Lindinha v. Hilo Coast Processing Co.

• Decision Date: 18 March 2004
• Docket Number: No. 24141.,24141.
• Citation: 86 P.3d 973,104 Haw. 164
• Parties: Steven H. LINDINHA, Claimant-Appellant v. HILO COAST PROCESSING COMPANY, Employer-Appellee, and Acclamation Insurance Management Services, Inc., Insurance Adjuster-Appellee.
• Court: Hawaii Supreme Court

86 P.3d 973

104 Haw. 164

Steven H. LINDINHA, Claimant-Appellant v. HILO COAST PROCESSING COMPANY, Employer-Appellee, and Acclamation Insurance Management Services, Inc., Insurance Adjuster-Appellee.

No. 24141.

Supreme Court of Hawai'i.

March 18, 2004.

Reconsideration Denied April 6, 2004.

Herbert R. Takahashi, Stanford H. Masui, Danny J. Vasconcellos, and Rebecca L. Covert (Takahashi, Masui & Vasconcellos), Honolulu, on the briefs, for claimant-appellant.

Sidney J.Y. Wong and Colette H. Gomoto (Wong, Oshima & Kondo), Honolulu, on the briefs, for employer-appellee and insurance adjuster-appellee.

MOON, C.J., LEVINSON, NAKAYAMA, ACOBA, and DUFFY, JJ.

Opinion of the Court by ACOBA, J.

We hold that (1) an order regarding the award or denial of attorney's fees and costs with respect to Hawai'i Revised Statutes (HRS) § 386-93(b) (1993)¹ is a final order under HRS § 91-14(a) (1993) for purposes of appeal, (2) this final order rule applies prospectively to prevent injustice, and (3) HRS § 386-93(b) allows assessment of attorney's fees and costs against an employer if the employer loses the final appeal. Accordingly, we conclude that an order like the May 29, 1997² order of the Labor and Industrial Relations Appeals Board (LIRAB) which denied the motion for reconsideration that attorney's fees and costs be awarded pursuant to HRS § 386-93(b) was a final order from which an appeal may be taken. However, inasmuch as under the case law in effect at the time the aforesaid order was entered, the order was not appealable until all rights were determined and no matter was retained for further action by the LIRAB, we treat the appeal of Claimant-appellant Steven H. Lindinha (claimant) as timely. On the merits of the appeal we hold that the LIRAB was wrong in concluding that claimant was not entitled to attorney's fees and costs pursuant to HRS § 386-93(b) because claimant's employer prevailed on its appeal to the LIRAB, inasmuch as the LIRAB's adverse decision was reversed in claimant's favor by the Intermediate Court of Appeals (the ICA).

I.

On August 28, 1991, claimant reported a psychological injury to his employer, Hilo Coast Processing Company (Coast). Coast was insured by Appellee, Acclamation Insurance Management Services (AIMS). The following timeline is relevant.

On February 4, 1992, a hearing was held before the Director of the Department of Labor and Industrial Relations (DLIR) Disability Compensation Division to determine if the claim was compensable. In his March 31, 1992 decision, the Director determined that the claim was compensable.

On April 20, 1992, Coast filed a notice of appeal with the LIRAB.

On May 15, 1992, the Director issued an order amending the amounts owed to claimant in its March 31, 1992 decision.

On June 13, 1994, the LIRAB filed its decision and order finding that claimant's injury did not arise out of and in the course of employment, thereby reversing the Director's decision.

On June 23, 1994, claimant filed a notice of appeal to this court, No. 18168.

On March 12, 1997, the ICA filed a summary disposition order (SDO) reversing the LIRAB's June 13, 1994 decision and reinstating the Director's March 31, 1992 Decision and Order, as amended by the May 15, 1992 Amended Decision. The ICA determined that claimant's injury of August 28, 1991 did arise out of and in the course of employment.

On April 10, 1997, the Notice and Judgment on Appeal was filed by the Clerk of the Court.

On April 21, 1997, claimant filed a request for approval of attorney's fees and costs with the LIRAB to be assessed against Coast, pursuant to HRS § 386-93(b). Coast filed its objections to the request on May 1, 1997.

On May 14, 1997, the LIRAB issued an order approving the request for attorney's fees and costs in the amount of $35,377.16 as a lien on compensation payable by Coast. In essence the order denied claimant's request for attorney's fees and costs against Coast and AIMS on the ground that Coast prevailed in its appeal to the LIRAB. The LIRAB stated that "[p]ursuant to Section 386-93(b), [HRS], Employer/Insurance Adjuster is not responsible for claimant's attorney's fee and costs." Rather, the LIRAB approved claimant's attorney's fee and costs but made the amount due of $35,377.16³ a lien against the compensation payable by Coast and AIMS to claimant.

On May 23, 1997, claimant filed a motion for reconsideration arguing that HRS § 386-93(b) entitled him to attorney's fees and costs. Claimant argued that "considering the fact that the ICA's Decision/Judgment on Appeal dated April 10, 1997, reversed the LIRAB's order of June 13, 1994, and reinstated the March 31, 1992 Decision and Order of the Director[,] ... under the statute (HRS § 386-93(b)) the Employer lost its appeal before the Appellate Board."

On May 29, 1997, the LIRAB filed an order denying claimant's motion for reconsideration. However, claimant did not appeal to this court from the order.

On February 13, 1998, a hearing was held before the Director to determine the remaining benefit issues raised by the claimant, namely (1) temporary disability period, (2) permanent disability, (3) vocational rehabilitation services, and (4) other issues as appropriate.

On March 23, 1998, the Director issued a supplemental decision finding that (1) claimant suffered no permanent disability resulting from the accident, (2) Coast paid temporary total disability (TTD) benefits through June 11, 1994, and no additional TTD benefits were due from June 12, 1994 through January 1, 1995, and (3) claimant was not eligible for vocational rehabilitation services and Coast had a reasonable basis to defend on the claim, thereby concluding that each party should be responsible for their own attorney's fees and costs.

On March 31, 1998, claimant filed a notice of appeal from the Director's March 23, 1998 supplemental decision.

On July 28, 2000, the LIRAB issued its decision which affirmed, in part, that TTD was already satisfied, but reversed the Director on the issue of permanent disability. The LIRAB found that claimant was entitled to benefits for 5% permanent partial disability of the whole person.

On August 7, 2000, claimant submitted two separate requests for approval of attorney's fees and costs for the LIRAB's approval for services rendered before the LIRAB. The first request was not disputed, and was for the approval of fees and costs to be assessed against claimant in the form of a lien on claimant's compensation payment which had been awarded by the LIRAB in the July 28, 2000 decision.

The second request was for approval of attorney's fees and costs pursuant to HRS § 386-93(b), for services rendered before the LIRAB in the April 20, 1992 appeal filed by the Employer challenging the March 31, 1992 decision of the Director. Claimant informed the LIRAB by an August 7, 2000 letter that he was pursuing a renewed motion for reconsideration of the May 14, 1997 order approving the request for attorney's fees and costs as a lien on compensation to be paid claimant. Claimant stated that "Claimant/Claimant's attorneys now believe that due to the new composition of the Labor Appeals Board, the Board will now approve the Motion for Reconsideration previously filed on May 23, 1997." Claimant based his motion to renew on Hawai'i Administrative Rules (HAR) § 12-47-53.⁴ However, at the hearing claimant explained that he believed there was no final decision until the Director and LIRAB had both completed their determinations of claimant's benefits.

On January 18, 2001, a hearing was held on claimant's renewed motion for reconsideration. On February 7, 2001, the LIRAB issued an order striking claimant's renewed motion for reconsideration. The LIRAB explained that "the August 7, 2000 renewed motion for reconsideration was improper and must be disregarded. If Claimant had wanted to further challenge our May 29, 1997 Order, his remedy was not to file another motion for reconsideration, but to appeal that Order to the Hawai'i Supreme Court."

The LIRAB thus disagreed with the claimant that "no appeal could have been taken to the Hawaii Supreme Court until July 28, 2000, when the Director and the Board completed their rulings on benefits." It noted that a "final judgment or decree is not necessarily the last decision of a case. What determines the finality of an order or decree is the nature and effect of the order or decree." In re Hawai'i Gov't Emp. Ass'n, 63 Haw. 85, 88, 621 P.2d 361, 364 (1980) (citations omitted). Referring to Bocalbos v. Kapiolani Med. Ctr., 89 Hawai'i 436, 974 P.2d 1026 (1999), the LIRAB observed that

the Hawai'i Supreme Court recognized the ongoing and piecemeal nature of workers' compensation proceedings, and the fact that each type of benefit such as temporary total disability ("TTD"), medical care, and permanent partial disability ("PPD") was separate and distinct from one another, such that an award of TTD had no bearing on a further award of PPD.

The LIRAB stated that "the Hawaii Supreme Court held that the Board's decision in Bocalbos relating to TTD and medical care was a final order from which an appeal could be taken, even though PPD and disfigurement had not yet been decided." Thus, according to the LIRAB, "[a]lthough this case involves attorney's fees, and not TTD and medical care, we find the rationale behind the Court's holding in Bocalbos equally applicable here."

The LIRAB also stated that claimant did not timely file a request for attorneys fees according to HAR §§ 12-10-69⁵ and 12-47-55.⁶ The LIRAB held that claimant should have filed a request for approval of attorney's fees within ten days of the filing of the LIRAB's June 13, 1994 Decision and Order.⁷

On March 8, 2001, claimant filed his notice of appeal in the instant case.

II.

On appeal, claimant argues that the LIRAB erred: (1) as a matter of law in concluding that claimant was statutorily required to file a request for assessment of attorney's fees and costs against...