Bimbo v. Pua Lani Landscaping Design, Inc.

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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

No. CAAP-19-0000422

Intermediate Court of Appeals of Hawaii

April 24, 2023

NOT FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER

APPEAL FROM THE LABOR AND INDUSTRIAL RELATIONS APPEALS BOARD (CASE NO. AB 2016-046).

On the briefs:

Brian G.S. Choy, Keith M. Yonamine, for Employer-Cross Appellant- Appellant and Insurance Carrier-Cross Appellant-Appellant.

Li-Ann Yamashiro, 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.

Katherine G. Leonard, Presiding Judge. Keith K. Hiraoka Associate Judge and Karen T. Nakasone, Associate Judge, JJ.

SUMMARY DISPOSITION ORDER

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.

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 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 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 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 § 12-1033; 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 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...