Opinion ID: 2519630
Heading Depth: 2
Heading Rank: 2

Heading: The Commissioner's Cross-Claims on Appeal

Text: The Commissioner presents two claims in his cross-appeal: (1) the circuit court erred in denying his request for pre-judgment interest; and (2) the court erred in denying his request for attorneys' fees.
The Commissioner claims that the circuit erred in denying pre-judgment interest on the basis that it is not provided for by Article 15. Specifically, the circuit court ruled, The [Commissioner's] requests for [pre-judgment] interest and attorneys' fees are DENIED on the ground that Article 15 of the Insurance Code does not provide for the allowance of pre-judgment interest or for attorneys' fees. Pre-judgment interest is designed to allow the court to designate the commencement date of interest in order to correct injustice when a judgment is delayed for a long period of time for any reason, including litigation delays. Schmidt v. Board of Directors of Ass'n of Apartment Owners of Marco Polo Apartments, 73 Haw. 526, 534, 836 P.2d 479, 483 (1992) (quoting Leibert v. Finance Factors, Ltd., 71 Haw. 285, 293, 788 P.2d 833-838 (1990)) (internal quotation marks omitted). [T]he purpose of prejudgment interest is to discourage `recalcitrance and unwarranted delays in cases which should be more speedily resolved.' Calleon v. Miyagi, 76 Hawai`i 310, 322, 876 P.2d 1278, 1290 (1994) (citation omitted). However, it is clearly within the discretion of the circuit court to deny prejudgment interest where appropriate, for example, where: (1) the defendant's conduct did not cause any delay in the proceedings, see Amfac, Inc. [v. Waikiki Beachcomber Investment Co. ], 74 Haw. [85], 137, 839 P.2d [10,] 36 [(1992)]; (2) the plaintiff himself has caused or contributed to the delay in bringing the action to trial, see Schmidt v. Board of Directors of the Ass'n of Apartment Owners of the Marco Polo Apartments, 73 Haw. 526, 534-35, 836 P.2d 479, 484 (1992); or (3) an extraordinary damage award has already adequately compensated the plaintiff, see Leibert v. Finance Factors, Ltd., 71 Haw. 285, 293, 788 P.2d 833, 838 (holding that it was an abuse of discretion for the circuit court to award prejudgment interest to a treble damages award), reconsideration denied, 71 Haw. 664, 833 P.2d 899 (1990). Roxas v. Marcos, 89 Hawai`i 91, 153, 969 P.2d 1209, 1271 (1998), reconsideration denied, 89 Hawai`i 91, 969 P.2d 1209 (1999). The statutory basis for pre-judgment interest is HRS § 636-16 (1993), which provides that, [i]n awarding interest in civil cases, the judge is authorized to designate the commencement date to conform with the circumstances of each case, provided that the earliest commencement date in cases arising in tort, may be the date when the injury first occurred and in cases arising by breach of contract, it may be the date when the breach first occurred. Under HRS § 636-16, courts in all civil cases have the discretion to award pre-judgment interest. Sussel, 74 Haw. at 618, 851 P.2d at 320 (citing McKeague v. Talbert, 3 Haw.App. 646, 658 P.2d 898 (1983)). As the Commissioner's suit against VEBAH was a civil case, nothing in the statute prohibits awarding pre-judgment interest. Accordingly, the circuit court based its ruling on an erroneous view of the law and, therefore, abused its discretion by failing to consider the Commissioner's request for pre-judgment interest. Accordingly, we vacate the circuit court's denial of pre-judgment interest and remand this case for a determination whether an award of pre-judgment interest is appropriate. We express no opinion regarding the propriety of such an award.
The Commissioner claims that the circuit court erred in denying his request for attorneys' fees. Ordinarily, attorneys' fees cannot be awarded as damages or costs unless so provided by statute, stipulation, or agreement. Shanghai Inv. Co. v. Alteka Co., Ltd., 92 Hawai`i 482, 501, 993 P.2d 516, 535 (2000) (citations and internal quotation marks omitted). The Commissioner argues that count I of his complaint was in the nature of assumpsit because it was brought to obtain premium money collected by VEBAH pursuant to the PGMA/VEBAH Master Agreement. Therefore, the Commissioner argues that the circuit court should have awarded attorneys' fees pursuant to HRS § 604-14 (Supp.1998), which provides in pertinent part: In all the courts, in all actions in the nature of assumpsit . . . there shall be taxed as attorneys' fees, to be paid by the losing party and to be included in the sum for which execution may issue, a fee that the court determines to be reasonable[.] This court has noted that `assumpsit' is `a common law form of action which allows for the recovery of damages for non-performance of a contract, either express or implied, written or verbal, as well as quasi contractual obligations.' Blair v. Ing, 96 Hawai`i 327, 332, 31 P.3d 184, 189 (2001) (quoting TSA Int'l. Ltd. v. Shimizu Corp., 92 Hawai`i 243, 264, 990 P.2d 713, 734 (1999)). Additionally, [i]n ascertaining the nature of the proceeding on appeal, this court has looked to the essential character of the underlying action in the trial court. The character of the action should be determined from the facts and issues raised in the complaint, the nature of the entire grievance, and the relief sought. Where there is doubt as to whether an action is in assumpsit or in tort, there is a presumption that the suit is in assumpsit. Blair, 96 Hawai`i at 332, 31 P.3d at 189 (citations, internal quotation marks, and footnote omitted). In the present case, the essential character of the suit against VEBAH was not in the nature of assumpsit. The basis of the Commissioner's action was HRS § 431:15-323. Under the facts and issues raised in the complaint, possession of premiums collected alone is determinative of the obligation to pay. Thus, contractual rights and obligations were not at issue in the case, and the typical contractual defenses were not available. The fact that there was an underlying contractual relationship between PGMA and VEBAH is not dispositive of this case. Therefore, we hold that proceedings under HRS § 431:15-323 are not in the nature of assumpsit and that the circuit court did not err in denying the Commissioner his attorneys' fees.