Barcena v. Hawaiian Ins. & Guar. Co., Ltd.

• Decision Date: 16 March 1984
• Docket Number: Nos. 9089,9005,No. 7548,7548,s. 9089
• Citation: 67 Haw. 97,678 P.2d 1082
• Court: Hawaii Supreme Court
• Parties: Ann Marie BARCENA, formerly known as Ann Marie Lewis, Plaintiff-Appellant, v. The HAWAIIAN INSURANCE & GUARANTY COMPANY, LIMITED, and Department of Social Services and Housing, State of Hawaii, Defendants-Appellees (Civil). Ann Marie BARCENA, formerly known as Ann Marie Lewis, Plaintiff-Appellant, v. The HAWAIIAN INSURANCE & GUARANTY COMPANY, LIMITED, and Department of Social Services and Housing, State of Hawaii, Defendants-Appellees (Civil).

Page 1082

678 P.2d 1082

67 Haw. 97

Ann Marie BARCENA, formerly known as Ann Marie Lewis, Plaintiff-Appellant, v. The HAWAIIAN INSURANCE & GUARANTY COMPANY, LIMITED, and Department of Social Services and Housing, State

of Hawaii, Defendants-Appellees (Civil

No. 7548).

Ann Marie BARCENA, formerly known as Ann Marie Lewis, Plaintiff-Appellant, v. The HAWAIIAN INSURANCE & GUARANTY COMPANY, LIMITED, and Department of Social Services and Housing, State

of Hawaii, Defendants-Appellees (Civil No. 7548).

Nos. 9089, 9005.

Supreme Court of Hawai'i.

March 16, 1984.

Syllabus by the Court

1. The purpose of the No-Fault Insurance Law is to create a system of reparations for accidental harm and loss arising from motor vehicle accidents, to compensate those damages without regard to fault, and to limit tort liability for these accidents. If the accident causing accidental harm occurs in the State, every person, insured under the law, and his survivors, suffering loss from accidental harm arising out of the operation, maintenance, or use of a motor vehicle has a right to no-fault benefits.

2. The statutory system of reparations embodied in the No-Fault Insurance Law is bottomed on the compulsory coverage of all motor vehicles and operators under no-fault insurance policies and on the partial abolition of tort liability.

3. One to whom harm befalls from an auto accident, except in those specific situations where tort liability has not been abolished, cannot seek recompense from a negligent perpetrator of harm; he must look instead to sources designated in the No-Fault Insurance Law.

4. The unavailability of "no-fault benefits" to an insured motorist who suffered accidental harm and incurred rehabilitation expenses cannot be reconciled with the No-Fault Insurance Law's declared purpose to create a no-fault system of reparations, its partial abolition of tort liability, and its establishment of a right to "no-fault benefits" for loss from accidental harm arising out of the operation of a motor vehicle.

5. There are times when uncertain words are to be wrought into consistency and unity with a legislative purpose which is itself a source of law.

6. The power to decide what the policy of the law shall be resides with the legislature; and if it has intimated its will, that will should be recognized and obeyed.

7. Where an insured motorist who was a recipient of public assistance when the accident causing harm occurred later became ineligible for such assistance, her no-fault insurer was obliged to pay "no- fault benefits" during a period of ineligibility.

Greg K. Nakamura, Hilo (William J. Rosdil, A Law Corp., Hilo, of counsel), for plaintiff-appellant.

Walter Davis, Honolulu (Davis, Playdon, Reid & Richards, Honolulu, of counsel), for defendant-appellee Hawaiian Ins. & Guar. Co.

Steven K. Chang, Deputy Atty. Gen., Honolulu, for defendant-appellee Dept. of Social Services & Housing, State of Hawaii.

Before LUM, C.J., and NAKAMURA, PADGETT, HAYASHI and WAKATSUKI, JJ.

NAKAMURA, Justice.

The dispositive question in these consolidated appeals from the Circuit Court of the Third Circuit is whether Anne Marie Barcena, formerly Anne Marie Lewis, who was insured under a "no-fault policy" that apparently provided no payments to defray expenses incurred for physical therapy because she was a recipient of public assistance when the auto accident causing her harm occurred, was nonetheless entitled to the "no-fault benefits" designed to cover such expenditures when she became ineligible for public assistance thereafter.

While a literal application of a discrete provision of the No Fault Insurance Law, Hawaii Revised Statutes (HRS) Chapter 294, would allow the insurer to reject her claim of benefits with impunity, we do not believe the legislature contemplated a person in her predicament would be without "no-fault benefits." Reading the provision consistently with the statute's purpose and policy, we conclude the insurer was obligated to reimburse Mrs. Barcena for the expenses of physical therapy during the time she could not qualify for public assistance. We therefore vacate the summary judgment awarded the Hawaiian Insurance and Guaranty Company, Ltd. (HIG) and the order denying attorney's fees and costs, affirm the summary judgment in favor of the Department of Social Services and Housing, State of Hawaii (DSSH), and remand the case for the determination of the amount of benefits she should receive and her entitlement to an attorney's fee and costs.

I.

Anne Marie Lewis, then a recipient of public assistance under the Aid to Families with Dependent Children (AFDC) program administered by DSSH, sustained an injury in a vehicular collision on March 6, 1980. Although she was insured under a "no-fault policy" as mandated by HRS § 294-8, ¹ the policy issued by HIG without cost to her, when read in conjunction with HRS § 294-24(b)(2), did not provide payments to cover her rehabilitation expenses. ² Under the legislative scheme of reparations for injury resulting from motor vehicle accidents, those expenses were met through the public assistance program. Hence, Ms. Lewis had no reason to assert a claim against HIG as long as she remained an AFDC beneficiary.

In January of 1981, Ms. Lewis, now Mrs. Barcena, informed DSSH that the AFDC payments to her should be discontinued since her husband's income disqualified her for assistance. But after she and her husband were separated in November of 1981, she again sought and received public aid. In the interim, however, she continued to incur expenses related to the injury. And though she sought "no-fault benefits" from HIG or assistance from DSSH to cover the cost of physical therapy during the time she received no AFDC payments, neither responded affirmatively to her request. HIG disavowed responsibility for payment of "no-fault benefits," since "the term, when applied to a no-fault policy issued at no cost under the provisions of ... [HRS s] 294-24(b)(2) ... [did] not include benefits under subparagraphs (A), (B), and (C) for any person receiving public assistance benefits." See note 2 supra. DSSH rejected the plea for aid on grounds that she was ineligible for AFDC payments when the therapy was administered.

The negative responses led Mrs. Barcena to seek a judicial remedy, and she filed a two-count complaint in the circuit court. In the first, she prayed that the court decree performance of HIG's obligation under the policy to furnish "no-fault benefits" and for damages. In the second, she sought an order directing the payment of AFDC benefits by DSSH, as well as damages. She further prayed that attorneys' fees and costs be assessed against the insurer and the State agency.

Mrs. Barcena's application for judicial relief suffered a fate similar to the earlier requests made of the defendants; summary judgments were awarded to HIG and DSSH. Her subsequent motion seeking the payment of attorneys' fees and costs pursuant to HRS § 294-30(a) ³ was also disallowed. Appeals to this court from the summary judgments and from the disallowance of fees and costs followed. ⁴

II.

A.

"The purpose of ... [HRS Chapter 294] is to create a system of reparations for accidental harm and loss arising from motor vehicle accidents, to compensate those damages without regard to fault, and to limit tort liability for these accidents." HRS § 294-1. "If the accident causing accidental harm occurs in this State, every person, insured under this chapter, and his survivors, suffering loss from accidental harm arising out of the operation, maintenance or use of a motor vehicle has a right to no-fault benefits." HRS § 294-3.

The statutory system of reparations embodied in the No-Fault Insurance Law is bottomed on the compulsory coverage of all motor vehicles and operators under no-fault insurance policies and the partial abolition of tort liability. See note 1 supra and HRS § 294-6. ⁵ Now, one to whom harm befalls from an auto accident, save in certain instances not relevant here, cannot seek recompense from a negligent perpetrator of harm; he must look instead to sources designated in the chapter. If the injured person has purchased the "no-fault policy" required of all motor vehicle owners and operators, the insurer is obliged to compensate him for damages to the extent they fall within "no-fault benefits" as defined by HRS § 294-2(10). If the insured accident victim is a public assistance recipient for whom the mandatory insurance coverage has been provided under the joint underwriting plan established by HRS § 294-22, ⁶ the "no-fault benefits" the insurer would be responsible for would not include payments for medical and rehabilitation expenses; in his case, the liability for such services is assumed by the government. See note 2 supra.

B.

The accident victim here concededly suffered loss from accidental harm arising from the operation of a motor vehicle, and she was insured under a "no-fault policy." Yet she was rebuffed when she sought reparations from her insurer or public aid to defray expenses incurred for therapy.

HIG rationalizes its refusal to honor her claim on the language of HRS § 294-2(10) defining "no-fault benefits." To be sure, "the term, when applied to a no-fault policy issued at no cost under the provisions of section 294-24(b)(2) ... [does] not include benefits ... [for expenses incurred for occupational therapy and rehabilitation by] any person receiving public assistance benefits." See note 2 supra. On superficial examination, the foregoing proviso to HRS § 294-2(10) appears to preclude the payment of the claimed "no-fault benefits." Still, the unavailability of benefits for Mrs. Barcena cannot be reconciled with Chapter 294's declared purpose to create a no-fault system of reparations, its limitation of tort liability, and its establishment of right to "no-fault benefits" for loss from accidental harm arising out of the operation of a motor vehicle. See HRS §§ 294-1 and 294-3....