Sifagaloa v. Board of Trustees of Employees' Retirement System of State of Hawaii
| Decision Date | 10 November 1992 |
| Docket Number | No. 15551,15551 |
| Citation | 74 Haw. 181,840 P.2d 367 |
| Parties | Apoga A. SIFAGALOA, Appellant-Appellant, v. BOARD OF TRUSTEES OF the EMPLOYEES' RETIREMENT SYSTEM OF the STATE OF HAWAII, Appellee-Appellee. |
| Court | Hawaii Supreme Court |
Syllabus by the Court
1. A fair trial in a fair tribunal is a basic requirement of due process; this applies to administrative agencies that adjudicate as well as to courts. A biased decision-maker is constitutionally unacceptable.
2. Disqualification of decision-makers on grounds of actual bias does not prevent unfairness in all cases; our system of justice endeavors to prevent even the probability of unfairness.
3. The use of a truly independent adjudicator is essential to attaining the appearance of justice. If there exists any reasonable doubt about the adjudicator's impartiality at the outset of a case, provision of the most elaborate procedural safeguards will not create an appearance of justice.
4. An administrative adjudicator should not be allowed to decide a case where the circumstances fairly give rise to an appearance of impropriety and reasonably cast suspicion on the adjudicator's impartiality.
5. Legislative enactments are presumptively constitutional. A party challenging a statutory scheme has the burden of showing unconstitutionality beyond a reasonable doubt; the constitutional defect must be clear, manifest, and unmistakable.
6. The very nature of due process negates any concept of inflexible procedures universally applicable to every imaginable situation. Whether a particular decision-making procedure is constitutionally defective for want of impartiality will depend on many factors, including the character of the decision being made, the nature of the individual and governmental interests at stake, and the feasibility of alternative procedures.
7. An appearance of impropriety does not occur simply where there is a joinder of executive and judicial power.
8. Administrators serving as adjudicators are presumed to be unbiased. The presumption can be rebutted by a showing of disqualifying interest, either pecuniary or institutional, or both. But the burden of establishing a disqualifying interest rests on the party making the assertion.
9. Administrators serving as adjudicators do not have a disqualifying interest where they have no direct, personal, or pecuniary interest in their adjudications, or no interest other than running a successful operation--i.e., where the situation is not one that would offer a possible temptation to the average person as a judge.
10. Where, fairly read, neither the facts nor the generalized assertions made about administrators' inconsistent responsibilities prove an interest on their part in the outcome of the claim, the presumption of honesty and integrity that attaches by virtue of their office is not overcome.
11. An administrative agency's factual findings are presumptively correct and cannot be set aside on appeal unless they are shown to be clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record. Substantial evidence is credible evidence of sufficient quantity and probative value to justify a reasonable person in reaching a conclusion that supports a finding of fact. A finding of fact is clearly erroneous when, despite evidence to support the finding, the appellate court is left with the definite and firm conviction that a mistake has been committed.
12. The "clearly erroneous" standard of review is not applicable to an agency's conclusions of law, which are freely reviewable.
13. Hawaii Revised Statutes (HRS) § 88-77 (1985) does not distinguish between physical and psychological disabilities. To qualify for service-connected total disability retirement, the statute only requires that a member of the Employees' Retirement System of the State of Hawaii be permanently incapacitated as the natural and proximate result of an accident occurring while in the performance of some employment-related duty.
Stephen K. Yamada (Glenn H. Uesugi, with him on the briefs), Honolulu, for appellant-appellant Apoga A. Sifagaloa.
Celia L. Jacoby (Charleen M. Aina, with her on the brief), Deputy Attys. Gen., Honolulu, for appellee-appellee Bd. of Trustees of the Employees' Retirement System of the State of Hawaii.
Before LUM, C.J., WAKATSUKI, * MOON and LEVINSON, JJ., and BURNS, C.J., Intermediate Court of Appeals in place of KLEIN, J., recused.
The appellant Apoga Sifagaloa (Sifagaloa), a member of the Employees' Retirement System (ERS) of the State of Hawaii, see generally Hawaii Revised Statutes (HRS) ch. 88 (1985) and, in particular, HRS §§ 88-21 and 88-22 (1985), 1 appeals from a circuit court order that affirmed the denial of his application for service-connected total disability retirement benefits under HRS § 88-77 (1985). 2
Sifagaloa urges that his due process rights were violated because the Board of Trustees of the ERS (Trustees) were not unbiased adjudicators, based on their allegedly conflicting duty, as trustees, to preserve the ERS funds pursuant to HRS § 88-110 (1985). 3 We conclude that this contention is without merit. However, Sifagaloa also argues that the circuit court erroneously affirmed the Trustees' denial of his claim on the basis that there was no evidence of permanent incapacitation resulting from an accident occurring while performing his duties as a city truck driver. See HRS §§ 88-77(d), and 91-14 (1985). 4 We agree and conclude that the circuit court erred in affirming the Trustees' decision. Accordingly, we reverse the circuit court's order and remand for entry of judgment in Sifagaloa's favor.
Sifagaloa was involved in a motor vehicle accident on December 7, 1981, while driving a truck within the scope of his employment with the City and County of Honolulu. On October 18, 1984, he filed a claim for service-connected total disability retirement benefits pursuant to HRS § 88-77.
On June 29, 1987, the Medical Board of the ERS submitted its decision to the Trustees on Sifagaloa's claim, finding that Sifagaloa was permanently incapacitated, due to psychological factors, both from further performance of his duties as a truck driver and from any other gainful employment. Nevertheless, the Medical Board recommended that Sifagaloa's claim be denied because it found that there was no causal connection between the motor vehicle accident and Sifagaloa's current physical impairment and, therefore, Sifagaloa's disability was "non-service connected." The Trustees accepted the Medical Board's finding and recommendation and denied Sifagaloa's claim. Sifagaloa timely appealed the Medical Board's decision to the Trustees pursuant to HRS § 88-82 (1985).
On May 5 and 17, 1988, the Trustees conducted hearings regarding Sifagaloa's appeal. Hearing officer Alfred Hee (Hee) heard testimony from Sifagaloa, several medical doctors, and a psychiatrist, Dr. Edward Furukawa, who was called as a witness by the Medical Board. 5
On direct examination, Dr. Furukawa testified that Sifagaloa suffered from a psychiatrically recognized disorder styled "Psychological Factors Affecting Physical Condition." During cross-examination, Dr. Furukawa opined that the December 7, 1981 accident was the cause of Sifagaloa's condition and that the condition was psychologically disabling. Dr. Furukawa also testified that Sifagaloa was not a malingerer. On redirect examination, Dr. Furukawa testified that he would not be surprised if Sifagaloa's psychological condition persisted even if the claim were ultimately resolved in Sifagaloa's favor.
Despite Dr. Furukawa's uncontroverted testimony, Hee found that Sifagaloa had presented no psychiatric evidence establishing that his disability was caused by the December 7, 1981 accident. Hee recommended that the Medical Board's report be affirmed. In its final decision, issued on December 10, 1990, the Trustees affirmed Hee's recommendation in its entirety.
On appeal to the circuit court, Sifagaloa argued that his right to due process of law was violated because the Trustees were not impartial adjudicators and should not have been permitted to determine whether he should receive retirement benefits. Sifagaloa also contended that the Trustees erred when they determined that his disability was not service-connected. The circuit court determined that the Trustees' dual statutory functions of investing retirement funds and adjudicating disability retirement cases gave rise to no appearance of impropriety. Moreover, the circuit court found no objective evidence in the record from which a determination could be made that any of the Trustees should be disqualified. Finally, the circuit court ruled that the Trustees' decision to deny Sifagaloa total disability retirement was consistent with the evidence. Accordingly, the circuit court entered an order affirming the Trustees' denial of Sifagaloa's application.
On appeal to this court, Sifagaloa argues that he was denied his constitutional right to due process of law, as guaranteed by the fourteenth amendment to the United States Constitution and article 1, section 5 of the Hawaii Constitution, because the Trustees have conflicting interests--awarding retirement benefits and preserving the financial integrity of the ERS fund. In effect, Sifagaloa urges that the Trustees' alleged conflict of interest gives rise to an appearance of impropriety on the basis of which their impartiality might reasonably be questioned; accordingly, Sifagaloa concludes that the Trustees should have been disqualified from adjudicating his appeal of the Medical Board's decision.
This court has articulated the conceptual framework within which we begin our analysis of Sifagaloa's due process claim. In Sussel v. City and County of Honolulu Civil Service Com'n, 71 Haw. 101, 784 P.2d 867 (1989), we declared the following propositions to which we continue to...
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Case Notes
...decided it did. A "fair trial in a fair tribunal is a basic requirement of due process." Sifagaloa v. Board, of Tr. of Employee Ret. Sys., 74 Haw. 181, 189, 840 P.2d 367, 371 (1992) (quoting In re Murchison, 349 U.S. 133, 136 (1955)). While the specifics of that guarantee can vary depending......