79 Hawai'i 495, Moniz v. Freitas

• Decision Date: 05 October 1995
• Docket Number: No. 16882,16882
• Citation: 904 P.2d 509
• Parties: 79 Hawai'i 495 Michael MONIZ, Jr., Plaintiff-Appellant, v. Noelani FREITAS; John Does 1-10; Jane Does 1-10; Doe Corporations 1-10; Doe Governmental Entities 1-10; Doe Partnerships 1-10; Doe Joint Ventures 1-10; Inclusive, Defendants-Appellees.
• Court: Hawaii Supreme Court

Page 509

904 P.2d 509

79 Hawai'i 495

Michael MONIZ, Jr., Plaintiff-Appellant, v. Noelani FREITAS; John Does 1-10; Jane Does 1-10; Doe Corporations 1-10; Doe Governmental Entities 1-10; Doe Partnerships 1-10; Doe Joint Ventures 1-10; Inclusive Defendants-Appellees.

No. 16882.

Supreme Court of Hawai'i.

Oct. 5, 1995.

James Ireijo and C. Bryan Fitzgerald, on the briefs, Hilo, for plaintiff-appellant Michael Moniz, Jr.

Kenneth A. Ross and Shawn M. Nakoa of Goodsill, Anderson, Quinn & Stifel, on the briefs, Kailua-Kona, for defendant-appellee Noelani Freitas.

Before MOON, C.J., and KLEIN, LEVINSON, NAKAYAMA and RAMIL, JJ.

MOON, Chief Justice.

Plaintiff-appellant Michael Moniz, Jr. appeals from the Third Circuit Court's denial of his "Motion to Withdraw Appeal and Request for Trial De Novo and to Enter Arbitration Award as Final Judgment." Moniz essentially argues that the circuit court erred in denying his motion because it incorrectly concluded that it did not have authority under the Hawai'i Arbitration Rules (HAR) ¹ or the Hawai'i Rules of Civil Procedure (HRCP) to grant the relief sought. For the reasons discussed below, we agree with Moniz, vacate the order denying Moniz's motion, and remand for further proceedings.

I. BACKGROUND

On November 25, 1989, Moniz, a Hawai'i County police officer, attempted to arrest defendant-appellee Noelani Freitas while she was stopped at a traffic light in Kailua-Kona for "driving with an open vessel," in violation of Hawai'i Revised Statutes (HRS) § 291-3.1(b) (1985). ² As far as we can glean from the record, Moniz was on foot at the time he approached Freitas and apparently was not in police uniform. Freitas admits having an open beer can on the front seat. When Freitas saw Moniz, she drove away in an apparent attempt to flee. Moniz gave chase, managed to jump onto the bed of Freitas's pick-up truck, and eventually arrested Freitas. ³ During the incident, Moniz allegedly injured his knee, the same knee that he had injured nine days earlier. On August 9, 1991, Moniz filed the instant personal injury action against Freitas for damages. The main issue was the cause of Moniz's knee injury.

The remaining salient facts are disputed. Moniz claims that, while on duty as a police officer on the date of the incident, he approached Freitas's vehicle and identified himself as a police officer. Moniz asserts that without warning, Freitas attempted to flee in her vehicle and that he climbed into the bed of the truck in an attempt to stop her. Freitas then accelerated the truck, causing Moniz to lose his balance and fall onto the bed of the truck, thereby injuring his knee.

Freitas claims that Moniz approached the passenger side of her vehicle and told her to pull over. Freitas also claims that Moniz did not display his police badge and looked like a teenager. She contends that she fled for her own safety because she thought Moniz was a "nut." According to Freitas, it was only after Moniz aimed a gun at her head, but did not pull the trigger, that she realized that Moniz was actually a police officer.

The civil suit was referred to the Court Annexed Arbitration Program (CAAP). ⁴ On June 25, 1992, a CAAP arbitrator awarded Moniz damages totalling $35,100 (special damages of $6,677.85, general damages of $28,322.15, and punitive damages of $100). Apparently not satisfied with the CAAP award, Moniz timely filed a notice of appeal and request for trial de novo pursuant to HAR Rule 22. ⁵ Freitas did not file a Rule 22 notice of appeal.

Discovery then proceeded under the HRCP. Although the record is unclear as to the specifics, at some point during discovery, a letter from John Bellatti, M.D., one of Moniz's treating physicians, dated July 22, 1992 (approximately a month after the arbitrator issued the $35,100 award), surfaced. In the letter, Dr. Bellatti purportedly apportioned Moniz's injuries 100% to a prior incident and 0% to the Freitas incident. Such evidence was unfavorable to Moniz's case against Freitas because the primary issue was whether Moniz's injuries were legally caused by Freitas's negligence.

On October 29, 1992, Moniz filed a motion for partial summary judgment, seeking to have the court declare "as a matter of law, that should [Moniz] dismiss his appeal to an [a]rbitration [a]ward filed herein, that [Freitas] and/or her insurer is liable to pay said [a]rbitration [a]ward filed herein forthwith." Moniz argued that the "primary basis" for appealing the arbitration award "was to make certain that full policy limits of [Freitas's] insurance would be paid in order to allow [Moniz] to seek further recovery under his own 'underinsurance' automobile policy." Because Moniz had determined that the applicable policy limit was $35,000 and that Freitas was judgment proof, there was "no further reason to continue to appeal the arbitration award herein."

In opposition, Freitas argued, inter alia, that "the real reason behind [Moniz's] consideration of withdrawal of the appeal is the detrimental discovery which was had after the Notice of Appeal was filed," specifically referring to Dr. Bellatti's letter of July 22, 1992. The court denied Moniz's motion.

Thereafter, on December 17, 1992, Moniz filed a "Motion to Withdraw Appeal and Request for Trial De Novo and to Enter Arbitration Award as Final Judgment," seeking to have the CAAP award of $35,100 entered in his favor rather than proceed to trial. The circuit court denied the motion on the ground that it had no authority to reinstate the CAAP award. Although Moniz had brought the motion exclusively under the HAR, the court noted that, even if the motion were made pursuant to HRCP Rule 41, ⁶ it had no authority to affirm the arbitration award. The court then granted leave to file the instant interlocutory appeal.

II. STANDARD OF REVIEW

The issue before us is whether the circuit court had the authority to allow Moniz to withdraw the appeal and request for trial de novo and to reinstate the CAAP award of $35,100. We apply principles of statutory construction when interpreting the HAR. Keaulii v. Simpson, 74 Haw. 417, 421, 847 P.2d 663, 666, reconsideration denied, 74 Haw. 650, 853 P.2d 542, cert. denied, 510 U.S. 814, 114 S.Ct. 61, 126 L.Ed.2d 31 (1993). The interpretation of the HAR is a question of law reviewed under the right/wrong standard. Richardson v. Sport Shinko (Waikiki Corp.), 76 Hawai'i 494, 510, 880 P.2d 169, 185 (1994).

III. DISCUSSION

A. The CAAP Process and Problems Associated With the Withdrawal of a Request For Trial De Novo

The purpose of the CAAP is "to provide a simplified procedure for obtaining a prompt and equitable resolution of certain civil matters to be designated by the Judicial Arbitration Commission." HAR Rule 2(A). ⁷ Moreover, the CAAP was established "to reduce delay and costs in the disposition of certain tort actions through mandatory and nonbinding arbitration as an alternative to costly and protracted litigation." Sen.Spec.Comm.Rep. No. 54-86, in 1986 Senate Journal (Special Session), at 29. Once an arbitrator makes an award, a party may file a written notice of appeal and request a trial de novo. HAR Rule 22. ⁸ After such notice, "the case shall be set for trial pursuant to applicable court rules." HAR Rule 22(B). To discourage unnecessary appeals, HAR Rule 26 ⁹ provides for potential sanctions if an appealing party does not improve upon the arbitration award. "HAR [Rule] 26 sanctions may be imposed to penalize a non-prevailing party whose decision to appeal the arbitration award and pursue a trial de novo was unreasonable under the circumstances of the particular case[.]" Richardson, 76 Hawai'i at 511, 880 P.2d at 186.

The problem in the present case revolves around the concept of the withdrawal of an appeal/request for trial de novo and the nature and extent of the circuit court's discretion to address the circumstances surrounding such withdrawals. Moniz presents two basic arguments in asserting that the circuit court should have allowed him to withdraw his appeal and request for trial de novo (and thereby reinstate his CAAP award). First, he stresses that Freitas did not file a corresponding appeal and request for trial de novo. Moniz asserts that Freitas's failure to appeal indicates her original satisfaction with the award. Moniz argues that Freitas should not be allowed to "bootstrap" onto his appeal now that evidence favorable to Freitas has surfaced. Moniz points out that in these circumstances Freitas is, in effect, forcing a trial de novo without risking sanctions under HAR Rule 26.

Second, Moniz contends that the policies underlying the CAAP would best be met by allowing reinstatement of the arbitration award after a withdrawal of an appeal. If an appeal were withdrawn and the arbitration award then "ripened" into a judgment, the litigation would end. Moniz reasons that his interpretation encourages arbitration and avoids litigation. Moniz further contends that he filed a protective appeal from the award merely to preserve it while investigating whether further litigation was worth pursuing. As previously indicated, Moniz's position is that, having determined that Freitas had no assets to satisfy a larger award, he decided to accept the award and thus sought to withdraw the appeal.

Freitas, on the other hand, contends that, once a CAAP award is appealed, the case exits arbitration and resumes a normal trial track. HAR Rule 22(B). Freitas argues that, once Moniz appealed, it was not necessary for her to appeal, reasoning that the CAAP is a procedure whereby a party "rolls the dice" when appealing from an arbitration award. Freitas submits that allowing Moniz to withdraw his appeal, knowing that the award can be reinstated, would frustrate the goals of the CAAP. Freitas further argues that Moniz could only "withdraw" his appeal from the arbitration award by dismissing the case under HRCP Rule 41, and Rule 41 provides no authority for reinstatement of an...