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Reginald Botelho v. Atlas Recycling Centers

February 28, 2013

REGINALD BOTELHO,
CLAIMANT-APPELLANT,
v.
ATLAS RECYCLING CENTERS, LLC AND HAWAII EMPLOYERS' MUTUAL INSURANCE COMPANY, EMPLOYER/INSURANCE CARRIER-APPELLEE AND SPECIAL COMPENSATION FUND,
APPELLEE



APPEAL FROM THE LABOR AND INDUSTRIAL RELATIONS APPEALS BOARD (CASE NO. AB 2009-334(H) (1-06-00818))

NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS AND PACIFIC REPORTER

MEMORANDUM OPINION

(By: Nakamura, Chief Judge, Foley and Leonard, JJ.)

The Director of the Department of Labor and Industrial Relations (Director) assessed attorney's fees against Employer- Appellee Atlas Recycling Centers, LLC (Atlas) and Insurance Carrier-Appellee Hawaii Employers' Mutual Insurance Company Inc. (collectively, "Employer") and in favor of Claimant-Appellant Reginald G. Botelho (Botelho), pursuant to Hawaii Revised Statutes (HRS) § 386-93(a) (1993). The Labor and Industrial Relations Appeals Board (LIRAB) issued a Decision and Order, which reversed the Director's decision to assess attorney's fees against Employer. Relying on this court's unpublished summary disposition order in Kelly v. Metal-Weld Specialties, Inc., Nos. 27127 & 27208, 2008 WL 4409419 (Hawaii App. Sept. 30, 2008), the LIRAB concluded that HRS § 386-93(a) did not authorize the assessment of attorney's fees.

The version of HRS § 386-93 applicable to this case, HRS § 386-93 (1993 & Supp. 2011), provided: § 386-93 Costs. (a) If the director of labor and industrial relations, appellate board or any court finds that proceedings under this chapter have been brought, prosecuted, or defended without reasonable ground the whole costs of the proceedings may be assessed against the party who has so brought, prosecuted, or defended the proceedings.

(b) If an employer appeals a decision of the director or appellate board, the costs of the proceedings of the appellate board or the appellate court, together with reasonable attorney's fees, shall be assessed against the employer if the employer loses; provided that if an employer or an insurance carrier, other than the employer who appealed, is held liable for compensation, the costs of the proceedings of the appellate board or the appellate court, together with reasonable attorney's fees, shall be assessed against the party held liable for the compensation.

(Emphasis added.) In Kelly, we construed the phrase "whole costs of the proceedings" in HRS § 386-93(a) as not including attorney's fees, noting the Legislature's specific reference to both attorney's fees and costs in HRS § 386-93(b) and the lack of a specific reference to attorney's fees in HRS § 386-93(a). On appeal, Botelho argues that our interpretation of the phrase "whole costs of the proceedings" in Kelly was erroneous because we overlooked decisions of the Supreme Court of the Territory of Hawaii that had construed the phrase "whole cost of the proceedings" in the predecessor statutes to HRS § 386-93(a) as including attorney's fees. We agree that we erred. Upon further review and based on the decisions of the Supreme Court of the Territory of Hawaii in Ilaga v. Yuen Lin Ho, 35 Haw. 591 (Hawaii Terr. 1940), and Rivas v. Curtis, 38 Haw. 405 (Hawaii Terr. 1949), we conclude that HRS § 386-93(a) (1993) authorizes the assessment of attorney's fees. We therefore vacate the LIRAB's Decision and Order, which was filed on November 16, 2009, and we remand the case for further proceedings.

We note that in 2012, the Hawaii Legislature amended HRS § 386-93(a) to provide as follows (new material underscored and repealed material in brackets):

(a) If the director of labor and industrial relations, appellate board, or any court finds that proceedings under this chapter have been brought, prosecuted, or defended without reasonable ground, the whole costs of the proceedings including reasonable attorney's fees may be assessed against the party who has [so] brought, prosecuted, or defended the proceedings.

2012 Haw. Sess. L. Act 234, § 1 at 810.*fn1 This amendment, which took effect on July 1, 2012, makes clear that HRS § 386-93(a) authorizes the assessment of attorney's fees for proceedings after July 1, 2012. Id. § 3 at 810.

BACKGROUND

Botelho was employed as a laborer by Atlas, and his job involved the repeated bundling and tying of bales of scrap metal. Botelho suffered a work-related left carpal tunnel syndrome injury. On January 30, 2007, the Director issued a decision (Director's Decision), which found that Employer had accepted liability for Botelho's injury. The Director's Decision ordered Employer to pay medical benefits required by the nature of Botelho's injury and reserved determination of Botelho's "average weekly wages, temporary disability, permanent disability and/or disfigurement."

After the issuance of the Director's Decision, Botelho was unsuccessful in obtaining temporary total disability (TTD) benefits from Employer despite repeated requests for payment. Botelho requested a hearing on the matter. On May 15, 2009, the Director issued a Supplemental Decision (Director's Supplemental Decision), which (1) ordered Employer to pay: (a) all medical care, services, and supplies required by the injury; (b) $1,409.59 in TTD benefits and additional TTD upon receipt of medical certification; (c) $281.92 as a 20% penalty under HRS § 386-92 (Supp. 2012) for failure to pay TTD; and (d) a $2,500 penalty payable to the Special Compensation Fund pursuant to HRS § 386-31(b) (Supp. 2011); and (2) assessed attorney's fees and costs against Employer pursuant to HRS § 386-93(a).

On June 3, 2009, Employer appealed the Director's Supplemental Decision to the LIRAB. Among other things, Employer challenged the Director's assessment of attorney's fees pursuant to HRS § 386-93(a). Employer filed a motion for partial summary judgment as to the attorney's fees assessment, contending that HRS § 386-93(a) did not authorize the Director to award attorney's fees. On November 16, 2009, the LIRAB issued its Decision and Order, which granted Employer's motion for partial summary judgment. The LIRAB, relying on this court's reasoning in Kelly, reversed the Director's Supplement Decision with respect to the assessment of ...


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