TIG Ins. Co. v. Kauhane, 24219.
| Decision Date | 28 March 2003 |
| Docket Number | No. 24219.,24219. |
| Citation | 67 P.3d 810,101 Haw. 311 |
| Parties | TIG INSURANCE COMPANY, Respondent-Appellant/Appellant, v. Genevieve KAUHANE, Claimant-Appellee/Appellee, and J.P. Schmidt, Insurance Commissioner, State of Hawai'i, Department of Commerce and Consumer Affairs, Appellee/Appellee. |
| Court | Hawaii Court of Appeals |
Katharine M. Nohr (Miyagi, Nohr & Myhre), Honolulu, for respondent-appellant/appellant.
Neal K. Aoki (Koshiba, Agena & Kubota), Honolulu, for claimant-appellee/appellee.
Deborah Day Emerson and David A. Webber, Deputy Attorneys General, State of Hawai'i for appellee/appellee.
This secondary appeal involves the proper interpretation of Hawaii Revised Statutes (HRS) § 431:10C-304(3) (1993), which imposes certain obligations on a no-fault insurer in handling claims for no-fault insurance benefits.
Appellee/Appellee Insurance Commissioner for the State of Hawai'i (the Insurance Commissioner), in an August 4, 2000 Final Order that was affirmed by a Final Judgment entered by the Circuit Court of the First Circuit (the circuit court)2 on March 20, 2001, ruled that Respondent-Appellant/Appellant TIG Insurance Company (TIG) violated HRS § 431:10C-304(3)(C) by not granting or denying the claim for no-fault benefits submitted by Claimant-Appellee/Appellee Genevieve Kauhane (Kauhane or Mrs. Kauhane) within thirty (30) days after TIG reasonably determined that the additional information it had requested from Kauhane's doctors to assist TIG in evaluating the merits of Kauhane's claim would not be forthcoming. The Insurance Commissioner further concluded that TIG's violation of the procedural requirements of HRS § 431:10C-304(3)(C) barred it from contesting the merits of Kauhane's claim and, accordingly, ordered TIG to pay no-fault benefits to Kauhane and attorney's fees and costs to Kauhane's attorney.
We conclude that TIG violated the time requirements of HRS § 431:10C-304(3)(C) when it delayed granting or denying Kauhane's claim for no-fault benefits pending (1) receipt of answers from Kauhane's treating physicians to TIG's questions regarding the underlying cause of the medical condition that required Kauhane to undergo bypass surgery a few days after a motor vehicle accident, and (2) Kauhane's undergoing two independent medical examinations (IMEs). We hold, however, that the Insurance Commissioner wrongly concluded that TIG's violation of these time requirements procedurally barred TIG from contesting the substantive merits of Kauhane's claim.
Accordingly, we vacate the Final Judgment entered by the circuit court on March 20, 2001 and remand this case to the circuit court, with instructions that the circuit court vacate the Insurance Commissioner's Final Order dated August 4, 2000 and remand this case to the Insurance Commissioner for further proceedings on the substantive merits of Kauhane's claim, consistent with this opinion.
Our disposition of this appeal renders it unnecessary to resolve TIG's challenge to the Insurance Commissioner's award of attorney's fees and costs to Kauhane.
Kauhane has a long history of coronary artery disease, hypertension, and hyperthyroidism. In January 1991, Kauhane underwent a successful coronary angioplasty3 of her anterior descending coronary artery. In April 1996, Kauhane developed unstable angina4 and had a significant blockage of her right coronary artery. To correct this condition, she underwent another coronary angioplasty. Thereafter, her medical condition appeared stable, and she did not complain of chest pain or discomfort.
On July 7, 1996, Kauhane was still recovering from the angioplasty and had not returned to work. That day, while she was a seat-belted passenger in the front seat of a car traveling south on Pilila'au Avenue in Nanakuli, a north-bound vehicle crossed the center lines of the road and sideswiped the car Kauhane was riding in. As a result of the collision, Kauhane was thrust forward into the shoulder strap of her seat belt.
Following the accident, Kauhane complained of chest pain and was taken by ambulance to the Waianae Coast Comprehensive Health Center (WCCHC). There, an electrocardiogram5 taken of Kauhane's heart "did not show any changes[.]" Kauhane was diagnosed as having acute anxiety and soft tissue injuries, and after her chest pain subsided later that day, she was released from WCCHC.
When the chest pain returned the next day, Kauhane was examined by her regular internist, Dr. Aaron Nada (Dr. Nada), and a cardiologist, Dr. Roy O. Kamada (Dr. Kamada). Dr. Nada ordered an x-ray of Kauhane's chest and ribs. The x-ray revealed that Kauhane's chest was bruised.
Over the next few days, the dull ache in Kauhane's chest grew, and on July 11, 1996, Kauhane returned to WCCHC, complaining of intense chest pain of a one-hour duration. On July 12, 1996, she was transferred to Kuakini Medical Center (KMC), where she was examined by Dr. Kamada. Dr. Kamada reported that Kauhane had been in pain for three hours upon admission to KMC and determined that Kauhane would need bypass surgery on her right coronary artery and left anterior descending artery. The surgery was performed on July 18, 1996. Kauhane was released from KMC a week later, and her condition has been stable since then.
At the time of the accident, Kauhane was covered under a no-fault insurance policy provided by TIG.6 On October 11, 1996,7 Kauhane submitted to TIG a claim for no-fault benefits, dated September 17, 1996, and copies of medical bills she had incurred for the bypass surgery and treatment after the accident. TIG received the claim on October 14, 1996. On October 29, 1996, Kauhane submitted to TIG copies of additional medical bills.
On November 13, 1996, TIG responded to Kauhane that it needed "to investigate and obtain information and/or medical records of [her] past medical history" before determining whether to pay her bills. The same day, TIG wrote letters to Kauhane's medical providers,8 requesting Kauhane's medical records, and also wrote to Dr. Nada, requesting information on Kauhane's medical history.9 On November 20, 1996, Kauhane's attorney wrote to TIG and asked for a determination of Kauhane's claim for no-fault benefits by November 30, 1996.
On December 18, 1996, TIG wrote to Dr. Kamada, requesting that he answer the following questions:
1. Did the automobile accident of 7/7/96 aggravate Mrs. Kauhane's pre-existing condition(s)? If so, please explain.
2. If the aggravation had anything to do with the bypass surgery? If it did, please explain.
3. If Mrs. Kauhane was not involved in this automobile accident, was the bypass surgery necessary?
On January 6, 1997, Kauhane's attorney wrote to TIG, requesting an update of the status of Kauhane's claim and copies of all records in TIG's possession relating to the claim. Kauhane's attorney also offered to assist TIG in obtaining medical records or information that TIG needed to evaluate Kauhane's claim.
On January 21, 1997, TIG responded that it had not yet received replies from Drs. Nada and Kamada to TIG's written requests for information. That same day, TIG wrote to both doctors, requesting replies to its prior letters and informing them that if TIG received no reply from them by January 31, 1997, it would "conclude that Mrs. Kauhane's conditions/symptoms/problems, surgery and treatments prior and following the auto accident were not in anyway [sic] related to the [July 7, 1996] auto accident."
On January 28, 1997, Dr. Nada provided TIG with medical records for Kauhane's bypass surgery and his answers to the questions posed by TIG in its November 13, 1996 letter to him.10 Thereafter, on February 27, 1997, TIG sent Dr. Nada another letter, requesting "further information concerning [Kauhane's] surgery, to assist [TIG] in determining whether any part of the surgery and treatments thereafter were/are in fact related to the ... accident." Specifically, TIG asked Dr. Nada the following questions:
1. Did the ... accident cause any degree of aggravation of Mrs. Kauhane's multiple pre-existing problems/conditions? If if [sic] did, please stipulate what percent, nature of treatments rendered; related to the aggravation and when did she return to pre-accident status? If she has not returned to pre-accident status, please state when you feel she will have reached this point?
2. If the accident did cause a degree of aggravation, was the aggravation the sole cause Mrs. Kauhane had to undergo the bypass surgery? (Please be specific in your response providing an explanation of how the aggravation was the sole factor for the surgery)
3. If the aggravation was not the sole cause of the surgery, was the aggravation partly the reason surgery had to be performed? (Please be specific in your response and explain what role the accident was partly the cause for surgery)
4. Had the accident not occur, [sic] due to Mrs. Kauhane's pre-existing problems/conditions, would the surgery, more than likely, have been necessary?
5. Prior to the auto accident, on Mrs. Kauhane's most recent visit to you, were there indications that the surgery would be needed/discussed?
6. You say that treatments for the accident consist of medications for her heart and blood pressure. Was Mrs. Kauhane being treated with these medications prior to the accident? When Dr. Nada did not promptly answer the foregoing questions, TIG sent him two letters, the first dated March 20, 1997 and the second dated April 17, 1997, requesting a response. The April 17, 1997 letter informed Dr. Nada that if TIG did not receive a response within ten days, it would "conclude that the bills/[Hawaii Medical Services Association] statements; treatments for Mrs. Kauhane's surgery, were not in anyway [sic] related to the above dated accident." By a letter dated April 25,...
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