87 Hawai'i 297, Del Rio v. Crake

• Decision Date: 08 May 1998
• Docket Number: No. 21094,21094
• Citation: 955 P.2d 90
• Parties: 87 Hawai'i 297 Montana G. DEL RIO, a minor, by her Guardian Ad Litem, Humberto DEL RIO, Plaintiff-Appellant, v. Sandra CRAKE, Defendant-Appellee, and John Does 1-5, Doe Corporations 1-5, Doe Partnerships 1-5, Roe Non-Profit Corporations 1-5, and Roe Governmental Agencies 1-5, Defendants.
• Court: Hawaii Supreme Court

Page 90

955 P.2d 90

87 Hawai'i 297

Montana G. DEL RIO, a minor, by her Guardian Ad Litem Humberto DEL RIO, Plaintiff-Appellant, v. Sandra CRAKE, Defendant-Appellee and John Does 1-5, Doe Corporations 1-5, Doe Partnerships 1-5 Roe Non-Profit Corporations 1-5, and Roe Governmental Agencies 1-5, Defendants.

No. 21094.

Supreme Court of Hawai'i.

May 8, 1998.

Timothy P. McNulty, on the briefs, Kihei, for plaintiff-appellant.

Melvyn M. Miyagi and James V. Myhre, of Reid, Richard & Miyagi, on the briefs, Honolulu, for defendant-appellee.

Deborah Day Emerson and David A. Webber, Deputy Attorneys General, on the briefs, as amicus curiae.

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

MOON, Chief Justice.

On July 17, 1997, the circuit court of the second circuit entered a written order granting defendant-appellee Sandra Crake's motion for summary judgment against plaintiff-appellant Montana G. Del Rio, a minor, by her guardian ad litem, Humberto Del Rio. Del Rio appeals, contending that the circuit court erred in ruling that, because Del Rio did not meet any of the tort threshold exceptions ¹ enumerated in Hawaii Revised Statutes (HRS) § 431:10C-306(b) (1993) ², she was precluded from bringing suit in tort against the allegedly negligent Crake, notwithstanding that Del Rio was uninsured and, therefore, ineligible for no-fault benefits. Specifically, Del Rio contends that the tort threshold statute, HRS § 431:10C-306, is unconstitutional per Joshua v. MTL, Inc., 65 Haw. 623, 656 P.2d 736 (1982), and McAulton v. Goldstrin, 66 Haw. 14, 656 P.2d 96 (1982), and requests that this court so declare and remand this matter for trial.

For the reasons set forth below, we (1) overrule Joshua and McAulton, and (2) affirm the circuit court's order granting summary judgment in favor of Crake.

I. BACKGROUND

This case arises from an August 20, 1995 motor vehicle accident that occurred at the intersection of Ka'anapali Parkway and Noheakai Drive in Ka'anapali, Maui. Del Rio, a minor, was driving an uninsured motor vehicle registered to her father. Crake, a tourist, ran the stop sign at the intersection and impacted the vehicle Del Rio was operating. Del Rio sustained personal injuries, but, because the vehicle she was operating was uninsured, she was unable to obtain no-fault benefits to pay for the health care expenses related to her injuries. On September 11, 1996, Del Rio filed suit against Crake, seeking to recover damages in tort. Crake then moved for summary judgment, and, on July 9, 1997, the circuit court heard argument on the motion.

At the hearing, Del Rio relied upon Joshua and McAulton as supporting her right to bring suit in tort. The court in Joshua held that the tort threshold statute then in effect ³ worked an unconstitutional denial of equal protection as applied to persons ineligible for no-fault benefits because the ineligible tended to be poor.

In Joshua, the plaintiff (Joshua) was injured when an MTL bus struck his vehicle. Unbeknownst to Joshua, his insurance had been canceled and notice thereof sent to his parents' home. Consequently, at the time of the accident, he was an uninsured driver and, thus, unable to recover no-fault benefits, even though the other vehicle was insured. He thereafter sued in tort; however, because he was ineligible to receive no-fault benefits, the trial court ruled that he was required to bring his action within two years of the accident under HRS § 294-36(b)(1) (1976), even though, under HRS § 294-36(b)(2) (1976), persons receiving no-fault benefits have until two years after the last payment of such benefits to commence suit.

On appeal, a majority of the Joshua court first noted that, prior to abolition of tort liability, a person suffering personal injuries due to the negligence of another in an automobile accident could bring suit against the negligent party. However, following enactment of HRS § 294-6, a person who could not claim no-fault benefits was also precluded from bringing suit if he or she could not meet any of the tort threshold exceptions.

The Joshua majority then applied the rational basis test to HRS § 294-6 to determine whether it denied those ineligible for no-fault benefits the equal protection of the laws. The Joshua majority found it to be so because

common sense tells us that the class of people most likely to find themselves in appellant's position are those whose poverty causes them to be unable to afford insurance. The unfortunate consequence of this is that the people most likely to be deprived of any hope of recovering their medical expenses either through a tort suit or insurance are also the people most likely to be unable to otherwise pay for, or even to obtain, the needed medical services for injuries negligently inflicted upon them by insured drivers. The result of the classification is hence likely to result not only in denying the class discriminated against reimbursement for their medical expenses but, as a practical matter, in actually depriving them of the needed services whenever the negligent party is driving a vehicle insured under a no-fault policy.

Certainly, given the stated purpose and objective of the Act, [which is to create a system of reparations for injuries and loss arising from motor vehicle accidents, to compensate these damages without regard to fault, and to limit tort liability for these accidents,] there is no rational basis, per se, for its discriminatory effects on appellant and others like him.

Joshua, 65 Haw. at 630, 656 P.2d at 741 (footnotes omitted).

The day following issuance of the Joshua decision, this court issued its three-to-two decision in McAulton. Therein, the plaintiff (McAulton) was an uninsured motorist and again was unable to claim no-fault benefits. McAulton then sued the allegedly negligent party, but the trial court held that suit was precluded because McAulton failed to meet any of the tort threshold requirements under HRS Chapter 294. On appeal, the McAulton majority reversed, stating that the tort threshold requirements were unconstitutional as applied to all persons ineligible for no-fault benefits, notwithstanding that McAulton clearly could have afforded to purchase insurance. ⁴ McAulton, 66 Haw. at 15, 656 P.2d at 97.

At the hearing on her motion for summary judgment, Crake argued that Joshua and McAulton were no longer applicable and, thus, did not govern this case. Crake asserted that this was so because, in 1983, the Legislature responded to Joshua and McAulton by "restating and clarifying its intent ... to make clear that the abolition of tort liability and the exceptions thereto apply to all persons regardless of whether they are entitled to receive no-fault benefits."

Specifically, the Legislature, via House Bill 915 (1983) (Act 245), expressed its view in the following standing committee report:

The majority opinion of the Hawaii Supreme Court in Joshua v. MTL, Inc. ... misread the intent of the legislature and may have removed all limits on the time in which an uninsured motorist may bring an action for recovery of tort. The effect of the decision is that law abiding citizens who obtain coverage may not sue in tort under Section 294-6(a)(2), Hawaii Revised Statutes, unless they reach the medical-rehabilitative threshold within two years of the last payment of any no-fault benefits, while persons who have failed to obtain coverage can sue at any time without having to reach threshold....

The system of no-fault insurance established by Chapter 294, can only be effective if all drivers participate to the extent required by law. This bill treats uninsured drivers more severely than those who obtain the legally required coverage within the specific legislative intent of encouraging participation by all drivers in the no-fault insurance system. Since the Legislature has provided for persons economically unable to afford insurance under the public assistance provisions of the no-fault law, there is no valid reason for persons not have no-fault insurance.

Sen. Stand. Comm. Rep. No. 830, in 1983 Senate Journal, at 1417. Also, in section 1 of Act 245, the Legislature further discussed its intention and purpose in enacting the no-fault motor vehicle insurance system.

In constructing Hawaii's No-Fault Law system, the legislature was cognizant of two possible areas of legal objections. The first was whether the taking away of the right to sue constitutes a denial of due process. The second area was whether persons of limited means would be deprived of equal protection.

The legislature viewed that due process question from the standpoint of an alteration of available remedies, rather than removal of the right to sue. While the legislature views the freedom to engage in gainful employment as a substantially more important privilege than driving, the legislature determined that the public interest would be enhanced by establishing a system of motor vehicle accident reparations which was similar to the one used for accidents on the job site. In so doing, the legislature established a structured system which bore a number of similarities to the workers' compensation system which had been in effect for years. Persons were not denied access to benefits. Only the means of obtaining them had been changed.

In the interest of equal protection, the legislature has remained sensitive to the interests of those whose ability to pay is limited, often due to circumstances beyond their control. Since the legislature has broad authority under the police power to provide for public health, safety, and welfare, however, it was their view that substantial measures can be taken to protect and assist persons who have suffered personal injuries and property damage as a result of motor vehicle accidents. Driving is a privilege, and the legislature always reserves the right to take reasonable measures to restrict this privilege in order to promote the public good. The...