Opinion ID: 2600604
Heading Depth: 2
Heading Rank: 3

Heading: The Circuit Court Abused Its Discretion When It Awarded Costs and Attorney's Fees To the Pruetts.

Text: Hawai`i Revised Statutes (HRS) § 431:10-242 (2005) provides, in its entirety: Where an insurer has contested its liability under a policy and is ordered by the courts to pay benefits under the policy, the policyholder, the beneficiary under a policy, or the person who has acquired the rights of the policyholder or beneficiary under the policy shall be awarded reasonable attorney's fees and costs of suit, in addition to the benefits under the policy. (Emphasis added.) The circuit court's order granting costs and attorney's fees to the Pruetts states that the award was made based on the Pruetts prevail[ing] on the issue of coverage under the automobile insurance policies as to Allstate and AIG . . . in accordance with [HRS § 431:10-242][.] AIG contends that the circuit court erred when it awarded costs and attorney's fees to the Pruetts because it was not ordered to pay benefits under its policy for purposes of HRS § 431:10-242. In Mikelson v. United Servs. Auto. Ass'n, 108 Hawai`i 358, 360, 120 P.3d 257, 259 (2005), this court acknowledged that the fundamental question with respect to the issue of awarding ['attorney's fees and the costs of suit'] is whether [the insurer] has in fact been ordered to pay benefits within the meaning of HRS § 431:10-242. (Brackets added.) In Mikelson, this court denied the insured's request for attorney's fees because the trial court ordered the insurer to provide [underinsured motorist (UIM) ] coverage and not UIM benefits, the latter of which would be sufficient to satisfy the plain and obvious meaning of the phrase pay benefits as used within HRS § 431:10-242. 108 Hawai`i at 360-61, 120 P.3d at 259-60. Similarly, in Ranger Insurance Co. v. Hinshaw, 103 Hawai`i 26, 30, 79 P.3d 119, 123 (2003), multiple complaints for declaratory relief were dismissed with prejudice. This court held that HRS § 431:10-242 was inapplicable because the insurer was not ordered to pay any benefits under its policy. Id. at 34, 79 P.3d at 127. In this case, the circuit court ordered that the exclusions in both Allstate's and AIG's automobile insurance policies were inapplicable to the Pruetts, and coverage is afforded under [AIG's automobile insurance policy] and [Allstate's automobile insurance policy][.] . . . In addition, [PIP] coverage is afforded to Ikaika Pruett under the Allstate Auto Policy arising from the February 8, 2002 accident. Because the circuit court did not order the Insurers to pay benefits, as mandated by the plain language of HRS § 431:10-242, HRS § 431:10-242 does not apply to this case. See Mikelson, 108 Hawai`i at 360-61, 120 P.3d at 259-60; see also Ranger Ins. Co., 103 Hawai`i at 34, 79 P.3d at 127. Accordingly, we hold that the circuit court abused its discretion when it awarded costs and attorney's fees to the Pruetts pursuant to HRS § 431:10-242. See TSA Int'l Ltd., 92 Hawai`i at 253, 990 P.2d at 723 (This court reviews the circuit court's denial and granting of attorney's fees under the abuse of discretion standard. . . . `The trial court abuses its discretion if it bases its ruling on an erroneous view of the law or on clearly erroneous assessment of the evidence.' (Citations omitted.)).