Kapuwai v. Honolulu, Dept. of Park and Rec.

Decision Date16 July 2009
Docket NumberNo. 27915.,27915.
Citation211 P.3d 750
PartiesDarrell N. KAPUWAI, Respondent/Claimant-Appellant, v. CITY AND COUNTY OF HONOLULU, DEPARTMENT OF PARKS AND RECREATION, Petitioner/Employer-Appellee, Self-Insured.
CourtHawaii Supreme Court

MOON, C.J., and Circuit Judge KIM, Assigned by Reason of Vacancy; ACOBA, J., Concurring Separately, with whom DUFFY, J., joins; and NAKAYAMA, J., Dissenting.

Opinion by MOON, C.J., Announcing the Decision of the Court.

On March 3, 2009, this court accepted a timely application for a writ of certiorari, filed by petitioner/employer-appellee City and County of Honolulu, Department of Parks and Recreation (the City) on January 23, 2009, requesting that this court review the Intermediate Court of Appeals' (ICA) December 8, 2008 judgment on appeal, entered pursuant to its November 12, 2008 published opinion in Kapuwai v. City & County of Honolulu, 119 Hawai`i 304, 196 P.3d 306 (App.2008). Therein, the ICA vacated the February 6, 2006 decision and order of the Labor and Industrial Relations Appeals Board (LIRAB), which, in turn, had modified the decision of the director of the Department of Labor and Industrial Relations (director).

Briefly stated, respondent/employee-appellant Darrell N. Kapuwai — who was employed by the City as a mason — sustained a work-related injury to his right great toe. The City eventually accepted liability for Kapuwai's injury, and the director awarded Kapuwai, inter alia, benefits for 96 percent permanent partial disability (PPD) of his right great toe. The City appealed to the LIRAB, and the LIRAB modified the director's decision, concluding that Kapuwai was entitled to 4 percent PPD on the whole person. Additionally, the LIRAB denied Kapuwai's request for attorney's fees and costs, made pursuant to Hawai`i Revised Statutes (HRS) § 386-93(b) (1993), quoted infra. Kapuwai appealed the LIRAB's decision to the ICA, arguing that the LIRAB should have converted the "whole person" rating to a PPD rating of the great toe, pursuant to HRS § 386-32(a) (Supp.2001), quoted infra, and should have granted his request for attorney's fees and costs. On appeal, the ICA held that Kapuwai was entitled to a PPD award based on the impairment of his great toe as opposed to a whole person rating if the award for the former exceeded the award for the latter; thus, the ICA remanded the case to the LIRAB for such determination. Based upon its remand of the case to the LIRAB, the ICA recognized that it could not decide the attorney's fees issue but, nevertheless, provided "guidance" to the LIRAB regarding the application of HRS § 386-93(b) on remand.

On application, the City essentially contends that the ICA erred: (1) by remanding Kapuwai's case to the LIRAB for a "determination of a [PPD] award based on an impairment of [Kapuwai's] great toe"; and (2) in its interpretation of HRS § 386-93(b). We agree with the ICA's rationale and ultimate disposition remanding the case to the LIRAB for a determination of a PPD award based on the impairment of Kapuwai's great toe and, therefore, affirm that portion of the ICA's opinion. However, as discussed more fully infra, we hold that the ICA erred in delving into the interpretation of HRS § 386-93(b) because, based on the ICA's remand of the case to the LIRAB, the issue of attorney's fees and costs was not ripe for decision. Accordingly, we vacate section II of the ICA's opinion relating to attorney's fees and costs.

I. BACKGROUND
A. Factual Background and Procedural History

As aptly summarized by the ICA:

Kapuwai was employed by ... [the City] as a mason. He developed a bunion and calluses on his right great toe which were aggravated by wearing steel-toed shoes at work. On November 23, 2001, Kapuwai underwent surgery on his right foot that consisted of metatarsal osteotomy and distal phalangeal exostectomy. The surgery was not successful in alleviating the pain and sensitivity Kapuwai experienced in his right great toe. Kapuwai walked with a mild limp, had difficulty going up and down stairs, and had problems with balance. He gave up driving because he experienced twitching under his toe when stepping on the accelerator. The surgery left a scar and a flexion deformity of his right great toe.

The City accepted liability for Kapuwai's injury on October 28, 2002, and on December 1, 2002, the [d]irector ... ordered the City to pay for Kapuwai's necessary medical expenses as well as $5,421.25 in temporary total disability benefits.

In December 2003, Kapuwai was evaluated by [Wayne K. Nadamoto, M.D. (Dr. Nadamoto)] for permanent impairment. Dr. Nadamoto used the Fifth Edition of the American Medical Association Guides to the Evaluation of Permanent Impairment (AMA Guides) in rating Kapuwai's impairment. Dr. Nadamoto applied the gait-derangement method rather that the range-of-motion method for assessing impairment under the Fifth Edition of the AMA Guides.[1] Based on the gait-derangement method, Dr. Nadamoto rated Kapuwai's impairment as a 7 percent PPD of the whole person.

A hearing was held before the [d]irector on the issues of permanent disability and disfigurement. The [d]irector credited Dr. Nadamoto's evaluation that Kapuwai suffered a 7 percent whole person disability. The [d]irector found that "[t]his percentage should properly be converted to an award for the great toe only as that was the site of the injury." The [d]irector used the Third Edition (Revised) of the AMA Guides to convert Dr. Nadamoto's 7 percent whole person disability rating to a 96 percent PPD of the right great toe, resulting in a PPD award of $19,954.56. The [d]irector also ordered the City to pay Kapuwai $800.00 for disfigurement, to pay additional temporary total disability benefits, and to reimburse Kapuwai for the cost of Dr. Nadamoto's evaluation.

The City appealed the [d]irector's decision to the LIRAB on July 13, 2004. The LIRAB issued a pretrial order identifying the issues on appeal as:

1. What is the extent of permanent disability resulting from [Kapuwai's] work injury ...; [and]

2. What is the extent of disfigurement resulting from [Kapuwai's] work injury. ...

At the City's request, [S.Y. Tan, M.D. (Dr. Tan)] conducted an independent medical examination of Kapuwai. Dr. Tan prepared a report and testified at the [hearing] held before the LIRAB on the City's appeal. Dr. Tan disagreed with Dr. Nadamoto's use of the gait-derangement method of assessing Kapuwai's impairment because Kapuwai's condition did not fit the criteria for using that method under the Fifth Edition of the AMA Guides. Dr. Tan concluded that the range-of-motion method, which was based on measuring the range of motion of the great toe, was the appropriate method to use.[2] Applying the range-of-motion method, Dr. Tan determined that Kapuwai had sustained a mild toe impairment equivalent to a 1 percent PPD of the whole person.

On February 6, 2006, the LIRAB entered a decision that modified the [d]irector's PPD award and affirmed the [d]irector's disfigurement award. The LIRAB credited Dr. Tan's opinion in finding [(]1) that Kapuwai should be rated under the range-of-motion method and [(]2) that[,] under the Fifth Edition to the AMA Guides, Kapuwai's range of motion measurements corresponded to a 1 percent impairment of the whole person. The LIRAB also credited Kapuwai's testimony on "how his toe condition has interfered with his activities of daily living, such as walking, going up and down stairs, driving, and standing."

The LIRAB concluded:

Based on the foregoing, including Dr. Tan's impairment rating and [Kapuwai's] testimony regarding his pain symptoms and how his toe condition has interfered with his activities of daily living, we conclude that [Kapuwai] is entitled to benefits for 4 [percent] permanent partial disability of the whole person. ...

The LIRAB's decision did not separately determine what Kapuwai's PPD award would have been if based solely on the impairment to his right great toe. The LIRAB agreed with the [d]irector's $800 disfigurement award.

[On February 16, 2006,] Kapuwai moved for reconsideration on the ground that the LIRAB failed to convert its award of 4 percent PPD of the whole person to an award based on the impairment of his right great toe, a specific body part covered by the schedule of awards for PPD under HRS § 386-32(a)[3]. The LIRAB denied Kapuwai's motion for reconsideration on March 29, 2006.

Kapuwai also submitted a request to the LIRAB that the City be required to pay $2,535, [pursuant to HRS § 386-93(b),4] which represented one-half of the attorney's fees and cost[s] incurred by Kapuwai in the City's appeal to the LIRAB. In support of his request, Kapuwai argued that the City raised two issues in the appeal (the extent of the PPD award and the extent of the disfigurement award); that Kapuwai was the prevailing party on the issue of disfigurement; and that the LIRAB did not reverse but only modified the [d]irector's decision on the issue of PPD. The LIRAB effectively denied Kapuwai's request by not assessing the City with 50 percent of Kapuwai's attorney's fees and costs, but instead making Kapuwai's attorney's fees and costs a lien upon the compensation payable by the City to Kapuwai.

Kapuwai, 119 Hawai`i at 307-08, 196 P.3d at 309-10. On April 28, 2006, Kapuwai filed a timely notice of appeal from the LIRAB's (1) February 6, 2006 decision and order and (2) March 29, 2006 order denying Kapuwai's motion for reconsideration.

B. Appeal Before the ICA

On direct appeal, Kapuwai contended that the LIRAB erred "as a matter of law" when it "failed to `convert' its award of 4 [percent] PPD of the `whole person' to an award of the right great toe under the `schedule' of injuries pursuant to [HRS] § 386-32(a)."...

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