Garcia v. Kaiser Foundation Hospitals

• Decision Date: 09 June 1999
• Docket Number: No. 19714.,19714.
• Citation: 978 P.2d 863,90 Haw. 425
• Parties: Deogracias T. GARCIA, Jr., and Sheila J. Garcia, Plaintiffs-Appellants/Cross-Appellees, v. KAISER FOUNDATION HOSPITALS; Kaiser Foundation Health Plan, Inc.; Hawaii-Permanente Medical Group Inc., Defendants-Appellees/Cross-Appellees; and Kent Davenport, M.D., Defendant-Appellee/Cross-Appellant; and The Honolulu Medical Group, Defendant-Appellee/Cross-Appellant, and John Does 3-10, Defendants.
• Court: Hawaii Supreme Court

978 P.2d 863

90 Haw. 425

90 Hawai`i 425

Deogracias T. GARCIA, Jr., and Sheila J. Garcia, Plaintiffs-Appellants/Cross-Appellees, v. KAISER FOUNDATION HOSPITALS; Kaiser Foundation Health Plan, Inc.; Hawaii-Permanente Medical Group Inc., Defendants-Appellees/Cross-Appellees; and Kent Davenport, M.D., Defendant-Appellee/Cross-Appellant; and The Honolulu Medical Group, Defendant-Appellee/Cross-Appellant, and John Does 3-10, Defendants.

No. 19714.

Supreme Court of Hawai`i.

June 9, 1999.

George W. Ashford, Jr. of Ashford & Associates, on the briefs, Honolulu, for Plaintiffs-Appellants/Cross-Appellees Deogracias Garcia and Sheila Garcia.

Allegra Hyte (William A. Bordner with her on the briefs) of Burke, Sakai, McPheeters, Bordner, Iwanaga & Estes, on the briefs, Honolulu, for Defendant-Appellee/Cross-Appellant The Honolulu Medical Group, Inc.

Daniel T. Kim (Arthur F. Roeca and H. William Goebert, Jr. with him on the briefs) of Roeca, Louie & Hiraoka, on the briefs, Honolulu, for Defendant-Appellee/Cross-Appellant Kent Davenport, M.D.

Robyn B. Chun (Sheryl L. Nicholson of Paul, Johnson Park & Niles, and George W. Playdon, Jr. and M. Lorena Uy of Reinwald, O'Connor, Marrack, Hoskins & Playdon with her on the brief), on the briefs, Honolulu, for Defendants-Appellees/Cross-Appellees Kaiser Foundation Hospitals, Kaiser Foundation Health Plan, Inc., and Hawaii-Permanente Medical Group, Inc.

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

Opinion of the Court by RAMIL, J.

After a work-related accident, plaintiffs-appellants/cross-appellees Deogracias T. Garcia, Jr. (Deogracias) and Sheila J. Garcia (Sheila) brought a multicount complaint against defendants-appellees/cross-appellees Kaiser Foundation Hospitals, Kaiser Foundation Health Plan, Inc., and Hawaii-Permanente Medical Group, Inc. (collectively, Kaiser) for damages and injunctive relief in connection with the alleged improper failure to provide benefits under a health benefits plan (the health plan) provided by Deogracias's employer. Plaintiffs later identified defendant-appellee/cross-appellant Kent Davenport, M.D., and defendant-appellee/cross-appellant The Honolulu Medical Group (HMG) as defendants. The circuit court subsequently granted Kaiser's motion for summary judgment, and Dr. Davenport's and HMG's motions to dismiss.

On appeal, Plaintiffs contend that the circuit court erred in concluding that: (1) Plaintiffs' claims against Kaiser were preempted by the Employee Retirement Income Security Act (ERISA) of 1974, 29 U.S.C. § 1001, et seq.; and (2) it had no jurisdiction over Plaintiffs' complaint against Dr. Davenport and HMG because those claims were medical torts that needed to be submitted to the Medical Claims Conciliation Panel (MCCP) under HRS § 671-12 (1993) prior to the filing of the complaint. Because we hold that ERISA does not preempt count six of Plaintiffs' complaint insofar as it seeks equitable relief, we vacate the circuit court's judgment with respect to count six of Plaintiffs' complaint. We affirm the circuit court's judgment in all other respects.

I. BACKGROUND

In January 1988, Deogracias was employed by Holmes & Narver (Employer) as a carpenter on Johnston Island. Kaiser, a Health Maintenance Organization (HMO), is a provider of one of the three health benefit plans made available by Employer to its employees and their dependents. Pursuant to the terms of employment, Employer provided Deogracias with health benefit coverage through Kaiser. Under Deogracias's health plan, the monthly premiums for the health plan were paid by Employer to Kaiser for each group member. In exchange, Kaiser agreed to provide necessary medical services that are generally and customarily provided by an attending physician, subject to certain stated terms, conditions, and exclusions.

On January 18, 1988, while working on a project on Johnston Island, Deogracias twisted his back and immediately thereafter felt pain in his lower back and left hip. After he continued to experience these pains, Deogracias was sent to the Kaiser Hospital in Honolulu.

Following examinations and tests, Kaiser doctors determined that Deogracias was suffering from necrosis¹ in both hips. The doctors also opined that Deogracias's low back pain resulted from a herniated lumbar disk. The doctors, however, concluded that the necrosis was not work-related and relayed that information to Employer's workers' compensation insurance carrier, Wausau Insurance Company (Wausau).

Because the necrosis was not found to be work-related, Wausau refused to pay for Deogracias's hip replacement surgery. After Deogracias made numerous office visits, Kaiser referred Deogracias to Dr. Davenport, an orthopedic specialist at HMG. After an examination, Dr. Davenport diagnosed Deogracias with necrosis in both hips and a herniated lumbar disc. Dr. Davenport determined that Deogracias would likely require replacement of both hips and a laminectomy to treat his herniated lumbar disc.

On September 23, 1988, Dr. Davenport submitted a formal report to Wausau for authorization to perform the hip replacement surgery and the laminectomy. In response to Wausau's inquiry thereafter, Dr. Davenport opined that Deogracias's back injury was the result of a work-related accident but that the necrosis of his hips was not. Thereafter, Employer and Wausau granted Dr. Davenport's request for authorization to perform a lumbar laminectomy but denied authorization for the hip replacement surgery.

On August 27, 1993, Plaintiffs filed a complaint against Kaiser, alleging: (1) breach of contract; (2) tortious breach of contract; (3) infliction of emotional distress; (4) fraud; (5) unfair and deceptive trade practices; (6) injunctive relief; (7) attorneys' fees; (8) loss of consortium; and (9) punitive damages. In short, Plaintiffs' complaint alleged that Kaiser failed to provide Deogracias with the reasonable and necessary medical treatment to which he was entitled to under the health plan.

On September 13, 1995, Plaintiffs sought leave of court to identify Dr. Davenport and HMG as doe defendants. The circuit court later granted Plaintiffs' motion. Plaintiffs' claims against Dr. Davenport and HMG included: (1) breach of contract; (2) tortious breach of contract; (3) infliction of emotional distress; (4) fraud; and (5) unfair and deceptive trade practices under HRS ch. 480 (1993).

On October 3, 1995, Kaiser filed a motion for summary judgment seeking a determination that Plaintiffs' claims were preempted by ERISA. Thereafter, Dr. Davenport and HMG moved to dismiss Plaintiffs' complaint due to lack of subject matter jurisdiction. Following a hearing on these motions on November 17, 1995, the circuit court granted: (1) Kaiser's motion for summary judgment; and (2) Dr. Davenport and HMG's motion to dismiss. Accordingly, judgment in favor of all defendants and against Plaintiffs was entered on February 12, 1996. From this judgment, Plaintiffs filed a timely notice of appeal.

II. STANDARDS OF REVIEW

A. Summary Judgment

We review a circuit court's award of summary judgment de novo under the same standard applied by the circuit court. Amfac, Inc. v. Waikiki Beachcomber Inv. Co., 74 Haw. 85, 104, 839 P.2d 10, 22, reconsideration denied, 74 Haw. 650, 843 P.2d 144 (1992) (citation omitted). As we have often articulated:

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 as to any material fact and that the moving party is entitled to a judgment as a matter of law.

Id. (citations and internal quotation marks omitted); see Hawai`i Rules of Civil Procedure (HRCP) Rule 56(c) (1990). "A fact is material if proof of that fact would have the effect of establishing or refuting one of the essential elements of a cause of action or defense asserted by the parties." Hulsman v. Hemmeter Dev. Corp., 65 Haw. 58, 61, 647 P.2d 713, 716 (1982) (citations omitted).

Four Star Ins. Agency, Inc. v. Hawaiian Elec. Indus., Inc., 89 Hawai`i 427, 430-31, 974 P.2d 1017, 1020-21 (1999) (quoting Konno v. County of Hawai`i, 85 Hawai`i 61, 70, 937 P.2d 397, 406 (1997)) (quoting Dunlea v. Dappen, 83 Hawai`i 28, 36, 924 P.2d 196, 204 (1996) (citations omitted)) (brackets in original). In addition,

"the evidence must be viewed in the light most favorable to the non-moving party." State ex rel. Bronster v. Yoshina, 84 Hawai`i 179, 186, 932 P.2d 316, 323 (1997) (citing Maguire v. Hilton Hotels Corp., 79 Hawai`i 110, 112, 899 P.2d 393, 395 (1995)). In other words, "we must view all of the evidence and the inferences drawn therefrom in the light most favorable to the party opposing the motion." Maguire, 79 Hawai`i at 112, 899 P.2d at 395 (citation omitted).

Four Star, at 431, 974 P.2d at 1021 (quoting State Farm Mut. Auto Ins. Co. v. Murata, 88 Hawai`i 284, 287-88, 965 P.2d 1284, 1287-88 (1998)) (quoting Estate of Doe v. Paul Revere Ins. Group, 86 Hawai`i 262, 269-70, 948 P.2d 1103, 1110-11 (1997)) (brackets in original).

B. Statutory Construction

The question whether the circuit court erred in granting Dr. Davenport's and HMG's motions to dismiss involves the interpretation of HRS §§ 671-12 (1993) and 671-16 (1993). The interpretation of a statute is a question of law reviewable de novo. Four Star, at 431, 974 P.2d at 1021 (citing Shimabuku v. Montgomery Elevator Co., 79 Hawai`i 352, 357, 903 P.2d 48, 52 (1995) (citation omitted)).

III. DISCUSSION

A. ERISA Preemption

Kaiser contends that the circuit court correctly determined that counts one through six, as well as eight and nine of Plaintiffs' complaint are preempted by ERISA. For the reasons discussed below, we agree with Kaiser that counts one through five, as well as eight and nine, are preempted by ERISA. However, we hold that count six of Plaintiffs' complaint, which sought equitable relief against Kaiser, was not preempted by ERISA insofar as it sought to: (1)...