76 Hawai'i 209, Pacific Intern. Services Corp. v. Hurip

Decision Date12 May 1994
Docket NumberNo. 15969,15969
Citation873 P.2d 88
Parties76 Hawai'i 209 PACIFIC INTERNATIONAL SERVICES CORPORATION, d/b/a Dollar Rent A Car, Hawai'i, Plaintiff-Appellant, v. Eddie HURIP, a/k/a Eddie Hurid, Defendant-Appellee.
CourtHawaii Supreme Court

Syllabus by the Court

1. On appeal, an order of summary judgment is reviewed under the same standard applied by the lower court. Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law.

2. If otherwise valid local legislation conflicts with state law, it is preempted by such law and is void. A conflict exists if the local legislation duplicates, contradicts, or enters an area fully occupied by general law, either expressly or by legislative implication. Local legislation is duplicative of general law when it is coextensive therewith. Similarly, local legislation is contradictory to general law when it is inimical thereto. Finally, local legislation enters an area that is fully occupied by general law when the legislature has expressly or impliedly manifested its intent to fully occupy the area.

3. A municipal ordinance may be preempted pursuant to Hawai'i Revised Statutes (HRS) § 46-1.5(13)--the substantively identical successor to HRS § 70-105 applicable to all counties--if it covers the same subject matter embraced within a comprehensive state statutory scheme disclosing an express or implied intent to be exclusive and uniform throughout the state or it conflicts with state law. The same principle applies to HRS § 70-105.

4. The interpretation of a statute is a question of law reviewable de novo. When construing a statute, the appellate court's 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.

5. If statutory language is ambiguous or doubt exists as to its meaning, courts may take legislative history into consideration in construing a statute.

6. The legislature expressly intended that: (1) the Hawai'i No-Fault Law afford a basic level of motor vehicle liability insurance statewide; and (2) the various counties have the prerogative to adopt local ordinances requiring car rental companies, i.e., U-Drive rental businesses, to afford greater protection or coverage than that mandated by the Hawai'i No-Fault Law. Accordingly, the legislature did not intend, expressly or impliedly, to fully occupy the field of motor vehicle liability insurance through the enactment of the Hawai'i No-Fault Law, and HRS ch. 294, pt. I does not preempt Honolulu, Haw., Rev. Ordinances § 12-2.7 (1990)--the Financial Responsibility Law--on that basis.

7. The Financial Responsibility Law is not contradictory or inimical to the Hawai'i No-Fault Law and therefore is not preempted on the basis that it is in conflict therewith.

William S. Hunt and Peter C. Hsieh of Alston Hunt Floyd & Ing, on the briefs, Honolulu, for plaintiff-appellant.

Roy F. Hughes, on the briefs, Honolulu, for defendant-appellee.

Before MOON, C.J., LEVINSON and NAKAYAMA, JJ., JAMES S. BURNS, Intermediate Court of Appeals Chief Judge in Place of KLEIN, J., recused, and ACOBA, Circuit Court Judge, assigned by reason of vacancy.

LEVINSON, Justice.

The plaintiff-appellant Pacific International Services Corporation, dba Dollar Rent A Car (Dollar) appeals the circuit court's order (order), dated March 2, 1992, which (1) granted the defendant-appellee Eddie Hurip (Hurip), a.k.a. Eddie Hurid's motion for summary judgment and declaratory relief and (2) dismissed all of the claims against Hurip set forth in Dollar's complaint for declaratory relief.

Dollar is a "U-Drive rental business," which rents or leases motor vehicles to customers for periods not exceeding six months. Hurip, the driver of an automobile (U-Drive vehicle) rented from Dollar by Henry Ma, was identified by a third party as a tortfeasor in a personal injury claim arising out of a motor vehicle accident. Relying on the "unauthorized driver exclusion clause" (the exclusion) in its rental agreement with Ma, Dollar advised Hurip that it would not defend or indemnify him in connection with the personal injury claim and thereafter filed the complaint for declaratory relief that is the subject of the present appeal.

In his motion for summary judgment, Hurip urged, inter alia, that the exclusion is in derogation of Honolulu, Haw., Rev. Ordinances § 12-2.7 (1990) (the Financial Responsibility Law) and that Dollar is therefore obligated to defend and indemnify him with respect to the personal injury claim. Dollar opposed Hurip's motion, arguing that (1) the Financial Responsibility Law is either preempted by or in conflict with state law, and (2) Dollar is therefore entitled to rely on the exclusion. The circuit court sided with Hurip, declaring in its order, inter alia, that the exclusion is "void or unenforceable as contrary to" the Financial Responsibility Law and that "Dollar owes a duty to defend and indemnify ... Hurip[.]"

For the reasons set forth below, we affirm the circuit court's order granting summary judgment in Hurip's favor. 1

I. BACKGROUND

The facts underlying the present appeal are undisputed. On June 3, 1988, Ma rented a U-Drive vehicle from Dollar, a self-insured U-Drive rental business. 2 The rental agreement between Dollar and Ma expressly prohibited any person not listed as an additional driver from using or operating the U-Drive vehicle.

On or about June 5, 1988, Hurip was involved in a motor vehicle accident (the accident) while driving Ma's U-Drive vehicle. Hurip was not a listed additional driver under the rental agreement and had neither express nor implied permission from Dollar to operate the U-Drive vehicle, although he did have Ma's permission to operate it. As a result of the accident, a third party asserted a personal injury claim against Hurip. Dollar subsequently informed Hurip that liability coverage would not be extended to him because he did not have Dollar's permission to operate the U-Drive vehicle as an additional driver.

On June 25, 1990, Dollar filed a complaint for declaratory relief in the Circuit Court of the First Circuit, State of Hawai'i, seeking a determination that it was not obligated to defend or indemnify Hurip in connection with the personal injury claim. On December 19, 1991, Hurip filed a motion for summary judgment, asserting, inter alia, that Dollar owed him a duty of defense and indemnification because the Financial Responsibility Law mandates that U-Drive rental businesses provide liability insurance coverage to "any person driving [a U-Drive] vehicle with express or implied permission of the ... customer." 3 In opposition to the motion, Dollar denied any duty to defend or indemnify Hurip alleging, inter alia, that the Financial Responsibility Law was preempted by the then-existing Hawai'i No-Fault Law, Hawai'i Revised Statutes (HRS) ch. 294, pt. I (1985), and contravened public policy because it expanded tort liability beyond that prescribed by the no-fault law.

As noted above, the circuit court entered an order granting Hurip's motion for summary judgment and ruled that Dollar owed Hurip a duty of defense and indemnification. 4 Dollar thereafter filed a timely notice of appeal.

II. STANDARD OF REVIEW

"On appeal, an order of summary judgment is reviewed under the same standard applied by the trial courts." Delos Reyes v. Kuboyama, 76 Hawai'i 137, 138, 870 P.2d 1281, 1282 (Sup.1994). "Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law." Kaapu v. Aloha Tower Dev. Corp., 74 Haw. 365, 379, 846 P.2d 882, 888 (1993) (citation and internal quotation marks omitted); Hawai'i Rules of Civil Procedure (HRCP) 56(c) (1990).

III. HRS CH. 294
DOES NOT PREEMPT THE FINANCIAL RESPONSIBILITY LAW

As a general matter, Dollar argues on appeal that the Financial Responsibility Law is "invalid" because it is preempted by HRS ch. 294, pt. I--the Hawai'i No-Fault Law. 5 Dollar's opening brief at 6. Specifically, Dollar contends that the Financial Responsibility Law

is invalid on two grounds: (1) the State [of Hawai'i] has clearly shown an intent that the field of motor vehicle insurance shall be exclusive, or uniform throughout the State 6 and, therefore, the City [and County of Honolulu] is preempted from regulating the same field; and (2) ... the [Financial Responsibility Law] is inconsistent with, or tends to defeat the intent of the Hawai'i no-fault law. 7

Dollar's opening brief at 8.

Both of Dollar's preemption theories are grounded in HRS § 70-105, 8 which provides:

Effect on state statutes. No ordinance [of the City and County of Honolulu] shall be held invalid on the ground that it covers any subject or matter embraced within any statute of the State; provided that the ordinance is not inconsistent with and does not tend to defeat the intent or object of the statute or of any other statute; provided also that the statute does not disclose an express or implied intent that the same shall be exclusive, or uniform throughout the State.

HRS § 70-105 (1985).

We have recently noted that HRS § 70-105, like its successor statute, HRS § 46- 1.5(13) (Supp.1992), "was intended [by the legislature] to be a provision mandating the preemption of any ordinance that either conflict[s] with the intent of a state statute or legislate[s] in an area already staked out by the legislature for exclusive and statewide statutory treatment." Richardson v. City and County of Honolulu, 76 Hawai'i 46, 60, 868 P.2d 1193, 1207 (1994).

In Richardson, we likewise set out "the...

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