Nakamoto v. Kawauchi, 050818 HIISC, SCWC-13-0004947

Docket Nº:SCWC-13-0004947
Opinion Judge:RECKTENWALD, C.J.
Party Name:PATRICIA NAKAMOTO, Petitioner/Plaintiff-Appellant, v. JAMAE KAWAUCHI, in her individual and official capacity as County Clerk, DOMINIC YAGONG, in his individual and official capacity as Chairman, Hawai'i County Council, County of Hawai'i, CORPORATE SPECIALIZED INTELLIGENCE AND INVESTIGATIONS LLC, Respondents/Defendants-Appellees. (Civil No. 12-...
Attorney:Ted H.S. Hong for petitioner Laureen L. Martin for respondents County of Hawai'i, and Jamae Kawauchi and Dominic Yagong, in their official capacities Jill D. Rasnov for respondents Jamae Kawauchi and Dominic Yagong, in their individual capacities Jodie D. Roeca for respondent Corporate Specialize...
Judge Panel:RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.
Case Date:May 08, 2018
 
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PATRICIA NAKAMOTO, Petitioner/Plaintiff-Appellant,

v.

JAMAE KAWAUCHI, in her individual and official capacity as County Clerk, DOMINIC YAGONG, in his individual and official capacity as Chairman, Hawai'i County Council, County of Hawai'i, CORPORATE SPECIALIZED INTELLIGENCE AND INVESTIGATIONS LLC, Respondents/Defendants-Appellees. (Civil No. 12-1-0466)

SHYLA A. AYAU, Petitioner/Plaintiff-Appellant,

v.

JAMAE KAWAUCHI, in her individual and official capacity as County Clerk, DOMINIC YAGONG, in his individual and official capacity as Chairman, Hawai'i County Council, County of Hawai'i, CORPORATE SPECIALIZED INTELLIGENCE AND INVESTIGATIONS LLC, Respondents/Defendants-Appellee. (Civil No. 12-1-0467)

No. SCWC-13-0004947

Supreme Court of Hawaii

May 8, 2018

          CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS (CAAP-13-0004947)

          Ted H.S. Hong for petitioner

          Laureen L. Martin for respondents County of Hawai'i, and Jamae Kawauchi and Dominic Yagong, in their official capacities

          Jill D. Rasnov for respondents Jamae Kawauchi and Dominic Yagong, in their individual capacities

          Jodie D. Roeca for respondent Corporate Specialized Intelligence and Investigations, LLC

          RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.

          OPINION

          RECKTENWALD, C.J.

         I.

Introduction

         This case concerns common law tort claims in the employment context. Petitioners Patricia Nakamoto and Shyla M. Ayau (collectively, "Petitioners") were employees of the County of Hawai'i (the County), whose employment was terminated following an investigation into alleged employee misconduct, including the use of a County Elections Office warehouse for private business purposes and to hold parties at which alcohol was consumed. An article was published in a local newspaper about the terminations, which quoted County officials, Respondents Jamae Kawauchi (Kawauchi) and Dominic Yagong (Yagong), as making various statements about the terminations.

         Petitioners brought the present action against the County, Kawauchi and Yagong in both their official and individual capacities, and Corporate Specialized Investigations and Intelligence Services, LLC (CSII), a licensed private investigation company which the County hired to conduct the investigation. Petitioners alleged that the defendants had caused defamatory statements about them to be published in the local newspaper, and that the investigation had been conducted negligently.

         The circuit court granted the County's motion to dismiss, finding that Petitioners' claims were barred by the Workers' Compensation Law (WCL) because Petitioners' alleged injury to their reputations arose through the course and scope of their employment.1 The circuit court also granted summary judgment in favor of Kawauchi and Yagong, finding that Petitioners had failed to adduce evidence raising a genuine issue of material fact that Kawauchi and Yagong had made false statements about them. Finally, the circuit court granted summary judgment in favor of CSII, finding that as a third-party investigator, it had no duty towards Petitioners.

         Petitioners appealed to the Intermediate Court of Appeals (ICA), which affirmed the circuit court in all respects, except that it held that the circuit court erred in holding that allegedly defamatory statements made after termination were barred by the WCL. However, the ICA did not vacate the circuit court's grant of the motion to dismiss, because it held as a matter of law that Kawauchi's and Yagong's alleged defamatory statements were true.

         On certiorari, Petitioners raise several issues. They argue that the ICA erred in holding that the WCL exclusivity provision covers reputational injuries. Petitioners also argue that the ICA erred in holding that Kawauchi's and Yagong's statements were true as a matter of law. Finally, Petitioners argue that the ICA erred in holding that CSII did not owe a duty to Petitioners to conduct an objective investigation.

         First, based on the language and purpose of the statute, we hold that the WCL's bar on claims for injuries incurred in the course of employment does not extend to injuries to a person's reputation. Accordingly, employees may bring defamation and false light claims against their employers.

         Second, we affirm summary judgment in favor of Kawauchi, but vacate summary judgment in favor of Yagong in his individual capacity, because we conclude that whether Yagong's allegedly defamatory statements were true involves a disputed question of material fact. Accordingly, we also vacate the circuit court's dismissal of Petitioners' defamation and false light claims against the County and Yagong in his official capacity, as Petitioners can assert those claims based on our holding that those claims are not barred by the WCL.

         Finally, we conclude that CSII owed a legal duty of care to Petitioners, because we hold that licensed private investigators owe a duty of care to the subjects of their investigations. We vacate and remand for a determination of whether CSII breached that duty.

         II. Background

         A. Circuit Court Proceedings

         Nakamoto and Ayau filed separate complaints in circuit court. Both complaints named as defendants Kawauchi and Yagong in their official and individual capacities, the County, CSII, and Doe individuals and entities.

         1.

Allegations in the Complaints

         Taken together, the complaints give the following account of the termination of Petitioners' employment at the County. Nakamoto began her employment at the County of Hawai'i Elections Division in 1982, and her title was Election Programs Administrator when she was fired. Ayau was hired as a full-time elections clerk in 2005, and at the time her employment was terminated, her title was Senior Elections Clerk.

         In July 2011, Kawauchi, who was the County Clerk, and Yagong, who was the County Council Chairman, inspected a privately-owned warehouse in Hilo that had been leased to the County to store equipment for the Office of Elections. There they "observed items that they concluded were violations of County policies"; they subsequently "identified and targeted" Petitioners and other County employees "to be terminated." Kawauchi and Yagong hired CSII to investigate the apparent violations of County policy, and they "pre-determined a particular course of action" against Petitioners and other County employees.

         CSII conducted its investigation, and in September 2011, it submitted an "Investigative Report, " which Petitioners attached as an exhibit to their respective complaints. The report indicated that a County employee, Glen Shikuma, had operated a private sign-making business from the warehouse. The report also found that "on more than one occasion alcoholic beverages have been consumed" by employees at the warehouse, and that a "''year-end get-together' when alcoholic beverages were being consumed" was held at the warehouse. The report indicated that Petitioners admitted to attending year-end parties at the warehouse, but denied knowledge of Shikuma's unauthorized business activities.

         Kawauchi held pre-termination hearings for both Petitioners. The complaint alleged that during the hearing, Nakamoto's union representative asked Kawauchi for copies of the County's policies that Nakamoto had allegedly violated, and Kawauchi replied that "she did not know what the policies were and that she would look them up and send them to" Nakamoto and her union representative.

         On January 9, 2012, Kawauchi sent Ayau a termination letter which "falsely accused" her of misconduct, including violating the County alcohol policy. Kawauchi sent Nakamoto a notice of termination, postmarked January 10, 2012. The notice accused Nakamoto of violating the County alcohol policy, conducting personal or other business unrelated to County business at the elections warehouse, dereliction of duties as the election program administrator, and storing confidential elections information unsecuredly.

         On January 12, 2012, two to three days after Kawauchi sent Petitioners their notices of termination, the Hawai'i Tribune Herald newspaper published an article entitled, "County elections workers fired, " detailing the termination of Petitioners and other County employees in connection with the alleged misconduct at the warehouse. The complaints recounted the following excerpts from the article: The infractions dealt with "violations of county policy, " the Hamakua councilman [Yagong] said Wednesday.

The investigation started with Shikuma, who is accused of running a sign printing business out of the elections warehouse and also storing alcohol there.

One source said he's seen Shikuma storing alcohol bottles in the warehouse and also attending a year-end party, complete with alcohol, held in the parking lot.

         Petitioners asserted that Nakamoto received...

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