120 P.3d 237 (Hawai'i 2005), 23625, Honda ex rel. Kamakana v. Board of Trustees of Employees' Retirement System of State of Hawai'i

Docket Nº:23625.
Citation:120 P.3d 237, 108 Hawai'i 338
Party Name:Katsumi HONDA, Deceased, by Arlene S. KAMAKANA, Special Administrator of the Estate of Helen Shizuko Honda, Deceased, Petitioner, Appellant-Appellee v. BOARD OF TRUSTEES OF THE EMPLOYEES' RETIREMENT SYSTEM OF The STATE OF HAWAI'I, Appellee-Appellant.
Attorney:[7] Russell Suzuki and Adina Kobayashi Cunningham, Deputy Attorneys General, for Appellee-Appellant, on the motion. [8] Reid A. Nakamura and Kurt K. Leong (Oliver, Lau, Lawhn, Ogawa & Nakamura), for Appellant-Appellee, in opposition.
Case Date:September 15, 2005
Court:Supreme Court of Hawai'i
 
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Page 237

120 P.3d 237 (Hawai'i 2005)

108 Hawai'i 338

Katsumi HONDA, Deceased, by Arlene S. KAMAKANA, Special Administrator of the Estate of Helen Shizuko Honda, Deceased, Petitioner, Appellant-Appellee

v.

BOARD OF TRUSTEES OF THE EMPLOYEES' RETIREMENT SYSTEM OF The STATE OF HAWAI'I, Appellee-Appellant.

No. 23625.

Supreme Court of Hawai'i

September 15, 2005.

Page 238

[108 Hawai'i 339] Russell Suzuki and Adina Kobayashi Cunningham, Deputy Attorneys General, on the motion, for appellee-appellant.

Reid A. Nakamura and Kurt K. Leong (Oliver, Lau, Lawhn, Ogawa & Nakamura), in opposition, for appellant-appellee.

NAKAYAMA, ACOBA, JJ., and Circuit Judge DEL ROSARIO, In Place of DUFFY, J., Recused; and LEVINSON, J., DISSENTING, with Whom MOON, C.J., Joins.

OPINION

ACOBA, J.

Appellee-Appellant Board of Trustees of the Employees' Retirement System of the State of Hawai'i (the ERS or ERS Board) filed a motion for reconsideration (the motion) of this court's June 17, 2005 published opinion (the opinion), which (1) vacated the July 28, 2000 final judgment of the circuit court of the first circuit (the court) and (2) remanded the case to the court with instructions to remand the case to the ERS to hold further proceedings. Honda v. Bd. of Trs. of the Employees' Ret. Sys., 118 P.3d 1155, 1157 (Haw.2005).

In the motion, the ERS Board argues that this court has violated the separation of powers doctrine by (1) "cloaking the ERS with the jurisdiction to decide contract and tort claims," (2) "waiving the State's sovereign immunity for those claims," and (3) "vesting the court with the legislative function of deciding a new set of fiduciary duties for ERS." It requests that this court "reconsider [the] opinion and decide this appeal on the arguments presented in the parties' briefs." In the alternative, the ERS Board asks that this court vacate the opinion and allow the parties to brief this court regarding the matters decided in the opinion and the question of whether the untimely passing of Petitioner/Appellant-Appellee Helen Honda (Helen) has rendered some or all of the issues presented in this appeal moot. 1

On August 15, 2005, this court filed an order directing Helen to respond to the motion for reconsideration. On September 2, 2005, Helen filed a memorandum in opposition to the motion, arguing that (1) the opinion

Page 239

[108 Hawai'i 340] does not require ERS to adjudicate tort and contract claims, (2) the opinion does not waive sovereign immunity for tort and contract claims, and (3) ERS and its trustees have a fiduciary duty to its members. Inasmuch as the opinion did not "overlook" or "misapprehend" the matters raised by the ERS, the motion for reconsideration is denied. 2

I.

In its first point, the ERS Board argues that the ERS does not have jurisdiction to decide remedies under Hawai'i Revised Statutes (HRS) chapters 661 and 662 3 because the circuit courts have original jurisdiction to hear contract and tort claims against the State and the ERS can only interpret and apply HRS chapter 88. These arguments are based upon a misreading of the opinion.

A.

The ERS Board states that the opinion " appears to vest ERS with the jurisdiction to decide and provide remedies for claims for rescission of contract and the torts of breach of fiduciary duty and negligent misrepresentation." (Emphasis added.) The opinion, however, does not direct the ERS to "decide civil, judicial remedies," but remands the case to the ERS Board for it to hold further proceedings in light of its fiduciary duty to retirees. 118 P.3d at 1157, 1166. The theories of unilateral mistake and negligent misrepresentation were discussed in the opinion to illustrate the basis upon which the ERS's failure to provide Katsumi Honda (Katsumi) "with clear, understandable information concerning retirement benefits" might be premised. 118 P.3d at 1157. Indeed, as the opinion states, the court's judgment was vacated and the case remanded "pursuant to HRS § 91-14(g)." 4 118 P.3d at 1166. Accordingly, this court did not "overlook" or "misapprehend" the ERS Board's jurisdiction to decide and provide remedies.

B.

The ERS Board further argues that "[n]o statute authorizes ERS to allow an as-yet unasserted estate or personal representative of a beneficiary to change an ERS member's retirement option" and that "[o]n remand, ERS is therefore left in the position of either exceeding its statutory authority or violating this court's order." First, it should be noted that none of the parties notified this court of Helen's death prior to the filing of the opinion. Hence, this court could not have "misapprehended" a fact that was never presented to it.

According to a declaration attached to the motion, Deputy Attorney General Diane S. Kishimoto spoke with Helen's attorney, Reid Nakamura, on June 21, 2005, at which time he informed her that Helen "had passed away approximately two years ago." Kishimoto declares that to "the best of [her] knowledge, this [was] the first time [the ERS Board had] learned of [Helen's] death."

Pursuant to HRAP Rule 43(a),

[i]f a party dies after the notice of appeal is filed, or while the proceeding is otherwise pending in a Hawai'i appellate court, that court may substitute the personal representative

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[108 Hawai'i 341] of the deceased party as a party on motion filed by the representative or by any party with the appellate clerk. The motion of a party shall be served upon the representative in accordance with the provisions of Rule 25. If the deceased party has no representative, any party may suggest the death on the record, and proceedings shall then be had as that court shall direct.

(Emphases added.) In the criminal context, HRAP Rule 43 has been construed to afford the appellate court with two options in the absence of a motion for substitution as follows:

The appellate court may, in its discretion, allow for substitution of a proper party-defendant. Absent such a motion, the appellate court may, in its discretion, either (1) dismiss the appeal as moot, vacate the original judgment of conviction, and dismiss all related criminal proceedings, or, in the alternative, (2) enter such other order as the appellate court deems appropriate pursuant to HRAP Rule 43(a).

State v. Makaila, 79 Hawai'i 40, 45, 897 P.2d 967, 972 (1995).

Because a "death" of a party had been "suggest[ed]," on August 11, 2005, this court ordered (1) Nakamura to confirm Helen's death by filing a death certificate in this court and (2) for either party to move for substitution of a proper party Appellee pursuant to HRAP Rule 43(a) or advise this court that no motion would be filed. On August 25, 2005, following the probate court's appointment of Kamakana, Helen's daughter, as Special Administrator of the Estate of Helen Shizuko Honda, Nakamura filed a motion to substitute Kamakana as the proper party Appellee. This court granted the motion for substitution on August 25, 2005. See supra note 1. A representative of the beneficiary has thus been identified. If in any way relevant, the event of Helen's death has become part of a case which has been remanded. Therefore, this matter was not "misapprehended" or "overlooked."

Second, it should be emphasized that because "the ERS made no findings with respect to the specific nature and sufficiency of information provided to Katsumi," 118 P.3d at 1166, the opinion remands the case to the ERS to hold further proceedings "in the framework of the entire record and in view of the ERS's fiduciary duty to retirees," id. The opinion confirms the ERS's fiduciary duty, but the application of that duty has been remanded to the board in light of the principles established in the opinion. As discussed infra, the remand is consistent with HRS chapter 88 and, hence, does not compel the ERS Board to "exceed[ ] its statutory authority."

II.

Relatedly, in its second argument, the ERS Board maintains that the courts cannot waive the State's sovereign immunity because, (1) pursuant to Chun v. Bd. of Trustees of the Employees' Retirement Sys., 106 Hawai'i 416, 106 P.3d 339 (2005), the legislature must expressly waive immunity, (2) pursuant to Pele Defense Fund v. Paty, 73 Hawai'i 578, 609-10, 837 P.2d 1247, 1266 (1992), "relief that is tantamount to an award of damages for a past violation of law, even though styled as something else, is barred by sovereign immunity[,]" and (3) pursuant to Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974), equitable restitution, like other forms of damages, is barred by the state's sovereign immunity.

As in the first argument, however, these points all stem from the ERS Board's presumption that the opinion determined contract and tort remedies. It should also be noted that the ERS did not raise the issues of sovereign immunity and "retrospective injunctive relief and damages" until after the opinion was filed. Accepting its view of the essential nature of the case, for the sake of argument, the ERS had multiple opportunities to raise the defense.

Although Helen's request for "a declaratory order ... allowing [her] to select a new mode of retirement for Retirant Katsumi Honda, deceased, to be effective retroactively to April 1, 1994[,]" and the court's order implicated what the ERS now characterizes as sovereign immunity concerns in reference to "retroactively," "benefits," and "pay," the ERS did not raise sovereign immunity arguments

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[108 Hawai'i 342] at the agency hearing, in its agency decision, or on the appeal to the court. The court's July 6, 2000 findings of fact and order reversing the decision of the ERS Board and awarding relief to Katsumi, by Helen stated, inter alia, as follows:

2. The relief requested by Petitioner/Appellant in its...

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