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Ihara v. State

Supreme Court of Hawaii

October 13, 2017

DENNIS T. IHARA, Petitioner/Claimant-Appellee, Cross-Appellant,
STATE OF HAWAI'I, DEPARTMENT OF LAND AND NATURAL RESOURCES Respondent/Employer-Appellant, Cross-Appellee, Self-Insured.

         CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS (CAAP-12-0000398; CASE NO. AB 2008-266 (2-07-40277))

          Wayne H. Mukaida for petitioner

          Scott G. Leong and Shawn L.M. Benton for respondent



          WILSON, J.


         This case raises two questions concerning the law of workers' compensation in Hawai'i as it relates to permanent partial disability (PPD) awards. First, must a PPD award for an unscheduled injury that is not comparable to a scheduled injury be supported by some factual finding of a determinate percentage of impairment of a physical or mental function of the whole person? This question relates to a required component in the way the PPD award for such an injury must be calculated under HRS § 386-32(a)[1] Second, may a PPD determination be based on a claimant's post-injury inability (or reduced ability) to perform the usual and customary work activities in the position the claimant occupied prior to the injury?[2] This question relates to the range of permissible methods by which the degree of partial impairment may be assessed. With the qualifications detailed below, we answer both questions in the affirmative.


          In March, 2012, the Labor and Industrial Relations Appeals Board (the LIRAB or the Board) awarded Ihara $250 in permanent partial disability (PPD) benefits and found the Department of Land and Natural Resources (DLNR) liable for vocational rehabilitation services. Both Ihara and DLNR appealed to the Intermediate Court of Appeals (ICA). The ICA vacated the LIRAB's award of $250 in PPD and related vocational rehabilitation services, and it remanded to the LIRAB for further proceedings. On certiorari, Ihara seeks reversal of the ICA's decision to vacate the LIRAB's award of permanent partial disability benefits to Ihara. Ihara contends the ICA erred in holding that (1) the LIRAB was required to calculate the award based on a percentage-based finding of impairment, and (2) that the LIRAB erred when it considered work activities in determining Ihara's PPD award.

         A. Ihara's employment and injury

         Ihara was employed as a Deputy Registrar at the Bureau of Conveyances, a division within DLNR. Although he was a Deputy Registrar, Ihara was in charge of operations for the Bureau of Conveyances and effectively performed the duties of the Registrar. Ihara described the Bureau as being in a state of "disarray and dysfunction, " explaining that "the Land Court section staff was pitted against the Regular System section staff." Job stress caused Ihara to experience trouble sleeping, memory lapses, anxiety, and depression.

         Ihara reported to DLNR that he suffered increased hypertension and stress resulting from the pressures of his position, and that this injury occurred on approximately February 1, 2007. On March 21, 2007, DLNR filed a Form WC-1: Employer's Report of Industrial Injury, which documented Ihara's claim and the nature of his injury, and on May 17, 2007, Ihara filed a Form WC-5: Employee's Claim for Worker's Compensation Benefits. Ihara's physician, Dr. Ronald A. Morton, submitted a letter stating that Ihara was in reasonably good health with controlled hypertension, but that high work stress had caused a recent and marked elevation in his blood pressure.

         At the request of DLNR, Dr. Ajit Arora performed an Independent Medical Examination and Dr. Jon Streltzer performed an Independent Psychiatric Examination on Ihara. Dr. Arora's report from May 21, 2007 diagnosed Ihara with "[e]ssential hypertension, genetically based, with temporary aggravation." Dr. Streltzer's report from June 19, 2007 stated that Ihara suffered from "Adjustment Disorder with Anxiety, Primary Insomnia, Occupational Problem (not a mental disorder), and High Blood Pressure." Based on Dr. Arora's and Dr. Streltzer's Independent Medical Examination and Independent Psychiatric Evaluation, DLNR accepted compensability for Ihara's claim as a temporary aggravation.

         The Department of Human Resources Development, Employee Claims Division, instructed the doctors to submit reports and statements to the Department of Human Resources Development, State Workers' Compensation Division, documenting the medical services rendered in relation to his increased stress and hypertension. Various notes from Dr. Morton were submitted, as well as from psychiatrist Dr. Dennis Lind, excusing Ihara from work and stating that he was disabled for certain dates. Ihara was put on unpaid medical leave with his last day at work being June 12, 2007.

         On June 19, 2008 the claims manager of the Employee Claims Division wrote to Drs. Lind and Morton requesting their opinions as to whether Ihara could return to work. On June 25, 2008, Dr. Lind responded that Ihara had reached medical stability and could work in other situations, but not at DLNR. Dr. Morton wrote on June 27, 2008 that Ihara could return to regular duty and had reached medical stability.

         Based on Dr. Lind's assessment that Ihara had reached medical stability but could only work in other situations, DLNR discharged Ihara from his position at the Bureau of Conveyances via a letter dated July 11, 2008. Relying on Dr. Lind's "medical assessment, " DLNR determined that Ihara was "medically disqualified for continued civil service employment, " not only for the Deputy Registrar position but also for "any DLNR employment."

         B. Hearings before the Department of Labor and Industrial Relations and the LIRAB

         Ihara claimed eligibility for temporary total disability benefits and vocational rehabilitation services. Ihara's employer, DLNR, disputed his eligibility for some of those benefits and services. Disputes concerning benefits are decided by the director of the Department of Labor and Industrial Relations. HRS § 386-86(a)-(b)(1993 & Supp. 2014). The director conducts an informal hearing on the claim and issues findings of fact and conclusions of law. Id. After an initial hearing in March 2008 and a decision in May 2008, the director, in a supplemental decision in October 2009, stated that DLNR was required to pay Ihara for "such medical care, services and supplies as the nature of the injury may require, " as well as weekly compensation for Ihara's temporary total disability and temporary partial disability for the relevant weeks of his leave. In addition, the director found that no permanent disability resulted from Ihara's injury. Both Ihara and DLNR appealed the decision to the LIRAB.

         In its March 13, 2012 decision and order, the Board found that Ihara was entitled to certain periods of temporary total disability as a result of his work injury and to vocational rehabilitation benefits for certain periods. The Board concluded that Ihara was entitled to benefits for permanent partial disability in the amount of $250 based on its finding that the DLNR's statement in its July 11, 2008 letter that Ihara was medically disqualified from his position served as an admission that Ihara was permanently disabled.

The Board finds that Employer's statement that Claimant was "medically disqualified" for his position was an admission or acknowledgement that Claimant was permanently disabled. The Board finds this to be especially so, because Employer sought out and received opinions of medical stability from Drs. Morton and Lind before it sent this letter.
The Board credits the opinions that Claimant sustained no ratable impairment. However, Employer's July 11, 2008 letter admitted or acknowledged permanent disability, stated that Claimant was "medically disqualified" for his position, and terminated him therefrom. Therefore, the Board finds that Claimant sustained permanent partial disability in the amount of $250.

         Both the DLNR and Ihara appealed the LIRAB's decision to the ICA.

         C. ICA proceedings

         The ICA vacated the Board's ruling awarding Ihara $250 in PPD benefits on two grounds. First, the ICA held that the statute governing PPD benefits requires the assignment of a percentage of impairment for unscheduled injuries, i.e., for injuries not listed in the statute. More precisely stated, the statute requires the assignment of a percentage of impairment for injuries not specifically listed in the statute or comparable to those listed in the statute. The Board had failed to assign any percentage of impairment to Ihara's injury, instead awarding him a lump sum of $250.

         Second, based on its analysis of the statute's legislative history, the ICA held that PPD may not be based on "ability to work, " because, unlike total disability awards, PPD benefits are essentially indemnity payments for loss of bodily integrity, not compensation to replace loss of wages. The ICA found that the Board improperly awarded Ihara permanent partial disability benefits based on his reduced ability to work. The ICA noted that the Board's award of PPD benefits was based on the ambiguous position that, though Ihara suffered no ratable impairment, nonetheless he was ...

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