Bimbo v. Pua Lani Landscaping Design, Inc. ( 2023 )

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
24-APR-2023
08:02 AM
Dkt. 54 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI#I
ROMEO Q. BIMBO, Claimant-Appellant-Appellee,
v.
PUA LANI LANDSCAPING DESIGN, INC., Employer-Cross Appellant-
Appellant and HAWAI#I EMPLOYERS' MUTUAL INSURANCE COMPANY, INC.,
Insurance Carrier-Cross Appellant-Appellant,
and
SPECIAL COMPENSATION FUND, Appellee-Appellee
APPEAL FROM THE LABOR AND INDUSTRIAL RELATIONS APPEALS BOARD
(CASE NO. AB 2016-046)
SUMMARY DISPOSITION ORDER
(By: Leonard, Presiding Judge, Hiraoka and Nakasone, JJ.)
Employer-Cross Appellant-Appellant Pua Lani Landscaping
Design, Inc. and Insurance Carrier-Cross Appellant-Appellant
Hawai#i Employers' Mutual Insurance Company, Inc. (collectively,
Employer) appeal from the Amended Decision and Order entered by
the Labor and Industrial Relations Appeals Board (LIRAB or Board)
on May 8, 2019. For the reasons explained below, we affirm.
Romeo Q. Bimbo worked for Pua Lani Landscaping. On
November 27, 2012, he was driving a company van to a worksite.
An oncoming car hit the front left side of the van. Bimbo's
chest hit the steering wheel. He complained of sharp chest pain,
left knee pain, and lower back pain. He made a claim for
workers' compensation benefits.
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Jon H. Scarpino, M.D. prepared a report for Employer,
dated May 5, 2015. He noted that Bimbo's left knee medial
meniscus was torn. Surgery had resulted in improvement, but
didn't resolve all symptoms. Bimbo also had lower back
sprain/strain with persistent pain. There was evidence of
underlying spinal stenosis at L4-5. Dr. Scarpino responded to
Employer's question:
11. If it is necessary to rate a pre-existing condition
based on worsening or aggravation, please provide an
apportionment. Please also apportion the impairment
that may be attributed to any intervening trauma.
It does not appear to be necessary to apportion the
impairment in relation to the left knee, as there is
no indication of previous left knee problems or
limited range of motion.
In relation to the lower back, there is a history of a
previous injury, with some intermittent symptoms
following that injury, but nothing severe enough to
prevent Mr. Bimbo from working at a heavy functional
level. The records of his previous 2010 injury would
be of benefit to try to better clarify the
apportionment position.
As well, he has underlying degenerative change in the
spine with spinal stenosis predating the subject
incident.
Medically, I would apportion 80% of his current
symptomatology to the previous injury and underlying
degenerative change, which made him more susceptible
to injury on 11/27/12, and apportion 20% of his
problems to the subject injury itself.
On November 6, 2015, the Disability Compensation
Division (DCD) of the state Department of Labor and Industrial
Relations (DLIR) set a hearing for December 9, 2015.
By letter to the DCD administrator dated December 8,
2015, Employer requested joinder of Appellee-Appellee Special
Compensation Fund (SCF) to apportion liability for permanent
disability benefits based on Dr. Scarpino's report.
The DCD decision was filed on February 5, 2016. As to
joinder of the SCF, the decision stated:
Section 12-10-33(a), Hawaii Administrative Rules
(HAR), states that the employer had thirty days after the
date of Dr. Scarpino's report to notify the SCF of a
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preexisting condition. Dr. Scarpino's report is dated
5/5/2015 and the employer's letter to the SCF is dated
12/9/2015,[1] more than thirty days after the date of
Dr. Scarpino's report. Accordingly, the employer's request
for apportionment of PPD benefits with the SCF is denied.
Employer appealed to the LIRAB. The LIRAB filed a
decision and order on June 26, 2018. As to joinder of the SCF,
the LIRAB found and concluded that Employer's request for joinder
of SCF was based upon Dr. Scarpino's May 5, 2015 IME report, but
was not made until December 9, 2015, "after the expiration of the
statutory 30-day period" under Hawaii Administrative Rules (HAR)
§ 12-10-33.
Employer moved for reconsideration. The LIRAB granted
reconsideration in part:
IT IS ORDERED that said motion be and hereby is
GRANTED IN PART. The Board will issue an Amended Decision
and Order, which deletes "statutory" from the reference to
the 30-day period, on page 21. Employer's motion is
otherwise DENIED. Whether an agency rule is "invalid," as
argued by Employer, is to be determined by the courts or the
legislature.
The Amended Decision and Order was filed on May 8, 2019. The
LIRAB found and concluded:
10. The Board finds that Employer has not met its
burden to prove an entitlement to an apportionment of
permanent disability benefits with the SCF because
Employer's notice to the Director of possible SCF
involvement was untimely.
. . . .
ANALYSIS/DISCUSSION
. . . .
In this case, Employer made its request for joinder of
the SCF on December 9, 2015,[2] the day of the hearing
scheduled before the Disability Compensation Division. The
request for joinder was based on Dr. Scarpino's May 5, 2015
evaluation report and permanent impairment rating of
Claimant. Employer did not show any cause, let alone good
1
This may be a typographical error; Employer's letter is dated
December 8, 2015.
2
Employer doesn't challenge this finding of fact. See supra
note 1.
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cause, why the Director should permit filing the written
notice long after the expiration of the 30-day period [under
HAR § 12-10-33]. Therefore, Employer alone is liable for
payment of PTD [sic] payments to Claimant.
CONCLUSIONS OF LAW
. . . .
4. The Board concludes that permanent disability
should not be apportioned between Employer/Insurance Carrier
and the Special Compensation Fund.
This appeal followed.
"Appellate review of a LIRAB decision is governed by
the provisions of the Hawai#i Administrative Procedure Act
relating to judicial review of agency action." Ihara v. State
Dep't of Land & Nat. Res., 141 Hawai#i 36, 41, 404 P.3d 302, 307
(2017) (citations omitted). The Act provides, in relevant part:
Upon review of the record, the court may affirm the decision
of the agency or remand the case with instructions for
further proceedings; or it may reverse or modify the
decision and order if the substantial rights of the
petitioners may have been prejudiced because the
administrative findings, conclusions, decisions, or orders
are:
(1) In violation of constitutional or statutory
provisions;
(2) In excess of the statutory authority or jurisdiction
of the agency;
(3) Made upon unlawful procedure;
(4) Affected by other error of law;
(5) Clearly erroneous in view of the reliable, probative,
and substantial evidence on the whole record; or
(6) Arbitrary, or capricious, or characterized by abuse of
discretion or clearly unwarranted exercise of
discretion.
HRS § 91-14(g) (Supp. 2018). Findings of fact are reviewed under
the clearly erroneous standard. HRS § 91-14(g)(5); Del Monte
Fresh Produce (Haw.), Inc. v. International Longshore & Warehouse
Union, Local 142, 128 Hawai#i 289, 302, 287 P.3d 190, 203 (2012).
Conclusions of law are reviewed de novo under the right/wrong
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standard. HRS § 91-14(g)(1), (2), (4); Ihara, 141 Hawai#i at 41,
404 P.3d at 307 (citation omitted).
Employer argues: (1) the LIRAB's application of HAR
§ 12-10-33 was erroneous; (2) the SCF waived, or should be
estopped from asserting, the 30-day deadline under HAR § 12-10-
33; and (3) a conflict of interest existed.
(1) HAR § 12-10-33 (effective 2013) pertains to
Employer's claims against the SCF. It provides, in relevant
part:
(a) In any case, including death, where an employer
believes that section 386-33, HRS [Hawaii Revised
Statutes],[3] applies, the employer shall give the director
written notice no later than thirty calendar days after the
date of the initial rating report indicating evidence of
pre-existing disability. The notice shall state the reasons
underlying the employer's belief that section 386-33, HRS,
applies and shall include a copy of the rating report or the
final decision of the director or the appellate board
indicating evidence of the pre-existing disability. Upon
good cause shown, the director may permit the employer to
file the written notice after the expiration of the time
period. Failure to file a notice in accordance with this
section shall subject the employer to liability for all
benefits.
(Emphasis added.)
"The general principles of construction which apply to
statutes also apply to administrative rules. As in statutory
construction, courts look first at an administrative rule's
language. Thus, . . . the interpretation of a[n administrative]
rule presents a question of law . . . [reviewed] under the
right/wrong standard." Cabatbat v. Cnty. of Haw., Dep't of Water
Supply, 103 Hawai#i 1, 6, 78 P.3d 756, 761 (2003) (cleaned up).
Employer doesn't dispute that its request to join SCF
was based on Dr. Scarpino's report of May 15, 2015, or that its
3
An employer seeking to obtain contribution from SCF for PPD
benefits under HRS [Hawaii Revised Statutes] § 386-33 must prove that: (1) the
injured employee suffered from a preexisting permanent partial disability;
(2) the preexisting permanent partial disability would support an award of
thirty-two weeks of PPD benefits; and (3) the preexisting permanent partial
disability and the subsequent work-related injury combined to cause a greater
present permanent partial disability. Bumanglag v. Oahu Sugar Co., 78 Hawai#i
275, 280, 892 P.2d 468, 473 (1995).
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request was made more than thirty days after the date of
Dr. Scarpino's report. The LIRAB's conclusion "that permanent
disability should not be apportioned between [Employer] and
[SCF]" is supported by the undisputed facts and reflects a
correct application of the plain language of HAR § 12-10-33. See
Est. of Klink ex rel. Klink v. State, 113 Hawai#i 332, 351, 152
P.3d 504, 523 (2007) (noting that conclusion of law supported by
trial court's findings of fact and reflecting application of
correct rule of law will not be overturned).
Employer argues that "HAR § 12-10-33 imposes an
arbitrary, artificial 30-day deadline for the filing of a joinder
request[,]" citing Higuchi v. Otaka, Inc., Case No. AB 2012-019
(2-96-02764). Higuchi is inapposite. Higuchi was injured in
1996. The employer paid PPD settlements in 1999 and 2003. A
doctor's report dated November 5, 2010 apportioned part of
Higuchi's PPD to "pre-existing permanent disability." The
employer notified SCF of its potential liability on November 10,
2010. The DCD denied apportionment with the SCF, "finding that
Employer did not file a written notice of the SCF's potential
liability prior to entering into the" 1999 and 2003 settlements.
The employer appealed. The LIRAB found that the
"November 5, 2010 report is the first rating report evidencing
pre-existing permanent disability" and concluded that the
November 10, 2010 notice was timely. In that context, the LIRAB
stated that the DCD "cannot effect a denial of apportionment by
denying joinder" of the SCF.4 By contrast, in this case
Employer's request to join SCF was made more than thirty days
after Dr. Scarpino's May 5, 2015 report. The LIRAB did not err
by applying the plain language of HAR § 12-10-33.
Employer argues that the LIRAB "should not have
automatically 'rubber stamped' the [DCD]'s invalid application of
4
The Higuchi case was remanded for the DCD to determine the amount
of the SCF's liability. On remand, the DCD ruled that the SCF must pay PPD
benefits in excess of 104 weeks. Higuchi v. Otaka, Inc., No. CAAP-XX-XXXXXXX,
2021 WL 5754988 (Haw. App. Dec. 3, 2021) (SDO). The SCF appealed. The LIRAB
affirmed. The SCF filed a secondary appeal. We affirmed. Id.6
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HAR § 12-10-33, especially where the SCF participated in trial de
novo and did not demonstrate any prejudice." It was not the
SCF's burden to show prejudice because of the late joinder. HAR
§ 12-10-33 gives LIRAB discretion to permit an employer to file
late written notice of a claim against the SCF "[u]pon good cause
shown." The record does not reflect the Employer attempting to
show good cause why LIRAB should allow late joinder of the SCF.
Employer's attempt to shift the burden of persuasion to the SCF
is not supported by the plain language of HAR § 12-10-33.
Employer argues that the HAR § 12-10-33 deadline is
contrary to "the beneficent, humanitarian purpose" of HRS § 386-
33. However, an injured employee will receive full PPD benefits
even if the employer misses the HAR § 12-10-33 deadline. HAR
§ 12-10-33 ("Failure to file a notice in accordance with this
section shall subject the employer to liability for all
benefits."). Moreover, an employer missing the 30-day deadline
is not the only situation in which the SCF would not be liable
for apportionment of PPD benefits. Under HRS § 386-33, if the
injured employee's "preexisting loss or impairment of a physical
or mental function was not the subject of an award of PPD
benefits, and would not have supported an award of thirty-two
weeks of compensation for PPD, the employer is liable for the
full amount of PPD benefits." Pave v. Prod. Processing, Inc.,
152 Hawai#i 164, 170, 524 P.3d 355, 361 (App. 2022). Employer
cites no authority for the proposition that the legislature
intended that the SCF be strictly liable for apportionment of PPD
benefits whenever an injured employee had a preexisting loss or
impairment of a physical or mental function, or that the DLIR
exceeded its rule-making authority under HRS § 386-72 (2015) by
promulgating HAR § 12-10-33.
(2) Employer argues that the SCF waived, or should be
estopped from asserting, the 30-day deadline under HAR § 12-10-
33, then conflates waiver and estoppel with its erroneous
argument on burden of persuasion.
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Employer's briefs fail to cite the elements of waiver
or estoppel. "[W]aiver is defined as an intentional
relinquishment of a known right, a voluntary relinquishment of
rights, and the relinquishment or refusal to use a right." In re
Yoneji Revocable Tr., 147 Hawai#i 104, 111, 464 P.3d 892, 899
(App. 2020). "The elements of promissory estoppel include: (1) a
promise; (2) at the time the promisor made the promise, the
promisor must foresee that the promisee would rely upon the
promise (foreseeability); (3) the promisee does in fact rely upon
the promisor's promise; and (4) enforcement of the promise is
necessary to avoid injustice." Furuya v. Ass'n of Apt. Owners of
Pac. Monarch, Inc., 137 Hawai#i 371, 387, 375 P.3d 150, 166
(2016) (cleaned up). "Equitable estoppel is a defense requiring
proof that one person wilfully caused another person to
erroneously believe a certain state of things, and that person
reasonably relied on this erroneous belief to his or her
detriment." Herrmann v. Herrmann, 138 Hawai#i 144, 155 n.11, 378
P.3d 860, 871 n.11 (2016) (cleaned up). "Quasi-estoppel . . . is
a species of equitable estoppel precluding one from asserting to
another's disadvantage, a right inconsistent with a position
previously taken by him or her." Id. (cleaned up).
Employer fails to cite any evidence in the record to
support its argument that the SCF waived, or should be estopped
from asserting, the 30-day deadline under HAR § 12-10-33. As
stated above, Employer failed to show good cause why LIRAB should
allow the admittedly late joinder of the SCF. Under those
circumstances, the SCF had no obligation to show it was
prejudiced by the late joinder. Employer's waiver and estoppel
argument is without merit.
(3) Employer argues that a conflict of interest
existed because the director of the DLIR "controls" and
"administers" the DCD, the SCF, and the LIRAB. Employer didn't
raise this issue before the LIRAB until the hearing on its motion
for reconsideration. The purpose of a motion for reconsideration
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is to allow the parties to present arguments that could not have
been presented during the earlier adjudicated hearing.
Reconsideration is not a device to raise arguments that could and
should have been brought to the LIRAB's attention during the
earlier hearing. Cf. Sousaris v. Miller, 92 Hawai#i 505, 513,
993 P.2d 539, 547 (2000).
"An order granting or denying a motion for
reconsideration is reviewed for abuse of discretion. An abuse of
discretion occurs where the circuit court has clearly exceeded
the bounds of reason or has disregarded rules or principles of
law or practice to the substantial detriment of a party
litigant." Tax Appeal of Subway Real Est. Corp. v. Dir. of
Taxation, State of Haw., 110 Hawai#i 25, 30, 129 P.3d 528, 533
(2006) (cleaned up). Employer's conflict of interest issue
could, and should, have been made to the LIRAB during the appeal
hearing. The LIRAB did not abuse its discretion by denying
Employer's motion for reconsideration on that issue.
For the foregoing reasons, the Amended Decision and
Order entered by the LIRAB on May 8, 2019, is affirmed.
DATED: Honolulu, Hawai#i, April 24, 2023.
On the briefs:
/s/ Katherine G. Leonard
Brian G.S. Choy, Presiding Judge
Keith M. Yonamine,
for Employer-Cross Appellant- /s/ Keith K. Hiraoka
Appellant and Insurance Carrier- Associate Judge
Cross Appellant-Appellant.
/s/ Karen T. Nakasone
Li-Ann Yamashiro, Associate Judge
Staci I. Teruya,
Deputy Attorneys General,
Department of the Attorney General,
State of Hawai#i,
for Appellee-Appellee
Special Compensation Fund,
Department of Labor and
Industrial Relations.
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