not inconsistent with €i

Sein the judgnent of the comission

appropriate for carzying out this chapter and
jetrat: 3

 

 

chapter,

PEeehtces, including every nacter or thing
HIGEIESG to be done or which may be done with te
Gpproval or consent or by order or under the
Gfeeccion or supervision of or as prescribed by
fhe comnieeion; which rules, when adopted
provided in chapter $2 shali have the force and
Retect of lawl.)

 

(underscored emphases added.)

   

(Bold emphasis in original

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im upholding the Commission’ prohibition on racial

 

discrimination, this court stated that

We are mindful that legislative grants of authority
jot be limited so ae to ensure that important choices of
focial policy are made by the legislature, the Branch of our
Government most responsive to the popular will,

‘The public policy of the State of Hawaii distavoring
racial digerininstion 1e embodies in our statutes and our’
Constitution. The strength of this expressed public policy
fageinet racial discrimination is beyond question,

 

 

Id, at 244, 738 P.2d at 1209 (citations, internal quotation
marks, and footnotes omitted). This court also noted that:

Hyatt examines specific instances where the
legislature expressly prohibited discrimination and argues
that where the legislature intends to prohibit
Giecriminstion, ie does so expressly. However, the issue is
fot whether ene legislature intended to prohibit
Giscrimination . .-, but whether the legislature, in
granting broad authority to the Comission, permitted the
Eonmisoion to prohibie Yaclal discrimination:

 

 

 

Id. at 244 n.7, 736 P.2d at 1209 n.7 (emphases in original). The

 

court concluded that the governing statute’s “extremely broad

 

grant of authority to the Commission,” coupled with "the great
weight to be accorded to the Commission’s construction of the
statute and the strong public policy of this State against racial
Giscrimination,” mandated the conclusion that the Comission did
not exceed its rule-making authority when it adopted HAR § 7-21.
Id, at 245, 738 P.2d at 1208.

In Orca Bay Seafoods, the United states court of
Appeals for the Ninth Circuit addressed the validity of a
regulation promulgated by the Secretary of Transportation that
exempted from the Vehicle Information and Cost Savings Act, Pub.

L. No, 92-513, 86 Stat. 961 (1972) (codified as amended at 15

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ee
U.S.C. §§ 1981-91), transfers of trucks with gross vehicle weight
ratings of sore than 16,000 pounds. Qrca Bay Seafoods, 32 F.3d
at 424, ‘The act required that all vehicle transfers include true
cdoneter readings or @ disclosure that actual mileage is

unknown, ‘The Ninth Circuit struck down the regulation ae
invalid, concluding that, although the reasoning for such an
exemption was rational, Congress had not delegated the power te
create euch an exemption. ‘The court reasoned that deference to
the agency's interpretation of ite governing statutes was not

required because

[aleference to administrative agencies under Chevron U.S.Au.
{eletereRSture: Resourcer Oefense council, Inc., 467 0.5
S7e2-83, 61 L- Ba.2 694 (1904),
SEL aoe save the regulation. Chersan deference only
‘idates [there isvanbiguity or silence in the statute;
hea a court reviews an agency's construction of the
{ETS Coatronted wien two

   

 

 

 

the question whether Congress
precise question at issue. If
GRIESE Ue"Boncrese Se clesr, chat is the end of the
Edteers for the coure, as well ae the agency, must give
REESEE’ co°tne nanbiguously expressed intent’ of Congress
SEES cert ehe court determines Congress has not directly
Ugrteses the precise question at issue, the question for

i
Beiseible construction of the -atatuns. 2d, at 642-43, 104
BERAt lt a7ei-e2 (footnotes omitted)

  
     

 

 

 

ive effect to the

 

td, at 436-7 (emphases added) «
in sum, Hyatt Corp. and Orca Bay Seafoods represent two
ends of the spectrum. The Liquor Commission’s power to ‘regulate

considered

 

the conduct of business of all licensees” w

wextrenely broad” and permitted the Commission to prescribe rules

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prohibiting licensees, including Hyatt, from discriminating
against custoners. In contrast, Congress had directly spoken on
the subject of the regulation at issue in Orca Bay Seafoods.

‘The instant case, however, is distinguishable from the
above cases. In Hyatt Corp., the Liquor Commission was granted
vexcrenely* broad authority to regulate “the proper conduct of
business of all licensees." 69 Haw. at 245, 738 P.2d at 1209.
‘he regulation at iesue as well as the other statutes raised by
Hyatt were consistent with the legislature’s “strong public
policy* against racial discrimination. In reviewing the question
whether the Commission was permitted to enact its regulations
given its “broad grant of authority," this court locked to the
legislature's policy regarding discrimination and determined that
the regulation was permitted. In the instant case, the
legislature's express policy, under the state Tort Liability Act,
nee supra note 4, is that the State ie liable for its torte in
the sane manner as a private party in like circunstances. Thus,

a regulatory shift of responsibility for the State's ovn

 

negligence contravenes the State’s express policy regarding
Liability for ite torte. As previously noted, unlike Orca Bay
Seafoods, the legislature has not spoken directly to whether the
DOT may impose a regulatory duty to indemify the state.
Admittedly, the governing statutes grant “all powers necessary”
for the regulation and control of state harbors, but such powers
are not so “extrenely broad” as those of the Liquor Comission in

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a

 

hyatt Corp, Indeed, the Liquor Conmiasion’s rule-making powers
were generally described as permitting the regulation of, inter
alia, the “proper conduct of the business of all licensees” as,
in the commission's judgment, "seem{ed] appropriate”; whereas
here, as previously discussed, the DOT’s rule-making authority is
specifically defined. Accordingly, we do not believe that the
por is permitted to bypass the general requirement that parties
(in this case, the state) secking to shift lability to ancther
(ice, the appellants) must secure the clear and unequivocal

agreenent of that party to assune the liability of another, See

Kamali, $4 Haw. at 162, 504 P.2d at 666.

cS déressis fies

the McCabe parties point to two cases -- (1) State v.

ka Piel any, 723 P.2d 76 (Alaska 1986), and
(2) state v. C & H Nationwide, 676 P.24 1199 (Ariz. Ct. APP-
1994) -- in which courts have held regulatory indemnification

unenforceable because they were not authorized by their
aescciated-governing statutes. In Alyeska Pipeline, an employee
of Alyeska Pipeline Service Conpany (Alyeska) sued the state of
Alaska after she was injured on a state highway (hereinafter, the
palton Highway], alleging that the state negligently failed to
control dust on the highway. The state joined Alyeska as 2
third-party defendant based upon an express indemnification
provision set forth in its highway use permit. Alyeska argued
that the regulation requiring the indemnification provision

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exceeded the authority of the governing statutes. The Supreme

 

Court of Alaska agreed with Alyeska, noting that the state
enumerated powers to control the state highway system included
the rights to control access to highways and to collect tolls,

well as to

 

fees, and charges for the use of such highways,
vexercise any other power necessary to carry out the purpose” of
the governing statutes. 723 P.2d at 78. The court noted that
the state also had a statutory duty to maintain the highway and
keep it open for industrial and commercial traffic. the
regulations promlgated by the state prohibited travel on the
Dalton Highway without a permit, which contained the following

indemity provision:

 

   

agents, and employees from all
‘oF claine of aay character brought because
of any injuries or damages sustained by any person or
property in consequence of any act or omission, in any way
Felated, directly or indirectly, to the issuance or use of
the permit, of the permittee, ice repr

exployecs, or of the state ay
agents, or employees, or of any other person

  

   

 

Id, at 78 (citation omitted). The Alaska Supreme Court concluded
that the regulation was inconsistent with the governing statutes

onable relation to the state’s statutory

 

because it bore “no r
duty to maintain the highway." Id.

In C & Hi Nationwide, a C & H truck, transporting an
jued by the Arizona

 

oversize load pursuant to a permit i
Department of Transportation (ADOT), was involved in a collision
with a motorhome, resulting in the deathe of seven people, The
survivors of the decedente brought a negligence action against

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a
C & Hand the State of Arizona (the state). 676 P.2d at 1200.

the state settled the case, and, thereafter, sought
indemnification against C & H based upon an ADOT regulation
generally requiring permit applicants to indemnify the state
ds at 1201. the state argued that the regulation requiring
indemnification was an authorized exercise of the broad powers

granted to the ADOT regarding public safety and the issuance of

oversize load permite. The court disagreed, stating that:

under A.R.S. § 28-208(A), the director of ADOT has the power
roti)

 

& ‘nd iurisdiction over tl f
‘Mahan and, renies and preset e eaeh othe abues

in regard to oversize load permite, A.R.S. § 26-202
provides:

A. (t]he director with respect to highways under the
Jurisdiecion of the department . . = may upon
2eEifGacion in writing and good cause being shows
therefor issues special permit _in writing authorizing
Ene applicant to operate or move a vehicle or
Edmbipetion of vehicles of a size or weight of vehicle
Sfioad exceeding the maximum specified in this
article ‘upon any highway under the jurisdiction
of the party granting the permit and for the
Saintenance of waich the party is responsible.

 

6." (ihe director... may with he
ts af the permit is issued,

Biliizector .- . say establish seasonal or other

Elne linitarione within which the vehicles described

 

Eav’pe operated on the highways indicated of otherwise
TMuttor prescribe conditions of operation of the
Yenicle cf vehicles, when necessary to eagure against
Undue dams ‘road foundations, surfaces oF
WiRigearee and may require ouch undertaking or other
Scluriey as aay be deemed necessary to compensate for
iny injury to any roadway or road structure,

       

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19 added.) Finally, A.R.S. 6 21
imposes Liability on the drivers and owners of over
vehicles for danage to highways or highway structur
by the sovenent of these vehicles. Movhere in the

Aeaislation do xe tind anv authority, expressed or imlicd,
sonferted upon the ADOT to require general indemnification
bynermictees. fven broadly construing the above statutory
provisions. we can discern no leaislative intent to require

((ttalieized e] mph

 

    

Id. (emphases added). The court further reasoned that:

Given [the aD0Ts) overall responsibility for regulating and
aintaining the state's highwaye, it ie ADOT that hae
Superior knowledge of the general nature and conditions of
the “thousands of miles of roadway it maintains,” rather
than carriers of oversize loads, particularly those fron
Sithout the state asin this case. Moreover, ADOT hae the
Tuthority to restrict the movement of dangerous oversize
Joace to certain routes and times that may be saf

ich purposes or to impose other
Yequiring eacort vehicles and warning

Pirthernore, sbeent a clear statutory directive, we do
not believe that the determination whether to require

dndennification ina nutter for the agency fo decide, duet
au tie decision to immunise the state from liapeiiey ie

elon to shift the etate’s ii

 

   

 

 

        

Bartel]
{ "we agree with the trial court that (.] had the
ification for savehing other tl ss
etatutes]- in the absence of
indesnity clause is unentorceable-

Id. at 1202-03 (citations omitted) (emphases added).

In the instant case, the circuit court found Alyeska
Pipeline and C & H Nationwide “distinguishable because the
delegations of power in those two cases were narrower than the
broad delegation [to regulate and control the State harbors that
is] involved in this case.” Although we agree with respect to
the scope of the delegation of power, we believe that some of the
ion.

 

d therein are worthy of discus

 

principles discu

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ET
Here, unlike the above cases, there is no permit

required of harbor users, i.e. a separate agreement.

Additionally, in ¢&H Nationwide, the court noted that the
permit itself éid not contain a separate indemnity provision, but
only cited to the regulation, stating that a permit applicant
sghall agree to hold [the state] harmless(.]" 676 P.2d at 1202
n.2. In that regard, the regulation at issue in C & Hi Nationwide
is more akin to the DOT's regulation at issue here. Although the
ADOT argued that, absent the regulation, ‘it would be required to
maintain constant surveillance over the thousands of miles of
roadway it maintains,” Id. at 1202, the Arizona Court of Appeals

reeponded that:

argument unpersuasive for several
9 indemnity obligation

ESsters safer highway operation by wide load carriers,

‘STthough eppeating on ite face, ie unsupported by any

Qidenge LEPike recora, and it avoide addressing potential

{Seuec concerning the state's own negligenc:

[tposing Hability on a permittee for the st

fay benefit the state's coffers, we cannot

Takreaves public safecy, and, ae C6 H urges, it may

Abusily diminish nighway safety by reducing’ the state's

Tpeentive to avoid negligence. Soe

L Sane bead 315, 318 (Alaska 1989)

inet oey indenaity provielon in state airport lease

AEORRRES Eke state's incentive to avoid negligence, not only

‘Seepect co FAL and other najor carriers with similar

‘cave provisions, but also with respect to the travelling

[eic) public"); cf. Salt Ri e

 

      

 

 

 

fea eis. 368, 362,
Puattenpte to avoid or Limit tort
stending to encourage

 

 

fee P20 198, 212 (1!
Liability disfavored
carelessness”)

 

jd. Similarly, we believe that the DoT’s argument that the power

 

to require indemnification is reasonably necessary is
unpersuasive. First, as previously stated, the DOT owns,
operates, and manages the State’s harbors, and, as such, it has

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ee

superior knowledge of the nature and conditions of ite piers,
wharves, commercial docks, landings, and the like. Second, given
its responsibility to maintain the overall safety of the users of
its harbors and related facilities, the DOT also has the
authority to, inter alia, regulate the movement of freight from
cargo ships to storage areas, designate and assign appropriate
storage areas, and otherwise control loading and unloading
activities. Third, like the Arizona appellate court, we also
fail to see how imposing liability on harbor users for the
State’s negligence is reasonably necessary to maintain their
safety. As observed by the court in C & H Nationwide, the
regulatory indemnification at issue here "may actually diminish

. safety by reducing the state’s incentive to avoid
negligence.” Id. And, finally, had the legislature intended to
afford the DOT authority to require indemnification, except where
the State is proven to be solely and legally negligent, it could
have expressly done so as it has in other circumstances as
discussed below.
B. Hawai'i Indemnification statutes

Although we acknowledge the State's argument that “the

 

existence of unrelated statutory duties to indemify does not
limit [the] DoT’s delegated authority,* we also recognize that
the legislature has imposed a duty to indemnify the State on

private parties without requiring a separate agreement in very

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a
limited instances. For example, HRS § 142-61(g) (1993)* imposes
on “any person who constructs or maintains” an electric fence
along publicly owned lands to indennify the public entity owning
guch land from all claims “arising from the use" of such fences;
RS § 266-172 (Supp. 2005) requires “any person receiving
information’ from the statewide traffic records systems to ‘hold
harmless the state and any agency thereof from all claims tor
improper use or release of such information.”

All other indemification statutes contemplate a
separate agreenent to shift liability to the indennitor and
generally fall into three main groups. The first includes those
etatutes that require a written acknowledgment or agreement.

see, exda, HRS § 302A-1164" (Supp. 2005) (requiring parents’
+ une § 142-6119) provides:

Any person who constructs or maintaing an electrically
charged fence of fence with an electrically charged
SREEEienea atong the boundary of any governnent road or
Sithin"ehe exterier boundaries of any leased public land or
Joe"thall defend, indennify, and hold haraless, the Stat
Aone or sther public entity fron all claine, quite, oF
SSgueses arieing fom the use of an electrically charged
donde or tence with electrically charged attachments

 

   

 

302A-1264 provides in pertinent part

5 302A-1164 Seif-adninistration of medication by
student and cnergency administration permitted. (a) The
Gepartment shall permit:

Ti)” “the eelf-adminietration of medication by &
Student for asthma, anaphylaxis, or other
forentially life-threatening ilinesses; and

(2) Bepertnent employees and agents to volunteer to
BGkinister giucagen in an emergency situation to
Geudente with diabetes.

 

 

ici © Te department shail inform the student's parent
or quatdian in writing that the department and its employees
SE Bence shail not incur any liability as a result of any
(continued. .

   

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written acknowledgment that duty to hold harmless and indemnity
the Department of Health for any claims arising from the
department's granting permission to students to self-administer
certain medications and administering medication to students in
certain emergency situations); age also ERS § 103F-409 (supp.
2005) (requiring all contracts for purchases of health and hunan
services to expressly state that the recipient or provider shall
indemnify and hold harmless the State from all claims, danages,
and costs arising out of or in connection with the acts or
omissions of the recipient or provider).

‘The second group of statutes requires indemnification
to be included as a lease provision. See, e.d., HRS § 2068-184
(supp. 2005) (regarding special facility projects under the
Hawaii Community Development Authority); see also HRS § 261-54
(supp. 2005) (requiring any special facility lease for
aeronautical special facility projects entered into by the DOT to

indemnify the department for claims arising from ite use).

"1. seontimuea)
Gnjury arieing from compliance with this section.
(@) the etudent's parent or guardian enail eisn =
statement acknowledging thats
(2) “The deparement and ite employees or agents shall
pot incur any ability as a result of any
injury arising fron compliance with thie
section; and
(2) The parent or guardian shall indemnify and hold
harmless the departnent and ite employees or
agente ageinet any claims arising out of
compliance with this section.

 

(Bold enphasie in original.)
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oe
The thira group of statutes requires an indemnification
agreenent as a grant condition. See, e.d., HRS § 10-17 (Supp.
2005) (regarding grants provided by the Office of Hawaiian
Affairs); HRS § 201-123 (Supp. 2005) (regarding grants from the
Hawaii television and film development special fund). Thus, the
statutes regarding indemnification generally comport with the
policy found in the State Tort Liability Act, see supra note 4,
that the State is liable to the sane extent as a private
individual for its torts, ive. that parties are generally
responsible for their own percentage of fault except where agreed

upon by the parties.
‘The state maintains that:

Like Dot's enabling statutes, the delegations (to other
igenciee) are general and broad. These laws also govern the
Control and use of large, important -- Jand
Glabiiiey-prone (=~ ]Stace resources. For example, the
Stadium Authority wae given the statutory authority £0
Seaintain, operate, and manage the stadium and related
facllities(s]> sto exercise ail powers necessary... £0
irry out and effectuate” his chapter, and to adopt rules
Ge ie may dees necessary(.)" HRS § 109-2 (Supp. 2008)
The stadium Authority enacted an administrative rule akin to
WAR § 19-41-71

 

 

(u)icensee shall be required to indemnify and hold
farelese the State, the authority, and thelr officers
and employees, from any and ail claims for lose,
injury, damage oF Iiability sustained . . . by reason
of) she wse'oz crcupation of the stadium prenises By
the Iicensee!

 

WAR § 3-70-28(b).._ ‘The Convention Center Authority did the
fone, gee HRS §"206X~4(b) (4) & (b) (20) (2999) (*] (agency
Shali “adept rules with respect to its projects, operations,
properties, and facilities;” and edo any and all things
Recessary to carry cut ite purposes and exercise the powers
granted); HAR § 15-110-40() (requiring licens

Gndennity the State and agency)

 

   

 

we the state notes that Authority over the Convention Center was later
reassigned to the Hawai Tourism Authority.

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(Brackets in original.) (Footnote omitted.) We note, however,
that such regulations are similar to existing indemity statutes
inasmuch as the regulations cited by the State require the
execution of @ separate license, permit, or lease agreement
See, e.g., HAR §§ 15-110-36 and -40 (regarding the Convention
center Authority, requiring a license, permit, or lease agreement
prepared by the authority); HAR §§ 3-70-7 and -15 (regarding the
Stadium Authority, requiring execution of a licensing agreement).
Based on the foregoing discussion, we conclude that:
(2) the Dot's governing statutes do not explicitly or implicitly
authorize the DOT to issue administrative rules exonerating the
state from the negligence of ite employees (i.e., they do not
allow the DOT to impose upon private parties a duty to defend or
indemnity the State); (2) HAR § 19-41-7 does not bear a
reasonable relationship to the DOT’s statutory mandate; and
(3) the legislature's imposition of a statutory duty to defend
and/or indemnify in other circumstances demonstrates the

legislature’a clear intent to reserve such power to itself."

 

2 gelying on HAR § 19-41-5, the State argues, in the alternative, that
‘even if consent (to aseune the State's liability] were required, the Mccabe
parties and Matson both gave it, by operating in the State's harbor." HAR
Pibcal-s provides for an "implied agreenent™ that all users of the state
harbors consent to abide by ll the rules. HAR § 19-42-5 states that "(tlhe
Gee of the commercial waterways and facilities under the juriediction of the
ber) shell constitute a consent to the terns and conditions” of ite rule
dn tities the rule ‘implied agreenent." The State argues further that the
duty here 1# sclear and unequivocal” and, thus, ie valid, The NeCabe partion
Sonvend that “there can be no valid consent to an unconatitutional oF
Stherwiee invalid regulation. In light of our conclusion that HAR § 19-41-7
{e'favalse and nenforceable, we need not address the State’s alternative
position.

 

   

    
 

       

 

 

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a

IV. cONCL

pased on the foregoing, we hold that the circuit court
exred in granting sunmary judgment in favor of the State and in
ebligating appellants to defend and indemnify the State against
saole's clains. We, therefore, vacate the circuit court's
pecenber 16, 2004 final judgnent and remand this case to the

cireuit court for further proceedings consistent with this

Gre —

opinion.”

on the brief.

 

John R. Lacy and Secale neo
Randolé L. M. Baldenor
Tee Gooarin anderson Peau Crt 0/6

Cie td tor
gotta appekiane

John 8. Nishimoto, Goren « Dusty

sonnet Nags

Bees cnong tianinoto
Seg potty aeons
teh mar Yectereegete
gtuceabe fananece
Petey ee

 

Richard K. Griffith,
for plaintiff-appellee

Deirdre Marie-tha and
Dorothy D. Sellers,
Deputy Attorneys General,
for defendant -appellee
state of Hawai'i

1 Tnasmuch as we conclude that HAR § 19-41-7 is invalid, we do not
reach the parties’ renaining arguments regarding (1) @ determination of

reach the Paresce war solely Liable and (2) whether the State's claine against
SAS flea! perty defendants are barred by the LHWCA.

 

 

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