86 Hawai'i 373, Honbo v. Hawaiian Ins. & Guar. Co., Ltd., 19865
| Decision Date | 28 November 1997 |
| Docket Number | No. 19865,19865 |
| Citation | 949 P.2d 213 |
| Court | Hawaii Court of Appeals |
| Parties | 86 Hawai'i 373 Earl Y. HONBO and Karen Honbo, Plaintiffs-Appellants, v. HAWAIIAN INSURANCE & GUARANTY COMPANY, LIMITED, a Hawai'i corporation, and Hawaiian Insurance & Guaranty Association, Defendants-Appellees, and Reynaldo D. Graulty, Insurance Commissioner of the State of Hawai'i in his capacity as Rehabilitator of Hawaiian Insurance & Guaranty Company, Limited, 1 HUI/UNICO in Liquidation Inc., and Doe Defendants 1-10, Defendants. |
David C. Schutter, Mitchell S. Wong, and Gary D. Weingarden (David C. Schutter & Associates, of counsel), on the briefs, Honolulu, for plaintiffs-appellants.
Kevin P.H. Sumida, Honolulu, and Daryl M. Arakaki (Matsui Chung Sumida & Chang, of counsel), on the brief, for defendant-appellee Hawaii Insurance Guaranty Association.
Richard B. Miller and David R. Harada-Stone (McCorriston Miho Miller Mukai, of counsel), on the brief, Honolulu, for defendant-appellee Hawaiian Insurance & Guaranty Company, Limited.
Before WATANABE, ACOBA and KIRIMITSU, JJ.
Plaintiffs-Appellants Earl Honbo (Earl) and Karen Honbo 2 (collectively, Plaintiffs) appeal the First Circuit Court's April 26, 1996 Final Judgment that dismissed all claims against Defendants-Appellees Hawaiian Insurance & Guaranty Co., Ltd. (HIG) and Hawaiian Insurance Guaranty Association (HIGA) (collectively, Defendants) pursuant to the January 9, 1996 and February 15, 1996 orders granting Defendants' motions for summary judgment. The orders found that all of Plaintiffs' claims were not timely brought within the two-year statute of limitations period set forth in Hawai'i Revised Statutes (HRS) § 294-36(a) (1985). For the reasons stated below, we affirm the April 26, 1996 Final Judgment.
The facts in this case are undisputed. On January 16, 1986, Earl was involved in an automobile accident (Accident No. 1). On August 9, 1986, Earl was involved in a second automobile accident (Accident No. 2). Consequently, Earl filed a claim for no-fault benefits for injuries arising out of both accidents with HIG.
On July 22, 1988, HIG informed Earl that he had exhausted his no-fault insurance benefits for Accident No. 1. On February 14, 1989, HIG informed Earl that he had exhausted his no-fault insurance benefits for Accident No. 2.
In March 1990, Plaintiffs sued each driver of Accident Nos. 1 and 2 in a single negligence lawsuit. The parties reached a settlement agreement and a Stipulation for Dismissal with Prejudice was filed on September 8, 1992.
On December 10, 1992, Plaintiffs issued a demand letter to HIG for Underinsured Motorist (UIM) coverage for Accident Nos. 1 and 2. 3 After receiving no response from HIG, Plaintiffs filed a lawsuit against Defendants, 4 seeking relief of UIM benefits (UIM claim) and damages for alleged bad faith handling of their UIM claim (bad faith claim).
Subsequently, Defendants filed motions for summary judgment claiming Plaintiffs' suit was filed beyond the two-year statute of limitations as set forth in HRS § 294-36(a). 5 The circuit court agreed with Defendants and found that the two-year statute of limitations for Accident No. 1 expired on July 22, 1990; the two-year statute of limitations for Accident No. 2 expired on February 14, 1991; and therefore, the instant lawsuit, filed on September 7, 1994, was not timely asserted within the applicable two-year period of HRS § 294-36(a). Accordingly, the circuit court granted Defendants' motions for summary judgment.
A Final Judgment was entered on April 26, 1996, and Plaintiffs timely filed this appeal on May 15, 1996.
On appeal, an order of summary judgment is reviewed under the same standard applied by the circuit courts. Summary judgment is proper where the moving party demonstrates that there are no genuine issues of material fact and it is entitled to a judgment as a matter of law. In other words, 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.
Iddings v. Mee-Lee, 82 Hawai'i 1, 5, 919 P.2d 263, 267 (1996) (citation omitted).
This case presents two questions on appeal: first, whether Plaintiffs' UIM claim is time barred by the two-year statute of limitations set forth in HRS § 294-36(a); and second, whether Plaintiffs' bad faith claim is time barred by the two-year statute of limitations set forth in HRS § 294-36(a).
To determine whether Plaintiffs' UIM claim is time barred, we address the question of (1) whether Plaintiffs' UIM claim is governed by the statute of limitations set forth in HRS § 294-36(a), and if so, (2) whether it bars Plaintiffs' UIM claim.
On its face, HRS § 294-36(a) applies to any suit "brought on any contract providing no-fault benefits or any contract providing optional additional coverage." HRS § 294-36(a). Thus, the dispositive question is whether UIM benefits constitute "optional additional benefits" for the purpose of HRS § 294-36(a).
We have already held that "optional additional benefits," as used in HRS § 294-36(b)(2), refer to "those insurance benefits that an insured may elect to purchase or elect not to purchase[.]" Higa v. Lino, 82 Hawai'i 535, 538, 923 P.2d 952, 955, cert. denied, 83 Hawai'i 204, 925 P.2d 374 (1996). Thus, in Higa, we determined that uninsured motorist benefits constitute "optional additional benefits" for the purpose of HRS § 294-36(b)(2). Id. at 538-39, 923 P.2d at 955-56. Additionally, HRS § 431-448(b) (1985) states, in relevant part, that "[e]ach insurer shall offer ... optional additional insurance coverage for loss resulting from ... underinsured motor vehicles."
Accordingly, we now extend the reasoning and holding of Higa to the immediate case and conclude that for the purpose of HRS § 294-36(a), UIM benefits constitute "optional additional benefits." As such, we hold that HRS § 294-36(a) applies to UIM claims.
Plaintiffs argue that HRS § 294-36(a) does not apply to UIM claims. Instead, they urge the court to create a new two-year statute of limitations period, specifically for UIM claims, that would start to accrue from the date of "the payment of a judgment or settlement by the third-party insurer." 6 However, the Hawai'i Supreme Court has long held that:
If there is any inequality or any situation that was overlooked in the law, it is up to the legislature to make the correction. For this court to do so under the guise of statutory construction is to indulge in judicial legislation which we are prohibited from doing under the doctrine of separation of powers.... The judicial function to be exercised in construing a statute is limited to ascertaining the intention of the legislature therein expressed. A casus omissus does not justify judicial legislation.
In re Taxes, Pac. Refiners, Ltd., 41 Haw. 615, 625-26 (1957) (internal quotation marks and citations omitted); see also Sherman v. Sawyer, 63 Haw. 55, 57, 621 P.2d 346, 348 (1980) (); Bissen v. Fujii, 51 Haw. 636, 638, 466 P.2d 429, 431 (1970) ( the same). Thus, if a special statute of limitations for UIM claims is necessary, then the legislature is the appropriate branch of government to effectuate the change.
Accordingly, we hold that HRS § 294-36(a) applies to Plaintiffs' UIM claim.
HRS § 294-36(a)(2) 7 specifically provides that no suit shall be brought on any contract providing no-fault benefits or optional additional coverage more than two years after the last payment of no-fault or optional additional benefits.
Earl exhausted his last no-fault payment on July 22, 1988 for Accident No. 1, and February 14, 1989 for Accident No. 2. Therefore, the statute of limitations for Plaintiffs' UIM claim expired on July 22, 1990 and February 14, 1991, respectively. Accordingly, Plaintiffs' lawsuit on their UIM claim, filed on September 7, 1994, was barred by the two-year statute of limitations period set forth in HRS § 294-36(a)(2). Hence, the trial court did not err by granting summary judgment on the UIM claim.
Plaintiffs also brought a first-party insurer bad faith claim which raises the following issues: (1) whether HRS § 294-36(a)(4), in particular, applies to first-party insurer bad faith claims; if not, (2) whether HRS § 294-36(a), in general, applies to first-party insurer bad faith claims; and if so, (3) whether Plaintiffs' first-party insurer bad faith claim is barred by the two-year statute of limitations set forth in HRS § 294-36(a). 8
Plaintiffs argue on appeal that the two-year statute of limitations period set forth in subsection (4) of HRS § 294-36(a) applies to their first-party insurer bad faith claim. We disagree.
HRS § 294-36(a)(4) reads as follows:
(a) No suit shall be brought on any contract providing no-fault benefits or any contract providing optional additional coverage more than:
....
(4) Two years after the entry of a final judgment in, or dismissal with prejudice of, a tort action arising out of a motor vehicle accident, where a cause of action for insurer bad faith arises out of the tort action; whichever is the last to occur.
HRS § 294-36(a)(4) (emphasis added).
It is well established that "where the language of the law in question is plain and unambiguous, construction by [the] court is inappropriate and [the court's] duty is only to give effect to the law according to its plain and obvious meaning." Strouss v. Simmons, 66 Haw. 32, 50, 657 P.2d...
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