Yang v. Abercrombie & Fitch Stores

• Decision Date: 30 April 2012
• Docket Number: No. 29757.,29757.
• Court: Hawaii Court of Appeals
• Parties: Rosa YANG, Plaintiff–Appellee, v. ABERCROMBIE & FITCH STORES, Defendant–Appellant, and John Peyton, Dustin Ares, John Does 1–10, Jane Does 1–10, Doe Corporations 1–10, Doe Partnerships 1–10, Doe Entities 1–10, and Doe Governmental Entities 1–10, Defendants.

128 Hawai'i 173

284 P.3d 946

33 IER Cases 1639

Rosa YANG, Plaintiff–Appellee,

v.ABERCROMBIE & FITCH STORES, Defendant–Appellant,andJohn Peyton, Dustin Ares, John Does 1–10, Jane Does 1–10, Doe Corporations 1–10, Doe Partnerships 1–10, Doe Entities 1–10, and Doe Governmental Entities 1–10, Defendants.

No. 29757.

Intermediate Court of Appeals of Hawai‘i.

April 30, 2012.

Phillip A. Li (Li & Tsukazaki, LLLC), Honolulu, for Defendant–Appellant (Matt A. Tsukazaki, with him on the briefs).

Peter C. Hsieh, Honolulu, on the brief, for Plaintiff–Appellee.

NAKAMURA, Chief Judge, FUJISE and LEONARD, JJ.

Opinion of the Court by LEONARD, J.

Defendant–Appellant Ambercrombie & Fitch Stores, Inc. (A & F) brings this interlocutory appeal from the Circuit Court of the First Circuit's (Circuit Court's) Order Denying Defendant Abercrombie & Fitch Stores' Motion To Dismiss Plaintiff Rosa Yang's Complaint Filed On May 20, 2008 (Order Denying Dismissal), which was filed on March 12, 2009.¹ In the Order Denying Dismissal, the Circuit Court rejected A & F's request to dismiss Plaintiff–Appellee Rosa Yang's (Yang's) claims against A & F on the ground that Yang's claims are all barred by the exclusive remedy provision in the Hawai‘i Workers' Compensation Law, which is set forth in Hawaii Revised Statutes (HRS) § 386–5 (1993).

As discussed herein, we hold that the exclusivity provision in HRS § 386–5 bars Yang's claims against A & F for the personal injuries she allegedly suffered arising out of and in the course of her employment, which were allegedly caused by the willful acts of her co-employees acting in the course and scope of their employment, but that this provision does not bar Yang's claim for wrongful termination in violation of public policy. Accordingly, we affirm in part and vacate in part, remanding the case to the Circuit Court.

I. BACKGROUNDA. The Incident at A & F's Store

On a motion to dismiss, the facts alleged in the complaint are considered to be true. Bremner v. City & Cnty. of Honolulu, 96 Hawai‘i 134, 138, 28 P.3d 350, 355 (App.2001). Accordingly, for the purpose of this review, we present the facts as they are alleged in Yang's complaint.

Yang was a store manager at the A & F Men's Store (Men's Store) at the Ala Moana Shopping Center in Honolulu. A & F is an Ohio corporation registered to do business in the State of Hawai‘i. On or about March 6 or 7, 2007, a wallet (Wallet) was found and turned over to Yang and another manager while they were working at the Men's Store. Yang and the other manager found $600 in cash (Money) in the Wallet and placed the Wallet and its contents in a safe located in the Men's Store.

After returning to the Men's Store a few days later, Yang checked the Wallet in the safe and discovered that the Money was missing. On March 12, 2007, Yang reported the Money missing to Defendant–Appellee John Peyton (Peyton), ² an A & F Loss Prevention Agent. After conducting interviews with “everyone” about the Wallet and viewing security video footage, on March 16, 2007, Peyton escorted Yang out of the Men's Store, “in plain view”, to the manager's office at the A & F Women's Store.

Peyton closed the office door and informed Yang that he wanted her to speak with a second A & F Loss Prevention Agent, Defendant–Appellee Dustin Ares (Ares).³ Ares began interrogating Yang over the phone and asking for personal information. Ares then began describing the means and motivations of employees who steal and cheat the company, as well as A & F's loss prevention methods. He asked Yang when was the first time she had taken money out of A & F. Yang was completely taken aback and denied that she had ever taken any money. Despite this denial, Ares and Peyton persisted in their allegations, including that she took the Money out of the Wallet, and pressured her to confess. Yang felt embarrassed, harassed, insulted, and humiliated. At the conclusion of the interrogation, Peyton suspended her “without any factual evidence proving that [Yang] had taken the Money.” He retrieved her handbag from the Men's Store and escorted her out of the Women's Store in plain view of her co-workers. Yang had been crying and was very embarrassed to be seen in that condition.

In addition, in conjunction with her claim for wrongful termination, Yang alleges that she was suspended and then terminated for abusing A & F's discount policy, without any factual or legal basis.

B. The Proceedings Below

On March 22, 2007, Yang filed a claim with the Department of Labor and Industrial Relations (DLIR) seeking workers' compensation benefits for a stress-related injury arising out of the above-described incident. On October 17, 2007, DLIR rendered a decision that Yang was entitled to receive workers' compensation benefits.

On May 20, 2008, Yang filed a complaint, which included the following counts: (1) unlawful and/or false imprisonment; (2) harassment; (3) defamation and/or defamation per se; (4) false light invasion of privacy; (5) wrongful termination in violation of public policy; (6) tortious interference with contractual relations; (7) tortious interference with economic or prospective opportunities; (8) civil conspiracy; (9) intentional infliction of emotional distress; and (10) willful and wanton conduct. As averred in the complaint, and as confirmed at the oral argument before this court, all of Yang's claims arise out of the assertion that Peyton and Ares engaged in tortious conduct, while in the course and scope of their employment with A & F, for which they should be held personally and individually liable to Yang, and that A & F should be held liable to Yang based on respondeat superior and/or vicarious liability. Yang prayed for general, special, compensatory, and punitive damages.

On June 16, 2008, A & F filed its motion to dismiss pursuant to Hawai‘i Rules of Civil Procedure (HRCP) Rule 12(b)(6) and Hawai‘i's Workers' Compensation Law, which is set forth in HRS Chapter 386. After opposition and reply memoranda were filed, a hearing was held on July 31, 2008. At the hearing, the Circuit Court stated its preliminary analysis, but asked for supplemental briefing. After further briefing by both parties, another hearing was held on October 28, 2008. The Circuit Court denied A & F's motion to dismiss, explaining:

All right. The Court's view, [ ] with all due respect, is still that I'm constrained by the plain language of the applicable statutes as I understand it. And as I understand it, again, it covers accidents. I don't think the intentional acts of the employer count as accidents. Accidents specifically under the statute do include the willful act of third persons directed against the employee. And these third persons can be co-employees. And I agree with you there's a lot of case law on that. But I don't think—as I said, I don't think any of the cases are on point as to the situation, the factual situation that's alleged here. I just don't think a third person is the same thing as the employer. And the willful acts of third persons that are also included in the definition of accidents are just that. They're the willful acts of third persons, not the employer.

I'm still troubled by the potential double recovery issue, as I'm troubled by the implications of what the Court sees as the plain language of the statute.

I'm going to deny your motion to dismiss for those reasons. But if you want to take it up interlocutory, I'll let you do it. So—because I think, you know, obviously I could be wrong about this. And I can see that, because to me, it's a very—it's kind of a strange situation in the Court's view. The Court's—as I said, the Court looks at the—looks at the plain language as I understand it and it seems to constrain one ruling, but that ruling seems to go against certain other principles.

So—and again, the Court understands that the statement in the Furukawa case is dicta. We talked about that last time too. But there is that statement in Furukawa which says most states recognize that all or nearly all intentionally tortious acts committed by the employer against the employee in the course of employment are excluded from the workers' compensation system. I mean, that language is clearly in Furukawa. It's not necessarily a part of the holding. I understand that. But it's there. And that's our Supreme Court that said that.

After the Order Denying Dismissal was entered, A & F filed a motion for approval of interlocutory appeal, which was granted pursuant to HRS § 641–1(b) (1993 & Supp.2010). This timely appeal followed.

II. POINTS OF ERROR ON APPEAL

A & F raises the following, as its points of error:

(1) The Circuit Court erred in concluding that the exclusive remedy provision in HRS § 386–5 did not bar Yang's suit for alleged injuries suffered because of her employment, which were caused by the alleged willful acts of her co-employees acting in the course and scope of their employment;

(2) The Circuit Court erred in concluding that Furukawa v. Honolulu Zoological Soc'y, 85 Hawai‘i 7, 936 P.2d 643 (1997), created an exception to the exclusive remedy provision under HRS § 386–5 for all intentional torts;

(3) The Circuit Court erred in concluding that an intentional tort committed by a co-employee acting in the course and scope of his or her employment is not an “accident,” as defined in the HRS § 386–3 because the employer is vicariously liable for the intentional acts of its employees;

(4) The Circuit Court erred in concluding that a co-employee is not a “third person” as used in HRS § 386–3(a) and, therefore, the “willful acts” of the co-employee are not covered by Hawai‘i's Workers' Compensation Law; and

(5) The Circuit Court erred in failing to dismiss Yang's complaint against A & F where she seeks a double recovery, i.e., damages in a lawsuit against her employer as well as workers' compensation benefits, for the same injury allegedly suffered in the course of her employment.

III. STANDARDS OF REVIEW

The appellate...