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In re Cost Review Billing Dispute Regarding: Linogon

Intermediate Court of Appeals of Hawaii

December 30, 2013

In the Matter of Cost Review Billing Dispute Regarding: DARRELL D. LINOGON, Claimant-Appellee,
v.
CITY MILL, Employer-Appellee, and ARGONAUT INSURANCE COMPANY, Insurance Carrier-Appellee,
v.
EMERSON M.F. JOU, M.D., Appellant-Appellant. In the Matter of Cost Review Billing Dispute Regarding: CLARITA PINSON, Claimant-Appellee,
v.
WAIKIKI BEACH MARRIOTT RESORT, Employer-Appellee, and MARRIOTT CLAIMS SERVICE ASSOCIATION, Insurance Carrier-Appellee,
v.
EMERSON M.F. JOU, M.D., Appellant-Appellant.

NOT FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER

APPEAL FROM THE LABOR AND INDUSTRIAL RELATIONS APPEALS BOARD. CASE NOS. AB 2009-230, 2-00-14173)), AB 2009-231 (2-01-06278))

Stephen M. Shaw, for Appellant-Appellant

Kenneth T. Goya, Steven L. Goto, Richard F. Nakamura, (Ayabe, Chong, Nishimoto, Sia & Nakamura, LLLP) for Employer/Insurance Carrier-Appellee

Nakamura, C.J., and Foley and Fujise, JJ.

SUMMARY DISPOSITION ORDER

These two appeals, which we consolidated for disposition, arise from a dispute over whether the Director of Labor and Industrial Relations (Director) should have required the payment of interest on disputed billings under Hawai'i Administrative Rules (HAR) § 12-15-94(c). At the time relevant to these appeals, HAR § 12-15-94(c) (1996) provided:

The employer, after accepting liability, shall pay all charges billed within sixty calendar days of receipt of such charges except for items where there is a reasonable disagreement. If more than sixty calendar days lapse between the employer's receipt of an undisputed billing and date of payment, payment of billing shall be increased by one per cent per month of the outstanding balance. In the event of disagreement, the employer shall pay for all acknowledged charges within sixty days of receipt and shall negotiate with the provider of service on items in disagreement.

(Emphasis added.)[1]

Appellant-Appellant Emerson M.F. Jou, M.D. (Dr. Jou) appeals from two decisions and orders issued by the Labor and Industrial Relations Appeals Board (LIRAB). In Appeal No. 30710, Dr. Jou appeals from the Decision and Order filed by the LIRAB on August 9, 2010, in Case No. AB 2009-230 in favor of Employer-Appellee City Mill (City Mill) and Insurance Carrier-Appellee Argonaut Insurance Company (Argonaut) (collectively, "Employer 1"). In Appeal No. 30711, Dr. Jou appeals from the Decision and Order filed by the LIRAB on August 2, 2010, in Case No. AB 2009-231 in favor of Employer-Appellee Waikiki Beach Marriott Resort (Waikiki Marriott) and Insurance Carrier-Appellee Marriott Claims Service Association (Marriott) (collectively, "Employer 2").

The LIRAB granted the motions for summary judgment filed by Employer 1 and Employer 2, and thereby affirmed the Director's determinations that Dr. Jou was not entitled to interest on billings which Employer 1 and Employer 2 had disputed. As explained below, we affirm the LIRAB's Decision and Order in both cases.

I.

Much of the relevant background facts and the procedural history in these consolidated appeals is set forth in our decision in Jou v. Hamada, 120 Hawai'i 101, 201 P.3d 614 (App. 2009), and will not be repeated here.[2] in Jou, we held that the provision of HAR § 12-15-94(d) that prohibited any appeal of the Director's decisions in billing disputes between employers and medical service providers in workers' compensation cases was invalid as beyond the Director's rulemaking power. Id. at 104, 201 P.3d at 617. We further held that Dr. Jou shall be permitted to file appeals of the Director's decisions in these two cases with the LIRAB within twenty days of the effective date of our judgment on appeal. Id. at 114, 201 P.3d at 627. We expressed no opinion on the merits of Dr. Jou's challenges to the Director's decisions. Id.

Dr. Jou thereafter appealed the Director's decisions, which had denied his requests for interest, to the LIRAB. Employer 1 and Employer 2 both moved for summary judgment, arguing, among other things, that (1) HAR § 12-15-94(c) only authorized the imposition of a one percent interest penalty on undisputed unpaid invoices, and (2) because there was no factual dispute that Employer 1 and Employer 2 had disputed Dr. Jou's invoices, Employer 1 and Employer 2 were entitled to a decision in their favor as a matter of law. Dr. Jou filed oppositions to the motions of Employer 1 and Employer 2.

In August 2010, the LIRAB issued its decisions and orders granting the motions for summary judgment filed by Employer 1 and Employer 2. In granting Employer l's motion for summary judgment in Case No. AB 2009-230, the LIRAB concluded: "There is no factual disagreement that [Employer 1] disputed Dr. Jou's November 9, 2000 bill for massage services rendered from October 2, 2000 through October 23, 2000. Said ...


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