Court Opinion

ID: 4689552
Source: CourtListenerOpinion
Date Created: 2021-05-24 22:03:41.984136+00
Date Added: 2024-06-11T08:04:54.637232
License: Public Domain

***NOT FOR PUBLICATION IN WEST’S HAWAII REPORTS AND PACIFIC REPORTER***

                                                               Electronically Filed
                                                               Supreme Court
                                                               SCWC-XX-XXXXXXX
                                                               24-MAY-2021
                                                               10:59 AM
                                                               Dkt. 24 MO

                             SCWC-XX-XXXXXXX

            IN THE SUPREME COURT OF THE STATE OF HAWAIʻI

                            KATE X. CUI,
              Petitioner/Claimant-Appellant-Appellant,

                                     vs.

              STATE OF HAWAIʻI, DEPARTMENT OF HEALTH,
       Respondent/Employer-Appellee-Appellee, Self-Insured.
            (Case No. AB 2011-206; DCD No. 2-09-40756)

                            KATE X. CUI,
              Petitioner/Claimant-Appellant-Appellant,

                                     vs.

              STATE OF HAWAIʻI, DEPARTMENT OF HEALTH,
     Respondent/Employer-Appellee-Appellee, Self-Insured and
   STATE OF HAWAIʻI, DEPARTMENT OF HUMAN RESOURCES DEVELOPMENT,
              Respondent/Adjuster-Appellee-Appellee.
            (Case No. AB 2013-232; DCD No. 2-12-40661)

          CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
                         (CAAP-XX-XXXXXXX)

                         MEMORANDUM OPINION
(By: Recktenwald, C.J., Nakayama, McKenna, Wilson, and Eddins, JJ.)
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            Petitioner/Claimant-Appellant-Appellant Kate X. Cui

(Cui) appeals from the Intermediate Court of Appeals’ (ICA)

January 2, 2020 Judgment on Appeal entered pursuant to its

December 3, 2019 Memorandum Opinion.        The ICA affirmed the

October 26, 2016 Decision and Order of the State of Hawaiʻi Labor

and Industrial Relations Appeals Board (the LIRAB).

            Cui first applied for workers’ compensation benefits

for a mental injury that she sustained as a result of harassment

by her supervisor in August 2009, while employed by

Respondent/Employer-Appellee-Appellee the State of Hawaiʻi,

Department of Health (Employer).         Cui’s original diagnosis was

Adjustment Disorder with Mixed Anxiety and Depressed Mood, for

which Employer accepted liability.        Employer began making

temporary disability payments, as ordered by the Director of

Labor and Industrial Relations (the Director).

            In March 2010, Employer terminated Cui’s employment.

In June 2010, Cui’s doctor diagnosed her as suffering from Major

Depressive Disorder.     After Cui’s diagnosis changed, the

Director determined that her Major Depressive Disorder was

caused by her termination and not her original stress injury.

As a result, the Director terminated Cui’s temporary disability

payments.

            Cui filed a new workers’ compensation claim form for

the alleged injury arising out of her termination, as well as an
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amended claim form for her original claim, both listing Major

Depressive Disorder as her injury.        At Cui’s request, the LIRAB

remanded both claims to the Director to determine whether her

Major Depressive Disorder was compensable under either claim.

As relevant here, the Director deferred determination of whether

Major Depressive Disorder was related to Cui’s original stress

injury because the Director could not locate a claim for Major

Depressive Disorder in the record.

          Cui appealed to the LIRAB, which affirmed the

Director’s decision deferring the determination of whether Cui’s

Major Depressive Disorder was related to her August 2009 injury.

Based on the Director’s deferral of the issue, the LIRAB

concluded that it would be premature for it to decide the issue.

          Cui appealed to the ICA, arguing inter alia, that her

Major Depressive Disorder was the result of a single continuous

injury which began in August 2009 and that the LIRAB abused its

discretion by deferring determination of compensability.            The

ICA affirmed the LIRAB’s decision and held that the LIRAB did

not err by failing to address whether Cui’s Major Depressive

Disorder was related to her August 2009 injury because the

Director deferred determination of the issue.

          A review of the record shows that Cui filed an amended

claim form for her August 2009 claim listing Major Depressive

Disorder as an injury.     It appears that the Director overlooked
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Cui’s amended claim form and erroneously deferred determination

of the issue.     In light of the circumstances presented here, the

LIRAB abused its discretion by declining to determine whether

Cui’s Major Depressive Disorder was related to her August 2009

injury after the Director erroneously deferred determination.

Having filed an amended workers’ compensation claim form listing

Major Depressive Disorder as an injury, Cui was entitled to

receive a timely decision regarding whether her injury was

compensable.

            Accordingly, we vacate the ICA’s January 2, 2020

Judgment on Appeal which affirmed the LIRAB’s October 26, 2016

Decision and Order and remand to the LIRAB for further

proceedings consistent with this opinion.

                               I.   BACKGROUND

            Cui was an epidemiologist with multiple advanced

degrees who began working for Employer in 1998.            On

September 22, 2009, Cui filed a claim for workers’ compensation

benefits for a mental personal injury sustained on

August 3, 2009, initiating Case No. AB 2011-206/DCD No. 2-09-

40756 (WC Claim 1).1

1     Cui filed her claim using Form WC-5, entitled “Employee’s Claim for
Workers’ Compensation Benefits.” The date of accident listed on the Form
WC-5 was originally noted as August 17, 2009, but was subsequently corrected
to August 3, 2009 in the Director’s April 22, 2010 decision.

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          On August 15, 2009, prior to filing WC Claim 1, Cui

was examined by a psychiatrist (Dr. Ponce) after being referred

by her primary care provider.       Cui told Dr. Ponce that her work

stress began in February 2009 when her new supervisor

(Supervisor) gave Cui a negative performance review.            Supervisor

began meeting with Cui weekly and Cui described the weekly

meetings to Dr. Ponce as “humiliating” and “harassment.”

Dr. Ponce diagnosed Cui with Adjustment Disorder with Mixed

Anxiety and Depressed Mood, arising out of the course of her

employment.   Cui began treatment with Dr. Ponce and continued to

work.

          On January 7, 2010, Cui was evaluated by another

psychiatrist (Dr. Steltzer) in an independent psychiatric

evaluation.   Dr. Steltzer confirmed Dr. Ponce’s diagnosis.

          By letter dated January 27, 2010, Adjuster-Appellee

State of Hawaiʻi, Department of Human Resources Development

(Adjuster) accepted liability for Cui’s workers’ compensation

claim for stress in the form of Adjustment Disorder with Mixed

Anxiety and Depressed Mood.

          By letter dated February 8, 2010, Employer notified

Cui that she would be terminated from her position for failure

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to improve her performance (Termination Letter).              Cui’s

employment was terminated effective March 25, 2010.2

A.     Administrative Proceedings

             On April 22, 2010, the Director issued a decision

finding that Cui’s Adjustment Disorder with Mixed Anxiety and

Depressed Mood was a work injury, based on Employer’s acceptance

of liability.      The Director ordered Employer to pay Cui weekly

temporary total disability benefits (TTD) and reserved the

matter of permanent disability for a later date.              Neither party

appealed this decision.

             Following her termination, Cui continued to see

Dr. Ponce for treatment and Dr. Ponce’s treatment notes from

these sessions demonstrate a substantial worsening of Cui’s

condition.      In a June 1, 2010 treatment plan sent to Adjuster,

Dr. Ponce changed his diagnosis to Major Depressive Disorder.3

In an assessment dated September 7, 2010, Dr. Ponce opined that

once Cui accepted the reality of her termination, she

“decompensated and is now in a Major Depressive Disorder

state[.]”      In a progress report dated September 11, 2010, Dr.

Ponce noted that Cui was “[v]ery depressed” and that her
2     Although the Termination Letter specified an effective date of
February 22, 2010, Cui’s termination was ultimately effective March 25, 2010,
after she requested and attended a pre-discharge hearing.

3     Dr. Ponce neither informed Cui of the change in diagnosis nor altered
her medication regimen based on his new diagnosis.

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“Adjustment Disorder has slipped into a Major Depressive

Disorder[.]”

            Dr. Steltzer reviewed Cui’s medical records at the

request of Adjuster and summarized his findings in a report

dated October 28, 2010.       Dr. Steltzer agreed with Dr. Ponce’s

diagnosis of Major Depressive Disorder, but disagreed with

Dr. Ponce as to the cause.        Dr. Steltzer concluded that Cui’s

Major Depressive Disorder was caused by her termination, whereas

Cui’s initial Adjustment Disorder was directly related to her

August 3, 2009 stress injury.         In a letter to Adjuster dated

February 11, 2011, Dr. Steltzer restated his opinion that

“[Cui’s] major depression developed in response to being

terminated.”4

            Adjuster, as Employer’s representative, terminated

Cui’s TTD benefits for WC Claim 1 effective March 21, 2011,

because it determined that Cui’s current diagnosis of Major

Depressive Disorder resulted from her March 25, 2010 termination

and not her original August 3, 2009 injury.

            Following a hearing, the Director issued a

supplemental decision on July 1, 2011 concluding that Employer
4     A third doctor, Dr. Joseph P. Rogers, performed an independent mental
examination of Cui and agreed with Dr. Steltzer that “Cui’s Major Depressive
Disorder is no longer related to [WC Claim 1] with the understanding that her
termination from employment [March 2010] caused a new injury and her prior
Adjustment Disorder related to [WC Claim 1] was aggravated into the level of
a Major Depressive Disorder by her termination[.]” (Emphases added.)

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was justified in terminating Cui’s TTD benefits for WC Claim 1

based on the finding that Cui’s Major Depressive Disorder was no

longer the result of the WC Claim 1 injury.          Cui timely appealed

the Director’s supplemental decision to the LIRAB.

          On August 10, 2012, Cui moved to temporarily remand

the case to the Director to rule on whether Cui’s Major

Depressive Disorder was a compensable injury.          In an affidavit

attached to Cui’s motion to remand, Cui’s counsel attested that

he would file (1) an amended Form WC-5 for WC Claim 1 listing

Major Depressive Disorder as an additional injury suffered by

Cui as a result of the August 3, 2009 accident; and (2) a new

Form WC-5 alleging that Cui’s Major Depressive Disorder resulted

from her March 25, 2010 termination to ensure that “the Director

will have jurisdiction to decide all possible outcomes[.]”             The

LIRAB granted Cui’s motion and remanded to the Director “to

address compensability of a claim to be filed by [Cui] for Major

Depressive Disorder and for determination of any other issue the

Director deems appropriate.”

          On remand, Cui filed a Form WC-5 dated August 28, 2012

alleging that her Major Depressive Disorder resulted from her

termination on March 25, 2010, initiating LIRAB Case No.

AB 2013-232/DCD No. 2-12-40661 (WC Claim 2).

          On May 1, 2013, Cui filed an “Amended” Form WC-5

(Amended Form WC-5) “[t]o add major depression as a diagnosis
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and facilitate adjudication of [her] claims.”            Cui’s Amended

Form WC-5 listed the “Date of Accident” as March 25, 2010 (the

date she was terminated) and the “Date Disability Began” as

August 3, 2009.5

            On May 2, 2013, the Director heard the issues on

remand.    Cui argued that her Major Depressive Disorder was

compensable under WC Claim 1 because it was the result of a

continuous injury which began on August 3, 2009, and in the

alternative, that it was compensable as a new injury under

WC Claim 2.     Employer argued that (1) the Director lacked

jurisdiction to consider whether Cui’s Major Depressive Disorder

was compensable under WC Claim 1 because the record contained no

written claim for Major Depressive Disorder related to the

August 3, 2009 injury;6 and (2) Cui’s WC Claim 2 was time-barred

because it was filed more than two years after her injury

manifested.

            On June 6, 2013, the Director issued two separate

decisions as to whether Cui’s Major Depressive Disorder was a

5     The record contains two Amended Forms WC-5, one that is typed and one
that is partially typed with handwritten strikethroughs and insertions. Both
forms are dated May 1, 2013.

6     According to Cui, after Employer argued that WC Claim 1 was never
amended to include a claim for Major Depressive Disorder, she filed a “Second
Amended WC-5” on May 3, 2013. However, both Amended Form WC-5s in the record
are date-stamped May 1, 2013.

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compensable injury.           As to WC Claim 1, the Director’s decision

states in relevant part:

                                  FINDINGS OF FACT

                  The Director’s Decision dated 4/22/2010 determined
            that [Cui]’s injury of 8/3/2009 consisted of Adjustment
            Disorder with Mixed Anxiety.7

                  The record affirms that a Major Depressive Disorder
            is a psychological condition separate and distinct from an
            Adjustment Disorder with Mixed Anxiety, although it is
            possible for one to lead to the other.

                  The record is absent of a written claim from [Cui]
            for a Major Depressive Disorder.

                    . . . .

                                    PRINCIPLES OF LAW

                    . . . .

                    Section 386-86, HRS,8 and Hawaiʻi Supreme Court 89 H.
            411,9   provides that where no written claim was filed with

7     The Director’s June 6, 2013 Decision misstated Cui’s full diagnosis,
which was Adjustment Disorder with Mixed Anxiety and Depressed Mood.
(Emphasis added.)

8     Hawaiʻi Revised Statutes (HRS) § 386-86 (Supp. 2005) provides in
relevant part:

                  (a) If a claim for compensation is made, the
            director shall make such further investigation as deemed
            necessary and render a decision within sixty days after the
            conclusion of the hearing awarding or denying compensation,
            stating the findings of fact and conclusions of law. The
            director may extend the due date for decisions for good
            cause provided all parties agree. The decision shall be
            filed with the record of the proceedings and a copy of the
            decision shall be sent immediately to each party.
                 (b) The hearing shall be informal and shall afford
            the parties a full and fair opportunity to present the
            facts and evidence to be considered. Hearings under this
            section shall not be subject to chapter 91. No
            stenographic or tape recording shall be allowed.

(Emphases added.)

9     In Potter v. Hawaii Newspaper Agency, 89 Hawaiʻi 411, 423, 974 P.2d 51,
63 (1999), this court stated: “The plain language of [HRS § 386-86]
                                                             (continued . . .)

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             the Director, the Director lacks the statutory authority to
             award or deny benefits to an injured employee.

                                  CONCLUSIONS OF LAW

                   The Director finds, based upon the above Findings of
             Fact and Principles of Law, the Director is unable to make
             a determination on the compensability of [Cui’s] Major
             Depressive Disorder. The Director credits an absence for
             said condition in the record.

(Emphases added.)       Accordingly, the Director deferred

determination of whether Cui’s Major Depressive Disorder was a

compensable injury under WC Claim 1.10

             In the second written decision regarding WC Claim 2,

the Director concluded that Cui suffered a compensable injury of

Major Depressive Disorder as the result of her termination on

March 25, 2010.       The Director waived the two-year statute of

limitations set forth in HRS § 386-82 (1993),11 “in light of the

confusing nature of [Cui’s] psychological situation having one

(. . . continued)

establishes that ‘a claim for compensation’ is a precondition of an order
awarding or denying workers’ compensation benefits. In the absence of a
lawful claim, the Director lacked the statutory authority either to award or
to deny benefits to [the worker].” (Emphasis added.)

10    The Director awarded Cui 8% permanent partial disability for WC Claim 1
based on her original diagnosis.

11     HRS § 386-82 (1993) provides in relevant part:

                   The right to compensation under this chapter shall be
             barred unless a written claim therefor is made to the
             director of labor and industrial relations (1) within two
             years after the date at which the effects of the injury
             for which the employee is entitled to compensation have
             become manifest[.]

(Emphases added.)

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condition superimposed upon another with a delay in a

corresponding psychological explanation for claimant.”

           Cui appealed the Director’s June 6, 2013 Decision in

WC Claim 1 and Employer and Adjuster (collectively Employer-

Adjuster) appealed the Director’s June 6, 2013 Decision in WC

Claim 2.   On October 21, 2013, the parties stipulated to

consolidate the cases for WC Claim 1 and WC Claim 2.

           The LIRAB heard the consolidated cases on

August 24, 2014, and both Cui and Dr. Ponce testified.            As

relevant here, Dr. Ponce testified that (1) he saw Cui as a

patient between August 15, 2009 and May 24, 2014, approximately

thirty times total; (2) he initially diagnosed Cui with

Adjustment Disorder with Mixed Anxiety and Depressed Mood;

(3) from March to June 2010, after Cui was formally notified

that her position was terminated, she began to decompensate and

was in a “noticeable downward spiral,” so the diagnosis

“evolved” to Major Depressive Disorder; (4) Cui’s “depression

was present right from the start” and “gradual[ly] slip[ped]

into . . . [M]ajor [D]epressive [D]isorder.”

           Both parties submitted post-hearing briefs to the

LIRAB, wherein each noted that the record contained an Amended

Form WC-5 listing Major Depressive Disorder as an additional

injury Cui suffered as a result of WC Claim 1.

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             The LIRAB issued its October 26, 2016 Decision and

Order (LIRAB Decision and Order) on the consolidated appeals.

The LIRAB (1) affirmed the Director’s decision in WC Claim 1

because it concluded that it would be premature for the LIRAB to

determine whether Cui’s Major Depressive Disorder was

compensable under WC Claim 1 since the Director had deferred

determination of whether Cui’s Major Depressive Disorder related

to her August 3, 2009 work injury; and (2) reversed the

Director’s decision in WC Claim 2 because it concluded that

Cui’s injury manifested by June 1, 2010 and was barred by the

two-year statute of limitations set forth in HRS § 386-82.

B.     ICA Proceedings

             Cui appealed to the ICA.        On appeal, Cui argued that

her Major Depressive Disorder was compensable under WC Claim 2

and that her claim was timely filed because Cui did not know of

the probable compensable character of her injury before

Dr. Steltzer’s February 11, 2011 opinion.            In the alternative,

Cui argued that her Major Depressive Disorder was compensable

under WC Claim 1 because it was the result of a single

continuous injury which began on August 3, 2009 and that the

LIRAB abused its discretion by deferring determination of

compensability.

             In its answering brief, Employer-Adjuster repeated its

arguments that Cui’s WC Claim 2 was time-barred because Cui
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filed the claim more than two years after she “should have

recognized the nature and probable compensable character of her

major depressive disorder[.]”          Regarding the LIRAB’s decision to

defer determination of whether Cui’s Major Depressive Disorder

was compensable under WC Claim 1, Employer-Adjuster argued that

because the Director had not yet made a determination, it was

within the LIRAB’s discretion to decline to make a

determination.       Employer-Adjuster cited § 12-47-20 of the Labor

and Industrial Relations Appeal Board Rules of Practice and

Procedure (LAB Rules) which states: “The board may decline to

hear and determine any issue which the director in the decision

on appeal did not decide or left for future determination.”

             The ICA affirmed the LIRAB Decision and Order.            First,

the ICA concluded that the LIRAB did not err in concluding that

Cui’s WC Claim 2 was time-barred.           Next, the ICA considered

whether the LIRAB abused its discretion by deferring

determination of whether Cui’s Major Depressive Disorder was

compensable under WC Claim 1.          The ICA noted that (1) the

Director conducted a hearing on the issue of compensability of

Cui’s Major Depressive Disorder on May 2, 2013; (2) the parties

agreed that Cui filed an Amended Form WC-5 on May 3, 2013;12 and

12    Although the ICA noted that there were two Amended Forms WC-5 in the
record date-stamped May 1, 2013, the ICA inferred that both of these were
filed under LIRAB Case No. AB 2013-232/DCD No. 2-12-40661 (WC Claim 2).
                                                             (continued . . .)

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(3) the Director’s June 6, 2013 Decision in WC Claim 1 deferred

determination of the issue of compensability based on the

alleged absence of an Amended Form WC-5 for Major Depressive

Disorder.      Citing Hawaiʻi Administrative Rules (HAR) § 12-47-2013

and LAB Rules § 12-47-20, the ICA concluded that the LIRAB did

not abuse its discretion by failing to address whether Cui’s

Major Depressive Disorder was compensable under WC Claim 1

because the Director had not yet made a determination.               In light

of the fact that both the Director and the LIRAB deferred

determination, the ICA further concluded that it was unable to

review Cui’s claim that her Major Depressive Disorder was the

result of a single continuous injury dating back to

August 3, 2009.

                          II.   STANDARDS OF REVIEW

A.     Appeals from Agency Determinations Relating to Workers’
       Compensation

                   Appellate review of the LIRAB’s decision is governed
             by HRS § 91–14(g) (1993), which provides that:

                    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

(. . . continued)

Despite the fact that the ICA was unable to locate an Amended Form WC-5 dated
May 3, 2013 in the record, it credited as true the parties’ assertions in
briefing that an Amended Form WC-5 for WC Claim 1 was filed on May 3, 2013.

13    The language of HAR § 12-47-20 is identical to LAB Rules § 12-47-20.
Both rules state: “The board may decline to hear and determine any issue
which the director in the decision on appeal did not decide or left for
future determination.”

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                   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, or capricious, or characterized by
                   abuse of discretion or clearly unwarranted exercise
                   of discretion.

             Tauese v. State, Dep’t of Labor & Indus. Relations, 113
             Hawaiʻi 1, 25, 147 P.3d 785, 809 (2006) (quotation marks and
             citations omitted).

                   The LIRAB’s conclusions of law are reviewed de novo,
             under the right/wrong standard. Id. Its findings of fact
             “are reviewable under the clearly erroneous standard to
             determine if the agency decision was clearly erroneous in
             view of reliable, probative, and substantial evidence on
             the whole record.” Id. (quoting Poe v. Hawaiʻi Labor
             Relations Bd., 87 Hawaiʻi 191, 195, 953 P.2d 569, 573
             (1998)) (quotation marks omitted).

Van Ness v. State, Dep’t of Educ., 131 Hawaiʻi 545, 557–58, 319

P.3d 464, 476–77 (2014), as corrected (Feb. 4, 2014) (internal

citations corrected).

B.     Interpretation of Agency Rules

                   General principles of statutory construction apply in
             interpreting administrative rules. As in statutory
             construction, courts look first at an administrative rule’s
             language. If an administrative rule’s language is
             unambiguous, and its literal application is neither
             inconsistent with the policies of the statute the rule
             implements nor produces an absurd or unjust result, courts
             enforce the rule’s plain meaning. While an agency’s
             interpretation of its own rules is generally entitled to
             deference, this court does not defer to agency
             interpretations that are plainly erroneous or inconsistent
             with the underlying legislative purpose.

Liberty Dialysis-Hawaii, LLC v. Rainbow Dialysis, LLC, 130

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Hawaiʻi 95, 103, 306 P.3d 140, 148 (2013) (internal quotation

marks and citation omitted).

                               III.   DISCUSSION

             On certiorari, we consider whether the ICA erred in

affirming the LIRAB’s Decision and Order.            Because we conclude

that the LIRAB abused its discretion by deferring determination

of whether Cui’s Major Depressive Disorder was compensable under

WC Claim 1, we need not reach the issue of whether WC Claim 2

was untimely.

             Cui filed a claim for Major Depressive Disorder under

WC Claim 114 and the Director was statutorily obligated to

determine whether her injury was compensable under that claim

within sixty days after the hearing.15           Yet, in the Director’s

June 6, 2013 Decision, the Director misstated Cui’s original

14    On August 16, 2012, the Board remanded to the Director “to address
compensability of a claim to be filed by [Cui] for Major Depressive Disorder
and for determination of any other issue the Director deems appropriate.” On
August 28, 2012, Cui filed a new claim form alleging that her Major
Depressive Disorder resulted from her termination on March 25, 2010,
initiating WC Claim 2. On May 1, 2013, Cui filed Amended Form WC-5 for her
WC Claim 1 adding Major Depressive Disorder.

15     HRS § 386-86 provides in relevant part:

                   (a) If a claim for compensation is made, the
             director shall make such further investigation as deemed
             necessary and render a decision within sixty days after the
             conclusion of the hearing awarding or denying compensation,
             stating the findings of fact and conclusions of law. . . .
                  (b) The hearing shall be informal and shall afford
             the parties a full and fair opportunity to present the
             facts and evidence to be considered.

(Emphases added.)

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diagnosis as “Adjustment Disorder with Mixed Anxiety,” rather

than “Adjustment Disorder with Mixed Anxiety and Depressed

Mood[,]” and found that “[t]he record is absent of a written

claim from claimant for a Major Depressive Disorder.”               (Emphasis

added.)     The Director cited HRS § 386-32(a) and Potter, 89

Hawaiʻi 411, 974 P.2d 51, for the proposition that “where no

written claim was filed with the Director, the Director lacks

the statutory authority to award or deny benefits to an injured

employee.”16     Based on the purported “absence of a written claim

for said condition in the record[]” of WC Claim 1, the Director

concluded as a matter of law that “the Director is unable to

make a determination on the compensability of [Cui’s] Major

Depressive Disorder.”17

16    The Director’s reliance on Potter to defer determination of
compensability was misplaced. In Potter, this court considered whether a
claim form filed by an employer on behalf of an injured employee, without the
employee’s authorization, could be construed as a valid claim under HRS
chapter 386. 89 Hawaiʻi at 422-23, 974 P.2d at 62-63. We concluded that an
employer’s report of an industrial injury is not a lawful claim for workers’
compensation and that “[i]n the absence of a lawful claim, the Director
lacked the statutory authority either to award or to deny benefits to [the
employee].” Id. at 423, 974 P.2d at 63.
      Here, the record contains both Cui’s original Form WC-5 listing
Adjustment Disorder with Mixed Anxiety and Depressed Mood and her Amended
Form WC-5, adding Major Depressive Disorder as an injury. (Emphasis added.)
Thus, even if the Director overlooked Cui’s Amended Form WC-5, this was not
like Potter in which “no lawful claim for workers’ compensation benefits was
filed with the Director[.]” See id.

17    Nor did the purported lack of a written claim for Major Depressive
Disorder for WC Claim 1 preclude the Director from making a declaratory
determination that Cui would be entitled to workers’ compensation benefits
for WC Claim 1 if she filed an amended claim form. In Potter, we reiterated
the general principle that the Director can make declaratory rulings:
“Unquestionably, the Director may issue declaratory rulings concerning
                                                             (continued . . .)

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            “The plain language of [HRS § 386-86] establishes that

‘a claim for compensation’ is a precondition of an order

awarding or denying workers’ compensation benefits.            In the

absence of a lawful claim, the Director lack[s] the statutory

authority either to award or to deny benefits to [an

applicant].”    Potter, 89 Hawaiʻi at 423, 974 P.2d at 63.           Here,

the record on appeal contains an Amended Form WC-5 dated

May 1, 2013 listing Major Depressive Disorder as an injury.

Thus, the precondition for “a claim for compensation” was met,

see id., and the Director’s finding that the Director lacked

statutory authority to determine the compensability of Cui’s

Major Depressive Disorder under WC Claim 1 was clearly

erroneous.

            Based on the Director’s decision to defer

determination, the LIRAB concluded that it would be “premature”

for it to determine whether Cui’s Major Depressive Disorder was

compensable under WC Claim 1.        The LIRAB cited no authority for

its own deferral of the issue and failed to acknowledge that Cui

actually filed an Amended Form WC-5, despite the fact that both

parties referred to the Amended Form WC-5 in their briefs.

(. . . continued)

whether, in a specific set of circumstances, a claimant would be entitled to
workers’ compensation benefits upon the bringing of a lawful claim.”
89 Hawaiʻi at 423, 974 P.2d at 63.

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          Here, the LIRAB exercised its discretion when it

declined to address the issue of whether Cui’s Major Depressive

Disorder was related to WC Claim 1.        Accordingly, this court

reviews the LIRAB’s decision to defer determination of the issue

reserved by the Director for abuse of discretion.           See Van Ness,

131 Hawaiʻi at 558, 319 P.3d at 477.

                The standard of review for administrative agencies
          therefore consists of two parts: first, an analysis of
          whether the legislature empowered the agency with
          discretion to make a particular determination; and second,
          if the agency’s determination was within its realm of
          discretion, whether the agency abused that discretion (or
          whether the agency’s action was otherwise “arbitrary, or
          capricious, or characterized by ... [a] clearly unwarranted
          exercise of discretion[.]” HRS § 91–14(g)(6)). If an
          agency determination is not within its realm of discretion
          (as defined by the legislature), then the agency’s
          determination is not entitled to the deferential “abuse of
          discretion” standard of review. If, however, the agency
          acts within its realm of discretion, then its determination
          will not be overturned unless the agency has abused its
          discretion.

Paul’s Elec. Serv., Inc. v. Befitel, 104 Hawaiʻi 412, 417, 91

P.3d 494, 499 (2004), as corrected (July 14, 2004) (internal

citation omitted) (emphasis added).        Both HAR § 12-47-20 and LAB

Rules § 12-47-20 provide that “[t]he board may decline to hear

and determine any issue which the director in the decision on

appeal did not decide or left for future determination.”            The

authorizing statute for both rules is HRS § 371-4 (2015), which

states in relevant part that “[t]he board shall have power to

decide appeals from decisions and orders of the director of

labor and industrial relations issued under the workers’

compensation law[.]”     Thus, the LIRAB was empowered by the
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Legislature to decline to determine whether Cui’s Major

Depressive Disorder was compensable under WC Claim 1 because the

Director had yet to render a decision on compensability.

             However, as previously stated, the Director’s decision

to defer determination of the issue based on the purported

absence of an Amended Form WC-5 was clearly erroneous.               The

record on appeal to the LIRAB contained Cui’s Amended

Form WC-5.18     Moreover, because the LIRAB conducted a hearing on

the consolidated cases and heard testimony from Cui and

Dr. Ponce, the LIRAB had the benefit of additional evidence that

was not before the Director.          By enacting HRS § 386-86, the

Legislature mandated that workers’ compensation claimants would

receive a timely decision on the merits of their claims.               See

HRS § 386-86(a) (“If a claim for compensation is made, the

director shall . . . render a decision within sixty days after

the conclusion of the hearing awarding or denying compensation,

stating the findings of fact and conclusions of law.”).               Yet

here, after holding a hearing on Cui’s consolidated claims to

determine the issue of compensability, the LIRAB either

18     We also note that the Form WC-5 is only two-pages long and was
unlikely to provide the Director with additional information to make a
determination regarding compensability, considering that the record already
contained voluminous medical and psychiatric records which documented Cui’s
condition and treatment.

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overlooked or ignored Cui’s Amended Form WC-5 and deferred

determination of the issue.

           In light of the circumstances of this case and the

statutory mandate that claimants receive a decision within sixty

days of a hearing, see HRS § 386-86(a), we conclude that the

LIRAB abused its discretion by deferring determination of

whether Cui’s Major Depressive Disorder was compensable under WC

Claim 1.

           On appeal, the ICA held that the LIRAB did not err by

deferring determination because HAR § 12-47-20 and LAB Rules

§ 12-47-20 permit the LIRAB to “decline to hear and determine

any issue which the director in the decision on appeal did not

decide or left for future determination.”         However, here, the

literal application of this rule “produces an absurd [and]

unjust result,” see Liberty Dialysis-Hawaii, 130 Hawaiʻi at 103,

306 P.3d at 148, because it would permit the LIRAB to defer

determination of the issue based on the Director’s erroneous

finding that Cui failed to file an Amended Form WC-5.            Moreover,

the ICA found Cui’s Amended Form WC-5 in the record, yet still

concluded that the LIRAB did not err in deferring determination

of the issue.   As a result, the ICA erred by affirming the LIRAB

Decision and Order because the LIRAB abused its discretion by

declining to make a determination on whether Cui’s Major

Depressive Disorder was compensable under WC Claim 1.
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             Accordingly, we remand to the LIRAB for further

proceedings to determine whether Cui’s Major Depressive Disorder

was compensable under WC Claim 1 because it is related to her

original injury.19

                               IV.    CONCLUSION

             For the foregoing reasons, we vacate the ICA’s

January 2, 2020 Judgment on Appeal which affirmed the LIRAB’s

October 26, 2016 Decision and Order and remand to the LIRAB for

further proceedings consistent with this opinion.

             DATED:    Honolulu, Hawaiʻi, May 24, 2021.

Lowell K.Y. Chun-Hoon                       /s/ Mark E. Recktenwald
and Rosalyn G. Payen
for petitioner                              /s/ Paula A. Nakayama

                                            /s/ Sabrina S. McKenna
Shawn L.M. Benton for
respondent employer-appellee-               /s/ Michael D. Wilson
appellee, self-insured State
of Hawaiʻi, Department of                   /s/ Todd W. Eddins
Health and respondent adjuster-
appellee-appellee State of
Hawaiʻi, Department of Human
Resources Development

19    As the ICA correctly noted, there is no decision “to review Cui’s
contention that this entire matter arose from the August 3, 2009 injury and
should be treated as a single injury.” However, the record does seem to
support Cui’s argument that her mental impairment should be treated as a
single industrial injury dating back to WC Claim 1. Dr. Ponce, Cui’s
treating psychiatrist who saw her more than thirty times, has consistently
opined that Cui’s Major Depressive Disorder was related to her original
stress injury and not caused by her March 25, 2010 termination.
Additionally, the most severe manifestation of Cui’s psychiatric disorder
occurred in April 2009 when Cui engaged in self-harm — which was the original
stress injury that Cui sought treatment for. Thus, the record supports Cui’s
argument that her mental impairment should be treated as a single industrial
injury dating back to WC Claim 1.

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