Court Opinion

ID: 870136
Source: CourtListenerOpinion
Date Created: 2013-05-24 19:28:32.235925+00
Date Added: 2024-06-11T09:06:56.507934
License: Public Domain

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                                                             Electronically Filed
                                                             Supreme Court
                                                             SCWC-28762
                                                             17-APR-2013
                                                             10:48 AM

           IN THE SUPREME COURT OF THE STATE OF HAWAI#I

                                ---o0o---

 DISTRICT COUNCIL 50, OF THE INTERNATIONAL UNION OF PAINTERS AND
      ALLIED TRADES and ALOHA GLASS SALES & SERVICE, INC.,
                Petitioners/Plaintiffs-Appellants,

                                   vs.

          KEALI#I S. LOPEZ, in her capacity as Director,
          Department of Commerce and Consumer Affairs,
                  Respondent/Defendant-Appellee.

                               SCWC-28762

        CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
               (ICA NO. 28762; CIV. NO. 07-1-0310)

                             APRIL 17, 2013

                NAKAYAMA, ACTING C.J., MCKENNA, J.,
   AND CIRCUIT JUDGE SAKAMOTO IN PLACE OF POLLACK, J., RECUSED,
  WITH CIRCUIT JUDGE KIM IN PLACE OF RECKTENWALD, C.J., RECUSED,
    CONCURRING AND DISSENTING, WITH WHOM CIRCUIT JUDGE TO#OTO#O,
               IN PLACE OF ACOBA, J., RECUSED, JOINS

          OPINION OF THE COURT BY NAKAYAMA, ACTING C.J.

          In 2005, the State of Hawai#i contracted with general

contractor Allied Pacific Builders, Inc. (Allied Pacific) to

complete the renovation of Lanakila Elementary School.           The

project included extensive glazing work, specifically the
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fabrication and installation of 476 jalousie windows.             Allied

Pacific holds a C-5 specialty license in “[c]abinet, millwork,

and carpentry remodeling and repairs,” but it does not hold a

specialty glazing license.

            The Department of Commerce and Consumer Affairs’s

(DCCA) Contractors License Board (the Board) concluded that

Allied Pacific could complete the jalousie window work pursuant

to its C-5 license.      The Board determined that the jalousie

window work qualified as “incidental and supplemental” to the

remodeling and repair work authorized under Allied Pacific’s C-5

license.    We hold that because the Board did not consider the

cost and extent of the work when determining if that work

qualified as “incidental and supplemental” to the project, the

Board’s interpretation of the “incidental and supplemental”

exception is contrary to law and contrary to the primary purpose

of the legislation regarding contractor licensing.

                               I.   BACKGROUND

A.    Factual Background

            This case arises from the State of Hawaii’s renovation

project known as “Lanakila Elementary School Renovate and Paint

Various Buildings DAGS Job No. 52-16-5581” (the Project).              On

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January 31, 2005,1 the Department of Education (DOE), State of

Hawai#i, and the Department of Accounting and General Services

(DAGS), Public Works Division, issued a Notice to Bidders

(Notice) describing the work involved in the Project.             The Notice

stated:
            The work generally consists of replacement of windows, floor
            covering, tackboards, whiteboards, electrical light
            fixtures, switches, receptacles and cover plates, doors and
            door frames, finish hardware, termite damaged wood, gypsum
            wallboard partition, sinks and cabinets, re-keying of locks,
            interior and exterior painting, cast-in-place concrete,
            concrete repairs, concrete masonry, and some minor repair
            work.

            . . . .

            To be eligible to submit a Bid, the Bidder must possess a
            valid State of Hawaii Contractor’s license classification B.

            Included within the Project was the installation of 476

aluminum jalousie windows, containing approximately 10,390 vinyl

slats.    The Project specifications required that “[f]abrication

and installation of jalousie windows shall be done by skilled and

experienced mechanics to the best standard of the trade and in

accordance with the approved shop drawings.”           Under one estimate,

the window work cost $372,875, representing approximately 20% to

25% of the total project cost.2        This type of window work falls

      1
            The hearings officer misstated the date of the Notice as March 3,
2005, and this mistake was replicated in the Intermediate Court of Appeals’
(ICA) memorandum opinion. See District Council 50 v. Lopez, No. 28762, 2012
WL 3044105, at *1 (App. July 26, 2012) (mem. op.). The final date for the
submission of bids on the project was March 3, 2005.
      2
            This estimate was submitted by Petitioner Aloha Glass Sales and
Service, Inc. in a declaration. Though the hearings officer declined to adopt
                                                                (continued...)

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within the C-22 specialty license for glaziers.3           See Hawai#i

Administrative Rules (HAR) § 16-77-28(c) (incorporating Exhibit A

into the chapter) (hereinafter HAR § 16-77-28(c), Exhibit A).

            The Notice also included detailed instructions

explaining how and why DOE and DAGS required bidders to specify

subcontractors in the bid.       The instructions provided, in

pertinent part:
            1. Bidder shall complete the “Joint Contractors or
            Subcontractors List”. It is the sole responsibility of the
            Bidder to review the requirements of this project and
            determine the appropriate specialty Contractor’s licenses
            that are required to complete the project. Failure of the
            Bidder to provide the correct names, license numbers,
            specialty class number, classification description and to
            indicate that the specialty Contractor is required for this
            project, may cause the bid to be rejected.

            2. Bidder agrees the completed listing of Joint Contractors
            or Subcontractors is required for the project and that the
            Bidder, together with the listed Joint Contractors and
            Subcontractors, have all the specialty Contractor’s licenses
            to complete the work.

            3. Based on the Hawaii Supreme Court’s January 28, 2002
            decision in Okada Trucking Co., Ltd. v. Board of Water
            Supply, et al., 97 Hawaii 450 (2002), the Bidder as a

      2
       (...continued)
this estimate in his findings of fact, he referenced it in his conclusions of
law.
      3
            A C-22 specialty license authorizes “Glazing and tinting
contractor[s]”:

            To glaze or tint frames, panels, sash, and doors. To
            assemble and install window wall and curtain wall, shower
            doors, tub enclosures, mirrors, metal windows and screens,
            metal sliding doors, metal jalousies, store front metal and
            trim, plastics, tempered glass doors; including items such
            as frames and hardware and any allied products not stated
            above but affiliated with the glass and glazing industry[.]

Hawai#i Administrative Rules (HAR) § 16-77-28(c) (incorporating Exhibit A into
the chapter) (emphasis added).

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          General Contractor (‘A’ or ‘B’ license) is prohibited from
          undertaking any work solely or as part of a larger project,
          which would require the Bidder (‘A’ or ‘B’ General
          Contractor) to act as a specialty (‘C’ license) Contractor
          in any area in which the Bidder (‘A’ or ‘B’ General
          Contractor) has no specialty Contractor’s license. Although
          the ‘A’ and ‘B’ Contractor may still bid on and act as the
          “Prime Contractor” on an ‘A’ or ‘B’ project (See, HRS
          §[]444-7 for the definitions of an “A” and “B” project),
          respectively, the ‘A’ and ‘B’ Contractor may only perform
          work in the areas in which they have the appropriate
          Contractor’s license. The Bidder (‘A’ or ‘B’ General
          Contractor) must have the appropriate ‘C’ specialty
          Contractor’s licenses either obtained on its own, or
          obtained automatically under HAR §[]16-77-32.

          On December 20, 2005, DOE and DAGS accepted low bidder

Allied Pacific’s bid on the Project.        Allied Pacific is licensed

as a “B” general building contractor4 and, therefore, holds an

automatic C-5 specialty license.5       See HAR § 16-77-32(c) (2004).

     4
          HAR § 16-77-32(c) provides:

          Licensees who hold the “B” general building contractor
          classification shall automatically hold the following
          specialty classifications without further examination or
          paying additional fees:
          (1)   C-5 cabinet, millwork, and carpentry remodeling and
                repairs;
          (2)   C-6 carpentry framing;
          (3)   C-10 scaffolding;
          (4)   C-12 drywall;
          (5)   C-24 building moving and wrecking;
          (6)   C-25 institutional and commercial equipment;
          (7)   C-31a cement concrete;
          (8)   C-32a wood and vinyl fencing;
          (9)   C-42a aluminum and other metal shingles;
          (10) C-42b wood shingles and wood shakes.

     5
          The C-5 license authorizes specialty contractors

          [t]o install cabinets, cases, sashes, doors, trims, or
          nonbearing partitions that become a permanent part of [sic]
          structure, and to remodel or to make repairs to existing
          buildings or structures, or both; and to do any other work
          which would be incidental and supplemental to the remodeling
          or repairing. The repairs, carpentry work, or remodeling
          shall include the installation of window shutters, garage
                                                              (continued...)

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Allied Pacific’s bid listed a number of subcontractors holding

specialty contractor licenses, but did not list any subcontractor

holding a C-22 glazing and tinting license.           It is undisputed

that Allied Pacific does not possess a C-22 license.             District

Council 50, 2012 WL 3044105, at *3.

B.    Procedural Background

            On or about March 24, 2006, District Council 50 of the

International Union of Painters and Allied Trades (DC 50)6 and

Aloha Glass Sales & Service, Inc. (Aloha Glass)7 (collectively,

Petitioners) filed a Petition for Declaratory Ruling (Petition)

with DCCA’s Contractors License Board.           The Board referred the

Petition to the Office of Administrative Hearings for further

proceedings on April 26, 2006.        The Petition was filed pursuant

to Hawai#i Revised Statutes (HRS) § 444-4(9) (1995)8 and HAR §

      5
       (...continued)
            doors, bifold, and shutter doors; and the installation of
            manufactured sidings and any other work that would not
            involve changes or additions to the building’s or
            structure’s basic components such as, but not limited to
            foundations, beams, rafters, joists, or any load bearing
            members or sections[.]

HAR § 16-77-28(c), Exhibit A (emphasis added).
      6
            DC 50 is a union representing glaziers and glass workers, carpet
and soft tile installers, and drywall finishers.
      7
            Aloha Glass is a C-22 licensed specialty glazing contractor.
      8
            HRS § 444-4(9) provides that “[i]n addition to any other powers
and duties authorized by law, the board shall: Issue informal nonbinding
interpretations or declaratory rulings, and conduct contested case
proceedings . . . .”

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16-201-48 (1990).9     This statute, and the rule implementing it,

allows the Board to issue declaratory rulings regarding statutes,

rules, and orders governing contractors.           See HRS § 444-4(9); HAR

§ 16-201-48.     Petitioners sought a ruling that “[a] general

building contractor with a B-license cannot engage in work

requiring a C-22 subcontractor license under the general

contractor’s license.”10

      9
            HAR § 16-201-48 provides that “[t]he department or any interested
person may petition the authority for a declaratory ruling as to the
applicability of any statutory provision or of any rule or order adopted by
the authority to a factual situation.”
      10
            The Petition raised three additional issues:

            2. Where more than 1% of the work under a public works
            project requires a C-22 license, a general building
            contractor with a B-license cannot perform that work, but
            must engage a subcontractor possessing a C-22 subspecialty
            license;

            3. The State of Hawai#i may not accept bids from a
            contractor for a public works contract who has failed to
            name each person or firm to be engaged by the bidder as a
            subcontractor where it is not in the best interest of the
            State and the value of the work to be performed by the joint
            contractor or subcontractor is greater than 1% of the total
            bid amount; and

            4. The bid of the B-licensed contractor described herein
            should not have been accepted and the lowest bidder listing
            a C-22 specialty subcontractor should have been awarded the
            contract.

The Board determined that it did not have jurisdiction over these issues
because they required the Board to interpret HRS § 103D-302(b) (Supp. 2006).
HRS § 103D-302 governed competitive sealed bidding then as it does today. As
specified in HRS § 103D-701(a) (Supp. 2006), only an “actual or prospective
bidder, offeror, or contractor who is aggrieved in connection with the
solicitation or award of a contract may protest to the chief procurement
officer or a designee” under chapter 103D. On appeal, the circuit court held
that “the Board [did] not have expertise in or jurisdiction over HRS § 103D-
302(b) or chapter 103D in general, thus the Court finds that, for the purposes
of this appeal, it also has no jurisdiction over the Procurement
                                                                 (continued...)

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            Petitioners’ argument was based on their interpretation

of HRS §§ 444-9 (1993) and 444-8(c) (1993), and our opinion in

Okada Trucking, 97 Hawai#i 450, 40 P.3d 73 (2002).           HRS § 444-9

contains a broad prohibition against unlicensed work:
            No person within the purview of this chapter shall act, or
            assume to act, or advertise, as general engineering
            contractor, general building contractor, or specialty
            contractor without a license previously obtained under and
            in compliance with this chapter and the rules and
            regulations of the contractors license board.

HRS § 444-8(c) creates a general exception for specialty

contractors to complete work for which they are unlicensed if the

work is “incidental and supplemental” to licensed work:
            This section shall not prohibit a specialty contractor from
            taking and executing a contract involving the use of two or
            more crafts or trades, if the performance of the work in the
            crafts or trades, other than in which the specialty
            contractor is licensed, is incidental and supplemental to
            the performance of work in the craft for which the specialty
            contractor is licensed.

(emphasis added).     Petitioners argued that “incidental and

supplemental” must be interpreted narrowly so as not to “‘expand

the scope of work in which a general engineering contractor may

engage.’”    They interpreted Okada Trucking as “explicitly

stat[ing] that neither an ‘A’ nor ‘B’ licensee could engage in

‘incidental and supplemental’ work in trades or crafts in which

it is not licensed.”

      10
        (...continued)
Code. . . . [T]hus the only issues appropriate for appeal are the decisions of
the Board, which only reached HRS Chapter 444.” Petitioners did not appeal
this determination.

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            The hearings officer issued his recommendations on

October 26, 2006.    The hearings officer concluded: “The jalousie

window replacement work can be undertaken by a C-22 specialty

contractor, and a C-5 specialty contractor provided that the work

is incidental and supplemental to the renovation work for which

the C-5 contractor is licensed to perform.”         The hearings officer

interpreted Okada Trucking as holding only that a general

building contractor could not perform work for which it was not

licensed.    Therefore, work that falls under the “incidental and

supplemental” provision is licensed and the performance of this

work by a general contractor would not violate Okada Trucking.

            In interpreting the terms “incidental and

supplemental,” the hearings officer relied upon the definition

found in HAR § 16-77-34.     This rule defines “incidental and

supplemental” as “‘work in other trades directly related to and

necessary for the completion of the project undertaken by a

licensee pursuant to the scope of the licensee’s license.’”

The hearings officer noted that this definition of “incidental

and supplemental” does not take into consideration the cost or

extent of work.    Based on this definition, the hearings officer

concluded that the jalousie window work was “incidental and

supplemental” to the Project.      Accordingly, the hearings officer

recommended that the Board deny the Petition.         On January 22,

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2007, the Board adopted the hearings officer’s recommended

decision as the Board’s final order.

           Petitioners appealed to the circuit court.           On

September 12, 2007, the circuit court affirmed the Board’s final

order.11   The circuit court reasoned that it was the Board’s duty

as the finder of fact to determine the scope of licensing and

“there is nothing to prohibit the Board from determining and

interpreting HRS chapter 444 such that jalousie window work

representing 20% to 25% of the total project meets the definition

of incidental and supplemental under HAR § 16-77-34.”

           Petitioners thereafter filed a secondary appeal with

the ICA.   On July 26, 2012, the ICA issued its memorandum

opinion.   See District Council 50, 2012 WL 3044105, at *1.            The

ICA held that, because Petitioners did not demonstrate that the

Board’s interpretation of “incidental and supplemental” was

clearly erroneous or inconsistent with the underlying legislative

purpose, the circuit court did not err in affirming the Board’s

final order.    Id. at *5.

           Petitioners timely filed an application for writ of

certiorari on October 18, 2012.        This court accepted Petitioners’

application on December 3, 2012 and heard oral argument on

     11
           The Honorable Eden Elizabeth Hifo presided.

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January 17, 2013.

                         II.   STANDARD OF REVIEW

A.    Secondary Judicial Review of an Administrative Decision

            The review of a circuit court’s decision upon its

review of an agency’s decision is a secondary appeal.             Haw.

Teamsters & Allied Workers, Local 966 v. Dep’t of Labor & Indus.

Relations, 110 Hawai#i 259, 265, 132 P.3d 368, 374 (2006).                In a

secondary appeal, “‘Hawaii appellate courts apply the same

standard of review as that applied upon primary review by the

circuit court.’”      AlohaCare v. Ito, 126 Hawai#i 326, 341, 271

P.3d 621, 636 (2012) (quoting Kaiser Found. Health Plan, Inc. v.

Dep’t of Labor & Indus. Relations, 70 Haw. 72, 80, 762 P.2d 796,

800-01 (1988)).     The applicable standard of review for

administrative appeals is set forth in HRS § 91-14(g) (1993),

which provides:
            Upon review of the record the court may affirm the decision
            of the agency or remand the case with instructions for
            further proceedings; or it may reverse or modify the
            decision and order if the substantial rights of the
            petitioners may have been prejudiced because the
            administrative findings, conclusions, decisions, or orders
            are:

                  (1) In violation of constitutional or statutory
                  provisions; or
                  (2) In excess of the statutory authority or
                  jurisdiction of the agency; or
                  (3) Made upon unlawful procedure; or
                  (4) Affected by other error of law; or
                  (5) Clearly erroneous in view of the reliable,
                  probative, and substantial evidence on the whole
                  record; or
                  (6) Arbitrary, capricious, or characterized by abuse

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                 of discretion or clearly unwarranted exercise of
                 discretion.12

See also AlohaCare, 126 Hawai#i at 341, 271 P.3d at 636 (applying

HRS § 91-14(g) when evaluating a petition seeking a declaratory

ruling under HAR § 16-201-48).       “[U]nder HRS § 91-14(g),

conclusions of law are reviewable under subsections (1), (2), and

(4); questions regarding procedural defects under subsection (3);

findings of fact under subsection (5); and an agency’s exercise

of discretion under subsection (6).”         Del Monte Fresh Produce

(Haw.), Inc. v. Int’l Longshore & Warehouse Union, Local 142, 112

Hawai#i 489, 499, 146 P.3d 1066, 1076 (2006) (alterations in

original) (quoting In re Hawaiian Elec. Co., 81 Hawai#i 459, 465,

918 P.2d 561, 567 (1996)).

           “‘An agency’s interpretation of its rule receives

deference unless it is plainly erroneous or inconsistent with the

underlying legislative purpose.’” Haw. Teamsters, 110 Hawai#i at

265, 132 P.3d at 374 (quoting Int’l Bhd. of Elec. Workers v.

Hawaiian Tel. Co., 68 Haw. 316, 322, 713 P.2d 943, 950 (1986)).

The agency’s “interpretation of a statute is a question of law

reviewable de novo.”      Okada Trucking, 97 Hawai#i at 458, 40 P.3d

      12
            The ICA cited HRS § 103D-710(e) (2011) for a similar standard of
review. District Council 50, 2012 WL 3044105, at *2 (citing Arakaki v. State,
Dep’t of Accounting & Gen. Servs., 87 Hawai#i 147, 149, 952 P.2d 1210, 1212
(1998)). However, HRS § 103D-710(e) is not applicable because, unlike the
petitioner in Arakaki, Petitioners here did not file their petition pursuant
to HRS chapter 103D, the Procurement Code.

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at 81.   We have stated that:
                 When construing a statute, our foremost obligation is
           to ascertain and give effect to the intention of the
           legislature, which is to be obtained primarily from the
           language contained in the statute itself. And we must read
           statutory language in the context of the entire statute and
           construe it in a manner consistent with its purpose.

                 When there is doubt, doubleness of meaning, or
           indistinctiveness or uncertainty of an expression used in a
           statute, an ambiguity exists.

                 In construing an ambiguous statute, “the meaning of
           the ambiguous words may be sought by examining the context,
           with which the ambiguous words, phrases, and sentences may
           be compared, in order to ascertain their true meaning.” HRS
           § 1-15(1) (1993). Moreover, the courts may resort to
           extrinsic aids in determining legislative intent. One
           avenue is the use of legislative history as an interpretive
           tool.

Gray v. Admin. Dir. of the Court, 84 Hawai#i 138, 148, 931 P.2d

580, 590 (1997) (internal brackets, ellipses, and footnote

omitted) (quoting State v. Toyomura, 80 Hawai#i 8, 18-19, 904

P.2d 893, 903-04 (1995)).

                            III.   DISCUSSION

A.   The Board’s decision was not inconsistent with our opinion
in Okada Trucking

           Petitioners have repeatedly argued that the Board’s

broad definition of “incidental and supplemental” would, if

upheld, “eviscerate” and “emasculate” this court’s opinion in

Okada Trucking.    They quote Okada Trucking for the principal that

“‘if a particular project for which a general engineering

contractor has obtained a contract requires work in a specialty

classification in which it is not licensed to operate . . . the

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general engineering contractor cannot, pursuant to HRS § 444-9,

undertake to perform that specialty work itself.’”          Under

Petitioners’ interpretation, the Board’s definition of

“incidental and supplemental” violates Okada Trucking by allowing

general contractors to perform all specialty work that is related

to and necessary for the completion of a project, regardless of

whether the general contractor holds the requisite specialty

licenses.   However, Petitioners fail to appreciate the

significant factual differences between Okada Trucking and this

case and the specificity of our holding in Okada Trucking.

            Okada Trucking involved a contract for an “A” general

engineering contractor to construct a booster station for the

City and County of Honolulu Board of Water Supply (“BWS”).             97

Hawai#i at 452, 40 P.3d at 75.      It was uncontested that the

contract included plumbing work requiring a C-37 specialty

contracting license.    Id. at 452-53, 40 P.3d at 75-76.         BWS

awarded the contract to low bidder Inter Island Environmental

Systems, Inc. (Inter Island), despite the fact that its bid did

not “disclose the name of and the nature and scope of work to be

performed by a C-37 licensed plumbing subcontractor.”           Id. at

453, 40 P.3d at 76.

            Okada Trucking Co., Ltd. (Okada Trucking), the second

lowest bidder on the contract, protested the award of the

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contract to Inter Island.       Id. at 453-54, 40 P.3d at 76-77.         The

DCCA hearings officer concluded that “it was not in the BWS’s or

the public’s best interests to have waived the disclosure

requirement” and therefore it was unlawful to do so.            Id. at 455,

40 P.3d at 78.

            The ICA vacated the hearings officer’s decision,

holding that Inter Island was not required to list a C-37

licensed subcontractor in its bid or retain a C-37 licensed

subcontractor to complete the specialty plumbing work.             Id. at

457, 40 P.3d at 80.

            This court accepted Okada Trucking’s application for

writ of certiorari.      Id. at 451, 40 P.3d at 74.       We held that the

ICA erred in holding that Inter Island could complete the

specialty plumbing work under its general contracting licenses.

Id. at 457, 40 P.3d at 80.       We concluded that “pursuant to HRS §

444-9, a general engineering or building contractor is prohibited

from undertaking any work, solely or as part of a larger project,

that would require it to act as a specialty contractor in an area

in which the general contractor was not licensed to operate.”13

      13
            We remanded the case to the ICA to consider the points of error
that Inter Island raised on appeal from the hearings officer’s decision.
Okada Trucking, 97 Hawai#i at 462, 40 P.3d at 85. The ICA dismissed the
appeal as moot due to Okada Trucking’s completion of the original contract.
Okada Trucking Co., Ltd. v. Bd. of Water Supply, No. 22956, 2002 WL 32056914,
at *1 (App. Apr. 29, 2002)(Order Dismissing Appeal). We granted the
subsequent application for writ of certiorari and held that Inter Island’s
                                                                (continued...)

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Id. at 462, 40 P.3d at 85 (emphasis in original).

            We discussed the implications of the “incidental and

supplemental” provision of HRS § 444-8(c), and the limiting

provision of HRS § 444-9, in a footnote:
            The foregoing provisions, to the extent that they permit a
            specialty contractor to engage in “incidental and
            supplemental” work in trades or crafts in which it is not
            licensed do not similarly expand the scope of work in which
            a general engineering contractor may engage. Rather, as to
            general engineering contractors, HRS §§ 444-8 and 444-9, as
            well as HAR §§ 16-77-32 through 16-77-34, expressly
            constrain them from engaging in any operations for which
            they are not duly licensed.

            More importantly, however, in the present matter, no party
            has ever contended that Inter Island could undertake the
            plumbing work required by the project because that work was
            “incidental and supplemental” to work that Inter Island was
            duly licensed to undertake. Inasmuch as we are not fact-
            finders and given that the hearings officer expressly found
            that the project required work in the C–37 plumbing
            classification, the ICA erred in construing the foregoing
            provisions to support its holding that the project in the
            present matter did not require specialized plumbing work
            that Inter Island was not duly licensed to undertake.

Id. at 461-62 n.16, 40 P.3d at 84-85 n.16 (emphasis added).               This

text clarifies that the “incidental and supplemental” provision

applies only to specialty contractors and not to general “A” or

“B” contractors.     However, we also qualified this conclusion by

stating that the most important factor in our determination that

      13
        (...continued)
question fell within an exception to the mootness doctrine “because it
involves a matter of public concern and is capable of repetition yet evading
review.” Okada Trucking Co., Ltd. v. Bd. of Water Supply, 99 Hawai#i 191,
192, 53 P.3d 799, 800 (2002) (Okada Trucking II). On remand, the ICA held
that, although Inter Island’s bid was non-responsive because it did not list a
C-37 licensed subcontractor, BWS was authorized to waive this de minimis
violation and accept Inter Island’s bid. Okada Trucking Co., Ltd. v. Bd. of
Water Supply, 101 Hawai#i 68, 76-80, 62 P.3d 631, 639-43 (App. 2002).

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a C-37 specialty contractor was required to complete the

specialty plumbing work was the parties’ uncontested admission of

this fact.   Id.

          Both Okada Trucking and the present application

consider under what circumstances a general contractor is

required to subcontract with a contractor holding a “C” specialty

contracting license.    However, the cases differ in two

significant aspects.    First, in Okada Trucking, the parties

conceded that the work could only be completed by a contractor

holding a specialty license that Inter Island did not possess.

Here, however, the Board concluded, and Allied Pacific has

consistently maintained, that Allied Pacific may complete the

specialty window work under its C-5 license.         Second, neither

party in Okada Trucking argued that Inter Island could complete

the specialty work because it was “incidental and supplemental”

to the licensed work.     Whereas here, the Board specifically held

that Allied Pacific could complete the jalousie window work under

the “incidental and supplemental” provision in its automatic C-5

specialty license.

          Okada Trucking’s holding dictates only that a general

contractor may not engage in work requiring a specialty license

that the general contractor does not hold.         See Okada Trucking,

97 Hawai#i at 462, 40 P.3d at 85.        We did not foreclose the

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possibility of a specialty contractor completing work falling

outside of their specialty license if that work was incidental

and supplemental to licensed work, as provided for by HRS § 444-

8(c).   Here, the Board concluded that the jalousie window work

qualified as “incidental and supplemental” to Allied Pacific’s C-

5 specialty license.    Therefore, pursuant to the Board’s

interpretation, the jalousie window work could be completed under

the C-5 specialty license, and did not require a C-22 specialty

glaziers license.    The Board’s decision was based on Allied

Pacific’s status as a C-5 specialty license holder, and not its

status as a general “B” contractor.       Because the Board determined

that Allied Pacific could complete the jalousie window work under

its C-5 specialty license, its conclusion did not violate our

holding in Okada Trucking.

B.   The Board’s interpretation of the “incidental and
supplemental” provision is plainly erroneous and inconsistent
with the underlying legislative purpose

           In this case, the Board interpreted the “incidental and

supplemental” provision in HRS § 444-8(c), the “incidental and

supplemental” provision in the C-5 specialty license at HAR § 16-

77-28(c), Exhibit A, and the definition of “incidental and

supplemental” contained in HAR § 16-77-34.         Statutory

interpretations are reviewed de novo and the “agency’s

interpretations of its rules receives deference unless it is

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plainly erroneous or inconsistent with the underlying legislative

purpose.”    Haw. Teamsters, 110 Hawai#i at 265, 132 P.3d at 374.

“Although judicial deference to agency expertise is generally

accorded where the interpretation and application of broad or

ambiguous statutory language by an administrative tribunal are

subject to review, this deference is constrained by our

obligation to honor the clear meaning of a statute, as revealed

by its language, purpose, and history.”        Morgan v. Planning

Dep’t, Cnty. of Kaua#i, 104 Hawai#i 173, 180, 86 P.3d 982, 989

(2004).   Because the Board’s interpretation of its rules was

plainly erroneous and contrary to the clear meaning of the

statute, it is not entitled to deference.

     1.   The Board’s interpretation of “incidental and
supplemental” was plainly erroneous under HRS § 444-8(c)

            In their application for writ of certiorari,

Petitioners argue that the ICA erred in deferring to the Board’s

interpretation of the “incidental and supplemental” provision of

HRS § 444-8(c) and that the Board’s interpretation was clearly

erroneous, contrary to law, and arbitrary and capricious.

Because “incidental” and “supplemental” are common words,

Petitioners look to the dictionary to find their “ordinary and

customary meanings” and the dictionary yields definitions of

“incidental” and “supplemental” which, when combined, form:

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“something ‘minor’ added to the whole.”        They argue that the

Board’s holding “that the statutory terms ‘incidental and

supplemental’ have nothing to do with ‘the extent or cost of the

work’” is contradictory to the ordinary meaning of the words.

Petitioners conclude that if “incidental and supplemental” are

defined as “necessary and indispensable,” as stated in HAR § 16-

77-34, “the exception swallows the rule”: a specialty contractor

licensed to complete work making up 1% of the project could

complete the remaining 99% of the work under this interpretation

of the “incidental and supplemental” provision.

          HRS chapter 444 (1993 & Supp. 2012) governs the

regulation of contractors.14     It divides contractors into three

classifications: general engineering, general building, and

specialty.   HRS § 444-7 (1993).      Generally, contractors may only

perform work for which they are properly licensed.          See HRS §

     14
          HRS § 444-1 (1993) defines a “contractor” as:

          any person who by oneself or through others offers to
          undertake, or holds oneself out as being able to undertake,
          or does undertake to alter, add to, subtract from, improve,
          enhance, or beautify any realty or construct, alter, repair,
          add to, subtract from, improve, move, wreck, or demolish any
          building, highway, road railroad, excavation, or other
          structure, project development, or improvement, or do any
          part thereof, including the erection of scaffolding or other
          structures or works in connection therewith.
                “Contractor” includes a subcontractor, a specialty
          contractor, and any person, general engineering, general
          building, or specialty contractor who performs any of the
          activities listed in the previous paragraph directly or
          indirectly for the federal government.

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444-8(a) (1993) (“The contractors license board may adopt rules

and regulations necessary to effect the classification of

contractors . . . and may limit the field and scope of the

operations of a licensed contractor to those in which the

contractor is classified and qualified to engage . . . .”).

However, HRS § 444-8(c) creates an exception for specialty

contractors to perform “incidental and supplemental” work outside

of their licensed area of expertise:
          This section shall not prohibit a specialty contractor from
          taking and executing a contract involving the use of two or
          more crafts or trades, if the performance of the work in the
          crafts or trades, other than in which the specialty
          contractor is licensed, is incidental and supplemental to
          the performance of work in the craft for which the specialty
          contractor is licensed.

(emphasis added).

          In interpreting the HRS § 444-8(c) exception for

specialty contractors to complete unlicensed “incidental and

supplemental” work, we must give effect to the plain and obvious

meaning of the language.     See Leslie v. Bd. of Appeals of Cnty.

of Haw., 109 Hawai#i 384, 393, 126 P.3d 1071, 1080 (2006).           To

determine the ordinary meaning of terms not statutorily defined,

we may use “legal or other well accepted dictionaries.”           Id.

“Incidental” is defined as: “[s]ubordinate to something of

greater importance; having a minor role.”         Black’s Law Dictionary

830 (9th ed. 2009).    “Supplemental” is defined as: “supplying

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something additional; adding what is lacking.”          Id. at 1577.

Therefore, the ordinary meaning of “incidental and supplemental”

is “subordinate to something of greater importance and supplying

something additional.”

           Applying the ordinary meaning of “incidental and

supplemental” to HRS § 444-8(c), it is apparent that the

legislature meant to provide specialty contractors with a limited

ability to perform work outside of their licensed specialty area.

However, the “incidental and supplemental” work must not make up

the majority of the project, and must instead be “subordinate”

and in addition to licensed work “of greater importance.”

           Under DCCA’s rules implementing HRS chapter 444, a “B”

general contractor such as Allied Pacific may not “undertake a

contract unless it requires more than two unrelated building

trades or crafts or unless the general building contractor holds

the specialty license to undertake the contract.          Work performed

which is incidental and supplemental to one contractor

classification shall not be considered as unrelated trades or

crafts.”   HAR § 16-77-33(b) (emphasis added).

           “B” general building contractors automatically hold

several specialty contracting licenses, including the C-5

cabinet, millwork, and carpentry remodeling and repairs license.

HAR § 16-77-32(c).    The C-5 specialty license is the only

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specialty license that specifically provides for contractors to

perform “incidental and supplemental” work outside of their

licensed specialties.     See HAR § 16-77-28(c), Exhibit A.         The C-5

license allows the licensee “[t]o install cabinets, cases,

sashes, doors, trims, or nonbearing partitions that become a

permanent part of [sic] structure, and to remodel or to make

repairs to existing buildings or structures, or both; and to do

any other work which would be incidental and supplemental to the

remodeling or repairing.”     HAR § 16-77-28(c), Exhibit A (emphasis

added).    DCCA’s rules define “incidental and supplemental” as any

“work in other trades directly related to and necessary for the

completion of the project.”      HAR § 16-77-34.

           The Board’s interpretation of the rules provides no

limitation on the amount of specialty work that may be completed

as incidental and supplemental to C-5 licensed work.           See id.

For remodeling and repair projects falling under the purview of a

“B” general building contractor, the contractor may complete

various types of work pursuant to its automatic C-5 specialty

license.   Under the Board’s interpretation, if the contractor is

qualified to complete some of the work under the C-5 license, the

contractor may complete any other work that is “related to and

necessary for the completion of the project.”

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          By statute, the Board is required to “[a]dopt, amend,

or repeal such rules as it may deem proper fully to effectuate”

HRS chapter 444.    HRS § 444-4(2).      Therefore, the “incidental and

supplemental” exception in the C-5 license must be interpreted in

accord with the language of HRS § 444-8(c).         While HRS § 444-8(c)

created a narrow exception for unlicensed work that is

“subordinate to something of greater importance and supplying

something additional,” the Board’s expansive interpretation of

the “incidental and supplemental” exception creates a loophole

for C-5 contractors to complete unlimited amounts of specialty

work for which they do not hold the requisite specialty licenses.

The Board’s refusal to consider cost and extent of work when

determining whether that work qualifies as “incidental and

supplemental” is plainly erroneous in light of the clear meaning

of HRS § 444-8(c).

     2.   The Board’s interpretation of “incidental and
supplemental” is inconsistent with the Legislature’s underlying
purpose

          Petitioners argue that the Board’s definition of

“incidental and supplemental” is “without meaning or substance

and fails to carry out the Legislature’s ‘manifest purpose.’”

They also argue that no deference is accorded to agency

interpretations that contravene the legislative purpose.            They go

so far as to argue that “[t]o allow a general contractor to

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perform any specialty work so long as it is ‘directly related to

and necessary for’ a project regardless of the ‘extent’ or ‘cost’

of that specialty work would render all specialty licensing laws

meaningless.”

          The purpose behind contractor licensing laws in Hawai#i

is to “protect the general public against dishonest, fraudulent,

unskillful or unqualified contractors.”        Jones v. Phillipson, 92

Hawai#i 117, 125, 987 P.2d 1015, 1023 (App. 1999) (quoting 1957

Haw. Sess. L. Act 305, at 358-67).       In accordance with this

principal, the stated purpose of HRS chapter 444 is “the

protection of the general public.”       Okada Trucking, 97 Hawai#i at

459, 40 P.3d at 82 (quoting HRS § 444-4(2) (Supp. 2000)).            The

legislature has stated that HRS chapter 444 was “enacted, in

part, to ensure the health and safety of the public by requiring

that contractors possess a minimum level of expertise, experience

and training.”   Jones, 92 Hawai#i at 125, 987 P.2d at 1023

(emphasis omitted) (quoting Hse. Stand. Comm. Rep. No. 727-96, in

1996 House Journal, at 1309).

          In furtherance of the purpose of HRS chapter 444, the

Board must “adopt such rules as it deems proper fully to

implement its authority and to enforce the provisions of HRS ch.

444 and the rules adopted pursuant thereto.”         Okada Trucking, 97

Hawai#i at 459, 40 P.3d at 82 (citing HRS §§ 444-4(2), (3), and

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(4)).      To protect public health and safety, the Board’s rules

must ensure that fully qualified contractors are completing all

major work involved in a particular project.

              The Board’s broad definition of “incidental and

supplemental” allows C-5 specialty contractors to complete

substantial amounts of work for which they are unlicensed.              A C-5

contractor may not possess the minimum level of expertise,

experience, and training to complete this unlicensed work.              If

such work is poorly completed, it could present a grave risk to

public health and safety.       Because the Board’s interpretation of

“incidental and supplemental” contravenes the manifest

legislative purpose of the statute, it is entitled to no

deference.15

              In creating the “incidental and supplemental” provision

in HRS § 444-8(c), the legislature crafted an exception for the

      15
            Though neither party has raised the issue of mootness, it is the
duty of the court “to decide actual controversies . . . and not to give
opinions upon moot questions.” Wong v. Bd. of Regents, Univ. of Haw., 62 Haw.
391, 394, 616 P.2d 201, 204 (1980). A case is moot if “the question to be
determined is abstract and does not rest on existing facts or rights.” CARL
Corp. v. State, Dep’t of Educ., 93 Hawai#i 155, 164, 997 P.2d 567, 576 (2000).
Although the record is silent, the Project, which began in 2006, was likely
completed several years ago. Therefore, Petitioners’ question regarding
whether a general “B” contractor could complete the Project’s jalousie window
work under a C-5 license is most likely moot. However, this court has
“repeatedly recognized an exception to the mootness doctrine in cases
involving questions that affect the public interest and are ‘capable of
repetition yet evading review.’” Okada Trucking II, 99 Hawai#i at 196, 53 P.3d
at 799 (quoting CARL Corp., 93 Hawai#i at 165, 997 P.2d at 577). Because
Petitioners’ question regarding the scope of a general “B” license is a matter
of public concern that will likely arise in the future and become moot before
it can receive appellate review, it qualifies for the mootness exception.

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completion of limited amounts of unlicensed work.          This exception

must be interpreted narrowly to preserve the statute’s

overarching purpose of protecting public safety by insuring that

work is completed by fully competent contractors.          In order to

comply with this statutory provision, and the overall purpose of

HRS chapter 444, the “incidental and supplemental” exception to

the C-5 license must be similarly limited.         By allowing C-5

specialty contractors to complete all work related to and

necessary for the completion of a renovation project, regardless

of cost and extent, the Board is contravening the express purpose

of HRS chapter 444.

                            IV.   CONCLUSION

          For the foregoing reasons, we vacate the ICA’s judgment

and the circuit court’s judgment and remand to the Board to

reconsider whether the jalousie window work qualified as

“incidental and supplemental” to the Project in light of the cost

and extent of work involved.

Michael A. Lilly                         /s/ Paula A. Nakayama
and Valerie M. Kato
for petitioners                          /s/ Sabrina S. McKenna

Lei S. Fukumura,                         /s/ Karl K. Sakamoto
Deborah Day Emerson
and Rodney J. Tam
for respondent

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