Pacheco v. Hilo Elec. Light Co., Ltd., 5385

• Decision Date: 19 March 1974
• Docket Number: No. 5385,5385
• Citation: 55 Haw. 375,520 P.2d 62
• Parties: Stanley PACHECO and Ramona Pacheco, Plaintiffs, v. HILO ELECTRIC LIGHT COMPANY, LTD., Defendant and Third-Party Plaintiff-Appellee, v. STATE of Hawaii, Third-Party Defendant-Appellant.
• Court: Hawaii Supreme Court

Page 62

520 P.2d 62

55 Haw. 375

Stanley PACHECO and Ramona Pacheco, Plaintiffs, v. HILO ELECTRIC LIGHT COMPANY, LTD., Defendant and Third-Party Plaintiff-Appellee, v. STATE of Hawaii, Third-Party Defendant-Appellant.

No. 5385.

Supreme Court of Hawai'i.

March 19, 1974.

Syllabus by the Court

1. HRS § 386-5 precludes all suits for contribution brought by a third-party tortfeasor against an employer obligated to pay workmen's compensation benefits to an employee injured by the tortfeasor's negligence.

2. In a civil action, an oral stipulation to try a case under certain assumptions, knowingly and unequivocally assented to by a party in open court, is the controlling measure of that party's rights in the case.

3. Contributory negligence is available as a defense against all claims accruing before July 14, 1969, the effective date of the comparative negligence statute, HRS § 663-31 (Supp.1973).

4. Whether a plaintiff was contributorily negligent-i. e., whether he failed to act as an ordinarily prudent man in the particular circumstances attending an accident-is treated as a question of fact where persons of reasonable intelligence may differ as to the conclusion to be drawn from the evidence of the plaintiff's actual conduct.

5. Under Rule 52(a) of the Hawaii Rules of Civil Procedure, a trial judge's findings of fact should not be set aside unless clearly erroneous, that is, unless the reviewing court is driven irrefragably to the conclusion that all objective appraisals of the evidence would result in a different finding.

6. A plaintiff's negligence is a contributing cause of an accident where the evidence shows that one of two equally possible acts committed by him must have caused the accident and where the inference that the plaintiff had been negligent is implicit in both.

Robert P. Jaress, Deputy Atty. Gen., State of Hawaii, Honolulu (George Pai, Atty. Gen., of counsel), for third-party defendant-appellant.

Richard E. Stifel, Honolulu (Goodsill, Anderson & Quinn, Honolulu, of counsel), for defendant and third-party plaintiff-appellee.

Before RICHARDSON, C. J., LEVINSON, KOBAYASHI and OGATA, JJ., and Circuit Judge CHANG assigned by reason of vacancy.

LEVINSON, Justice.

On August 27, 1967, Stanley Pacheco was seriously injured while operating a tractor-type lawnmower as an employee of the State of Hawaii. On that day, Pacheco was mowing grass near the 18-mile post on the roadside between Hilo and Honokaa on the island of Hawaii when a large sign, owned and maintained by the Hilo Electric Light Company, hereinafter referred to as HELCO, collapsed and fell on his head. As a result of the injuries Pacheco suffered in this accident, the State, as his employer, paid him $40,000 in workmen's compensation benefits during the following four and one-half years.

As was his right under HRS § 386-8 (Supp.1973) ¹ however, Pacheco on August 27, 1969 filed suit against HELCO alleging that his injuries were the proximate result of HELCO's negligence in constructing, placing, and maintaining the sign which fell on him, and claiming $150,000 in damages. ² HELCO, in turn, joined the State as a third party defendant, claiming in two separate counts of its complaint that (1) the State was liable as a joint tort-feasor for contribution to HELCO in the event the latter should be found liable to Pacheco, and (2) the State's alleged negligence, through its agents, precluded it from asserting a right to recover from HELCO any of the $40,000 the State had paid Pacheco in benefits. In response, the State moved to dismiss the third party complaint entirely on the ground that its liability to Pacheco under Hawaii's Workmen's Compensation Law precluded HELCO, under HRS § 386-5, ³ from joining it as a party. The trial court treated this motion as one for summary judgment and dismissed the first count of HELCO's complaint; it denied the State's motion to dismiss the second count, however.

Subsequently HELCO entered into a compromise with both plaintiffs, by the terms of which HELCO agreed to pay them $25,000 in full settlement of their claims against HELCO arising out of the accident in which Pacheco was inuured. The State approved this settlement. In addition, HELCO and the State mutually stipulated to proceed with count two of the third party complaint to trial on the merits. The dismissal of count one of the complaint and the terms of the stipulation narrowed the issues in the lawsuit considerably. HELCO no longer sought contribution from the State for any part or all of the $25,000 HELCO had agreed to pay Pacheco. The sole point of controversy became whether the State could recover from HELCO the $40,000 it had already expended in workmen's compensation benefits for Pacheco's injuries. In assenting thus to limit the parameters of the suit, the State expressly waived its right to assert a lien against the $25,000 settlement between HELCO and Pacheco. ⁴ Instead, the parties agreed that the factual determination whether the State was negligent, either through Pacheco's own contributory fault or the negligence of other State employees, would determine the State's right to collect $40,000 from HELCO. Basically, the parties by this stipulation acknowledged HELCO's actionable negligence, but agreed that the burden of loss with respect to the $40,000 paid to Pacheco in workmen's compensation benefits would remain with the State if it were also found negligent.

With this understanding, the case proceeded to trial before Circuit Court Judge Benjamin Menor, sitting without a jury. After hearing the evidence, Judge Menor determined that '(b)oth the negligence of Stanley Pacheco and the other employees of the State were proximate causes of the injuries sustained by Stanley Pacheco.' Accordingly, on August 3, 1972, he entered judgment in favor of HELCO and against the State, thereby foreclosing whatever right the State may have had to reimbursement for the benefits it had paid Pacheco. From this judgment the State appeals.

As a threshold matter, the State argues that the trial court erroneously denied the motion to dismiss count two of HELCO's third party complaint. While it lacked case authority from this jurisdiction at the time it made this motion, the State nonetheless argued that the language of HRS § 386-5, quoted at note 3 supra, precludes all suits for contribution, 'limited' or otherwise, ⁵ brought by a third-party tortfeasor against an employer obligated to pay workmen's compensation benefits to an employee injured by the tortfeasor's negligence. See generally 2 A. Larson, The Law of Workmen's Compensation §§ 76.21 to .22 (1970). In Kamali v. Hawaiian Electric Co., 54 Haw. 153, 159, 504 P.2d 861, 865 (1972), decided several months after the judgment in this case, we subscribed to the foregoing position, holding that section 386-5 'clearly and unequivocally precludes all contribution by a third party against an employer on the theory that the employer was a joint tortfeasor.' It follows that the trial court correctly dismissed count one of HELCO's complaint, which claimed contribution from the State. Count two, however, was not based on a theory of contribution, but rather on the theory that the State's negligence barred it from asserting any right to recover from HELCO the benefits the State had paid Pacheco. ⁶ In substance it sought a declaration of HELCO's non-liability to the State. Consequently, the trial court erred in not dismissing this count only if we hold that section 386-5 immunizes employers from suits for any purpose by third-party tortfeasors. Even if we assume that the rationale of Kamali extends this far, and that the trial court should have dismissed both counts of HELCO's complaint, the agreement to try the case effected by the State and HELCO vitiated whatever error in this regard the trial court committed. The State chose to compromise its then uncertain right to dismissal under HRS § 386-5 in return for HELCO's admission of primary negligence in causing Pacheco's injuries; further, the State expressly agreed to try the question of its negligence, through Pacheco or its other agents, as determinative of its right to recover from HELCO the $40,000 it had paid in benefits. Essentially, the State elected to reverse the procedural aspects of the case and proceed to trial as a de facto plaintiff asserting its rights as subrogee under HRS § 386-8 (Supp.1973) ⁷ rather than to adhere to its demand for technical compliance with its interpretation of HRS § 386-5 and hence, arguably, dismissal of HELCO's third-party complaint. In short, the State is bound by the settlement to which it knowingly and unequivocally assented in open court. ⁸ Cf. Kam Chin Chun Ming v. Kam Hee Ho, 45 Haw. 521, 543, 371 P.2d 379, 394 (1962) (compromise 'is not necessarily defective because the parties did not know the full extent of their rights').

Proceeding to the merits of the case, the State asserts that the evidence adduced at trial does not support the trial court's determination that Pacheco was contributorily negligent in causing the accident. Under the terms of its stipulation with HELCO and as subrogee to Pacheco's rights, the State could not recover from HELCO if Pacheco himself had no legal right to do so. And under the law in existence in Hawaii on the date of Pacheco's accident, and hence applicable to his claim whenever asserted, see Bissen v. Fujii, 51 Haw. 636, 466 P.2d 429 (1970), a plaintiff's contributory fault, absent a negligent defendant's 'last clear chence,' constituted a complete bar to this recovery. ⁹ See generally Restatement (Second) of Torts § 467 (1965). It therefore becomes necessary to review the facts upon which the trial court based its conclusion that Pacheco was negligent.

In early April, 1967, HELCO began erecting transmission lines along the highway between Hilo and Honokaa on the island of Hawaii. As was its practice on such projects, HELCO placed signs upon the strips of land,...