82 Hawai'i 405, Romero v. Star Markets, Ltd.

• Decision Date: 18 July 1996
• Docket Number: Nos. 17466,17720,s. 17466
• Citation: 922 P.2d 1018,82 Hawaii 405
• Parties: 82 Hawai'i 405 Patricia S. ROMERO, Petitioner-Appellee, v. STAR MARKETS, LTD., Liberty Mutual Insurance Companies, a Massachusetts corporation, Respondents-Appellants, and John Does 1-5, Doe Corporations 1-5, Doe Partnerships 1-5, Roe Non-Profit Corporations 1-5, Roe Governmental Agencies 1-5, Respondents.
• Court: Hawaii Court of Appeals

Page 1018

922 P.2d 1018

82 Hawai'i 405

Patricia S. ROMERO, Petitioner-Appellee, v. STAR MARKETS, LTD., Liberty Mutual Insurance Companies, a Massachusetts corporation, Respondents-Appellants and John Does 1-5, Doe Corporations 1-5, Doe Partnerships 1-5 Roe Non-Profit Corporations 1-5, Roe Governmental Agencies 1-5, Respondents.

Nos. 17466, 17720.

Intermediate Court of Appeals of Hawai'i.

July 18, 1996.

Syllabus by the Court

Petitioner filed an ex parte motion for entry of judgment against Respondents under Hawai'i Revised Statutes (HRS) §§ 386-91(a) (1993) and 386-124 (1993). HRS § 386-91(a), part of the workers' compensation laws, authorizes the circuit court to render judgments enforcing decisions of the director of the Department of Labor and Industrial Relations (DLIR) or the Labor Appeals Board of the DLIR.

The circuit court granted the ex parte motion for entry of judgment and an ex parte motion for issuance of garnishee summons after judgment.

Respondents filed a motion to set aside the judgment. The motion maintained that (1) the failure to serve the ex parte motion for entry of judgment on Respondents voided the judgment rendered against them for lack of in personam jurisdiction, (2) Petitioner was not entitled to any recovery under the doctrine of accord and satisfaction, and (3) the motion was frivolous, and Respondents were, thus, entitled to attorneys' fees.

The statutory language and the legislative history of HRS § 386-91 are silent with respect to the notice, if any, which must be served upon parties affected by a judgment rendered pursuant to HRS § 386-91(a)(3). On its face, however, the statute provides for enforcement of a decision by a judgment obtained through a circuit court. Enforcement of a decision by the Labor Appeals Board assessing penalties, or awarding compensation or other relief under the workers' compensation law is, by definition, civil in nature.

The Hawai'i Rules of Civil Procedure (HRCP) govern proceedings commenced in circuit court which are civil in nature. Thus, a request to the circuit court to render a judgment pursuant to HRS § 386-91 must comply with the HRCP. Construing Petitioner's motion so as to do substantial justice, we treat it as a complaint. HRCP Rule 8(f).

HRCP Rule 4 provides that a complaint and a summons to answer the complaint shall be served on the opposing parties. Despite the requirement for service of the initial pleading under HRCP Rule 4, Petitioner failed to serve Respondents with her motion and summons.

The Rules of the Circuit Courts of the State of Hawaii [Hawai'i] (RCC) Rule 5 states that all pleadings and papers in civil actions must be served pursuant to the HRCP.

The circuit court lacked in personam jurisdiction over Respondents because service of the motion and a summons was not made on Respondents as required under HRCP Rule 4 and RCC Rule 5.

In deciding the jurisdictional defense, the circuit court should have also held in favor of Respondents because, as a result of the judgment entered, Respondents were deprived of property without due process. The "[b]asic requisites of 'due process' ... where property rights may be affected, [are that] notice and an opportunity to be heard must be afforded to all interested persons." In re Ellis, 53 Haw. 23, 30, 487 P.2d 286, 290 (1971).

However, we are faced with the issue of whether Respondents waived their jurisdictional defense by (1) raising the affirmative defense of accord and satisfaction, and (2) requesting attorneys' fees under HRS § 607-14.5(a) (1993) in their motion to set aside Petitioner's judgment.

HRCP Rule 12(b)(2) provides that the defense of lack of jurisdiction over the person may at the option of the pleader be made by motion.

There no longer is any necessity for appearing specially to challenge personal jurisdiction. Rule 12 permits a jurisdictional defense to be joined with other defenses.

Accord and satisfaction is an affirmative defense which must be pleaded under HRCP Rule 8(c). The affirmative defense of accord and satisfaction is not listed as one of the defenses which may be made by motion under Rule 12(b). However, it is now common to allow an affirmative defense to be asserted by a motion under Rule 12(b)(6) when the validity of that defense is apparent from the face of the pleading. We conclude that the joinder of a jurisdictional defense with an affirmative defense in the same Rule 12(b) motion should not be fatal to the assertion of a jurisdictional defense.

Respondents' request for attorneys' fees did not constitute a waiver of its jurisdictional defense or a consent to the circuit court's jurisdiction.

The ex parte entry of the December 24, 1992 judgment against Respondents allowed Petitioner to garnishee Star Market's bank account without notice and an opportunity to be heard. Consequently, the January 3, 1994 judgment nunc pro tunc and the garnishee summons issued pursuant to the judgment were void.

Kurt A. Gronau and Glenn N. Taga (Law Offices of Kurt A. Gronau, of counsel), on the briefs, Honolulu, for respondents-appellants.

Timothy P. McNulty (Law Office of Timothy P. McNulty, of counsel), on the brief, Kihei, Maui, for petitioner-appellee.

Before BURNS, C.J., and ACOBA and KIRIMITSU, JJ.

ACOBA, Judge.

On December 24, 1992, Petitioner-Appellee Patricia S. Romero (Petitioner) filed an ex parte motion for entry of judgment in the circuit court against her employer, Star Markets, Ltd. (Star Market) and its insurer Liberty Mutual Insurance Co. (collectively Respondents) under Hawai'i Revised Statutes (HRS) §§ 386-91(a) (1993) and 386-124 (1993). ¹ HRS § 386-91(a), part of the workers' compensation laws, authorizes the circuit court to render judgments enforcing decisions of the director of the Department of Labor and Industrial Relations (DLIR) or the appellate board of the DLIR (the Labor Appeals Board). HRS § 386-91(a) provides in relevant part as follows:

(a) Any party in interest or the director may file in the circuit court in the jurisdiction in which the injury occurred, a certified copy of:

....

(3) A decision of the appellate board assessing penalties, or awarding compensation or other relief, including attorneys fees, from which no appeal has been taken within the time allowed therefor[.]

....

The court shall render a judgment in accordance with the decision and notify the parties thereof. The judgment shall have the same effect, and all proceedings in relation thereto shall thereafter be the same, as though the judgment had been rendered in an action duly heard and determined by the court, except that there shall be no appeal therefrom.

(Emphases added.)

The memorandum in support of the motion claimed that the Labor Appeals Board had approved a compromise and release agreement on July 20, 1992 awarding Petitioner $25,637.44, that the compromise was a full and final settlement of a claim Petitioner had against Respondents, and that $3,399.31 was the remaining unpaid balance on the settlement.

The motion was not served on Respondents.

An order granting the ex parte motion for entry of judgment dated December 24, 1992 was filed. A judgment entered against Respondents "pursuant to HRS § 386-91 in the sum" of $3,399.31 and "in favor of [Petitioner] together with allowable interest, fees and costs" dated December 24, 1992 was filed. ²

On January 19, 1993, Petitioner filed an ex parte motion for issuance of garnishee summons after judgment. An order for issuance of garnishee summons dated January 19, 1993 was filed.

On February 17, 1993, a garnishee order was filed ordering garnishee Bank of Hawai'i to pay Petitioner the sum of $3,399.31.

On March 2, 1993, Petitioner filed a satisfaction of judgment which also released and discharged garnishee Bank of Hawai'i.

On May 3, 1993, Respondents filed a motion to set aside judgment. The motion maintained that (1) the failure to serve the ex parte motion for entry of judgment on Respondents voided the judgment rendered against them for lack of in personam jurisdiction, (2) Petitioner was not entitled to any recovery under the doctrine of accord and satisfaction, and (3) the motion was frivolous, and Respondents were, thus, entitled to attorneys' fees.

Petitioner's memorandum in opposition to Respondents' motion to set aside judgment argued that HRS § 386-91 did not require notice to Respondents, and that the court acquired personal jurisdiction when Respondents joined their defense of lack of personal jurisdiction with the "voluntary affirmative claim" of accord and satisfaction and their request for attorneys' fees. Petitioner further contended that there was no accord and satisfaction, and that an award of attorneys' fees would be inappropriate because the motion was not filed in bad faith.

On June 9, 1993, the court determined that it had jurisdiction over Respondents and denied the motion to set aside judgment. The court also orally rejected Respondents' defense of accord and satisfaction and denied Respondents' request for attorneys' fees. ³

On June 14, 1993, Petitioner moved to enter the judgment nunc pro tunc as of the date of Respondents' motion to set aside judgment on the basis that the court had obtained in personam jurisdiction by virtue of the matters stated in Respondents' motion to set aside the judgment.

On July 6, 1993, Respondents filed a memorandum in opposition to Petitioner's motion to enter judgment nunc pro tunc on the grounds that (1) the "court never acquired jurisdiction over [Respondents] so as to render a binding judgment," (2) the doctrine of nunc pro tunc and the Hawai'i Rules of Civil Procedure (HRCP) Rule 60(a) did not apply, and (3) the clerk of the court and Petitioner failed to "afford notice of the entry of judgment" as required under HRCP Rule 77(d).

On July 6, 1993, the court denied Respondents' motion to set aside judgment.

On August 27, 1993, the court granted Petitioner's motion to amend judgment nunc pro tunc. On ...